Matinee Pricing Opt-in Pilot Rate Proposal (R ) Commission Workshop February 24, 2016 Manager, Pricing Design

Introduction Ruling directs utilities to develop an opt-in Matinee pilot tariff that offers more attractive pricing during the Matinee period to non-residential customers ‒ Matinee period (defined as 10 a.m. to 4 p.m. during Spring) is aligned with periods when renewable and low-water use energy generation is most abundant ‒ Ruling called for a June 1, 2016 implementation SCE’s Matinee Pilot Program (MPP) proposal is based on a modified version of the existing Real-Time Pricing (RTP) tariff The pilot will operate through two spring seasons and will target customers in four specific customer groups SCE proposes to establish a memorandum account to track incremental costs associated with the pilot In an upcoming September-2016 Rate Design Window (RDW) Application, SCE plans to develop a new RTP rate design to better reflect the long-term projection of market trends and net system profiles ‒ Implementation expected in Q2/Q after a Final Decision is reached in the RDW Southern California Edison2

Existing Real-Time Pricing Rate Structure SCE’s RTP tariff provides an hourly pricing rate schedule through a menu of nine pre-defined day types ‒ Day types are categorized by temperature, season, and weekday or weekend The applicable day type is known a day in advance based on the National Weather Service (NWS) temperature in Downtown Los Angeles ‒ Customer notifications generally occur via text, through the Account Representatives, or any NWS-based weather source Hourly RTP prices are comprised of generation energy and capacity ‒ Energy prices are based on SCE’s production model runs of hourly energy prices ‒ Capacity is based on SCE’s GRC Phase 2 valuation, allocated on an hourly Loss of Load Expectation (LOLE) basis Delivery charges are the same as the Base Rate (Option B) for each rate class Southern California Edison3

Summary of Tariff Proposal Modify existing RTP rates by replacing current production cost model marginal energy cost with CAISO day ahead energy price in rate design ‒ Overall rate structure will remain the same: hourly prices that reflect nine different temperature day-types ‒ Retain current capacity valuation and allocation The resulting rate reflects reduced energy prices in the Matinee periods ‒ Approximately 30% less than the production model values in the Matinee periods Open to Bundled Service non-residential customers with monthly demands of 200kW and above ‒ For cost containment and scheduling considerations, the pilot program excludes customers participating in NEM, DR programs, Standby, or other rate options The pilot will target the following customer groups: ‒ Agricultural & Pumping ‒ Water Agencies ‒ Electric Vehicle & Energy Storage ‒ Existing RTP customers Southern California Edison4

Summary of Tariff Proposal (cont.) The pilot will be limited to 200 participants ‒ The population of the four targeted groups represents approximately 2,000 customers ‒ Currently, approximately 180 customers are served on the existing RTP rate with a group diversified peak of 200 MW Duration of the pilot will be for two spring seasons and expire on June 1, 2018 ‒ Participating customers can opt-out but cannot re-enter the pilot program ‒ Bill protection will not be provided ‒ No incentives for signing up Upon receiving a final Commission decision, the pilot will take 9-12 months to implement ‒ Outreach will start no later than the quarter prior to implementation The memorandum account will track incremental costs: ‒ IT and billing system changes ‒ Marketing, outreach, and recruitment Southern California Edison5

Current RTP Rate: TOU-PA-3-RTP - Illustrative Utility-Retained Generation (URG) Rates ($/kWh) Southern California Edison6 Notes: Rate levels shown reflect only the Utility-Retained Generation (URG) rates. Total RTP rate comprises the following charges: URG + DWREC + Delivery (Base Rate) Temperature Day-Types reflect average temperatures for years 2007 – 2011

Proposed RTP Pilot Rate: TOU-PA-3-RTP-MPP - Illustrative Utility-Retained Generation (URG) Rates ($/kWh) Southern California Edison7 Notes: Rate levels shown reflect only the Utility-Retained Generation (URG) rates. Total RTP rate comprises the following charges: URG + DWREC + Delivery (Base Rate) Temperature Day-Types reflect average temperatures for years 2007 – 2011 Matinee Period: 10 a.m. to 4 p.m. during Spring

Current RTP Customers’ Usage Pattern Hourly Load Profiles by Day-Type for All Rate Groups Southern California Edison8

Glossary of Acronyms AcronymDefinition CAISO / ISOCalifornia Independent System Operator / Independent System Operator CPUC / CommissionCalifornia Public Utilities Commission DRDemand Response DWRECDepartment of Water Resources Energy Credit GRCGeneral Rate Case LOLELoss of Load Expectation MPPMatinee Pilot Program MWMegawatt NEMNet Energy Metering NWSNational Weather Service PAAgricultural & Pumping PSTPacific Standard Time RDWRate Design Window RTPReal-Time Pricing TOUTime-of-Use URGUtility-Retained Generation 9Southern California Edison