Steven Powell : Sure. So obviously, we’ve seen significant growth in EV adoption in California over the last number of years. In 2019, about 6% of new vehicle sales were electric. Right now, we’re hitting about 25% of new vehicle sales in the state being electric. And so that’s — we’ve seen the ramp up and we see that continuing. We’ve been planning for this for quite some time. So in our distribution, long-term planning forecast, this has been baked into our load forecast, which then feeds our plans around the distribution grid. And that’s what informed the plans in our 2025 to 2028 general rate case, where a big portion of our load growth program in there is driven from electrification load growth. And so that’s what our teams are focused on.
Both not just planning it out, but then starting to build the circuits and the infrastructure to support it. Aside from the light-duty side, we see the growth in our territory from medium- and heavy-duty vehicle charging. Particularly in pockets that range from the transportation segments down by the ports all the way out to the warehouses further inland. And that’s where our teams are really looking at different solutions so that we can meet the demands because those demands come in large chunks and they come quickly. So we’re looking at everything from how do we accelerate the infrastructure development ahead of that demand to temporary bridge solutions in places like mobile batteries and mobile substations that can help us get through while we have to build out more circuits and substations to enable it.
So we’re certainly able to meet the growth that we’re seeing right now, and we’ve planned and are planning for the growth that’s coming ahead.
Pedro Pizarro : And I think the last point that Steve made is really critical that innovation in the general rate case to include the request for mobile equipment, to temporary equipment, it’s a great step because, particularly when we think about medium and heavy-duty fleet deployment, that’s a technical term here, chunkier, right? Then when you’re looking at passenger vehicles being spread out over neighborhoods. And so that’s where Steve and the team have been working and how to make sure we can meet that load. So Michael, maybe more than you want it, but it’s a topic near and dear to us.
Michael Lonegan : Yeah, yeah. Of course. No, thank you. Thank you very much. I’ll see you at ER.
Pedro Pizarro : Terrific. Next.
Operator: Thank you. The next question is from David Arcaro with Morgan Stanley. You may go ahead.
Pedro Pizarro : Hi, David.
David Arcaro : Hey, how are you doing? Thanks so much for taking my questions.
Pedro Pizarro : Sure.
David Arcaro : I was just curious to get your perspective on PG&E’s rate case, they’ve had just some challenges getting CapEx and rate base approved in its rate case. It’s not done yet, but just wondering if there’s anything you would take away or read across to your GRC as you go forward. Any changes in your thinking or strategy there? Or any perspectives that might come into play as you go through the process?
Pedro Pizarro : Yeah. David, thanks for the question. And I give you maybe a quick answer here. I think it starts with acknowledging that each of these rate cases is very situation-specific and company-specific. So I know that our colleagues at PG&E, for example, have had a big emphasis in the rate case on the amount of undergrounding based on their territory and the fact that they have so much more forest land in our high-fire risk areas, as compared to SCE, which has more graft lands and the additions have been in the past more from elements that can be addressed through covered conductor. So you’ve seen us in the ’25 to ’28 rate case application, continue completing the build-out of covered conductor with another 1,250 miles per post, complemented by around 600 miles of undergrounding.
Very different needs in our territory than MTGE territory. So hard to abstract out strong payrolls from the PG&E case for hours, given that difference. At the same time, there are some elements that are common. And in fact, you saw that Southern California is filed comments in the PG&E rate case. Particularly focused on the topic of the escalation mechanism in there. The fact that the alternative proposed decision relied on essentially a 25% — provided only 25% of the escalation requested, that — it’s something that we thought needed to be called out as we provided a comment saying that in order to be fully compensatory rates have to include, right, the full allowable costs and escalation is an important part of the cost structure. So that’s certainly one that we’ve watched more closely.
And like I said, our team intervened in the rate case because it’s a topic that will be of common interest across all utilities. But beyond that, though, we’re just watching the case and recognize that there’s some significant differences in the situations for the two companies. Maria, anything you want to add?
Maria Rigatti : Yeah. Just to kind of underscore Pedro’s comment about everything is very situation-specific and every rate case is different. Even that last example on the escalator, we actually have a different escalation mechanism. So I think it’s — like as I said, as Pedro said, rather, there’s really not a read-through across to the different general rate cases in our view.
David Arcaro : Got it. Got it. Thanks. I appreciate that perspective. And then I also wanted to — let’s see, check on the CapEx outlook. It was decreased for this year and next year. Was that also related to the store project?
Maria Rigatti : Yeah. So David, it’s entirely — well, not entirely, but one piece of it is related to particularly ’23 and ’24. That’s related to the schedule around the utility owned stores. So more dollars will be spent in ’24 versus ’23. And then the other piece that I mentioned earlier was that we have some slightly different schedules around one of our transmission — larger transmission projects that we’re supposed to start in the very near future. It’s moved out essentially a year as well. So still all captured within the period through 2028, and we’re still at that $38 billion to $43 billion of CapEx.
David Arcaro : Okay, perfect. Thanks for that. I’ll pass it on. Appreciate it.
Operator: Thank you. Our next question is from Paul Zimbardo with Bank of America. You may go ahead.
Maria Rigatti : Hey, Paul.
Paul Zimbardo : Hi, good afternoon, team. The first one, I just wanted to clarify something in the prepared remarks around the Track 4 GRC benefit. You mentioned $0.12 year-over-year into 2024. Is that correct? That’s just a component of kind of what you would expect in terms of like the rate as earnings per share growth.
Maria Rigatti : Yeah, to reflect the rate base math, yeah.
Paul Zimbardo : Okay. And then the other, just assuming the cost of capital trigger is in force at $0.39, should we think about it as kind of above the earnings growth range to 2025? Because I think at this point, that would be like 609 versus the 590? Or should we think about within the range with some of those reinvestments that you discussed?
