Edison International · NYSE:EIX
Edison International — Corporate Update (July 2022)
51 slides from Edison International's corporate update, Jul 29, 2022
Slide 1: Business Update
July 29, 2022 Business Update
Slide 2: Forward-looking statements
1 Statements contained in this presentation about future performance, including, without limitation, operating results, capital ex penditures, rate base growth, dividend policy, financial outlook, and other statements that are not purely historical, are forward - looking statements. These forward -
Slide 3: Edison International is leading the transformation of the electric power industry
2 Edison International is leading the transformation of the electric power industry One of the nation’s largest electric - only utilities, serving over 15 million residents EIX’s principal subsidiary, with ~$5+ billion annual electric infrastructure investment opportunity Growth driven by investment
Slide 4: EIX is well positioned for a decarbonized future
3 EIX is well positioned for a decarbonized future, with no coal or gas LDC exposure and high electric sales growth potential UTY 1 EEI Index 2 Electric - Only & No Gas LDC Exposure (# of Companies) 6 of 21 12 of 39 ✓ No stranded asset risk with increased electrification No Coal Generation Ownership
Slide 5: Sustainability is central to Edison's vision
4 Sustainability is central to Edison’s vision to lead the transformation of the electric power industry Social Environmental Governance 2045 goals: net - zero GHG emissions across Scopes 1, 2, and 3 and 100% carbon - free power delivered ( ~43% in 2021) 1 Over $800 million in approved SCE funding t
Slide 6: Sustainable financing activities link strategy and financings
5 Our sustainable financing activities underscore the strong link between our strategy and financings July 29, 2022 Primary Category 1 U.N. Sustainable Development Goals Alignment Green Renewable Energy Clean Transportation Energy Efficiency & Carbon Reduction Climate Change Adaptation Social Socioe
Slide 7: Thesis: Wires-focused electric utility with regulated rate base growth
6 Thesis: Wires - focused electric utility with regulated rate base growth aligned with state’s aggressive clean energy goals Constructive California and Federal regulatory structures Aggressive climate goals met with clean, efficient, economy - wide electrification Significant investment required t
Slide 8: California's regulatory mechanisms provide revenue certainty
7 California’s regulatory mechanisms provide revenue certainty, even as load and payment patterns change Revenue Decoupling means earnings aren’t affected by changes in electricity sales Long - standing regulatory mechanism that breaks the link between retail electricity sales and revenue; promotes
Slide 9: Clean Energy Transition Leadership
CLEAN ENERGY TRANSITION LEADERSHIP
Slide 10: Reaching California's 2045 GHG goals requires near-complete transformation of energy use
9 Reaching California’s 2045 GHG goals requires a near - complete transformation of energy use economy wide July 29, 2022 100% of grid sales with carbon - free electricity 80 GW of utility - scale clean generation 30 GW of utility - scale energy storage 30 GW of generation and 10 GW of storage from
Slide 11: Electricity sales required to be 100% carbon-free by 2045
10 Electricity sales required to be 100% carbon - free by 2045 Decarbonizing transportation sector, ~40% of GHG emissions, requires widespread vehicle electrification State’s commitment highlighted by requiring all new passenger vehicles sold to be zero - emission by 2035 and operations of MD/HD veh
Slide 12: Significant incremental grid investments required by 2045
11 Significant incremental grid investments required by 2045 to serve load growth and integrate renewables and storage July 29, 2022 1. In 2019 dollars under Balanced Scenario 2. Source: CAISO Draft 20 - year Transmission Outlook published January 31, 2022, which is long - range conceptual plan of t
Slide 13: Decarbonized, electrified world produces household energy cost savings
12 Annual residential household energy costs (2019$) 1 2019 2045 By 2045, a greater reliance on electricity, combined with population and economic growth, will result in a 60% increase in electricity sales from the grid Household savings driven by reduced gasoline consumption due to high market pene
Slide 14: 2021 energy burden in SCE's service area below median
13 0% 2% 4% 6% 8% West Virginia Mississippi Tennessee Alabama Oklahoma Kentucky Arkansas South Carolina Indiana Vermont Michigan Maine Kansas Louisiana Missouri Georgia Arizona South Dakota North Carolina Rhode Island Ohio Oregon Connecticut Montana Nebraska Nevada Idaho Florida North Dakota SCE Wis
Slide 15: SCE's average rate has grown less than inflation
14 5 10 15 20 25 30 2001 '08 '15 2022 SCE’s average rate has grown less than inflation over the last 20 years, even with recent increases to mitigate wildfire risks July 29, 2022 1. All rates include California Climate Credit 2. Inflation data based on CPI Los Angeles - Long Beach - Anaheim region:
Slide 16: Edison International has one of the strongest electrification profiles
15 Transportation Electrification Energy Storage Edison International has one of the strongest electrification profiles in the industry July 29, 2022 Building Electrification 1. As of May 2022. Source: DMV on data provided by EPRI 2. Based on SCE analysis. SCE’s Pathway 2045 analysis estimates that
Slide 17: SCE leads largest utility transportation electrification initiatives
16 $872 $414 $367 $235 $205 $205 EIX PCG ED SRE PEG NEE SCE leads the largest utility transportation electrification initiatives and programs in the U.S. 1. Low Carbon Fuel Standard. The LCFS program at the California Air Resources Board (CARB) funds SCE’s vehicle rebate programs t hro ugh the sale
Slide 18: Future load growth is highly levered to EV adoption
17 SCE’s future load growth is highly levered to EV adoption, which is a critical component of reaching state GHG goals 1. Includes both light duty and non - light duty EV load 2. As of May 2022. Source: DMV data provided by EPRI To date, ~1 in 7 U.S. electric vehicles have been sold in SCE’s servic
Slide 19: Increased energy storage essential to carbon-free future
18 Increased energy storage is essential to support the transition to a carbon - free future – 1,000 2,000 3,000 4,000 5,000 6,000 7,000 2020 2021 2022 2023 2024 2025 2026 Future Procurement Requirements Procured or Under Construction Online 1. SCE’s proportional procurement obligation under D.21 -
Slide 20: SCE Wildfire Mitigation: Approach, Progress, and Results
SCE WILDFIRE MITIGATION: APPROACH, PROGRESS, AND RESULTS
Slide 21: AB 1054 provides strong regulatory construct for wildfire liability and cost recovery
20 AB 1054 1 provides a strong regulatory construct for determining wildfire liability and cost recovery July 29, 2022 Established safety certification process and additional wildfire safety oversight Under AB 1054, SCE can obtain an annual safety certification upon submission of required safety inf
Slide 22: AB 1054 and Wildfire Insurance Fund provide pathway and ceiling on liability
21 • Pay out claims to claimants subject to fund administrator approval • Subrogation claims settled at ≤40% approved unless exceptional facts and circumstances; higher amounts may be approved by fund administrator Fund payment of “eligible claims” 4 AB 1054 and the Wildfire Insurance Fund provide c
Slide 23: Wildfire Fund Illustrated
22 Wildfire Fund Illustrated: Eligible claims paid by Fund and IOUs reimburse up to cap only to degree found imprudent 1,2 July 29, 2022 SCE does not reimburse Fund for eligible claims 1 above annual aggregate retention of $1 billion If found 100% prudent 2 SCE’s Insurance/ Retention Wildfire Insura
Slide 24: SCE's wildfire mitigation practices have evolved since 2018
23 Many of SCE’s wildfire mitigation practices have been in place for years and have greatly evolved since 2018 July 29, 2022 Longstanding wildfire mitigation efforts at SCE Pre - 2018 practices and enhancements Foundational strategy established in 2018 – 2019 GS&RP (2018) and 2019 WMP Advance techn
Slide 25: Tools and technology monitor real-time conditions
24 SCE’s tools and technology allow it to monitor real - time conditions to help inform operational decision - making July 29, 2022 170+ cameras that provide visibility to about 90% high fire risk areas to monitor wildfire conditions Plan to increase coverage to nearly all of high fire risk areas by
Slide 26: Covered conductor is one of the most effective measures
25 https://library.sce.com/conten t/dam/eix/documents/investo rs/wildfires - document - library/Wildfire_CaliforniaBiom es.pdf Covered conductor is one of the most effective measures to reduce wildfire and PSPS risks in SCE’s service area July 29, 2022 Execution Speed Geography Unique Factors Cost t
Slide 27: California has increased investments in wildfire suppression and prevention
26 California has continued to increase investments in wildfire suppression and prevention 1 July 29, 2022 CAL FIRE budget support along with actions to increase staffing and improve effectiveness ~$2.5 – 2.8bn/year ~7,180 – 8,769 Increases to firefighting crews Helicopter fleet replacement Air tank
Slide 28: Execution of wildfire mitigation strategy is reducing risk
27 SCE’s execution of its wildfire mitigation strategy is reducing risk of wildfires associated with utility infrastructure July 29, 2022 Community Resource Centers Community Crew Vehicles 67 sites available 8 vehicles available High - Definition Wildfire Cameras Distribution Equipment Inspections 2
Slide 29: Substantial progress on grid hardening and situational awareness
28 SCE has made substantial progress on grid hardening and situational awareness measures July 29, 2022 Investments to harden the grid and enhance situational awareness targeted through 2023 Green shading represents completed measures through June 30, 2022, as proportionate to the 2024 forecast in S
Slide 30: Meaningful progress in mitigating wildfire risk
29 SCE is making meaningful progress in mitigating wildfire risk for its customers July 29, 2022 Covered conductor has reduced faults, which could lead to ignitions High fire risk inspection program has reduced remediation needs Expanded vegetation management and tree removal has reduced faults 67%
Slide 31: Mitigation and PSPS reduced probability of catastrophic wildfire losses
30 ~21% of total risk reduction SCE estimates its wildfire mitigation and PSPS have reduced probability of losses from catastrophic wildfires by ~65 – 70% 1,2 1. Baseline risk estimated by RMS using its wildfire model, the location of SCE’s assets, and SCE reported ignitions from 2014 - 2020 .. Risk
Slide 32: Ongoing grid hardening expected to reduce risk from less severe events
31 Additionally, ongoing grid hardening expected to result in faster pace of reduced risk of losses from less severe events 1,2 July 29, 2022 1. Baseline risk estimated by Risk Management Solutions, Inc. (RMS), a leading provider of climate and natural disaster risk mod eli ng, using its wildfire mo
Slide 33: Financial Information
[WJEPISON Bee | a SANNA NY, WAT) MONO | ‘e } J FINANCIAL INFORMATION
Slide 34: SCE has significant capital expenditure opportunities
33 Range Case 2 n/a 6.0 5. 2 5.2 5.2 5.4 6.2 5.6 5.7 – 5.8 6.7 2021 2022 2023 2024 2025 SCE has significant capital expenditure opportunities driven by investments in the safety and reliability of the grid July 29, 2022 Capital deployment expected to increase in future GRC and other applications 1 C
Slide 35: GRC decision provides rate base visibility through 2023
34 Range Case 2 n/a 38.5 41.5 43.4 46.6 2021 GRC track 1 decision provides rate base visibility through 2023; future applications expected to extend growth July 29, 2022 1. Weighted - average year basis. Excludes rate base associated with ~$1.6 billion of wildfire mitigation - related spend that sha
Slide 36: SCE's long-term growth drivers aligned with California's policy goals
35 SCE’s long - term growth drivers are highly aligned with California’s public policy goals Overarching Goals SCE Growth Drivers Safe, Reliable, and Affordable Electricity Service Infrastructure Replacement Sustained investment required to reach and maintain equilibrium replacement rate Wildfire Mi
Slide 37: Memo account recovery and securitization strengthens balance sheet
36 Cash flow from memo account recovery and securitization strengthens our balance sheet and credit metrics July 29, 2022 Approved Applications Application / Account Balance @ June 30 Recovery Through Remaining Rate Recovery by Year 2022 2023 2024 2025 ✓ GRC Track 1 (Jan. – Sept. 2021 Balance) 503 D
Slide 38: 2017/2018 Wildfire/Mudslide Events Update
37 2017/2018 Wildfire/Mudslide Events Update: 89% of best estimate resolved. Anticipate cost recovery filing by late 2023 July 29, 2022 7.0 0.9 7.9 Best Estimate of Total Losses 89% of best estimate has been resolved 1. After giving effect to approximately $86 million in fixed payments due under set
Slide 39: SCE requested a 10.53% ROE for 2023
38 SCE requested a 10.53% ROE for 2023. Also awaiting result for 2022 cost of capital July 29, 2022 10.30% 10.53% 2022 Currently Authorized 2023 Request SCE’s requested ROE balances reasonable returns with affordability for customers CPUC Return on Equity (ROE) In April, SCE filed application to est
Slide 40: Track record of meeting EPS guidance and growing dividend
39 EIX has a strong track record of meeting or exceeding EPS guidance and growing its dividend 0.80 2.80 2004 2022 7.2% CAGR …and has 18 consecutive years of dividend growth 2 Dividends per Share (in Dollars) 1. EPS guidance was not provided in 2012 or 2018 because of the timing of final decisions i
Slide 41: Committed to maintaining investment grade credit ratings
40 EIX and SCE are committed to maintaining their investment grade credit ratings SCE EIX Moody’s Baa2 Positive Baa3 Positive S&P BBB Stable BBB Stable Fitch BBB - Positive BBB - Positive Long - term Issuer Rating and Outlook As of July 29, 2022 During Q2 2022, Fitch and Moody’s changed outlooks to
Slide 42: EIX reaffirms 2022 core EPS guidance of $4.40–4.70
41 EIX reaffirms 2022 core EPS guidance of $4.40 – 4.70 July 29, 2022 YTD Recorded 1 2022 Guidance 1 SCE 2022 Rate Base EPS 2.54 5.34 SCE Operational Variances (0.05 ) 0.16 – 0.43 EIX Parent and Other (0.33 ) (0.73) – (0.70 ) EIX Operational Results 2.16 4.77 – 5.07 SCE Costs Excluded from Authorize
Slide 43: 2022 EIX Core Earnings Guidance Assumptions
42 2022 EIX Core Earnings Guidance Assumptions July 29, 2022 1. Beginning in 2023, Intervenors have an annual opportunity to terminate the TO2019A Formula Rate. The earliest any new rate co uld become effective is January 1, 2024 2. Does not include securities with equity content that could be issue
Slide 44: EIX parent continues to execute on 2022 financing plan
43 EIX parent continues to execute on its 2022 financing plan July 29, 2022 1. Financing plans are subject to change 2. Edison International expects to issue securities containing up to $250 million of equity content annually, on average from 20 22 through 2025. The higher - than - average equity co
Slide 45: EIX reaffirms 2021–2025 EPS growth rate target
44 4.52 4.40 – 4.70 5.50 – 5.90 2021 Guidance Midpoint 2022 Guidance 2023 2024 2025 EIX reaffirms 2021 – 2025 EPS growth rate target, which would result in 2025 EPS of $5.50 – 5.90 July 29, 2022 Earnings progression expected to continue to 2025 Core Earnings per Share 1. Based on the midpoint of ini
Slide 46: EIX has double-digit total return potential
45 EIX has double - digit total return potential, supported by leadership role in clean energy transition July 29, 2022 9 – 11% total return o pportunity 4 before potential P/E multiple expansion driven by estimated 65 – 70% wildfire risk reduction 5 , a nd ongoing utility and government wildfire mi
Slide 47: Internationals
INTERNATIONALS.
Slide 48: Energy services subsidiary partners with market leaders
47 Partners with market leaders to deliver on their strategic, financial, and sustainability goals by addressing carbon, cost, complex choices, and creating energy justice across communities Provide independent, expert advice and services Using an integrated approach to design and implement strategi
Slide 49: SCE Key Regulatory Proceedings
48 SCE Key Regulatory Proceedings Proceeding Description and Next Steps Base Rates 2021 GRC Track 4 (A.19 - 08 - 013) Set CPUC base revenue requirement for third attrition year (2024) Intervenor testimony and SCE rebuttal testimony to be submitted Q1 2023 2022 Cost of Capital (A.21 - 08 - 013) Estab
Slide 50: Earnings Per Share Non-GAAP Reconciliations
49 Low High Basic EIX EPS $3.25 $3.55 Total Non - Core Items 2 (1.15 ) (1.15) Core EIX EPS $4.40 $4.70 1. EPS is calculated on the assumed weighted - average share count for 2022 of 381.4 million 2. Non - core items are presented as they are recorded Earnings Per Share Non - GAAP Reconciliations Jul
Slide 51: Core earnings definition
50 Edison International's earnings are prepared in accordance with generally accepted accounting principles used in the United States. Management uses core earnings (losses) internally for financial planning and for analysis of performance. Core earnings (losses) are also used when communicating wit