Edison Insights Series: California’s Climate Policies and Transportation Electrification April 12, 2017
Forward-Looking Statements Statements contained in this presentation about future performance, including, without limitation, operating results, capital expenditures, rate base growth, policy developments at the state and federal level, and other statements that are not purely historical, are forward-looking statements. These forward-looking statements reflect our current expectations; however, such statements involve risks and uncertainties. Actual results could differ materially from current expectations. These forward-looking statements represent our expectations only as of the date of this presentation, and Edison International assumes no duty to update them to reflect new information, events or circumstances. Important factors that could cause different results include, but are not limited to the: decisions and other actions by the CPUC, the FERC and other regulatory authorities, including the • determinations of authorized rates of return or return on equity, approval of proposed spending on grid modernization, transportation electrification, storage, transmission and other initiatives, and delays in regulatory actions; risks associated with cost allocation, including the potential movement of costs to certain customers, • caused by the ability of cities, counties and certain other public agencies to generate and/or purchase electricity for their local residents and businesses, along with other possible customer bypass or departure due to increased adoption of distributed energy resources or technological advancements in the generation, storage, transmission, distribution and use of electricity, and supported by public policy, government regulations and incentives; risks inherent in the construction of SCE’s transmission and distribution infrastructure investment • program, including those related to project site identification, public opposition, environmental mitigation, construction, permitting, power curtailment costs (payments due under power contracts in the event there is insufficient transmission to enable acceptance of power delivery), and governmental approvals. Other important factors are discussed under the headings “Risk Factors” and “Management’s Discussion and Analysis” in Edison International’s (EIX) Form 10-K and other reports filed with the Securities and Exchange Commission, which are available on our website: www.edisoninvestor.com. These filings also provide additional information on historical and other factual data contained in this presentation. April 12, 2017 2
Edison Insights Series Objectives Series and Call Objectives Supporting Our Value Proposition Wires-Focused SCE Strategy • Series of conference calls and videos on key topics that underscore the EIX Infrastructure replacement – safety and • investor value proposition with an SCE reliability focus Grid modernization – California’s low- • • This call will address key policy drivers carbon goals (legislation, regulation and key agencies) Operational excellence influencing California greenhouse gas • Edison International Investor Value Drivers (GHG) policies particularly important to investors Above average earnings growth • opportunity driven by SCE rate base • “Paint the picture” of how SCE’s grid and growth operating model will evolve as a key enabler of California GHG policies while Above average dividend growth • identifying some of the likely conflicts opportunity and barriers as policies and technologies are adopted • Future series topics will include grid modernization and renewables and transmission planning plus others as appropriate April 12, 2017 3
T oday’s Call Speakers Topics • Objectives – Key California public policies to Pedro Pizarro, President and CEO monitor related to current 2030 GHG reduction Edison International targets and a deeper dive on transportation electrification • Key takeaways • Legal and policy foundation Kevin Payne, CEO • California’s continued broadening of Investor- Southern California Edison Owned Utility (IOU) role in GHG reduction • Importance of CARB and cap-and-trade program • 2030 GHG targets and SCE views on priorities • The positive California GHG policy implications Ron Nichols, President for long-term SCE growth Southern California Edison • Los Angeles Basin air quality compliance implication for transportation electrification • Transportation electrification – CARB priorities Caroline Choi, Senior Vice President and potential of SCE’s proposed programs Southern California Edison • SCE Phase I EV Charging Program early lessons learned April 12, 2017 4
California Climate Policies –Timeline 2006-2010 2016-2017 • SB 32 (2016) – 40% GHG CPUC authorizes Smart Meter SB 1 (2006) – establishes • • reduction from 1990 levels investments by IOUs (2006) California Solar Initiative targeting by 2030 SB 107 (2006) – accelerates 20% 1 million solar installations • • AB 2868 (2016) – added 500 IOU renewable target to 2010 AB 32 (2006) – targets reaching • MW storage investment SB 1368 (2006) – Emission 1990 GHG levels by 2020 • • CARB Updated Scoping Performance Standards effectively CARB Climate Change Scoping • Plan under SB32 (2017) preclude coal-fired generation Plan under AB 32 (2008, 2014) • SB 1078 (2002) – 20% SB X1-2 (2011) – increases renewables Executive Order B-30-15 (2015) • • renewables target for targets to 33% by 2020 for all electric – 40% GHG reduction policy IOUs by 2017 utilities target from 1990 levels and 50% • Executive Order S-03-05 CPUC authorizes 1,325 MW of storage renewable target by 2030 • (2005) – 80% GHG investments by IOUs (2013) SB 350 (2015) – codifies 50% • reduction policy target CPUC authorizes IOUs to own renewables target; solicits IOU • by 2050 transportation electrification (TE) TE proposals infrastructure (2014) 2011-2015 2000-2005 April 12, 2017 5
California Climate Policies – Future Timeline 2017 2020 2050 • IOU Transportation • Reduce GHG • Once through cooling retires • Target reduction of Electrification proposals emissions to 1990 significant conventional GHG emissions to • CARB Updated Scoping levels generation 80% below 1990 Plan • 33% of electricity • New residential construction levels • Integrated Resource sales from with zero net energy Plan renewables • 1.5 million • Reduce GHG emissions to • New commercial electric 40% below 1990 levels construction zero net vehicles • 50% of electricity sales energy • Energy from renewables • Double statewide storage • 4.2 million electric vehicles energy efficiency policy CPUC target savings mandate • Post 2020 cap-and-trade program 2025 2030 Achieving California’s expansive energy and environmental policy goals will require taking foundational steps to evolve the electric grid and further develop new technologies April 12, 2017 6
CARB Updated Scoping Plan – January 2017 CARB GHG Reduction Targets First Scoping Plan Under AB 32 (2008, 700 2014) – Policy Framework for Economy Greenhouse Gas Emissions Reductions (MMTCO 2 e) Updated Scoping Plan (2017) – Key 600 191 Elements • Post 2020 cap-and-trade program 342 500 • 50% renewables and energy efficiency targets from SB 350 400 217 • Low Carbon Fuel Standard – reduce carbon intensity by 18% by 2030 300 67 • Mobile Source Strategy – put 4.2 million 200 zero emission vehicles (ZEVs) on the road 54 338 and increase ZEV buses, delivery and other 88 100 trucks by 2030 30 9 25 • Sustainable Freight Strategy – deploy over 0 100,000 ZEV trucks and equipment by 2030 Proposed Scoping Plan Uncertainty Scenario Scenario CARB’s Uncertainty Scenario Highlights Key Swing Factor Role of Cap-and-Trade Should Program Mandates Fall Short Source: CARB 2017 Climate Change Scoping Plan Update . The GHG reductions in the Plan’s Uncertainty Scenario represent uncertainty surrounding measure performance. CARB modeled assumptions around the ability of measures to achieve its full estimated potential GHG reductions as provided in the modeled scenario. April 12, 2017 7
CARB Updated Scoping Plan GHG Reductions 2% 35% Cap ‐ and ‐ Trade 16% Other 5% Transportation 22% 28% Industrial Electric Power 21% 25% Residential and Commercial 14% Agriculture 10% 10% 6% 6% 1990 Total: 431 MMTCO 2 e 2030 Proposed Total: 260 MMTCO 2 e Cap-and-trade effectiveness will be a key success factor in meeting CARB’s target emission reductions by sector Source: CARB 2017 Climate Change Scoping Plan Update. 2030 Forecast based on midpoint of CARB proposed Scoping Plan scenario ranges for targeted GHG reductions. April 12, 2017 8
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