0 Distributed Energy Resources: Going Small IEP 2015 Annual Conference September 30, 2015 Colin Cushnie V.P., Energy Procurement & Management Southern California Edison Company

1 The trend has already started… more distributed resources! 1

2 SCE’s LCR RFO Procurement Contracted ~2,220 MW of resources, including 422 MW of customer-side resources (EE, DG, DR, behind-the-meter (BTM) solar, and BTM energy storage) RESOURCEBUCKETCOUNTERPARTYDETAILSTOTALMW RenewablesSunPowerBehind the Meter Solar PV50 Energy Storage (ES) Ice BearES BTM Permanent Load Shift Thermal ES 161 StemBTM 4 hour like DR Hybrid ElectricBTM 4 hour like DR Energy Efficiency (EE) Onsite Energy, Sterling Analytics, & NRG Aggregated EE136 Demand Response (DR) NRG Aggregated DR offer with at least 4 hour dispatch 5 Distributed Generation (DG) NRGAggregated BTM distributed generation70 TOTAL DISTRIBUTED RESOURCES422

3 Preferred Resources Pilot Electrical needs in the PRP region are changing: Loss of generation in the area with the closure of SONGS and retirement of OTC plants Population and business growth is resulting in an increased peak demand Proposed solution: In order to avoid the need for new gas-fired generation in PRP region, prove Preferred Resources can deliver what is needed and when it is needed Measurement is key Stakeholder participation is required Procurement of Preferred Resources: Leverage existing programs (e.g., LCR, RPS, SPVP) PRP specific RFOs – PRP RFO 1 is wrapping up and PRP RFO 2 launched last week

4 SCE’s Energy Storage Targets 265 MW of SCE’s Energy Storage target are distribution-level resources

5 SCE Demonstration Projects Irvine Smart Grid Demonstration Large Distributed Energy Storage (2MW/500kWh unit – Q2 2014) Large-Scale Community Energy Storage (CES) (100kW/100kWh – Q4 2013) Community Energy Storage (CES) (25kW/50kWh – Q2 2013) Residential Home Energy Storage Unit (RESU) (4kW/10kWh – Q3 2013) Irvine Smart Grid Demonstration Large Distributed Energy Storage (2MW/500kWh unit – Q2 2014) Large-Scale Community Energy Storage (CES) (100kW/100kWh – Q4 2013) Community Energy Storage (CES) (25kW/50kWh – Q2 2013) Residential Home Energy Storage Unit (RESU) (4kW/10kWh – Q3 2013) Tehachapi Storage Project Large-Scale Energy Storage (8MW/32MWh – Q2 2014) Tehachapi Storage Project Large-Scale Energy Storage (8MW/32MWh – Q2 2014) Large Commercial PLS Program (100kW/500kWh – Q2 2014)

6 SCE Demonstration Projects ( ) 1 1 Distributed Energy Storage Integration (DESI 1) Pilot Program (approx. 2MW/4MWh – Q2 2015) Deployed energy storage on the distribution system to solve a challenge or for economic benefit Distribution Optimized Storage (DOS) (1MW/1MWh – 2016) Evaluate aggregated energy storage units on the distribution system with optimized controller Distributed Energy Storage Integration (DESI 2) Pilot Program (2016) Finalization of design for storage system, communication and interconnection Distributed Energy Storage Integration (DESI 1) Pilot Program (approx. 2MW/4MWh – Q2 2015) Deployed energy storage on the distribution system to solve a challenge or for economic benefit Distribution Optimized Storage (DOS) (1MW/1MWh – 2016) Evaluate aggregated energy storage units on the distribution system with optimized controller Distributed Energy Storage Integration (DESI 2) Pilot Program (2016) Finalization of design for storage system, communication and interconnection

7 SCE’s Distributed Resources Plan SCE’s DRP reflects the Commission’s three objectives: Modernize the distribution system to accommodate customer choice Enable new technologies & services that reduce emissions and improve reliability Animate opportunities for DERs to realize benefits by providing grid services Growth TypeScenario 1Scenario 2Scenario 3 Solar PV (nameplate AC) 1,636 MW1,905 MW4,770 MW Demand Response 1,265 MW2,087 MW2,981 MW Storage (D&C) 270 MW 637 MW Storage (T) 310 MW 731 MW AAEE (annual) 10,536 GWh17,031 GWh17,243 GWh CHP (annual) 6,350 GWh8,576 GWh13,612 GWh EV (annual) 2,422 GWh3,395 GWh

8 Some Open Challenges Associated with DERs Interconnection How can the interconnection process be optimized without jeopardizing safety What level of utility control, if any, is needed to ensure reliable operations How can we reconcile the need for specific resources in specific locations while still maintaining open access requirements How will DERs be monetized? Will DERs be bid into the CAISO market Will a DSO be developed and, if so, how will it integrate with the CAISO

9 Questions & Answers?