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Edison (EIX) Unit’s Projects Get Nod, Seek to Cut Pollution


Edison International’s EIX unit Southern California Edison (“SCE”) has received approval from the California Public Utilities Commission to begin four electric transportation pilot projects that will help increase usage of electric in transportation. The primary objective of these transportation pilots is to lower emission levels and meet California’s 2030 greenhouse gas and air pollution reduction goals.

California aims to lower its 2030 greenhouse gas emissions by 40% below 1990 levels. SCE, through its transportation pilot projects, will expand the usage of electricity in cars, buses, medium- and heavy-duty trucks, and industrial vehicles and equipment.

Emission Reduction Benefits

Southern California is the gateway for nearly 40% of the goods entering the United States, which move through the region’s ports and highways. It is evident that the goods movement through the heavy vehicles is major source of emission in this region.

The pilot projects primarily aim to promote development of more electric charging points that will assist in charging the electric vehicles and work on electrification of the equipment used in ports. The projects are part of the $550 million investment program, which the commission is yet to approve.

Reduction of pollution from the transportation space, which is the major contributor to emission levels in California will help to achieve the pollution reduction goals. Also, several utility scale renewable energy projects are coming up in the state, which will help in achieving the target.

Road Ahead

SCE serves nearly 15 million people in its 50,000 square miles of service area. To efficiently serve the growing population of California, the company aims to invest $14.7 billion in next few years to strengthen and expand its existing electricity infrastructure.

Also, energy efficiency programs of SCE have helped customers save enough energy to power 1.2 million homes for a year.

SCE’s massive asset base and expertise will allow it to develop the transportation electrification market in California and these pilot projects are means to achieve the same.

Price Movement

Edison International’s shares have lost 13.6% in a year against the industry’s gain of 2.8%.

Zacks Rank & Key Picks

Edison International currently has a Zacks Rank #4 (Sell). Some better-ranked stocks in the same industry are NextEra Energy NEE, Algonquin Power & Utilities Corp. AQN and WEC Energy Group WEC all having a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

NextEra Energy delivered an average positive surprise of 4.34% in the last four quarters. Its 2018 Zacks Consensus Estimate has moved up 0.1% to $7.27 in the last 90 days.

Algonquin Power & Utilities delivered an average positive surprise of 33.17% in the last four quarters. Its 2018 Zacks Consensus Estimate has moved up 1.8% to 58 cents in the last 60 days.

WEC Energy Group delivered an average positive surprise of 3.08% in the last four quarters. Its long-term earnings growth rate is pegged at 5.45%.

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