Edison International · NYSE:EIX
Edison International — Corporate Update (July 2021)
43 slides from Edison International's corporate update, Jul 30, 2021
Slide 1: Business Update
Business Update July 30, 2021
Slide 2: Forward-looking statements
1 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 statements. These forward-looki
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 in
Slide 4: EIX is well positioned for a decarbonized future, with no coal or gas LDC exposure
3 EIX is well positioned for a decarbonized future, with no coal or gas LDC exposure and high electric sales growth potential UTY1 EEI Index2 Electric-Only & No Gas LDC Exposure (# of Companies) 6 of 20 11 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 Targeting 100% carbon-free power delivered by 2045; ~43% carbon-free power in 20201 Over $800 million in approved SCE funding to expand transportation electrificat
Slide 6: Thesis: Wires-focused electric utility with regulated rate base growth
5 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 to s
Slide 7: California's regulatory mechanisms provide revenue certainty
6 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 en
Slide 8: Reaching California's 2045 GHG goals requires near-complete transformation of energy use
7 Reaching California’s 2045 GHG goals requires a near- complete transformation of energy use economy wide 100% of grid sales with carbon-free electricity 80 GW of utility-scale clean generation 30 GW of utility-scale energy storage 30% of space and water heating to be electrified by 2030 70% of spa
Slide 9: SCE delivered ~43% carbon-free electricity in 2020
8 SCE delivered ~43% carbon-free electricity to customers in 2020 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 ve
Slide 10: SCE leads the largest utility transportation electrification programs in the U.S.
9 SCE leads the largest utility transportation electrification initiatives and programs in the U.S. $872 $414 $314 $205 $191 $133 $118 EIX PCG ED PEG SRE XEL AGR 1. Low Carbon Fuel Standard. The LCFS program at the California Air Resources Board (CARB) funds SCE’s vehicle rebate programs through the
Slide 11: A decarbonized, electrified world produces energy cost savings for an average household
10 Annual residential household energy costs (2019$)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 penet
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 30, 2021 1. In 2019 dollars under Balanced Scenario Source: SCE’s Pathway 2045 analysis. See Pathway 2045 Appendices for additional information on the analysis and its methodol
Slide 13: AB 1054 provides a strong regulatory construct for wildfire liability and cost recovery
12 AB 10541 provides a strong regulatory construct for determining wildfire liability and cost recovery July 30, 2021 Established safety certification process and additional wildfire safety oversight Under AB 1054, SCE can obtain an annual safety certification upon submission of required safety info
Slide 14: AB 1054 and the Wildfire Insurance Fund provide a ceiling on liability
13 • 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 cl
Slide 15: Wildfire Fund Illustrated
14 Wildfire Fund Illustrated: Eligible claims paid by Fund and IOUs reimburse up to cap only to degree found imprudent1,2 July 30, 2021 SCE does not reimburse Fund for eligible claims1 above annual aggregate retention of $1 billion If found 100% prudent2 SCE’s Insurance/ Retention Wildfire Insurance
Slide 16: Foundational strategy for mitigating wildfire risk continues
15 Foundational strategy for mitigating wildfire risk continues; increased focus on risk-prioritization and customer impacts 2020–2022 Wildfire Mitigation Plan Hardening the Grid Covered Conductor ~4,000 circuit miles by end of 20221 2020: 965 | 2021: 1,000-1,400 | 2022: 1,600 Undergrounding Conside
Slide 17: SCE's execution of its wildfire mitigation strategy is reducing risk
16 SCE’s execution of its wildfire mitigation strategy is reducing risk of wildfires associated with utility infrastructure July 30, 2021 Note: Data as of June 30, 2021. Blue check marks indicate met or exceeded target. Green arrows indicate execution is on track. Community Resource Centers Communit
Slide 18: SCE is making meaningful progress in mitigating wildfire risk
17 SCE is making meaningful progress in mitigating wildfire risk for its customers July 30, 2021 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 line contac
Slide 19: Substantial progress on grid hardening and situational awareness measures
18 SCE has made substantial progress on grid hardening and situational awareness measures July 30, 2021 Investments to harden the grid and enhance situational awareness requested through 2023 Green shading represents completed measures through June 30, 2021, as proportion of GRC request by 20231,2 C
Slide 20: SCE's publicly available real-time data enhances situational awareness
19 SCE’s publicly available real-time data enhances situational awareness and informs critical operational decisions Live HD camera feeds provide critical information to fire agencies for effectively deploying air and ground resources Provide real-time weather data, including wind speed and gust, te
Slide 21: California has continued to increase investments in wildfire suppression and prevention
20 California has continued to increase investments in wildfire suppression and prevention1 July 30, 2021 CAL FIRE budget support along with actions to increase staffing and improve effectiveness ~$2.5–2.8bn/year ~7,180–8,134 Increases to firefighting crews Helicopter replacements continue Air tanke
Slide 22: SCE has strong capex and rate base growth
21 36.3 39.0 41.6 2021 2022 2023 5.5 5.5 5.3 5.4 2020 2021 2022 2023 SCE has strong capex and rate base growth driven by significant electric infrastructure investment opportunities 1. In accordance with Assembly Bill (AB) 1054, ~$1.6 billion of wildfire mitigation-related spend shall not earn an eq
Slide 23: SCE's long-term growth drivers are aligned with California's public policy goals
22 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 Miti
Slide 24: Our Sustainable Financing Framework
23 Our Sustainable Financing Framework underscores the strong link between our strategy and financing activities July 30, 2021 Primary Category1 U.N. Sustainable Development Goals Alignment Green Renewable Energy Clean Transportation Energy Efficiency & Carbon Reduction Climate Change Adaptation Soc
Slide 25: Ongoing and pending cost recovery will strengthen balance sheet and credit metrics
24 Ongoing and pending cost recovery will further strengthen balance sheet and credit metrics Approved Application Approved Amount1 Expected recovery mechanism/timing ✓ GRC Track 2 Jan. 2021 391 Securitization of O&M and AB 1054 capital2 ✓ WEMA1 Sept. 2020 505 Currently in rates. Complete by Oct. 20
Slide 26: SCE plans to securitize ~$1.6 billion of AB 1054 capex and ~$0.5 billion of O&M
25 SCE plans to securitize ~$1.6 billion of AB 1054 capex and ~$0.5 billion of O&M upon CPUC approval July 30, 2021 O&M Total Costs2 Cost Recovery Financing Order Issue Recovery Bonds App # Proceeding/ Category AB 1054 Capex1 File Testimony CPUC Approval File Testimony CPUC Approval 1 GS&RP 327 – 32
Slide 27: 2017/2018 Wildfire/Mudslide Events Update
26 2017/2018 Wildfire/Mudslide Events Update: Less than 23% of best estimate remains July 30, 2021 SCE continues to make substantial progress resolving claims Remaining expected potential losses, $ in Billions 6.2 1.4 Best Estimate of Total Losses Remaining Expected Potential Losses (At 6/30/2021) L
Slide 28: 2021 GRC track 1: CPUC's proposed decision
27 2021 GRC track 1: CPUC’s proposed decision supports critical investments and provides foundation through 2023 July 30, 2021 PD would support rate base growth of ~6% over GRC track 1 period2 Total company rate base2, $ in Billions 35.7 38.0 40.0 2021 2022 2023 Capex under PD-authorized levels woul
Slide 29: SCE's opening comments on covered conductor program scope
28 SCE’s opening comments focus on addressing covered conductor program scope and other critical issues July 30, 2021 SCE’s opening comments will note several areas that, if corrected, would result in a balanced final decision PD’s cuts to wildfire covered conductor program are inappropriate Propose
Slide 30: CPUC cost of capital adjustment mechanism
29 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 Oct. 1, 2020 Apr. 1, 2021 Oct. 1, 2021 CPUC cost of capital mechanism current measurement period is October 1, 2020 through September 30, 2021 ROE adjustment based on 12-month average of Moody’s Baa utility bond rates, measured October 1 to September 30 If index ex
Slide 31: EIX has a strong track record of meeting EPS guidance and growing its dividend
30 EIX has a strong track record of meeting or exceeding EPS guidance and growing its dividend 0.80 2.65 2004 2021 7.3% CAGR …and has 17 consecutive years of dividend growth2 Dividends per Share (in Dollars) 1. EPS guidance was not provided in 2012 or 2018 because of the timing of final decisions in
Slide 32: EIX and SCE are committed to maintaining investment grade credit ratings
31 EIX and SCE are committed to maintaining their investment grade credit ratings SCE EIX Moody’s Baa2 Stable Baa3 Stable S&P BBB Negative BBB Negative Fitch BBB- Stable BBB- Stable Long-term Issuer Rating and Outlook As of July 28, 2021 Investment grade ratings at SCE and EIX, targeting EIX long-te
Slide 33: Edison Energy empowers organizations to conquer biggest challenges in energy
32 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, expert advice and services Using an integrated approach, p
Slide 34: Appendix
Appendix ee FY EDON.
Slide 35: SCE has delivered 7.2% annualized rate base growth since 2015
34 SCE has delivered 7.2% annualized rate base growth since 2015, driven by growing capital investment Historical Recorded Rate Base $ in Billions, Weighted-average basis Historical Capital Expenditures $ in Billions 3.9 3.5 3.8 4.4 4.8 5.5 2015 2016 2017 2018 2019 2020 23.9 25.1 26.6 28.5 30.8 33.8
Slide 36: The bulk of SCE's investments are in its distribution system
35 The bulk of SCE’s investments are in its distribution system, consistent with wires-focused strategy Investments will upgrade and modernize World War II-era infrastructure SCE forecasts investing $13.6 billion from 2021 to 2023 in its distribution system, ~85% of total ~$16 billion capital plan1
Slide 37: Covered conductor has reduced faults that could lead to ignitions
36 On segments where SCE has installed covered conductor, there has not been a CPUC-reportable ignition from contact with objects or wire-to-wire contact July 30, 2021 Covered conductor has reduced faults that could lead to ignitions1 Faults per 100 circuit miles on HFRA Circuits in 2021 Since incep
Slide 38: Increased energy storage is essential as renewable share expands
37 Increased energy storage is essential as we expand the share of intermittent renewable electricity sources SCE estimates that California will need 10 GW of utility- scale energy storage by 2030 and 30 GW by 2045 to support the transition to 100% carbon-free power 690 MW Already procured or instal
Slide 39: SCE Key Regulatory Proceedings
38 SCE Key Regulatory Proceedings Proceeding Description and Next Steps ($ in Millions unless otherwise noted) Base Rates 2021 GRC Tracks 1 and 4 (A.19-08-013) Set CPUC base revenue requirement for 2021–2024 Track 1 PD can be voted on as soon as Aug. 19. Track 4 to be filed Q2 2022 CSRP Track 1 (A.2
Slide 40: SCE's 2021 General Rate Case will be approved in four tracks
39 SCE’s 2021 General Rate Case will be approved in four tracks over 2021–2023 SCE Testimony Intervenor Testimony SCE Rebuttal Opening & Reply Briefs CPUC Proposed Decision Track 1: 2021–2023 GRC Revenue Requirement ✓ ✓ ✓ ✓ ✓ Track 2: 2018–2019 FMA Update1 ✓ ✓ ✓ N/A due to settlement ✓ (Approved) Tr
Slide 41: SCE's average residential bills lower than national average
40 SCE’s average residential bills lower than national average because higher rates more than offset by lower usage July 30, 2021 …which offset above- average residential rates that reflect a cleaner fuel mix, higher cost of living, and lower system utilization Average Residential Rate, Cents per kW
Slide 42: SCE's system average rate has grown less than inflation over 31 years
41 SCE’s system average rate has grown less than inflation over the last 31 years, with some ups and downs along the way July 30, 2021 SCE’s system average rate has grown at an annualized ~2.3% as compared to local inflation of ~2.4% since 19901 Cents per kWh 0 5 10 15 20 25 1990 '95 '00 '05 '10 '15
Slide 43: Core earnings non-GAAP definition
42 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