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    EIX
    Earnings call· Jun 2025(Q2 FY25)

    EDISON INTERNATIONAL Q2 FY25 earnings call EIX

    Jul 31, 2025 Source

    Executive summary

    Edison International Q2 FY25 — GRC Proposed Decision Aligns with Rate Base Forecast, Wildfire Framework Discussions Ongoing

    Edison International reported Q2 FY25 earnings, reaffirming its 2025 EPS guidance and long-term growth targets despite a pending GRC decision. The proposed GRC decision generally aligns with the company's rate base forecast, supporting critical grid investments, though some areas require revision. Discussions continue on enhancing California's wildfire framework and addressing affordability, with the company advocating for policies that balance customer costs and utility financial health.

    Highlights

    5

    • Edison International reaffirmed its 2025 EPS guidance of $5.94 to $6.34.

    • The company reaffirmed its long-term core EPS CAGR of 5% to 7% through 2028.

    • The 2025 GRC Proposed Decision generally aligns with SCE's range case rate base forecast, supporting critical grid investments.

    • SCE launched a Wildfire Recovery Compensation Program to resolve Eaton Fire claims quickly and mitigate costs.

    • SCE's Advanced Waveform Anomaly Recognition Engine (AWARE) received the prestigious Edison Award for innovation in grid safety and reliability.

    Concerns

    5

    • Q2 core EPS was $0.97, down from $1.23 a year ago, primarily due to higher O&M and regulatory decisions, though this comparison is not meaningful given the pending GRC.

    • The Eaton Fire investigation is ongoing, with SCE equipment potentially associated with the ignition, and numerous lawsuits have been filed.

    • The 2025 GRC Proposed Decision authorizes $9.8 billion in base revenue for 2025, which is 93% of SCE's requested amount, with reductions in scope, pacing, or cost for some programs.

    • The GRC PD shifts approximately 400 miles from targeted undergrounding to covered conductor, limiting SCE's ability to mitigate wildfire risk in the most vulnerable areas.

    • The PD's gradual ramp-up for infrastructure replacement does not fully reflect the urgency of today's reliability and electrification needs.

    Guidance & targets

    8
    CategoryTargetConfidence
    Core EPS CAGR
    5% to 7%
    high materiality
    High
    2025 Core EPS range
    $5.94 to $6.34
    high materiality
    High
    Base rate revenue requirement
    $9.8 billion
    high materiality
    High
    Base rate revenue requirement
    $10.2 billion
    high materiality
    High
    Base rate revenue requirement
    $10.6 billion
    high materiality
    High
    Base rate revenue requirement
    $11 billion
    high materiality
    High
    Wildfire mitigation plan investment
    $6.2 billion
    medium materiality
    High
    System average rate growth
    inflation-like level
    medium materiality
    High

    Operational metrics

    16
    Core EPS
    $0.97vs. $1.23 in Q2 FY24
    Q2 FY25

    Reported core earnings per share.

    O&M expense
    higherYoY
    Q2 FY25

    Primary driver of SCE's core EPS variance.

    Interest expense
    higherYoY
    Q2 FY25

    Primary driver of EIX Parent and Other's variance.

    Wildfire self-insurance
    $1 billion
    current

    Customer-funded self-insurance for the first $1 billion of costs related to wildfire events.

    WMCE O&M recovery
    $300 million
    historical

    CPUC authorized recovery for historical wildfire mitigation and restoration.

    WMCE capital recovery
    $700 million
    historical

    CPUC authorized recovery for historical wildfire mitigation and restoration.

    2022 WM/VM O&M recovery
    $290 million
    historical

    CPUC authorized recovery in SCE's 2022 WM/VM proceeding.

    2022 WM/VM capital recovery
    $99 million
    historical

    CPUC authorized recovery in SCE's 2022 WM/VM proceeding.

    2022 WM/VM O&M disallowance
    $65 million
    historical

    CPUC disallowance, for which SCE has filed an application for rehearing.

    TKM securitization financing
    $1.6 billion
    historical

    Application filed for authority to issue securitized bonds to finance recovery related to the TKM proceeding.

    Grid hardening authorized
    1,800 miles
    2025 GRC PD

    Authorized in the Proposed Decision, consistent with SCE's total hardening request.

    Targeted undergrounding shift
    400 miles
    2025 GRC PD

    Shifted from targeted undergrounding to covered conductor in the Proposed Decision.

    Tree inspections
    1 million trees
    annually

    Aim of the 2026-2028 wildfire mitigation plan.

    Customers per square mile
    3,100
    current

    Comparison of service territory density.

    Customers per square mile
    105
    current

    Comparison of service territory density with Los Angeles Department of Water and Power.

    Wildfire ignitions increase
    20%
    by 2050

    Projected increase across all causes due to climate change, as per SCE's white paper.

    Industry KPIs

    1
    MetricValueDetails
    Regulatory rate base growthgenerally in line with our current range case

    Capital programs

    1
    2026-2028 Wildfire Mitigation Planplanned$6.2 billion
    Start: 2026

    Benefit: Comprehensive strategy to address immediate and long-term wildfire risks, including grid hardening, vegetation management, aerial firefighting, and PSPS updates.

    SCE anticipates investing $6.2 billion over the 2026 to 2028 period for its wildfire mitigation plan, which builds on foundational mitigations.

    Risks & headwinds

    5
    Eaton Fire liabilityOngoing investigation

    Probable loss, numerous lawsuits filed, estimated costs not disclosed

    Mitigation: Wildfire Recovery Compensation Program to resolve claims quickly, customer-funded self-insurance ($1B), Wildfire Fund, AB 1054 regulation

    Legislative uncertainty regarding AB 1054 frameworkCurrent legislative session (2025), next year's session (2026)

    Potential for shareholder contributions, securitization provisions that could raise customer costs

    Mitigation: Ongoing discussions with Governor's office and legislators, advocating for policies that balance customer costs and utility financial health

    GRC Proposed Decision reductions2025-2028

    Base revenue of $9.8 billion (93% of request), 400 miles shifted from targeted undergrounding to covered conductor, scaled-back infrastructure replacement

    Mitigation: SCE will file opening comments and advocate for adjustments to better align with state objectives and community needs

    Affordability concerns for customersOngoing

    Legislative proposals like securitization could raise customer costs by deteriorating credit quality

    Mitigation: Operational excellence, O&M efficiency, addressing public purpose programs, NEM, streamlining siting/permitting

    Climate change increasing wildfire riskBy 2050

    20% more wildfire ignitions across all causes by 2050

    Mitigation: State-wide efforts needed on building codes, insurance market, liability reform, and utility infrastructure hardening

    What to watch in Q3 FY25

    5

    Eaton Fire investigation outcome

    Next quarter / when sufficiently material
    CurrentInvestigation ongoing, no new disclosures on ignition or cost estimate
    TargetDisclosure of ignition cause and estimated cost

    Why it matters

    Determines the financial impact and liability for SCE, impacting the wildfire fund and potential shareholder contributions.

    When we have additional relevant information, we will share it with you and importantly, we'll continue our transparency with our community.

    Q&A highlights

    7

    What is Edison's view on the proposed $18 billion AB 1054 fix, particularly regarding shareholder debt or equity contributions, and what defines an acceptable structure?

    Pedro stated that the company will evaluate the entire package, but ideally, an expansion of AB 1054 would not require upfront shareholder contributions, given the wildfire fund's current capacity. He emphasized that a large upfront payment would drive up the cost of capital and ultimately not benefit customers.

    “We don't foresee and frankly, don't see a need for having upfront contributions like they were in AB 1054 previously.”

    asked by Nicholas Campanella · answered by Pedro Pizarro

    2 min read6 chapters

    Detailed Narrative

    01

    Eaton Fire Update

    SCE's investigation into the origin and cost of the Eaton Fire is ongoing, with no new disclosures at this time. SCE is not aware of evidence pointing to another possible source of ignition, suggesting its equipment could be associated with the ignition. Numerous lawsuits have been filed against SCE, but the company remains confident it can demonstrate reasonable utility actions regarding its transmission facilities.

    02

    Wildfire Recovery Compensation Program

    SCE will launch a wildfire recovery compensation program this fall to provide direct payments to eligible individuals and businesses impacted by the Eaton Fire. This initiative aims to resolve claims quickly, minimizing overall costs by mitigating interest expense and inflation, and ensuring efficient use of the wildfire fund to support affected community members.

    03

    Legislative Discussions on AB 1054

    Discussions are continuing with the Governor's office and legislators to enhance California's AB 1054 regulatory framework. Management believes policymakers will strengthen the framework during the current legislative session, with broader wildfire solutions, such as those addressing building codes and insurance markets, potentially being tackled in next year's legislative session.

    04

    2025 GRC Proposed Decision (PD)

    The Administrative Law Judge's proposed decision for SCE's 2025 General Rate Case generally aligns with the company's range case rate base forecast, authorizing $9.8 billion in base revenue for 2025 (93% of the requested amount). While supporting critical investments, the PD shifts 400 miles from targeted undergrounding to covered conductor and scales back infrastructure replacement, prompting SCE to seek revisions.

    05

    Wildfire Mitigation Plan (2026-2028)

    SCE submitted its 2026-2028 Wildfire Mitigation Plan in May, outlining a comprehensive strategy with anticipated investments of $6.2 billion. The plan builds on foundational mitigations like covered conductor, targeted undergrounding, and enhanced vegetation management, and includes continued use of aerial firefighting assets and revised Public Safety Power Shutoff (PSPS) criteria.

    06

    Affordability and Operational Excellence

    SCE maintains a 15-year track record of the lowest system average rate among California's major investor-owned utilities, driven by operational excellence and cost management. The company highlighted its Advanced Waveform Anomaly Recognition Engine (AWARE), an AI-driven solution that uses real-time grid sensor data to predict potential system issues, enhancing safety, reliability, and affordability.

    AI-generated summary of the company’s earnings call. Not investment advice.