Edison International(EIX) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Edison International reported third quarter core earnings per share (EPS) of $2.34, up from $1.51 a year ago, although this comparison is not meaningful due to a true-up for the 2025 General Rate Case [4][17] - The company narrowed its 2025 core EPS guidance range to $5.95 to $6.20, reflecting strong year-to-date performance and outlook for the remainder of the year [4][18] - The company reaffirmed its long-term core EPS growth target of 5% to 7% through 2028 [4][17] Business Line Data and Key Metrics Changes - Southern California Edison (SCE) has made significant progress in wildfire mitigation, having deployed over 6,800 miles of covered conductor and hardened nearly 90% of its distribution lines in high fire risk areas [12][13] - The final decision on the 2025 General Rate Case authorized base revenue of $9.7 billion, supporting investments in wildfire mitigation and safety [12] Market Data and Key Metrics Changes - California's legislative session concluded with the passage of SB 254, which creates an up to $18 billion continuation account to support utilities and customers in wildfire risk management [5][6] - The company expects a near-term load growth compound annual growth rate (CAGR) of up to 3%, driven by electrification and new housing developments [24] Company Strategy and Development Direction - The company is focused on legislative and regulatory progress to enhance financial stability and address wildfire risks, with SB 254 seen as a constructive step [5][6] - Edison International is committed to maintaining affordability for customers while investing in safety and reliability [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the legislative actions taken to address wildfire risks and the financial stability of investor-owned utilities [5][6] - The company anticipates significant investments in infrastructure upgrades to meet growing demand, particularly in electrification and new housing [24] Other Important Information - The company has a four-year capital plan of $28 billion to $29 billion, incorporating substantial investments in infrastructure and wildfire mitigation [19] - Edison International expects to receive approximately $1.6 billion in securitization proceeds from the TKM settlement by year-end [21] Q&A Session Summary Question: Clarification on the $0.10 charge related to preferred equity - Management confirmed that the $0.10 charge is related to preferred equity series with rate resets in March 2026 and March 2027, and they are evaluating options for addressing this [28][30] Question: Participation level in the Wildfire Recovery Compensation Program - Management indicated that the program has not yet launched but is expected to finalize soon, and they are working with experts to ensure effective implementation [32][33] Question: Guidance on EPS growth rate - Management expressed confidence in the 5% to 7% EPS growth target, citing clarity from recent regulatory proceedings and settlements [38] Question: Phase two process for wildfire liability - Management discussed the transparency of the phase two process and the engagement with stakeholders to shape future legislative actions [42][45] Question: Customer cost and capital allocation - Management emphasized the importance of maintaining healthy balance sheets and credit ratings to minimize customer costs, while also considering capital returns to shareholders [51][52] Question: Near-term sales growth breakdown - Management provided insights into the balanced mix of electrification, residential growth, and commercial industrial demand driving the projected 1% to 3% sales growth [78]