The Transition to a High DER Future Through Vision, Strategy, and Technical Innovation AEE Southern California Annual Conference Eric Nunnally Southern California Edison September 22, 2016

SCE and the Utility Business Transmission 500kV & 230kV 33kV, 16kV, 12kV & 4kV Distribution Customers Generation SCE and the Utility Business 115kV & 66kV Our “Wires Business” ~50,000 mi2 territory 1.4 million power poles 725,000 transformers 103,000 miles of power lines 3,100 MW owned generation SCE owns less than 20% of its power generation needs The rest is procured on a competitive market Revenue Decoupling SCE earning are not directly affected by changes in electricity sales Promotes energy conservation

Distributed Energy Resource (DER) Integration Status Examples of SCE’s DER activities include: Over 5,000 interconnection of roof-top solar per month, totaling to over 180,000 customers, expected to nearly quadruple by 2025 Approximately 70,000 customers have adopted plug-in electric vehicles, expected to more than double in the next two years Contracted 260 MW for energy storage contracts in 2014, enough to power nearly 40,000 homes. Recently signed another 125 MW as part of our preferred resources pilot SCE’s integration of DERs continues to grow in both quantity and importance Providing customer choice Helping achieve environmental goals Providing reliability and other services to the grid Distribution grid modernization will play a crucial role in allowing customers and grid operators to realize the full value of distributed resource technology

Policy Drivers Towards a Clean Energy Future Multiple Proceedings Underway AB 327 Distribution Resource Plan (DRP) Integrated Distributed Energy Resource (IDER) Proceeding Net Energy Metering Successor Tariff Integrated Resource Planning Mandates and Targets SB 350 -50% Renewable Portfolio Standard (RPS) by 2030 50% increase in building Energy Efficiency by 2030 Zero emission vehicles 1325 MW Energy Storage SB 32 – 40% below 1990 emission levels by 2030 SCE’s strategy for the future is to facilitate California’s low carbon goals and enable customer choice by modernizing the distribution system, improving productivity, and managing costs Long-Term Industry Trends Technology Increasingly Distributed Falling Costs for Solar, Wind and Batteries Changing Load Profiles and Flattening Demand Policy Environmental Sustainability Renewable Portfolio Standards (RPS) Transportation Electrification Customers More Choices Grid-Interactive Resources Conservation and Self-Generation Technology Customer technology innovation and adoption Demonstration Projects Grid Modernization

Distributed Energy Resources ELECTRIC VEHICLE INTEGRATION ROOFTOP SOLAR PV BATTERY ENERGY STORAGE FLEXIBLE LOAD Emergence of the “prosumer” Some DERs add load to the system (EVs), others reduce load at certain times (solar PV, energy efficiency, demand response) DERs can have positive or negative impacts on the grid depending on size, location, and technology Electric grid is in common to all loads and resources connected, fundamentally changing how utilities plan and operate Prepare the workforce of the future across the energy sector with Knowledge, skills, and training for workforce of the future 8

Integrate DER Forecasting & Planning Improve ability to forecast DER adoption and evaluate DER Portfolio solutions as alternatives to conventional wires investments. Illustrative Increased Capacity Rating (Typical Wires Solution) Forecasted Load Profile Solar PV Capacity Rating New Load Factor Adjusted Capacity Rating Energy Storage Energy Storage Net Load Profile with DER Portfolio Solution Demand Response Energy Efficiency

Substation Load Profile with Forecast Overload Illustrative Increased Capacity Rating (Typical Wires Solution) Forecasted Load Profile Capacity Rating

Alter Substation Load Profile Using DER Portfolio Solar Can Impact Load Profile During Daytime Hours Illustrative Forecasted Load Profile Solar PV Capacity Rating Net Load Profile

Alter Substation Load Profile with DER Portfolio Energy Efficiency Programs can Permanently Reduce Load Profile Illustrative Forecasted Load Profile Solar PV Capacity Rating Net Load Profile Energy Efficiency

Alter Substation Load Profile Using DER Portfolio Demand Response Programs can Temporarily Reduce Load Profile Illustrative Forecasted Load Profile Solar PV Capacity Rating Net Load Profile Demand Response Energy Efficiency

Alter Substation Load Profile Using DER Portfolio Energy Storage can be Dispatched to Prescriptively Reduce Load Profile Illustrative Forecasted Load Profile Solar PV Capacity Rating Energy Storage Net Load Profile Demand Response Energy Efficiency

Alter Substation Load Profile Using DER Portfolio Energy Storage Also Requires Charging Which Will Impact Load Profile Illustrative Forecasted Load Profile Solar PV Capacity Rating Energy Storage Energy Storage Net Load Profile Demand Response Energy Efficiency

Alter Substation Load Profile Using DER Portfolio Customized DER Portfolios Can Address Capacity Needs On Distribution Illustrative Increased Capacity Rating (Typical Wires Solution) Forecasted Load Profile Capacity Rating Net Load Profile with DER Portfolio Solution

Alter Substation Load Profile Using DER Portfolio Operators Need Visibility to DER Portfolio Performance in Real Time Illustrative Increased Capacity Rating (Typical Wires Solution) Forecasted Load Profile Solar PV Capacity Rating Energy Storage Energy Storage Net Load Profile with DER Portfolio Solution Demand Response Energy Efficiency

Greater Interaction With and Control of DERs Increase DER Portfolio dependability by integrating DERs into planning and operations. Capabilities required to meet the growth of Distributed Energy Resources (DERs) on SCE’s distribution system. Monitor Analyze Real Time Situational Awareness Short Term & Long Term Grid & DER Forecasting Control Optimize Grid Reconfiguration DER Dispatching Micro-grid Management Optimizing Voltage, Power Flow, & Protection What this means to Distribution Planning and Operations. New automated equipment on the distribution system New software solutions for operations and planning organizations Increased levels of inbound data to operations Requires more granular Demand Side Management data for Grid Planning

Greater Interaction With and Control of DERs Enhance capabilities through advanced field automation, back office upgrades, and technology software solutions for planning & operations.

A smart, more dynamic and secure power grid Means building smarter energy infrastructure that will improve system safety, reliability and visibility, while delivering the benefits of a smart grid to customers Advanced Capabilities Communications Networks Technology Platforms Development of intelligent substations and advanced automation of distribution circuits Improving the customer experience, infrastructure planning, and addressing Cybersecurity Expansion of fiber and radio communications to enable high speed and high bandwidth to support automation and analytics Grid Reinforcement Making the grid more robust through an integrated planning, asset management, and technology strategy Edison.com. SCE whitepaper, The Emerging Clean Energy Economy: Customer-Driven. Modernized. Reliable 7

The Future Grid will Benefit all Customers Thank you. Eric.Nunnally@sce.com SCE’s DRP, DERiM, and additional information : http://www.cpuc.ca.gov/PUC/energy/drp 10