Businessweek

Edison International, through its subsidiaries, engages in the generation and distribution of electric power. Segments The company operates through two segments, Electric Utility and Competitive Power Generation. ELECTRIC UTILITY This segment, through the company’s subsidiary, Southern California Edison Company (SCE), operates as an investor-owned public utility company. The company primarily engages in the business of supplying electricity to an approximately 50,000 square-mile area of southern California. The company serves commercial, residential, industrial, public authorities, and agricultural and other customers. Properties SCE supplies electricity to its customers through transmission and distribution networks. Its transmission facilities, which are located primarily in California and also in Nevada and Arizona, deliver power from generating sources to the distribution network and consist of lines ranging from 33 kV to 500 kV and substations. SCE's distribution system, which takes power from substations to customers, includes approximately 59,000 circuit miles of overhead lines, 44,000 circuit miles of underground lines, and approximately 700 distribution substations, majority of which are located in California. Seasonality Due to warm weather during the summer months and SCE's rate design, operating revenue during the third quarter (year ended December 2011) of each year is higher than the other quarters. Regulation SCE's retail operations are subject to regulation by the California Public Utilities Commission. SCE's wholesale operations (including sales of electricity into the wholesale markets) are subject to regulation by the Federal Energy Regulatory Commission (FERC). The construction, planning, and project site identification of SCE's power plants of 50 megawatts or greater within California are subject to the jurisdiction of the California Energy Commission. SCE is subject to the jurisdiction of the Nuclear Regulatory Commission with respect to the safety of its San Onofre and Palo Verde Nuclear Generating Stations. COMPETITIVE POWER GENERATION This segment, through the company’s subsidiary, Edison Mission Group Inc. (EMG), engages primarily in the power generation business. EMG, through its principal wholly owned subsidiary, Edison Mission Energy (EME), engages in developing, acquiring, owning or leasing, operating, and selling energy and capacity from independent power production facilities. EME also engages in hedging and energy trading activities in competitive power markets through its Edison Mission Marketing & Trading, Inc. (EMMT) subsidiary. EMG's operating projects primarily consist of coal-fired and natural gas-fired generating facilities, and renewable energy facilities, primarily wind projects. As of December 31, 2011, EMG's subsidiaries and affiliates owned or leased interests in 43 operating projects with an aggregate net physical capacity of 11,504 megawatts of which EME's pro rata share was 10,379 megawatts. As of December 31, 2011, EME's subsidiaries and affiliates also had 1 wind project and 1 natural gas-fired peaker plant under construction, totaling 80 megawatts and 479 megawatts, respectively of net generating capacity. EMG's major power plants are its coal power plants located in Illinois, which are collectively referred to as the Midwest Generation plants, and the Homer City plant located in Pennsylvania. The coal plants sell power primarily into PJM Interconnection, LLC, a Regional Transmission Organization, which includes various parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and the District of Columbia. Asset Management and Trading Activities EMG's power marketing and trading subsidiary, EMMT, manages the energy and capacity of EMG's merchant generating plants and, in addition, trades electric power, gas, oil and related commodity and financial products, including forwards, futures, options and swaps. EMMT segregates its activities into two categories: Asset Management: EMMT engages in the sale of energy and capacity and the purchase and sale of fuels, including natural gas and fuel oil, through intercompany contracts with EMG's subsidiaries that own or lease EMG's facilities. Trading: EMMT seeks to generate trading profits from volatility in the price of electricity, capacity, fuels, and transmission congestion by buying and selling contracts in wholesale markets under limitations approved by EMG's risk management committee. Regulation EMG's exempt wholesale generators are subject to the FERC's ratemaking jurisdiction under the Federal Power Act and authorized by the FERC to sell power at market-based rates. In addition, EMG's power marketing subsidiaries, including EMMT is authorized by the FERC to make wholesale market sales of power at market-based rates and subject to FERC ratemaking regulation under the Federal Power Act. Seasonality EMG's third quarter (year ended December 2011) equity in income from its unconsolidated energy projects is higher than equity in income related to other quarters of the year due to seasonal fluctuations and higher energy contract prices during the summer months. History Edison International was founded in 1886. The company was incorporated in 1987, under the laws of the state of California.