Edison International Trims Capex Forecast After Rate Case

Executives of Edison International Inc., the parent company of Southern California Edison, have lowered the top end of their four-year capital spending plan forecast by $3 billion while lifting the floor of the rate base growth range they expect.

The capex update from President and CEO Pedro Pizarro and CFO Maria Rigatti came shortly after California regulators approved Edison International’s latest general rate case and alongside third-quarter results, which showed a net profit of $888 million, up from $577 million in the same period of last year, on operating revenues of more than $5.7 billion. Edison’s leaders now expect they’ll spend between $28 billion and $29 billion from this year through 2028 versus their previous guidance of $27 billion to $32 billion.

The revised plan trims the company’s projected spending growth each year of the plan, including a $700 million drop this year to $6.8 billion. Pizarro told analysts on an Oct. 28 conference call that the recent GRC approval by the California Public Utilities Commission sanctions $26.2 billion of projects—down from the roughly $28 billion expected in July. Similarly, Edison teams will spend $500 million less through 2027 than previously forecast on projects sanctioned by the Federal Energy Regulatory Commission but then add $200 million worth of capex to their 2028 work.

Those forecasts are based on near-term load growth expectations of between 1% and 3%, which Pizarro and SCE President and CEO Steve Powell say is relatively evenly balanced and not—as with many of Edison’s peers around the country—counting on large contributions from data centers. That should translate into annual rate base growth in a range of 7% to 8% through 2028, the bottom end of which is up a point from executives’ previous guidance.

“New vehicle purchases that are zero emissions [are] really bolstering […] transportation electrification load growth. It’s probably about one-third of the driver,” Powell said. “We continue to see residential new home starts and new residential development happening across our territory. So that’s another key piece. And then the commercial industrial load growth—and that’s a breadth of different types of industries, whether it’s defense, manufacturing [and] down to logistics.”

As they suggested this summer, Pizarro and Rigatti expect their capex plans to grow beyond their current range because of additional growth opportunities. Those includes investing in advanced metering technologies—the executives plan to file with regulators on that front early next year—as well as FERC transmission projects starting in 2029. Each of those buckets could amount to at least $2 billion of additional capex over time.

Shares of Edison (Ticker: EIX) were down slightly to about $56 on Oct. 29, the first trading session after executives’ Q3 report. Over the past six months, they have lost about 5% of their value, which has trimmed the company’s market value to about $21.5 billion.