Edison International (EIX) 27 Feb 202019 Q4 Earnings call transcript

Good afternoon, and welcome to the Edison International Fourth Quarter 2019 Financial Teleconference. My name is Michelle, and I will be your operator today. [Operator Instructions]. Today's call is being recorded.

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

and Thank welcome, Michelle, everyone. you,

today Chief Officer, Our Pizarro, President of are speakers and team. Vice here other and the Also management and Executive President Chief Rigatti. Financial Maria are members Executive Pedro Officer,

call at business we Tomorrow, supporting prepared our include regular XX-K, presentation. www.edisoninvestor.com. will our presentation. today's Materials from the Pedro teleconference These Form update remarks and are available Maria and distribute

for factors measures outlook International make materially are forward-looking as cause SEC statements subsidiaries. carefully. as read our this results and different of filings. in During measure. we the Actual these assumptions the its well reconciliation The call, will from to about GAAP current that results Edison could nearest includes differ presentation outlook Please non-GAAP forth expectations. set Important could certain

please one the yourself During and limit session, one follow-up. question-and-answer to question

to turn will call Pedro. over I the now

increase and of of core Case outstanding. the during Sam, Rate primarily you, FERC General increase was good in to an International EPS Today, This XXXX Edison a XXXX The $X.XX approval offset the for Thank to number due higher in $X.XX remarks. core higher her wildfire year-ago. everyone. our EPS the and costs of revenues. by shares financial discuss Maria mitigation detail will partially performance was and afternoon, reported in compared more

of with XXXX wildfire state of the management a stabilizing We on and Bill efforts believe profile local different among wildfire investor-owned utilities. State’s XXXX particularly the and State’s Also, coordination the the utility, very years. a on beginning SCE improved Edison previous the health enactment California’s personnel. emergency commends Assembly that are California had effect than financial risk and two suppression

Advisory Council last Board, of the Safety Response implementation regulatory California new have filed recently XXXX our certification Catastrophe This and Wildfire safety issuance AB to Mitigation continued XXXX pleased the with and the framework. year, appointments includes XXXX We the the Wildfire of been our to Plan.

timely CPUC’s General of proposed of Case. schedule application We Capital also SCE’s XXXX and XXXX Cost approval SCE’s Rate the encouraged are the by for

work to be remains However, much done.

this and XXXX the settlement, decisions Expense the litigation obtaining Program charges, proceedings SCE’s This the Safety Memorandum for means application and Grid various of phases SCE, XXXX accounting on capital at the and Resiliency includes Account related Wildfire CPUC. GRC waiver For particularly our to the application. structure the of XXXX SCE’s application, outstanding

related safety expects XXXX, discuss legislators, shutoff, later. or work clean for I to PSPS, the sustainable Additionally, and with same about more time, are our and we power to in operations. with a improve vision will energy regulators future. to continue forward At public SCE this communities moving

cameras. past our risk XXX Program Safety XXX covered miles SCE XXXX stations Since weather Mitigation our for year, Resiliency XXX saturation than comprehensive cameras SCE Plan. XXXX, high-definition micro aggressively of wildfire areas, Wildfire in and XX% out of This conductor, Grid and laid mitigation executed covering installed reaching strategy the more has high and effective fire more point than over

areas were go work to in able WMP XXXX reduce to compliance our the risk possible. quickly many as We beyond as as in targets wildfire we

the over all high our this in a areas the overhead enhanced risk would In fire months of past, of completed also have infrastructure X-year the during of performed period. We inspection our X year. first been

XXXX. cycles, beyond standard risk-prioritization plan program XXXX our lessons inspection overhead and to filed will XXXX Wildfire higher-risk the our transmission includes and on Plan distribution inspections for learned Mitigation inspection enhanced approach. assets recently ground-based building from advance aerial SCE’s This in comprehensive

CPUC performance. capital the provide operational plan capabilities and technology. enable billion that the period. In specific transparency has analytics harden bolster while O&M X-year includes The situational further data calls also enhance and for public spending plan awareness filing, plan practices The infrastructure, and SCE to metrics our evaluate the to harnessing in SCE’s and proposed and over $X.X stakeholders will to approximately other us

faced marked and our dry elevated Last by days wildfire service low October, threat humidity conditions winds, many territory severe fuel. of parts of

PSPS preventive During protect equipment a and equipment safety the these power weather periods, the lines. conditions, the validated measure a events SCE importance electric Patrols exercised protocols after further from causing XX of impacts conditions. those from PSPS This contacting branches tree under de-energization our severe risk as damage the to public of fire. severe over conducted including found

We PSPS effort that understands extensive prepare outreach utilized customers a for help SCE be community can these our communities. to an and events. customers for hardship

working from learned and have PSPS We mitigation wildfire to these capabilities. are our experiences improve and resilience

of priority and one the safety employees number our first the continues to customers, be public, responders. Our

has also local significant of on and demonstrate work communities, spent time and efforts officials customers, our SCE data state educating that on and events. the government to amount vast into decision-making go our PSPS PSPS-related analysis

to expect high Potential PSPS scope and but available wildfire and we deployed, impact have Fire remain of PSPS, are to to a will events. tool during as mitigations the weather more severe reduce Index mitigate As risk

like the accounting XXXX an related wildfire XXXX I give reserve you would and to and mudslide now to update our events. on

$X.X which events. quarter You end reserve, of wildfire assessment range reassess of XXXX, related and loss internal We liability litigating damage our risks, estimable proceedings estimates, in claims. claims, and litigation and that includes these regularly billion for this prior fourth will settling SCE for the expected experience recorded third-party recall and a the known the of of gross low

to by and assessment, estimated the $XXX mudslide our the XXXX million In we latest $X.X for claims to estimate losses billion. related increased of XXXX a gross events and wildfire

with others of is in an estimate increase some review contributed a factors to while on significant significant to we connection the the aggregate loss determined basis, evaluated certain estimates, this a in decrease. While contributed

of billion, accrued liability $X.X our accrued These with for the we in of remaining billion and local changes million our number of an this is a which reached for is a for million revised the liabilities and adjusting previous quarter $XXX and million from coverage by Also, $XXX wildfire of net the insurance public fourth the billion regulatory to mudslide charge these After for $XXX increase $X.XX after-tax XXXX settlement FERC a estimate. $X.X lowered asset, gross pre-tax entities. led XXXX events events. liability

and the an our our top with our our is like I provide service operational our to communities. update excellence and a of and core Board a Operational of key would the major metrics our on the measuring priority non-financial now efforts very excellence company is at This of service uses and in few and safety across workers our starts performance. values.

safety had results. Our XXXX performance worker on mixed

employee there “DART” away, were restricted worker that than however, SCE as hearts to culture transferred, our an our their injuries training enterprise-wide more and reviews was successfully the rate fatalities any injuries XXXX to of through have the target. or days our fell lays number not our has contractor employees workforce. serious We employee among received three did, strong program long-term improvement. families safety duty, continue for our from ones. on known did of fatalities, we leading by worse The and importantly, than complete While out foundation and rate from And in XX% XXXX, go loved but

other these safety the earlier. our reliability customer in measures public Wildfire We improving key as wildfire are Plan. Among and measures, XXXX system outlined satisfaction GSRP implementation progress areas our tied resiliency to I targets. made Mitigation and related goals short fell discussed to our in Our the of significant of

safeguard wildfire was communities PSPS electric impacted during performance and Our installation to equipment system, and to our maintenance activities our repair to of de-energizations heavily by related fire mitigation, new conditions. dangerous weather the harden

business our deployed and quality additional processes efficiency improve also We digital to across our and operations. transform of technologies the

For to rolled example, customers. used to process enhanced new notification we support and improve robotic outage solutions overhead mobile out automation our to inspections

our sustainability, change. particularly climate continued on We focus addressing on

aggressive committed to will delivering XX% targets profound. are are California’s energy I shows carbon We required industry. among XXXX, by the goals XXXX our be the economy quarter, paper, XXX% Last meet the renewable announced power neutrality state’s Pathway in the XXXX across of the by which changes which to release and white XXXX clean most

the our doing vehicles is transportation as our through program. sites Ready $XXX to XXXX, XXX such Today, Charge support million and largest SCE part, heavy-duty infrastructure approximately in accelerating the at medium- by charging electric Transport focused are initiative electrification. by nation X,XXX We truck transit and utility on implementing installing

application We utilities. is needed underscores that need this new are also resilient will ahead, awaiting support California’s This million X XX,XXX and support the to years $XXX for fraction that believe the over sound further be passenger of financially and CPUC technologies vehicle chargers. Ready economy approval infrastructure Charge for will we our which but just strong in big, the a

investment long-term At addressing climate resiliency. near-term conclude, opportunities grid time, related are we business continue significant over our and we see To California’s the to significant in making the same in XXXX goals. to investments hardening

robust $X billion a over program mitigation. than capital years that, annually replacement, transmission infrastructure the few transportation electrification, more on if We wildfire infrastructure will and next invest have approved,

continuing safety see, and As have you can objectives. on and advancement resiliency, policy operational strategic focus of we excellence a

XXXX safety improve broad our grid California, accelerate increased is resources of will and reliable risk of electrification for wildfire needed the mitigate Pathway use economy. to that goals priorities the achieve near-term energy vision state’s including and resilient toward the and Our enable to and clean zero-carbon

With that, her report. provide financial Maria will

framework. expenditure base afternoon, results, you, everyone. EPS forecast, cover rate today and fourth and will financing and XXXX XXXX My full-year good guidance Thank comments Pedro, capital quarter our and

year-over-year As are we’ve timing decision. for the of comparisons XXXX the said, GRC given meaningful less XXXX

Please turn X. to Page

driven per quarter For core see the had $X.XX the of earnings that same $X.XX reported dilution variance higher year. was you higher the Edison primarily positive SCE. period outstanding. that $X.XX partially XXXX, side, share, for will the which core last right-hand International of There of From a few than by was items EPS table from variance on at the EPS fourth which offset activities majority SCE a $X.XX increase EPS of an the are SCE was This of year-over-year. $X.XX accounted shares core from in by

XXXX a To result taxes. and our Formula CPUC the expenses, tax offset variance begin refunded mechanism in positive higher had tax as in revenues of driven income largely Rate a by was $X.XX. customers to GRC primarily from proceeding. a XXXX of higher is the higher income to benefits with, rate the escalation revenues revenues positive growth FERC of had $X.XX of lower settlement balancing $X.XX This of due which increased and variance ROE base account,

Higher an this discuss by negatively about variances. impacted year-over-year by when expenses. I EPS increase $X.XX. This largely full-year we was mitigation in cover O&M wildfire expenses more will driven

tax recorded benefits under had expenses covered insurance, that wildfires. borrowings deductibles treated $X.XX $X.XX charge are how with costs which related quarter, XXXX this retention a treat charge lower for as increased we by consistent as the self-insured through There impact. to we benefit, reflects for remain a primarily tax During core to related We captured the insurance. to $X.XX our financing a tax Higher earlier. also negative was noted our primarily income account balancing net wildfire

Other variance due to borrowings, XXXX had to a related higher a due core variance This impairment. EIX Edison to quarter. by offset largely Parent Energy the in was interest $X.XX and at positive increased $X.XX $X.XX expense negative of the goodwill partially

Please X. turn Page to

For at higher SCE partly core improvement This $X.XX share per Other an $X.XX. the per earnings and earnings Edison in offset increased $X.XX by Parent share. $X.XX includes full-year, core EIX costs International of to of

analysis the will and earnings quarter few highlight are full-year While areas. I largely a fourth consistent,

XXXX which positive XXXX we in have SCE’s of recorded FERC in $X.XX third QX. positive application $X.XX the decision a Also, the related settlement, that we impact in Formula recorded revenues quarter. the see $X.XX will retroactive to includes from was Rate You GRC

was for tax variance earnings. balancing account, that to tax year, the positive back a impact $X.XX with benefits through customers related primarily no on there passed to the income Finally, are

recorded precedents. assets that memo for we mitigation full-year, resemble wildfire the recorded historical to closely related for activities, $XXX of to $XXX most We the specifically expenses regulatory Related million the million of accounts. spend

only As objectively recorded when for is is you know, verifiable precedent a recovery. there regulatory asset

unlike expenses there We like which I some for have million, in and historical scale asset regulatory not year. no seen for we and amounts a what the precedent. are there recorded O&M the are of for this the past to is context pre-tax, remaining effort in have reflected these $XXX The which mitigation provide would for additional is some activities

and During the other to personnel year, we project to human mitigation execute our had wildfire increase resources management programs. crews,

and higher and as execution The work which to fire in non-high increased crew, also We order high resource contributed as higher costs increases in also fire managed quickly costs. risk that work in the possible also risk to areas of areas. drove in reduce drove risk volume sequenced costs human

incremental one don’t precedent We area cost have another or drive geographic area. incremental impacts a costs where in in program

for assets the regulatory costs costs all not areas. we’ve non-high fire incremental incurred, in So, recorded particularly the risk

the is these XXXX SCE tracks GRC. through separate of However, recovery costs of full seeking

Page non-GRC million forecast. from through CPUC $XX.X includes are an FERC expenditures, XXXX, on and CPUC-jurisdictional capital robust represents GRC higher and capital due This capital is wildfire X we SCE’s billion XXXX spending to spending. expenditure program. $XXX a our shows This $XX.X mitigation. capital approximately forecast increase previous to From billion primarily spending capital certain of forecasting

CPUC and for fourth SCE the extended adding large a year In January, the utilities. cycle GRC other by

SCE is result, an its application for a to GRC As to an XXXX. attrition amendment XXXX required add file to year

Commission We amendment. timing the on are this awaiting the of further direction from

a Spanning in rate GRC, two request compound weighted-average X, X.X% at levels of Page base base forecast. At the periods, X-year rate and increase this $XX we show rate represents the FERC requested will to XXXX growth expenditure XXXX. On billion jurisdictional SCE’s rate the capital level. case by annual total CPUC

To of of to based reduction other compound is applying amounts base develop reflects outcomes, base of considerations. forecast growth SCE’s annual authorized X.X%. experience the our operational this management historical forecast, a level, range rate XX% rate a and rate previously a on At

XXXX and modeling guidance key show our Pages assumptions X the for X and purposes.

rate begin GRC decision. have let’s ROE the XXXX as Cost XXXX reflects capital rate in jurisdictional earnings. the Capital This and we past, approved the of with well authorized recently the base the in CPUC from structure as As base

rate We in that early settled was XXXX. November effect rate the until XXXX transmission and case

in regarding and the XXXX. FERC make had we not However, resolved have case assumption ROE the yet an subsequent to

approach rehearing know, varied has As considering past to its unsettled, and approach FERC over currently determining Order. the its the few ROE years to remains FERC with you requests MISO

comparable will state-level sub-optimal At that investment We in believe is XXXX time, we of a are than ROEs lower that ROE CPUC guidance decisions. FERC methodologies our resulting ROE FERC on in ROEs basing result to XX.X%. this

historically weighted the average and does rate a the not count of capital on structure related used items in has This base from Based at forecasted XXX.X to result other revenues. recorded FERC and Finally, benefit million, XXXX $X.XX. EPS is determine items. exclusions to XXXX AB in XXXX XX% actual share these outlook CPUC of

some forecasted add financial which to SCE discuss large a earnings. a at of years. prior contribution is and we next are this. in number of Let’s net base seen operating variances There drivers which not is as rate $X.XX, as This have to

CPUC decision embedded benefits. actual, cost noted earlier, First, the was and preferred cost debt implemented, capital as equity on and January adjusted the of of X, were to financing reducing previous

benefits side, the ultimately operating we our On costs, continue customers. manage to which

to $X.XX However, we costs as such than AFUDC, activities mitigation seen offset of represent historically. a larger items, related have other wildfire to

costs accounts. I memo will recovery we earlier, As record that of we these incremental in wildfire discussed pursue

the a lacking accounting historical deferral. do However, will assume for we meet requirements not precedent, we

drag XXXX since the to activities XXXX the to expect We related mitigation in be request. removed included costs wildfire GRC in are revenue the

efficiency Finally, to energy we expected also $X.XX related include earnings.

items highlight XXX and annualized of chart, contribution insurance of in right to in disallowed to the the recovered total compensation. we AB expense that These amount of SB XXXX a XXXX rates. not related In wildfire interest fund the the to and guidance, non-recovery the are executive Moving drag $X.XX. cost included certain

$X.XX the for Parent $X.XX. operating XXXX EIX plan. $X.XX includes per after-tax of including issuance for the part total drag at the The that impact month, balance the Other, Finally, expect is or million cost, of year. and $XXX we other debt rate This communicated financing $X.XX the is approximately holdco expected a of and of previously expenses interest of the

be areas. impact dilution into share can count from The two down XXXX broken in

full-year issued this and of translates the impact XXXX $X.XX. in the to first The shares is

to to This the in impact the related I equity EPS XXXX. the and a financing guidance is in results issuance of another in area equity discuss in million $XXX in relates $X.XX our second embedded debt plan XXXX XXXX dilution The guidance. will these moment. assumptions that

proceedings our $X.XX with accommodates are Overall, in in per Case. the a past share the wider of range to results share. of $X.XX Rate per resolved this typical slightly that This than $X.XX in range number large outside EPS of being guidance General items is and XXXX

Please to The Slide well the objective we and plan for and as and turn XXXX strategy that is a our informs provide regarding details framework our to will outlook. discuss longer-term as XXXX rationale funding X longer-term approach.

years, spending two our make some required the have prepare resilient plans, past that and Insurance unique constant been level Fund the energy there more informed grid issues future. Over financing contribution. our capital the One Wildfire of been robust the clean have for to including has

That part per years. over is plans, on estimating to several ratings of capital the discussed we longer the run next both approximately at long-term of grade XX%. One targeting overarching our is will us capital these XXXX XX% tenet maintain SCE as spending of influence financing while year key we and we plan are SCE investment informs $X also in EIX. a billion ratio and to framework deliver the FFO-to-debt As earlier,

to be rating this general wildfire look a ratings near-term financing outlook will their supportive the our improves. forward view also longer-term level a improvement plan. when of further point as This California ratio framework of for implications has risk and We ratings agencies’

insurance on we those not and yet in amounts rates. First, and wildfire significant being spending mitigation recovered amounts are are wildfire

and near-term spending continue to expect this to the operational we addressing mitigation, worked provides year, begin additional of some Commission items are down. the while challenge the these resolved proceedings though the Even metrics until balances amounts risk this credit and our will are

claims. those paid few debt agencies to are their capital $XXX SCE. $XXX factors while expect The credit of carry-over the we in is imputed million to equity, million to assumptions that events, which our and a related burdening related liability this around 'XX framework this have rating been need in we year. our With to metrics growth remaining supports some plan pay in mind, with equivalent the claims very yet holdco XXXX, Second, to at plan $XXX equity the XXXX million financing disclosed XXXX includes for the complete

approaches, programs. this We flexibility of earlier. as mentioned $XXX have ATM The to debt of variety our and the internal through also need total a equity address including includes plan million

capital and customers’ this we continue. XXXX, we deployed expect meet In needs our significant to to

our beyond and Given equity our the supported ongoing payout of by we ratio capital at expect issuance, to expenditures XXXX as ratings, dividend minimal utility, level growth this fund the current equity XXXX. requirements

With regard memorandum there the cost plan material current will wildfire-related wildfire accounts, that that is, of the will current balance for and plans, drove and If capital our financing and will predicated waiver the prior structure is XXXX on balance to wildfire-related ratings in a approach assumptions, and reflected the framework sheet this level same using events costs, is also requested recovery on that financing our liabilities XXXX be on we our reevaluate we mudslide consistent request. to timely requirements year of grade resolution work SCE’s our change these then sheet our objective. investment maintain with and

my remarks. concludes That

the open please call for Michelle, questions.

to in one everyone and we question has line follow-up, As questions. so request reminder, to limit a one yourself to you an ask opportunity

first Instructions] question from [Operator Mehta Our Citigroup. Praful from come will

now open. is line Your

Hello, Praful.

Thanks so guys. much. Hi,

Hi.

of the efforts how be the expect And XXXX, versus I that. question, been how you understand far? the Sorry, with in you repeat juggling on fund wanted ground XXXX sense But on sufficiency the for calls, mitigation to the side? in then the terms activities, could wildfire Wildfire give of sorry you so terms from wildfire to I’ve progress all on just risk feel in us a about if so the the

repeat you and can question, Yes, tell the so thanks, Praful, you’re first don’t any.

that risk of consciousness It's to are I preparedness in that that in think and been far importantly, work doing ball there's done. across greater it's fire the as that reduction. And the to as But entities of a frankly, that about So doing. mentioned is not we're other lot state my work prevention also mitigation we've helps work the terms continue the remarks, certainly preparations just and the advance we that state. doing. And that the and

made made early mentioned earnings last we in our to in or in XXXX, conductor PSPS, we of not over the October, work of big instances we’ve our how XX probably the through fire that we actions like turned mention I which could I because that firefighters think used already covered suppression. remarkable add saw. governors the have call, mix from seen stages the And the of so But in one were call, of and around impact to PSPS. in as I speed in in so state's my addition things terms of were the sold state the we of bulk way XXXX. impact capacity an difference that a increasing remarks issues and the into have factors ignition, we in we there mentioned saw that that response, the had key the And impact in after I wave of doing, significant replacement, equipment, budget the a the ignition,

his we but by governor I XXXX increasing XXXX. about talked resources firefighting next As XXXX, years, in taking that if of proposal now over five in XXX the believe, individuals good don't another, into chunk the head a budget you're know I aware,

our helps. State like work suppression, the all So that the not the that in fire fact it's but areas work, just by

the years the of showed AB of was some improve terms you a remind on were of debated, through terms I concept XX years, course continuing of in based to into least it, quantitatively XX at surviving of XXXX their that's state, in those and fund question the in think I'll terms risk governor's That others of the had over assumptions. answering baked utilities a reduction. number Now that to team funds, being XX% the that I your probability analysis think do. when that harder some

will year the don't you, stronger can't is in we zero quantitatively in of, what ever I'll risk last place risk much I we're tell a year percent tell that That this be and but zero. said, reduced, before. think I the terms means were you not So risk the or than year

California. of realities the Given

it. Got it. Got

As comprehensive always, answer. pretty

that. appreciate I So

look side, like SCE should timeframe, Just I or needs going looking get ongoing the an going But of ongoing quickly, debt the we you by post post needs, million we separately need. equity the forward, as at about driven holdco $XXX flat? need equity of equity you at forward? the think are the keep the How XXXX on XXXX kind equity kind

is Praful, Maria. this Yes.

think to what to long-term we're is for on trying the XX% a framework debt. targeting out we of lay I both that FFO sort will XX% to be basis where metrics,

related we forward think we to capital about those see As at actually the the capital program program, levels. a going minimal equity

I level. think, I'm trying to pinpoint a very precise

So whether wildfire the but waiver. see we'll wildfires, particularly a balance did on metric made level If those a framework. again, new structure minimal associated XX% our capital liabilities changes quantitative it's there, for sheet for that's accounts, the response, of did we that we needs, assumptions revisit XX% recovery with material as just significant to I really Separately, mention, see certain equity need not around -- that. well, we issues we don't just within

get Got back queue. Thank appreciate questions, guys. it. you, it. I will Lots in more I

Hey, Thanks, Praful.

Our next come from Research. Steve question Fleishman Wolfe from will

Your line now is open.

Steve. Hi,

the structure request. Hey, curious good I'm on waiver afternoon. just capital

you or just there has think is any real of us to a will give knowing rolled an update on? also when you get I are that is likely one. process it, there an PG&E similar answer? waiting any for Could just opposition like And

two be actually And be The reminder. liabilities from for file capital waiver for were would capital paying would -- think time So on been the this the We still that are on charge interveners some of itself was we is average. XX charge. capital to things will that whether Interveners we they from with for February we that asked of compliance the recovery The until various the that structure did structure also impending in any Actually, which request took when because the yet of request decision excluded get not debt some a last at while. a filed we be with have really associated the for excluded would commission the is or around. our that. a as claims structure. calculation ripe said our the made or have month the the comments,

it us us. of a answer -- the of which each relevant capital a pushed to were ask our question, little of proceeding, once to cost bit. we the got As out particular of pretty us like part decision, of sort not for ALJ all But

PG&E, not there of the stops whether being were Some for then certain more or waiver filed related at a should date effective. customers. set which kind them to be around We largely have of issue And comments also your replied those. deadline were a processes decision regulatory comments, commission has not then actually in those their return August. or that And believe, for in set the I they to a implications before

be in at month the if and calculate numbers we compliance even if do Of you deemed flexibility are, waiver, look We do whether we're determining we of the terms the where now. or that's waiver, we of we that. would a extend our in course, And be they the But basis with the have right date not getting don't XX on even Until we receive have in compliance. they status to today not for the rolling when will average. back. calculation hear

other Okay. And question. one

other excuse as the variances, you me, the looking guess the a Just mentioned, variances but wildfire, you operating to not for number, GRC. related at XXXX than -- the financial while. and there are have the you SCE $X.XX that that’s necessarily in I The a $X.XX, XXXX, been would specifically recovery incremental through hopefully

that portion assume I to be there sustainability some continuing? So should

of embedded have Every change benefits -- capital includes of debt adjusted capital includes things. a year bucket cost get which we rate It a we we new to because when the of customers. lot to and costs time. year do actually equity That from back This case, they benefits due time financing would the changed proceeding to decision. have

helps average system that to and rate because manage implement of all So we plans we're how of capital terms overall try costs well. continuing us our and in really our as

and do potentially you ability just starting down time go from time different you'll cycle. manage have are mixes an those up areas. through But we could see to in rate So we new and to because case see things

Thank you. Great.

Thanks, Steve.

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

line Your open. now is

Hey, good afternoon.

Julien. Hey,

[Indiscernible] howdy.

And do want little amount I you just way, metric. how perhaps So how the do of rating that about understand not variety think how of this And and to specifically more latitude a here today, credit to think that of you are a the about ongoing about already I'll in certain FFO-to-debt you you Sort and of a XX% of what just scenarios of let thinking Maybe focus latitude XX% bit you asked now. metrics b, to last further and an respond a; on here back normalized kind ask to issues imputation a under impute thinking look to. the basis? are some on liability? the do where you today? relative getting might around simplistic possess sort But again, alluded that that you agencies a metric? Steve the on like variances, And the that gets about question basis? your A,

Okay.

we've the we this. around ongoing is, guess how about first feel or termination before the had do is I whether liabilities we get having conversations recovery. with think the will rating of agencies Certainly, I So lots not question imputed, to

the I point to in to time, because similar because, no take think it, really our asset and there's not regulatory have requirement against here. again, at this President a charge put

cost the absent recovery see step rating a to impute before not they take going a back debt. the would that's and actually want some where place agencies actual are to think I

things I continue that's happen now. they ongoing commission, that's a them. conversation think will fact. a are we right the we to I where with potentially conversation mean, But as can this just with that is that be have that see an more

lot normally on In of in recovery recovery time. you. Right dollars to that or mentoring, are of be -- that insurance we really because I'll of do get quicker the we wildfire time where turnaround, do with related, of a I actually our we you lot the --I'll say having have mitigation with a would are little not we metrics sort lot are wildfire expenses real are but are real and frank that in of a getting those challenged. terms real on related, relative O&M lot a it have now, dollars think in A which fact to we bit capital

had I But they those recovery direction, we And that's I as to the remarks the dialogues and that. said, the financing plan of have amounts was, a going was part of in my understand To extent one why predicated of see agencies that timely I certain on the ongoing we've revisit in that. the think those assumptions, with that well. we closing different discussions things think in around accounts. again, rating earlier, will which

into able wildfire quickly. Got it. this variances. the costs? that principally then said, I $X.XX, to successfully may you at about If And or the about in of instance, those recovery securitization tap created you you getting That here, for when just there, to timely With secondly, what to of think be what just that newly just talking you're you being back mitigation clarify you just is simply comfortable income fund? going are here, alluding saying basically what said would are

realize part. yet, to now last right ask just I if $X.XX, look to under about not $X.XX actually you a question the So I'm but you that in at terms cover of the first at our look But XX-K we it's million. $XXX on clarify that, the no that are one going you asked,

the we that So for collected we the in have the there door the at XXXX, of had you we're million. XXXX already regulatory guidance booked that books part now $X.XX are end $XXX not yet us. assets not -- Cash against out see have the about well. that amounts that asset on things regulatory as in a of do Right are in

So of above. it's the all

second fair. you comfort so? That’s credit piece the was then the to ability get there to here, doing were the And your rating needed front end agencies tap actually into was just when about that that saying successfully

timely. not That’s No, all. flow will accounts be from no. the these I’m getting comfortable cash with etcetera, [indiscernible]

Okay.

to comfortable. the fund need tap securitization or actually don’t the to get You

No, no.

Okay, didn’t to I want … sorry.

overall narrowly. should I and more going over be described, I increase just the was comfort that to speaking Julien, you but think with I mean, time be just to all the clear, factors its related California to

would in of implied in range. AB sure that discount mean, have the kind time time terms was implied as its hope that there's level hope machinery over FFO-to-debt over that just would when clear. reassessments applied of is implementation credit a There of really continued California of a rating I to to by Yes. a that risk. they how make translating into XX% they some XX% XXXX, reduced see There risk. being that of time also is ratings. view place , higher overall what We credit We���d wildfire

guys. Expectations,

Julien. thanks, Yes,

from question Mizuho. next Paul come Freeman will from Our

is open. now line Your

Paul. Hi,

Hey, thank you very much.

the estimate wildfire I think high-end? -- would expect would revised, estimate guys, on point have obviously, have you an you exposure. that do the You end low At what you on

various went just a That assessments. as be look down challenging. continue broad set revision, to at we as looked went the to we I really do we And comments, mentioned as significantly, facts, did our as things some of in up my think all factors significantly. some we as shared things at And continues I this I

may continue So done just it we remaining which narrower. we you the -- and us on as low would what the be, for see range with And that to the the wildfire the you But example, settlement, what here, be up $XXX you, ins of of high-end. It off end liabilities. nature cases able see taken a to these We be do the if table. how a hard honest we be -- given be But, court know might define a now outs, of whether time million or and different the where we hard high-end. pieces for define might being makes that, Maria, we've we define That rules, uncertainties to of XX% accounting me we resolution and get place, under to those sense, do additional whether a the later that? you view process, don't to any can gets unclear process fast regulatory seeing that with range. uncertainty have the place the it's high-end then a have probability fall would into we is all Paul? settlements would a define end through continue may

an assume which that can equivalent going actually to you when that paying NOL in to you're get you least are off charge would materialize? that out XXXX, timeframe claims I book Yes. the that we NOL over the of the took could at a sense

So took put impacts the we when the tax charge. we

I the like cash or we a now, XXXX. EIX will question inform would payer? be tax we expect cash becomes obviously, this But right when may future well. we're think And as taxpayer now become around your that a estimating right

of donations Great. in offset about terms And I've only maybe The comp. executive so comp, you've as the I talked last question you've talked advertising, charitable for that Historically, think heard far is AFUDC, about me. offsets. executive

expect to portion the of So should equity AFUDC? we recognize that should remaining you able be

that we So to were that in in a a benefit, are bars just whole that may we past that’s enumerated bit laundry $X.XX guidance, about. walk net XXXX the Included the historically, other talking all here, right. that are things you the provided talking are of but of the sort all things list be bar, of we've each know included I -- little kind for over when we those

We've newer XXXX, they've there. So more to of They're know things right XXX that it a included as isn't in out And I'll discussed. legislation. you that, specificity. give items, sort post the But away. per issues. the bit cannot They that are little the SB broken historically gone call we of on some those just all are then to get recovery we we legislation, as of weren’t AB the things those those set

to go be that? expect two would no sort should beyond out years So that as XXXX, there of mean, we I we material offsets

identify try chart are we the we to what do laid might when that out consider, things that you is things to new. So

So items, incremental against will those into things we a not will that the some think that things the asset example, as and continue incorporated GRC XXXX for rig costs XXX, have revenue. because, XXXX mitigation we SB AB then our don't because wildfire get currently

as try benefits which will that manage have, customers. our always We headroom, and ultimately continue our create we we costs,

these basis. to on So same to some We the how I just manage components. give think go a new have business you forward visibility that the we more wanted approach we into of

you. Thank Great.

Next Lapides question will with come Goldman from Michael Sachs.

line Your open. now is

to earnings of Hi. you to there? have path I'm you get which think takes to things question, is kind what the how happen key normal simplifying a power a about ask and to do is how and the get it trying that long to

either lot them of the which general sort accounts now, of we seeing Michael, terms always happening have been is or to and visibility, in few more of what past actually already I have things are we've rate good we generally in that So been in one very the balancing terms think reviewed that They're case. the those We've are what addition outside recovery. But things, with constructive balancing had a cover accounts, the that of etcetera. history amounts, is is things. years are of

of say or we costs to a a avoid all you visibility sort XXX% because don't give retroactive to when are of accounts have probable we have we in probable recovery have, sort actually ability precedent. accounts. historical Now And of us hit. And but an don't as a help will yet lot memo rate the cases, memo making they're they recovery of that them some of don't issue,

was So the I we earnings think for the guidance. up set really driver that we XXXX how that -- and core

specifically. could see of So those you some start more things to

general As opposed will our things we get into now you'll that in see are the the wildfire then decided that case, where dissipate in costs of as included and because have another some in requirement to -- next that. variability rate revenue cost with decided track a XXXX gets that and the be after that are related one track mitigation going XXXX, to 'XX 'XX gets we

a into through next line why bit rate we little little way a get tried -- did. think to the have little and more we and clarity. bit up variability that's the need to again, less do that we guidance I move But set the a cycle to case So bit

Maria, add from point this, a angle. one And maybe I'll other to different

very different address period you've higher because understood different wildfire been unprecedented figuring years to Some seen here or three ago. has we a levels type of out how been of risk of in of the than an we've risk variability

of use the to recovered. etcetera. take accounts, () on be the redefined the that things needs team lot to and And extraordinary activities to required doing then needs seen so the our utility a cost you've of also a They've [indiscernible]

continue we as wildfire or and hoping see belts. to narrow year the another of two under uncertainty experience further I that think we maturity get ban I’m our in process, terms mitigation that understanding. plan through of

Okay.

us terms a that's of recovery in investors more for items Maria's here's fire Here's for cost that of and get investments we the both built much risk. and operations do a of translates other into point then in -- rate utility into wild world now kinds the and And how higher predictability cases proceedings.

normal they actually the So moving used is having and new lingo little the a a normalized stabilized. from bit

question, And then paying which I that XXX the municipals. in the it. one other you're have is settlement, Got

damages Just the and they were? curious, original claims what of what what is that a percent as original or the request, filed

what guess. of or I original third the they hope That's about expectation, a --

Got it.

for they a So filed a and little billion settled in XXX. over roughly $X

Got it. Yup.

it. Got

thank appreciated. you. Much Okay,

Michael. Thanks,

Arnold from Vertical Research. question Jonathan with Our will next come

Your line is now open.

circuit the here. in back you have to good Jonathan,

to Thank you, Pedro. Good back you. be to thank you. Well,

things I be Just willing kinds -- this, but of whether I'm you the be I'm do you curious sure might us have in give sort moved wonder, the any into to could accruals. you'll around not insight of

you sense moved us bit a any Can the of more little to be give You just said more movements. -- process? they big specific

Yes.

disclosing the there's ongoing And there. basis. some a pieces will and perspective, reason And the amount. expect we of no. pieces, all Sorry, the we don't disclosure on disclosed is, a that from be lot parts parts we've But inside net

didn’t we if continue down ones around. claims, but are keep which won't being to that's So that This your level. things to includes you this won't include able answer But it the guidance be filed move move. that which which ones went that question, I can -- of of been that claims at has size inside or ones the think went to just like, there up why the items or high the and imagine actual I track you will, spreadsheet, share won't things

have of cases. facts it's then those complexity. not that are things elements just one across Additional of action the really of are that sorts add individual the being It's uncovered all across the Remember, each different big to it's the layer And of cases. more one process, discovery events. in you set underlying

And so lot other. a of each underneath detail

thing. a keeping it's we're to complex than why at investors And the pretty So a a rather do massive, try just that's justice, and disclosure level. not high

we various on ignitions view your sort of Will your of in position involvement in see any the change general we your when read XX-K?

that are of. new events regarding there can No, the information no material think I about disclosures

thing the client think that believe little one to was our is But new -- that The a comment. we bit general holding involved. didn't attorney than felt, we through gotten sign We still the I other is, [indiscernible]. that, they've summarize we're iconic

disclosure information XXXX same that we last the The fire, have and quarter. in still air have we see we'll the other around the in ignition

Maybe so, new general, please. you’re bit offering, attorney elaborate on little a no the right. that information but we're Maria

Yes.

moving general with as of California sort And forward So liability the around completed process got not -- now -- And any charges. through we the their will over during is year, course the we Thomas. continue. has they're understand criminal the not attorney the there evaluation that analysis

fund. the previous you'd Okay, suggestion to the I that one just tapping on questions. great. Thank wanted some you for that. There -- of was And clarify I something sort of be

sure with So I I just fund, to was [technical -- the I nothing difficulty] want whatsoever about do to right? talking make

funds. fires take little did are have on well not the charge our a it's within retention in But a self-insured XXXX. bit did wildfires our a own We service for We going in into primarily. few of those territory a commercial insurance. we Yes,

need fund, would the qualify no be require would don't about that actuate we to that. been clear really Yes, event or has that

Yes.

regular [indiscernible]? You were about recovery just talking

Right.

Correct. Yes.

Ok.

Thanks, Jonathan.

Paul Patterson from Our with next question will come Associates. Glenrock

Your now line open. is

Hey, afternoon. good

Paul. Hi,

Hi.

lot So questions a my been have of answered.

bit as thought I for portions happens plan one the when bit assume out. you environment transmission Canyon just is that happening? got that guys guidance in your I'm that And mentioned And a everything of that about this, what Gates given I [indiscernible] that bit seeing And just one, you and in I've in a your wondering, power. projects. you what might are that’s to, project mentioned could with XXXX we the of a Diablo Mesa flavor of have be of little little that for you you a your sort competitive so XX-K remaining projects. ROE what is for stuff give and But regulated terms us think

Yes.

higher transmission projects it additional what of the planning, have Until started. hasn't renewable going [indiscernible] required to standard yet sort transition green in around does more the required, be -- needed. solar, their wind, planning California So, yet to might energy be that higher you for are be the exactly that get to what I won't clear what's the more think

they be would work now, done to a of get normally of sort obviously time projects to people own there's be I very mean, than little and basis. bit right think participate ones the and on to them bid with other determine familiar But out involve the competitive think what needed. fact still and would that those I already last. I our still So a that, you're facilities try there's are facilities, are

that essentially full the if And line, line, process. we an right of needed quarter on an again, then -- if to is facility [indiscernible] upgrade have new a the then it's it's that, refusal first of goes if existing brand

about what to this to plans updated respect be information Okay. And this their going are with -- when … [indiscernible] are releasing

they in timeline think don't believe actually don’t started here, Sitting XXXX-ish view mind time -- that's to milestone planning or of We we offer. I timeframe really probably And sale. have process that kind and with broad towards yet. a them

so Okay. Thanks much.

Paul. Thanks, Yes.

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

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