Edison International (EIX) Q1 2021 Earnings Call Transcript

Edison International (EIX 0.27%)
Q1 2021 Earnings Call
Apr 27, 2021, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good afternoon, and welcome to the Edison International First Quarter 2021 Financial Teleconference. My name is Michelle, and I will be your operator today. [Operator Instructions]

I would now like to turn the call over to Mr. Sam Ramraj, Vice President of Investor Relations. Mr. Ramraj, you may begin your conference.

Sam Ramraj -- Vice President, Investor Relations

Thank you, Michelle, and welcome, everyone. Our speakers today are President and Chief Executive Officer, Pedro Pizarro; and the Executive Vice President and Chief Financial Officer, Maria Rigatti. Also on the call are other members of the management team. I would like to mention that we are doing this call with our executives in different locations, so please bear with us if you experience any technical difficulties.

Material supporting today's call are available at www.edisoninvestor.com, these include our Form 10-Q, prepared remarks from Pedro and Maria, and the teleconference presentation. Tomorrow we will distribute our regular business update presentation. During this call, we will make forward-looking statements about the outlook for Edison International and its subsidiaries. Actual results could differ materially from current expectations. Important factors that could cause different results are set forth in our SEC filings, please read these carefully. The presentation includes certain outlook assumptions as well as reconciliation of non-GAAP measures to the nearest GAAP measure. [Operator Instructions]

I will now turn the call over to Pedro.

Pedro J. Pizarro -- President and Chief Executive Officer

Well, thank you, Sam, and good afternoon, everybody. Today, Edison International reported core earnings per share of $0.79 compared to $0.63 a year ago. However, this year-over-year comparison is not particularly meaningful because SCE has not received a decision in its 2021 General Rate Case. SCE recognized revenue from CPUC activities for both the first quarter 2020 and 2021, largely based on 2020 authorized base revenue requirements. Maria will discuss our financial performance in her remarks.

Investors have been asking us about how we view Edison's risk profile given all the news reports that California is headed into another peak wildfire season with above-average risk. As I have shared before, 2019 and 2020 were also above-average-risk years, with 2020 setting records for acres burned. However, and this is a really important however, the state has successfully avoided the scale of catastrophic damage seen in 2017 and 2018. I would like to highlight three key factors that have significantly improved our risk profile, state investments to improve firefighting, CPUC progress on AB 1054 implementation and SCE's own wildfire mitigation work.

Well, first, the state has increased investments in firefighting capabilities over the last several years. Incorporating the Governor's 2021 to 2022 proposed budget, which continues this trend, this would represent a 45% increase in CAL FIRE's budget since 2016, a 30% increase in firefighters at the peak of the season since 2019, and significant increases in equipment and modeling to enhance the state's wildfire suppression capabilities. For example, the state is expected to have seven large air tankers operating this fire season and another five in 2022. These enhanced suppression resources will help the state move more quickly to combat wildfires before they become catastrophic.

The proposed budget also adds a focus on wildfire prevention, and the Governor and the Legislature have already taken early action. Earlier this month, they approved $536 million to accelerate land and forest management projects laid out in the Wildfire and Forest Resilience Action Plan, and an additional $80 million for roughly 1,400 new CAL FIRE firefighters for the 2021 fire season. We have also seen significant staff and resource additions in our local fire departments to aid response times and firefighting capacity.

The second risk improvement factor is that the CPUC has made steady and timely progress over the past nearly two years, enacting AB 1054's provisions as designed. For instance, shortly after the Legislature passed AB 1054, the CPUC opened a proceeding on an emergency basis to establish the non-bypassable charge that funds about half of the Wildfire Insurance Fund.

Another indicator is that the Commission has approved each of SCE's annual safety certifications in a timely manner. This certification is a key step in implementing the prudency standard that AB 1054 codified, where a utility's conduct is deemed reasonable if it has a valid safety certification, unless serious doubt is created. Importantly, this standard will go on beyond the life of the Wildfire Insurance Fund.

The Commission established its Wildfire Safety Division, providing additional wildfire safety oversight and direction. Lastly, the CPUC has completed numerous wildfire-related decisions on a timely pace despite the COVID-19 pandemic. The Commission has also been proactive in engaging with the IOUs on Public Safety Power Shutoff

Or PSPS execution, at the same time acknowledging that it is within the utilities' discretion to use this crucial tool to protect the public's safety. Taken together, these are all signs that AB 1054's intent is being implemented steadily as designed.

The third risk improvement factor is SCE's own work to reduce wildfire risk. Fire

Mitigation has been an integral part of SCE's operational practices for years and the utility has had several programs in place to manage and reduce wildfire risk. As climate change intensified wildfire risk, the utility stepped up its comprehensive wildfire mitigation strategy and has made substantial progress, particularly through its WMP.

In 2021, SCE continues to invest in its infrastructure and new technologies to mitigate the risk of fires from electric infrastructure, increase accuracy in fire weather forecasting, enhance its operational practices, and improve its PSPS program. SCE has assembled a dedicated PSPS Readiness team to address the feedback from customers, public safety partners, elected officials, and regulatory agencies.

The utility is accelerating the pace of covered conductor deployment and expects to install at least 1,000 additional circuit miles by year-end. At this pace, SCE will have hardened over 2,500 miles or over 25% of all its overhead distribution infrastructure in high fire risk areas, substantially reducing the risk of wildfires associated with utility equipment. Well, this combination of investment and actions by the State of California, the CPUC, and SCE gives us increasing confidence in Edison International's improved risk profile with respect to wildfires.

Slides 2 and 3 in our deck provide additional information on SCE's year-to-date wildfire mitigation activities and on the State's actions over the last few years. This work is also a building block for longer term reliability and resiliency, which will be essential as electrification increases dramatically across the entire economy for decarbonization.

Now, speaking of decarbonization, we agree with the goals of President Biden's $2.25 trillion infrastructure proposal to address climate change, create well-paying jobs, improve air quality, particularly in our most vulnerable communities and increase our global competitiveness. That future requires substantial deployment of EVs, electrification of buildings, and new investments in electric infrastructure to ensure clean, reliable and resilient electric service for this greater demand. We look forward to working with the Administration and leaders in Congress to develop and implement the complementary policies that will effectively meet the Nationally

Determined Contribution or NDC, target of 50% to 52% greenhouse gas reductions across the economy relative to 2005.

This is in close alignment with what SCE outlined in its Pathway 2045 white paper,

And Edison has already stated its support for this economywide target prior to the NDC's release. As highlighted in Pathway 2045, the least expensive way to achieve economywide decarbonization is through an equitable clean energy future with increasing amounts of carbon-free generation powering the further electrification of the economy. The average customer will also benefit from a decline in total energy costs of one-third, thanks to the greater efficiency of electric technologies. Slides 4, 5, and 6 in our earnings deck provide you with additional information on our views in these areas.

SCE has a long track record in maintaining affordability, but in the near-term, customers will see increases in their bills as SCE invests in grid hardening and makes the investments needed to support clean energy goals and the long-term affordability that they will yield. For over a decade, SCE has proactively pursued cost reduction efforts as well as improvements in areas like reliability, through its operational excellence efforts.

We expect to do more, and embedding more digital tools deep in our operations, areas like inspections and vegetation management will enable efficiencies in how we work and better harness data to improve asset management and performance and reduce risk. Building a more robust capability in lean process management will help us drive these efficiencies and create a stronger basis to use automation and other technology to streamline our operations. Fundamentally, delivering value to our customers starts with being an excellent and safe operator, through the safe delivery of reliable and affordable electricity.

Well, let me close my comments by acknowledging yesterday's news that our colleague and good friend, Carla Peterman, SCE's SVP of Strategy & Regulatory Affairs, will be leaving us on May 7th for a new role as PG&E's Executive VP of Corporate Affairs. We are very sad to lose Carla after a great -- really great year and a half together, but we wish her well as she takes on the important and very challenging task of helping Patti Poppe and her new leadership team turn around PG&E's operations and their relationships with their stakeholders and communities. California needs all of its utilities to be healthy and strong, so I am really glad our state will continue to benefit from Carla's talent.

With that, Maria will provide her financial report.

Maria Rigatti -- Executive Vice President and Chief Financial Officer

Thanks, Pedro, and good afternoon, everyone. My comments today will cover first quarter 2021 results, our capital expenditure and rate base forecasts, key regulatory filings, and updates on other financial topics.

Edison International reported core earnings of $0.79 per share for the first quarter 2021, an increase of $0.16 per share from the same period last year. As Pedro noted earlier, this year-over-year comparison is not particularly meaningful because SCE has not received the decision in its 2021 General Rate Case.

On Page 7, you can see SCE's key first quarter EPS drivers on the right-hand side. I would like to highlight a handful of items that accounted for much of the variance. To begin, revenue was higher by $0.05 per share. FERC-related revenue contributed $0.03 to this variance, primarily due to higher rate base. CPUC-related revenue contributed $0.02 to this variance, however this was offset by balancing account expenses with no effect on earnings. O&M had a positive variance of $0.20, largely due to lower wildfire mitigation-related O&M and lower employee benefits expenses.

Wildfire mitigation expenses were lower in the first quarter, primarily because fewer remediations were identified through the inspection process. There was also a negative variance of $0.08 from an increase in depreciation due to a higher asset base. Lower net financing cost had a positive variance of $0.08 due to several items,including lower interest rates on balancing accounts and lower preferred dividends due to the redemption of preferred stock at SCE last year. Finally, SCE's EPS in the quarter was $0.04 lower because of dilution from the increase in shares outstanding, primarily associated with the equity offering in May 2020.

I would now like to comment on SCE's capital expenditure and rate base growth forecasts, which are shown on Page 8. Our capital and rate base forecasts are unchanged from the last quarter, pending a final decision in SCE's 2021 GRC track 1. SCE is executing against a capital plan that targets key programs, while maintaining flexibility in later years to adapt to what is ultimately authorized in the GRC decision.

The rate base forecast does not include certain projects and programs that are not yet approved. This includes the Customer Service Re-Platform project, or CSRP, which went operational earlier this month. SCE expects to file an application for cost recovery for CSRP later this year and, if approved, this could add approximately $500 million to rate base by 2023. It also does not reflect capital spending on fire restoration related to wildfires affecting SCE's facilities and equipment in late 2020. SCE is evaluating the costs to determine how much may be incremental to the current rate base forecast.

Please turn to Page 9. On the regulatory front, we remain hopeful that SCE will receive a proposed decision on track 1 of its 2021 GRC this quarter. As a reminder, the CPUC can vote out a final decision no sooner than 30 days after it issues a proposed decision. Consistent with our prior practice, we will issue earnings guidance after we receive a final decision on the GRC. Additionally, SCE filed its testimony in track 3 of the 21 -- 2021 GRC in the first quarter. In track 3, SCE is requesting recovery of $497 million in revenue requirement, and that the CPUC find reasonable $679 million of incremental wildfire mitigation capital expenditures. This filing is another step towards recovery of wildfire mitigation costs we have already incurred.

Page 10 provides a summary of the approved and pending cost recovery applications for incremental wildfire-related costs, including track 3, which I just mentioned. As you can see on Page 11, in the coming months, SCE will request a financing order that would allow it to securitize the costs authorized in GRC track 2, residential uncollectibles for 2020, and additional AB 1054 capital authorized in GRC track 1.

We expect SCE's total request to be approximately $1 billion, composed of $500 million of AB 1054-related capital, $400 million of wildfire mitigation-related O&M, and $100 million of incremental residential uncollectible expenses associated with the economic effects of the COVID-19 pandemic.

Related to the 2017 and 2018 Wildfire and Mudslide events, SCE continues to make solid progress settling the remaining individual plaintiff claims. As shown on Page 12, during the first quarter, SCE resolved approximately $200 million of individual plaintiff claims. In total, that brings resolved claims to approximately $4.2 billion, representing more than two-thirds of the best estimate of total losses, which remains unchanged.

I would now like to provide an update on the EIX financing plan and the issuance of securities with up to $1 billion of equity content that we discussed on our last earnings call. To reiterate our previous statements, this equity content supports maintaining investment grade ratings at EIX and the utility. During the first quarter, Edison International issued $1.25 billion of preferred stock, with equity content of approximately $625 million. We will continue to monitor market conditions and consider additional preferred equity, internal programs, and if needed, the existing at-the-market program to satisfy the balance of the equity content need this year. Beyond 2021, we continue to expect to have minimal equity needs associated with SCE's ongoing capital program and we will quantify these after receiving a final decision in the 2021 GRC.

That concludes my remarks.

Sam Ramraj -- Vice President, Investor Relations

Michelle, please open the call for questions. [Operator Instructions]

Questions and Answers:

Operator

Thank you. [Operator Instructions] Jeremy Tonet from J.P. Morgan. You may go ahead.

Jeremy Tonet -- J.P. Morgan -- Analyst

Hi, good afternoon.

Maria Rigatti -- Executive Vice President and Chief Financial Officer

Hi, there.

Pedro J. Pizarro -- President and Chief Executive Officer

Hey, Jeremy.

Jeremy Tonet -- J.P. Morgan -- Analyst

Just want to start off on the Biden plan, if I could, and granted it's very kind of early innings here and it could still change its form, but just wondering as you see it right now, what impact do you think the plan would have on EIX, particularly as it relates to transmission in EVs? If you could just share any thoughts for us there.

Pedro J. Pizarro -- President and Chief Executive Officer

Yeah, to give you a few high-level thoughts, Jeremy. And as you said, it's early here, and as you know, we've seen the administration provide last week the start to their plan through the NDC, but lots of details to be filled in, not only by the administration but then also ultimately by Congress, right. And so, with a divided Congress, I expect that anything happens in Washington at least on the congressional side, will have to be bipartisan and therefore, something that both parties can work with. I think at the highest level, we -- as I mentioned in my prepared remarks, we absolutely support the overall economywide direction and the 50% to 52% reduction in greenhouse gas emissions by 2030.

As you've seen the initial elements of the Biden plan, clean energy, electrification and transmission are all big parts of the plan and they line up really nicely with what we've been saying is the most feasible and cheapest way for California to get there to our Pathway 2045 work, so that's really good alignment in terms of strategy, and I think it just provides long-term support for what we've been talking about for the last several years. Of -- from an SCE perspective, making the investments needed to prepare the grid to be able to manage the transition and to support customers see electrifying building, space and water heating, electrifying transportation.

And then, I think in terms of the core utility investment, what that means is, I think most importantly, support for the core program that we've outlined, I know that we don't provide guidance beyond the rate case cycle to-date, but we have said that we expect to see this very robust spending need, investment need for the next several years, certainly, well past the rate case and really as you look at it on a California-wide basis, we have estimated in Pathway 2045 that the investment needed will be something like $250 billion or so across the need for clean energy resources, renewables, storage and transmission investment. The transmission part of that alone -- transmission and distribution part is around $75 billion and I think one of the charts in the deck provided a little detail on that. So I think, it's Page 6 that showed a $75 billion breakout for the state. So a long way of saying, we think that that's all supportive of the core investment opportunity as well as some upside opportunities to the extent that the utility ends are meeting to play a role in California to be on core grade investments. So, for example, for added storage or for programs like our Charge Ready 2 and Charge Ready Transport that we have under way right now.

One final thing I'll say is that there was more press this morning on the campaign trail, President Biden had talked about getting the power sector itself on a stand-alone basis to zero GHG by 2035 and there is now discussion about potentially setting the target of 80% reductions from 2005 levels for the power sector by 2030. Yeah, speaking here, both from an Edison perspective and from a broader industry perspective, we're all lined up to do as much as we can, as fast as we can at a national level. 80% may really be stretching, I think the feasibility for the nationwide transition, just given the fact that it’s nine years until then, there's still R&D and technology that's needed to help fill the gaps and significant technology deployment that would be needed.

Particularly on the transmission side, it's not just the capital investment, but the permitting process and can take quite a while. So our Pathway 2045 analysis actually concluded that California would see something like a 72% decrease in greenhouse gas emissions from 2005 levels by 2030. I've seen some national analysis from EPRI and others that suggest that the national number in an -- on an aggressive pathway might still be below 70%, maybe mid-60s or so. So I think that will be the net of discussions among the industry, and the administration and Congress will be on, what defines -- what -- as much as we can do, as soon as we can do, what defines the art of that and how do we make sure that the transition is reliable, affordable and equitable for all customers across the country.

Jeremy Tonet -- J.P. Morgan -- Analyst

Got it. That's very helpful. Thank you.

Pedro J. Pizarro -- President and Chief Executive Officer

Got maybe more than you wanted, we've been...

Jeremy Tonet -- J.P. Morgan -- Analyst

No, no, no. That was great. Thank you. And maybe just kind of pivoting a bit here and thinking kind of higher level, when it comes to inverse condemnation, I think there had been legal challenges in the past, and just wondering what your thoughts are on this front, do you see any changes on this outlook or do you see any challenges going forward here or any thoughts you could share would be helpful? Thanks.

Pedro J. Pizarro -- President and Chief Executive Officer

Yeah. This one maybe more brief. Very near term, we are pleased that we have AB 1054 and AB 1054 did not resolve inverse condemnation, but it created a fair framework. And so, I think that they went the wrong ways and in our view, significantly reduced the risk exposure for utilities across the state. In terms of changing the state's current approach on the inverse itself, I think it's unlikely you'd see legislative action anytime soon, because quite frankly, there has been a lot of work at the Legislature on wildfire issues already by AB 1054. They have a full agenda in helping the economy recover from the pandemic, so I wouldn't expect that there will be a whole lot of bandwidth for taking that up in the near term. There is always a possibility that there could be court cases, where inverse could be tested again, and challenged again, probably premature to go into details of specific court cases, but I'm aware that not only might there be some that pop up for us as we go through our case load, but other utilities also may have opportunities to challenge inverse. So that's always a possibility out there through the court system.

Jeremy Tonet -- J.P. Morgan -- Analyst

Got it. That's helpful. That's it for me. Thanks.

Pedro J. Pizarro -- President and Chief Executive Officer

Thanks, Jeremy.

Operator

Thank you. Our next question comes from Julien Dumoulin-Smith from Bank of America. You may go ahead.

Pedro J. Pizarro -- President and Chief Executive Officer

Hey there, Julien.

Julien Dumoulin-Smith -- Bank of America -- Analyst

Hey, good afternoon, team. Thanks for the time. Perhaps, the year of the outset -- Pedro, I appreciate your comment on just all the mitigation actions you guys have taken on wildfires. Can you comment a little bit on just the wildfire probabilities and just as you see weather events materializing thus far, etc., what the risk profile is going into the fall, especially relative just versus the mitigation efforts that you guys have already pursued here? How would you frame that risk profile? Seems to be getting some attention here, so put it back to you.

Pedro J. Pizarro -- President and Chief Executive Officer

Yeah, thanks, Julien. And that's why I dedicated the first part of my comments to framing that. I guess, I would recap one part and maybe add a little bit. The recap part is we do see and I think all the external forecast that we see are calling for a likely above-average fire risk peak period here. I think in terms of the mitigations, I went through them in a fair amount of detail. Maybe what I would add is that -- to remind you that the approach we have taken over the last several years has been a risk-informed approach, so when we went out to replace the first mile of bare wire with covered conductor. It was the mile that was in one of the highest risk areas possible, right. So we've been going down the stack, if you will, by trying to address the highest risk areas.

First where the mitigations would have the highest impact on risk reduction, so every piece of work we do is reducing the risk and we've gone after the big bite early on. That I think is really helpful and constructive in terms of framing that risk profile. That risk profile continues to narrow and that's the stuff we've been doing, as I mentioned in my prepared remarks, we've also seen the state dedicate just outstanding effort to improving firefighting modeling and just firefighting period capabilities, fire suppression capabilities. And so, that ability now that the state has that. Frankly, it didn't have in 2017 or 2018 to fight multiple large fires, simultaneously. You might recall, I mentioned, there are some -- I've shown really interesting LA Times articles around 2018 and the challenge that the state had in fighting the Camp fire and the Woolsey fire and the Hill fire all simultaneously. Well, the state's added a lot of qualified bodies with a lot more planes and trucks and equipment to be able to deploy across multiple fronts simultaneously and that is a significant piece of risk reduction for all of us. So I'm not sure I can give you a disclosural-quality quantified answer to assess. So therefore, it explain 20% [Phonetic] lower, but I think it's a significant percent difference in terms of the overall risk profile that the state faces and therefore we face right now.

Julien Dumoulin-Smith -- Bank of America -- Analyst

Got it. Excellent, thank you. I know, tough question. If I can clarify this, Maria, you commented about the $200 million in individual claims here, but just as you look prospectively through '21 here, any specific milestones that could drive perhaps chunkier resolution here and remaining claims of the third, anything you could say at all on that front?

Maria Rigatti -- Executive Vice President and Chief Financial Officer

Yeah, I think, Julien, we're going to continue to disclose every quarter the progress that we've made, as we've mentioned before, the individual plaintiffs are not sort of like the homogeneous group that we saw in the several claims, because those are all property damage claims. So we're just going to continue to move through. We have some processes to try and make the discussions with the individual plaintiffs as streamlined as efficient as possible. So we'll do that and we'll come back to you every quarter and let you know what the progress has been.

Julien Dumoulin-Smith -- Bank of America -- Analyst

Okay, thank you guys. Best of luck.

Pedro J. Pizarro -- President and Chief Executive Officer

Thanks, Julien.

Operator

Thank you. Our next question comes from Jonathan Arnold with Vertical Research Partners. You may go ahead, sir.

Jonathan Arnold -- Vertical Research Partners -- Analyst

Hi, good afternoon, guys.

Pedro J. Pizarro -- President and Chief Executive Officer

Hi, Jonathan.

Maria Rigatti -- Executive Vice President and Chief Financial Officer

Hey, Jonathan.

Jonathan Arnold -- Vertical Research Partners -- Analyst

Just wondering if you could talk a little bit about your approach to PSPS and what you're specifically doing to avoid some of the issues you could have come on taken some flak for in the past. And then, also obviously, PG&E is sort of been putting these new criteria in front of the CPUC, I'm just curious if you're working on anything similar or just as an update on that whole situation.

Pedro J. Pizarro -- President and Chief Executive Officer

I'll start and then Maria, you may have more to add. I would separate the PSPS space into two broad categories, one is the actual -- the physical execution of it and the planning for it, the engineering behind it and then the prosecution. The second would be the broad communications element. I think that SCE has done frankly pretty well in terms of the core execution and -- for the last several years, right. We -- utility had significant prior investment in sectionalizing the grid, I remember reporting to you all in earnings calls, probably going a year and a year and a half back about how, at that point, something like -- if you looked at our circuits in high fire risk areas, on average it could be cordoned off into four separate section, right, which allowed us to better target PSPS events. While we’ve continue to add segmentation sectionalization devices, two circuits in high fire risk areas, so that continues to hone down the scope of PSPS events. Through that and through better planning from '19 to '20 and now to '21, we've seen significant improvement in terms of the number of customers who have been impacted in given events. Now, I have to add though that this is all very much weather-driven. And so, a lot of what happened in 2020 was where we had some tough weather events to necessitate it using this tool of last resort -- as a last resort, right. And so that drove some of the numbers, but even as you look now at the various filings that the utilities have made through the WMP process, if you take a look at the numbers, I think, Edison has actually had on a percentage of total customers' basis has the lowest percent of customers who were impacted by PSPS in the 2020 season.

Importantly, the continued work from '20 to '21 has -- we believe, will allow Edison to significantly reduce the impact further for customers who were impacted last year, if we have the same weather as we did last year. Of course, we won't have the very same weather but for an assumption basis, we would see a pretty significant reduction in the impact. I think the number is over 28% or close to 30% reduction in impact to customers who were impacted last year. So lots of good things in terms of the modern capabilities, the -- being able to triage it down and strip the impact of any one event.

On the communication side, I think, is when we had more opportunity and frankly, got some pretty pointed feedback deservedly from customers and communities and local governments. And so, if you look at the action plan that SCE filed in February, there is a lot there on continuing to do better, the things that we were doing okay, and also doing much better than things that we didn’t do so okay at. And so, that's why you see a lot of focus on how do we have more timely communications with customers, with communities, with local governments, with the emergency operation centers, improving the quality of those communications and the vehicles for them. And so, that's an area where I hope our customer -- expect our customers will see a good improvement going into this next peak season.

Maria, what have I missed in there?

Maria Rigatti -- Executive Vice President and Chief Financial Officer

Yeah, I guess, I would just add two things, one is that still along the lines of how we communicate with our customers as well. Really a focus on additional programs that could benefit them when they are de-energized, because I think that's obviously a big component of this, I think it's clear that this tool is necessary and important. What can we do to help customers when we do de-energize them. And then, I think the other aspect that I would just add is now that we filed our action plan, we do have the opportunity now to communicate with the Commission. So I think our cadence is about every two weeks now. So it really does provide an opportunity for us to have an ongoing dialog around what it is that SCE is doing. So I think those are all important aspects of PSPS for this year.

Pedro J. Pizarro -- President and Chief Executive Officer

Great. Maria, I'm glad you added that, because, for example, the battery programs and deployment of batteries is something we've really increased the emphasis on, appropriately.

Jonathan Arnold -- Vertical Research Partners -- Analyst

I'm not sure, Pedro, trying to do it less often, if you can and make it more bearable for people when you have to?

Pedro J. Pizarro -- President and Chief Executive Officer

Absolutely. But we will do it when we have to do it, right, because it's an important protective tool to protect the health and safety of our communities.

Jonathan Arnold -- Vertical Research Partners -- Analyst

Okay. And then, maybe if I may just on the GRC, do you have any sense of what sort of -- it seems to be extending the timing a bit here and Commission has been moving pretty fast on the whole host of other things, that, that maybe this case doesn't have a statutory deadline or just any thoughts you have why we're still waiting here?

Maria Rigatti -- Executive Vice President and Chief Financial Officer

Yeah, Jonathan. I would not read anything into it, it's a complicated case. It's a request that has a lot of different components like most GRCs. So, I think that they're just working through the different aspects of it and putting pen to paper to get that proposed decision out.

Jonathan Arnold -- Vertical Research Partners -- Analyst

All right, thank you.

Pedro J. Pizarro -- President and Chief Executive Officer

Hey, thanks, Jonathan.

Operator

And our next question comes from Shar Pourreza, you may go ahead, from Guggenheim Partners.

Pedro J. Pizarro -- President and Chief Executive Officer

Hello, Shar.

Constantine Lednev -- Guggenheim Partners -- Analyst

Hey, good afternoon. It's actually Constantine here filling in. Just had a couple of quick ones and just a follow-up and a lot of questions that I had have been answered. As Jonathan mentioned, it's been kind of quiet with the ex-partes and the filings and the CPUC has called out a few of the more contra vertical proceedings. And just curious to get your sense on kind of the CPUC process, this GRC cycle, if kind of do you see some prospective improvements in the timeliness of the decisions and is this indicative of the staff getting close to the PD, since everything else is now moving forward?

Pedro J. Pizarro -- President and Chief Executive Officer

Yeah. And I -- if I'm hearing your question right, you're asking about broadly at the PUC, not just with the GRC, right?

Constantine Lednev -- Guggenheim Partners -- Analyst

Yes.

Pedro J. Pizarro -- President and Chief Executive Officer

Right. So I think we mentioned this in our prepared comments a bit, but the PUC has been moving expeditiously through a whole lot of stuff and you throw in a pandemic into the mix and frankly, I think they performed pretty admirably given the amount of -- the number of balls they juggle under blue skies and then you make the skies a lot tougher with COVID-19 and the impacts on their own operations. So that, as well as the extra volume of work that COVID created, right. So I think they've been doing all right, we all have. The GRC is a complex case and obviously, we had hoped that we would have had a PD by now, but we're still hopeful that we'll have a PD by the end of this quarter, as Maria mentioned in her comments, and I'm not -- I don't think we're seeing anything systemic there that says this is a problem, the process is broken, on the contrary, we provided a number of examples in the prepared remarks around things like safety certifications for Edison, the disposition of a number of the cost recovery accounts. So I just think they have a lot going on under difficult times. And obviously, we would like to see a PD for the GRC soon and we'll do our part for that but we're not sensing that there is something going in the gears down more systemically.

Maria, anything you'd say differently there?

Maria Rigatti -- Executive Vice President and Chief Financial Officer

No, I agree.

Constantine Lednev -- Guggenheim Partners -- Analyst

Thanks for that color. That's really helpful. And just one kind of last follow-up, you mentioned that kind of some of the drivers were kind of lower expenses related to fewer mitigation activities on kind of wildfire risk. And just a little bit more broadly, I guess, there has been some studies on kind of the extremely low moisture content in California forests this year and this fire season, so that kind of, I guess, puts us in another kind of high wildfire risk year. Can you kind of qualify a little bit, if you have enough recoverable capacity for another year of wildfire risk conditions, and I guess more broadly, kind of how are you thinking about rate inflation even in the near term, and I know you kind of mentioned the longer-term that some of these issues bounce out, but in the near-term kind of some -- what are the some mitigating factors, and understanding that there will be rate inflation?

Pedro J. Pizarro -- President and Chief Executive Officer

Yeah. And maybe I'll take the -- Maria, do you want...

Maria Rigatti -- Executive Vice President and Chief Financial Officer

No, never heard of...

Pedro J. Pizarro -- President and Chief Executive Officer

The first part of that? Yeah. Now, just on the first part of that, we are certainly seeing the risk around the moisture content and basically all the signs that point to a number of average risk here. It -- when you talk about capacity again, I'm thinking of multiple ways and so, well, first and foremost, focus on the fact that we believe we're doing the things we need to do in our Wildfire Mitigation Plan to help mitigate our side of the risk and we believe the state is doing the things they need to do to have the fire suppression resources ready to help control a fire if it ignites. But I think your question then also went more to on the rate pressure side, Maria, I know you commented some on that already, but maybe you can follow up some more.

Maria Rigatti -- Executive Vice President and Chief Financial Officer

Sure. I think as you mentioned, we did see some lower expenses related to wildfire mitigation, that’s inspections that we do, we found fewer areas that we had to remediate, but I think more broadly, there are still cost associated with mitigating this risk. We've talked before and in fact the Commission convened an on bond not too long ago, to talk about affordability. And so as we do that, we continue to focus people on the necessity for the wildfire mitigation expenditures that we and other IOUs are doing that, that goes squarely to maintain the safety of our communities. And then, over the longer term, looking at what it really means to our electric rates as we further electrify the economy.

What that means for rates, but then also what it means for the energy bill itself. And so, I think as we think about affordability, we and the Commission and other stakeholders are looking at it from different perspectives, total share of wallet that energy represents and not just the electric bill, affordability has been defined a few different ways by the Commission, things like how many hours do you have to work at minimum wage in order to pay your electric bill. I think it's going to be an ongoing discussion, but we do know that wildfire mitigation is very important to the safety of our communities and we know that a broader electrification is important for the greenhouse gas and environmental objectives that the state has. And that's important because as we do that and we think about affordability, it's also about being equitable and having all of our communities also participate in that improvement in the environment. So I think it's going to be an ongoing discussion, the Commission is rightfully focused on it and we have been focused on it as well. As Pedro mentioned, over many years' cycle trying to manage our costs. And then, as we further electrify the economy allowing that to help increase affordability as well.

Constantine Lednev -- Guggenheim Partners -- Analyst

Thanks, Maria. That's very helpful commentary, and thank you for taking the questions.

Pedro J. Pizarro -- President and Chief Executive Officer

Okay, thank you.

Operator

Thank you. [Operator Instructions] Our next question comes from Michael Lapides with Goldman Sachs. You may go ahead, sir.

Michael Lapides -- Goldman Sachs -- Analyst

Hi, thank you for taking my question. Mine might be a Maria question. I'm just trying to think about the puts and takes for cash flow. So if I look at slide -- what is it? Slide 10 and Slide 11, and even the liability you still have to pay out, I mean if I think about it, the liability you still need to pay out around $2 billion based on your estimates. And I want to make sure I'm not double counting here, because if I think about it, you've still got a good chunk of cash coming in the door as outlined on the items in Slide 10. And then, almost $2 billion, little over $2 billion of securitization on Slide 11, should I think about those two sources as more of an ample enough cash to fund the cash outflow that you're going to acquire when you finalize settlements or when the litigation gets finalized from the 2017 and '18 wildfires?

Maria Rigatti -- Executive Vice President and Chief Financial Officer

So a couple of things in there. I think as you look at Page 10 and look at Page 11, some of those things are not unique. So some of the things that we talk about on Page 10, end up being securitized on Page 11, so it's probably easier if we kind of maybe -- you can separately go through and I'll tick and tie the numbers for you. The more general response to your question is, we do have cash that we have already spent on wildfire mitigation, this will -- these securitizations and/or recoveries through rates as we continue to file the application will allow us to sort of get that cash back in the doors to some of the pressure that you've seen often expressed through the issuance of short-term debt in the past or funded through short-term debt in the past will be alleviated.

I think, from a claims perspective, what we've said before is that EIX has issued equity or preferred equity in the past in order to sustain the credit metrics and the investment-grade ratings, both of the utility and the holding company, and that equity issuance allows SCE to continue to debt finance the claims payments as they come due now that we're -- shortly will be past the insurance recovery. And so they'll be able to do that and subject to the waiver that they have, they can keep that debt outside of the capital structure. Over -- cash is all fungible as we're putting dollars down there, that may impact the exact timing of when they do their debt financings, but over time, they'll be funding their business in accordance with our authorized capital structure. So I think that's the general framework. I think the numbers on Slides 10 and 11 there is a little bit, as I said, of overlap between applications and then we translate that into securitizations on Page 11 and we can go over that in more detail if you like later on.

Michael Lapides -- Goldman Sachs -- Analyst

That'd be great. And finally, Pedro, can you circle back, you highlighted some areas where there could be upside to capex, can you revisit those a little bit for us? You kind of went through that a little bit quickly. And are these items that impact you in kind of '22, '23 or are they beyond that, meaning '24 and beyond?

Pedro J. Pizarro -- President and Chief Executive Officer

Sure. I think there's probably some of mid-term and some of long-term, and you've already seen over the last few years, things that were near term that materialized, right. So we didn't have our Charge Ready programs in and forecast for quite a while until we got approval of those applications, but now we have over $800 million of program and of that probably, what -- 3 plus 2 some -- it's certainly over $0.5 billion worth of capex coming from those make ready programs for light duty and heavy duty, maybe duty vehicles. So that's an example of one way, we were talking about it for a few years, went through the process, developed and designed a program and got PUC support for this.

I think as you look at the near-term, mid-term in the next decade or half a decade, storage is an opportunity that could present some potential upside, because for storage -- I think, a lot of that will be done by third parties and whether it's large scale or the BPAs or whether its customers down at the customer premise, but there may be opportunities for utility level grid side storage. You've seen us do already some of that, the rate case included some assumptions about a modest level but particularly, as we see the acceleration of things like vehicle electrification that might lend itself to places where it might make sense to reinforce a substation with more storage, as we did with Mira Loma, where we put in 20 megawatts of batteries a few years ago. So that's a -- that's kind of a near-term or we call it mid-term one. I think longer term, the upside is in transmission.

And, of course, we have per quarter 1,000 with competition for transmission. We want to make sure that the utilities are able to compete, however, I'll remind you that for projects that are upgrades of existing utility on projects, the utility has a right of first refusal and just given the scale of values investment that we think is needed, that's -- I would hypothesize handedly, that there will be probably some projects that are upgrades of existing lines, where maybe we haven't considered that yet. We really are going to be dependent on the California Independent System Operator to run those transmission planning process and determine the transmission that's needed for renewables by 2030 and later on by 2045. So I think transmission presents another upside opportunity.

Finally, very -- coming way back down to the more mundane very near-term. I know Maria mentioned this, but just to remind you that we have our Customer Service Re-Platform Project and that could be $500 million of rate base additions if approved by the Commission, where we just went live with that in early April and then, there could also be some additional rate base additions from the wildfire restoration of work that we did in 2020 out of the Creek fire. And we haven't quantified that yet externally, but we're finalizing that analysis now. So those are much more kind of blocking and tackling near-term opportunities.

Michael Lapides -- Goldman Sachs -- Analyst

Got it. Thank you. Much appreciated.

Pedro J. Pizarro -- President and Chief Executive Officer

Thanks, Michael.

Operator

Thank you. Our next question comes from Ryan Levine from Citi. You may go ahead.

Ryan Levine -- Citigroup -- Analyst

Hi, good afternoon.

Pedro J. Pizarro -- President and Chief Executive Officer

Hey.

Ryan Levine -- Citigroup -- Analyst

How is the cadence settlement discussions continued in recent weeks for the remaining 32% of the alleged and potential claims recognizing that they're smaller in nature as the pace has been changing.

Pedro J. Pizarro -- President and Chief Executive Officer

Yeah, we probably won't be able to help you very much there, unfortunately, because those are confidential negotiations. I think, we did share that there's good news and that we now have a process both for the Thomas, Koenigstein mudslide plaintiffs as we -- as well as for the Woolsey plaintiffs, individual plaintiffs. So there is an established process approved by the court that allows us to have a smoother approach to working our way through several thousand cases that remain. I would also say, you mentioned the smaller ones remaining, when you think -- they’re smaller relative to say the subrogation settlements that we did earlier, but I want to make sure you're not generalizing too much by looking at, say, the dollar amount of settlements we've done with individual plaintiffs so far, relative to the number of individual plaintiffs cases that we settle and making any assumptions or extrapolating from that about the remaining cases. All of these are still case-by-case very individualized, so it's really hard to extrapolate, and say, because we did X dollars for these Y plaintiffs, you can use that ratio for the remaining ones. It's really case-by-case. I think the one thing we can anchor you on is that we review the reserves doing a best estimate every quarter. We did that once again and you saw that we did not make any changes to that estimates.

Maria, what may have I -- what I have missed in that?

Maria Rigatti -- Executive Vice President and Chief Financial Officer

No, I think you've covered it out. There is not really anything, Ryan, that we can say in terms of cadence or patterns or anything like that. I think that the most -- the signposts that you should look for is that we'll be updating every quarter for the amount of settlements that we have reached with some -- with these individual plaintiffs. So that's really going to be the milestone.

Ryan Levine -- Citigroup -- Analyst

Great. And if I could just squeeze in one more in terms of the follow up around the transmission growth opportunity that you had outlined in your Pathway 2045 that was at $75 billion. In light of the presidential and congressional bills before Congress, is there any key permits that underpin that longer-term growth outlook and any politics that may be influx that could get accelerated in light of some of the federal and stakeholders?

Pedro J. Pizarro -- President and Chief Executive Officer

Yeah, maybe let's take a shot at that. Probably the most honest answer I can give you is say it's really early, all right. And you're going to see significant discussions between the administration and Congress over the next weeks and maybe even months, I think that there is -- in terms of framing the timing a bit, I would expect that the administration will want to have a plan firmly in place in time for the Glasgow Conference of the Parties, United Nations Conference of the Parties in November. And so, if not hopefully sooner. But the pace, the scale, I mean, you can see it in the discussions right now on the infrastructure package has been proposed by the President and you're hearing $2 billion plus numbers coming from this proposal, you're hearing Republican members talking about packages that are more on the $600 million mark. So that'll influence this -- the relative degree of emphasis on different levers in the packages.

And so in the case of transmission, I think it's generally accepted by both sides that transmission will be a key element of the equation but how that translates into other federal incentives, frankly, from our perspective, it seems like we would really like to see the federal government do more than just money as -- focus on the permitting process and helping on the federal side to streamline access to federal lands where we might need to have access for rights of way for new transmission lines. That alone is probably one of the biggest levers they have to accelerate this, because that -- it's that piece, the permitting process that adds years and years to transmission projects. It can take you a decade to build a transmission project. So -- but in any case, Ryan, I'll go back to my first point, that it's early in the game, lots of discussions ahead and those discussions will then guide the level of emphasis, frankly, that's in transmission but how deep we have to go in the power sector, by what timeframe, how does that compare with -- how you're going deeper in other sectors? To what extent are you using market mechanisms to do that versus more sector-by-sector allocations? All of that is to be determined.

Ryan Levine -- Citigroup -- Analyst

Appreciate it. Thank you.

Pedro J. Pizarro -- President and Chief Executive Officer

You bet.

Operator

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

Sam Ramraj -- Vice President, Investor Relations

Yeah. Thank you for joining us today. This concludes the conference call. Have a good rest of the day, everyone, and stay safe. You may now disconnect.

Operator

[Operator Closing Remarks]

Duration: 54 minutes

Call participants:

Sam Ramraj -- Vice President, Investor Relations

Pedro J. Pizarro -- President and Chief Executive Officer

Maria Rigatti -- Executive Vice President and Chief Financial Officer

Jeremy Tonet -- J.P. Morgan -- Analyst

Julien Dumoulin-Smith -- Bank of America -- Analyst

Jonathan Arnold -- Vertical Research Partners -- Analyst

Constantine Lednev -- Guggenheim Partners -- Analyst

Michael Lapides -- Goldman Sachs -- Analyst

Ryan Levine -- Citigroup -- Analyst

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