Total Compensation Study Prepared By Hewitt Associates LLC

2012 General Rate Case—Total Compensation Study Report— Final —Southern California EdisonNovember 4, 2010Hewitt AssociatesB-1

IntroductionIn 2010 Southern California Edison (“SCE”) and the Division of Ratepayer Advocates (“DRA”) of theCalifornia Public Utilities Commission (“CPUC”) selected Hewitt Associates (“Hewitt”) to conduct acompetitive analysis of SCE’s total compensation. This 2012 GRC Total Compensation Study (the “Study”)was conducted in conjunction with SCE’s 2012 General Rate Case submittal in compliance with CPUCdecisions D.87-12-066, D.89-12-057, D.96-01-011, and D.07-07-004.Working together as the GRC Study Team (the Team), representatives of SCE, DRA, and Hewitt developedthe Study methodology. Hewitt applied this methodology to obtain competitive total compensation data andthen compared that data to SCE’s total compensation levels.The Team made major project methodology decisions by consensus. Although many issues were raisedand discussed, the Team attained general agreement regarding the Study approach. The majormethodology decisions and the rationale for making them are included in this report and are also referencedin the meeting notes and workpapers. Areas of agreement, as well as varying points of view, are describedin the meeting notes.The Team members included the following: Marek Kanter—DRA, Energy Cost of Service and Natural Gas Branch Lupe C. Clapp—SCE Martin J. Collette—SCE George M. DeMaria—SCE Patricia L. Adams—SCE, Project Manager Blake Murphy—Hewitt Associates, Project Consultant Kathy Miller—Hewitt Associates, Project Consultant Chelsea G. Penaloza—Hewitt Associates, Project Consultant Alison A. Peterson—Hewitt Associates, Study Project ManagerThis report contains Study results and a description of the Study methodology.Hewitt Associates i 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-2

executive retirement benefits increased from the 2009 Study primarily as a result of a methodology changeemployed in the 2012 Study which recognizes the value of the Supplemental Executive Retirement Plan(SERP) benefit over the years of service as an executive. In the 2009 Study, SERP benefit values wererecognized over an executive’s entire career. Using a shorter time frame increases the value of the retirementbenefit. In addition, because many of the comparator companies do not provide SERP benefits, this changeincreased the value of SCE’s SERP benefits much more than the values of benefits for the comparator group.Survey ErrorIn addition to normal survey error, several additional sources of possible error are mentioned in the StudyMethodology section. Hewitt estimates each is minor relative to the overall Study results. In Table 2 below, areHewitt’s estimates of the impact of each factor relative to SCE’s compensation vs. comparator companies:Table 2: Source of Specific Survey Error 7Source of ErrorReport ReferenceSection—PageEstimated Possible Erroras Percentage of TotalCompensationJob matching inaccuracies Job Match Validation—p. 12 -0.2% to +0.2%Assume all employees receive salariedbenefitsEmployee Benefits—p. 16 -0.1% to +0.1%Benefit AggregationData Aggregation and AverageBenefit Calculation—p. 19-0.1% to +0.1%Total -0.4% to +0.4%Total error can either increase or decrease SCE’s competitive posture. However, the maximum error isestimated by Hewitt to be no more than –0.4 percent to +0.4 percent of total compensation. This is in additionto normal survey error, noted on page 2, of plus or minus 5 percent from the overall calculated estimate ofcompetitive posture.Benchmark JobsAs noted above, this competitive Study was an analysis of total compensation for a statistically significantportion of the SCE organization. Because of the high number of SCE employees in benchmark jobs, Hewitt isconfident the Study accurately estimates competitive posture for the entire company.Table 3 below presents the amount of coverage the Study provides as a percentage of SCE population. Itshows the number of total SCE employees and job titles in each employee category compared with thenumber of SCE jobs and incumbents that are Study benchmarks.“Benchmark” jobs are those classification titles that are common across comparator organizations and arefound in surveys of competitive data (generally these are “high population” jobs).The process used to determine benchmark jobs is detailed in the next section. Table 3 shows that the Studycovers 66 percent of the SCE workforce. Compared with similar studies Hewitt has conducted, this is very highcoverage and, in Hewitt’s opinion, a sound basis for determining the competitiveness of total compensation.7 Estimated by Hewitt Associates.B-7Hewitt Associates 4 01551/RPT001AAP.DOC/TOC NB 04887 11/2010

Table 3: Study Coverage of SCE PopulationIn TotalIn StudySCE # of # of SCE % of SCE% of SCEJob CategoryPopulation Jobs Incumbents Population # of Jobs JobsPhysical/Technical 4,770 219 2,820 59.1% 44 20.1%Clerical 4,683 139 2,617 55.9% 18 12.9%Professional/Technical 4,912 124 3,850 78.4% 44 35.5%Manager/Supervisor 2,669 276 1,919 71.9% 89 32.2%Executive 31 31 17 54.8% 17 54.8%Overall 17,065 789 11,223 65.8% 212 26.9%Supporting MaterialsThe appendices are key references in understanding Study results: Appendix A presents the benchmark jobs in each category. It also presents jobs initially selected asbenchmarks but not included in the Study due to a lack of data or appropriate survey match, as indicated. Appendix B is the list of comparator companies used in the Study. Appendix C presents the results for each benchmark job within each category. Subtotals are provided at theend of each category and are presented in Table 1 above. Appendix D explains how the percentages in Table 1 above were derived. It shows average compensationdollars by category and pay element (Table D-2) and estimated total compensation dollars by category andpay element (Table D-3). Appendix E is a summary of the approach used to match incumbents in SCE’s “generic” job titles to surveysources. Appendix F lists the benchmark Study positions that include LTI values. Appendix G contains examples of the benefit valuation for SCE and a sample comparator company. Thissection should be reviewed in conjunction with the methodology section, pages 15 to 18 describing theapproach used to value benefits. Appendix H includes the benefit valuations and total compensation results based on Hewitt’s standarddemographic profile and assumptions. The Study results include benefits values and total compensationresults based on SCE’s demographic profile and economic and other assumptions used in valuing SCE’sbenefits plans. The values using the Hewitt standard demographic profiles and assumptions are included inAppendix H for comparison purposes. See the description of valuation of employee benefits on page 15 inthe Study Methodology section for an explanation of the valuations. Appendix I is documentation summarizing each Team meeting and teleconference. Appendix J is a description of the methodology used to measure error in the Study results. Appendix K is a glossary of terms used in this report.Hewitt Associates 5 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-8

Project workpapers are submitted along with SCE’s GRC filing. The project workpapers provide additionalclarity regarding the Study process. The workpapers, combined with this Study report, should provide a clearpicture of how the Study was conducted, the decisions made by the Team, and the calculated results. Theworkpapers include: A list of all SCE jobs (by job category) used to select Study benchmark jobs. SCE job descriptions. A list of survey job matches for each Study benchmark, which includes SCE department identifiers used tomatch manager and supervisor jobs to surveys (as described in Appendix E).Hewitt Associates 6 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-9

Study MethodologyOverviewIn general, the principles behind the Study methodology were the following: To collect and analyze data on a company-specific basis in order to ensure that the levels of totalcompensation (for SCE and for each comparator company) were captured accurately; and To express both cash and benefit elements of compensation on an equivalent basis for SCE andcomparator companies as of a common point in time.Hewitt obtained and valued pay and benefits information from comparator companies and SCE. Hewitt thencalculated SCE’s competitive posture vs. comparator companies.Job CategoriesFor the purpose of this Study, SCE and Hewitt placed SCE jobs into one of five categories agreed upon by theTeam (these five categories were used in the 2009 Study). The Study results include subtotals for each ofthese five categories: Physical/Technical. Usually, these are field jobs requiring physical activities that are repetitive in nature.They are found more frequently in utility companies and are typically covered by a collective bargainingagreement (at SCE and at other comparator utilities). Physical jobs often have a formal apprenticeshipprogram and typically do not require college study. Technical jobs are individual contributor jobs that mayrequire some college study, but a college degree is not required. These jobs are subject to the Fair LaborStandards Act 8 (“FLSA”) and are categorized as nonexempt. Clerical. These jobs are nonexempt under the FLSA, typically include work in an office environment, andrequire activities that are generally routine and clerical in nature. The exception is the Meter Reader, whichworks in the field. These jobs may require some college study, but a college degree is not required. Thesejobs may be organized, but most are not—neither at SCE nor at most other comparator companies. Professional/Technical. These jobs are individual contributor jobs that are typically exempt from the FLSA.Usually, these jobs require a college degree, and the nature of the work involves analytical thought andindependent judgment. Manager/Supervisor. These jobs are exempt from the FLSA; these jobs are primarily responsible for thedirection and final product of the work of others. Executive. This category contains the limited group of company top executives who are responsible foroverall direction of the company.The Team discussed preliminary assignment of job categories made by SCE, and made changes to the jobcategories for six jobs to align the positions to the category that best matches the job accountabilities based onjob detail provided by SCE, including, job description, job posting, organization charts, and verbal descriptionof the job function.8 The Fair Labor Standards Act (FLSA) of 1938 established overtime, record keeping, and a floor for minimum wage. It also determined thetype of positions that are exempt from the overtime provisions. Federal law requires that “nonexempt” positions receive overtime pay forhours in excess of 40 worked in a week. Some states (e.g., California) require overtime pay for nonexempt positions for hours in excess of8 worked in one day.Hewitt Associates 8 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-11

The category changes made from the 2009 Study are: Analyst-Business 2 Analyst-Program/Project 2 Construction/Material Crdntr 3 Network Oprtns Spclst 2 Planner 1 Technl Spclst/Scientist 2(Changed from Professional/Technical to Clerical)(Changed from Professional/Technical to Clerical)(Changed from Clerical to Professional/Technical)(Changed from Professional/Technical to Clerical)(Changed from Professional/Technical to Clerical)(Changed from Professional/Technical to Clerical)Benchmark Job Selection and Job MatchingIn this Study, Hewitt attempted to assess competitive posture for enough jobs so that the Team could beconfident there was adequate coverage of each category.The benchmark job selection process included a review by the Team of all benchmark jobs covered in the2009 Study with consideration of the number of incumbents by job and coverage by job category. The Teamagreed to use the 2009 benchmark jobs as a starting point in identifying benchmarks for the 2012 Study.Further the Team agreed to try to increase the number of benchmarks and incumbents covered for thePhysical/Technical, Clerical, and Executive categories from the 2009 Study levels of 53.4 percent, 48.8percent, and 38.2 percent. Coverage of the Professional/Technical category at 83.9 percent andManager/Supervisor category at 73.9 percent in the 2009 Study was deemed acceptable.Due to the Study timeline, cost, and existence of valid survey data sources, Hewitt did not create a separate ornew database for Study purposes. Hewitt and SCE identified survey sources that might be used in the Studyand reviewed those along with the Team.Hewitt preliminarily identified additional benchmarks for the 2012 Study, identifying jobs that were matched inthe 2009 Study but for which there was insufficient survey data and high incumbent jobs in thePhysical/Technical and Clerical categories that Hewitt assumed could be found in existing compensationsurvey databases. Hewitt also reviewed Executive jobs to identify additional benchmarks.Hewitt then met in a series of three meetings with SCE staff familiar with SCE jobs to identify survey matches.During the matching process, Hewitt and SCE performed the following activities: Hewitt identified initial job matches based on a review of the 2009 Study benchmark jobs, SCE jobdescriptions, and compensation survey databases. Hewitt confirmed matches with SCE staff, which in some cases included conducting additional discussionswith individuals knowledgeable about a specific job and its actual job duties. Based on the discussions,Hewitt adjusted some job matches. Hewitt made these matches to surveys where it deemed job duties to be 80 percent comparable to thesurvey job (Hewitt follows this 80 percent guideline as an industry standard).Similar to the 2009 Study, the Team decided to capture inclusion of SCE’s broadly defined “generic” jobs.Hewitt Associates 9 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-12

SCE generic job titles are meant to be broad and cover similar activities in different functionalareas/departments which are the same level of work. The following SCE generic job titles and levels withineach were examined: Manager 1, 2, and 3 Supervisor 1, 2, 3, and 4 Technical Specialist 1, 2, 3, and 4 Information Technology Specialist 2, 3, 4, and 5 Manager, Project/Product 1, 2, and 3 Manager, Program/Contract 1, 2, and 3The Team discussed the nature of these jobs, which, while broadly defined, could be compared to a variety ofsurvey benchmarks also performing a similar level of work at comparator organizations. The surveybenchmarks would likely be found in several departments at Study comparator companies.The Team agreed to include these jobs in the Study, using the approach described in Appendix E.When Hewitt completed the benchmarking process, the coverage of SCE incumbents ranged from54.8 percent (Executive) to 78.4 percent (Professional/Technical). Overall, there was 65.8 percent coverage ofSCE employees by benchmark jobs. This provides a statistically significant level of employee coverage,sufficient for Hewitt to be confident of the validity of Study results.Appendix A shows the specific benchmark titles, by category, included in the Study with the number of SCEincumbents.Labor Market and Comparator CompaniesThe Team selected comparator companies found in existing survey databases reflecting the labor market foreach SCE job category. Generally, the labor market was assumed to include other utilities for roles specific tothe industry, general industry organizations for roles that are not utility-specific, and comparably sized U.S.based utilities and general industry companies for executive positions.Based on these labor markets, Hewitt provided the Team with lists of companies that met these criteria andthat also: Participate in the cash compensation survey databases used in the Study. Participate in the Hewitt Benefits database.For each job category, it was determined to use the following labor markets: Physical/Technical, Clerical, Professional/Technical, and Manager/Supervisor For utility-specific jobs (e.g., Lineman, Meter Reader, roles found in Operations, and roles found inTransmission and Distribution): large, urban energy utilities, including those in the western United Statesand California. For non-utility-specific jobs (e.g., roles found in Finance, Human Resources, and InformationTechnologies): large, Southern California general industry employers. Executive For utility-specific jobs (e.g., Chairman and Chief Executive Officer, VP Power Production): nationalurban energy utilities with revenues of $8 billion to $19 billion. For non-utility-specific jobs (e.g., SVP Chief Financial Officer, VP Tax): national general industryemployers with revenues of $8 billion to $18 billion.Hewitt Associates 10 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-13

For some benchmarks that can be found in both utilities and general industry, the Team determined themarket to be the combination of the utility and non-utility groups. In addition, a few companies without benefitsinformation in Hewitt’s database were identified. Hewitt was able to obtain benefits data from theseorganizations.Selecting specific companies for use in the Study allowed Hewitt to obtain total compensation amounts foreach comparator by matching average cash compensation with average benefits for each Study job.Most survey databases used in the Study did not provide benefits. Hewitt calculated benefits values for eachStudy company based on information contained in its database of benefit specifications. Hewitt required bothcash compensation and benefits data from comparators in order to determine a total compensation value.Therefore, participation in the Hewitt Benefits database was required for Study inclusion.Based on the Team’s input, the comparator companies were finalized and are shown in Appendix B. Thecompany revenue shown reflects 2009 information, which is the effective date of compensation data used forcomparator companies and SCE.Survey and Data Sources and Job Match ValidationBenefits data for all Study companies were drawn from the Hewitt Benefits database. Hewitt obtained cashcompensation data from the best available survey sources. These sources, shown by survey provider and thesurvey used were as follows: AON: Total Compensation Survey (AON: Radford). The Edward A. Powell Data Information Solutions Study (EAPDIS). Organization Resource Counselors: Salary Information Retrieval System (ORC: S). Towers Perrin: Energy Services Survey: Executive, Middle Management & Professional Database General Industry Survey: Executive, Middle Management & Professional Database Hewitt Associates Executive Total Compensation Measurement (TCM ) Database.Because the Los Angeles Department of Water & Power (LADWP) did not participate in any of these surveydatabases, Hewitt requested and received compensation data from LADWP representatives directly.Hewitt Associates 11 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-14

Survey and Data SourcesThe cash compensation survey and data sources used for each job category are shown in Table 5.Table 5: Cash Compensation Survey and Data SourcesJob Category Energy Utility General IndustryPhysical/TechnicalClericalProfessional/TechnicalManager/SupervisorExecutive LADWP compensation data EAPDIS EAPDIS (Meter Reader andCustomer Specialist only) Towers Perrin Energy Services Towers Perrin Energy Services Towers Perrin Energy Services Hewitt TCM ORC:SIRS AON: Radford ORC:SIRS AON: Radford ORC:SIRS AON: Radford Towers Perrin General Industry ORC:SIRS AON: Radford Towers Perrin General Industry Towers Perrin General Industry Hewitt TCMMost survey sources allow custom extractions for a group of designated Study companies on a job-by-jobbasis. The survey data were provided to Hewitt in an aggregate (total) manner, except EAPDIS data, whichreleases line-by-line data, in a confidential, coded manner.Once Hewitt collected and analyzed compensation data, it noted the number of matches for each job: If the job had insufficient company matches within the selected comparator subgroup (e.g., utilities had lessthan five matching companies), the combined group (e.g., utilities plus general industry) was used ifappropriate. This approach was applied to Professional/Technical, Manager/Supervisor, and Executivepositions only. If both the comparator group and the combined group had fewer than five companies matching a job, thenHewitt excluded the job from the Study. 9Job Match ValidationHewitt reviewed a list of benchmark jobs including incumbent counts with the Team. The DRA selected jobsfrom this list for review in the job match validation process. Once the DRA selected the list of jobs forvalidation, Hewitt compiled the SCE job descriptions and survey source job descriptions for use in validatingmatches.The DRA selected forty-four SCE jobs (21 percent of total jobs) covering 7,697 employees (69 percent of thebenchmark population) for review in the validation process (see Table 6 below). The Team met to review thejob descriptions and survey descriptions and validate the level of match of the job. Through this process, theTeam agreed to modify matches for two positions including dropping one of the survey matches used for thePlanner 1 job and adding a match for the Manager-Project/Product 1 job. These changes did not changeSCE’s position against the comparator group.9 This threshold complies with the antitrust survey guidelines established by the U. S. Department of Justice and Federal TradeCommission regarding surveys of salaries, wages, and benefits (Statement 6A from the September 1994 “Statements of AntitrustEnforcement Policies”).Hewitt Associates 12 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-15

Because SCE did not have job descriptions for the seventeen executive jobs, those matches were notvalidated. Instead, organization charts were reviewed and executive position responsibilities were discussedon an individual basis to determine the level of executive responsibilities.Hewitt assumes that if DRA had reviewed all remaining 168 (212 total jobs – 44 for which job matches werevalidated = 168) jobs (covering 3,529 SCE incumbents), other changes in job matches might have occurred.Hewitt estimates such changes would not materially affect overall Study results.Table 6: Summary of Jobs Covered by Job Match Validation ProcessValidatedJobMatchesValidatedJobsas % ofBenchmarkJobsValidatedJob MatchIncumbentsValidatedas % ofBenchmarkIncumbentsTotalBenchmark 10JobsTotalBenchmark 10IncumbentsTotal SCEPopulationPhysical/Technical 8 18% 2,028 72% 44 2,820 4,770Clerical 8 44% 1,867 71% 18 2,617 4,683Professional/Technical 12 27% 2,524 66% 44 3,850 4,912Manager/Supervisor 12 13% 1,274 66% 89 1,919 2,669Executive 4 24% 4 24% 17 17 31Total 44 21% 7,697 69% 212 11,223 17,06510 Represents the benchmark jobs and incumbents included in the results only. Does not include the jobs selected as benchmark but notincluded in the Study due to lack of data.Hewitt Associates 13 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-16

Elements of Total CompensationElements of Compensation—IncludedThe following elements of compensation were included in this Study:Cash Compensation Base pay Short-term (annual) incentives Total cash compensation (base pay plus short-term incentives)Noncash Compensation Employee benefits 11 Defined benefit pension plans Defined contribution plans– Deferred profit sharing– Savings/thrift plans with company matches– Savings/thrift plans without company matches– Stock purchase plans– Employee stock ownership plans– 401(k) plans Death benefits– Preretirement group life– Postretirement group life– Group survivor’s income Long-term disability Health care benefits– Preretirement medical– Postretirement medical– Dental and vision coverage Supplemental executive benefits (Executive category only) Medical/dental Nonqualified retirement plans– Defined benefit restoration plans– Supplemental executive retirement plans– Defined contribution restoration plans Long-term disability Nonqualified deferred compensation plans Executive death benefits Long-term incentives Stock options and stock appreciation rights Deferred stock units Performance shares/units Restricted stock Phantom stock11 Note that not all benefits listed are provided by SCE or by each comparator company.Hewitt Associates 14 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-17

Elements of Compensation—ExcludedThe Team decided to exclude pay elements other than base salary, annual incentives, long-term incentives,and benefits.Shift differentials and spot awards were excluded because these data are generally not available in surveys ona position-by-position basis, and wide variances exist in their utilization among comparators and SCE. Neitherof these programs was included in total compensation amounts reported to survey databases used in thisStudy.Also, overtime pay and shift differentials were excluded as they reflect an organization’s staffing models andbusiness conditions over which the employer has limited control (such as fire storms and earthquakes).Also excluded from the Study were: Paid Time Off, which is assumed to be part of an employee’s base pay. Short-Term Disability, which is usually paid by the employer as a salary continuation during the disabilityperiod and therefore should be treated like paid time off.Valuation of Total Compensation ElementsBase PayAverage base pay data were obtained from SCE and comparators for incumbents in each benchmark job.Hourly pay data were annualized as needed by multiplying by 2,080 hours.The Team developed a compensation adjustment factor or “aging factor” by reviewing competitive payincrease data provided by Hewitt. Using actual 2009 salary increase rates reported by companies in SCE’scomparator groups to Hewitt’s annual Salary Increase Survey, Hewitt developed an average salary increasefactor for each job category (Physical/Technical, Clerical, etc.) within the utility industry and general industry.Then a weighted average adjustment factor was developed for the utility industry (3.0 percent) and the generalindustry group (2.7 percent). The utility industry factor was applied to utility survey data and the generalindustry factor was applied to the general industry survey data to adjust the survey data to the effective date ofthe Study (December 18, 2009). To illustrate, general industry survey data that needed to be adjusted by 3months was increased by 3/12 of the annual rate of 2.7%, or 0.675 percent.SCE base salary information was effective December 18, 2009 so it was not adjusted.Short-Term (Annual) Incentives (Bonus)Average annual cash incentive payments were collected, by position, from each survey source forcomparators and for SCE. Similar to base pay, survey amounts were adjusted by the aging factor toDecember 18, 2009. SCE amounts, which were paid in March, 2009, were also adjusted to the same date.SCE and survey company incentives were actual amounts paid (not planned or “target” amounts) in 2009 (for2008 performance) and may include cash profit sharing, gainsharing awards, or other lump-sum paymentsfrom ongoing incentive plans requested by each survey. As noted earlier, spot award payments wereexcluded.For SCE, these amounts included the employee Results Sharing program, Management Incentive Program,and Executive Incentive Compensation Program awards. This Study did not examine the operation of theseprograms; rather, it examined the magnitude of awards provided by SCE to its employees as reported toHewitt.Total Cash CompensationBase pay and short-term incentives, as reported by the comparators and SCE, were totaled for incumbents ineach Study position to obtain total cash compensation.Hewitt Associates 15 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-18

Employee BenefitsBenefit values have been computed by Hewitt’s application of its Benefit Index® methodology. All values arenet of employee contributions. Hewitt uses this proprietary methodology to value each type of employeebenefit. (Note that the specific formulae used cannot be shared with third parties, due to potential loss ofHewitt’s competitive advantage.)In the 2009 Study, Hewitt applied a standard demographic model based on a broad cross section ofcompanies in its database to facilitate comparisons. This demographic model reflected hourly (used for thePhysical/Technical job category), salaried (used for the Clerical, Professional/Technical, andManager/Supervisor job categories), and executive positions (used for the Executive category) at different paylevels.For the 2012 Study, at the request of the DRA and with agreement from SCE, the Team developed benefitvalues using two demographic models and assumptions. These were: Hewitt’s standard demographic model (similar to the model used in the 2009 Study) based on a broad crosssection of companies in Hewitt’s database, and reflecting age, gender, years of service, etc., and standardassumptions such as mortality for group life insurance values and rates of disability based on studies fromthe Society of Actuaries, assumptions about the percentage of employees opting out of health carecoverage, and retirement age. Hewitt applied this demographic model and assumptions to SCE’s and thecomparator companies’ benefit designs to isolate, as best as possible, the impact on benefit values resultingfrom differences in plan design and minimize the impact on benefit values resulting from differences inemployee demographics. SCE’s actual demographic profile based on employee and retiree data including, age, gender, years ofservice, rate of opt-out from health care coverage, etc., as well as economic and other assumptions used invaluing SCE’s Retirement Plan and Post-retirement Benefits Other than Pensions (PBOPs) such asprojected salary increases, average retirement age, and rates of disability. Hewitt applied SCE’sdemographic profile and assumptions to SCE’s and the comparator companies’ benefit designs to asexplained above, isolate as best as possible the impact on benefit values resulting from differences in plandesign. The Team agreed that using SCE’s demographic profile and assumptions would better reflect SCE’s benefitvalues since they are based on the company’s employee data and benefit utilization experience. Benefitvalues were developed using both methodologies in order to provide a basis for comparison with the 2009Study results which employed the standard Hewitt methodology. The benefit values using the SCEdemographic profile are included in the 2012 Study results. Benefit values computed using the standardHewitt demographic model are included for reference in Appendix H.For each job that was included in the Study (for all companies, including SCE), the average total cashcompensation level of the incumbents in that position was used as the basis for benefit valuation.Hewitt obtained a detailed description of each comparator company’s benefit program in effect, which it usedto value benefits.Benefits may differ by employee group. For Study purposes, Hewitt used the primary salaried employeebenefit plans There were no differences in benefits between employee groups for SCE but there weredifferences in benefits between employee groups for approximately 37 percent of the Study companies. Inmost of these cases, this difference was limited to the health care contribution for represented employees, whoare primarily found in the Physical/Technical category. For simplicity and cost-effectiveness, the Team askedHewitt to use salaried benefits for all Study jobs. This introduces a small amount of error in the Study. Hewittestimates this decision understates the competitors’ total compensation value by less than 0.1 percent of totalcompensation for most Study positions.Hewitt Associates 16 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-19

Some of these assumptions for the Hewitt methodology, such as mortality for group life insurance values andrates of disability, are based on studies from the Society of Actuaries. Economic assumptions, such as interestrates and pay increases, are based on best estimates of long-term future experience.The assumptions used to value benefits using the SCE demographic profiles and assumptions, are reflected inannual SCE Retirement Plan and postretirement benefit actuarial valuations, and represent the signingactuaries’ best estimates of the future plan experience, taking into consideration past experience andreasonable future expectations. These actuarial valuations are used to determine pension and postretirementbenefit expense under Financial Accounting Standards Board Statements Nos. 87 and 106, as well as pensionfunding policy contributions and minimum funding requirements under the Pension Protection Act.Demographic actuarial assumptions, including rates of retirement and employment termination, were reviewedin detail in 2009. Postretirement health benefit claims and trend assumptions are reviewed annually based onactual plan experience and insurance premiums, as well as plan design features and national trends. Allactuarial assumptions are reviewed each year for general consistency with emerging plan experience.In general, the value of each benefit provided by SCE or a comparator company was determined in one of twoways: Not every benefit is received by every employee in every year. Thus, for each individual in the standardpopulation, the probability of an event, such as disability, is multiplied by the lump-sum value of all amountsto be paid arising from that event. This approach is used for all benefits for which value may be received inthe current year; or Because many benefits are commitments to provide a payment after active employment has ended, theseare valued by establishing the benefit as a percentage of pay for the current year. This approach is used tocalculate a discounted present value for a future promise.These values are determined as (1) a percentage of cash compensation (for pay-related benefits such aspensions) or (2) flat-dollar amounts (for programs such as medical coverage). Where compensation data arenecessary to determine the value for a particular benefit at a given company, the appropriate actual cashcompensation level is used.Benefit values were calculated using each company’s plan features in place for calendar-year 2009.Specific comments on valuation methodology for benefit elements are provided below, and examples areprovided in Appendix G: Defined Benefit Pension: Values for each position in the Study were determined by performing a standardpension valuation of qualified and, if applicable, nonqualified plans on the populations used. (Qualified plansare those that comply with Internal Revenue Code requirements of funding, vesting, and broad employeeparticipation. Employers make tax-deductible contributions to trusts to provide for the future benefits to theiremployees. Nonqualified plans are generally provided for select management and highly compensatedemployees and are not subject to the same funding, vesting, and participation requirements as qualifiedplans. Employers generally pay such benefits as they come due.) The most important factors consideredinclude the benefit formula, definition of covered pay, early retirement subsidies, subsidized payment forms,and the existence of benefit restoration plans.Ultimately, pension values represent a consistent annual employer contribution that would be required toprovide the promised benefit at retirement. Capital Accumulation and Defined Contribution: Profit sharing, 401(k), matched savings, broad-basedstock purchase, and employee stock ownership plans were included in this area. Employer contributionswere adjusted only for eligibility and the possibility of forfeiture.Hewitt Associates 17 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-20

Group Life: The value of this benefit for each incumbent was determined as the amount of the benefit timesthe probability of that person dying in the next year, minus any employee contributions. The benefitsincluded were noncontributory and contributory qualified plans, supplemental programs, accidental deathand dismemberment coverage, and continuation of benefits on disability. Survivor Income Annuity Benefits: These programs were valued the same way as group life benefits,except that the benefit amount is converted to the lump-sum value of the annuity stream of payments thatwould be paid. Benefits paid from a pension upon death of an active employee were included, as wereannuities not paid from the pension plan. Postretirement Death Benefits: Values for postretirement death benefits were determined through apension valuation approach, except that the benefit being funded was not an annuity payable while theretiree is alive, but a lump sum payable at death. Annuities paid from a pension to the beneficiary upon theretiree’s death were included in the pension value rather than the postretirement death value. Long-Term Disability: This benefit captures the value to the employee of coverage for disability that islonger than six months. The value of the benefit to each incumbent equals the probability of disability timesthe annuity value of the benefits received, minus employee contributions (if any). Both qualified andnonqualified plans were included. In addition, pension benefits paid to disabled employees prior to normalretirement were included in this category of benefits. Health Care: The value of the preretirement medical, dental, hearing, and vision plans was based onexpected claims determined using a rate-making manual, taking into account the utilization associated witheach employee group, adjusted for the net effect of persons waiving coverage. An adjustment to expectedmedical claims was made to reflect the relative purchasing efficiency of the various delivery modelsincorporated within each type of medical plan.The adjustment was based on factual data from Hewitt’s Health Value Initiative study, which measures thepurchasing efficiency of each delivery model. The Health Value Initiative study adjusts each employer’s plancost for differences in plan design, demographics (age, gender, and family size of the enrolled group), andgeographic cost differences to obtain a true comparison of the purchasing efficiency of each plan. The studyaggregates all various plans of the same delivery model type and allows Hewitt to quantify each deliverymodel’s purchasing efficiency. Definitions of the various delivery models are illustrated below in order ofpurchasing efficiency to the employer. Health Maintenance Organization (HMO): A “prepaid” medical group plan consisting of a definedpanel of physicians and facilities. Patients must follow the HMO’s protocols in order to obtain coverage(the primary care physician must approve all care and provides referrals to specialists when necessary).Generally, no benefits are paid for care obtained outside the designated provider panel. Exclusive Provider Option (EPO): A medical group plan that mirrors the HMO concept, but isself-funded by an employer. Claims are paid as they are incurred; medical care is not “prepaid.” Point-of-Service (POS): A medical group plan with two levels of benefits: in-network andout-of-network. Typically, in-network benefits mirror HMO benefits (patients must follow HMO-likeprotocols). Out-of-network benefits are available, but are less comprehensive and typically are subject tohigher deductibles and lower coverage levels. Preferred Provider Option (PPO): A medical group plan with two levels of benefits similar to a POSplan. The key difference is that the in-network benefits are not subject to HMO-like protocols. Patientscan access specialists directly, referrals are not required, and medical utilization reviews are lessstringent than in HMOs. Indemnity: A medical group plan without any provider networks or stringent utilization controls.Hewitt Associates 18 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-21

A purchasing efficiency adjustment was applied to each comparator company based on the medical planenrollment distribution for that company. Employee contributions, if any, were subtracted. Retiree Medical: Postretirement medical benefit values were calculated in a manner similar to pensionsand postretirement death benefits. In 2003, SCE announced retiree health care changes that would affect allof its employees. Equivalent changes were negotiated with the Unions representing employees in 2004 and2005. Some employees were “grandfathered” under the prior plan; the remaining employees will receive adifferent level of retiree medical benefits. The grandfathered percentage of SCE employees is small and notconsidered in this Study.Also, Hewitt statistically determined that employees in benchmark jobs have approximately the same ageand service as employees in non-benchmark jobs. Therefore, retiree medical values for SCE benchmarksare representative of the entire workforce. Flexible Credits: Each company’s program is structured differently. Most often, however, flexible creditsare granted by benefit type. For example, a company may give $3,000 toward the purchase of medicalcoverage, $500 toward the cost of dental coverage, enough flexible credits to purchase a 50 percent LTDplan, and enough credits to purchase two-times-pay life insurance.Credits were allocated back to the benefit types for which they were intended and were treated as offsets toemployee contributions. Thus, using the flexible credits in the example above, if the overall medical price tagwas $4,000, the $3,000 of flexible credits effectively reduced the employee contribution to $1,000.If the credits for a given benefit area exceeded the price tag for that benefit, the extra credits that result wereallocated to other areas where such credits were not sufficient to pay the entire cost.If the flexible credits in total were more than sufficient to purchase all eligible benefits, the excess creditswere allocated to health care spending accounts, defined contribution accounts, or cash, depending on theterms of the program.Data Aggregation and Average Benefit CalculationAs noted earlier in this report, data from survey providers, except EAPDIS, were provided in aggregated form.This means that Hewitt did not have access to the base salaries and short-term incentives paid by eachcompany. Instead, Hewitt had only the total number of incumbents, average base salary, bonus, and total cashcompensation (in aggregate) for each survey job.Based on this information, Hewitt used the following process to calculate benefit values for each surveybenchmark: For each job, Hewitt used average (aggregated) base salary and bonus data. Benefits for each comparator company and SCE were valued for each job category. These values were averaged for utility, general industry, and the combined groups. These averages were applied to appropriate total cash levels in each job category. Hewitt summed the average base salary, bonus, and benefit values to determine an average totalcompensation figure for the job.In past studies, Hewitt conducted test analyses using data provided in both aggregated and non-aggregatedform to determine the significance of the differences between averaging benefits across each Study group andcalculating benefits values separately for each company.In the past analyses, Hewitt found the difference between the approaches was minor, and that the variancewas sometimes positive and sometimes negative. Thus, over the group of survey benchmarks, variancesoffset each other, and the overall differences were negligible.Hewitt Associates 19 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-22

Hewitt believes that while error is possible, it would not affect Study results by more than 0.1 percent of thetotal compensation in either direction.Long-Term IncentivesLTI compensation programs include such plans as: Stock options; Deferred stock units/performance units; Stock appreciation rights; Restricted stock; and Phantom stock.In determining which benchmark jobs were eligible for LTI awards and, therefore, should include LTI values inthe 2012 Study, the Team examined two forms of eligibility data. First, the Team examined eligibility data thatreported the percentage of comparator companies that granted LTI for each benchmark job. Since eligibility forLTI is often determined by pay level, and since not all surveys provide eligibility data by job, the Team alsoexamined data that reported the percentage of comparator companies that granted LTI by salary range. Forexample, LTI eligibility data was reviewed for jobs whose base pay was between $150,000 and $200,000.Based on this eligibility data, the Team agreed to include LTI values for jobs that were eligible for LTI at 50%or more of the comparator companies. A total of 34 benchmark jobs met this criteria including:1 Professional/Technical position, 16 Manager/Supervisor positions, and 17 Executive positions.In 2009, SCE granted stock options and restricted shares to long-term incentive recipients.Hewitt employed its proprietary methodology to value each long-term incentive opportunity for recipients,which is described on the following pages. This methodology is applied to the most recent annual long-termgrants made by the comparator companies and Southern California Edison (in most cases, this was acompany’s grant made in 2009). All comparator companies had stock options or other long-term incentiveprograms.The general principle behind the valuation method is to arrive at a figure that corresponds as closely aspossible to the intrinsic (economic) value of the long-term incentive award on the date of grant. Stock Options: To recognize the potential value inherent in stock option grants, Hewitt used anoption-pricing model. Hewitt’s model is based on the Black-Scholes option pricing approach, adjusted for avariety of elements unique to employee stock options. This model does not assume a particular growth instock price, but rather values the right to buy stock at a fixed price for a certain period of time.The model takes into account several factors in assigning a value to the option. These factors include thefollowing: Option price; Fair market value on the date of grant; Length of exercise period; Vesting restrictions on the exercise of options; Stock price volatility; Projected dividend stream; Reasonable discount factor; and Recipient turnover.The character of a stock is largely defined by its dividend yield and price volatility. The pricing modelrecognizes these characteristics in the valuation of stock options. Simply expressed, an option on a stablesecurity (high dividend yield, relatively little fluctuation in price) is worth less, as a percent of stock price,than an option on an active, growth-oriented stock, which may not pay dividends. An option holder benefitsHewitt Associates 20 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-23

from a stock in which the majority of the investment returns lies in appreciation; the holder of most stockoptions derives no benefit from dividends on the stock until after exercise of the option occurs.The design of a stock option plan can have a material impact on an option’s value. An option with a ten-yearterm, for instance, is worth more than a five-year option, primarily because the recipient has a longer timeperiod over which to benefit from relative stock price volatility.Other plan design features incorporated into the valuation include dividend equivalents (payment ofdividends as if the recipient held the stock), extension of the exercise period beyond termination ofemployment, and the frequency of grants.Among Study comparators, Hewitt has found that utility companies are more likely to pay dividends andtheir stock price tends to be less volatile than general industry companies. Therefore, the per stock optionvalue (assuming the same exercise price and other design features) we ascribe for a utility company wouldtypically be lower (i.e., 20-25% of stock price at grant) than we ascribe to a stock option of a generalindustry company (i.e., 30-40% of stock price at grant). Deferred Stock Units/Performance Units: The data obtained from each company in the Study includes:actual grant size (in number of shares or units) for each position, target (expected) and maximum awardopportunities, performance requirements necessary to earn target and maximum awards, and the relatedperformance measurement period for each grant. The starting point for deferred stock/performance unitvaluations generally equals the market price of the company’s stock on the date of award, reduced for theprobability of goal attainment. In cases where a performance share plan does not provide for the payment oraccrual of dividends, the value is reduced further. The calculated unit or share value then is multiplied bygrant size to determine the final grant value.Both deferred stock units, performance shares and units are valued to reflect: Volatility of performance; Maximum award levels; Length of performance period; and Recipient turnover.If a deferred stock unit/performance share has the same design characteristics, Hewitt’s calculated valuewill be similar across industries. Stock Appreciation Rights: Similar to stock options, stock appreciation rights (SARs) allow the recipient toobtain the gain from stock price appreciation, but require no recipient payment. Generally, SARs are valuedin the same manner as stock options. Restricted Stock: The total value of each restricted stock grant is obtained by multiplying the number ofshares granted by the value of the stock on the date of grant. This value is then reduced by an amountequal to the assumed turnover for the period of restriction. In cases where the plan does not provide for thepayment or accrual of dividends on restricted shares, or where the recipient has to make cash payment forsuch shares, the value is reduced further. If a restricted share has the same design characteristics, Hewitt’scalculated value will be similar across industries. Phantom Stock: Phantom stock programs are valued in one of two ways. If the recipient obtains the fullvalue of the phantom share or unit, then the valuation methodology is similar to that used for restrictedstock.Alternatively, if the phantom stock award is based solely on the appreciation in the stock price, then themethodology is similar to that used for stock appreciation rights.Hewitt Associates 21 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-24

Appendix A: Benchmark JobsHewitt Associates 22 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-25

Benchmark Jobs 12The following tables report SCE job titles by category for all benchmark jobs covered in the Study. In total, 273jobs were benchmarked; however sufficient market data was available for only 212 of the jobs. If thecompensation surveys did not have a minimum of five companies matching, the benchmark was excludedfrom the Study consistent with the threshold set in the antitrust guidelines established by the U.S. Departmentof Justice and Federal Trade Commission regarding surveys of salaries, wages, and benefits, Benchmarksexcluded from the Study due to insufficient market data are reported by job category as are benchmarks thatwere validated through the job match validation process defined on page 12 of the Study Report.Table A-1: Physical/Technical PositionsIncluded in 2012 StudyStudyPositionNumberSCEJobCodeValidatedJobMatchSCE Job Title# of SCEIncumbentsComparatorGroup 131 8755 Control Operator 4 Utility2 9338 Electn 1 Utility3 9400 Electn Constrn 40 Utility4 9670 Electn Nclr Mtce 43 Utility5 9481 Form Electl Crew 149 Utility X6 9525 Groundman 20 Utility7 9528 Groundman 146 Utility X8 9529 Groundman A 136 Utility X9 9519 Handlr Mtrl 1 Utility10 9520 Handlr Mtrl 1 Utility11 9531 Handlr Mtrl 64 Utility12 9683 Handlr Mtrl 3 Utility13 9522 Handlr Sr Mtrl 1 Utility14 9682 Handlr Sr Mtrl 14 Utility15 9566 Hlpr Mtce-Stm 28 Utility16 9614 Lineman (Rubber Glove Trained) 2 Utility17 9611 Lineman(Rubber Glove Trained) 644 Utility X18 9671 Machnst Nclr Mtce 33 Utility19 9627 Machnst Service Shop 20 Utility20 9672 Mech Nclr Blr & Cnsr 41 Utility21 9446 Meter Technician 5 80 Utility22 8721 Nuclear Control Operator 48 Utility23 9697 Officer Nclr Scrty 1 376 Utility X24 8730 Operator Control 14 Utility25 8713 Opr Control 5 Utility26 7863 Repr Fld Srvce 2 285 Utility X27 8761 Secondary NPEO 34 Utility28 9867 Splcr Cnsn Cable 3 Utility12 List of non-benchmark jobs is included in Study workpapers.13 In the Study, Hewitt used a comparator group with two subgroups. “Utility” is the energy utility comparator subgroup. “General” is thegeneral industry comparator subgroup. “Combined” included all utility and general industry companies.Hewitt Associates 23 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-26

Table A-1: Physical/Technical Positions (Continued)Included in 2012 StudyStudyPositionNumberSCEJobCodeValidatedJobMatchSCE Job Title# of SCEIncumbentsComparatorGroup29 9871 Splcr Subs Cable 7 Utility30 9866 SPLICER CABLE 17 Utility31 9344 Substation Electrician 120 Utility X32 9914 Techn Chemical 2 Utility33 9929 Techn Comnctn 44 Utility34 9913 Techn Hlth Physics 37 Utility35 9934 Techn Lab 20 Utility36 9906 Techn Nclr Chemistry 14 Utility37 9767 Technician 49 Utility38 9664 Technician, Nuclear Inst & Cnt 40 Utility39 9827 Technician, Test 50 Utility40 9501 Troubleman 172 Utility X41 9991 Welder Certified 1 Utility42 9993 Welder Cnstrn 3 Utility43 9888 Welder Nclr Mtce 7 Utility44 9987 Welder Steam 1 UtilityNot Able to Include in 2012 Study Because of Insufficient DataSCEJobCode# of SCEIncumbentsSCE Job Title7403 Handlr Mail 3Hewitt Associates 24 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-27

Table A-2: Clerical PositionsIncluded in 2012 StudyStudyPositionNumberSCEJobCodeValidatedJobMatchSCE Job Title# of SCEIncumbentsComparatorGroup 1445 ACA1 Accounting Assistant 1 14 General46 ACA2 Accounting Assistant 2 16 General47 ACA3 Accounting Assistant 3 94 General48 AID2 Administrative Aide 2 35 Combined49 AID3 Administrative Aide 3 180 Combined X50 AID4 Administrative Assistant 142 General51 ABU2 Analyst-Business 2 149 Combined X52 APP2 Analyst-Program/Project 2 319 Utility X53 9421 Assistant, Office 2 131 Utility54 CCM2 Construction/Material Crdntr 2 45 General55 CSR1 Customer Solutions Repr 1 152 General X56 CUS2 Customer Specialist 2 288 Combined X57 EXA1 Executive Assistant 1 90 Combined58 8300 Meter Reader II 147 Utility59 8301 Meter Reader Project Temporary 432 Utility X60 PLA1 Planner 1 196 Utility X61 TSP1 Technl Spclst/Scientist 1 36 General62 TSP2 Technl Spclst/Scientist 2 151 Combined XNot Able to Include in 2012 Study Because of Insufficient DataSCEJobCode# of SCEIncumbentsSCE Job TitleABU1 Analyst-Business 1 47APP1 Analyst-Program/Project 1 208CCM1 Construction/Material Crdntr 1 9CSR2 Customer Solutions Repr 2 86CUS1 Customer Specialist 1 196DES1 Designer 1 49DRF2 Drafting Technician 2 33NOS2 Network Oprtns Spclst 2 114 In the Study, Hewitt used a comparator group with two subgroups. “Utility” is the energy utility comparator subgroup. “General” is thegeneral industry comparator subgroup. “Combined” included all utility and general industry companies.Hewitt Associates 25 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-28

Table A-3: Professional/Technical PositionsIncluded in 2012 StudyStudyPositionNumberSCEJobCodeValidatedJobMatchSCE Job Title# of SCEIncumbentsComparatorGroup 1563 ACC2 Accountant 2 12 Combined64 ACC3 Accountant 3 18 Combined65 ACC4 Accountant 4 7 Combined66 ABU3 Analyst-Business 3 242 Combined X67 AFN2 Analyst-Financial 2 48 General68 AFN3 Analyst-Financial 3 98 Combined X69 AFN4 Analyst-Financial 4 30 General70 APP3 Analyst-Program/Project 3 194 Utility X71 ASY2 Analyst-Systems 2 36 Combined72 ASY3 Analyst-Systems 3 124 Combined X73 ASY4 Analyst-Systems 4 76 General74 ADV2 Application Developer 2 8 Combined75 ADV3 Application Developer 3 63 Combined76 ADV4 Application Developer 4 14 General77 AUC3 Auditor-Corporate 3 14 Combined78 AUC4 Auditor-Corporate 4 22 General79 CCM3 Construction/Material Crdntr 3 135 Combined X80 CRR1 Corporate Repr 1 5 General81 CRR2 Corporate Repr 2 44 Combined82 CRR3 Corporate Repr 3 30 Combined83 ENG1 Engineer 1 62 Combined84 ENG2 Engineer 2 82 Combined85 ENG3 Engineer 3 98 Combined X86 ENN2 Engineer-Nuclear 2 66 Utility87 ENN3 Engineer-Nuclear 3 76 Utility88 HRC2 Hum Res Consultant 2 35 General89 HRC3 Hum Res Consultant 3 41 General90 IQC3 Inspector-Qlty Control 3 6 Utility91 ITS2 IT Specialist/Engineer 2 37 Combined92 ITS3 IT Specialist/Engineer 3 150 Combined X93 ITS4 IT Specialist/Engineer 4 161 General X94 ITS5 IT Specialist/Engineer 5 49 Combined95 MPC1 Mgr-Program/Contract 1 14 Combined96 MPC2 Mgr-Program/Contract 2 115 Combined X97 MPC3 Mgr-Program/Contract 3 76 General98 MPP1 Mgr-Project/Product 1 625 Combined X99 PLA2 Planner 2 182 Utility X100 ENG4 Senior Engineer 91 Combined101 ENN4 Senior Nuclear Engineer 65 Utility102 SES3 Sfty & Envrnmntl Spclst 3 54 General103 ATT3 Sr Attorney 1 43 Combined15 In the Study, Hewitt used a comparator group with two subgroups. “Utility” is the energy utility comparator subgroup. “General” is thegeneral industry comparator subgroup. “Combined” included all utility and general industry companies.Hewitt Associates 26 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-29

Table A-3: Professional/Technical Positions (Continued)Included in 2012 StudyStudyPositionNumberSCEJobCodeValidatedJobMatchSCE Job Title# of SCEIncumbentsComparatorGroup104 TSP3 Technl Spclst/Scientist 3 400 Combined X105 TRS2 Training Specialist 2 39 Combined106 TRS3 Training Specialist 3 63 GeneralNot Able to Include in 2012 Study Because of Insufficient DataSCEJobCode# of SCEIncumbentsSCE Job TitleAEM1 Account Executive 1 12AEM2 Account Executive 2 77AEM3 Account Manager 3 32AEM4 Account Manager 4 7LSA3 Land Services Agent 3 22LSA4 Land Services Agent 4 11NOS3 Network Oprtns Spclst 3 3PLA3 Planner 3 60TSP4 Technl Spclst/Scientist 4 164TRS4 Training Specialist 4 14Hewitt Associates 27 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-30

Table A-4: Manager/Supervisor PositionsIncluded in 2012 StudyStudyPositionNumberSCEJobCodeValidatedJobMatchSCE Job Title# of SCEIncumbentsComparatorGroup 16107 237 Dir Benefits 1 Combined108 MGR1 Controllers 13 Combined109 MGR1 Corporate Communications 6 Combined110 MGR1 Customer Service: Customer Programs & Services 31 Combined X111 MGR1 Customer Service: Customer Service Operations 43 Combined X112 MGR1 Human Resources 15 Combined113 MGR1 Human Resources: Employee & Labor Relations 2 Utility114 MGR1 Information Tech & Business Integration: BusinessIntegration115 MGR1 Information Tech & Business Integration: InformationTechnology & IT Ops - Service & Operations Mgmt3 General62 Combined X116 MGR1 Nuclear Organization: Administration 18 Utility117 MGR1 Nuclear Organization: Engineering 1 Utility118 MGR1 Nuclear Organization: Maintenance 9 Utility119 MGR1 Nuclear Organization: Operations 1 Utility120 MGR1 Nuclear Organization: Security 7 Utility121 MGR1 Nuclear Organization: Training 6 Utility122 MGR1 Operations Support: CE H&S Manager 5 Combined123 MGR1 Operations Support: OS Corporate Security Mgmt 3 Combined124 MGR1 Operations Support: OS Real Properties 6 Combined125 MGR1 Operations Support: OS SCM Logistics 2 General126 MGR1 Power Procurement: Energy Supply & Management 6 Utility127 MGR1 Power Production 26 Utility128 MGR1 Transmission & Distribution: Bus Planning & Fin MgmtBsn Ln13 Combined129 MGR1 Transmission & Distribution: Engineering & Tech SrvcsBs Ln130 MGR1 Transmission & Distribution: Power Delivery BusinessLine18 Utility65 Utility X131 MGR2 Audit Services 12 General132 MGR2 Controllers 15 Combined133 MGR2 Corporate Communications 1 Combined134 MGR2 Customer Service: Customer Programs & Services 22 General135 MGR2 Customer Service: Customer Service Operations 21 Combined136 MGR2 Human Resources 8 General137 MGR2 Information Tech & Business Integration: BusinessIntegration29 General138 MGR2 Information Tech & Business Integration: InformationTechnology & IT Ops - Service & Operations Mgmt55 Combined X139 MGR2 Nuclear Organization: Administration 18 Utility140 MGR2 Nuclear Organization: Engineering 12 Utility16 In the Study, Hewitt used a comparator group with two subgroups. “Utility” is the energy utility comparator subgroup. “General” is thegeneral industry comparator subgroup. “Combined” included all utility and general industry companies.Hewitt Associates 28 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-31

Table A-4: Manager/Supervisor Positions (Continued)Included in 2012 StudyStudyPositionNumberSCEJobCodeSCE Job Title# of SCEIncumbentsComparatorGroup141 MGR2 Nuclear Organization: Maintenance 12 Utility142 MGR2 Nuclear Organization: Operations 6 Utility143 MGR2 Nuclear Organization: Security 2 Utility144 MGR2 Nuclear Organization: Training 3 Utility145 MGR2 Operations Support: CE H&S Manager 7 Combined146 MGR2 Operations Support: OS Corporate Security Mgmt 2 Combined147 MGR2 Power Procurement: Energy Supply & Management 10 Utility148 MGR2 Power Production 14 Utility149 MGR2 Reg Policy & Affair 9 Utility150 MGR2 Transmission & Distribution: Bus Planning & Fin MgmtBsn Ln151 MGR2 Transmission & Distribution: Engineering & Tech SrvcsBs Ln152 MGR2 Transmission & Distribution: Power Delivery BusinessLine11 General3067UtilityUtility153 MGR2 Treasurers 1 General154 MGR3 Controllers 9 Combined155 MGR3 Corporate Communications 6 General156 MGR3 Customer Service: Customer Service Operations 6 General157 MGR3 Human Resources 7 Combined158 MGR3 Human Resources: Employee & Labor Relations 4 Combined159 MGR3 Information Tech & Business Integration: InformationCombined19Technology & IT Ops - Service & Operations Mgmt160 MGR3 Legal Organization 1 Combined161 MGR3 Nuclear Organization: Engineering 5 Utility162 MGR3 Nuclear Organization: Maintenance 4 Utility163 MGR3 Operations Support: CE H&S Manager 5 General164 MGR3 Operations Support: OS Corporate Security Mgmt 2 Combined165 MGR3 Power Procurement: Power Procurement Finance 3 General166 MGR3 Reg Policy & Affair 8 Utility167 MGR3 Transmission & Distribution: Bus Planning & Fin MgmtCombined6Bsn Ln168 MGR3 Transmission & Distribution: Power Delivery BusinessLine25UtilityValidatedJobMatch169 MGR3 Treasurers 5 Combined170 MPP2 Mgr-Project/Product 2 506 Combined X171 MPP3 Mgr-Project/Product 3 19 Combined172 5635 Senior Attorney 12 Combined173 SUP1 Customer Service: Customer Programs & Services 2 Combined174 SUP1 Nuclear Organization: Administration 7 Utility175 SUP1 Nuclear Organization: Security 1 UtilityXHewitt Associates 29 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-32

Table A-4: Manager/Supervisor Positions (Continued)Included in 2012 StudyStudyPositionNumberSCEJobCodeValidatedJobMatchSCE Job Title# of SCEIncumbentsComparatorGroup176 SUP1 Operations Support: OS Corporate Security Mgmt 1 General177 SUP2 Controllers 2 General178 SUP2 Customer Service: Customer Service Operations 52 Combined X179 SUP2 Nuclear Organization: Administration 7 Utility180 SUP2 Nuclear Organization: Maintenance 71 Utility X181 SUP2 Nuclear Organization: Operations 38 Utility X182 SUP2 Nuclear Organization: Security 21 Utility183 SUP2 Power Production 4 Utility184 SUP2 Transmission & Distribution: Power Delivery BusinessLine185 SUP4 Information Tech & Business Integration: InformationTechnology & IT Ops - Service & Operations Mgmt2536UtilityGeneral186 SUP4 Legal Organization 2 General187 SUP4 Nuclear Organization: Administration 4 Utility188 SUP4 Nuclear Organization: Engineering 8 Utility189 SUP4 Nuclear Organization: Maintenance 31 Utility X190 SUP4 Nuclear Organization: Operations 14 Utility191 SUP4 Nuclear Organization: Training 5 Utility192 SUP4 Power Production 1 Utility193 SUP4 Reg Policy & Affair 1 Combined194 SUP4 Transmission & Distribution: Engineering & Tech SrvcsCombined5Bs Ln195 SUP4 Transmission & Distribution: Power Delivery BusinessLine2UtilityXHewitt Associates 30 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-33

Table A-4: Manager/Supervisor Positions (Continued)Not Able to Include in 2012 Study Because of Insufficient DataSCEJobCode SCE Job Title# of SCEIncumbents2209 Assistant Controller 12278 Assistant Treasurer 1228 Corporate Medical Director 12344 Dir Comp, Benefits & Services 1307 Dir Corp Sec & Bus Cntnuty Mgt 1109 Dir Corporate Budgets 12267 Dir Operations 1339 Dir Tax 12362 HR SBP (Corporate Center) 12363 HR SBP (CSBU) 12398 Hr Sbp (It/Erp) 12364 HR SBP (Ops Support, PP, ECS) 12393 HR SBP (TDBU) 1MGR1 Customer Service: Business Customer Division 18MGR1 Legal Organization 6MGR1 Power Procurement: Power Procurement Finance 7MGR2 Customer Service: Business Customer Division 16MGR2 Legal Organization 7MGR2 Operations Support: OS Real Properties 6MGR3 Customer Service: Business Customer Division 6MGR3 Customer Service: Customer Programs & Services 7MGR3 Information Tech & Business Integration: Business Integration 17MGR3 Nuclear Organization: Administration 7MGR3 Nuclear Organization: Operations 10MGR3 Nuclear Organization: Security 1MGR3 Operations Support: OS SCM Logistics 1MGR3 Power Procurement: Energy Supply & Management 12MGR3 Power Production 6MGR3 Transmission & Distribution: Engineering & Tech Srvcs Bs Ln 142431 Plant Manager 1SUP1 Legal Organization 4SUP1 Transmission & Distribution: Power Delivery Business Line 7SUP2 Corporate Communications 1SUP2 Information Tech & Business Integration: Information Technology & IT Ops - Service &Operations Mgmt1SUP2 Nuclear Organization: Engineering 1SUP2 Transmission & Distribution: Engineering & Tech Srvcs Bs Ln 9Hewitt Associates 31 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-34

Table A-5: Executive PositionsIncluded in 2012 StudyStudyPositionNumberSCEJobCodeValidatedJobMatchSCE Job Title# of SCEIncumbentsComparatorGroup 17196 1502 Chairman & CEO, SCE 1 Combined X197 2338 EVP Power Operations 1 Utility198 58 President, SCE 1 Combined199 1498 SVP & CFO 1 Combined200 2352 SVP & Chief Nuclear Officer 1 Combined X201 92 SVP & General Counsel 1 Combined202 188 SVP Business Integration & CIO 1 Combined X203 486 VP & Assoc General Counsel 1 General204 259 VP & Treasurer 1 Combined205 2228 VP Customer Programs & Srvcs 1 General206 69 VP Customer Svc Operations Div 1 General207 189 VP Engineering & Technical Svs 1 Utility208 121 VP Power Production 1 Utility209 2248 VP Public Affairs-Sacramento 1 Combined210 VPSCECorpCom VP SCE Corporate Communications 1 General211 606 VP, Human Resources 1 Combined212 41 VP/GnAud, EIX/SCE & GnAud, EMG 1 Combined XTable A-5: Executive PositionNot Able to Include in 2012 Study Because of Insufficient DataSCEJobCode# of SCEIncumbentsSCE Job Title1236 SVP Customer Service 12432 VP Advanced Technology 12261 VP Energy Supply & Management 1199 VP Power Delivery 12229 VP Renewable & Alternative Power 1477 VP, Chief Ethics & Compliance Officer 117 In the Study, Hewitt used an executive comparator group. “Utility” is the energy utility companies in the group. “General” is the generalindustry companies in the group. “Combined” included all utility and general industry companies.Hewitt Associates 32 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-35

Appendix B: Comparator ListHewitt Associates 33 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-36

Comparator ListTable B-1Energy Utility Industry CompaniesCompanyHeadquarters LocationRevenue Size($ Millions) 181. Ameren Corporation St. Louis, MO $6,7802. American Electric Power Company (AEP) Columbus, OH $12,6223. Arizona Public Service Phoenix, AZ $2264. Consolidated Edison of New York, Inc. New York, NY $12,1375. Constellation Energy Group, Inc. Baltimore, MD $19,2856. Detroit Energy Company (DTE) Detroit, MI $9,0227. Dominion Resources, Inc. Richmond, VA $16,4828. Duke Energy Corporation Charlotte, NC $16,7469. Entergy Corporation New Orleans, LA $10,93210. Exelon Corporation Chicago, IL $15,65511. FirstEnergy Corp. Akron, OH $11,98912. Florida Power & Light Florida Power & Light $9,52813. Los Angeles Department of Water & Power (LADWP) Los Angeles, CA -14. Mirant Atlanta, GA $3,18815. Pacific Gas and Electric Company (PG&E) San Francisco, CA $12,53916. PacifiCorp Portland, OR $2,92417. PPL Corporation Allentown, PA $6,89918. Public Service Enterprise Group Newark, NJ $12,16419. Reliant Energy, Inc. Houston, TX $10,87720. San Diego Gas & Electric (Sempra) San Diego, CA $11,76121. Sierra Pacific Resources Reno, NV $3,03022. Southern California Gas (Sempra) Los Angeles, CA $3,99723. Southern Company Atlanta, GA $14,35624. TXU Corp. Dallas, TX $10,43718 Annual revenues reported by companies for 2009; LADWP is a governmental agency and does not provide revenue statistics.Hewitt Associates 34 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-37

Comparator ListTable B-2General Industry CompaniesCompanyHeadquarters LocationRevenue Size($ Millions)1. Aerospace Corporation, The El Segundo, CA $6642. Allergan, Inc. Irvine, CA $3,0633. Allianz SE (Fireman’s Fund) Novato, CA $115,7234. Amgen Inc. Thousand Oaks, CA $14,2685. AT&T Inc. Dallas, TX $63,0556. Avery Dennison Corporation Pasadena, CA $5,5767. Bechtel Group Inc. San Francisco, CA $18,1008. Boeing Integrated Defense Systems Long Beach, CA $30,7919. ChevronTexaco Corporation San Ramon, CA $170,24410. Computer Sciences Corporation El Segundo, CA $14,61611. Jacobs Engineering Group Inc. Pasadena, CA $7,42112. Jet Propulsion Lab Pasadena, CA $2,14213. Kaiser Permanente Oakland, CA $37,80014. McKesson Corporation San Francisco, CA $88,05015. Nestlé USA, Inc. Glendale, CA $8,10016. Northrop Grumman Corporation Los Angeles, CA $30,14817. Occidental Petroleum Corporation Los Angeles, CA $18,16018. Parsons Corporation Pasadena, CA $3,00019. Science Applications International Corporation San Diego, CA $10,07020. Walt Disney Company, The Burbank, CA $34,28521. WellPoint Health Networks Westlake Village, CA $61,25122. Wells Fargo & Company San Francisco, CA $47,998Hewitt Associates 35 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-38

Comparator ListTable B-3Energy Utility Industry Companies and General Industry Companies used for Executive JobsCompanyHeadquarters LocationRevenue Size($ Millions)1. Ameren Corporation St. Louis, MO $6,7802. American Electric Power Columbus, OH $12,6223. Consolidated Edison New York, NY $12,1374. Constellation Energy Baltimore, MD $19,2855. Dominion Resources, Inc. Richmond, VA $16,4826. DTE Energy Company Detroit, MI $9,0227. Duke Energy Corporation Charlotte, NC $16,7468. Entergy Corporation New Orleans, LA $10,9329. FirstEnergy Corp. Akron, OH $11,98910. PG&E Corporation San Francisco, CA $12,53911. Reliant Energy, Inc. Houston, TX $10,87712. Sempra Energy San Diego, CA $10,75813. Southern Company Atlanta, GA $14,35614. SunTrust Banks, Inc. Atlanta, GA $12,56615. Praxair, Inc. Danbury, CT $10,79616. The Sherwin-Williams Company Cleveland, OH $7,98017. R. R. Donnelley & Sons Company Chicago, IL $11,58218. Sara Lee Corporation Downers Grove, IL $12,27819. ITT Corporation White Plains, NY $11,69520. Baxter International Inc. Deerfield, IL $12,34821. Science Applications International Corporation San Diego, CA $10,07022. Amgen Inc. Thousand Oaks, CA $14,26823. Nestlé USA, Inc. Glendale, CA $8,10024. Occidental Petroleum Corporation Los Angeles, CA $18,160Hewitt Associates 36 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-39

Appendix C: Detailed Results by CategoryHewitt Associates 37 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-40

Table C-2: Clerical 20#SCE JobCode SCE Job Title# SCEEEs BaseSCE (Avg, $000) Market (Avg, $000) SCE +/- MarketTotalCash LTI BenefitsTotalComp BaseTotalCash LTI BenefitsTotalComp BaseTotalCash LTI Benefits45 ACA1 Accounting Assistant 1 14 $33.4 $33.8 - $11.6 $45.4 $38.8 $40.7 - $10.7 $51.4 -13.9% -16.9% - 7.9% -11.7%46 ACA2 Accounting Assistant 2 16 $39.7 $41.0 - $11.9 $52.9 $44.2 $46.6 - $11.1 $57.7 -10.2% -12.0% - 7.2% -8.3%47 ACA3 Accounting Assistant 3 94 $44.2 $45.4 - $12.4 $57.8 $47.8 $51.4 - $11.4 $62.7 -7.7% -11.6% - 8.8% -7.9%48 AID2 Administrative Aide 2 35 $40.2 $41.3 - $11.9 $53.2 $46.3 $48.4 - $12.8 $61.2 -13.0% -14.6% - -7.2% -13.1%49 AID3 Administrative Aide 3 180 $45.8 $47.1 - $12.2 $59.3 $52.0 $54.0 - $13.3 $67.3 -11.8% -12.8% - -7.9% -11.8%50 AID4 Administrative Assistant 142 $52.7 $54.4 - $12.9 $67.4 $54.3 $57.4 - $11.7 $69.1 -2.8% -5.1% - 10.2% -2.5%51 ABU2 Analyst-Business 2 149 $71.3 $73.8 - $14.3 $88.1 $66.3 $71.8 - $14.5 $86.3 7.6% 2.8% - -1.7% 2.0%52 APP2 Analyst-Program/Project 2 319 $64.3 $66.6 - $13.8 $80.4 $70.2 $76.6 - $15.5 $92.1 -8.4% -13.0% - -11.2% -12.7%53 9421 Assistant, Office 2 131 $43.5 $44.6 - $12.3 $56.9 $50.4 $53.7 - $13.7 $67.4 -13.8% -16.8% - -10.5% -15.5%54 CCM2 Construction/Material Crdntr 2 45 $68.2 $70.5 - $14.0 $84.5 $62.2 $68.9 - $12.5 $81.3 9.6% 2.4% - 12.1% 3.9%55 CSR1 Customer Solutions Repr 1 152 $45.2 $46.8 - $12.2 $59.0 $39.2 $42.3 - $10.8 $53.1 15.3% 10.7% - 12.5% 11.1%56 CUS2 Customer Specialist 2 288 $40.2 $41.7 - $12.0 $53.6 $47.5 $50.2 - $13.0 $63.2 -15.4% -17.0% - -7.9% -15.1%57 EXA1 Executive Assistant 1 90 $64.1 $66.3 - $13.8 $80.1 $74.4 $75.7 - $14.8 $90.5 -13.9% -12.4% - -6.9% -11.5%58 8300 Meter Reader II 147 $51.9 $53.8 - $12.9 $66.6 $56.2 $56.6 - $13.9 $70.5 -7.5% -4.9% - -7.6% -5.5%59 8301 Meter Reader Project Temporary 432 $36.6 $37.2 - $11.5 $48.7 $56.2 $56.6 - $13.9 $70.5 -34.8% -34.2% - -17.5% -30.9%60 PLA1 Planner 1 196 $66.6 $69.1 - $13.8 $82.9 $70.8 $74.7 - $15.4 $90.1 -6.0% -7.5% - -10.1% -8.0%61 TSP1 Technl Spclst/Scientist 1 36 $61.2 $63.2 - $13.5 $76.6 $50.6 $50.6 - $11.3 $61.9 21.0% 24.9% - 19.2% 23.9%62 TSP2 Technl Spclst/Scientist 2 151 $79.0 $82.0 - $14.8 $96.7 $72.5 $79.6 - $15.1 $94.6 9.0% 3.0% - -2.0% 2.2%$52.4 $54.1 - $12.8 $66.9 $57.9 $61.1 - $13.7 $74.8 -9.5% -11.4% - -6.4% -10.5%TotalComp20 Represents average pay data for SCE and comparator (market) data.B-42Hewitt Associates 39 01551/RPT001AAP.DOC/TOC NB 04887 11/2010

Table C-3: Professional/Technical 21#SCE JobCode SCE Job Title# SCEEEs BaseSCE (Avg, $000)TotalCash LTI BenefitsTotalComp BaseMarket (Avg, $000)TotalCash LTI BenefitsTotalComp BaseSCE +/- MarketTotalCash LTI Benefits63 ACC2 Accountant 2 12 $59.9 $63.9 - $17.0 $80.8 $59.2 $63.6 - $17.0 $80.6 1.1% 0.4% - -0.2% 0.3%64 ACC3 Accountant 3 18 $73.8 $79.4 - $18.6 $98.1 $73.2 $79.6 - $18.4 $98.0 0.7% -0.2% - 0.9% 0.0%65 ACC4 Accountant 4 7 $91.3 $97.3 - $20.2 $117.5 $90.7 $100.8 - $20.3 $121.1 0.7% -3.5% - -0.6% -3.0%66 ABU3 Analyst-Business 3 242 $84.3 $89.5 - $19.5 $109.0 $81.2 $88.9 - $19.3 $108.2 3.9% 0.6% - 1.2% 0.7%67 AFN2 Analyst-Financial 2 48 $71.1 $73.6 - $17.9 $91.5 $79.3 $84.8 - $16.1 $100.9 -10.3% -13.2% - 11.5% -9.3%68 AFN3 Analyst-Financial 3 98 $88.0 $92.9 - $19.7 $112.6 $95.9 $107.1 - $20.9 $127.9 -8.2% -13.3% - -5.6% -12.0%69 AFN4 Analyst-Financial 4 30 $107.3 $114.7 - $21.5 $136.2 $116.9 $134.8 - $20.4 $155.2 -8.1% -14.9% - 5.6% -12.3%70 APP3 Analyst-Program/Project 3 194 $80.0 $84.7 - $19.0 $103.7 $82.3 $92.5 - $20.7 $113.2 -2.8% -8.3% - -8.4% -8.3%71 ASY2 Analyst-Systems 2 36 $77.2 $81.7 - $18.6 $100.3 $86.0 $93.2 - $19.7 $112.8 -10.2% -12.3% - -5.2% -11.1%72 ASY3 Analyst-Systems 3 124 $90.6 $96.3 - $20.1 $116.4 $99.6 $109.9 - $21.1 $131.0 -9.1% -12.3% - -4.9% -11.1%73 ASY4 Analyst-Systems 4 76 $109.0 $115.3 - $21.6 $136.9 $114.5 $125.9 - $19.1 $145.0 -4.7% -8.4% - 12.9% -5.6%74 ADV2 Application Developer 2 8 $83.3 $89.0 - $19.5 $108.4 $86.9 $93.8 - $19.7 $113.5 -4.2% -5.2% - -1.3% -4.5%75 ADV3 Application Developer 3 63 $97.1 $104.0 - $20.5 $124.5 $103.6 $113.8 - $21.5 $135.3 -6.3% -8.6% - -4.6% -7.9%76 ADV4 Application Developer 4 14 $111.2 $115.0 - $21.6 $136.6 $112.3 $121.3 - $18.8 $140.1 -1.1% -5.2% - 14.9% -2.5%77 AUC3 Auditor-Corporate 3 14 $95.3 $102.6 - $20.4 $123.0 $95.1 $107.1 - $20.9 $128.0 0.2% -4.2% - -2.6% -3.9%78 AUC4 Auditor-Corporate 4 22 $109.7 $117.9 - $21.9 $139.7 $108.0 $120.4 - $18.7 $139.2 1.6% -2.2% - 16.9% 0.4%79 CCM3 Construction/Material Crdntr 3 135 $87.6 $94.4 - $19.9 $114.3 $78.7 $87.8 - $19.2 $107.0 11.3% 7.5% - 3.7% 6.9%80 CRR1 Corporate Repr 1 5 $78.4 $83.9 - $18.9 $102.7 $63.5 $69.0 - $15.0 $84.0 23.5% 21.5% - 25.8% 22.3%81 CRR2 Corporate Repr 2 44 $91.7 $97.0 - $20.2 $117.2 $85.4 $96.6 - $20.0 $116.5 7.3% 0.4% - 1.1% 0.6%82 CRR3 Corporate Repr 3 30 $111.6 $120.1 - $22.1 $142.2 $100.7 $114.1 - $21.5 $135.7 10.9% 5.2% - 2.7% 4.8%83 ENG1 Engineer 1 62 $69.8 $71.3 - $17.7 $89.0 $79.3 $84.2 - $18.9 $103.1 -11.9% -15.4% - -6.4% -13.7%84 ENG2 Engineer 2 82 $87.1 $92.6 - $19.7 $112.3 $97.1 $105.1 - $20.7 $125.8 -10.3% -11.8% - -4.9% -10.7%85 ENG3 Engineer 3 98 $103.2 $109.4 - $21.1 $130.5 $111.8 $121.9 - $22.3 $144.2 -7.7% -10.2% - -5.5% -9.5%86 ENN2 Engineer-Nuclear 2 66 $95.9 $103.2 - $20.4 $123.6 $91.9 $102.4 - $21.7 $124.1 4.3% 0.8% - -6.0% -0.4%87 ENN3 Engineer-Nuclear 3 76 $112.6 $121.5 - $22.3 $143.7 $106.0 $121.2 - $23.7 $145.0 6.2% 0.2% - -6.2% -0.9%88 HRC2 Hum Res Consultant 2 35 $87.7 $92.5 - $19.7 $112.2 $80.9 $89.6 - $16.4 $106.0 8.5% 3.3% - 19.7% 5.8%89 HRC3 Hum Res Consultant 3 41 $106.2 $113.2 - $21.4 $134.6 $95.6 $108.7 - $17.9 $126.5 11.1% 4.1% - 19.7% 6.3%90 IQC3 Inspector-Qlty Control 3 6 $79.6 $84.3 - $18.9 $103.3 $94.0 $104.2 - $21.9 $126.1 -15.3% -19.1% - -13.6% -18.1%91 ITS2 IT Specialist/Engineer 2 37 $74.4 $78.3 - $18.5 $96.8 $88.5 $99.3 - $20.2 $119.5 -15.9% -21.1% - -8.6% -19.0%92 ITS3 IT Specialist/Engineer 3 150 $95.1 $100.9 - $20.2 $121.0 $103.5 $118.4 - $21.9 $140.3 -8.1% -14.8% - -8.0% -13.8%93 ITS4 IT Specialist/Engineer 4 161 $113.5 $120.3 - $22.1 $142.4 $117.7 $117.7 - $19.0 $136.7 -3.6% 2.2% - 16.3% 4.2%94 ITS5 IT Specialist/Engineer 5 49 $133.3 $150.6 - $24.8 $175.3 $128.4 $151.0 - $25.1 $176.1 3.9% -0.3% - -1.4% -0.4%95 MPC1 Mgr-Program/Contract 1 14 $67.4 $70.5 - $17.6 $88.1 $74.3 $82.1 - $18.7 $100.8 -9.4% -14.1% - -5.9% -12.6%96 MPC2 Mgr-Program/Contract 2 115 $89.7 $95.2 - $20.0 $115.2 $92.6 $104.2 - $20.7 $124.9 -3.1% -8.6% - -3.3% -7.8%97 MPC3 Mgr-Program/Contract 3 76 $105.0 $112.3 - $21.4 $133.7 $118.9 $126.7 - $19.7 $146.5 -11.7% -11.4% - 8.3% -8.8%98 MPP1 Mgr-Project/Product 1 625 $100.6 $107.5 - $20.9 $128.4 $103.5 $118.9 - $22.0 $140.9 -2.8% -9.6% - -4.9% -8.9%99 PLA2 Planner 2 182 $99.5 $107.0 - $20.8 $127.9 $84.6 $94.8 - $21.0 $115.8 17.6% 12.9% - -0.6% 10.4%100 ENG4 Senior Engineer 91 $122.5 $131.9 - $23.3 $155.2 $128.6 $141.6 - $24.3 $165.8 -4.8% -6.8% - -3.9% -6.4%101 ENN4 Senior Nuclear Engineer 65 $133.0 $143.7 - $24.1 $167.8 $116.1 $133.3 - $25.0 $158.3 14.6% 7.8% - -3.6% 6.0%102 SES3 Sfty & Envrnmntl Spclst 3 54 $103.6 $110.7 - $21.2 $131.9 $93.5 $101.3 - $17.3 $118.7 10.9% 9.3% - 22.5% 11.2%103 ATT3 Sr Attorney 1 43 $175.5 $208.2 $22.6 $29.5 $260.3 $177.8 $224.0 $54.2 $31.6 $309.7 -1.3% -7.1% -58.3% -6.5% -16.0%104 TSP3 Technl Spclst/Scientist 3 400 $96.1 $102.4 - $20.3 $122.7 $99.1 $110.2 - $21.2 $131.3 -3.1% -7.1% - -4.0% -6.6%105 TRS2 Training Specialist 2 39 $85.3 $90.0 - $19.4 $109.4 $78.5 $86.1 - $19.0 $105.1 8.6% 4.6% - 2.0% 4.1%106 TRS3 Training Specialist 3 63 $97.2 $103.3 - $20.4 $123.7 $88.1 $96.9 - $17.0 $113.9 10.4% 6.6% - 20.2% 8.6%$97.4 $104.1 $22.6 $20.6 $125.0 $98.6 $110.0 $54.2 $20.9 $131.5 -1.2% -5.3% -58.3% -1.2% -4.9%TotalComp21 Represents average pay data for SCE and comparator (market) data.B-43Hewitt Associates 40 01551/RPT001AAP.DOC/TOC NB 04887 11/2010

Table C-4: Manager/Supervisor 22#SCE JobCode SCE Job Title# SCEEEs BaseTotalCash LTI BenefitsTotalComp BaseTotalCash LTI BenefitsTotalComp BaseTotalCash LTI Benefits107 237 Dir Benefits 1 $192.1 $257.0 $67.7 $36.2 $360.9 $178.0 $250.4 $49.2 $37.8 $337.4 7.9% 2.6% 37.8% -4.3% 7.0%108 MGR1 Manager 1: Controllers 13 $114.7 $123.5 - $25.7 $149.2 $111.3 $130.0 - $25.5 $155.5 3.1% -5.0% - 0.9% -4.0%109 MGR1 Manager 1: Corporate Communications 6 $111.6 $120.3 - $25.3 $145.6 $105.4 $126.1 - $25.1 $151.1 5.9% -4.6% - 0.9% -3.7%110 MGR1 Manager 1: Customer Service: Customer Programs & 31 $106.6 $113.3 - $24.4 $137.8 $103.7 $121.5 - $24.4 $145.8 2.8% -6.7% - 0.1% -5.5%Services111 MGR1 Manager 1: Customer Service: Customer Service43 $112.0 $120.7 - $25.4 $146.0 $108.4 $129.8 - $25.5 $155.3 3.3% -7.0% - -0.5% -6.0%Operations112 MGR1 Manager 1: Human Resources 15 $113.5 $122.4 - $25.6 $148.0 $110.5 $130.3 - $25.5 $155.8 2.7% -6.1% - 0.2% -5.0%113 MGR1 Manager 1: Human Resources: Employee & Labor2 $117.2 $121.3 - $24.8 $146.1 $127.9 $160.8 - $30.9 $191.7 -8.4% -24.5% - -19.7% -23.8%Relations114 MGR1 Manager 1: Information Tech & Business Integration: 3 $115.0 $123.5 - $25.7 $149.2 $128.8 $146.0 - $23.1 $169.0 -10.8% -15.4% - 11.5% -11.7%Business Integration115 MGR1 Manager 1: Information Tech & Business Integration: Information Technology & IT Ops - Service & OperationsMgmt62 $114.2 $123.0 - $25.7 $148.7 $116.2 $138.2 - $26.3 $164.5 -1.7% -11.0% - -2.6% -9.6%116 MGR1 Manager 1: Nuclear Organization: Administration 18 $115.0 $124.0 - $25.8 $149.8 $118.1 $142.7 - $28.7 $171.4 -2.6% -13.1% - -10.0% -12.6%117 MGR1 Manager 1: Nuclear Organization: Engineering 1 $119.5 $128.4 - $25.7 $154.0 $123.0 $144.7 - $28.9 $173.6 -2.9% -11.3% - -11.1% -11.3%118 MGR1 Manager 1: Nuclear Organization: Maintenance 9 $122.2 $132.9 - $26.2 $159.2 $119.6 $143.4 - $28.7 $172.1 2.2% -7.3% - -8.7% -7.5%119 MGR1 Manager 1: Nuclear Organization: Operations 1 $131.2 $141.8 - $26.8 $168.6 $123.4 $150.3 - $29.5 $179.8 6.3% -5.7% - -9.2% -6.3%120 MGR1 Manager 1: Nuclear Organization: Security 7 $115.4 $122.8 - $25.0 $147.8 $99.9 $118.0 - $25.8 $143.8 15.4% 4.1% - -3.1% 2.8%121 MGR1 Manager 1: Nuclear Organization: Training 6 $119.6 $129.2 - $25.8 $155.0 $119.9 $140.0 - $28.3 $168.3 -0.2% -7.7% - -9.0% -7.9%122 MGR1 Manager 1: Operations Support: CE H&S Manager 5 $111.5 $120.2 - $25.3 $145.5 $116.1 $140.2 - $26.5 $166.7 -4.0% -14.3% - -4.7% -12.7%123 MGR1 Manager 1: Operations Support: OS Corporate Security 3 $106.9 $106.9 - $23.6 $130.5 $111.9 $135.1 - $26.0 $161.1 -4.5% -20.9% - -9.2% -19.0%Mgmt124 MGR1 Manager 1: Operations Support: OS Real Properties 6 $117.3 $126.5 - $25.5 $152.0 $116.8 $143.7 - $26.9 $170.6 0.4% -12.0% - -5.4% -10.9%125 MGR1 Manager 1: Operations Support: OS SCM Logistics 2 $111.7 $120.4 - $25.3 $145.7 $106.1 $121.5 - $21.0 $142.5 5.3% -0.9% - 20.7% 2.3%126 MGR1 Manager 1: Power Procurement: Energy Supply &6 $132.4 $144.0 - $27.1 $171.1 $114.5 $183.6 - $33.4 $217.0 15.6% -21.5% - -18.9% -21.1%Management127 MGR1 Manager 1: Power Production 26 $111.9 $120.6 - $25.3 $145.9 $110.8 $133.4 - $27.6 $161.0 1.1% -9.6% - -8.1% -9.3%128 MGR1 Manager 1: Transmission & Distribution: Bus Planning & 13 $113.4 $121.3 - $25.4 $146.7 $104.8 $123.1 - $24.6 $147.7 8.1% -1.5% - 3.6% -0.6%Fin Mgmt Bsn Ln129 MGR1 Manager 1: Transmission & Distribution: Engineering & Tech Srvcs Bs Ln18 $112.6 $120.8 - $25.4 $146.2 $122.5 $146.1 - $29.0 $175.1 -8.1% -17.3% - -12.6% -16.5%130 MGR1 Manager 1: Transmission & Distribution: Power DeliveryBusiness Line65 $121.8 $131.7 - $26.1 $157.8 $114.7 $138.6 - $28.2 $166.8 6.2% -5.0% - -7.4% -5.4%131 MGR2 Manager 2: Audit Services 12 $140.1 $160.0 - $28.9 $188.8 $139.5 $146.3 - $23.0 $169.4 0.5% 9.3% - 25.3% 11.5%132 MGR2 Manager 2: Controllers 15 $132.2 $148.0 - $27.6 $175.6 $132.3 $159.8 - $28.6 $188.4 -0.1% -7.4% - -3.5% -6.8%133 MGR2 Manager 2: Corporate Communications 1 $135.4 $169.2 - $29.9 $199.1 $130.2 $162.9 - $28.9 $191.8 4.0% 3.8% - 3.7% 3.8%134 MGR2 Manager 2: Customer Service: Customer Programs &ServicesSCE (Avg, $000) Market (Avg, $000) SCE +/- Market22 $133.7 $149.3 - $27.7 $177.0 $147.2 $192.4 - $27.9 $220.3 -9.1% -22.4% - -0.6% -19.6%135 MGR2 Manager 2: Customer Service: Customer Service21 $135.8 $155.1 - $28.3 $183.4 $138.4 $175.6 - $30.2 $205.8 -1.8% -11.7% - -6.2% -10.9%Operations136 MGR2 Manager 2: Human Resources 8 $144.4 $165.7 $0.0 $29.5 $195.2 $139.4 $169.1 $27.3 $25.0 $221.4 3.6% -2.0% - 18.0% -11.8%TotalComp22 Represents average pay data for SCE and comparator (market) data.B-44Hewitt Associates 41 01551/RPT001AAP.DOC/TOC NB 04887 11/2010

Table C-4: Manager/Supervisor 23 (continued)#SCE JobCode SCE Job Title137 MGR2 Manager 2: Information Tech & Business Integration:Business Integration138 MGR2 Manager 2: Information Tech & Business Integration:Information Technology & IT Ops - Service & OperationsMgmt# SCEEEs BaseTotalCash LTI BenefitsTotalComp BaseTotalCash LTI BenefitsTotalComp BaseTotalCash LTI Benefits29 $136.2 $154.8 - $28.3 $183.1 $141.2 $179.0 - $25.9 $204.9 -3.5% -13.5% - 9.1% -10.6%55 $139.3 $158.9 $0.0 $28.7 $187.7 $136.1 $158.7 $26.5 $28.4 $213.7 2.4% 0.1% - 1.1% -12.2%139 MGR2 Manager 2: Nuclear Organization: Administration 18 $138.0 $155.8 - $28.4 $184.1 $143.5 $184.7 - $33.5 $218.2 -3.8% -15.7% - -15.4% -15.6%140 MGR2 Manager 2: Nuclear Organization: Engineering 12 $149.1 $169.0 - $29.9 $198.9 $146.2 $184.8 - $33.5 $218.4 2.0% -8.6% - -10.9% -8.9%141 MGR2 Manager 2: Nuclear Organization: Maintenance 12 $142.6 $158.5 - $28.7 $187.2 $139.6 $169.6 - $31.8 $201.3 2.1% -6.5% - -9.7% -7.0%142 MGR2 Manager 2: Nuclear Organization: Operations 6 $146.6 $165.6 - $29.5 $195.1 $139.2 $179.4 - $32.9 $212.3 5.4% -7.7% - -10.4% -8.1%143 MGR2 Manager 2: Nuclear Organization: Security 2 $130.5 $153.9 - $28.3 $182.1 $127.4 $158.8 - $30.7 $189.5 2.5% -3.1% - -7.9% -3.9%144 MGR2 Manager 2: Nuclear Organization: Training 3 $147.8 $161.6 - $29.0 $190.6 $144.8 $180.6 - $33.0 $213.7 2.1% -10.5% - -12.3% -10.8%145 MGR2 Manager 2: Operations Support: CE H&S Manager 7 $131.6 $148.7 - $27.7 $176.4 $135.5 $173.1 - $29.9 $203.0 -2.9% -14.1% - -7.6% -13.1%146 MGR2 Manager 2: Operations Support: OS Corporate Security 2 $127.6 $137.3 - $26.3 $163.6 $141.9 $171.7 - $29.8 $201.4 -10.1% -20.0% - -11.7% -18.8%Mgmt147 MGR2 Manager 2: Power Procurement: Energy Supply &Management10 $143.7 $163.7 - $29.3 $193.0 $158.1 $213.8 - $36.8 $250.6 -9.1% -23.5% - -20.5% -23.0%148 MGR2 Manager 2: Power Production 14 $136.0 $155.7 - $28.4 $184.1 $121.0 $146.7 - $29.1 $175.8 12.3% 6.1% - -2.6% 4.7%149 MGR2 Manager 2: Reg Policy & Affair 9 $131.4 $149.9 - $27.8 $177.6 $130.0 $171.9 - $32.2 $204.1 1.1% -12.8% - -13.7% -13.0%150 MGR2 Manager 2: Transmission & Distribution: Bus Planning & 11 $134.7 $152.1 - $28.0 $180.1 $132.5 $158.9 - $24.2 $183.1 1.7% -4.3% - 15.9% -1.6%Fin Mgmt Bsn Ln151 MGR2 Manager 2: Transmission & Distribution: Engineering &Tech Srvcs Bs Ln152 MGR2 Manager 2: Transmission & Distribution: Power DeliveryBusiness Line30 $136.9 $153.5 - $28.1 $181.6 $135.7 $178.2 - $32.8 $210.9 0.9% -13.9% - -14.2% -13.9%67 $134.0 $149.8 - $27.8 $177.6 $131.1 $163.3 - $31.2 $194.5 2.2% -8.3% - -11.0% -8.7%153 MGR2 Manager 2: Treasurers 1 $157.6 $180.8 - $29.9 $210.7 $141.3 $170.5 - $25.2 $195.7 11.5% 6.1% - 18.7% 7.7%154 MGR3 Manager 3: Controllers 9 $156.8 $183.3 $26.9 $30.1 $240.4 $157.0 $203.3 $39.5 $33.2 $276.0 -0.1% -9.8% -31.8% -9.2% -12.9%155 MGR3 Manager 3: Corporate Communications 6 $156.2 $184.6 $25.3 $30.3 $240.1 $157.7 $203.9 $30.5 $28.9 $263.3 -0.9% -9.5% -17.1% 4.6% -8.8%156 MGR3 Manager 3: Customer Service: Customer Service6 $154.6 $182.7 $16.8 $31.5 $230.9 $163.1 $210.0 $45.3 $29.5 $284.8 -5.3% -13.0% -63.0% 6.7% -18.9%Operations157 MGR3 Manager 3: Human Resources 7 $165.5 $196.5 $15.4 $31.5 $243.4 $159.6 $201.2 $37.4 $33.0 $271.6 3.7% -2.3% -58.9% -4.4% -10.4%158 MGR3 Manager 3: Human Resources: Employee & Labor4 $157.0 $183.4 $15.6 $30.1 $229.1 $166.9 $218.4 $49.7 $34.5 $302.6 -5.9% -16.0% -68.6% -12.7% -24.3%Relations159 MGR3 Manager 3: Information Tech & Business Integration: 19 $168.4 $199.3 $22.3 $31.8 $253.4 $161.6 $200.7 $27.0 $32.9 $260.6 4.2% -0.7% -17.4% -3.4% -2.7%Information Technology & IT Ops - Service & OperationsMgmtSCE (Avg, $000) Market (Avg, $000)SCE +/- Market160 MGR3 Manager 3: Legal Organization 1 $174.9 $209.4 - $32.9 $242.3 $114.5 $138.0 - $26.3 $164.4 52.7% 51.7% - 25.0% 47.4%161 MGR3 Manager 3: Nuclear Organization: Engineering 5 $174.6 $209.8 $23.4 $33.0 $266.2 $169.3 $221.2 $32.5 $37.5 $291.1 3.2% -5.1% -27.9% -12.1% -8.6%162 MGR3 Manager 3: Nuclear Organization: Maintenance 4 $159.3 $181.2 $26.5 $29.9 $237.6 $163.4 $209.9 $39.0 $36.4 $285.2 -2.5% -13.7% -32.0% -17.8% -16.7%163 MGR3 Manager 3: Operations Support: CE H&S Manager 5 $165.1 $195.6 - $31.4 $227.0 $176.9 $226.7 - $31.0 $257.8 -6.7% -13.7% - 1.2% -11.9%164 MGR3 Manager 3: Operations Support: OS Corporate Security 2 $158.8 $182.9 $20.7 $30.1 $233.7 $150.3 $183.7 $40.9 $31.2 $255.9 5.7% -0.4% -49.5% -3.6% -8.7%Mgmt165 MGR3 Manager 3: Power Procurement: Power Procurement 3 $157.1 $184.1 - $30.2 $214.3 $180.6 $228.3 - $31.2 $259.4 -13.0% -19.4% - -3.0% -17.4%Finance166 MGR3 Manager 3: Reg Policy & Affair 8 $160.3 $187.8 $20.5 $30.6 $239.0 $178.5 $243.1 $57.8 $39.8 $340.6 -10.2% -22.7% -64.5% -23.0% -29.8%TotalComp23 Represents average pay data for SCE and comparator (market) data.B-45Hewitt Associates 42 01551/RPT001AAP.DOC/TOC NB 04887 11/2010

Table C-4: Manager/Supervisor 24 (continued)#SCE JobCode SCE Job Title167 MGR3 Manager 3: Transmission & Distribution: Bus Planning &Fin Mgmt Bsn Ln168 MGR3 Manager 3: Transmission & Distribution: Power DeliveryBusiness Line# SCEEEs BaseTotalCash LTI BenefitsTotalComp BaseTotalCash LTI BenefitsTotalComp BaseTotalCash LTI Benefits6 $160.1 $187.3 $27.4 $30.6 $245.3 $175.6 $240.0 $53.7 $36.8 $330.4 -8.8% -21.9% -49.0% -16.8% -25.8%25 $160.5 $189.4 - $30.8 $220.2 $155.0 $208.7 - $36.3 $244.9 3.6% -9.2% - -15.0% -10.1%169 MGR3 Manager 3: Treasurers 5 $151.0 $173.6 $27.9 $30.4 $232.0 $167.8 $221.9 $45.2 $34.9 $302.0 -10.0% -21.8% -38.1% -12.9% -23.2%170 MPP2 Mgr-Project/Product 2 506 $126.2 $141.4 $0.18 $26.8 $168.3 $138.3 $173.0 $25.9 $29.9 $228.8 -8.7% -18.3% -99.3% -10.5% -26.4%171 MPP3 Mgr-Project/Product 3 19 $155.3 $179.6 $20.0 $29.7 $229.3 $169.2 $220.1 $56.7 $34.7 $311.5 -8.2% -18.4% -64.7% -14.4% -26.4%172 5635 Senior Attorney 12 $210.9 $273.6 $73.8 $36.4 $383.7 $214.6 $294.7 $77.7 $41.8 $414.2 -1.7% -7.2% -5.1% -12.9% -7.4%173 SUP1 Supervisor 1: Customer Service: Customer Programs &Services2 $62.9 $65.3 - $19.2 $84.5 $72.1 $79.8 - $20.1 $100.0 -12.7% -18.2% - -4.5% -15.4%174 SUP1 Supervisor 1: Nuclear Organization: Administration 7 $71.4 $75.5 - $20.3 $95.8 $96.4 $109.3 - $24.8 $134.1 -26.0% -30.9% - -18.3% -28.6%175 SUP1 Supervisor 1: Nuclear Organization: Security 1 $71.6 $71.6 - $19.7 $91.4 $80.1 $90.0 - $22.4 $112.4 -10.5% -20.4% - -11.9% -18.7%176 SUP1 Supervisor 1: Operations Support: OS Corporate1 $82.0 $88.4 - $21.7 $110.1 $78.9 $88.4 - $17.9 $106.3 4.0% 0.0% - 21.2% 3.6%Security Mgmt177 SUP2 Supervisor 2: Controllers 2 $71.1 $76.2 - $20.4 $96.6 $75.9 $84.9 - $17.6 $102.6 -6.2% -10.3% - 15.5% -5.8%178 SUP2 Supervisor 2: Customer Service: Customer Service 52 $85.0 $90.7 - $22.0 $112.7 $86.6 $93.9 - $21.6 $115.6 -1.9% -3.5% - 1.8% -2.5%Operations179 SUP2 Supervisor 2: Nuclear Organization: Administration 7 $93.6 $100.1 - $23.0 $123.0 $96.4 $109.3 - $24.8 $134.1 -2.9% -8.5% - -7.5% -8.3%180 SUP2 Supervisor 2: Nuclear Organization: Maintenance 71 $94.8 $102.3 - $23.2 $125.5 $97.0 $110.0 - $24.9 $134.9 -2.3% -7.1% - -6.6% -7.0%181 SUP2 Supervisor 2: Nuclear Organization: Operations 38 $104.6 $114.3 - $24.6 $138.9 $91.9 $106.1 - $24.4 $130.5 13.7% 7.7% - 0.8% 6.4%182 SUP2 Supervisor 2: Nuclear Organization: Security 21 $84.1 $90.4 - $22.0 $112.4 $80.1 $90.0 - $22.4 $112.4 5.1% 0.5% - -1.8% 0.1%183 SUP2 Supervisor 2: Power Production 4 $93.3 $98.8 - $22.8 $121.6 $96.1 $109.9 - $24.9 $134.7 -2.9% -10.0% - -8.3% -9.7%184 SUP2 Supervisor 2: Transmission & Distribution: Power253 $106.7 $117.4 - $24.9 $142.3 $124.6 $134.6 - $27.7 $162.3 -14.4% -12.8% - -10.0% -12.3%Delivery Business Line185 SUP4 Supervisor 4: Information Tech & Business Integration:Information Technology & IT Ops - Service & OperationsMgmt6 $115.3 $124.2 - $25.2 $149.4 $110.8 $117.0 - $20.6 $137.6 4.1% 6.1% - 22.3% 8.5%186 SUP4 Supervisor 4: Legal Organization 2 $96.9 $105.8 - $23.5 $129.3 $111.6 $128.6 - $21.6 $150.2 -13.2% -17.7% - 8.7% -13.9%187 SUP4 Supervisor 4: Nuclear Organization: Administration 4 $119.4 $129.0 - $25.8 $154.8 $118.1 $142.7 - $28.7 $171.4 1.1% -9.6% - -10.1% -9.7%188 SUP4 Supervisor 4: Nuclear Organization: Engineering 8 $126.4 $135.7 - $26.1 $161.8 $123.0 $144.7 - $28.9 $173.6 2.7% -6.2% - -9.6% -6.8%189 SUP4 Supervisor 4: Nuclear Organization: Maintenance 31 $117.4 $129.1 - $25.8 $154.9 $119.6 $143.4 - $28.7 $172.1 -1.9% -9.9% - -10.3% -10.0%190 SUP4 Supervisor 4: Nuclear Organization: Operations 14 $122.0 $134.6 - $26.4 $161.1 $123.4 $150.3 - $29.5 $179.8 -1.2% -10.4% - -10.5% -10.4%191 SUP4 Supervisor 4: Nuclear Organization: Training 5 $122.6 $132.3 - $26.2 $158.5 $119.9 $140.0 - $28.3 $168.3 2.3% -5.5% - -7.7% -5.8%192 SUP4 Supervisor 4: Power Production 1 $108.6 $118.0 - $25.0 $143.1 $107.9 $133.4 - $27.6 $161.0 0.6% -11.5% - -9.3% -11.1%193 SUP4 Supervisor 4: Reg Policy & Affair 1 $123.4 $133.0 - $26.2 $159.3 $114.0 $135.4 - $26.0 $161.4 8.2% -1.7% - 0.8% -1.3%194 SUP4 Supervisor 4: Transmission & Distribution: Engineering& Tech Srvcs Bs Ln195 SUP4 Supervisor 4: Transmission & Distribution: PowerDelivery Business LineSCE (Avg, $000) Market (Avg, $000) SCE +/- Market5 $112.2 $121.1 - $25.4 $146.5 $120.3 $148.5 - $27.4 $175.9 -6.7% -18.4% - -7.2% -16.7%2 $112.5 $121.7 - $25.5 $147.2 $114.7 $138.6 - $28.2 $166.8 -2.0% -12.2% - -9.6% -11.8%$122.5 $136.6 $4.8 $26.5 $164.8 $127.9 $155.1 $29.4 $28.6 $194.2 -4.2% -12.0% -83.7% -7.5% -15.2%TotalComp24 Represents average pay data for SCE and comparator (market) data.B-46Hewitt Associates 43 01551/RPT001AAP.DOC/TOC NB 04887 11/2010

Table C-5: Executive 25#SCE JobCode SCE Job Title# SCEEEs BaseSCE (Avg, $000) Market (Avg, $000) SCE +/- MarketTotalCash LTI BenefitsTotalComp BaseTotalCash LTI BenefitsTotalComp BaseTotalCash LTI Benefits196 1502 Chairman & CEO, SCE 1 $717.0 $1,288.4 $1,022.0 $356.1 $2,666.4 $683.3 $1,299.2 $1,629.8 $180.7 $3,109.7 4.9% -0.8% -37.3% 97.1% -14.3%197 2338 EVP Power Operations 1 $396.6 $703.9 $489.2 $196.6 $1,389.7 $456.2 $843.9 $624.4 $120.6 $1,589.0 -13.1% -16.6% -21.7% 62.9% -12.5%198 58 President, SCE 1 $456.0 $789.7 $562.5 $220.0 $1,572.2 $395.6 $707.1 $569.9 $105.5 $1,382.4 15.3% 11.7% -1.3% 108.5% 13.7%199 1498 SVP & CFO 1 $325.0 $504.6 $270.9 $142.8 $918.3 $299.1 $506.3 $344.1 $80.4 $930.8 8.7% -0.3% -21.3% 77.7% -1.3%200 2352 SVP & Chief Nuclear Officer 1 $357.0 $548.4 $283.1 $154.7 $986.2 $446.8 $831.2 $559.5 $118.8 $1,509.5 -20.1% -34.0% -49.4% 30.2% -34.7%201 92 SVP & General Counsel 1 $378.0 $612.1 $299.7 $171.8 $1,083.6 $472.7 $855.9 $792.2 $123.2 $1,771.3 -20.0% -28.5% -62.2% 39.5% -38.8%202 188 SVP Business Integration & CIO 1 $394.3 $638.5 $312.7 $178.9 $1,130.1 $323.5 $525.0 $332.5 $81.5 $939.0 21.9% 21.6% -6.0% 119.6% 20.3%203 486 VP & Assoc General Counsel 1 $312.5 $480.4 $179.0 $136.1 $795.6 $324.3 $512.1 $343.7 $80.2 $936.0 -3.6% -6.2% -47.9% 69.7% -15.0%204 259 VP & Treasurer 1 $267.0 $412.2 $152.9 $117.0 $682.2 $297.1 $496.4 $234.9 $77.7 $809.0 -10.1% -17.0% -34.9% 50.6% -15.7%205 2228 VP Customer Programs & Srvcs 1 $262.7 $375.7 $127.3 $107.2 $610.2 $202.2 $293.8 $87.3 $49.6 $430.7 29.9% 27.9% 45.9% 116.1% 41.7%206 69 VP Customer Svc Operations Div 1 $270.1 $422.2 $154.7 $119.6 $696.5 $240.8 $377.7 $160.3 $60.8 $598.7 12.2% 11.8% -3.5% 96.9% 16.3%207 189 VP Engineering & Technical Svs 1 $231.5 $323.6 $112.2 $93.3 $529.1 $287.1 $427.0 $178.1 $68.5 $673.6 -19.4% -24.2% -37.0% 36.2% -21.5%208 121 VP Power Production 1 $280.5 $431.3 $160.6 $122.2 $714.1 $296.4 $507.4 $322.2 $79.1 $908.7 -5.4% -15.0% -50.1% 54.5% -21.4%209 2248 VP Public Affairs-Sacramento 1 $275.0 $275.0 $151.3 $81.5 $507.9 $205.0 $279.3 $76.6 $48.1 $403.9 34.1% -1.5% 97.7% 69.4% 25.7%210 VPSCECorpCVP SCE Corporate Communications 1 $235.0 $297.5 $120.2 $86.7 $504.4 $259.1 $405.2 $189.7 $65.6 $660.6 -9.3% -26.6% -36.7% 32.1% -23.6%211 606 VP, Human Resources 1 $285.0 $285.0 $185.3 $84.5 $554.8 $240.2 $379.6 $157.3 $62.0 $598.9 18.7% -24.9% 17.8% 36.3% -7.4%212 41 VP/GnAud, EIX/SCE & GnAud, EMG 1 $274.2 $418.7 $157.0 $118.8 $694.6 $232.8 $349.0 $125.3 $57.0 $531.3 17.8% 20.0% 25.3% 108.5% 30.7%$336.3 $518.1 $278.9 $146.3 $943.3 $333.1 $564.5 $395.7 $85.8 $1,046.1 1.0% -8.2% -29.5% 70.5% -9.8%TotalComp25 Represents average pay data for SCE and comparator (market) data.B-47Hewitt Associates 44 01551/RPT001AAP.DOC/TOC NB 04887 11/2010

Appendix D: Competitive Analysis SummaryHewitt Associates 45 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-48

Competitive Analysis Summary This appendix shows the data used to calculate competitive posture in Table 1. Table D-1—Displays SCE’scompetitive status for each element of compensation. This is the same information presented in Table 1 ofthe Study Results. Table D-2—Displays total compensation by job category and compensation element including base salary,total cash compensation, LTI, and benefits for SCE and the comparator companies. Total compensation foreach compensation element is derived by adding together the compensation dollars for each incumbentcovered by a benchmark job in the Study. Table D-3—Displays average compensation by job category and compensation element for SCE and thecomparator companies. Average compensation is derived by dividing the sum of compensation dollars forall incumbents covered by benchmark jobs for each compensation element by the number of SCEincumbents covered by benchmark jobs in the Study.Hewitt Associates 46 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-49

Competitive Analysis SummaryTable D-1: Competitive Summary (SCE versus Market)Job CategorySCESCE Payroll PayrollSCE vs. MarketPopulation 26 Dollars ($000s) 27 Weighting Base TCC LTI28 Benefits Total Comp 29Physical/Technical 4,770 $365,719.0 24.0% 9.0% 11.1% —1.8% 9.4%Clerical 4,683 $256,809.4 16.9% -9.5% -11.4% — -6.4% -10.5%Professional/Technical 4,912 $509,920.3 33.5% -1.2% -5.3% -58.3% -1.2% -4.9%Manager/Supervisor 2,669 $376,630.7 24.7% -4.2% -12.0% -83.8% -7.5% -15.2%Executive 31 $14,564.0 1.0% 1.0% -8.2% -29.5% 70.5% -9.8%Overall 30 17,065 $1,523,643.4 100.0%-0.9% -4.0% -8.3% -2.2% -4.7%Table D-2: Competitive Analysis—By Total Compensation Dollars (000s)# Ees in SCE MarketJob Category Study Base TCC LTI 31 Benefits Total Comp Base TCC LTI 31 Benefits Total CompPhysical/Technical 2,820 $211,792 $222,903 $46,373 $269,275 $194,346 $200,612 $45,530 $246,143Clerical 2,617 $137,179 $141,597 $33,547 $175,144 $151,642 $159,896 $35,847 $195,743Professional/Technical 3,850 $375,076 $400,939 $972 $79,442 $481,353 $379,685 $423,432 $2,331 $80,388 $506,150Manager/Supervisor 1,919 $235,173 $262,118 $3,247 $50,824 $316,189 $245,447 $297,707 $20,034 $54,947 $372,688Executive 17 $5,717 $8,807 $4,741 $2,488 $16,036 $5,662 $9,596 $6,728 $1,459 $17,78326 SCE’s population is as of December 18, 2009.27 Payroll dollars include base pay as of December 18, 2009, and annual incentives (as defined on page 14), paid in 2009 for 2008 performance.28 Total Compensation includes long-term incentives (LTI) for 17 Executive, 16 Managers/Supervisor, and 1 Professional/Technical job. SCE’s position on LTI vs. the market is determined bycomparing the value of LTI grants for all incumbents in the 34 eligible positions to the market value of LTI grants for those positions and incumbents.29 For Study purposes, total compensation is defined as total cash compensation, benefits, and actual LTI.30 Results are weighted by SCE payroll dollars for all jobs; both benchmark and non-benchmark.31 Total compensation dollars for LTI for SCE and the market are derived by adding all LTI values for all incumbents in the 34 positions eligible for LTI.Hewitt Associates 47 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-50

Table D-3: Competitive Analysis—By Average Compensation Dollars (000s)# Ees in SCE MarketJob Category Study Base TCC LTI 32 Benefits Total Comp Base TCC LTI 32 Benefits Total CompPhysical/Technical 2,820 $75.1 $79.0 – $16.4 $95.5 $68.9 $71.1 – $16.1 $87.3Clerical 2,617 $52.4 $54.1 – $12.8 $66.9 $57.9 $61.1 – $13.7 $74.8Professional/Technical 3,850 $97.4 $104.1 $0.3 $20.6 $125.0 $98.6 $110.0 $0.6 $20.9 $131.5Manager/Supervisor 1,919 $122.5 $136.6 $1.7 $26.5 $164.8 $127.9 $155.1 $10.4 $28.6 $194.2Executive 17 $336.3 $518.1 $278.9 $146.3 $943.3 $333.1 $564.5 $395.7 $85.8 $1,046.132 Average LTI dollars by job category for SCE and the market is determined by adding LTI values for all incumbents in the 34 positions eligible for LTI and dividing the sum by the number of SCEemployees in the job category.Hewitt Associates 48 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-51

Appendix E: Generic Job MethodologyHewitt Associates 49 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-52

Generic Job MethodologyThis section summarizes the approach used to compare each of SCE’s generic job titles analyzed in thisStudy to market. For the 2012 Study, the Team agreed upon a method for each generic job described belowthat would allow Hewitt to match incumbents in generic job titles to survey sources. This approach was alsoused for the 2009 Study.Manager (MGR)—3 LevelsThere are 843 SCE incumbents assigned to a Manager level (MGR 1, 2, or 3). This classification is used todesignate general levels of Manager work; each level has a market base salary and an annual incentive (as apercentage of salary) target. SCE assigns jobs to each level based on benchmark market pay data and thelevel of work required of incumbents. In addition, when making a Manager level assignment, SCE considersreporting relationships, market bonus targets, number and type of subordinates, budget authority, and impact.The level of work is assumed to vary somewhat for all incumbents at each level, but still reflects the jobdescription for each Manager level.Supervisor (SUP)—3 Levels 33There are 538 SCE incumbents assigned to a Supervisor level (SUP 1, 2, or 4). This classification is used todesignate the level of Supervisor; each level has a market base salary and a bonus target (which is the samepercentage of base salary for all levels of Supervisor). SCE assigns jobs to a Supervisor level using marketpay data for benchmark jobs. However, similar to the Manager classification, other considerations are alsoused, including, supervisory responsibility, subordinate pay levels, and number of direct reports and their jobtitles.Matching Manager and Supervisor Titles to MarketThe Manager and Supervisor classifications were broken out into more discrete levels to allow comparison tomarket. SCE noted that within a function such as “Finance,” there are several departments (such asControllers, Corporate Budgets, and Treasurers). Within each of these departments are more discrete workunits. Hewitt benchmarked these work unit managers and supervisors to market based on their specificresponsibility. Hewitt then used that benchmark data for all other Managers and Supervisors at the same levelin that department.For example, within the Controllers department, there are four work units, including, “Corporate AccountingOperations” and “Corporate Accounting Reporting.” The Team decided that if Hewitt was able to benchmarkMGR2 jobs in the Controllers’ Corporate Accounting Operations work unit, that data would also be applied toall MGR2 incumbents within the entire Controllers department, such as the Manager for the “Capital Recoveryand Valuation” work unit.Technical Specialist (TSP)—4 LevelsThere are 587 SCE incumbents assigned to a Technical Specialist level (TSP 1, 2, 3, or 4). This classificationis used for incumbents who are performing technical activities not common across the organization (such asBiologist, Physicist, and Chemist). SCE’s internal analysis indicates that the level of technical work is similar ateach level of Technical Specialist, regardless of the specific department to which the employees are assigned.33 A fourth level exists, SUP3; however, no benchmarks exist for this job.Hewitt Associates 50 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-53

The count of Technical Specialist incumbents by SCE business unit/department is as follows:Table E-1: Technical Specialist# of SCE Incumbents In StudySCE Business Unit/Department TSP Total TSP1 TSP2 TSP3Customer Service 66 13 53Information Tech & Business Integration 3 3Legal Organization 1 1Nuclear Organization 176 4 34 138Operations Support 87 5 20 62Power Procurement 1 1Power Production 24 1 8 15Transmission & Distribution 229 26 75 128Total 587 36 151 400Several types of Technical market benchmarks are used internally by SCE to test the competitiveness ofmarket for each Technical Specialist level. These benchmarks include Technical jobs with specialties such asHealth Physics, Environmental Health and Safety Engineering, Chemistry, and Biology.Hewitt used the benchmark matches listed above (similar to SCE’s current internal practice) to compare eachlevel of Technical Specialst to market.Information Technology Specialist/Engineer (ITS)—4 LevelsThere are 397 SCE incumbents assigned to an Information Technology Specialist/Engineer level (ITS 1, 2, 3,or 4). This classification is used for IT functions that are not highly populated, such as IT Security, NetworkAdministration, and Database Administration. Similar to the Technical Specialist role, employees are expectedto perform similar IT work at each Information Technology Specialist/Engineer level. Hewitt used several ITmarket benchmarks to assess pay competitiveness for each Information Technology Specialist/Engineer level,including, Network Engineering, IT Security, and Database Administration.The count of Information Technology Specialist/Engineer incumbents by SCE business unit/department is asfollows:Table E-2: Information Technology Specialist# of SCE Incumbents In StudySCE Business Unit/Department ITS Total ITS2 ITS3 ITS4 ITS5Business Integration 33 2 5 21 5Information Technology 306 25 114 124 43IT Ops - Service & Operations Mgmt 58 10 31 16 1Total 397 35 150 161 49Manager, Project/Product (MPP)—3 LevelsThere are 1,150 SCE incumbents assigned to a Manager, Project/Product level (MPP 1, 2, or 3); all but 19 areMPP1 or MPP2. This classification is used for roles that manage finite projects, regardless of functional area.SCE believes that the primary skill sets for these jobs—establishing, monitoring, and assessing progress onproject milestones; resource allocation; negotiation; budget determination; and monitoring project changes—are similar, regardless of department. Hewitt primarily matched this job family to Project Manager benchmarksfound in surveys.The count of Manager, Project/Product incumbents by SCE business unit/department is as follows:Hewitt Associates 51 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-54

Table E-3: Manager, Project/Product# of SCE Incumbents In StudySCE Business Unit/Department MPP Total MPP1 MPP2 MPP3Audit Services 1 1Controllers 21 11 10Corporate Budgets 3 3Corporate Communications 40 24 16Customer Service 263 188 75Edison Carrier Solutions 4 2 2Ethics & Compliance 1 1Gen Planning & Strategy 14 4 10Human Resources 32 6 26Information Tech & Business Integration 227 99 109 19Legal Organization 5 5Nuclear Organization 55 30 25Operations Support 88 40 48Performance Mgmt and Measurement 2 2Power Procurement 53 23 30Power Production 23 13 10Reg Policy & Affair 28 5 23Risk Control 14 14Transmission & Distribution 271 175 96Treasurers 5 5Total 1,150 625 506 19MPP3 is a Project Manager in the IT function only and was matched to that job in salary surveys.Manager, Program/Contract (MPC)—3 LevelsThere are 205 SCE incumbents assigned to a Manager, Program/Contract level (MPC 1, 2, or 3). Thisclassification contains jobs that perform purchasing or contract administration activities. Hewitt matched these jobsto survey roles performing this type of work, such as Contracts Administrator and Subcontracts Administrator.The count of Manager, Program/Contract incumbents by business unit/department is as follows:Table E-4: Manager, Programs/Contracts# of SCE Incumbents In StudySCE Business Unit/Department MPC Total MPC1 MPC2 MPC3Audit Services 1 1Customer Service 50 5 33 12Edison Carrier Solutions 6 3 3Gen Planning & Strategy 1 1Human Resources 1 1Information Tech & Business Integration 7 4 3Legal Organization 1 1Nuclear Organization 15 1 10 4Operations Support 51 1 27 23Power Procurement 13 6 7Power Production 2 1 1Reg Policy & Affair 5 5Transmission & Distribution 52 7 30 15Total 205 14 115 76Hewitt Associates 52 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-55

Appendix F: LTI Study PositionsHewitt Associates 53 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-56

LTI Study Positions Chairman & CEO, SCE President, SCE EVP Power Operations SVP Business Integration & CIO SVP & General Counsel SVP & Chief Nuclear Officer SVP & CFO VP & Associate General Counsel VP, Human Resources VP, Power Production VP Public Affairs – Sacramento VP.GnAud, EIX/SCE & Gn/Aud, EMG VP Customer Service Operations Division VP & Treasurer VP Customer Programs & Services VP SCE Corporate Communications VP Engineering & Technical Services Senior Attorney Director, Benefits Sr. Attorney I Manager 3: Nuclear Organization: Engineering Manager 3: Information Tech & Business Integration: IT and Ops-Services Manager 3: Human Resources Manager 3: Regulatory Policy & Affairs Manager 3: Transmission & Distribution: Bus Planning & fin Management Bsn Ln Manager 3: Nuclear Organization: Maintenance Manager 3: Operations Support: OS Corporate Security Mgmt Manager 3: Human Resources: Employee & Labor Relations Manager 3: Controllers Manager 3: Corporate Communication Manager-Project/Product 3 Manager 3: Customer Service: Customer Service Operations Manager 3: Treasurer Manager-Project/Product 2Hewitt Associates 54 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-57

Appendix G: Benefit Calculation Samples(SCE and Comparator Company)Hewitt Associates 55 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-58

Sample Benefit Calculations—SCEThe following briefly summarizes the calculation methodology for a sample Professional/Technical SCEemployee, using actual benefits.Sample employee characteristics: Age: 46 Service: 13 years Base Salary: $100,000 Bonus: $9,000These illustrations do not show the full, complex set of calculations. They are intended to represent theapproach Hewitt took to value benefits according to Hewitt’s Benefit Index ® methodology utilizing SCE’sdemographic profile and assumptions. All values shown are annual amounts.Defined ContributionHewitt determined defined contribution plan values based on the amount of company contribution during theplan year.The SCE plan matches up to 6 percent of base pay at a rate of $1 for each $1 of employee deferrals. Allemployees are immediately eligible to participate, and after five years of service, all company matchingcontributions are fully vested. This sample employee has 13 years of service and, therefore, is fully vested inthe company match provided this year.Assuming that this employee defers 5 percent of salary into the plan, SCE’s contribution would equal 5 percentof salary (or $100,000 × 5 percent).This produces a value of $5,000.Defined Benefit PensionUnder the SCE plan formula, this sample employee has 59 “points” of pension credit (“points” under theformula is a total of age plus service) and is, therefore, eligible for an allocation of 5 percent of base pay, or$5,000 in the current year. A similar calculation was performed for all past and future years and thisemployee’s account is projected to each assumed retirement age.Normal RetirementTo illustrate the calculations assuming a single point, age 65 retirement, assume that this employee’s accountis projected to accumulate to $700,000. At that time, this employee will have 32 years of service. Theprojected account balance was then spread evenly over each year of service to produce an annual “credit” of$22,000 assigned to this year.Because this employee is currently age 46, the actuarial present value of this $22,000 credit was determinedby discounting this amount for 19 years to reflect the time value of money and the probability of remaining inservice to age 65. This discounted value is approximately $5,500.Early RetirementA similar calculation was performed to determine a value if the employee leaves SCE between the ages 55 to65. Assume that the sum of these discounted values is approximately $3,000.Hewitt Associates 56 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-59

If we assume 60 percent of employees retire at age 65 and 40 percent retire prior to age 65, the total value ofthe defined benefit pension is then ($5,500 x 60 percent) + ($3,000 x 40 percent) = $4,500(Additional value is added for terminated vested benefits, disability benefits, etc., as applicable in eachplan, but those elements are excluded from this example for simplicity’s sake.)Death BenefitsDeath benefits were valued taking into account the probability of an employee dying during the plan year.Several components of death benefits were valued:Basic and accidental life insuranceSCE provides 1 times base pay (maximum $30,000) of life insurance and an additional $30,000 of accidentaldeath coverage. Assuming that the probability of this employee’s death this year is 0.18 percent by naturalcauses and 0.04 percent by accident, the value of the basic and accidental preretirement life insurance benefitis $30,000 × 0.18 percent + $30,000 × 0.04 percent = $66.Supplemental life insuranceIn addition, suppose this employee elects to purchase supplemental coverage equal to 3 times salary. Thisbenefit has a value of 3 × $100,000 × 0.18 percent = $540. Assume that this employee pays a monthly rate of$.11 per thousand dollars of coverage. Therefore, the contribution would be 300 × $.11 × 12 = $396 per yearfor this benefit. Hewitt calculated the net value of this supplemental coverage at $540 – $396 = $144.Death benefits from defined benefit planThe value of death benefits from the cash balance pension plan was not included as a retirement benefit, butrather was included in this calculation. Suppose our employee has an account balance of $70,000 at age 46.The death benefit value is $70,000 × 0.18 percent = $126.Postretirement life insuranceThe SCE postretirement death benefit is $5,000. Suppose the value at age 65 (taking into account theemployee’s life expectancy at age 65) is $2,000. The value assigned to this year is a proportional share of the$2,000. Given that this employee will have 32 years of service at age 65, the amount assigned to this year is$2,000 divided by 32, or $63. Discounting this back to the current age for the time value of money and theprobability of working until retirement at age 65, as was done with the pension benefit, produces a value ofapproximately $19.Therefore, the total value of death benefits is $66 + $144 + $126 + $19 = $355.DisabilityThe SCE program offers a choice of disability benefit levels of 50 percent, 60 percent, or 70 percent of pay,minus the primary Social Security benefit. Assume that this employee selects the 60 percent of pay option.Assume that the employee’s primary Social Security benefit is approximately $25,000. Therefore, the disabilitybenefit amount would be approximately 60 percent × $100,000 – $25,000, or $35,000 per year.Assume that the probability the employee will become disabled this year is 0.5 percent and the actuarialpresent value of the disability payment stream (i.e., the annuity factor) is 5.14.The value of the disability benefit, net of flex credits, is $35,000 × 0.5 percent × 5.14 = $900.Hewitt Associates 57 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-60

Active Health CareHealth care is divided into medical, dental, vision and hearing benefits:MedicalValues for a given active employee medical plan option were obtained by using a rate-making manual. Overallvalues were determined by taking a weighted average of the option’s rates based on actual election patternsat SCE and reflecting the percentage of employees who waive coverage. Within each plan, the distribution offamily size elections was based on the structure and patterns of SCE’s demographic model.Hewitt calculated the weighted average rate for all plans at $10,500 and assumes that the employeecontributions average $3,300, net of flex credits. The employer-paid value is $10,500 – $3,300 = $7,200.DentalHewitt used a similar approach to value dental coverage. Assume the weighted average value of eachcoverage tier and election is $1,100 and net employee contributions are $200. Therefore, the employer-paidvalue is $1,100 – $200 = $900.Vision and hearingVision and hearing have a combined value of $125 with zero employee contributions.Therefore, the preretirement health care (medical, dental, vision and hearing) value is$7,200 + $900 + $125 = $8,225.Retiree Health CareRetiree health benefits were valued in a manner similar to defined benefit pension benefits. The value atretirement is assigned equally to each year worked. Although a distribution of retirement ages is used, toillustrate, assume age 62 retirement.Pre-Medicare benefitsAssume pre-65 retiree medical costs are about $16,200 in 2009. Assume SCE’s share in 2008 was $11,300,which increases each year by the greater of CPI or 50% of plan cost inflation (maximum CPI + 2%). When thisperson reaches age 62 in 2025, assume pre-65 retiree medical costs are $45,000 per year and SCE’s share isnow $19,200. The retiree’s portion is $45,000 - $19,200 = $25,800.Hewitt assumes the value of this benefit at age 62 is $59,500 for the 3 years of pre-medicare coverage.Because the employee will have 29 years of service at age 62, we estimate the annual value of $59,500 isdivided by 29 = $2,100 per year. Discounting that to the current year for the time value of money at an annualrate of 6.25 percent, and the probability of remaining in service until 62, gives an approximate value of $600.Medicare-eligibleAssume that at age 65 the annual cost will be approximately $16,000 per year, to reflect coordination withMedicare. Assume also that SCE will pay about $2,600 per year. Hewitt estimates the actuarial, lifetimepresent value at age 65 is approximately $35,500. Spreading this amount over 29 years produces an annualvalue of $1,200. Discounting this to the current year at an annual rate of 6.25 percent gives an approximatepresent value of $380.Therefore, the total retiree health value is $600 + $380 = $980.Hewitt Associates 58 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-61

Overall Benefit ValueThe value for this sample SCE employee is approximately:Benefit AreaBenefit Index ValueDefined Contribution $5,000Defined Benefit 4,500Death 355Disability 900Active Health Care 8,225Retiree Health Care 980Total $19,960Hewitt Associates 59 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-62

Sample Benefit Calculations—Comparator CompanyThe following briefly summarizes the calculation methodology for a sample employee, using benefits planfeatures from a company in SCE’s comparator group.Sample employee characteristics: Age: 46 Service: 13 years Base Salary: $100,000 Bonus: $9,000These illustrations do not show the full, complex set of calculations. They are intended to represent theapproach Hewitt took to value the benefits according to Hewitt’s Benefit Index methodology.Defined ContributionDefined contribution plan values were determined based on the amount of company contribution during theplan year. The comparator company sponsors an ESOP (employee stock ownership program)/profit sharingplan and a matching 401(k) plan.401(k)The comparator company matches employee contributions at a rate of $.50 per $1 on the first $2,000 ofemployee deferrals and $.25 per $1 on deferrals above $2,000. All employees are immediately eligible toparticipate, and after five years of service all company matching contributions are fully vested. This sampleemployee has 13 years of service and, therefore, is fully vested in the company match provided this year.Assuming that this employee defers 2 percent of salary into the plan (2 percent × $100,000 = $2,000), thecomparator company’s contribution would equal $1,000 (.50 × $2,000). This produces a value of $1,000.ESOPThe ESOP is assumed to provide contributions of 8 percent of base pay. Therefore, this employee wouldreceive a contribution of $100,000 × 8 percent = $8,000.The total defined contribution value for this employee is $1,000 + $8,000 = $9,000Defined Benefit PensionThis comparator company does not provide a defined benefit pension plan, so this value is $0.Death BenefitsDeath benefits were valued taking into account the probability of an employee dying during the plan year.Several components of death benefits were valued:Basic and accidental life insuranceThe comparator company provides a basic death benefit of 2 times salary ($200,000 for this employee) and anadditional 1 times salary ($100,000) of accidental death coverage. Assuming that the probability of thisemployee’s death this year is 0.18 percent by natural causes and 0.04 percent by accident, the value of thebasic and accidental preretirement life insurance benefit is $200,000 × 0.18 percent + $100,000 × 0.04 percent= $400.Hewitt Associates 60 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-63

Supplemental life insuranceIn addition, suppose this employee elects to purchase supplemental coverage equal to 2 times salary. Thisbenefit has a value of 2 × $100,000 × 0.18 percent = $360. Assume that this employee pays a monthly rate of$.20 per thousand dollars of coverage. Therefore, the contribution would be 200 × $.20 × 12 = $480 per yearfor this benefit. The net value of this supplemental coverage is $360 – $480 = $0.Death benefits from defined benefit planBecause the comparator company does not sponsor a defined benefit plan, this value is $0.Postretirement life insuranceThe comparator company does not provide a postretirement life insurance benefit. Therefore, this value is $0.Therefore, the total value of death benefits is $400 + $0 + $0 + $0 = $400.DisabilityThe comparator company provides a disability benefit equal to 67 percent of annual pay, minus the familySocial Security benefit. Assume that the employee’s family Social Security benefit is approximately $40,000.Therefore, the disability benefit amount would be approximately 67 percent × $100,000 – $40,000, or $27,000per year.Hewitt assumes that the probability the employee will become disabled this year is 0.5 percent and theactuarial present value of the disability payment stream (i.e., the annuity factor) is 5.14.The value of the disability benefit is $27,000 × 0.5 percent × 5.14 = $694.Active Health CareHealth care is divided into medical, dental, vision and hearing benefits:MedicalValues for a given active employee medical plan option were obtained by using a rate-making manual. Overallvalues were determined by taking a weighted average of the option’s rates based on actual election patternsand accounting for employees who waive coverage. Within each plan, the distribution of family size electionswas based on the structure and patterns of SCE’s demographic experience.Hewitt calculates the weighted average rate for all plans at $10,500, and that the employee contributionsaverage $1,000, net of flex credits. The employer-paid value is $10,500 – $1,000 = $9,500.DentalA similar approach was used to value dental coverage. Hewitt assumes the weighted average value of eachcoverage tier and election is $1,100 and net employee contributions are $450. The employer-paid value is$1,100 – $450 = $650.Vision and hearingThe comparator company provides a vision and a hearing plan on an employee-pay-all basis. Therefore, theemployer-paid value is $0.Therefore, the preretirement health care (medical, dental, vision and hearing) value is $9,500 + $650 =$10,150.Retiree Health CareThe comparator company does not sponsor a retiree health care plan. Therefore, this value is $0.Hewitt Associates 61 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-64

Overall Benefit ValueThe value for this sample employee is approximately:Benefit AreaBenefit Index ValueDefined Contribution $9,000Defined Benefit 0Death 400Disability 694Active Health Care 10,150Retiree Health Care 0Total $20,244Hewitt Associates 62 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-65

Appendix H: Benefits and Total CompensationResults Based on Hewitt Standard Demographicsand AssumptionsHewitt Associates 63 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-66

Valuation of Benefits and Total Compensation Based on Hewitt StandardDemographics and AssumptionsTable G-1 presents SCE’s competitive status for each major element of compensation (base pay, total cashcompensation, benefits, long-term incentives (LTI), and total compensation) using Hewitt’s standarddemographic profiles and assumptions for valuing benefits. The Hewitt standard approach was used in the2009 Study.As described on page 15 of the Study Methodology, the Team determined that SCE’s demographics profileand assumptions would be used in the 2012 Study rather than the Hewitt standard approach. Table G-1 isincluded to provide a comparison to what the Study results would have been had the Hewitt standardapproach been used in the 2012 Study and can be compared to Table 1 on page 2 of this Report..Table G-1: Competitive Summary (SCE versus Market) Based on Hewitt’s Standard Demographics andAssumptionsSCE vs. MarketJob CategoryPhysical/TechnicalSCEPopulation 34SCE PayrollDollars($000s) 35PayrollWeightingBasePayTotalCashComp 36Long-TermIncentives 37BenefitsTotalComp 384,770 $365,719.0 24.0% 9.0% 11.1% — 11.2% 11.1%Clerical 4,683 $256,809.4 16.9% -9.5% -11.4% — 2.6% -8.9%Professional/TechnicalManager/Supervisor4,912 $509,920.3 33.5% -1.2% -5.3% -58.3% 6.3% -3.9%2,669 $376,630.7 24.7% -4.2% -12.0% -83.8% -1.4% -14.4%Executive 31 $14,564.0 1.0% 1.0% -8.2% -29.5% 70.5% -9.8%Overall 39 17,065 $1,523,643.4 100.0% -0.9% -4.0% -8.3% 5.6% -3.5%34 SCE’s population is as of December 18, 2009.35 Payroll dollars include base pay as of December 18, 2009, and annual incentives (as defined on page 14), paid in 2009 for 2008performance.36 Total Cash Compensation reflects base pay plus short-term (annual) incentives for all categories, adjusted to December 18, 2009.37 Total Compensation includes long-term incentives (LTI) for 17 Executive, 16 Managers/Supervisor, and 1 Professional/Technical job.38 For Study purposes, total compensation is defined as total cash compensation, benefits, and LTI.39 Results are weighted by SCE payroll dollars for all jobs; both benchmark and non-benchmark.Hewitt Associates 64 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-67

Appendix I: Meeting NotesHewitt Associates 65 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-68

Date: February 22, 2010To:The GRC Study Team (the Team)cc: Blake Murphy, HewittJennifer Casey, HewittKathy Miller, HewittFrom:Liz SnyderSubject: February 22, 2010 Meeting NotesRevised November 1, 2010AttendeesNameMarek KanterPat AdamsLupe ClappMartin ColletteGeorge DeMariaYesenia EliseaJudy WoodAlison PetersonLiz SnyderOrganizationDivision of Ratepayers’ Advocates (DRA)Southern California Edison (SCE)SCESCESCESCESCEHewittHewittThe Team met at SCE’s offices in San Francisco (Kanter, Adams, Collette, Peterson and Snyder) and byvideo conference in Rosemead (Clapp, DeMaria, Elisea & Wood).Discussion ItemsOpening Remarks and Introductions The Team introduced itself and reviewed Hewitt’s role and accountabilities. The Team agreed thatHewitt’s primary roles will be to facilitate Team meetings; serve as joint consultant and subject matterexpert (SME) for Edison and DRA; represent best practices (e.g., regarding the benchmarking process);and to help guide the Team to consensus. Lupe requested that all references to Edison be changed to SCE to reflect that this is a utility study, andnot to be confused with Edison International. The Team discussed the role of SCE SMEs. Lupe mentioned that SCE’s Director of Benefits,Barbara Decker, will be an SME for benefits. Additionally, Margo Koss will be an SME for LTI/executivecompensation. George mentioned that SCE Corporate Compensation may have another employeeassisting with research, but that person likely will not be attending the Team meetings. The Team agreed that the benefits and executive compensation SMEs only need to be invited tomeetings during which their subject matter expertise will be discussed. Likewise, Hewitt will involve itsbenefits SMEs, Blake Murphy and Jennifer Casey, only on an as needed basis.Ground Rules and Meeting Notes The Team is scheduled to have 12 Team meetings. There also will be 3 and ½ days of job matchingmeetings between Hewitt and the SCE Corporate Compensation team (and other SMEs as needed) atSCE’s or Hewitt’s offices in Southern California. Chelsea Penaloza, from Hewitt, will participate in thesemeetings.B-69

February 22, 2010The GRC Study TeamPage 2 Prior to each meeting, Hewitt will put together an agenda and distribute it to the Team. During themeeting, Hewitt will take detailed notes. The notes will be finalized within 2-3 days after the Teammeetings and will be distributed to the Team for review while the meeting still is fresh in mind. All editsand comments to the meeting notes should be sent to Pat Adams, at SCE. Pat will collect the commentsand provide them to Hewitt prior to the next Team meeting. At the next Team meeting, Hewitt will reviewthe revised notes with the Team, collect any final comments, and finalize the notes from the priormeeting. The Team reviewed sample meeting notes from the prior project and agreed that the format anddetail/summary level was sufficient.Project Plan, Timing, and Meetings The Team reviewed the project plan and suggested timing. The project plan now has a start date ofFebruary 22, 2010, and the final report is scheduled to be completed by July 13, 2010. The Team agreedthat this timing is aggressive, but we will need to stick to it, as the Notice of Intent is scheduled to be filedon July 19, 2010. The Team reviewed a suggested meeting schedule. SCE will confirm upcoming meeting dates with itsbenefits and LTI SMEs and get back to Hewitt about alternative dates. The Team generally agreed on the suggested schedule, and Marek said he would prefer to have allTeam meetings in either SCE’s or Hewitt’s San Francisco offices.Project MethodologyReport Format The Team reviewed the 2009 GRC Total Compensation Study (the 2009 Study) report in detail andHewitt asked the Team to comment on whether they had any questions or suggested modifications to themethodology used during the prior Study. Marek asked for clarification about the data analysis and validation process described in the project planand wanted to know whether the process is described in the report. Marek asked about Hewitt’s Benefits Index (BI) methodology and whether, like Towers Perrin, Hewitt isusing 1987 standard demographic data. Marek’s preference is to use current SCE demographic data.The Team agreed to defer this conversation until the next meeting, when Hewitt’s benefits valuation teamcan provide additional detail and answer Marek’s methodology questions. Marek requested that the Team provide more detail in the Data Aggregation and Average BenefitCalculation section of the report when it is finalized for the Study, reflecting the proposed change inmethodology regarding the demographic data. He also would like to include an appendix in the report thatprovides the formulae showing how the data aggregation and average benefit calculation was prepared,including information on sample size. The Team reviewed the workpapers from the 2009 Study to see whether the formulae were includedin that report—they were not. Alison noted that the meeting notes from the prior Study included adiscussion about whether to include the formulae, and they were excluded because of the level ofdetail. Other than the above comments, the remainder of the Study Methodology section of the prior report wasreviewed without comment.01551/GRC2012/Meeting Notes/TOCNB 04887 02/22/2010B-70

February 22, 2010The GRC Study TeamPage 3 Upon reviewing Appendix A (Benchmark Jobs) from the prior Study, Lupe asked if Hewitt could includethe jobs that were excluded from the benchmark list due to lack of data. Hewitt agreed to include thisinformation. Marek explained that he would like to see an expansion of the appendices related to validation of results.Lupe asked Marek whether there was anything from the PG&E study that we could leverage tounderstand the validation level requested. Marek explained that the PG&E study employed the historicmethod that SCE has used in the past. He is asking Sempra (who is working with Towers Perrin) to usean updated validation method, but that work has not been done yet. The Team agreed that we would getmore specific about Marek’s request in our next meeting and will decide what is reasonable to do in termsof time and money. The Team agreed that Appendix C (Detailed Results by Category) and Appendix D (Competitive AnalysisSummary) in the 2009 Study report provide the appropriate level of detail.Job Categories The Team reviewed the job categories definitions and agreed that the definitions are still appropriate.Pay Elements The Team agreed that the pay elements to be included in the Study would be the same as those used inthe 2009 Study: Base Pay Total Cash (base pay + actual bonus) Benefits LTI (stock options, restricted stock, and/or other LTI vehicles) The Team agreed that the items that were excluded in the 2009 Study likewise should be excluded fromthis Study. Non-cash benefits such as time-off and short-term disability are deemed by SCE to be part of basesalary. Spot awards, shift differentials, and overtime typically are not reflected in survey data and a widevariance exists in practice and usage of these programs. In addition, spot awards generally are lessthan 1% of SCE payroll. The Team discussed whether the increased employer usage of furloughs in the last year or so wouldhave any impact on the survey data. The Team agreed that there may be some impact to the basesalary and total compensation reported, but since there is no clear way to identify which companieshad a furlough, it will not be possible to consider this in our analysis. The Team discussed the use of target vs. actual annual incentive data. Most surveys report actualbonuses, paid on the prior year’s bonus opportunity, and some also include target bonus. Thus, 2009surveys will report 2008 bonuses paid in 2009. The Team discussed the impact of the recessionarybusiness cycle on bonus data and noted that it’s possible that 2009 actual bonuses will be lower than theprior year’s data. The Team agreed that it would be useful to have target bonus information to compareand evaluate the variance (if any) between actual and target. As a result, both target and actual bonusdata will be collected.01551/GRC2012/Meeting Notes/TOCNB 04887 02/22/2010B-71

February 22, 2010The GRC Study TeamPage 4Treatment of EIX jobs In the 2009 Study, a few SCE executives’ roles covered accountabilities for both EIX and SCE, requiringthat part of their compensation be included in the Study. Pat will research whether there are any roles likethat at SCE/EIX for this Study and will report back at the next meeting. (Lupe thinks maybe one-third ofTed Craver’s compensation will need to be included.)Comparator Companies The Team reviewed the list of comparator companies provided by Hewitt. The list included all thecompanies used as comparators in the prior two GRC Studies (2009 and 2006), and indicates whetherHewitt has current benefits data in its database for these companies. The Team agreed that Hewitt willcontact the companies for whom we do not have current data and solicit their participation. SCE requested specifically that Hewitt seek participation from DWP, PacifiCorp, and Sierra Pacific,though Sierra Pacific is not as high a priority as the other two. SCE will review the comparator list more closely and provide feedback regarding any other organizationsthat should be removed or added to the list. To facilitate this, Hewitt will provide SCE with a list of all thecompanies that are in the Hewitt database so that SCE knows what information is readily available.Benchmark Jobs Review & Validation The Team agreed that it will use a similar approach to the 2009 Study to identify benchmarks, whichincludes the following steps: SCE will update its job data by job category. Hewitt will compare the new data to what jobs were used as benchmarks in the 2009 Study, andidentify opportunities for other jobs to be benchmarks; e.g., high-incumbent jobs or representationfrom each job category—enough incumbents/jobs to be statistically valid. Hewitt and SCE will schedule 3 and ½ days of benchmark sessions to review the benchmarks,confirm survey sources (using the criteria that the job must be 80% comparable to the survey job),and gather any additional data, as needed. Alison explained that the 80% match criteria is deployedby reviewing and comparing SCE job descriptions, survey job descriptions, and other relevant jobdata as needed (e.g., SME interviews). Due to the unique nature of some of SCE’s positions, ourconfidence level in the matches may be greater for some jobs than for others. Marek requested thatthe Team maintain a record of the criteria used in determining the matches and the confidence levelof each match so that the Team is clear on how the match was derived. After the benchmarking sessions, the Team will review and finalize the benchmark list. The Team agreed that the following compensation survey data sources will be used: EAPDIS TowersPerrin Hewitt AON (Radford) ORC (SIRS) Mercer Watson Wyatt Other boutique surveys used by SCE, as needed, depending on what jobs are benchmarked01551/GRC2012/Meeting Notes/TOCNB 04887 02/22/2010B-72

February 22, 2010The GRC Study TeamPage 5Generic Jobs Methodology The Team reviewed the generic jobs methodology described in the 2009 Study report. SCE continues toutilize certain job codes generically across the organization. The generic job families have not changedsince the 2009 Study. The Team agreed that the methodology employed for the 2009 Study will bereplicated for this Study. This process includes the following: Manager (MGR), 3 levels Supervisor (SUP), 4 levels– Approach for MGR and SUP: break out into more discrete departments and work units and matchaccording to specific responsibilities. Technical Specialist (TSP), 4 levels– Approach for TSP jobs: use benchmarks for Health Physics, Environmental Health and SafetyEngineering, Chemistry, and Biology. Information Technology Specialist/Engineer (ITS), 3 levels– Approach for ITS jobs: use IT market benchmarks, including, Network Engineering, IT Security, andDatabase Administration. Manager, Project/Product (MPP), 3 levels– Approach for MPP jobs: match to Project Manager benchmarks for MPP1 and MPP2; match to ITProject Manager for MPP3. Manager, Programs/Contract (MPC), 3 levels– Approach for MPC jobs: match to Contracts Administrator and Subcontracts Administrator jobs.Study Effective Date and Escalation Factor The Team discussed how to determine what escalation factor to use to age the survey data to theeffective date of the 2012 Study. The Team agreed that the effective data of the Study will beDecember 18, 2009. This is the Friday before the salary increase for IBEW took effect, and is consistentwith the selection of an effective date for the 2009 Study. The SCE bonus was paid in March 2009. Thisdata will be aged to December 18, 2009 for purposes of the Study. Hewitt introduced a report of Salary Increase Survey (SIS) data to help the Team consider theappropriate escalation factor. The SIS data includes data from the Hewitt SIS and from WorldatWork. TheHewitt SIS has approximately 1,150 participants from a variety of industries, including 40-50 utilities. Thedata in the report shows what companies’ actual salary budgets were for 2009 and what the projectedbudgets are for 2010. Alison explained that 2009 was an unusual year for salary increases (as well as for bonuses). Manymore companies reported zero base salary increase budgets for 2009 versus other years. In addition,Alison clarified that the West Region data cut is broader than just California. Alison referenced the 2009 Study, where the Team applied one escalation factor to all job categories.The 2009 salary increase budget data differs by a few tenths of a percent between employee groupswithin the Energy/Utility and General Industry segments. However, the data varies by about apercentage point between the Energy/Utility segment and the General Industry segment.01551/GRC2012/Meeting Notes/TOCNB 04887 02/22/2010B-73

February 22, 2010The GRC Study TeamPage 6 The Team agreed to use a weighted average escalation factor developed by multiplying the numberof incumbents in each job category by the reported salary increase factor for that job category, addingthe results, and dividing by the total number of incumbents. The Team next considered whether to use the data including or excluding 0% increases. Alisonmentioned that in prior studies, this would not have been a significant consideration, but since therewas a dramatic increase in the number of companies reporting zero budgets in 2009, it was relevantto determining an escalation factor. Therefore, the Team agreed that it should use the data thatincludes 0% increases.– The Team asked if Hewitt could determine the 2009 merit budgets for SCE’s comparatorcompanies. Alison explained that Hewitt could cross-reference the list of comparators to theparticipants in Hewitt’s 2009/2010 Salary Increase Survey to determine if that data is available.Hewitt will not be able to report the budgets of specific companies, but can consolidate the resultsand report averages if sufficient data is available. Hewitt will begin evaluating this option and willreport status at the next Team meeting. The Team will consider the data presented and will confirm its decision at one of its next twomeetings.– Marek informed the Team that the escalation factor was not an issue at PG&E, and the issue hasnot yet been addressed in the Sempra study. The Team agreed that the DRA does not need to provide Global Insight data as another source ofsalary increase data. Marek was satisfied with the level of data provided on this issue by Hewitt.Benchmark Job Data The Team reviewed a job data file from the 2009 Study and confirmed that SCE should update the datain the same format. Hewitt will sort the data by job category and incumbent size on one worksheet, andwill sort the data by job category, union code, and incumbent size on another worksheet. Hewitt also willmake sure that subtotals and column headings are easy to follow. Hewitt will send SCE a data request for a current download of its jobs. Lupe reminded the Team that SCEhas some union/represented jobs that SCE wouldn’t normally consider clerical that are in the Clericalcategory. Jobs have been recategorized in the past at the request of the DRA. An example is the MeterReader job. Marek confirmed that this is how other utilities classify these jobs as well. As part of the benchmarking process, Hewitt will clarify with SCE whether the job content of any jobsselected as benchmarks has changed since the prior Study. If the content of any benchmark jobs haschanged, SCE will provide Hewitt with updated job descriptions for these jobs. SCE also will provide jobdescriptions for any new jobs selected as a benchmark and/or will make SMEs available to answerquestions about the job content.Action ItemsSCE Pat will confirm whether any Executive jobs are shared between EIX and SCE. George will provide Hewitt with the updated jobs data.01551/GRC2012/Meeting Notes/TOCNB 04887 02/22/2010B-74

February 22, 2010The GRC Study TeamPage 7 The Team will review the current comparator company list and possible alternative companies, with afocus on employers located in Southern California, to determine if additional companies should be added. Pat will compile any comments to the draft meeting notes and send them to Hewitt prior to the nextmeeting.Hewitt Hewitt will compose and distribute the draft meeting notes. Hewitt will determine if salary increase budget data is available for SCE’s comparator companies and, ifavailable, will collect data and report status at the next meeting. Hewitt will send SCE a request for a jobs data download. Hewitt will reformat the job data report after it receives the updated jobs data from SCE, will identifybenchmark adds/drops, and will circulate the data at the next meeting. Hewitt will send the Team a list of Southern California employers that are included in its database, so theTeam can determine whether there are other companies that should be included on the comparator list.SCE will review the comparator list more closely and provide feedback regarding any other organizationsthat should be removed or added to the list. Hewitt will start to solicit data from the comparator companies from whom updated data is needed. Hewitt will prepare background information and considerations around Hewitt’s benefits valuationmethodology employing a demographic profile based on a census of companies that participate in the BIdatabase for review and discussion at the next meeting. Hewitt also will outline considerations ofchanging the methodology to use the current SCE demographic information for use in valuing benefits. The next meeting date is Tuesday, March 9, 2010 at SCE’s San Francisco office. Hewitt’s benefits SME,Blake Murphy, will participate in person. SCE’s benefits SME, Barbara Decker, also will participate inperson. Upcoming meeting dates are: Wednesday, March 24. Tuesday, March 30. The Team will review suggested April meeting dates during the next meeting.Agenda Items for Next Meeting Review and edit notes from prior meeting. Discuss benefits methodology. Finalize comparator group list. Review/Discuss escalation factor and additional data cut from SIS regarding 0% companies. Review benchmark jobs data.01551/GRC2012/Meeting Notes/TOCNB 04887 02/22/2010B-75

Date: March 9, 2010To:The GRC Study Team (the Team)cc: Chelsea Penaloza, HewittJennifer Casey, HewittFrom:Liz SnyderSubject: March 9, 2010 Meeting NotesRevised November 1, 2010AttendeesNameMarek KanterPat AdamsLupe ClappMartin ColletteChristine SanchezBarbara DeckerMargo KossLu WeissGeorge DeMariaYesenia EliseaJudy WoodAlison PetersonBlake MurphyKathy MillerLiz SnyderOrganizationDivision of Ratepayers’ Advocates (DRA)Southern California Edison (SCE)SCESCESCESCESCESCESCESCESCEHewittHewittHewittHewittThe Team met at SCE’s offices in San Francisco (Kanter, Adams, Collette, Decker, Peterson, Murphy &Snyder), by telephone (Miller), and by video conference in Rosemead (Clapp, Sanchez, Koss, Weiss,DeMaria, Elisea & Wood).Christine Sanchez recently joined the SCE HR team from the Law Department and will be working on HRregulatory matters and the GRC with Pat.Discussion ItemsConfirm Agenda and Review Meeting Notes from Feb. 22, 2010 Meeting The Team reviewed and confirmed the draft meeting notes from the Feb. 22, 2010 meeting. The noteswill be finalized and circulated to the Team.Benefits Methodology Discussion Blake Murphy presented a discussion of Hewitt’s standard Benefit Index (BI) methodology. Some of thekey items to note include: The methodology is not static. Hewitt regularly updates the valuation methodology and the actuarialassumptions. BI measures the relative economic value of the benefit, not the perceived value or cost. Perceivedvalues reflect plan design and utilization/delivery. Cost comparisons can be distorted by other factors,such as employee demographics, location, plan funding, and other actuarial assumptions.B-76

March 9, 2010The GRC Study TeamPage 2 In order to distinguish between different category populations in the benchmark jobs, Hewitt’smethodology uses a consistent set of demographics for all companies to facilitate comparisons thatfocus on program design, as opposed to reflecting incumbent demographics that might vary fromcompany to company. For example, two companies may have a defined contribution plan with 5%contribution. There may be different costs for one company than another due to pay levels, but thesame benefit is offered. The intent of the BI methodology is to normalize or even out the employeepopulations to compare the relative value of the benefits themselves. Hewitt’s BI methodology also recognizes that a company can have different demographic groupswithin its organization. Therefore, BI breaks out its demographic data into nine “tiers” of employeesthat are used as a basis for the valuation of benefits. Each tier has 1,000-11,000 sample livescovering the full spectrums of age, service, pay levels, gender, etc. For SCE, BI uses five of the nine tiers. These tiers are: Executives: model population of approximately 1,000 people; average age is 50 years, averageservice is 20 years; Managers/Supervisors: model population of approximately 2,400 people; average age is 46; averageservice is 16 years; Professional/Technical: model population of approximately 4,500 people; average age is 42; averageservice is 14 years; Physical/Technical: model population of approximately 7,800 people; average age is 41; averageservice is 13 years; and Clerical: model population of approximately 11,000 people; average age is 39; average service is 11years. Hewitt is not using the other four tiers. Marek agrees that he does not need to see details of the other fourtiers if we are not using them. Marek asked Hewitt to explain how the analysis is run on the roughly 17,000 people in the categoriesbeing used for SCE. For example, consider the pension benefit—look at the SCE pension model for theManager/Supervisor job category. A separate pension valuation is conducted for eachmanager/supervisor straw person. Straw person A is age 35. Given actuarial assumptions of mortality,withdrawal, and disability, and the BI methodology, what would the SCE pension current annual valuebe? How many discrete factors do you look at? Blake responded that all data, including age, gender,service, pay level, and marital status for each straw person is included. The analysis also considers thehealthcare benefit: choice of plan, dependent coverage, gender, assumptions around ages ofdependents, and compensation (if there are deductibles or premiums based on that). Specifics are basedon the plans’ terms. The model reflects what the likelihood is of using services in a given timeframe. Marek asked: If we assume Hewitt benchmarks 1,000 of SCE’s Professional/Technical employees, doesHewitt collect the specific factors for the included SCE employees? Blake responded that specific factorsfor each included employee are not collected. When Hewitt completes the benefits valuation, it adds that information to the SCE compensation. Forexample, the BI analysis results in an outcome that states that, at a certain pay level, this employee in01551/GRC2012/Meeting Notes/TOCNB 04887 03/09/2010B-77

March 9, 2010The GRC Study TeamPage 3this job category would have a representative cost of X for their benefits and that amount, X, is added tothe employee’s pay to represent their total compensation. Hewitt’s analysis provides a composite value ofwhat an employee’s benefits are worth for someone at a certain pay level and job category. Marek explained that he is concerned that there is no way to discern whether the valuation and samplebeing used is introducing a bias, that it is not a representative sample of the whole group. His preferencewould be to check for bias by analyzing how the sample compares to the whole you are looking at (e.g.,by salary, age, number of dependents, etc.). Blake explained that the benefits plans offered at SCE generally are the same within each category; thus,at least relative to benefits being offered, there should not be a bias. Blake agreed that it is possible therecould be an issue regarding the demographics, but the fact that Hewitt applies the same demographicprofile to every company makes the analysis consistent. Marek explained that he would like the demographics used in the benefits analysis to relate more exactlyto the SCE population. Blake confirmed that this could be done, but that Hewitt would need to collectinformation related to SCE’s demographics, and this would have an impact on fees, and potentially ontiming, unless SCE could provide the information quickly. Blake also noted that, in his opinion, the benefitvalues for each company would tend to move in the same direction, such that the net impact may besmall (at least, there is a strong probability of that happening). However, Blake confirmed that it is difficultto predict with certainty what the end result would be. Regarding the Executive tier, Martin noted that the Hewitt BI tier population is much larger than the SCEExecutive population. Blake explained that BI targets a profile of Executive-level employees, not an exactcompany. Marek commented that the Executive category likely will have a slightly different analysis, andhis main concern is with the other categories. The Team agreed that SCE will provide average age and service data for the employee populations ineach job category, and the Team will evaluate how similar the BI tiers are to the actual SCE population. Blake described in detail the methodology for calculating benefit values for each job category.Specifically: Average total pay for the job category is determined (using straight average) for all SCE incumbents. The job category is aligned with the population tier that best matches the average pay. The range in total pay within a job category is divided into $10,000 increments. The straw population in each pay band is valued separately based on the midpoint of each $10,000pay band range. Values are calculated for each straw employee in the population tier at each pay band (in themanager/supervisor example, if there are 17 pay bands, valuations are performed on 2,400 strawemployees 17 times). The benefit “value” for each pay band is the average value of all the employees in the population. Benefit values are broken out by “percent of pay benefits” (such as retirement, death and disability)and “flat dollar benefits” (such as medical). The percent of pay + flat dollar benefit value for each pay band is applied to each benchmark job inthe job category for each company separately, based on that job’s pay. These are then added to cash to equal total compensation. Marek asked whether it is possible that certain benefits might be offered to some tiers but not others.Blake responded that yes, it is possible, most likely if one category is union vs. nonunion, although01551/GRC2012/Meeting Notes/TOCNB 04887 03/09/2010B-78

March 9, 2010The GRC Study TeamPage 4Barbara noted that SCE has worked very hard to make sure all their employee groups, including unions,have the same benefits. Blake confirmed that there is a range of values of what the people/straws get in terms of benefits in thestraw populations, as reflected by a variety of factors (age, gender, union status, etc.). This is the reasonHewitt employs the tiered approach, to take into account where the typical employee might fit. Marek commented that if there is value in having the tiers reflect the typical population, then there isgreater value in having them reflect the actual population. Blake agreed, but commented that it really is amatter of degree. While this may not be so difficult to do with cash compensation, because that is aknown value, it is more difficult to value a benefit by person because the value will depend on what theperson uses each year, which creates many unknown variables. Marek explained that he would like the matched jobs to be representative of the entire demographicpopulation and his request to use the SCE demographic profile in the benefits valuation is a way to testhow representative it is. Blake noted that one of the difficulties in running this different analysis for the 2012 GRC TotalCompensation Study (the Study) is that the peer companies in the database have had all their values runusing the standard process. Hewitt would need to re-run all the models using the SCE demographicpopulation to accomplish what Marek is asking, and he is not sure what the incremental value to SCEwould be. Marek commented that regardless of the potential impact, he would rather use themethodology that makes the most sense and that he is most comfortable with. Barbara asked whether the Team could research the actual language of the Commission’s order tocomplete the Total Compensation Study requests. She is concerned that since benefits valuation is arelative analysis in the first place, there may not be a material difference in using Hewitt’s standarddemographic profile versus using the SCE demographic profile. Marek agreed that he would be willing toconsider the language of the order and any decisions from the Commission that have bearing on thisissue. Martin agreed to find out and let the Team know at the next meeting. Pat asked whether otherutilities are using the approach requested by Marek, and Marek responded that none have used it todate, but he is expecting that Sempra will use it in its upcoming study. Marek outlined the value of using the SCE demographic profile and assumptions: (1) it gives SCE achance to evaluate/compare its own population; (2) SCE can evaluate how its benefits and compensationcompare to other companies if they had a similar population; (3) it reduces any consistency problemsinherent in using different methodologies from different vendors; and (4) it eliminates the possibility ofbias in the final results due to not using SCE demographics. (The example discussed was thehypothetical case when SCE would have a significantly younger (or older) workforce than the Hewittdemographics.) The Team agreed that it did not make sense at this point to evaluate what the 2009 GRC TotalCompensation Study (the 2009 Study) values would have looked like if the SCE demographic would havebeen used. Blake explained that Hewitt’s methodology is a reasonable model at a reasonable cost, but that Hewittcan accommodate a customized request. Blake suggested that Hewitt could run simultaneous studies,using Hewitt’s standard demographic profile and assumptions and the SCE demographic profiles andassumptions and then compare the two analyses to understand what the relative impact is. To do this,Hewitt would need to collect the SCE data. If Hewitt gets the SCE data immediately (before the end of01551/GRC2012/Meeting Notes/TOCNB 04887 03/09/2010B-79

March 9, 2010The GRC Study TeamPage 5March), the additional work will not affect the timeline. Hewitt will send out a formal letter request if SCEdecides to conduct the simultaneous studies. Barbara commented that SCE’s tracking of marital status is not very accurate. Blake noted that thiswouldn’t have a big impact, and Hewitt could use the standard assumption if necessary. Marekagreed with this approach. There is an outstanding issue regarding whether Hewitt can use the actuarial assumptions related todeath, disability, etc. that SCE employs for its pension and benefits valuation. Barbara will contactSCE’s actuary, Aon, to ask whether it can certify that its actuarial assumptions would be appropriatefor purposes of the Study. Kathy explained how Hewitt might go about conducting the Study with SCE data. Hewitt needs toresearch whether it uses different economic assumptions by tier or not and will report back to the Team.Kathy later confirmed that the same assumptions are used for all tiers in the Study. The Team will reconvene by phone as soon as possible (hopefully by the beginning of the week of March15) to see what our progress has been on this issue. Barbara confirmed with Marek that the Hewitt model population for executives can be used in the Study.Background on Current LTI Plans Lu is the lead for the GRC for executive compensation. Margo will talk about executive LTI. Judy canaddress any nonexecutive LTI.Executive LTI In 2009, LTI for executives was awarded in three forms: 50% in non-qualified stock options; 25% in performance shares; and 25% in restricted stock units. The value of the annual LTI grant is based on the median level of target long-term incentive values forSCE’s peer group as reported in compensation surveys.Nonexecutive LTI In 2009, eligible employees below the Executive level received LTI grants of deferred stock units. Thenumber of units granted was equal to the target award, established through the use of salary survey data,divided by the stock price on the date of grant. The grants are paid out as cash upon vesting based onthe stock price at that point. Hewitt will provide Marek with a copy of the LTI valuation methodology so that he can review it prior tothe next meeting. If Marek has any questions about the methodology, he will raise his concerns then.SCE Comparator Groups The Team reviewed the list of the 2009 Study comparator companies and the additional data provided byHewitt of companies in Hewitt’s database with headquarters or significant presence in California or withrevenues between $7B – $13B. SCE is considering whether to add additional companies to its01551/GRC2012/Meeting Notes/TOCNB 04887 03/09/2010B-80

March 9, 2010The GRC Study TeamPage 6comparator list due to the fact that a couple companies from the 2009 Study list are no longer inexistence, e.g., Countrywide Financial. Several potential companies were discussed during the meeting: Blue Shield of California (not-for-profit, smaller revenue, and based in Northern California). Broadcom (located in Southern California, but may not have a lot of similar jobs; also has a smalleremployee population). Fluor (used to be located in Southern California and still has a presence here, but headquartersrelocated to Texas). Kaiser (headquarters in Northern California, but still has a lot of employees in Southern California;also has union representation and a lot of clerical and manager roles; but also not-for-profit). Weyerhauser (Pacific Northwest, but not California). Beckman Coulter (Southern California, but probably too small). DIRECTV (headquarters in Southern California, but employee population is geographicallydispersed). State Street (might be a good substitute for Countrywide, as financial services). The Team decided to add Kaiser, and Hewitt will research the rest of the banks and finance subsets(location, size, revenue, assets under management) to understand which would be the best match and/orsubstitute for Countrywide. Hewitt will provide its research to the Team, along with preliminaryrecommendations of which organizations would be the best comparators. George also asked if Hewitt could confirm that Portland General was purchased by Mirant. Marek noted that in the 2011 PG&E study and in the upcoming 2012 Sempra study, the utilities decidedto use a separate comparator group of general industry companies for executives, with a rule that allcompanies on the list should have revenues that are within +/- 2.5 times the subject utility’s revenues.The Team agreed that this approach makes sense though it likely will have a cost impact on the Study.As an action item, Martin is going to provide Hewitt with the exact revenue number for SCE and Hewittwill search its database for organizations that fall within +/- 2.5 times that number for potentialcomparators. Hewitt will provide this list, with preliminary recommendations identified, to SCE forconsideration. George also will look at the Towers Perrin database to determine which companies fallwithin the range outlined above.Escalation Factor SCE requested that, once the comparators are finalized, Hewitt run a custom cut of the Salary IncreaseSurvey data. Hewitt will share the results with the Team as soon as this is completed.Benchmarking Methodology and Update SCE provided Hewitt with its employee data effective Dec. 18, 2009. Hewitt preliminarily modeled theStudy coverage by job category using the current data and the 2009 benchmark jobs. The preliminarynumbers are reflected on page 89 of the meeting materials and include the following:In TotalIn StudyJob CategorySCEPopulation# of Jobs# ofIncumbents% of SCEPopulation# of Jobs% of SCEJobsPhysical/Technical 4,485 218 2,020 45.0% 28 12.8%01551/GRC2012/Meeting Notes/TOCNB 04887 03/09/2010B-81

March 9, 2010The GRC Study TeamPage 7Clerical 4,968 140 3,068 61.8% 25 17.9%Professional/Technical 4,912 124 3,792 77.2% 45 36.3%Manager/Supervisor* 2,669 129 2,556 95.8% 17 13.2%Executive 31 31 10 32.3% 10 32.3%Grand Total 17,065 642 11,446 67.1% 125 19.5%* The # of jobs for the Manager/Supervisor category needs to be broken out into departments/work units in order to get accurateincumbent and job counts. Process is underway now. Coverage in the 2009 Study was 73.9% of incumbents. The Team noted that there was some shift in percent covered between the 2009 Study and thesepreliminary numbers. For example: Although the Physical/Technical population and percent of jobs covered is similar, the percent ofincumbent coverage has decreased from 53.4% to 45%. Additionally, the Clerical category has more employees now, and the percent of jobs and incumbentscovered has increased. In the Professional/Technical category, the employee population has increased slightly, but thepercent of coverage has decreased for both incumbents and jobs. Hewitt will look into adding more Physical/Technical benchmarks and will continue to work with SCECorporate Compensation to align the jobs to the right categories and determine benchmarks. The Team also reviewed preliminary union coverage. Judy noted that SCE does not have Teamstersanymore—they now are represented by IBEW. The Team agreed that it is comfortable with coverage by union category and the focus for identifyingbenchmark jobs should be high-incumbent jobs. Hewitt will review the Executive jobs and determine whether more of them can be benchmarked. Hewittnoted that the coverage for Executive jobs initially was higher in the 2009 Study, but several of thebenchmarks had to drop out due to lack of data. Pat is in the process of confirming which executives might have shared SCE–EIX duties. After themeeting, Pat shared with Hewitt that the following executives should be included in the 2012 Study: Chairman, President & CEO, EIX (30% of his duties are apportioned to SCE). VP, Investor Relations, EIX (70% of his duties are apportioned to SCE). Marek asked if SCE could add the average compensation (base + bonus) to the Study coverage analysisfor the benchmark population and the total population by category. Corporate Compensation will run thisanalysis and provide the data to Hewitt. In terms of benchmarking methodology, the Team agreed that Hewitt will start with the assumption that ifa job was a benchmark in the 2009 Study, it will be a benchmark in this Study, and, unless there hasbeen a significant change in job duties or the survey description has changed, Hewitt will assume thebenchmark is still good. In reviewing the full employee population file, the Team noted that the Meter Reader II and Meter ReaderProject Temporary is the same job and should be combined (job codes 8300 and 8301).01551/GRC2012/Meeting Notes/TOCNB 04887 03/09/2010B-82

March 9, 2010The GRC Study TeamPage 8 The Team reviewed the sample benchmarking data report. Marek will review this in greater detail and getback to the Team at the next meeting if he has additional questions about the process. The Team confirmed the benchmarking methodology, which consists of the following steps, mirrors theprocess used in the 2009 Study: Preliminary review of the 2009 Study benchmark list with the Team (completed); SCE provides Hewitt with a list of all jobs sorted by job category and number of incumbents(completed); Hewitt identifies any additional benchmark jobs as requested by the Team, jobs with a high number ofincumbents, Physical/Technical jobs, and Executive jobs and preliminarily benchmarks those jobs; SCE and Hewitt meet in a series of sessions to confirm survey sources, review preliminarybenchmarks, and gather additional information about specific jobs and duties; and Preliminary benchmark list is jointly reviewed/refined with the DRA. Hewitt and SCE are preparing for the benchmark meetings, which are scheduled to be held the last weekof March.Action ItemsSCE Corporate Compensation will provide average age and service by job category for its employeepopulation to compare with the tiers used in Hewitt’s BI methodology. Martin will research what the exact language/directive is on the order from the Commission. Barbara will contact Aon to ask whether it would be willing to certify that the economic assumptions ituses are appropriate for this Study. Corporate Compensation will provide Hewitt with the department level breakdown for the MGR and SUPCIP jobs. Corporate Compensation will provide Hewitt with job descriptions for any jobs that have changed or havebeen added since the prior Study and with all benchmarking survey descriptions. Pat will confirm which EIX officers should be included in the Study and at what percentage. Corporate Compensation will compute average total cash for the total employee population by current jobcategory and provide that information to Hewitt. Corporate Compensation will identify companies within the Towers Perrin database that meet the criteriaof +/-2.5 times SCE revenue for use in developing a peer group for the Executive population. Martin will provide Hewitt with SCE’s total revenue number (utility company only, not holding company).Hewitt Blake will send SCE a formal data request for the SCE demographic data. Kathy will research if Hewitt uses different economic assumptions for each tier in its BI methodology.01551/GRC2012/Meeting Notes/TOCNB 04887 03/09/2010B-83

March 9, 2010The GRC Study TeamPage 9 Alison will provide Marek with the written discussion of the LTI valuation methodology used in the priorStudy. Kathy will add Kaiser to the SCE comparator list. Chelsea will research the following banks and finance organizations in our TCM and BI databases andprovide detailed company descriptions to SCE including, revenue/assets under management,headquarters, size, etc. BB&T Corporation Fifth Third Bancorp The PNC Financial Services Group, Inc. SunTrust Banks, Inc. American International Group, Inc. Regions Financial Corporation State Street Corporation Hewitt also will provide our most recent data regarding revenue/assets under management,headquarters, size, etc. for the now defunct Countrywide as a comparison. Hewitt will provide the data described in the two bullet points above to SCE along with a preliminaryrecommendation as to which organizations would be the best comparators for SCE. Kathy will research/confirm whether Portland General was purchased by Mirant. After the comparator list is finalized, Hewitt will run a custom cut of the 2009-2010 Salary IncreaseSurvey to include as many of SCE’s comparators as possible. Hewitt will review the jobs in the Physical/Technical category and see if we can recommend other jobs toinclude on the benchmark list. For purposes of the Study, Hewitt will combine job codes 8300 and 8301. Hewitt will add the average cash numbers provided by SCE to the Study Coverage table that wasreviewed during this meeting. Hewitt will send out meeting notices for all confirmed meetings. Hewitt will review the general industry comparator group and identify companies in our compensation andBI databases that meet the criteria of +/- 2.5 times SCE revenue and provide the list to SCE.Upcoming Meetings The next meeting is scheduled for March 24 at SCE’s San Francisco office, starting at 8:30 a.m. The Team will meet on March 30 at SCE’s San Francisco office, starting at 11:00 a.m.01551/GRC2012/Meeting Notes/TOCNB 04887 03/09/2010B-84

March 9, 2010The GRC Study TeamPage 10 After the Team meeting, the SCE confirmed that April 13 and April 20 will be two of our meeting dates inApril. Hewitt will send out meeting notices to hold these dates on everyone’s calendars.Agenda Items for Next Meeting Review and edit notes from the prior meeting. Discuss and resolve outstanding benefits methodology issues and any added timing and costs. Resolve comparator groups and escalation factors and any added timing and costs. Update on collecting comparator data.01551/GRC2012/Meeting Notes/TOCNB 04887 03/09/2010B-85

Date: March 19, 2010To:From:The GRC Study Team (the Team)Liz Snyder, HewittSubject: Meeting Notes, Touch Base Meeting on March 19, 2010Revised September 24, 2010Meeting AttendeesNameMarek KanterPat AdamsLupe ClappMartin ColletteJudy WoodLiz SnyderOrganizationDRASCESCESCESCEHewittMembers of the Team met by telephone conference on March 19, 2010 to review a number of outstandingitems.Discussion ItemsBenefits MethodologySCE confirmed that they would like Hewitt to run the 2012 GRC Total Compensation Study (the Study)using both the Hewitt standard demographic profile and assumptions and the SCE demographic profile andassumptions.Liz confirmed that SCE’s Corporate Compensation group will still provide average age and service by jobcategory for its employee population to compare with the tiers used in Hewitt’s Benefits Index (BI)methodology, and that the Team still considered this to be valuable information to review.Executive Comparator DataThe Team reviewed possible comparators for the Executive employee segment based on a revenue size of+/-2.5 times SCE revenue ($4B to approximately $28B). Hewitt attempted to identify possible comparatorcompanies by: (1) selecting companies from multiple industries in order to represent a general industry cut;(2) selecting all of the utility companies; and (3) selecting companies whose revenues were approximately$9B – $14B, which is similar to SCE. Both Judy and Marek concurred with the narrowing down of possiblecomparators by revenue size.Judy asked if Hewitt could provide additional insight as to which of the pink highlighted companies (thoseidentified by Hewitt to represent a starting point for discussions in creating a separate comparator group forthe SCE Executive population) have a business model that is more similar to SCE and those that are lesssimilar so that they can better narrow down the list. Judy also expressed that the final list should be asbalanced as possible between general industry organizations that are above SCE revenues and those thatare below. SCE wants to be mindful of how many companies it is adding to the comparator list as wediscuss them next week.B-86

March 19, 2010The GRC Study TeamPage 2Nonexecutive Comparators (Financial Services Research)The Team reviewed the data Hewitt provided on replacement companies for Countrywide Financial from the2009 Study general industry comparator group. Judy asked if Hewitt can confirm that this list includes all theBanking and Financial Services organizations from Hewitt's database. Liz confirmed that it includes all theBanking and Financial Services with revenues between $7B and $13B in revenue, except Freddie Mac,Genworth Financial, Inc., National City Corp., and Sallie Mae, Inc. The Team agreed that Freddie Macshould not be considered, but that Hewitt would go back and research the other three and any others thatmight be appropriate to include for consideration and provide the data, if relevant, at the next Teammeeting.LTI Valuation MethodologyLiz confirmed that Marek had received from Hewitt the LTI valuation methodology document. Marek said hehad not had an opportunity to review the document in detail. Liz suggested that if Marek has a chance toreview the document prior to the meeting next Wednesday and can provide any questions he has about themethodology prior to the meeting, then Hewitt can make sure the relevant SMEs from either SCE or Hewittare available at the meeting and are prepared to address Marek’s questions.Commission ResearchMarek asked what the status was of Martin's research into past Commission decisions. Martin said that hisresearch has not turned up anything particularly relevant yet in terms of using a particular employeepopulation. Marek asked about whether Martin has seen any decisions regarding the purpose of the totalcompensation studies. Martin said there have been a few decisions that mentioned the importance of totalcompensation versus just looking at base salary. Lupe asked if Martin saw any early decisions about whytotal compensation studies were requested in the first place. Martin said he would continue the researchand provide some highlights from the key decisions from a historical context at the next meeting.MiscellaneousHewitt will send out the meeting agenda to the Team on Monday for the Wednesday meeting. Liz confirmedthat the meeting is scheduled to be from 8:30 a.m. to about 12:30 p.m., in case anyone needed to make orchange airline reservations.01551/GRC2012/Meeting Notes/TOCNB 04887 03/19/2010B-87

Date: March 24, 2010To:From:Subject:The GRC Study Team (the Team)Liz SnyderMarch 24, 2010 Meeting NotesRevised October 17, 2010AttendeesNameMarek KanterPat AdamsLupe ClappMartin ColletteBarbara DeckerGeorge DeMariaAlison PetersonBlake MurphyKathy MillerLiz SnyderOrganizationDivision of Ratepayers’ Advocates (DRA)Southern California Edison (SCE)SCESCESCESCEHewittHewittHewittHewittThe Team met at SCE’s offices in San Francisco (Kanter, Adams, Collette, Peterson & Snyder), bytelephone (Murphy & Miller), and by video conference in Rosemead (Clapp, Decker & DeMaria).Discussion ItemsConfirm Agenda and Review/Finalize Draft Meeting Notes from March 9, 2010 Meeting Alison reviewed the agenda with the Team and noted that decisions about the comparator groups wouldbe a critical outcome of the meeting. Lupe requested that Hewitt prepare formal meeting notes from the touch base phone call held onMarch 19, 2010. The Team reviewed the draft meeting notes from the March 9, 2010 meeting. Lupe requested that onpage 6 of the draft meeting notes (page 8 of the meeting materials handout), Hewitt clarify the referencesto PG&E and Sempra by indicating the years of their studies (2011 and 2012, respectively). The March 9, 2010 meeting notes will be finalized and circulated to the Team.Review Action Items from March 9, 2010 MeetingThe Team reviewed the outstanding Action Items from the March 9, 2010 meeting:Review SCE Action Items Corporate Compensation will provide average age and service by job category for its employeepopulation to compare with the tiers used in Hewitt’s Benefits Index (BI) methodology. Done.B-88

March 24, 2010The GRC Study TeamPage 2 Martin will research what the exact language/directive is on the order from the Commission. In progress. Martin needs to coordinate with the Legal Department to conduct some Lexis researchon this issue and will report back to the Team later this week. Barbara will contact Aon to ask whether they would be willing to certify that the economic assumptionsthey use are appropriate for this Study. Done. Barbara talked to her key contact at Aon, Steve Heffner. Steve indicated he is comfortablewith certifying the economic assumptions for use in this Study. He will extract the assumptions fromthe 2009 valuation reports and send them to Barbara, who will send them to Blake and Kathy, with acopy to the rest of the Team. The assumptions will cover retiree medical (PBOP) and pensionvaluations. Blake confirmed that should cover what Hewitt needs. Corporate Compensation will provide Hewitt with the department level breakdown for the MGR and SUPCIP jobs. Done. Corporate Compensation will provide Hewitt with job descriptions for any jobs that have changed or havebeen added since the prior Study with all benchmarking survey descriptions. Done. Pat will confirm which EIX Officers should be included in the Study and at what percentage. Done. This is covered in the final meeting notes from the March 9, 2010 meeting. Corporate Compensation will compute average total cash for the total employee population by current jobcategory and provide that information to Hewitt. Done, but sent to Pat only. Pat confirmed she received the data and forwarded it to the Team duringthe meeting. Martin will provide Hewitt with SCE’s total revenue number (utility company only, not holding company). Done. The revenue number is $11.414B.Review Hewitt Action Items Blake will send SCE a formal data request for the SCE demographic data. Done. Kathy will research if Hewitt uses different economic assumptions for each tier in its BI methodology. Done. Kathy confirmed that Hewitt uses the same economic and actuarial assumptions for each tier.01551/GRC2012/Meeting Notes/TOCNB 04887 03/24/2010B-89

March 24, 2010The GRC Study TeamPage 3 Alison will provide Marek with the written discussion of the LTI valuation methodology used in the priorStudy. Done. Marek confirmed that he received and does not have any questions about the methodology. Kathy will add Kaiser to the SCE comparator list. Done. Chelsea will research the following banks and finance organizations in Hewitt’s TCM and BI databasesand provide detailed company descriptions to SCE including, revenue/assets under management,headquarters, size, etc. BB&T Corporation Fifth Third Bancorp The PNC Financial Services Group, Inc. SunTrust Banks, Inc. American International Group, Inc. Regions Financial Corporation State Street CorporationDone. Hewitt will also provide our most recent data regarding revenue/assets under management,headquarters, size, etc. for the now defunct Countrywide as a comparison. Done. Hewitt will provide the data described in the two bullet points above to SCE along with a preliminaryrecommendation as to which organizations would be the best comparators for SCE. Done. Kathy will research/confirm whether Portland General was purchased by Mirant. Done. Portland General was not purchased by Mirant. After the comparator list is finalized, Hewitt will run a custom cut of the 2009-2010 Salary IncreaseSurvey (SIS) to include as many of SCE’s comparators as possible. In progress, since the comparator group has not yet been finalized. Hewitt will review the jobs in the Physical/Technical category and see if we can recommend other jobs toinclude on the benchmark list. In progress. Benchmarking meetings are scheduled to be held the week of March 29, 2010. For purposes of the Study, Hewitt will combine job codes 8300 and 8301.01551/GRC2012/Meeting Notes/TOCNB 04887 03/24/2010B-90

March 24, 2010The GRC Study TeamPage 4 Done. Hewitt will add the average cash numbers provided by SCE to the Study Coverage table that wasreviewed during this meeting. Data was provided by SCE Corporate Compensation and handed out at the meeting (see tablebelow). Marek said he wanted to review it further. We will discuss during the next Team meeting.In study Not in study Difference (in study vs. not)Job CategoryEECountAvg TCCAvg Age(years)Avg LOS(years)EECountAvg TCCAvg Age(years)Avg LOS(years)EECountAvg TCCAvg Age(years)Avg LOS(years)Clerical 3068 $ 56,644 41.53 9.92 1900 $ 59,085 43.55 13.39 1,168 ($2,441) (2.02) (3.47)Executive 10 $ 514,780 54.21 28.70 21 $ 442,910 53.48 15.32 (11) $71,871 0.73 13.38Manager/Supervisor 2556 $ 195,158 52.21 18.42 113 $ 253,983 53.60 19.36 2,443 ($58,826) (1.39) (0.95)Physical/Technical 2020 $ 77,941 47.02 16.27 2465 $ 72,294 46.61 16.10 (445) $5,647 0.41 0.17Professional/Technical 3792 $ 100,226 45.32 12.63 1120 $ 105,124 44.68 12.30 2,672 ($4,898) 0.64 0.33 Hewitt will send out meeting notices for all confirmed meetings. This was done by Pat at SCE. Hewitt will review the general industry comparator group and identify companies in our TCM and BIdatabases that fall within the +/- 2.5 times range and provide the list to SCE. Done.Benefits Valuation Discussion Blake noted that he had three outstanding issues to cover during the meeting. Defined Contribution Plans: Blake noted that many companies temporarily eliminated or suspendedmatching contributions last year. Hewitt’s preliminary research has found that the companies SCEhas identified in its peer group so far have not suspended their company matches. However, as westill are finalizing the list, we wanted to bring up the question of how to value these benefits if we findthat one of the companies in the peer group did suspend its DC contribution. The alternatives are tovalue the current benefits being provided to new hires, or ignore the amount of the suspendedcontributions and value the benefit as if it were restored, which reflects the level of intended, longtermbenefits. The latter is the recommended approach. However, it appears this will not be an issue,as even if one company has suspended the match, the impact will be so slight as to not impact theStudy. We will address this issue when the Study companies are finalized if any companies areaffected. Pensions: In 1999, SCE changed its pension formula. Some employees still are eligible for the oldpension benefit. In past Studies, we have looked just at the new formula, and used the new formulafor peers also. Blake wanted to confirm that this is the approach the Team would like to take for the01551/GRC2012/Meeting Notes/TOCNB 04887 03/24/2010B-91

March 24, 2010The GRC Study TeamPage 52012 Study as well. Barbara agreed that the approach still makes sense. Marek also agreed that theapproach makes sense and likely is the only approach that is feasible. Retiree Medical: More recently, SCE announced a change to its retiree medical plan andgrandfathered certain employees during a period of transition. The period of transition occurredthrough the end of 2008, which was during the period covered in the 2009 GRC Study (2009 Study).As a result, Hewitt looked at a two-tiered retiree medical benefit for the 2009 Study. Now, thetransition period has passed, and the current state is similar to that of the pension plan. New hires areonly eligible for the new level of retiree medical benefit. Hewitt recommends that for the 2012 Study,we do not look at a two-tiered benefit, and instead only review the benefit as it applies to new hires.Although this would be a change in approach from the 2009 Study, it is more in alignment with theapproach for the pension plan.– Barbara noted that she could argue this issue either way, since the retiree medical change wasmore recent than the pension change.– Marek commented that the two-tiered approach would be a lot more work for little value. Marekconfirmed that he agreed with the Hewitt recommendation to only value the benefit as it stands fornew hires. Blake noted that the only other thing we need to get started on the benefits analysis is the demographicdata. The Team confirmed that SCE Corporate Compensation is providing that data to Hewitt per thedata request sent to SCE by Hewitt on March 15, 2010.Impact of Benefit Methodology Approach In light of the change of using SCE demographics and assumptions, the Team reviewed the implicationson work effort, timing, and fees. Kathy noted that the timing to complete the benefits valuations is not impacted much by the change inusing SCE’s demographics and assumptions. However, the identification of the final comparator groupshas had a slight impact on timing. Lupe commented that no one really knows, at this time, the impact of using the SCE demographics andassumptions; however, since there is a change for the 2012 Study, it is important, at least for this Studyyear, that the Team understand what impact the change has on the analysis. The Team agreed anddetermined that benefits valuations using both the SCE demographic profile and assumptions and theHewitt standard demographic profile and assumptions should be used for the 2012 Study.Update on Survey Participation Kathy reported that she has contacted all of the companies requiring participation, and all haveresponded that they will participate. Kathy reported that Hewitt only has 2008 benefits data for KeySpan, and the company was acquired byNational Grid in 2008. Hewitt does not have data for National Grid. The options are: (1) use the 2008 datafor KeySpan; (2) try to contact National Grid and use its data; or (3) drop KeySpan from the utilitycomparator list. KeySpan is a comparator for the nonexecutive population only. The Team agreed toeliminate them. The Team discussed whether to try to replace KeySpan with another utility company and agreed that itwas not necessary.01551/GRC2012/Meeting Notes/TOCNB 04887 03/24/2010B-92

March 24, 2010The GRC Study TeamPage 6Comparator Groups for Executive and Nonexecutive PopulationsNonexecutive General Industry Group After the last meeting, Hewitt researched a number of financial services companies. The additionalcompanies go beyond the original revenue scope and include companies with revenues less than $7B ormore than $14B. In Hewitt’s opinion, none of the companies on the three-page handout have a businessmodel consistent with Countrywide, which is the company that SCE is trying to replace on itsnonexecutive general industry list. Lupe asked for Hewitt’s opinion about what is the preferred/recommended number of companies toinclude in the general industry list. Is 22 (the current number including last week’s add of KaiserPermanente) a reasonable number? Alison responded that Hewitt recommends a minimum of 15 and atypical maximum of around 25. The Team discussed Sun Trust briefly. Ultimately, the Team determinedthat it was of limited value to add another comparator to the list, and that the current list of 22 companieswould be sufficient for this Study. Below are the final lists of the nonexecutive utility comparator group and the nonexecutive generalindustry group:Nonexecutive Energy/UtilityMarch 24, 2010CompanyRevenue Size($ Millions)Ameren Corporation $6,780.00American Electric Power Company (AEP) $12,622.00Arizona Public Service $225.60Consolidated Edison of New York, Inc. $12,137.00Constellation Energy Group, Inc. $19,284.90Dominion Resources, Inc. $16,482.00Detroit Energy Company (DTE) $9,022.00Duke Energy Corporation $16,746.00Entergy Corporation $10,932.20Exelon Corporation $15,655.00FirstEnergy Corp. $11,989.00Florida Power & Light $9,528.00Los Angeles Department of Water & Power (LADWP) -PacifiCorp $2,924.10Pacific Gas and Electric Company (PG&E) $12,539.00Mirant $3,188.00PPL Corporation $6,899.00Public Service Enterprise Group $12,164.00Reliant Energy, Inc. $10,877.40San Diego Gas & Electric (Sempra) $11,761.00Sierra Pacific Resources $3,030.20Southern California Gas (Sempra) $3,997.00Southern Company $14,356.00TXU Corp. $10,437.0001551/GRC2012/Meeting Notes/TOCNB 04887 03/24/2010B-93

March 24, 2010The GRC Study TeamPage 7Nonexecutive General IndustryMarch 24, 2010CompanyRevenue Size($ Millions)The Aerospace Corporation $663.50Allergan, Inc. $3,063.30Allianz SE (Fireman’s Fund) $115,723.00Amgen Inc. $14,268.00AT&T Inc. $63,055.00Avery Dennison Corporation $5,575.90Bechtel Group Inc. $18,100.00Boeing Integrated Defense Systems $30,791.00ChevronTexaco Corporation $170,244.00Computer Sciences Corporation $14,615.60Jacobs Engineering Group Inc. $7,421.30Jet Propulsion Lab $2,142.00McKesson Corporation $88,050.00Nestlé USA, Inc. $8,100.00Northrop Grumman Corporation $30,148.00Occidental Petroleum Corporation $18,160.00Parsons Corporation $3,000.00Science Applications International Corporation $10,070,000The Walt Disney Company $34,285.00WellPoint Health Networks $61,251.00Wells Fargo & Company $47,998.00Kaiser Permanente $37,800.00Executive GroupHewitt provided a list of potential executive comparator organizations to the Team using the parametersagreed on at the March 9, 2010 meeting of +/- 2.5 times SCE’s revenues. Hewitt recommended the Teamfocus on companies with revenues similar to SCE, from approximately $8B to $14B. Further, the Teamdiscussed the value of including companies already covered in the general industry and utility lists for theexecutive comparator group. This allows some continuity between Study groups. Thirteen companies onthe list of potential executive comparators already are included in the nonexecutive utility comparator group.Additionally, four companies, Amgen, Nestle USA, Occidental Petroleum, and SAIC, are included in thenonexecutive general industry group. The Team agreed that those 17 companies should be included in theexecutive comparator group, and that the Team should select another 5-10 companies with revenuescomparable to SCE and that represent a mix of industries to reflect a general industry comparison.01551/GRC2012/Meeting Notes/TOCNB 04887 03/24/2010B-94

March 24, 2010The GRC Study TeamPage 8 The Team agreed on the following list for the executive comparator group:CompanyRevenue Size($ Millions)Ameren Corporation $7,839,000American Electric Power $14,440,000Consolidated Edison $13,583,000Constellation Energy $19,818,301Dominion Resources, Inc. $16,290,000DTE Energy Company $9,329,000Duke Energy Corporation $13,207,000Entergy Corporation $13,093,756FirstEnergy Corp. $13,580,000PG&E Corporation $14,628,000Reliant Energy, Inc. $12,553,210Sempra Energy $10,758,000Southern Company $17,127,000SunTrust Banks, Inc. $12,565,666Praxair, Inc. $10,796,000The Sherwin-Williams Company $7,979,727R. R. Donnelley & Sons Company $11,581,600Sara Lee Corporation $12,278,000ITT Corporation $11,694,800Baxter International Inc. $12,348,000Science Applications International Corporation $10,070,000Amgen Inc. $14,268.00Nestlé USA, Inc. $8,100.00Occidental Petroleum Corporation $18,160.00 Alison confirmed that if there are any custom analyses we need to get from surveys, SCE CorporateCompensation should request and obtain these. Hewitt will provide a custom cut of the SIS data using as many of the companies in the comparator groupas possible and will distribute the report to the Team so that the Team can evaluate and decide theappropriate aging factors to use in the Study at the next meeting.Review Action ItemsSCE Martin will coordinate with the SCE Legal Department to conduct Lexis research on past Commissiondecisions regarding the purpose of total compensation studies and will report back to the Team. Barbara will follow up with the Aon consultant to obtain the assumptions from the 2009 valuation reportsand send them to Blake and Kathy, with a copy to the rest of the Team. Corporate Compensation will provide the SCE demographic data to Hewitt per the data request sent toSCE by Hewitt on March 15, 2010.01551/GRC2012/Meeting Notes/TOCNB 04887 03/24/2010B-95

March 24, 2010The GRC Study TeamPage 9 Corporate Compensation will generate custom cuts from the surveys of the agreed upon comparatorgroups, if needed. Pat will coordinate with the SCE team, including SMEs, to see which two consecutive days work best tomeet during the week of April 19 (suggested possible dates are April 20, 21, or 22).Hewitt Hewitt will create meeting notes from the touch base conference call held on March 19, 2010. Hewitt will finalize the March 9, 2010 meeting notes and distribute them to the Team. Hewitt will run a custom cut of the 2009-2010 SIS to include as many of SCE’s comparators as possible.Hewitt will distribute this data as soon as it is processed and will schedule a conference call to review anddetermine an escalation factor. Participants in the meeting will be Alison, Liz, Marek, Pat, Martin, George,and Lupe. Hewitt will delete KeySpan from the nonexecutive utility comparator group.DRA Marek will review the average total cash numbers provided by SCE to the Study Coverage table, includedin the meeting notes above, and will provide his feedback in the next meeting.Next Meeting Hewitt and SCE will be meeting in a series of benchmarking meetings during the week of March 29. Inlight of this, and the fact that we have just finalized the comparator groups and the benefits methodology,the Team agreed that we should not meet on March 30, as originally planned. Instead, the Team now willstart the data analysis work and will be better able to have a productive meeting the week of April 19. The Team agreed to meet on two consecutive days the week of April 19 to review both the preliminarybenefits and compensation data.01551/GRC2012/Meeting Notes/TOCNB 04887 03/24/2010B-96

Date: May 10, 2010To:From:The GRC Study Team (the Team)Alison Peterson, HewittSubject: Meeting Notes, May 10, 2010Meeting AttendeesNameMarek KanterPat AdamsLupe ClappMartin ColetteBarbara DeckerGeorge DeMariaJennifer CaseyKathy MillerBlake MurphyChelsea PenalozaAlison PetersonOrganizationDRASCESCESCESCESCEHewittHewittHewittHewittHewittThe Team met at SCE’s offices in San Francisco (Kanter, Adams, Collette, Peterson & Murphy), bytelephone (Miller and Casey), and by videoconference in Rosemead (Clapp, Decker, DeMaria & Penaloza).Discussion ItemsConfirm Agenda and Review/Finalize Draft Meeting Notes from the March 19, 2010 Conference Calland March 24, 2010 Meeting Alison reviewed the agenda with the Team which includes a review of benefits valuations and base salaryand total cash compensation results (excluding the Executive employee group). The Team reviewed the draft meeting notes from the March 19, 2010 conference call andMarch 24, 2010 Team meeting.Review Action Items from March 24, 2010 MeetingThe Team reviewed the outstanding action items from the March 24, 2010 meeting. Martin reviewed a series of decisions and comments from the Commission regarding the purpose of the2012 Study and the inclusion of benefits values as part of the Study. A summary of his findings isincluded at the end of these meeting notes. This research was done to determine if there were anydecisions or orders that would impact the approach used to value benefits. Martin will provide a writtensummary of his research and the decisions. In summary, over the past approximately 25 years, theCommission has ordered changes to the Study methodology in order to improve the accuracy ofcomparison of pay and benefits to the market. Orders have included the inclusion of benefits valuations inaddition to cash compensation; use of job classifications, including distinctions between exempt and nonexemptjobs; use of a West Coast comparator group for Clerical and Physical/Technical jobs; use of aB-97

national comparator group for Executive and Management jobs; decision to include a representativesample of benchmark jobs; and to improve the quality of benchmark matches while also recognizing thatjudgment is applied in determining these matches. In the 2003 GRC Study for SCE, the Commission indicated that it was satisfied with the way theStudy had been conducted, noting the collaboration between the utility and the DRA, the selection ofan outside consultant to facilitate the benchmarking, and satisfactory documentation of themethodology and benchmarks. The Commission was similarly satisfied with the results of the 2006and 2009 Studies. Marek noted the evolution from 1983 to 2003 in the Commission’s orders to improve the accuracy ofthe Study and that using SCE’s actual employee population in the benefits valuation is consistent withthe Committee’s continued efforts over time to establish a valid and fair approach. Lupe commented that there has been an evolution to the approach and we should continue toimprove upon the process if we find better ways to do things. Corporate Compensation will identify companies within the Towers Perrin database that meet the criteriaof +/-2.5 times SCE revenues for use in developing a peer group for the Executive population. Done. SCE obtained a custom survey from Towers Perrin to cover the peer group companiesidentified by the Team for use with the Executive group. After the comparator group list is finalized, Hewitt will run a custom cut of the 2009–2010 Salary IncreaseSurvey to include as many of SCE’s comparators as possible. Done. Alison provided the results of the custom analysis to the Team via email for review. Based onthe Study, escalation rates of 3.0% for the utility peer group and 2.7% for the general industry peergroup were recommended and agreed to by the DRA and SCE. Hewitt will review the jobs in the Physical/Technical category and see if it can recommend other jobs toinclude on the benchmark list. Done. Hewitt and SCE identified 20 additional Physical/Technical benchmarks for the 2012 Study,increasing the coverage of this Study population from 53.4% in the 2009 Study to 59.2% in the 2012Study. Hewitt will add the average cash numbers provided by SCE to the Study Coverage table that wasreviewed during the March 24, 2010 Team meeting. Marek asked for time to review the data and theTeam agreed to discuss during the next meeting (May 10, 2010).B-98

Done. Marek completed his review and noted that the difference in average total cash compensationbetween Clerical jobs/employees in the Study versus those not in the Study was large anddemonstrates that the benchmark jobs are a sample and not necessarily fully representative of the fullemployee population. The Team will review similar data comparing employees included and notincluded in the 2012 Study to assess how representative the benchmark sample is for each employeegroup.Benefits ValuationsBlake reviewed the results of the benefits valuations which includes: Benefits values for the utility and general industry peer groups using Hewitt’s Benefits Index (BI) standarddemographic profile and assumptions; and Benefits values for the utility and general industry peer groups using SCE’s demographic profile andassumptions.In general, the value of SCE’s benefits are lower as a percentage of compensation for the 2012 Studyresults versus the 2009 Study results, regardless of the demographic profile or assumptions used with theexception of the benefits values for the Manager/Supervisor employee group, where benefits values arehigher for the 2012 Study results. The biggest factors contributing to lower benefits values in the 2012 Study versus the 2009 Study arerelated to health care plans and include: Increases in SCE employees’ contributions to health care plans. SCE’s employee contributions haveincreased at a greater rate than those of companies in the comparator groups and than medicalinflation. Lower cost of health care for SCE is attributable to the use of HMOs by SCE. SCE is primarilyCalifornia-based and the HMO market place in California is more competitive than in other states.Many of the comparator companies are outside of California, where HMO costs are less competitiveand higher as a result. Increases in the percentage of employees opting out of health care coverage. Trend toward working spouses to enroll at their own workplace, which has lowered the averagenumber of covered family members.Impact of Retirement Plans on Benefits ValuesRetirement benefits account for the majority of value outside of medical. The biggest drivers of value ofretirement plans are plan design and the definition of pay used to determine the retirement benefit. For the utility comparator group, there has not been a lot of change in the retirement plan designs overthe past three years. Twenty three of 24 of the companies provide primary retirement benefits through adefined benefit pension plan or noncontributory defined contribution plan in addition to a 401(k) with acompany match. These plan designs have not changed much from the 2009 Study.B-99

The general industry peer group has had a greater amount of change. Fifteen of 22 companies provideprimary retirement benefits through a defined benefit pension plan or noncontributory defined contributionplan in addition to a matched 401(k). Since the 2009 Study, six companies have frozen or closed pensionplans.Impact of Using SCE Employee Demographics and AssumptionsBenefits values for SCE versus the market were lower for the 2012 Study versus the 2009 Study whenderived using SCE’s demographic profile and benefits assumptions versus Hewitt’s standard demographicprofile and assumptions. Items contributing to differences include: Assumptions around the number of employees who opt out of medical plans. Fewer people opting out willincrease costs overall. SCE’s opt-out assumption is 7.5% versus Hewitt’s 10%. SCE’s population is a little older than the Hewitt population. SCE has a higher assumed percentage of health care coverage for married retirees than Hewitt. SCE has a lower average retirement age than Hewitt. SCE has a higher assumed retiree medical cost inflation than Hewitt. SCE’s health care costs tended to be a little lower than Hewitt’s.By using the SCE demographics and assumptions at the comparator companies, all of the companies’benefits become more valuable (as a result of younger retirees, etc.). The Team reviewed illustrative samples of benefits valuations for different employee groups derivedunder both demographic profiles and assumptions. The illustrations showed benefits values for three tiersof employee pay: low, middle, and high. Barbara commented that it seemed strange thatManager/Supervisor benefits values as a percent of compensation relative to the peer group would belower for the middle tier than for the low or high tiers. Blake explained this pattern is due to theManager/Supervisor group (primarily in the middle tier) having a broader array of bonus awards, and as aresult, there is more variation in results than in the other tiers.Barbara reported that overall, she feels comfortable with the concept of using the SCE demographicprofile in the benefits valuation. Marek agreed and indicated that this approach was more representativeof SCE’s situation, costs, and benefits values. Blake reported that he sees no flaws in using SCE’sdemographics and assumptions in valuing benefits and that this approach is more representative ofSCE’s actual costs and benefits values. The Team asked Blake to revise the materials to incorporate references to Study years 2009 and 2012and to revise the tables showing the illustrative samples so that they were easier to understand andinterpret. Blake will modify the materials and present them at the next Team meeting. The Team agreed that we would revisit the decision about which benefits valuation to use in the 2012Study at our next meeting when we will review total compensation results.B-100

The Team briefly discussed what information should be included in the Study regarding the alternativebenefits valuations. Marek indicated that an overview of both methodologies should be included sinceboth were considered by the Team. Further, he suggested that results for the selected methodologyshould be included in the body of the report while results for the other methodology would be included inthe Appendix. Alison will develop draft language describing the alternative methodologies, and present to the Team forreview at the next meeting.Compensation ReviewAlison reviewed preliminary results of the compensation benchmarking (excluding data for Executive jobs,including long-term incentive (LTI) values) with the Team. The number of benchmarks has increased from 175 in the 2009 Study to 275 in the 2012 Study. We wereable to identify a number of new jobs for the Physical/Technical and Clerical groups to increasecoverage. Coverage for the Professional/Technical group dropped by about 5%, but coverage for thisgroup is still over 75% of jobs/employees. While Hewitt was able to increase the number of benchmarks, we were not able to get sufficient marketdata for approximately 50 jobs from the various salary surveys we are using in the 2012 Study. Alisonexplained that due to the economic crisis in 2009, companies were less willing to invest time inparticipating in compensation surveys last year, particularly since many of them were not funding meritincreases and so did not plan on purchasing and using survey data. Of the companies that did continueto participate, many submitted less data than in prior years. As a result, the quantity of data available insurveys may be lower for 2009 compensation surveys. Based on the preliminary results, SCE’s overall position versus the market is about at the average of themarket for 2012 (similar to 2009). Total cash is about -5% to the market for 2012 preliminary results,down about 4% from 2009. SCE’s lower position to market on total cash is likely due to the increase inprevalence and award levels of bonus pay in the market over the past three years. The Team reviewed market data for each benchmark job organized by group. Lupe asked why twoentries exist for Groundman. George explained that both jobs are similar in accountability and have thesame benchmark but they are reported separately because they are represented by two different unionsand as a result, have two different job codes. Alison pointed out two entries for the Meter Reader jobs—one is for a Temporary Meter Reader. Lupe explained that SCE determined a few years back that thecompany would be eliminating the Meter Reader role and at that point, began hiring temporaryemployees at a lower pay rate than the employees who were already in the role. That explains thedifference in pay between the two groups of Meter Readers. Lupe believes that this role will likely bedropped from the next GRC Study. Alison explained that we wanted to confirm the LTI valuation approach with the Team. Each surveyapplies a preferred methodology to determine the value of LTI. For example, Hewitt uses a Black-Scholesmodel to value restricted stock grants that takes into account events like termination and early retirement.Other surveys report the face value of the restricted stock grant instead with no adjustment for theseevents. Marek commented that he felt we should be using the LTI amounts reported by each surveyrather than adjusting the values based on a particular methodology. Alison reported that that is Hewitt’sB-101

preferred approach also. The Team concluded that we will use the values reported by each survey for theLTI valuation. Alison described that in the 2009 Study, LTI values were reported for the Executive group jobs and a fewDirector level jobs that were classified in the Manager/Supervisor group. For the 2012 Study, we have LTIvalues from the compensation surveys for a larger group of jobs, including other positions in theManager/Supervisor group. Alison indicated that total compensation results should include LTI values foreligible positions and that the Team should review the LTI data we have for the full array of jobs todetermine if we should include it as a component for more positions in the 2012 Study. Marek agreed thatthis made sense. Alison agreed to create a summary report covering all of the positions with LTI data forreview by the Team at the next meeting. Alison explained that we will complete the executive compensation and benefits valuations and reviewthem at the next Team meeting. In addition, there are about 20 benchmarks that we are researchingbecause of anomalies in the market data. For example, there are a few energy trading jobs for which themarket data reports very high bonuses. We need to confirm these benchmarks with the SCECompensation team. There are also a few jobs where SCE’s pay levels are very low to the market data,and we need to confirm the benchmark matches. Finally, we are researching some of the data from theEAPDIS survey where it appears that participating companies matched more than one level of a job tothe same benchmark. A similar issue was reported with the EAPDIS data in the 2009 Study. After we have completed the benchmarking research, Hewitt will compile a list of all of the benchmarks,including the number of incumbents covered and whether the job was validated in the 2009 Study. Wewill provide the list to Marek so that he can identify the jobs he would like to review in our benchmarkvalidation meetings for the 2012 Study. The Team discussed the timing (mid-June) and location of thevalidation meetings. George suggested that it would be easiest to conduct these meetings in SCE’soffices in Rosemead since we’d have access to all of the job documentation as well as managers andsubject matter experts. Marek reported that he needs to determine if he is able to incur travel costs andwill let us know if he can participate in the meetings in Southern California. If Marek cannot get approvalto travel, Alison suggested that she could come to San Francisco to meet with Marek and the rest of theTeam could participate via videoconference.Review Action ItemsHewitt Blake to revise the materials and formatting of the materials on the benefits valuations and review withthe Team at the next meeting. Chelsea will create a report covering all benchmark jobs that have LTI values for the 2012 Study forreview at the next meeting Alison, Chelsea, and the SCE Compensation team will meet to discuss data anomalies for about 20benchmark positions. Alison will create draft language for describing the two demographic profiles and assumptions examinedby the Team and will provide for review at the next meeting.SCE Martin will summarize his notes regarding the Commission’s past orders on the total compensation study.B-102

DRA Marek will determine if he is able to travel to Southern California to participate in the two-daybenchmarking validation meetings.Review of Commission Decisions on the Total Compensation StudyThe first Commission decision that references a Total Compensation Study is D.83-12-068, a PG&E ratecase decision. In adopting escalation factors to apply to wage and salary expenses, the Commission notedthat “neither the staff nor PG&E presented detailed analyses of the various wage and salary levels paid toPG&E employees.” [D.83-12-068, pg. 35] The Commission further stated:“We are concerned that the process of escalating wage and salary levels by a certain escalationfactor…can result in significant increase in the overall level of wages and salaries through the yearswithout any review by the Commission as to whether or not the salaries and wage paid are in factreasonable when compared to wages and salaries in the marketplace.” [D.83-12-068, pg. 35]The Commission directed that in PG&E’s next general rate case, there would be a “presentation of levels ofwages and salaries estimated by the utility for comparison with similar wages and salaries paid in themarketplace.” [D.83-12-068, pg. 35] This study would make it possible to assess whether ‘reasonable levelsof wages and salaries’ were being paid to PG&E employees, when judged against ‘comparable salaries inthe marketplace.’ PG&E and the staff were ordered to “examine the relevant comparable wage studies andarrive at some means of making a comparison that can be useful for the Commission’s purposes.”PG&E’s next rate case (1987 test year) resulted in the first opportunity for the Commission to compareutility wages to the marketplace wages. The Staff and PG&E both presented wage studies. In their wagestudies, both parties split labor into four categories: Clerical, Physical, Technical and Management. TheStaff presented a comparison of PG&E’s wages relative to an “all-industry standard.” This wage comparisonwas adjusted for regional wage differences, but compared the PG&E wages to the wages paid by allindustries across the United States. In D.86-12-095 (pg. 34), the Commission rejected the results of theStaff’s wage study, and accepted the PG&E estimates. The specific findings made by the Commission withregard to the study methodology were as follows: Wage studies need to focus on the labor market that the utility is drawing from; Evaluation of benefits should be adjusted for the size of the company and differentiate between exemptand nonexempt employees; and In comparing wages with other employees, positions need to be carefully matched.In D.87-12-066, an SCE general rate case decision, the Commission made several findings with regard toevaluating the reasonableness of a utility’s compensation practices. First, the Commission ordered that infuture rate cases, the utility and the Staff should file an “agreed upon data base for judging thereasonableness of employee compensation levels,” rather than conducting separate compensation studies.Second, the Commission ordered that future comparisons should be done on a total compensation basis,including benefits along with wages. The Commission noted that “since employees choose employmentopportunities on a total compensation basis, we consider it reasonable to judge utility compensation in thesame manner.” [D.87-12-066, 26 CPUC2d 392, 457.] Third, the Commission rejected adjustments proposedB-103

y the Staff because their proposals were based on a study that was statistically inadequate, and there wasa ‘weak’ matching of utility jobs with the jobs in the surveys. The Commission also noted that “our objectiveis to ensure that ratepayers are not burdened with paying for employee compensation levels beyond thatwhich is necessary for Edison to provide safe reliable service at reasonable rates. This type of evaluation isdifficult because of the subjectiveness involved in quantifying the variables used.” [D.87-12-066, 26CPUC2d 392, 457.]In D.91-12-076, SCE’s 1992 test year general rate case, the Commission addressed a joint compensationstudy filed by SCE and the DRA. In this case, “the two parties agreed on matching of Edison employee andsurvey positions and on the appropriate adjustments of wage and salary data for comparability. Howeverthe comparison still excludes employee benefits.” The Commission noted that the study did address thestatistical shortcomings of previous studies. (p. 3-4). The study found that SCE’s wages, weighted by jobcategory, were 2.88% above market. The Commission rejected a DRA proposal to reduce labor expensebased on this result because ‘We do not have before us evidence to support market parity as a reasonablestandard for total compensation.’ (p. 4) The Commission ordered Edison and the DRA to ‘continue their jointstudies, with more emphasis on total compensation,’ as well as providing more detail on ‘benefits as apercentage of cash compensation and distribution (not only averages) of total compensation among firms.’In D.92-12-057, the Commission adopted PG&E’s proposed compensation levels as reasonable, eventhough they were 5% above market. The Commission accepted that wage surveys are subject to error andthat compensation within 5% of the market was a reasonable level of error to accept in evaluatingreasonableness.In D.96-01-011, the Commission noted that SCE and the DRA had trouble in implementing the order to filea joint data base for employee compensation. The Commission rejected much of both parties’ requests.The Commission emphasized the importance of job matching. ‘In order for a total compensation study to bevalid, it is critical that an accurate ‘apple to apples’ comparison be made for each job match.’ [D.96-01-0111996 Ca. PUC LEXIS 23, p. 4] The Commission determined that this standard had not been met in thiscase, and discussed expectations for meeting this standard in future cases. ‘We believe Edison shoulddemonstrate that its job matching decisions and benchmarks, in addition to related data inputs,assumptions and overall methodology, fully support its compensation level…Edison did not providedocumentation for its job matching assumptions and benchmarking conclusions.’ [ibid] The Commissionsingled out the lack of ‘notes or any other documentation for its job matching assumptions andbenchmarking conclusions.’ The decision also discusses a number of specific areas (e.g., lack of matchingbenchmarks for various grades of Engineers) where the matching posed a problem for determiningreasonableness of the total compensation. The Commission also singled out the need to show the criteriaused in selecting jobs for benchmarking, to demonstrate that the selection process has been unbiased. TheCommission also rejected a proposed DRA reduction because it was based only on cash compensation,not total compensation.There was a long interlude to the next rate cases, as the Commission adopted Performance BasedRatemaking (PBR) mechanisms for many of the utilities. In D.04-07-022, the first SCE general rate casedecision (2003 test year) after the lapse of the PBR mechanism, SCE and the DRA filed a joint totalcompensation study. ‘We look to market comparators to determine the level of employee compensationneeded to provide reasonable assurance that SCE is a competitive employer that is not providing abovemarketsalary/benefit packages that would add unnecessarily to ratepayer costs.’ [D.04-07-022, p. 196) TheCommission concluded that ‘SCE and the DRA, along with Hewitt, have fulfilled our directives in earlierdecisions, and have provided the value we expected with respect to the total compensation study.’ (p. 196)B-104

May 10, 2010The GRC Study TeamPage 9In SCE’s two rate case decisions since D.04-07-022, the total compensation study has been accepted asfiled. In D.06-05-016, the total compensation study is mentioned only in the context of two forms ofcompensation that were litigated (Results Sharing and Spot Bonuses, p. 118-132). In D.09-03-025, theCommission noted that ‘the study does provide a basis for assessing the reasonableness of thecompensation offered by SCE’ and that the ‘compensation levels sought by SCE are generally at market,with the overall compensation level 0.9% above market levels, well within the margin of error.’ (p. 127).01551/GRC2012/Meeting Notes/TOCNB 04887 05/10/2010B-105

Date: June 15, 2010To:From:The GRC Study Team (the Team)Alison Peterson, HewittSubject: Meeting Notes, June 15, 2010Revised November 1, 2010Meeting AttendeesNameMarek KanterPat AdamsLupe ClappMartin ColletteBarbara DeckerGeorge DeMariaYesenia EliseaJennifer CaseyKathy MillerBlake MurphyChelsea PenalozaAlison PetersonOrganizationDRASCESCESCESCESCESCEHewittHewittHewittHewittHewittThe Team met at SCE’s offices in San Francisco in person (Kanter, Adams, Collette & Peterson), bytelephone (Miller and Murphy), and by videoconference in Rosemead (Clapp, Decker, DeMaria, Elisea &Penaloza).Discussion ItemsConfirm Agenda and Review/Finalize Meeting Notes from May 10, 2010 Meeting Alison reviewed the agenda with the Team which includes a review of the preliminary total compensationresults, executive benefits valuations, long-term incentive (LTI) data, and draft language for discussion ofthe benefits valuations. The Team reviewed the draft meeting notes from the May 10, 2010 meeting and also confirmed that theaction items from the May 10, 2010 meeting were completed. Lupe mentioned that some of the meeting materials are written to suggest that two differentmethodologies were used in developing benefits valuations when, in fact, the same methodology wasemployed but two different demographic profiles and sets of assumptions were used to developvalues. Alison concurred that this was confusing and agreed to review and revise the meeting notesand to clarify this point.Total CompensationAlison reviewed the preliminary total compensation results that cover base, bonus, total cash (base plusbonus), LTI, benefits, and total compensation for all employee groups.B-106

Alison noted that the LTI data included in the preliminary 2012 GRC Total Compensation Study (theStudy) covers 17 Executive positions and one position in the Manager/Supervisor category, a Directorposition. In the 2009 Study, LTI was reported for 13 executives and 6 Directors. The survey results didnot have sufficient data for three of the six Director positions; one Director position no longer exists; andwe were unable to find an appropriate benchmark match for the final Director position. However, LTI datawas reported and collected for the 2012 Study for a much larger number of jobs, including 27 additionaljobs in the Manager/Supervisor group and one job in the Professional/ Technical group. These jobs didnot have LTI data included for them in the 2009 Study. The Team will review the LTI data later in themeeting and discuss which jobs should include LTI data in the 2012 Study. Alison noted that the 2012 study covers 65.8% of SCE’s employee population and described thefollowing key findings: SCE has lost ground on total cash compensation with overall results dropping from -0.5% in 2009 to-3.9% in 2012. The drop in total cash compensation is due in part to the increased prevalence ofannual incentive plans and the increase in target and actual bonus awards for these plans amongstSCE’s peer group. SCE is also lower to the market on total compensation (base, bonus, LTI, and benefits), droppingfrom +0.9% in 2009 to -3.8% in 2012. Contributing factors to the decline in total compensationinclude the drop in total cash noted above, a decline in benefits values related in part to reduction inhealth care costs fueled by increased cost sharing with SCE’s employees, an increase in the rate ofemployees opting out of coverage, and extensive use of HMOs by SCE that represent a lower costalternative vs. plans offered by SCE’s peer group. Marek asked Alison to clarify how the overall results were calculated to reflect payroll weighting.Alison explained that the total payroll for each employee group (e.g. Physical/Technical, Clerical,etc.) was multiplied by that group’s position against market as determined by the benchmark jobmarket analysis and that the results for all employee groups were added together and then divided bytotal payroll to arrive at SCE’s overall position vs. market. Alison mentioned that SCE’s below market position for total cash impacts the benefits valuations. Thevalues of some components of benefits, most notably retirement benefits, are influenced bycompensation and are expressed and derived as a percentage of total cash. As SCE’s position ontotal cash drops relative to the market, the portion of benefits that is influenced by compensation alsodrops relative to the market. The Team reviewed an analysis that illustrated how the value of each component of total compensationfor SCE and for the market has increased or decreased. This analysis highlights the contributing factorsto changes in SCE’s position to the market for each employee group. The Team reviewed the results andnoted that the contributing factors are somewhat different by employee group. For example, total cashcompensation did not change much for the Physical/Technical group; however, benefits values droppedfor this group. In contrast, total cash compensation dropped by approximately -5% for the Manager/Supervisor group and benefits values also dropped for this group. Lupe observed that the total compensation analysis for the Manager/Supervisor group is misleadingsince it includes LTI results for only one job. Alison agreed and explained that the Team would needB-107

to evaluate the LTI eligibility data to determine which jobs should have LTI included in the totalcompensation calculation.LTI EligibilityAlison provided context for reviewing and evaluating the LTI data. All surveys report base and the majorityreport total cash, but not all report LTI. This means that there are gaps in the market data by survey. Inaddition, for the surveys that do report LTI, some do not include eligibility data. LTI practices do vary fromcompany-to-company with some organizations extending grants further down into the organization andothers limiting use of LTI to executives and perhaps a level or two down. As a result of these practices, it ismore challenging to discern eligibility and value of LTI grants in the market. The Team reviewed a report that presented LTI values and eligibility data (when available) for 17Executive jobs, 27 Manager/Supervisor jobs, and 1 Professional/Technical job. Alison confirmed atMarek’s request that data was collected on a job-by-job basis. Eligibility data was available for 31of the jobs. Within SCE’s peer group, Executive positions wereeligible for LTI 100% of the time except for the VP & Associate General Counsel job that is eligible89% of the time. Of the Manager/Supervisor jobs, average eligibility was 71%, with a low of 40% anda high of 100%. Alison noted that it is typical for jobs a level or two below the Executive group to beeligible for LTI, though not all eligible employees will receive a grant. The eligibility data and marketpractice would suggest that more than 50 percent of Manager 3 and Manager 2 jobs are typicallyeligible for LTI while Manager 1 jobs would more typically be eligible at less than 50% ofcomparators. Alison indicated that this data suggests that a broader group of jobs are eligible for LTI than the jobscovered in the 2009 Study. Marek asked which jobs at SCE are eligible for an LTI grant and whether grant values vary by job.George explained that in 2009, LTI grants were made to Manager 3’s and MPP3’s and that theaverage grant was about 13% of base pay. SCE does adjust grants based on performance. Lupe asked if we should assume that if a job does not have LTI values reported for it, that it is noteligible for LTI. Alison said that you could not conclude that because of the gaps in the market data.Jobs without market data could still be eligible but the survey source that covered that job may nothave reported LTI values or there may have been insufficient data for the job. Marek suggested that we could use regression analysis to derive LTI values for jobs that do not havean LTI value. This would entail regressing the LTI values we have against the base salary levels. Lupe mentioned that since LTI is a component of compensation, the total compensation resultsshould include LTI. Alison mentioned that LTI does represent a significant portion of compensation,particularly for executives and jobs one to two levels down.B-108

Alison reported that the eligibility data for Manager 2/3 and MPP2/MPP3 indicates that these jobs areeligible, on average, more than 50% of the time and that we should consider including LTI results forthese levels of jobs. Further, she explained that it is a fairly common practice for companies todesignate eligibility by level (e.g., all Director level or VP jobs and above) and that it would beconsistent with market practice to take this approach. The Team briefly discussed the Attorney jobs that show high eligibility (77% for Sr. Attorney 1 and100% for Senior Attorney). George mentioned that the Sr. Attorney is comparable to a Director leveljob and that SCE has found when recruiting for these jobs that LTI is a common component ofcompensation. Lupe asked Alison to provide her expert opinion around LTI eligibility based on the data. Alisonresponded that she believes the data supports the conclusion that eligibility for LTI does extend toManager 2/3, MPP2/3, and Attorney jobs. Marek reported that he was uncomfortable concluding that a job receives LTI unless there is marketdata to support it. He indicated that if the eligibility data reported that more than 50% of employees ina job were eligible that would support including LTI for the job. Alison suggested that we determine if market data is available for LTI eligibility by salary range vs. byjob. The Team agreed that it would determine if it can get LTI eligibility data by salary range. If thatdata is available, the Team will meet, perhaps by conference call, to review and discuss its approachto LTI. Lupe asked that Hewitt outline the pros and cons of determining eligibility through a salary bandanalysis or by using the eligibility data we currently have. Alison agreed that Hewitt will create thisanalysis if salary band eligibility data is available. Marek asked Hewitt to send an example of eligibility data for LTI. Hewitt will provide this to the Team.BenefitsBlake reviewed the materials from the May 10, 2010 Team meeting on benefits valuations that were revisedat the request of the Team.Blake reviewed the executive benefits valuations with the Team. SCE’s costs for executive benefitsincreased primarily due to a change in how Supplemental Executive Retirement Plans (SERP) are valued.In the past, the cost of executive benefits was spread over the employee’s entire tenure with SCE. Underthe new approach, the cost is spread only over the years that the employee is in an executive role. Toillustrate the impact on executive benefits values: Assume an employee has worked for SCE for 20 years. He/She is in an executive role for 10 of thoseyears. Further, assume upon retirement, the employee is eligible for a $100,000 lump-sum retirementpayment. In the past, the $100,000 value would be spread over 20 years, resulting in an annualized cost of$5,000.B-109

June 15, 2010The GRC Study TeamPage 5 In the new approach, the $100,000 is spread over only the number of years that the employee was inan executive role. In our example, that is 10 years resulting in an annualized cost of $10,000. Thevalue of the benefits overall is the same ($100,000), but is higher on an annualized basis given thisshift in approach. Marek agreed with this change. Blake explained that some of SCE’s peer groups do not have SERP plans and as a result, SCE’sexecutive benefits are significantly higher than the market. In addition, for executives, retirement is alarge portion of total benefits, particularly because it is based on pay. Total benefit value for executivesbecause of level of pay will be largely a result of retirement costs.Job ValidationAlison reminded the Team that it will be conducting job validation sessions on June 30 and July 1. Marekhas been provided with a list of all the benchmark jobs as well as data indicating which benchmarks werevalidated in the 2009 Study. Marek agreed to provide the list of benchmarks to be validated to the Team byMonday, June 21. Marek asked if SCE could provide job descriptions for the benchmarks. Georgeexplained that SCE can provide generic descriptions for the Manager/Supervisor jobs.Draft Benefits LanguageThe Team reviewed the draft language describing the benefits valuations approach using the Hewitt andSCE demographics and assumptions. Alison will edit the language to remove the reference to two differentmethodologies since this is confusing.Review Action ItemsHewitt Alison to review meeting notes and meeting materials and revise references to using “two differentbenefits methodologies” to using “two demographic profiles and assumptions.” Blake to revise the benefits valuation slides to include changes requested by the Team. Alison to outline pros/cons of using eligibility data for LTI reported by surveys or determined using asalary range analysis. The Team will discuss the need to use regression analysis to develop LTI valuesfor positions that do not have LTI reported. Alison to send the Team an example of LTI eligibility data. Chelsea to send Marek an electronic copy of the benchmark jobs for his use in identifying and recordingthe jobs to be covered in the validation process.SCE SCE to send Marek the CIP descriptions (non-union) for use in identifying benchmark jobs for validation. SCE to contact Towers-Watson to determine if we can get an LTI eligibility analysis by salary range foruse in evaluating which jobs should include LTI data in the 2012 Study. Barbara to confirm Aon assumptions regarding the different percentages reported for retirees related tomedical vs. retirement.DRA Marek to select jobs for validation and return by Monday, June 21.01551/GRC2012/Meeting Notes/TOCNB 04887 06/15/2010B-110

Date: June 30, 2010To:From:The GRC Study Team (the Team)Alison Peterson, HewittSubject: Meeting Notes, Job Match Validation Meetings, June 30, 2010Revised October 17, 2010Meeting AttendeesNameMarek KanterPat AdamsMartin ColletteGeorge DeMariaYesenia EliseaChelsea PenalozaAlison PetersonOrganizationDRASCESCESCESCEHewittHewittThe Team met at SCE’s offices in San Francisco (Kanter, Adams, Collette & Peterson) and by videoconference in Rosemead (DeMaria, Elesia & Penaloza). The meetings were originally scheduled for June30 and July 1, but the July 1 meeting was not needed as the validation process was completed on June 30.Meeting SummaryThe purpose of the meeting was to go through the job matching process to validate that the comparatorjobs selected were matched to the appropriate SCE position. The validated jobs are listed on the followingpages.In advance of the meeting, the DRA selected 44 jobs to be reviewed during the job matching validationprocess. For each of these jobs (except for Executive positions), Hewitt compiled a list of SCE jobdescriptions as well as the survey match job descriptions. For the Executive positions, Hewitt compiledorganization charts and survey match job descriptions.For the Towers Perrin, ORC-SIRS, and Radford surveys, leveling charts were also supplied. Leveling chartsprovide descriptive details of skills and competencies for different levels of positions within a job family.In addition to the descriptions provided, SCE provided a verbal overview/description of each job as it wasreviewed. George was able to provide most of these summaries, but Pat and Martin also provided somecontext from their experiences and knowledge of the positions.B-111

Summary of Benchmark Validation CoverageSCE Incumbents in Validated JobsSCE Jobs ValidatedJob Category # % of Benchmark # % of BenchmarkPhysical/Technical 2,028 72% 8 18%Clerical 1,867 71% 8 44%Professional/Technical 2,524 66% 12 27%Manager/Supervisor 1,274 66% 12 13%Executive 4 24% 4 24%Grand Total 7,697 69% 44 21%The following benchmark positions were validated:JobCode Job Title # IncsPhysical/Technical9611 Lineman(Rubber Glove Trained) 6449697 Officer Nclr Scrty 1 3767863 Repr Fld Srvce 2 2859501 Troubleman 1729481 Form Electl Crew 1499528 Groundman 1469529 Groundman A 1369344 Substation Electrician 120Clerical8301 Meter Reader Project Temporary 432APP2 Analyst-Program/Project 2 319CUS2 Customer Specialist 2 288PLA1 Planner 1 196AID3 Administrative Aide 3 180CSR1 Customer Solutions Repr 1 152TSP2 Technl Spclst/Scientist 2 151ABU2 Analyst-Business 2 149Professional/TechnicalMPP1 Mgr-Project/Product 1 625TSP3 Technl Spclst/Scientist 3 400ABU3 Analyst-Business 3 242APP3 Analyst-Program/Project 3 194PLA2 Planner 2 182ITS4 IT Specialist/Engineer 4 161ITS3 IT Specialist/Engineer 3 150CCM3 Construction/Material Crdntr 3 135ASY3 Analyst-Systems 3 124MPC2 Mgr-Program/Contract 2 115AFN3 Analyst-Financial 3 98ENG3 Engineer 3 98B-112

June 30, 2010The GRC Study TeamPage 3JobCode Job Title # IncsManager/SupervisorMPP2 Mgr-Project/Product 2 506SUP2 Supervisor 2: Transmission & Distribution: Power Delivery Business Line 253SUP2 Supervisor 2: Nuclear Organization: Maintenance 71MGR2 Manager 2: Transmission & Distribution: Power Delivery Business Line 67MGR1 Manager 1: Transmission & Distribution: Power Delivery Business Line 65MGR1 Manager 1: Information Tech & Business Integration: IT & IT Ops - Service & Operations Mgmt 62MGR2 Manager 2: Information Tech & Business Integration: IT & IT Ops - Service & Operations Mgmt 55SUP2 Supervisor 2: Customer Service: Customer Service Operations 52MGR1 Manager 1: Customer Service: Customer Service Operations 43SUP2 Supervisor 2: Nuclear Organization: Operations 38MGR1 Manager 1: Customer Service: Customer Programs & Services 31SUP4 Supervisor 4: Nuclear Organization: Maintenance 31Executive41 VP/GnAud, EIX/SCE & GnAud, EMG 1188 SVP Business Integration & CIO 11502 Chairman & CEO, SCE 12352 SVP & Chief Nuclear Officer 1Positions Matching Modifications Planner 1: dropped ORC-SIRS Engineering Design 2 (T412-2). After discussing the content of the SCEjob, the Team concluded that the SIRS match appears to have a more complex component related toengineering design as compared to the SCE job. Specifically, the Team felt that the SCE job did not“design major components or major portions of a functional system to develop or improve products andfacilitate manufacturing operations.” Mgr-Project/Product 1: Added TP-MM Information Technology Project Management (APM010-P4) so thatthe matches for this level are the same as the matches used for the Mgr-Project/Product 2.Action Items Hewitt to modify matches as noted and update the data summaries.01551/GRC2012/Meeting Notes/TOCNB 04887 06/30/2010B-113

Date: July 9, 2010To:From:Subject:The GRC Study Team (the Team)Alison Peterson, HewittMeeting Notes from July 9, 2010 Call on Long-Term Incentive (LTI) EligibilityRevised October 17, 2010Meeting AttendeesNameMarek KanterPat AdamsMartin ColletteLupe ClappGeorge DeMariaYesenia EliseaChelsea PenalozaAlison PetersonOrganizationDRASCESCESCESCESCEHewittHewittThe Team met via conference call on July 9, 2010.Meeting SummaryThe purpose of the meeting was to review LTI eligibility data and market data and determine whichbenchmark positions included in the 2012 GRC Total Compensation Study (the Study) should include LTIvalues in determining total compensation.In advance of the meeting, Hewitt provided the Team with a salary band analysis prepared by TowersWatson for the utility, general industry, and combined peer groups showing LTI eligibility by pay range andposition.The Team reviewed the salary range analysis which indicated that: Positions with base salaries of between $100,000 and $125,000 are, on average, eligible for LTI at 20%to 26% of the comparator companies. Positions with base salaries of between $125,000 and $150,000 are, on average, eligible for LTI at 30%to 45% of the comparator companies. Positions with base salaries of between $150,000 and $200,000 are, on average, eligible for LTI at 58%to 82% of the comparator companies.The Team also reviewed the job-specific eligibility data available for 31 positions including, 17 Executivepositions, 33 Manager/Supervisor positions, and 1 Professional/Technical position.B-114

Alison explained that the pattern of eligibility found in the salary range analysis is consistent with theposition-specific eligibility data. She noted that Manager 1 positions are typically eligible for LTI at less than50% of companies, Manager 2 level employees are mixed with some positions eligible at more than 50% ofcompanies and others eligible at less than 50% of companies, and that Manager 3 positions and Executivepositions are eligible at more than 50% of the comparator companies.Marek indicated that the Study should include LTI values for positions that are eligible for LTI at more than50% of companies. The Team agreed with the criteria.Following is the list of positions that meet the criteria and for which LTI values will be reported in the Study: Chairman & CEO, SCE President, SCE EVP Power Operations SVP Business Integration & CIO SVP & General Counsel SVP & Chief Nuclear Officer SVP & CFO VP & Associate General Counsel VP, Human Resources VP, Power Production VP Public Affairs – Sacramento VP.GnAud, EIX/SCE & Gn/Aud, EMG VP Customer Service Operations Division VP & Treasurer VP Customer Programs & Services VP SCE Corporate Communications VP Engineering & Technical Services Senior Attorney Director, Benefits Sr. Attorney I Manager 3: Nuclear Organization: Engineering Manager 3: Information Tech & Business Integration: IT and Ops-Services Manager 3: Human Resources Manager 3: Regulatory Policy & Affairs Manager 3: Transmission & Distribution: Bus Planning & fin Management Bsn Ln Manager 3: Nuclear Organization: Maintenance Manager 3: Operations Support: OS Corporate Security Mgmt Manager 3: Human Resources: Employee & Labor Relations Manager 3: Controllers Manager 3: Corporate Communication Manager-Project/Product 3 Manager 3: Customer Service: Customer Service Operations Manager 3: Treasurer Manager-Project/Product 2B-115

Date: August 5, 2010To:From:The GRC Study Team (the Team)Alison Peterson, HewittSubject: Meeting Notes, August 5, 2010Revised October 17, 2010Meeting AttendeesNameMarek KanterPat AdamsLupe ClappMartin ColletteGeorge DeMariaYesenia EliseaChelsea PenalozaAlison PetersonOrganizationDRASCESCESCESCESCEHewittHewittThe Team met at SCE’s offices in San Francisco in person (Kanter, Adams, Collette & Peterson) and byvideoconference in Rosemead (Clapp, DeMaria, Elisea & Penaloza).Discussion ItemsConfirm Agenda and Review/Finalize Meeting Notes from the June 15 Team Meeting, the June 30Benchmark Validation Meeting, and the July 9 Conference Call Covering Long-Term Incentive (LTI)Eligibility Alison reviewed the agenda with the Team which includes a review of the total compensation resultsreflecting LTI values for all positions the Team has deemed eligible for LTI and a review of the first draftof the 2012 GRC Total Compensation Study (the Study) report. The Team reviewed the draft meeting notes from the June 15 meeting, the June 30 BenchmarkValidation meeting, and the July 9 conference call on LTI eligibility and also confirmed that the actionitems from these meetings were complete. Lupe asked that the format of all the meeting notes be revised so that the actual date of the meetingis reflected in both the subject and the date lines. George asked that we clarify in the June 15 meeting notes under the LTI Eligibility section that the LTIgrants he describes were grants made in 2009. Lupe asked that the jobs that the Team determined were eligible for LTI for the 2012 Study be listedin an appendix of the Study report.B-116

Study Results Including LTI ValuesAlison reviewed the Study results which have been adjusted to incorporate LTI values for 34 jobs. SCE’sLTI values are overall below the comparator group by -8.3%. The LTI data, as reported in Table 1 of thedraft Study results could be misleading since SCE’s position vs. market for LTI is reported by job group butcovers a relatively small number of benchmark jobs. For example, only one position in theProfessional/Technical group includes LTI values, and SCE’s LTI for that position is more than 50% belowthe comparator group. The Team agreed that the Study report should include footnotes outlining thenumber of positions in each employee group that were included in determining SCE’s position against themarket for LTI.Review of Draft Study ReportThe Team had reviewed the draft Study report in advance of the meeting and came prepared withquestions and suggested edits. The Team reviewed each page of the report and provided input. Alisonagreed to incorporate the Team’s input and to use the “track changes” mode so that edits would be clearlyidentified when the Team receives the modified report.Following are areas where the Team requested notable edits or additions: Discussion of Competitive Posture Provide more detail on which high-incumbent jobs in the Professional/Technical job category werebelow market. Address the fact that changes in incumbents in Executive roles will impact year-over-year or studyover-studycomparisons of results since all of these jobs are single-incumbent. Employee Benefits Modify the explanation of how the use of a demographic model and assumptions impacts benefitsvaluations. Ensure that we refer to two demographic profiles and sets of assumptions when describing thebenefits valuation methodology rather than referring to two different methodologies. Long-Term Incentives Add an explanation of the approach used by the Team to determine LTI eligibility. Appendix A: Benchmark Jobs Add an introduction explaining that benchmarks with insufficient data were not used in the Study. Appendix B: Comparator Companies Add the list for the Executive comparator companies.B-117

August 5, 2010The GRC Study TeamPage 3 Appendix G: Benefits and Total Compensation Results Based on Hewitt Standard Demographics andAssumptions Add an introduction explaining the purpose of this table and referencing the text in the Study reportthat describes the Team’s evaluation of using the Hewitt standard demographic profile andassumptions vs. the SCE demographic profile and assumptions. Add an Appendix that lists the jobs that included LTI values.Review Action ItemsHewitt Alison to review meeting notes and adjust dates to be consistent. Alison to edit the draft Study report. Chelsea to compile Study workpapers. Hewitt to distribute the Study report in “track changes” mode to the Team for review.SCE Lupe to ask Barbara to review the benefits section of the draft Study report. George and Yesenia to review Appendix E: Generic Job Methodology and provide edits to Hewitt.01551/GRC2012/Meeting Notes/TOCNB 04887 08/05/2010B-118

Date: September 24, 2010To:From:The GRC Study Team (the Team)Alison Peterson, HewittSubject: Meeting Notes, September 24, 2010Meeting AttendeesNameMarek KanterPat AdamsLupe ClappMartin ColletteGeorge DeMariaYesenia EliseaChelsea PenalozaAlison PetersonOrganizationDRASCESCESCESCESCEHewittHewittThe Team met at Hewitt’s offices in San Francisco in person (Kanter, Adams, Collette & Peterson) and byvideoconference in Rosemead (Clapp, DeMaria, Elisea & Penaloza).Discussion ItemsConfirm Agenda and Review/Finalize Meeting Notes from the August 5 Team Meeting Alison reviewed the agenda with the Team which includes reviewing the most recent drafts of the 2012GRC Total Compensation Study (the Study) report, meeting notes, and workpapers.Review Action Items from August 5, 2010 Meeting Hewitt to review meeting notes and adjust dates to be consistent and incorporate edits to the draft Studyreport. Done. Hewitt to distribute the Study report in “track changes” mode to the Team for review. Done. Lupe to ask Barbara to review the benefits section of the draft Study report and provide input and edits. Done. George and Yesenia to review Appendix E: Generic Job Methodology and provide edits to Hewitt. Done.B-119

Measurement of ErrorThe Team reviewed an explanation of measurement of possible error including error from job matchinginaccuracies, from assuming all employees receive salaried benefits, and from benefits aggregation. Thesummary described the approach used to measure error and provided calculations of mean and standarddeviation. The Team found the explanation helpful, though it asked Hewitt to clarify some of the examplecalculations. The Team also agreed that the measurement of error explanation should be included in anAppendix to the Study report. Alison will work with Blake to clarify the example calculations and willincorporate this material into the next draft of the Study report.Review of Draft Study ReportThe Team had reviewed the draft Study report and meeting notes in advance of the meeting and cameprepared with questions and suggested edits. The Team reviewed each page of the report and providedinput. Alison agreed to incorporate the Team’s input and to use the “track changes” mode so that editswould be clearly identified when the Team receives the modified report.Most of the Team’s suggested edits were for minor adjustments in word choice, spelling, or formatting. Afew notable edits include: Lupe noted that there are inconsistencies in the Study report and in the meeting notes in how wereference the Team and the Study. She asked that Hewitt review all of the materials to ensure that weuse the same reference in all cases. Martin noted that the May 10, 2010 meeting notes should include his written summary of theCommission’s previous decisions regarding the purpose and scope of the Total Compensation studies.This information was used by the Team to guide decision making on methodology for the Study andshould be included for reference. Martin will provide to Hewitt.Hewitt will incorporate the suggested edits and circulate the revised Study report, meeting notes, andworkpapers to the Team.Review Action ItemsHewitt Alison to edit draft Study report and meeting notes to incorporate the Team’s edits. Alison to incorporate the measurement of error explanation into an Appendix in the Study report. Hewitt to distribute the Study report, meeting notes, and workpapers in “track changes” mode to theTeam for review.SCE Martin to provide Hewitt with a write-up on the Commission’s previous decisions that provided guidanceon the purpose and scope of the Total Compensation studies for inclusion in the May 10, 2010 meetingnotes.B-120

Appendix J: Measurement of ErrorHewitt Associates 119 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-121

Measurement of ErrorFollowing is a description of how error was measured in conducting the 2012 Study.Error related to assuming all employees receive salaried benefitsHewitt’s database does not have specific data for all employee types at all peer companies. However, of the17 companies in the peer group that disclosed that they provide different benefits to union hourly than tosalaried employees, we have benefit specifications for 6 of them. When we evaluated the difference in benefitsfor these groups, we found that the primary difference was in the level of employer contributions toward activeand retiree medical benefits. The average difference in benefit values for the two groups was approximately$39 per year. If you compare that with the pay for a Clerical employee (the group with the lowest pay), youwould find that the impact on total compensation would be about 0.1% (equals $39 / $36,000 = .108%) of pay.This percentage would, of course, be much lower for higher paid employees.Hewitt compared all of the benefit values for the Clerical employees who earn $36,000 and found the followingsummary data statistics: $12,047 - mean $1,916 - standard deviationThe calculated difference of $39 per year is clearly much smaller than one standard deviation for thisemployee group. The mean and standard deviation are both higher for higher paid employees.Error related to benefit aggregationTo estimate the impact of aggregating benefit costs based on average pay data versus determining benefitcosts for each employee, Hewitt looked at the benefits for employees at different pay levels within thephysical/technical group, who had average pay of $55,000, and determined a simple average of their benefitcosts. We then compared the average costs for these employees to the benefit cost for an employee in thephysical/technical group who earns $55,000. Hewitt found that the difference between the average cost for thegroup and the cost for the sample employee was only $20 per year. This translates into about 0.04% of totalcompensation (equals $20 / $55,000 = .036%).Hewitt compared all of the benefit values for the Physical/Technical employees who earn $55,000 and foundthe following summary data statistics: $13,407 - mean $2,177 - standard deviationThe calculated difference of $20 per year is clearly much smaller than one standard deviation for thisemployee group. The mean and standard deviation are both higher for higher paid employees.Error related to job matching inaccuraciesTo estimate the impact of job matching inaccuracies on survey error, Hewitt measured the dollar change inbenchmark values resulting from changes made to two of the 44 benchmark positions that were validated.Sixty-nine percent or 7,697 of employees included in the Study were covered by the 44 benchmark validationpositions. Two benchmarks were modified as a result of the benchmark validation process: Planner 1: no change to benchmark results (196 incumbents). Mgr-Project/Product 1: $420 increase in benchmark from $140,486 dollars to $140,906 resulting in a changeof 0.3% for this job. This increase was applied to pay for the 625 incumbents in the role, changing theHewitt Associates 120 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-122

market total compensation by $266,632 resulting in a change to the total compensation for all incumbentscovered by validated jobs of 0.0296%.Hewitt Associates 121 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-123

Appendix K: Glossary of TermsHewitt Associates 122 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-124

Glossary of TermsThe following terms are referenced in this report and are defined in this section for Study purposes.AnnuityA stream of payments, generally payable over a participant’s lifetime, but also payable for a limited time periodor over the lives of a participant and beneficiary.Annuity FactorAn amount used to convert an annuity to an equivalent value paid in another form (e.g., single sum), or viceversa.AverageThe arithmetic mean of a group of numbers (see “Mean” below).Base PayThe fixed rate (whether hourly, weekly, monthly or annual), that an employee receives as compensation forwork performed. Usually, these amounts are guaranteed.Base SalaryCompensation paid by the week, month or year rather than by the hour. Generally, a salary is a guaranteedamount that is not reduced for time not worked. Generally, salaries apply to higher-level professional orsupervisory jobs that are exempt from the provisions of the Fair Labor Standards Act of 1938 (FLSA).BenchmarkingA process by which an organization seeks to identify information about other organizations and analyzes theirpractices (including pay) for comparison purposes. Benchmark jobs are specific titles used in thebenchmarking process. Such jobs are commonly found at most organizations, have a high population, andperform a similar level of work.ComparatorThe group of companies against which pay and benefits are compared. Typically includes companies ofsimilar size, in the same industry, that operate in the same geographic location, and with whom the Studycompany competes for talent.Deferred Stock UnitsA form of long-term incentives that includes an award of units that correspond in number and value to aspecified number of shares of stock. Units do not represent actual ownership or equity interest and typicallyare subject to vesting requirements and transferability restrictions.Defined Benefit Formula/PointsA formula is typically used in the calculation of an employee’s pension benefit. Often a point value, usually acombination of age and years of service (e.g., 55 years of age + 20 years of service = 75 ”points”), thatinfluences the amount of benefit received.Defined Benefit Pension PlanBoth the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code (IRC)define any plan that is not an individual account plan as a defined benefit pension plan. It is a pension planHewitt Associates 123 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-125

that specifies the benefits, or the methods of determining the benefits, but not the level or rate of contribution.Contributions are determined actuarially on the basis of the pension benefits expected to become payable.Defined Contribution PlanA defined contribution or individual account plan as defined by the Employee Retirement Income Security Actof 1974 (ERISA) and the Internal Revenue Code (IRC) as a plan that provides for an individual account foreach participant and for benefits based solely on (1) the amount contributed to the participant’s account, plus(2) any income, expenses, gains and losses, and forfeitures of accounts of other participants that may beallocated to the participant’s account. The benefit amount actually received by the participant at retirement isunknown.Demographic Profile and Assumptions used in Valuing BenefitsSince demographics of any group (such as age, marital status, length of service) affect the inherent value ofthe benefit package, it is important to use information that most closely reflects the experience of that group.To facilitate comparisons that focus on program design while minimizing the impact of differences inincumbent demographics, demographic data is collected from a broad cross-section of companies in Hewitt’sDataBase to create a standard demographic profile. The value of benefits is determined by applying eachbenefit program to each individual in the standard demographic profile using realistic and consistent actuarialassumptions. Some of these assumptions, such as mortality (used for generating the group life insurancevalues) and rates of disability (used for generating the long-term disability values) are based on studies fromthe Society of Actuaries. Economic assumptions, such as interest rates and pay increases, are based on bestestimates of long-term future expectations.EAPDISThe Edward A. Powell Data Information Solutions Study survey; formerly, the Edison Electric Institute (EEI)Nonexempt Survey.EEIEdison Electric Institute.Employee BenefitsA collection of noncash compensation elements, including, but not limited to, income protection, healthcoverage, retirement savings, and income supplements for employees, provided in whole or in part byemployer payments.FLSAThe Fair Labor Standards Act (FLSA) of 1938 established overtime, record keeping, and a floor for minimumwage. It also determined the type of positions that are exempt from the overtime provisions. Federal lawrequires that “nonexempt” positions receive overtime pay for hours in excess of 40 worked in a week. Somestates (e.g., California) require overtime pay for nonexempt positions for hours in excess of 8 worked in oneday.Generic JobThis is an SCE job that is broadly defined to include employees performing the same level of work in variousparts of the organization. At many other organizations, there would be a variety of unique job titles performingthese activities. At SCE, these titles are consolidated into a single job title, encompassing employees invarious departments.Health and Welfare BenefitsPlans that provide dental, vision, disability, life insurance, medical, surgical, or hospital care, or benefits in thecase of sickness, accident, death or unemployment.Hewitt Associates 124 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-126

Long-Term IncentivesAny incentive plan that requires sustained performance of the firm for a period longer than one fiscal year.Most plans are based on stock value of an organization and may require investment by the participant. Stockoptions are the most common form of long-term incentive.MeanA simple arithmetic mean (or average) obtained by adding a set of numbers and then dividing the sum by thenumber of items in the set. A weighted average is used when there are multiple observations for one or morenumbers in the set. In this case, the multiple observations are counted as individual observations and areincluded in the numerator and the denominator of the average calculation.MedianThe median of a set of data is the value that half of the data are above and half of the data are below. If thereare an odd number of data points, the median is the value of the middle item when the data are arranged inascending or descending order. If there are an even number of data points the median is the average of thetwo middle values when the data are arranged in ascending or descending order.Performance SharePerformance shares are a common form of long-term incentive. Typically, a performance share is a promise toprovide a share of stock to a recipient at no cost, subject to achievement of performance goals over aspecified time frame. The award of a performance share is usually structured so that the recipient forfeits theshare is they terminate employment with the company.Phantom StockA long-term incentive, which is based on a hypothetical value of an organization’s equity (stock), rather than itsactual equity. The incentive’s value is calculated based on a formula to derive the hypothetical (or phantom)value.Restricted StockRestricted stock is a common form of long-term incentive. Typically, a restricted share is a promise to providea share of stock to a recipient at no cost. The share is usually “restricted” by a vesting schedule, so that therecipient forfeits the share if they terminate employment with the company.Short-Term IncentivesUsually a lump-sum payment (in cash) made in addition to an employee’s base salary or for a fiscal orcalendar year. Generally, these are formula-driven pay plans that are designed to reward the accomplishmentof specific results. Plan awards can be based on individual, group, division, business-unit or company-wideperformance, or a combination.Standard DeviationIn probability theory and statistics, the standard deviation of a statistical population, a data set, or a probabilitydistribution is the square root of its variance. Standard deviation is a widely used measure of the variability ordispersion. It shows how much variation there is from the "average" (mean, or expected/budgeted value). Alow standard deviation indicates that the data points tend to be very close to the mean, whereas high standarddeviation indicates that the data is spread out over a large range of values.Stock Appreciation Rights (SARs)This is a long-term incentive which allows the recipient to receive the increase in stock price of a share ofstock over a specified maximum period of time. SARs are typically subject to vesting restrictions. They do notusually require that the recipient actually purchase shares of company stock.Hewitt Associates 125 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-127

Stock OptionsStock options are the most commonly used form of long-term incentive. Stock options allow a recipient topurchase a share of stock at a fixed price, subject to vesting restrictions and contractual term. The recipientexecutes the purchase by “exercising” the option, allowing them to obtain the share, regardless of current pricelevel, for the fixed contractual price.Target/Actual Incentive AwardsThe planned or expected payout from an incentive plan is the target award. Usually, target incentives areexpressed as a percentage of base salary. Actual incentive awards may be higher or lower than the targetincentive award.Total Cash CompensationThe typical definition was used for this Study: the sum of annual base pay and annual incentives provided byan employer to an employee. In some cases, total cash compensation also includes spot bonuses or othercash awards. For this Study, spot bonuses were excluded due to lack of consistent, reliable data amongcomparator groups. Additionally, overtime pay was excluded from the Study because it varies with companyoperating policies and staffing practices.Total CompensationTotal Compensation is the sum of all elements of compensation provided by an employer to an employee. ForStudy purposes, the Team defined it to include annualized base pay, incentives, and benefit values. In otherstudies, other extrinsic elements of pay may be included. (For example, overtime pay and shift differentials). Insome definitions, intrinsic awards (e.g., job satisfaction) are considered a part of total compensation, but theseare not quantifiable and consequently not included in total compensation studies.Hewitt Associates 126 01551/RPT001AAP.DOC/TOC NB 04887 11/2010B-128

Witness Qualificationsof Alison PetersonB-129

Alison PetersonHewitt Associates LLC100 Bayview CircleNewport Beach, CA 92660Direct: (949) 823-7463Email: Alison.Peterson@hewitt.comAlison is a Principal Consultant in Hewitt Associates’ Talent and Organization Consulting (TOC)practice. She is based in the firm’s Newport Beach regional consulting center and has over 15 yearsof experience in compensation consulting with Hewitt. Her current role includes leading thecompensation consulting practice for the Western United States, where she is responsible fordirecting the work efforts of other compensation consultants and leading compensation consultingassignments for clients.Some of Alison’s clients include Barclays Global Investors; Cardinal Health Systems; CareFusion;LPL Financial; McKesson Corporation; Wal-Mart Stores, Inc; and the Walt Disney Company.Prior to joining Hewitt Associates, Alison worked for Ameritech in a variety of compensation rolesincluding designing and administering base pay, bonus and long-term incentive plans. Alison holds aB.A. in Finance from the University of Wisconsin - Eau Claire and a Masters in BusinessAdministration from Marquette University.During the course of the Total Compensation Study, Alison helped coordinate the survey work andprocess.Hewitt Associates 01551\BI001PY.DOC/TOCSF-15008 11/2007B-130