1. SOUTHERN CALIFORNIA EDISON® Leading the Way in Electricity -1- CONFIDENTIAL Integrated Critical Communications Infrastructure Wireless WAN Business & Policy Track Howard Liu May 25, 2011

2. SOUTHERN CALIFORNIA EDISON® Leading the Way in Electricity -2- CONFIDENTIAL -2- Topics 1.Current SCEnet & ECS Status 2.New Business Drivers 3.SCE Integrated Communications Infrastructure – Purposes & Characteristics 4.Utilities had to build their own Integrated Critical Comm Infrastructure for Critical Applications 5.Roadmap to Executing the Strategy 6.Conclusion

3. SOUTHERN CALIFORNIA EDISON® Leading the Way in Electricity -3- CONFIDENTIAL 1. SCE Service Territory SCE One of the nation’s largest electric utilities Serving a population of nearly 14 million people 50,000 in square-mile service area within Central/Coastal/Southern California SCE Telecommunication Network - 75,000 miles

4. SOUTHERN CALIFORNIA EDISON® Leading the Way in Electricity -4- CONFIDENTIAL Current SCEnet Status  SCEnet, built in the 90’s for $110 million dollars,  Has resulted in over a 300% ROI in avoided costs & revenue generation – Fiber optic: 3,100 route-miles. – Microwave network: 3,792 path-miles. – A private satellite network to provide network connectivity to over 300 remote substations – 2,568 Hand-held Radios (A private Mobile Radio Network that is used for emergency communication) – 28,275 Netcom Radios (remotely control devices in the electric system, and Load Management radio system for Demand Response.)

5. SOUTHERN CALIFORNIA EDISON® Leading the Way in Electricity -5- CONFIDENTIAL SCEnet – A Reliable Electric Grids  SCE’s fiber optic, microwave, and Netcom network have helped create one of the most automated, and reliable electric grids in the nation.  Automated portions of the electric system include: – 56% of SCE’s 900 substations, – 41% of the 4,400 electric circuits – 100% of commercial and industrial customers (with Smart metering). – The Network is supporting the real time monitoring of over 200,000 points in the electric grid every four seconds.

6. SOUTHERN CALIFORNIA EDISON® Leading the Way in Electricity -6- CONFIDENTIAL 2. Internal/External factors contributing to the movement of SCE’s Telcomm

7. SOUTHERN CALIFORNIA EDISON® Leading the Way in Electricity -7- CONFIDENTIAL Requirement Changes for SCEnet2 CategoryTodayFuture Facilities with high-speed connections Top 150 SCE connected locations Expand to 1,000+ locations Intelligent Electronic Devices Millions Tens of millions, includes Smart Meters and intelligent electronic devices Push-to-talk voice dispatch for construction field forces Proprietary analog, followed by Open standard, encrypted, interoperable, digital land mobile radio Land Mobile Radio Anytime/anywhere connectivity Broadband wireless connectivity to field personnel and equipment Mobile data, smart phoneAnytime/anywhere connectivity Security Compliance Current requirements are limited in scope but are expected to be broader and more stringent over time Strict NERC/CIP, Smart Grid security requirements moving to “military grub” over time Multimedia and Collaboration Limited Streaming video, Rich Media Real-time collaboration Grid Load via grid management applications Time-Division Multiplex SCADA IP-enabled Smart Grid control

8. SOUTHERN CALIFORNIA EDISON® Leading the Way in Electricity -8- CONFIDENTIAL 3. SCE Integrated Communications Infrastructure

9. SOUTHERN CALIFORNIA EDISON® Leading the Way in Electricity -9- CONFIDENTIAL 4. Utilities had to build their own Integrated Critical Comm Infrastructure for Critical Applications 1.Latency 2.Coverage 3.Reliability 4.Emergency Availability

10. SOUTHERN CALIFORNIA EDISON® Leading the Way in Electricity -10- CONFIDENTIAL 4.1 Latency: – Telco circuits were not able to meet the very low latency requirements of important Utility applications. E.g. Phase Comparison Circuits. – Utilities had to build their own networks to ensure they can support the stringent latency specifications of 2 to 8 milliseconds (i.e. less than ½ cycle). T=0 FAULT CLEARING TIME Communication Delay Receiver Delay T=32 msT=50 ms Fault Occurs Relay Detects Fault (TX Keyed) Receiver Input Receiver Output to Interposing Relay Breaker TripsTrip Relay Actuated T=16 ms

11. SOUTHERN CALIFORNIA EDISON® Leading the Way in Electricity -11- 4.2 Coverage: Utility crews operate in wide geographical areas many of which are in remote areas far from populations centers. Utility assets such as reclosers, capacitor banks, & regulators are typically distributed in remote areas. The Telco business model of providing service only to highly populated areas left huge coverage gaps in the Utilities’ service territory. These coverage gaps often presented safety or operational risks that the utility was not willing to assume. SCE Mobile Radio Network Coverage

12. SOUTHERN CALIFORNIA EDISON® Leading the Way in Electricity -12- CONFIDENTIAL -12- In 2002, Johnstone Peak lost power for several weeks, due to fire, but SCE’s mobile radio serving the area continued to operate using back-up power from engine generators. 4.3 Reliability: Telco networks built for the mass consumer market often lack the reliability needed for core Utility applications…voice dispatch or SCADA. E.g., whereas Utility base station sites have several weeks of emergency power backup, Telco cell sites have only hours (or days at most) of power backup.

13. SOUTHERN CALIFORNIA EDISON® Leading the Way in Electricity -13- CONFIDENTIAL 4.4 Emergency Availability: Telco consumer services run into congestion problems during emergencies. E.G. September 11, the 2005 Hurricane Katrina, the 2009 Hurricane Ike, & the 2007 bridge collapse in Minneapolis.

14. SOUTHERN CALIFORNIA EDISON® Leading the Way in Electricity -14- CONFIDENTIAL -14- Lease vs. Own?  SCE has always used a hybrid approach  SCE has relied primarily on its own network for those Utility applications that have demanding latency, coverage, reliability, and emergency- availability requirements.  The question is: moving forward, can SCE rely primarily on the Telcos to support these critical applications, or should it build its own network by refreshing and expanding SCEnet?

15. SOUTHERN CALIFORNIA EDISON® Leading the Way in Electricity -15- CONFIDENTIAL -15- SCE still needs to evaluate the leased option for various Smart Grid applications  Business models change over time, so do technologies. We should be open-minded and explore new possibilities.  The Teclos understand “Smart Grid” is the next big area of opportunity, so they are gearing up to see how they can support the Smart Grid rollout. Some are creating new business units just focused on the Energy Sector.  Some emerging 4G wireless technologies may be able to meet some Utility requirements.

16. SOUTHERN CALIFORNIA EDISON® Leading the Way in Electricity -16- CONFIDENTIAL -16- 5. Telecomm Roadmap

17. SOUTHERN CALIFORNIA EDISON® Leading the Way in Electricity -17- CONFIDENTIAL -17- 6. Conclusions  SCEnet has been performing well for over 15 years  SCE’s Unified Communication Architecture anticipates all enterprise needs  SCE Integrated Critical Communications Infrastructure – A Layered Architecture Vision  Utilities had to build their own Integrated Critical Comm Infrastructure for Critical Applications  SCE is open-minded and explore new wireless possibilities. – Identify frequency bands between 700 MHz and 2.6 GHz that may be suitable for a private wireless communications in the SCE service territory – Utilize emerging 4G wireless technologies