Edison International(EIX) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For the full year 2024, Edison International reported core EPS of $4.93, which was above the midpoint of their guidance range [22][33] - The fourth quarter core EPS was reported at $1.05, contributing to a strong financial performance [32][33] - The company has a target of 5% to 7% core EPS CAGR through 2028, maintaining confidence in meeting 2025 EPS guidance [23][48] Business Line Data and Key Metrics Changes - Southern California Edison (SCE) has installed over 6,400 miles of covered conductor and hardened nearly 90% of its distribution lines in high fire risk areas [13][34] - The utility has made significant investments in operational measures, including vegetation management and a network of weather stations and AI-enabled wildfire cameras [14][34] Market Data and Key Metrics Changes - The California Public Utilities Commission (CPUC) approved a settlement agreement allowing SCE to recover about $1.6 billion or 60% of wildfire claims payments and associated costs [25][26] - The wildfire fund has $21 billion of creating capacity, which has largely been unused by California investor-owned utilities [15][25] Company Strategy and Development Direction - The company emphasizes safety as its top priority and continues to execute a robust risk-prioritized wildfire mitigation plan [7][12] - Edison International is focused on rebuilding and supporting communities affected by wildfires while continuing to invest in grid hardening and safety measures [37][49] - The company is engaged in discussions with stakeholders to enhance the regulatory framework established by AB 1054 [20][60] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the ongoing investigation into the Eaton fire and emphasizes the importance of transparency throughout the process [9][10] - The company remains optimistic about the regulatory environment and believes that policymakers will enhance the AB 1054 framework to support utilities [20][60] - Management is confident in the financial outlook, supported by the regulatory framework that ensures utilities can access the wildfire fund for claims payments [48][49] Other Important Information - The Board declared a first-quarter 2025 common stock dividend of $0.8275 per share, reflecting confidence in the financial outlook [24] - Former U.S. Secretary of Energy Jennifer Granholm will join the Board of Directors, bringing expertise in energy technology and policy [21] Q&A Session Summary Question: What is the potential impact of the wildfire fund if SCE's equipment was involved in the fire? - Management stated it is too early to determine the impact and emphasized the need to conclude whether SCE's equipment was involved before assessing potential liabilities [54][56] Question: How is the current policy environment shaping discussions around wildfire fund enhancements? - Management noted that there is a strong understanding among policymakers of the importance of financially healthy utilities and ongoing discussions with legislative leaders [60][62] Question: What steps is SCE taking to strengthen its bonding process in light of the Eaton fire? - Management highlighted that SCE is committed to learning from past incidents and is taking immediate steps to strengthen operational protocols [66][70] Question: Will the wildfires impact the General Rate Case (GRC) outcome? - Management expressed confidence that the GRC process is proceeding as planned and that they have settled numerous issues with interveners [80][81] Question: How will the company finance potential liabilities stemming from the January 2025 events? - Management explained that the wildfire fund is designed to support claims payments, reducing the need for issuing debt as was done in the past [89][90] Question: What is the outlook from rating agencies regarding the impact of recent fires? - Management indicated that rating agencies are focused on climate risk and that S&P has a negative outlook, but they are working to provide more information to improve perceptions [95][96]