Edison International · NYSE:EIX
Edison International — Investor Presentation (April 2021)
38 slides from Edison International's investor presentation, Apr 28, 2021
Slide 1: Business Update
Business Update April 28, 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
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 20202 Over $800 million in approved funding to expand transportation electrification3
Slide 6: California's regulatory mechanisms provide revenue certainty
5 California’s regulatory mechanisms provide revenue certainty, even as load and payment patterns change Revenue Decoupling means earnings aren’t affected by changes in electricity sales Long-standing regulatory mechanism that breaks the link between retail electricity sales and revenue; promotes en
Slide 7: Reaching California's 2045 GHG goals requires near-complete transformation of energy use
6 Reaching California’s 2045 GHG goals requires a near- complete transformation of energy use economy wide 100% of grid sales with carbon-free electricity 80 GW of utility-scale clean generation 30 GW of utility-scale energy storage 30% of space and water heating to be electrified by 2030 70% of spa
Slide 8: SCE delivered ~43% carbon-free electricity in 2020
7 SCE delivered ~43% carbon-free electricity to customers in 2020 Decarbonizing transportation sector, ~40% of GHG emissions, requires widespread vehicle electrification State’s commitment highlighted by requiring all new passenger vehicles sold to be zero-emission by 2035 and operations of MD/HD ve
Slide 9: Decarbonized, electrified world produces household energy cost savings
8 Annual residential household energy costs (2019$)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 penetr
Slide 10: Significant incremental grid investments required by 2045
9 Significant incremental grid investments required by 2045 to serve load growth and integrate renewables and storage1 April 28, 2021 1. Based on SCE’s Pathway 2045 analysis 2. In 2019 dollars under Balanced Scenario 3. See SCE’s Reimagining the Grid white paper for additional information Source: SC
Slide 11: AB 1054 provides strong regulatory construct for wildfire liability and cost recovery
10 AB 10541 provides a strong regulatory construct for determining wildfire liability and cost recovery April 28, 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 inf
Slide 12: AB 1054 and the Wildfire Insurance Fund provide clear pathway
11 • 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”3 AB 1054 and the Wildfire Insurance Fund provide cl
Slide 13: Wildfire Fund Illustrated
12 Wildfire Fund Illustrated: Eligible claims1 paid by Fund and IOUs reimburse up to cap2 only to degree found imprudent3 April 28, 2021 SCE does not reimburse Fund for eligible claims1 above annual aggregate retention of $1 billion If found 100% prudent3 SCE’s Insurance/ Retention Wildfire Insuranc
Slide 14: Foundational strategy for mitigating wildfire risk continues
13 Foundational strategy for mitigating wildfire risk continues; increased focus on risk-prioritization and customer impacts 2020–2022 Wildfire Mitigation Plan1 Hardening the Grid Covered Conductor ~4,000 circuit miles by end of 2022 2020: 965 | 2021: 1,000-1,400 | 2022: 1,600 Undergrounding Conside
Slide 15: Execution of wildfire mitigation strategy is reducing risk
14 SCE’s execution of its wildfire mitigation strategy is reducing risk of wildfires associated with utility infrastructure April 28, 2021 Community Resource Centers Community Crew Vehicles 56 sites available 8 vehicles available High-Definition Wildfire Cameras Completed Since 2018 166 cameras inst
Slide 16: Progress toward grid hardening and situational awareness targets
15 SCE continues to progress toward its targets for grid hardening and situational awareness measures April 28, 2021 Covered Conductor 6,388 circuit miles Fast-Acting Fuses 13,560 Sectionalizing Devices3 124 Wildfire Cameras 166 Weather Stations 2,175 1. Numbers shown are initial targets for GRC bud
Slide 17: Publicly available real-time data enhances situational awareness
16 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 18: California continues to increase wildfire suppression and prevention investments
17 California has continued to increase investments in wildfire suppression and prevention1 April 28, 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 tank
Slide 19: SCE has strong capex and rate base growth
18 5.5 5.5 5.3 5.4 2020 (Actual) 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 equity return 2. Morong
Slide 20: SCE's long-term growth drivers aligned with California public policy goals
19 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 21: Ongoing and pending cost recovery will strengthen balance sheet
20 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 22: SCE plans to securitize AB 1054 capex and O&M
21 SCE plans to securitize ~$1.6 billion of AB 1054 capex and ~$0.5 billion of O&M upon CPUC approval April 28, 2021 O&M2 Total Costs Cost Recovery Financing Order Issue Recovery Bonds AB 1054 Capex1 File Testimony CPUC Approval File Testimony CPUC Approval GS&RP3 327 – 327 ✓ ✓ ✓ ✓ ✓ GRC Track 2 219
Slide 23: 2017/2018 Wildfire/Mudslide Events Update
22 2017/2018 Wildfire/Mudslide Events Update: More than two-thirds of best estimate has been resolved 1. Thomas Fire, Koenigstein Fire, and Montecito Mudslides 2. After giving effect to approximately $1.8 billion in fixed payments due under settlements executed before March 31, 2021, but not paid at
Slide 24: CPUC cost of capital adjustment mechanism
23 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 Oct. 1, 2019 Apr. 1, 2020 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 t
Slide 25: Track record of meeting EPS guidance and growing dividend
24 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 26: Committed to maintaining investment grade credit ratings
25 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 Outlook1 As of April 20, 2021 Investment grade ratings at SCE and EIX, targeting EIX long-
Slide 27: Edison Energy empowers organizations to address energy challenges
26 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 28: Appendix
Appendix ee FY EDON.
Slide 29: SCE delivered 7.2% annualized rate base growth since 2015
28 SCE has delivered 7.2% annualized rate base growth since 2015, driven by growing capital investment 1. Since 2015, rate base excludes SONGS Historical Recorded Rate Base1 $ 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 201
Slide 30: Bulk of SCE's investments are in distribution system
29 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 $13.7 billion from 2021 to 2023 in its distribution system, ~85% of total ~$16 billion capital plan1
Slide 31: Increased energy storage is essential
30 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 32: SCE Key Regulatory Proceedings
31 SCE Key Regulatory Proceedings Proceeding Description and Next Steps Base Rates 2021 GRC Tracks 1 and 4 (A.19-08-013) Set CPUC base revenue requirement for 2021–2024 Track 1 decision pending. Track 4 to be filed Q2 2022 Wildfire1 2021 GRC Track 3 (A.19-08-013) Incremental 2020 wildfire mitigation
Slide 33: SCE's 2021 General Rate Case request
32 SCE’s 2021 General Rate Case request balances foundational work with advancing ambitious State public policy goals 1. Includes all updates to the GRC revenue requirement filed with the CPUC as of September 29, 2020 2. Includes Wildfire Mitigation Plan Memo Account, Fire Hazard Prevention Memo Acc
Slide 34: 2021 General Rate Case tracks timeline
33 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 ✓ ✓ ✓ ✓ Pending Track 2: 2018–2019 FMA Update2 ✓ ✓ ✓ N/A due to settlement ✓ (Approv
Slide 35: GRC request supported by grid hardening and electrification investments
34 GRC track 1 request supported by investments for grid hardening, wildfire mitigation, and electrification 1. SCE Rebuttal rate base forecast reflects 2021–2023 rebuttal and latest Non-GRC and FERC estimates 2. CalPA rate base forecast assumes CPUC GRC rate base attrition year increases for 2022 a
Slide 36: SCE's average residential bills lower than national average
35 SCE’s average residential bills lower than national average because higher rates more than offset by lower usage April 28, 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 k
Slide 37: SCE's system average rate has grown less than inflation
36 SCE’s system average rate has grown less than inflation over the last 31 years, with some ups and downs along the way April 28, 2021 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 0 5 10 15 20 25 1990 '95 '00 '05 '10 '15
Slide 38: Core earnings non-GAAP definition
37 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
Edison International — Investor Presentation (April 2021) on 6ix