Edison International · NYSE:EIX
Edison International — Corporate Update (February 2021)
33 slides from Edison International's corporate update, Feb 26, 2021
Slide 1: Business Update
Business Update February 26, 2021
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements contained in this presentation about future performance, including, without limitation, operating results, capital expenditures, rate base growth, dividend policy, financial outlook, and other statements that are not purely historical, are forward-looking statem
Slide 3: Edison International is leading the transformation of the electric power industry
Edison International is leading the transformation of the electric power industry Holding company focused on opportunities in clean energy, efficient electrification, grid of the future, and customer choice One of the nation’s largest electric-only utilities, serving over 15 million residents EIX’s
Slide 4: Sustainability is central to Edison's vision to lead the transformation
Sustainability is central to Edison’s vision to lead the transformation of the electric power industry We have made long-term, public commitments related to clean energy, transportation electrification, diversity and inclusion, and safety1 Environmental Social Governance Targeting 100% carbon-free S
Slide 5: Investment thesis: Strong alignment between California's clean energy goals and EIX's business drivers
Investment thesis: Strong alignment between California’s clean energy goals and EIX’s business drivers Decoupling of sales Constructive California and Forward-looking ratemaking Federal regulatory structures Premium California ROE Wildfire prudency standard Aggressive climate goals met California GH
Slide 6: California's regulatory mechanisms provide revenue certainty
California’s regulatory mechanisms provide revenue certainty, even as load and payment patterns change Revenue Decoupling Long-standing regulatory mechanism that breaks the link between retail means earnings aren’t electricity sales and revenue; promotes energy efficiency, helps stabilize affected b
Slide 7: Reaching California's 2045 GHG goals requires a near-complete transformation of energy use
Reaching California’s 2045 GHG goals requires a near- complete transformation of energy use economy wide “Adaptation to climate change must begin in earnest — which SCE is doing in part with our grid hardening, situational awareness, and operational changes — but we must act on longer term solutions
Slide 8: SCE is a catalyst for achieving California's GHG and clean energy goals
SCE is a catalyst for achieving California’s aggressive GHG and clean energy goals via economy-wide electrification Achieving 80% GHG reduction by 2050 will require fuel SCE delivered ~43% carbon-free use changes in all sectors electricity to customers in 2020 State Carbon Emissions Reduction Pathwa
Slide 9: A decarbonized, electrified world produces energy savings for an average household
A decarbonized, electrified world produces energy savings for an average household Total energy cost for an average household decreases By 2045, a greater reliance on by about one-third by 2045 electricity, combined with Annual residential household energy costs (2019$)1 population and economic grow
Slide 10: Significant incremental grid investments required by 2045
Significant incremental grid investments required by 2045 to serve load growth and integrate renewables and storage At least a third of incremental grid investment fits CAISO-wide investment required at squarely within IOU jurisdictions various voltage levels and to address CAISO-wide grid investmen
Slide 11: Foundational strategy for mitigating wildfire risk continues
Foundational strategy for mitigating wildfire risk continues; increased focus on risk-prioritization and customer impacts 2020–2022 Wildfire Mitigation Plan1 Hardening Covered ~4,000 circuit miles by end of 2022 the Grid Conductor 2020: 965 | 2021: 1,000-1,400 | 2022: 1,600 Undergrounding Considerin
Slide 12: SCE is exceeding many benchmarks established in its 2020–2022 Wildfire Mitigation Plan
SCE is exceeding many benchmarks established in its 2020–2022 Wildfire Mitigation Plan to reduce wildfire risk1 Miles of covered conductor installed since 2018, 1,400+ accounting for ~15% of lines in SCE’s high fire risk areas; plan to install ~6,000 miles by end of 2023 Cameras installed provide vi
Slide 13: SCE's publicly available real-time data enhances situational awareness
SCE’s publicly available real-time data enhances situational awareness and informs critical operational decisions Cameras on ALERT Wildfire Threat Index Emergency Operations Wildfire Network HD Weather Stations Predictive Model Center (EOC) Live HD camera feeds Provide real-time weather Helps fire a
Slide 14: SCE has strong rate base growth driven by electric infrastructure investment
SCE has strong rate base growth driven by significant electric infrastructure investment opportunities SCE forecasts deploying significant capital in …resulting in strong rate base growth over 2021–2023… two rate case cycles Capital Expenditures, $ in Billions Rate Base2,3, $ in Billions ~$16 billio
Slide 15: SCE's long-term growth drivers are aligned with California's public policy goals
SCE’s long-term growth drivers are highly aligned with California’s public policy goals Overarching Goals SCE Growth Drivers Sustained investment required to reach Infrastructure and maintain equilibrium replacement Safe, Reliable, and Replacement rate Affordable Electricity Service Significant inve
Slide 16: EIX track record of meeting EPS guidance and growing its dividend
EIX has a strong track record of meeting or exceeding EPS guidance and growing its dividend EIX has consistently met or exceeded Core EPS guidance… …and has 17 consecutive years of dividend growth2 Core EPS Relative to Guidance Range Dividends per Share (in Dollars) 2004 Exceeded 2005 Exceeded 2.65
Slide 17: EIX and SCE are committed to maintaining investment grade credit ratings
EIX and SCE are committed to maintaining their investment grade credit ratings Long-term Issuer Rating and Outlook1 Investment grade ratings at SCE and EIX, As of February 25, 2021 targeting EIX long-term FFO-to-Debt ratio SCE EIX of 15–17% Moody’s Baa2 Baa3 Total liquidity of $5.4 billion2 Stable S
Slide 18: 2017/2018 Wildfire/Mudslide Events Update
2017/2018 Wildfire/Mudslide Events Update Remaining expected potential losses Resolved approximately 2/3rds of best estimate $ in Billions Settlement progress as a proportion of best estimate Best estimate of potential losses 6.2 Resolved Settlement progress: claims Remaining 34% alleged and Local P
Slide 19: Edison Energy empowers organizations to conquer biggest challenges in energy
Edison Energy empowers organizations to conquer biggest challenges in energy today: Cost. Carbon. Complex Choices. Partners with market leaders to align energy spend with strategic, financial, and sustainability goals Provide independent, Using an integrated approach, provides energy solutions for c
Slide 20: Appendix
Appendix
Slide 21: SCE has delivered 7.2% annualized rate base growth since 2015
SCE has delivered 7.2% annualized rate base growth since 2015, driven by growing capital investment Historical Capital Expenditures Historical Recorded Rate Base1 $ in Billions $ in Billions, Weighted-average basis ~$25.9 billion 2015–2020 7.2% 33.8 5.5 CAGR 30.8 4.8 28.5 26.6 4.4 25.1 23.9 3.9 3.8
Slide 22: The bulk of SCE's investments are in its distribution system
The bulk of SCE’s investments are in its distribution system, consistent with wires-focused strategy SCE forecasts investing $13.7 billion from 2021 to 2023 in its Investments will upgrade and distribution system, ~85% of total ~$16 billion capital plan1 modernize World War II-era $ in Billions infr
Slide 23: Increased energy storage is essential as renewable share expands
Increased energy storage is essential as we expand the share of intermittent renewable electricity sources 690 MW SCE exceeded 2020 Already state-mandated procured or storage target1 installed SCE estimates that California will need 10 GW of utility- 1,360 MW Incremental capacity scale energy storag
Slide 24: CPUC cost of capital mechanism current measurement period
CPUC cost of capital mechanism current measurement period is October 1, 2020 through September 30, 2021 CPUC Cost of Capital Adjustment Mechanism Moody’s Baa Utility Index Rate (%) 6.0 5.5 Mechanism did not trigger 5.0 a change to 2021 ROE Starting Value – 4.50% because average for Dead- 4.5 band pe
Slide 25: SCE Key Regulatory Proceedings
SCE Key Regulatory Proceedings Proceeding Description and Next Steps Base 2021 GRC Tracks 1 and 4 Set CPUC base revenue requirement for 2021–2024 Rates (A.19-08-013) Track 1 decision pending. Track 4 to be filed Q2 2022 Wildfire1 2021 GRC Track 3 Incremental 2020 wildfire mitigation costs and GS&RP
Slide 26: Recent CPUC approvals improve cash flow; pending decisions will generate additional cash
Recent CPUC approvals improve cash flow; pending decisions will generate additional cash $ in Millions Application Approval/ Request1 Additional Information GRC track 2 settlement 391 Settlement approved unmodified; $401 million of approved in Jan. 2021 O&M and reasonableness of $302 million of ca
Slide 27: SCE's 2021 General Rate Case request balances foundational work with public policy goals
SCE’s 2021 General Rate Case request balances foundational work with advancing ambitious State public policy goals In 2021 GRC, SCE GRC addresses major portion of CPUC-jurisdictional revenue requirement requests Test Year for 2021–2024, including operating costs and capital investment revenue requir
Slide 28: SCE's 2021 General Rate Case will be approved in four tracks
SCE’s 2021 General Rate Case will be approved in four tracks over 2021–2023 Estimated timeline for 2021 General Rate Case tracks and milestones1 Opening CPUC SCE Intervenor SCE & Reply Proposed Testimony Testimony Rebuttal Briefs Decision Track 1: 2021–2023 GRC Pending Revenue Requirement Tr
Slide 29: GRC track 1: Represents rate base CAGR of 7.6%
GRC track 1: Represents rate base CAGR of 7.6% over two rate case periods1 SCE’s request would result in 2018–2023 rate SCE requests 2021 revenue requirement base growth of 7.6% increase of ~$1.3 billion4 Rate Base CAGR, 2018–2023 2021 GRC Revenue Requirement, $ in Billions 7.6% 7.6 6.9 6.7 6.4% 202
Slide 30: GRC track 2 update: Settlement allowing recovery of $391 million approved
GRC track 2 update: Settlement allowing recovery of $391 million for wildfire mitigation approved by CPUC GRC track 2 Agreement reached with Cal Advocates, TURN, and SBUA to resolve all settlement reached issues pending in track 2 of the 2021 GRC with intervenors Covers Wildfire Mitigation Plan MA (
Slide 31: SCE's average residential bills lower than national average
SCE’s average residential bills lower than national average because higher rates more than offset by lower usage SCE’s residential usage and …which offset above- Within California, PG&E and bills are lower than national average residential rates that SDG&E’s system average average due to milder refl
Slide 32: SCE's system average rate has grown less than inflation over 31 years
SCE’s system average rate has grown less than inflation over the last 31 years, with some ups and downs along the way SCE’s system average rate has grown at an annualized ~2.2% as compared to local inflation of ~2.4% since 1990 Cents per kWh 25 Los Angeles Area 20 Inflation 15 SCE System Average Rat
Slide 33: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures 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
Edison International — Corporate Update (February 2021) on 6ix