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

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 % SCE DR response numbers updated as of 3/31/08. Per Larry Oliva: Rely on what the CEC says is technical potential of 25 percent. Technical Peak Demand Reduction is the total DR potential if all DR eligible SCE customers participated in DR programs

Expanded AC cycling by 225 MW in 2007 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

Where SCE is Going with DR Dynamic 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)

EIX Vision for Clean Energy Future Integration of Information Technology with Energy Technology Delivers Environmental Benefits Renewable & Clean Generation 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

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

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

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 SDP (Res) SDP (Comrcl) PCT-ZigBee Rates CPP PTR TOU Rates Incremental New DR = 883 MW

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

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