Wildfire recovery
Southern California Edison, a subsidiary of parent Edison International, announced several new wildfire-related legal settlements during its third quarter earnings call on Oct. 28, including an initial settlement agreeing to pay certain insurance companies 52 cents on the dollar for policyholder claims stemming from January's Eaton Wildfire.
Despite the settlement, Pizarro said the company still did not have enough information to estimate the total potential losses associated with the Eaton fire. Investigations into the cause of the fire remain ongoing, though Pizarro said Edison International has yet to identify an explanation for the fire that does not involve SCE equipment. The company will launch a wildfire recovery program for victims of the fire “shortly,” Pizarro said.
Pizarro touted California's expansion of the state wildfire fund, which he expects to reimburse SCE for liabilities associated with the Eaton fire, as a positive development for the utility. He noted that the bill expanding the program allows for the securitization of claims stemming from the Eaton Fire if the fund is exhausted before the $18 billion expansion is implemented.
Edison International CFO Maria Rigatti acknowledged that S&P Global in September had downgraded the company's credit rating, but said she believes S&P did not take the full benefits of the state's legislative reforms into account.
Diversified growth outlook
SCE President and CEO Steven Powell noted that the utility hasn't seen the same level of demand from data centers as other utilities, but pitched SCE's more moderate load growth as a potential boon to investors. He expects sales to grow 1% to 3% a year over the next four years, driven primarily by strong electric vehicle adoption, residential growth and increased demand from commercial sectors such as manufacturing, logistics and defense.
“We really like the durability of having that diverse profile as opposed to just relying on data centers,” Pizarro said.
While the company plans to spend about $680 million per year through 2028 on grid upgrades intended to support load growth, SCE's $28 billion to $29 billion four-year capital plan will focus on other goals, including system reliability and wildfire mitigation. SCE could also spend $4 billion or more outside its capital plan on as-yet-unapproved advanced metering infrastructure upgrades and transmission projects awarded by the California Independent System Operator.
The company will not need to issue new equity to finance its capital plan, Rigatti said.
