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Remarks to Annual Shareholders Meeting


Edison International www.edison.com Page 1
Remarks to Annual Shareholders Meeting
John E. Bryson
April 26, 2007

Since all of you own our stock, you might be interested in your company's market
performance. I'll start there, but be brief.
Since we met last year our stock has grown in value 34 percent, from $40.41 to $54.03.
Edison International shares are trading at an all-time high. Our five year stock price
appreciation is number one in the industry. So if you invested $1,000 in us five years ago, it
would be worth nearly $3,300 today. For comparison, if you had invested that same $1,000
in the S&P 500, a common measure of the overall equity market, it would be worth about
$1,500, less than half as much as in our company.
So that is all good news.
But you may be thinking, "Don't tell us what the company did yesterday. Tell us what you're
going to do tomorrow." That is my topic today.
I'll describe five changes shaping the future of our industry, largely driven by new
technologies, and discuss how your company is leading the way in electricity:
* first, new tools for our utility customers;
* second, "smart" electricity distribution grids;
* third, more sophisticated transmission systems;
* fourth, advances in clean power generation; and
* finally, electricity as a transportation fuel of the future.



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Heres the first game-changer:
Advanced electricity meters will allow us to provide our customers with better tools to
manage their energy use. SCE already leads the nation's utilities in helping customers save
electricity through efficiency programs. We also have the largest demand response
program in California.
Now we're going to raise the bar higher. In a few years every household in our utility
service territory will be equipped with a truly state of the art "smart" digital electricity meter.
These new meters will be small but powerful computers and communication systems.
Among many benefits, they will allow a variety of pricing options for customers. This will
create powerful incentives for customers to save money by shifting their use to off-peak
hours when electricity costs are much lower.
We estimate our advanced meters could reduce peak demand on our system by as much
as 1,000 megawatts, or the output of an entire power plant. With these meters, customers
will be able to use their home computers to develop efficient usage patterns that can help
reduce their electric bills.
It will be common to see signs in appliance stores labeling household devices as
"communicating." Communicating thermostats already exist. Soon we will have
communicating dishwashers, electric dryers, refrigerators and pool pumps.
These appliances will be able to respond to the smart meters and automatically reduce
usage when power costs rise. Some customers will sign up for programs that allow the
utility to control many of their appliances remotely when needed, in exchange for
guaranteed additional cost savings.
A little more than a year ago, no existing meter technology met our requirements for cost
effectiveness and customer benefits. So we challenged the market with the prospect of a
five million meter purchase to drive the development of technology.



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The result?
We think weve got what we wanted new meters from several manufacturers are being
tested right now by SCE technicians. From 2008 through 2013, we plan to install five million
advanced meters with the largest array of customer-service features offered by any utility.
We call the program, "Edison SmartConnect."
The advanced meter constitutes the customer end of the smart grid.
The next two game-changers involve smart grid technology at the transmission and
distribution levels.
First, the distribution system, the component of the grid that delivers power directly to most
customers. Our SCE distribution system is both aging and growing.So we are making
capital investments in the system at an all-time high rate.
We can't, however, continue to use the same old circuit designs. Even momentary
interruptions can now cause significant economic loss for business customers. And
residential customers using more digital home electronics have understandably higher
expectations for service.
A high-tech world can no longer afford a low-tech electricity grid. We need to build the
distribution system of the future.
An early example of the smart grid's potential will be a 12 kV circuit we are calling the
Avanti circuit. Avanti will become operational this July serving 2000 customers in the San
Bernardino area. It will feature a large array of advanced monitoring and control
capabilities. Through wireless communication technologies, it will interface directly with our
new smart meters.



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What will all that mean?
Automated repair schemes can now take more than a minute to locate and isolate a faulted
line section. The Avanti circuit will do the job in seconds. Our goal is to isolate problems
fast enough to make tripping the entire circuit entirely unnecessary. In effect, our
distribution circuits will become better able to heal themselves.
New technology will also enable faster outage response. With the aid of our new meters,
dispatchers will know immediately when and where an outage occurs. Crews will be able to
respond faster.
In addition, through a project we call "lineman of the future," Edison craftspeople in the next
few years could be equipped with helmet-mounted cameras that have the ability to scan
and recognize equipment. Wireless computers would give them instant access to
maintenance records, expert assistance, and safety warnings. That would improve their
ability to troubleshoot and repair customer problems.
And there is one more very important benefit to what new technology can do for our
distribution employees: It can help them work more safely. We are now investigating, for
example, small detectors to warn employees if they come too close to energized equipment
without proper precautions.
The third game-changer is increased sophistication to be built into the transmission system.
This will reduce congestion, improve reliability and support the integration of more
renewable generation.
Through the work of Bharat Bhargava and his team of SCE engineers, we lead the nation
in a pioneering technology that measures stress on the transmission system. Called
"Synchronous Phasor Measurement," it is a single metric that effectively reflects,
integrates, and makes practically useful a large volume of essential system information -
including voltage, frequency, load and generation.
Put briefly, this metric is the one-stop shop of early warning systems. Enabled by advances
in computer technology and high-speed communications, we can now collect this new
measurement up to 30 times per second through monitoring devices deployed across our
service territory and the Western grid.


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At present, our ability to collect and analyze this data is faster than our ability to act upon it.
As technology advances over the next two to five years, however, we will have the ability to
activate high-tech switching equipment and compensation systems automatically and at a
great distance.
Let me give you a sense of how important this is. If the technology I just described had
existed in August 2003, the Northeast blackout, which affected 50 million customers, would
likely have been largely controlled.
These same advances will also facilitate the continued development of renewable power.
Faster and more sophisticated monitoring and control technologies will allow the system to
react to the variability of wind and solar generation by activating VAR Compensation
systems, dampening peak demand, and smoothing out disruptions.
This is particularly important at SCE, where for some time now we have been the national
leader in renewable energy. We purchase for our customers more than one-sixth of the
renewable electricity produced for retail sale in the United States. When smart grid
transmission technology becomes widespread nationally, it also has a potentially
substantial impact on our wind generation business at Edison Mission Group.
That leads to the fourth game-changercleaner power generation.
At EMG we are rapidly climbing the ranks of the largest domestic producers of wind energy.
We currently have 14 wind projects in operation or under construction. At least as
significant, we have exclusive negotiation rights on 2,600 additional megawatts of potential
projects moving through our development pipeline.
To support this pipeline, EMG has contracts to purchase more than $800 million in new
wind turbines over the next three years. These state of the art turbines will have the ability
to produce between two and three megawatts of electricity each, nearly double the output
of typical wind turbines just three years ago.
The continued development of our wind portfolio is a significant business opportunity. New
technology is also reducing the environmental impact