PACIFIC GAS AND ELECTRIC INSTALLATION, MAINTENANCE AND OPERATION OF GAS FACILITIES

5. In addition to the Gas Extension Advance paid by the City, City, in lieu of a monthly cost of ownership charge, shall also pay to PGandE $43,543 (Gas Ownership Fund) representing the present worth of the annual costs to PGandE to own, operate and maintain the requested Gas Facilities, equal to 19.2 percent of the total cost of the Gas Facilities times the present worth factor of 5.52 based on 12.57 percent interest fora period of ten years. Such interest rate is equal to PGandE's authorized rate of return on the date of this agreement. 6. (a) In the event that PGandE shall make refunds of the Gas Extension Advance as provided for in Section 3 above, PGandE shall also adjust the Gas Ownership Fund. Refunds and adjustments of the Gas Extension Advance and Gas Ownership Fund will be made annually on the anniversary of the date service is first made available. For the purpose of this agreement, the first year shall end one year after the date PGandE is ready to supply gas service from the Gas Facilities as shown on Exhibit "A", as such date is established in PGandE's records. (b) Interest at the rate of 12.57 percent annually will be added to the unamortized balance of the Gas Ownership Fund before the current year's Cost of Ownership charges have been deducted. 7. The total cost of the Gas Facilities ($41,085) shall be subject to refund to the c;ty, without interest, in the manner and as provided in the applicable section of the gas main extension rule in effect at the time service is established to each applicant in the District. Any unrefunded balance of the Gas Extension Advance will be retained by PGandE at the end of ten years after the date PGandE is ready to supply gas service. Any unused balance of the Gas Ownership Fund will be refunded to the City at the end of -3-