Southern California Edison, a subsidiary of Edison
International ( EIX ), intends to install smart electric meters
in the San Joaquin Valley. As a part of Edison SmartConnect
program, the company will begin installing the meters in late
Edison SmartConnect is a $1.6 billion program authorized by the
California Public Utilities Commission. Edison SmartConnect meters
are digital, safe and mutual communicating devices. The company
will replace the traditional mechanical meters resulting in the
transition of electric system into a smart grid.
SCE's smart metering program was designed to help achieve
California's energy policy goals, relating to improved electric
system reliability, customer energy efficiency and demand response,
and reduced environmental impact. The company expects its sustained
energy conservation to reduce greenhouse gas emissions and smog
forming pollutants by an estimated 365,000 metric tons per year,
which is equivalent of removing 79,000 cars from the road.
Going forward, the program will help California to achieve its
goal of generating 33% of electricity from renewable sources by
These meters will allow the residential and small business
customers to benefit from new energy and cost-saving programs and
services in the near term. Residential customers will have the
option to choose between Edison SmartConnect meter and a
traditional electric meter. Customers choosing the traditional
electric meter program will pay a $75 onetime setup fee and a $10
recurring monthly charge as required by the California Public
The company has been focusing on developing an industry leading
smart meter program that includes extensive testing of smart meters
and associated systems to ensure their quality and performance. It
is working with Corix Utilities Inc. to make most of its
The company had installed its first smart meter in September
2009. The company plans to continue to make further installations
this year for a total of approximately 5 million SCE residential
and small business customers. It expects to make majority of the
installations from October through December 2012.
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In May this year, as a part of the Edison SmartConnect program,
the company had begun installing smart electric meters in western
Los Angeles County and eastern Ventura County.
With its strong portfolio of regulated utility assets and
well-managed merchant energy operations, Edison International
presents a lower risk profile compared to its utility-only peers.
Going forward, key growth drivers of the company are the consistent
performance of its stable utility operations, California's
supportive regulatory environment, steep growth in the rate base,
incremental dividend, and ongoing alternative energy projects, in
line with the renewable energy mandate.
However, several factors continue to weigh on the Edison
International stock, including a tepid economy, volatile gas prices
and the pending regulatory approval for recovery of capital
expansion costs. The company presently retains a short-term Zacks
#3 Rank (Hold) that corresponds with our long-term Neutral
recommendation on the stock.
The company mainly competes with Consolidated Edison
Inc. ( ED ) and Entergy Corporation (