Boiling Point: Edison Under Fire
Host: Sammy Roth
Guest: Pedro Pizarro, President and CEO of Edison International
Release Date: April 3, 2025

Introduction

In the April 3, 2025 episode of Boiling Point, climate columnist Sammy Roth engages in a comprehensive discussion with Pedro Pizarro, the President and CEO of Edison International, parent company of Southern California Edison. The conversation centers around the Eaton Fire's devastating impact, Edison's role in wildfire prevention, the challenges of transitioning to renewable energy, rising electricity rates, and the broader implications of climate change on California's energy landscape.

Edison's Response to Wildfires

The Eaton Fire, which resulted in 17 fatalities and destroyed over 9,000 buildings in Altadena, has thrust Edison into the spotlight. While the exact cause remains under investigation, Edison has acknowledged the possibility that one of its transmission lines may have ignited the blaze.

Key Points:

• Wildfire Prevention Efforts: Since 2017, following a series of catastrophic fires, Edison has intensified its wildfire mitigation strategies, including deploying insulated wires and enhancing vegetation management.

  “We've done more, added other equipment that helps reduce the risk of fire... our work had reduced the risk of our equipment starting a catastrophic fire as of the end of last year by 85 to 90% compared to pre2017.”
  — Pedro Pizarro, 07:01

• Public Safety Power Shutoffs (PSPS): Edison employs PSPS as a last-resort measure to prevent fires during high-risk conditions, continuously refining their targeting to minimize disruptions.

  “Shutting off power when the risks are high... but that's still been a tool of last resort.”
  — Pedro Pizarro, 05:46

• Impact of Climate Change: Pizarro emphasizes that the increasing frequency and intensity of wildfires are exacerbated by climate change, necessitating robust adaptation measures.

  “Climate change is a big element of the wildfire risk that we've seen.”
  — Pedro Pizarro, 07:03

Financial Implications and Rate Increases

Edison's wildfire mitigation and infrastructure upgrades have led to significant financial implications for both the company and its customers.

Key Points:

• Rate Increases: Approximately 10% of Edison’s electric bills are now attributed to wildfire mitigation, a stark increase from seven years ago. Overall, system average rates have surged by about 50% over the past five years, primarily driven by power market costs rather than wildfire prevention alone.

  “Today around 10% of the Edison bill is related to wildfire mitigation... The largest driver was power market costs.”
  — Pedro Pizarro, 14:00

• Future Projections: Edison anticipates that rate increases will stabilize to around 2.6% per year through 2028, aligning more closely with inflation rates.

  “Our rate increases will be about 2.6% per year through 2028.”
  — Pedro Pizarro, 16:59

• Return on Equity (ROE): Edison has requested an increase in ROE from 10.33% to 11.75%, justifying it as a reflection of the heightened risks and investments in wildfire mitigation.

  “We've hired an outside expert... they came up with a range of something like 10.7 to 11.75% as the fair range.”
  — Pedro Pizarro, 28:05

• Profitability: In the previous year, Edison reported profits of $1.62 billion, the highest since the energy crisis two and a half decades ago.

  “Edison made $1.62 billion last year... more profit than the company made at any time since the energy crisis 25 years ago.”
  — Pedro Pizarro, 28:05

Climate Change and Net Zero Goals

Edison is actively contributing to California’s ambitious climate goals, aiming for net-zero emissions by 2045. Pizarro outlines the company's strategy to balance climate mitigation with necessary infrastructure investments.

Key Points:

• Electrification as a Solution: Edison underscores the importance of electrifying various sectors to enhance energy efficiency and reduce overall energy consumption.

  “Electric appliances... use a lot less energy to do work.”
  — Pedro Pizarro, 19:35

• Projected Energy Demand: The company forecasts an 80% increase in electricity sales by 2045, necessitating substantial grid expansion and investment in clean, firm energy sources like advanced geothermal and nuclear power.

  “Total electricity sales across the state, we see almost doubling... which means you need a much bigger grid.”
  — Pedro Pizarro, 22:33

• Policy and Infrastructure Challenges: Pizarro highlights the significant delays in transmission line projects, often taking 10 to 12 years to complete due to siting and permitting hurdles.

  “Today it takes probably about a dozen years... most of the time is spent on the siting and permitting and approvals process.”
  — Pedro Pizarro, 24:08

Rooftop Solar and Distributed Energy

The integration of rooftop solar is pivotal in Edison's strategy, yet it has been a contentious issue due to its impact on the utility's revenue model and ongoing debates over net metering benefits.

Key Points:

• Subsidies and Incentives: Edison acknowledges the role of subsidies in making rooftop solar viable but stresses the importance of adjusting incentives as solar technology becomes more cost-effective.

  “Subsidies should be reduced significantly as solar costs come down.”
  — Pedro Pizarro, 43:34

• Storage Integration: Approximately 80% of new solar installations now include storage solutions, enhancing grid resilience and reducing reliance on utility infrastructure during outages.

  “Something like 80% of solar installations have storage now.”
  — Pedro Pizarro, 42:42

• Future Projections: Edison aims to double its rooftop solar capacity by 2045, advocating for continued, appropriately sized incentives to support this growth.

  “We see a doubling of the amount of rooftop solar investment out there.”
  — Pedro Pizarro, 22:44

Public Trust and Community Relations

Building and maintaining public trust is a cornerstone of Edison's operations, especially in the wake of catastrophic events like the Eaton Fire.

Key Points:

• Transparency and Accountability: Edison pledges to maintain transparency throughout investigations and rebuild efforts, emphasizing honest communication with the community.

  “Ensuring that we will be transparent is point one.”
  — Pedro Pizarro, 14:00

• Community Engagement: The company is committed to supporting affected communities through rebuilding initiatives and charitable activities, reinforcing its role as an integral part of the region.

  “Helping those communities come back stronger... that's how we build public trust, one step at a time.”
  — Pedro Pizarro, 47:02

Government Policies and Future Challenges

Edison navigates a complex policy landscape, balancing state and federal regulations while advocating for reforms to expedite infrastructure development.

Key Points:

• Permitting Reforms: Pizarro expresses optimism about upcoming reforms aimed at streamlining the permitting process for electric infrastructure, which are crucial for meeting climate goals.

  “Reforms at the federal and state levels if we're going to have any opportunity... getting to Net Zero by 2045.”
  — Pedro Pizarro, 24:08

• Inflation Reduction Act (IRA): The potential repeal of the IRA poses challenges for clean energy investments, as the associated tax credits directly impact customer electricity bills.

  “We're out there advocating for maintaining as many of those credits as possible because they're helping our customers see a lower bill.”
  — Pedro Pizarro, 47:19

• Legislative Efforts: Edison monitors legislative developments, such as AB 1167, which addresses the allocation of costs for utility advertisements, ensuring that such expenses do not unfairly burden customers.

  “We do not run ads that are about our brand image... it's something that PUC does not allow.”
  — Pedro Pizarro, 51:57

Conclusion

The episode "Edison Under Fire" delves into the multifaceted challenges Edison International faces amidst escalating wildfire risks, the imperative transition to renewable energy, and the socio-economic implications of these shifts. Pedro Pizarro articulates a vision of robust infrastructure investment, transparent community engagement, and strategic policy advocacy as essential components for navigating California's turbulent climate and energy future.

Notable Quotes:

• “Climate change is a big element of the wildfire risk that we've seen.” — Pedro Pizarro, 07:03
• “The cost of action is high, but the cost of inaction is a lot higher.” — Pedro Pizarro, 13:35
• “These investments are crucial to helping our economy take steps to both mitigate climate change and adapt to the climate change that's already baked in.” — Pedro Pizarro, 17:03
• “Total energy bill going down 40% from current levels in real terms by 2045.” — Pedro Pizarro, 20:17
• “Public trust is one of the key things that we need to earn every day from our public.” — Pedro Pizarro, 45:30
• “If they know that we're going to be honest and speak our minds and be trying to do the right thing at all times, I think that's what you could ask for.” — Pedro Pizarro, 54:33

This summary captures the essence of the "Edison Under Fire" episode, providing an in-depth overview of the critical discussions between Sammy Roth and Pedro Pizarro. It outlines Edison's ongoing efforts to mitigate wildfire risks, manage financial challenges, contribute to California's climate goals, and maintain public trust amidst a rapidly evolving energy landscape.