Good afternoon, and welcome to the Edison International Third Quarter 2024 Financial Teleconference. My name is Sheila, and I will be your operator today. Today's call is being recorded. I would now like to turn the call over to Mr. Sam Ramraj, Vice President of Investor Relations. Mr. Ramraj, you may begin your conference.

Thank you, Sheila, and welcome, everyone. Our speakers today are President and Chief Executive Officer, Pedro Pizarro; and Executive Vice President and Chief Financial Officer, Maria Rigatti. Also on the call are other members of the management team. Materials supporting today's call are available at www.edisoninvestor.com. These include our Form 10-Q, prepared remarks from Pedro and Maria, and the teleconference presentation. Tomorrow, we will distribute our regular business update presentation. During this call, we'll make forward-looking statements about the outlook for Edison International and its subsidiaries. Actual results could differ materially from current expectations. Important factors that could cause different results are set forth in our SEC filings. Please read these carefully. The presentation includes certain outlook assumptions as well as reconciliation of non-GAAP measures to the nearest GAAP measure. During the question-and-answer session, please limit yourself to one question and one follow up. I will now turn the call over to Pedro.

Well, thanks, Sam, and good afternoon, everyone. Edison International's core earnings per share for third quarter 2024 was $1.51, bringing year-to-date core EPS to $3.88. With this strong year-to-date performance, we are confident in narrowing our 2024 core EPS guidance to $4.80 to $5. Additionally, we remain confident in our ability to meet our 2025 EPS guidance and deliver a 5% to 7% EPS CAGR through 2028. My remarks today include three important takeaways. First, SCE continues to demonstrate its ability to navigate the regulatory landscape and is in the final stages of two key regulatory proceedings, reaching a settlement agreement in the TKM cost recovery application and awaiting a proposed decision in the 2025 GRC, which will solidify our financial outlook through 2028. Second, our team has achieved remarkable success over the last years managing unprecedented external risks, making our operations more resilient and positioning us strongly for growth ahead. Third, we recently reaffirmed our net-zero commitment in our latest white paper. Reaching net-zero greenhouse gas emissions by 2045 is a core pillar of our climate-related risk management. Starting with a couple of constructive updates on the regulatory front, SCE is in the final stages of resolving the legacy wildfires. We have provided an update on Page 3. You saw that in August, the utility reached an agreement with Cal Advocates to settle the TKM application. Once approved by the CPUC, the settlement would authorize recovery of 60% of the costs, or $1.6 billion. This settlement marks a significant milestone and is a good compromise all around. Customers and the state benefit from the demonstration of a strong regulatory framework and constructive negotiations with intervenors, as do you, our owners. It is also another clear indication of the utility's ability to navigate the complex regulatory landscape. SCE recently filed the Woolsey cost recovery application, which we expect to take about 18 months to complete. SCE made a strong case supporting the prudency of its operations and the claims settlement process. But with the proceeding just underway, it is premature to speculate about the ultimate outcome. As a reminder, we have not factored cost recovery for these legacy events into our earnings targets, thus the TKM settlement and the eventual outcome in Woolsey will be additive to our core operational growth. SCE's rapid response to mitigate wildfire risk also resulted in numerous regulatory applications. These included 2021 GRC tracks 2 and 3, a couple of WEMA applications, several CEMAs, three AB 1054 securitizations, and several others. SCE has achieved strong regulatory outcomes, recovering substantial amounts of prior spending in rates and expecting another $3 billion of incremental cash flow over the coming years. Upcoming on the regulatory calendar are decisions on the TKM settlement and the 2025 GRC, both of which we believe could happen in the first half of next year. The decisions will solidify our financial outlook through 2028. Capital investment enabled by the GRC is the driver for the growth and customer benefits necessary to ensure the grid is reliable, resilient, and ready to achieve the clean energy transition. We are confident in getting a strong outcome for SCE's customers that will also enable us to deliver on our commitment of a 5% to 7% EPS CAGR through 2028 with minimal equity needs. Staying with the California regulatory environment, a couple of weeks ago, the Commission changed the cost of capital mechanism and the investor-owned utilities' 2025 ROEs. While it only applies to 2025, we believe the decision is unfortunate and the process was disappointing. That said, this is just one of numerous business and regulatory outcomes that we manage in delivering on our commitments. I reiterate our confidence in delivering on our 2025 EPS and long-term EPS growth commitments. Moving on to SCE's core operations, I am proud of our team's ability to manage unprecedented climate challenges and navigate the numerous associated regulatory applications over the last several years. As you can see on Page 5, we have made remarkable strides in reinforcing our operational resilience and financial stability. Our robust performance is a testament to our strategic initiatives and the dedication of our workforce. To address the climate challenges, you have seen the results of SCE's industry-leading wildfire mitigation plan for several years now. Wildfires will always be a part of California, exacerbated by climate change, and the number of acres burned so far this year is roughly in line with the five-year average. What is important, though, is that SCE has adapted its operations and managed the risk. To drive this point home, Page 6 shows the significant reduction in acres burned from SCE's ignitions in high fire risk areas since 2017, and that this has happened while ignitions have been relatively flat, despite several of these years having been extremely high fire risk periods. This is due to SCE's strong wildfire mitigation plan execution and increased state fire suppression. Importantly, none of the ignitions are from the failure of covered conductor, the cornerstone of SCE's grid hardening strategy. Now, with more than 6,100 miles of covered conductor deployed, SCE has physically hardened 85% of its distribution grid in high fire risk areas. Consequently, SCE's grid is more resilient, reliable, and well-positioned to focus on the growth ahead as we lead the clean energy transition. California will also continue to benefit from improved state fire suppression support and as other utilities in the state increase their grid hardening actions. Moving to the bigger picture, wildfires are just one way that climate change is impacting California's health, economy, and quality of life. Edison International is acting to create a safer, more affordable future with cleaner air and reduced risk of climate disasters. Reaching net-zero greenhouse gas emissions by 2045 is a core pillar of our climate-related risk management. We recently unveiled our latest white paper, Reaching Net Zero, which builds on our previous analysis of what is needed for California to reach carbon neutrality. The publication focuses on Edison International's net zero plan and reaffirms our net zero commitment. As you see on Page 7, this plan is centered around delivering 100% carbon-free power to SCE's customers, as 85% of enterprise-wide emissions are associated with power delivery. In addition, we will reduce operational emissions, primarily by reducing those from the supply chain. Lastly, we project about 2 million tons of emissions will remain across all scopes in 2045. To fully decarbonize, we will need to neutralize those emissions, preferably through high-quality carbon removal solutions or offsets. As always, we take a pragmatic approach to our analysis and findings. A key point of emphasis is that the state will need substantial deployment of clean firm generation to safely, reliably and affordably supply power 24/7 in any weather. So one of the big and maybe surprising conclusions is that California must retain its existing natural gas generation fleet as insurance against delays in new technology development and deployment, though the generators will run significantly less often. The bottom line is that to reach net-zero, nearly every sector of the economy will need to incorporate clean electricity. It will take much investment and cooperation between industry and government. The effort will be worth it for customers who will see a projected 40% reduction in their total energy costs by 2045. With that, let me turn it over to Maria for her financial report.

Thanks, Pedro, and good afternoon. In my comments today, I would like to emphasize three key financial messages. First, we are very pleased with EIX's year-to-date financial performance, which reinforces our confidence in delivering yet another year of solid results. Second, on the regulatory front, SCE continues to generate cash flow by recovering past costs tracked in memo accounts and is making strong progress through the final stages of resolving the legacy wildfires. Third, we remain confident in our ability to deliver on our commitments for 2025 and beyond. I will note that we plan to update our projections next year following a final decision in SCE's GRC. Let's start with a brief review of our third quarter results. EIX reported core EPS of $1.51. As you can see from the year-over-year quarterly variance analysis shown on Page 8, core earnings grew by $0.13. This EPS growth was primarily due to higher CPUC revenue authorized in Track 4 of the 2021 GRC and higher authorized rates of return. Partially offsetting these drivers was higher interest expense associated with debt for wildfire claims payments. EIX Parent and Other was in line with the same period last year. Our quarterly results bring year-to-date EPS to $3.88, and this strong performance is largely driven by O&M, benefitting from a combination of efficient execution and timing. Pages 9 and 10 show SCE's capital and rate base forecasts, which are consistent with last quarter's disclosures. We expect our next major update to the capital plan will follow a final decision in SCE's 2025 GRC. In addition to the capital investment supported by the GRC, the utility is working on the standalone application for its next-generation enterprise resource planning system, which is expected to be filed in the next six months. Further, SCE expects to file the advanced metering infrastructure 2.0 application toward the end of 2025. Combined, these represent over $2 billion of CPUC-jurisdictional capital investment. SCE also has more than $2 billion of FERC transmission projects in development. Both the incremental CPUC and FERC spending are upside to our current capital plan. Turning to Page 11. Following strong regulatory outcomes in recent years, SCE has recovered about $4.5 billion since 2021. In this quarter's update, you will notice one new item, the securitization that we expect will follow approval of the TKM settlement agreement. After a final decision on the settlement, SCE will file an application to request approval to securitize the $1.6 billion recovery, targeting completion of a financing by year-end 2025. In total, the cash flow already received and expected over the next couple of years significantly strengthens our balance sheet and credit metrics. Not only that, but we should also see the amounts recovered through memo accounts decline over time as these activities are built into SCE's GRCs going forward, simplifying the regulatory process. I would now like to expand on the status of fully resolving the legacy wildfires. SCE has now received demands for 95% of TKM and 94% of Woolsey outstanding individual plaintiff claims and the utility continues to work swiftly to resolve them. Under the settlement agreement, the same 60% recovery ratio will apply to the remaining TKM costs, net of a previously agreed to disallowance. For Woolsey, SCE also proposed a process to recover claims paid after the date the application was filed. The best estimate of total losses remained unchanged this quarter as additional settlements have been in line with expectations. Turning to EPS guidance, Page 12 shows our 2024 core EPS guidance and modeling considerations. We are pleased with our very strong year-to-date performance which also gives us the opportunity to continue pulling forward O&M for the benefit of customers. With nine months of results behind us and based on our outlook for the remainder of the year, we are very comfortable with narrowing our EPS guidance to $4.80 to $5. Turning to Page 13. We have refreshed the modeling considerations for 2025. I'll note a couple of items. First, we've updated rate base EPS to reflect the CPUC decision on cost of capital that Pedro mentioned. Secondly, continuing the trend, we see favorable cost management flexibility, driven by the pace of O&M reinvestment and financing benefits. Lastly, I want to emphasize that we have not incorporated the benefits from the TKM settlement agreement into this refresh, which would be incremental to our forecast. I will now discuss the plan for updating our guidance and long-term outlook. At a macro level, let me note that the moderating interest rate environment removes the financing headwind we have faced in recent years. Additionally, cost recovery in the legacy wildfire proceedings provides a tailwind. Looking at our core operations, SCE's GRC is the driver for our high-quality earnings growth. As Pedro mentioned, we are hoping to see a CPUC decision in the first half of next year. Once SCE gets a final decision from the CPUC on the GRC, we will update our capital plan, financing plan, 2025 EPS guidance, and EPS growth forecast, factoring in the TKM settlement. So what gives us confidence in achieving our 2025 core EPS guidance of $5.50 to $5.90 and growing earnings by 5% to 7% through 2028? There are two key factors. First is the strength of SCE's GRC and progress throughout the proceeding. SCE made a strong case and even based on intervenors' positions, SCE's rate base growth would still be in line with its range case forecast of 6%. Second is our ability to manage the numerous variables in the business, as we've demonstrated year in and year out over the last two decades. Additionally, it is important to reiterate that our guidance does not incorporate the upside from the TKM settlement. As you saw on Page 3, that total upside to 2025 core EPS is about $0.44, and the ongoing annual benefit beyond 2025 is $0.14. I'll conclude by saying that our strong financial discipline enables us to deliver not only on our financial targets, but also to continue SCE's cost leadership for customers. Given that affordability is a key component of the clean energy transition. That concludes my remarks, and back to you, Sam.

Sheila, 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.

Our first question will come from Mike Lonegan with Evercore ISI. Your line is open.

Hi. Thanks for taking my question. So on the general rate case, I was just wondering if you could share your latest thoughts on it in the context around affordability concerns in California. We've seen the change in formula for the cost of capital trigger mechanism and a proposed decision in SDG&E and SoCal Gas rate case that cut attrition to your revenues?

Yes. Thanks, Michael. I appreciate you being on the call. Let me start by reminding folks of the comments we've made in other places. As we look at the rate trajectory for Southern California Edison, I think we said in the last quarter that we see that going back to levels at or below local inflation from 2024 onto 2028. So we think affordability is key. We are fortunate that the increases embedded in the general rate case are offset by a number of other items so that we can end up delivering that around inflation performance in terms of rate trajectory over the next several years. Looking beyond that, the point I made quickly in my remarks, and I know we stress at other times is that as we look at the continued investments needed over the longer term, beyond our 2028 guidance period for driving the clean energy transition, we see those continuing to put pressure likely around inflation levels for the electric rates. We see electric bills increasing because people will be using more electricity. But as you look at the total energy bill of electric plus gasoline plus natural gas, we see that total bill for our average customer going down 40% in real terms to 2045. Importantly, their share of wallet, the amount of their household income that they're spending on the total energy bill, which today is 7% goes to 3% in our analysis by 2045. So all of those in, I can give you a near-term answer and a long-term answer and both are important as we make the case and help educate our customers and our policymakers.

Yes. Michael, maybe I'll just add on a little bit. So you definitely referred to affordability being a theme. And you're right. Every rate case is different, every proceeding is different, but that affordability theme is consistent through all of them. When SCE filed its application, it had that affordability lens in everything that it asked for and all of its justification. In fact, they introduced savings into the GRC that they had already accumulated between GRC periods. I think one really important factor to note is that even intervenor positions in response to our application still have about a 6% growth rate on rate base. So we've had this focus on affordability for a long time. We've integrated it into our rate case, and we think you're seeing that sort of responsiveness from interveners, and we'll get the general rate case decision as we noted early in the first part of next year.

Thank you. And secondly from me, you've been talking about load growth materializing sooner than expected. You've mentioned potentially reprioritizing CapEx in the GRC or pursuing alternative funding approaches through separate applications. Just wondering what your latest thinking is around this.

Well, we have the benefit of having repaired the GRC forecast in a time period when we're already seeing some of that acceleration in load. As we look at certainly 2025, we have a good beat on what is needed. As we look into the later years of the rate case, we'll see, first and foremost, what final decision we get and what capital levels embedded in there. We continue to have the ability to reprioritize capital to deploy it against the most pressing needs. If we were to determine later on that we need more capital support beyond the GRC decision, there are a couple different avenues, including the SP410 mechanism or mechanism in the rate case process. But right now, I think we're focused on continuing to press for a good rate outcome and prioritizing from there. Anything to add, Maria or Sam?

Thanks for taking my question.

Thank you. Next, you will hear from Shar Pourreza with Guggenheim Partners. You may proceed.

So, Pedro, regarding the TKM settlement, in addition to the $0.14 improvement in run rate EPS, does the balance sheet flexibility from the memo account recovery along with TKM provide an opportunity to eliminate some of the equity-like instruments that were used to support wildfire claims, such as the preferred shares and junior subordinated debt? Your metrics are improving. Could you reduce some of the equity? Would that align with your current plan?

Shar, thanks for the question. Yes. First and foremost, we have the framework of 15% to 17% FFO to debt. I think the first thing that we would look at is the $100 million a year of equity that we've said is in our plan because as long as we're solid on the balance sheet, that might not be necessary. As we move forward in time, we will be looking at the hybrids. I think those don't actually come into play until 2026 and then even beyond that. But that's definitely an opportunity that we will be looking at.

Got it. Incremental to the plan, right? So that's not something that you're embedding in the plan right now.

Yes. We'll take a look at that as we get closer and closer to those reset dates.

Okay. Great. And then as you guys note, the assumption changes for ROE in '25 in the slides, can you clarify if the offset in operation variance is driven by pulling back some of the reinvestment that was originally planned? How much of the financing benefit that you're kind of calling out contributed to that $0.20 positive there?

Yes. So when we obviously got the final decision on the ROE, we wanted to update the rate base math for that. That's something that we've done in the past few cycles because since we've given this guidance, we've gone through a number of cost of capital situations. At the same time that we did that, we thought it would be appropriate to update sort of those high-level modeling considerations that we provided. But remember, those are high-level considerations. We operate the business at a much more granular level. So we took a look at many, many things and many, many factors across the business. One aspect of what we did was we looked at financing costs. We put those assumptions out there a number of years ago. We've obviously worked through a number of different interest rate environments at this point, both in terms of the underlying rates as well as spreads. We do see cost benefits across the board, including in the operational variances area but across the other elements as well. The other thing that we looked at, which is really a lever that we have every year is that reinvestment rate. I mentioned earlier that even in 2024, we have the flexibility to pull forward O&M costs into 2024 to the benefit of customers, and that gives us further flexibility as we move forward. We did the same thing with 2025. We're not quantifying every penny down to the net, but I think that that's the sort of work that we did as we went through the process for the quarter.

And I would just stress, Maria, you covered it well. Shar, hopefully, you walked away with a sense of our commitment to managing the business well for our customers and meeting our commitment to all of you around our 2025 and 2028 targets.

Perfect. No, that's loud and clear. I appreciated that. Thank you. See you in a couple of weeks.

Thanks, Shar. See you soon.

Our next question will come from Anthony Crowdell with Mizuho. Your line is open.

Hi. Good afternoon, Pedro. Good afternoon, Maria. I have two quick questions. You mentioned that you would provide an update once you receive a GRC decision in '25. Do you think that by then we will have clarity on TKM and Woolsey, and will the update include the GRC along with the two wildfire proceedings?

So, the schedule for TKM and the GRC we're thinking in the first half of the year. So hopefully, we'll have the ability to incorporate both of those. For Woolsey, it's early in the process, Anthony. I think we just filed the application relatively recently. Interveners have filed their response that will bring us through. We won't have a pre-hearing conference until later this year. So we're going to work through the process. What I want to emphasize is the same way that we treated TKM where we weren't incorporating any benefits from a settlement or a litigated process until we saw it happening and we get a decision. Same thing for Woolsey. I think it's just much more straightforward if we keep that out and you'll just see the strength of the underlying business in our numbers.

Great. My last question may be difficult to answer, but some investors are concerned about the change in the cost of capital in year three, which we thought was set even without a triggering event. As you look ahead to the next cost of capital cycle, how can you reassure investors that we may not experience another mid-cycle change? We are uncertain about the macro environment and whether a cost of capital trigger will occur, but can you clarify that this situation was unique and that we shouldn't anticipate another mid-cycle change unless there is a trigger in the future?

Anthony, let me start on that one. I'll take a bit of a broader view. You did hear me say in my comments that we were disappointed with that specific decision. But then we put it in the broader context of the regulatory environment in California. When you think about when the wildfire period started and the uncertainty around that, you saw us work through that, you saw the state work through that. You've seen the CPUC work through the implementation of AB 1054. You've seen the CPUC work through a number of other proceedings. Maria talked about the past number of memo accounts where we've been recovering cash from them. We got a number of things that have been highly constructive in this environment. And I'm not a big sports guy, but since baseball is a big thing right now, nobody bats 1,000. You're going to get a few misses here and there. But overall, we're seeing a CPUC in a state that is committed to having a robust regulatory framework that maintains the financial health of utilities. It gives certainty to investors. We're going to disagree with a few of the things that they do, and that's a bit of light. But we would expect as we turn to the '26 to '28 capital proceeding that you've seen the table set in terms of some clarity and what came out of '25, and we'll take it from there. In the meantime, we're going to be looking for constructive regulation out of the general rate case decision.

Thanks so much for taking my question, Pedro, and see you in Hollywood.

Take care.

Our next question will come from Steve Fleishman with Wolfe Research. You may proceed.

Thank you. Ouch, Pedro.

Sorry, man.

Could you provide additional details on the timing of the GRC? Since both PG&E and Sempra's cases extended into the end of the year, are you optimistic about the timeline for the first half due to the smaller differences in positions? Additionally, is there a possibility of resolving more issues before receiving an order?

Yes. So Steve, I think as we've worked through the proceeding, we've seen the ALJ and all the parties meet every deadline. There are a few days here and there where people got extensions, but it's been very much according to the schedule. At this point, all of the documents are submitted, everybody is finished with their written briefs, et cetera. We're really waiting on the ALJ to write the proposed decision. We think that there certainly is time to get a decision in the first half of the year with the other GRCs now sort of moving past or through to resolution. We think that also helps a little bit with the staffing issues, not everybody works on everything, but it's always more helpful when you're clearing that. So, we do think that the first half of next year right now looks like a reasonable time frame for us. In terms of additional settlements, procedurally, that is actually behind us now in terms of settling different things. These are very complex cases, and to have an overall settlement is typically reasonably difficult. But as you know from some of the discussion last quarter, we have settled a number of different items, which helps streamline what is remaining for the proposed and final decision. So, we do think that we've moved through a fair amount of items, but we'll be waiting for a final decision in the first half of next year.

Okay. And then I guess the one missing piece would be the cost of capital for the next three years, which won't affect '25, but just that won't be decided probably till the end of '25 for the...

We will file in March. The commission has a strong history of making those decisions before the year ends. You have a clear understanding of what to expect as you enter the first year of the three-year cycle. We will file a similar cost of capital proceeding as in the past, looking at all issues from both quantitative and qualitative angles. We will continue to highlight the California premium, which the commission has previously mentioned, acknowledging the extra work that the investor-owned utilities in California do compared to other regions. However, as we consider the longer term, we have consistently stated our expectations of 5% to 7% compound annual growth through 2028, regardless of different return on equity environments.

Great. Thank you. Appreciate it.

Our next question comes from Ryan Levine with Citi. Your line is open.

Hi, everybody. A couple of quick ones. In your queue you highlighted that there was a change to the nuclear decommissioning trust estimate to $2.3 billion net to Edison. What drove that and what are the impacts to the financing plan?

Every three years, we update the cost to decommission as part of our regulatory process. During this three-year review, we refresh all our estimates. Factors that may change include the anticipated timeline for the federal government to remove spent fuel from the site. All these elements are considered. The trust fund is adequately funded, and any adjustments to the decommissioning trust will not affect our financing plan.

Okay. As a follow-up regarding 2025, can you provide any additional information about the offsetting items to the cost of capital benefit aside from the outcomes of the rate case?

Sure. So in terms of how we managed through and looked at all of those granular issues, it's a little bit akin to what I said earlier on the call. So we took a look at, as an example, we had a lot of assumptions built in there around financing plans. Over the past four years, the time from which we first announced the numbers to now, we've actually done a good job at managing through various interest rate environments. From a portfolio perspective, we do find that we are doing better than we had originally assumed we would. As we look forward into next year, we don't have too much left to finance for 2025, but we think that we can manage that as well through both timing of when we go out to market as well as again some more positive expectations about what the market will look like next year. When we think about more about the levers on the reinvestment side, we are always evaluating the timing and the quantum of what we're investing in the business.

Thank you.

Next, we will hear from Gregg Orrill with UBS. You may proceed.

Yes. Thanks. Maybe a detail-oriented question. What's involved in the next filing for the Generation enterprise resource planning system? And maybe just another question on top of that, just your view in terms of the role of gas in California and how long that would be around if you could scale that at all? Thank you.

Thanks, Gregg. Why don't we start with Steve on the ERP piece?

Sure. We call it NextGen, our NextGen enterprise resource planning program is going through its solution analysis right now, and it's focused on both the technology underpinnings as well as the process changes around work management, supply chain, and kind of those major functions across the organization. We're heading to a point where our current ERP system is nearing its end of life or end of service. That's later this decade. So we're redesigning the next generation of that ERP system for implementation. Right now, we're finalizing the filing with the commission and so we expect that to come in Q1 as we finish that up.

And then on the gas piece, Gregg, you're probably referring to my comments on reaching net-zero. What our team did here was important work because they took a look at not just the normal supply-demand balance picture, but this included power flow analysis. It really goes into how the system operates. They saw that California will need a lot of clean firm generation. So think about resources like next-generation geothermal or could be nuclear, over which would require a change in law in California, or it could be gas paired with stores of carbon capture and storage, but resources that can run 24/7 or when needed. What's interesting is that 1 gigawatt of those clean firm generation resources gives you the same greenhouse gas emissions effectiveness of reduction as 7 to 11 gigawatts of solar paired with storage. We will have lots of solar and storage, but you need it all. Clean firm generation will be an important part of the picture; the challenge, though, is that a number of those resources are still not mature. They need technology development and maturation and you also have the permitting challenges for any resource. So there's a lot of uncertainty in terms of getting them built between now and 2045. In the meantime, we have a big insurance policy: all the natural gas generation that currently exists in the state. Holding onto the existing gas generation fleet will be critical as an insurance policy for those potential scenarios. Again, we expect that those gas generators will be running a lot less than they do today. In our prior analysis, we estimated that California would see something like between 4% and 5% of its electrons coming from gas resources in 2045. Now hopefully, that covers the second question.

Yes. Thank you.

Thanks, Gregg.

Our next question will come from Nicholas Campanella with Barclays. Your line is open.

Hi, everyone. Thanks for taking my question. So I know a lot of questions on '25 and the variance and cost of capital, and you guys seem well positioned to absorb all this. So just to kind of tie it up, when we think about '25 and into '26 earnings power? Is it as simple as just adding $0.14 to that 570 midpoint and then growing 5 to 7 off that? Is there anything wrong with doing that? And are there offsets that you would flag that we should consider as we think about '25 and '26 pro forma TKM? Thank you.

Yes, the $0.14 is the run rate, so it is definitely an addition to anything we've stated for 2026. The slight difference lies in 2025, as we are uncertain about the timing of the decision throughout the year. You may not achieve the full year run rate of $0.14 in the first year, but it will reach a $0.14 run rate as you move beyond that.

And then just on the TKM, you've got 50% recovery. I know that you just started the Woolsey request, but can you just kind of talk about what can make that outcome different than the 50% in TKM, like what are the key things to watch for? Thanks.

Yes. Thanks, Nick. I'll stay pretty high level here. The bottom line answer is they're very different cases, and this is all very case specific, so we can't look at the TKM number and assume that that is, therefore, the number for another fire, whether it's Woolsey or something else. Just to remind you of a couple of the specifics in TKM, you had two different ignition sources. For one of those ignition sources, we acknowledge that Edison equipment was at issue. We still think that SCE was prudent in its operations, but we know that the spark came from that equipment. For the other ignition point, while there was some investigation report by a fire agency that pointed to Edison, there really wasn't the evidence there. We don't think that that was correct. But in any case, you have one ignition source that is linked to Edison, one that we don't think is, then they merge. That's a complicated case. Woolsey is different as there's a single ignition point. Again, we know that it's linked to Edison infrastructure. We believe that SCE was fully prudent in its operations and made that case in its filing, but it's just different; it's apple and orange when you're looking at just for starters two different starting ignition points versus one ignition point and all the other intricacies for each of those fires. So long-winded way of going back to what I said at the beginning, case specific for different fires.

Very fair. Appreciate the time. Thank you.

Thanks.

Next, you will hear from Jeremy Tonet with JPMorgan. Please go ahead.

Hi. Good afternoon. It's actually Rich Sunderland on for Jeremy. How are you?

Hi. All right.

Just one for me. The $2 billion FERC transmission CapEx and the $2 billion across those two CPUC jurisdictional applications, when you give your plan update next year, any sense of that spend and if it would be right for including in the base plan? And then maybe more broadly, just on the FERC stuff, what is the status of your work on that when do you think you'll have a sense on timing of when that might be deployed and if you're going to be funding that? Thank you.

So I'll let Steve talk about the timing of the FERC and how we're working towards resolution on that, but just in terms of the updates to the plan first. Typically, what we would do is, as we get close to filing the applications and we know the quantum and the amount and the timing of the spend better that's when we would roll it into our plan. And that's why we haven't rolled it in yet because we're still working through all the details. I will note that on the FERC side, much of that will be spent post 2028. But Steve, why don't you talk a little bit about the details.

So in the 2022 through '23 CISO transmission plan, that's where Edison was awarded about 20 incumbent projects worth over $2 billion. Generally, those projects are, as Maria mentioned, they come online outside the '28 period. Most of the spend is going to happen out there. In that same process, there also was a competitive project that Edison won in partnership with Lotus Infrastructure partners. Again, that project is, I think the online date is 2032. We will be working through the other approval processes with the Public Utilities Commission, design, and all the stuff it takes to get transmission built. As the types of plans continue to come out with new projects, it’s important to note that transmission projects still take a long time, and it's one of the reasons why we're also focused on getting siting and licensing improvements to help accelerate this because they are very long time frames to get the projects built that are required to help meet electrification growth as well as the growth in all the new energy resources needed over the next decade and beyond.

Great. Thanks for the time today.

Thanks.

Our next question will come from David Arcaro with Morgan Stanley. Your line is open.

Hi. Thanks so much. How are you?

Hi, Dave.

I wanted to just follow up on the Woolsey process here. Is there a timeframe where we might watch for the potential for a settlement? Would that be a year from now in terms of just I'm looking at TKM versus Woolsey, when might those discussions become more realistic in the process?

Yes. Just to give you an overall view of the Woolsey schedule as it exists today, at least our proposed schedule. We expect that on November 12, that we'll get protests and responses from interveners. We would get a chance then to apply to that, and then a pre-hearing conference probably in early December. We'll need to wait for the scoping memo, and that is where you'll get the more definitive schedule as the ALJ lays it out. SCE has asked for a single phase with an end date that's about an 18-month schedule, which is consistent with TKM. We get the scoping memo; that would be the place to look for in terms of whether the ALJ wants to set aside time for a settlement conference, et cetera. That's exactly what they did on TKM. A really important part of TKM was developing the testimony, having intervenors participate in that. Cal PA submitted a number of volumes of their own testimony. Setting that stage is really important even looking forward to a litigated outcome or a settled outcome. That’s really what to be looking for.

Got it. That's helpful. Very thorough. I appreciate that. And then I was just curious on the ERP and AMI filings. It sounded like those were coming in the near term, or I guess next roughly six to 12 months. How long would those processes be? Like when would the CapEx end up hitting the plan?

There would be CapEx in the plan for those projects in this next four years. But even for those projects, particularly the metering project, you'll see spend beyond 2028.

And in terms of the length of time for the regulatory process, it's probably also kind of the standard, call it, 18 months it will take.

Makes sense. All right, awesome. Thanks so much.

Thanks, David.

Our next question will come from Angie Storozynski with Seaport. Your line is open.

How are you?

Great.

Great. So I have a question about data centers. I listened to some interview with you, and you mentioned that California is probably not the place or your services are not the place where you will have those hyperscale data centers just purely because those should flock to areas with cheap electric rates. But I'm just wondering, if there were to be demand-driven increases in electricity prices in California, how that would potentially impact your CapEx and growth plans.

Thanks, Angie. I'll quickly address both topics. Regarding data centers, you're correct. We've been discussing this for a while. The major hyperscale centers are not as prominent here. When it comes to AI, we are noticing some impact in California. The large hyperscale training centers are not really visible, but we are observing growth in data centers, which is partly driven by AI. The inference centers, responsible for providing answers in search engines, tend to be located close to the data load to reduce latency. While we're indeed experiencing data center applications in our territory, the increase isn't as significant in Southern California, where we already have a substantial data center presence. Steve, do you have anything else to add? Much of this is reflected in the 35% increase in the 10-year demand forecast we mentioned last quarter. Now, regarding the 40% reduction in total energy costs, yes, Angie, this comes from replacing devices like gas water heaters with electric heat pump water heaters and gasoline cars with electric ones. The energy efficiency gained from this switch is much higher, which is key to achieving that 40% reduction. Customers who have made the change are definitely noticing the benefits. For example, after I electrified my home a year and a half ago, my natural gas bill decreased, although I still have a gas barbecue. While I've seen an uptick in my electric bill, the new appliances have led to improved efficiency. The real concern is whether customers who haven't made the switch yet understand these benefits, and that's where CEA collaborates with other utilities, EEI, and the commission to enhance consumer education. This is crucial for both consumers and contractors as they navigate home conversions.

Okay. I have a big picture question. I understand the current differences in natural gas prices in California, but how would your growth plan be affected if there were a significant increase in electricity prices, whether from higher demand or rising natural gas costs? Do you think there's a sensitivity in your growth strategy related to the possibility of sharply increasing electricity prices?

I might say this, and again, Steve, you might have a different view on it to be interesting. But here's how I say, Angie, the endpoint, I think, ends up being the same, because California has made an important and very firm commitment to getting to net zero by 2045. That's something we believe is needed not only in California but more broadly, if we're going to keep the planet at a reasonable overall temperature increase. The way you get there you might see variations in any given year, right? Where there are gas prices, or energy prices you're talking about, it could also be if you have a different changes in incentives, impact of different rate structures, a number of factors that can impact folks adoption at least new technologies when they're gas heater brace and they're sitting at Home Depot deciding on the electric versus gas. So you might see ups and downs along the way, but if the thing is going to remain committed, which I believe it is and must to net zero, and if we build our analysis, which we absolutely do that the most affordable and reliable way to get there is by electrifying so much of the economy, then the endpoint ends up being the same. Hopefully, it happens by 2045. Does it happen a little sooner or a little later? That's where you might see some variations depending on what happens in between here and there.

Okay. Thank you.

Thanks, Angie. I appreciate the interesting, strategic questions.

That was our last question. I will now turn the call back over to Sam Ramraj for closing remarks.

Thank you for joining us. This concludes the conference call. Have a good rest of the day. You may now disconnect.