Operator:

Good afternoon, and welcome to the Edison International Second Quarter 2024 Financial Teleconference. My name is Julie, and I will be your operator today. [Operator Instructions] Today's call is being recorded. I would now like to turn the call over to Mr. Sam Ramraj, Vice President of Investor Relations. Mr. Ramraj, you may begin your conference.

Pedro Pizarro :

Thanks a lot, Sam, and hello, everyone. Edison International's core EPS for second quarter 2024 was $1.23 bringing year to date core EPS to $2.37. With this strong start to first half of the year, we are confident in reaffirming our 2024 core EPS guidance of $4.75 to $5.05. Based on the progress in SCE's 2025 General Rate Case, including many partial settlements, we are also confident in getting a strong outcome for customers. The funding authorized in the GRC to continue making investments in a reliable, resilient, and ready grid is the linchpin for achieving our 2025 EPS guidance and delivering a 5% to 7% EPS CAGR through 2028. My remarks today include four important insights

Sam Ramraj:

Julie, please open the call for questions. As a reminder, we request you to limit yourself to one question and one follow-up, so everyone in line has the opportunity to ask questions.

Michael Lonegan:

Obviously, you've reached a partial settlement in the GRC representing 19% of O&M and 8% of the capital request, certainly a positive development, but still a good amount not settled on. Just wondering how you're thinking about the key debates remaining and what gives you confidence in a constructive final decision?

Maria Rigatti:

I'd like to say the proceeding is still on track from a time perspective. We have been able to settle these areas that are noted in the materials. That means that, we can focus on a narrow and narrow set of issues. But again, Pedro's point, at the end of the day, the proposals that the interveners put into the proceeding at this point still tied to -- and are consistent with the lower end of our range. I think we have a lot of opportunity here to do something that's beneficial to customers.

Maria Rigatti:

So Michael, I think our team is -- I think you noticed we were in the planning phase for a plan that's going to be submitted shortly. The team will need to look and continue to evaluate the precise plans that our customers are bringing forward to us, and that will allow us to then lay out when the investments will come back into the capital plan and then come back into rate base. To the extent that we see these things materializing within the GRC cycle, we do have the ability to reprioritize capital. We've mentioned that before, and we have built flexibility into the rate case. And then beyond that, we'll look at other mechanisms that allow us to file separate applications and there are a number of avenues that we could pursue. But Steve, you've been working with the team on the plan. So Steve, do you want to jump in?

Operator:

Our next question comes from Shar Pourreza with Guggenheim Partners.

Pedro Pizarro:

Hey, Shar, this one, as you can imagine, it's a live proceeding. And we really can't comment on potential settlements beyond just saying that we're certainly open to that and always willing to engage with parties. And we think the team did a strong job and showing their prudency. But I don't think we're in a place where we can comment on specific elements of the case at this point. Apologies for that.

Shar Pourreza:

Okay, perfect. We'll look for that. And then just -- and obviously you noted a small buyback program basically focused on share-based comp. How are you thinking about maybe capital allocation in light of the legacy wildfire claims recovery if that recovery potentially over equitizes relative to your credit targets – your metrics?

Operator:

Our next question comes from Nick Campanella with Barclays.

Maria Rigatti:

Nick, it's Maria. We're very confident in our guidance. We've reaffirmed it. I think that over the course of the year, different quarters have events that happen within them. We are very confident in our guidance and we think we're right on track.

Maria Rigatti:

Nick, I think that really depends when the capital comes in and when we have to make the investments. As I said, we have that 15% to 17% FFO-to-debt financing framework that we work towards and where we are in that range will dictate, whether we can continue to use our existing financing plan or if we need to do anything beyond that. We will, of course, as Steve pointed out earlier, we could re-prioritize some of the spending within our GRC. We have some flexibility there and we've actually noted that in our GRC, or we could go beyond that and look at some other mechanisms to also get cost recovery on a timely basis as well.

David Arcaro:

Maybe a quick clarification on load growth. I was just wondering, is that already faster than what you were thinking last quarter? You mentioned the 2% to 3% load growth in the near-term through 2028 and then accelerating above 3% beyond that. Are you now thinking that it's kind of higher within that range or even faster than you were just previously thinking?

Steve Powell:

I would just add that -- so I'd say first, particularly the new customer demand, the specific project, certainly gives a lot more certainty to the need for the investments on the front end and during the GRC cycle. I would want to note that the 2% to 3% we're talking about that you heard last time, that's about the total energy, the kilowatt hour growth. This demand is the specific local capacity needs of customers. And so this is really driving the infrastructure the distribution level sort of upgrades as opposed to the total energy consumption that's happening. Now those can head in the same direction. So I think this does bolster the view around the 2% to 3%. But at this point, we don't see it driving it well out of that range in the near term.

Pedro Pizarro :

Yeah. And David, I'll start with maybe a big picture comment and Steve may have more to add here as well. At the highest level, if you go back to our count on to 2045 white paper, we see this need for California to be adding significant amounts of large scale renewables and other clean resources. And so at one level, what the CPUC is doing in this proposal is to start filling in the blanks in terms of some of the near and midterm procurement. The team is still going through the details of that, right? And some things we want to look at are relative timing, what's the likelihood of the technology developing and frankly that development being feasible within the time frames that the PUC has laid out. So more to come on that as our team evaluates what the PUC put out. But directionally, we certainly see the need to develop a whole host of resources in order to meet the demand that's coming. Steve?

Operator:

Our next question comes from Ryan Levine with Citi.

Maria Rigatti:

Yes. When we file the application, we are going to lay out of course the cost of the system, but also really importantly we're going to lay out the benefits, because that is really going to be a big component. The NextGen system will be, of course, related to the financial reporting aspect of the business, but also has a lot to do with work management and becoming more efficient in that regard. There'll be a lot of benefits that we can talk through when we file our application. In terms of whether or not it competes with load growth, we need to build out the infrastructure to meet the demand that we're seeing from our customers, but we also need to run an efficient T&D operation and do the financial statements appropriately, as you appreciate. I don't think they're in competition with each other. Also, I think it's really related to the point that Pedro made earlier in his prepared remarks about where we see the system average rate going over the next several years. When you get a chance to look at the materials, you'll be able to see that, those rate increases are consistent with inflation and we have built in our entire GRC request, the NextGen application, the AMI application and 100% cost recovery on 1,718 wildfire claims. With all of that, we are still consistent with our patience of SAR forecast.

Pedro Pizarro:

One way that I think about it, Ryan, is that, we have -- we really are being driven, open intended, in California by the state's requirements and targets for EVs, for having net-zero vehicles by 2035, et cetera. That really in some sense sets the demand picture, because that's the binding constraint. Where the federal government comes in is in a couple of ways. One is, certainly the incentives that are being provided by the Inflation Reduction Act are really helpful in lowering the ultimate cost of the transition to consumers. Certainly, both as Edison and jointly the industry as EEI are very focused on preserving those IRA benefits regardless of what administration we have next in Washington. That's a message that we've been carrying already really forcefully. I think fortunately, with you although you might hear some comments from some camps about potential reversal of the IRA, I think in general, you're hearing -- understanding that those benefits are really flowing across all states, both more red states and more blue states. In fact, probably the majority of benefits are flowing to red states right now. I think there's a sense that they're having an impact in the economy. We're hopeful that, our customers will continue to benefit from those incentives, but at the same time, we see a commitment in California to the transition that is unwavering regardless of federal support. The other federal touch point here, of course, is the clean air provisions in California's favor. And so that's the other element to watch in all of this. But again, I don't see California shifting its focus away from encouraging the adoption of electric vehicles. Does that help with the question?

Anthony Crowdell:

Hey. I just have a quick one, and I -- you may not want to answer it. It's kind of in the line of the one Shar was asking earlier. Just, how should we interpret on the TKM recovery? How do we interpret just only Cal Advocates file testimony? Could we look at it as similar to like a GRC when the rest of the parties may not sign on to sometimes they don't sign on to a settlement, they don't object. I'm just wondering what's the best way to interpret that?

Anthony Crowdell:

Great. That’s all I had. Congrats on a good quarter.

Pedro Pizarro:

Yeah, thanks, Anthony.

Sam Ramraj:

Thank you for joining us. This concludes the conference call. Have a good rest of the day. You may now disconnect.

Operator:

Good afternoon, and welcome to the Edison International First Quarter 2024 Financial Teleconference. My name is Missy, and I'll be your operator today. [Operator Instructions] Today's call is being recorded.

Sam Ramraj:

Thank you, Missy, and welcome, everyone. Our speakers today are President and Chief Executive Officer, Pedro Pizarro; and Executive Vice President and Chief Financial Officer, Maria Rigatti. Also on the call are other members of the management team.

Pedro Pizarro:

Well, thank you, Sam, and good afternoon, everyone. Edison International's core EPS for first quarter 2024 was $1.13. We are pleased with our start to the year, and we are confident in affirming our 2024 core EPS guidance of $4.70 to $5.05. We also remain confident in delivering on our long-term EPS growth targets of 5% to 7% for 2021 through 2025 and similarly for 2025 to 2028.

Sam Ramraj:

Missy, please open the call for questions. As a reminder, we request you to limit yourself to one question and one follow-up. So everyone in line has the opportunity to ask questions.

Nicholas Campanella:

I guess just to start with the charge. I guess it's good that we move past this kind of mediation program deadline, but you did highlight an unfavorable litigation environment and settlements kind of exceeding previous estimates. Can you just maybe kind of talk about your confidence level that we wouldn't see another kind of revision higher here as we get to the third quarter and knock out that remaining $800 million. Is this the kind of last remaining revision in your mind? Or how should we kind of think about as you kind of progress to that third quarter deadline?

Maria Rigatti:

And maybe, Nick, just one other thing to underscore Pedro's comment about completion, driving final certainty. I'll point out two numbers that we've already said today on the call, individual plaintiffs are the largest component of what's going on here. 97% of the TKM individual plaintiffs have been settled and 86% of the Woolsey individual plaintiffs have been settled. So that's really what's driving us to also comment that we're on track for a Q3 filing for Woolsey Cost recovering.

Maria Rigatti:

Sure. I think the latest report that I've seen from S&P actually has is just over 14% FFO to debt. So inside or above their downward rational range, 15% to 17% FFO to debt is still our objective. The financing plan that we provided last quarter and that we have, again, in the materials for this quarter is consistent with moving into that range over the next several years. We're making good progress on that as we continue to get claims put behind us but also as we continue to recover those minimal accounts, $4 billion over the last three years, $2 billion more through 2025. That, plus the growing rate base and the ability to earn on that and depreciation, et cetera, that's really moving us through that. And we tested a lot of different scenarios, and that's how we came up with $100 million of equity every year through 2028.

Michael Lonegan:

On the best estimate of losses for Woolsey, you spoke about a limited number of plaintiffs that have received extensions. Just wondering if you could share more detail about that, the kind of visibility you have into that because obviously, those losses would probably be harder to estimate.

Maria Rigatti:

Sure. So we are expecting that the next-gen ERP application late 2024 and that the AMI, the smart meter application would be in 2025. Across the two of them, a couple of billion dollars in capital. As we think about financing for those additional or incremental capital requirements, we're really going to -- obviously, SCE will always finance in accordance with its authorized capital structure. And we'll see where we are in terms of our credit metrics. As I said, we're growing strongly into our credit metric range. And as long as we can stay in that range, we'll be minimizing the amount of equity that would otherwise be required for those incremental capital opportunities.

Gregg Orrill:

Just wondering if there's anything to be watching for in terms of trends on transmission CapEx through the Cal ISO planning process or otherwise that you're thinking about?

Jeremy Tonet:

Just want to start off with, I guess, a broader question. And just with summer approaching, can you provide an update on buyer conditions you're seeing across your territory right now? And I guess, overall expectations into the season given all of the derisking has been accomplished over time?

Pedro Pizarro:

And using new technologies at it, right? So it was nice since you said, Maria, to have S&P recognized that. Think about PSPS. That has been an important tool, but now it only accounts for something like 10% of our overall risk reduction. And we continue to look for ways to refine that and minimize the potential impact to customers.

Jeremy Tonet:

Got it. That kind of hits my second question, but maybe just to continue with that. On the national level, do you see movement in D.C.? And could we actually get policymakers moving in that direction to develop something that comprehensive but nationwide approach here? Just wondering given how divisive politics are today if you think that could actually be a motion at some point?

Steven Powell:

I'd just say right now, we've been really focused on education about how the risk is evolving and the mitigations that the industry is taking to manage the physical risk itself. In terms of the financial risk, I think there's -- I know that different states are approaching it in different ways. We'll look for ways that you can combine what's being done at the state level with potentially complementary efforts at the federal level. Some of the things that I know there's interesting on the Hill is in things like being able to remove timber. And there's lots of tactical things around permitting and allowing utilities to effectively do streamline the process to get their work done in high-fire areas. In terms of more of the financial solution, again, I think that's there's a lot of work to be done even just to shape what the ask is and it will take some time, but it's most likely to be some combination of state solutions with potential at the federal level.

Maria Rigatti:

Right now, the deadlines are all over the next couple of months, but we'll keep you posted.

Ryan Levine:

Maybe interested in terms of the cost structure, it looks like your O&M numbers ticked up year-over-year in your footnotes points inspection and maintenance costs being higher this quarter. Is there anything to read into that? Or any color you could share around what's driving some of the escalation on your costs?

Ryan Levine:

And then in terms of wildfire mitigation plans more broadly to the extent that this becomes the more national initiative for utilities around the country? Are there opportunities to streamline maybe the cost of implementation or any iterations that you can anticipate as it becomes more of a nationwide phenomenon?

Sam Ramraj:

Thank you for joining us. This concludes the conference call. Have a good rest of the day. You may now disconnect.

Operator:

Good afternoon. And welcome to the Edison International Fourth Quarter 2023 Financial Teleconference. My name is Sheila, and I will be your operator today. [Operator Instructions] Today's call is being recorded. I would now like to turn the call over to Mr. Sam Ramraj, Vice President of Investor Relations. Mr. Ramraj, you may begin your conference.

Pedro Pizarro:

Well, thank you, Sam. And good afternoon, everyone. Thanks for joining us. I am pleased to report that Edison International’s core EPS for 2023 was $4.76, which was above the midpoint of our guidance range despite the pending CEMA decision shifting into 2024. This strong performance demonstrates our ability to manage the business and extends our track record of meeting annual EPS guidance over the last two decades, as shown on page 3. Today, we are introducing 2024 EPS guidance of $4.75 to $5.05. This range incorporates a planned investment in O&M for reliability-focused activities and redeploys savings from prior years into operational excellence initiatives. This spending will benefit customers and therefore shareholders in the long run. I also reaffirm the strong confidence we have in our long-term EPS growth targets of 5 to 7% for 2021 through 2025, and 2025 through 2028. Maria will discuss our financial performance and outlook later on the call. Page 4 shows our accomplishments in 2023. First, we once again delivered on our annual EPS guidance. Second, SCE exceeded its wildfire mitigation plan target to install 1, 100 circuit miles of covered conductor, bringing the total to more than 5, 580 in just five years. We are proud of this progress, which, combined with enhanced vegetation management, asset inspections, and other programs, has significantly reduced the need for public safety power shutoffs. Incorporating this progress into the independent wildfire risk model managed by Moody’s RMS, you can see on page 5 that SCE has achieved 85% to 88% risk reduction as compared to pre-2018 levels. Third, SCE filed its cost recovery application for the TKM events, requesting $2.4 billion. SCE provided a compelling case that it prudently designed, managed, and operated its equipment, and that the associated costs were reasonably incurred. Lastly, we raised our annual dividend by 5.8%, reflecting the board and management’s continued confidence and commitment to delivering on our EPS growth targets. Our dividend yield is in excess of 4% and remains a key component of our total return proposition. This marked the 20th consecutive annual increase in Edison International’s dividend. Page 6 provides an update on the 2017 and 2018 wildfire resolution and our approach for 2024. I would like to emphasize three takeaways. First, SCE continues to make solid progress and overall claims are settling in line with expectations. SCE revised the best estimate of total losses upward by $65 million, with the majority of this based on a single settlement. The deadline in the Woolsey settlement protocol to provide complete claims packages was yesterday and SCE is now evaluating the responses. Second, the utility targets resolving more than 90% of Woolsey claims and filing the cost recovery application in Q3. Third, CPUC President Reynolds issued the scoping memo earlier this month for the TKM proceeding, which largely adopts SCE’s framing of the issues. We are encouraged by this ruling because the issues will be handled in a single phase, allowing for a final decision as soon as Q1, 2025. Also, the schedule provides an opportunity for parties to submit a settlement agreement. I would like to remind you that our financial assumptions for 2025 and beyond do not factor in the cost recovery applications, which would represent substantial value for the company and SCE’s customers. Page 7 summarizes the key management focus areas for 2024. On the wildfire mitigation front, SCE plans to install an additional 1, 050 miles of covered conductor in 2024, after which this program will start to ramp down. By the end of next year, SCE will be approaching a significant milestone, 90% hardening of its total distribution lines in its high fire risk area. You can see this depicted on page 8. Also, SCE will continue its GRC advocacy for funding critical investments that will enable efficient electrification and the state’s clean energy transition. I want to emphasize that distribution grid investment accounts for more than 85% of SCE’s capital plan, and these investments are crucial for ensuring reliability, resiliency, and readiness. The CPUC has consistently approved this type of spending in previous GRCs, reinforcing our confidence in SCE’s request. As for the legal and financial categories, I just discussed our legal approach, including filing the Woolsey application in the third quarter, and Maria will discuss our financial targets shortly. We at Edison are equally focused on the long term. As we have highlighted in several industry-leading white papers, the grid will be a key enabler for realizing California’s pathway to net zero. To get there, it will be critical to rapidly expand the high-voltage transmission system and localized distribution networks that serve customers. This aligns well with the underlying drivers of our investment outlook. As more and more vehicles and buildings are electrified, the electricity demand will increase by 80% over the next 20 years, which will benefit customer affordability through a 40% decrease in their total energy costs across electricity, gasoline, and natural gas. After years of flat demand, SCE is projecting an uptick in electricity usage of about 2% annually over the coming years. To accelerate the development of new markets over time, SCE has developed innovative proposals, including its nation-leading suite of transportation electrification programs. Recently, although the CPUC denied SCE’s building electrification application due to their near-term affordability pressures, it acknowledged SCE’s leadership in proposing programs to accelerate much-needed building decarbonization. The utility will continue to evaluate the results of other building electrification pilots it has in progress and look for different ways to support the state in advancing its clean energy priorities. Another area where we continue to innovate is building our digital and AI capabilities to drive greater efficiency. We are investing in technologies to improve our data analytics skills to enhance decision-making and strengthen operational excellence. For example, we are using generative AI to improve inspections, customer experience, and grid planning. Today, our team is also using AI for research, workflow automations, and code development. In SCE’s customer service operations, AI is enabling call center agents to retrieve information faster, performing speech and sentiment analytics, and supporting billing operations. We will continue this proactive approach to capture value using new technology. To conclude, our operational agenda is driven by safety first, reliability, affordability, and resiliency in our overall utility operations, including SCE’s wildfire mitigation and industry leading covered conductor program. Our financial agenda is very clear, deliver on our 2024 EPS guidance and achieve our EPS target for 2025. Our team and I are very committed to executing strongly and we will continue to share our progress with you. And with that let me turn it over to you Maria for her financial report.

Sam Ramraj:

Sheila, please open the call for questions. As a reminder, we request you to limit yourself to one question and one follow up so everyone in line have the opportunity to ask questions.

Shar Pourreza:

Can you hear me now? Sorry about those little technical issues. Pedro, just wanted to start off on the components of the ‘24 drivers, in particular maybe that $0.15 to $0.20 cents of O&M reinvestment. When you reference redeploying the savings in the future, would that be one for one with the $0.15 to $0.20? And I guess what timeframe would that impact?

Maria Rigatti:

Yes, Shar, I think Pedro captured a lot of it in that response. I'd also focus on the fact that the spending that we're doing, the reinvestment that we're doing, we talk a lot about affordability, but we also talk a lot about reliability for our customers. So you're seeing us put the money to work in reliability efforts, so grid remediation, generation, as well as the operational excellence initiatives that will provide value over a long-term period. So I think it's those things that we're really focused on in 2024. And you'll continue to see us make those investments as we move forward.

Maria Rigatti:

Sure. So as you know, we are not assuming any recovery in our long-term EPS forecast. We have submitted a very compelling case, and you know we're making progress and have the scoping memo now, but we haven't incorporated anything there in terms of the benefit. We have provided interest rate assumptions. We don't really have -- we have some refinancings in ‘24. As I mentioned earlier, we only have $300 million of refinancings coming due in 2025, but the interest rate forecast that we have today embedded there is pretty consistent with what we're seeing. So as we continue down that path, we'll just be providing sort of quarterly updates on the activity around the cost recovery application.

Steve Fleishman:

Hi. Good afternoon. Hi there. Hi, Pedro. So the -- just wanted to -- you talked in the past about the kind of higher cost of capital would be, why that would be offset with likely reinvesting the business and the likes. So just as we look at the guidance for ‘24, and I guess ‘25, could you just kind of go back to that prior comment and have a think of it from that standpoint?

Steve Fleishman:

Okay. Thank you. Just one follow-up. You mentioned the FERC transmission projects that are not in your plan. Kind of when would we have a sense of whether you're likely to get those and would they kind of become part of your plan?

Pedro Pizarro:

And, Steve, I think a reminder beyond those projects that have been identified by ISO, to go back to our countdown to 2045 white paper from last year as we looked across all of California, we see this continued need to invest in the grid over the long term through 2045 with the pace of transmission of issues needing to be 4x statewide what it's been historically and the pace of distribution of issues needing to be 10x what it's been historically. So we see a lot of work for the utility in the two decades ahead. Great.

Nick Campanella:

Hey, thanks a lot for taking the questions and all the updates today. Hey, good afternoon. Especially the EPS bridge, I just had a question on that. Just the $0.30 of true-up in the ‘25 EPS bridge, is that just very unique to ‘25, or does any of that kind of continue through ‘26? Because I just notice a lot of programs and true-ups outside of traditional GRC. Thanks.

Nick Campanella:

Okay, I appreciate the color, that's helpful. And then I guess just a little bit of a follow-up on Steve's question, just thinking through as you wrap in some of these upside factors to the plan, just what's the type of balance sheet capacity that you have to do that and to stay in higher CapEx, and how do we think about incremental equity funding, if at all?

Operator:

Our next question will come from Anthony Crowdell with Mizuho.

Maria Rigatti:

So it's probably not either exactly, Anthony. Basically,

Maria Rigatti:

It's a third choice. We have some maturities that are coming up in 2024. So that's built into the ‘24 number. Obviously also built into the ‘25 number. Also as we continue to settle claims, the way we've modeled this is that we will be substantially complete with that by the end of 2024. And so you're really not seeing big increases in the debt. There is a maturity that will have to be refinanced in 2025, but it's only $300 million. So those are the drivers for why the number stays pretty constant and we would expect that as we get closer and closer to the end.

Pedro Pizarro:

What I said was that the majority of it was from one claim, Anthony. And what we're seeing is that as we went to that, it was one claim and then I think just a small number of other claims made up the balance of that. We're seeing that our research modeling continues to be robust, but we had a couple unique outliers that required an adjustment this time.

Michael Lonegan:

Hi. Thanks for taking my question. I'm planning to ask that to related to the tower attachments. Just wondering what your expectation is on when a scoping memo will be issued, and if you could comment on the level of interest you're seeing from potential buyers, and do you still expect to receive proceeds in ‘24 and into ‘25.

Michael Lonegan:

Great, thank you. And then secondly from me, just a general question. You've highlighted that by the end of 2025, you expect 90% of your distribution lines that are located in high-fire risk areas to be hardened and have said that wildfire mitigation spend is stabilizing. My question is, I would think, presumably there are areas that are not currently categorized as high-risk that could potentially become high-risk over the long term. Things seem to be evolving pretty quickly. I was just wondering, have you done analysis or do you have plans to do proactive work on areas that could emerge as high-risk in the event that they develop that way faster than expected?

Operator:

Next, we will hear from Ryan Levine with Citi.

Pedro Pizarro:

Yes, and I'd say I'm getting perspectives of that on that not only for my EDI colleagues, but as I engage with CEOs across the economy, right? The Business Roundtable, Business Council. It is a big topic for everybody, a big focus area. I think this is a long-term opportunity, Ryan, and we're really excited about it. I feel proud that Edison, I think it's one of the early movers, certainly in our sector. And so the kinds of examples you heard me describe where we had some pilots, we've moved from pilots to actually implementing permanent additions to things like what I mentioned in the Customer Call Center support. It's a real long-term efficiency opportunity, but we're still very early days, right? And so handicapping, I know it's going to be significant. How quickly can they really get deployed? How quickly does the technology mature? Pitting that in against more specific cost estimates. I think this is something we will continue to see in probably at least a next two or three rate cases over time at SCE. So there's going to be a curve to that. And we're moving quickly with the pieces we're working on right now. We're seeing impact from them, but it will take a while for that to mature into long-term savings where we can say, here's X cents in EPS that's coming from that, or here's the millions of dollars that we're able to save customers in a future rate case.

Maria Rigatti:

Ryan, I'm just going to say that the CAISO has all of our information, and we'll let them go through it before we make a lot of detailed statements about our bid.

Operator:

Our next question will come from Angie Storozynski with Seaport.

Maria Rigatti:

Sure. So we did provide sort of a bridge between 2024 midpoint to 2025 midpoint. And I think the way that we've discussed the cost of capital mechanism before is that it is, it triggered because of the interest rate environment. And so we view it as, in part, a hedge against interest rate movement. We also view it as an opportunity to make investments. And those investments could be purely around creating longer-term affordability, which then provides more opportunity to invest in rate-based, but also around reliability, which we know is a top focus for our customers as well as for our regulator. If you think about what we've updated for 2025, we took the rate-based update that's associated with the cost of capital mechanism. We also took a look at where interest rates had moved, which is, again, the hedge, the other part of the cost of capital is on the expense side. And we updated our cost excluded from authorized. Those movements were largely related to wildfire claims debt. That's stabilizing, of course, post-2024, but you can see that we've updated that. We looked at the operational variances again as well, and we've seen that those are pretty much flat year-over-year, a little bit of an increase year-over-year with 2024, so in line with historical levels. Obviously, as Pedro noted, we're working on a lot of different operational excellence efforts. And so we're going to continue to make those investments so that ultimately, we get more of those benefits out on the other side. But those are the ways that we thought about the update to 2025 and really wanted to highlight that if you look at 2024 and then you look at 2025, it's that rate-based growth that is driving earnings. And that is ultimately in the long term, the earnings growth trajectory for the company is always going to be tied to rate-based growth. And so I think that really clarifies sort of the stability and the foundation for our long-term earnings trajectory.

Maria Rigatti:

Right. So I think we've been really explicit. I think there's even a chart that shows the progression, even from 2001 to 2025, in terms of what that earnings drag is related to the wildfire debt. Not trying to mask anything at this point. We've laid out the maturity schedule that we have related with wildfire debt. We've incorporated, we basically, as I noted earlier, we've assumed that we will be pretty much done with the wildfire claims payments by the end of this year. And so all of those amounts, plus the refinancings that we'll do this year and next year, are baked into that number. So I don't think that we're talking about anything that is sort of an area where you would see something unexpected happen. We haven't incorporated, we're talking a little bit about offsets and the like. We have not incorporated any benefit from the cost recovery application and recovery of those claims payments. So there is nothing that would eat into that $0.61 in a negative way. Cost recovery obviously creates a benefit because then that interest expense would be offset by authorized revenue. So it actually, I think, in terms of your question, would go the other way.

Maria Rigatti:

Well, we are comfortable. We have a black box settlement. Our settlement doesn't have references to the CAISO ADR or the like. So that 10.3 is the number that we have. Interveners can ask us at this point to go in and file another rate case or another FERC formula rate case. They haven't done so to this point. Obviously, interest rate -- the interest rate environment is significantly different than the last time that we settled the case. So I guess there's potential risk on both sides, right?

Jeremy Tonet:

Hi, good afternoon. Hi, just wanted to come back to an earlier point. Apologies if I missed it here, but with regards to the ‘25 bridge and the prior spending true-ups of $0.37, is that a number that recurs going forward or should we expect in ‘26 to that to drop off?

Jeremy Tonet:

Got it, that's helpful. Thank you for that. And another smaller point, if you will, just turning to slide 26 and looking at the 2025 core earnings per share component ranges and the SCE costs excluded from authorized. It seems like that goes up by a quarter or so versus ‘23. And I was just wondering what would be some of the drivers there? It looks like the industry assumption was unchanged. So just wondering component feeding into that.

Jeremy Tonet:

Sorry, just to clarify there, I didn't mean versus ’23, versus the prior ‘25. I think that number changed.

Operator:

Our next question will come from Gregg Orrill with UBS.

Maria Rigatti:

So, Greg, we, as you know, every quarter take a look at all of the information that we have and then tie that back to what we think about our best estimate. The process that you just referred to ended yesterday, the team is in the process now of evaluating all of the responses that have been submitted. And so, over the course of the next quarter, we'll be taking a look at that and we will update folks as we get through that onto the next earnings call.

David Arcaro:

Oh, hey there. Thanks so much. Let me see. I want to get your perspective on the building electrification proposal. I guess, how are you positioning that type of an opportunity? Is that something that you could approach in a different way, refile in the future, look for maybe different strategy or funding or affordability considerations just as you look at maybe other strategies for investing in building electrification going forward?

David Arcaro:

Yes, that's the helpful perspective, doesn't seem like the opportunity goes away.

David Arcaro:

Right, yes, make sense. No great and then I guess my only other kind of lingering question here maybe I'll have to follow up separately but just on that cost excluded from authorized sorry Marie to go back to this but just are there any other moving pieces in that $0.25 versus the last slide deck. Did the amount of wildfire claim debt go up meaningfully? I would have thought that was not changing too much kind of quarter-to-quarter here and then it looked like the interest rate assumption was flat between the two slides there. So sorry just curious if there's anything else there is missing?

Operator:

Our next question will come from Julien Dumoulin-Smith with Bank of America.

Maria Rigatti:

Okay. So, Julien, I think that actually if you think about what happened in 2023, where we managed the variability that we saw in the business and came out at $4.76, which is above the midpoint of our guidance range, we always have things that we're managing in the business, and we would do that to the extent that we needed to relative to the cost of capital. But I want to just re-emphasize. The cost of capital mechanism triggered because of the interest rate environment we're in. Like, I'll reflect again that the energy division did disposition our advice letter and indicated that the change would be implemented. They went through and responded to all of the intervener commentary around sort of interveners perspectives on why they think it shouldn't be implemented and they did a very thorough job of responding to each point. It does now have to be resolved through the CPUC writ large but none of the facts have changed and we continue to move forward with it and again it's in our tariff sheets and it will be implemented in our next rate change.

Julien Smith:

I hear you on that one. Excellent and well done. Maybe just speaking of guidance and long-term outlooks just real quickly on the EPS profile. So you have this ‘25 to ‘28. We've talked a little bit with Jeremy earlier about the continuity of that $0.37 from ‘25 into ‘26. How do you think about the earnings profile from ‘25 to ’28? That might go back to some of the variances, the cadence, the GRC itself, any comments that you offer?

Pedro Pizarro:

Yes. And Julien, again, same thing for ‘28 is for ‘25. We've shared with you our target of 5% to 7% growth rate through ‘28. And our growth rate will be someplace in that 5% to 7% range. For ‘25, you're going to see a growth rate for us. It's going to be 5% to 7%. It's not 3%, it's not 4%, it's going to be 5% to 7%. So we're going to meet our guidance and deliver on our expectations for you all.

Sam Ramraj:

Thanks for joining us. This concludes the conference call. Have a good rest of the day. You may now disconnect.

Operator:

Good afternoon, and welcome to the Edison International Third Quarter 2023 Financial Teleconference. My name is Sue, and I will be your operator today. [Operator Instructions] Today's call is being recorded. I would now like to turn the call over to Mr. Sam Ramraj, Vice President of Investor Relations. Mr. Ramraj, you may begin your conference.

Pedro Pizarro:

All right. Thanks, Sam and good afternoon, everybody. Edison International reported core earnings per share of $1.38 for the third quarter and $3.48 for the first nine months of the year. We are pleased with our performance year-to-date and, combined with the outlook for the fourth quarter, we are confident in reaffirming our 2023 core EPS guidance range of $4.55 to $4.85. I would also like to reaffirm our ongoing commitment to delivering 5 to 7% core EPS growth through 2025, which does not factor in several potential upsides. We also reaffirm our EPS growth guidance of 5 to 7% for 2025 through 2028. My comments today cover four key topics

Sam Ramraj:

Sue, can you please open the call for questions. As a reminder, we request you to limit yourself to one question and one follow up, so everyone in line have the opportunity to ask questions.

Anthony Crowdell :

Good afternoon, Pedro. Good afternoon, Maria.

Anthony Crowdell :

Good. Follow up on the last slide, Maria, Slide 10, or Pedro wants to take it, on the cost of capital. Just first, I mean, you gave some insight into the use of proceeds on the reset. Just curious if the Senate Bill 410 plays into where you would deploy the proceeds. And then also if you go through the procedurally, what happens at November 2? And then I have one follow-up.

Anthony Crowdell :

Great. And then post November 2 intervenors file, I guess, tomorrow, and then post November 2, I guess, do we wait for comments on the Energy division or just -- if you just took us through the year-end?

Anthony Crowdell :

Great. And then just lastly, if I went to Slide 3. I appreciate the clarity. Is my understanding correct, if I think about the additional increase, I think, two thirds related to Woolsey? And by February, I think where the deadline is due for claims, again, it may be you may change that 6.4, but by February, we should be -- have much more certainty on the total amount of claims here?

Anthony Crowdell :

Great. Thanks for all the clarity.

Operator:

Thank you. The next question is from Shar Pourreza with Guggenheim Partners. You may go ahead.

Shar Pourreza :

Hey, guys. Hey, Pedro. Just on the monetization of the telecom infrastructure leases, $20 million in revenue and obviously potentially coupling that with the wildfire claims recovery. What time frame are you embedding in plan to start seeing EPS and credit metric benefits? And do the increased claims figures present a drag versus some of the benefits from the equity content of the sale?

Shar Pourreza :

Got it. And the increasing value of the claims, does that present any challenges to the timing of the claims recoveries with the CPUC?

Pedro Pizarro :

I'll say no, remember, Shar, that in our TKM filing, the cost recovery application filing, we proposed a procedure for introducing amounts that have been settled after the filing date. And so it's been contemplated. There will be some number of settlements coming in that we'll be doing it beyond the numbers that we had initially filed. So the increase in claims will just fit into that final two procedure that we proposed.

Maria Rigatti :

Yeah. So we would be looking at a whole range of things in terms of deploying that $0.39 and that could range everywhere from further pushing forward on our initiatives in the field to improve the processes there. And so that would allow us to get capital efficiencies as well as O&M efficiencies. We're going to keep looking at other opportunities in customer service and enhancing or improving the customer experience. We also have things that we want to do with support services and places in finance and regulatory affairs as examples. So we're looking at that. And as I said earlier, for us, operational excellence, cost efficiencies really driving effectiveness in the business. It's not a single year effort, like we are doing this on a multiyear basis. And so we're going to be building on successes that we have next year into 2025. So I think this plan is still developing, but we would expect to see that '25-'26-'27.

Operator:

Thank you. And our next question is from Angie Storozynski with Seaport. You may go ahead.

Angie Storozynski :

Hello. Thanks for letting me ask the question. So the first, again, I mean, those wildfire loss increases are very substantial. It just almost feels like it's a moving target, right? We're almost in the ninth inning. And every other quarter, we have these very big increases. It's somewhat surprising, at least from our vantage point to see it this late into the process. And again, I'm clearly hopeful that by February, we will have a full picture, but it just feels like there is more of those increases to come. Would you disagree?

Maria Rigatti :

And maybe if I could just offer up one more thing, and I think Pedro kind of touched on in his last comment. It is a process that we have to go through, and we have to do an evaluation. The most important part of this process is getting through it and creating the certainty that comes with completion. Because that's when we will be able to fully -- we have a true-up mechanism in the TKM application. But when we're done with all these processes, we will be able to go and get a final resolution also with the commission. So from our perspective, it's getting through the claims and getting to the claims as quickly as we possibly can because that completion will create the certainty.

Maria Rigatti :

Yeah. So we will -- in our cost recovery application, we are going to file for recovery of the interest expense associated with claims -- financing the claims payments. And the other aspect as well is that we are -- and just to highlight another couple of numbers for you. We are about 85% complete with all of our individual plaintiffs clean to resolutions. So we are moving through the pile, if you will, expeditiously.

Maria Rigatti :

Sure. And actually, it turns out that your two questions are very much related. So the capital that you're seeing moving around is particularly in the very near term. It's just a shift in the utility-owned storage project and the timing of those payments. So what you're seeing related to your second question, shifts between rate base earnings and AFUDC on the slide that has modeling consideration. It's really a shift between those two buckets. Utility on storage was in rate base before. Now it's in construction work in progress longer. So you just see the two numbers, if you add them back together, they'll be the same as they were last quarter. So that's one piece of it. The other piece that's going on in our capital program is we have shifted one of the transmission projects that we are still going through the permitting process on but that's just shifted out each year, it shifted out just one year. And so you're seeing a little bit of that impact. But that's why, overall, for the period '23 through '28, the capital program is still the same as it was last quarter.

Pedro Pizarro :

Thanks, Angie.

Pedro Pizarro :

Hey, Gregg.

Maria Rigatti :

Gregg, this is Maria. We can address it in different ways. I think in the opening documents, we note how we will finance the tender, and we can do that either by JSN or some other equity content security right after the offering, we could have some sort of bridge using some other securities temporarily. But I think our objective overall is -- and then we've made it clear in the offering documents is that we will replace the equity content of preferred stock.

Operator:

Thank you. The next question is from Ryan Levine with Citi. You may go ahead.

Maria Rigatti :

Sure. So a couple of things. So why now. I think we have been discussions before about are we looking at different things in our portfolio that might -- we might consider selling. And so we have been doing that. And so the why now is that we've completed our analysis and we think that these are attractive assets that folks who are in this business day in and day out will also find attractive. And so that's why -- that's the why now. I think that when you look at the overall portfolio that we have, the other thing that helps to drive this is that these are good assets. Customers do share and the benefit of this, whether we sell them or not, you'll see in our filing tomorrow that round numbers, you can think about this as 15% of the value is for customers and about 85% of the value is for the company or shareholders. By taking this action now, we actually, during a time of affordability concerns and constraints for customers, we'll be able to accelerate those benefits into the near term. So another element of the why now. And I think the comment I just made probably answered the question about what part is for customers and what parts for shareholders. Was there something else in the Ryan?

Maria Rigatti :

Yeah. So when you think about our equity program, you've said that about $100 million a year or so because we're going to be using our internal programs. Obviously, as I mentioned earlier, this depending on the regulatory path if the commission goes down, we could see something middle of '24, maybe into 2025, at which point we can look at the proceeds and determine what that there's an opportunity there to offset some of the equity that we would otherwise issue under our internal program.

Operator:

Thank you. The next question is from Michael Lonegan with Evercore. You may go ahead.

Pedro Pizarro :

Yeah. I'll start. Steve Powell, you might have some additional thoughts on this too. First, you're right, we've seen, I think, really significant pickup of EVs in our territory and really across California. That's continued through the latest reporting period that I saw. I know I've seen some broader articles in the press, you're probably referring to as well in terms of could there be a slowdown at a national level. There are a number of things that come together here. And I think one of the important elements is the strong support that there is in the IRA, right, for continuing not only the $7,500 tax credit for new electric vehicles, but also the introduction of the $4,000 used electric vehicle tax credit, which is something that, by the way, Edison really helped advance in Washington since it's pattern after something we had here already in California. So look, I think like with any market, you're going to see ups and downs. And you have to guess that things like a higher interest rate environment, making vehicle loans a little more expensive, probably puts a bit of a temporary damper on that. But the long-term trend, I think it's pretty clear here in terms of the value of electric vehicles to consumers and the role that EV deployment will play in reducing greenhouse gases. And certainly our Countdown to 2045 white paper makes clear how valuable that is for GHG reduction. But also just say that when you think a look at the total cost of ownership for electric vehicles today, it's already -- certainly for the lower-cost EV models, the total cost of ownership is lower than it is for similar combustion engine vehicles. You asked also about the impact it could have on our infrastructure buildout and our planning. And I think right now, we're seeing significant growth that's been baked into our rate case. So -- but we can -- we're following the customer on this, Steve, let me turn it over to you and thoughts around impacts on the distribution system or for that growth.

Pedro Pizarro :

And I think the last point that Steve made is really critical that innovation in the general rate case to include the request for mobile equipment, to temporary equipment, it's a great step because, particularly when we think about medium and heavy-duty fleet deployment, that's a technical term here, chunkier, right? Then when you're looking at passenger vehicles being spread out over neighborhoods. And so that's where Steve and the team have been working and how to make sure we can meet that load. So Michael, maybe more than you want it, but it's a topic near and dear to us.

Pedro Pizarro :

Terrific. Next.

Pedro Pizarro :

Hi, David.

Pedro Pizarro :

Sure.

Pedro Pizarro :

Yeah. David, thanks for the question. And I give you maybe a quick answer here. I think it starts with acknowledging that each of these rate cases is very situation-specific and company-specific. So I know that our colleagues at PG&E, for example, have had a big emphasis in the rate case on the amount of undergrounding based on their territory and the fact that they have so much more forest land in our high-fire risk areas, as compared to SCE, which has more graft lands and the additions have been in the past more from elements that can be addressed through covered conductor. So you've seen us in the '25 to '28 rate case application, continue completing the build-out of covered conductor with another 1,250 miles per post, complemented by around 600 miles of undergrounding. Very different needs in our territory than MTGE territory. So hard to abstract out strong payrolls from the PG&E case for hours, given that difference. At the same time, there are some elements that are common. And in fact, you saw that Southern California is filed comments in the PG&E rate case. Particularly focused on the topic of the escalation mechanism in there. The fact that the alternative proposed decision relied on essentially a 25% -- provided only 25% of the escalation requested, that -- it's something that we thought needed to be called out as we provided a comment saying that in order to be fully compensatory rates have to include, right, the full allowable costs and escalation is an important part of the cost structure. So that's certainly one that we've watched more closely. And like I said, our team intervened in the rate case because it's a topic that will be of common interest across all utilities. But beyond that, though, we're just watching the case and recognize that there's some significant differences in the situations for the two companies. Maria, anything you want to add?

David Arcaro :

Got it. Got it. Thanks. I appreciate that perspective. And then I also wanted to -- let's see, check on the CapEx outlook. It was decreased for this year and next year. Was that also related to the store project?

David Arcaro :

Okay, perfect. Thanks for that. I'll pass it on. Appreciate it.

Maria Rigatti :

Hey, Paul.

Maria Rigatti :

Yeah, to reflect the rate base math, yeah.

Maria Rigatti :

Yeah. So I don't want to sort of recap everything I said earlier, but I'll just take a few points. What I was saying in response, I think it was Anthony, who asked the question, first off, was that we have -- the cost of capital mechanism, it's related to interest rates. We have done a really good job completing our financing plan for 2023, hitting the marks that we have shared with you around our interest rate assumptions. The CCM, again, driven by interest rates and I'll say the more recent volatility underscores the benefit of the CCM. We see that as a hedge against interest rate movements beyond what's embedded in our forecast going forward, that's it. Second part of it is that we do year in and year out look for opportunities to reduce costs for the benefit of the customer, and of course, the benefit of our overall operations. We are managing the business every day. If we see an opportunity to accelerate benefits, we have four years -- four years ahead of us. If we see an opportunity to accelerate lock-in benefits so that we can provide an even sure foundation for customer benefit going forward, we are going to do that. The plan is in work. And as I said during the prepared remarks, we'll certainly share more with you on a go-forward basis.

Paul Zimbardo :

Okay, great. Thank you very much, team.

Operator:

Thank you. And that was our last question. I will now turn the call back over to Mr. Sam Ramraj.

Operator:

Good afternoon, and welcome to the Edison International Second Quarter 2023 Financial Teleconference. My name is Fran, and I will be your operator today. [Operator Instructions] Today's call is being recorded. I would now like to turn the call over to Mr. Sam Ramraj, Vice President of Investor Relations. Mr. Ramraj, you may begin your conference.

Pedro Pizarro:

Well, thanks a lot, Sam, and good afternoon, everyone. I would like to begin with three financial comments. First, driven by EIX’s impressive performance through June. We are confident in our 2023 core EPS guidance of $4.55 and $4.85. Second, we remain fully confident in and deeply committed to delivering our long-term EPS growth target of 5% to 7% from 2021 to 2025. This target incorporates all known business headwinds, but does not factor in potential tailwinds which could present significant upside. Third, based on the strength of SCE’s 2025 GRC application, and other investment opportunities, we are providing EPS growth guidance of 5% to 7% or 2025, 2028, which provides the path towards $7 in earnings per share potential for 2028. Underpinning this is the rate-based growth driven by the essential investments to advance California's clean energy transition. Importantly, these actions will maintain SCE’s cost leadership and the lowest system average rates for customers among California's investor-owned utilities for the foreseeable future. We are very proud of this commitment and I will show more about it later. On the operational front, my two key messages today are

Sam Ramraj:

Fran, please open the call for questions. As a reminder, we request you to limit yourself to one question and one follow-up, so everyone in line has the opportunity to ask questions.

Ryan Levine :

Thank you. In terms of your longer term growth outlook, what do you see as the biggest risk to achieving the longer-term 5% to 7% LF through 2028? And from a financing standpoint, you highlighted a couple billion dollars worth of upsides. To the extent that that were to materialize how would you look to fund that?

Pedro Pizarro :

You know, Ryan this is Pedro, let me just underscore the first question. The need for this infrastructure build is so clear and strong. Thinking of that the team at SCE has done a nice job encapsulating that in the general rate case application, we will have other pieces as Maria discussed or the need will also be very strong. So to me, it kind of enter because it needs to be for infrastructure of that’s really needed for reliability and resiliency and readiness. And that's the big opportunity here and that's why we're so confident.

Maria Rigatti :

Sure, maybe we'll have Steve Powell kind of address what we're seeing with some of the vendors. He's the CEO of the utilities. Steve?

Pedro Pizarro :

I think as you are looking at longer term, we will also start seeing the benefits across the economy of things like the CHIPS laws Act, right. The focus of the federal government has had I'm bringing back manufacturing supply to domestically. So that's not a next year thing. And so, the answer to the question, what went into the near term? But I'm also a confident in the longer term supply chains will respond to market signals and the impact of, the CHIPS laws to act and other infrastructure bill et cetera in bringing back manufacturing for supply of critical components in the US will help.

Pedro Pizarro :

Well, thanks, Ryan.

Pedro Pizarro :

Hi, Shar.

Maria Rigatti :

Yeah, so maybe, Shar let's first check through some of them that you mentioned.

Maria Rigatti :

So, the CAISO opportunities are significant as you say, $2.3 billion for the projects for which SCE is being the incumbent transmission owner, Those are largely going to be incurred, probably post 2028. So, that's a runway issue, right? You've talked about the CCM trigger. We absolutely believe that two months left as I said before, it's highly likely that the CCM will trigger. And then, we think that it is fully supported by what's going on in the broad financial market. We are not relying on the CCM trigger for our 5% to 7% growth trajectories. So we will go through that process as we go through that process. I would also note that by the time we get to 2028 we are going to get another cost of capital cycle though. So, you'll see some interplay there. And then in terms of claims cost recovery, as Pedro said earlier, we have been fully prudent and we will make a strong case for our cost recovery when we file our application, in August. The proceeds from that, of course, would be used to pay down existing debt at SCE. And so you would see for sure, it will be a help to our earnings profile because interest expense is currently hitting the bottom-line would be authorized for recovery and also we will have an improvement on credit metrics. So I think you'll see a lot of improvements from all of those things and we'll take them as they come.

Maria Rigatti :

So first, I would note in terms of the equity financing plan that we put forward for ‘25 to ’28, we're really talking about our internal programs. So that's about a $100 million a year for you typically realize through that program. So just to cite that for you. In terms of looking at other opportunities beyond that for other forms of financing, we will certainly watch with interest what's going on up in the north. But there's a regulatory process that we need to be gone through. And so I think it's just for us and observational point at this point in time.

Shar Pourreza:

No. It's fantastic. Thank you, Pedro and Maria. Appreciate the additional color guys. Have a good evening.

Operator:

Our next question from Gregg Orrill with UBS. Sir, your line is open.

Gregg Orrill:

Hey. Congratulations. The transmission CapEx. You highlighted from the CALISO awards. How does that process renew itself over time? How often do those occur? Should we be expecting more CapEx to be identified?

Steven Powell:

Right. So, the California Independent System Operator create - develops and approves these projects through their transmission planning process, which they're putting out updated plans on a regular basis going forward. They have a 20-year outlook that defines the big picture project that need to happen over a long time. The last one they did identified about $30 billion of project need to happen over the next 20 years. Now they're going through and developing these ten-year plans. And right now, they're working through the process with the current approved plan of both gain the incumbent projects assigned. And so we know that we've got our $2.3 billion of projects we need to do and they run their competitive process for their competitive projects in the current planned ten year cycle. There's three projects that are going out to bid that are worth approximately $3 billion based on their early estimates. I mean, those bids will go we do in the later in the fall and September and October and bids will be awarded next year. They'll work their way through that process. A new plan has been developed and put out another two years out and then they will continue to work that cycle as they did assign new projects on the horizon that are filling out what's in their long-term outlook.

Pedro Pizarro :

Thanks, Gregg.

Pedro Pizarro :

Hello, Angie.

Maria Rigatti :

Angie, that’s a great question and I think maybe I'll step back for a second and historically we've given you some of the information to kind of think through our business and our operating model, if you will. We've kind of bucketed things into a number of different line items. And one of the operational variances that you just referred to. But when we think about our business, underneath those four line items, there's many, many more things that we're actually managing. And so, as we roll forward and we are thinking about ‘25 through ‘28, we've tried to actually provide you with some additional information that's more granular. That we’re hoping is going to be allow you to get more insight into our business. So as an example, what have we talked about in that 2025 operational variances bucket? We've talked about AFEDC, we talked about the timing of regulatory approvals, we talk about operational efficiencies we've talked about depreciation and we kind of, given you some insights into that. If we roll forward to between ‘25 and ’28, you'll see the sensitivity is actually go right to, okay? So what is the sensitivity around AFEDC? And if you see because our capital program is growing so rapidly and so robustly, but the time we get to 2028 AFEDC is like in the $0.45 range as opposed to being in the $0.30 to $0.35 range that it was before. We've given you some depreciation sensitivities that you can factor in. Frankly, by the time we get to 2028, we don't actually see regular – the timing of regulatory proceedings or O&M variances as being the major drivers for that part of the model, if you will. So I think that's how we're trying to provide you with that additional information, as well as all the other sensitivities that people like to ask us about like, interest rate assumptions and things like that. So, as I think that's hopefully a more granular approach to how we think about our business.

Anthony Crowdell:

Hey, good afternoon, Maria. Good afternoon, Pedro. Just one quick question on slide 4 talking about the application of the key KM events. Just if you could maybe provide as much as you know on the timing of how long it will take for that application to play out? And then more specifically, what type of - I guess Part D meet with parties ahead of time or any type of feedback you give us on your meeting with any of the interveners right now in the application. Thank you.

Anthony Crowdell:

Great. Thank you so much for taking my question.

Operator:

Our next question is from David Arcaro with Morgan Stanley and your line is open.

David Arcaro :

Hey, thanks so much for taking my questions. Let me see. One, maybe a little bit of housekeeping item. I was just wondering if you could give any outlook for equity needs into 2024, it seems like we've got a good clarity around it. But just curious if there's any specific financing that we should be keeping an eye on for ’24?

David Arcaro :

Okay, got it. So it should be I guess in that same $100 million, roughly cadence.

David Arcaro :

Okay? Got it. And then, I was just wondering longer term, I guess the rate base growth comes down as you look, if I just look at rate base growth ‘25 to ‘28 it's more like 5% to 7%. I know it's early on, but and that it kind of lines up then with the EPS growth in the 5% to 7% range. Does that get tied in your mind or is the rate base growth just likely to escalade over time as new CapEx plans are identified?

David Arcaro :

Oh sure. I guess, you know, historically, you've had a gap between the rate base growth level and the EPS growth rate level. And I guess, at looking out further into the planned rate base growth ends up being kind of equating to EPS growth. I'm just wondering if that's just an early stage dynamic or if we start to see a gap widening out over time?

David Arcaro :

Got it. Thanks. Very helpful. And just - sorry if this is a little repetitive, but just on operational variances, I see that AFEDC is rising from the ‘25 to ’28 period. Do - is there much change in the rest of the operational variances bucket between the ‘25 level where you have to find it versus where it'll end up in ‘28?

David Arcaro :

Okay. Understood. Thank you so much.

Operator:

Thank you. Our next question is from David Paz with Wolfe Research. And sir, your line is open.

David Paz:

Yes. Hello guys. Thank you for the time. Just on the growth rates, can you maybe address where - would you be on the low end or lower half of your growth rate if the ROE remains at 10.05%.

David Paz:

Okay. And then, forgive me if this slide here I am missing it. But what level of cash recoveries are you expecting aside from GRC in the TKM, which I know you're not expecting, but aside from those proceedings, what level of cash recovery to ‘28 has been embedded in your plan? I think for instance, you had $1 billion of recovery in 2024, in the slide earlier this year, I believe. Any sense of what we should assume for cash recoveries through ’28?

David Paz:

Right. Right. Got it. Okay. Thank you.

Nick Campanella :

Hey everyone. I hope you're doing well. Good to reconnect. Thanks for my question. I guess, I'm sorry if I missed it, as well. But acknowledging that you reaffirm in ‘23 as well as the 570 midpoint for ‘25 just can you give us a sense of how to think about ‘24? Are you going to be in that 5% to 7% range?

Nick Campanella :

Absolutely. And I guess, that's a good segue. Have similar question to Anthony just some CPUC process, but the CCM trigger can you just walk us through the timing. Obviously, I guess you filed an advice letter in October with the goal to have something out by year end. But just how do you kind of see it playing out?

Nick Campanella :

Thanks for all the information.

Operator:

Our next question from Julien Dumoulin-Smith with Bank of America. Your line is now open.

Maria Rigatti :

Sure. So, the sensitivity that we provided it's on the - in the appendix page. It gives you a range of outcomes. And there's two different elements at work there. We provide you with the capital forecast that is tied to our request – the request that we made in the general rate case. And when we do that, we have a lot of data from the general rate case that allows us to put that together. When we give you the other points on the curve, when we take CapEx down, just to provide you with a little bit more insight as to what that would look like in terms of rate base, we make some very simplifying assumptions. So when we convert those lower CapEx levels into rate base, we made simplifying assumptions about the timing of when the CapEx is spent. We made simplifying assumptions about the type of CapEx that gets reduced. So, when we get to the lower end of the capital range, you end up with that depreciation variance again. So, at the lower end of the CapEx, you'll get a $0.15 - you will need to make a $0.15 adjustment. And it's very similar to the depreciation variances that we talk about during the rate case cycle when CapEx turns out to be a little different than what's embedded in your actual authorize. The other piece of the sensitivity that we provided is, we've made a request in the general rate case or – and we made a depreciation proposal. We know that sometimes, the outcomes of that may vary. And so, we've also given you a sensitivity as to what would happen to earnings and ultimately you can patch rate base, so what would happen to earnings if our depreciation proposal is modified from what's requested? So those are the two things.

Maria Rigatti :

So, the proposed decision that we received yesterday extends our capital structure waiver. So, I guess, the most basic answer to your question is we are at 52% because we have the waiver. Roll that forward, we are not assuming that we will get any cost recovery for the ‘17 and ‘18 Legacy Wildfire claims and deaths. So if you roll that forward and we don't get that then we would have to at the end of that process propose a plan to get back into conformance with the authorized capital structure. We can propose a plan that we think is appropriate. We could do a number of things. We could start with proposing that the differences be excluded because this is not rate base, right, so we exclude this permanently from our capital structure. There's some precedent there. We know we got this that sort of treatment on the song settlement. More recently, we had that same treatment on the on the amounts that were disallowed on the SEB settlement. So that would be one approach that we would take. That would be our plan to be in conformance. At the other end of the spectrum, we could also just move that debt up to the parent company, and then we would propose a timeline over which we would do it. And as we did that, we would not be impacting - we've already issued the equity to support all of those claims. So it could be a little bit more expensive, but it would be within our current credit metrics. And just as a reminder that the equity ratio is actually measured over a 36-month period.

Maria Rigatti :

Thank you.

Operator:

Good afternoon, and welcome to the Edison International First Quarter 2023 Financial Teleconference. My name is Ted, and I will be your operator today. [Operator Instructions] Today's call is being recorded. I would now like to turn the call over to Mr. Sam Ramraj, Vice President of Investor Relations. Mr. Ramraj, you may begin your conference.

Pedro Pizarro:

Well, thanks a lot, Sam, and good afternoon, everybody. Edison International's core EPS for the first quarter 2023 was $1.09. We are pleased with our start to the year and are confident in affirming our 2023 core EPS guidance of $4.55 to $4.85. We also remain confident in delivering our long-term EPS growth target of 5% to 7% from 2021 through 2025. Maria will discuss our financial performance and outlook. My key message today is that we continue to see a number of positives in the near-term and in the long-term, and these make us excited for our company’s future. SCE’s actions to sustain and strengthen the electric grid, mitigate wildfires, and enable decarbonization through electrification are critically needed by California and are increasing our investment opportunity. In the longer-term, our Pathway 2045 analysis highlights the continued investment in transmission and distribution needed to evolve the grid. This is being recognized by regulators in California. In 2021, the California ISO released a 20-year plan estimating about $30 billion of transmission investment needed through 2040, consistent with our Pathway analysis. Only a few weeks ago, CAISO published its Draft 2022 to 2023 Transmission Plan, with its current thinking on system needs over the next 10 years. Their draft plan calls for 46 transmission projects with a total estimated cost of $9.3 billion. Over $2 billion of that represents proposed incumbent projects for SCE, and over $5 billion represents FERC Order 1000 competitive projects within Southern California for which SCE will be able to compete. In the near-term, SCE continues its diligent execution of its Wildfire Mitigation Plan and has reduced the probability of losses from catastrophic wildfires by 75% to 80% compared to pre-2018 levels, predominantly from grid hardening measures that allow the utility to mitigate risk while keeping electricity flowing to our customers. I want to say thanks again to the many of you who visited us in person at our headquarters and heard directly from several of our leaders about the utility’s achievements and ongoing actions. In March, SCE filed its 2023 through 2025 WMP with the Office of Energy Infrastructure Safety. Highlights of the plan are shown on Page 3. Our number one priority remains the safety of the public, customers, workers, and first responders. In 2023, the utility is building on the work already accomplished while focusing on five key areas

Operator:

The phone line is now open for questions. [Operator Instructions] The first question is from Angie Storozynski with Seaport. Your line is now open.

Angie Storozynski:

Thank you. How are you? Okay, so my first question is still just looking at the settlements of the 2017 and 2018 claims, so didn’t settle more since basically the fourth quarter update?

Angie Storozynski:

Okay, okay, that's fine. And then for the SCC GRC application that you'll file in May, do you plan to assume positive load growth in your filing?

Steven Powell:

Hi, yes. As we, now on load growth we expect to see in the rate case focus on all the things we need to do on the grid, both to deal with customer demands like now as well as the load growth [indiscernible] investigation and other things. And so that will be a focus on reliability including looking at infrastructure replacements that has been ramped down over the last number of years while we've dealt with a lot more wildfire mitigation. So you'll see more wildfire mitigation activities in there, both continuation of our covered conductor program as well as a move towards some targeted undergrounding, continued electrification investment and of course dealing with what we project to be load growth between now and 2035 is going to be about 2% a year on average. So that was right investments in the grid and of course with all of that is making sure we're thinking about from affordability perspective balancing the needed investments in the grid with the customer's needs for affordability.

Maria Rigatti:

Sure, so Angie I think we've -- for a long time we've had the reverse, right, where there's been a big gap between us and where the others in the industry are, we share that with the commission as well. We are seeing some improvement. I think there's still room for improvement and it's one of the things that we're very focused on over time, but we have seen some benefits from some of these recent upgrades.

Pedro Pizarro:

Thank you, Angie.

Shar Pourreza:

Hey guys.

Pedro Pizarro:

Hey, good afternoon, Shar.

Pedro Pizarro:

Yes, so on the first part of the question, no, those are not part of our 2021 to 2025 EPS growth rate. And in fact, the chances are that those projects would be early in the development process by 2025, since they're only now being identified by the Cal-ISO. One of the challenges Shar is that, today transmission development can take a decade largely because of the approval and permitting and siding processes. So, we're also looking at the efforts at the federal level and state levels to expedite permitting and siding. So that's on the transmission piece. On your question about Western regional market expansion, we're monitoring the bill. We are actually very supportive of the concept of an expanded Cal-ISO providing a platform to become a western regional market. Of course the devil will be in the details and we want to make sure that that expansion if and when it happens, and hopefully it will, but that it's done with all the right sort of safeguards in place to make sure that the right benefits accrue both to California and other state's customers. And then you asked whether that could add tailwinds and I think of it as a, it's a larger market will provide greater opportunities to minimize the cost of the clean energy transition. It will allow better sharing of resources across the west. And so at its core, I think the main benefit of it would be to provide a platform to support greater affordability for both California customers and customers across the west. And it's -- we mentioned in remarks here we are mindful of affordability. It's something we continue to focus a lot on. So anything like a western regional market that helps bring down the cost of the transition is a good thing then in terms of creating more room in our rates to either minimize rates or to provide, rate room for all the other projects that are important here. As to whether our western regional market like mean more transmission projects, ultimately for SCE it's a little harder to tell and I think the main benefit is that cost reduction for customers.

Maria Rigatti:

Yes. So Shar, it’s Maria. So the financing we've done to date has been consistent with what we said on our last call in terms of the total $1.4 billion and the junior subordinate notes were aimed at the equity content, balance in the equity content we're going to be addressing through our internal program, so that's one piece of it. In terms of the debt financings we have to do for the balance of the year, we're going to look at all the different options. We want to be efficient. We want to consider all of the costs, the all in cost of doing that and take into consideration what both the near-term but also the longer-term potential costs associated with that. But, we're going to keep everything on our radar.

Pedro Pizarro:

Yes, thanks Shar.

Pedro Pizarro:

Hi, Ryan.

Pedro Pizarro:

Hey Ryan, you're cutting up a little bit. Would you mind repeating the question? Might be our bad phone line or so.

Pedro Pizarro:

Yes, so it really starts with what timeline the Cal-ISO follows for the process of finalizing the transmission plan and then ultimately taking projects through that competitive process. I don't know that we have a specific time available yet, but Steve, are you aware of anything more specific at this point?

Ryan Levine:

Okay. And then the follow-up maybe from Maria, if those projects were to be one, what, how would you look at the financing of the incremental capital given that it's more long duration?

Ryan Levine:

Right. Thank you.

Operator:

The next question is from Gregg Orrill with UBS. Your line is open.

Gregg Orrill:

Yes, hi. Thank you. Maybe just a quick one on the pending heat pumps investment and just wondering what you would expect the duration of that program would be to spend the money, the $677 million?

Gregg Orrill:

Thank you very much.

Operator:

The next question is from Julien Dumoulin-Smith with Bank of America. Your line is open.

Julien Dumoulin-Smith:

Hey, thank you guys very much. I appreciate it. Hey, look, I wanted to come back to the commentary about the update forthcoming. When you made the -- obviously mid-May we've got this rate base update coming. It seemed like in the prepared remarks you were alluding to a potential extension of the earnings outlook with the second quarter call. Can you affirm that? Just think of -- provide us some context as to the parameters that you're thinking there in the base here, et cetera? But more specifically also how you think about maybe the EPS trajectory relative to the rate base that you'll release here with mid-May.

Pedro Pizarro:

So stay tuned.

Maria Rigatti:

So we'll go into all that detail when we get to the Q2 call.

Pedro Pizarro:

All right, thanks Julien.

Operator:

And that was the last question. I will now turn the call back over to Mr. Sam Ramraj.

Operator:

Thank you for your participation. You may disconnect at this time.

Operator:

Good afternoon, and welcome to the Edison International Fourth Quarter 2022 Financial Teleconference. My name is Ted, and I will be your operator today. [Operator Instructions] Today's call is being recorded. I would now like to turn the call over to Mr. Sam Ramraj, Vice President of Investor Relations. Mr. Ramraj, you may begin your conference.

Pedro Pizarro:

Well, thanks a lot, Sam, and good afternoon, everybody. I am pleased to report that Edison International's core EPS for 2022 was $4.63, which was in the upper end of our initial guidance range. Today, we are introducing 2023 EPS guidance of $4.55 to $4.85 and we are reinforcing our strong confidence in delivering our long-term EPS growth target of 5% to 7% from 2021 through 2025. Maria will discuss our financial performance and outlook. Let's start with our key accomplishments in 2022, and they are noted on Page 3. First, we once again delivered on our annual EPS guidance, as I just mentioned. Second, SCE continued to make tremendous progress in reducing wildfire risk and PSPS. SCE successfully executed its wildfire mitigation plan and updated the key statistic shown on Page 5; that is that SCE now estimates it has reduced the probability of losses of catastrophic wildfires by 75% to 80% compared to pre-2018 levels, and critically with much lower reliance on PSPS, now only 15%, as hardening and other mitigations continue, as depicted on Page 6. Despite this strong operational and financial performance, market sentiment impacted our total shareholder return. Our TSR for 2022 trailed that of the Philadelphia Utility Sector Index and most of our peers. As shareholders ourselves, our leadership team and I are deeply committed to achieving our financial targets while strengthening SCE's ability to deliver safe, reliable, affordable, and increasingly clean electricity. Diving deeper into SCE's tremendous progress in wildfire mitigation, despite challenging weather conditions and some fires in our service area last year, 2022 marks the fourth consecutive year without a catastrophic wildfire associated with SCE's infrastructure. Key achievements in 2022 included deploying about 1,400 circuit miles of covered conductor, bringing total installations to around 4,400 circuit miles. To put this in perspective, this is nearly the round-trip distance from Los Angeles to Washington, DC. So, I am extremely proud of SCE's ongoing execution of grid hardening activities, which have made our communities safer. The utility is targeting up to another 1,200 miles of covered conductor in 2023. By year-end, approximately 74% of total distribution lines in high fire risk areas, or HFRA, including the 7,000 miles already underground, are expected to be hardened. This is a significant achievement and it is summarized on Page 7. SCE completed its one-millionth high fire risk inspection since 2019, which is like visiting every structure in HFRA at least three times. The utility continued to build out its network of weather stations, and now, with more than 1,600 in total, SCE has the largest privately-owned weather station network in the country, providing a granular view of weather-related risk to inform operations. A key result is that total acres burned from ignitions on hardened sections of our grid are 99% smaller than those in areas not yet hardened. SCE's approach to reducing wildfire risk is differentiated by the speed of its infrastructure hardening and by reducing reliance on measures that affect customer reliability, like PSPS, for example, by prioritizing hardening circuits at risk of power shutoffs. By the end of the 2023 through 2025 wildfire mitigation plan, SCE will have hardened about 7,700 miles of its overhead distribution system and scaled innovative pilots, such as Early Fault Detection. We look forward to SCE's continued success in reducing the greatest amount of wildfire risk in the shortest amount of time. Turning to the 2017 and 2018 wildfire and mudslide events outlined on Page 8. In the fourth quarter, SCE paid about $280 million in claims settlements. SCE now targets filing the TKM cost recovery application in the third quarter of 2023. Let me emphasize that SCE will seek full CPUC cost recovery, excluding amounts foregone under the agreement with the Safety Enforcement Division or already recovered. SCE will show its strong, compelling case that it operated its system prudently and that it is in the public interest to authorize full cost recovery. The utility currently expects to request about $2 billion in this first application. Our financial assumptions for 2025 and beyond do not factor in any potential upside from the cost recovery applications, which would represent substantial value. Looking ahead, I want to highlight key management focus areas for 2023; these are laid out on Page 9. First and foremost, safety is foundational to our values and success, and we are targeting reducing the rates of employee injuries by 15%. Tragically, a utility troubleman, Johnny Kinkade, died from a work-related injury last month, and 1,200 of us joined his loved ones at his memorial service last week. This was our first employee work-related fatality in 5.5 years and it redoubled my resolve and it redoubled our team's resolve to make it our very last. SCE's unwavering commitment to keeping our communities safe through wildfire mitigation also continues. The utility plans to keep its pace of about 100 miles per month of covered conductor, reaching a total of 5,600 miles by year-end. Again, filing the first cost recovery application for the historical wildfires is a front-and-center focus area for us. On the regulatory front, SCE looks forward to its upcoming 2025 GRC application and will monitor the cost of capital mechanism, which could result in significant upside to 2024 earnings should it trigger. On the financial side, we will be focused on achieving our capital expenditure and earnings goals, as well as pursuing upgrades to our credit ratings. We believe this is well-warranted considering the significant wildfire risk reduction by SCE, the state's strong firefighting capabilities, and supportive California regulation. Looking toward the future, the support for economywide electrification continues to grow nationally and here in California. We've shared before that we forecast electricity usage growing 60% by 2045, yes, that's a big six zero. And previously, we projected almost flat annual growth through 2030 followed by a steep trajectory through 2045, but we are now seeing earlier increases with the breadth of legislation, regulations, and codes and standards approved last year. SCE has updated its electricity sales forecast to reflect these significant policy changes and now projects about 2% annual growth from 2023 through 2035. Both transportation and building electrification forecasts have increased significantly, narrowing the gap to our Pathway 2045 analysis. This strong electrification load growth outlook is also consistent with the California Energy Commission's forecast based on the state's decarbonization policies, providing a source of external validation. Rapid expansion of electrification sharpens the continued need to make significant investments in SCE's infrastructure. Over the coming years, SCE will continue to invest in wildfire mitigation and increase its grid work to support California's leading role in building a carbon-free economy. With growth in electricity demand, this significant grid investment will be spread over a higher volume of sales, supporting affordability overall. SCE's system average rate is already the lowest among major California investor-owned utilities and we expect it will be the lowest for the foreseeable future. All of this, wildfire risk reduction, cost recovery for historical wildfires, the clean electrification investment opportunity, and, importantly, our confidence in the 2025 EPS target, makes me excited about our near-term steps and our long-term growth, so I am confident that investors will fully recognize our significant value creation. And with that, let me turn it over to Maria for the financial report.

Sam Ramraj:

Ted, please open the call for questions. As a reminder, we request you to limit yourself to one question and one follow-up, so everyone in line has the opportunity to ask questions.

Pedro Pizarro:

Good afternoon, Shar.

Shar Pourreza:

Hey, good afternoon, Pedro. Hey, Maria. Pedro, just given the, I guess, emerging visibility on the wildfire cost recovery, I mean, I guess that's light at the end of the tunnel, if you will, do you still need to issue equity or equity content? I mean, assuming if you start getting cost recovery, you become over equitized, right, at that time, so you could find some efficiency in deferring issuance and potentially showing the agencies a glide path for credit metrics?

Shar Pourreza:

Okay. Got it. So, more to come there. Okay. And then, just obviously since you're now seeing a 2% load growth starting in '23, I think from flattish levels, I guess, do you anticipate any increment investment needs that aren't currently in the GRC approved CapEx within sort of this planning horizon? I mean, could that sort of have an impact on rate base? And how do we sort of think about the recovery mechanisms would that be recovered under? Or do you need to file another GRC? Thanks.

Shar Pourreza:

No, it's okay.

Steven Powell:

I'd just point out, Pedro, in terms of clarification around load growth, over the next 13 years, we do expect to see that load growth increase over time. It will start lower, so I wouldn't expect to see 2% starting next year. It will ramp up as the level of vehicle electrification as well as building begins to accelerate. And at some point, it begins to swamp the solar rooftop growth as well. So that will -- that won't really impact the next couple of years within our current rate case cycle. But Pedro, like you said, we're looking at hard for 2025 rate case to figure out what additional investments will be needed to support that growth.

Maria Rigatti:

So maybe, Shar, just the main takeaway there is that in the next couple of years, we can fully manage within our existing GRC, but you will see this load growth fully reflected in our 2025 application.

Pedro Pizarro:

Thanks, Shar.

Pedro Pizarro:

Hey, Angie.

Pedro Pizarro:

And how are you?

Maria Rigatti:

Hi, Angie. It's Maria. So, I think I'm going to start by just saying, we are managing to that 15% to 17% FFO to debt range. We have a real commitment to our investment-grade ratings. Having said that, we've told you before that we have about $1 billion -- up to about $1 billion of equity content need through [Technical Difficulty] '25, but that would flex depending on where we were in our capital program, et cetera. So, as we came into 2023, yes, we had deferred some of the equity content out of 2022 given the market conditions, but we took another good look at where we want to be in terms of our metrics, and this will satisfy that and allow us to continue to make that commitment to our investment-grade rating. So, as we move through the rest of the '21 through '25 cycle, we'll continue to take a look at where we are in the capital plan. But we're very comfortable with where we are today for our '23 financing plan.

Pedro Pizarro:

Yes, that's on track to be online by the summer. Steve, you want to give any more detail on that?

Angie Storozynski:

Okay. And then, lastly and probably most importantly, so you are planning to accelerate the filing for the wildfire cost recovery, at least the first portion. I'm just wondering why is it coming earlier than expected. So, that's one. And number two is, so you're not deferring any interest associated with the financing of those wildfire claims, because you haven't had any decision from the CPUC. So, I'm just wondering, if you do get a decision or a settlement or at least a settlement in that first batch, is that enough for you to start deferring the interest expense associated with Woolsey?

Maria Rigatti:

Yes. So Angie, as you correctly point out, we are not deferring the interest expense associated with the wildfire claims debt. And so that's running to the income statement. We are asking for -- or will ask for recovery when we file the application. And when we get recovery, then we will reverse that and you would recognize that in earnings. When we get the decision, we will look at what the precise languages is, et cetera, and see if we want to apply that to Woolsey or how that would set itself up as a precedent. So, we'll see what happens around that when we actually get the language of the decision on TKM.

Pedro Pizarro:

Thanks, Angie.

Steve Fleishman:

Yes. Hi, good afternoon.

Steve Fleishman:

You guys probably -- you probably knew this already, but as we were on this call, looks like Moody's may have upgraded your rating, so congrats on that.

Maria Rigatti:

So, first checkmark on our scorecards, do you?

Maria Rigatti:

Yes. So...

Maria Rigatti:

Sure. So, our intent when we filed the application is to request an 18-month schedule, that's consistent with how they handle rate setting sorts of applications. We are also going to ask that they consider both of those items that you just mentioned, both the prudency of our operations and the prudency of our settlement process or claim process simultaneously. What will happen after we file the application is that typically, there would be a 30-day window in which people could file comments, after which the commission would schedule a pre-hearing conference. And following a pre-hearing conference, they would issue their scoping memo. The scoping memo would then have their schedule, sort of their response to our requests and other intervener comments. So that's sort of thing we're looking at, and we'll know a lot more after that scoping memo is issued.

Maria Rigatti:

Sure. And there's a lot of things in there and you can even see it in our 2023 guidance. We have actually a fairly similar range in '23 that we have in the 2025 EPS CAGR. So, what's in there? Big things that are in there are AFUDC earnings, that's a healthy chunk of operational variances. We also have regulatory applications that we have been submitting from time to time, actually pretty much every year at this point. And when those get -- when we get those decisions, some of those true-ups then go through the operational variances. Speaking specifically to 2025 and how do we manage through that since it's the first year of GRC cycle, there are things that become less aligned over the course of the GRC cycle. An example I often use is depreciation. So, you can get out of -- or you can get misaligned with what you're actually recognizing as depreciation versus what was authorized. When you get to the first year over GRC cycle, you can actually true those things back up and get more into a normal cadence. So, those are the sorts of things that we have embedded, whether it was '23 or last year '22 or the future '25.

Pedro Pizarro:

Yes, thanks, Steve.

Ryan Levine:

Hi, everybody. Hoping to follow up on cost recovery application. In the prepared remarks in the presentation, you highlighted about $2 billion that would be the ask. How did you determine that amount? And what factors could cause some deviation from that request?

Maria Rigatti:

But it probably doesn't give you perfect insight quite yet, because we will continue to settle claims and we will continue to accrue interest and we will include a true-up mechanism in the application that we filed, so that we can address anything that we incur -- any cost we incur following the application.

Ryan Levine:

Between now and any filing in the third quarter, presumably, there's a lot of work that needs to be done, any factors that you care to share that could influence the more specific timing and the milestones to watch in the process?

Ryan Levine:

Okay. Thank you.

Operator:

The next question is from Gregg Orrill with UBS. Your line is open.

Gregg Orrill:

Yes, hi. Thank you. Can you talk about the Track 4 proceeding and sort of how that impacts your -- how that's going and how that impacts your ability to hit your financial goals? How we should think about it?

Gregg Orrill:

And the final outcome would be expected to be somewhere between the interveners and some improvement on that in the final decision?

Gregg Orrill:

Yes.

Gregg Orrill:

All right. Good luck.

Operator:

Next question is from Nicholas Campanella with Credit Suisse. Your line is now open.

Pedro Pizarro:

Yes. We haven't given new timing on that yet. We have commented in the past on how Woolsey happened around a year after TKM, so you'd expect that schedule to be sometime later than TKM. I don't think that we would necessarily need to wait for the TKM proceeding to be completed to file for Woolsey. So, just as we did with TKM when we have -- really we have a -- or substantially complete in terms of settlements, I think that would be the timing for a filing.

Maria Rigatti:

Well, fundamentally, '25 is the most important aspect of this conversation, right, because that's the target we put out there and that we're driving towards and we'll commit to. In terms of 2024 though, how do we think about that? I think obviously, we'll give guidance for 2024 on the Q4 call of next year -- this year, Q4 '23, but I still think about 2024 as rate base is a fundamental driver of growth. And there are things that we're going to find out in 2023 that are going to inform our 2024 guidance when we give it. So, some of the things we've already discussed today, the GRC Track 3 to Track 4 decision. We have a number of memo account filings that we've made and we'll see where -- the timing on those, for example. We're going to continue to execute on our financing plan. I want to be really clear. We've embedded sort of this higher interest rate environment in all the numbers at this point. So, I think I won't say to you definitively where interest rates will end up in 2025, but there is that already baked into it. We're also frankly going to continue to monitor the cost of capital mechanism. It's not necessary for us to get to our 5% to 7% EPS CAGR in 2025, but it is something that could impact 2024. So, we are doing all of those things as we prepare and move into 2024. And of course, the team here continues to lean in and work on all of the operational efficiencies that are so important to this question, but also to customer affordability.

Pedro Pizarro:

Thanks, Nick. Take care.

David Arcaro:

Hi, thanks so much for taking my questions. I was wondering maybe first following up on the financing outlook and the interest rate environment. We've seen a couple of your peers do some different types of debt securities recently, convertible-like debt securities that have offered lower interest rates. Wondering if there are any ideas like that, that you're exploring in terms of opportunities to lower the debt financing costs as you look at some of the upcoming refinancing and debt issuances?

David Arcaro:

Okay, got it. Thanks. And then, also following up on the operational variances, looking at the 2025 outlook, I'm wondering if you could give an indication as to what kind of portion of that increased versus the prior expectation? And are you able to give just how much of that is operational efficiencies within the overall bucket?

David Arcaro:

Okay, great. That's helpful color. I appreciate it. Thanks so much.

Pedro Pizarro:

Thanks so much.

Julien Dumoulin-Smith:

Hey, good afternoon, team. Thanks so much for the time. I appreciate it. Hope you guys are well. Hey, just coming back to the guidance here, right, '23, '25, we received a good amount of attention here. But just let me ask it this way, when you look at your Parent and Other, right, it's relatively flattish from '23 to '25, call it, like that $0.88 midpoint. Given the commentary thus far about the balance sheet and the focus on equity issuance and the fact that some of that included, right, the parent includes the dilutive effect, it kind of suggests that there is no incremental parent debt issuance or equity issued. Or if there is, there is some kind of positive offset, right, i.e., maybe some debt paydown from TKM or something like that. Just trying to understand the puts and takes in that Parent and Other line.

Julien Dumoulin-Smith:

Got it. Do we have any sense of how much is baked in there in terms of cost reductions through the course of the period, if you will? And also, in the '23 guidance, I think it was like a $0.14 CEMA. So, what is that true-up as well, just while we're on the subject of details?

Julien Dumoulin-Smith:

Got it. All right. Thank you, guys, very much. Have a great day.

Maria Rigatti:

Thanks, Julien.

Sam Ramraj:

Well, thank you for joining us. This concludes the conference call, and have a good rest of the day and stay safe. You may now disconnect.

Operator:

Good afternoon, and welcome to the Edison International Third Quarter 2022 Financial Teleconference. My name is Dexter, and I'll be your operator today. [Operator Instructions] Today's call is being recorded. I would like to now turn the call over to Mr. Sam Ramraj, Vice President of Investor Relations. Mr. Ramraj, you may begin your conference.

Pedro Pizarro :

Thank you, Sam. Edison International reported core earnings per share of $1.48 for the third quarter and $2.49 for the first 9 months of the year. Based on our year-to-date performance and outlook for the remainder of the year, we are narrowing our 2022 core EPS guidance range to $4.48 to $4.68 from our prior range of $4.40 to $4.70. We are fully committed to delivering our long-term EPS growth rate target of 5% to 7% for 2025. In my remarks, I will focus on 3 key messages. First, SCE's excellent progress reducing wildfire risk. Second, we have updated the 2017 and 2018 wildfire and mudslide events reserve. Third, I'll talk about the increasing alignment between California's clean energy actions and SCE's vision to lead the transformation of the electric power industry. SCE is making excellent progress in executing its wildfire mitigation plan. As I mentioned before, when we look across all 17,000 circuit miles of distribution lines in SCE's high fire risk area or HFRA, over 7,000 miles are already underground. And the utilities grid hardening measures are focused on the remaining approximately 10,000 miles that were above ground. SCE is rapidly deploying covered conductor and is on pace to complete 4,300 miles or 43% of its overhead miles in HFRA by year-end. As depicted on Page 3, SCE plans to continue hardening the grid through its next rate case cycle, which would result in about 8,400 overhead miles hardened. Additionally, SCE has continued to reduce the impact of PSPS. With the acceleration of grid hardening activities on frequently impacted PSB circuits this year, SCE anticipates reducing PSPS out exploration by over 44 million customer minutes of interruption. That's more than 17% compared to the last 2 years, assuming the same weather and fuel conditions. As analysts, investors, rating agencies and members of the CPUC have observed from visits to emergency operations center this year, SCE has made marked advancements in its wildfire mitigation and emergency preparedness capabilities. Additionally, we continue to share extensive data on SCE wildfire mitigation efforts on the Investor Relations website. Turning to the 2017 and 2018 wildfire and mudslide events. In the third quarter, SCE paid about $350 million towards settlement of claims. Driven by this significant new information obtained through the litigation process following the closing of the Woolsey Fire statute of limitations in May, and our thorough evaluation of such information. The utility increased the best estimate of total losses by $880 million to a total of $8.8 billion. As summarized on Page 4, I would like to share with you some additional information and background on the reasons for this large estimate revision. [indiscernible] solution is a long and challenging process. And we really appreciate your patience as SCE works through it in a prudent manner, which will ultimately support the utility's strong cost recovery applications. With the statute of limitations for Woolsey individual plaintiffs behind us, we now know the actual number of plaintiffs bringing claims in connection with that event. And we have obtained important additional information on the nature of the claims for many of these remaining plaintiffs though still not for all of them. To give you more visibility into the process. We now have more information regarding the type of claim a plaintiff has. For example, whether a plaintive has a claim for smoke and ash damage or damaged property or entire property loss or for a business. Based on now having a defined number of claimants and more clarity on the nature of the respective claims, the reserve was adjusted to reflect our experience to date settling similar types of claims including higher-than-expected costs to settle several types of those claims. The continued progress settling claims enables us to move further along in resolving these historical 2017 and 2018 events. I want to be clear that we still expect SCE to file the application for TKM cost recovery by late 2023 and to seek full CPUC cost recovery of claims payments excluding, of course, amounts recoverable from insurance or FERC forgone under the agreement with the Safety Enforcement Division. I will also note that our financial assumptions for 2025 and beyond do not factor in any potential upside from this cost recovery application. My final comments focus on California's clean energy actions and Edison International's vision to lead the electric utility industry through the clean energy transition. In August, the California Air Resources Board, or CARB, approved the rule requiring 100% of new cars sold in California to the zero emission vehicles by 2035. The regulation codifies the light-duty vehicle goals set out in an executive order earlier this year. In September, CARB voted to ban the sale of new gas furnaces and water heaters beginning in 2030. This built on the CPUC's unanimous decision a week earlier to eliminate subsidies for new natural gas hookups beginning July 2023. At the federal level, the administration is proceeding with multiple implementation actions by The Bipartisan Infrastructure Bill, the Inflation Reduction Act and the CHIPS Act. Just this week, the U.S. EPA announced the first $965 million tranche of funding for the electric school bus program authorized by the infrastructure built with about $35 million supporting school districts in SCE's area. We are pleased to see this state and federal support for electrification, which is also consistent with our vision laid out in our Pathway 2045 white paper. SCE is a leader in electrification with the country's largest suite of transportation electrification programs led by an investor-owned utility, which benefit SCE in a differentiated manner. Electric vehicle adoption continues to accelerate here in California. Over the last 3 months, EVs accounted for roughly 20% of new car sales in California. SCE service area has about 400,000 of the 3 million EVs in the country. EV charging accounts for over 2.5 million megawatt hours or about of 3% SCE's projected 2022 retail sales. However, by 2045, this could grow to about 50 million-megawatt hours. Meanwhile, we are awaiting CPUC review of SCE's $677 million building electrification application which will help catalyze this market in tandem with California's plans to include around $1 billion in state budgets over the next 5 years. We are excited about working in partnership with state and federal governments and with other stakeholders including the communities we serve to advance policies that rapidly cut greenhouse gas emissions. With that, Maria will provide her financial report.

Sam Ramraj :

Dexter, please open the call for questions. As a reminder, we request you to limit yourself to 1 question and 1 follow-up, so everyone in line has the opportunity to ask questions.

Shar Pourreza:

Wanted to just start off on the legacy claims disclosures. Obviously, the estimates going up to 8.8%. What are you currently embedding for financing needs associated with the increase in the overall liability? And as you guys are reiterating the cost recovery process could be an upside to the current financial plan. I guess, what's a good way of looking at the potential range of scenarios and how and when you would disclose any potential benefits?

Maria Rigatti :

Sure. So Shar, just to reiterate, we don't have anything built into our 5% to 7% EPS CAGR through 2025 related to a cure on this. But rather, we've actually embedded all of the liability beyond the insurance recovery, et cetera, that we have. We've embedded that in basically the SCE costs excluded from authorized. So the drag is in there. we've updated the drag includes the update to the revision -- the liabilities that we did this quarter. And we've assumed about a 5.3% cost of financing, which corresponds to sort of where the forward curve looks today, and we're assuming sort of a 5-year tenure on that debt. We will, of course, be as efficient as possible as we go out and finance it -- so as the market reasserts itself and you see a shorter-term debt looking cheaper, we might decide to do some of that as well. But right now, that's what we're embedding. We're embedding 5-year tenure is based on a current forward curve.

Maria Rigatti :

Yes. So I would say, as part of the 5% to 7% CAGR, we're assuming that we execute our financing plans, I'll say, in the normal course. So what we announced earlier this year, but we've just created additional runway to push that off into next year. We're always looking at opportunities. I think obviously, we'll be tracking the developments that are happening in other parts of the state, looking at the regulatory outcomes, et cetera. We're also looking at other opportunities. We're always looking through our portfolio for assets that could provide a more efficient form of financing, but every company has a different portfolio. So we'll have to just keep looking.

Steve Fleishman:

So I think just going to the claims increase, I think your percent resolved actually went down. And so could you just explain, is that just because you're now assuming just a bigger total amount?

Maria Rigatti :

We resolved about $350 million claims this quarter. So we're still making progress on the claims, but it's just the math of the increase versus the resolutions.

Pedro Pizarro:

No, there is not.

Maria Rigatti :

So the rating agencies typically treat whether we've actually sent the dollars yet or we've just reported the reserve or the liability, they treat that as either actual debt. We've we financed it or imputed debt if we haven't yet financed it. So that is part of the calculation. So it will be embedded. We do not need to change our financing plan to address this. We've been, as you know, quite interested in having our metrics improve. And so we've built up a little cushion. This is leading to the cushion over the next several years now.

Pedro Pizarro:

Yes. Steve, I appreciate the question, and I know it's a lot of investor minds. We have all hands on deck on this. And the reality is that we passed a major milestone in terms of information content with the closing of the Woolsey statute of limitations period. As I said in my prepared remarks, we now actually know the number of claimants, which is not something that we knew until we were able to get past that closer date and be able to evaluate the data. We said all along that we work hard to make sure we are providing investors the best estimate under GAAP, but we recognize that there's things that can change the best estimate as we proceed along I'm not aware of something -- the magic tool that we could use to somehow accelerate this other than where our legal team is working expeditiously with the thousands of remaining plaintiffs to get through that process. As you might recall from prior quarters, we have worked successfully to set up processes or having that be as expedited as possible with support from the respective courts. And so we will continue at it. I know there's some element of frustration with this for all of us but it is the reality of having the mass litigation case with thousands of individual plans still remaining in the balance sheet.

Steve Fleishman:

And just one more clarification on that filing. Of the -- could you give us some sense roughly of the kind of amount that's available for recovery, how much that filing would capture as a percent of that? Is it half of it? Is it 90% of it? Is it 20% of it?

Pedro Pizarro:

But to be clear, Maria, and helping out upon misunderstanding, Steve, Steve, we plan to request for recovery of all allowable amounts. So the only amount that we would not be asking for recovery for are the amounts that we've recovered already through insurance, the amounts that will recover from FERC or we expect to recover from FERC and the amounts that we agreed in the settlement with the safety enforcement division to exclude from cost recovery. So that leaves the vast bulk of the reserve is we are planning to go seek for recovery of all of that.

Pedro Pizarro:

Between the combined filings. So again, remember, this filing in 2023 will be for the 2017 events, the TKM events, and then that will follow later with our filing for the 2018 events when '18 happened a year after 2017. So it's natural that those would not land at the finish line at the same time. And I think what Maria was referring to is we have not broken out for investors what portion is TKM versus what portion is Woolsey. We've shown you a combined number. We are in active litigation, and that's just -- we can always finding the balance point here between providing sufficient information for our investors, while recognizing we're in active litigation, so making sure that we're not providing excessive information that could end up impairing our ability to defend our customers in the litigation poses.

Gregg Orrill:

I think Maria made a comment about the real estate portfolio or management of and an optimization there. What were you referring to?

Operator:

Our next question comes from Jeremy Tonet, JPMorgan.

Maria Rigatti :

Yes. So we did update the financing assumptions there. So now at the parent company, we are assuming that the embedded cost is about 6.1%. Like the rest of the company, at the parent, we have opportunities for both operational and performance efficiencies. And so we're targeting some of those to help offset the increase in rates. So it's a blend of things that have happened this quarter.

Maria Rigatti :

It's a variety. So some things will certainly -- we will accomplish some efficiencies over the course of the next few years, and that will reset in the 2025 GRC. There's also things where you get misaligned over the course of a GRC. And so when we the spend back in line with authorized or vice versa, authorized back in line with the spend, we'd actually see a reduction of maybe some drag that we've been experiencing. So I think across the different variances, there's just a variety of different inputs. And so other things in that line, AFUDC, we have operational efficiencies. We have some other things where we'll have a catch up with the GRC. So a have a number of things.

Maria Rigatti :

It changes through the year because the other thing that impacts that line item is also the timing of regulatory approvals. So you saw that earlier this year, we had highlighted getting an approval on the customer service replatform project and said that was a big timing difference potentially between this year and next year. We've gotten a final decision now. And so it's in 2022. You'll see some of those things over the course of the next few years, the exact timing of when they hit does -- is impacted by when we file the application as well. So it's a little bit of a mix from year-to-year.

Nick Campanella:

I just wanted to ask kind of when you think about the capital that needs to be deployed for your decarbonization plan, the coverage conductor plan? And then also the just the fact that fuel lines have come up and we're in just a greater inflationary environment here. And then you kind of layer on the recovery of the wildfires. Just overall confidence level and just being able to kind of maintain customer rates where they are and kind of execute on this plan?

Maria Rigatti :

Yes. Maybe Nick, just maybe one more thing. I think Pedro has really focused both on the long term and the near term and recognizing that there are things that we want to work on over the near term to help bridge to that longer term. I think it's really interesting, too, from a commission perspective that they recognize the need for affordability. They recognize the work that people need to do. And our recent cost of capital proposed decision alternate proposed decision. A lot of the interveners actually focused a lot on affordability as the reason why the trigger mechanism should be permitted to trigger. And when the PD and the APD came out, the commission recognized that it's allowed to trigger that rates would actually go down, things were dollars already refunded to customers. But they also recognize that if you don't set the ROE at an appropriate level that reflects the utilities' risk. It will just make it that much harder to attract capital. So I think that you're seeing a balanced approach to affordability in California.

Maria Rigatti :

So we'll obviously give our guidance on our 2023 guidance on our Q4 call. We've said before 5% to 7% from the midpoint of our 2021 guidance through 2025. There are some nonlinear years in there, you can imagine. But we are focused on delivering that value over the longer term.

Julien Dumoulin-Smith:

Thanks, team, for the time. I appreciate it. So maybe just stepping in when Nick left off here, just to make sure I heard this right. As you think about '23 relative to the core of the outlook through '25, is it fair to say that there's sort of a nonlinear element to getting to that 5% to 7%, i.e., near-term pressures with respect to the refinancing, et cetera, but ultimately, between the cost savings that you've identified and latitude on timing of equity that you can get to that '25 outlook in kind of a nonlinear way?

Julien Dumoulin-Smith:

Excellent. And then just to clarify, I think just going back to Rich's question on the 85 to 95 by '25 here. Can you elaborate a little bit on the lower total equity content issued? Is that basically pushing out the time line in the 26 plus the total equity? Or is there a way to actually eliminate equity from the plan altogether. I just want to clarify, because you alluded before to multiple moving pieces and how you get there, although in the slide you specifically called this one out.

Julien Dumoulin-Smith:

Right. But the core point there being that you could actually structurally bring down equity content potentially depending on what happens?

Operator:

That was our last question. I will now turn the call back to Mr. Sam Ramraj.

Sam Ramraj:

Thank you, Michelle, and welcome, everyone. Our speakers today are President and Chief Executive Officer, Pedro Pizarro; and Executive Vice President and Chief Financial Officer, Maria Rigatti. Also on the call are other members of the management team. Materials supporting today's call are available at www.edisoninvestor.com. These include our Form 10-Q, prepared remarks from Pedro and Maria, and the teleconference presentation. Tomorrow, we will distribute our regular business update presentation. During the call, we'll make forward-looking statements about the outlook for Edison International and its subsidiaries. Actual results could differ materially from current expectations. Important factors that could cause different results are set forth in our SEC filings. Please read these carefully. The presentation includes certain outlook assumptions as well as reconciliation of non-GAAP measures to the nearest GAAP measure. During the question-and-answer session, please limit yourself to one question and one follow-up. I will now turn the call over to Pedro.

Maria Rigatti:

Thanks, Pedro, and good afternoon, everyone. Edison International reported core earnings of $0.94 per share for the second quarter. Core EPS at SCE increased year-over-year, primarily due to the adoption of the 2021 GRC final decision in the third quarter of 2021, partially offset by higher O&M expenses. At EIX Parent and other, the core loss was $0.05 higher in the second quarter. This was primarily due to higher preferred dividends and unrealized losses on investments in the second quarter of 2022 and compared to unrealized gains recognized in the same period last year. On Page 8, you can see SCE's key second quarter EPS drivers on the right-hand side, and I'll highlight a few. Authorized revenue from the 2021 GRC was higher by $0.34 for two reasons. First, the escalation mechanism for 2022 contributed $0.18 for the variance. Second, because SCE did not have a GRC final decision in the second quarter of last year, it was recording revenue at 2020 levels. This timing difference contributed $0.16 to year-over-year Q2 revenue growth. Other CTC revenue was $0.26 higher, primarily related to the approval of GRC Track 3. With this approval, SCE recognized revenue for costs previously deferred to memo accounts because the costs were also recognized there was no net earnings impact from this revenue growth. The remaining O&M variance for this quarter was primarily driven by the timing of wildfire mitigation activity expense recognition. Moving to Page 9. SCE's capital forecast is unchanged from last quarter, when we reflected the capital expenditures SCE requested in Track 4 of its GRC. During the second quarter, SCE submitted its Track 4 request, which covers funding for 2024, the third attrition year of SCE's 2021 GRC. In addition to requesting a revenue increase driven by the GRC attrition mechanism and inflation, SCE proposed deploying another 1,200 miles of covered conductor, which would bring the utility to a total of about 6,500 miles installed by the end of 2024 or about two-thirds of its overhead distribution miles in high fire risk areas. As shown on Page 10, our capital forecast continues to result in projected rate base growth of 7% to 9% from 2021 to 2025. This forecast incorporates SCE's current view of the request to be made in the 2025 GRC and other applications. We see strong potential for SCE to continue deploying capital and achieving 7% to 9% rate base growth through 2025. Before turning to guidance, I would like to share a couple of positive developments in the quarter. First, SCE recently completed its annual wildfire insurance negotiations for policies that run from July 2022 through June 2023. In view of the measures SCE has implemented to reduce wildfire risk, the company's insurance carriers have further reduced premiums this year. Second, during the quarter, both Moody's and Fitch affirmed EIX and SCE's credit rating and raised their outlook to positive from stable. Both of these positive outlook changes were driven by recognition of the utility's significant progress addressing wildfire risk combined with the constructive AB 1054 framework. Turning to guidance. Pages 11 and 12 show our 2022 guidance and the key assumptions for modeling purposes. We are reaffirming our 2022 core EPS guidance range of $4.40 to $4.70. We are awaiting resolution and whether the cost of capital will remain unchanged for 2022. And after receiving a CPUC final decision, we will provide an update on guidance to incorporate any changes and our outlook for the rest of the year. In the 2023 cost of capital proceeding, the administrative law judge recently issued a scoping ruling with two positive components that I'd like to point out. First, the proceeding schedule calls for a proposed decision to be issued in mid-November, which could allow for a final decision to be made by year-end. Second, consistent with SCE's request and past proceedings, the schedule calls for updating the cost of debt and preferred in September, which will allow SCE to reflect more up-to-date interest rate forecast. SCE has made a strong case for its requested ROE of 10.53%, and we will incorporate the final decision in our 2023 earnings guidance, which we will introduce on our Q4 earnings call. At that time, we will also update you on our long-term EPS growth rate target. We remain confident in our ability to achieve EPS growth of 5% to 7% from 2021 to 2025, and which results in a 2025 EPS range of $5.50 to $5.90. I would now like to provide a brief update on our 2022 financing plan shown on Page 13. Our overall plan remains consistent with what we shared with you previously. In April, the parent borrowed $600 million under a term loan agreement, which matures in 2023. This transaction provides flexibility for issuing the previously disclosed debt and equity content securities later this year or in 2023. We will continue to monitor market conditions to optimize our capital structure, which, as we have said in the past, issuance, preferred equity or common equity to the use of internal and at-the-market program. Our prior three-year ATM program expired earlier this year, and we plan to establish a replacement program in the coming weeks. Let me conclude by building on Pedro's earlier comments on sustainability. I will emphasize the strong alignment between the strategy and drivers of the EIX business and the clean energy transition that is underway. Since publishing the sustainable financing framework last June, SCE has issued $2.1 billion of sustainability bonds under that framework with strong demand from investors recognizing the environmental and social benefits related to projects funded by these bonds. Our large capital investment plan focused on the grid provides ample opportunity for continued issuance of securities under this framework, which is aligned with the company's sustainability-oriented strategy and vision. That concludes my remarks, so we can go to questions.

Operator:

[Operator Instructions] Our first question comes from Shahriar Pourreza with Guggenheim Partners. Your line is open sir.

Pedro Pizarro:

Yes, Shar. Thanks for the question. A couple of thoughts on that. First, we've talked notionally before about having at least 90 to 90 plus. That's not a hard threshold, right? And what we want to see is substantial completion. Substantial is not 100% necessarily, right? So we're not focused on that. But we want to see enough progress that we believe that we can then put an application in front of the commission that they will then say, they will agree happy enough of these settlements in place so that there is clarity about the final exposure. When you think about that 90% that we have in aggregate right now, remember that it's a split across the -- both the Thomas Koenigstein, mudslide matters as well as the Woolsey matter. We've mentioned in the past that those are different cases. And so what we've pointed to towards the -- or by the end of 2030 is confidence that we'll make our first application by then. Thomas Koenigstein, mudslide happened a year earlier, so stentorian that those be more likely the first to go into an application. And so remember that 90 -- nearly 90% we have now is across all of the cases, and we haven't broken that out just for -- it is active litigation, so it's just best to provide that as a joint number. So I think bottom line is we feel a sense of urgency, which I think is what's really underlying your question, we feel a sense of urgency to file for cost recovery, but we want to sure we do it right. And we haven't given you a precise number. It's this x.y percent that we need to hit. I don't think the number exists because as we're looking at not only the amount outstanding, but also the number of plaintiffs, the types of cases that will all factor into our ultimate judgment call on when it's ready for prime time.

Pedro Pizarro:

Thanks, Shar. We have that framework. It's called AB 1054, and the wildfire mitigation plan process. So we feel very comfortable with that framework. Under that framework, we shared with you last quarter that we are looking at a number of areas where we'll do increased targeted undergrounding. We do have a very different geography from our friends at PG&E. They have -- we've talked about this before, they have a lot more forest land, where more of their incidents have come from trees falling into lines outside of the vegetation management zone. We have more grasslands Chaparral or we get more blow in making contact with the lines. And so that's why, from a risk spend efficiency perspective covered conductor, which is a fraction of the custom of undergrounding and we can deploy much more quickly has been the superior solution for most of our territory. But again, under the wildfire mitigation plan, we are looking at doing more undergrounding and targeted spots. I think we said in the past that probably be hundreds of miles for us, not thousands of miles. You asked about the legislative package is going through Sacramento right now, and our friends at PG&E, I think, are very focused on that because they have much larger scale of undergrounding. And so I certainly respect that. But given the scale that we have on our hands and the strength of the wildfire mitigation plan framework for Southern California Edison, I think we have what we need at this point. Should legislation be passed, we will, of course, take a look at it and see if there's anything there that would be beneficial for our customers.

Maria Rigatti:

So we have 10.3% embedded in our growth rate, and we have been looking at that and managing around all of that since we put the numbers out there.

Michael Lapides:

Just curious, when you're looking out at potential things that could make material changes to your long-term rate base growth guidance, and I don't mean long term 20 and 30 years, that's probably further out than I'm going to be tracking you guys. But let's talk 2024, 2025, 2026, how do you think about things that could move the needle in those years? And what the process is to get more certainty on those items?

Michael Lapides:

And then one follow-up, just on the cost recovery process in filing, I mean you talked about filing at the end of '24 -- second half of 2023. Is there a framework for what that proceeding would actually look like, like how that would actually work process-wise at the CPUC?

Operator:

Our next question comes from Jonathan Arnold with Vertical Research Partners. Your line is open.

Maria Rigatti:

Sure, Jonathan. So maybe I'll take a step back to, we are really working hard on minimizing the cost of wildfire insurance for our customers. And we talked before about doing that in two ways. One is, getting the commercial premiums down and then also using customer-funded self-insurance, so we can fill the tower. And this year, we've actually filled pieces of the tower, about $100 million worth with customer-funded self-insurance. So that's a really great avenue for customer cost reduction and affordability because if you don't have losses, you just roll that forward to the next year. The other piece, which is sort of, I'll say, a third-party indication is what are the commercial insurance carriers charging us. And what we have found this year, and as I noted, because of the ongoing risk reduction that we have going on at the company. If you look at last policy year, which just ended versus the current policy year which has now just started are weighed online, since the percentage that we're being charged -- again, across the tower up and down from the low level all the way to the top. Overall, the average has gone from 47% rate online to 43% rate online. So we're finding that -- we're seeing a trend that people are starting to see the risk mitigation and acknowledging it. And when we couple that with the use of customer-funded self-insurance, we're able to provide a better outcome for our customers.

Maria Rigatti:

That's right. That's right. That's how you do it.

Maria Rigatti:

Sure, absolutely. The O&M that I mentioned in the quarter, there's some of that Track 3 that's moving through both of those buckets, but it's really a timing issue on the wildfire mitigation expense recognition. So that's what happened in the quarter. I think in terms of inflation and the like, we did file a Z-Factor application few weeks ago now, and that's in recognition of the fact that we have -- in terms of where we're seeing inflation, it's largely labor related, labor that does our management, wildfire mitigation, outside contractors. So that's where we're seeing it. We do have a number of areas that we use in order to mitigate the impacts of inflation. So we have the attrition mechanism that's in our GRC. And we use a basket of indices to escalate the revenue requirement every year. So I think that's one really important inflationary risk mitigate. We have interestingly in the balancing accounts and the memo accounts, the amounts that get recorded there, ultimately, they do get trued up for reasonableness, but we can embed the costs there that we're seeing in the market now. So there's an avenue there as well on the capital side. In our Track 4 filing, we also included some additional inflation mitigation, so that when we come to 2024, we'll be able to recognize the actual inflation that's occurred. And again, just going back to that one instance of the Z-Factor where we noted that we were seeing some inflationary impact. Now as we go out further in time, and you get to the longer-term growth trajectory, obviously, 2025 is a new GRC and we'll be able to embed the current contracts that we have. So that covers the waterfront I think, in terms of inflation impact.

Steve Fleishman:

I know you kind of strongly resupported the 5% to 7% earnings growth for '25. Just curious when you're doing that, are you including kind of the higher financing cost environment that, let's say, we currently have versus beginning of the year when you kind of do that? Is that kind of in the mix?

Operator:

Our next question comes from Paul Fremont with Mizuho. Your line is open.

Maria Rigatti:

Sure. So operational variances, you see us talk about that every year, and that's an area that we manage very closely. It's something that I think is core to sort of our overall operational excellence perspective and commitment, and we have had the lowest system average rate in the state for a long time. So I think that there's a lot of history behind that. Included in that, though, there's -- as I mentioned earlier, there are just so many different things. That line item can include -- if you just see it, it includes the timing of regulatory impacts. It includes operational efficiencies, it include things like depreciation true-ups. So as we get closer and closer, and we continue to look at the mix that's involved there, we've just been able to make refinements and expectations about what we'll be able to deliver at that point in time. And it's a natural thing for us to do because we do know that there have been some changes in terms of the interest rate environment that we're dealing with in the other category. So it's just part of our overall approach to managing the business.

Maria Rigatti:

It is a lot of different things in that category. It's just running the business and what we would perceive to be and characterized as an operationally excellent manner.

Paul Fremont:

And I think your disclosure talks about sort of the $3 billion of debt that has funded wildfires through the end of last year. Can you provide any update on that as to what issuance you might have done so far this year?

Paul Fremont:

And how much will that?

Paul Fremont:

And then last question. If I heard you correctly, you're looking to sort of -- are you looking to finance variable rate? Or are you looking to finance fixed rate? Because you were talking about sort of the short end of the curve.

Operator:

Our next question comes from Julien Dumoulin-Smith, your line is open, from Bank of America.

Maria Rigatti:

Yes. So two pieces there. The first, maybe I'll just clarify. We don't actually embed recovery in the growth targets, the 5% to 7%. We are absolutely going to file an application. We're making the -- we're going to have a great argument and a great set of customary that we're going to file with the commission, but that's not the embedded assumption in that 5% to 7%. So that's one thing. In terms of the operational efficiencies and going in and out over time. So we definitely do this on behalf of our customers. We want to increase the efficiency of the company, so that overall customer rates can be managed most effectively, and we make as much as possible for all of the necessary capital, of course, that 79% rate base growth represents capital that we will be deploying. But we're going to continue whatever the year, it was the first year of the rate case cycle or last year rate case cycle, we're actually always pursuing efficiencies. So that's a piece of the puzzle for us every year, year in, year out, going after it. And then there are a bunch of other things in that overall bucket of operational variances as well. So there are places where we're going to pull levers in order to ensure the most efficient outcome. So it's many things. But I think in terms of the operational efficiencies question, specifically that you asked, we're just doing it year in, and year out, regardless of what year of the rate cycle is in.

Julien Dumoulin-Smith:

Right. No, indeed. In fact, if I can talk about the cadence of these operational excellence, I think you just took a charge here on organizational realignment in the quarter here. Can you talk about sort of what that -- is this the start of a wider program? How does that fit into that $0.20 benefit by '25? Should be expecting more of that? You know what I mean to what extent could that feed in earlier in terms of that $0.20 uplift?

Steven Powell:

Sure. Thanks, Pedro. So the charge you kind of noted is related to part of the changes that we're looking at and what we call our catalyst program, this bottom-up set of ideas for employees. And we -- as we've talked about before, we identified thousands of ideas. Our teams went through and identified 600-plus ideas that are all contributing to improvements, not just around affordability, they're going to help customers, but as well as things around safety, reliability, et cetera. And our plan is to go and execute against those ideas over the next 24 months or so and kind of reap benefits all along the way. Some of them require investment in technology support, there's process changes. But that's what's going to lead to some of the operational efficiencies that we'll get as well as other improvements around our core operating metrics. We would expect that this, along with other efforts are things that will become more of a recurring activity that help drive continued operational improvements and efficiencies year-over-year. And so as we get our legs underneath us with this program and look to the next one, we'll be able to better identify how much of that is going to become a great benefit for customers and in interim periods could contribute to earnings.

Operator:

Our next question comes from Ryan Levine with Citi. Your line is open.

Pedro Pizarro:

Yes. Ryan, it's a good question. You might recall that we really haven't split apart the TKM versus Woolsey claim amounts. We've been pretty candid that we do have active litigation going on, active settlements going on. And so I think it's been in our customers' interest to present the combined picture of the two. So therefore, we really can't provide color at this time on what the split is between those two and therefore, what you might see in an earlier filing versus later filing?

Pedro Pizarro:

Ryan, what we've done is that we've given you the outside mark, we expect to be making that first filing by the end of 2023. As I mentioned a little earlier, we have a sense of urgency. So if we see that we progressed enough with settlements where we can go earlier, we will do that. I would expect that we would give you that color as we're making the application, as we're filing -- as we are coincidently filing the application. And you can understand why just against sensitivity as we continue the negotiation process for settlements that -- I just want to let the entire market know us at the same time that we let the regulators know that we're making that application.

Pedro Pizarro:

Yes. Let me answer it this way. Maria, you may have something to add here. We continue to make sure that we are really being straight down the middle of the road and you seem have GAAP definitions, right? And so we want to make sure that we're providing you our best estimate at any given time. And that best estimate, as you saw, they not change quarter-to-quarter. We disclosed that the actual number could be higher, could be lower. I think the one factor to consider is that while there is always uncertainty in that final number, the cone of uncertainty keeps getting narrower because now we have $400 million in that expected estimate. And so just the amount remaining is smaller. So therefore, to the extent that we might have had -- and I know we haven't disclosed it this way, right, but if you thought about an x percent potential level of uncertainty over $1.3 billion and an x percent level of uncertainty over $900 million, we're a [Indiscernible] percent smaller number now this quarter. That's about all I can say, but I do want to reiterate, consistent with our disclosures that there is uncertainty to that, that is our best estimate, the final number could be higher or lower.

Sam Ramraj:

Thank you for joining us. This concludes the conference call. Have a fantastic rest of the day and stay safe out there. You may now disconnect.

Disclaimer*:

This transcript is designed to be used alongside the freely available audio recording on this page. Timestamps within the transcript are designed to help you navigate the audio should the corresponding text be unclear. The machine-assisted output provided is partly edited and is designed as a guide.:

Sam Ramraj:

00:29 Thank you, Dextor, and welcome everyone. Our speakers today are President and Chief Executive Officer, Pedro Pizarro; and Executive Vice President and Chief Financial Officer, Maria Rigatti. Also on the call are other members of the management team. 00:43 Materials supporting today's call are available at www.edisoninvestor.com. These include our Form 10-Q, prepared remarks from Pedro and Maria, and the teleconference presentation. Tomorrow, we will distribute our regular business update presentation. 01:01 During this call, we'll make forward-looking statements about the outlook for Edison International and its subsidiaries. Actual results could differ materially from current expectations. Important factors that could cause different results are set forth in our SEC filings. Please read these carefully. The presentation includes certain outlook assumptions, as well as reconciliation of non-GAAP measures to the nearest GAAP measure. 01:28 During the question-and-answer session, please limit yourself to one question and one follow-up. I will now turn the call over to Pedro.

Maria Rigatti:

08:49 Thank you, Pedro and good afternoon. My comments today will cover first quarter 2022 results, our capital expenditure and rate base forecasts, SCE’s cost of capital applications, and 2022 EPS guidance. 09:03 Edison International reported core earnings of $1.07 per share for the first quarter, an increase of $0.28 per share from the same period last year. Core EPS increased year-over-year, primarily due the adoption of the 2021 GRC final decision in the third quarter of 2021, partially offset by interest expense from increased borrowings. 09:26 On Page 6, you can see SCE’s key first quarter EPS drivers on the right-hand side. I’ll highlight a few. Authorized revenue from the 2021 GRC was higher by $0.35 for two reasons. First, the escalation mechanism for 2022 contributed $0.18 to the variance. Second, because SCE did not have a GRC final decision in the first quarter of last year, it was recording revenue at 2020 levels. This timing difference contributed $0.17 to year-over-year Q1 revenue growth. 10:00 Other CPUC revenue was $0.51 higher, primarily related to the approval of GRC track 2. With this approval, SCE recognized revenue for costs previously deferred to memo accounts. Note that this revenue increase was fully offset, primarily by the recognition of $0.46 of O&M resulting from the track 2 decision. At EIX Parent and Other, the core loss was $0.06 higher in the first quarter. This was primarily due to dividends on the preferred equity issued last year. 10:33 Now let’s move to SCE’s capital expenditure and rate base forecasts. Page 7 shows SCE’s updated capital forecast to reflect its upcoming GRC track 4 application, which will be filed on May 13. Track 4 covers funding for 2024, which is the third attrition year of SCE’s 2021 GRC. 10:54 In addition to requesting a revenue increase driven by the GRC attrition mechanism and inflation, SCE will propose continued deployment of covered conductor beyond the over 5,000 miles expected to be installed by the end of 2023. 11:10 I would like to reiterate Pedro’s earlier comment on SCE’s wildfire mitigation plan. It is immediately actionable and the execution of the work results in real risk reduction today and each day that SCE hardens its grid. As shown on Page 8, our capital forecast continues to result in projected rate base growth of 7% to 9% from 2021 to 2025. 11:34 The forecast reflects SCE’s current view of the requests to be made in GRC track 4, the 2025 GRC, and other applications. We continue to see strong potential for SCE to continue deploying capital and achieving 7% to 9% rate base growth through 2025. 11:53 Turning to guidance, Pages 9 and 10 show our 2022 guidance and the key assumptions for modeling purposes. We are affirming our 2022 core EPS guidance range of $4.40 to $4.70. SCE is recording revenue based on its currently authorized cost of capital and will reflect the final decision in the 2022 cost of capital proceeding in the quarter in which it is received. 12:19 As Pedro mentioned, we are awaiting resolution of whether the cost of capital mechanism will operate for 2022. After receiving a final decision from the CPUC, we will provide an update on guidance to incorporate any changes in the ROE and our outlook for the rest of the year. 12:36 Also embedded in our guidance is EIX’s 2022 financing plan, which we disclosed last quarter and remains unchanged. The revision to the best estimate of total expected losses does not change our plan. Also, I’ll remind you that the claims payments themselves are funded with debt issued by SCE. 12:55 I’d like to provide some additional insight into two of SCE’s recent applications to the CPUC. First, SCE filed a request to extend its CPUC capital structure waiver with respect to the 2017 and 2018 Wildfire and Mudslide Events. You may recall that the CPUC previously approved a waiver through the earlier of May 2022 or resolution of the 2017 and 2018 events. 13:20 The waiver allows SCE to exclude certain charges and debt when calculating compliance with its 52% authorized CPUC equity ratio. SCE has requested an extension of the waiver period until the CPUC resolves the last of SCE’s cost recovery applications for the 2017 and 2018 events. 13:41 The current waiver remains in place until the CPUC rules on the recently filed application. This provides SCE with the flexibility to finance itself in a way that is efficient for customers and shareholders. Second, in SCE’s 2023 cost of capital application, it requested an ROE of 10.53%, consistent with its recently filed off-cycle application. This ROE is at the upper end of the reasonable range estimated by SCE’s expert witness. 14:12 We believe SCE made strong arguments justifying its request and remind you that in SCE’s last cost of capital decision the CPUC concluded SCE’s ROE should be at the upper end of the range. Under SCE’s proposed schedule, the proceeding would conclude with a final decision by the end of the year. 14:32 Turning to Page 11, I want to reiterate our growth opportunities that drive strong core earnings growth from 2021 through 2025, and highlight EIX’s potential to achieve double-digit total shareholder return during that period. A key component of our total return proposition is our common dividend, which currently yields approximately 4%. 14:54 I’m proud of our track record of 18 consecutive years of dividend growth and look forward to building on that history. Our EPS growth of 5% to 7% is driven by SCE’s significant capital expenditure opportunities, including investments in the safety and reliability of the grid. Sustainable rate base growth results from the investments necessary to reduce wildfire risk and investments to support infrastructure replacement and load growth. 15:20 Affordability is also a key consideration, and I would like to emphasize that SCE has the lowest system average rate among California’s large IOUs. This is in large part driven by our strong culture of excellent cost management that has been a cornerstone of the utility for more than a decade. 15:38 That concludes my remarks. Thank you.

Operator:

15:52 [Operator Instructions] Our first question comes from Shar Pourreza of Guggenheim Partners. Shar, your line is open.

Pedro Pizarro:

16:09 Hi Shar.

Shar Pourreza:

16:12 Pedro, first sort of in terms of the initial filings coming in 2023, it’s obviously it is a great start to a resolution and it obviously implies that you would be filing multiple times for recovery, how do we plan to separate the tranches? Is it kind of based on the percentage of value settled? Just want to get some clarity on the process from your standpoint. How long the recovery, regulatory recovery could take and if you don’t have 90% of the claims settled, are you still going to file in late 2023? And even why not file even sooner in 2022, if these are going to be in step functions?

Shar Pourreza:

18:36 Got it. And then just, I guess the [impetus] [ph] was we’re getting questions on – because you have 80% already almost resolved, it seems like it is “substantial” so why not file sooner, but it makes sense, it makes sense Pedro. And then, just may be a question for Maria, as I was sort of thinking about potentially more cost increases as sort of the incremental 20% gets resolved, what's the trigger for more equity back and as we think about the balance sheet capacity, sort of other rating agencies comfortable with the current metrics and the approach you guys are taking, how is the dialogue going? I guess, what's their sense of patients in anticipation of multiple filings for recovery? Thanks.

Shar Pourreza:

20:27 Got it. That's what I wanted to sort of get [indiscernible] if there's incremental cost increases you think you have enough cushion in your balance or thresholds not have to hit the equity markets. That's the impetus.

Shar Pourreza:

20:53 Okay, terrific. Thank you guys so much.

Operator:

20:57 Our next question comes from Steve Fleishman, Wolfe Research. Steve, your line is open.

Pedro Pizarro:

21:22 Hard to predict in advance. I would say, first of all, it starts with having a strong showing. So, we expect that our team will have a very strong showing put together when we file. And as you can imagine, the team has been working on that all along. 21:37 Once you go into a CPUC proceeding, it’s hard to estimate, what that would be, I'd say, typical time frames for CPUC proceedings can be and the short-end something very fast maybe the 12 months, 15 months, sometimes it can take a little a little longer, so we'll just have to see, and I have a better gauge for how long it might take once we file and once we see what kind of initial set of intermediary actions are filed.

Pedro Pizarro:

22:36 So, for the 2017 and 2018 cases, the remaining statute of [limitations stayed] is just we'll see that I thought it to. To your broader question, as we go along, that uncertain count continues to narrow right because we have more settlements under our belt and you heard 80% number. As you'll see in other disclosures, we acknowledge it is possible we may see further changes because the reality is, every individual case is different. And frankly there can be new insights and new kinds of cases, etcetera that show up. 23:19 In this particular quarter, as we mentioned, we made great progress Steve, but frankly, there was a small number of outlier cases where the ultimate claims were significantly larger than what we had expected based on the neighborhood these were in, what you would expect for an average case in those and sale, one thing that you are going to be saying is that we have now made provisions not only increasing the reserve for what we have seen, but we also added a provision in the reserve now, now expecting some of that previously unexpected, right? Based on the experience we had, we've added provision or potential other exceedingly large individual claims exceeding what we had initially thought might be an average claim size. So, we try to learn from the continuous information we've gotten, make the provision for that, but at the end of the day under GAAP we would provide [indiscernible] what we believe is our best estimate at this point in time.

Pedro Pizarro:

25:21 I think, also Maria, and basically, we keep taking uncertainty off the table.

Pedro Pizarro :

25:31 Yes. Thanks, Steve.

Ryan Levine:

25:39 Hi, good afternoon. Hi, everybody. Two questions, what's the status of the battery supply chain and execution? And do you still see the August first date as realistic? And I guess more broadly, how do you viewing resource adequacy going into the remaining portion of the year?

Steve Powell:

26:42 Sure. So, hey, Ryan the – like we talked about for the increased risk of delivery, some of that's come through and at this point based on the project delays, we're trying to get work with Ameresco to ensure we get as many megawatts online as possible. At this point, we expect that there could be up to 300 megawatts online in August, still subject to continued COVID and shipping restrictions out of China. But on the ground here, work is progressing. 27:16 With respect to the broader battery supply chain and really to your other question around resource adequacy, as we look at this summer, we feel that the state is in a slightly better position than it's been the last couple of summers with respect to capacity. We're definitely focused on bringing our batteries online and ensuring other projects are getting online for this summer, but still there'll be a lot of caution going into summer and there's is a lot effort going into ensuring we get more resources available. 27:47 As you project beyond this year, as we know, the state is focused on bringing more than 11,000 megawatts of resources online by 2026. SCE’s portion of that is about 4,000 megawatts, and so we continue to procure resources for 2023, 2024 and then we'll be focused on 2025 and 2026 next. 28:07 We're working on everything from interconnection to securing supplies and with all of our third parties. To ensure that we can get enough resources in the state to ensure the liability and that's SCE’s job as well as the other entities within the state. So, this summer, we'll be in a better position than the last few summers.

Ryan Levine:

28:40 Thanks. And I guess one follow-up. In terms of the cost recovery, if you're going to file that in late 2023, how are you currently looking at use of proceeds?

Ryan Levine:

29:12 Appreciate the color. Thank you.

Operator:

29:16 Our next question comes from Sophie Karp, KeyBanc. Sophie, your line is open.

Maria Rigatti:

29:50 Sophie, we still plan to deploy the full capital plan this year. So, it would impact on our financing plan.

Pedro Pizarro:

30:22 Let me turn this over to Adam Umanoff, who’s our General Counsel, Sophie.