Pedro Pizarro, Executive Vice President Southern California Edison

1. California’s Energy Future:Generation, Integration, Storage and TransportationThe Independent Energy Producers Association 29th Annual Meeting September 24, 2010 Pedro Pizarro, Executive Vice President Southern California Edison

2. Near Term SCE Strategic Priorities Infrastructure replacement program and load growth Grid Reliability System operability and renewable driven transmission Transmission Generation General facility maintenance, SONGS steam generator replacement and solar photovoltaic Edison SmartConnect™ deployment, distributed generation, energy storage, energy management, and transportation electrification Smart Grid/ Advanced Technologies

3. Forecast By Classification $ % Solar Photovoltaic 1.0 4 Edison SmartConnect™ 1.1 5 Generation2 3.0 14 Transmission 5.5 26 Distribution 10.9 51 Total 21.5 100 SCE Capital Investment Forecast ($ billions) $4.6 $4.4 $4.3 $4.0 $4.2 $2.9 2009 2010 2011 2012 2013 2014 SCE’s main role in wholesale markets is as a transmission provider and its capital spending is focused on transmission and distribution related assets • Forecast includes 2009 CPUC GRC & FERC Decisions and currently forecasted 2010-2014 FERC and 2012-2014 CPUC capital spending, subject to timely receipt of permitting, licensing and regulatory approvals. Forecast range reflects a 16.5% potential variability to annual investment levels related to execution risk, scope change, delays, regulatory constraints and other contingencies. • Generation forecasted expenditure is used to maintain existing facilities (i.e. nuclear, hydro, coal and gas-fired facilities).

4. SCE Total Energy Requirement CAGR1 Purchases 5.26% SCE Owned -0.21% 2.91% SCE relies primarily on purchased power to meet its growing load 1 7 year - GWh basis

5. New CA Generation Commitments Capacity, in MW 2 Contracts Executed By Classification # MW CCGT 1 550 Gas Turbine 3 1256 Geothermal 2 400 Landfill Gas 5 13 1 Solar PV 46 740 Solar Thermal 11 3306 Wind 8 1943 Total 76 8207 SCE relies on IPPs for the majority of its new generation 1 AC 2 Online dates range from 1/11 to 12/16

6. The Package of RPS Rules Matters Principles Needed for RPS Program • Broad Markets –Increases competition and viability, reduces costs • Equal Rules – All buyers should have the same rules • Cost Containment – RPS creates sellers’ market • Flexible Compliance – Increasing goals require increasing flexibility Lower Costs Goals More Likely To Be Met Dependent on Details More CARB RES Regulation SB 722 Existing Law Compliance Flexibility Dependent on Details SB 14 Higher CostsGoals Less Likely To Be Met Less Less More Market Constraints SCE supported SB 722 for the manner in which it balanced the principles

7. SCE’s Smart Grid Vision • Edison SmartConnect™ • Customer Product R&D • Plug-in Electric Vehicle Readiness • Field Worker Safety Equipment Demonstration • Innovation Lab (focus on workforce safety) • Tehachapi Wind Energy Storage Project (TSP) • Solar PV Readiness • Irvine Smart Grid Demonstration (ISGD) • Distribution Automation • Smart Grid Information Integration Demonstration with CalTech • Automated Data Exchange Standards Development SCE is active in developing a smart grid that is reliable, secure, efficient, and environmentally-friendly

8. SmartConnectTM Program Five million electric meters to be replaced with “smart” meters from 2009 through 2012 As of August 2010, 1.4 million meters installed Total approved project: $1.6 billion ($1.25 billion capital) Implementation expected to: Provide residential and small commercial customers access to detailed energy use and cost information and new dynamic pricing programs Promote energy efficiency benefits, potentially reducing as much as 1,000 MW of peak demand Avoid GHG emissions up to 365,000 metric tons per year Be capable of integrating homes with the utility circuit framework Offer the potential for real time demand response, e.g.: MRTU prices Grid conditions and Environmental impacts Smart meters will empower customers, improve load management and increase operational efficiencies

9. 1 Tehachapi Storage Project (8MW / 32 MWh system) Increase grid performance & integrate wind 2 Distributed Generation Storage System Evaluation (Two 2MW / 500kWh systems) Evaluate transportable, containerized Li-Ion batteries system in field / laboratory trials 3 Community Energy Storage Systems (25kW / 50kWh systems) Enhance circuit efficiency, resilience and reliability 4 Home battery pilot (4kW / 10 kWh systems) Evaluate home storage integration Energy storage poses unique opportunities and challenges for the electric utility Storage is different • Storage… • Can act as generation, transmission / distribution, or an end-user asset • Must be evaluated based on the application it performs • Is a tool that helps us toward our goals, and not an objective in and of itself • Decision-making on storage must be based on the results of R&D, piloting and feasibility studies • Regulatory or market agencies must address energy storage issues through proceedings and inclusive stakeholder forums

10. The New Wave of Plug-in Electric Vehicles Cumulative Plug-in Vehicles Forecast in SCE Territory (in thousands) • For over two decades, SCE has performed plug-in electric vehicle (PEV) system impact evaluation and demonstration • In the nascent stages of rollout, with low volumes and many uncertainties, the next few years will be vital • Utility efforts focus on most important aspects to protect customers and satisfy early adopters • Distribution infrastructure • Home charging infrastructure installation process • Customer education & outreach Note: Includes both plug-in hybrid and battery electric vehicles.

11. California’s Key Challenges State Policy Objectives • CHP • CARB Scoping Plan assumes 6.7 MMT of greenhouse gas reductions from Combined Heat and Power • RPS • Executive order raising goal to 33 percent renewables • GHG • AB32 establishes a statewide Green House Gas emissions cap for 2020 based on 1990 emissions • OTC • State Water Resource Control Board Policy limits Once Through Cooling in coastal power plants • Priority Reserve issues limit new generation • DA • Legislation reopened retail choice Reliability Rates Public Policies These policy objectives need to be weighed together and balanced in order to achieve California’s ambitious goals

13. SCE Renewable Portfolio • SCE 2010 20% Renewable Energy Goal • Contracts are in place to meet 20% of customers’ energy requirement with renewable resources, but a portion of energy delivery may be delayed in 2010 due to transmission constraints. SCE expects to meet the 2010 goal with flexible compliance that allows banking and earmarking of past and future renewable energy surplus. 28.2 89% Increase 2009 Renewable Resources 14.8 Small Hydro 4% 13.6 9% Increase Billion kWh Solar 6% Biomass 7% Geothermal 57% Wind 26% 2009 Actual 2010 20%Goal 2020 Potential 33% RPS SCE continues its aggressive procurement efforts combined with the use of flexible compliance rules to meet California’s RPS