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Edison International, the parent company of Southern California Edison, reported annual earnings for 2021 a bit higher than the previous year, at $759 million, or $2.00 per share, compared to $739 million, or $1.98 per share, for 2020. Southern California Edison’s income rose to $829 million compared to $810 million in 2020. The parent corporation drove down earnings by $70 million with its payout of equity and preferred dividends last year, which was about on par with $71 million in 2020. SCE’s earnings rose from higher revenue approved by federal and state regulators, including an increase in its 2021 general rate case at the California Public Utilities Commission, plus income tax benefits from a 2007 tax settlement. The gain was in spite of claims over the wildfires and mudslides the company caused in 2017-18, that cost $3.8 billion as of the end of last year. As for fourth quarter earnings, Edison International was slightly down, at $523 million, or $1.38 per share, compared to net income of $526 million, or $1.39 per share, in the same quarter of 2020. Pedro Pizarro, Edison International CEO and president, is bullish about the company’s financial prospects, projecting a 9–11% total return between 2021-25. He pointed to the expected surge in the electrification of vehicles and buildings, and utility profit from its wildfire reduction investments, as well as continued revenue increases authorized by state and federal regulators over the next several years. Pizarro noted that California has the most electric cars in the United States, reaching 1 million last week, with one in seven of those in SCE territory. The state is aiming for 7.5 million EVs. “We have one of biggest electrification programs in the country,” Pizarro told financial analysts at the end of last week. EV adoption in the state is expected to create 6.7 million MW hours of additional demand on SCE's grid by 2030, and grow to 50 MWh by 2045, he noted. That increase will lead to profit for the company. In addition, the California grid operator estimates $30 billion is needed to expand and upgrade the grid over the next 20 years to allow for more renewable energy and storage. Of that amount, $8 billion will be in SCE territory, increasing the utility’s rate base, according to Pizarro. The company expects SCE capital expenditures to rise to a total $30 billion between 2021-25, from $5.4 billion last year, $6.2 billion this year, and up to $6.8 billion in 2025. The company projects its rate base will grow 5-7% by 2025, from $35.3 billion in 2021 to $49.4 billion in 2025. SCE plans significant capital investments, including $2.2 billion from ratepayers over the next two years to lower fire risks with investments in covered power lines, increased tree removal, and more cameras and weather stations. It also includes $1.23 billion for 525 MW of planned energy storage . The utility at the end of last year also launched a $677 million program to replace 250,000 gas-fueled water and space heaters with electric heat pumps. In addition, Gov. Gavin Newsom allocated $1 billion in the state budget last year to advance electrification, which SCE can tap into. Unlike Pacific Gas & Electric, SCE does not plan a massive undergrounding of power lines, citing higher costs and more time to bury lines compared to covering bare wires, with the latter expected also to significantly reduce fire danger. That is in spite of the fact that undergrounding avoids ongoing vegetation clearance. Pizarro said undergrounding 10 miles cost $3.5 million per mile. “We’re looking at hundreds not thousands of miles from a risk-based perspective,” and trying to figure out how to bring the costs down. Unlike Pacific Gas & Electric, which is planning 10,000 miles of undergrounding, a few hundred won't achieve economies of scale. One analyst on the call asked the CEO about competition between electrification and hydrogen to replace natural gas as part of decarbonization. Pizarro, who is head of an all-electric utility, said the two strategies are complementary, not in competition because some major sectors are hard to electrify, like maritime and aviation and rail, along with heavy-duty vehicles, all of which may need to be fueled by renewable hydrogen to decarbonize the system. Annual earnings for Sempra Energy, parent of Southern California Gas and San Diego Gas & Electric fell sharply in 2021. Net income was $1.25 billion, or $4.01 per share, compared to 2020 earnings of $3.76 billion, or $12.88 per share. Its big earners last year were SDG&E and its Texas utility, Oncor. SDG&E earned $819 million last year, lower than its 2020 income of $824 million. SoCalGas lost $427 million, compared to a $504 million gain in 2020. That is principally because of the $1.2 billion payout to settle claims for the massive four-month-long leak from Aliso Canyon six years ago. Quarterly earnings for Sempra were brighter, rising to $604 million, or $1.90 per share, compared to $414 million, or $1.43 per share, in the final quarter of 2020. SDG&E’s fourth-quarter income rose to $216 million, from $191 million in 2020. SoCalGas said its net income rose to $198 million from $79 million in 2020. The rate bases of the two California and Texas utilities have nearly tripled in the last four years, Jeffrey Martin said, Sempra CEO, growing from $14 billion to $41 billion. “Together with expected capital expenditures at Sempra Infrastructure, the company is forecasting a company record five-year capital plan of approximately $36 billion,” which is $4 billion more than the previous highest plan, Martin told financial analysts Feb. 25. He forecasts the rate bases to further increase to $62 billion by 2026. Of that amount, about $21.2 billion will be invested in SDG&E and SoCalGas to increase the safety of its system and provide less-polluting resources. That includes its approval to spend $400 million on three battery storage projects totaling 161 megawatts. Sempra also is a major developer and exporter of liquified natural gas, with major facilities in Mexico and Louisiana. “We are seeing extreme interest in our LNG, “Martin said after the start of the war in Ukraine. “We wish we could meet all the demand.”

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