Pedro J. Pizarro
President and Chief Executive Officer at Edison International
Thanks a lot, Sam, and hello, everyone. Edison International's core EPS for second quarter 2024 was $1.23, bringing year-to-date core EPS to $2.37. With this strong start to the first half of the year, we are confident in reaffirming our 2024 core EPS guidance of $4.75 to $5.05. Based on the progress in SCE's 2025 general rate case, including many partial settlements, we are also confident in getting a strong outcome for customers. The funding authorized in the GRC to continue making investments in a reliable, resilient and ready grid is the linchman for achieving our 2025 EPS guidance and delivering a 5% to 7% EPS CAGR to 2028. My remarks today include four important insights.
First, low growth trends are materializing sooner than expected, reinforcing SCE's substantial capex opportunities with potential upside. Second, SCE is now forecasting system average rate increases through 2028 to be closely aligned with inflation rates, ensuring more stable costs for customers. Third, the company's overall operational and financial risk profiles have significantly improved and are only getting better. Fourth, Edison International is leading the charge towards a carbon-neutral California, with sustainability at the core of our strategy.
Leading up with load growth trends. I highlighted last quarter that we are seeing 2% to 3% annual sales growth in the coming years with an inflection point above 3% annual growth beginning in 2028. However, these demand trends are materializing sooner than expected. As you can see on Page 3, our 10-year load growth forecast has increased substantially in just a relatively short time since SCE's 2022 distribution system plan was prepared. We now expect 35% higher 10-year load growth, far exceeding all prior internal and external forecasts. One significant driver is more customers calling SCE to request load growth projects, including commercial developments, particularly logistics-related buildings, transportation electrification and new residential housing.
In parallel, forecasted policy-driven electric vehicle and building electrification demand has increased. We expect new policies will drive higher customer adoption in the near future, and we have incorporated this information so the grid is ready when customers reach out to us. We see two major implications from growth showing up sooner and at a larger scale than anticipated. Over a 10-year system planning horizon, grid upgrades will need to be implemented several years ahead of schedule to accommodate the increased load. As SCE highlighted in its GRC request, serving customers with a reliable, resilient and ready grid will require the utility to significantly expand the electric system through substantial investments that will drive continued rate base growth.
As our investment levels grow to support economy-wide electrification, affordability remains top of mind. We have demonstrated cost leadership over the years, resulting in the lowest system average rate among the major California investor-owned utilities. You will notice that SCE's current system average rate of $0.267 per kilowatt hour is actually lower than at the start of the year. On June 1, SCE reduced rates by about 2% and driven by removing historical costs that have been fully recovered in rates. SCE recently filed an application with the CPUC for approval of its 2025 fuel and purchase power costs, which are projected to be lower than in 2024.
Based on current projections, this application would reduce the system average rate by another 9%. This offsets most of the increase in rates that will follow the 2025 GRC final decision. On Page 4, we now project SCE's rate increases through 2028 to be closely aligned with local inflation levels. To put this in context, let me emphasize two important underlying assumptions.
This 2.6% projected rate growth incorporates both the requested increases in SCE's GRC and full recovery of SCE's legigacy wildfire costs. As you will recall, SCE has recovered a significant amount of historical costs tracked in regulatory accounts over the last few years. These historical costs rolling out of rates, combined with rising electricity consumption, partially offset the increases I just mentioned.
You have all witnessed how the company's overall operational and financial risk profiles have significantly improved in recent years. On Page 5, we reemphasized the estimated wildfire risk reduction of 85% to 88% compared to pre-2018. As you know, we've been reporting on the $1 billion annual and $3.5 billion over three years losses because those tied to AB 1054. They are the threshold for accessing the wildfire insurance fund and SCE's liability cap when we began reporting this metric. We are now also showing you the loss level that would result from hitting the liability cap in a single year which is about $4 billion. The risk reduction of this scenario is over 90%. The differentiator for SCE's wildfire risk mitigation and operational risk profile is the substantial physical grid hardening it has completed.
A key benefit of physical grid hardening is that it reduces the burden on customers arising from heavy reliance on operational measures like power shutoffs or fast rip settings. In just 5.5 years, SCE has deployed approximately 5,900 miles of covered conductor. As you see on Page 6, combined with miles underground, SCE has 84% of its planned hardening complete, and that's permanent physical and observable risk mitigation. It is getting even better. By the end of 2025, SCE expects to be approaching 90% of total distribution lines in high fire risk area being hardened. As you can see on Page 7, SCE is leading the way in physical risk reduction with its total hardened miles and high fire risk area exceeding those of all other California IOUs combined.
In addition to all the successful wildfire mitigation work by SCE, and also by peer utilities, the State of California itself has the strongest wildfire risk reduction profile in the nation. As outlined on Page 8, that is due to notable improvements via legislation, regulation and suppression. California's legislature passed the landmark Assembly Bill 1054 in 2019, which codifies the prudency standard for IOUs, created the $21 billion wildfire insurance fund and establish a utility liability cap. These are now models informing other states as the threat of wildfires have spread nationwide. On regulation, the CPUC and other agencies have implemented processes for rigorously reviewing and approving wildfire mitigation plans and safety certifications.
On suppression, California has consistently shown its commitment to resource allocation. CAL FIRE's budget has doubled since 2017 to '18, along with an 80% increase in staffing. CAL FIRE has the largest civil aerial firefighting fleet in the world and recently contracted for 20 additional helicopters and four airplanes. SCE is also contributing to local fire agency suppression capabilities through the funding of the year-round quick reaction force. This is made up of the world's largest fire suppression helicopters with unique night firefighting capabilities. This partnership with the L.A. County Fire Department, Orange County Fire Authority and Ventura County Fire Department helps suppress fires regardless of how they start, and it helps protect the communities SCE serves. This is the sixth straight year the utility has funded aerial suppression resources as part of its wildfire mitigation efforts.
Turning to sustainability. We continue to lead the way towards a clean energy future. SCE is a leader in California's efforts to reduce greenhouse gas emissions while also focusing on the grid investments needed for a more resilient equitable clean energy economy. I am proud of all that we've done to execute on our long-term net 0 commitment in alignment with California's ambitious policy goals. I encourage you to read our 2023 sustainability report for details about our accomplishments, our goals and our long-term ESG commitments. Pages 9 and 10 highlight a few of our accomplishments.
In 2023, SCE delivered 52% carbon-free power to customers and that's 55% cleaner than the national average. SCE contracted approximately 2,200 megawatts of energy storage, bringing the total at year-end to about 7,200 megawatts and that's currently standing at 8,100 megawatts. This is simply one of the largest portfolios in the nation. Lastly, the utility met or outperformed nearly all wildfire mitigation targets last year and invested heavily in hardening the grid leading to the 85% to more than 90% risk reduction I discussed earlier.
Let me conclude by saying that Edison International is leading the charge towards a carbon-neutral California. We're committed to ensuring that the clean energy transition remains reliable, resilient, affordable, equitable and accessible to all customers and communities.
With that, Maria will provide her financial report.
