Edison International Q1 FY2025 earnings call

Wildfire Recovery and Community Efforts

• Pedro Pizarro mentioned ongoing work with state and county leaders to rebuild wildfire-impacted areas in Altadena and Malibu, including undergrounding over 150 circuit miles in fire-impacted areas.
• SCE's investigation into the Eaton Fire continues, with ongoing analysis of equipment and removal of idle facilities for review. While SCE hasn't conclusively determined its equipment caused the fire, it's probable EIX and SCE will incur material losses.

Regulatory Milestones

• Pedro highlighted SCE's progress in regulatory proceedings, including the CPUC's unanimous approval of the TKM settlement agreement, and milestones in the Woolsey cost recovery ALJ process.
• Maria Rigatti discussed SCE's 2026 cost of capital application, NextGen ERP application, and the approval of the $1.6 billion TKM cost recovery settlement, which will lead to SCE filing for securitized bonds.

Legislative and Leadership Updates

• Pedro mentioned ongoing discussions with legislators and the Governor's office to support wildfire safety and enhance California's AB 1054 framework.
• Changes in leadership were noted, including Vanessa Chang's retirement from the Board and Adam Umanoff's upcoming retirement, with Chonda Nwamu joining as new general counsel.

Edison International reported core earnings per share of $1.37 in the first quarter of 2025, compared to $1.13 a year ago. However, the year-over-year comparison is not particularly meaningful due to SCE not having received a decision in its 2025 General Rate Case. SCE recognized revenue based on 2024 authorized base revenue requirements, adjusted for the lower authorized CPUC ROE. Maria Rigatti also discussed various regulatory proceedings and financial milestones related to SCE's operations.

2025 Guidance

• Edison International reaffirmed the 2025 Core EPS range of $5.94 to $6.34 and maintained the long-term Core EPS CAGR expectation of 5 to 7% through 2028, translating to $6.74 to $7.14 of 2028 EPS.

Post-GRC Guidance Refresh

• Maria Rigatti stated that six weeks after a final decision in the 2025 General Rate Case, Edison will provide updated capital and rate base projections, 2025 Core EPS range, long-term Core EPS growth, and financing plan.

Eaton Fire Liability Uncertainty

• There is a probable material loss related to the Eaton Fire, but liability is not estimable yet. The investigation is ongoing, and while SCE hasn't conclusively determined its equipment caused the fire, there's no other likely hypothesis for the fire's cause. The wildfire fund will be accessed for claims, but liability estimation remains uncertain.

Q: Nick Campanella asked about the disclosure of potential material loss from the Eaton Fire and how it relates to the wildfire fund.

A: Sam Ramraj said the investigation is ongoing, liability is not estimable yet, and the wildfire fund will be accessed for claims. Maria Rigatti added that the wildfire fund will be used to pay claims initially, avoiding debt issuance for claims.

Q: Michael Lonegan asked about wildfire legislative updates and Moody's risk model.

A: Pedro Pizarro mentioned ongoing legislative discussions, and Steve Powell discussed grid hardening and risk reduction from wildfire mitigations, noting the Moody's RMS model is comprehensive and risk reduction from system work is factored in.

Q: Carly Davenport asked about wildfire mitigation plans for idled or abandoned lines.

A: Pedro Pizarro said idle lines are inspected and maintained, with continuous improvement in operations and grounding procedures.

Q: Paul Zimbardo asked about material losses disclosure and litigation recovery.

A: Maria Rigatti explained that losses would be recorded with offsetting receivables, and Pedro Pizarro clarified SCE believes it was a reasonable operator and would make a good faith showing of prudence.

Q: Richard Sunderland asked about investigation timing and third-party ignition sources.

A: Pedro Pizarro said investigation timing is unclear, and SCE is not aware of evidence conclusively pointing to another ignition source.

Q: Gregg Orrill asked about losses and interest expense.

A: Maria Rigatti broke down interest expense related to TKM true-up and ongoing benefits, and explained the wildfire fund's availability for damage claims.

Q: Anthony Crowdell asked about legislative efforts and solutions.

A: Pedro Pizarro said legislative discussions are early, and educating policymakers on safety and cost impacts is ongoing.

Q: David Arcaro asked about losses and balance sheet impact.

A: Maria Rigatti explained losses would be recorded with offsetting receivables, and Pedro Pizarro discussed third-party estimates of potential damages related to the wildfire fund.

Q: Ryan Levine asked about wildfire mitigation plan changes and wildfire fund access.

A: Steve Powell discussed evolving wildfire mitigation plans with continued grid hardening, and Maria Rigatti said accessing the wildfire fund is premature as the investigation is ongoing.