Edison International : BUSINESS UPDATE 2024 q3
EIX
BUSINESS UPDATE
OCTOBER 29, 2024
IntroductionClean Energy Transition LeadershipWildfire MitigationFinancial InformationAppendix
Edison International leads the transformation of the electric power industry
Focused on opportunities in clean energy, advancing electrification, building a modernized and more reliable grid, and enabling customers' technology choices
One of the nation's largest electric-only utilities, with over 5 million customer accounts in 50,000 square-mile service area
EIX's principal subsidiary, with $38-43 billion 2023-2028 electric infrastructure investment opportunity
Growth driven by investment in strengthening and modernizing the grid and advancing California's aggressive climate goals
Wires-focused rate base, with limited power generation ownership (<20% of power delivered from owned generation)
Partners with large commercial, industrial, and institutional organizations to navigate the energy transition by providing integrated energy management and sustainability solutions Clients include 50 of the world's largest companies
Edison International | October 2024 Business Update
$32+ billion
Market capitalization
14,000+
Employees
125,000+
Miles of SCE T&D lines
~$43 billion
SCE rate base
>15 million
Residents served
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IntroductionClean Energy Transition LeadershipWildfire MitigationFinancial InformationAppendix
Thesis: Wires-focused utility with rate base growth aligned with state's aggressive clean energy goals
Constructive California and Federal
Decoupling of sales
Premium California ROE
Forward-looking
Wildfire prudency
regulatory structures
ratemaking
standard
Aggressive climate goals met with
California GHG reduction
clean, efficient, economy-wide
Helping customers make clean energy choices
electrification
Significant investment required to
Address wildfire risk and climate adaptation needs
Infrastructure replacement
ensure the grid is reliable, resilient, and
ready for widespread electrification
Electrification infrastructure
Investment in electric-led clean energy
6-8%2023-2028 rate base CAGR
future results in strong rate base and
Target dividend payout of 45-55% of
dividend growth
SCE core earnings
Edison International | October 2024 Business Update
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Introduction
Clean Energy Transition Leadership
Wildfire Mitigation
Financial Information
Appendix
EIX well positioned for a decarbonized future; no coal or gas LDC exposure and high electric sales growth potential
UTY1
EEI Index2
Electric-Only Utility &
5 of 201
12 of 39
No Gas LDC Exposure
(# of Companies)
No Coal Generation
7 of 21
10 of 39
Ownership
(# of Companies)
Net-zero commitments
across scopes 1, 2, and 3
1 of 21
3 of 39
by 20453
(# of Companies)
Electric Sales per
12-40
12-57
15
Customer
Avg: 24
Avg: 25
(MWh/year)4
No stranded asset risk with
increased electrification
No coal generation or contracts in SCE's portfolio
EIX's net-zero commitment is strongly aligned with California's ambitious climate goals
Relatively low per-customer usage
will grow with electrification, which supports affordability
1. PHLX Utility Sector Index (UTY) consists of 21 geographically diverse public utility stocks, including one water utility. Values shown include EIX. Total company count for "electric-only utility & no gas LDC exposure" excludes Constellation Energy, which does not have any regulated utility operations
2. EEI Index consists of 39 publicly traded companies that are members of Edison Electric Institute, which includes 18 of the companies also in UTY. Values shown include EIX
3. Counts reflect companies with net-zero commitments by 2045 or sooner that are wholly inclusive of the company's scopes 1, 2, and 3 greenhouse gas emissions profile
4. Refers to total customer base, including residential, commercial, and industrial customers. Based on latest available data for year ended 2023. Excludes Constellation Energy, which does not have any regulated utility operations Source: EIX research, S&P Capital IQ Pro
Edison International | October 2024 Business Update
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Introduction
Clean Energy Transition Leadership
Wildfire Mitigation
Financial Information
Appendix
Sustainability at the core of Edison's vision to lead the transformation of the electric power industry
Committed to achieving net-zero GHG emissions by 2045.
Also have long-term ESG goals for clean energy, electrification, DEI, and safety
Environmental
Social
Governance
2045 goals: net-zero GHG emissions across Scopes 1, 2, and 3; 100% carbon- free power delivered (~51% in 2023)1
Nearly $2 billion portfolio of programs to expand transportation electrification
Winner of SEPA's 2024 Policy Power Player of the Year Award for clean energy leadership and innovation
Winner of EEI's Edison Award for innovative suite of Transportation Electrification programs
Committed to SCE vehicle fleet electrification goals by 2030
Recipient of several awards for workplace diversity & inclusion
Long-standing community partnerships, including $2.3 billion annual spend with diverse suppliers
Lowest system average rate among major California investor-ownedutilities
Committed to gender parity in executive roles by 2030 and broader DEI actions
$20 million per year in philanthropic contributions with at least 80% going to diverse and underserved communities
Highest level governance score from ISS
Independent board chair since 2016;
1 of only 6 UTY companies with independent board chair2
8 of 11 directors diverse by gender, race/ethnicity, and/or LGBTQ+ self-ID;gender parity for independent directors
50% of executive annual incentive pay tied to safety & resiliency-relatedgoals for 2024
CPA-Zicklin "Trendsetter" with 100% score in multiple years for political accountability and disclosure3
Edison International | October 2024 Business Update
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Introduction
Clean Energy Transition Leadership
Wildfire Mitigation
Financial Information
Appendix
California's regulatory mechanisms provide revenue certainty
Revenue Decoupling
Long-standing regulatory mechanism that breaks the link between retail
means earnings aren't
electricity sales and revenue; promotes energy efficiency, helps stabilize customer
affected by changes in
bills, and supports environmental goals
electricity sales
Changes in sales only affect timing of cash collection
Balancing Accounts
SCE has several balancing accounts, including for variances in sales volume, such
allow SCE to collect and
as those related to weather
refund differences to
Balancing account established for incremental residential uncollectibles
authorized revenue
Forecast Ratemaking
reduces regulatory lag
Four-year GRC cycle with forward-looking test year and attrition year increases
CPUC has historically authorized mechanism that gives SCE opportunity to offset some inflationary price increases based on utility-specific indices
Cost of capital proceedings on three-year cycle separate from GRC with mechanism to reasonably adjust cost of capital if market conditions change significantly during cycles
Edison International | October 2024 Business Update
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CLEAN
ENERGY TRANSITION LEADERSHIP
Introduction
Clean Energy Transition Leadership
Wildfire Mitigation
Financial Information
Appendix
Reaching California's 2045 GHG goals requires a near-complete transformation of energy use economy wide
DECARBONIZE
ELECTRICITY
100%
RETAIL SALES
100% of grid sales with carbon-free electricity
~90 GW of add'l utility- scale clean generation
~25 GW of add'l utility- scale energy storage
>15 GW each of add'l behind-the-meter solar and storage
ELECTRIFY TRANSPORTATION
90%
OF VEHICLES
90% of light-duty vehicles need to be electric
90% of medium-duty vehicles need to be electric
54% of heavy-duty vehicles need to be electric
ELECTRIFY
BUILDINGS
95%
OF BUILDINGS
Zero emission appliance regulations expected to drive >95% building electrification
98% and 90% of commercial water and space heating to be electrified by 2045, respectively
USE LOW-CARBON FUELS
48%
NON-ELECTRIC
ENERGY
20% and 13% of pipeline natural gas volume to be hydrogen and RNG, respectively
37% of heavy-duty vehicles to be hydrogen fuel cell vehicles
20% of buses to be hydrogen fuel cell vehicles
SINK REMAINING CARBON
75
MMT
CARBON SINK
25 MMT from carbon capture and storage (point source)
25 MMT from natural and working lands
25 MMT from other (e.g., direct air capture)
Edison is partnering with state and federal governments and with other stakeholders
to advance policies that rapidly cut GHG emissions in a feasible way
Edison International | October 2024 Business Update
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IntroductionClean Energy Transition LeadershipWildfire MitigationFinancial InformationAppendix
EIX is directly contributing to California's clean energy transition by taking steps to reach net zero
Our Net-Zero Action Plan
Reducing Scope 1, 2, and 3 Emissions
Deliver Carbon-Free Power to
1 SCE's Customers: Increase clean power procurement and decrease natural gas generation use, in line with commitment to deliver 100% carbon-freepower by 2045
Reduce Operational Emissions:
2 Engaging vendors to reduce supply chain emissions, phasing out older technology, and continuing to electrify vehicle fleet
Neutralize remaining emissions:
3 Mostly from natural gas generation supporting reliability and affordability
Reaching net-zero GHG Emissions by 2045
GHG Emissions Reductions by 2045 (MMT CO2e)
10.3
(7.2)
(1.1)
(2.0)
2020
Power
Operational
Neutralized
Net Zero
Emissions
Delivery-related
by 2045
Source: EIX's Reaching Net Zero analysis. See EIX's Reaching Net Zero paper for additional information on the analysis and its methodology
Edison International | October 2024 Business Update
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Disclaimer
Edison International published this content on October 30, 2024, and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on October 30, 2024 at 13:09:13.539.