Business Context and Reporting Period
This Form 8-K, dated December 18, 2025, is filed by Edison International (EIX) and its principal subsidiary, Southern California Edison Company (SCE). The report details a regulatory decision by the California Public Utilities Commission (CPUC) regarding SCE's 2026 cost of capital and reaffirms Edison International's long-term and 2025 earnings guidance.
Key Financial Metrics and Regulatory Decisions
2026 Cost of Capital Authorization
The CPUC issued a final decision authorizing SCE's cost of capital for 2026, extending the current mechanism. The authorized capital structure and rates of return are as follows:
| Component | 2026 Capital Structure | 2026 Cost of Capital | 2025 Capital Structure | 2025 Cost of Capital |
|---|---|---|---|---|
| Long-Term Debt | 43.00% | 4.71% | 43.00% | 4.58% |
| Preferred Equity | 5.00% | 6.89% | 5.00% | 6.42% |
| Common Equity | 52.00% | 10.03% | 52.00% | 10.33% |
| Rate of Return | 7.59% | 7.66% | 7.59% | 7.66% |
2025 Earnings Guidance
Edison International reaffirmed its 2025 earnings guidance, which remains unchanged from the October 28, 2025, update:
- Basic EPS: $8.05 to $8.30
- Non-Core Items: $2.10 per share (based on $808 million recorded for the nine months ended September 30, 2025)
- Core EPS: $5.95 to $6.20
Material Changes and Outlook
Long-Term Guidance (2025–2028)
Following the CPUC decision, Edison International reaffirmed the following long-term targets:
- Core EPS Growth: 5%–7% compound annual growth rate (CAGR), targeting 2028 Core EPS of $6.74–$7.14.
- Rate Base Growth: 7%–8% CAGR for 2024–2028.
- Capital Plan: $28–$29 billion for 2025–2028.
- Equity Needs: No annual equity needs anticipated for 2025–2028.
Management Commentary
Pedro J. Pizarro, President and CEO, highlighted a dividend yield of approximately 6% combined with the 5%–7% core EPS growth target, projecting total shareholder returns in the range of 11% to 13%. Management emphasizes the strength of the regulated business model in delivering sustainable value.
Risks and Contingencies
The filing includes standard forward-looking statement disclaimers, noting that projections are subject to risks and uncertainties outside the company's control. The company states it has no obligation to update these statements. The filing does not provide specific new risk factors beyond the standard regulatory and operational uncertainties inherent in the utility sector.
Investor Verification Checklist
- Regulatory Impact: Verify the implications of the 2026 CPUC cost of capital decision on future rate cases and revenue requirements.
- Non-Core Items: Confirm the nature and timing of the $808 million in non-core items excluded from Core EPS to understand the volatility in Basic EPS.
- Capital Expenditure Execution: Monitor the execution of the $28–$29 billion capital plan against the projected 7%–8% rate base growth.
- Dividend Sustainability: Assess the company's ability to maintain the ~6% dividend yield while funding the capital plan without issuing new equity.