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      SCE Rate Update to the
Kern County Taxpayers Association

               Russ Garwacki
    Manager – Pricing Design and Research



            February 9, 2012




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Revenue Requirement Components
- Overview
 SCE Revenue Requirement (2011)
                                                                                            Conclusion
                DWR Charges                             Generation
                • Cost recovery on contracts            • Investment and O&M for
                  entered into on behalf of IOUs          utility owned generation      Less than half of retail
                  during energy crisis (shifted to      • Fuel and purchased power
                  SCE-Gen as of 1/1/12)                                                 rates fund generation-
                                                          costs
                                                        • SPVP Program                      related activities:
Public Purpose Programs
• Legislative mandates (energy
                                                                                        SCE spends 55% of
  efficiency, RD&D, renewables                                                             rate revenue on
  investment, etc.)
                                                     9.1%                                   important non-
• CPUC programs (additional
  energy efficiency, CARE                6.3%
                                                                                        generation services
  program, etc.)                                                                          such as distribution
                                      5.3%                                                  and transmission
Transmission
• Investment and O&M                                                                     system development
                                                                   44.2%
  in transmission                                                                        and reliability, energy
  (typically >220 kV)                                                                     efficiency, demand
Distribution                                 35.0%
                                                                                           response, and low
• Investment in distribution:                                                              income assistance
  poles, wires, substations, servic
                                                                                                programs
  e centers, meters, etc.
• California Solar Initiative
• Demand Response Programs
• Edison SmartConnect


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2012 CPUC General Rate Case
- Phase 1 Update

 Application Status
   – Evidentiary hearings took place July 25 – August 26
   – Proposed decision expected 1st quarter 2012
   – Final decision expected 2nd quarter 2012

 Reasons for Request
   – Inspect, maintain and/or upgrade 1.5 million electric poles, 712,605 transformers
     and 88,207 miles of distribution lines
   – Increase grid security
   – Add smart grid components to integrate more renewable energy
   – Maintain a skilled work force to handle upcoming changes to the grid and related
     customer service needs

 Current Status
   – SCE proposed a revenue increase of $794 million for 2012, then $155 million for
     2013 and $515 million for 2014. That translates to a 6.9% increase in 2012, 1.3%
     in 2013, and 4.3% in 2014.
   – Expecting a proposed decision in the next 1-2 months.
   – GRC Phase 1 rates expected to be effective 2nd quarter 2012



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2012 FERC General Rate Case
Rate increase driven primarily by Renewable Portfolio Standard
   – Requested increase of $135M from $636M to $771M (21%)
   – Rates effective January 1, 2012, subject to refund.
Formula Rate Strategy
   – The rate case model worked well for SCE when rate changes were
     infrequent due to sales growth and limited transmission investment

   – A formula rate approach used at FERC where specific formulas are used
     to calculate the utility’s revenue requirement rather than litigating multiple
     cases.

   – About 75% of FERC-jurisdictional utilities have a formula rates (e.g.
     SDG&E and APS, PG&E does not)

   – If approved, formula rate changes may begin as early as October-2012




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Energy Resource Recovery Account (ERRA)
- includes Balancing Accounts

 ERRA Application
   – Revenue requirements associated with fuel and power
     purchases, year-end balancing account balances, and
     miscellaneous expenses
   – Filed August 1, 2011 with an update filed November 2011
   – Two items are particularly noteworthy –
       1. Calculations associated with DA customers’ Cost Responsibility
          Surcharge (CRS) and specifically the Power Charge Indifference
          Amount (PCIA) to be implemented. DA customers’ re-billed from
          2011-forward.
       2. ERRA balancing account is currently over-collected due to low
          natural gas prices.
   – Rates will likely be implemented in second Quarter 2012 and
     possibly be consolidated with GRC Phase 1 rate changes


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Department of Water Resources (DWR)
 DWR Power Charge
   – DWR Power Contracts were established in 2001
   – Two DWR Power Contracts expired on September 30, 2011
   – SCE’s last DWR Power contract expired on December 31, 2011


 DWR Bond Charge remains in effect


 DWR Power Credit (Reserves Refund)
   – A portion of the historical DWR-Power payments funded these
     reserves
   – DWR will begin returning these reserves to which SCE will pass
     through to Bundled Service customers on a separate fixed cents/kWh
     line item credit (about 0.6 cents/kWh).
   – DA customers will see benefit via our reduced portfolio price thus a
     reduced CRS.


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Estimated 2012 Rate Changes –
Rate Group Averages and Tiered Residential Rates
                      Bundled Service Average Rates - ¢/kWh                                           Bundled Service Average Rates - ¢/kWh
                      June 2011     2012 2nd Qtr*     % change                                        June 2011   2012 2nd Qtr*   % change
                         (A)             (C)             C/B
 Domestic               15.5             17.7           14.1%            NON-CARE Energy Charge
                                                                                          Baseline      12.5          12.6          1.0%
 GS-1                    17.0            19.3           13.5%              101% - 130% of Baseline      14.8          15.5          5.0%
 GS-2                    15.5            16.6            6.9%              131% - 200% of Baseline      22.9          30.5         33.0%
                                                                           201% - 300% of Baseline      26.4          34.0         28.6%
 TC-1                    15.4            17.3           13.0%
                                                                             Over 300% of Baseline      29.9          37.5         25.3%
 TOU-GS                  13.4            14.3            7.0%
 LSMP                    15.2            16.6            9.1%            NON-CARE Energy Charge
                                                                                          Baseline       8.5           8.5          0.0%
 TOU-8-SEC               12.4            13.3           6.9%               101% - 130% of Baseline      10.7          10.7          0.0%
 TOU-8-PRI               11.4            12.0           5.2%               131% - 200% of Baseline      17.5          20.0         14.3%
                                                                           201% - 300% of Baseline      17.5          20.0         14.3%
 TOU-8-SUB                7.1             7.0           -0.9%
                                                                             Over 300% of Baseline      17.5          20.0         14.3%
 Large Power             10.4            10.8           4.6%

 PA-1                    19.2            22.3           16.2%
 PA-2                    14.1            15.5           10.1%
 TOU-AG                  10.7            11.1            3.7%
 TOU-PA-5                11.9            11.6           -2.5%
 Ag & Pumping            11.9            12.7            6.1%

 Streetlight             18.6            18.5           -0.3%

 Total                   14.1            15.6           10.3%



* These rate levels are estimated based on SCE’s latest forecast & are subject to change based on CPUC and FERC decisions
** Includes 2012 ERRA forecast and 2012 GRC Phase 1 at full request

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2012 GRC Phase 2




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2012 GRC Phase 2
 Overall Objective - Equitably Recover our Revenue Requirement while supporting
  various State Energy Policy Objectives.
 Since 2001, SCE has successfully reversed the 2001 energy crisis surcharge
  revenues to achieve an equitable inter-class revenue allocation and achieved
  settlements in the 2003, 2006, and 2009 cases.
  Cost Studies and Revenue Allocation Process
     –   Each rate group’s share of SCE's authorized revenue requirements is based on marginal
         costs for delivery services (distribution and customer costs), and generation (energy and
         capacity) that are litigated in this proceeding. Transmission costs and their allocation is
         established by FERC and are not at issue in this proceeding.

     –   SCE's marginal cost proposals generally follow precedent established in prior GRCs. We
         apply marginal costs to customer, demand, and usage characteristics of each customer
         group to determine the relative contribution of each rate group to our costs.

     –   We use SCE's current authorized revenue requirements to illustrate the effect of our
         proposals. Actual results will incorporate whatever revenue requirement changes have
         been adopted at the time we implement these changes.




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2012 GRC Phase 2 –
Revenue Allocation versus Rates

Revenue Allocation:
Revenue allocations are aligned relatively close to cost of service
Public policy allocations are primarily defined by statute or CPUC decisions

Commercial / Industrial Rates:
Structures are currently aligned with cost to serve principles
Dynamic pricing proposals expected to take effect in 2013

Residential Rates:
Structures are driven by legislation, not costs:
     –Pre-1970’s oil-embargo rate structure had declining block cost-based rates
     –Mildly inclining block rates introduced to send a conservation price signal (2-tier with maximum differential of 15%).
     –2001 Energy Crisis brought 5-tier rates with baseline rate restrictions leading to current maximum tier differentials
     of nearly 250%.
High use customers subsidize low use customers by over $600M annually.
CARE program subsidy exceeds $300M annually - paid by all remaining customers (res
and non-res) on an equal cents/kWh basis.
Bulk of $50M annual NEM subsidies caused from by-passing upper tier rates




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    Residential Rate Equity – The Elephant in the Room
•    Tiered rate structures are not cost-based.
•    Higher usage customers (> 600 kWh/month) currently pay $600 M above cost annually.




                                                          At 7 cents/kWh, a 1200 kWh/month
        Low usage                                         customer pays $1,000/year above cost.
        customers are
        subsidized




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2012 GRC Phase 2 – Residential Rate Equity

 SCE has proposed modifications to the rate structure and baseline
  allowances to mitigate the growing residential intra-class subsidies.
 Proposals to mitigate higher bills include:
    – Elimination of Tier 5 (collapsing with Tier 4 reduces the highest rate)
    – Overall reduction in baseline allowances to 50% of energy consumed.
        • Reduced from 60% to 55% in our 2009 GRC Phase 2
        • By billing more usage at upper tier rates, upper tier rates are reduced.
        • Shifts some revenue to low and mid-usage customers.
    – Separate and distinct baseline allowances for single-family and multi-family
      residences.




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2012 GRC Phase 2 – Residential Rate Equity
Single and Multi-family Baseline Allowances


Improves cost allocation between Single and Multi-family dwellings

Establish separate baselines for Single and Multi-family dwellings
      Refinement in baseline allocations = improved cost allocation
      Very different needs
           Average Single-family home is 2,434 square feet vs. 1,249 square feet for average Multi-family home
           Average monthly Single-family home usage (kWh) is 690 kWh vs. 400 kWh for Multi-family homes
           Average number of occupants for Single-family homes is 3.2 vs. 2.3 for Multi-family homes


                                 Current: Baseline                              Proposed: Baseline
                             Sing-family Multi-family                       Sing-family    Multi-family
                Tier 1          48%            65%       Tier 1                52%            50%
                Tier 2          11%             9%       Tier 2                11%            10%
          Tier 3 and above      41%            26%       Tier 3 and above      37%            40%




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2012 GRC Phase 2 – Residential Rate Equity
Baseline Adjustments



                       Basic Customer Daily Allowance -- Summer
                                  Current @ 55%            Proposed at 50%

         Baseline Regions                               Single          Multi

                5                      9.1               11.0            4.9

                6                      9.2               11.1            6.3

                8                     10.2               12.3            6.9

                9                     13.9               15.1            9.5

               10                     16.0               17.0           11.7

               13                     18.6               18.6           14.2

               14                     16.1               16.1           11.7

               15                     43.9               45.8           26.9

               16                     11.5               11.9            9.3




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2012 GRC Phase 2 – Residential Rate Proposals

                                                                                                            Collapse Tiers,
                                                                                                               Baseline
      Comparison of 2012 GRC Non-CARE                                            Status Quo Design          Modifications
      Rates Structures                                        June 2011               (Note 1)                 (Note 2)
                     Baseline Allowance =>                      55%                     55%                      50%
                                   Tiers =>                       5                       5                        4
      Baseline                                                  12.5                    12.4                     12.4
      101% - 130% of Baseline                                   14.8                    14.8                     14.8
      131% - 200% of Baseline                                   22.9                    24.5                     23.0
      200% - 300% of Baseline                                   26.4                    28.0                     27.0
      Over 300% of Baseline                                     29.9                    31.5                     27.0

      Single Family Basic Charge $/month                         0.88                      0.88                     0.88

      Comparison of 2012 GRC CARE Rates
      Structures
      Baseline                                                   8.5                       8.5                      8.5
      101% - 130% of Baseline                                   10.7                      10.7                     10.7
      131% - 200% of Baseline                                   17.5                      18.7                     17.5
      200% - 300% of Baseline                                   17.5                      18.7                     17.5
      Over 300% of Baseline                                     17.5                      18.7                     17.5

      Single Family Basic Charge $/month                         0.70                      0.70                     0.70
      Notes:
      1) The status quo rate structure is defined as SCE’s existing rate structure, maintaining the existing customer charge,
       baseline allocations, and $0.07/kWh differential between Tier 3 and Tier 5 rates.
      2) The Proposed rate structure includes the adjustments to baseline allowances and a 4-Tier rate structure.
      3) 2012 forecasted rates (columns 2-5), reflect updated cost allocations.

         Note: Data above do NOT include impacts of all 2012 revenue requirements changes.



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2012 GRC Phase 2 – Residential Rate Equity

 KernTax was instrumental in getting several rate changes in PG&E’s
   recent GRC.
    – Reduced baseline allowances from 60% to 55% (SCE in 2009 GRC)
    – Implemented a Tier 3 rate for CARE customers (SCE in 2003 GRC)
    – Eliminated Tier 5 (SCE proposed in 2012 GRC)
    – A new customer charge for PG&E was rejected by the CPUC on legal and
      policy grounds (SCE in 1995 GRC)


 SCE’s proposals help, but significant improvements in rate equity will
   require legislation.
    – The single most significant rate change to improve equity is the ability to
      implement a reasonable customer charge.
    – Typical utility monthly customer charges range from $5-$10.
    – If implemented, these new revenues would offset upper tier rate levels.



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Dynamic Pricing Deployment
 2009 GRC Phase 2 decision (D.09-08-028) ordered SCE to file an application
  proposing:
    – Mandatory TOU rates for all non-residential customers

    – Default Critical Peak Pricing (CPP) rates for all commercial/industrial customers
      < 200 kW and Ag/Pumping customers > 200 kW

    – New rates to be effective January 1, 2012

 On September 1, 2010, SCE filed its Dynamic Pricing application proposing:
    – Mandatory TOU rates for all non-residential customers

    – Default CPP rates for all commercial/industrial customers < 200 kW and Ag/Pumping
      customers > 200 kW

 ALJ Ruling directed SCE to include its Dynamic Pricing proposals in its 2012 GRC
  Phase 2 Application


 In the 2012 GRC Phase 2 Application, SCE proposed to:
    –   Implement mandatory TOU rates for non-residential customers
    –   Offer CPP rates to all customer classes on an opt-in basis
    –   On-line customer rate analysis tool to be deployed late 2012 for rates to be effective
        January 2013.


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SCE’s 2012 GRC Phase 2 – Current Schedule

      SCE – Application and Service of Marginal
                                                               June 6, 2011
      Cost (MC), Revenue Allocation (RA) and
      Rate Design Testimony
      DRA – MC, RA and Rate Design                      December 20, 2011
      Testimony
      Other Parties’ – MC, RA and Rate Design              February 6, 2012
      Testimony
      Settlement Discussions                           February – April 2012
      Public Participation Hearings                    February – April 2012

      Rebuttal Testimony- All Parties                         April 23, 2012

      Evidentiary Hearings                                 May 14-18, 2012

      Opening Briefs                                          June 15, 2012

      Reply Briefs                                              July 6, 2012

      ALJ Proposed Decision (PD)                              October 2012

      Initial Comments on PD                                  October 2012

      Reply Comments on PD                                    October 2012

      CPUC - Final Decision                                 November 2012

      Rates Effective                                       January 1, 2013




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Backup




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 2012 GRC Phase 2 Bill Impacts: Oct 7th filing -
 Non CARE
                                                                                          Residential NON-CARE (Bundled):
                                                                                      Annual Bill Impact (June 2011 Vs 2012 GRC)

                   35.0%
                                                                            33.1%


                   30.0%


                   25.0%

                                              20.8%
       %Customer




                   20.0%

                                                             16.0%
                   15.0%


                   10.0%                                                                   8.2%
                                                                                                                                                    6.0%
                                                                                                                                        5.0%                     4.6%
                    5.0%                                                                                                    3.9%
                                                                                                            1.6%
                                 0.4%                                                                                                                                          0.3%              0.0%
                    0.0%
                               Below -     < -10% to -     < -5% to -      < -3% to      > 0% to      > 3% to 5%         >5% to        > 10% to    > 15% to     > 20% to      >30% to
                                10%            5%              3%             0%            3%                             10%            15%        20%           30%          45%            Above45%
                                                                                                               % Impact




                                                                                                                                                              Percent
                                                                                                                                          Average Rates -     Impact -   Average Monthly Bill
   Impact                  Customer          Customer Ratio                                                             Average                ¢/kWh             %                    -$
                                                                               %                    % All                    Monthly                                                                    $ Bill
       %             Numbe r        %        %Multi      %Single % Multi Single        % Ba s ic   Ele ctric   Bill da ys      kW h     J une 2011 GRC 2012 Ave ra ge      Curre nt        Propos e d Cha nge
Be low -10%           11,617       0.4%       0.0%        0.6%     0.0%      100.0%     0.6%        99.4%          328         974        18.9         16.5   -12.6%       $184.2           $161.0      -$23.2
< -10% to -5%        613,013      20.8%       0.2%        30.2%    0.3%      99.7%      97.4%        2.6%          351         952        21.4         19.9    -7.1%       $203.5           $189.0      -$14.5
< -5% to -3%         472,273      16.0%       0.1%        23.3%    0.2%      99.8%      98.8%        1.2%          351         802        18.5         17.8    -3.8%       $148.3           $142.7        -$5.6
< -3% to 0%          974,102      33.1%       20.1%       39.0%    19.0%     81.0%      91.2%        8.8%          301         470        16.2         15.9    -1.8%        $76.1            $74.8        -$1.3
> 0%   to 3%         240,554       8.2%       12.3%       6.3%     47.2%     52.8%      81.9%       18.1%          322         531        16.3         16.4    0.6%         $86.5            $87.0         $0.5
> 3% to 5%            46,856       1.6%       4.9%        0.1%     96.1%      3.9%      66.6%       33.4%          313         404        15.9         16.6    4.0%         $64.3            $66.9         $2.6
>5%    to 10%        115,818       3.9%       12.0%       0.3%     95.4%      4.6%      68.7%       31.3%          322         485        16.2         17.4    7.7%         $78.4            $84.4         $6.0
> 10% to 15%         148,030       5.0%       15.7%       0.2%     97.3%      2.7%      76.0%       24.0%          326         545        16.0         18.0    12.7%        $87.3            $98.3       $11.0
> 15% to 20%         176,244       6.0%       19.1%       0.0%     99.7%      0.3%      81.8%       18.2%          328         539        15.5         18.3    17.5%        $83.8            $98.5       $14.6
> 20% to 30%         136,197       4.6%       14.8%       0.0%    100.0%      0.0%      86.6%       13.4%          323         489        14.7         18.0    22.2%        $72.1            $88.1       $16.0
>30% to 45%           7,913        0.3%       0.9%        0.0%    100.0%      0.0%      0.7%        99.3%          327         887        14.1         19.0    34.6%       $125.5           $168.8       $43.4
  Above 45%            181         0.0%       0.0%        0.0%    100.0%      0.0%      0.0%       100.0%          43          824        13.3         19.7    47.6%       $110.0           $162.3       $52.4
 Group Tota l 2,942,798           100.0%     100.0%      100.0%    31.3%     68.7%      89.5%       10.5%          326         652        18.3         18.0    -1.8%       $119.3           $117.2        -$2.1




 Note: Customer Charge = $0.88; 4 Tiers; BL = 50%                                                                                                               SOUTHERN CALIFORNIA EDISON®
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2012 Functional Revenue Allocation Factors
                                      % of Marginal Cost Revenue Responsibility (MCRR)
                                                 Generation                                     Percent of
                                                    Total       Generation      Generation       System
                                                  (Bundled        Energy         Capacity       Sales (incl.
            Rate Class            Distribution     Sales)     (Bundled Sales) (Bundled Sales)     losses)

            Total Residential       50.03%         41.49%         37.81%          47.77%          37.14%

            GS-1                     6.92%          6.55%          6.60%           6.46%           5.91%
            TC-1                     0.14%          0.07%          0.09%           0.05%           0.07%
            GS-2                    20.07%         19.55%         20.17%          18.49%          19.05%
            TOU-GS-3                 7.90%          8.42%          8.64%           8.04%           9.71%
            Total LSMP              35.04%         34.60%         35.50%          33.05%          34.74%

            TOU-8-SEC                6.39%         8.46%          8.99%            7.55%           9.74%
            TOU-8-PRI                3.55%         4.79%          5.22%            4.05%           5.95%
            TOU-8-SUB                0.97%         3.83%          4.37%            2.92%           5.68%
            Total Large Power       10.92%         17.07%         18.57%          14.52%          21.37%

            TOU-PA-2                 1.88%         2.27%          2.50%            1.87%           2.07%
            TOU-PA-3                 0.84%         1.40%          1.66%            0.96%           1.31%
            Total Ag.&Pump.          2.72%         3.67%          4.16%            2.83%           3.38%

            Total Street Lights      0.27%         0.59%          0.93%            0.01%           0.55%

            Standby-SEC              0.18%         0.23%          0.26%            0.19%           0.25%
            Standby-PRI              0.58%         0.69%          0.79%            0.54%           0.77%
            Standby-SUB              0.28%         1.65%          1.97%            1.10%           1.81%
            Total Standby            1.04%         2.58%          3.02%            1.82%           2.83%

            SYSTEM                 100.00%       100.00%         100.00%         100.00%         100.00%


 The allocation factors indicate the relative importance of various revenue requirement changes upon different rate
 groups. For example, a “distribution” case (e.g. GRC Phase 1) has a larger impact on Residential customers versus
             Large Power customers, who are more strongly affected by “generation” cases (e.g. ERRA).

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   2012 GRC Phase 2 Class Average Rate Levels –
   Average Rate Impacts at June 2011 Present Rate Revenue Levels

                                                                                               Current +Phase 1

                                                                                                                   % Change (June
                                  June 2011              Proposed                            Proposed                   11 vs.
                                   (¢/kWh)    % of SAR    (¢/kWh)   % of SAR   % Change       (¢/kWh)   % of SAR   Current+Phase 1)
Total Domestic                      15.6       110%        15.9      113%        2.0%          17.3       114%          10.5%
GS-1                                17.0       120%        15.7      111%       -8.0%          16.8       111%          -1.1%
TC-1                                15.3       108%        16.2      114%       5.7%           17.6       116%          15.0%
GS-2                                15.2       107%        14.8      105%       -2.6%          15.9       104%           4.5%
TOU-GS-3                            13.2       93%         13.6      96%        2.9%           14.5       95%           10.0%
Total LSMP                          15.0       106%        14.6      104%       -2.6%          15.7       103%           4.5%
TOU-8-SEC                           12.4        88%        12.1       86%       -2.6%          12.9        85%           3.7%
TOU-8-PRI                           11.2        79%        11.0       78%       -1.4%          11.7        77%           5.0%
TOU-8-SUB                            7.1        50%         7.7       55%       9.3%            8.2        54%          15.6%
Total Large Power                   10.8        76%        10.7       76%       -0.4%          11.4        75%          6.0%
TOU-PA-2                            13.0        92%        12.7       90%       -2.1%          13.6        90%           4.9%
TOU-PA-3                            10.2        72%        10.7       75%       4.7%           11.4        75%          11.6%
Total Ag.&Pumping                   11.9        84%        11.9       84%       0.2%           12.7        84%           7.2%
Total Street Lighting               18.0       127%        18.3      130%        2.0%          18.8       123%          4.3%

Standby-SEC                         11.5        81%        11.6       82%        0.5%          12.4        81%          7.4%
Standby-PRI                         11.3        80%        11.5       81%        1.6%          12.3        81%          8.4%
Standby-SUB                          8.1        57%         8.1       58%        0.5%           8.6        56%          5.6%
Total Standby                        9.2        65%         9.3       66%        0.8%           9.8        65%          6.7%


Total System                        14.2       100%        14.1      100%       -0.1%          15.2       100%          7.3%


                        Note: Data above do NOT include impacts of all 2012 revenue requirements changes.



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SM




    Historical Class Average Rates
                                                                            Southern California Edison Company
                                                                      Historical Average Rates by Rate Group (¢/kWh)
                                                                           Based on Recorded Revenue and Sales
    – (¢/kWh) Bundled Service                                                          Bundled Service


                                   1998       1999       2000       2001     2002       2003      2004       2005       2006       2007    2008      2009   2010   2011 1   2012 2

Domestic                            11.4       11.4       11.5      13.0      13.5       12.8        12.5      12.9      15.7       15.3    15.0     15.2   15.5    15.5     15.9

GS-1                                12.1       12.1       12.0      16.2      17.5       15.8        14.8      15.2      17.6       17.6    17.0     16.9   17.5    17.0     15.7
TC-1                                 7.3        7.4        7.4      10.3      13.5       12.4        12.0      11.5      13.4       13.5    13.8     14.5   15.8    15.5     16.2
GS-2                                 9.9       10.2       10.1      13.2      15.5       14.1        13.3      13.5      15.6       14.3    14.3     14.8   15.7    15.4     14.8
TOU-GS-3                             9.7        8.9       10.2      13.1      14.7       13.0        11.8      10.8      13.6       14.2    14.1     14.3   13.7    13.4     13.6
Sm. and Medium Comm.                10.3       10.5       10.4      13.7      15.8       14.4        13.5      13.6      15.6       14.9    14.7     15.0   15.5    15.2     14.6

TOU-8-Sec                            8.1        8.2        8.7      12.2      14.3       12.6        11.2      11.3      13.2       12.5    12.4     12.7   13.1    12.4     12.1
TOU-8-Pri                            7.2        7.4        7.9      10.9      13.0       11.5        10.3      10.7      12.6       11.9    11.8     11.7   11.8    11.4     11.0
TOU-8-Sub                            4.9        5.1        5.7       8.3       9.4        8.4         7.4       7.5       9.1        8.3     8.1      7.9    8.0     7.1      7.7
Large Power                          6.8        7.1        7.7      10.6      12.6       11.2         9.9      10.0      11.8       11.1    10.9     10.9   11.1    10.4     10.7

TOU-8-Sec-Standby                    n/a        n/a        n/a       n/a       n/a        n/a         n/a       n/a       n/a        n/a       n/a    n/a    n/a      n/a    11.6
TOU-8-Pri-Standby                    n/a        n/a        n/a       n/a       n/a        n/a         n/a       n/a       n/a        n/a       n/a    n/a    n/a      n/a    11.5
TOU-8-Sub-Standby                    n/a        n/a        n/a       n/a       n/a        n/a         n/a       n/a       n/a        n/a       n/a    n/a    n/a      n/a     8.1
Large Power-Standby                  n/a        n/a        n/a       n/a       n/a        n/a         n/a       n/a       n/a        n/a       n/a    n/a    n/a      n/a     9.3

PA-1                                12.8       12.1       12.1      14.3      15.3       14.9        14.0      15.1      18.2       16.9    17.5     17.8   19.4    19.2
                                                                                                                                                                             12.7
PA-2                                 8.7        8.5        8.7      10.7      11.3       10.5        10.4      10.7      12.8       12.5    12.8     13.1   14.8    14.1
AG-TOU                               7.4        6.9        7.5       9.4      10.1        9.0         8.5       8.5      10.0        9.6     9.7      9.9   10.9    10.7
                                                                                                                                                                             10.7
TOU-PA-5                             6.9        6.3        7.0       8.8       9.4        8.2         7.8       7.8       9.4        9.0     8.9      9.1    9.9    11.9
Ag. and Pumping                      8.8        8.5        8.7      10.6      11.1        9.9         9.4       9.5      11.3       10.9    10.8     11.0   12.0    11.9     11.9

St. and Area Lighting               17.0       14.1       13.9      15.8      17.3       15.5        14.7      14.0      15.3       16.9    17.9     18.7   19.0    18.6     18.3

Total System                         9.6        9.9       10.0      12.5      14.0       12.9        12.2      12.4      14.6       14.0    13.8     14.0   14.4    14.1     14.1

1
    Based on June 2011 Proposed Rate Revenue (PRR) Rates
2 1  Based on June 2011 Proposed Rate Revenue (PRR )Rates
    2012 GRC Proposed Rates
    22012   GRC Proposed Rates with no revenue requirement change
3
    2012 GRC Proposed Rate Group Change for Ag/Pumping Customers with Demand <Demands < 200 kW (PA-1andmapped to TOU-PA-2) to TOU-PA-2)
    32012 GRC Proposed Rate Group Change for Ag/Pumping Customers with 200 kW (PA-1 and PA-2 will be PA-2 will be mapped
4 4
    2012 GRC Proposed Rate Group Change for Ag/Pumping Customers with Demand >Demands > 200 kW (AG-TOU and TOU-PA-5 to TOU-PA-3) to TOU-PA-3
     2012 GRC Proposed Rate Group Change for Ag/Pumping Customers with 200 kW (AG-TOU and TOU-PA-5 will be mapped will be mapped



                                                                                                22                                         SOUTHERN CALIFORNIA EDISON®
SM




Historical Percent of System Average Rates                               Southern California Edison Company
                                                                   Historical Average Rates by Rate Group (¢/kWh)
– Bundled Service                                                       Based on Recorded Revenue and Sales
                                                                                   Bundled Service


                            1998       1999      2000       2001       2002      2003       2004       2005      2006       2007       2008   2009   2010    2011 1    2012 2

Domestic                    118%      115%       114%       104%       96%        99%       103%       104%      108%       109%      109%    109%   108%   110%      113%

GS-1                        125%      122%       120%       130%       125%      122%       121%       123%      121%       126%      123%    120%   122%   120%      111%
TC-1                        76%       74%        74%        83%        96%       96%        99%        93%       92%        96%       100%    103%   110%   110%      115%
GS-2                        103%      103%       100%       106%       110%      109%       109%       109%      107%       103%      104%    106%   110%   109%      105%
TOU-GS-3                    100%      90%        102%       105%       105%      100%       97%        87%       94%        102%      102%    102%   95%    95%       96%
Sm. and Medium Comm.        107%      106%       104%       110%       113%      111%       111%       110%      107%       107%      107%    107%   108%   108%      104%

TOU-8-Sec                   84%        83%        87%       98%        102%       98%        92%       92%        90%       90%        90%    91%    91%    88%       86%
TOU-8-Pri                   75%        74%        79%       87%        92%        89%        84%       86%        86%       85%        86%    83%    82%    81%       78%
TOU-8-Sub                   51%        52%        56%       67%        67%        65%        61%       61%        62%       60%        59%    56%    56%    50%       55%
Large Power                 70%        72%        77%       85%        90%        87%        82%       81%        81%       79%        79%    78%    77%    73%       76%

TOU-8-Sec-Standby            n/a        n/a        n/a       n/a        n/a        n/a       n/a        n/a        n/a       n/a        n/a   n/a    n/a    n/a       82%
TOU-8-Pri-Standby            n/a        n/a        n/a       n/a        n/a        n/a       n/a        n/a        n/a       n/a        n/a   n/a    n/a    n/a       82%
TOU-8-Sub-Standby            n/a        n/a        n/a       n/a        n/a        n/a       n/a        n/a        n/a       n/a        n/a   n/a    n/a    n/a       57%
Large Power-Standby          n/a        n/a        n/a       n/a        n/a        n/a       n/a        n/a        n/a       n/a        n/a   n/a    n/a    n/a       66%

PA-1                        133%      122%       120%       115%       109%      115%       115%       122%      125%       121%      127%    127%   135%   136%
                                                                                                                                                                      90%
PA-2                        90%       86%        87%        86%        80%       82%        86%        86%       88%        89%       93%     93%    103%   100%
AG-TOU                      76%       69%        74%        75%        72%       69%        70%        69%       69%        69%       70%     71%    76%    76%
                                                                                                                                                                      76%
TOU-PA-5                    71%       63%        70%        70%        67%       64%        64%        63%       65%        65%       64%     65%    69%    84%
Ag. and Pumping             92%       85%        87%        85%        79%       76%        77%        77%       78%        78%       78%     79%    84%    85%       84%

St. and Area Lighting       176%      142%       138%       127%       123%      120%       121%       114%      105%       121%      130%    134%   132%   132%      130%

Total System                100%      100%       100%       100%       100%      100%       100%       100%      100%       100%      100%    100%   100%   100%      100%

1 1
  Based
   Based on June 2011 Proposed Revenue (PRR) Rates )Rates
        on June 2011 Proposed Rate Rate Revenue (PRR
2 2
   2012 GRC Proposed Rates with no revenue requirement change
 2012 GRC Proposed Rates
3 3
  2012 GRC Proposed Rate Group Change for Ag/Pumping Customers with Demand < 200 kW (PA-1 and PA-2 will be mapped to TOU-PA-2) to TOU-PA-2)
   2012 GRC Proposed Rate Group Change for Ag/Pumping Customers with Demands < 200 kW (PA-1and PA-2 will be mapped
4 42012 GRC Proposed Rate Group Change for Ag/Pumping Customers with Demands > 200 kW (AG-TOU and TOU-PA-5 will be mapped to TOU-PA-3
  2012 GRC Proposed Rate Group Change for Ag/Pumping Customers with Demand > 200 kW (AG-TOU and TOU-PA-5 will be mapped to TOU-PA-3)



                                                                                           23                                          SOUTHERN CALIFORNIA EDISON®

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SCE rate update to KCTA 120209

  • 1. SM SCE Rate Update to the Kern County Taxpayers Association Russ Garwacki Manager – Pricing Design and Research February 9, 2012 SOUTHERN CALIFORNIA EDISON®
  • 2. SM Revenue Requirement Components - Overview SCE Revenue Requirement (2011) Conclusion DWR Charges Generation • Cost recovery on contracts • Investment and O&M for entered into on behalf of IOUs utility owned generation Less than half of retail during energy crisis (shifted to • Fuel and purchased power SCE-Gen as of 1/1/12) rates fund generation- costs • SPVP Program related activities: Public Purpose Programs • Legislative mandates (energy SCE spends 55% of efficiency, RD&D, renewables rate revenue on investment, etc.) 9.1% important non- • CPUC programs (additional energy efficiency, CARE 6.3% generation services program, etc.) such as distribution 5.3% and transmission Transmission • Investment and O&M system development 44.2% in transmission and reliability, energy (typically >220 kV) efficiency, demand Distribution 35.0% response, and low • Investment in distribution: income assistance poles, wires, substations, servic programs e centers, meters, etc. • California Solar Initiative • Demand Response Programs • Edison SmartConnect 1 SOUTHERN CALIFORNIA EDISON®
  • 3. SM 2012 CPUC General Rate Case - Phase 1 Update  Application Status – Evidentiary hearings took place July 25 – August 26 – Proposed decision expected 1st quarter 2012 – Final decision expected 2nd quarter 2012  Reasons for Request – Inspect, maintain and/or upgrade 1.5 million electric poles, 712,605 transformers and 88,207 miles of distribution lines – Increase grid security – Add smart grid components to integrate more renewable energy – Maintain a skilled work force to handle upcoming changes to the grid and related customer service needs  Current Status – SCE proposed a revenue increase of $794 million for 2012, then $155 million for 2013 and $515 million for 2014. That translates to a 6.9% increase in 2012, 1.3% in 2013, and 4.3% in 2014. – Expecting a proposed decision in the next 1-2 months. – GRC Phase 1 rates expected to be effective 2nd quarter 2012 2 SOUTHERN CALIFORNIA EDISON®
  • 4. SM 2012 FERC General Rate Case Rate increase driven primarily by Renewable Portfolio Standard – Requested increase of $135M from $636M to $771M (21%) – Rates effective January 1, 2012, subject to refund. Formula Rate Strategy – The rate case model worked well for SCE when rate changes were infrequent due to sales growth and limited transmission investment – A formula rate approach used at FERC where specific formulas are used to calculate the utility’s revenue requirement rather than litigating multiple cases. – About 75% of FERC-jurisdictional utilities have a formula rates (e.g. SDG&E and APS, PG&E does not) – If approved, formula rate changes may begin as early as October-2012 3 SOUTHERN CALIFORNIA EDISON®
  • 5. SM Energy Resource Recovery Account (ERRA) - includes Balancing Accounts  ERRA Application – Revenue requirements associated with fuel and power purchases, year-end balancing account balances, and miscellaneous expenses – Filed August 1, 2011 with an update filed November 2011 – Two items are particularly noteworthy – 1. Calculations associated with DA customers’ Cost Responsibility Surcharge (CRS) and specifically the Power Charge Indifference Amount (PCIA) to be implemented. DA customers’ re-billed from 2011-forward. 2. ERRA balancing account is currently over-collected due to low natural gas prices. – Rates will likely be implemented in second Quarter 2012 and possibly be consolidated with GRC Phase 1 rate changes 4 SOUTHERN CALIFORNIA EDISON®
  • 6. SM Department of Water Resources (DWR)  DWR Power Charge – DWR Power Contracts were established in 2001 – Two DWR Power Contracts expired on September 30, 2011 – SCE’s last DWR Power contract expired on December 31, 2011  DWR Bond Charge remains in effect  DWR Power Credit (Reserves Refund) – A portion of the historical DWR-Power payments funded these reserves – DWR will begin returning these reserves to which SCE will pass through to Bundled Service customers on a separate fixed cents/kWh line item credit (about 0.6 cents/kWh). – DA customers will see benefit via our reduced portfolio price thus a reduced CRS. 5 SOUTHERN CALIFORNIA EDISON®
  • 7. SM Estimated 2012 Rate Changes – Rate Group Averages and Tiered Residential Rates Bundled Service Average Rates - ¢/kWh Bundled Service Average Rates - ¢/kWh June 2011 2012 2nd Qtr* % change June 2011 2012 2nd Qtr* % change (A) (C) C/B Domestic 15.5 17.7 14.1% NON-CARE Energy Charge Baseline 12.5 12.6 1.0% GS-1 17.0 19.3 13.5% 101% - 130% of Baseline 14.8 15.5 5.0% GS-2 15.5 16.6 6.9% 131% - 200% of Baseline 22.9 30.5 33.0% 201% - 300% of Baseline 26.4 34.0 28.6% TC-1 15.4 17.3 13.0% Over 300% of Baseline 29.9 37.5 25.3% TOU-GS 13.4 14.3 7.0% LSMP 15.2 16.6 9.1% NON-CARE Energy Charge Baseline 8.5 8.5 0.0% TOU-8-SEC 12.4 13.3 6.9% 101% - 130% of Baseline 10.7 10.7 0.0% TOU-8-PRI 11.4 12.0 5.2% 131% - 200% of Baseline 17.5 20.0 14.3% 201% - 300% of Baseline 17.5 20.0 14.3% TOU-8-SUB 7.1 7.0 -0.9% Over 300% of Baseline 17.5 20.0 14.3% Large Power 10.4 10.8 4.6% PA-1 19.2 22.3 16.2% PA-2 14.1 15.5 10.1% TOU-AG 10.7 11.1 3.7% TOU-PA-5 11.9 11.6 -2.5% Ag & Pumping 11.9 12.7 6.1% Streetlight 18.6 18.5 -0.3% Total 14.1 15.6 10.3% * These rate levels are estimated based on SCE’s latest forecast & are subject to change based on CPUC and FERC decisions ** Includes 2012 ERRA forecast and 2012 GRC Phase 1 at full request 6 SOUTHERN CALIFORNIA EDISON®
  • 8. SM 2012 GRC Phase 2 7 SOUTHERN CALIFORNIA EDISON®
  • 9. SM 2012 GRC Phase 2  Overall Objective - Equitably Recover our Revenue Requirement while supporting various State Energy Policy Objectives.  Since 2001, SCE has successfully reversed the 2001 energy crisis surcharge revenues to achieve an equitable inter-class revenue allocation and achieved settlements in the 2003, 2006, and 2009 cases.  Cost Studies and Revenue Allocation Process – Each rate group’s share of SCE's authorized revenue requirements is based on marginal costs for delivery services (distribution and customer costs), and generation (energy and capacity) that are litigated in this proceeding. Transmission costs and their allocation is established by FERC and are not at issue in this proceeding. – SCE's marginal cost proposals generally follow precedent established in prior GRCs. We apply marginal costs to customer, demand, and usage characteristics of each customer group to determine the relative contribution of each rate group to our costs. – We use SCE's current authorized revenue requirements to illustrate the effect of our proposals. Actual results will incorporate whatever revenue requirement changes have been adopted at the time we implement these changes. 8 SOUTHERN CALIFORNIA EDISON®
  • 10. SM 2012 GRC Phase 2 – Revenue Allocation versus Rates Revenue Allocation: Revenue allocations are aligned relatively close to cost of service Public policy allocations are primarily defined by statute or CPUC decisions Commercial / Industrial Rates: Structures are currently aligned with cost to serve principles Dynamic pricing proposals expected to take effect in 2013 Residential Rates: Structures are driven by legislation, not costs: –Pre-1970’s oil-embargo rate structure had declining block cost-based rates –Mildly inclining block rates introduced to send a conservation price signal (2-tier with maximum differential of 15%). –2001 Energy Crisis brought 5-tier rates with baseline rate restrictions leading to current maximum tier differentials of nearly 250%. High use customers subsidize low use customers by over $600M annually. CARE program subsidy exceeds $300M annually - paid by all remaining customers (res and non-res) on an equal cents/kWh basis. Bulk of $50M annual NEM subsidies caused from by-passing upper tier rates 9 SOUTHERN CALIFORNIA EDISON®
  • 11. SM Residential Rate Equity – The Elephant in the Room • Tiered rate structures are not cost-based. • Higher usage customers (> 600 kWh/month) currently pay $600 M above cost annually. At 7 cents/kWh, a 1200 kWh/month Low usage customer pays $1,000/year above cost. customers are subsidized 10 SOUTHERN CALIFORNIA EDISON®
  • 12. SM 2012 GRC Phase 2 – Residential Rate Equity  SCE has proposed modifications to the rate structure and baseline allowances to mitigate the growing residential intra-class subsidies.  Proposals to mitigate higher bills include: – Elimination of Tier 5 (collapsing with Tier 4 reduces the highest rate) – Overall reduction in baseline allowances to 50% of energy consumed. • Reduced from 60% to 55% in our 2009 GRC Phase 2 • By billing more usage at upper tier rates, upper tier rates are reduced. • Shifts some revenue to low and mid-usage customers. – Separate and distinct baseline allowances for single-family and multi-family residences. 11 SOUTHERN CALIFORNIA EDISON®
  • 13. SM 2012 GRC Phase 2 – Residential Rate Equity Single and Multi-family Baseline Allowances Improves cost allocation between Single and Multi-family dwellings Establish separate baselines for Single and Multi-family dwellings  Refinement in baseline allocations = improved cost allocation  Very different needs  Average Single-family home is 2,434 square feet vs. 1,249 square feet for average Multi-family home  Average monthly Single-family home usage (kWh) is 690 kWh vs. 400 kWh for Multi-family homes  Average number of occupants for Single-family homes is 3.2 vs. 2.3 for Multi-family homes Current: Baseline Proposed: Baseline Sing-family Multi-family Sing-family Multi-family Tier 1 48% 65% Tier 1 52% 50% Tier 2 11% 9% Tier 2 11% 10% Tier 3 and above 41% 26% Tier 3 and above 37% 40% 12 SOUTHERN CALIFORNIA EDISON®
  • 14. SM 2012 GRC Phase 2 – Residential Rate Equity Baseline Adjustments Basic Customer Daily Allowance -- Summer Current @ 55% Proposed at 50% Baseline Regions Single Multi 5 9.1 11.0 4.9 6 9.2 11.1 6.3 8 10.2 12.3 6.9 9 13.9 15.1 9.5 10 16.0 17.0 11.7 13 18.6 18.6 14.2 14 16.1 16.1 11.7 15 43.9 45.8 26.9 16 11.5 11.9 9.3 13 SOUTHERN CALIFORNIA EDISON®
  • 15. SM 2012 GRC Phase 2 – Residential Rate Proposals Collapse Tiers, Baseline Comparison of 2012 GRC Non-CARE Status Quo Design Modifications Rates Structures June 2011 (Note 1) (Note 2) Baseline Allowance => 55% 55% 50% Tiers => 5 5 4 Baseline 12.5 12.4 12.4 101% - 130% of Baseline 14.8 14.8 14.8 131% - 200% of Baseline 22.9 24.5 23.0 200% - 300% of Baseline 26.4 28.0 27.0 Over 300% of Baseline 29.9 31.5 27.0 Single Family Basic Charge $/month 0.88 0.88 0.88 Comparison of 2012 GRC CARE Rates Structures Baseline 8.5 8.5 8.5 101% - 130% of Baseline 10.7 10.7 10.7 131% - 200% of Baseline 17.5 18.7 17.5 200% - 300% of Baseline 17.5 18.7 17.5 Over 300% of Baseline 17.5 18.7 17.5 Single Family Basic Charge $/month 0.70 0.70 0.70 Notes: 1) The status quo rate structure is defined as SCE’s existing rate structure, maintaining the existing customer charge, baseline allocations, and $0.07/kWh differential between Tier 3 and Tier 5 rates. 2) The Proposed rate structure includes the adjustments to baseline allowances and a 4-Tier rate structure. 3) 2012 forecasted rates (columns 2-5), reflect updated cost allocations. Note: Data above do NOT include impacts of all 2012 revenue requirements changes. 14 SOUTHERN CALIFORNIA EDISON®
  • 16. SM 2012 GRC Phase 2 – Residential Rate Equity  KernTax was instrumental in getting several rate changes in PG&E’s recent GRC. – Reduced baseline allowances from 60% to 55% (SCE in 2009 GRC) – Implemented a Tier 3 rate for CARE customers (SCE in 2003 GRC) – Eliminated Tier 5 (SCE proposed in 2012 GRC) – A new customer charge for PG&E was rejected by the CPUC on legal and policy grounds (SCE in 1995 GRC)  SCE’s proposals help, but significant improvements in rate equity will require legislation. – The single most significant rate change to improve equity is the ability to implement a reasonable customer charge. – Typical utility monthly customer charges range from $5-$10. – If implemented, these new revenues would offset upper tier rate levels. 15 SOUTHERN CALIFORNIA EDISON®
  • 17. SM Dynamic Pricing Deployment  2009 GRC Phase 2 decision (D.09-08-028) ordered SCE to file an application proposing: – Mandatory TOU rates for all non-residential customers – Default Critical Peak Pricing (CPP) rates for all commercial/industrial customers < 200 kW and Ag/Pumping customers > 200 kW – New rates to be effective January 1, 2012  On September 1, 2010, SCE filed its Dynamic Pricing application proposing: – Mandatory TOU rates for all non-residential customers – Default CPP rates for all commercial/industrial customers < 200 kW and Ag/Pumping customers > 200 kW  ALJ Ruling directed SCE to include its Dynamic Pricing proposals in its 2012 GRC Phase 2 Application  In the 2012 GRC Phase 2 Application, SCE proposed to: – Implement mandatory TOU rates for non-residential customers – Offer CPP rates to all customer classes on an opt-in basis – On-line customer rate analysis tool to be deployed late 2012 for rates to be effective January 2013. 16 SOUTHERN CALIFORNIA EDISON®
  • 18. SM SCE’s 2012 GRC Phase 2 – Current Schedule SCE – Application and Service of Marginal June 6, 2011 Cost (MC), Revenue Allocation (RA) and Rate Design Testimony DRA – MC, RA and Rate Design December 20, 2011 Testimony Other Parties’ – MC, RA and Rate Design February 6, 2012 Testimony Settlement Discussions February – April 2012 Public Participation Hearings February – April 2012 Rebuttal Testimony- All Parties April 23, 2012 Evidentiary Hearings May 14-18, 2012 Opening Briefs June 15, 2012 Reply Briefs July 6, 2012 ALJ Proposed Decision (PD) October 2012 Initial Comments on PD October 2012 Reply Comments on PD October 2012 CPUC - Final Decision November 2012 Rates Effective January 1, 2013 17 SOUTHERN CALIFORNIA EDISON®
  • 19. SM Backup 18 SOUTHERN CALIFORNIA EDISON®
  • 20. SM 2012 GRC Phase 2 Bill Impacts: Oct 7th filing - Non CARE Residential NON-CARE (Bundled): Annual Bill Impact (June 2011 Vs 2012 GRC) 35.0% 33.1% 30.0% 25.0% 20.8% %Customer 20.0% 16.0% 15.0% 10.0% 8.2% 6.0% 5.0% 4.6% 5.0% 3.9% 1.6% 0.4% 0.3% 0.0% 0.0% Below - < -10% to - < -5% to - < -3% to > 0% to > 3% to 5% >5% to > 10% to > 15% to > 20% to >30% to 10% 5% 3% 0% 3% 10% 15% 20% 30% 45% Above45% % Impact Percent Average Rates - Impact - Average Monthly Bill Impact Customer Customer Ratio Average ¢/kWh % -$ % % All Monthly $ Bill % Numbe r % %Multi %Single % Multi Single % Ba s ic Ele ctric Bill da ys kW h J une 2011 GRC 2012 Ave ra ge Curre nt Propos e d Cha nge Be low -10% 11,617 0.4% 0.0% 0.6% 0.0% 100.0% 0.6% 99.4% 328 974 18.9 16.5 -12.6% $184.2 $161.0 -$23.2 < -10% to -5% 613,013 20.8% 0.2% 30.2% 0.3% 99.7% 97.4% 2.6% 351 952 21.4 19.9 -7.1% $203.5 $189.0 -$14.5 < -5% to -3% 472,273 16.0% 0.1% 23.3% 0.2% 99.8% 98.8% 1.2% 351 802 18.5 17.8 -3.8% $148.3 $142.7 -$5.6 < -3% to 0% 974,102 33.1% 20.1% 39.0% 19.0% 81.0% 91.2% 8.8% 301 470 16.2 15.9 -1.8% $76.1 $74.8 -$1.3 > 0% to 3% 240,554 8.2% 12.3% 6.3% 47.2% 52.8% 81.9% 18.1% 322 531 16.3 16.4 0.6% $86.5 $87.0 $0.5 > 3% to 5% 46,856 1.6% 4.9% 0.1% 96.1% 3.9% 66.6% 33.4% 313 404 15.9 16.6 4.0% $64.3 $66.9 $2.6 >5% to 10% 115,818 3.9% 12.0% 0.3% 95.4% 4.6% 68.7% 31.3% 322 485 16.2 17.4 7.7% $78.4 $84.4 $6.0 > 10% to 15% 148,030 5.0% 15.7% 0.2% 97.3% 2.7% 76.0% 24.0% 326 545 16.0 18.0 12.7% $87.3 $98.3 $11.0 > 15% to 20% 176,244 6.0% 19.1% 0.0% 99.7% 0.3% 81.8% 18.2% 328 539 15.5 18.3 17.5% $83.8 $98.5 $14.6 > 20% to 30% 136,197 4.6% 14.8% 0.0% 100.0% 0.0% 86.6% 13.4% 323 489 14.7 18.0 22.2% $72.1 $88.1 $16.0 >30% to 45% 7,913 0.3% 0.9% 0.0% 100.0% 0.0% 0.7% 99.3% 327 887 14.1 19.0 34.6% $125.5 $168.8 $43.4 Above 45% 181 0.0% 0.0% 0.0% 100.0% 0.0% 0.0% 100.0% 43 824 13.3 19.7 47.6% $110.0 $162.3 $52.4 Group Tota l 2,942,798 100.0% 100.0% 100.0% 31.3% 68.7% 89.5% 10.5% 326 652 18.3 18.0 -1.8% $119.3 $117.2 -$2.1 Note: Customer Charge = $0.88; 4 Tiers; BL = 50% SOUTHERN CALIFORNIA EDISON® 19
  • 21. SM 2012 Functional Revenue Allocation Factors % of Marginal Cost Revenue Responsibility (MCRR) Generation Percent of Total Generation Generation System (Bundled Energy Capacity Sales (incl. Rate Class Distribution Sales) (Bundled Sales) (Bundled Sales) losses) Total Residential 50.03% 41.49% 37.81% 47.77% 37.14% GS-1 6.92% 6.55% 6.60% 6.46% 5.91% TC-1 0.14% 0.07% 0.09% 0.05% 0.07% GS-2 20.07% 19.55% 20.17% 18.49% 19.05% TOU-GS-3 7.90% 8.42% 8.64% 8.04% 9.71% Total LSMP 35.04% 34.60% 35.50% 33.05% 34.74% TOU-8-SEC 6.39% 8.46% 8.99% 7.55% 9.74% TOU-8-PRI 3.55% 4.79% 5.22% 4.05% 5.95% TOU-8-SUB 0.97% 3.83% 4.37% 2.92% 5.68% Total Large Power 10.92% 17.07% 18.57% 14.52% 21.37% TOU-PA-2 1.88% 2.27% 2.50% 1.87% 2.07% TOU-PA-3 0.84% 1.40% 1.66% 0.96% 1.31% Total Ag.&Pump. 2.72% 3.67% 4.16% 2.83% 3.38% Total Street Lights 0.27% 0.59% 0.93% 0.01% 0.55% Standby-SEC 0.18% 0.23% 0.26% 0.19% 0.25% Standby-PRI 0.58% 0.69% 0.79% 0.54% 0.77% Standby-SUB 0.28% 1.65% 1.97% 1.10% 1.81% Total Standby 1.04% 2.58% 3.02% 1.82% 2.83% SYSTEM 100.00% 100.00% 100.00% 100.00% 100.00% The allocation factors indicate the relative importance of various revenue requirement changes upon different rate groups. For example, a “distribution” case (e.g. GRC Phase 1) has a larger impact on Residential customers versus Large Power customers, who are more strongly affected by “generation” cases (e.g. ERRA). 20 SOUTHERN CALIFORNIA EDISON®
  • 22. SM 2012 GRC Phase 2 Class Average Rate Levels – Average Rate Impacts at June 2011 Present Rate Revenue Levels Current +Phase 1 % Change (June June 2011 Proposed Proposed 11 vs. (¢/kWh) % of SAR (¢/kWh) % of SAR % Change (¢/kWh) % of SAR Current+Phase 1) Total Domestic 15.6 110% 15.9 113% 2.0% 17.3 114% 10.5% GS-1 17.0 120% 15.7 111% -8.0% 16.8 111% -1.1% TC-1 15.3 108% 16.2 114% 5.7% 17.6 116% 15.0% GS-2 15.2 107% 14.8 105% -2.6% 15.9 104% 4.5% TOU-GS-3 13.2 93% 13.6 96% 2.9% 14.5 95% 10.0% Total LSMP 15.0 106% 14.6 104% -2.6% 15.7 103% 4.5% TOU-8-SEC 12.4 88% 12.1 86% -2.6% 12.9 85% 3.7% TOU-8-PRI 11.2 79% 11.0 78% -1.4% 11.7 77% 5.0% TOU-8-SUB 7.1 50% 7.7 55% 9.3% 8.2 54% 15.6% Total Large Power 10.8 76% 10.7 76% -0.4% 11.4 75% 6.0% TOU-PA-2 13.0 92% 12.7 90% -2.1% 13.6 90% 4.9% TOU-PA-3 10.2 72% 10.7 75% 4.7% 11.4 75% 11.6% Total Ag.&Pumping 11.9 84% 11.9 84% 0.2% 12.7 84% 7.2% Total Street Lighting 18.0 127% 18.3 130% 2.0% 18.8 123% 4.3% Standby-SEC 11.5 81% 11.6 82% 0.5% 12.4 81% 7.4% Standby-PRI 11.3 80% 11.5 81% 1.6% 12.3 81% 8.4% Standby-SUB 8.1 57% 8.1 58% 0.5% 8.6 56% 5.6% Total Standby 9.2 65% 9.3 66% 0.8% 9.8 65% 6.7% Total System 14.2 100% 14.1 100% -0.1% 15.2 100% 7.3% Note: Data above do NOT include impacts of all 2012 revenue requirements changes. 21 SOUTHERN CALIFORNIA EDISON®
  • 23. SM Historical Class Average Rates Southern California Edison Company Historical Average Rates by Rate Group (¢/kWh) Based on Recorded Revenue and Sales – (¢/kWh) Bundled Service Bundled Service 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1 2012 2 Domestic 11.4 11.4 11.5 13.0 13.5 12.8 12.5 12.9 15.7 15.3 15.0 15.2 15.5 15.5 15.9 GS-1 12.1 12.1 12.0 16.2 17.5 15.8 14.8 15.2 17.6 17.6 17.0 16.9 17.5 17.0 15.7 TC-1 7.3 7.4 7.4 10.3 13.5 12.4 12.0 11.5 13.4 13.5 13.8 14.5 15.8 15.5 16.2 GS-2 9.9 10.2 10.1 13.2 15.5 14.1 13.3 13.5 15.6 14.3 14.3 14.8 15.7 15.4 14.8 TOU-GS-3 9.7 8.9 10.2 13.1 14.7 13.0 11.8 10.8 13.6 14.2 14.1 14.3 13.7 13.4 13.6 Sm. and Medium Comm. 10.3 10.5 10.4 13.7 15.8 14.4 13.5 13.6 15.6 14.9 14.7 15.0 15.5 15.2 14.6 TOU-8-Sec 8.1 8.2 8.7 12.2 14.3 12.6 11.2 11.3 13.2 12.5 12.4 12.7 13.1 12.4 12.1 TOU-8-Pri 7.2 7.4 7.9 10.9 13.0 11.5 10.3 10.7 12.6 11.9 11.8 11.7 11.8 11.4 11.0 TOU-8-Sub 4.9 5.1 5.7 8.3 9.4 8.4 7.4 7.5 9.1 8.3 8.1 7.9 8.0 7.1 7.7 Large Power 6.8 7.1 7.7 10.6 12.6 11.2 9.9 10.0 11.8 11.1 10.9 10.9 11.1 10.4 10.7 TOU-8-Sec-Standby n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 11.6 TOU-8-Pri-Standby n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 11.5 TOU-8-Sub-Standby n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 8.1 Large Power-Standby n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 9.3 PA-1 12.8 12.1 12.1 14.3 15.3 14.9 14.0 15.1 18.2 16.9 17.5 17.8 19.4 19.2 12.7 PA-2 8.7 8.5 8.7 10.7 11.3 10.5 10.4 10.7 12.8 12.5 12.8 13.1 14.8 14.1 AG-TOU 7.4 6.9 7.5 9.4 10.1 9.0 8.5 8.5 10.0 9.6 9.7 9.9 10.9 10.7 10.7 TOU-PA-5 6.9 6.3 7.0 8.8 9.4 8.2 7.8 7.8 9.4 9.0 8.9 9.1 9.9 11.9 Ag. and Pumping 8.8 8.5 8.7 10.6 11.1 9.9 9.4 9.5 11.3 10.9 10.8 11.0 12.0 11.9 11.9 St. and Area Lighting 17.0 14.1 13.9 15.8 17.3 15.5 14.7 14.0 15.3 16.9 17.9 18.7 19.0 18.6 18.3 Total System 9.6 9.9 10.0 12.5 14.0 12.9 12.2 12.4 14.6 14.0 13.8 14.0 14.4 14.1 14.1 1 Based on June 2011 Proposed Rate Revenue (PRR) Rates 2 1 Based on June 2011 Proposed Rate Revenue (PRR )Rates 2012 GRC Proposed Rates 22012 GRC Proposed Rates with no revenue requirement change 3 2012 GRC Proposed Rate Group Change for Ag/Pumping Customers with Demand <Demands < 200 kW (PA-1andmapped to TOU-PA-2) to TOU-PA-2) 32012 GRC Proposed Rate Group Change for Ag/Pumping Customers with 200 kW (PA-1 and PA-2 will be PA-2 will be mapped 4 4 2012 GRC Proposed Rate Group Change for Ag/Pumping Customers with Demand >Demands > 200 kW (AG-TOU and TOU-PA-5 to TOU-PA-3) to TOU-PA-3 2012 GRC Proposed Rate Group Change for Ag/Pumping Customers with 200 kW (AG-TOU and TOU-PA-5 will be mapped will be mapped 22 SOUTHERN CALIFORNIA EDISON®
  • 24. SM Historical Percent of System Average Rates Southern California Edison Company Historical Average Rates by Rate Group (¢/kWh) – Bundled Service Based on Recorded Revenue and Sales Bundled Service 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1 2012 2 Domestic 118% 115% 114% 104% 96% 99% 103% 104% 108% 109% 109% 109% 108% 110% 113% GS-1 125% 122% 120% 130% 125% 122% 121% 123% 121% 126% 123% 120% 122% 120% 111% TC-1 76% 74% 74% 83% 96% 96% 99% 93% 92% 96% 100% 103% 110% 110% 115% GS-2 103% 103% 100% 106% 110% 109% 109% 109% 107% 103% 104% 106% 110% 109% 105% TOU-GS-3 100% 90% 102% 105% 105% 100% 97% 87% 94% 102% 102% 102% 95% 95% 96% Sm. and Medium Comm. 107% 106% 104% 110% 113% 111% 111% 110% 107% 107% 107% 107% 108% 108% 104% TOU-8-Sec 84% 83% 87% 98% 102% 98% 92% 92% 90% 90% 90% 91% 91% 88% 86% TOU-8-Pri 75% 74% 79% 87% 92% 89% 84% 86% 86% 85% 86% 83% 82% 81% 78% TOU-8-Sub 51% 52% 56% 67% 67% 65% 61% 61% 62% 60% 59% 56% 56% 50% 55% Large Power 70% 72% 77% 85% 90% 87% 82% 81% 81% 79% 79% 78% 77% 73% 76% TOU-8-Sec-Standby n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 82% TOU-8-Pri-Standby n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 82% TOU-8-Sub-Standby n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 57% Large Power-Standby n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 66% PA-1 133% 122% 120% 115% 109% 115% 115% 122% 125% 121% 127% 127% 135% 136% 90% PA-2 90% 86% 87% 86% 80% 82% 86% 86% 88% 89% 93% 93% 103% 100% AG-TOU 76% 69% 74% 75% 72% 69% 70% 69% 69% 69% 70% 71% 76% 76% 76% TOU-PA-5 71% 63% 70% 70% 67% 64% 64% 63% 65% 65% 64% 65% 69% 84% Ag. and Pumping 92% 85% 87% 85% 79% 76% 77% 77% 78% 78% 78% 79% 84% 85% 84% St. and Area Lighting 176% 142% 138% 127% 123% 120% 121% 114% 105% 121% 130% 134% 132% 132% 130% Total System 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 1 1 Based Based on June 2011 Proposed Revenue (PRR) Rates )Rates on June 2011 Proposed Rate Rate Revenue (PRR 2 2 2012 GRC Proposed Rates with no revenue requirement change 2012 GRC Proposed Rates 3 3 2012 GRC Proposed Rate Group Change for Ag/Pumping Customers with Demand < 200 kW (PA-1 and PA-2 will be mapped to TOU-PA-2) to TOU-PA-2) 2012 GRC Proposed Rate Group Change for Ag/Pumping Customers with Demands < 200 kW (PA-1and PA-2 will be mapped 4 42012 GRC Proposed Rate Group Change for Ag/Pumping Customers with Demands > 200 kW (AG-TOU and TOU-PA-5 will be mapped to TOU-PA-3 2012 GRC Proposed Rate Group Change for Ag/Pumping Customers with Demand > 200 kW (AG-TOU and TOU-PA-5 will be mapped to TOU-PA-3) 23 SOUTHERN CALIFORNIA EDISON®

Editor's Notes

  1. November of 2010, SCE filed original GRC Phase 1 ApplicationApril 2011, filed adjustment to the application reducing amount requested from $866M to $794MHigh level process:File ApplicationData Request and Discovery PeriodHearingsBriefs (legal documents we file) -&gt; OctProposed Decision -&gt; Nov/DecFinal Decision -&gt; 1st Qtr 2012
  2. We are anticipating two refueling events in 2012 (usually only have one), but every once in awhile we have two refueling events. We did not have a refueling event in 2011. During time SONGS is down, we are purchasing power on the marketReplacement energy costs will be higher than normal due to the outages
  3. Department of Water Resources on behalf of the State of California purchased long term power contracts as the IOU’s and state were going through the energy crisis in 2001. For the last 10 years there has been a DWR Power charge on your bill. The split for most of the time was 70% SCE URG and 30% DWR Power was recently to 80%/20% January 1, 2011 and adjusted again to 91%/9% on October 1, 2011Effective 1/1/12 SCE will purchase 100% generationOriginal DWR Bond issue included reserves. As contracts expire, DWR will credit each IOU for reserves that no longer have to be maintained. SCE will pass through the payments on the reserves back to the customers in the form of a DWR Power CreditThese two contracts accounted for approximately 1,700 MW, or 67% of the energy currently received from DWROriginal DWRBond Issue included reserves. As contracts expire, DWR will credit each IOU for reserves that no longer have to be maintained. SCE will pass through the payments on the reserves back to the customers in the form of a DWR Power Credit
  4. This is just an estimate at this point based on what we have filed with the CPUCThis is based on SCE receiving 100% of what we asked for in our GRC Phase 1 filing. These numbers will be adjusted based on the final decision on GRC Phase 1 from the CPUC
  5. Proposed Distribution Allocation:Distribution~60% Grid-Based (System Average)Associated with grid infrastructure whose costs does not vary with demandAllocation is based on sum of non coincident demands at final line transformerDiversified Load measured at the Final Line Transformer – Billed as a customer charge. Diversity allowance benefits Res, GS-1 and GS-2 the most as they have more than one customer hooked up~40% Effective Demand Allocated (System Average)Same as what we do todaySum of non-coincident demand for individual customer Exact NEM Breakdown is:Res = $34M (100MW) Results in current subsidy of $340k per MWNon-Res = $16M (150MW) Results in current subsidy of $107k per MW