1. SOUTHERN CALIFORNIA EDISON® SM Preferred Resources Pilot August 17, 2015 http://on.sce.com/preferredresources http://edison.com/preferredresources

2. SOUTHERN CALIFORNIA EDISON ® SM Preferred Resource Pilot (PRP) Overview Integrated Grid Project (IGP) –Accelerating deployment of PR in the IGP sub-PRP region –Employing advanced technology, through an EPIC funded effort –Assessing distribution system requirements to manage high penetration of PR (also called Distributed Energy Resources - DER) The PRP seeks to investigate and demonstrate how the use of preferred resources (PR) may: –meet local capacity needs by offsetting the expected over 300 MW of load growth –reduce or eliminate the need for additional natural gas fired generation (GFG) power plants The PRP is focused on –Reducing the peak load (10 a.m. – 6 p.m.) –Engaging commercial and industrial customers PRP Roadmap –Phase 1: Laying the Foundation (Nov. 2013 – 2014) –Phase 2: Demonstration and Proof (2015 – 2017) –Phase 3: Sustain and Close-out (2018 – 2022) Area of Focus Blue: Integrated Grid Project region PRP region 2

3. SOUTHERN CALIFORNIA EDISON ® SM PRP Milestones and Roadmap Major Milestones –Milestone 1 - 2017/2018: Demonstrate the ability to acquire and deploy a mix of preferred resources* to offset the over 300 MW of forecasted load growth Measure the performance capabilities of those resources to defer or eliminate the need for new gas-fired generation in the PRP region –Milestone 2 - 2022: Meet 2022 reliability needs in PRP region by using preferred resources to offset the over 300MW of forecasted load growth Phase 1: Lay Foundation Nov 2013-2014 –Defined initial local specific electrical supply needs and designed resource portfolios to meet needs –Developed and began implementation of resource acquisition strategy –Established grid-level measurement processes for solar and DR 3 * Preferred resources include energy efficiency (EE), demand response (DR), renewable distributed generation (DG) such as solar, and energy storage (ES)

4. SOUTHERN CALIFORNIA EDISON ® SM PRP Roadmap (continued) Phase 2: Demonstration and Proof 2015-2017 –Continue building the pipeline of resources using the acquisition strategy –Test integrated and tactical use of preferred resources –Ready the PRP distribution system (grid) for higher penetration of PR –Evaluate effectiveness of acquiring right mix of PR –Evaluate delivery capabilities of PR –Confirm if PR can offset load growth Phase 3: Sustainability 2018-2022 –Make determination on PR ability to meet projected 2022 need and ability to continue to defer new GFG need –Implement any changes to acquisition plan to meet 2022 need –Develop and implement program and process changes to support PR meeting 2022 forecasted need 4

5. SOUTHERN CALIFORNIA EDISON ® SM PRP Location Specific Analysis Bottom up Approach Customer load growth was determined using local specific data Peak months were identified as June through September Forecasted incremental* 2022 peak day load shape was used to determine the PR attributes Daily MW need Hourly duration of need Annual frequency of need Portfolio scenarios were developed based on the different delivery capabilities, limitations, and market potential for each type of preferred resource 5 * - the incremental load is the difference between the 2013 peak load to the expected 2022 peak load Several different combinations of preferred resources can serve the peak 2022 Peak Day Load Shape

6. SOUTHERN CALIFORNIA EDISON® SM PRP Milestone 1 Status - Acquire 6 The 2017 mix of preferred resources include: o EE: 31 MW o DR: 31 MW o Solar: 25 MW o ES: 1 MW 113 MW have been acquired toward the current 316 MW target Additional acquisitions are planned for a mix of preferred resources that can serve the expected 2022 peak load shape 91 MW are expected to be deployed by year end 2017; The source of these MW include: o ~67.4 MW from solicitations (LCR & SPVP RFOs) o 1 MW of ES (0.5 MW SCE owned & 0.5 Ma vendor owned) o ~23 MW already deployed by customers

7. SOUTHERN CALIFORNIA EDISON® SM PRP Milestone Status - Deploy Near-term deployment achievements are from SCE’s customer programs – EE and DG (CSI) Customers adoption of solar without CSI Utility customer demand response programs pose some challenges Heavy customer recruitment in 2012 to DR programs following the SONGS shutdown limits the ability to enroll new customers Current utility DR programs are not designed to contract with customers for delivery in 2022 and beyond Power purchase agreements with longer term commitments may provide a solution 7

8. SOUTHERN CALIFORNIA EDISON® SM *Summer on-peak hours based un June-September Time-of-Use rates ** Expected solar PV contribution is based on tracked NEM solar PV generation in the PRP region ***Expected EE contribution is based on 2014 deployment amounts from mid- stream and down-stream programs SCE is measuring preferred resources to confirm they are available when called upon (dependable), can deliver an expected load reduction or production (predictable), and can deliver in future years (persistent) Graph below illustrates how the PRP region’s load was reduced by the contributions from solar, demand response and energy efficiency products 8 PRP Milestone Status - Measure Load Solar** Demand Response Energy Efficiency***

9. SOUTHERN CALIFORNIA EDISON ® SM PRP Challenges The PRP continues to explore solutions to most effectively use preferred resources. Examples include: –Improving participation rate of commercial property owners/customers and institutional customers Improving the solar and demand response participation rate Resolving owner/tenant barriers –Preparing/reinforcing the PRP area distribution system (grid) to support higher levels of preferred resources and locational benefits –Creating local reliability products More reliability DR to complement price-responsive DR EE that may help to defer or avoid distribution-level investment –Optimizing energy storage integration in constrained areas –Integrating the region-specific measured performance results of preferred resources into grid planning processes 9

10. SOUTHERN CALIFORNIA EDISON® SM SCE’s Preferred Resources Pilot Working to Meet Local Peak Demand Needs and Local Capacity Requirements Questions? Demonstrating our commitment to keeping electricity safe, reliable, affordable, and clean today and for the future. 10