Edison International

Good afternoon and welcome to the Edison International Fourth Quarter 2020 Financial Teleconference. My name is Missy and I will be your operator today. When we get to the question and answer session, if you have a question, press star one on your phone. 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 Missy and welcome everyone. Our speakers today are President and Chief Executive Officer Pedro Abduzaro and Executive Vice President and Chief Financial Officer Maria Riccardi. Also on the call are other members of the management team. I would like to mention that we are doing this call with our executives in different locations, so please bear with us if you experience any technical difficulties. Materials supporting today's call are available at .edisoninvestor.com. These include a form 10K, prepared remarks from Pedro and Maria in the teleconference presentation. Tomorrow we will distribute a regular business update presentation. During this call, we will 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 thank you Sam. Let me start the call with our sentiments of support for the residents of Texas and all the other states that were impacted physically and financially by last week's frigid weather. Climate change is a major part of the story there and our industry just has to continue our collective efforts on climate mitigation and adaptation. Today, Edison International reported core earnings per share of $4.52 for 2020. This exceeded the midpoint of our initial guidance range and is within the narrowed updated on our last earnings call. Core EPS of $4.52 was lower than $4.70 a year ago and the decline was due to $0.44 of equity share dilution. On an operational basis excluding dilution, core EPS was $0.26 higher driven by strong performance at SCE. Maria will discuss our financial performance in detail in her remarks. In 2020, SCE made substantial progress on its comprehensive wildfire mitigation strategy. This continues to advance one of SCE's top priorities, increasing grid resiliency to adapt to the changing climate and to protect public safety. SCE accomplished the vast majority of its 2020 program targets and in many cases exceeded those goals despite the challenges we all face during the COVID-19 pandemic. We have highlighted measures of SCE's progress and execution on page two of the slide deck that we issued with our earnings release. Since the end of 2018, SCE's execution of its wildfire mitigation strategy has reduced the risk of wildfires associated with utility infrastructure despite a record-setting California wildfire season last year. For the second consecutive year, we do not believe damages from any wildfires alleged to be caused by SCE equipment will exceed insurance. SCE is further accelerating its wildfire mitigation efforts. Earlier this month, the utility filed its 2021 wildfire mitigation plan update which describes how it has matured its wildfire mitigation capabilities and outlitens the long-term plan to further advance risk-informed decision-making, data management, grid hardening, and community engagement. A prime example is the covered conductor program which will increase the coverage within SCE's high-fire risk areas from approximately 15% today to over 60% by the end of 2023, subject to CPUC approval. The utility continues to innovate and implement technology-based solutions and options such as early fault detection for reducing ignition risks. As described in its 2021 WMP, SCE estimates a 25% reduction in ignitions in high-fire risk areas by 2022 as compared to 2020, assuming the same conditions as experienced in 2020. SCE continues to improve its public safety power shutoff or PSPS operations with public safety being the paramount consideration. SCE uses PSPS only when conditions warrant. Let me underscore the need for PSPS despite the hardships it creates. By noting that in 2019 and 2020, post-PSPS patrols found at least 60 incidents of wind-related damage that could have potentially caused ignitions. In 2020, the installation of more weather stations and sectionalization devices paired with the automation of existing devices all enabled SCE to limit PSPS footprints wherever possible based on risk assessments, achieving a 22% reduction in customer minutes of interruption. All that said, SCE recognizes there are opportunities to further improve the execution of PSPS and better support its customers. That was loud and clear in the January 19 letter from President Badger and in the CPUC and community input that SCE leaders received during the four and a half hour PSPS hearing on January 26. All this especially underscored the need to improve SCE's communications with customers and the PSPS action plan filed on February 12 includes important near-term commitments to use this essential tool of last resort in a way that better care for our customers. Beyond SCE, the state has been building on significant investments in its firefighting capabilities. In its 2021-22 budget, the governor proposed an additional $1 billion to support a coordinated forest health and fire prevention strategy that maximizes technology and science-based approaches to protect state lands. This includes prioritizing fire breaks around high-risk communities and grants for individual homeowners to harden their properties. Recognizing the need to move quickly, the governor also proposed that $323 million out of that billion would be for early action to start these prevention projects before the next fire season. For fire suppression, the budget adds funding to support 30 additional statewide fire crews and seven large air tankers. The state will continue phasing in Black Hawk helicopters, with seven expected to be in operation this fire season and another five in 2022. These new suppression resources will help the state move more quickly to combat wildfires before they become catastrophic. The governor and the California Insurance Commission also announced a plan to establish statewide standards for home and community hardening that will reduce wildfire risk and help make insurance available and affordable to residents and businesses. Shifting to past wildfires, SCE has made significant progress toward resolving pending litigation. Last month, SCE resolved all insurance subrogation claims in the pending 2018 Woolsey fire litigation. The utility continues to make solid progress settling remaining individual plaintiff claims across the 2017 and 2018 wildfire and mudslide evaps. In total, SCE has resolved approximately two-thirds of the best estimate of total losses established last September. Maria will provide an update on the equity financing needs related to these events later on the call. Turning to regulatory actions, we welcome the reappointment of CPUC President Batcher for a six-year term, subject to confirmation by the Senate. President Batcher's leadership has energized the commission's implementation of the state's greenhouse gas emission reduction goals. Yesterday, the CPUC hosted an en banc to share ideas about affordability across many stakeholders. Given the economic impacts of COVID-19, this is a timely discussion and it follows on many years of SCE leadership to manage system average rate growth well below the other California utilities, which we were proud to see acknowledged by the commission staff report and others. The discussion reinforced many of the issues we have raised in our Pathway 2045 analysis, including that the great investments needed to decarbonize the economy and improve local air quality through clean energy and electrification may increase electric costs, but will actually result in greater affordability and equity, with the average customer spending 30% less across all forms of energy in 2045 than they do today, thanks to the greater efficiency of electric technologies. Looking ahead, SCE is planning for the critical role it plays in sustainability, particularly from the unique vantage point of a wires-focused business. This will include significant capital investment opportunities to support the electrification of transportation and buildings, as outlined in SCE's Pathway 2045 and Reimagining the Grid white papers. The governor's budget proposal also underscores this, with its proposed $1.5 billion comprehensive strategy to achieve zero emission vehicle goals by 2035 and 2045. This includes infrastructure investments for and improved access to new and used zero emission vehicles. SCE has received CPUC approval for over $800 million to support electric vehicles, including investing in electric charging infrastructure for light, medium, and heavy duty vehicles. The utility launched its Charge Ready 2 program, the largest light duty EV charging program by an investor-owned utility in the United States, which will support approximately 38,000 light duty charging ports. Charge Ready Transport, SCE's program to build charging infrastructure for medium and heavy duty vehicles, will grow through 2024, eventually building charging infrastructure to power 8,500 electric, medium, and heavy duty vehicles. SCE has also committed to a long-term goal to electrify its own vehicle fleet, including 100 percent of all light duty vehicles by 2030. In the area of building electrification, SCE launched new programs in 2020 to incentivize heat pump installations and expects to continue to expand these offerings going forward. Before I conclude, I would like to say that I am just very, very proud of what our employees accomplished over the last year in spite of the COVID-19 pandemic. COVID-19 has reshaped the way that all of us do business and how we interact with our customers and communities, and we adapted to continue delivering an essential service. We cared for each other, whether working in the field or teleworking. We cared for our customers, providing relief for those facing economic challenges, and we cared for our communities and their safety. Looking forward, I am excited about our year and long-term business opportunities. SCE is well positioned as an electric-only utility with investments highly aligned with the states and now the federal government's long-term decarbonization goals. We will continue to accelerate our wildfire mitigation efforts while building toward an equitable, clean energy future. With that, Maria will provide her financial report.

Thanks, Pedro, and good afternoon, everyone. My comments today will cover fourth quarter 2020 results, our capital expenditure and rate-based forecast, and an update on our financing plans for 2021. Edison International reported core earnings of $1.19 per share for the fourth quarter 2020, an increase of 20 cents per share from the same period last year. Full year 2020 core EPS was $4.52, which exceeded the midpoint of our initial guidance range and is within the narrowed range we updated on our last earnings call. Core EPS of $4.52 was lower than $4.70 a year ago, and the decline was due to $0.44 of equity share dilution. On an operational basis, excluding dilution, core EPS was $0.26 higher, driven by strong performance at FDE. On page three, you can see FDE's key fourth quarter EPS drivers on the right-hand side. I would like to highlight four items that accounted for much of the variance. First, EPS increased by $0.16 related to higher revenue. CPUC-related revenue contributed $0.22 of this increase due to the escalation mechanism from the 2018 GRC decision. There was also a negative variance of $0.11 primarily related to benefits captured in our tax balancing account. This is offset in the income tax line with no effect on earnings. FERC and other operating revenue had a positive variance of $0.05, largely due to higher rate rates. Second, O&M had a positive variance of $0.11 primarily due to higher regulatory deferrals related to wildfire mitigation activities and customer uncollectibles, and from approval of the GRC Track 2 settlement. Third, depreciation had a negative variance of $0.07 due to higher ratings. Lastly, FDE's EPS in the quarter was lower by $0.07 because of dilution from the increase in shares outstanding primarily associated with the equity offering in May 2020. I would now like to comment on FDE's capital expenditure and rate-based growth forecast, which are shown on page 4. We continue to see opportunities to significantly grow FDE's rate base driven by investments in electric infrastructure. The capital program reflects expenditures of $15 to $16 billion between 2021 and 2023. This represents compound annual rate based growth of .6% over two rate case periods after request level. Our total capex forecast during this period is unchanged as we are awaiting a proposed decision in FDE's 2021 GRC Track 1. In 2020, FDE's capital spending was $5.5 billion, approximately $400 million higher than forecast, primarily as a result of higher fire restoration costs. For 2021, FDE has developed and will execute against a robust capital plan that targets key programs while maintaining flexibility in Please turn to page 5. While the commission's schedule calls for a proposed decision this quarter on Track 1 of FDE's 2021 GRC, based on the level of inquiry to date from the CPUC compared to our past experience, we believe it is unlikely that FDE will receive a PD by the end of the first quarter. We remain hopeful that FDE will receive a PD in the second quarter. As a reminder, the CPUC can vote out a final decision no sooner than 30 days after it issues a proposed decision. Consistent with our prior practice, we will issue earnings guidance after we receive a final decision on the GRC. Page 6 shows a summary of the substantial progress on receiving approvals for recovery of incremental wildfire mitigation costs. FDE expects to receive over $1 billion of cash flow through September 2022 as the utility implements CPUC approval. This is in addition to ongoing securitization of AB 1054 capital. You may recall that last quarter, the CPUC issued a financing order authorizing FDE to securitize the first tranche of AB 1054 capital expenditures, approved in the grid safety and successfully closed that securitization issuing $338 million of AAA rated recovery bonds. The proceeds will be used to repay short-term borrowings issued for AB 1054 capital expenditures. In January, the CPUC approved FDE's GRC Track 2 settlement, which allows FDE to request another financing order to securitize the approved AB 1054 capital expenditures and recover the $2.5 billion of FDE. Additionally, FDE filed a REMA application for wildfire insurance premiums for the second half of 2020. If approved, FDE will recover $215 million beginning January 2022. I would now like to provide an update on the approximately $1 billion equity issuance that we have discussed previously. As Pedro noted, FDE has been making significant progress resolving pending wildfire-related litigation and thus far has settled claims that represent approximately two-thirds of the best estimate that we established. We continue to ground our financing plan in a framework that supports investment grade ratings by targeting consolidated FFO to debt in the 15 to 17 percent range. To support this outcome, EIX will issue securities with up to $1 billion of equity content in 2021, consistent with the previously identified need. We will consider a range of options to achieve this equity content, including preferred equity, internal programs, and if needed, our existing ATM program. We will be flexible regarding the specific timing and monitor market conditions to efficiently finance the need. Beyond this year, we expect to have minimal equity needs associated with our ongoing capital program and will plan by these after receiving a final decision in the 2021 GRC. Overall, the company is well positioned to achieve the growth associated with the safety and resiliency investments being made in the grid and the longer-term opportunity associated with our clean energy objectives. That concludes my remarks.

Let's see. Please open the call for questions. As a reminder, we recommend you to limit yourself to one question and one follow-up so everyone in line has the opportunity to ask questions.

Yes, sir. If you would like to ask a question, please press star 1 on your phone. One moment for the first question, please. First question comes from Julian Demolin-Smith from Bank of America. Your line is open,

sir. Hey, good afternoon, everyone. Thanks for the time and the opportunity. Good. Thank you very much. We appreciate it. Perhaps if I can start with the balance sheet here. I'm just curious to get a little bit of an update. I appreciate your remarks, but curious on how you would characterize the conversations with the rating agencies and where you stand with Cushion. I know the GRC is outstanding, but if you can provide any context as to how you think about your metrics relative to what the agencies are thinking about, I would really appreciate any commentary here. Again, I appreciate perhaps commenting around perhaps the proposed GRC, your file, for instance.

Sure, Julian. As you can probably imagine, we are talking to rating agencies all the time. We're talking to them about our operational risk mitigation as well as just what's going on more generally in California and providing them with updates as you have with all of you, where the settlements landed back last year and all of that. We've been having those sorts of conversations. As we've mentioned before, we think that the equity plan that we have in place, the financing plan that we have had in place and announced last year is very supportive of the FSO to get range that we're targeting and supportive of investment grade rating. I'm sure you've read all the recent reports that the agencies have put out. The metrics on a look-back basis are skinny, but that's why the plans issue equity and to move forward with that so that we can support the balance sheet appropriately.

Got it. Appreciate it. Then if I can pivot over to the PSPS commentary, I appreciate what you guys provided in the remarks. Can you elaborate a little bit on the action plan and the expectations for response from CPC around their inquiry with respect to the PSPS events from the last year here? What should we expect in terms of process at a minimum, if anything?

Yeah, I'll start with this and Maria, I have more. Kevin Payne is also on the line so he can add as he said. Just a process, you saw the letter that President Batchelor sent. You monitored the hearing that the CDC had where Kevin and Steve Powell and other members of the team participated. That provided a lot of frankly good helpful input from commissioners and communities and other state agencies. Based on that, SCE developed the action plan that has a series of steps and commitments. You saw there are some things in there around our continuing work on trying to minimize just the impact and scope of PSPS. I would put that in the category of work that's been going on and continuous. Areas like continuing to do polysectionalization and tend to work on continuous improvement of weather modeling and the like to just really to help to narrow the gap between the approach we have, which is frankly the right approach for SCE to have, notifying customers based on forecast conditions but then de-energizing on real time conditions. For more that we can narrow the gap between the number of customers that get notified versus those who get de-energized by having better and better forecasting and modeling, that helps. You saw some actions around those lines but I'd say a lot of the focus was really on how do we process communications with the emergency agencies, with government, with community leaders, with end-use customers. You saw member actions around that. In terms of process, there's going to be a series of meetings every couple of weeks for the next while with commission staff just to continue to keep them updated. SCE has taken the step of now dedicating a vice president to PSDS, who's a strong leader, Taki Esu, and he's moving from the T&D business to over the next few months, spend all of his time along with the dedicated team on the PSDS improvement approach. That's a somewhat informal process and then there's the action plan, more functionality to it and formal discussions with the commission on how it's coming along and checking with them. Frankly, wanting to make sure the BSE team can move on all the elements and meet its commitments. Kevin, anything you would add there?

I think you covered it really well, Pedro, the pieces of the action plan and also the process with the commission. Good.

Thanks, Kevin. Thanks, Julian.

Excellent, Gene. Cheers.

Thank you.

Next question comes from Jonathan Arnold from Vertical Research. Your line is open.

Good afternoon, guys. Thank you. If I could ask one on the success you've had with settling the legacy wildfire claims and appreciate the quantifications in simple terms around the two thirds. Have you seen any change in the pace of being able to move these things along now that you've reached the subrogation settlement with Woolsey? Is there anything you can report for the latest update, Pedro? I'll

give you a quick answer, Maria. We have more. The remaining plaintiffs are largely individual plaintiffs. Just by the nature of that, you're now talking about thousands of individual cases. In many cases, multiple individual plaintiffs might be represented by a common legal counsel. You might see packages of settlements that can be done. It's just a more time-intensive laborious process to work through that. There is a more formal process that's been established on the Thomas Connickstein much like cases. We're working through that. We're working with individual plaintiffs in the Woolsey cases. It's just harder to pin down a timeframe for that, Jonathan. The team is going at it and frankly, that's a good steady pace of progress. I think from an investor perspective, you'll see the outcome of that every quarter as we update the council members that we shared with you today. What am I missing there, Maria?

I think that's a take. We have a process on Thomas Connickstein in March slides where we are trying to move through with various plaintiffs. It's not going to be sort of endpoint that we can pinpoint for you and back to Jonathan. As Pedro points out, we'll be updating that every quarter. You'll see the progress as it occurs.

Slide 9 is going to be a live thing,

effectively. Very much so. It's really just to put a fine point on it. Don't expect a big bang when it comes to individual plaintiff cases. You should expect just continued measure of progress because it's case by case. Those cases are all very individualized, different stories of facts and circumstances for a homeowner in this kind of area versus a business owner in that kind of area.

I think this is a good way of helping people track it though. I appreciate that.

Thanks for the feedback. May

I just ask one other thing? You've obviously said that the GRCPD might not come until the second quarter. At what sort of point does delay start to affect your decision making about spending capital and sort of throwing you off a bit as has happened in the past? How long a delay could you sort of work with?

Well, obviously we like to know sooner rather than later, but from an operational perspective, what we've done this year, which is what we've done in the past in the first year of the GRC's cycle as well, is we've just planned the work. We're going to do the work. We're going to progress against it. You can see that the capital plan is very robust in 2021, but we have the flexibility in the back end to adjust based on what the final decision comes out with. So I think we have degrees of freedom there. Again, we'd still like to get the decisions in there rather than later, but from an operational perspective, I think we have it well in hand.

Great. Thanks a lot. Thanks, Jonathan.

Thank you. Next question comes from Steve Fleischman from Wolf Research. Your line is open.

Hi, Steve.

Hi. Good afternoon, Pedro. Thank you. Just on the comments on the GRC timing, you mentioned that based on the CPUC questioning later, is it just a lot more questions than normal or just the timing of things? Or just any more color on that comment, please?

Yeah. It's really more about timing. We have experience with these cases every three years. I guess now it'll be every four years after this one. And so as the PD is getting put together and as the commission staff go through the analysis they need to do, you typically see different pace and nature of questions as you get closer to the PD. And we haven't really seen a lot of that yet at this point. So that's what suggests to us that a PD is not likely imminent within the quarter. So it's really about, there's just a different set of questions, kinds of questions that you get as you're getting down to that final evaluation and writing of the PD and staff don't seem to be at that point yet.

Okay. Great. That's helpful. Thank you. And then with respect to the equity commentary, I think you said a billion of equity content. So that's, I guess if you did prefer, there's some things that are not full equity content. You're kind of saying focus on equity content, not total dollars. Is that

the way to think about that? That's right. As we've said in the past, we are trying to think about this very holistically, monitor market conditions. So when we talk about equity content, it's the equity content that we're targeting. So absolutely right to you.

Yeah. One last question along those lines. I'm sure you saw that PG&E did this transmission tower sale of access to SBA. Is that something that you could potentially look at as well?

Yeah. So we did see the transaction and it's an interesting sale team has been learning about it. There may be some somewhat different circumstances for FCE in that we do have obviously transmission towers with attachments on them already today, like PG&E did. In our case, they're part of a bit more comprehensive telecom business Edison Care Solutions, which is essentially a competitive telco inside the utility that not only does sell antenna attachments, but also has managed fiber services, dart fiber, as well as lit fiber, providing bandwidth to carriers. And so in SES case, there's that broader telecom business that also operates under a little different framework. I noticed that there's some revenue sharing that the PG&E deal contemplates. SES business operates under a different revenue sharing mechanism. So there's just a number of different bolts and whistles that make for a different maturity of the business and different scope and scale today. So the PG&E transaction might not be fully transferable or applicable.

Okay. Great. Thanks for

that.

Thank you.

You might be surprised I said so much about a telecom business, but it's because I used to run it like 20 years ago.

Yep. Thank you.

Thanks a lot, Steve.

Thank you. Next question comes from Jeremy Tenet from JP Morgan. Your line is open,

sir. Hi. Good afternoon. Hi,

Jeremy.

I just want to go back to slide nine for a minute there. And you discussed that after the Woolsey recovery, you expect to exhaust insurance. Can you file for a CPUC recovery of settlements or are there other kind of gating items that we should be thinking about here?

Yeah. So if you look to the past as sort of an indicator, our experience has been that the commission generally wants to understand sort of the quantum of the ask before they make decisions around recovery. So I think we have a little ways to go still to get a total size of the ask that we would make ultimately to the CPUC. Obviously, you know, we said before that prudently incurred costs, we will be asking for recovery. You know, at this point, based on history and prior precedent, we can't say that that was probable of recovery, which is why we took the charge a couple of years ago. But that's generally the framework that the commission has.

Got it. That's very helpful. Thanks. And just thinking about, you know, PSPS discussions and just the environment in the state right now, just wondering if you might be comment on how you see overall kind of relationships, political risks currently, you know, in the state. Any thoughts you can provide to be helpful?

Yeah, I'm happy to chip in on that. Look, I think the headline is that we continue to view California as one of the most constructive states in the country when it comes to legal regulation, right? And it's both because of the backward looking and current mechanisms like the fact that we have our fully looking rate cases, we have the balancing accounts for elements like procurement purchases, energy procurement, I should say, we have decoupling, right? So you have a number of elements that have been here for quite a while that make for a constructive environment. You also have, frankly, looking more towards the future, a state that's been fairly aggressive in terms of wanting to push the edge of technology and, you know, have as one of utilities to play a significant role in advancing the ball for the sector, right, for the benefit of California customers. That's meant that utilities have to take on some added operational risks in managing more distributed resources in, you know, our peers in other states or in having deeper penetration renewables or being earlier in the curve around storage and the like. And that has lent itself to providing an opportunity for, you know, ROEs that have reflected a premium based on those risks that we are being asked to manage. And then finally, you know, looking solidly well out in the future, it's a state that is really committed to decarbonizing the economy. And so, you know, you've seen through our papers like the Pathway 2045 and re-managing the grid papers that, you know, you see that that decarbonization getting to net zero for the state will require a significant ramp up in renewable and other carbon free, you know, resources along with storage. This will lead to a dramatic increase in load across the state, 60% or so increase in order to then electrify a lot of the economy. And that all requires a really robust grid, you know, with significant more investment than what, you know, we have in place today to make that all happen. So that all adds up to a good opportunity for the utilities. Now, by the way, it's also a good opportunity for the customer because, as I said in my previous remarks, we see all of that leading ultimately to a 30% decline in the total energy costs that the average customer has got in 2045. It may put some pressure on utility bills, but it will help bring down overall costs for the customer and make, you know, the state more affordable. Now, that said, there are always bumps in the road, you know, there are things that can give folks pause. The wildfire experience has been a challenging one or less over the years. We've had a lot of encouragement in, you know, getting items like 801054 to help create a restored framework. We're still going through implementation of that. I know that there is, you know, some discount that the utilities are carrying today relative to our states. And hopefully over time, as investors see that the framework is working, that, you know, the physical risks are being mitigated and that the structure is there to help mitigate the financial side of the risk too. That'll help to, you know, get investors sort of fully comfortable with that and better align, you know, the values of California opportunities with the long-term opportunity that we have. You know, one final item is there's a lot going on and it's all going on the middle of COVID. So, you know, I feel for the CPUC staff, you know, the 800 or so of them have a lot on their plates. I think person in Batchurus, I've mentioned in the comments, has done a great leadership and focusing the commission on that clean energy future. I think generally she's also helped the commission to, you know, in general be timely in its decisions. And you saw that in, you know, elements like the Track 2 success we had recently, but there's a lot on their plate. So while I'm a little disappointed that we may not end up seeing a GRC Track 1 PD, you know, this quarter, I know that they're on the case and they recognize the importance of overall primary decisions. And then when it comes to something like PSDS, you know, there's been some tough feedback we got. So, you know, a lot of it, frankly, was merited and it's a good learning opportunity. And I, commend Kevin Payne and the team at SCE for having sat there for four and a half hours and listened and, you know, take a note and reflected that good feedback in the PSDS action plan that SCE filed. So, you know, there will be bumps in the road in any relationship, but I think overall, if you look at, you know, maybe a couple of trees that get in the way now and then, but if you look at the forest, it's a really interesting forest for the long term.

Got it. That's very helpful there. And maybe picking up with electrifying, you know, specific to the transportation sector there. You spoke about this in the past, you spoke about it and you prepared remarks. Just wondering if you could provide some perspective, I guess, for the easy outlook, you know, how it works today versus maybe it worked a couple years ago and, you know, kind of down the future. How big do you think this opportunity is for EIX?

So, we started talking about this a few years ago. You know, we had our charge rating application. I think our BATHLEE 2045 paper at the time was forecasting something like a need for 7 million electric vehicles in California by 2030. You know, at the time, I'm sure the state was talking about a 5 million mark. You know, since then, you've seen the state really look at doubling down on electric vehicles and, you know, progress like Governor Newsom's executive order for zero emission vehicles, you know, 100% zero emission vehicle sales by 2035. That says something right there about the growing commitment by the state and frankly driven by growing realization that that is a key tool and one of the most affordable tools to get to decarbonization, you know, at the end of the day. The other angle I share on this is then there's the market, right? And so, when we started talking about this, there was the vote. You know, I remember when I got my first vote in 2011 and the new model year and, you know, my colleagues were driving to look at first test lists and a whole lot of EVs out. Now you're looking at a rollout, just reading one of the latest articles where I think over the next year there's going to be what, something like 20 or 30 new model offerings across auto OEMs and it's an area where U.S. automakers are realizing that if they don't run fast, they could lose leadership to Chinese automakers or European automakers. So, you know, seeing things like Ford's commitment of 20-some billion dollars in investment towards EVs over the next several years, seeing GM's aspiration to not have internal combustion engines anymore in a decade or so, that is a very different landscape from where we started four or five years ago and it tells you that this is happening, it's real and I suspect like other technology innovations like, you know, the deployment of cell phones, folks may be surprised by how quickly that S-Griv takes off.

Got it. That's very helpful. Thank you for that.

Thanks, Jim.

Thank you. Next question comes from Michael Lapidus from Goldman Sachs. Your line is open, sir.

Hi, Michael. Hey, Pedro. A little bit of housekeeping question. So, capital spend for 2020 came in about $500 million higher than what you all had put out when you reported third quarter earnings or just after third quarter earnings. First of all, what drove that $400 to $500 million being done just so quickly? And then second of all, does that all, you know, is there any change in the capital spend program potentially in terms of what you think about long-haul transmission-related spend or do you think you're still in a five or seven-year cycle where there's more maintenance work on the transmission grid, there's not a lot of new sizable scale development there?

Well, I'll go take the first piece at least, a little bit of a second, and I'll let Pedro also chime in on his thoughts on long-haul transmission. But so that delta in the capital spending between last quarter and this quarter was largely driven by wildfire restoration costs. So, you will recall that late last year there were a number of large fires in our service territory, particularly up in the northern part of our service territory around Big Creek. And so a lot of the spend that's been going on since then has been to really get all of those facilities back into service and to repair them, et cetera. So that's really the driver there, Michael. We have to go through analysis and see, you know, sort of what in there was otherwise going to have been replaced or upgraded, et cetera, with incremental, but that's largely the capital change from last quarter. In terms of, you know, transmission and, you know, we're still in the cycle, I think, you know, obviously the state's, you know, planning for the future, the future that Pedro just described in earlier remarks, and, you know, we have to look to the CAISO to do that planning. There's obviously a lot of work going on around the need as well, both, you know, in integrated resources plan, integrated resource plans, as well as at the CAISO. But I'll let Pedro, you know, share his thoughts as well.

Just maybe a quick sound by Maria is that, again, you know, you may have heard me share this before, Michael, from our past 2045 analysis, but that analysis estimated that California would need to add 80 gigawatts of bulk power to wholesale level renewables and 30 gigawatts of wholesale bulk power level storage by 2045. That's in addition to 30 gigawatts of distributed generation and 10 gigawatts of distributed behind the meter storage. But all that, you know, would require something like $175 billion investment for the resource side, for the, you know, renewables and storage side. And the counterpart to that is that you need something like $70 billion in wire side investment, with most of that being for, you know, transmission, whether it's, you know, new lines or enhancing of current lines. Now that's statewide, right? So that's not all SCE, but that just gives you a sense of how big the investment need will be in order to accommodate that electrified future to the carbonized economy. And then as a reminder that under the current per quarter 1000 structure, if the CAISO determines that an existing line needs to be upgraded, then the utility has right of first refusal, you know, to do that upgrade on its line, a line that it already owns and operates. If it's a brand new line, that's not an extension of an existing line, then that is big out competitively. And I would expect the utility to, you know, suit to compete with third parties for, you know, for that new built. So, you know, hard to quantify what the specific SCE opportunity would be from all of that, but it's clearly you know, a very large pie that will need to be met across the state. And I expect that SCE will, you know, certainly play a significant role within its territory for that.

When do you think we could start seeing that roll into three or four year or three to five year forecast views? Like when does it, when do you think the southern part of the state might actually start to need it?

Yeah, that's a really good question. I'm not sure I'm going to have a sharp answer for you right now, Michael. You know, partly because the CalISO, I don't think turned the crank yet on the underlying analysis for, you know, what lines and in what timing. You know, my guess is that, or my sense is, not guess, my sense from the analysis is that a lot of that spend may be post 2030 spend because that's when you really see the load pick up too. You know, in our analysis load, which has been fairly flat statewide to slightly decline for last decade to 2030, you know, interestingly continues to be fairly flattered, right? Because you have a lot of electrification between now and 2030 being counterbalanced by, you know, continued distributed generation deployment as well as continued energy efficiency. But we see a big, you know, elbow, you know, turn in the curve, upswing post 2030. And that's where the state really picks up, you know, the bulk of that 60% load increase that I talked about before. It's really happens mostly between 2030 and 2045. So that may suggest that a good chunk of that build maybe post that. But in the meantime, you know, you've seen, you know, our capital spend so far, as Maria described, that we had a bump up from just that Creek fire restoration last year. And so I hope we don't have to do fire restoration like that for, you know, for any future fires. But, you know, we continue to say that we see an ongoing opportunity for significant capital spend just for the core capital investment in the utility. And so I think about that long haul transmission that becomes an adder that, you know, certainly supports the long term growth for the company.

Got it. Thank you, Pedro. Much appreciated. Same, Maria.

You bet. Yeah. Thanks, Michael.

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

Thank you for joining us today. And please call if you have any follow-up questions. This concludes the conference call. Have a good rest of the day and stay safe. You may now disconnect.