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EBCE customers will have a charge for "PCIA". The Power Charge Indifference Adjustment or "exit fee" is a charge on customers that switch their service over to a CCA from an IOU such as PG&E. PCIA is assessed to cover electricity generation costs acquired by PG&E prior to a customer's departure for EBCE. This ensures that, as PG&E's customer base dwindles, those that remain will not be unfairly burdened with previously acquired energy contract obligations and PG&E's other legacy investments. Since EBCE's rates are pegged to PG&E's, EBCE must absorb the PCIA costs, while still keeping Bright Choice ata 1.5% discount and Brilliant 100 on par with PG&E's rates. Tables 2 and 3 above illustrate the PCIA's effect on EBCE's 3 tiers of rates and PG&E's Solar Choice rate. The California Public Utility Commission (CPUC) determines how the PCIA is calculated. At its October 2018 meeting, the CPUC revisited the PCIA issue, and voted unanimously to restructure it in a way that was generally viewed as favorable to IOUs. Per the new PCIA, CCA customers are now responsible for the IOU's pre -2002 legacy utility -owned generation costs. This means that, for example, utility -owned power plants built before 2002 can be included in the PCIA calculations. In addition, a previously existing 10 -yr cost recovery limit on older generation -related commitments was also removed at the same time, essentially resulting in a lack of sunset date for the PCIA. Both of these methodology changes will result in a PCIA rate increase. Conversely, there will be a $0.005/kWh cap on the year-to-year PCIA rate changes starting in 2020 to prevent the PCIA from fluctuating massively on a yearly basis. According to the CPUC, a typical residential customer leaving PG&E to join a CCA in 2018 in PG&E territory can expect a 1.68% increase in their bill under the new PCIA regime, without interference from the CCA. According to EBCE, PG&E's own analysis has found that the CPUC's decision can result in a greater than 18% increase in the PCIA rate. This is concerning for EBCE and will undoubtedly impact their ability to deliver competitively priced power and develop local renewable energy programs. If EBCE is to continue pegging their energy rates to PG&E, they must absorb all PCIA rate increases, which will affect EBCE's projected revenue stream, lengthen the time needed to build up reserves, make it more difficult to enter into long-term renewable energy contracts, slow Local Development Business Plan (LDBP) implementation to fund energy efficiency programs, and limit energy portfolio diversification. Ultimately, EBCE may also be forced to provide smaller rate discounts. However, there is significant uncertainty associated with electricity rates and PCIA, especially in light of PG&E's Chapter 11 bankruptcy filing in January 2019. For example, would PG&E's bankruptcy lead to the restructuring of its debts and financial obligations including past energy contracts? Would it result in future energy purchases with less favorable financial terms for them and, therefore, limit their ability to compete with CCAs? It is very difficult to assess the implications at this time. Page 7 of 20