Q4 2024 Edison International Earnings Call

February 27, 2025

[music].

Good afternoon, and welcome to the Edison International fourth quarter 2024 financial teleconference. My name is Michelle and I will be your operator today, when we get to the question and answer session. If you have a question press star one on your phone today's call is being recorded I would now like to turn the call over to Mr. Sam.

Speaker Change: <unk> Vice President of Investor Relations. Mr. <unk>, you may begin your conference.

Speaker Change: Thank you Michelle and welcome everyone. Our speakers today are president and Chief Executive Officer Pedro Pizarro.

And execute our vice President and Chief Financial Officer Maria regarding also on the call are other members of the management team.

Speaker Change: Materials supporting today's call are available at Www Dot Edison Investor Dot Com. These include our Form 10-K prepared remarks from Pedro and Maria and the teleconference presentation Tomorrow, we will distribute our regular business update presentation.

Speaker Change: During this call.

Speaker Change: We'll make forward looking statements about the outlook for Edison International and its subsidiaries.

Speaker Change: Actual results could differ materially from current expectations.

Speaker Change: Factors that could cause to print yourselves set forth.

Speaker Change: What I see SEC filings.

Speaker Change: Please read these carefully.

Speaker Change: Presentation includes certain outlook assumptions as well as reconciliation of non-GAAP measures to the nearest GAAP measure.

Speaker Change: During the question and answer session. Please limit yourself to one question and one follow up.

Pedro Pizarro: I will now turn the call over to Pedro Thanks.

Pedro Pizarro: Thanks, a lot Sam and good afternoon, everyone.

Pedro Pizarro: Let me start by saying that our hearts continue to be with everyone who has been impacted by the recent southern California wildfires.

Pedro Pizarro: Including our own 18 team members, who lost their homes.

Pedro Pizarro: We are so grateful for their first responders, our colleagues and all the community partners, who have begun the long recovery process.

Pedro Pizarro: This is number one value and priority remains safety and.

Pedro Pizarro: And that means the safety of the public safety of our customers and the safety of our team members.

President of Investor Relations. Mr. <unk>, you may begin your conference.

Pedro Pizarro: He continues to make tremendous progress as it works diligently on reconstruction after the Eden and Palisades fires.

Speaker Change: Thank you Michelle and welcome everyone. Our speakers today are president and Chief Executive Officer, Pedro Pizarro and executed a vice President and Chief Financial Officer Maria regarding also on the call are other members of the management team.

Pedro Pizarro: Turning to the Eaton fire its cost remains undetermined as the investigation continues and is complex.

Speaker Change: Yes. She is examining the available evidence to help determine potential causes of recognition, including the possibility of being linked to sce's equipment.

Speaker Change: Cereal supporting today's call are available at Www Dot Edison Investor Dot Com. These include our Form 10-K prepared remarks from Pedro and Maria and the teleconference presentation.

Speaker Change: Engineers photo Grandma tourists meteorologists and other experts every year in images videos and other information as part of this with you.

Speaker Change: Tomorrow, we will distribute our regular business update presentation.

Speaker Change: We anticipate the full investigation will take several months or longer to complete and there isn't a discreet timeline for the county or SCE to complete their respective investigations for example.

Speaker Change: During this call we will make forward looking statements about the outlook for Edison International and subsidiaries.

Speaker Change: Actual results could differ materially from current expectations.

Speaker Change: One valuable next step involves further examination and testing of the idled transmission line near the reported point of origin to examine the equipment for things like arc marks or missing metal.

Speaker Change: Factors that could cause different results are set forth.

Speaker Change: <unk> SEC filings.

Speaker Change: Please read these carefully.

Presentation includes certain outlook assumptions as well as reconciliation of non-GAAP measures to the nearest GAAP measure.

Speaker Change: But this may still take many weeks as it requires agreeing on a protocol with plaintiffs attorneys and other interested stakeholders, we are committed to being transparent throughout this process.

Speaker Change: During the question and answer session. Please limit yourself to one question and one follow up.

Speaker Change: I will now turn the call over to Pedro Thanks, a lot Sam and good afternoon, everyone.

Speaker Change: While this investigation is ongoing.

Speaker Change: Belief that S. E is a reasonable operator of electric system.

Pedro: Let me start by saying that our hearts continue to be with everyone who has been impacted by the recent southern California wildfires.

Speaker Change: Importantly, the commission has recognized in numerous decisions that are prudent standard does not demanded perfection.

Pedro: <unk>, our own 18 team members, who lost their homes.

Speaker Change: We believe that prudently derives from the soundness of the utilities decision, making process and whether its overall policies and systems and practices are consistent with actions of a reasonable utility.

Pedro: We are so grateful for their first responders, our colleagues and all the community partners, who have begun the long recovery process Edison.

Pedro: Medicines number one value and priority remains safety and that means the safety of the public safety of our customers and the safety of our team members.

Speaker Change: And there is CPUC precedents supporting our interpretation.

Speaker Change: If it is determined that sce's transmission equipment was associated with the addition of the Eaton fire.

Pedro: SCE continues to make tremendous progress as it works diligently on reconstruction after the Eden and Palisades fires.

Speaker Change: Based on the information we have reviews. Thus far we are confident that SCE would make a good faith showing that its conduct with respect to its transmission facilities in the Eaton Canyon area was consistent with the actions of a reasonable utility.

Pedro: Turning to the Eaton fire its costs remains undetermined and the investigation continues and is complex.

Speaker Change: CE is examining the available evidence to help determine potential causes of ignition, including the possibility of being linked to sce's equipment.

Speaker Change: That is the standard by which the utility is judged as written into statute by a return to 54.

Speaker Change: Engineers photo Grammatist meteorologists and other experts are reviewing images videos and other information as part of this review.

Speaker Change: Page three provides a number of helpful links that pertained to information about Sce's wildfire mitigation company disclosures legislation and other resources.

Speaker Change: The catastrophic impact that the recent wildfires underscores the importance of grid resiliency and the actions SCE has taken to heart and it system to support the communities. It serves.

Speaker Change: One valuable next step involves further examination and testing of the idled transmission line.

Speaker Change: SCE continues to execute its robust risk prioritized wildfire mitigation plan, which is approved by California's office of energy infrastructure safety and ratified by the CPUC.

Speaker Change: We reported point of origin to examine the equipment for things like arc marks or missing metal.

Speaker Change: This has significantly bolstered efforts to protect against wildfire threats and to respond when they happen.

Speaker Change: Now she has now installed more than 6400 miles of covered conductor and it's hard to nearly 90% of its distribution lines in high fire risk area.

Speaker Change: While this investigation is ongoing.

Speaker Change: Believe that SCE is a reasonable operator of its electric system.

Speaker Change: Accordingly, The commission has recognized in numerous decisions that the prudent standard does not demand perfection.

Speaker Change: This is in addition to significant investments in operational measures in transmission and distribution such as vegetation management and the extensive network of weather stations and high definition AI enabled wildfire cameras to provide greater situational awareness for SCE and fire agencies.

Speaker Change: We believe that prudent derives from the soundness of the utilities decision, making process and whether its overall policies systems and practices are consistent with the actions of a reasonable utility.

Speaker Change: And there is CPUC precedent supporting our interpretation.

Speaker Change: We will continue to invest in Sce's important work to make our system safer for its customers and communities.

Speaker Change: If it is determined that sce's transmission equipment was associated with the addition of the <unk> fire.

Speaker Change: On the regulatory framework SCE has received timely approval of its safety certification each year.

Speaker Change: Based on the information we have reviews. Thus far we are confident that SCE would make a good faith showing that its conduct with respect to its transmission facilities in the eastern Canyon area was consistent with actions of a reasonable utility.

Speaker Change: Which provides a presumption of prudency and a cap on the liability to reimburse the wildfire fund.

Speaker Change: We have confidence in the fund.

Speaker Change: And we believe it is working as intended to protect wildfire victims customers and investors.

Speaker Change: That is the standard by which the utility is judged as written into statute by a $1 54.

Speaker Change: The fund has $21 billion of claims paying capacity and has largely been unused by California Ious.

Speaker Change: Page three provides a number of helpful links that pertained to information about Sce's wildfire mitigation company disclosures legislation and other resources.

Speaker Change: Let me also emphasize that the fund provides liquidity for paying claims thus in the event that utility work to needs to make claims payments it would not have to use its balance sheet.

Speaker Change: The catastrophic impact of the recent wildfires underscores the importance of grid resiliency and the actions SCE has taken to heart and it system to support the communities. It serves.

Speaker Change: Turning to the Legislative fronts, California has consistently demonstrated a strong commitment to supporting customers and the investor owned utilities that serve them.

Speaker Change: <unk> continues to execute its robust risk prioritized wildfire mitigation plan, which is approved by California's office of energy infrastructure safety and ratified by the CPUC.

Speaker Change: Over my own 25 year career at Edison.

Personally witnessed the state's leadership during challenging times from the energy crisis in the early two thousands to the urgent need to develop a new generation resources in the mid two thousands managing to the financial crisis in 2008 dealing with natural gas spikes in the mid 20 tense and guiding the states to the Covid pandemic.

Speaker Change: This has significantly bolstered efforts to protect against wildfire threats and to respond when they happen.

Speaker Change: SCE has now installed more than 6400 miles of covered conductor and is hard to nearly 90% of its distribution lines in high fire risk area.

Speaker Change: Importantly, governor Newsome led the charge in 2019, along with his colleagues in the legislature to pass and implement a be 10 54 and that is the model among all states to address wildfire risk.

Speaker Change: If we conclude sce's equipment ignited beat and fire.

Speaker Change: Which was then fanned by Hurricane force winds in spite of firefighters best efforts.

Speaker Change: We will continue to invest in Sce's important work to make our system safer for its customers and communities.

Speaker Change: This catastrophe is precisely what it'd be 10 54 was designed to address recognizing wildfire risk will never be zero.

Speaker Change: On the regulatory framework SCE has received timely approval of its safety certification each year.

Speaker Change: This legislation reshaped, our regulatory and financial landscape by balancing wildfire cost recovery with utility accountability and customer protections.

Speaker Change: Which provides a presumption of prudency and a cap on the liability to reimburse the wildfire fund.

Speaker Change: Multiple stakeholders benefit and I want to focus on three broad areas first customer and community safety and benefit from the risk reduction achieved through the W. M P and safety certification process.

Speaker Change: We have confidence in the fund.

Speaker Change: And we believe it is working as intended to protect wildfire victims customers and investors.

Speaker Change: The fund has $21 billion of claims paying capacity and has largely been unused by California Ious.

Speaker Change: Second communities that suffered losses related to wildfires associated with utility equipment have a funding source for claims payments.

Speaker Change: Let me also emphasize that the fund provides liquidity for paying claims thus in the event the utility work to needs to make claims payments it would not have to use its balance sheet.

Speaker Change: And third Investor owned utilities that participate in the fun and benefit from a structure that provides liquidity for claims payments.

Speaker Change: Turning to the Legislative fronts, California has consistently demonstrated a strong commitment to supporting customers and the investor owned utilities that serve them.

Speaker Change: Clear prudency standard and a liability cap all of which support financial stability and long term investment in the grid at the most affordable cost to customers.

Speaker Change: Over my own 25 year career at Edison I have personally witnessed the state's leadership during challenging times from the energy crisis in the early two thousands to the urgent need to develop new generation resources in the mid two thousands managing to the financial crisis in 2008 dealing with natural gas spikes in the mid 20.

Speaker Change: Okay.

Speaker Change: Magnitude of the recent wildfires has brought the long term durability of the fun into focus.

Speaker Change: We have been actively engaged in conversations with key stakeholders, including other utilities, the Governor's office and legislative leaders to find solutions to support the safety of our community effectively manage customer costs and reinforce investor confidence in California's utilities.

Speaker Change: And guiding the states through the Covid pandemic.

Speaker Change: Importantly, governor Newsome led the charge in 2019, along with his colleagues in the legislature to pass and implement Avi 10, 54 and that is the model among all states to address wildfire risk.

Speaker Change: We are confident policymakers will make the enhancements needed to strengthen the industry, leading <unk> 10, 54 regulatory framework.

Speaker Change: Okay.

Speaker Change: If we conclude sce's equipment ignited Ethan fire, which was then fanned by Hurricane force winds in spite of firefighters best efforts.

Speaker Change: Before moving onto our financial results I'd like to note. In addition to our board of directors that was announced last week.

Speaker Change: Former U S Secretary of energy, Jennifer Granholm will join the board of directors of both E. I N S C.

Speaker Change: This catastrophe is precisely what AB 1054 was designed to address recognizing wildfire risk will never be zero.

Speaker Change: Jennifer has deep expertise in energy technology energy policy safety and sustainability.

Speaker Change: This legislation reshaped, our regulatory and financial landscape by balancing wildfire cost recovery with utility accountability and customer protections.

Speaker Change: We are thrilled that she is joining our board and we look forward to the guidance. She will provide based on her understanding of the technical and political and economic forces shaping our industry today.

Speaker Change: Multiple stakeholders benefit and I want to focus on three broad areas first customer and community safety benefit from the risk reduction achieved through the W. MP and safety certification process.

Speaker Change: I know Jennifer has many organizations seeking her time, so I appreciate her vote of confidence in our company's strong future.

Speaker Change: For 2024.

Speaker Change: Edison International's core EPS of $4 93 was above the midpoint of our guidance.

Speaker Change: Communities that suffered losses related to wildfires associated with utility equipment have a funding source for claims payments.

Speaker Change: This extends our track record of meeting or exceeding annual EPS guidance or the last two decades. Additionally, we remain confident in our ability to meet our 2025, EPS guidance and deliver a 5% to 7% core EPS CAGR through 2028.

Speaker Change: And third Investor owned utilities that participate in the fund benefit from a structure that provides liquidity for claims payments.

Speaker Change: Clear Prudence standard and a liability cap all of which support financial stability and long term investment in the grid at the most affordable cost to customers.

Speaker Change: Maria will discuss our financial performance and outlook later.

Speaker Change: Further today the board declared a excess of first quarter 2025, common stock dividend of $82 75 per share.

Speaker Change: The magnitude of the recent wildfires has brought the long term durability of the fund into focus.

Speaker Change: Consistent with this regular process. The board took into account a broad range of considerations and scenarios before making this declaration.

Speaker Change: There is no change to our current dividend policy or outlook.

Speaker Change: And this balance is a competitive dividend that industrious expect with reinvesting sce's earnings back into the infrastructure that serves customers' needs.

Speaker Change: We are confident policymakers will make the enhancements needed to strengthen the industry, leading <unk> hundred 54 regulatory framework.

Speaker Change: This consistent and growing dividend demonstrates our confidence in our financial outlook, where supports raising cost effective capital and directly benefits customer rates.

Speaker Change: Okay.

Speaker Change: Before moving onto our financial results I'd like to note. In addition to our board of directors that was announced last week.

Speaker Change: Former U S Secretary of energy, Jennifer Granholm will join the board of directors of both <unk> and SCE.

Speaker Change: On the regulatory front, we are very encouraged by the Cpuc's unanimous approval of the Teekay M settlement agreement, allowing us to recover about $1 $6 billion or 60% of the wildfire claims payments and associated cost for a pre a be 10 50 for wildfire.

Speaker Change: Jennifer has deep expertise in energy technology energy policy safety and sustainability.

Speaker Change: Approval of the settlement signals, a constructive cost recovery framework in California. In fact, following approval CPUC precedent Reynolds made important remarks about cost recovery and they'd be 10 54. She noted how under state law SCE like public entities.

Speaker Change: I know Jennifer has many organizations seeking her time, so I appreciate her vote of confidence in our company's strong future.

Speaker Change: For 2024.

Speaker Change: Edison International's core EPS of $4 93 was above the midpoint of our guidance.

Speaker Change: Liable for damages from a fire costs biopsy electrical system, but if the utility acted prudently. These costs are covered by customers. She also noted that because of 80 254 in the future. The wildfire fund would cover claims similar to those empty gaiam.

Speaker Change: This extends our track record of meeting or exceeding annual EPS guidance over the last two decades.

Speaker Change: Additionally, we remain confident in our ability to meet our 2025, EPS guidance and deliver a 5% to 7% core EPS CAGR through 2028.

Speaker Change: SCE expects to file its TK I'm securitization application in March.

Speaker Change: Maria will discuss our financial performance and outlook later.

Speaker Change: So we'll see cost recovery proceeding is underway.

Further today the board declared <unk> first quarter 2025, common stock dividend of $82 75 per share.

Speaker Change: Just on the pre hearing conference participating intervenors noted similar areas of focus and engagement to those in PJM.

Speaker Change: Consistent with this regular process. The board took into account a broad range of considerations and scenarios before making this declaration.

Speaker Change: P. A L J adoptions schedule SCE and intervenors jointly proposed the next major filings to watch for are intervenor testimony is due in early June and rebuttal testimony due in mid July.

Speaker Change: There is no change to our current dividend policy or outlook.

Speaker Change: The proposed schedule also includes a motion for approval of a settlement agreement or joint statement of stipulations of issues that would be due in mid August.

Speaker Change: And this balance is a competitive dividend that investors expect with reinvesting sce's earnings back into the infrastructure that serves customers' needs.

Speaker Change: Just like with PJM.

Speaker Change: This consistent and growing dividend demonstrates the confidence in our financial outlook, which supports raising cost effective capital and directly benefits customer rates.

Speaker Change: The utility is open to settlement discussions if a fair and reasonable outcome can be achieved and we look forward to keeping you updated on our progress in this important proceeding.

Speaker Change: Okay, I'm going to conclude by saying that SCE is focused on partnering with impacted communities, our near and long term strategies to build back stronger.

Speaker Change: On the regulatory front, we are very encouraged by the Cpuc's unanimous approval of the Teekay M settlement agreement, allowing SCE to recover about $1 6 billion.

Speaker Change: All while we continue to execute on our core operations and deliver on the commitments we have laid out for you.

Speaker Change: Or 60% of the wildfire claims payments and associated cost for a two.

Speaker Change: I look forward to sharing more updates throughout the year.

Speaker Change: <unk> hundred 50 for wildfire.

Speaker Change: With that Maria turn it over to you for your financial report.

Speaker Change: Approval of the settlement signals, a constructive cost recovery framework in California. In fact, following approval CPUC precedent Reynolds made important remarks about cost recovery and AB 254. She noted how under state law SCE like public entities is liable for damages from a fire.

Maria: Thanks, Pedro before I turn to our financial results I also wanted to take a moment to recognize the tireless efforts of our team to manage the response to the southern California wildfires. Our management team is grateful for our colleagues who have come together to restore power and help customers recover.

Speaker Change: Cost by its electrical system, but if the utility acted prudently.

Maria: So now turning to my comments for today, I will discuss fourth quarter and full year 2024 results are focus areas for 2025, Sce's capital and rate base forecasts and 2025 guidance.

Speaker Change: These costs are covered by customers. She also noted that because of $82 54 in the future. The wildfire fund would cover claims similar to those in PJM.

Maria: For the fourth quarter, Yeah, I extra reported core EPS of $1 five star.

Speaker Change: SCE expects to file its teekay M securitization application in March.

Maria: Full year 2024 core EPS of $4 93 was above the midpoint of our guidance range.

Speaker Change: So we'll see cost recovery proceeding is underway.

Speaker Change: Based on the pre hearing conference participating intervenors noted similar areas of focus and engagement to those in PJM.

Maria: Six and seven provide the year over year variance analysis and additional color can be found in our earnings news release.

Speaker Change: If the ALJ adopts this schedule SCE and intervenors jointly proposed the next major filings to watch for are intervenor testimony due in early June and rebuttal testimony due in mid July.

Maria: This strong performance demonstrates our ability to manage the business and extend our track record of meeting annual EPS guidance over the last two decades as shown on page eight.

Speaker Change: The proposed schedule also includes a motion for approval of a settlement agreement or joint statement of stipulations of issues that will be due in mid August.

Maria: Delivering strong financial results with just one accomplishment and another year of strong execution in 2024 as shown on page nine.

Maria: SCE also continued its progress and harden the grid and making its it system safer for customers by installing over 800 miles of covered conductor, bringing total deployment to more than 6400 miles.

Just like with TKL.

Speaker Change: The utility is open to settlement discussions if a fair and reasonable outcome can be achieved and we look forward to keeping you updated on progress in this important proceeding.

Speaker Change: Okay, I'm going to conclude by saying that SCE is focused on partnering with impacted communities, our near and long term strategies to build back stronger.

Speaker Change: On the regulatory front, we were pleased to see a number of positive developments first the timely settlement of GKN, which Pedro addressed earlier.

Speaker Change: All while we continue to execute on our core operations and deliver on the commitments we have laid out for you.

Speaker Change: Second utility reached substantial completion of resolving claims for Woolsey and filed a cost recovery applications.

Speaker Change: I look forward to sharing more updates throughout the year.

Speaker Change: Third the CPUC issued a final decision in the 2022 seem a proceeding which contributed 14 cents to 2024 E. P. S.

Speaker Change: With that Maria turn it over to you for your financial report.

Maria Regarding: Thanks, Pedro before I turn to our financial results I also wanted to take a moment to recognize the tireless efforts of our team to manage the response to the southern California wildfires. Our management team is grateful for our colleagues who have come together to restore power and help customers recover.

Speaker Change: Fourth the utility continued its strong advocacy in the 2025 G. R C and settled in numerous issues with intervenors.

Speaker Change: Lastly, reflecting the confidence and commitment to achieving our long term EPS growth target in December we raised the dividend by six 1%, which is the 21st consecutive annual increase.

Maria Regarding: So now turning to my comments for today, I will discuss fourth quarter and full year 2024 results are focus areas for 2025.

Speaker Change: Page 10 summarizes the key management focus areas for 2025.

Maria Regarding: Capital and rate base forecast and 2025 guidance.

Maria Regarding: For the fourth quarter <unk> reported core EPS of $1 five.

Speaker Change: Supporting the people and communities affected by wildfires is front and center.

Maria Regarding: Full year 2024 core EPS of $4 93.

Speaker Change: Rebuilding and emerging stronger I, restoring infrastructure and bringing power back to those areas is critical.

Maria Regarding: Was above the midpoint of our guidance range.

Maria Regarding: Pages, six and seven provide the year over year variance analysis and additional color can be found in our earnings news release.

Speaker Change: SCE will also continue its wildfire mitigation work and its focus on operational excellence to reduce costs for customers.

Maria Regarding: This strong performance demonstrates our ability to manage the business and extend our track record of meeting annual EPS guidance over the last two decades as shown on page eight.

Speaker Change: There will also be additional progress on the regulatory front.

This year, we expect SCE will receive decisions on its 2025 general rate case, it's W. M C E filing and its cost of capital application for 2026 through 2028.

Maria Regarding: Delivering strong financial results with just one accomplishment and another year of strong execution in 2024 as shown on page nine.

Speaker Change: Additionally, the utility will be filing an application for its nextgen ERP program.

Maria Regarding: SCE also continued its progress and harden the grid and making <unk>.

Speaker Change: SCE will also continue its progress towards resolving the woolsey cost recovery proceeding.

Maria Regarding: And safer for customers by installing over 800 miles of covered conductor.

Speaker Change: Let's now turn to Sce's capital and rate base forecast shown on pages, 11, and 12 and 13.

Maria Regarding: Total deployment to more than 6400 miles.

Maria Regarding: On the regulatory front, we were pleased to see a number of positive developments first the timely settlement in PJM, which Pedro addressed earlier.

Speaker Change: The 2025 Trc is the core driver of the outlook through 2028.

Speaker Change: <unk> capital plan is focused on replacing aging infrastructure to support reliability and safety for customers.

Maria Regarding: Second utility reached substantial completion of resolving claims for welding and filed a cost recovery application.

Speaker Change: Continuing grid hardening investments to mitigate risk and enhance our resiliency and expanding the grid to make the system ready for load growth today and in the future as customers increase their electricity usage.

Maria Regarding: Third the CPUC issued a final decision in the 2022 seamer proceeding, which contributed 14 to 2024 EPS.

Maria Regarding: Fourth the utility continued its strong efficacy in the 2025 GSE and settled in numerous issues with engineered.

Speaker Change: I would also like to highlight several additional capital deployment opportunities that support customer needs over the coming years, which we have discussed in the past and are not yet included in the plan.

Maria Regarding: Lastly, reflecting the confidence and commitment to achieving our long term EPS growth target in December we raised the dividend by six 1%, which is the 20 <unk> consecutive annual increase.

SCE has refined estimates for these projects, resulting in an increase of at least $1 billion to these opportunities.

Speaker Change: One such investment is the Nextgen ERP project I just mentioned.

Maria Regarding: Page 10 summarizes the key management focus areas for 2025.

Speaker Change: Later this year the utility also plans to file an application for an advanced metering infrastructure program to replace and upgrade the first generation of smart meters, which are at the end of their useful lives.

Maria Regarding: Supporting the people and communities affected by wildfires is front and center.

Rebuilding and emerging stronger I, restoring infrastructure and bringing power back to those areas is critical.

Speaker Change: We also anticipate additional system needs on the distribution grid, including for system restoration and expansion.

Maria Regarding: SCE will also continue its wildfire mitigation work and its focus on operational excellence to reduce costs for customers.

Speaker Change: Further SCE has more than $2 billion of FERC transmission projects in development.

Maria Regarding: It will also be additional progress on the regulatory front.

Speaker Change: Moving to Sce's 2025 G. R. C. The utility is awaiting a proposed decision from the ALJ.

Maria Regarding: This year, we expect SCE will receive decisions on a 2025 general rate case at WMC E filing and its cost of capital application for 2026 through 2028.

Speaker Change: We remain optimistic that we could see a proposed decision during the first half of the year.

Speaker Change: To reiterate our previous comments SCE made a compelling case and even based on intervenors positions Sce's rate base growth would still be in line with its range case forecast of 6%.

Maria Regarding: Additionally, the utility will be filing an application for its nextgen ERP program.

Maria Regarding: SCE will also continue its progress towards resolving the worldview cost recovery proceeding.

Speaker Change: Once SCE he gets a final decision from the CPUC on the G. R. C. We will refresh our capital plan financing plan 2025, EPS guidance and EPS growth forecast.

Maria Regarding: Let's now turn to Sce's capital and rate base forecast shown on pages, 11, and 12 and 13.

Maria Regarding: The 2025 Trc is the core driver of the outlook through 2028.

Speaker Change: Turning to EPS guidance page 14 shows our 2025 core EPS guidance and modeling considerations.

Maria Regarding: Sce's capital plan is focused on replacing aging infrastructure to support reliability and safety for customers.

Speaker Change: You will see that we have revised the guidance range. This is simply our prior range of $5 50 to $5.90 plus the incremental 44 cents associated with the recently approved TK I'm settlement.

Maria Regarding: Continuing grid hardening investments to mitigate risk and enhance our resiliency and expanding the grid to make the system ready for load growth today and in the future as customers increase their electricity usage.

Speaker Change: As we have discussed before those 44 cents are composed of a 30 cent one time chew off the historical interest expense and the 14th annual reduction in Unrecoverable interest expense.

I would also like to highlight several additional capital deployment opportunities that support customer needs over the coming years, which we have discussed in the past and are not yet included in the plan.

Maria Regarding: SCE has refined estimates for these projects, resulting in an increase of at least $1 billion to these opportunities.

Speaker Change: While SCE waits for the DRC decision I want to remind you that we will be recording revenue at 2024 rates adjusted for the change in Rowley.

Maria Regarding: One such investment is the Nextgen ERP project I just mentioned.

Speaker Change: Therefore, our quarterly results comparisons pending a 2025 G. R. C decision are not meaningful.

Maria Regarding: Later this year the utility also plans to file an application for an advanced metering infrastructure program to replace and upgrade the first generation smart meters, which are at the end of their useful lives.

Speaker Change: We will record a true up when we receive a final decision.

Speaker Change: He has established a memo account to track the differences in revenue until it receives a final decision, which will be retroactive to January 1st.

Maria Regarding: We also anticipate additional system needs on the distribution grid, including for system restoration and expansion.

Speaker Change: I'll touch briefly on the parent financing plan. This year <unk> has $800 million of debt maturities a portion of which were pre funded through a debt offering last December.

Maria Regarding: Further SCE has more than $2 billion of FERC transmission projects in development.

Maria Regarding: Moving to Sce's 2025, GIC the utility is awaiting a proposed decision from the ALJ.

Speaker Change: Moving to our longer term outlook on page 15, you will see that we have also incorporated the benefit from the 14th and interest expenses a reduction resulting from the TK I'm settlement into the 2028 E. P. S range.

Maria Regarding: We remain optimistic that we could see a proposed decision during the first half of the year.

Maria Regarding: To reiterate our previous comments SCE made a compelling case and even based on intervenors positions Sce's rate base growth would still be in line with its range case forecast of 6%.

Speaker Change: Given that this annual interest reduction will be ongoing and as part of our base here, we are maintaining our target of 5% to 7% core EPS growth off a higher base of $5.84.

Maria Regarding: Once SCE get the final decision from the CPUC on the GIC, we will refresh our capital plan financing plan 25, EPS guidance and EPS growth forecast.

Speaker Change: While the cause of the Eaton fire remains under investigation and we are not speculating on potential outcomes. A 10 54 was enacted to ensure the financial stability of California's utilities in scenarios like this.

Maria Regarding: Turning to EPS guidance page 14 shows our 2025 core EPS guidance and modeling considerations.

The supportive regulatory framework and processes established by this legislation ensure that no utility would have to use its balance sheet, while accessing the wildfire fund to make claims payments.

Maria Regarding: You will see that we have revised our guidance range. This is simply our prior range of $5 50 to $5 90.

Maria Regarding: Plus the incremental 40 <unk> associated with the recently approved <unk> settlement.

Speaker Change: Additionally, the potential liability to reimburse the fund is capped.

Maria Regarding: As we have discussed before those 44 or <unk> 31 time true up for historical interest expense and the 14th annual reduction in Unrecoverable interest expense.

Speaker Change: Lastly, the prudency standard means a utility is presumed to be a prudent manager if it has a safety certification, which SCE has.

Speaker Change: Given these factors and a supportive regulatory framework, we remain confident in our financial outlook as we continue to support wildfire response recovery and efforts to rebuild.

Maria Regarding: While SCE waits for the GIC decision I want to remind you that we will be recording revenue at 2024 rates adjusted for the change in ROE.

Speaker Change: Sce's core operations and a central role it plays in the clean energy transition remain the driving force behind our core earnings growth.

Maria Regarding: Therefore, our quarterly results comparisons pending a 2025 DRC decision are not meaningful.

Maria Regarding: We will record a true up when we receive a final decision.

Speaker Change: That concludes my remarks back to you soon.

Maria Regarding: CE has established a memo account to track the differences in revenue until it received a final decision, which will be retroactive to January one.

Speaker Change: Michelle Please open the call for questions. As a reminder, we request you limit yourself to one question and one follow up so everyone. In line has the opportunity to ask questions.

Maria Regarding: I'll touch briefly on the parent financing plan this year.

Maria Regarding: <unk> had $800 million of debt maturities, a portion of which were pre funded through a debt offering last December.

Speaker Change: Thank you and if you would like to ask a question. Please press star one on your phone one moment for the first question. Please.

Maria Regarding: Moving to our longer term outlook on page 15, you will see that we have also incorporated the benefit from the 14th interest expenses that reduction, resulting from the <unk> settlement into the 2028 EPS range.

Speaker Change: Nick Campanella from Barclays. You May go ahead.

Nick Campanella: Hey, this is Nick thanks for getting me on.

Speaker Change:

Speaker Change: So obviously, there's been a lot of questions are you know in the case that it.

Maria Regarding: Given that this annual interest reduction will be ongoing and as part of our base year, we are maintaining our target of 5% to 7% core EPS growth off a higher base of $5 84.

Speaker Change: Equipment was involved with this fire what the impact to the wildfire fund would be and I. Appreciate it's early but the 10-K does mentioned you'd had several lawsuits already and just do you have any indication about you know what the number would be for damages from the starting point or if you don't when when do you expect to know thank you.

Maria Regarding: While the cause of the Eaton fire remains under investigation, and we are not speculating on potential outcomes.

<unk> hundred 54 was enacted to ensure the financial stability of California's utilities in scenarios like this.

Speaker Change: Nick Thanks, very much for the question and the short answer is it just way too early but first we need to.

Maria Regarding: The supportive regulatory framework and processes established by this legislation and sure that no utility would have to use its balance sheet, while accessing the wildfire fund to make claims payments.

Speaker Change: I'll conclude determining whether a recruiting wasn't being involved.

Speaker Change: And then beyond that there would be a process for determining what potential liabilities could be.

Maria Regarding: Additionally, potential liability to reimburse the fund is capped.

Speaker Change: And it's really hard to handicap timing you know it maybe this will answer some of the other although of course was somebody come up but for example, you might recall that in previous fires. It's taken 12 to 18 months even to go to an investigation reports.

Maria Regarding: Lastly, the prudency standard means the utility is presumed to be a prudent manager if it has a safety certification, which SCE has.

Maria Regarding: Given these factors and a supportive regulatory framework, we remain confident in our financial outlook as we continue to support wildfire response recovery and efforts to rebuild.

Speaker Change: From a official fire authorities that my hope when conclude our main conclusions.

Maria Regarding: Sce's core operations and a central role it plays in the clean energy transition remain the driving force behind our core earnings growth.

Speaker Change: So I was gonna viability really depends on.

Speaker Change: The filing of legal actions by plaintiffs and those can take some time, so it could be quite a while before there's a sense of what you know even the low end of our range might be.

Sam: That concludes my remarks back to you Sam.

Maria Regarding: Michelle.

Maria Regarding: 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.

Speaker Change: Understood. Thank you and then.

Maria Regarding: Thank you and if you would like to ask a question. Please press star one on your phone one moment for the first question. Please.

Speaker Change: Just I know, you're you're working towards legislative solution, that's coming session.

You know obviously this is a wider issue for the state to Taco was a hole here and there's going to be a lot of different interests at stake.

Nick Campanella: Nick Campanella from Barclays. You May go ahead.

Nick Campanella: This is Nick Thanks for getting me on.

Speaker Change: So obviously this has been a lot of questions.

Nick Campanella: In the case that.

Nick Campanella: Shipment was involved with this fire what the impact to the wildfire fund would be and I. Appreciate it's early but the 10-K does mentioned you've had several lawsuits already and just do you have any indication about.

Speaker Change: Maybe you can be more specific about what you think would be most helpful or whether it's an increase to the wildfire fund itself or some type of strengthening of our liquidity backstop. That's what I have thank you.

Nick Campanella: What the number would be for damages from a starting point or if you don't win when do you expect to know thank you.

Speaker Change: Oh, hey, thanks snake in it so you understand the questions.

Nick Campanella: Nick Thanks, very much for the question and the short answer is just way too early the first we need to.

Speaker Change: Let me just start by saying, it's very early days as you can imagine we're still you know the S. E. T was still very engaging and are the main focus which is helping the community to be safe and rebuild back stronger.

Nick Campanella: I'll conclude determining whether a recruitment was indeed involved.

Nick Campanella: And then beyond that there would be.

Nick Campanella: The process for determining what potential liabilities could be.

Speaker Change: <unk>.

Speaker Change: I will also say, though that when I compare this to the activity that we had going back to 2018 in 2019 as the states develop SB 901, and then every 10 54.

Nick Campanella: And really hard to handicap timing.

Nick Campanella: Maybe this will answer some of other other questions that may come up but for example, you might recall that in previous fires.

Speaker Change: Where are we are fortunately at a very different starting point.

Nick Campanella: Taken 12 to 18 months, even to an investigation report.

Nick Campanella: From official fire authorities that my hope when conclude.

Speaker Change: There is I believe strong understanding by policymakers of the importance of having financially healthy utilities to support the state's economy, and that's keeping the lights on borrowing economy, but it's also helping advance the state schools for.

Nick Campanella: There may conclusions.

Nick Campanella: The seller has been of liability really depends on.

Nick Campanella: The filing of legal actions by plaintiffs those can take some time.

Nick Campanella: It can be quite a while before theirs.

Speaker Change: The clean energy transition.

Speaker Change: And so there's that underpinning of understanding the importance of financial health for companies like ours, and our peers. That's a really important starting point that we can you know.

Speaker Change: Of what.

Nick Campanella: <unk>.

Nick Campanella: Our low end of our range might be.

Nick Campanella: Understood. Thank you and then.

Speaker Change: I know you are youre working towards legislative solution, that's coming session.

Speaker Change: So it's something we think required more development back in 2018.

Speaker Change: Obviously this is a wider issue for the state to tackle as a hole here and there is going to be a lot of different interest at stake.

Speaker Change: Beyond that Youre seeing commitment.

Speaker Change: To look into the issues were.

Patterson: We really appreciate that you know the government a governor Oh, that's a retain and Patterson.

Speaker Change: How would you kind of frame the current policy environment in the conversations you've had with people and whether those conversations have been constructive in terms of having a solution here at the end of August and maybe you can be more specific about what you think would be most helpful. Whether it's an increase to the wildfire fund itself or some type of strengthening.

Speaker Change: In his office. It was just you know very thoughtful person.

To be the the points leader for the Governor's office and welfare issues, we understand that the administration is now engaged Guggenheim.

Speaker Change: To provide financial analysis support, which they provided the financial advisory service back during the crafting of ABB 10 54.

Speaker Change: The liquidity backstop.

Speaker Change: That's what I have thank you.

Speaker Change: Yes, hey, thanks, Nick and I certainly understand the questions.

Speaker Change: But as I mentioned, we're already in discussions with legislative leaders, who.

Speaker Change: Let me just start by saying, it's very early days as you can imagine we're still the team is still very engaging and the main focus which is helping the community to be safe and rebuild back stronger.

Speaker Change: Generally understand that.

Speaker Change: More needs to be done here.

Speaker Change: And I think you also mentioned that you know that its broad set of issues here and frankly, I'm not smart enough to know so standing here today or sitting here today.

Speaker Change: I will also say, though that when I compare this to the activity that we had going back to 2018 in 2019 as to state develop SB 901, and then <unk> 54.

Speaker Change: What's the best path and will frankly, we'll be looking to the governor and his team for their leadership.

Speaker Change: And you know what's the best for purchase here, but we certainly will be advocating for near term solutions has multiple levers. So you could imagine to help reinforce the strength of the APB 10 54 framework.

Speaker Change: Where we are fortunately at a very different starting point.

Speaker Change: There is I believe strong understanding by policymakers.

Speaker Change: Probably but lots of different levers that could be pulled but we'll be engaged with them and I'm, taking a lot of comfort from the fact that they in turn are engaged in deploying the right resources against the issue.

Speaker Change: The importance of having a financially healthy utilities to support the state's economy, and that's keeping the lights on borrowing economy, but it's also helping advance the state's goals for.

Speaker Change: Thanks for your thoughts there.

Speaker Change: The clean energy transition and so they're set underpinning of understanding the importance of financial health for companies like ours, and our peers. That's a really important starting point that we can.

Speaker Change: Thank you our next caller is Mike along again with Evercore you May go ahead Sir.

Mike: Alright, Thanks for taking my questions I like obviously, you're you're evaluating a number of causes of the even fire, including weather and idle transmission line could have become energized.

Speaker Change: So it's something we.

Speaker Change: Required more development back in 2018.

Speaker Change: Beyond that Youre seeing commitment.

Mike: You highlighted in the section 315 letter that you're taking immediate steps to strengthen and standardized the grounding process. Just wondering if you could talk about some of the steps you're taking there that you felt needed to be strengthened.

Speaker Change: To look into the issues.

Speaker Change: We really appreciate the government a governor.

<unk> retained and Patterson.

Speaker Change: In his office shifts.

Speaker Change: Wanting to take these steps it sounds like you you feel very confident that you will sustain the presumption of prudency I was wondering if you could share more of your thoughts on the confidence in that.

Speaker Change: Thoughtful person.

Speaker Change: To be the the points leader for the Governor's office on welfare issues, we understand that the administration is now engaged Guggenheim.

Speaker Change: And I'll start with the back part of that to just reinforce that obviously you know.

Speaker Change: To provide financial analysis support, which they provided that financial advisory service back during the crafting of AB 254.

Speaker Change: Well, we we know what we know today right, but based on what we know today. We are confident that we would be able to make or is he would be able to make a good faith showing that.

Speaker Change: As I mentioned, we're already in discussions with legislative leaders, who.

Speaker Change: Think generally understand that.

Speaker Change: It's been a reasonable operator of the system.

Speaker Change: <unk>.

Speaker Change: And as I have said in my remarks, when we think about that.

Speaker Change: More needs to be done here.

Speaker Change: I think you also mentioned the accumulated.

Speaker Change: It's.

Speaker Change: Really about the operations of the broad system as well as just application to the specifics of any given ignition.

Speaker Change: Broad set of issues here, and frankly, I'm not smart enough to know.

Speaker Change: Standing here today or sitting here today.

Speaker Change: It's the best path and will frankly, we'll be looking to the governor and his team for their leadership.

Speaker Change: Oh I am.

Speaker Change: Proud of the work that Steve Paul and the team at <unk>. So you have done.

Speaker Change: <unk>.

Speaker Change: What's the best approaches here.

Speaker Change: Over the last several years to continue to strengthen the system and if you go back to win.

Speaker Change: But we certainly will be advocating for near term solutions has multiple levers. So you could imagine to help reinforce the strength of the AB 254 framework.

Speaker Change: This error for California started with their first catastrophic wildfires in 2017.

Speaker Change: We took a risk prioritized approach right and so we're consistently learning.

Speaker Change: I'll be lots of different levers that could be pulled.

But we will be engaged with them and I am taking a lot of comfort from the fact that they in turn are engaged in deploying the right resources against the issue.

Speaker Change: And with a rich prioritized approach where U S. C went after closing the gaps that post the highest risk first and then you know going on down the line. So we're always we're always looking to learn.

Speaker Change: Thanks for all the thoughts there.

Speaker Change: Thank you our next caller is Michael Monaghan with Evercore you May go ahead Sir.

Speaker Change: Yeah, I think we mentioned that 315 letter just some of the steps that we took immediately after the fire.

Michael Monaghan: Alright, thanks for taking my questions.

Speaker Change: So the ignition I'll give you. One example, maybe because it would be on your question but.

Michael Monaghan: Obviously, you're you're evaluating a number of causes of the fire, including weather and Idaho transmission line could have become energized.

Speaker Change: You know for example, what are we.

Speaker Change: During the evening with the admission happened.

You highlighted in the section $3 15 letter that you're taking immediate steps to strengthen and standardize the grounding process. Just wondering if you could talk about some of the steps you're taking there that you felt needed to be strengthened.

Speaker Change: We exercised our P. S P S protocols.

Speaker Change: And Oh.

Speaker Change: Well, we had already taken a more conservative stance going into this wind storm.

Michael Monaghan: Despite wanting to take these steps it sounds like you feel very confident that you will sustain the presumption of prudency I was wondering if you could share more of your thoughts on the confidence in that.

Speaker Change: We took an even more conservative stance as we went into the second and third when storm events. So similarly into where we're looking at everything around our system and always looking for opportunities to learn.

Michael Monaghan: Yes, and I'll start with the back part of that to just reinforce that now obviously.

Speaker Change: You know, whether it's about how we.

Michael Monaghan: Michael We know what we know today right, but based on what we know today.

Speaker Change: Spectrum's grounding, etc, Steve Paul anything you would like to add from an operational perspective in terms of things we're doing moving forward cover.

Michael Monaghan: We are confident that we will be able to make or is he would be able to make a good faith showing that.

Covered is the first one.

Michael Monaghan: It's been a reasonable operator of the system and as I have said in my remarks, when we think about that.

Speaker Change: I would just say as we like we do with any ignition any fire. We're looking for anything that we can learn whether it's related to our system or somebody else's system and how we integrate those into our practices for the year you know when I look at what we have set up for this year and every other year you know we've improved our vegetation management practices, our inspection practices, we look.

Michael Monaghan: It's.

Michael Monaghan: Really about the operations of the broad system as well as this application to the specifics of any given ignition.

Michael Monaghan: I am.

Speaker Change: Very proud of the work that Steve Paul and the team at SCE have done.

Speaker Change: At the conditions as we head into a season. So I think about the next the next summer in the fire season to come.

Speaker Change: Over the last several years to continue to strengthen the system and if you go back to win.

Speaker Change: And we'll be looking to see where whereas you know where fuels the dry ice and where where do we have the highest risks that we can do additional mitigation that includes more vegetation management and more inspections. So I'd say, it's a lot of the practices that we have only doubling down and putting them into places, but we will continue to look for opportunities to see how else.

Speaker Change: This error for California started with our first catastrophic wildfires in 2017.

Speaker Change: We took a risk prioritized approach alright, and so we're consistently learning.

Speaker Change: And with our risk prioritized approach.

Speaker Change: We went after closing the gaps that post the highest risk first and then going on down the line. So we're always we're always looking to learn.

Speaker Change: Can we harden the system and what are their practice scheme, we take to make sure that we're safe.

Speaker Change: As we head into the next.

Speaker Change: Yes, I think we mentioned in 2015 later just some of the steps that we took immediately after the fire.

Next season.

Speaker Change: That's great, Steve and Michael maybe one one more little you said might be helpful. Here.

Speaker Change: Designation I'll give you. One example, maybe because it would be on your question but.

Speaker Change: You've heard us to commit committed to transparency and so as we continue to learn and as appropriate we'll be sharing as much as we can at the same time, we recognize that like with prior fires.

Speaker Change: For example.

Speaker Change: During the evening with the admission happened.

Speaker Change: We exercised our <unk> protocols.

Speaker Change: There may be litigation involved here or there will be litigation evolves. So we will need to be thoughtful about not getting ahead of that process and so now having the right sort of balance between not litigating, you know individual elements and public while providing as much transparency as possible for our public.

Doug: And Doug.

Doug: For 12, we had already taken a more conservative stance going into this wind storm.

Doug: We took an even more conservative stance as we went into the second and third when storm events. So similarly, we're looking at everything around our system and always looking for opportunities to learn.

Speaker Change: Great. Thank you and then secondly, I was just wondering if you have concerns about the wildfires impacting the outcome and the G. R. C. You know in the public there's some perception that yes. It may have started the fire.

Doug: <unk>.

Doug: Whether it's about how we.

Doug: Spectrum's grounding, etc, Steve Paul anything you would like to add from an operational perspective in terms of things we are doing moving forward.

Do you think that makes it less likely that the commission will grant a rate increase given the headlines that could create.

Doug: Covered it sufficiently.

Doug: I would just say as we like we deal with any ignition any fire. We're looking for anything that we can learn whether it's related to our system or somebody else's system and how we integrate those into our practices for the year when I look at what we have set up for this year and every other year, we've improved our vegetation management practices, our inspection practices, we look at the.

Speaker Change: You know, especially as residents are going to see an increase in insurance premiums and then you know also do you see reaching a settlement amongst various parties in the world with filing being harder to achieve as well.

Speaker Change: Yeah.

I don't think so and it was reassuring to see that Teekay M approval with Maria Let me turn it over to so Michael So we're very far along in our GIC process. We filed all of our papers that have the intervenors and I think you've observed that you know we've actually settled quite a few things with intervenors and 20% of the of the O&M items eight per.

Doug: Conditions as we head into a season. So I think about the next the next summer in the fire season to come and we'll be looking to see.

Doug: Whereas.

Doug: Where fuels the dry ice and where do we have the highest risks that we can do additional mitigation that includes more vegetation management and more inspections. So I'd say, it's a lot of the practices that we have only doubling down and putting them into places, but we'll continue to look for opportunities to see how else can we harden the system and whether the practice scheme, we take to make sure that we are.

Speaker Change: A sense of the capital items and covers a dozen different topics. So we see that proceeding continuing on as it previously was and where I am looking for a proposed decision first half of the year as far as the will the cost recovery application goes we had a pre hearing conference back in December we actually are awaiting a scoping memo.

Doug: Safe as.

Doug: As we head into next.

Doug: Next season.

Speaker Change: That's great, Steve and Michael maybe one more and more a little piece that might be helpful. Here.

Speaker Change: And the schedule for that has been agreed upon by the intervenors and S. E. So we continue to see that moving forward on its own path as well.

Speaker Change: Thank you for taking my question.

Speaker Change: Mike.

Speaker Change: Thank you. Our next caller is Paul Zimbardo with Jefferies. You May go ahead Sir.

Speaker Change: <unk> litigation involved here or there will be litigation involved so we will need to be thoughtful about not getting ahead of that process.

Paul Zimbardo: Hi, Paul.

Paul Zimbardo: Hi, good afternoon team.

Speaker Change: So having the right sort of balance between not litigating individual elements and public while providing as much transparency as a spa.

Paul Zimbardo: I just wanted to touch a little bit on the balance sheet side of the equation. So obviously your cost of capital has changed quite a bit since we last chatted.

Speaker Change: Hospital for a public.

Speaker Change: The extent you are successful on like the Nextgen ERP that am I, how should we think about financing some of the incremental capital if it does come into the plan.

Speaker Change: Great. Thank you and then secondly, I was just wondering if you have concerns about the wildfires impacting the outcome in the DRC.

Speaker Change: In the public there's some perception that ice may have started the fire.

Speaker Change: So we've actually been running a lot of those scenarios before and after the events in January and we still see our financing plan. The one that we've laid out on one of the pages that there and that's in the deck that you have we still see something very consistent with that to the extent, we have more and more opportunity.

Speaker Change: Do you think that makes it less likely that the commission will grant a rate increase given the headlines that could create.

Especially as residents are going to see an increase in insurance premiums and then also do you see reaching a settlement amongst various parties in the world, we filing being harder to achieve as well.

Speaker Change: These two invest capital because of things like Nextgen, ERP et cetera, we will finance that at SCE and in line with our authorized capital structure and its E. I ask will take a look at where our credit metrics are at the time I think you know that our credit metrics, we've been moving into that 15% to 17% <unk> to debt range. The latest reports.

Speaker Change: Yes.

Speaker Change: I don't think so and it was reassuring to see the TK M approval of Maria Let me turn it over to.

Speaker Change: Michael.

Michael Monaghan: We're very far along in our GIC process, we filed all of our paper that have the intervenors and I think you've observed that we've actually settled quite a few things with intervenors in 20% of the of the O&M items, 8% of the capital items and covers a dozen different topics.

Speaker Change: You know S&P reports also see us in that range in the 25 through 28 period and so.

Speaker Change: So we think we're in a good place. There obviously you know the rating agencies are looking at the business environment in California, but I don't think that goes to sort of our balance sheet strength at this point.

Michael Monaghan: We see that proceeding continuing on as it previously was and looking for a proposed decision first half of the year as far as that will be cost recovery application goes we had a pre hearing conference back in December we actually are awaiting a scoping memo and the schedule for that has been agreed upon by the intervenors and SCE. So we can.

Speaker Change: Okay understood and then to the extent there are liabilities that do stem from that the January 2025 events, but how should we think about financing that is that like you've done in the past kind of hybrid.

Michael Monaghan: To see that moving forward on its own path as well.

Michael Monaghan: Thank you for taking my question.

Michael Monaghan: Thanks Mark.

Speaker Change: Thank you. Our next caller is Paul from BARDA with Jefferies. You May go ahead Sir.

Speaker Change: And at the parent prefer just any flavor you can give in that scenario would be helpful. Yeah, absolutely absolutely. Paul So that's one of the really big differences between a pre <unk> for fire and the fire that occurred post 80 pence for the wildfire fund is there.

Speaker Change: Hi, Paul.

Speaker Change: Hi, good afternoon team.

Speaker Change: I just wanted to touch a little bit on the balance sheet side of the equation. So obviously your cost of capital has changed quite a bit since we last chatted to the extent you are successful on like the Nextgen ERP.

Speaker Change: Obviously for claims payments, so that people who suffered from the fire can get paid.

Speaker Change: How should we think about financing some of the incremental capital if it does come into the plan.

Speaker Change: But it's also there to support the balance sheet of the utilities. So there is a process in place where you know once we use our customer funded self insurance to the extent we have to make claims payments, who would then go to the wildfire fund and and they have a process already set up and it's very streamlined and so we would be using the fund and not issuing debt the way we work.

Speaker Change: So we've actually been running a lot of those scenarios.

Speaker Change: And after the events in January and we still see our financing plan. The one that we've laid out on one of the pages that they're in that's in the deck that you have we still see something very consistent with that.

Speaker Change: For the 17 and 18.

Speaker Change: We have more and more opportunities to invest capital because of things like next Gen ERP et cetera, we will finance that at SCE.

Speaker Change: So I think theres, a very very big difference in terms of what it would look like.

Speaker Change: That's really one of the core features of a B 10, 54, Paul and you know, it's Maria covered very well.

Speaker Change: In line with our authorized capital structure and in <unk>, We will take a look at where our credit metrics are at the time I think you know that our credit metrics, we've been moving into that 15% to 17% <unk> to debt range. The latest reports S&P reports also see us in that range in the 25 through 28 period.

Speaker Change: Thank you Tim.

Speaker Change: Thanks.

Speaker Change: And our next caller is Steve Fleishman with Wolfe Research you May go ahead Sir.

Speaker Change: Hey, Steve, Thanks, Hi, Pedro or Maria.

Speaker Change: So we think we're in a good place there obviously the rating agencies are looking at the business environment in California, but I don't think that goes to sort of our balance sheet strength at this point.

Speaker Change: So I guess, just maybe along similar track.

Speaker Change: Any sense of where the rating agencies are on kind of what.

Speaker Change: The updated you know impact of these fires might be in ratings and if there were.

Speaker Change: Okay understood and then to the extent there are liabilities that do stem from the January 2025 events.

Speaker Change: For example, some kind of.

Speaker Change: Risk rating.

Speaker Change: That led to where we're at.

Speaker Change: Should we think about financing that is that.

Speaker Change: Some kind of rating reduction how does that impact you.

Speaker Change: Like you've done in the past kind of hybrid.

Speaker Change: Our financing plan.

Speaker Change: In terms of cost or anything meaningful to your financing cost. Thanks sure. So I mean, I do think that the rating agencies and obviously, we stay in touch with them and talk to them, but they've been pretty straightforward in other venues as well they talk.

Speaker Change: <unk> at the parent preferred just any flavor you could give in that scenario would be helpful. Thank you absolutely absolutely Paul.

Speaker Change: So that's one of the really big differences between a pre <unk> for fire and the fire that occurred post ADM for the wildfire fund is there obviously for claims payments. So that people who have suffered from the fire can get paid.

Speaker Change: Talk to you a bunch of of you all they've certainly been at conferences and they're highlighting climate risk generally so not just california, but across the country. They are focused on climate risk and climate events I think they certainly are observing that the things that are going on in California. I think you know that S&P has us on negative outlook and.

Quickly, but it's also there to support the balance sheet of the utilities. So there is a process in place where once we use our customer funded self insurance to the extent we have to make claims payments. We would then go to the wildfire fund and they have a process already setup and it's very streamlined and so we would be using the fund and not issuing debt the way we.

Speaker Change: So we are working to move through the process and share more information with them. Obviously again, it's not about the metrics. It's about you know sort of how they view sort of the climate risk in California, and more broadly I think if you look at sort of what impact any of that would have on our financing plan. It is it is a cost issue.

Speaker Change: For the 17 and 18.

Speaker Change: So I think there is a very very big difference in terms of what it would look like.

Speaker Change: If you think about SCE in Sce's need to finance rate base, we actually are going into a cost of capital cycle. So we're filing an application in March so anything that would need to be updated relative to sce's cost of debt would be updated through that process and will be captured through that process I think from an EI expert.

Speaker Change: That's really one of the core features of AB 254, Paul and Maria covered very well.

Speaker Change: Thank you Tim.

Speaker Change: Thanks.

Speaker Change: And our next caller is Steve Fleishman with Wolfe Research you May go ahead Sir.

Pedro Brito: Hey, Steve Thanks, Hi, Pedro Brito.

Speaker Change: Active you know we've been doing a number of different scenarios I think you know including to look at the longer term 25 through 28 period, and we can manage what's happening to the rates and to the spreads within the range that we've already provided so I think that you know we're still on track for all of that is noted in the prepared remarks.

Pedro Brito: So I guess, just maybe along similar track.

Speaker Change: Any sense of.

Speaker Change: Where are the rating agencies are on kind of what.

Speaker Change: The updated.

Speaker Change: The impact of these fires might be in ratings and if there were.

Speaker Change: For example, some kind of.

Speaker Change: Okay and then one other unrelated question just the the.

Speaker Change: Risk rating.

Speaker Change: That led to.

Speaker Change: Some kind of rating reduction how does that impact your financing plan.

Speaker Change: Comment you made Pedro about you know.

Speaker Change: We're taking weeks to even work with the lawyers to figure out how to.

Speaker Change: In terms of cost or anything meaningful to your financing costs. Thanks sure. So I mean.

Speaker Change: Investigate and bring down the lines to investigate more could you just.

Speaker Change: Do you think that the rating agencies and obviously, we stay in touch with them and talk to them, but they've been pretty straightforward in other venues as well.

Speaker Change: I mean, it seems like you could you and they can just go their watch and work just what.

Speaker Change: Well.

Speaker Change: Maybe you can give more color on what the issue was there.

Speaker Change: Talk to you a bunch of you all they've certainly been at conferences and they're highlighting climate risks generally so not just california, but across the country. They are focused on climate risk and climate events I think.

Speaker Change: Oh, I I wish Dave I wish.

Speaker Change: It's a little more complicated than that.

Speaker Change: As you can imagine there are multiple multiple plant, there's a multiple plaintiffs attorneys.

Speaker Change: And you know they have an interest in making sure they and other stakeholders, making sure that.

Speaker Change: <unk> certainly are observing that the things that are going on in California. I think you know that S&P has us on negative outlook and so we are working to move through the process and share more information with them. Obviously again, it's not about the metrics, it's about sort of how they view sort of the climate risk in California and more broadly.

Speaker Change: Any movement of the lines anything that's done regarding sce's equipment.

Speaker Change: It's done in a way that will.

Speaker Change: Preserve the a the nature of the materials start.

Speaker Change: Somehow spoil it or make it difficult to examine and in some ways.

Speaker Change: <unk> I think if you look at.

Speaker Change: Sort of what impact any of that would have on our financing plan. It is a cost issue.

Speaker Change: So there is.

Speaker Change: A series of extended discussions with this whole group.

Speaker Change: If you think about SCE in Sce's need to finance rate base, we actually are going into a cost of capital cycle.

Speaker Change: To agree on protocols. So if you know, how how and when would align be touched and how would it be removed.

Speaker Change: We're filing an application in March so anything that would need to be updated relative to sce's cost of debt would be updated through that process and will be captured through that process. I think from an <unk> perspective, we've been doing a number of different scenarios I think including to look at the longer term 25 through 2008 period.

Speaker Change: What might you inspect before touching it and how do you touch it and you know when you touch it who's watching and where do you put it.

What things get sent to our lab afterwards.

Speaker Change: So that it's just the reality of it is this is very common in these kinds of cases.

Speaker Change: And we can manage what's happening to the rates into the spreads within the range that we've already provided so I think that.

Speaker Change: And so going through that process as much as we would like to speed it up.

Speaker Change: We're still on track for all of that is noted in the prepared remarks.

Speaker Change: As much as possible.

Speaker Change: It's likely to take weeks yet.

Speaker Change: Okay and then one other unrelated question just the the.

Speaker Change: So hopefully that gives you a little bit of color, Steve, but you know I'm I'm very.

Speaker Change: Comment you made Pedro about.

Very confident that the S. E T would you or could go there tomorrow and move things and do it in a way that would preserve the ability for parties to you don't have confidence that it was done right, but in this case, we're really to have a full agreement among all of the parties on the specifics.

Speaker Change: We're taking weeks to even work with the lawyers to figure out how to.

Speaker Change: Investigate and bring down the lines to investigate more could you just.

Speaker Change: I mean, it seems like you could you and they can just go there and watch and work just what.

Speaker Change: Maybe you can give more color on what the issue is there.

Speaker Change: Steps and precautions and so you know we want to do that with integrity.

Speaker Change: Oh I wish Steve.

Speaker Change: It's a little more complicated than that.

Speaker Change: Makes sense. Thank you understood.

Speaker Change: As you can imagine there are multiple multiple plant is a multiple plaintiffs attorneys and.

Speaker Change: Yeah. Thanks, Dave.

Speaker Change: Thank you. Our next caller is Ryan Levine with Citi. You May go ahead Sir.

Speaker Change: They have an interest in making sure they and other stakeholders, making sure that.

Ryan Levine: Hi, everybody.

Speaker Change: Any movement of the lines anything thats done regarding sce's equipment.

Ryan Levine: How do you how do you expect the events from last month will change the cost of Capex items and O&M costs in the coming years.

Speaker Change: Is done in a way that will.

Speaker Change: Pre surf.

Ryan Levine: Do you mean from a supply availability kind of volume of materials perspective, or am I just have a different angle on the question right exactly right.

Speaker Change: The nature of the materials start.

Speaker Change: Somehow spoil it or make it difficult to examine and in some way.

Speaker Change: So there is.

Speaker Change: The series of extended discussions with this whole group.

Ryan Levine: Yes, exactly particularly okay.

Speaker Change: Steve I don't have a perspective on it feels like it's probably a little early I'm not sure that it would be in the context of the broad, California Western economy, I don't think that.

Speaker Change: To agree on protocols.

Speaker Change: How how and when would align be touched and how would it be removed.

Speaker Change: What might you inspect before touching it and how do you touch it.

Speaker Change: And you know we have an answer I might be a little bit of impact, but I don't think it's a massive impact based on where we sit right now but any different views do you know what I'd say, Brian that the scale. The scale I mean, obviously the impact of the communities is massive and you know we've got a lot of work to do but.

Speaker Change: One year touchwood, who's watching and where do you put it in what things get sent to our lab afterwards.

Speaker Change: So that that's just the reality of it is very common in these kinds of cases and so.

Speaker Change: It's also not of the scale that it's meaningful to our overall plans that we do each year in terms of how you think about the number of line miles just last year that we did in covered conductor alone 800 miles you know that's an order of magnitude more than the types of impacts we're seeing from a conductor size amount of conductor you need to deal with this and so it's a smaller.

Speaker Change: Going through that process.

Speaker Change: As much as we would like to speed it up.

Speaker Change: As much as possible.

Speaker Change: It's likely to take weeks yet.

Speaker Change: So hopefully that gives you a little bit of color Steve but.

Speaker Change: I'm very confident that the team would.

Speaker Change: Go there tomorrow and move things and do it in a way that would preserve the.

Speaker Change: Amount relative to our overall plan and what anything that could actually impact broader supply chains.

Speaker Change: Steve probably a.

Speaker Change: The ability for parties to you don't have confidence that it was done right but.

Speaker Change: The appropriate to also say that.

Speaker Change: <unk>.

Speaker Change: In this case were related to have full agreement among all of the parties on the specific steps and precautions and so we wanted to do that with integrity.

All the homes and customer premises that can be cut reconnected our already reconnected.

And sell a lot of the rebuild moving forward will be more for homes premises that needs to be rebuilt and so that doesn't happen overnight that the process that will evolve.

Speaker Change: Makes sense. Thank you understood.

Speaker Change: Yes, Thanks, Dave.

Speaker Change: Thank you. Our next caller is Ryan Levine with Citi. You May go ahead Sir.

Speaker Change: Hi, everybody.

Speaker Change: Siting permitting for those structures themselves.

How do you how do you expect the events from last month will change the cost of Capex items and O&M costs in the coming years.

Speaker Change: And so that that's probably the larger a gating item here, which means that it's not months its going to be years likely for these communities and by the way from an Edison perspective, it's not just what Steve and his team will be doing to make sure that we have the power side of that right, but as a company we want to make sure. We're there with those communities through our charitable.

Speaker Change: Do you mean from a supply availability kind of volume of materials perspective or might have a different angle on the question Ryan.

Speaker Change: Exactly right.

Speaker Change: Giving for engagement or broadly.

Speaker Change: Yes exactly.

Speaker Change: Okay.

Speaker Change: Because again as I mentioned that where this is not just something that you're doing. This this is home for a lot of us and it will be will be part of the answer.

Speaker Change: Steve I don't have a perspective on it.

Speaker Change: A little early I'm not sure that it would be in the context of the broad, California Western economy, I don't think that.

Speaker Change: Yeah.

Speaker Change: Alright, Thanks, and then one follow up in terms of the the venue is there establish venue to determine how the protocol will unfold in terms of investigating the the equipment and other related items regarding the unit fire.

Speaker Change: Okay.

Speaker Change: We have an answer.

Speaker Change: Might be a little bit of impact, but I don't think its a massive impact based on where we sit right now, but any different views do not I would say, Brian the scale. The scale I mean, obviously the impact of the communities is positive and we've got a lot of work to do but it's also not of the scale that it's meaningful to our overall plans that we do each year in terms of.

Speaker Change: Yeah that that's happening through the court process and so.

Speaker Change: So that gives us a judge assigned that I believe that the.

Brian: If you think about the number of line miles just last year that we did in covered conductor alone 800 miles that's an order of magnitude more than the types of impacts we're seeing from a conductor size amount of conductor you need to deal with this and so it's a small amount relative to our overall plan and anything that could actually impact broader supply chains.

Speaker Change: The discussions over the specific protocols are happening under the umbrella of her her oversight.

Speaker Change: I think there was a court hearing just yesterday.

Speaker Change: This yeah just yesterday.

Speaker Change: I believe she said I think that mix discussion will be in a week or so if I recall correctly. So it's a court process.

Steve: Steve probably.

Speaker Change: I think you appreciate it.

Steve: The appropriate to also say that.

Ryan Levine: Thanks Ryan.

Steve: <unk>.

Speaker Change: Thank you. Our next caller is sharp raise up with Guggenheim you May go ahead.

Steve: All the homes and customer premises that can be reconnected our already reconnected.

Ryan Levine: Sure.

Speaker Change: Hi, good afternoon, its actually talking to you here really brief.

Steve: And sell a lot of the rebuild moving forward will be more for homes premises that need to be rebuilt and so that doesn't happen overnight.

Speaker Change: Hi lessons.

Speaker Change: Maybe starting off following up on next question a bit more theoretical in terms of the timing for a potential 54 drawdown given the history of claims and settlement that you mentioned do you believe it will take a few years and that gives the stakeholder as more time to deliberate and best assurances around the construct.

Steve: Process that will evolve.

Steve: Siting permitting for those structures themselves.

Steve: And so thats, probably the larger gating item here, which means that it's not months its going to be years likely for these communities and by the way from an Edison perspective, it's not just what Steve and his team will be doing to make sure that we have the power side of that right, but as a company we want to make sure. We're there with those communities through our charitable giving.

Speaker Change: So I think hum.

Speaker Change: Yes.

Speaker Change: When people will start to see.

Speaker Change: Fast forward, we Havent determined you know sort of what the what the causes it yet for the fire, but fast forward. If it was a fire that was subject to a be tempting for I think it's actually early to know when people will start to be submitting claims and entering into a process.

Steve: For our engagement or broadly.

Steve: Because again as I mentioned.

This is not just something in the air to home. This is home for a lot of us.

Steve: <unk> will be part of the answer.

Speaker Change: Alright, Thanks, and then one follow up in terms of the venue is there establish venue to determine how the protocol will unfold in terms of investigating.

Speaker Change: That's my firm opinion, the first thing that we would do as well is we have $1 billion of customer funded self insurance and so we would be utilizing that for the first billion dollars of claims payments and only then will be go onto the 80 10 54 layer. So I think we do know that the processes are in place.

Speaker Change: The equipment and other related items regarding that you desire.

Speaker Change: Yes, that's happening through the court process and so.

Speaker Change: To go to the fund and you submit claims for payment, but I think it's early to tell me what exactly hit that point yet.

Speaker Change: That gives us a judge a sign that I believe.

Speaker Change: The discussions over the specific protocols are happening under the umbrella of her her oversight.

Speaker Change: I think Maria answered the substance of your question of well I think I also heard an angle and your question around does that didn't give parties in Sacramento more time to deliberate and.

Speaker Change: There was a court hearing just yesterday.

Speaker Change: On this just yesterday.

Speaker Change: I believe she said.

Speaker Change: And I think the flipside to that is we have a real sense of urgency here.

Speaker Change: Mix discussion will be in a week or so if I recall correctly. So it's a court process.

Speaker Change: And part of the message that we'll be providing is that I believe the market has responded very quickly.

Speaker Change: Hi, Thank you I appreciate it sure thanks, Brian.

Speaker Change: Thank you our next caller is sharp <unk> with Guggenheim you May go ahead.

Speaker Change: And we believe that it will be in California's best interest to demonstrate the commitment to.

Speaker Change: Sure.

Speaker Change: Hi, good afternoon team, it's actually compensating here really brief.

Speaker Change: No questions.

Speaker Change: Extending the framework or making changes again, we're not I'm not sitting here specifying it's a b C alright, but we're specifying here's the issue.

Speaker Change: And I think from a market perspective, and restoring investors' confidence in California, and frankly, I think there's a cruise not only to the view on California utilities for the view on the California economy more broadly.

Does that give the stakeholder as more time to deliberate and Beth assurances around the construct.

Speaker Change: So I think.

Speaker Change: We believe it's important that action at least the first steps happen.

Speaker Change: <unk>.

Speaker Change: When people will start to.

Speaker Change: Soon.

Speaker Change: Fast forward, we haven't determined what the causes that yet by the fire, but that forward. If it was a fire that was subject to AB <unk> for I think it's actually early to know when people will start to be submitting claims and entering into a process and.

Speaker Change: So while technically there's a time that you were asking about from an overall perspective.

Speaker Change: The the timing here of fracture in Sacramento, We are certainly focused on near term action at least for the initial steps.

Speaker Change: Thanks for that I'd really appreciate it.

Speaker Change: That's my opinion, the first thing that we would do as well as we have $1 billion of customer funded self insurance and so we would be utilizing that for the first billion dollars of Cui.

Speaker Change: Thank you.

Speaker Change: The question was more oriented towards kind of finding the best assurance, but I don't think that there is a question around the urgency at this point.

Speaker Change: You can get a very clear, but really appreciate that.

Speaker Change: And maybe as a quick follow up on some of the regulatory proceedings are just with the cost of capital coming up in the state.

Speaker Change: <unk> payments and only then will be go onto the <unk> 10, 54 layer. So I think we do know that the processes are in place to go to the fund and to submit claims for payment, but I think it's early to tell on what exactly hit that point.

Speaker Change: Uh huh.

Speaker Change: Obviously, the markets are not changing for the better.

Speaker Change: Does that impact kind of the.

Speaker Change: The impacts of the filing and maybe do you see offensive delay the preceding to alleviate some of that pressure.

Speaker Change: And I think Maria answered the substance of your question well I think I also heard an angle and your question around does that didn't give parties in Sacramento more time to deliberate.

Speaker Change: The company, we're moving forward with the filing its due in March I think you'll see US file you know as we have in the past we'll file all of the information both from a quantitative aspect as well as a qualitative aspect clearly events recently have impacted the cost of capital and we will be discussing that as well.

Speaker Change: And I think the flipside to that is.

Speaker Change: We have a real sense of urgency here.

Speaker Change: And part of the message there will be providing is that.

Speaker Change: The market has.

Speaker Change: Responded very quickly.

And I think at the end of the day yesterday.

Speaker Change: And we believe that it will be in California's best interest to demonstrate.

Pedro Pizarro: The approaches that Pedro was talking about before those are the solutions to the cost of capital I don't know that you find the solution purely and exclusively through the cost of capital proceeding, but you will see extensive discussion of these events and our application.

Speaker Change: <unk> commitment to <unk>.

Speaker Change: Extending the framework or making changes again, we're not I'm not sitting here specifying its ABC alright, but we're specifying here's the issue.

Speaker Change: And then maybe one more thought on this one is again I.

Speaker Change: And I think from a market perspective, and restoring investors' confidence in California, and frankly, I think this of crews not only through the view on California utilities for the view on the California economy more broadly.

Speaker Change: I bought this upward with one of the other questions as well.

Speaker Change: I keep pointing to the fact that the PUC proceeded with its approval of the Teekay M settlement.

Speaker Change: We believe it's important that action at least the first steps happen.

Speaker Change: On the schedule.

Speaker Change: This happened even after the the fires had taken place so.

Speaker Change: Soon.

Speaker Change: So while technically there is a time that you were asking about from an overall perspective.

Speaker Change: So I think that's it.

Speaker Change: It's an important time for their steady leadership, which they are showing they are providing.

Speaker Change: The timing here for action in Sacramento, We are certainly focused on near term action at least for the initial steps.

Speaker Change: Because frankly that that's part of helping investors you'll retain confidence in the durability of the California framework. So I really appreciate it not only the approval of PJM, but the very thoughtful comments a person Reynolds made that I mentioned before.

Speaker Change: Thanks for that I'd really appreciate it.

Speaker Change: I do think that the.

Speaker Change: The question was more oriented towards kind of a finding the best assurances, but I don't think that there was a question around the urgency at this point.

Speaker Change: That's been communicating very clear, but really appreciate that.

Speaker Change: Thanks for that really appreciate the transparency and the updates I think it goes a long way. Thanks, so much.

Speaker Change: And maybe that's a.

Speaker Change: Quick follow up in terms of regulatory proceedings, just with the cost of capital coming up in the state.

Speaker Change: So much take care.

Speaker Change: Uh huh.

Speaker Change: Thank you. Our next caller is Anthony <unk> with Mizuho you May go ahead Sir.

Obviously, the markets are not changing for the better.

Does that impact kind of the.

Speaker Change: Hey, good afternoon Pedro Good afternoon, Maria just a quick question slide 20.

Speaker Change: The impacts of the filing and maybe do you see a sense of delaying the proceeding to alleviate some of that pressure.

Speaker Change: It talks about prudent see whether if you found 100 per cent imprudent or 100% prudent I'm. Just curious is there a middle ground there.

The company, we're moving forward with the filing its due in March I think Youll see us file as we have in the past we'll file all of the information both from a quantitative aspect as well as the qualitative aspect clearly.

Speaker Change: Yeah.

Speaker Change: It's a really important thing I just speaking generally in terms of how this works are absolutely. The PUC has full discretion to final utility prudent pace on a fully prudent based on the facts are fully imprudent or something in between and you might recall Anthony that frankly, there's just one of the challenges with a prior PUC Andy.

Speaker Change: <unk> recently have impacted the cost of capital and we won't be discussing that as well.

Speaker Change: And I think at the end of the day.

Pedro Brito: The approaches that Pedro was talking about before those are the solutions to the cost of capital I don't know that you find the solution purely and exclusively through the cost of capital proceeding, but you will see extensive discussion of these events in our application.

Speaker Change: Did a case.

Speaker Change: Case regarding the 2007 fires for San Diego gas and electric where a prior PUC.

Speaker Change: And in making their decision set that they were stuck with a binary choice they could only provide either full recovery or zero recovery.

Speaker Change: And then maybe one more thought on this one is again.

Speaker Change: I bought this upward with one of the other questions as well.

Speaker Change: I keep pointing to the fact that the PUC proceeded with its approval of the <unk> settlement.

Speaker Change: Later on he when does seem precedent and believe the general counsel at the time, both made comments again later on that they realized that was not the case and the commission has discretion as it always has so that's a really important part of the framework here in life is not binary.

Speaker Change: On the schedule.

Speaker Change: This happened even after the fires had taken place so.

Speaker Change: So I think that's it.

Speaker Change: As an important time for their steady leadership, which they are showing they are providing.

Speaker Change: Great. That's all I had thank you so much.

Speaker Change: Because frankly, that's part of helping investors, you'll retain confidence in the durability of that California framework. So I really appreciate it not only the approval of <unk>, but the.

Anthony: Anthony take care.

Speaker Change: Thank you our next caller is Richard Sunderland with J P. Morgan.

Richard Sunderland: Hi, Richard Good afternoon can you hear me.

Speaker Change: Very thoughtful comments a person Reynolds made that I mentioned before.

Speaker Change: Yes hear you well.

Speaker Change: Great. Thank you just one question for me if a legislative solution does not emerge are there any operational changes across P. S. P. S practices or elsewhere, you would consider if the future fund backstop is potentially lower given that potential that impacts the fund as a risk backstop.

Speaker Change: Thanks for that really appreciate the transparency and the updates I think it goes a long way. Thanks, so much.

Speaker Change: So much take care.

Anthony: Thank you. Our next caller is Anthony <unk> with Mizuho you May go ahead Sir.

Anthony: Good afternoon, Pedro Good afternoon Maria just.

Speaker Change: Well actually I'm going to answer that.

Anthony: Quick question.

Anthony: Slide 20.

Speaker Change: Question or started Steve may have more to add from a little different angle.

Anthony: It talks about prudency, whether if you found a 100% imprudent or a 100% prudent.

We are always in learning mode.

Speaker Change: And so we're always looking for steps that we think might be needed to maintain the safety of our public as we continue to learn more and more.

Anthony: I'm just curious.

Is there a middle ground there.

Anthony: Yes.

Anthony: That's a really important thing I just speaking generally in terms of how this works absolutely. The PUC has full discretion to.

Speaker Change: This windstorm.

Speaker Change: Was something else right, because we had up to 100 mile an hour winds.

Speaker Change: Two final utility prudent based on a fully prudent based on the facts are fully imprudent or something in between and you might recall Anthony that frankly, there's just one of the challenges with a prior PUC indeed.

And so you heard me mention earlier that going into the wind storm, we had already gone and more conservative in terms of the P. S. P. S criteria, meaning that S. He was ready to the energized at a little bit lower conditions than the standard protocols were called for and in fact.

Speaker Change: Case regarding the 2007 fires for San Diego gas and electric where a prior PUC.

Speaker Change: And making their decision set that they were stuck with a binary choice. They could only provide either full recovery or zero recovery and later on EBIT that same precedent and believe the general counsel at the time.

Speaker Change: During the wind storm at one point when a night flying firefighting aircraft, we're unable to fly because of the strength of the wins S. Either won't became even more conservative in terms of its application for U S. P. S. So that's one example, where there was more conservatism that came in in real time based on conditions right.

Speaker Change: Both made comments again later on that they realized that was not the case and the commission has discretion as it always has so that's a really important part of the framework here in life.

Speaker Change: Uh huh.

Speaker Change: The team and Steve maybe you can talk a bit about what does he is doing its part of your continuous learning as we then look at the next W. M P update et cetera.

Speaker Change: Life is not binary.

Speaker Change: Great Thats all I had thank you so much thanks.

Anthony: Thanks, Anthony take care.

Speaker Change: Thank you our next caller is Richard Sunderland with Jpmorgan.

Speaker Change: Yes.

Pedro Pizarro: Pedro I'll reiterate when we look at our mitigation for wildfire, whether it is the grid hardening our choices around covered conductor, where we do underground in the factories that are there how we have enhanced our inspections, where and how much veg management. We're doing every aspect of our wildfire mitigation plan is based and public safety.

Richard Sunderland: Hi, Richard Good afternoon can you hear me.

Speaker Change: Yes hear you well.

Speaker Change: Great. Thank you just one question for me.

Speaker Change: So the solution does not emerge are there any operational changes across <unk> practices or elsewhere, you would consider if the future fund backstop is potentially lower given that potential.

Pedro Pizarro: And how do we make sure that we have a system that operates safely now we learn along the way with as Pedro noted from incidents that happened on our system off of off of our system and we look at other ways that there may be risks in the system that we didn't see before and we didn't bake those into our wildfire mitigation plans.

Speaker Change: <unk> the fund as a risk backstop.

Speaker Change: So I'm going to answer that.

Steve: The question or started Steve may have more to add from a little different angle. We are always in learning mode.

Steve: And so we're always looking for steps that we think might be needed to maintain the safety of our public as we continue to learn more and more.

Pedro Pizarro: We started on a risk prioritized basis, seven or eight years ago heavily focused on distribution, because thats, where the bulk of our admissions and our risk with that and we've been working our way down as we continue to learn we'll continue to look at what the next set of mitigation Saar and so but that is primarily driven from a public safety perspective, as we're thinking about the best way to run the system and keep our communities.

Steve: This windstorm.

Steve: Was something else right, because we had up to 100 mile an hour winds.

And so you heard me mention earlier that going into the wind storm, we had already gone and more conservative in terms of the PSP as criteria, meaning that SCE was ready to the energized at little bit lower conditions than the standard protocols would call for and in fact.

Pedro Pizarro: So that's what drives it at the end of the day and you know like I say.

Pedro Pizarro: So my comments, we are confident that this state will do the right thing in terms of the framework.

Pedro Pizarro: Great. Thank you for the thought without response I'll leave it there.

Pedro Pizarro: Thanks Rich.

Speaker Change: Thank you Carly Davenport with Goldman Sachs. You May go ahead.

Steve: During the windstorm of one point win.

Steve: Night flying firefighting aircraft were unable to fly because of the strength of the wins SCE. There wont became even more conservative in terms of its application fee Sps. So that's one example, where there was more conservatism that came in in real time based on conditions right.

Carly Davenport: Good afternoon, Hey, thanks, so much for taking the question just one from me as well a follow up on I think Constantine question earlier, just any color that you can share in terms of Oh in terms of what's embedded in your plan or just how youre thinking about a potential improvement or not in the CPUC Roe.

Steve: Yes.

Speaker Change: The team and Steve maybe you can talk a bit about what <unk> is doing its part of your continuous learning as we look at the next WMC update et cetera, yes.

Carly Davenport: As you go into the cost of capital next month I'm, just what's reflected over this planning period.

Speaker Change: So MEO.

Yes, so maybe Pedro I'll reiterate when we look at our litigations for wildfire, whether it is the grid hardening our choices around covered conductor, where we do underground in the factories that are there how we have enhanced our inspections, where and how much of its management. We're doing every aspect of our wildfire mitigation plan is based and.

Speaker Change: Decompose that into two questions, because you're asking what's embedded into our planning period. So I think you'd see the sensitivities that we have in the in the deck in terms of the $25 28 on EPS growth and we've had a number of different ROE over the time that we've been providing those updates in those numbers. So we have won numerous.

Speaker Change: Public safety and how do we make sure that we have a system that operate safely now we learn along the way with as Pedro noted from incidents that happened on our system offer off of our system and we look at other ways that there may be risks in the system that we didn't see before and we didn't bake those into our wildfire mitigation plans.

Speaker Change: Scenarios related to that and do you think that the range covers us for a number of different outcomes. If your question is really more aimed at sort of what is in the cost of capital filing when we go in in March I think I'll, just reiterate that it's going to I would say look like the ones that we filed before in the sense of you know gene a quantitative analysis as well as the qualitative analysis.

Speaker Change: We started on a risk prioritized basis, seven or eight years ago heavily focused on distribution, because thats, where the bulk of our admissions and our risk with that and we've been working our way down as we continue to learn we'll continue to look at what the next set of mitigation are and so but that is primarily driven from a public safety perspective, as we're thinking about the best way to run the system and keep our communities.

Speaker Change: We will have extensive discussion on the impacts.

Speaker Change: From Janney the January events, the market reaction to that as well as you know sort of how we would think about that in terms of the ongoing cost I do think that the commission in the past when we filed our second 2019. When we filed did include the concept of a wildfire adder, but even at the top.

Speaker Change: So that's what drives it at the end of the day and.

Speaker Change: So my comments, we are confident that this state will do the right thing in terms of the framework.

Speaker Change: Time, we underscored not going to fix this issue by just addressing it through the cost of capital. It's really the structural changes back then was 80 tend to do for them that will help the market reacts more favorably to California. So.

Speaker Change: Okay.

Speaker Change: Great. Thank you for the thought without response I'll leave it there.

Speaker Change: Thanks Rich.

Carly Davenport: Thank you Carly Davenport with Goldman Sachs. You May go ahead.

Speaker Change: I currently good afternoon, hey, thanks, so much for taking the questions just one from me as well a follow up on I think Constantine question earlier, just any color that you can share in terms of in terms of what's embedded in your plan or just how youre thinking about a potential improvement or not in the CPUC ROE as you go into the cost of capital next month.

Speaker Change: You know, we're really going to approach it from that fundamental perspective.

Speaker Change: That's really helpful. Thank you I'll leave it there.

Speaker Change: Thanks Karli. Thanks.

Speaker Change: Thank you David Arcaro with Morgan Stanley You May go ahead.

Hi, David Thanks, so much for taking my questions Hey.

Carly Davenport: Just what's reflected over this planning period.

Speaker Change: I was curious to get your thoughts what do you think is the solution here you know what are you advocating for I'm thinking in the legislative backdrop. What are you advocating for them. What do you think is kind of needed to give the certainty that investors are seeking with the California wildfire kind of protective.

Speaker Change: So.

Speaker Change: Neil.

Speaker Change: Presenting to you question, because youre asking whats embedded in our planning period. So I think you'll see the sensitivities that we have in the deck in terms of the 25% to 28.

Speaker Change: EPS growth and we.

Speaker Change: Financial backdrop.

Speaker Change: Had a number of different ROE over the time that we've been providing those updates in those numbers. So we have won numerous scenarios related to that and we think that the range covers us for a number of different outcome. If your question is really more aimed at sort of what is in the cost of capital filing when we go in in March I think I'll, just reiterate that it's gone.

Speaker Change: You know David look I'm Gonna acknowledges too early days and as I mentioned, where we're talking and we're listening to virtually <unk>.

Speaker Change: Cussing with third our peer utilities with legislative leaders et cetera.

Speaker Change: And there's probably a lot of different levers that could be employed here.

Speaker Change: Two I would say look like the ones that we filed before in the sense of energy and the quantitative analysis as well as the qualitative analysis, we will have extensive discussion on <unk>.

Speaker Change: So I don't want to get too far ahead of that but I think ultimately part of the message. We're hearing from investors and I think as reflected in the valuation impact not just for Edison, but for Sempra N and M. P. C G.

Speaker Change: Tax.

Speaker Change: From the January events, the market reaction to that as well as <unk>.

Speaker Change: It's a concern that.

Speaker Change: How we would think about that in terms of the ongoing cost I do think that the commission in the past when we've filed.

Speaker Change: The events that the L. A area just lived through for really large events, whether or not they were caused by electric infrastructure. They were large events and to some extent they reset the sense of how large events could get in California.

Speaker Change: Back in 2019, when we filed did include the concept of a wildfire adder, but even at the time, we underscored not going to fix this issue by just addressing into the cost of capital it's really the structural changes.

Speaker Change: And so that Dustin good folks thinking about the durability of the fund and levers like the liability cap rate today to liability cap is attached to the existence of the fund.

Speaker Change: Back then was 80 tentative who are that will help the market reacts more favorably to California. So.

Speaker Change: We're really going to approach it from that fundamental perspective.

Speaker Change: So are there ways to.

That's really helpful. Thank you I'll leave it there.

Right.

Speaker Change: Provide for the fun being able to scale up if needed. However, you get there the waste to assure that the liability cap and yours, regardless of the state of the fund. So I think there are some other questions, it's probably different levers to answer this beyond the utility piece.

Charlie: Charlie Thanks.

David Arcaro: Okay. Thank you David Arcaro with Morgan Stanley You May go ahead.

Speaker Change: Hi, David Thanks, so much for taking my questions.

David Arcaro: Yeah, I was curious to get your thoughts.

Speaker Change: What do you think is the solution here what are you.

Speaker Change: Vacating for Im thinking in the legislative backdrop, what are you advocating for what.

Speaker Change: You've already seen.

Speaker Change:

Speaker Change: The leadership across the state talk about some of the other elements that may be part of a solution and again I don't I don't know ultimately you know will we see vehicles in Sacramento that or at least in this first turned this year for this session focused just the navy to 54, while youll see other pieces I noticed that I believe yesterday.

Speaker Change: What do you think is kind of needed to give the certainty that investors are seeking with the California wildfire kind of protective.

Speaker Change: Financial backdrop.

David Arcaro: David look I'm going to acknowledge is still early days.

Speaker Change: As I mentioned, where we're talking and we're listening to virtually discussed.

Speaker Change:

Speaker Change: Discussing with third our peer utilities with legislative leaders et cetera.

Mike Mcguire head of the Senate.

Speaker Change: And there's probably a lot of different levers that could be employed here.

Speaker Change: <unk> announced a package in a series of bills that.

Speaker Change: So I don't want to get too far ahead of that but I think ultimately part of the message. We are hearing from investors and I think as reflected in the valuation impact not just for Edison, but for.

Speaker Change: Touch on insurance reform.

Speaker Change: You've heard discussion around building codes and standards right. The reality is California will continue to have to work through wildfire risk.

Speaker Change: Sempra and PSEG.

We're adapting for tomorrow White paper, a three or four years ago pointed out that the state will see increased wildfire risk because we see deeper impacts from climate change over the next several decades.

Speaker Change: Is a concern that.

Speaker Change: The events that led area just lived through for really large events, whether or not they were caused by electric infrastructure. They were large events and to some extent reset.

Speaker Change: So I give a lot of credit to the governor and the legislature they've been working on more than just <unk> 54.

Speaker Change: Reset.

Speaker Change: Sense of how large events could get in California.

Speaker Change: You know doubled state budgets for firefighting Dave.

Speaker Change: And so that Dustin good folks thinking about the durability of the fund and levers like the liability cap rate today to liability cap is attached to the existence of the fund.

Speaker Change: I was having a further discussion around.

Speaker Change: Managing fuel and clean.

Speaker Change: Cleaning forest and that kind of thing.

Speaker Change: Again, the role for building codes and standards.

Speaker Change: So are there ways to.

Speaker Change: Fencible space, which is I saw that package I mentioned on the insurance side. So one of the bills dealt with ensuring defensible space.

Speaker Change: Provide for the fun being able to scale up if needed.

Speaker Change: You get there.

Speaker Change: This will all be I'm sure tough topics.

Speaker Change: Ways to ensure that the liability cap and yours, regardless of the state of the fund. So I think there are some other questions with probably different levers to answer this beyond the utility piece.

Speaker Change: All on each of their own two feet and that's why I don't know will we see the legislature coalesce around trying to do a lot of this all at once or take a piece at a time.

Speaker Change: <unk> already seen.

Speaker Change: The leadership across the state talk about some of the other elements that may be part of a solution and again I don't I don't know ultimately where we see vehicles in Sacramento that are at least in this first turn this year for discussion focused just in maybe 254, where youll see other pieces I noticed that I believe.

Speaker Change: From our perspective, we want to make sure that we have a strong boys and.

Speaker Change: Helping them understand the immediacy of demonstrating to you all to the market.

Speaker Change: <unk>.

Speaker Change: Okay.

Speaker Change: Immediacy of the need to reassure investors on the strength and durability of 18 to 54 and again the good news here is that this is more like 2018, when we were starting from scratch.

Speaker Change: Yesterday.

Speaker Change:

Speaker Change: Mike Mcguire head of the Senate.

Speaker Change: We get to stand on their platform of a very strong build you know led by Governor Newsome prior legislature that really set the model for the country and I know it's always a.

Speaker Change: Almost a package of a series of bills that.

Speaker Change: Touch on insurance reform.

Speaker Change: You have heard discussion around building codes and standards right. The reality is California will continue to have to work through wildfire risk.

Speaker Change: Better to be in a place where you could talk about how you modify and extend as opposed to how you create from a new whole cloth.

Speaker Change: Yeah, absolutely no very helpful and thank you for your thoughts there and.

Speaker Change: Are adapting for tomorrow White paper, three or four years ago pointed out that the state will see increased wildfire risk because we see impacts from climate change over the next several decades, and so I give a lot of credit to the governor and the legislature are they've been working on more than just <unk> 54.

Speaker Change: I was also curious you know as you maybe reflect on your capital plan and the prioritization of different projects and initiatives do you think it would make sense to pivot you know incremental capex back toward fire risk reduction you know I'm looking at like Slide 12, the split of where.

Speaker Change: <unk> doubled state budgets for firefighting Dave.

Speaker Change: Capex is flowing within the distribution system is there a do you think there's a case to be made for wildfire mitigation to become a bigger piece again.

Speaker Change: I was having a further discussion around.

Speaker Change: Managing fuel in.

Speaker Change: Cleaning forest and that kind of thing.

Speaker Change: Yeah. So we always have the discretion to move the general rate case dollars around to prioritize based on what is you know at hand, when we get into that period I think one of the first things you'll see US do is in the areas with that where we're doing restoration. We are taking a look at how we rebuild those communities.

Speaker Change: Again, the roles were building codes and standards defensible space, which is I saw that package I mentioned on the insurance side to be one of their bills dealt with ensuring the principal space.

Speaker Change: This will all be I'm sure.

Speaker Change: Tough topics.

Speaker Change: On each of their own two feet and Thats why I don't know will we see the legislature coalesce around trying to do a lot of this all at once or take a piece at a time from our perspective, we want to make sure that we have a strong voice in.

Speaker Change: Support those communities, whether it's you know places we have already covered conductor or places, where we can advance in targeted underground ing, but I'll turn it over to fee that he would probably have other thoughts as to where we might actually mean in a little bit differently.

Speaker Change: Helping them understand.

Speaker Change: I think.

Speaker Change: The immediacy of demonstrating to you all to the market.

Speaker Change: Really one of the things from these <unk>.

Speaker Change: So whether it's the palisades fire the fire.

Speaker Change: I think everyone's looking back at risk models to determine you know what's changed in terms of risks is there anything new that we've missed and when we look at how we prioritize our capital. We're starting with you know risk public safety reliability et cetera to determine where we put those in so to extent that our risk models are showing that we should be hardening the system differently or play.

Speaker Change: Okay.

Speaker Change: <unk> of the need to reassure investors on the strength and durability of AB 254, and again the good news here is that this is more like 2018, when we were starting from scratch.

Speaker Change: We get to stand on their platform of a very strong bill led by Governor Newsome prior legislature that really set the model for the country and now.

Speaker Change: Our our capital allocation differently.

Speaker Change: <unk>.

What will evaluate it's too early to say how it will change Maria mentioned, certainly where we're in places where we are rebuilding and starting from scratch. One a lot of places if we're starting clean our standard generally is to underground and so we could likely see more underground input in places where we're building from scratch.

Speaker Change: Better to be in a place where you could talk about how you modify and extend as opposed to how you created from our new whole cloth.

Speaker Change: Yes, absolutely very helpful. Thank you for your thoughts there.

Speaker Change: I was also curious as you maybe reflect on your capital plan and the prioritization of different.

Speaker Change: But that's really as we look at that overall capital allocation. It starts with how we allocate how we how we view the risks and what the best mitigation are so too early to say how much change there will be but it is something that will go back and look at like we do each year as we reevaluate our capital plans.

Speaker Change: Projects and initiatives do you think it would make sense to pivot.

Speaker Change: Incremental capex back towards fire risk reduction and I'm looking at.

Speaker Change: Slide 12, the split of where Capex is falling within the distribution system.

Speaker Change: You know my guess is that as we ever stunning 12 months from now or 24 to 36 months from now when you look backwards.

Speaker Change: Is there a do you think there is a.

Speaker Change: Ace to be made for wildfire mitigation to become a bigger piece again.

Speaker Change: He might not be a clean split right because particularly in the communities to require rebuilding and we've been doing that's stronger.

Speaker Change: Yes, so we always have the discretion to move the general rate case dollars around to prioritize based on what is.

Speaker Change: I mean for example, you already that your team has now replaced something like four or five.

Speaker Change: At hand, when we get into that period I think one of the first things Youll see US do is in the areas with that where we're doing restoration. We are taking a look at how we rebuild those communities and support those communities whether it's.

Speaker Change: Existing four kv circuits in altadena, whereas a modern 16 kv circuit with covered conductor right and so there's a that was a rebuild it to a fire.

Speaker Change: Places, we have already covered conductor or places, where we can advance in targeted underground ing, but I'll turn it over to fee that probably have other thoughts as to where we might actually lean in a little bit differently.

Speaker Change: But it was also a resiliency improvement.

Speaker Change: I think some of those areas.

Speaker Change: Circuits, where parts of them were in non each of our areas. So they got rebuilt with covered conductor. So that's also a wildfire risk improvement. So it hits, probably you know multiple boxes bolt checks and multiple boxes around the categories that you were asking about there if that makes sense.

Speaker Change: Yes, I think.

Speaker Change: Really one of the things from these <unk>.

Speaker Change: <unk>, whether it's the Palisades, Florida beginning fire.

Speaker Change: I think everyone's looking back at risk models to determine whats changed in terms of risk is there anything new that we've missed and when we look at how we prioritize our capital we're starting with risk public safety reliability et cetera to determine where we put those in so to extent that our risk models are showing that we should be hardening the system differently or <unk>.

Speaker Change: Yes, it does great. Thanks, so much.

Speaker Change: Yes.

Raj: Thank you I will now turn the call back over to Mr. Sam I'm Raj for any closing comments.

Speaker Change: Thank you for joining US. This concludes our conference call have a good rest of the day you may now disconnect.

Speaker Change: <unk> or our capital allocation differently.

Speaker Change: What will evaluate it's too early to say how will change Maria mentioned, certainly where we are in places, where we are rebuilding and starting from scratch. One a lot of places if we're starting clean our standard generally is to underground and so we could likely see more underground in places where we're building from scratch.

Speaker Change: Okay.

Speaker Change: But thats really as we look at that overall capital allocation. It starts with how we allocate how we how we view the risks and what the best mitigation are so too early to say how much change there will be but it's something that we will go back and look at it like we do each year as we reevaluate our capital plans.

Speaker Change: Steve.

Steve: My guess is that as we ever standing 12 months from now or 24 to 36 months from now when you look backwards.

Steve: It might not be a clean split right, because particularly in the communities that require rebuilding and doing that stronger.

Steve: I mean for example, you already that your team is now replaced something like four or five.

Steve: Existing four kv circuits in Altadena.

Steve: With a modern 16 kv circuit with covered conductor alright.

Steve: So there is a that was a rebuild the tilda fire, but it was also a resiliency improvement.

I think some of those circuits.

Steve: The circuits were in parts of them were in non Egfr areas. So they've got rebuilt with covered conductor. So that's also a wildfire risk improvement so it hits, probably multiple boxes checks and multiple boxes around the categories that you were asking about it if that makes sense.

Steve: Yes, it does great. Thanks, so much.

Steve: Okay.

Speaker Change: Thank you I will now turn the call back over to Mr. Sam Ross for any closing comments.

Speaker Change: Thank you for joining US. This concludes our conference call have a good rest of the day.

Speaker Change: You may now disconnect.

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