A digest of some of the top insights that I’ve gathered from this week’s earnings calls. Full notes can be found here.
Need to be able to spend on infrastructure
“Beyond 2017, we see the need for annual capital expenditures in electric infrastructure to support reliability at level similar to those we are proposing in our 2015 GRC. A central tenet of our strategy is that we should lead in modernizing the distribution system. Building this next generation grid require significant technical know-how and capital investment.”
Rate case based on growth prospects for So Cal Ed
“This is something Edison is particularly well positioned to do. The foundation of our investment case is the strong growth prospects for SCE. We also recognized the need to have a strategic eye on the transformative changes occurring in our industry that extend even beyond California. With this in mind, we are selectively pursuing other growth initiatives both with SCE and in competitive businesses.”
Investing where public policy provides incentives to invest
“nside the utility, the pieces that we’ve mostly focused on are really things that further public policy initiatives within the State.
So for instance, that California ISO along with some other State agencies have clearly identified a set of ‘Preferred resources’ that would be used for dealing with some of dislocations with San Onofre going out. So these are things like distributed generation, storage, energy efficiency, demand response.
So we are looking at some pilot projects that would provide referred resources particularly in the areas most affected by San Onofre going out. And that would be additional growth opportunity within the utility. The State has a mandate on energy storage 1,300 megawatts across the State. Our share of that is a little less than 600 megawatts within SCE and half of that can be actually owned and put in rate based by the utility.
So we are looking at those opportunities that would really ducktail with our modernizing the distribution system efforts. Community solars and other areas where that actually might be a combination of growth opportunities both within the utility and outside of the utility. So those are some of the high level areas.”
Focused on growth opportunities
“I think very long-term, if in fact we have good growth opportunities that’s really what will provide sustained earnings growth and sustained earnings growth ultimately circles back to providing sustained dividend growth. So it’s the usual balancing acted every company has to go through.”
A lot of energy in the state but not necessarily in the right places
” we’ve got a lot of energy in this state of times, but may not be in the right place and we need to have voltage in the right places too and to in order need combination a lot of things.’
Residential rooftop solar requires subsidies to work
“our sense is been the residential rooftop solar business models really largely requires subsidies and kind of cost shifting mechanisms to really be viable that is not been as appealing to us. As a result, we’ve really focused more on the commercials and industrial distributed generation activities.”
Not interested in putting residential solar into rate base
“for the foreseeable future. We would not really look to try to put residential rooftop solar into owned that, put it into our rate base.”
Provide the infrastructure to facilitate a distributed network
“our primary strategy is provide the network, provide the backbone through a modern distribution system that really facilitates any and all of these distributed resources. Whether that’s rooftop solar or whether its storage and anything else. That’s the part that we are uniquely positioned to do well and that’s really where our investment dollars are focused in the utility.”