Sacramento Municipal Utility District

Pending Management Approval

SACRAMENTO MUNICIPAL UTILITY DISTRICT

Standards of Conduct Concerning

Open Access Transmission Tariff Services

1. Definitions: The following terms, when used in these Standards of Conduct, shall have the meanings set forth below:

1.1 Affiliate. This term means another person that controls, is controlled by or is under the common control with SMUD. An affiliate includes a division that operates as a functional unit.

1.2 Commission. This term means the Federal Energy Regulatory Commission (FERC).

1.3 Control (including the terms “controlling”, “controlled by”, and “under common control with”). This term includes, but is not limited to, the possession, directly or indirectly and whether acting alone or in conjunction with others, of the authority to direct or cause the direction of the management or policies of a company. A voting interest of 10% or more creates a rebuttable presumption of control.

1.4 Marketing Functions. This term means the sale for resale in interstate commerce, or the submission of offers to sell in interstate commerce, of electric energy or capacity, demand response, virtual transactions, or financial or physical transmission rights, all as subject to an exclusion for bundled retail sales, including sales of electric energy made by providers of last resort (POLRs) acting in their POLR capacity.

1.5 Marketing Function Employee. This term means an employee, contractor, consultant or agent of a transmission provider or of an affiliate of a transmission provider who actively and personnally engages on a day-to-day basis in marketing functions.

1.6 Open Access Same-Time Information System or OASIS. This term refers to the Internet location where SMUD voluntarily posts the information, by electronic means.

1.7 SMUD. This term refers to the Sacramento Municipal Utility District, a municipal utility district organized and existing under the Municipal Utility District Act as set forth in the Public Utilities Code of the State of California.

1.8 SMUD’s OATT. This term means SMUD’s Open Access Transmission Tariff.

1.9 SMUD’s Transmission System. This term means SMUD’s transmission facilities or entitlements over which SMUD will provide transmission service as set forth in SMUD’s OATT.

1.10 Transmission Customer. This term means any eligible customer that can or does execute a transmission service agreement or can and does receive transmission service, including all persons who have pending requests for transmission service or for information regarding transmission.

1.11 Transmission Functions. This term means the planning, directing, organizing or carrying out of day-to-day transmission operations, including the granting and denying of transmission service requests.

1.12 Transmission Function Information. This term means information relating to transmission functions.

1.13 Transmission Function Employee. This term means an employee, contractor, consultant or agent of SMUD who actively and personally engages on a day-to-day basis in transmission functions.

1.14 Transmission Service. This term means the provision of any transmission service

1.15 Waiver. This term means the determination by SMUD, if authorized by its tariff, to waive any provisions of its tariff for a given entity.

2. Independent Functioning

2.1 Separation of Functions

2.1.1 Except in emergency circumstances affecting system reliability, the Transmission Function Employees of SMUD will function independently of SMUD’s Marketing Function Employees.

2.1.2 Notwithstanding any other provisions in this Section 2.1, in emergency circumstances affecting system reliability, SMUD may take whatever steps are necessary to keep the system in operation. SMUD shall post on its OASIS each emergency that resulted in any deviation from these standards of conduct, within 24 hours of such deviation.

2.1.3 SMUD’s Merchant Function Employees are prohibited from:

(a) Conducting Transmission Functions; or

(b) Having access to the system control center or similar facilities used for transmission operations that differs in any way from the access available to other transmission customers.

2.1.4 SMUD’s Transmission Function Employees are prohibited from conducting Marketing Functions.

2.2 Identifying Affiliates on the OASIS

2.2.1 SMUD shall post the names and addresses of SMUD’s Marketing Function Employees and any Affiliates on its OASIS.

2.2.2 SMUD shall post a complete list of the facilities shared by SMUD’s Transmission Function Employees and its Marketing Function Employees, including the types of facilities shared and their addresses.

2.2.3 SMUD shall post information concerning potential merger partners and Affiliates that may employ or retain Marketing Function Employees, within seven days after a potential merger is announced.

2.3 Identification of Employee Information on OASIS

2.3.1 SMUD shall post on its OASIS the job titles and job descriptions of its Transmission Function Employees.

2.3.2 SMUD shall post a notice on its OASIS of any transfer of a Transmission Function Employee to a position as a Marketing Function Employee, or any transfer of a Marketing Function Employee to a position as a Transmission Function Employee. This information shall remain on OASIS for 90 days. No such job transfer may be used as a means to circumvent any provision of these standards of conduct. Information to be posted shall include:

(a) The name of the transferring employee;

(b) The respective titles while held performing each function; and

(c) The effective date of the transfer.

2.4 Timing and General Requirements of Postings on the OASIS.

2.4.1 SMUD shall update on its OASIS the information required herein within seven business days of any change, and post the date on which the information was updated.

2.4.2 In the event an emergency, such as an earthquake, flood, fire or hurricane, severely disrupts SMUD’s normal business operations, the posting requirements may be suspended by SMUD.

2.4.3 All OASIS postings will be sufficiently prominent as to be readily accessible.

2.5 Written Procedures.

2.5.1 SMUD shall post on the OASIS current written procedures implementing these standards of conduct in such detail as will enable customers to determine that SMUD is in compliance with them.

2.5.2 SMUD shall distribute the written procedures to all all of its Transmission Function Employees, Marketing Function Employees, officers, directors, supervisory employees, and any other employees likely to become privy to Transmission Function Information.

2.5.3 SMUD shall train officers as well as employees with access to Transmission Function Information or information concerning gas or electric purchases, sales or Marketing Functions. SMUD shall require each employee to sign a document or certify electronically signifying that s/he has participated in the training.

2.5.4 SMUD shall designate a Chief Compliance Officer who will be responsible for compliance with these standards of conduct. SMUD will post the name of its Chief Compliance Officer and provide his contact information on its OASIS.

3. Non-Discrimination Requirements

3.1 Information Access

3.1.1 SMUD shall ensure that its Marketing Function Employees only have access to that information available to SMUD’s Transmission Customers (i.e. the information posted on the OASIS), and must not have access to any information about SMUD’s Transmission System that is not available to all users of the SMUD OASIS.

3.1.2 SMUD shall ensure that its Marketing Function Employees are prohibited from obtaining information about SMUD’s Transmission System (including, but not limited to, information about available transmission capability, price, curtailments, storage, maintenance activity, or similar information) through access to information not posted on the OASIS or that is not otherwise also available to the general public without restriction.

3.2 Prohibited Disclosure

3.2.1 Subject to Section 3.3, SMUD employees may not disclose to its Marketing Function Employees any non-public Transmission Function Information concerning SMUD’s Transmission System or the transmission system of another (including, but not limited to, information received from non-affiliates or information about available transmission capability, price, curtailments, storage, maintenance activity, or similar information) through non-public communications conducted off the OASIS, through access to information not posted on the OASIS that is not contemporaneously available to the public, or through information on the OASIS that is not at the same time publicly available.

3.2.2 SMUD employees shall not share any information, acquired from non-affiliated transmission customers, or developed in the course of responding to requests for transmission or ancillary service on the OASIS, with SMUD’s Marketing Function Employees, except to the limited extent information is required to be posted on the OASIS in response to a request for transmission service or ancillary services.

3.2.3 If an employee of SMUD discloses information in a manner contrary to the requirements of Section 3.2.1 and 3.2.2, SMUD must immediately post the information that was disclosed on the OASIS.

3.2.4 If an employee of SMUD discloses, in a manner contrary to the requirements of Section 3.2.1 and 3.2.2, non-public transmission customer information, critical energy infrastructure information, or any other information that a regulatory authority has determined to be subject to limited dissemination, SMUD shall immediately post on its OASIS that the information was disclosed.

3.2.5 Neither SMUD nor an employee of SMUD is permitted to use anyone as a conduit for sharing information covered by the prohibitions of Sections 3.2.1 and 3.2.2, above, with SMUD’s Marketing Function Employees.

3.2.6 An employee, contractor, consultant or agent of SMUD, and an employee, contractor, consultant or agent of an affiliate of SMUD that is engaged in Marketing Functions, is prohibited from disclosing non-public Transmission Function Information to any of SMUD’s Marketing Function Employees.

3.3 Exclusion For Certain Information Exchanges

3.3.1 A non-affiliated transmission customer may voluntarily consent, in writing, to allow SMUD to share the non-affiliated customer’s non-public information with SMUD’s Marketing Function Employees. If a non-affiliated customer authorizes SMUD to share its information with its Marketing Function Employees, SMUD must post notice of the OASIS of that consent along with a statement that it did not provide any preferences, either operational or rate-related, in exchange for that voluntary consent.

3.3.2 SMUD is not required to contemporaneously disclose to all transmission customers or potential transmission customers information covered by Section 3.2.1, above, (a) if it relates solely to a specific request for transmission service by SMUD’s Marketing Function Employees or a third party transmission customer; or (b) if it relates solely to conditions on SMUD’s internal transmission system that will require SMUD’s Marketing Function Employees or a third party transmission customer to curtail or redispatch its generation for reliability reasons. SMUD shall provide the notices hereunder on a non-discriminatory basis.

3.3.3 SMUD may share with its Marketing Function Employees generation information necessary to perform generation dispatch that does not include specific information about individual third party transmission transactions or potential transmission arrangements.

3.3.4 Notwithstanding Sections 2.1, 3.2.5, and 3.2.6, herein, and in accordance with the recordation requirements set forth in Section 3.3.5, SMUD’s Transmission Function Employees and Marketing Function Employees may exchange the following Non-Public Transmission Information:

(a) Information pertaining to compliance with Reliability Standards approved by the Federal Energy Regulatory Commission; and

(b) Information necessary to maintain or restore operation of the transmission system or generating units, or that may affect the dispatch of generating units.

3.3.5 In the event that Transmission Function Employees exchange non-public Transmission Information in accordance with Section 3.3.4, SMUD shall make and retain a contemporaneous record of all such exchanges except in emergency circumstances, in which case a record must be made of the exchange as soon as practicable after the fact. The record may consist of hand-written or typed notes, electronic records such as emails and text messages, recorded telephone exchanges, and the like, and shall be retained for a period of five years.

3.4 Implementing Tariffs

3.3.1 SMUD must strictly enforce all tariff provisions relating to the sale or purchase of open access transmission service, if those tariff provisions do not permit the use of discretion.

3.4.2 SMUD must apply all tariff provisions relating to the sale or purchase of open access transmission service in a fair and impartial manner that treats all transmission customers in a non-discriminatory manner, if those tariff provisions permit the use of discretion.

3.4.3 SMUD must process all similar requests for transmission in the same manner and within the same period of time.

3.4.4 SMUD may not, through its tariff or otherwise, give preference to its Marketing or Energy Affiliate, over any other wholesale customer in matters relating to the sale or purchase of transmission service (including, but not limited to, issues of price, curtailments, scheduling, priority, or ancillary services).

3.5 Discounts: Any offer of a discount for any transmission service made by SMUD must be posted on the OASIS contemporaneously with the time that the offer is contractually binding. The posting must include:

· The name of the customer involved in the discount and whether it is an affiliate of SMUD or whether an affiliate of SMUD is involved in the transaction;

· The rate offered;

· The maximum rate;

· The time period for which the discount would apply;

· The quantity of power upon which the discount is based;

· The delivery points under the transaction; and

· Any conditions or requirements applicable to the discount.

The posting must remain on the OASIS for 60 days from the date of posting.

3.6 Posting of Waivers: SMUD must post on its OASIS notice of each waiver of a tariff provision that it grants in favor of an Affiliate. SMUD shall make such posting within one business day of the act of the waiver. SMUD must also maintain a log of the acts of waiver. The records must be kept for a period of five years from the date of each act of waiver.

The following parties’ signature evidences approval and adoption of these Standards of Conduct:

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Director, Workforce

Gary King

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Deputy AGM, Customer Distribution & Operations

Paul Lau

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Director, Legislative & Regulatory Affairs
Mike Gianunzio

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AGM Energy Supply

James Shetler

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AGM Customer Distribution & Operations

Betty Masuoka

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General Counsel

Arlen Orchard

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Chief Financial Officer

James Tracy

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Chief Information Officer

Linda Johnson

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General Manager & CEO

John DiStasio