SM The California Experience December 4 2009 EDISON

SM The California Experience December 4, 2009 EDISON INTERNATIONAL®

SM CA 2020: Energy Policy Initiatives RPS Bulk Power Integration RPS Distributed Power Integration 2010 2012 500 MW of Large Scale Solar Rooftop Generation ~25 k PEV’s ~3500 g. Wh of EE Savings (2009 – 11) Wholesale Market Structure 2016 2018 20% Renewable Generation Transportation Electrification Energy Efficiency & Demand Resp 2014 50% of new homes are 35% more efficient than T 24 ~100 k PEV’s Smart. Connect DR Goals (~1000 MW) 90% of new homes are 35% more efficient than T 24 1 Million Solar Roofs statewide 2020 33% Renewable Generation (Proposed) ~ 400 k PEV’s ~7300 g. Wh of EE Savings (2012 – 2020) Zero Energy Homes 100% AB 32 Reduce GHG Emissions to 1990 Levels by 2025 Policy Areas Creation of alternative resource markets 1 st Full Year of MRTU market operation Page 1 EDISON INTERNATIONAL ®

SM SCE Strategy for a Smarter, Cleaner Energy Future Innovation in Energy & Information Technologies will Deliver Environmental Benefits & Customer Value • SCE is doing its part to reduce greenhouse gas emissions by providing its customers with energy from renewable resources • Smart power delivery is needed to manage greater diversity of supply and to optimize existing capacity • Smart metering enables customers to save energy and reduce peaks while improving customer service and operational efficiency • Plug-in electric vehicles will achieve transportation sustainability and enable distributed energy storage systems Page 2 EDISON INTERNATIONAL ®

SM Renewable & DER Growth California is pushing beyond limits of current grid capabilities CA Renewable Portfolio Standard • 20% by 2010 • 33% by 2020 (Governor’s Exec Order) 16% Renewable Portfolio 2007 Lg Rooftop Solar PV Program • 500 MWs by 2015 • 250 MWs by SCE & 250 MWs by IPP • ~ 350 projects at 1 -2 MWs each California Solar Initiative (CSI) • Goal of install 3, 000 megawatts (MW) of new, customer-side solar photovoltaic projects by 2017 CA Carbon Reduction Law (AB 32) • Reduce GHG by 25% by 2025 Page 3 EDISON INTERNATIONAL ®

SM 4, 500 MWs of New Wind in Tehachapi Expected in 2015 Potential 7 x Increase in total wind energy to 15 billion k. Wh From “Briefing on the CAISO Renewable Integration Study”, October 17, 2007 Page 4 EDISON INTERNATIONAL ®

SM Solar Intermittencies • Seasonal, Daily, Minute Solar Power Fluctuating • PV Inverter – Grid Interactions • Low Capacity Factor < 20% • Inaccurate forecasting • No storage Page 5 EDISON INTERNATIONAL ®

SM Synchronized Phasor Measurement System Phasor technology enables real-time system monitoring and reduces the probability of major disturbances • The growing complexity of interconnected electric grids increases the threat of blackouts and other operational challenges, facilitating the need for a smarter electric grid equipped with wide-area measurement units to monitor large grids • Phasor measurement units (PMUs) help identify remote system disturbances in advance to prevent wide-scale power outages • Real-time software tools that enables operators and engineers to quickly and affordably analyze system data Page 6 EDISON INTERNATIONAL ®

SM Tehachapi Wind Energy Storage Demo Lithium Ion (A 123 System) • 32 MWhs of storage from autoderivative batteries • Modular rack based battery design • Housed in 8, 000 sf Building • Smart inverter technology • Interoperability & security included Page 7 EDISON INTERNATIONAL ®

SM Advanced Distribution Automation • Enable distributed energy resources and storage to support customer choice and improve grid stability • Develop new technology for dynamic Volt/VAR and harmonics control to provide quality service and enable voltage conservation • Minimize customer outages due to distribution system failures through expansive automation • Development of superconducting devices such as fault current limiters and transformers Avanti - Circuit of the Future Page 8 EDISON INTERNATIONAL ®

SM Edison Smart. Connect™: Empowering Customers • Choice to Manage Cost & Peak Demand – Rates • Time of Use and Tiered Rates • Critical Peak Pricing (CPP) • Peak Time Rebate (PTR) – Programs • Smart Communicating Thermostats – Outcome • Reduce Peak Load by 1, 000 MWs • Energy Information Drives Conservation – Reduce Residential Energy Consumption by 1% (minimum) – Reduce GHG by 365, 000 tons/yr • Automated Self-Service – Remote Service Switch – Payment and Billing Options © Copyright 2008, Southern California Edison Page 9 EDISON INTERNATIONAL ®

SM 2020 PEV Market Penetration Forecast SCE Could Achieve up to ~12 MMT of CO 2 Savings, Primarily from PEVs Cumulative (000 s) SCE forecast PEV adoption within service territory Page 10 EDISON INTERNATIONAL ®

SM Engaging Customers in the Supply Chain Page 11 EDISON INTERNATIONAL ®

SM SCE Smart Grid Development Building on Smart Foundation Built Over the Past Decade ~$1. 5 Billion Capital* Smart. Grid Development 2009 2010 2011 2012 PEV Integration Renewable Integration Tech Dev. Enhanced Outage Management Expanded Distribution Automation Centralized Remedial Action Scheme Phasor Measurement Substation Security Video Surveillance Energy Management System Upgrade Advanced Load Control Smart Metering * Project capital approved by CPUC in SCE’s 2009 GRC & Smart. Connect program Page 12 EDISON INTERNATIONAL ®

SM What is needed to realize a smarter grid? • Intelligent and communicating PEVs that integrate gracefully with the grid • Cost effective energy storage at bulk transmission and distribution • Commercial products based on open, non-proprietary standards that are secure • Seemless and secure telecommunications infrastructure that integrates millions of intelligent devices to produce actionable information that is used to control the electric system • Workforce with the skills and knowledge to engineer, build, operate and maintain an electric grid with pervasive information technology embedded Page 13 EDISON INTERNATIONAL ®

SM Observations • Smart Grid is a journey that will be 20+ years in the making – Personal computing was introduced 30 years ago – Portable cell phones were introduced 25 years ago – Public Internet was launched 20 years ago (DARPANet 40 yrs ago) • Pace of technology adoption will need to consider policy, customer impact, utility operations and asset obsolesce • A smarter electric grid will become more interactive with our customers’ lives thru the home, transportation and workplace Page 14 EDISON INTERNATIONAL ®