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DATE
Tuesday, April 28, 2026 at 4:30 p.m. ET
CALL PARTICIPANTS
- President and Chief Executive Officer — Pedro J. Pizarro
- Executive Vice President and Chief Financial Officer — Maria Rigatti
- Chief Executive Officer, Southern California Edison — Steven Powell
- Vice President, Investor Relations — Sam Ramraj
- Incoming Executive Vice President and Chief Financial Officer — Aaron Moss
TAKEAWAYS
- Core Earnings Per Share -- $1.42, reflecting a $0.05 increase driven by prior GRC adoption and partially offset by a $0.30 absence from first-quarter 2025 TKM cost recovery approval.
- 2026 Core EPS Guidance Reaffirmed -- $5.90 to $6.20, with all future year EPS targets and 5%-7% long-term core EPS growth reiterated.
- Capital Plan -- $38 billion to $41 billion planned investment from 2026 to 2030, focused on grid infrastructure supporting clean energy goals.
- SCE Rate Base Growth -- Approximately 7% compound annual rate base growth expected from 2025 to 2030.
- Wildfire Mitigation Investment Completion -- About 93% of distribution-system hardening in high fire risk areas complete, attributed to covered conductor and targeted undergrounding investments.
- AI Initiatives -- Edison International (EIX 0.92%) has deployed AI/ML models capable of detecting nearly 100 object classes and dozens of defect conditions, contributing to operational improvements and anticipated $25 million in potential revenue savings over three to six months once new AI-driven revenue monitoring is implemented.
- Wildfire Recovery Compensation Program (WRCP) -- Over 1,500 offers totaling $500 million extended for Ethan fire claims; 3,100 claims submitted out of 18,000 potentially eligible properties and approximately 30,000 plaintiffs, showing program activity remains at an early stage.
- Equity Issuance Outlook -- No new common equity expected for at least five years through 2030, with only about $400 million issued in the past five years.
- FFO-to-Debt Target -- Commitment to maintaining a 15% to 17% FFO-to-debt ratio, with forecasts showing Edison International as one of S&P's strongest consolidated FFO-to-debt performers.
- Major Regulatory Proceedings -- Key proceedings, including 2025 GRC, cost of capital, and legacy wildfire cost recoveries, are resolved, resulting in high earnings visibility through 2028.
- Advanced Metering Infrastructure (AMI 2.0) -- $3.1 billion capital investment filed in March 2026, with half in the current plan (to 2030) and half beyond 2030; application process is in early stages, with intervenor comments expected in July.
- Dividend Policy -- The dividend was increased by 6% in December and management reaffirmed the commitment to continued payout.
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RISKS
- Pedro J. Pizarro said, "If we do not see legislation this year, it is quite likely we could see, for example, credit rating impacts not only for utilities or for insurance companies, but you could see it in other sectors in the state." He added, "Without action this year, I think we could see some dire financial consequences across multiple sectors of the economy, not just utilities."
- Uncertainty in sizing ultimate WRCP liabilities remains, with leadership unable to estimate the timing for loss projections, as Pedro J. Pizarro said, "it is very difficult to come up with the best estimate or even, at this stage, a low end of the estimable range."
SUMMARY
Edison International (EIX 0.92%) delivered core EPS of $1.42 and reaffirmed financial outlooks, anchored by regulatory clarity and disciplined capital execution. Management highlighted 93% completion of grid hardening in high fire risk areas and disclosed substantial AI-driven operational improvements and cost savings prospects. The AMI 2.0 application, valued at $3.1 billion, advances digital system upgrades while incorporating affordability and resilience benefits for customers. Strategic plans emphasize no new equity issuance through 2030 and continued focus on cost management and operational excellence.
- Senior management transition was detailed, with Aaron Moss set to assume the CFO role from Maria Rigatti on July 3, 2026.
- Management called for urgent legislative action on wildfire risk, warning inaction could trigger negative credit and financial impacts for California’s utilities and broader sectors.
- Southern California Edison's WRCP is in early stages, and claims resolution pace introduces ongoing uncertainty over wildfire financial exposure.
- The company reported that Southern California Edison’s average rates from 2019 to 2024 increased above inflation due to external factors but is now targeting rate increases at or below inflation through 2030.
INDUSTRY GLOSSARY
- GRC (General Rate Case): Regulatory proceeding determining utility rates and allowable revenues over a multi-year period.
- FFO-to-Debt Ratio: A credit metric comparing funds from operations to total debt, indicating balance-sheet strength.
- WRCP (Wildfire Recovery Compensation Program): Southern California Edison’s mechanism for compensating claimants for wildfire impacts outside traditional litigation channels.
- AMI 2.0 (Advanced Metering Infrastructure 2.0): Next-generation metering investment aimed at grid modernization, advanced data services, and enhanced customer solutions.
- PSPS (Public Safety Power Shutoff): Protocol where utilities proactively cut electric power to minimize wildfire risk during specific conditions.
- RAMP (Risk Assessment and Mitigation Phase): A filing outlining a utility’s safety and risk mitigation strategies that precedes new rate cases.
Full Conference Call Transcript
Pedro Pizarro: Thanks a lot, Sam, and good afternoon, everyone. Let me start by acknowledging that last week we announced Maria's retirement plans. This is our last earnings call that we are partnering on together. I will come back to this at the end of my remarks because if I start now, I may not make it to my other comments. Before moving on, I would like to welcome Susan Hardwick to our board. She brings over 35 years of leadership experience in the electric and water utilities, including as CEO of American Water, with deep strengths in operations, finance, and regulatory oversight. We are pleased with our start to the year and the momentum across our business.
Edison International's first quarter 2026 core earnings per share were $1.42. Our continued performance reflects disciplined execution, steady operational progress, and a clear focus on the priorities that matter most to our customers, communities, and capital providers. Importantly, we are reaffirming our 2026 core EPS guidance and other financial targets, including our 5% to 7% core EPS growth over the long term. Our targets are supported by strong visibility into the capital plan, SCE's regulatory outlook, and a sustained focus on safety and risk management.
Today I will focus on three areas: first, our continued work to make communities safer and more resilient, including wildfire mitigation and rebuilding efforts; second, key legislative developments; and finally, our confidence in the financial outlook that Maria will expand on in her remarks. Beginning with wildfire mitigation and grid reliability, safety and community protection continue to guide SCE decisions and investment. Over the past several years, the utility has made substantial progress strengthening the grid, improving situational awareness, and reducing wildfire risk across its service area. The plan's physical hardening work on the distribution system in high fire risk areas is now about 93% complete, reflecting years of sustained investment in covered conductor and targeted undergrounding.
SCE continues to evolve its public safety power shutoff, or PSPS, protocols, which include enhancing its analysis of on-the-ground conditions, enabled by its vast network of weather stations and overall system visibility. These measures, plus the grid hardening work I mentioned earlier, are keeping SCE customers and communities safe. Importantly, in March, the Office of Energy Infrastructure Safety approved SCE's annual safety certification after its independent assessment of the utility's wildfire mitigation plan and SCE's continued progress implementing its plan. SCE's wildfire mitigation plan includes new and expanded tools to improve safety, reliability, and efficiency across its network. Let me share some tangible examples.
SCE is using AI models to improve grid inspection and identify maintenance needs with faster and more accurate diagnostics and enhanced quality control. Since 2023, SCE has developed and deployed AI and machine learning models that are collectively capable of detecting nearly 100 unique object classes and dozens of defect conditions. SCE is also using LIDAR and satellite imagery to support precise proactive vegetation management to help prevent ignitions. The utility is also expanding its deployment of early fault detection tools that identify abnormal grid conditions, enabling earlier awareness and faster response to potential equipment issues or ignition risk. Capabilities like these are increasingly integrated into how SCE monitors conditions, anticipates risk, and deploys resources in real time.
Turning to the Wildfire Recovery Compensation Program, or WRCP, SCE continues to make progress. SCE has now extended over 1,500 offers, totaling over $500 million, to community members impacted by the Ethan fire, helping families and individuals move forward more quickly without the delays and uncertainty of traditional litigation. SCE remains committed to administering the program in a transparent way that is responsive to community needs with fast and fair payments. On the legislative front, earlier this month, the California Earthquake Authority released its study.
It reinforces that addressing California's growing wildfire risk requires a whole-of-society approach and that the status quo is not working for customers, policyholders, or wildfire-impacted communities who ultimately bear the real and increasing costs of inaction. It presents options for policymaker consideration, including three nonexclusive pathways, a defined set of strategies, and more than two dozen specific policy choices for reforming California's wildfire, insurance, and utility systems. We have provided a summary on page 3. There is urgency for legislative action, and we remain actively engaged with policymakers and key stakeholders to help shape solutions that support safety, affordability, and long-term resilience for California communities.
Our team is also fully engaged on the various pieces of proposed legislation pertaining to utilities, with affordability a critical focus. A common goal across wildfire reform and affordability is to build the right whole-of-society approach, allocating wildfire risk equitably across the economy, and attracting capital at a reasonable cost on customer bills. This will benefit both customers and capital providers. Operational excellence is a core Edison International value as SCE aims to maintain its cost leadership position with the lowest system average rate among the large IOUs in the state.
I have shared on prior earnings calls examples of operational excellence including SCE's use of AI in areas like grid inspections, vegetation management, and wildfire situational awareness, including the award-winning Aware grid monitoring platform. The team continues to explore new AI-enabled process improvements across the entire value chain. Let me share another recent example. All utilities have instances where electricity usage can occur at a location before it is fully linked to an active customer billing record. In the past, identifying those situations required periodic manual checks and often occurred after the fact.
Through SCE's internal innovation program, and in only a handful of development hours, frontline teams developed an initial proof of concept of an AI-driven approach that continuously monitors for these situations and brings them to the surface earlier with clearer and more actionable insights. Once implemented, we anticipate this approach could yield roughly $25 million in potential unbilled revenue savings over a three- to six-month period. It is a good illustration of how smarter systems and disciplined execution translate directly into stronger financial controls and support long-term affordability. Let me now turn briefly to the financial outlook. We remain confident in the company's financial position and long-term trajectory.
Major SCE regulatory decisions like the 2025 GRC, cost of capital, and legacy wildfire cost recoveries are successfully resolved, providing clear visibility to 2028 earnings. Combined with our operational progress and disciplined capital execution, this also points to confidence in our long-term targets, including 5% to 7% core EPS growth with no new equity needs. Before I turn it over to Maria, we announced that she will retire on September 1, after transitioning the Edison International CFO role on July 3 to Aaron Moss, who is here in the room with us today. Maria will focus her final months on critical policy priorities including the SB 254 process and supporting Aaron's transition.
This is really bittersweet because Maria and I have partnered continuously for over 15 years across our Edison Mission Energy, SCE, and EIX gigs. Our board, our team, and I are grateful for the outstanding leadership she has provided across multiple challenges that many of our investors will remember well, including the EME restructuring, helping our communities recover after tragic wildfires, a global pandemic, four SCE GRCs, and shepherding the investment and operational improvement opportunities created by the clean energy transition, historic load growth, and the rapid acceptance of AI.
Throughout it all, she has shown great financial skill, unfathomable balance, a deep commitment to engaging with our investors—some might say a lot of patience dealing with me—and a real passion for developing our people including Aaron. Aaron, Maria, and I worked closely together through the EME restructuring, and we kept on going as Aaron took on the EIX and SCE controller roles, and most recently as SCE's chief financial officer. He has been a key leader of SCE's operational excellence efforts over the past several years, and many of you know him well already from his extensive investor interactions. I am excited about and confident in our new chapter together. And so Aaron, welcome to this role. Maria?
Just thank you for your partnership. Thank you for your friendship. And now it is time for your thirty-ninth and final earnings call remarks. We are waiting for you to drop the mic here.
Maria Rigatti: I appreciate that, Pedro, and would like to extend my thanks as well. Over the years I have spent with Edison International, I have had the privilege to work with dedicated people who are focused on delivering on the commitments we have made to our customers, communities, and investors. I thank the team for their focus and innovation. I also want to thank all our investors for your engagement and feedback through the opportunities and challenges that Edison International has managed, and I know that Pedro, Aaron, and the entire team will continue to benefit from your support. Let us move on to the quarter and the financial outlook.
I will cover first quarter 2026 results, our capital and rate base outlook, regulatory updates, and our earnings guidance. Edison International reported first quarter core EPS of $1.42. Page 4 provides the year-over-year quarterly variance analysis. Core earnings increased by $0.05 primarily due to the adoption of the GRC decision last year, partially offset by the absence of about $0.30 recorded in the first quarter of 2025 related to the TKM cost recovery approval. Parent and other core loss was $0.01 lower, driven primarily by lower financing costs following the redemption of preferred stock. Overall, the quarter reflects benefits from solid execution and SCE having strong regulatory visibility with no major proceedings driving this year's results.
Importantly, it also reflects the quality and durability of our earnings profile while keeping our focus squarely on delivering safe, reliable, and affordable service for customers. Our first quarter results reinforce our confidence in the underlying business and our ability to deliver consistent performance through the year. Building on first quarter performance, I will turn to SCE's capital and rate base outlook, shown on pages 5 and 6, which is unchanged from last quarter. Our capital plan of $38 billion to $41 billion from 2026 through 2030 is driven by essential investments in the grid to meet customer needs and support California's clean energy objectives. We are executing this plan with an unwavering focus on affordability, cost efficiency, and discipline.
I want to reinforce Pedro's earlier comments on execution and line of sight into our financial projections. With an improved GRC covering the bulk of SCE's capital plan through 2028, we have a high degree of confidence in our ability to execute and deliver on this plan in a way that meets customer needs and regulatory expectations. That confidence is further bolstered by long-term fundamentals as we ensure the grid is ready for the economy-wide electrification ahead. Customer demands for an increasingly reliable and resilient grid continue to grow, making the need for sustained grid investment clear.
As shown on page 6, we expect SCE rate base compound annual growth of approximately 7% from 2025 to 2030, reflecting both near-term visibility and the long-term case for grid investment. SCE is focused on executing the work authorized under the current GRC, which provides clarity for most of its operations through 2028. In addition to the approved GRC, SCE has two significant stand-alone applications underway. The first is the NextGen ERP program we have discussed in prior quarters. The second is SCE's AMI 2.0 application, which was filed in March and requests approximately $3.1 billion of capital investment through 2033. As we have previously disclosed, the capital associated with both programs is already incorporated in our capital plan.
AMI 2.0 represents a comprehensive modernization effort with benefits across the system. It supports grid resilience and operational efficiency, enables more advanced customer services, and provides the data foundation needed to support electrification, distributed energy resources, and more dynamic system management. Looking ahead to the next GRC cycle, SCE will take the first step next month by filing its Risk Assessment and Mitigation Phase, or RAMP, application. This filing informs the next GRC and outlines the risk mitigations that guide proposed investments across wildfire risk, transmission and distribution reliability, cybersecurity, climate adaptation, and other safety-related measures.
As in prior cycles, this process provides a clear, safety- and risk-driven framework for evaluating capital needs and supports consistent engagement with regulators and stakeholders on safety and risk priorities. I will highlight that following the resolution of several major proceedings last year, 2026 represents a cleaner regulatory slate—meaning fewer open proceedings and greater visibility into capital recovery—which further supports our confidence in the utility's ability to execute the long-term plan reflected in our capital and rate base outlook. I want to underscore an important differentiator in our financial strategy: we plan to deliver this growth without issuing new common equity for at least the next five years through 2030.
This builds on our track record of cost-effectively managing our credit metrics and having issued only about $400 million of common equity over the last five years. We will continue to finance the business efficiently and remain committed to our 15% to 17% FFO-to-debt framework. We expect to be within this range in the forecast window, and Edison International has one of the strongest consolidated FFO-to-debt ratios projected by S&P. These data points demonstrate the strength of our balance sheet and cash flow profile. This diligence allows us to fund critical infrastructure investment, maintain financial flexibility, and create value for both customers and shareholders. Moving to earnings guidance, we are affirming our 2026 core EPS range of $5.90 to $6.20.
We are also affirming our previously provided core EPS targets for 2027, 2028, and 2030, as well as our long-term EPS growth rate. With a strong start to the year, we remain confident in our ability to deliver on these commitments for customers and capital providers. That confidence is grounded in disciplined execution. We continue to maintain a strong focus on capital prioritization, operating efficiency, and cost management. Investments are evaluated through a risk-based framework with a clear line of sight to recovery. This rigor reinforces our ability to deliver on our long-term financial targets while continuing to advance safety, reliability, and resilience for the customers and communities we serve. That concludes my remarks. Back over to Sam.
Sam Ramraj: Michelle, 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.
Operator: Thank you, sir. If you would like to ask a question, please press 1 on your phone. One moment for the first question. Nicholas Joseph Campanella of Barclays, your line is open.
Pedro Pizarro: Hi, Nick.
Nicholas Joseph Campanella: Hey, good afternoon and thanks for the time. Congrats to Maria and Aaron here. Always a pleasure, both of you. So you brought up in your prepared remarks the wildfire legislation and the SB 254 study. And I guess a lot was thrown out there in terms of the recommendations. But ultimately, what is Edison International advocating for in the three paths? Where is the threshold, in your mind, for shareholder contributions, just keeping in mind what played out last year? And then as we move forward here, when do you expect the actual CEA report to go in front of the legislature, if there is any timing that you can talk to?
Pedro Pizarro: That is a few questions in one. Thank you. First, on what we think is important here—broad strokes—we appreciate that the CEA report really touches on all of these. It is important that we, as the broad California economy—not just utilities but the whole society—see broad risk reduction incentives and programs to reduce the physical risk across our entire state. It is important that when, in spite of everybody's best efforts, catastrophe strikes, there be a process for recovering quickly and having a fair process for that, one that is predictable, with good accountability, transparent enforcement, and tying that to conduct with the various parties involved.
You saw that the joint submissions that the utilities made talked about some examples from other jurisdictions and mechanisms for how you think about addressing, say, the insurance components and the like. On the shareholder piece here, we have said before, we think it is really important that the state return to an industrial and utility cost-of-service model—the model that we have across the country—where investors can know that there is a good opportunity to recover their capital investment, both return of and on that, if the utility has been prudent, and where further shareholder contributions would take place if utility management was not demonstrated to have been prudent. To me, that is the base piece here.
We also recognize that there could be a lot of different ins and outs, and ideas for folks to throw out, so we will continue to engage with all the stakeholders and evaluate any and all packages on their merits at the time. Finally, on timing, the one solid piece of timing guidance I can give you is that the legislative session ends August 31, and bills have to be in print by August 28—72 hours prior. I know I have seen some chatter about whether it is sooner or later. This is complex legislation in a year that is full of complex topics.
There is a discussion about wildfire, but it in itself really touches on affordability for the state broadly. As you saw in the CEA report, doing the right thing in terms of the wildfire framework will indeed help affordability for the state. I would not expect this to get solved in the first week of the legislature being back. I really cannot predict when it happens. If it takes the whole session, it takes the whole session. Most important is to make sure that we do our part to help them do the right thing for our economy.
Nicholas Joseph Campanella: Thank you.
Pedro Pizarro: Thanks. I think I covered all three parts.
Operator: Thank you. Our next question comes from Richard Sunderland with Truist Securities. Your line is open, sir.
Richard Wallace Sunderland: Hi, good afternoon. Thank you. Congratulations as well to both Maria and Aaron. Picking up on the legislative discussion from earlier, I realize, Pedro, it looked like you did not want to speak to timing much, and I get that. But just procedurally, this go-around versus last year or a few years back, how do you think that will differ, given we have the CEA report out? Do you see more of a public bent to all of this, given the high-profile public nature of the report? Any other thoughts there would be helpful. Thank you.
Pedro Pizarro: Sure. It is a good question. I think part of the answer is the CEA process itself. Prior to the legislative session reopening, you had a very professional group at the CEA go through a methodical process and engage a broad range of stakeholders. A lot of different voices are appropriately represented in the options that the CEA laid out in their report. It is me speculating a little bit here, but it is probably fair to say that this gives the legislature a much more robust platform from which to enter their debate and one that already reflects stakeholder voices, given that so many stakeholders contributed to the development of the CEA report.
I would expect to see a broad group of folks engage in the legislature, and that is a good thing. This cannot be just about utilities, or just about insurance, or just about building codes and standards. You really need all of these things to come together to make the system work for the world's fifth-largest economy. In terms of procedure, the other thing I would offer is that, typically, with these kinds of complex topics, it is not surprising to expect continued engagement from the governor's office and their leadership.
You saw the governor say early on in his initial press release after SB 254 that the state would benefit from the continued engagement of, for example, Anne Patterson, now at Stanford. Good brains are being applied to this. In the legislature, I would imagine and expect that the leaders of some of the relevant committees will be personally engaged. In the past, sometimes you have seen working groups get assembled, designated by leadership. I have not heard that is going to happen, but I would not be shocked if we saw something similar because you really need a core group of policymakers to be able to dive into the details as they craft potential legislation.
Maria, do you have anything to add there?
Richard Wallace Sunderland: That is helpful context. Thanks for that, Pedro. Sticking with this theme, I think if I follow the script correctly, you talked about some broader legislative engagement and mentioned affordability is a critical focus. Could you expand on that a little bit more? Are you talking outside of the wildfire reform efforts, and any other context for what you are focused on and promoting there would be helpful?
Pedro Pizarro: Look, just acknowledging you have seen a number of bills introduced already that hit in some way on affordability. Going into that, it is really important that Southern California Edison is proud of the affordability trajectory that it has been on. We mentioned it briefly in my remarks, but the hard work that Steve and Aaron and the whole team have been doing over multiple years to manage costs and be as affordable as possible will continue. That is an important fact that we bring into all this. I was acknowledging that you have seen a number of bill introductions that hit on affordability. It is clearly a theme in the gubernatorial primary.
It is on some people's minds, and the wildfire piece will be an important part of managing affordability for the state.
Maria Rigatti: The wildfire legislation itself is about affordability. It is inherently an affordability bill. The other affordability bills really do cover a wide range of things—everything ranging from looking at rates and rate structures and how to manage those down, to things that are around reporting and how the utilities would disclose the work that they do, how things are audited. It really covers a wide spectrum of things that fall into that affordability category.
Pedro Pizarro: You are also seeing affordability discussions around the insurance market. I am sure as folks think about risk reduction in the physical space, there will be affordability considerations there. It is just an important theme for the state. One thing that the CEA report pointed out is that wildfire—while that is the main focus here in this discussion—is one of a range of other natural impacts that California needs to deal with. There was a table in the CEA report that was instructive, where what is needed in the state in terms of earthquake hardening, for example, probably has an extra zero compared to wildfire. I think lawmakers will be thinking about affordability with the large picture in that context.
Richard Wallace Sunderland: Great. Appreciate all the thoughts. Thank you.
Sam Ramraj: Right. Take care.
Operator: Thank you. Our next caller is Gregg Orrill with UBS. Your line is open, sir.
Pedro Pizarro: Hi, Greg.
Gregg Gillander Orrill: Hi. Thank you. What is your anticipation, or is it too early to know, what the scale will be of the Wildfire Recovery Compensation Program?
Pedro Pizarro: If you mean SCE's 1,500 offers that have been made already, there are over 3,100 claims that have been filed. But to put that in scale, we have also seen claims brought forth by something like 30,000 plaintiffs so far. We know that in the program itself, there are around 18,000 properties that qualify for the program—they are in the eligibility zones—and any given property could have multiple claimants. That tells us that the 3,100-plus claims so far and the roughly 1,500 offers so far are very early stage, but we really cannot forecast what that ultimate number might be.
Gregg Gillander Orrill: Okay. Congratulations, Maria and Aaron.
Operator: Thank you. Our next caller is Anthony Crowdell with Mizuho. Your line is open, sir.
Anthony Christopher Crowdell: Hey there. Thanks for taking my question, and congrats to Maria and Aaron. Just off of Greg's question—maybe you just answered it—you know, the claimants grew about three times from the update you provided. It is over $500 million now. At what point, or with what clarity on the pace of settlements, would you have enough visibility to provide a loss estimate?
Pedro Pizarro: Sorry, Anthony. I know this is going to sound familiar from prior quarters, but it is really hard to estimate even when we will be able to provide an estimate. I think we will need to see not only a large enough volume of claims go through the program, but also stability—or a lack of volatility—in terms of the types of claims that we are seeing, so that we could then somehow extrapolate and have a really good bead on what the rest of the exposure might look like.
You might remember—we all learned lessons together as we went through the exposures and the heartbreaking instances of TKM and Woolsey—that new facts came out and there was a variety of different types of claims. We learned from that it is very difficult to come up with the best estimate or even, at this stage, a low end of the estimable range. That is a long-winded way of saying not sure when we would be in a position to do that, Anthony.
Anthony Christopher Crowdell: Great. And just a quick follow-up. I believe in the first quarter you stated you filed the AMI 2.0 application. Any timing of a decision there, or expected timeline of the CPUC decision?
Pedro Pizarro: Let me turn it over to Aaron for that.
Aaron Moss: We just filed in March. That is a little bit more than a $3 billion capital program that we filed for, replacing the smart meters that we deployed nearly 20 years ago. About half of that capital is in our current capital forecast; about half of it extends beyond the 2030 time frame. We are at the front stages of the process with the application just being filed. I believe intervenors would provide comments later in the summertime—July—and then the decision follows along after that, Anthony.
Anthony Christopher Crowdell: Great. Thanks for taking my questions.
Operator: Thank you. Our next caller is Carly Davenport with Goldman Sachs. Your line is open.
Pedro Pizarro: Hi, Carly.
Carly S. Davenport: Good afternoon. Thanks so much for taking the questions. To follow up on SB 254, there is still robust debate around whether there will in fact be legislation passed this session, or if you maybe see this pushed into 2027. Could you provide some thoughts on the course of action in the event that legislation is not passed this session, or maybe is not as comprehensive as you might have hoped? Should we expect any changes to the strategic focus areas or the current plan on the back of that?
Pedro Pizarro: Thanks, Carly. Let me be very clear. Our singular focus today is on 2026. In my prepared remarks, one of the strongest messages from the CEA report was the deep cost of inaction. That was a real call for action and a sense of urgency that the CEA communicated, and that I think you are already starting to see reflected in some of the early comments from the legislature. That said, we cannot guarantee that we will see action in 2026. We think that the table is very much set for that and that there is a need for the economy to see that.
I would also add that, frankly, as a resident of California—put aside my CEO of Edison International hat—I worry about this from a broad state perspective. If we do not see legislation this year, it is quite likely we could see, for example, credit rating impacts not only for utilities or for insurance companies, but you could see it in other sectors in the state. You could see it for the state's own financing authority. Part of our job will be to make sure that we and others are providing that message—providing that fact base—to legislators and policymakers that this really requires action this year.
Without action this year, I think we could see some dire financial consequences across multiple sectors of the economy, not just utilities. If, in spite of all that, there is not sufficient action in 2026, then we will plan for what we would do in future cycles. We would also need to look at what happens with, for example, our cost of capital and whether that leads to us having to think differently about our capital allocation. But we are not there today, and our singular focus is on 2026.
Maria Rigatti: Carly, I would underscore that the process is progressing right now as it was intended to and as outlined under the legislation. We have a lot of visibility into our capital plan because we knocked out a lot of the regulatory proceedings in 2025, so there is a lot of certainty as to the plan, how we execute the plan, and what the plan costs. We have no need for new equity for the next five years. And as you know, we have the commitment to the dividend that the board has been declaring, and it was increased by 6% in December. We have laid a lot of the groundwork and visibility.
Looking to the future, we have a lot of confidence in the scenarios and the conservatism that we have built in. As Pedro said, if the cost of capital goes up, our customers would pay more; if the cost of capital goes up, we would have to consider that in the future when we develop new capital plans. That is why a predictable framework under legislation that supports reasonably priced capital is really most helpful to our customers.
Carly S. Davenport: Got it. That is really helpful. Picking up on that last piece in terms of what is in the best interest of your customers—there has been a lot of focus on affordability, particularly in the rhetoric around the upcoming gubernatorial election, and there have been some recent changes in the polling there. How are you positioning some of the rate decreases that you have seen this year and Edison International's overall strategy on affordability with policymakers, in response to some of the noise on affordability related to the election?
Pedro Pizarro: The last word you used—noise—is appropriate, because it is an election and there is a lot of stuff flying around. Ultimately, we will work with and work well with whomever the people of the state elect, but we are very focused on making sure that we are clear about the facts around affordability. Southern California Edison had, up until the 2019 to 2024 period, rate increases that on average were at or below inflation. We then had a period of five years where we were beyond inflation for reasons we have explained—external impacts from weather and power market costs, and a bit of wildfire. About a third of it was normal load growth impacts.
Importantly, we have made the commitment—and Steve and Aaron and the team are steering SCE—to deliver rate increases that are once again at or below inflation through 2030. That is an important message that needs to be out there, and we are making sure we are communicating it. We will continue to engage with candidates and their campaigns, continue to educate our policymakers and our customers, and most importantly, continue the real work on operational excellence and continuous operational improvement.
Operator: Thank you. Our next caller is Aidan Kelly with JPMorgan. Your line is open.
Aidan Kelly: Hey, good morning. Thanks for the time today. Just one question on my end. I want to hone in on the Ethan fire process if I could. It seems there have been some recent media headlines pushing back on the information flow in court proceedings. Could you share some thoughts on Edison International's dissemination of information to the state? Do you see this pushback as normal give and take, or maybe a touch higher than what you would expect typically?
Pedro Pizarro: I think you are referring to an article that was posted by the LA Times over the weekend that made that argument. You probably saw in the article that I sat down with the reporter and tried my best to make sure the reporter understood the facts here. I think the article had a slant to it that lacked appropriate balance. The core argument was that because some of the information in the case is privileged, somehow that means Edison is withholding information. That is simply not an appropriate take on the process.
It starts with a commitment that I made on behalf of the company—and we continue to make—to be as transparent as possible with our public and with you, our investors. We have continued to do that throughout the process. However, there is information in litigation that is privileged—not just on the Edison side, but there is privileged information on the plaintiffs' side. That is one of the items that I emphasized, and I am not sure it was captured strongly in the article. There is a balancing act here, and both sides develop privileged information. It is important for their litigation strategies. It is litigation, and it is appropriate to protect privileged information.
Also, some information is protected by confidentiality orders in the case. Some of that information may have nothing to do with the Ethan fire case itself. For example, in sweeping up discovery, if you are asking for information about the network or about meters on the network, that might sweep up information around our network map topology that the federal government wants us to keep under wraps because putting it out there would provide a roadmap for bad actors who could harm the system. Similarly, some of the information might include specific customer information that we need to protect and keep confidential.
The other side—plaintiffs' attorneys—can see some of that information under protective orders, but it is not released to the public. Those are the categories of information I think the reporter was referring to. The article was trying to support a thesis that somehow we are not being as transparent as possible. That is simply not true, and we will continue to stress what is fact and what is not.
Operator: Thank you. Our next caller is Ryan Levine with Citi. Your line is open, sir.
Ryan Michael Levine: Hi, good afternoon, and congrats to Maria and Aaron. In terms of sizing, is there a way you could size how much cost-cutting initiatives AI could enable or unlock, and how the AMI 2.0 and ERP systems could impact that opportunity?
Pedro Pizarro: I will turn it over to Steve and Aaron here.
Steven Powell: Ryan, how are you doing? It is still really early to get a full sizing of what the potential with AI is. Pedro listed out in his opening remarks a number of areas where we are leveraging AI. They span from things that we have already done in our customer operations—helping our call center agents more quickly respond to customers and shorten the length of those calls—to identifying trends around customer issues and flagging them before they happen so we can get ahead with proactive communications to customers.
There is a lot of emerging opportunity on the grid: developing tools that will automatically do designs of infrastructure; starting with basics like-for-like replacement; changes to how you dispatch your resources; and changes to how you optimize our capital portfolio. It spans the entire business from procurement to grid to the customer side. It is still early days. We have benefits that we capture and they roll into our forecast, but the total opportunity is something that will continue to evolve, especially as the technology evolves so rapidly.
Aaron Moss: I would add to that on the advanced metering initiative. The data that we will be gathering through AMI will be critically useful for us. Take a look, Ryan, at our application—we do quantify a significant amount of value that will come to customers from that program.
In that, we look at the case for a like-for-like replacement and the case for a more expensive but much more valuable to customers near-state-of-the-art metering initiative, and how we could use data to inform demand, provide customer signals, and enable things like allowing customers to avoid the cost of a meter upgrade to charge their electric vehicle by better managing their electric consumption within the panel and within the meter that we have there. There are a lot of quantified benefits with a benefit-cost ratio for the incremental costs above the obsolescence case well above one. It is exciting, and ultimately all of this is supportive of the 5% to 7% EPS growth rate.
Ryan Michael Levine: Great. And then one follow-up question to some of the prepared comments. How are you assessing wildfire risk going into this summer wildfire season compared to prior years, given weather and all the company actions over the last few years?
Steven Powell: When we go into each year, as the weather evolves, we are really focused on our long-term mitigations and how they are significantly reducing risk across the whole system. We have now deployed more than 7,100 of covered conductor and nearly 100 miles of undergrounding, and that really forms the basis for that risk reduction. Layer on top of it, going into each season, we look to see what parts of our system may have increased risk relative to the rest of the system. We do additional inspections—both for equipment issues as well as for vegetation management—so that we can take care of the risky stuff before we are into the peak fire season.
Each year, it is also about how we continue to improve our PSPS program—changes to our thresholds and triggers, and importantly, getting ahead to understand where some communities might see PSPS that have not seen it as much in the past so we can go and educate and really engage the communities to understand what to be ready for and how they can be prepared. It is that suite of mitigations that, as we head into the summer and peak season, we are fine-tuning to help make the risk lower every single year. On the weather, this year we had a fair amount of rain early in the season and it has been drier more recently.
Trying to predict what the fire risk will look like in any given season is challenging. We certainly can project how dry it may get, but winds are notoriously difficult to forecast. That is why we come back to making sure that we are fully deploying all of our mitigations, keeping in line with the activities laid out in our wildfire mitigation plan.
Pedro Pizarro: I think Steve covered it well. One thing I would add is that while we track year-to-year conditions and get those questions from investors regularly, the reality is the work that SCE is doing is not about this year or next year—it is about recognizing that the risk posed by extreme weather, driven by climate change, is going to increase over the next several decades. That is why there is so much good focus on long-term risk management here.
Ryan Michael Levine: Thank you. Take care.
Operator: Thank you. Our next caller is Shahriar Pourreza with Wells Fargo.
Analyst: Hi, good afternoon, team. It is actually Constantine here for Shar, but I appreciate the time today, and first of all, a big congrats to Maria and Aaron on the transition here from the entire team. We have a couple of cleanup questions around the edges. Without trying to find an estimate today for the Ethan liabilities, how do you feel about the pace of the claim submissions? Is there a way to frame a timeline where you can get to a point of visibility?
Maria Rigatti: Think about it this way, Constantine. The statute of limitations is actually still running. There will be a lot more time—it is a three-year statute of limitations on property damage—so it is not until January 2028 that it will close. We will get a lot more information as time passes. The other piece, which Pedro touched on earlier, is that there is a very complex interdependency between claims and insurance, and the level of insurance a claimant might have—whether they are fully insured, underinsured, or uninsured. Until we can get more information around that, which will take time, it will be difficult for us to generate an estimate.
As more claims come in and we get more data from them, that will add to our knowledge base, but even as claims come in, people do not have to give us a lot of specificity as to what their damages are. That is a way to share some of the complexities we are facing. Fundamentally, it gets back to Pedro's point that we have not been able to provide a timeline for when we will get to that point.
Analyst: That is crystal clear. Thank you. And touching on the election rhetoric we mentioned—regarding utilities—is there anything actionable or practical in the suggested distributed solution framework for driving down cost, or is that a potential cost shift?
Maria Rigatti: Are you talking about the concept we have heard from some folks around disaggregating and breaking up the utilities? Pedro has made this point a few times that integrated utilities actually have lower costs than not, so we question the mathematical foundation for some of those comments.
Pedro Pizarro: I will be very pointed. Specifically, one of the candidates, Tom Steyer, has made claims around a 25% rate reduction by breaking up the monopoly utilities, and also claimed that the lowest rates in the country are in competitive markets. I do not see any fact basis for the 25% reduction. The way we get rate reduction is the hard work that Steve, Aaron, and the whole team at SCE are doing—that has led to the lowest system average rates among our investor-owned utility peers. Also, at a national level, the lowest rates tend to be in vertically integrated utilities. Much to Mr. Steyer's chagrin, some of those still have quite a bit of coal generation in their systems.
We have been very pointed about taking on things that are not connected to fact like those, and being outspoken about them.
Analyst: Excellent. Appreciate that. Thanks.
Operator: Thank you. That was our last question. I will now turn the call back over to Mr. Sam Ramraj for any closing remarks.
Sam Ramraj: Thank you for joining us. This concludes the conference call. Have a good rest of the day. You may now disconnect.
Operator: Thank you. This concludes today's conference call. You may go ahead and disconnect at this time.
