DistribuTECH February 2006 Advanced Metering Infrastructure DistribuTECH February 2006

Energy Policy Makers Promoting Advanced Metering Support for Smart Meters The policy of the U.S. is to encourage time-based pricing and other forms of demand response and that deployment of devices to enable consumers to participate in these programs be facilitated, and that unnecessary barriers be eliminated (2005 Federal Energy Policy Act) Advanced Metering OIR Goal “Issue decisions on the proposals for statewide installation of AMI for all small commercial and residential customers by early 2006” (EAP II Draft, June 8, 2005) Demand Response “…begin implementing a large-scale rollout of advanced metering systems for smaller customers, targeted first to areas of the state with the highest peak demand.” (2004 Integrated Energy Policy Report Update)

SCE AMI Business Case – Directional Cost/Benefit Address fundamental cost drivers for last business case Telecom network coverage, performance, reliability and system management Meter failures and life-cycle performance Interoperability & system security End-to-end data management Re-evaluate Aug 1st added functionality Interface to A/C load control thru PCT Remote service turn on/off Identify additional uses for system based on tangible customer and business value Develop new conceptual estimate of overall business case SCE Proposal SCE Proposal AMI AMI Price Price Price Price Response Response Response Response A/C Load A/C Load A/C Load A/C Load Control Control Control Control O&M O&M O&M O&M Operations Operations Operations Operations Cust Cust Cust Cust Svc Svc Svc Svc Capital Capital Capital Capital (Meters, (Meters, (Meters, (Meters, Meter Meter Meter Meter Network, Network, Network, Network, Reading Reading Reading Reading IT) IT) IT) IT) Costs Benefits Costs Benefits Benefits SCE Aug., 2005 Supplemental SCE Aug., 2005 Supplemental Testimony supporting Phase I Testimony supporting Phase I

CA Utility Proposals & Applications 2005 2006 2007 2008 2009 2010 2011 2012 2013 PG&E Pre-Deployment Deployment SDG&E Development Pre-Deployment Deployment SCE Phase I Phase II Pre-Deployment Deployment CA Utility Proposed Deployment Application Status SCE 3 Year development of AMI Business case & application If a go, deployment 2009-2013 March 30th, filed for $31 million development funding Approved Dec. 1, 2005 PG&E 1 yr Pre-deployment start Q3 2005 5 year rollout Electric and Gas Sept. 2006 through Aug. 2011 Application for $49 million in pre-deployment funding approved Q3 2005 Application for full deployment in hearings in Fall 2005 and decision by Summer 2006 SDG&E 1 Yr Pilot 18 mo. Pre-deployment 2007-2008 30 mo. rollout Electric and Gas mid-2008-2010 Development funding of $9.3 million approved Q3 2005 Application for full deployment in hearings in 2006 and decision by end of 2006

AMI Meter Design Objectives Expand meter metrics and analytics beyond the revenue cycle to distribution power characteristics and operational information Extend SCE’s data and controls network to 5 million nodes (WAN) Leverage sensor technologies for customers and utility distribution (LAN/HAN) Metrology & Intelligence Telecom Open Design & Standards Demand Management Enable CPUC price response requirements Interface with load control technologies like CEC’s PCT Integrate programmable turn on/turn-off switch Interface with home information, automation & control technology Create a durable design to match 15–20 year lifecycle based on interoperability and open standards

Conceptual AMI System SCE AMI system seeks to leverage a 2-way communications infrastructure with 5 million intelligent devices on our distribution network for our customers directly and our operations. Illustrative Example

Utility Driven Meter Development Challenges Achieve the right balance among Marketability, Functionality and Openness Develop a specification that is supported by multiple meter and communications vendors and is commercially viable in the NA utility market Leverage OpenAMI, Intelligrid, Gridwise, CEC PCT, ANSI & other standards and reference design initiatives Engage other utilities & vendors in development process to generate interest and feedback Durable open design that will support a solid positive business case that provides customer value

Phase I Program Scope External Engagement System Design Technology Development Business & Functional Requirements Regulatory Stakeholder Engagement Technology Advisory Board Industry Standards Utility Collaboration Vendor Engagement Technology Evaluation Vendor Product Bench Testing Reference Architecture Trade-off Analysis Cost/Benefit Analysis Preliminary Business Case & Regulatory Application

System Design: Business Use Cases (Scenarios) Brainstorming Billing & Customer Service Customer Interface Delivery Energy Procurement Field Services/System Recovery Installation & Maintenance Multiple clients read demand and energy data automatically from customer premises Customer reduces demand in response to pricing event Distribution operator curtails customer load for grid management Real-time operations curtails (or limits) load for economic dispatch (ES&M) AMI system recovers after power outage, communications or equipment failure Utility installs, provision and configure the AMI system Utility remotely limits or connects/disconnects customers Customer reads recent energy usage and cost at site Distribution operations optimize network based on data collected by the AMI system Utility procures energy and settles wholesale transactions using data from the AMI system -- Utility maintains the AMI system over its entire life-cycle Utiltiy detects tampering or theft at customer site Customer uses pre-payment services Customer provides distributed generation Utiltiy upgrades AMI system to address future requirements Meter reading for gas and water utilities Multiple clients use the AMI system to read data from devices at customer site Distribution operator locates outage using AMI data and restores service - -

Technology Assessment/Procurement Plan Goal: Competitive commercial products available from at least three meter and three communication vendors that meet SCE’s minimum requirements for performance and price by the end of Phase I Objectives: Proactively engage in a close collaborative process with selected vendors with the most promising products in development Rationalize the number of vendors that SCE wants to engage on product development In recognition of long procurement cycle (3-4 years), provide on-ramp for promising products and off ramp for non-performing products Ensure level playing field for relevant vendor information such as requirements, architecture and future procurements Identify Potential Vendors Worldwide Initial Candidate Vendor Screen Q1 06 Candidate Vendor Due Diligence Vendor Development Screen Business Requirements Gap Analysis Beta Product Testing Product Selection

External Engagement UtilityAMI Technology Advisory Board Organizing international utility group focused on interoperability & security Proposal to form UtilityAMI within existing standards body UCA® International Users Group, the parent organization for OpenAMI Interested potential charter members represent over 75 million meters worldwide Technology Advisory Board Objective is to leverage existing reference design and standards efforts for SCE Membership: Carnegie Mellon: Dr. R. Tongia AMI technology & policy + Asia & Europe insights CEC PEIR: D. Watson CEC DR Research OpenAMI: R. Bell AMI reference design effort Intelligrid: J. Hughes Utility systems interoperability & security Gridwise: S. Widergren Smart network reference architecture IEC: R. Schomberg International standards + European insights

visit our website @ www.sce.com/ami Q & A To Learn More About The SCE AMI Program visit our website @ www.sce.com/ami