10-KPeriod: FY2006

EDISON INTERNATIONAL Annual Report, Year Ended Dec 31, 2006

Filed February 28, 2007For Securities:EIX

Summary

Edison International's 2006 Form 10-K details its operations primarily through two segments: Southern California Edison Company (SCE), its regulated electric utility, and Edison Mission Group (EMG), its non-utility power generation and energy services arm. SCE serves a large customer base in California and operates a significant infrastructure of generation, transmission, and distribution assets. EMG, through its subsidiaries like Edison Mission Energy, is involved in power generation, energy marketing, and trading. The company emphasizes its commitment to regulatory compliance across its operations, particularly for SCE under the CPUC and FERC. Environmental regulations are a significant factor, with ongoing efforts to comply with air and water quality standards, and potential impacts from climate change initiatives. The filing also highlights risks associated with regulatory changes, operational challenges, market volatility in the energy sector, and the company's ability to access capital markets and recover costs.

Key Highlights

  • 1Southern California Edison (SCE) is the primary operating subsidiary, serving over 13 million people across a 50,000-square-mile area.
  • 2Edison International operates through three main segments: SCE (electric utility), Edison Mission Group (nonutility power generation and energy services), and Edison Capital (energy and infrastructure investments).
  • 3Significant regulatory oversight exists from entities like the California Public Utilities Commission (CPUC) and the Federal Energy Regulatory Commission (FERC), influencing rates, operations, and financial decisions.
  • 4Environmental regulations are a material consideration, with substantial focus on air and water quality standards, and potential future impacts from climate change legislation.
  • 5The company is exposed to market risks through its non-utility power generation segment (EME), particularly concerning wholesale energy prices and fuel costs.
  • 6Access to capital markets and the ability to recover costs through regulated rates are critical to SCE's financial viability and the overall company's financial health.
  • 7Risks include potential regulatory changes, operational issues at power plants (including nuclear), and financial market volatility affecting energy trading activities.

Frequently Asked Questions

Edison International's primary business segments are its regulated electric utility operations (Southern California Edison Company - SCE), its non-utility power generation and energy services segment (Edison Mission Group - EMG), and its investments in energy and infrastructure projects (Edison Capital).

Edison International is subject to oversight from various regulatory bodies. Its primary utility, SCE, is regulated by the California Public Utilities Commission (CPUC) for retail operations and the Federal Energy Regulatory Commission (FERC) for wholesale operations. FERC also regulates aspects of EMG's wholesale power sales. Additionally, environmental regulations are enforced by federal, state, and local agencies.

Key risks include regulatory changes impacting SCE's ability to recover costs and earn a fair return, environmental regulations leading to significant capital expenditures, market volatility in wholesale energy prices affecting EMG's merchant power plants, the company's reliance on capital markets for funding, and operational risks associated with power generation facilities, including nuclear power.

Edison International's subsidiaries are subject to numerous federal, state, and local environmental laws and regulations. The company believes it is in substantial compliance but acknowledges that future developments, such as more stringent regulations on air and water quality, hazardous waste, and climate change, could require substantial additional capital and operational expenditures. The company attempts to recover these costs from customers where allowed by regulators.