EDISON INTERNATIONAL® Leading the Way in Electricity SM Pedro Pizarro, Executive Vice President Southern California Edison California’s Energy Future: Generation, Integration, Storage and Transportation The Independent Energy Producers Association 29 th Annual Meeting September 24, 2010

EDISON INTERNATIONAL® Leading the Way in Electricity SM 1 Near Term SCE Strategic Priorities Transmission Generation Smart Grid/ Advanced Technologies System operability and renewable driven transmission General facility maintenance, SONGS steam generator replacement and solar photovoltaic Edison SmartConnect™ deployment, distributed generation, energy storage, energy management, and transportation electrification Grid Reliability Infrastructure replacement program and load growth

EDISON INTERNATIONAL® Leading the Way in Electricity SM 2 ($ billions) 1Forecast includes 2009 CPUC GRC & FERC Decisions and currently forecasted FERC and 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. 2Generation forecasted expenditure is used to maintain existing facilities (i.e. nuclear, hydro, coal and gas-fired facilities). SCE Capital Investment Forecast $4.4 $4.6 $4.3 $4.2 $4.0 $ Forecast By Classification $% Solar Photovoltaic 1.04 Edison SmartConnect™ 1.15 Generation Transmission Distribution Total SCE’s main role in wholesale markets is as a transmission provider and its capital spending is focused on transmission and distribution related assets

EDISON INTERNATIONAL® Leading the Way in Electricity SM 3 SCE Total Energy Requirement SCE Owned Purchases -0.21% 5.26% CAGR 1 Total: (GWh) 69,03974,81776,36278,77280,82884,28186,04884,376 SCE relies primarily on purchased power to meet its growing load 1 7 year - GWh basis 2.91%

EDISON INTERNATIONAL® Leading the Way in Electricity SM 4 New CA Generation Commitments SCE relies on IPPs for the majority of its new generation Contracts Executed By Classification #MW CCGT 1550 Gas Turbine Geothermal 2400 Landfill Gas 513 Solar PV46740 Total Solar Thermal Wind AC 1 Capacity, in MW 2 Online dates range from 1/11 to 12/16 2

EDISON INTERNATIONAL® Leading the Way in Electricity SM 5 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 Dependent on Details Lower Costs Goals More Likely To Be Met Dependent on Details Higher Costs Goals Less Likely To Be Met Less More Compliance Flexibility LessMore Market Constraints SB 14 SB 722 CARB RES Regulation Existing Law SCE supported SB 722 for the manner in which it balanced the principles

Leading the Way in Electricity SM EDISON INTERNATIONAL® 6 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 Demonstratio n (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

EDISON INTERNATIONAL® Leading the Way in Electricity SM 7 SmartConnect TM 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

EDISON INTERNATIONAL® Leading the Way in Electricity SM 8 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 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 Home battery pilot (4kW / 10 kWh systems) Evaluate home storage integration 4

EDISON INTERNATIONAL® Leading the Way in Electricity SM 9 The New Wave of Plug-in Electric Vehicles 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 1. Distribution infrastructure 2. Home charging infrastructure installation process 3. Customer education & outreach Cumulative Plug-in Vehicles Forecast in SCE Territory (in thousands) Note: Includes both plug-in hybrid and battery electric vehicles.

EDISON INTERNATIONAL® Leading the Way in Electricity SM 10 California’s Key Challenges These policy objectives need to be weighed together and balanced in order to achieve California’s ambitious goals 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 State Policy Objectives Public Policies ReliabilityRates

EDISON INTERNATIONAL® Leading the Way in Electricity SM

EDISON INTERNATIONAL® Leading the Way in Electricity SM 12 SCE Renewable Portfolio 2009 Renewable Resources SCE continues its aggressive procurement efforts combined with the use of flexible compliance rules to meet California’s RPS SCE continues its aggressive procurement efforts combined with the use of flexible compliance rules to meet California’s RPS Biomass 7% Geothermal 57% Solar 6% Wind 26% Small Hydro 4% 2009 Actual % Goal 9% Increase Potential 33% RPS % Increase SCE % 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. Billion kWh