8-KRegulation FDOther EventsExhibits & Filings

EDISON INTERNATIONAL 8-K Report, Regulation FD Disclosure (Aug 29, 2024)

Filed August 29, 2024For Securities:EIX

Summary

Edison International (EIX) has filed an 8-K report detailing a significant settlement agreement proposed by its subsidiary, Southern California Edison Company (SCE), with the California Public Advocates Office concerning costs associated with the Thomas Fire, Koenigstein Fire, and Montecito Mudslides (TKM Events). The proposed settlement, if approved by the California Public Utilities Commission (CPUC), would allow SCE to recover approximately $1.6 billion, or 60%, of its $2.7 billion in incurred losses related to these events. This includes uninsured claims and related costs paid as of May 31, 2024, plus a portion of costs incurred after that date. Additionally, SCE would recover 60% of approximately $65 million in restoration costs. As part of the agreement, SCE has also committed to $50 million in shareholder-funded wildfire and public safety system enhancements. This settlement is a crucial step for EIX in resolving a significant financial overhang and provides clarity on the recovery of a substantial portion of these fire-related expenses.

Key Highlights

  • 1Southern California Edison (SCE) has reached a settlement agreement with the California Public Advocates Office regarding recovery of losses from the Thomas Fire, Koenigstein Fire, and Montecito Mudslides (TKM Events).
  • 2The settlement seeks CPUC approval to allow SCE to recover 60% of approximately $2.7 billion in TKM Events losses, totaling about $1.6 billion.
  • 3SCE will also be authorized to recover 60% of restoration costs incurred related to the Thomas and Koenigstein Fires, amounting to approximately $55 million.
  • 4As part of the agreement, SCE will invest $50 million in shareholder-funded wildfire- and public safety-related system enhancements.
  • 5The settlement allows SCE to exclude permanently from its regulatory capital structure any after-tax charges to equity associated with disallowed costs or shareholder-funded enhancements.
  • 6SCE intends to seek CPUC approval to finance the approved amounts through the issuance of securitized bonds.
  • 7Management will present this settlement information to institutional investors and analysts, with a presentation filed as an exhibit.

Frequently Asked Questions

The main financial impact is the potential recovery of approximately $1.6 billion (60% of $2.7 billion) of losses incurred by Southern California Edison (SCE) from the Thomas Fire, Koenigstein Fire, and Montecito Mudslides (TKM Events), subject to CPUC approval. This provides a degree of financial certainty regarding these past events.

The primary condition is the approval of the settlement agreement by the California Public Utilities Commission (CPUC). If approved, SCE will be authorized to recover 60% of the specified losses and restoration costs.

No, the settlement covers 60% of the incurred losses and restoration costs. Approximately $1.1 billion of the $2.7 billion in losses remains unrecovered under this agreement. Additionally, SCE waived its right to recover $125 million of uninsured claims and related financing costs.

This $50 million commitment represents an investment by shareholders in wildfire and public safety system improvements. A key benefit is that SCE will be allowed to permanently exclude any related after-tax charges to equity from its regulatory capital structure, mitigating future impacts on earnings.