Southern California Edison Demand Response Present and Future

1. Southern California EdisonDemand Response Present and Future Presented by Larry Oliva Director, Tariff Programs and Services Demand Response Coordinating Committee Town Meeting, Washington DC June 3, 2008

2. Recent Successes in Demand Response • SCE Demand Response today • System peak 23,303 MW • Interruptible Large Customer 627 MW • Emergency Res/Sm. Comm. 607 MW • Emergency Ag Pumping/Other 56 MW • Price Responsive Programs 107 MW • Total DR 1,397 MW • Total DR % 5.9 % • SCE technical peak demand reduction potential • If all customers participated similarly 30 %

3. Recent Successes in Demand Response Expanded AC cycling by 225 MW in 2007 • Seasonal Incentives based on: • Tons of Cooling • Cycle Strategy (50%, 67%, 100%) • Event Choice (15 events vs. unlimited) • FIXED incentive amounts PAID in advance • Over 320,000 participants • 91% of participating A/C Units range in size from 2.5 to 5 tons • 88% of participating customers opt for 100% cycling (Maximum $ Incentive) • Average annual residential incentive paid = $140/device

4. Where SCE is Going with DRDynamic Pricing-The Essential Path • Industries with high cost of capacity transitioned to dynamic pricing, examples: • Airlines • Hospitality • Rental Cars • Shipping • Electric Utilities can benefit • Peak load growth continuing • Regulatory and environmental impediments to build • Real cost escalation of new construction • Technology enablement (metering and controls)

5. Renewable & Clean Generation EIX Vision for Clean Energy Future Integration of Information Technology with Energy Technology Delivers Environmental Benefits Connected Home Connected PHEV Smart Grid SmartConnect Energy Management& Efficiency Low Carbon Fuel Mix • Dynamic Pricing • Reduced Cost & Rate Pressures • Meeting Customer Expectations for Value & Environment

6. TOU Rates CPP PTR Empowering Customer Choice Rates and Rebates Smart appliances Connected Home Smart thermostats Energy information

7. Load Shaping and Following Long-Term Opportunities through Plug-in Electric Vehicles Connected Home Customer Home Energy Storage Creates Opportunities for Increased Renewables Enable Net Metering, Discrete metering and Integrated energy management w/Solar Panel

8. SDP (Comrcl) TOU Rates SDP (Res) CPP PTR Edison SmartConnectDemand Response Goals Pilots Launch 2008 2009 2010 2011 2012 2013 3K 703K 2.2M 3.7M 5.1M Programs >531 MW > 72 MW 342 MW 78 MW 410 MW 53 MW PCT-ZigBee Rates Incremental New DR = 883 MW

9. Rate Tier Position and Tier “Alert” Programs encourage conservation behavior Tier Position Provides Customer with billing status via webpage: Current billing tier, cost and days left in billing period Proactive Tier “Alerts” and an In-Home Tier “Position” Display Device: Peak Rebate Available Energy Cost Display $.19 $.22 $.33 $.38 $.43

10. Next Challenges for SCE Demand Response • Customer adoption of Peak Time Rebates and Dynamic Rates • Move incentive programs to Pay-for-Performance • Integrate retail DR products with CAISO markets • Promote enabling technologies