Pedro J. Pizarro
President and Chief Executive Officer at Edison International
Well, thank you, Sam, and good afternoon, everyone. Edison International's core EPS for first quarter 2024 was $1.13. We are pleased with our start to the year and we are confident in affirming our 2024 core EPS guidance of $4.70 to $5.05. We also remain confident in delivering on our long term EPS growth targets of 5% to 7% for 2021 through 2025, and similarly for 2025 through 2028. Our conviction remains grounded in the drivers that continue to support our outlook.
Starting with SCE's legacy wildfires, the utility continues to advance the process of resolving claims. Based on the latest information available, which Maria will expand on. The best estimate of losses increased by $490 million or $333 million after tax. With wildfires now a national issue, litigation outcomes outside of California are impacting the cost to resolve claims everywhere. We remain committed to achieving ultimate certainty by working through the process expeditiously and seeking cost recovery. We are confident about the case SCE has made in TKM and will make for Woolsey. I would like to reiterate that we strongly believe that cost recovery is warranted and in the public interest, and we conservatively have not reflected the significant potential in our financial projections.
On the operations front, I want to start by highlighting Edison's leadership of the industry's response to climate change. Recent wildfires across the nation have provided a stark reminder of the changing climate conditions, which underscore the need for further enhancing resiliency and adaptation as we transition to a clean energy future. SCE is a clear leader in wildfire mitigation and is sharing its expertise with peers across the industry, who are now experiencing similar conditions. We have shown that wildfire risk associated with utility infrastructure is manageable.
Also, our State has dramatically increased resources for fire suppression, including having the largest civil aerial firefighting fleet in the world. Our regulators understand the importance of financially healthy utilities AB 1054, put in place constructive prudency standards and the insurance fund. Over the past five years, SCE has invested about $5 billion of wildfire mitigation related capital and expects to invest more than $6 billion over the next five years. This investment ranks among the highest levels in the utility sector.
On Page 3, you can see the numbers and their results. I will point out that SCE has not seen ignitions due to the failure of covered conductor, and the program is well recognized for its effectiveness. Putting this all together into what it means for reducing future risk of losses from wildfires, we estimate the risk is 85% to 88% lower than pre-2018.
Turning to Page 5, let me highlight three key points that enhance the significance of this reduction:
First, physical mitigation dominates. Unlike heavy reliance on operational measures like power shutoffs or fast curve settings, the primary driver behind this risk reduction is physical mitigation. This is important because it means a much lower burden for customers.
Second, SCE's estimate comes from Moody's RMS' industry-leading model, widely trusted by insurers. This model considers intricate factors; terrain, vegetation, historical data, and more to predict wildfire probabilities.
Third, to estimate the probabilities of losses in dollar terms, we employ a stochastic model. This model runs 50,000 simulations considering potential ignitions and fire sizes, while incorporating SCE's mitigation strategy. This approach contrasts with simpler deterministic methods used by some other companies and regulators that only analyze past events. In summary, our rigorous data-driven approach, validated externally, paints a clear picture. SCE's risk profile today is dramatically different than in the past as a result of the utilities mitigation efforts.
To focus specifically in grid hardening, Pages 6 and 7 highlight SCE's significant progress to-date. I'm pleased with the progress our team has made, and I look forward to continued progress making our communities even safer. By the end of 2025, SCE expects to be approaching 90% physical hardening of its distribution lines and high fire risk areas. With over 7,300 miles already underground and more than 5,700 overhead miles hardened, SCE's total hardened miles surpass those of all other California IOUs combined. We're really proud of these efforts to swiftly enhance grid safety for SCE's customers.
Turning to load growth after years of relatively flat demand, we are seeing 2% to 3% annual growth in the coming years with an inflection point above 3% annual growth beginning in 2028. In SCE service area, we project this growth will be driven by the continued adoption of electric vehicles, increases in industrial electrification, and higher penetration of building electrification.
In California, one-fourth of new cars sold in 2023 were zero emission vehicles, and that trend is continuing into 2024. As another indication of this acceleration, the State recently reached a milestone of over 100,000 public EV chargers now installed throughout California, and that is on top of over 500,000 at home chargers. Southern California already has a significant data center presence, so while we also see load growth potential from this sector, we expect Transportation Electrification to drive a more substantial increase in the region's electricity demand.
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 IOUs. This discipline of managing our costs is a continuous focus. For example, we previously highlighted that the 2025 GRC application included $41 million of annual O&M savings as an immediate benefit for customers. Well, building on that, in SCE's rebuttal testimony submitted earlier this month, the utility identified another $35 million of annual O&M savings to further mitigate the revenue increase.
2024 is very much a year of execution across the business, and we are pleased with our start to the year. SCE continues to make significant investments and make the grid safer year-after-year, we continue to see constructive regulatory decisions. SCE is also making progress toward full resolution of the legacy wildfires. All of this allows us to remain confident in our ability to achieve our near and long-term commitments.
I will conclude by reemphasizing that Edison International offers an excellent investment vehicle to participate in California's Clean Energy transition. SCE is hardening the grid every day to the benefit of customers and investors, and its wildfire mitigation execution has shown positive results for five wildfire seasons running. California is at the forefront of electrification, decarbonization and climate adaptation. As an electric-only wires-focused utility, SCE is in a strong position to focus on the future, which will be electric-led. Our commitment to clean energy leadership and innovation is well recognized in the industry and has only been further elevated as the impacts of climate change become more prominent. Ensuring the greatest reliable, resilient and ready is paramount to achieving the clean energy transition and the driving theme of our investments and growth.
With that, I'll turn it over to Maria for her financial report.
