Slide 1

May 2013Electric infrastructure:Balancing competing interestsTehachapi Renewable Transmission Project (TRTP)

You may have heard the debate regarding the proposed undergrounding of a segment of the Tehachapi Renewable Transmission Project, which passes through the city of Chino Hills.We respect the rights of homeowners and individuals to express their concerns. As a utility bound to serve the greater good, we weigh these concerns with whats in the best interest of the public. What it comes down to is a measure of fairness and fiduciary responsibility. And wed like to give voice to the silent majority and the impacts of an undergrounding decision. 1SCE is expanding and upgrading its transmission and distribution networks to:Meet the regions growing demand for electricityImprove grid performanceMeet Californias ambitious renewable power goalsRenewable resources such as wind and solar are located far from the populated areas where customers can put that power to useBuilding new or upgrading existing high-voltage transmission lines makes it possible to transport power from its generation source over long distances to where most Californians live and work

Delivering more renewable power

3The playing fieldBuilding infrastructure means bALANCING COMPETING INTERESTS

SAFETY,RELIABILITYPUBLIC POLICY,RENEWABLESAFFORDABLE ENERGY VARIOUS INTERESTS.There are many sides to this story. But SCE needs to champion whats in the best interest of California and its customersnot take the side of special interests.

The state of California wants to provide renewable energy. This projects timely and cost-effective completion will support meeting the 33% renewable energy procurement goal by 2020.

As mentioned, SCE has the responsibility is to serve customers to provide the safest, most reliable and affordable electricity. Completing the project as planned is what the CPUC and SCE agree is the way to accomplish this.

Our customersbusiness and residentialare willing to pay more to support renewables, but not willing to pay more to support the special interests of a few.

And then there are those who oppose continuing the project as planned because of aesthetics. What it comes down to is that they dont want the poles visible on the SCE right of way. The proposal to underground the 3.5 miles of lines in Chino Hills has been advanced by the city on behalf of a subset of Chino Hills residents, such as the roughly 1,000+ customers that live within 300 feet of the right-of-way. If the commission orders SCE to place the lines underground, the nearly 12 million California electricity customers served by the Independent System Operator would have to pay for putting the lines underground.

34Tehachapi Renewable Transmission Project (TRTP)

The nations largest transmission project devoted primarily to renewable energy

Total project length: 250 circuit miles of infrastructure (spanning 173 miles) across 20 communities in 3 counties; nearly all in existing utility right-of-way corridor

Overall project cost: $2.1 billion

New capacity: Enough renewable energy capacity to power approximately 3 million homes (4,500 megawatts)

CPUC approved the overhead project in 2009 with completion targeted for late 2015

TRTP Segments 1-3 (shown as green lines) were approved in March 2007 and are completeThe Tehachapi Renewable Transmission Project is a massive project designed to help import renewable energy from distant locations.

The primary purpose of this project is to meet Californias Renewable Portfolio Standard program to increase renewable energy procurement to 33% by 2020.

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5TRTP: $2.1 billion project spanning 20 communities to import up to 4,500 MW of renewable power to the Southern California basinCURRENT STATE20092011NOW2015CPUC approves overhead construction after extensive engineering and environmental analysisConstruction begins and Chino Hills portion later halted by CPUC

12 of 18 transmission structures complete in Chino Hills

CPUC directs SCE to explore undergrounding

Complete project to meet state renewable mandateCONSTRUCTION ON OTHER TRTP SEGMENTS CONTINUESIn 2009, after a thorough evaluation focusing on Chino Hills concerns, the California Public Utilities Commission made the decision to reject undergrounding, instead finding that an overhead option for the Tehachapi project-route through Chino Hills was in the best interest of California.

The primary purpose of this project is to meet Californias Renewable Portfolio Standard program to increase renewable energy procurement to 33% by 2020. SCE should be able to rely on that determination to construct the transmission necessary to connect critical renewable generation to Californias transmission grid.

Instead, construction has been delayed and unnecessary cost has been added to that segment of the project because of the interests of the few.

Meanwhile, 12 of the 16 transmission structures are complete and we have a state-mandated deadline of 2015 to complete the project.

5Most effective route for transmitting 500 kilovolts to import up to 4,500 MW of renewable power over distance

Least environmental impact

Most cost-effective: extra $400m-$700m to underground

3 miles is less than 2% of overall project$400m - $700m is approximately 25% - 33% of total project budget

Construction method

Overhead proven reliable over time Underground of 500 kilovolt transmission is first in US

6Overhead is the best option

Completing the project with overhead lines was originally deemed in the best interest of California, according to the CPUC. The route was picked specifically by the CPUC because it had the least environmental impact.

The undergrounding process is being driven by Chino Hills and the California Public Utilities Commission, not SCE. SCE is recommending the previously approved, overhead route.

A requirement to underground the high voltage lines would not only add significant cost to the projecta burden that would need to be shared by ALL customers of the California Independent System Operatorbut also has no precedent of being done in the US.

67Overhead/Underground COMPARISON

Tehachapi (Chino Hills)OverheadUndergroundSupports states renewable energy goalsYESYES But potential schedule delaysEnvironmentally sensitiveYES75% completeTRTP EIRs completed/approvedNOTwo transition stations and extensive constructionUnknown artifacts underground Best use of financial resourcesYESNO$400m-$700m additional costsPaid by all CAISO ratepayers (SCE, SDG&E, PG&E)

Safe construction methodYES FIRST IN US (500 kilovolt)Quick restoration time if outage YESEasy to identify problem overheadHours/days to restoreNOHard to identify problem undergroundWeeks/months to restoreBenefit to all ratepayersYESNOIn summary, completing the project as plannedas an overhead line construction projectoffers the greatest benefit for the public good.

It would not unfairly burden CAISO customers with unnecessary costs for project completion. It would not require additional switching stations and environmental impact. It would not open the door to unintended consequences of an unprecedented construction method for 500 KV lines.

The only thing that it doesnt provide is a better view for the homeowners along the right of way.

Its up to us to decide which is the more prudent method of completing the project. 7Assemblymember Steve BradfordState Senator Alex PadillaBoard of Equalization Vice Chair Michelle SteelCounty of KernVentura County Econ. Dev. AgencyCity of WhittierCity of Pico RiveraAmerican Assoc. of Blacks in EnergyCA Manufacturers & Technology Assoc.Congress of CA SeniorsCA Asian Pacific Chamber of CommerceNumerous other chambers of commerce throughout CAOrganizations OPPOSING impacts of UNDERGROUND OPTIONIn Orange CountyHuntington Beach Chamber of CommerceFullerton Chamber of CommerceCypress Chamber of CommerceSeal Beach Chamber of CommerceOrange Chamber of CommercePlacentia Chamber of CommerceOrange County Black Chamber of CommerceOrange County Hispanic Chamber of CommercePartial list, to date, of individuals and organizations urging the CPUC to oppose the underground consideration:Potential cost impacts

Precedence for an undergrounding project like this

Bad public policy of a state agency reversing an earlier decisionStatewide issue

Questions?