Edison International(US:EIX)2024-10-30 00:36Financial Data and Key Metrics Changes - Edison International's core earnings per share (EPS) for Q3 2024 was $1.51, bringing year-to-date core EPS to $3.88, with guidance for 2024 narrowed to $4.80 to $5.00 [6][24][29] - Core earnings grew by $0.13 year-over-year, primarily due to higher CPUC revenue authorized in Track 4 of the 2021 GRC and higher authorized rates of return [24][30] Business Line Data and Key Metrics Changes - Southern California Edison (SCE) has achieved strong regulatory outcomes, recovering about $4.5 billion since 2021, with expectations for an additional $3 billion of incremental cash flow over the coming years [12][26] - SCE's wildfire mitigation plan has resulted in a significant reduction in acres burned from SCE's ignitions in high fire risk areas since 2017, demonstrating effective risk management [17][18] Market Data and Key Metrics Changes - The California regulatory environment has seen changes in the cost of capital mechanism and investor-owned utilities' 2025 return on equity (ROE), which could impact future earnings [14][36] - The company anticipates that total energy bills for customers will decrease by 40% in real terms by 2045, despite expected increases in electric rates due to necessary investments [36][21] Company Strategy and Development Direction - Edison International reaffirmed its commitment to achieving net zero greenhouse gas emissions by 2045, focusing on delivering 100% carbon-free power to customers [19][20] - The company plans to update its capital and financing plans following a final decision in SCE's 2025 GRC, which is expected in the first half of next year [25][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering on 2025 EPS guidance of $5.50 to $5.90 and achieving a 5% to 7% EPS compound annual growth rate (CAGR) through 2028 [33][34] - The management acknowledged the challenges posed by climate change and emphasized the importance of maintaining existing natural gas generation as a backup during the transition to cleaner energy sources [21][59] Other Important Information - SCE is in the final stages of resolving legacy wildfire claims, with a settlement agreement for the TKM application expected to authorize recovery of 60% of costs, or $1.6 billion [9][28] - The company is working on a standalone application for its next-generation enterprise resource planning system, expected to be filed in the next six months [25][58] Q&A Session Summary Question: Thoughts on the general rate case and affordability concerns in California - Management indicated that the rate trajectory for SCE is expected to align with or be below local inflation from 2024 to 2028, emphasizing affordability [36][37] Question: Load growth materializing sooner than expected - Management confirmed that they are prepared to reprioritize capital expenditures in response to load growth and are exploring alternative funding approaches [38][39] Question: TKM settlement and balance sheet flexibility - Management noted that the TKM settlement would provide an annual run rate EPS improvement of $0.14, with potential for reducing equity-like instruments supporting wildfire claims [40][41] Question: Clarity on TKM and Woolsey outcomes - Management stated that the TKM and Woolsey cases are very different, and outcomes cannot be directly compared [64][65] Question: Timing of GRC decision and potential for settlements - Management expressed optimism for a GRC decision in the first half of the year, with the potential for settlements being more complex [50][70]