Participants

Sam Ramraj; Vice President, Investor Relations; Edison International

Pedro Pizarro; President, Chief Executive Officer, Director; Edison International

Maria Rigatti; Chief Financial Officer, Executive Vice President; Edison International

Steven Powell; President, Chief Executive Officer of SCE; Edison International

Nicholas Campanella; Analyst; Barclays

Michael Lonegan; Analyst; Evercore ISI

Carly Davenport; Analyst; Goldman Sachs

Shahriar Pourreza; Analyst; Guggenheim Securities LLC

Paul Zimbardo; Analyst; Jefferies

Richard Sunderland; Analyst; JPMorgan

Gregg Orrill; Analyst; UBS Equities

Anthony Crowdell; Analyst; Mizuho Securities USA

David Arcaro; Analyst; Morgan Stanley

Ryan Levine; Analyst; Citi

Presentation

Operator

Good afternoon, and welcome to the Edison International first-quarter 2025 financial teleconference. My name is Michelle, and I will be your operator today. (Operator Instructions) 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.

Sam Ramraj

Thank you, Michelle, and welcome, everyone. Our speakers today are President and Chief Executive Officer, Pedro Pizarro; and Executive Vice President and Chief Financial Officer, Maria Rigatti. Also, on the call are other members of the management team.
Materials supporting today's call are available at www.edisoninvestor.com. These include our Form 10-Q, prepared remarks from Pedro and Maria and the teleconference presentation. Tomorrow, we will distribute our 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 this carefully. The presentation includes certain outlook assumptions as well as reconciliation of non-GAAP measures to the nearest GAAP measure. (Operator Instructions)
I will now turn the call over to Pedro.

Pedro Pizarro

Well, thank you, Sam, and good afternoon, everyone. Just three months have passed and see devastating wildfires and all of us at Edison continue to keep everyone affected in our thoughts. We are working closely with state and county leaders and the communities of Altadena and Malibu to rebuild wildfire impacted areas stronger than ever. I will share further updates in a minute after touching on our earnings headlines.
Today, Edison International reported core earnings per share of $1.37 compared to $1.13 a year ago. However, this year-over-year comparison is not particularly meaningful because SCE has not received a decision in its 2025 General Rate Case. SCE recognized revenues from CPUC activities for both the first quarter 2024 and 2025 and largely based on 2024 authorized base revenue requirements with 2025 adjusted for the lower authorized CPUC ROE.
Looking ahead, we remain confident in our ability to meet our 2025 EPS guidance and deliver a 5% to 7% core EPS CAGR to 2028. Maria will discuss our financial performance in her remarks. We recently provided Governor Newsom with SCE's initial comprehensive plans to rebuild the impacted electrical distribution infrastructure in the Palisade and Eaton fire areas. Under this plan, SCE would underground more than 150 circuit miles, including nearly all distribution power lines in high fire risk areas within the burn cars of the affected communities. Once constructed, this grid hardening will increase reliability and make electrical distribution infrastructure more resilient to high wind and other extreme weather events, helping us better protect and serve our communities.
On the Eaton fire, SCE's investigation continues. Since our last update, the utility completed additional physical and video inspections of the electrical equipment in Eaton Canyon which were carried out in collaboration with stakeholders. Analysis of the images, videos and equipment is ongoing. The utility also recently began the removal of portions of the idle facilities in Eaton Canyon for further expert review.
While SCE has not conclusively determined that its equipment was associated with the admission of the Eaton fire. It is also not aware of evidence conclusively pointing to another source of edition. Absent additional evidence SCE believes that its equipment could have been associated with the addition of the Eaton fire.
As such, and in light of pending litigation, it is probable that EIX and SCE will incur material losses in connection with the Eaton Fire. As always, we are committed to being transparent throughout this process. With significant media coverage surrounding the Eaton fire, we have noted numerous instances where facts have been misrepresented.
We address factual errors and misstatements. We launched a new page on our website called Edison for the record. I encourage you to take a look and a link can be found on page 3. I will reiterate that we continue to believe that SCE is a reasonable operator of its electric system, if it is determined that SCE's transmission equipment was associated with the addition of the Eaton fire, based on the information we have reviewed thus far, we remain confident that SCE would make a good faith showing that its conduct with respect to its transmission facilities in the Eaton Canyon area was consistent with actions of a reasonable utility.
Turning to the legislative front. We have continued to engage in broad discussions with legislators and the governor's office to support the safety of our communities and enhance California's industry-leading AB 1054 regulatory framework. The conversations we've had leave us with no doubt that stakeholders understand the criticality of addressing the issue and the important role the investor-owned utilities play in supporting California's growth and economic development.
We are confident policymakers are focused on the need to strengthen and restore confidence in California's wildfire framework. On the regulatory front, I'm pleased to share that SCE continues to reach important milestones this year. The CPUC's unanimous approval of the TKM settlement agreement signals a constructive California regulatory environment.
Last month, the [Wolfe] cost recovery ALJ issued the scoping memo, adopting the scheduled SCE and intervenors jointly proposed. The next major filings will be inter-meter testimony in early June and rebuttal testimony in mid-July. The schedule also includes their motion for consideration of a settlement agreement or joint statement of stipulations of issues due in mid-August.
As we have noted in the past, SCE is open to settlement discussions if a fair and reasonable outcome can be achieved benefiting customers and shareholders. We will keep you updated as the utility continues its progress towards resolution in this proceeding. Maria will highlight other milestones in her remarks.
On SCE's 2025 General Rate Case, the ALJ recently made an administrative ruling extending the statutory deadline, which is typical and expected based on the prior calendar. Nonetheless, we continue to be optimistic that we will see a proposed decision in the first half of the year with the final decision as soon as 30 days later.
The GRC will support SCE's commitment to providing electric service that is reliable, resilient and ready for customers' needs. The utility's significant investment plan is driven by the need to resume a traditional level of infrastructure replacement work necessary for system reliability and continue its wildfire mitigation programs that protect the safety of customers and the public.
SCE's full GRC request also includes about $1.4 billion of annual capital spending on wildfire mitigation and includes hardening an additional 1,800 miles of the utilities overhead distribution infrastructure. SCE will submit its 2026 wildfire mitigation plan in May. This comprehensive WMP reflects our collective priorities, risk mitigation, public safety and affordability.
It also includes continued deployment of covered conductor and targeted undergrounding. Utility looks forward to executing its integrated wildfire mitigation strategy, which prioritizes industry-leading practices such as grid hardening, asset inspections and vegetation management. Before I turn it over to Maria, I would like to take a moment to say a big, big thank to a few very special members of our team. Last week, Vanessa Chang retired from our Board of direction directors. And we congratulate Vanessa on her retirement and are so thankful for her 18 years of dedicated service and leadership on the board.
I also want to recognize our former General Counsel, Adam Umanoff, who we previously announced, we'll be retiring in July. Adam has simply been the ideal General Counsel. He is a business leader above all, who is also a constant at legal esprit. On top of that, Adam has been a step to spread to many in our organization. And absolutely, he spent that to me.
On behalf of our Board and management team, we want to thank Adam for his outstanding service. At the same time, I am delighted to welcome Chonda Nwamu, who joined us earlier this month as our new General Counsel. Chonda brings substantial expertise within our sector and a solid understanding of California's legal, political and regulatory environments. We're excited to have Chonda here and look forward to her leadership and partnership.
All right. Maria, with that, I'll turn it over to you for the financial report.

Maria Rigatti

Thanks, Pedro, and I echo the appreciation for Adam and Vanessa and welcome Chonda. Now my comments today will cover first quarter 2021 results provide additional insight into key regulatory proceedings and update you on other financial topics. Starting with the first quarter, EIX reported core EPS of $1.37.
The page 4 provides the year-over-year quarterly variance analysis. As Pedro mentioned, the year-over-year comparison is not particularly meaningful because SCE has not received the final decision in its 2025 general rate case. SCE is booking revenues at 2024 authorized levels adjusted for the change in ROE and will report a true-up when it receives the final decision. First quarter EPS includes about $0.30 associated with the TKM settlement approval, partially offset by higher interest expense at EIX Parent and Other.
On the regulatory front, I want to echo Pedro's comment on SCE making significant progress across numerous proceedings. Let me highlight a few. First, SCE recently reached a settlement agreement with interveners and its WMCE proceeding related to wildfire mitigation and restoration. The settlement, which is awaiting CPUC approval, would authorize 100% of the capital expenditures, along with 96% of the O&M. It would also contribute about $0.10 per share of true-up earnings and about $700 million of rate base, both of which are embedded in our 2025 guidance.
Second, on SCE's 2026 cost of capital application summarized on page 5. SCE requested an ROE of 11.75% and proposed updating the embedded cost of debt and preferred equity. The request also recommends the continuation of the cost of capital mechanism and to reset the benchmark. The utility made a strong case for its ROE based on risks that differentiate California utilities from their peers and other jurisdictions. SCE's proposed schedule called for a PD in November which would allow for a final decision by year-end. Historically, the CPUC has issued timely decisions on cost of capital applications.
Third, SCE filed its next-gen ERP application with the CPUC seeking total capital investment of about $1.1 billion. The utility expects this program will provide substantial benefits to customers and enable business improvements. As a reminder, this program is not currently embedded in our capital and rate base projections. Lastly, with the $1.6 billion TKM cost recovery settlement now approved, within the next few weeks, SCE will file an application requesting authorization to issue securitized bonds.
Moving to SCE's GRC. The utilities request provides the foundation for advancing critical customer objectives. Reliability, resiliency and readiness as well as supporting our growth outlook through 2028. As you can see on page 6, we will refresh our guidance following a GRC final decision. We wanted to be proactive in sharing with you that 6 weeks after a final decision, we will provide our updated capital and rate base projections, 2025 core EPS range, long-term core EPS growth and financing plans.
Turning to SCE's capital expenditure and rate base forecasts shown on pages 7 and 8. The utility continues to execute against a capital plan that targets key programs while maintaining flexibility in later years, to adapt to what is ultimately authorized in the GRC. As I highlighted in comments going into 2025, we continue to see substantial additional capital opportunities that are incremental to the plan. This includes investments to enhance our distribution system and more than $2 billion of FERC transmission spending.
In addition, SCE plans to file an application for its advanced metering infrastructure program. to request funding to replace its smart meter fleet, the majority of which were installed more than a decade ago. This program will address technology obsolescence and offers a chance to incorporate future capabilities that benefit customers. The program is expected to provide insights into energy usage and enable smarter energy management, thereby enhancing grid efficiency.
Turning to the financing activities. I will highlight two recent transactions. In March, EIX issued $550 million of senior notes, which successfully addresses our parent debt needs for 2025. Additionally, SCE issued $1.5 billion of long-term debt as part of its planned financings for the year. Both of these offerings saw strong investor support and were significantly oversubscribed.
Moving to EPS guidance on pages 9 and 10. We are confident in affirming the 2025 range of $5.94 to $6.34 and reaffirming our long-term EPS growth expectations of 5% to 7% from 2025 to 2028, which translates to $6.74 to $7.14 of 2028 EPS.
Let me conclude by reinforcing our confidence in delivering on our financial targets. With a strong regulatory backdrop and robust rate base growth, coupled with a significant need for incremental grid investments, we are well positioned to deliver on the company's near- and long-term growth expectations. That concludes my remarks, and back to you, Sam.

Sam Ramraj

Michelle? Please open the call for questions. (Operator Instructions)

Question and Answer Session

Operator

(Operator Instructions) Nicholas Campanella, Barclays.

Nicholas Campanella

For all the disclosures today. So I appreciate the new material loss disclosure that you mentioned. And I guess just what drove you to kind of put that out there now versus in the fourth quarter update? And then I guess just now that you're in the situation -- now that you had kind of more time to digest the situation how do you kind of see the potential liability stacking up versus the $21 billion fund that you also kind of talk about in the disclosure?

Pedro Pizarro

Okay. Thanks, Nick, for the question and for the comments. As you can imagine, this is an ongoing process, right? We are only three months here since the start of the fire. The community is still recovering and will be for quite a long time.
And as I mentioned in my prepared remarks, the investigation continues. And so as I mentioned in my comments, I think one of the key factors here is that while we have not yet concluded that our equipment started to fire it was the cost of emission.
There's certainly a lot of number of pieces of call it circumstantial facts. But importantly, we also are not finding another likely hypothesis for the cost of the fire. So I think it's really when you combine those two elements, it felt appropriate to in this quarter, make the disclosure about this being a probable event.
In terms of liability, again, it's still very early days here. the liability is simply not estimable today. And I'm not sure when it may become estimable. That could take quite some time, too. There's a number of third parties out there in the public who have come up with estimates of various pieces of this.
Those seem to suggest that perhaps the buyer might be somewhere in the range of the fund. But I think it's just -- certainly too early for us to be able to make any sort of estimate around the site of liability, and therefore, I can't answer your question fully. Maria or anybody else, anything you would add?

Maria Rigatti

No, I think you covered it, Pedro.

Nicholas Campanella

Certainly appreciate the moving factors, and I appreciate that color there. And then just in regards to the financing plan refresh six weeks after the GRC decision, can you just remind us or kind of give us color on how you're thinking about how you would reflect any liabilities from the Eaton fire? Like how that -- would that go into the financing considerations at that point?

Maria Rigatti

Yes, Nick, that's a great question. It's Maria. So when you think about potential and the probable losses that Pedro talked about. Remember that now at this point in time, unlike when we were dealing with TCAM and Woolsey, we have the wildfire fund that we will be accessing -- so when it comes to it, we'll take our first $1 billion of customer-funded self-insurance, we would be paying claims from that initially, and then we would access the fund.
And the benefit of that is that we will not need to be issuing debt in order to pay claims as we did for TCAM and Woolsey, there will be another avenue for that. And that not only benefits sort of the financing plan, but obviously, that's there is a protection for the community that suffered the loss. So when we do our financing plan, we will be just basing it on sort of the normal course things that we'll be looking at, which is our capital plan, et cetera. So that is how we will be refreshing a plan and that's what we'll be communicating once we get the GRC final decision.

Operator

Michael Lonegan, Evercore ISI.

Michael Lonegan

Just wondering if you could share more color about the latest options being considered for updated wildfire legislative in California. What should be confident the legislation will give investors more certainty about effective financial backdrop in the state? And then also are you confident the legislation will get past this session ending in September.

Pedro Pizarro

Your phone line was just a little shaky, but I think I got the bulk of that. If you're asking about the prospects for legislation and what drives a level of confidence. So as I mentioned in my remarks, Mike -- the good news here is that clearly, the governor's office is engaged as our legislative leaders. They're getting their arms around what is admittedly a very complex issue, but they are on the case, and we are having discussions as folks are looking for information. But again, it's very early days here in terms of those discussions.
I think what gives me confidence is that, let put it this way, we are confident that they understand the need for expansion of the AB 1054 framework and the need for action. Beyond that, though, while I think that there's a sensing a lot of good intent around action in this session, we need to let this play out and continue to engage constructively on our side. There's never any guarantees in anything like this, but certainly very encouraged by the level of diligence and engagement that I'm seeing on the part of key leaders across the legislature and the governor's office.

Michael Lonegan

And then I think last disclosure on your Moody's risk management model, you said you had reduced the probability of catastrophic wildfire by 88%. And obviously, wildfire mitigation has been focused on distribution assets, and this one could potentially have been on transmission. Just wondering, have you had discussions with Moody's about updating that probability? And if so, where you stand now?

Pedro Pizarro

Well, I said a little differently for starters, and I'll ask Steve Powell to weigh in here as well. But the Moody's RMS model is really a comprehensive model that looks across our various risk areas. For us historically, distribution has led to ignitions. We haven't seen them from the transmission side. But the model is comprehensive, and we always knew that the -- unfortunately, the risk would never be 0. But Steve, is there any other color you would add here for Mike.

Steven Powell

I'd just say that the grid hardening that we've done as well as all the other mitigations we've deployed really are the driver of that risk reduction. And so that from the modeling perspective, that doesn't really change. I'll say we'll continue to evaluate other models. I know RMS will mature their models.
And we look at other models as well to see is there more to learn about wildfire risk and how that's evolving and can be modeled to continue to evaluate that risk reduction. But the fact is that the work that we've done on the system has lowered the risk of ignitions and frankly, of catastrophic wildfires being associated with our equipment. Both on the distribution and the transmission system. So that's all incorporated in to that analysis. And so we'll continue to focus on reducing the risk further, but also paying attention to the tail risk that exists.

Operator

Carly Davenport, Goldman Sachs.

Carly Davenport

Maybe just a follow-up on the last one there. Just as you continue to investigate Eaton with the potential of the idled facilities to have been involved. Can you just talk a bit about your wildfire mitigation plans related to any other idled or abandoned lines that could potentially pose risk going forward?

Pedro Pizarro

Yes. So at a high level, we -- I think you've heard us comment before, when we maintain idle lines and we don't take them down, it's because we relate to the utility may have future use. So they are inspected. They are maintained.
Certainly, as we look at this latest experience, but also every year as we update the wildfire mitigation plans. We look at are there any further learnings that we can bring to bear to continue to make the system stronger we have disclosed, for example, that coming out of the recent experience, we realized you could bring some added clarity to, for example, the transmission operations manual in terms of the detail around how you ground idle lines. And those are always very case-by-case basis, but Steve's team added more specificity that there's more clarity to how grounding is done out in the field. That's one example of the continuous improvement cycle that we go through, not only for this, but really for all aspects of operations.

Carly Davenport

Got it. That's really helpful. And then maybe just as you think about the current capital plan, can you talk a little bit about if you've done any work quantifying exposure to tariff risk and how you might be working to mitigate that?

Maria Rigatti

Yes. Carly, I mean, obviously, I think like most of the companies in the U.S., we've been thinking about that. And as we look at it and step back, really about about 5% of our total purchases are foreign materials. So it's a relatively -- relative to our whole program, it's a relatively small number. If you translate that into dollars, it's probably about $125 million on an annualized basis.
Now we're going to continue to monitor that. We're going to continue to look for any kind of secondary impacts that might occur, but we're in that zone. And the customer impact will be mitigated to some extent because all of that is really related to capital and the capital will enter rates and recovery of that capital interest rates over a very long useful life for most of our assets. So that's where we are right now in terms of the tariff evaluation.

Operator

Shahriar Pourreza, Guggenheim.

Shahriar Pourreza

It's actually conferencing here for Shahriar. Just starting off maybe on the shifting deadline for the SCE rate case. Do you anticipate any offsets in the new rates through the first half of the year? And is there enough visibility to continue executing on CapEx? Or would there be a little bit more focus on critical kind of versus discretionary as you get that clarity.

Maria Rigatti

Yes. So may I'll take the second part of your question first in terms of the capital plan. Because of the general rate case is a four-year cycle. We can execute against our plan and continue on with our priorities and get the general rate case final decision, we can always adjust what the spend is in the back end over the next to 3 years and 3.5 years beyond the decision. So I think that's how we're thinking about the capital plan.
In terms of offsets in rates and the like. Obviously, we're charging folks and rates include right now the 2024 revenue requirement adjusted for the ROE as we get into the final decision any changes to the revenue requirement will be amortized into the bills over time. So I think we have a handle on the rates.
And I think maybe just pointing back to where we think our rates are going on a longer-term trajectory. I think you've seen the analysis that we've done that looks at the general rate case, 100% of that request -- it looks at additional capital that we might deploy, it looks at recovery on TKM and Woolsey. And even with those other pieces added into the rate trajectory, we see our rates growing, again, back in line with local inflation.

Shahriar Pourreza

And as you're working on the incremental CapEx items, like the ERP and AMI among the other item transmission how investors think about financing alternatives on the incremental CapEx, just in terms of maintaining capital efficiency and the potential need for any capital structure waivers or any of that sort?

Maria Rigatti

Yes. So we typically, at SCE finance capital in line with the authorized capital structure. I don't think you would really see a need for any capital waivers that came about during the TKM and Woolsey process, but the capital plan is very different than that. As we think about just more generally the financing plan, we've run a lot of scenarios. I think you've seen our financing plan right now through 2028, very minimal equity, largely debt financed between the parent and the utility. As we get the final GRC decision, we can rerun all of those numbers. But again, I think we have a lot of capacity to fulfill our capital needs.

Shahriar Pourreza

Okay. Excellent. I appreciate taking the questions.

Operator

Paul Zimbardo, Jefferies.

Paul Zimbardo

Following up on Nick's question a little bit on the Eaton disclosures around a potential material loss. Just does that indicate like you think there could be a reimbursement back to the wildfire fund? Or just is there any kind of signal around that? Because if it's contained within the fund, I would think there wouldn't be a material loss if you were found to be prudent. So if you could just help unpack that disclosure a little bit, it would be helpful absolutely.

Maria Rigatti

Sorry, maybe I'll just go through how you account for it. You have to actually think about the two pieces separately. You think about the loss or the liability and you disclose information around that and then you think about the recovery of that. So we would record sort of receivables from insurance or the normal course insurance. And then as we go through, we will also record receivables from the wildfire fund.
So it's not trying to be a signal as to positioning around what we think in terms of prudency, I think that -- or refunding the fund, I think you've heard us say before that based on everything we know today and the information that we've reviewed, we believe that SCE will make a good faith showing that it was prudent, but from an accounting perspective, you kind of show the piece parts, not a net number.

Pedro Pizarro

Yes. And Maria, that's I want to start there because the signal we're giving you is what Maria just said. That based on what we know today, we believe SCE was a reasonable operator of the system, all right? The shift to probable just indicates that we do see a material losses probable now because of the absent of another likely cost having come to delight so far.
But we view this as a fire ultimately, if we conclude that it is an Edison related fire, then we have access to the fund. And in terms of prudency, we believe that SCE will be able to make that good faith or showing a reasonableness. I just want to be sure crystal clear on that.

Paul Zimbardo

Yes. No, thank you for clearing that up. I appreciate it.

Pedro Pizarro

I appreciate you asking the question.

Paul Zimbardo

And then the other -- I know you said things are going to take a long time to play out to get more clarity and you did mention like litigation strategies and the just is there any time when -- based on other events you think about like approaching settlement conversations with parties.

Pedro Pizarro

Yes. You will have heard this answer from us regarding fires. They're all case by case, right? Specific factoring circumstances in each fire causage really difficult to extrapolate any timing for this one based on other experiences.
One timing item we pointed to is that when it comes to the core formal investigation, materials, right, coming out of the fire authorities, this can take 12 to 18 months, right? There seems to be a broad time line that we've seen elsewhere. But beyond that, timing towards making decisions about engaging with plaintiff's settlements, et cetera, that's still very difficult to handicap at this point.

Operator

Richard Sunderland, JPMorgan.

Richard Sunderland

Can you hear me?

Pedro Pizarro

Yes, we hear you great.

Richard Sunderland

Just following up on the last one there. It sounds like this hasn't changed, but do you have any revised timing expectations on the investigation just as your own progresses here?

Pedro Pizarro

No, we haven't been able to provide an estimate, and we still can't provide an estimate.

Richard Sunderland

Understood. And then I know we've unpacked the material losses disclosure a bit, but just have you ruled out any third-party potential sources of ignition at this point? I mean I know you said you haven't ruled out your own equipment and there's still some others out there, but just trying to understand if that impacted the language coming this quarter.

Pedro Pizarro

Yes. I guess I'd refer back to the way I said it in my prepared remarks, at this point, we are not aware of any evidence that conclusively points to another source of ignition. So looking, obviously, if someone has information, we would be very interested in hearing it or seeing it. But based on where we are today in the absence of evidence pointing conclusively to something else. That was one of the factors in changing our destination to probable.

Operator

Greg Orrill, UBS.

Gregg Orrill

Just regarding the expectation of losses disclosure again. Just is there anything about the nature of the type of the lawsuit that would make it unrecoverable by the wildfire fund that you're seeing? Whether it's not economic damage or something else?

Maria Rigatti

No. Gregg, this is Maria. The wildfire fund is available to pay damage claims. So period full stop. We have a safety certificate, so we also have the benefit of the liability cap. So there's nothing in the way we provided disclosure or any of that, that would preclude us from accessing the funds. And there's no limitation on those types of claims that are paid by the fund, which might be more directly your question.

Gregg Orrill

Okay. Just one other, just on the interest expense driver for the quarter. Is it possible to break that up into TKM one time and then ongoing and anything else?

Maria Rigatti

Yes. So the interest expense driver, I think you're looking at the materials that we posted -- there's about $0.30 that's related to the prior period true-up for TKM. The $0.14, which is an annualized benefit on a go-forward basis you'll start to see that now as we get into the second quarter, and we have now closed out the prior period.

Operator

Anthony Crowdell, Mizuho.

Anthony Crowdell

Just I guess on the legislative efforts going on in Sacramento. I'm just wondering if I think in a rate presenting, you guys may meet with parties before just to talk about plans and everything else. Any of the -- just wondering if you could share with us any type of -- when you're meeting with policymakers, is there any ideas on the solutions of modifying AB 1054 that you believe are maybe resonating with the policymakers, whether that's a replenishment mechanism or a bigger fund or anything to that that you could share?

Pedro Pizarro

Yes. Not really, Anthony. Again, it's pretty early days right now. I think a lot of the legislators are still getting their arms around this and recognize that A lot of our legislators are newer to Sacramento from post the 2019 period. So there are ideas that various people are mentioning, but I think it would be premature, we get into the sort of details right now.
Our tomorrow end, we're just very committed to remaining engaged to helping educate and to making sure that policymakers understand the implications here, right? This is ultimately about how do we maintain safety for our communities and do it at the lowest possible cost to customers? And so we're making sure that, for example, people understand the impacts that actions from the shareholder side can have on cost of debt, on credit ratings, and therefore, impact to customer cost. So I think that's still in that early phase of getting arms around the topic.

Operator

David Arcaro, JPMorgan Stanley.

David Arcaro

Let's see a quick question on the losses and the probable losses that you may recognize, would that be -- would there be any considerations from like a balance sheet perspective from either the CPC or credit rating agencies when that impacts the financial statements?

Maria Rigatti

Yes. So David, the way it would be recorded as we would have the loss, again, so that's one piece of the puzzle, but we would also have offsetting receivables or regulatory assets, if you will. So there'll be a balance on the balance sheet. So it wouldn't have an earnings impact. and you'd be grossing up the balance sheet, but it would be offsetting on each side. So from a regulatory capital perspective as well as from sort of a rating agency perspective, we've got the bases covered.

David Arcaro

Yes. Got you. Okay. Understood. You made it pretty clear that it's not a cash flow impact just based on the access to the fund.
And let me see Pedro. I just also wanted to clarify something. Did you mention that are you seeing third-party estimates of potential damages that suggested that the entire fund or something close to the size of the current fund could potentially be used or potentially representing the liability at that level?

Pedro Pizarro

Yes. Not quite what I indicated was maybe a little more detail. If I read the paper, as you read the papers, right, every now and then in an article, you'll see estimates by this expert or that expert or that entity. And I -- not sure that those were all comprehends that. But I think sometimes, as I recall, they might talk about insured losses.
So am I talking about another kind of loss? I don't recall seeing any one of those elements add up to $21 billion yet. But again, because they're parts and parts kind of hard to tell from that. So certainly, it is a large fire. And if it ends up being linked to Edison infrastructure, then it could certainly consume a good quantum of the fund, but at this point, we can't estimate. So it's unclear whether it would consume ex-percent or even extinguish the funds.
So it's just, again, too soon to tell, but a number of those estimates seem to have whatever they're estimating, they seem to be within the envelope of it. Just you'd have to peel the onion back on what they're looking at and how they're looking at and what's the qualities of those estimates sell. I just wanted to acknowledge that you may be reading the same papers that we are and seeing the numbers pop up here and there.

Operator

Ryan Levine, Citi.

Ryan Levine

Have there been any changes to the wildfire mitigation plan preparation work or approach to forming the updated plan post the January events?

Pedro Pizarro

Yes. Let me turn it to Steve and just remind you, as I mentioned earlier, this is something that every year the team looks at what else are we learning, what else we'd be looking at it. Steve, let me turn it over to you.

Steven Powell

Yes, Pedro, you hit the top line message, which is the plan is always evolving around the edges. The core of it remains, we've got to continue to execute on our grid hardening programs, right? And so that means doing the cover conductor and the undergrounding. As Pedro mentioned, as we look at the areas, at least within the burn scars, we certainly are doing more undergrounding there than was originally planned, just based on the devastation that is there. The need to rebuild back stronger for those communities and take advantage of the fact that there's a lot of other work going on there.
But beyond that, we look at every aspect of our inspection programs and our vegetation management to see are there emerging risks or things we've learned over, frankly, fires over the last few years. that would change the nature of those programs. But generally, it's the same programs. We continue to be as aggressive as we can in deploying those. And so I'd say the wildfire mitigation plan that we've been working on is an extension of the plans modified for learnings over the past couple of years.

Ryan Levine

And then one follow-up from a previous question. In terms of the time table to access the wildfire fund, recognizing that there's a number of moving pieces. Is there any early indication of when you may start to full capital from that front?

Maria Rigatti

Yes, I think that's pretty that's very premature Orion because we don't know what the process is. Obviously, we're still going through the investigation and the analysis. We want to through all that, then we would have to go through some sort of settlement process. But if you believe that you're going to skip over all those things and think about sort of accessing the fund. First, we have $1 billion of customer funded self-insurance, so if there were any claims that had to be paid, that would be the first piece.
And then you would -- one would go to the wildfire fund. And there is a process that the fund administrator has, which has appears to be going very smoothly for others who have accessed it where you accumulate the claims and you go and you get them reimbursed. So I think it's a pretty -- they've made it a very streamlined, straightforward process once you hit the point where you need to access.

Operator

Thank you. I will now turn the call back over to Mr. Sam Ramraj, for any closing comments.

Sam Ramraj

Thank you for joining us. This concludes the conference call. Have a good rest of the day. You may now disconnect.

Operator

Thank you. You may now disconnect from today's conference. Have a good rest of your day.