Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☑
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2024
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
CommissionFile Number
Exact Name of Registrantas specified in its charter
State or Other Jurisdiction ofIncorporation or Organization
IRS EmployerIdentification Number
1-9936
EDISON INTERNATIONAL
California
95-4137452
1-2313
SOUTHERN CALIFORNIA EDISON COMPANY
95-1240335
2244 Walnut Grove Avenue
(P.O. Box 976)
(P.O. Box 800)
Rosemead, California 91770
(Address of principal executive offices)
(626) 302-2222
(626) 302-1212
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Edison International:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, no par value
EIX
NYSE LLC
Southern California Edison Company: None.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Edison International
Yes ☑ No ☐
Southern California Edison Company
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-12 of the Exchange Act.
Large Accelerated Filer
Accelerated Filer
Non-accelerated Filer
Smaller Reporting Company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☑
Yes☐ No ☑
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:
Common Stock outstanding as of October 22, 2024:
387,150,269 Shares
434,888,104 Shares
TABLE OF CONTENTS
SEC Form 10-Q
Reference Number
GLOSSARY
iv
FORWARD-LOOKING STATEMENTS
1
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
4
Part I, Item 2
MANAGEMENT OVERVIEW
Highlights of Operating Results
2025 General Rate Case
6
Cost of Capital Trigger
7
Capital Program
Southern California Wildfires and Mudslides
8
RESULTS OF OPERATIONS
9
Three months ended September 30, 2024 versus September 30, 2023
10
Earning Activities
Cost-Recovery Activities
11
Nine months ended September 30, 2024 versus September 30, 2023
12
13
Supplemental Operating Revenue Information
14
Income Taxes
Edison International Parent and Other
Loss from Operations
LIQUIDITY AND CAPITAL RESOURCES
Available Liquidity
15
Regulatory Proceedings
Capital Investment Plan
17
Decommissioning of San Onofre
Margin and Collateral Deposits
18
Edison International Income taxes
19
Historical Cash Flows
22
Contingencies
MARKET RISK EXPOSURES
i
CRITICAL ACCOUNTING ESTIMATES AND POLICIES
NEW ACCOUNTING GUIDANCE
23
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Part I, Item 3
FINANCIAL STATEMENTS
24
Part I, Item 1
Edison International Consolidated Statements of Income
Edison International Consolidated Statements of Comprehensive Income
25
Edison International Consolidated Balance Sheets
26
Edison International Consolidated Statements of Cash Flows
28
SCE Consolidated Statements of Income
29
SCE Consolidated Statements of Comprehensive Income
SCE Consolidated Balance Sheets
30
SCE Consolidated Statements of Cash Flows
32
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
33
Note 1. Summary of Significant Accounting Policies
Note 2. Consolidated Statements of Changes in Equity
37
Note 3. Variable Interest Entities
40
Note 4. Fair Value Measurements
42
Note 5. Debt and Credit Agreements
45
Note 6. Derivative Instruments
46
Note 7. Revenue
48
Note 8. Income Taxes
49
Note 9. Compensation and Benefit Plans
50
Note 10. Investments
51
Note 11. Regulatory Assets and Liabilities
52
Note 12. Commitments and Contingencies
53
Note 13. Equity
66
Note 14. Accumulated Other Comprehensive Loss
67
Note 15. Other Income
Note 16. Supplemental Cash Flows Information
68
Note 17. Related-Party Transactions
CONTROLS AND PROCEDURES
69
Part I, Item 4
Disclosure Controls and Procedures
Changes in Internal Control Over Financial Reporting
Jointly Owned Utility Plant
LEGAL PROCEEDINGS
Part II, Item 1
2017/2018 Wildfire/Mudslide Events
Environmental Proceedings
70
ii
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Part II, Item 2
Share Repurchase Program
Purchases of Equity Securities by Edison International and Affiliated Purchasers
71
OTHER INFORMATION
Part II Item 5
EXHIBITS
72
Part II, Item 6
SIGNATURES
73
This combined Form 10-Q is separately filed by Edison International and SCE. Information contained in this document relating to SCE is filed by Edison International and separately by SCE. SCE makes no representation as to information relating to Edison International or its subsidiaries, except as it may relate to SCE and its subsidiaries.
iii
The following terms and abbreviations appearing in the text of this report have the meanings indicated below.
the Thomas Fire, the Koenigstein Fire, the Montecito Mudslides and the Woolsey Fire, collectively
2023 Form 10-K
Edison International's and SCE's combined Annual Report on Form 10-K for the year ended December 31, 2023
2023 MD&A
Edison International's and SCE's MD&A for the calendar year 2023, which was included in the 2023 Form 10-K
AB 1054
California Assembly Bill 1054, executed by the governor of California on July 12, 2019
AB 1054 Excluded Capital Expenditures
$1.6 billion in wildfire risk mitigation capital expenditures that SCE has excluded from the equity portion of SCE's rate base as required under AB 1054
AB 1054 Liability Cap
a cap on the aggregate requirement to reimburse the Wildfire Insurance Fund over a trailing three calendar year period which applies if certain conditions are met and is equal to 20% of the equity portion of the utility's transmission and distribution rate base, excluding general plant and intangibles, in the year of the applicable prudency determination
ARO(s)
asset retirement obligation(s)
CAISO
California Independent System Operator
Cal Advocates
the California Public Advocates Office
CAL OES
California Governor's Office of Emergency Services
Capistrano Wind
a group of wind projects referred to as Capistrano Wind
Capital Structure Compliance Period
January 1, 2023 to December 31, 2025, the current compliance period for SCE's CPUC authorized capital structure
CCAs
community choice aggregators which are cities, counties, and certain other public agencies with the authority to generate and/or purchase electricity for their local residents and businesses
CPUC
California Public Utilities Commission
CSRP
Customer Service Re-platform, a customer service system implemented in April 2021
DGC
the decommissioning general contractor engaged by SCE to undertake a significant scope of decommissioning activities at San Onofre
ECS
SCE commercial telecommunications services operated under the name of Edison Carrier Solutions
EIS
Edison Insurance Services, Inc., a wholly-owned subsidiary of Edison International licensed to provide insurance to Edison International and its subsidiaries
Electric Service Provider
an entity other than an investor-owned utility or CCA that provides electric power and ancillary services to retail customers
ERRA
Energy Resource Recovery Account
Fast curve settings
protective settings, used to mitigate the risk of wildfires in high fire risk areas, that enable SCE to more quickly shut off power when an electrical fault occurs than under traditional settings
FERC
Federal Energy Regulatory Commission
Fitch
Fitch Ratings, Inc.
GAAP
generally accepted accounting principles in the United States
GHG
greenhouse gas
GRC
general rate case
IRA
Inflation Reduction Act of 2022
Koenigstein Fire
a wind-driven fire that originated near Koenigstein Road in the City of Santa Paula in Ventura County, California, on December 4, 2017
MD&A
Management's Discussion and Analysis of Financial Condition and Results of Operations
Montecito Mudslides
the debris flows and flooding in Montecito, Santa Barbara County, California, that occurred in January 2018
Moody's
Moody's Investors Service, Inc.
MW
Megawatt(s)
NDCTP
Nuclear Decommissioning Cost Triennial Proceeding, a CPUC proceeding to review decommissioning costs
NERC
North American Electric Reliability Corporation
NRC
United States Nuclear Regulatory Commission
OEIS
Office of Energy Infrastructure Safety of the California Natural Resources Agency
Other 2017/2018 Wildfires
Collectively, all the wildfires that originated in Southern California in 2017 or 2018 where SCE's equipment has been or may be alleged to be associated with the fire's ignition, except for the Thomas Fire, the Koenigstein Fire and the Woolsey Fire
Other Wildfires
Collectively, the Other 2017/2018 Wildfires and the Post-2018 Wildfires
PABA
Portfolio Allocation Balancing Account
Palo Verde
nuclear electric generating facility located near Phoenix, Arizona in which SCE holds a 15.8% ownership interest
PBOP(s)
postretirement benefits other than pension(s)
PG&E
Pacific Gas & Electric Company
Post-2018 Wildfires
Collectively, all the wildfires that originated in Southern California after 2018 where SCE's equipment has been or may be alleged to be associated with the fire's ignition
PSPS
Public Safety Power Shutoff(s)
ROE
return on common equity
RPS
California's Renewables Portfolio Standard
S&P
Standard & Poor's Financial Services LLC
San Onofre
retired nuclear generating facility located in south San Clemente, California in which SCE holds a 78.21% ownership interest
SCE
Southern California Edison Company, a wholly-owned subsidiary of Edison International
SCE Recovery Funding LLC
a bankruptcy remote, wholly owned special purpose subsidiary, consolidated by SCE
SDG&E
San Diego Gas & Electric Company
SEC
U.S. Securities and Exchange Commission
SED
Safety and Enforcement Division of the CPUC
SED Agreement
an agreement dated October 21, 2021 between SCE and the SED regarding the 2017/2018 Wildfire/Mudslide Events and three other 2017 wildfires
Thomas Fire
a wind-driven fire that originated in the Anlauf Canyon area of Ventura County, California, on December 4, 2017
TKM
collectively, the Thomas Fire, the Koenigstein Fire and the Montecito Mudslides
TKM Settlement Agreement
a settlement agreement entered into between SCE and the California Public Advocates Office in August 2024 in the CPUC-jurisdictional rate recovery proceeding related to TKM
Track 4
Track 4 of the 2021 GRC, which addressed SCE's revenue requirement for 2024
Trio
Edison Energy, LLC, an indirect wholly-owned non-utility subsidiary of Edison International, a global energy advisory firm providing integrated sustainability and energy solutions to commercial, industrial and institutional customers doing business as "Trio"
WCCP
Wildfire Covered Conductor Program
WMP
a wildfire mitigation plan required to be filed under AB 1054 to describe a utility's plans to construct, operate, and maintain electrical lines and equipment that will help minimize the risk of catastrophic wildfires caused by such electrical lines and equipment
Wildfire Insurance Fund
the insurance fund established under AB 1054
Woolsey Fire
a wind-driven fire that originated in Ventura County in November 2018
v
This quarterly report on Form 10-Q contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect Edison International's and SCE's current expectations and projections about future events based on Edison International's and SCE's knowledge of present facts and circumstances and assumptions about future events and include any statements that do not directly relate to a historical or current fact. Other information distributed by Edison International and SCE that is incorporated in this report, or that refers to or incorporates this report, may also contain forward-looking statements. In this report and elsewhere, the words "expects," "believes," "anticipates," "estimates," "projects," "intends," "plans," "probable," "may," "will," "could," "would," "should," "targets," and variations of such words and similar expressions, or discussions of strategy or plans, are intended to identify forward-looking statements. Such statements necessarily involve risks and uncertainties that could cause actual results to differ materially from those anticipated. Some of the risks, uncertainties and other important factors that could cause results to differ from those currently expected, or that otherwise could impact Edison International and SCE, include, but are not limited to the:
2
Additional information about risks and uncertainties, including more detail about the factors described in this report, is contained throughout this report and in the 2023 Form 10-K, including the "Risk Factors" section. Readers are urged to read this entire report, including information incorporated by reference, as well as the 2023 Form 10-K, and carefully consider the risks, uncertainties, and other factors that affect Edison International's and SCE's businesses. Forward-looking statements speak only as of the date they are made and neither Edison International nor SCE are obligated to publicly update or revise forward-looking statements. Readers should review future reports filed by Edison International and SCE with the SEC. Edison International and SCE post or provide direct links to (i) certain SCE and other parties' regulatory filings and documents with the CPUC and the FERC and certain agency rulings and notices in open proceedings in a section titled "SCE Regulatory Highlights," (ii) certain documents and information related to Southern California wildfires which may be of interest to investors in a section titled "Southern California Wildfires," and (iii) presentations, documents and information that may be of interest to investors in a section titled "Presentations and Updates" at www.edisoninvestor.com in order to publicly disseminate such information. The reports, presentations, documents and information contained on, or connected to, the Edison International investor website are not deemed part of, and are not incorporated by reference into, this report.
The MD&A for the nine months ended September 30, 2024 discusses material changes in the consolidated financial condition, results of operations and other developments of Edison International and SCE since December 31, 2023 and as compared to the nine months ended September 30, 2023. This discussion presumes that the reader has read or has access to the 2023 MD&A.
Except when otherwise stated, references to each of Edison International or SCE mean each such company with its subsidiaries on a consolidated basis. References to "Edison International Parent and Other" mean Edison International Parent and its subsidiaries other than SCE and its subsidiaries and "Edison International Parent" mean Edison International on a stand-alone basis, not consolidated with its subsidiaries. Unless otherwise described, all the information contained in this report relates to both filers.
3
Edison International is the ultimate parent holding company of SCE and Edison Energy, LLC, doing business as Trio ("Trio"). SCE is an investor-owned public utility primarily engaged in the business of supplying and delivering electricity to an approximately 50,000 square mile area across Southern, Central and Coastal California. Trio is a global energy advisory firm providing integrated sustainability and energy solutions to commercial, industrial and institutional customers. Trio's business activities are currently not material to report as a separate business segment.
Edison International's earnings are prepared in accordance with GAAP. Management uses core earnings (loss) internally for financial planning and for analysis of performance. Core earnings (loss) are also used when communicating with investors and analysts regarding Edison International's earnings results to facilitate comparisons of the company's performance from period to period. Core earnings (loss) are a non-GAAP financial measure and may not be comparable to those of other companies. Core earnings (loss) are defined as earnings attributable to Edison International shareholders less non-core items. Non-core items include income or loss from discontinued operations and income or loss from significant discrete items that management does not consider representative of ongoing earnings, such as write downs, asset impairments and other income and expense related to changes in law, outcomes in tax, regulatory or legal proceedings, and exit activities, including sale of certain assets and other activities that are no longer continuing.
Beginning July 1, 2023, SCE implemented a customer-funded wildfire self-insurance program. With the commencement of this program, Edison International and SCE no longer consider claims-related losses for wildfires to be representative of ongoing earnings and treat such costs as non-core items. For additional information on the customer-funded self-insurance program, see "Management Overview—Customer-Funded Self-Insurance" in the 2023 MD&A.
Three months ended
Nine months ended
September 30,
(in millions)
2024
2023
Change
Net income (loss) available to Edison International
$
602
239
363
1,190
1,029
161
(86)
(84)
(2)
(246)
(210)
(36)
516
155
361
944
819
125
Less: Non-core items
2017/2018 Wildfire/Mudslide Events claims and expenses, net of recoveries
(7)
(458)
451
(485)
(560)
75
Other Wildfires claims and expenses, net of recoveries1
(3)
(124)
(117)
Wildfire Insurance Fund expense
(54)
(109)
(159)
Severance costs, net of recovery
(44)
—
2021 NDCTP disallowance
(30)
Customer cancellations of certain ECS data services
(17)
Insurance recovery related to employment litigation matter
(10)
Income tax benefit2
145
(120)
213
214
(1)
Customer revenues for EIS insurance contract, net of (claims)
Income tax benefit (expense)2
(9)
Total non-core items
(66)
(376)
310
(551)
(516)
(35)
Core earnings (loss)
667
613
54
1,739
1,578
(85)
(82)
(244)
(243)
582
531
1,495
1,335
160
Edison International's third quarter 2024 earnings increased $361 million from the third quarter of 2023, resulting from an increase in SCE's earnings of $363 million and an increase in Edison International Parent and Other's loss of $2 million. SCE's higher net income consisted of $54 million of higher core earnings and $309 million of lower non-core loss. Edison International Parent and Other's loss increased due to $3 million of higher core loss, partially offset by $1 million of lower non-core loss. Edison International's earnings for the nine months ended September 30, 2024 increased $125 million from the nine months ended September 30, 2023, resulting from an increase in SCE's earnings of $161 million and an increase in Edison International Parent and Other's loss of $36 million. SCE's higher net income consisted of $161 million of higher core earnings. Edison International Parent and Other's loss increased due to $35 million of lower earnings in non-core items and $1 million increase in core loss.
The increase in SCE's core earnings for both the three and nine months ended September 30, 2024 from the same periods in 2023 was primarily due to higher revenue authorized in Track 4 and an increase in the authorized rate of return resulting from the cost of capital adjustment mechanism, partially offset by higher interest expense. The increase in core earnings for the nine months period was also due to recognition of previously unrecognized return on rate base related to emergency restoration related capital expenditures.
Edison International Parent and Other's core loss for the three and nine months ended September 30, 2024 were both in line with the same periods in the prior year.
5
Consolidated non-core items for the nine months ended September 30, 2024 and 2023 primarily included:
See "Results of Operations" for discussion of SCE's and Edison International Parent and Other's results of operations.
As discussed in the 2023 Form 10-K, SCE filed its 2025 GRC application with the CPUC in May 2023, for the four-year period 2025 – 2028. In its application, SCE requested that the CPUC authorize a test year 2025 revenue requirement of approximately $10.3 billion. This represents a $1.9 billion, or 23% increase over the approximately $8.4 billion 2024 revenue requirement adopted in Track 4, prior to adjustments for updated operations and maintenance escalation rates, the CPUC's decisions to adopt SCE's 2023 to 2025 cost of capital, and the expanded customer-funded self-insurance for wildfire-related claims.
In February 2024, intervenors to the 2025 GRC proceeding, including Cal Advocates and The Utility Reform Network ("TURN"), submitted testimony in response to SCE's application. Cal Advocates and TURN recommended reductions to SCE's requests for load growth investments, infrastructure replacement, targeted undergrounding of conductors, and other areas of SCE's application.
Cal Advocates in its testimony proposed a test year 2025 revenue requirement of approximately $9.3 billion, representing an increase of approximately 11% over the 2024 revenue requirement adopted in Track 4, before the adjustments described above. While TURN did not calculate a test year 2025 revenue requirement in connection with its proposals in its testimony,
SCE estimates that TURN's proposals would result in a test year 2025 revenue requirement of approximately 12% over the 2024 revenue requirement adopted in Track 4, before the adjustments described above.
In June 2024, following amendments and other revisions to rebuttal testimony, SCE updated its 2025 revenue requirement request to $10.5 billion, and proposed post-test year revenue requirement increases of approximately $670 million, $750 million and $730 million in 2026, 2027 and 2028, respectively. The updated 2025 revenue requirement included a $220 million increase associated with the cost of capital adjustment authorized by the CPUC in a separate proceeding, which was subsequently modified by a CPUC decision in October 2024, as discussed in "—Cost of Capital Trigger."
In July 2024, the CPUC issued a decision approving SCE's request in the 2025 GRC to extend the wildfire customer-funded self-insurance through the 2025 GRC period.
In October 2024, the CPUC approved the establishment of a memorandum account to track changes in the revenue requirement between January 1, 2025, and the implementation date of the final decision, in the event that the decision is not issued in time for implementation by January 2025. While SCE and certain parties have entered into stipulations to resolve certain contested areas in the 2025 GRC, SCE cannot predict the revenue requirement the CPUC will ultimately authorize or forecast the timing of a final decision.
As discussed in the 2023 Form 10-K, the cost of capital adjustment mechanism set by the CPUC provides for an adjustment to SCE's authorized cost of capital that, when triggered, will impact SCE's results of operations and cash flows. In 2023, the cost of capital adjustment mechanism was triggered and resulted in an increase to SCE's CPUC-authorized ROE from 10.05% to 10.75% effective January 1, 2024. The resulting increase to SCE's 2024 GRC-related revenue requirement was $201 million. The cost of capital adjustment mechanism was not triggered in 2024.
In October 2024, the CPUC issued a decision modifying the cost of capital adjustment mechanism that changes the mechanism's adjustment ratio from 50% to 20% effective on January 1, 2025, and also applies to the increase that most recently triggered it in 2023. As a result, SCE's 2025 CPUC-authorized ROE will be adjusted to 10.33%. The decision reduces SCE's updated 2025 GRC-related revenue requirement by approximately $117 million. For further information, see "—2025 General Rate Case." For additional information on the cost of capital adjustment mechanism, see "Business—SCE—Overview of Ratemaking Process—CPUC" in the 2023 Form 10-K.
Total capital expenditures (including accruals) were $4.0 billion and $3.9 billion for the nine months ended September 30, 2024 and 2023, respectively. As discussed in the 2023 Form 10-K, SCE forecasts total capital expenditures ranging from $32.2 billion to $37.5 billion for 2024 – 2028, and weighted average annual rate base from $43.0 billion to $60.6 billion for 2024 – 2028. These capital program and rate base projections incorporate the amounts requested in the 2025 GRC application and do not reflect subsequent updates included in SCE's amended and revised rebuttal testimony. For further information regarding the capital expenditures, see "Liquidity and Capital Resources—SCE—Capital Investment Plan" below and "Management Overview—Capital Program" in the 2023 MD&A.
In May 2023, the CAISO released its 2022 – 2023 Transmission Plan based on the CPUC's projections that more than 40 gigawatts of new resources need to be added in California by 2032. As the incumbent transmission owner for a portion of these transmission projects, SCE expects to construct projects requiring capital investment of at least $2.0 billion, most of which will be incurred beyond 2028. In May 2024, the CAISO released its 2023 – 2024 Transmission Plan which identified four additional transmission projects expected to be constructed by SCE with anticipated capital expenditures of approximately $40 million in 2027 and $48 million in 2029.
In addition to projects awarded to incumbent transmission owners, the CAISO identified projects eligible for competitive solicitation. On May 20, 2024, SCE, in association with Lotus Infrastructure Global Operations, LLC ("Lotus"), was selected
as the approved project sponsor for a 30-mile overhead transmission line project connecting San Diego and Orange Counties. The project is expected to be in-service in 2032. Subject to contract finalization with the CAISO and Lotus, under the terms of the commercial arrangement with Lotus, Lotus is expected to finance and construct the project. Upon the in-service date, SCE will purchase the entire project from Lotus for approximately $325 million, subject to certain adjustments, and lease 25% of the transmission capability to Lotus. Under the proposed lease agreement, Lotus will pay approximately $81 million in prepaid rent as well as 25% of the ongoing operations and maintenance costs. As a result, SCE expects to place approximately $244 million into its transmission rate base in 2032.
As discussed in the 2023 Form 10-K, multiple lawsuits and investigations related to the 2017/2018 Wildfire/Mudslide Events have been initiated against SCE and Edison International. SCE has previously entered into settlements with a number of local public entities, subrogation and individual plaintiffs in the TKM and Woolsey Fire litigations and under the SED Agreement. As of October 22, 2024, in addition to the outstanding claims of approximately 440 of the approximately 15,000 initial individual plaintiffs, there were alleged and potential claims of certain public entity plaintiffs, including CAL OES, outstanding.
Through September 30, 2024, SCE has accrued estimated losses of $9.9 billion, recoveries from insurance of $2.0 billion, all of which have been collected, and expected recoveries through FERC electric rates of $440 million, $376 million of which has been collected, related to the 2017/2018 Wildfire/Mudslide Events claims. The after-tax net charges to earnings recorded through September 30, 2024 have been $5.4 billion.
Estimated losses for the 2017/2018 Wildfire/Mudslide Events litigation are based on a number of assumptions and are subject to change as additional information becomes available. Actual losses incurred may be higher or lower than estimated based on several factors, including the uncertainty in estimating damages that have been or may be alleged. For instance, SCE will receive additional information with respect to damages claimed as the claims mediation and trial processes progress. Other factors that can cause actual losses incurred to be higher or lower than estimated include the ability to reach settlements and the outcomes of settlements reached through the ongoing claims mediation processes, uncertainties related to the impact of outcomes of wildfire litigation against other parties and increasingly negative jury sentiments in general litigation, uncertainties related to the sufficiency of insurance held by plaintiffs, uncertainties related to the litigation processes, including whether plaintiffs will ultimately pursue claims, uncertainty as to the legal and factual determinations to be made during litigation, including uncertainty as to the contributing causes of the 2017/2018 Wildfire/Mudslide Events, the complexities associated with fires that merge and whether inverse condemnation will be held applicable to SCE with respect to damages caused by the Montecito Mudslides, and the uncertainty as to how these factors impact future settlements.
As of September 30, 2024, SCE had paid $9.3 billion under executed settlements and had $78 million to be paid under executed settlements, including $58 million to be paid under the SED Agreement, related to the 2017/2018 Wildfire/Mudslide Events. After giving effect to all payment obligations under settlements entered into through September 30, 2024, Edison International's and SCE's best estimate of expected losses for remaining alleged and potential claims related to the 2017/2018 Wildfire/Mudslide Events was $491 million. Edison International and SCE may incur a material loss in excess of amounts accrued in connection with the remaining alleged and potential claims related to the 2017/2018 Wildfire/Mudslide Events.
CPUC-Jurisdictional Rate Recovery
In August 2023, SCE filed an application to seek CPUC-jurisdictional rate recovery of prudently incurred losses related to the Thomas Fire, the Koenigstein Fire and the Montecito Mudslides. SCE also sought recovery of approximately $65 million in restoration costs in the proceeding. In August 2024, SCE and Cal Advocates filed a joint motion in the proceeding seeking
approval of the TKM Settlement Agreement between SCE and Cal Advocates. One party to the proceeding, the Wild Tree Foundation, has opposed the TKM Settlement Agreement.
Under the TKM Settlement Agreement, if approved by the CPUC, SCE will be authorized to recover 60%, or approximately $1.6 billion, of approximately $2.7 billion of losses, consisting of approximately $1.3 billion of uninsured claims paid as of May 31, 2024, and $0.3 billion of costs, composed of legal and financing costs incurred as of May 31, 2024 and estimated ongoing financing costs. SCE will also be authorized to recover 60% of claims paid and related costs incurred after May 31, 2024, other than for $125 million of uninsured claims and related financing costs which SCE waived its right to seek recovery of under the SED Agreement. Subject to approval of the TKM Settlement Agreement, SCE will request approval from the CPUC to finance the amounts authorized under the TKM Settlement Agreement through the issuance of securitized bonds. Further, SCE will be authorized to recover approximately $55 million of approximately $65 million in restoration costs incurred. In the TKM Settlement Agreement, SCE also agreed to $50 million of shareholder-funded wildfire- and public safety-related system enhancements. If the TKM Settlement Agreement is approved, SCE will be allowed to permanently exclude any after-tax charges to equity associated with the costs disallowed or funded by shareholders in the TKM Settlement Agreement and the debt issued to finance those costs from SCE's CPUC regulatory capital structure.
In October 2024, SCE filed an application to seek CPUC-jurisdictional rate recovery of $5.4 billion of prudently incurred losses related to the Woolsey Fire, consisting of approximately $4.4 billion of uninsured claims paid as of August 31, 2024 and $1.0 billion of associated costs, composed of legal and financing costs incurred as of August 31, 2024 and estimated ongoing financing costs. SCE is also seeking recovery of approximately $84 million in restoration costs in the proceeding.
Because the CPUC's decision in a cost recovery proceeding involving SDG&E arising from several 2007 wildfires in SDG&E's service area is the only directly comparable precedent available, SCE believes that there is substantial uncertainty regarding how the CPUC will interpret and apply its prudency standard to an investor-owned utility in wildfire claims related cost-recovery proceedings for fires ignited prior to the adoption of AB 1054 on July 12, 2019. Accordingly, while the CPUC has not made a determination regarding SCE's prudency relative to any of the 2017/2018 Wildfire/Mudslide Events, SCE is unable to conclude, at this time, that uninsured CPUC-jurisdictional wildfire-related costs related to the 2017/2018 Wildfire/Mudslide Events are probable of recovery through electric rates. If, and when, the CPUC adopts a final decision approving the TKM Settlement Agreement, SCE will record a regulatory asset for recoveries permitted under the agreement. SCE does not expect to record a regulatory asset for recoveries related to the Woolsey Fire at that time. SCE will continue to evaluate the facts and circumstances of the Woolsey Fire cost recovery proceeding in determining if and when a regulatory asset may be recorded.
For further information on Southern California Wildfires and Mudslides, see "Risk Factors," "Notes to Consolidated Financial Statements—Note 1. Summary of Significant Accounting Policies—Initial and annual contributions to the wildfire insurance fund established pursuant to California Assembly Bill 1054," "Business—Southern California Wildfires" in the 2023 Form 10-K and "Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides" in this report.
SCE's results of operations are derived mainly through two sources:
The following table is a summary of SCE's results of operations for the periods indicated.
Three months ended September 30, 2024
Three months ended September 30, 2023
Cost-
Earning
Recovery
Total
Activities
Consolidated
Operating revenue
2,606
2,582
5,188
2,387
2,300
4,687
Purchased power and fuel
1,898
1,988
Operation and maintenance
685
679
1,364
552
302
854
Wildfire-related claims, net of insurance recoveries
479
36
Depreciation and amortization
698
710
650
665
Property and other taxes
163
167
133
138
Total operating expenses
1,582
2,593
4,175
1,868
2,310
4,178
Operating income (loss)
1,024
(11)
1,013
519
509
Interest expense
(390)
(13)
(403)
(353)
(16)
(369)
Other income, net
102
126
128
Income before income taxes
736
268
Income tax expense (benefit)
95
Net income
641
269
Less: Preference stock dividend requirements
39
Net income available to common stock
Earning activities were primarily affected by the following:
Operating revenue and the corresponding operating expenses in cost-recovery activities were primarily affected by the following:
Nine months ended September 30, 2024
Nine months ended September 30, 2023
7,662
5,914
13,576
6,787
5,799
12,586
4,140
4,453
2,159
1,754
3,913
1,828
1,342
3,170
614
575
109
159
2,101
35
2,136
1,937
1,969
461
474
405
20
425
5,444
5,942
11,386
4,904
5,847
10,751
2,218
(28)
2,190
1,883
(48)
1,835
(1,144)
(41)
(1,185)
(968)
(29)
(997)
339
408
298
77
375
1,413
1,213
Income tax expense
94
96
1,319
1,117
129
88
As a result of the CPUC-authorized decoupling mechanism, SCE revenues are not affected by changes in volume of retail electricity sales.
Compared to the same periods in 2023, SCE's income tax expense increased by $96 million for the three months ended September 30, 2024 and was comparable to the nine months ended September 30, 2024. In both periods, the key drivers were higher pre-tax income partially offset by higher flow-through tax benefits. The effective tax rates were 12.9% and (0.4)% for the three months ended September 30, 2024 and 2023, respectively. The effective tax rates were 6.7% and 7.9% for the nine months ended September 30, 2024, and 2023, respectively. SCE's effective tax rate is below the federal statutory rate of 21% for 2024 and 2023 primarily due to the CPUC's flow-through ratemaking treatment for the current tax benefit arising from certain property-related and other temporary differences, which reverse over time. The accounting treatment for these temporary differences results in recording regulatory assets and liabilities for amounts that would otherwise be recorded to deferred tax expense/benefit.
See "Notes to Consolidated Financial Statements—Note 8. Income Taxes" for a reconciliation of the federal statutory rate to the effective income tax rates.
Results of operations for Edison International Parent and Other include amounts from other subsidiaries that are not reportable segments, as well as intercompany eliminations.
The following table summarizes the results of Edison International Parent and Other:
Three months ended September 30,
Nine months ended September 30,
Edison International Parent and Other net loss
(64)
(57)
(181)
(131)
Less: Preferred stock dividend requirements
27
65
79
Edison International Parent and Other net loss attributable to common shareholders
The net loss attributable to common shareholders from operations of Edison International Parent and Other for the three months ended September 30, 2024 was in line with the same period in 2023. The net loss attributable to common stock from operations of Edison International Parent and Other increased $36 million for the nine months ended September 30, 2024 compared to the same period in 2023, primarily due to lack of earnings from an EIS insurance contract and higher interest expense, partially offset by lower preferred stock dividend.
SCE's ability to operate its business, fund capital expenditures, and implement its business strategy is dependent upon its cash flow and access to the bank and capital markets. SCE's overall cash flows fluctuate based on, among other things, its ability to recover its costs in a timely manner from its customers through regulated rates, changes in commodity prices and volumes, collateral requirements, interest obligations, dividend payments to and equity contributions from Edison International, obligations to preference shareholders, and the outcome of tax, regulatory and legal matters.
In the next 12 months, SCE expects to fund its cash requirements through operating cash flows, and capital market and bank financings. SCE also has availability under its credit facility to fund cash requirements. SCE also expects to issue additional debt for general corporate purposes, and to finance, and refinance debt issued for, payment of claims and expenses related to the 2017/2018 Wildfire/Mudslide Events.
During the first nine months of 2024, SCE issued a total of $4.3 billion of first and refunding mortgage bonds. For further details, see "Notes to Consolidated Financial Statements—Note 5. Debt and Credit Agreements." In May 2024, SCE issued $350 million of preference stock. The proceeds were used in June 2024 to redeem all outstanding shares of SCE's Series E Preference Stock. For further details, see "Notes to Consolidated Financial Statements—Note 13. Equity."
SCE's credit ratings may be affected if, among other things, regulators fail to successfully implement AB 1054 in a consistent and credit supportive manner, or the Wildfire Insurance Fund is depleted by claims from catastrophic wildfires. Credit rating downgrades increase the cost and may impact the availability of short-term and long-term borrowings, including commercial paper, credit facilities, bond financings or other borrowings. In addition, some of SCE's power procurement contracts and environmental remediation obligations would require SCE to pay related liabilities or post additional collateral if SCE's credit rating were to fall below investment grade. For further details, see "—Margin and Collateral Deposits."
For restrictions on SCE's ability to pay dividends, see "Notes to Consolidated Financial Statements—Note 1. Summary of Significant Accounting Policies—SCE Dividends" in the 2023 Form 10-K.
At September 30, 2024, SCE had cash on hand of $91 million and approximately $2.8 billion available to borrow on its $3.4 billion revolving credit facility. In May 2024, SCE extended its credit facility through May 2028. The aggregate maximum principal amount may be increased up to $4.0 billion, provided that additional lender commitments are obtained. SCE also has standby letters of credit with total capacity of $625 million, and the unused amount was $429 million as of September 30, 2024. For further details, see "Notes to Consolidated Financial Statements—Note 5. Debt and Credit Agreements."
SCE may finance balancing account undercollections and working capital requirements to support operations and capital expenditures with commercial paper, its credit facilities or other borrowings, subject to availability in the bank and capital markets. As necessary, SCE will utilize its available liquidity, capital market financings, other borrowings or parent company contributions to SCE equity in order to meet its obligations as they become due, including costs related to the 2017/2018 Wildfire/Mudslide Events. For further information, see "Management Overview—Southern California Wildfires and Mudslides."
Debt Covenant
SCE's credit facilities and term loan require a debt to total capitalization ratio as defined in the applicable agreements of less than or equal to 0.65 to 1. At September 30, 2024, SCE's debt to total capitalization ratio was 0.57 to 1.
At September 30, 2024, SCE was in compliance with all financial covenants that affect access to capital.
Wildfire-related Regulatory Proceedings
In response to the increase in wildfire activity, and faster progression of and increased damage from wildfires across SCE's service area and throughout California, SCE has incurred wildfire mitigation, wildfire insurance and wildfire and drought restoration related spending at levels significantly exceeding amounts authorized in SCE's GRCs.
2021 GRC Wildfire Mitigation Memorandum Account Balances
In June 2022, SCE filed an application with the CPUC requesting reasonableness review of the incremental costs incurred in 2021 related to non-WCCP wildfire mitigation and vegetation management activities, requesting a total revenue requirement of approximately $327 million plus ongoing capital-related revenue requirement. In March 2024, the CPUC issued a decision fully authorizing SCE's requested revenue requirement. The revenue requirement is being recovered in rates over 12 months starting June 1, 2024.
In October 2023, SCE requested authority to recover a revenue requirement of $384 million, including interest, associated with 2022 operations and maintenance and capital expenditures above levels authorized in wildfire mitigation accounts and the vegetation management balancing account. In July 2024, the CPUC approved SCE's request for interim rate recovery of $210 million of this revenue requirement, subject to refund. The revenue requirement for the interim rate recovery is being recovered in rates over 17 months starting October 1, 2024. A final decision for the total authorized revenue requirement is expected in the second quarter of 2025 according to the CPUC adopted schedule.
2020 Emergency Wildfire Restoration
As discussed in the 2023 MD&A, SCE filed a catastrophic event memorandum account application in 2022 primarily related to restoration efforts related to multiple 2020 wildfires. In May 2024, the CPUC issued a decision approving the recovery of SCE's capital request of $312 million and operation and maintenance expenses of $200 million, resulting in a revenue requirement of $191 million plus ongoing capital-related revenue requirement. The revenue requirement is being recovered in rates over a 12-month period starting October 1, 2024.
Multi-year Wildfire Mitigation and Catastrophic Events Filing ("WMCE Filing")
In April 2024, SCE filed its WMCE Filing, seeking to recover incremental operating and maintenance expenses of $320 million and incremental capital expenditures of $702 million, primarily associated with 2019 – 2023 WCCP capital expenditures recorded in the wildfire risk mitigation balancing account, 2023 operations and maintenance and capital expenditures incremental to amounts authorized in wildfire mitigation accounts and the vegetation management balancing account, storm-related costs associated with certain 2020 – 2022 events recorded in the catastrophic event memorandum account, and certain wildfire liability insurance premium expenses recorded to the wildfire expense memorandum account, which were denied without prejudice in a previous decision. In July 2024, the CPUC adopted a schedule with a proposed decision expected in the third quarter of 2025.
ERRA Trigger Application
SCE recovers its fuel and purchased power-related costs through various balancing accounts, primarily the ERRA and the PABA. SCE sets rates based on an annual forecast of the costs that it expects to incur during the subsequent year. The aggregate overcollection in the ERRA and the eligible portion of the PABA at April 30, 2024 resulted in SCE triggering an established mechanism, which required SCE to file an expedited application for the CPUC's approval to reduce bundled service generation rates (see "Business—SCE—Overview of Ratemaking Process" in the 2023 Form 10-K for further information about the trigger mechanism). The CPUC approved this application in August 2024, resulting in a $742 million reduction in the revenue requirement, returned through rates over a 12-month period starting October 1, 2024.
2025 FERC Formula Rate Annual Update
In June 2024, SCE provided its preliminary 2025 annual transmission revenue requirement update to interested parties. The update proposes a 2025 transmission revenue requirement of $1.3 billion, which is a $221 million, or 20% increase from the 2024 annual rates. The increase is primarily due to 2024 rates including a return of a prior year overcollection. SCE expects to file its 2025 annual update with the FERC by December 1, 2024, with the proposed rates effective January 1, 2025.
16
Major Transmission and Utility Owned Storage Projects
Riverside Transmission Reliability Project
As discussed in the 2023 MD&A, the City of Norco filed a petition for modification ("PFM") to modify the CPUC decision approving the project and reopen the record to reconsider full undergrounding during 2023. In March 2024, the CPUC denied the PFM. In May 2024, the Riverside City Council voted to move forward with the original scope of the project and SCE restarted its work on the project.
Alberhill System Project
As discussed in the 2023 MD&A, a final CPUC decision remains pending. In June 2024, the CPUC issued an addendum to its 2017 Final Environmental Impact Report, concluding its California Environmental Quality Act review. The project is now seeking final CPUC approval to begin construction. SCE is expecting the final CPUC decision in mid-2025.
Eldorado-Lugo-Mohave Upgrade Project
As discussed in the 2023 MD&A, additional work is required to mitigate the impact of the project on nearby natural gas transmission lines and a further PFM or an amendment to an existing PFM is expected to be filed to include reasonable and prudent costs of the mitigation work. SCE expects the project to be in service in 2025, subject to the completion of environmental agency review of the mitigation work. See "Liquidity and Capital Resources—SCE—Capital Investment Plan" in the 2023 Form 10-K for further information.
Utility Owned Storage
As discussed in the 2023 MD&A, in October 2021, SCE contracted with Ameresco, Inc. ("Ameresco") for the construction of utility owned energy storage projects at three sites in SCE's service territory that have an aggregate capacity of 537.5 MW, consisting of a 225 MW project, a 200 MW project and a 112.5 MW project, with an in-service date of August 1, 2022. The 200 MW and 112.5 MW projects went in-service during the third quarter of 2024 and Ameresco has advised SCE that it currently expects the 225 MW project to be in-service before the end of 2024. SCE believes that there is risk of delay beyond Ameresco's projected in-service date.
As discussed in the 2023 Form 10-K, SCE filed the 2021 NDCTP with the CPUC in February 2022 to request reasonableness review of approximately $570 million (SCE share in 2022 dollars) of recorded San Onofre Units 2 and 3 decommissioning costs incurred during the period 2018 to 2020. In May 2023, SCE agreed to a $30 million disallowance related to the 2021 NDCTP under a settlement with the relevant intervenors and recognized the disallowance in 2023. In August 2024, the CPUC approved the 2021 NDCTP, as modified by the settlement agreement. In September 2024, SCE made a contribution to the non-qualified nuclear decommissioning trust to effectuate the disallowance. For more information, see "Liquidity and Capital Resources—SCE—Decommissioning of San Onofre" in the 2023 Form 10-K.
In the third quarter of 2024, SCE updated its decommissioning cost estimate for decommissioning activities to be completed at San Onofre Units 2 and 3 to $3.0 billion (SCE share is $2.3 billion) in 2024 dollars. For more information, see "Notes to Consolidated Financial Statements—Note 1. Summary of Significant Accounting Policies." The decommissioning cost estimate included costs through the expected decommissioning completion date, currently estimated to be in 2056 for San Onofre Units 2 and 3. SCE intends to file its updated decommissioning cost estimate with the CPUC before the end of 2024.
Certain derivative instruments, power and energy procurement contracts and other contractual arrangements contain collateral requirements. In addition, certain environmental remediation obligations require financial assurance that may be in
the form of collateral postings. Future collateral requirements may differ from the requirements at September 30, 2024 due to the addition of incremental power and energy procurement contracts with collateral requirements, if any, the impact of changes in wholesale power and natural gas prices on SCE's contractual obligations, and the impact of SCE's credit ratings falling below investment grade.
The table below provides the amount of collateral posted by SCE to its counterparties as well as the potential collateral that would have been required as of September 30, 2024, if SCE's credit rating had been downgraded to below investment grade as of that date. The table also provides the potential collateral that could be required due to adverse changes in wholesale power and natural gas prices over the remaining lives of existing power and fuel derivative contracts.
In addition to amounts shown in the table, power and fuel contract counterparties may also institute new collateral requirements, applicable to future transactions to allow SCE to continue trading in power and fuel contracts at the time of a downgrade or upon significant increases in market prices. Furthermore, SCE may also be required to post up to $50 million in collateral in connection with its environmental remediation obligations, within 120 days of the end of the fiscal year in which a downgrade below investment grade occurs.
Collateral posted as of September 30, 20241
368
Incremental collateral requirements for purchased power and fuel contracts resulting from a potential downgrade of SCE's credit rating to below investment grade2
101
Incremental collateral requirements for SCE's financial hedging activities resulting from adverse market price movement3
57
Posted and potential collateral requirements
526
Net collateral provided to counterparties and other brokers consisted of $211 million in letters of credit and surety bonds and $157 million of cash collateral.
Represents potential collateral requirements for accounts payable and mark-to-market valuation at September 30, 2024. The requirements vary throughout the period and are generally lower at the end of the month.
Incremental collateral requirements were based on potential changes in SCE's forward positions as of September 30, 2024 due to adverse market price movements over the remaining lives of the existing power and fuel derivative contracts using a 95% confidence level.
In the next 12 months, Edison International expects to fund its net cash requirements through cash on hand, dividends from SCE, and capital market and bank financings. Edison International may finance its ongoing cash requirements, including dividends, working capital requirements, payment of obligations, and capital investments, including capital contributions to subsidiaries, with short-term or other financings, subject to availability in the bank and capital markets.
In the second quarter of 2024, Edison International Parent issued $500 million of 5.45% senior notes due in 2029. For further details, see "Notes to Consolidated Financial Statements—Note 5. Debt and Credit Agreements."
At September 30, 2024, Edison International Parent and Other had cash on hand of $109 million and $1.5 billion available to borrow on its $1.5 billion revolving credit facility. In May 2024, Edison International extended its credit facility through May 2028. The aggregate maximum principal amount may be increased up to $2.0 billion, provided that additional lender commitments are obtained. For further information, see "Notes to Consolidated Financial Statements—Note 5. Debt and Credit Agreements."
Edison International Parent and Other's liquidity and its ability to pay operating expenses and pay dividends to preferred and common shareholders are dependent on access to the bank and capital markets, dividends from SCE, realization of tax benefits and its ability to meet California law requirements for the declaration of dividends. For information on the California law requirements on the declaration of dividends, see "Notes to Consolidated Financial Statements—Note 1. Summary of
Significant Accounting Policies—SCE Dividends" in the 2023 Form 10-K. Edison International intends to maintain its target payout ratio of 45% – 55% of SCE's core earnings, subject to the factors identified above.
Edison International's ability to declare and pay common dividends may be restricted under the terms of its Series A and Series B Preferred Stock. For further information, see "Notes to Consolidated Financial Statements—Note 14. Equity" in the 2023 Form 10-K.
Edison International Parent's credit facility requires a consolidated debt to total capitalization ratio as defined in the applicable agreements of less than or equal to 0.70 to 1. At September 30, 2024, Edison International's consolidated debt to total capitalization ratio was 0.63 to 1.
At September 30, 2024, Edison International Parent was in compliance with all financial covenants that affect access to capital.
Edison International Parent's credit ratings may be affected if, among other things, regulators fail to successfully implement AB 1054 in a consistent and credit supportive manner, or the Wildfire Insurance Fund is depleted by claims from catastrophic wildfires. Credit rating downgrades increase the cost and may impact the availability of short-term and long-term borrowings, including commercial paper, credit facilities, note financings or other borrowings.
Edison International Income Taxes
On August 16, 2022, the IRA was signed into law. The law imposes a 15% corporate alternative minimum tax ("CAMT") on adjusted financial statement income ("AFSI") of corporations with average AFSI exceeding $1.0 billion over a specified 3-year period. The CAMT was effective beginning January 1, 2023. Based on the current interpretation of the law and historical financial data, Edison International estimates that it will exceed the $1.0 billion threshold and be subject to CAMT on its consolidated federal tax returns beginning in 2026. SCE expects to be subject to CAMT on its stand-alone Federal return beginning in 2025.
The law also includes significant extensions, expansions, and enhancements of numerous energy-related investment tax credits, as well as creating new credits applicable to electricity production which may apply to SCE's capital expenditures. Under the IRA, SCE expects to generate investment tax credits related to its utility owned storage projects, which will accrue to the benefit of its customers.
Net cash provided by operating activities
4,037
2,733
Net cash provided by financing activities
188
713
Net cash used in investing activities
(4,093)
(3,894)
Net increase (decrease) in cash, cash equivalents and restricted cash
132
(448)
Net Cash Provided by Operating Activities
The following table summarizes major categories of net cash for operating activities as provided in more detail in SCE's consolidated statements of cash flows for the nine months ended September 30, 2024 and 2023.
Change in cash flows
2024/2023
Non-cash items1
2,173
Subtotal
3,492
3,290
202
Changes in cash flow resulting from working capital2
(834)
(1,120)
286
Regulatory assets and liabilities
1,557
705
852
Wildfire-related claims3
(304)
(75)
(229)
Other noncurrent assets and liabilities4
(67)
193
1,304
Net cash provided by operating activities was impacted by the following:
Net income and non-cash items increased in 2024 by $202 million primarily due to higher revenue authorized in Track 4, an increase in the authorized rate of return resulting from the cost of capital adjustment mechanism, and recognition of previously unrecognized return on rate base related to emergency restoration related capital expenditures, partially offset by higher interest expense.
The net outflows in cash resulting from working capital were $834 million and $1,120 million during the nine months ended September 30, 2024 and 2023, respectively. Net cash outflows for both 2024 and 2023 were primarily due to the increases in customer receivables and unbilled revenue for both years.
Net cash provided by regulatory assets and liabilities, including changes in net undercollections recorded in balancing accounts, was $1,557 million and $705 million during the nine months ended September 30, 2024 and 2023, respectively. SCE has a number of balancing and memorandum accounts, which impact cash flows based on differences between timing of collection through rates and incurring expenditures. Cash inflows in 2024 and 2023 were both due to recovery of prior year undercollections. The higher inflow in 2024 compared to 2023 was driven by higher prior year undercollections implemented into rates in 2024 and higher sales volume due to hotter weather in 2024.
Net Cash Provided by Financing Activities
The following table summarizes cash provided by financing activities for the nine months ended September 30, 2024 and 2023, respectively. Issuances of debt are discussed in "Notes to Consolidated Financial Statements—Note 5. Debt and Credit Agreements."
Issuances of long-term debt, net of discount and issuance costs
4,217
3,589
Long-term debt repaid
(2,176)
(1,467)
Short-term debt borrowed
496
Short-term debt repaid
(386)
(944)
Commercial paper financing, net
(609)
137
Preference stock issued, net of issuance cost
345
Preference stock redeemed
(350)
Payment of common stock dividends to Edison International Parent
(720)
(1,050)
Payment of preference stock dividends
(130)
(87)
Other
Net Cash Used in Investing Activities
Cash flows used in investing activities are primarily due to total capital expenditures of $4.2 billion and $4.0 billion for nine months ended September 30, 2024 and 2023, respectively. In addition, SCE had a net redemption of nuclear decommissioning trust investments of $70 million and $94 million during the nine months ended September 30, 2024 and 2023, respectively. See "Nuclear Decommissioning Activities" below for further discussion.
Nuclear Decommissioning Activities
SCE's consolidated statements of cash flows include nuclear decommissioning activities, which are reflected in the following line items:
Net cash used in operating activities:
Net earnings from nuclear decommissioning trust investments
SCE's decommissioning costs
(162)
(167)
Net cash provided by investing activities:
Proceeds from sale of investments
3,558
3,223
Purchases of investments
(3,488)
(3,129)
Net cash (outflow) inflow
(59)
Net cash used in operating activities relates to interest and dividends less administrative expenses, taxes and SCE's decommissioning costs. Investing activities represent the purchase and sale of investments within the nuclear decommissioning trusts, including the reinvestment of earnings from nuclear decommissioning trust investments. The net cash impact reflects timing of decommissioning payments ($162 million and $167 million in 2024 and 2023, respectively) and reimbursements to SCE from the nuclear decommissioning trust ($151 million and $171 million in 2024 and 2023, respectively). The net cash outflow in 2024 also includes $19 million of tax benefits received and a $30 million disallowance under the 2021 NDCTP (For further details, see "—Decommissioning of San Onofre), both contributed by SCE to the decommissioning trust.
21
The table below sets forth condensed historical cash flow from operations for Edison International Parent and Other, including intercompany eliminations.
Net cash used in operating activities
(193)
(187)
176
(4)
Net decrease in cash, cash equivalents and restricted cash
(21)
(20)
Net Cash Used in Operating Activities
Net cash used in operating activities was impacted by the following:
Net cash provided by financing activities was as follows:
Dividends paid to Edison International common shareholders
(896)
(833)
Dividends paid to Edison International preferred shareholders
(88)
(105)
Dividends received from SCE
720
1,050
Long-term debt issuance, net of discount and issuance costs
1,089
Receipt from stock option exercises
204
62
Long-term debt repayments
(400)
Issuance of short-term debt
355
Repayments of short-term debt
(15)
(1,000)
Preferred stock repurchased
(208)
(63)
Edison International's and SCE's material contingencies are discussed in "Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies."
Edison International's and SCE's primary market risks are described in the 2023 Form 10-K, and there have been no material changes during the nine months ended September 30, 2024. For further discussion of market risk exposures, including commodity price risk, and credit risk, see "Notes to Consolidated Financial Statements—Note 4. Fair Value Measurements" and "Note 6. Derivative Instruments."
For a discussion of Edison International's and SCE's critical accounting policies, see "Critical Accounting Estimates and Policies" in the 2023 MD&A.
There have been no material changes in recently issued or adopted accounting standards from those disclosed in "Notes to Consolidated Financial Statements—Note 1. Summary of Significant Accounting Policies—New Accounting Guidance" in the 2023 Form 10-K.
Information responding to this section is included in the MD&A under the heading "Market Risk Exposures" and is incorporated herein by reference.
Consolidated Statements of Income
(in millions, except per-share amounts, unaudited)
5,201
4,702
13,615
12,632
1,393
882
3,995
3,207
482
616
578
2,138
1,971
168
139
477
428
4,206
4,210
11,475
10,796
Operating income
995
492
2,140
1,836
(477)
(433)
(1,401)
(1,186)
127
130
413
377
645
189
1,152
1,027
(23)
41
577
212
1,138
986
Less: Net income attributable to noncontrolling interests - preference stock of SCE
Preferred stock dividend requirements of Edison International
Net income available to Edison International common shareholders
Basic earnings per share:
Weighted average shares of common stock outstanding
387
383
386
Basic earnings per common share available to Edison International common shareholders
1.33
0.40
2.45
2.14
Diluted earnings per share:
Weighted average shares of common stock outstanding, including effect of dilutive securities
390
385
388
Diluted earnings per common share available to Edison International common shareholders
1.32
2.44
2.13
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated Statements of Comprehensive Income
(in millions, unaudited)
Other comprehensive income, net of tax:
Pension and postretirement benefits other than pensions
Foreign currency translation adjustments
Other comprehensive income, net of tax
Comprehensive income
579
1,141
989
Less: Comprehensive income attributable to noncontrolling interests
Comprehensive income attributable to Edison International
540
182
1,012
901
Consolidated Balance Sheets
December 31,
ASSETS
Cash and cash equivalents
200
Receivables, less allowances of $341 and $360 for uncollectible accounts at respective dates
2,780
2,016
Accrued unbilled revenue
1,202
742
Inventory
533
527
Prepaid expenses
104
112
Regulatory assets
2,168
2,524
Wildfire Insurance Fund contributions
Other current assets
319
341
Total current assets
7,444
6,811
Nuclear decommissioning trusts
4,424
4,173
Other investments
Total investments
4,474
4,227
Utility property, plant and equipment, less accumulated depreciation and amortization of $13,833 and $12,910 at respective dates
58,092
55,877
Nonutility property, plant and equipment, less accumulated depreciation of $122 and $114 at respective dates
206
207
Total property, plant and equipment
58,298
56,084
Regulatory assets (include $1,524 and $1,558 related to a Variable Interest Entity ("VIE") at respective dates)
8,660
8,897
1,913
1,951
Operating lease right-of-use assets
1,180
1,221
Long-term insurance receivables
501
Other long-term assets
2,394
2,066
Total other assets
14,533
14,636
Total assets
84,749
81,758
(in millions, except share amounts, unaudited)
LIABILITIES AND EQUITY
Short-term debt
568
1,077
Current portion of long-term debt
2,548
2,697
Accounts payable
2,185
1,983
Wildfire-related claims
Accrued interest
452
Regulatory liabilities
874
763
Current portion of operating lease liabilities
124
120
Other current liabilities
1,717
1,538
Total current liabilities
8,507
8,598
Long-term debt (include $1,492 and $1,515 related to a VIE at respective dates)
32,303
30,316
Deferred income taxes and credits
6,967
6,672
Pensions and benefits
403
415
Asset retirement obligations
2,531
2,666
10,310
9,420
Operating lease liabilities
1,056
1,101
1,055
1,368
Other deferred credits and other long-term liabilities
3,510
3,258
Total deferred credits and other liabilities
25,832
24,900
Total liabilities
66,642
63,814
Commitments and contingencies (Note 12)
Preferred stock (50,000,000 shares authorized; 1,159,317 and 1,159,317 shares of Series A and 503,454 and 532,454 shares of Series B issued and outstanding at respective dates)
1,645
1,673
Common stock, no par value (800,000,000 shares authorized; 387,148,995 and 383,924,912 shares issued and outstanding at respective dates)
6,538
6,338
Accumulated other comprehensive loss
(6)
Retained earnings
7,486
7,499
Total Edison International's shareholders' equity
15,663
15,501
Noncontrolling interests – preference stock of SCE
2,444
2,443
Total equity
18,107
17,944
Total liabilities and equity
Consolidated Statements of Cash Flows
Cash flows from operating activities:
Adjustments to reconcile to net cash provided by operating activities:
2,183
2,034
Equity allowance for funds used during construction
(143)
(116)
Deferred income taxes
(42)
Wildfire Insurance Fund amortization expense
43
(118)
(94)
Changes in operating assets and liabilities:
Receivables
(847)
(692)
(40)
336
(186)
Tax receivables and payables
198
Other current assets and liabilities
(492)
(214)
Derivative assets and liabilities, net
(139)
Regulatory assets and liabilities, net
Wildfire-related insurance receivable
115
Other noncurrent assets and liabilities
122
90
3,844
2,546
Cash flows from financing activities:
Long-term debt issued, net of discount and issuance costs of $37 and $48 for the respective periods
4,713
4,678
(1,867)
Short-term debt issued
851
(401)
(1,944)
Common stock issued
Preferred and preference stock repurchased or redeemed
(378)
Commercial paper (repayments) borrowing, net
(817)
74
Dividends and distribution to noncontrolling interests
Common stock dividends paid
Preferred stock dividends paid
180
97
364
880
Cash flows from investing activities:
Capital expenditures
(4,211)
(3,991)
Proceeds from sale of nuclear decommissioning trust investments
Purchases of nuclear decommissioning trust investments
44
(4,097)
111
(468)
Cash, cash equivalents and restricted cash at beginning of period
532
917
Cash, cash equivalents and restricted cash at end of period
643
449
642
1,321
91
Receivables, less allowances of $340 and $360 for uncollectible accounts at respective dates
2,772
1,981
1,200
741
103
314
331
7,319
6,633
38
4,456
4,211
Nonutility property, plant and equipment, less accumulated depreciation of $107 and $100 at respective dates
199
201
58,291
56,078
Regulatory assets (include $1,524 and $1,558 related to a VIE at respective dates)
1,173
1,214
118
157
Long-term insurance receivables due from affiliate
281
2,312
1,987
14,457
14,561
84,523
81,483
548
831
1,248
2,197
2,191
1,966
367
123
2,104
1,535
7,494
7,795
28,582
26,297
8,470
8,126
105
1,096
3,452
3,206
26,973
25,987
63,049
60,079
Preference stock
2,495
Common stock, no par value (560,000,000 shares authorized; 434,888,104 shares issued and outstanding at respective dates)
Additional paid-in capital
8,436
8,446
(12)
8,385
8,307
21,474
21,404
31
2,177
2,022
(868)
(679)
359
(178)
227
(541)
(211)
113
131
114
Long-term debt issued, net of discount and issuance costs of $33 and $36 for the respective periods
Preference stock dividends paid
(4,208)
(3,990)
398
766
530
318
(Unaudited)
Note 1.Summary of Significant Accounting Policies
Organization and Basis of Presentation
Edison International is the ultimate parent holding company of Southern California Edison Company ("SCE") and Edison Energy, LLC, doing business as Trio ("Trio"). SCE is an investor-owned public utility primarily engaged in the business of supplying and delivering electricity to an approximately 50,000 square mile area across Southern, Central and Coastal California. Trio is a global energy advisory firm providing integrated sustainability and energy solutions to commercial, industrial and institutional customers. Trio's business activities are currently not material to report as a separate business segment. These combined notes to the consolidated financial statements apply to both Edison International and SCE unless otherwise described. Edison International's consolidated financial statements include the accounts of Edison International, SCE, and other controlled subsidiaries. References to Edison International refer to the consolidated group of Edison International and its subsidiaries. References to "Edison International Parent and Other" refer to Edison International Parent and its competitive subsidiaries and "Edison International Parent" refer to Edison International on a stand-alone basis, not consolidated with its subsidiaries. SCE's consolidated financial statements include the accounts of SCE, its controlled subsidiaries and a variable interest entity, SCE Recovery Funding LLC., of which SCE is the primary beneficiary. All intercompany transactions have been eliminated from the consolidated financial statements.
Edison International's and SCE's significant accounting policies were described in the "Notes to Consolidated Financial Statements" included in Edison International's and SCE's combined Annual Report on Form 10-K for the year ended December 31, 2023 (the "2023 Form 10-K"). This quarterly report should be read in conjunction with the financial statements and notes included in the 2023 Form 10-K.
In the opinion of management, all adjustments, consisting only of adjustments of a normal recurring nature, have been made that are necessary to fairly state the consolidated financial position, results of operations, and cash flows in accordance with accounting principles generally accepted in the United States ("GAAP") for the periods covered by this quarterly report on Form 10-Q. The results of operations for the interim periods presented are not necessarily indicative of the operating results for the full year.
The December 31, 2023 financial statement data was derived from the audited financial statements, but does not include all disclosures required by GAAP for complete annual financial statements. Certain prior period amounts have been conformed to the current period's presentation, including the separate presentation of accrued interest on Edison International's and SCE's consolidated balance sheets.
Cash, Cash Equivalents and Restricted Cash
Cash equivalents consist of investments in money market funds. Generally, the carrying value of cash equivalents equals the fair value, as these investments have original maturities of three months or less. The cash equivalents were as follows:
Money market funds
78
Cash is temporarily invested until required for check clearing. Checks issued, but not yet paid by the financial institution, are reclassified from cash to accounts payable at the end of each reporting period.
The following table sets forth the cash, cash equivalents and restricted cash included in the consolidated statements of cash flows:
Short-term restricted cash1
Long-term restricted cash2
376
152
Total cash, cash equivalents and restricted cash
SCE:
63
151
Allowance for Uncollectible Accounts
The allowance for uncollectible accounts is recorded based on SCE's estimate of expected credit losses and adjusted over the life of the receivables as needed. Since the customer base of SCE is concentrated in Southern California which exposes SCE to a homogeneous set of economic conditions, the allowance is measured on a collective basis on the historical amounts written-off, assessment of customer collectibility and current economic trends, including unemployment rates and any likelihood of recession for the region. The increase in the provision of uncollectible accounts and write-offs for the three and nine months ended September 30, 2024 is driven primarily by consumer protection programs.
The following table sets forth the changes in allowance for uncollectible accounts for SCE:
September 30, 2024
September 30, 2023
Customers
All others
Beginning balance
349
326
343
Current period provision for uncollectible accounts1
Write-offs, net of recoveries
(78)
(22)
Ending balance
329
347
334
354
Current period provision for uncollectible accounts2
208
(196)
(70)
(80)
34
Based on information available in January of 2024 regarding catastrophic wildfires during 2023, SCE reassessed its estimate of the life of the Wildfire Insurance Fund. After incorporating 2023 expected losses into the historical data for the Monte Carlo simulations, SCE determined that effective in the first quarter of 2024, the life of the Wildfire Insurance Fund increased from 15 to 20 years from the date SCE committed to participate in the Wildfire Insurance Fund. Accordingly, the change resulted in a reduction in wildfire insurance fund expense from $54 million in the three months ended September 30, 2023 to $36 million in the three months ended September 30, 2024 and from $159 million in the nine months ended September 30, 2023 to $109 million in the nine months ended September 30, 2024.
Nuclear Decommissioning and Asset Retirement Obligations
As a result of an update to SCE's cost estimate for decommissioning activities to be completed at San Onofre Units 1, 2 and 3, SCE recorded a decrease of $59 million to its asset retirement obligation ("ARO") in the third quarter of 2024.
Earnings Per Share
Edison International computes earnings per common share ("EPS") using the two-class method, which is an earnings allocation formula that determines EPS for each class of common stock and participating security. Edison International's participating securities are stock-based compensation awards, payable in common shares, which earn dividend equivalents on an equal basis with common shares once the awards are vested. See Note 13 for further information.
EPS attributable to Edison International common shareholders was computed as follows:
(in millions, except per-share amounts)
Net income available to common shareholders
Weighted average common shares outstanding
Basic earnings per share
Income impact of assumed conversions
Net income available to common shareholders and assumed conversions
945
820
Incremental shares from assumed conversions
Adjusted weighted average shares – diluted
Diluted earnings per share
In addition to the participating securities discussed above, Edison International also may award stock options, which are payable in common shares and are included in the diluted earnings per share calculation. Stock option awards to purchase 20,371 and 3,231,385 shares of common stock for the three months ended September 30, 2024 and 2023, respectively, and 2,040,879 and 3,230,603 shares of common stock for the nine months ended September 30, 2024 and 2023, respectively, were outstanding, but were not included in the computation of diluted earnings per share because the effect would have been antidilutive.
Revenue Recognition
Revenue is recognized by Edison International and SCE when a performance obligation to transfer control of the promised goods is satisfied or when services are rendered to customers. This typically occurs when electricity is delivered to customers, which includes amounts for services rendered but unbilled at the end of a reporting period.
FERC 2024 Formula Rate Update
In November 2023, SCE filed its 2024 annual transmission revenue requirement update with the FERC, with the rate effective January 1, 2024. The update reflects a $1.1 billion transmission revenue requirement for 2024, $290 million or 20% lower than amounts included in the 2023 annual rates. The decrease is primarily due to the return of prior year overcollection. Pending resolution of the FERC formula rate proceedings, SCE recognized revenue in the first nine months of 2024 based on the FERC 2024 annual update rate, subject to refund.
Severance Costs
Severance costs are recorded when it is probable that employees will be entitled to benefits under an existing plan and the amount can be reasonably estimated. As a result of current and probable reductions in workforce, SCE recorded estimated severance costs of $47 million during the third quarter of 2024. Severance costs are included in "Operation and maintenance" on the consolidated statements of income.
New Accounting Guidance
Accounting Guidance Adopted
No material accounting standards were adopted in 2024.
Accounting Guidance Not Yet Adopted
In November 2023, the FASB issued an accounting standards update to enhance the disclosures related to public entities' reportable segments. The new guidance requires an entity with only one reportable segment to include all the required segment disclosures. The guidance will be effective for annual disclosures for the year ended December 31, 2024 and subsequent interim periods with early adoption permitted. The guidance is applied retrospectively to all periods presented in the financial statements. Edison International and SCE have one reportable segment and are currently evaluating the impact to the segment disclosures.
In December 2023, the FASB issued an accounting standards update requiring public entities to provide more disclosures primarily related to the income tax rate reconciliation and income taxes paid. The guidance also eliminates certain existing disclosure requirements related to uncertain tax positions and unrecognized deferred tax liabilities. The guidance is effective January 1, 2025 with early adoption permitted. The guidance is applied prospectively. Edison International and SCE are currently evaluating the impact of the new guidance.
Note 2.Consolidated Statements of Changes in Equity
The following tables provide Edison International's changes in equity:
Noncontrolling
Equity Attributable to Edison International Shareholders
Interests
Accumulated
Preferred
Common
Comprehensive
Retained
Preference
(in millions, except per share amounts)
Stock
Loss
Earnings
Equity
Balance at December 31, 2023
Common stock dividends declared ($0.78 per share)
(300)
Preferred stock dividend declared ($26.875 per share for Series A and $25.00 per share for Series B)
Dividends to noncontrolling interests ($24.418 - $58.854 per share for preference stock)
Noncash stock-based compensation
(19)
Balance at March 31, 2024
1,654
6,361
7,166
15,172
17,615
460
Other comprehensive income
86
(301)
Dividends to noncontrolling interests ($17.927 - $54.8223 per share for preference stock)
(43)
Balance at June 30, 2024
6,461
(8)
7,326
15,424
17,868
538
64
(302)
Dividends to noncontrolling interests (31.25 - $51.8084 per share for preference stock)
(33)
(39)
(72)
Balance at September 30, 2024
Balance at December 31, 2022
1,978
6,200
7,454
15,621
1,901
17,522
365
Common stock dividends declared ($0.7375 per share)
(282)
(52)
Dividends to noncontrolling interests ($22.281 - $35.937 per share for preference stock)
Balance at March 31, 2023
6,223
7,456
15,648
17,549
380
409
(283)
Dividends to noncontrolling interests ($24.273 - $35.937 per share for preference stock)
Balance at June 30, 2023
6,270
7,553
15,793
17,694
(53)
Dividends to noncontrolling interests ($25.1276 - $35.937 per share for preference stock)
Noncash stock-based compensation and other
Balance at September 30, 2023
6,301
7,399
15,670
17,571
The following tables provide SCE's changes in equity:
Additional
Paid-in
Capital
106
Dividends declared on common stock ($0.8278 per share)
(360)
Dividends declared on preference stock ($24.418 - $58.854 per share)
Stock-based compensation
8,433
8,012
21,097
572
Dividends declared on common stock (0.8278 per share)
Dividends declared on preference stock ($17.927 - $54.8223 per share)
Preference stock issued
350
(5)
8,435
8,175
21,262
Dividends declared on preference stock ($31.25 - $51.8084 per share)
1,945
8,441
8,243
20,789
399
Dividends declared on common stock ($0.8048 per share)
Dividends declared on preference stock ($22.281 - $35.937 per share)
8,438
8,264
20,807
Dividends declared on preference stock ($24.273 - $35.937 per share)
8,442
8,334
20,881
Dividends declared on preference stock ($25.1276 - $35.937 per share for preference stock)
8,447
8,223
20,775
Note 3.Variable Interest Entities
A Variable Interest Entity ("VIE") is defined as a legal entity that meets one of two conditions: (1) the equity owners do not have sufficient equity at risk, or (2) the holders of the equity investment at risk, as a group, lack any of the following three characteristics: decision-making rights, the obligation to absorb losses or the right to receive the expected residual returns of the entity. The primary beneficiary is identified as the variable interest holder that has both the power to direct the activities of the VIE that most significantly impact the entity's economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE. The primary beneficiary is required to consolidate the VIE. Commercial and operating activities are generally the factors that most significantly impact the economic performance of such VIEs. Commercial and operating activities include construction, operation and maintenance, fuel procurement, plant dispatch and compliance with regulatory and contractual requirements.
Variable Interest in VIEs that are Consolidated
SCE Recovery Funding LLC is a bankruptcy remote, wholly owned special purpose subsidiary, consolidated by SCE. SCE Recovery Funding LLC is a VIE and SCE is the primary beneficiary. SCE Recovery Funding LLC was formed in 2021 for the purpose of issuing and servicing securitized bonds related to SCE's AB 1054 Excluded Capital Expenditures.
SCE Recovery Funding LLC has issued a total of $1.6 billion of securitized bonds. The proceeds were used to acquire SCE's right, title and interest in and to non-bypassable rates and other charges to be collected from certain existing and future customers in SCE's service territory ("Recovery Property"), associated with the AB 1054 Excluded Capital Expenditures,
until the bonds are paid in full, and all financing costs have been recovered. The securitized bonds are secured by the Recovery Property and cash collections from the non-bypassable rates and other charges are the sole source of funds to satisfy the debt obligation. The bondholders have no recourse to SCE.
The following table summarizes the impact of SCE Recovery Funding LLC on SCE's and Edison International's consolidated balance sheets.
80
Regulatory assets: non-current
1,524
1,558
Regulatory liabilities: current
Current portion of long-term debt1
47
Long-term debt1
1,492
1,515
Variable Interest in VIEs that are not Consolidated
Power Purchase Agreements
SCE has PPAs that are classified as variable interests in VIEs, including agreements through which SCE provides the natural gas to fuel the plants, fixed price contracts for renewable energy, and resource adequacy agreements that, upon the seller's election, include the purchase of energy at fixed prices. SCE has concluded that it is not the primary beneficiary of these VIEs since it does not control the commercial and operating activities of these entities. Since payments for capacity are the primary source of income, the most significant economic activity for these VIEs is the operation and maintenance of the power plants, which SCE does not perform.
As of the balance sheet date, the carrying amount of assets and liabilities included in SCE's consolidated balance sheet that relate to involvement with VIEs that are not consolidated, result from amounts due under the PPAs. Under these contracts, SCE recovers the costs incurred through demonstration of compliance with its CPUC-approved long-term power procurement plans. SCE has no residual interest in the entities and has not provided or guaranteed any debt or equity support, liquidity arrangements, performance guarantees, or other commitments associated with these contracts other than the purchase commitments described in Note 12 of the 2023 Form 10-K. As a result, there is no significant potential exposure to loss to SCE from its variable interest in these VIEs. The aggregate contracted capacity dedicated to SCE from these VIE projects was 5,103 Megawatt(s) ("MW") and 3,443 MW at September 30, 2024 and 2023, respectively. The amounts that SCE paid to these projects were $246 million and $191 million for the three months ended September 30, 2024 and 2023, respectively, and $592 million and $476 million for the nine months ended September 30, 2024, and 2023, respectively. These amounts are recoverable in customer rates, subject to reasonableness review.
Unconsolidated Trusts of SCE
SCE Trust II, Trust III, Trust IV, Trust V, Trust VI, Trust VII and Trust VIII were utilized in 2013, 2014, 2015, 2016, 2017, 2023 and 2024, respectively, for the exclusive purpose of issuing the 5.10%, 5.75%, 5.375%, 5.45%, 5.00%, 7.50% and 6.95% trust preference securities, respectively ("trust securities"). The trusts are VIEs. SCE has concluded that it is not the primary beneficiary of these VIEs as it does not have the obligation to absorb the expected losses or the right to receive the expected residual returns of the trusts. SCE Trust II, Trust III, Trust IV, Trust V, Trust VI, Trust VII and Trust VIII issued to the public trust securities in the face amounts of $400 million, $275 million, $325 million, $300 million, $475 million, $550 million and $350 million (cumulative, liquidation amounts of $25 per share), respectively, and $10,000 of common stock each to SCE. The trusts invested the proceeds of these trust securities in Series G, Series H, Series J, Series K, Series L, Series M and Series N Preference Stock issued by SCE in the principal amounts of $400 million, $275 million, $325 million,
$300 million, $475 million, $550 million and $350 million (cumulative, $2,500 per share liquidation values), respectively, which have substantially the same payment terms as the respective trust securities.
The Series G, Series H, Series J, Series K, Series L, Series M and Series N Preference Stock and the corresponding trust securities do not have a maturity date. Upon any redemption of any shares of the Series G, Series H, Series J, Series K, Series L, Series M or Series N Preference Stock, a corresponding dollar amount of trust securities will be redeemed by the applicable trust. The applicable trust will make distributions at the same rate and on the same dates on the applicable series of trust securities, if and when the SCE board of directors declares and makes dividend payments on the related Preference Stock. The applicable trust will use any dividends it receives on the related Preference Stock to make its corresponding distributions on the applicable series of trust securities. If SCE does not make a dividend payment to any of these trusts, SCE would be prohibited from paying dividends on its common stock. SCE has fully and unconditionally guaranteed the payment of the trust securities and trust distributions, if and when SCE pays dividends on the related Preference Stock.
The Trust II, Trust III, Trust IV, Trust V, Trust VI and Trust VII balance sheets as of September 30, 2024 and December 31, 2023 consisted of investments of $220 million, $275 million, $325 million, $300 million, $475 million and $550 million in the Series G, Series H, Series J, Series K, Series L and Series M Preference Stock, respectively, $220 million, $275 million, $325 million, $300 million, $475 million and $550 million of trust securities, respectively, and $10,000 each of common stock. The Trust VIII balance sheet as of September 30, 2024, consisted of investments of $350 million in the Series N Preference Stock (see Note 13 for further information), $350 million of trust securities and $10,000 of common stock.
The following table provides a summary of the trusts' income statements:
Trust II
Trust III
Trust IV
Trust V
Trust VI
Trust VII
Trust VIII
Dividend income
Dividend distributions
Note 4.Fair Value Measurements
Recurring Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (referred to as an "exit price"). Fair value of an asset or liability considers assumptions that market participants would use in pricing the asset or liability, including assumptions about nonperformance risk. As of September 30, 2024 and December 31, 2023, nonperformance risk was not material for Edison International or SCE.
Assets and liabilities are categorized into a three-level fair value hierarchy based on valuation inputs used to determine fair value.
Level 1 – The fair value of Edison International's and SCE's Level 1 assets and liabilities is determined using unadjusted quoted prices in active markets that are available at the measurement date for identical assets and liabilities. This level includes exchange-traded equity securities, U.S. treasury securities, mutual funds, and money market funds.
Level 2 – Edison International's and SCE's Level 2 assets and liabilities include fixed income securities, primarily consisting of U.S. government and agency bonds, municipal bonds and corporate bonds, and over-the-counter commodity derivatives. The fair value of fixed income securities is determined using a market approach by obtaining quoted prices for similar assets and liabilities in active markets and inputs that are observable, either directly or indirectly, for substantially the full term of the instrument.
The fair value of SCE's over-the-counter commodity derivative contracts is determined using an income approach. SCE uses standard pricing models to determine the net present value of estimated future cash flows. Inputs to the pricing models include forward published or posted clearing prices from an exchange (Intercontinental Exchange) for similar instruments and discount rates. A primary price source that best represents trade activity for each market is used to develop observable forward market prices in determining the fair value of these positions. Broker quotes, prices from exchanges, or comparison to executed trades are used to validate and corroborate the primary price source. These price quotations reflect mid-market prices (average of bid and ask) and are obtained from sources believed to provide the most liquid market for the commodity.
Level 3 – This level consists of congestion revenue rights ("CRRs"), which are derivative contracts that trade infrequently with significant unobservable inputs (CAISO CRR auction prices). SCE employs a market valuation approach of utilizing historical CRR prices as a proxy for forward prices. Edison International Parent and Other does not have any Level 3 assets and liabilities.
Assumptions are made in order to value derivative contracts in which observable inputs are not available. In circumstances where fair value cannot be verified with observable market transactions, it is possible that a different valuation model could produce a materially different estimate of fair value. Modeling methodologies, inputs, and techniques are reviewed and assessed as markets continue to develop and more pricing information becomes available, and the fair value is adjusted when it is concluded that a change in inputs or techniques would result in a new valuation that better reflects the fair value of those derivative contracts. See Note 6 for a discussion of derivative instruments.
The following table sets forth assets and liabilities of SCE that were accounted for at fair value by level within the fair value hierarchy:
Netting
and
Level 1
Level 2
Level 3
Collateral1
Assets at fair value
Derivative contracts
Money market funds and other
Nuclear decommissioning trusts:
Stocks2
1,767
Fixed Income3
929
1,730
2,659
Short-term investments, primarily cash equivalents
59
Subtotal of nuclear decommissioning trusts4
2,743
1,789
4,532
2,748
1,820
4,596
Liabilities at fair value
Net assets
1,734
December 31, 2023
100
1,658
923
1,421
2,344
169
273
2,750
1,525
4,275
2,828
1,550
4,466
(77)
1,473
SCE Fair Value of Level 3
The following table sets forth a summary of changes in SCE's fair value of Level 3 net derivative assets and liabilities:
Fair value of net assets at beginning of period
Sales
Settlements
(47)
Total realized/unrealized (losses)/gains1
(49)
(65)
Fair value of net assets at end of period
There were no material transfers into or out of Level 3 during 2024 and 2023.
The following table sets forth the significant unobservable inputs used to determine fair value for Level 3 CRR assets and liabilities:
Fair Value
Significant
Weighted
Unobservable
Range
Average
Assets
Liabilities
Input
(per MWh)
CAISO CRR auction prices
($11.27) - $8,423.68
2.72
(6.44) - 16,574.36
2.74
Level 3 Fair Value Uncertainty
For CRRs, increases or decreases in CAISO auction prices would result in higher or lower fair value, respectively.
Nuclear Decommissioning Trusts
SCE's nuclear decommissioning trust investments include equity securities, U.S. treasury securities, and other fixed income securities. Equity and treasury securities are classified as Level 1 as fair value is determined by observable market prices in active or highly liquid and transparent markets. The remaining fixed income securities are classified as Level 2. There are no securities classified as Level 3 in the nuclear decommissioning trusts. See Note 10 for more information on nuclear decommissioning trusts.
Edison International Parent and Other assets measured at fair value and classified as Level 1 consisted of money market funds of $100 million and $121 million at September 30, 2024 and December 31, 2023, respectively. There were no assets classified as Level 2 at September 30, 2024. Assets measured at fair value and classified as Level 2 consisted of short-term investments of $2 million at December 31, 2023. There were no securities classified as Level 3 for Edison International Parent and Other.
Fair Value of Debt Recorded at Carrying Value
The carrying value and fair value of Edison International's and SCE's long-term debt (including the current portion of long-term debt) are as follows:
Carrying
Fair
Value1
Value2
34,851
33,887
33,013
31,315
29,830
28,679
28,494
26,712
Note 5.Debt and Credit Agreements
Long-Term Debt
In the first nine months of 2024, SCE issued the following first and refunding mortgage bonds:
Description
Month of Issuance
Rate
Maturity Date
Amount (in millions)
Series 2024A
January 2024
4.875%
2027
500
Series 2024B
5.20%
2034
900
Series 2024C
March 2024
5.35%
2026
600
Series 2024D
5.15%
2029
Series 2024E
5.75%
2054
400
Series 2024F
May 2024
5.45%
2031
750
Series 2024G
September 2024
4.40%
The proceeds were used to fund and refinance debt for the payment of wildfire claims and related expenses above the amount of insurance proceeds, repay commercial paper borrowings, and for general corporate purposes.
In June 2024, Edison International Parent issued $500 million of 5.45% senior notes due in 2029. The proceeds were used for general corporate purposes and to repay commercial paper borrowings.
Credit Agreements and Short-Term Debt
The following table summarizes the status of the credit facilities at September 30, 2024:
(in millions, except for rates)
Borrower
Termination Date
Secured Overnight Financing Rate ("SOFR") plus (bps)
Commitment
Outstanding borrowings
Outstanding letters of credit
Amount available
Edison International Parent1, 3
May 2028
1,500
1,480
SCE2, 3
108
3,350
2,781
Total Edison International
4,850
4,261
Uncommitted Letters of Credit
SCE entered into agreements with certain lenders for bilateral unsecured standby letters of credit ("SBLC") with a total capacity of $625 million that is uncommitted and supported by reimbursement agreements. The SBLCs are not subject to any collateral or security requirements. At September 30, 2024, SCE had $196 million outstanding under these agreements, which expire between October 2024 and July 2025. The unused capacity under these agreements was $429 million.
Note 6.Derivative Instruments
Derivative financial instruments are used to manage exposure to commodity price risk resulting from SCE's electricity and natural gas procurement activities. The risks of fluctuating commodity prices are managed in part by entering into forward commodity transactions, including options, swaps and futures. To mitigate credit risk from counterparties in the event of nonperformance, master netting agreements are used whenever possible, and counterparties may be required to pledge collateral depending on the creditworthiness of each counterparty and the risk associated with the transaction.
Certain power and gas contracts contain a provision that requires SCE to maintain an investment grade rating from the major credit rating agencies, referred to as a credit-risk-related contingent feature. If SCE's credit rating were to fall below investment grade, SCE may be required to post additional collateral to cover derivative liabilities and the related outstanding payables. The fair value of these derivative contracts and any related collateral were immaterial as of September 30, 2024 and December 31, 2023.
SCE presents its derivative assets and liabilities, recorded at fair value, on a net basis on its consolidated balance sheets when subject to master netting agreements or similar agreements. Derivative positions are also offset against margin and cash collateral deposits. See Note 4 for a discussion of fair value of derivative instruments.
The following table summarizes the gross and net fair values of SCE's commodity derivative instruments:
Derivative Assets
Derivative Liabilities
Short-Term1
Long-Term2
Short-Term
Commodity derivative contracts
Gross amounts recognized
87
Gross amounts offset in the consolidated balance sheets
Cash collateral posted
Net amounts presented in the consolidated balance sheets
(74)
At September 30, 2024, SCE posted and accrued $133 million of cash collateral, of which $77 million was offset against derivative liabilities and $56 million was reflected in "Other current assets" on SCE's consolidated balance sheets. At December 31, 2023, SCE posted and accrued $121 million of cash collateral, of which $74 million was offset against derivative liabilities and $47 million was reflected in "Other current assets" on the consolidated balance sheets.
Financial Statement Impact of Derivative Instruments
SCE recognizes realized gains and losses on derivative instruments as purchased power expense and unrealized gains and losses as regulatory assets or liabilities. Both realized and unrealized gains and losses are expected to be recovered from customers and therefore do not affect earnings. Cash flows from derivative activities, including cash collateral, are reported in cash flows from operating activities in SCE's consolidated statements of cash flows.
The following table summarizes the (losses)/gains of SCE's economic hedging activity:
Realized
(313)
Unrealized
(56)
(344)
Notional Volumes of Derivative Instruments
The following table summarizes the notional volumes of derivatives used for SCE's economic hedging activities:
Unit of
Economic Hedges
Commodity
Measure
Electricity options, swaps and forwards
Gigawatt hours
5,363
3,494
Natural gas options, swaps and forwards
Billion cubic feet
CRRs
15,824
35,011
Note 7.Revenue
SCE's revenue is disaggregated by two revenue sources:
The following table is a summary of SCE's revenue:
Revenue from contracts with customers1
2,512
4,051
6,563
2,362
3,479
5,841
Alternative revenue programs and other operating revenue2
(1,469)
(1,375)
(1,179)
(1,154)
Total operating revenue
Revenues from contracts with customers1
6,858
7,576
14,434
6,481
6,685
13,166
804
(1,662)
(858)
306
(886)
(580)
Deferred Revenue
As of September 30, 2024, SCE has deferred revenue of $358 million related to the 2021 sale of transmission line use, of which $344 million is included in "Other deferred credits and other long-term liabilities" on SCE's consolidated balance sheets and is being amortized straight-line over the period of use of 30 years.
Note 8.Income Taxes
Effective Tax Rate
The table below provides a reconciliation of income tax expense computed at the federal statutory income tax rate to the income tax provision:
Income from operations before income taxes
Provision for income tax at federal statutory rate of 21%
136
242
216
Increase (decrease) in income tax from:
State tax, net of federal tax effect
(18)
Property-related
(195)
(152)
Total income tax expense (benefit)
Effective tax rate
10.5
%
(12.2)
1.2
4.0
56
297
255
12.9
(0.4)
6.7
7.9
The CPUC requires flow-through ratemaking treatment for the current tax benefit arising from certain property-related and other temporary differences which reverse over time. Flow-through items reduce current authorized revenue requirements in SCE's rate cases and result in a regulatory asset for recovery of deferred income taxes in future periods. The difference between the authorized amounts as determined in SCE's rate cases, adjusted for balancing and memorandum account activities, and the recorded flow-through items also result in increases or decreases in regulatory assets with a corresponding impact on the effective tax rate to the extent that recorded deferred amounts are expected to be recovered in future rates. For further information, see Note 11.
In the third quarter of 2024, SCE placed in-service two utility owned storage projects of 200MW and 112.5MW, generating an investment tax credit of approximately $210 million. The tax benefits associated with these credits will be recognized and returned to customers as the credits are utilized.
Tax Disputes
The tax years that remain open for examination by the IRS and the California Franchise Tax Board are 2021 – 2023 and 2013 – 2023, respectively.
Note 9.Compensation and Benefit Plans
Pension Plans
Net periodic pension expense components are:
Service cost
Non-service cost (benefit)
Interest cost
135
Expected return on plan assets
(58)
(176)
Amortization of net loss1
Regulatory adjustment
Total non-service benefit2
(61)
Total expense
(51)
(166)
(153)
Postretirement Benefits Other Than Pensions ("PBOP")
Net periodic PBOP expense components for Edison International and SCE are:
(27)
(81)
Amortization of net gain
(24)
Total non-service benefit1
Future decommissioning costs related to SCE's nuclear assets are expected to be funded from independent decommissioning trusts.
The following table sets forth amortized cost and fair value of the trust investments (see Note 4 for a discussion on fair value of the trust investments):
Amortized Costs
Fair Values
Longest
Maturity Dates
Municipal bonds
2067
754
636
931
757
Government and agency securities
2074
1,098
1,072
1,262
1,186
Corporate bonds
2072
402
466
401
Short-term investments and receivables/payables1
One-year
98
164
171
Total debt securities and other
2,352
2,233
2,657
2,515
Equity securities
Total2
Trust fund earnings (based on specific identification) increase the trust fund balance and the ARO regulatory liability. Unrealized holding gains, net of losses, were $1.9 billion and $1.8 billion at September 30, 2024 and December 31, 2023, respectively.
The following table summarizes the gains and losses for the trust investments:
Gross realized gains
84
186
243
Gross realized losses
(38)
(69)
Net unrealized gains/(losses) for equity securities
116
Due to regulatory mechanisms, changes in the assets of the trusts from income or loss items do not materially affect earnings.
Edison International Parent and Other's Investments
Edison International Parent and Other holds strategic investments in companies focused on innovative clean energy related technologies and services, included as "Other investments" on Edison International's consolidated balance sheets. As of September 30, 2024 and December 31, 2023, these investments include $14 million and $12 million of equity investments without readily determinable fair values, respectively. The equity investments without readily determinable fair values balances included cumulative upward adjustments of $9 million, resulting primarily from values determined by additional capital infusions, at both September 30, 2024 and December 31, 2023.
Regulatory Assets
SCE's regulatory assets included on the consolidated balance sheets are:
Current:
Regulatory balancing and memorandum accounts
2,098
2,502
Total current
Long-term:
5,829
5,533
Unamortized investments, net of accumulated amortization
110
Unamortized losses on reacquired debt
99
777
1,257
Environmental remediation
226
Recovery assets
Total long-term
Total regulatory assets
10,828
11,421
Regulatory Liabilities
SCE's regulatory liabilities included on the consolidated balance sheets are:
830
704
Costs of removal
2,603
2,635
2,171
2,211
Recoveries in excess of ARO liabilities
1,855
1,498
1,964
1,395
Pension and other postretirement benefits
1,695
1,664
Total regulatory liabilities
11,184
10,183
Net Regulatory Balancing and Memorandum Accounts
The following table summarizes the significant components of regulatory balancing and memorandum accounts included in the above tables of regulatory assets and liabilities:
Asset (liability)
Energy procurement related costs
397
Public purpose and energy efficiency
(1,864)
(1,736)
GRC related balancing accounts
1,361
FERC related balancing accounts
Wildfire risk mitigation and insurance
687
1,169
Wildfire and drought restoration
256
417
Residential uncollectibles balancing account
179
Customer service re-platform memorandum account
Tax accounting memorandum account
134
Assets, net of liabilities
81
1,660
Indemnities
Edison International and SCE have various financial and performance guarantees and indemnity agreements which are issued in the normal course of business.
Edison International and SCE have agreed to provide indemnifications through contracts entered into in the normal course of business. These are primarily indemnifications against adverse litigation outcomes in connection with underwriting agreements, indemnities for specified environmental liabilities and income taxes with respect to assets sold or other contractual arrangements. Edison International's and SCE's obligations under these agreements may or may not be limited in terms of time and/or amount, and in some instances Edison International and SCE may have recourse against third parties. Edison International and SCE have not recorded a liability related to these indemnities. The overall maximum amount of the obligations under these indemnifications cannot be reasonably estimated.
In addition to the matters disclosed in these Notes, Edison International and SCE are involved in other legal, tax, and regulatory proceedings before various courts and governmental agencies regarding matters arising in the ordinary course of business. Edison International and SCE believe the outcome of each of these other proceedings will not materially affect its financial position, results of operations and cash flows. Legal costs expected to be incurred by Edison International and SCE in connection with loss contingencies are expensed as incurred.
California has experienced unprecedented weather conditions in recent years due to climate change and wildfires in SCE's territory, including those where SCE's equipment has been alleged to be associated with the fire's ignition have caused loss of life and substantial damage. SCE's service territory remains susceptible to additional wildfire activity.
Numerous claims related to wildfire events have been initiated against SCE and Edison International. Edison International and SCE have incurred material losses in connection with the 2017/2018 Wildfire/Mudslide Events (defined below) and other fires, which are described below. In addition, SCE's equipment has been, and may further be, alleged to be associated with other wildfires that have originated in Southern California.
Liability Overview
The extent of legal liability for wildfire-related damages in actions against utilities depends on a number of factors, including whether the utility substantially caused or contributed to the damages and whether parties seeking recovery of damages will be required to show negligence in addition to causation. California courts have previously found utilities to be strictly liable for property damage along with associated interest and attorneys' fees, regardless of fault, by applying the theory of inverse condemnation when a utility's facilities were determined to be a substantial cause of a wildfire that caused the property damage. If inverse condemnation is held to be inapplicable to SCE in connection with a wildfire, SCE still could be held liable for property damages and associated interest if the property damages were found to have been proximately caused by SCE's negligence. If SCE were to be found negligent, SCE could also be held liable for, among other things, fire suppression costs, business interruption losses, evacuation costs, clean-up costs, medical expenses, and personal injury/wrongful death claims, including claims for non-economic damages. Additionally, SCE could potentially be subject to fines and penalties for alleged violations of CPUC rules and state laws investigated in connection with the ignition of a wildfire.
While investigations into the cause of a wildfire event are conducted by one or more fire agencies, fire agency findings do not determine legal causation of or assign legal liability for a wildfire event. Final determinations of legal causation and liability for wildfire events, including determinations of whether SCE was negligent, would only be made during lengthy and complex litigation processes and settlements may be reached before determinations of legal liability are ever made. Even when investigations are still pending or legal liability is disputed, an assessment of likely outcomes, including through future settlement of disputed claims, may require estimated losses to be accrued under accounting standards. Each reporting period, management reviews its loss estimates for remaining alleged and potential claims related to wildfire events. The process for estimating losses associated with alleged and potential wildfire-related claims requires management to exercise significant judgment based on a number of assumptions and subjective factors, including, but not limited to: estimates of known and expected claims by third parties based on currently available information, opinions of counsel regarding litigation risk, the status of and developments in the course of litigation, and prior experience litigating and settling wildfire litigation claims. As additional information becomes available, management's estimates and assumptions regarding the causes and financial impact of wildfire events may change. Actual losses incurred may be higher or lower than estimated based on several factors, including the uncertainty in estimating damages that have been or may be alleged and in estimating settlement outcomes.
Wildfires in SCE's territory in December 2017 and November 2018 caused loss of life, substantial damage to both residential and business properties, and service outages for SCE customers. The investigating government agencies, the Ventura County Fire Department ("VCFD") and California Department of Forestry and Fire Protection ("CAL FIRE"), have determined that the largest of the 2017 fires in SCE's territory originated on December 4, 2017, in the Anlauf Canyon area of Ventura County (the investigating agencies refer to this fire as the "Thomas Fire"), followed shortly thereafter by a second fire that originated near Koenigstein Road in the City of Santa Paula (the "Koenigstein Fire"). The December 4, 2017 fires eventually burned substantial acreage in both Ventura and Santa Barbara Counties. According to CAL FIRE, the Thomas and Koenigstein Fires, collectively, burned over 280,000 acres, destroyed or damaged an estimated 1,343 structures and resulted in two confirmed fatalities. The largest of the November 2018 fires in SCE's territory, known as the "Woolsey Fire," originated in Ventura County and burned acreage in both Ventura and Los Angeles Counties. According to CAL FIRE, the Woolsey Fire burned almost 100,000 acres, destroyed an estimated 1,643 structures, damaged an estimated 364 structures and resulted in three confirmed fatalities. Four additional fatalities are alleged to have been associated with the Woolsey Fire.
As described below, multiple lawsuits related to the Thomas and Koenigstein Fires and the Woolsey Fire have been initiated against SCE and Edison International. Some of the Thomas and Koenigstein Fires lawsuits claim that SCE and Edison International have responsibility for the damages caused by debris flows and flooding in Montecito and surrounding areas in January 2018 (the "Montecito Mudslides," and collectively with the Thomas Fire and the Koenigstein Fire, "TKM") based on a theory alleging that SCE has responsibility for the Thomas and/or Koenigstein Fires and further alleging that the Thomas and/or Koenigstein Fires proximately caused the Montecito Mudslides. According to Santa Barbara County initial reports, the
Montecito Mudslides destroyed an estimated 135 structures, damaged an estimated 324 structures, and resulted in 21 confirmed fatalities, with two additional fatalities presumed but not officially confirmed.
The Thomas Fire, the Koenigstein Fire, the Montecito Mudslides and the Woolsey Fire are each referred to as a "2017/2018 Wildfire/Mudslide Event," and, collectively, referred to as the "2017/2018 Wildfire/Mudslide Events."
As of September 30, 2024, SCE had paid $9.3 billion under executed settlements, had $78 million to be paid under executed settlements, including $58 million to be paid under the SED Agreement (as defined below), and had $491 million of estimated losses for remaining alleged and potential claims reflected on its consolidated balance sheets related to the 2017/2018 Wildfire/Mudslide Events. As of the same date, SCE had assets for expected recoveries through FERC electric rates of $64 million on its consolidated balance sheets and had exhausted expected insurance recoveries related to the 2017/2018 Wildfire/Mudslide Events.
The estimated losses for the 2017/2018 Wildfire/Mudslide Events do not include estimates of potential losses related to certain potential public entity plaintiff claims, including the California Governor's Office of Emergency Service's ("Cal OES") claim in the TKM litigation, for which the statute of limitations has been tolled, and for an individual plaintiff demand received in the first quarter of 2024 that has not been substantiated, as losses from these alleged and potential claims are not estimable at this time. Edison International and SCE may incur a material loss in excess of amounts accrued in connection with the remaining alleged and potential claims related to the 2017/2018 Wildfire/Mudslide Events. Due to the number of uncertainties and possible outcomes related to the 2017/2018 Wildfire/Mudslide Events litigation, Edison International and SCE cannot estimate the upper end of the range of reasonably possible losses that may be incurred.
Estimated losses for the 2017/2018 Wildfire/Mudslide Events litigation are based on a number of assumptions and are subject to change as additional information becomes available. Actual losses incurred may be higher or lower than estimated based on several factors, including the uncertainty in estimating damages that have been or may be alleged and uncertainty in estimating settlement outcomes. For instance, SCE will receive additional information with respect to damages claimed as the claims mediation and trial processes progress. Other factors that can cause actual losses incurred to be higher or lower than estimated include the ability to reach settlements and the outcomes of settlements reached through the ongoing claims mediation processes, uncertainties related to the impact of outcomes of wildfire litigation against other parties and increasingly negative jury sentiments in general litigation, uncertainties related to the sufficiency of insurance held by plaintiffs, uncertainties related to the litigation processes, including whether plaintiffs will ultimately pursue claims, uncertainty as to the legal and factual determinations to be made during litigation, including uncertainty as to the contributing causes of the 2017/2018 Wildfire/Mudslide Events, the complexities associated with fires that merge and whether inverse condemnation will be held applicable to SCE with respect to damages caused by the Montecito Mudslides, and the uncertainty as to how these factors impact future settlements.
The CPUC and FERC may not allow SCE to recover uninsured losses through electric rates if it is determined that such losses were not prudently incurred. See "Loss Estimates for Third Party Claims and Potential Recoveries from Insurance and through Electric Rates" below for additional information.
External Investigations and Internal Review
The VCFD and CAL FIRE have jointly issued reports concerning their findings regarding the causes of the Thomas Fire and the Koenigstein Fire. The reports did not address the causes of the Montecito Mudslides. SCE has also received a non-final redacted draft of a report from the VCFD regarding Woolsey Fire (the "Redacted Woolsey Report"). SCE cannot predict when the VCFD will release its final report regarding the Woolsey Fire.
The CPUC's Safety and Enforcement Division ("SED") conducted investigations to assess SCE's compliance with applicable rules and regulations in areas impacted by the Thomas, Koenigstein and Woolsey Fires. As discussed below, in October 2021, SCE and the SED executed the SED Agreement (as defined below) to resolve the SED's investigations into the 2017/2018 Wildfire/Mudslide Events.
55
The California Attorney General's Office has completed its investigation of the Thomas Fire and the Woolsey Fire without pursuing criminal charges.
SCE's internal review into the facts and circumstances of each of the 2017/2018 Wildfire/Mudslide Events is complex and time consuming. SCE expects to obtain and review additional information and materials in the possession of third parties during the course of its internal reviews and the litigation processes.
On March 13, 2019, the VCFD and CAL FIRE jointly issued a report concluding, after ruling out other possible causes, that the Thomas Fire was started by SCE power lines coming into contact during high winds, resulting in molten metal falling to the ground. However, the report does not state that their investigation found molten metal on the ground. At this time, based on available information, SCE believes that it is likely that its equipment was not associated with the ignition of the Thomas Fire. Based on publicly available radar data showing a smoke plume in the Anlauf Canyon area emerging in advance of the report's indicated start time and other evidence, SCE believes that the Thomas Fire started at least 12 minutes prior to any issue involving SCE's system and at least 15 minutes prior to the start time indicated in the report.
On March 20, 2019, the VCFD and CAL FIRE jointly issued a report finding that the Koenigstein Fire was caused when an energized SCE electrical wire separated and fell to the ground along with molten metal particles and ignited the dry vegetation below. SCE believes that its equipment was associated with the ignition of the Koenigstein Fire.
SCE's internal review includes inquiry into whether the Thomas and/or Koenigstein Fires proximately caused or contributed to the Montecito Mudslides, whether, and to what extent, the Thomas and/or Koenigstein Fires were responsible for the damages in the Montecito area and other factors that potentially contributed to the losses that resulted from the Montecito Mudslides. Many other factors, including, but not limited to, weather conditions and insufficiently or improperly designed and maintained debris basins, roads, bridges and other channel crossings, caused, contributed to or exacerbated the losses that resulted from the Montecito Mudslides.
At this time, based on available information, SCE has not been able to determine whether the Thomas Fire or the Koenigstein Fire, or both, were responsible for the damages in the Montecito area. In the event that SCE is determined to have caused the fire that spread to the Montecito area, SCE cannot predict whether, if fully litigated, the courts would conclude that the Montecito Mudslides were caused by or contributed to the Thomas and/or Koenigstein Fires or that SCE would be liable for some or all of the damages caused by the Montecito Mudslides.
SCE's internal review into the facts and circumstances of the Woolsey Fire is ongoing. SCE has reported to the CPUC that there was an outage on SCE's electric system in the vicinity of where the Woolsey Fire reportedly began on November 8, 2018. SCE is aware of witnesses who saw fire in the vicinity of SCE's equipment at the time the fire was first reported. While SCE did not find evidence of downed electrical wires on the ground in the suspected area of origin, it observed a pole support wire in proximity to an electrical wire that was energized prior to the outage.
The Redacted Woolsey Report states that the VCFD investigation team determined that electrical equipment owned and operated by SCE was the cause of the Woolsey Fire. Absent additional evidence, SCE believes that it is likely that its equipment was associated with the ignition of the Woolsey Fire. SCE expects to obtain and review additional information and materials in the possession of CAL FIRE and others during the course of its internal review and the Woolsey Fire litigation process, including SCE equipment that has been retained by CAL FIRE.
Litigation
Multiple lawsuits related to the 2017/2018 Wildfire/Mudslide Events naming SCE as a defendant have been filed by three categories of plaintiffs: individual plaintiffs, subrogation plaintiffs and public entity plaintiffs. A number of the lawsuits also name Edison International as a defendant and some of the lawsuits were filed as purported class actions. As of October 22, 2024, in addition to the outstanding claims of approximately 440 individual plaintiffs, there were alleged and potential claims of certain public entity plaintiffs, including the CAL OES, outstanding. The litigation could take a number of years to be completely resolved because of the complexity of the matters and number of plaintiffs.
On October 4, 2018, the Los Angeles Superior Court denied Edison International's and SCE's challenge to the application of inverse condemnation to SCE with respect to the Thomas and Koenigstein Fires and, on February 26, 2019, the California Supreme Court denied SCE's petition to review the Superior Court's decision. In April 2022, following a stipulated judgment entered against SCE in the TKM litigation, SCE filed an appeal related to inverse condemnation in the California Court of Appeal, which was denied. In August 2024, the California Supreme Court denied SCE's petition to review the California Court of Appeal's decision.
In January 2019, SCE filed a cross-complaint against certain local public entities alleging that failures by these entities, such as failure to adequately plan for flood hazards and build and maintain adequate debris basins, roads, bridges and other channel crossings, among other things, caused, contributed to or exacerbated the losses that resulted from the Montecito Mudslides. These cross-claims in the Montecito Mudslides litigation were not released as part of the Local Public Entity Settlements (as defined below). Several of these cross-claims have been settled or dismissed.
Settlement of Claims
In 2019, SCE paid $360 million to a number of local public entities to resolve those parties' collective claims arising from the 2017/2018 Wildfire/Mudslide Events (the "Local Public Entity Settlements"). SCE has also settled all fire suppression claims related to the 2017/2018 Wildfire/Mudslide Events.
In 2020, Edison International and SCE entered into an agreement (the "TKM Subrogation Settlement") under which all of the insurance subrogation plaintiffs' in the TKM litigation (the "TKM Subrogation Plaintiffs") collective claims arising from the Thomas Fire, Koenigstein Fire or Montecito Mudslides have been resolved. Under the TKM Subrogation Settlement, SCE paid the TKM Subrogation Plaintiffs an aggregate of $1.2 billion in October 2020 and also agreed to pay $0.555 for each dollar in claims to be paid by the TKM Subrogation Plaintiffs to their policy holders on or before July 15, 2023, up to an agreed upon cap.
In 2021, Edison International and SCE entered into an agreement (the "Woolsey Subrogation Settlement") under which all of the insurance subrogation plaintiffs' in the Woolsey Fire litigation (the "Woolsey Subrogation Plaintiffs") collective claims arising from the Woolsey Fire have been resolved. Under the Woolsey Subrogation Settlement, SCE paid the Woolsey Subrogation Plaintiffs an aggregate of $2.2 billion in March and April 2021. SCE has also agreed to pay $0.67 for each dollar in claims to be paid by the Woolsey Subrogation Plaintiffs to their policy holders on or before July 15, 2023, up to an agreed upon cap.
As of October 22, 2024, SCE has also entered into settlements with approximately 13,000 individual plaintiffs in the 2017/2018 Wildfire/Mudslide Events litigation. In 2023, 2022 and 2021, SCE entered into settlements with individual plaintiffs in the 2017/2018 Wildfire/Mudslide Events litigation under which it agreed to pay an aggregate of approximately $876 million, $1.7 billion and $1.7 billion, respectively, to those individual plaintiffs. In the first, second, and third quarters of 2024, SCE entered into settlements with individual plaintiffs in the 2017/2018 Wildfire/Mudslide Events litigation under which it agreed to pay an aggregate of approximately $216 million, $180 million, and $107 million, respectively, to those individual plaintiffs.
The statutes of limitations for individual plaintiffs in the 2017/2018 Wildfire/Mudslide Events have expired. As of October 22, 2024, SCE has received demands for approximately 95% and 94% of outstanding individual plaintiff claims in the TKM litigation and Woolsey Fire litigation, respectively.
Edison International and SCE did not admit wrongdoing or liability as part of any of the settlements described above. Other claims and potential claims related to the 2017/2018 Wildfire/Mudslide Events remain. SCE continues to explore reasonable settlement opportunities with other plaintiffs in the outstanding 2017/2018 Wildfire/Mudslide Events litigation.
In October 2021, SCE and the SED executed an agreement (the "SED Agreement") to resolve the SED's investigations into the 2017/2018 Wildfire/Mudslide Events and three other 2017 wildfires for, among other things, aggregate costs of $550 million. The $550 million in costs was composed of a $110 million fine to be paid to the State of California General Fund, $65 million of shareholder-funded safety measures, and an agreement by SCE to waive its right to seek cost recovery in CPUC-jurisdictional rates for $125 million and $250 million of third-party uninsured claims payments (and related financing costs) in the TKM litigation and the Woolsey Fire litigation, respectively. The SED Agreement provides that SCE may, on a permanent basis, exclude from its ratemaking capital structure any after-tax charges to equity or debt borrowed to finance costs incurred under the SED Agreement. The SED Agreement also imposes other obligations on SCE, including reporting requirements and safety-focused studies. SCE's obligations under the SED Agreement commenced on August 15, 2022, when CPUC approval of the SED Agreement became final and non-appealable. SCE did not admit imprudence, negligence or liability with respect to the 2017/2018 Wildfire/Mudslide Events in the SED Agreement.
Loss Estimates for Third Party Claims and Potential Recoveries from Insurance and through Electric Rates
At September 30, 2024 and December 31, 2023, Edison International's and SCE's consolidated balance sheets included fixed payments to be made under executed settlement agreements and accrued estimated losses of $569 million and $715 million, respectively, for claims related to the 2017/2018 Wildfire/Mudslide Events. The following table presents changes in estimated losses since December 31, 2023:
Balance at December 31, 20231
715
Increase in accrued estimated losses
490
Amounts paid
(636)
Balance at September 30, 20242
569
58
For the three and nine months ended September 30, 2024 and 2023, Edison International's and SCE's consolidated statements of income included charges for the estimated losses, net of expected recoveries from FERC customers, related to the 2017/2018 Wildfire/Mudslide Events claims as follows:
Charge for wildfire-related claims
475
565
Expected revenue from FERC customers
Total pre-tax charge
448
463
Income tax benefit
(125)
(148)
Total after-tax charge
323
333
384
For events that occurred in 2017 and early 2018, principally the Thomas and Koenigstein Fires and Montecito Mudslides, SCE had $1.0 billion of wildfire-specific insurance coverage, subject to a self-insured retention of $10 million per occurrence. For the Woolsey Fire, SCE had an additional $1.0 billion of wildfire-specific insurance coverage, subject to a self-insured retention of $10 million per occurrence.
In total, through September 30, 2024, SCE has accrued estimated losses of $9.9 billion, has paid or is obligated to pay approximately $9.4 billion in settlements, including $58 million to be paid under the SED Agreement, and has recovered $2.0 billion from its insurance carriers in relation to the claims related to the 2017/2018 Wildfire/Mudslide Events.
Recovery of SCE's losses realized in connection with the 2017/2018 Wildfire/Mudslide Events in excess of available insurance is subject to approval by regulators. Under accounting standards for rate-regulated enterprises, SCE defers costs as regulatory assets when it concludes that such costs are probable of future recovery in electric rates. SCE utilizes objectively determinable evidence to form its view on probability of future recovery. The only directly comparable precedent in which a California investor-owned utility sought recovery for uninsured wildfire claims related costs is San Diego Gas & Electric's ("SDG&E") requests for cost recovery related to 2007 wildfire activity, where the FERC allowed recovery of all FERC-jurisdictional wildfire claims related costs while the CPUC rejected recovery of all CPUC-jurisdictional wildfire claims related costs based on a determination that SDG&E did not meet the CPUC's prudency standard ("SDG&E Decision"). As a result, while SCE does not agree with the CPUC's decision, it believes that the CPUC's interpretation and application of the prudency standard to SDG&E creates substantial uncertainty regarding how that standard will be applied to an investor-owned utility in wildfire cost-recovery proceedings for fires ignited prior to July 12, 2019. SCE will continue to evaluate the probability of recovery based on available evidence, including judicial, legislative and regulatory decisions, including any CPUC decisions illustrating the interpretation and/or application of the prudency standard when making determinations regarding recovery of uninsured wildfire-related costs. While the CPUC has not made a determination regarding SCE's prudency relative to any of the 2017/2018 Wildfire/Mudslide Events, SCE is unable to conclude, at this time, that uninsured CPUC-jurisdictional wildfire claims related costs related to the 2017/2018 Wildfire/Mudslide Events are probable of recovery through electric rates. SCE would record a regulatory asset at the time it obtains sufficient information to support a conclusion that recovery is probable.
In August 2023, SCE filed an application to seek CPUC-jurisdictional rate recovery of prudently incurred losses related to the Thomas Fire, the Koenigstein Fire and the Montecito Mudslides, consisting of uninsured claims and associated costs, including legal costs and financing costs. In August 2024, SCE and the California Public Advocates Office filed a joint motion in the cost recovery proceeding seeking approval of a settlement agreement between SCE and the California Public Advocates Office (the "TKM Settlement Agreement"). One party to the proceeding, the Wild Tree Foundation, has opposed the TKM Settlement Agreement.
Under the TKM Settlement Agreement, if approved by the CPUC, SCE will be authorized to recover 60%, or approximately $1.6 billion, of approximately $2.7 billion of losses, consisting of approximately $1.3 billion of uninsured claims paid as of May 31, 2024, and $0.3 billion of costs, composed of legal and financing costs incurred as of May 31, 2024 and estimated ongoing financing costs. SCE will also be authorized to recover 60% of claims paid and related costs incurred after May 31,
2024, other than for $125 million of uninsured claims and related financing costs which SCE waived its right to seek recovery of under the SED Agreement.
In October 2024, SCE filed an application (the "Woolsey Application") to seek CPUC-jurisdictional rate recovery of $5.4 billion of prudently incurred losses related to the Woolsey Fire, consisting of approximately $4.4 billion of uninsured claims paid as of August 31, 2024 and $1.0 billion of associated costs, composed of legal and financing costs incurred as of August 31, 2024 and estimated ongoing financing costs.
If, and when, the CPUC adopts a final decision approving the TKM Settlement Agreement, SCE will record a regulatory asset for recoveries permitted under the agreement. SCE does not expect to record a regulatory asset for recoveries related to the Woolsey Fire at that time. SCE will continue to evaluate the facts and circumstances of the Woolsey Fire cost recovery proceeding in determining if and when a regulatory asset may be recorded.
Through the operation of its FERC Formula Rate, and based upon the precedent established in SDG&E's recovery of FERC-jurisdictional wildfire-related costs, SCE believes it is probable it will recover its FERC-jurisdictional costs related to the 2017/2018 Wildfire/Mudslide Events and has recorded total expected recoveries of $440 million within the FERC balancing account. This amount is the FERC portion of the total estimated losses accrued and is subject to refund. As of September 30, 2024, collections have reduced the regulatory assets remaining in the FERC balancing account to $64 million. FERC recoveries are subject to refund, and SCE will continue to evaluate the probability of recovery of FERC-jurisdictional wildfire and mudslide related costs related to the 2017/2018 Wildfire/Mudslide Events based on available evidence, including any FERC decisions to allow or disallow recovery, or require refund, of FERC-jurisdictional wildfire-related costs based on a state regulator's decision on whether to permit recovery of related costs.
Through September 30, 2024, SCE has recorded $145 million gross, and $120 million net of depreciation, in incremental property, plant and equipment in relation to restoration costs related to the 2017/2018 Wildfire/Mudslide Events. These assets would be impaired to the extent restoration costs are permanently disallowed by the CPUC in cost recovery proceedings. Under the TKM Settlement Agreement, if approved by the CPUC, SCE will be authorized to recover approximately $55 million of approximately $65 million in incremental restoration costs, inclusive of operations and maintenance expenses, incurred related to the Thomas and Koenigstein Fires. SCE is seeking recovery of approximately $84 million in incremental restoration costs, inclusive of operations and maintenance expenses, incurred related to the Woolsey Fire in the Woolsey Application.
In addition to the Thomas, Koenigstein and Woolsey Fires, several other wildfires that ignited in and after 2017 impacted portions of SCE's service territory. Wildfires, where SCE's equipment has been and may be further alleged to be associated with the fire's ignition, that originated in Southern California (i) in 2017 or 2018, other than the Thomas, Koenigstein and Woolsey Fires, are referred to collectively as the "Other 2017/2018 Wildfires," (ii) after 2018 are referred to collectively as the "Post-2018 Wildfires." The Post-2018 Wildfires and the Other 2017/2018 Wildfires are referred to collectively as the "Other Wildfires."
During the nine months ended September 30, 2024, SCE accrued estimated losses of $184 million for claims related to the Other Wildfires, against which SCE has recorded expected recoveries from insurance of $60 million and expected recoveries through electric rates of $7 million. The resulting net charge to earnings was $117 million ($84 million after-tax).
Through September 30, 2024, SCE has recorded total estimated losses of $1.1 billion, expected recoveries from insurance and third parties of $683 million and expected recoveries through electric rates of $175 million related to the Other Wildfires claims. The after-tax net charges to earnings recorded through September 30, 2024 have been $152 million.
As of September 30, 2024, SCE has paid or is obligated to pay approximately $549 million under executed settlements related to the Other Wildfires and Edison International's and SCE's estimated losses for remaining alleged and potential claims (established at the low end of the estimated range of reasonably possible losses) related to the Other Wildfires was
60
$521 million. As of the same date, SCE had assets for expected recoveries through insurance and third parties of $399 million and through electric rates of $148 million on its consolidated balance sheets related to the Other Wildfires.
Numerous claims related to the Other 2017/2018 Wildfires have been initiated against SCE. The SED is also conducting investigations with respect to some Other 2017/2018 Wildfires.
2017 Creek Fire
The Creek Fire originated near Sylmar in Los Angeles County in December 2017 and burned approximately 16,000 acres, destroyed an estimated 123 structures, damaged an estimated 81 structures, and resulted in 3 civilian injuries. While the United States Forest Service's ("USFS") January 2018 report of investigation concluded that the Los Angeles Department of Water and Power ("LADWP") long-span transmission lines slapping together in high winds resulted in arcing and ignition of the fire, in August 2024, the USFS issued a supplemental report concluding that the fire was caused by SCE power lines. In 2023, the USFS dismissed its claim against LADWP and filed a claim against SCE to recover over $40 million for fire-suppression costs incurred by the USFS and environmental damage to U.S. lands. A trial in the USFS litigation is currently set for July 2025. Other than for the claims of 8 individual plaintiffs related to two properties that were damaged by the Creek Fire, SCE has entered into settlements or settlements in principle on all claims filed by individual and subrogation plaintiffs who filed complaints against SCE related to the fire. A damages-only bench trial is currently set for June 2025 in one of the outstanding individual plaintiff cases. SCE expects to obtain and review additional information and materials in the possession of third parties during the course of its internal reviews and the litigation process. SCE has accrued charges for potential losses relating to the Creek Fire. The accrued charges correspond to the low end of the estimated range of reasonably possible losses that may be incurred in connection with the Creek Fire and are subject to change as additional information becomes available. While Edison International and SCE may incur a material loss in excess of the amount accrued, they cannot estimate the upper end of the range of reasonably possible losses that may be incurred. SCE has recorded recoveries from insurance of $18 million related to the Creek Fire. No additional insurance is available because wildfire insurance for the period in which the Creek Fire was ignited has been almost fully exhausted as a result of the TKM litigation.
Numerous claims related to the Post-2018 Wildfires have been initiated against SCE and Edison International. The SED is also conducting investigations with respect to several Post-2018 Wildfires.
Expected recoveries from insurance recorded for the Post-2018 Wildfires are supported by SCE's insurance coverage for multiple policy years. While Edison International and SCE may incur material losses in excess of the amounts accrued for certain of the Post-2018 Wildfires, Edison International and SCE expect that any losses incurred in connection with any such fire will be covered by insurance, subject to self-insured retentions and co-insurance, and expect that any such losses after expected recoveries from insurance and through electric rates will not be material.
2019 Saddle Ridge Fire
The "Saddle Ridge Fire," originated in Los Angeles County in October 2019 and burned approximately 9,000 acres, destroyed an estimated 19 structures, damaged an estimated 88 structures, and resulted in one fatality and injuries to eight fire fighters. In August 2023, SCE received a signed report of investigation from the Los Angeles Fire Department ("LAFD"), in which the LAFD stated with respect to the Saddle Ridge Fire that the cause of ignition was unintentional, the form of heat was undetermined, the item first ignited was undetermined and the material type first ignited was undetermined. The LAFD report noted that no other competent ignition sources other than SCE's transmission lines were found in the specific origin area of the Saddle Ridge Fire. There are currently no trials scheduled in the Saddle Ridge Fire litigation. Based on pending litigation and without considering insurance recoveries, it is reasonably possible that SCE will incur a material loss in connection with the Saddle Ridge Fire, but the range of reasonably possible losses that could be incurred cannot be estimated
61
at this time. SCE has not determined that losses in connection with the Saddle Ridge Fire are probable and consequently has not accrued a charge for potential losses relating to the Saddle Ridge Fire.
2020 Bobcat Fire
The "Bobcat Fire" was reported in the vicinity of Cogswell Dam in Los Angeles County in September 2020. The USFS has reported that the Bobcat Fire burned approximately 116,000 acres in Los Angeles County, destroyed an estimated 87 homes, one commercial property and 83 minor structures, damaged an estimated 28 homes and 19 minor structures, and resulted in injuries to six firefighters. In addition, fire authorities have estimated suppression costs at approximately $80 million. An investigation into the cause of the Bobcat Fire was led by the USFS. In May 2023, SCE received a report of investigation from the USFS, in which the USFS finds that the Bobcat Fire was caused when an SCE electrical wire made contact with a tree limb. The SED has concluded its investigation of the Bobcat Fire and found no violations of its rules and regulations by SCE related to the Bobcat Fire. The United States of America has filed a claim against SCE and one of its contractors to recover fire-suppression costs, property and natural resource losses, and emergency response costs. A jury trial in this litigation is currently set for July 2025. Individual plaintiffs have also filed complaints against SCE related to the Bobcat Fire, and a trial is currently set for July 2025. SCE expects to obtain and review additional information and materials in the possession of third parties during the course of its internal reviews and the litigation process. SCE has accrued material charges for potential losses relating to the Bobcat Fire. The accrued charges correspond to the low end of the estimated range of reasonably possible losses that may be incurred in connection with the Bobcat Fire and are subject to change as additional information becomes available. While Edison International and SCE may incur a material loss in excess of the amount accrued, they cannot estimate the upper end of the range of reasonably possible losses that may be incurred.
2022 Coastal Fire
The "Coastal Fire" originated in Orange County in May 2022 and burned approximately 200 acres. The Orange County Fire Authority ("OCFA") has reported that the Coastal Fire destroyed 20 residential structures and damaged 11 residential structures. Two firefighters also reportedly sustained minor injuries. In addition, fire authorities have estimated suppression costs at approximately $3 million. While SCE's investigation remains ongoing, SCE's information reflects that a SCE circuit in the area experienced an anomaly (a relay) approximately 2 minutes prior to the reported time of the fire. An investigation into the cause of the Coastal Fire was led by the OCFA. The OCFA has retained SCE equipment in connection with its investigation. In September 2024, SCE received a report of investigation from the OCFA, in which the OCFA finds that the Coastal Fire was unintentionally caused by sparks from overhead SCE electrical equipment igniting vegetation under the equipment. One damages only trial for a household of individual plaintiffs in the Coastal Fire litigation is currently scheduled for March 2025. SCE expects to obtain and review additional information and materials in the possession of third parties during the course of its internal reviews and the litigation process. SCE has accrued material charges for potential losses relating to the Coastal Fire. The accrued charges correspond to the low end of the estimated range of reasonably possible losses that may be incurred in connection with the Coastal Fire and are subject to change as additional information becomes available. While Edison International and SCE may incur a material loss in excess of the amount accrued, they cannot estimate the upper end of the range of reasonably possible losses that may be incurred.
2022 Fairview Fire
The "Fairview Fire" originated in Riverside County in September 2022 and burned approximately 28,000 acres. CAL FIRE has reported that the Fairview Fire destroyed 22 residential structures, damaged five residential structures, and destroyed or damaged 17 minor structures. CAL FIRE also reported two civilian fatalities, one civilian injury and two injuries to responding fire personnel. In addition, fire authorities have estimated suppression costs at $39 million. While SCE's investigation remains ongoing, SCE's information reflects that a SCE circuit in the area experienced an anomaly (a relay) approximately 8 minutes prior to the reported start time of the fire. In November 2023, SCE received a report of investigation conducted by CAL FIRE, in which CAL FIRE finds that the Fairview Fire was caused when a sagging SCE electrical conductor came in contact with a communication line, causing sparks to fall and ignite surrounding vegetation. In July 2024, the SED issued a notice of violation alleging that SCE failed to comply with clearance requirements with respect to its
electrical conductor. Jury trials for bellwether plaintiffs in the Fairview Fire litigation have been set for April and May 2025. SCE expects to obtain and review additional information and materials in the possession of third parties during the course of its internal reviews and the litigation process. SCE has accrued material charges for potential losses relating to the Fairview Fire. The accrued charges correspond to the low end of the estimated range of reasonably possible losses that may be incurred in connection with the Fairview Fire and are subject to change as additional information becomes available. While Edison International and SCE may incur a material loss in excess of the amount accrued, they cannot estimate the upper end of the range of reasonably possible losses that may be incurred.
At September 30, 2024 and December 31, 2023, Edison International's and SCE's consolidated balance sheets included accrued estimated losses of $525 million and $683 million, respectively, for claims related to the Other Wildfires. Edison International and SCE have accrued the low end of the estimated range of reasonably possible losses for each of the Other Wildfires as no amount within the range of reasonably possible losses for each such fire appears at this time to be a better estimate than any other amount within the range. While Edison International and SCE may incur a material loss in excess of the amount accrued, they cannot estimate the upper end of the range of reasonably possible losses that may be incurred.
The following table presents changes in estimated losses since December 31, 2023:
683
184
(342)
525
For the three and nine months ended September 30, 2024 and 2023, Edison International's and SCE's consolidated statements of income included charges for the estimated losses (established at the low end of the estimated range of reasonably possible losses), net of expected recoveries from insurance and customers, related to the Other Wildfires as follows, respectively:
Expected insurance recoveries1
(111)
Expected revenue from CPUC and FERC customers
119
Expected insurance recoveries
(114)
(60)
117
Recovery of SCE's losses realized in connection with the Other Wildfires in excess of available insurance is subject to approval by regulators. The CPUC and FERC may not allow SCE to recover uninsured losses through electric rates, including by requiring refund of amounts recovered, if it is determined that such losses were not prudently incurred. Under accounting standards for rate-regulated enterprises, SCE defers costs as regulatory assets when it concludes that such costs are probable of future recovery in electric rates. SCE utilizes objectively determinable evidence to form its view on the probability of future recovery. As of September 30, 2024, SCE has recorded total expected recoveries related to the Other Wildfires claims of $152 million within the Wildfire Expense Memorandum Account and Risk Management Balancing Account and $23 million within the FERC balancing account.
As discussed above, the SDG&E Decision is evidence of a California investor-owned utility seeking recovery for uninsured wildfire-related costs and FERC allowing recovery of all FERC-jurisdictional wildfire-related costs while the CPUC rejected recovery of all CPUC-jurisdictional wildfire-related costs based on a determination that the utility did not meet the CPUC's prudency standard. In light of the SDG&E Decision, as with the 2017/2018 Wildfire/Mudslide Events, SCE is unable to conclude, at this time, that uninsured CPUC-jurisdictional costs related to the Other 2017/2018 Wildfires are probable of recovery through electric rates.
The SDG&E Decision was prior to the adoption of AB 1054 on July 12, 2019, after which date AB 1054 clarified that the CPUC must find a utility to be prudent if the utility's conduct related to the ignition was consistent with actions that a reasonable utility would have undertaken in good faith under similar circumstances, at the relevant point in time, and based on the information available at that time. Further, utilities with a valid safety certification at the time of the relevant wildfire will be presumed to have acted prudently related to a wildfire ignition unless a party in the cost recovery proceeding creates serious doubt as to the reasonableness of the utility's conduct, at which time, the burden shifts back to the utility to prove its conduct was prudent. Each of the Post-2018 Wildfires was ignited after July 12, 2019, and SCE has held a valid safety certificate since July 15, 2019. While a California investor-owned utility has not yet sought recovery for uninsured claims and other costs related to wildfires ignited after the adoption of AB 1054, SCE believes that for fires ignited after July 12, 2019, and investor-owned utilities holding a safety certificate at the time of the fire, the CPUC will apply a standard of review similar to that applied by the FERC which presumes all costs requested by an investor-owned utility are reasonable and prudent unless serious doubt as to the reasonableness of the utility's conduct is raised. As such, SCE has concluded, at this time, that both uninsured CPUC-jurisdictional and uninsured FERC-jurisdictional wildfire-related costs related to those Post-2018 Wildfires that it has deferred as regulatory assets are probable of recovery through electric rates. SCE will continue to evaluate the probability of recovery based on available evidence, including regulatory decisions, including any CPUC decisions illustrating the interpretation and/or application of the prudency standard under AB 1054, and, for each applicable fire, evidence that could cast serious doubt as to the reasonableness of SCE's conduct relative to that fire.
Wildfire Insurance Coverage
In May 2023, the CPUC allowed SCE to establish an expanded self-insurance program for wildfire-related costs that will be funded through CPUC-jurisdictional rates, with $150 million collected for the second half of 2023 and, in the absence of wildfire-related claims, $300 million collected for 2024. In July 2024, the CPUC issued a decision in the 2025 GRC proceeding authorizing this self-insurance framework to continue through at least 2028, supporting a self-insurance fund of up to $1.0 billion per policy year. Through 2028, $300 million will be collected annually until a total available self-insurance accrual amount of $1.0 billion is achieved. If losses are accrued for wildfire-related claims for wildfires that occur between July 1, 2023 and the end of 2028, customer rates will be increased in subsequent years, as needed, to allow for full recovery of the amounts accrued up to $1.0 billion per policy year, subject to a shareholder contribution of 2.5% of any self-insurance costs ultimately paid exceeding $500 million in any policy year, up to a maximum annual contribution of $12.5 million per policy year. SCE's self-insurance program meets its obligation to maintain reasonable insurance coverage under AB 1054 for the January 1, 2024 through December 31, 2024 period.
SCE has approximately $1.0 billion of wildfire-specific insurance coverage for events that occurred during the period July 1, 2022 through June 30, 2023, subject to up to $100 million of self-insured retention and co-insurance per fire, which results in
aggregate net coverage of approximately $937 million. Of this coverage, approximately $102 million is provided by EIS and approximately $835 million is provided by other commercial insurance carriers (commercial insurance carriers other than EIS are referred to herein as "Third-Party Commercial Insurers").
SCE's wildfire insurance expense for the July 1, 2022 through June 30, 2023 policy period was approximately $450 million, of which $357 million was paid to Third-Party Commercial Insurers. The difference between the Third-Party Commercial Insurer cost and total cost for the July 1, 2022 through June 30, 2023 policy period was paid in premiums to EIS. Wildfire insurance premiums paid for the July 1, 2022 through June 30, 2023 policy period are being recovered through customer rates. See Note 17 for further information.
Edison International and SCE record a receivable for insurance recoveries when recovery of a recorded loss is determined to be probable.
Environmental Remediation
SCE records its environmental remediation and restoration liabilities when site assessments and/or remedial actions are probable and a range of reasonably likely cleanup costs can be estimated. SCE reviews its sites and measures the liability quarterly, by assessing a range of reasonably likely costs for each identified site using currently available information, including existing technology, presently enacted laws and regulations, experience gained at similar sites, and the probable level of involvement and financial condition of other potentially responsible parties. These estimates include costs for site investigations, remediation, operation and maintenance, monitoring, and site closure. Unless there is a single probable amount, SCE records the lower end of this reasonably likely range of costs (reflected in "Other long-term liabilities") at undiscounted amounts as timing of cash flows is uncertain.
At September 30, 2024, SCE's recorded estimated minimum liability to remediate its 21 identified material sites (sites with a liability balance at September 30, 2024, in which the upper end of the range of expected costs is at least $1 million) was $238 million, including $156 million related to San Onofre. In addition to these sites, SCE also has 19 immaterial sites with a liability balance as of September 30, 2024, for which the total minimum recorded liability was $3 million. Of the $242 million total environmental remediation liability for SCE, $226 million has been recorded as a regulatory asset. SCE expects to recover $36 million through an incentive mechanism that allows SCE to recover 90% of its environmental remediation costs at certain sites (SCE may request to include additional sites in this mechanism) and $190 million through proceedings that allow SCE to recover up to 100% of the costs incurred at certain sites through customer rates. SCE's identified sites include several sites for which there is a lack of currently available information, including the nature and magnitude of contamination, and the extent, if any, that SCE may be held responsible for contributing to any costs incurred for remediating these sites. Thus, no reasonable estimate of cleanup costs can be made for these sites.
The ultimate costs to clean up SCE's identified sites may vary from its recorded liability due to numerous uncertainties inherent in the estimation process, such as: the extent and nature of contamination; the scarcity of reliable data for identified sites; the varying costs of alternative cleanup methods; developments resulting from investigatory studies; the possibility of identifying additional sites; and the time periods over which site remediation is expected to occur. SCE believes that, due to these uncertainties, it is reasonably possible that cleanup costs at the identified material sites and immaterial sites could exceed its recorded liability by up to $112 million and $2 million, respectively. The upper limit of this range of costs was estimated using assumptions least favorable to SCE among a range of reasonably possible outcomes.
SCE expects to clean up and mitigate its identified sites over a period of up to 35 years. Remediation costs for each of the next five years are expected to range from $13 million to $20 million. Costs incurred for the nine months ended September 30, 2024 and 2023 were both $9 million, and were included in the "Operation and maintenance" expense on Edison International's and SCE's consolidated statements of income.
Based upon the CPUC's regulatory treatment of environmental remediation costs incurred at SCE, SCE believes that costs ultimately recorded will not materially affect its results of operations, financial position, or cash flows. There can be no
assurance, however, that future developments, including additional information about existing sites or the identification of new sites, will not require material revisions to estimates.
Nuclear Insurance
SCE is a member of Nuclear Electric Insurance Limited ("NEIL"), a mutual insurance company owned by entities with nuclear facilities. NEIL provides insurance for nuclear property damage, including damages caused by acts of terrorism up to specified limits, and for accidental outages for active facilities. The amount of nuclear property damage insurance purchased for San Onofre and Palo Verde exceeds the minimum federal requirement of $50 million and $1.1 billion, respectively. If NEIL losses at any nuclear facility covered by the arrangement were to exceed the accumulated funds for these insurance programs, SCE could be assessed retrospective premium adjustments of up to approximately $17 million per year.
Federal law limits public offsite liability claims for bodily injury and property damage from a nuclear incident to the amount of available financial protection, which is currently approximately $560 million for San Onofre and $16.3 billion for Palo Verde. SCE and other owners of San Onofre and Palo Verde have purchased the maximum private primary insurance available through a Facility Form issued by American Nuclear Insurers. SCE withdrew from participation in the secondary insurance pool for San Onofre for offsite liability insurance effective January 5, 2018. Based on its ownership interests in Palo Verde, SCE could be required to pay a maximum of approximately $79 million per nuclear incident for future incidents. However, it would have to pay no more than approximately $12 million per future incident in any one year. Based on its ownership interests in San Onofre and Palo Verde prior to January 5, 2018, SCE could be required to pay a maximum of approximately $255 million per nuclear incident and a maximum of $38 million per year per incident for liabilities arising from events prior to January 5, 2018, although SCE is not aware of any such events.
Common Stock Issuances
As of September 30, 2024, Edison International had not issued any shares through its "at-the-market" ("ATM") program established in August 2022. Under the ATM program, Edison International may sell shares of its common stock having an aggregate sales price of up to $500 million. Edison International has no obligation to sell the remaining shares available under the ATM program.
Edison International continued to settle its ongoing common stock requirements of various internal programs through issuance of new common stock. During the three months ended September 30, 2024, 1,049,343 shares of common stock were issued as stock compensation awards for net cash receipts of $67 million.
During the nine months ended September 30, 2024, 3,075,416 shares of common stock were issued as stock compensation awards for net cash receipts of $171 million, 70,246 shares of new common stock were issued in lieu of distributing $5 million to shareholders opting to receive dividend payments in the form of additional common stock, 43,300 shares of common stock were issued to employees through the 401(k) defined contribution savings plan for net cash receipts of $3 million as dividend payments and 31,112 shares of common stock were issued to employees through the Employee Stock Purchase Plan for net cash receipts of $2 million.
Preferred Stock
In the first and second quarter of 2024, Edison International repurchased 20,000 shares and 9,000 shares of its Series B Preferred Stock via open market repurchases for $19 million and $9 million at an average price of $952 per share and $967 per share, respectively, including accrued and unpaid dividends. Edison International recognized a total net gain of $1 million from the open market repurchase, reflected in "Preferred stock dividend requirements of Edison International" on the consolidated statements of income.
Preference Stock of SCE
During the second quarter of 2024, SCE issued $350 million of 6.95% Series N preference stock (140,004 shares; cumulative, $2,500 liquidation value) to SCE Trust VIII, a special purpose entity formed to issue trust securities as discussed in Note 3. The Series N preference stock may be redeemed at a premium, in whole, but not in part, at any time prior to May 13, 2029 if certain changes in tax or investment company law or interpretation or applicable rating agency equity credit criteria occur. On or after May 13, 2029, SCE may redeem the Series N shares at par, in whole or in part. The shares are not subject to mandatory redemption. In June 2024, the proceeds were used to redeem $350 million of SCE's Series E Preference Stock.
The changes in accumulated other comprehensive loss, net of tax, are as follows:
Pension and PBOP:
Reclassified from accumulated other comprehensive loss1
Ending Balance
Note 15. Other Income, Net
Other income net of expenses is as follows:
SCE other income (expense):
143
Increase in cash surrender value of life insurance policies and life insurance benefits
Interest income
194
Net periodic pension and PBOP benefit income – non-service components
Civic, political and related activities and donations
(14)
Total SCE other income, net
Other income (expense) of Edison International Parent and Other:
Net loss on equity securities
Interest income and other
Total Edison International other income, net
Supplemental cash flows information is:
Cash payments (receipts):
Interest, net of amounts capitalized
1,034
991
888
Income taxes, net
Non-cash financing and investing activities:
Dividends declared but not paid:
Common stock
283
Preference stock of SCE
SCE's accrued capital expenditures at September 30, 2024 and 2023 were $546 million and $584 million, respectively. Accrued capital expenditures are included in investing activities in the consolidated statements of cash flows in the periods paid.
In July 2022, SCE purchased wildfire liability insurance for premiums of $273 million from EIS, for the period to June 30, 2023. SCE subsequently did not renew or purchase wildfire liability insurance from EIS for additional periods. In lieu of obtaining wildfire liability insurance from the commercial insurance market, SCE implemented its customer-funded wildfire self-insurance program beginning July 1, 2023. For further information, see Note 12. The expected insurance recoveries from previously purchased wildfire-related insurance from EIS included in SCE's consolidated balance sheets were $281 million and $355 million at September 30, 2024 and December 31, 2023, respectively. The expense for wildfire-related insurance premiums paid to EIS was $132 million for the nine months ended September 30, 2023.
The management of Edison International and SCE, under the supervision and with the participation of Edison International's and SCE's respective Chief Executive Officers and Chief Financial Officers, have evaluated the effectiveness of Edison International's and SCE's disclosure controls and procedures (as that term is defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended), respectively, as of the end of the third quarter of 2024. Based on that evaluation, Edison International's and SCE's respective Chief Executive Officers and Chief Financial Officers have each concluded that, as of the end of the period, Edison International's and SCE's disclosure controls and procedures, respectively, were effective.
There were no changes in Edison International's or SCE's internal control over financial reporting, respectively, during the third quarter of 2024 that have materially affected, or are reasonably likely to materially affect, Edison International's or SCE's internal control over financial reporting.
Edison International's and SCE's respective scope of evaluation of internal control over financial reporting includes their Jointly Owned Utility Projects as discussed in "Notes to Consolidated Financial Statements—Note 2. Property, Plant and Equipment" in the 2023 Form 10-K.
Multiple lawsuits related to the 2017/2018 Wildfire/Mudslide Events naming SCE as a defendant have been filed by three categories of plaintiffs: individual plaintiffs, subrogation plaintiffs and public entity plaintiffs. A number of the lawsuits also name Edison International as a defendant and some of the lawsuits were filed as purported class actions. As of October 22, 2024, in addition to the outstanding claims of approximately 440 of the approximately 15,000 initial individual plaintiffs, there were alleged and potential claims of certain public entity plaintiffs, including CAL OES, outstanding. The litigation could take a number of years to be completely resolved because of the complexity of the matters and number of plaintiffs.
As of October 22, 2024, SCE was aware of approximately 30 pending unsettled lawsuits representing approximately 80 individual plaintiffs related to the Thomas and Koenigstein Fires naming SCE as a defendant. Approximately 15 of the approximately 30 lawsuits also name Edison International as a defendant based on its ownership and alleged control of SCE. One of the lawsuits was filed as a purported class action. The lawsuits, which have been filed in the superior courts of Ventura, Santa Barbara and Los Angeles Counties allege, among other things, negligence, inverse condemnation, trespass, private nuisance, and violations of the public utilities and health and safety codes. SCE and certain of the individual plaintiffs in the Thomas and Koenigstein Fire litigation have been pursuing settlements of claims under a mediation program adopted to promote an efficient and orderly settlement process. As of October 22, 2024, one damages only trial has been set for May 2025 for individual plaintiffs in the TKM litigation.
Approximately 10 of the approximately 30 pending unsettled individual plaintiff lawsuits mentioned in the paragraph above allege that SCE has responsibility for the Thomas and/or Koenigstein Fires and that the Thomas and/or Koenigstein Fires proximately caused the Montecito Mudslides, resulting in the plaintiffs' claimed damages. Many of the Montecito Mudslides lawsuits also name Edison International as a defendant based on its ownership and alleged control of SCE. In addition to other causes of action, some of the Montecito Mudslides lawsuits also allege personal injury and wrongful death.
As of October 22, 2024, SCE was aware of approximately 100 currently pending unsettled lawsuits representing approximately 360 individual plaintiffs related to the Woolsey Fire naming SCE as a defendant. Approximately 80 of the 100
lawsuits also name Edison International as a defendant based on its ownership and alleged control of SCE. The lawsuits, which have been filed in the superior courts of Ventura and Los Angeles Counties allege, among other things, negligence, inverse condemnation, personal injury, wrongful death, trespass, private nuisance, and violations of the public utilities and health and safety codes. SCE and certain of the individual plaintiffs in the Woolsey Fire litigation have been pursuing settlements of claims under a mediation program adopted to promote an efficient and orderly settlement process. As of October 22, 2024, a liability trial has been set for March 2025 for CAL OES.
The Thomas and Koenigstein Fires and Montecito Mudslides lawsuits are being coordinated in the Los Angeles Superior Court. The Woolsey Fire lawsuits have also been coordinated in the Los Angeles Superior Court.
For further information, including regarding settlement activity related to the 2017/2018 Wildfire/Mudslide Events, see "Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides."
Each of Edison International and SCE have elected to disclose environmental proceedings described in Item 103(c)(3)(iii) of Regulation S-K unless it reasonably believes that such proceeding will result in no monetary sanctions, or in monetary sanctions, exclusive of interest and costs, of less than $1,000,000.
On July 25, 2024, Edison International announced a stock repurchase program effective July 29, 2024 for repurchase of up to $200 million of its common stock until December 31, 2025 ("Repurchase Program"). The Repurchase Program will be used to offset dilution from common stock issued under Edison International's long-term incentive compensation programs and will be funded using Edison International's working capital.
The timing and the amount of any repurchased common stock will be determined by Edison International's management based on their evaluation of market conditions and other factors. The Repurchase Program may be executed through various methods, including open market purchases, privately negotiated transactions, and other transactions in accordance with applicable securities laws. Any repurchased shares of common stock will be retired. The Repurchase Program does not obligate Edison International to acquire any particular amount of common stock, and it may be suspended or discontinued at any time in its discretion.
During the quarter ended September 30, 2024, Edison International did not purchase any shares under the Repurchase Program.
The following table contains information about all purchases of Edison International's common stock made by or on behalf of Edison International in the third quarter of 2024.
(a) Total Number of Shares (or Units Purchased) 1
(b) Average Price Paid per Share (or Unit)
(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs
(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
July 1, 2024 to
July 31, 2024
90,089
$77.19
-
August 1, 2024 to
August 31, 2024
21,245
$80.36
September 1, 2024 to
660
$86.03
111,994
$77.85
The shares were purchased by agents acting on Edison International's behalf for delivery to plan participants to fulfill requirements in connection with Edison International's 401(k) Savings Plan, Dividend Reinvestment and Direct Stock Purchase Plan, and Employee Stock Purchase Plan. The shares were purchased in open-market transactions pursuant to plan terms and participant elections. The shares were never registered in Edison International's name and none of the shares purchased were retired as a result of the transaction.
Trading Plans
During the quarter ended September 30, 2024, no director or Section 16 officer adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements (in each case, as defined in Item 408(a) of Regulation S-K).
Exhibit Number
10.1**
Edison International 2008 Executive Retirement Plan, as amended and restated effective August 21, 2024
31.1
Certifications of the Chief Executive Officer and Chief Financial Officer of Edison International pursuant to Section 302 of the Sarbanes-Oxley Act
31.2
Certifications of the Chief Executive Officer and Chief Financial Officer of Southern California Edison Company pursuant to Section 302 of the Sarbanes-Oxley Act
32.1
Certifications of the Chief Executive Officer and the Chief Financial Officer of Edison International required by Section 906 of the Sarbanes-Oxley Act
32.2
Certifications of the Chief Executive Officer and the Chief Financial Officer of Southern California Edison Company required by Section 906 of the Sarbanes-Oxley Act
101.1
Financial statements from the quarterly report on Form 10-Q of Edison International for the quarter ended September 30, 2024, filed on October 29, 2024, formatted in Inline XBRL: (i) the Consolidated Statements of Income; (ii) the Consolidated Statements of Comprehensive Income; (iii) the Consolidated Balance Sheets; (iv) the Consolidated Statements of Cash Flows; and (v) the Notes to Consolidated Financial Statements
101.2
Financial statements from the quarterly report on Form 10-Q of Southern California Edison Company for the quarter ended September 30, 2024, filed on October 29, 2024, formatted in Inline XBRL: (i) the Consolidated Statements of Income; (ii) the Consolidated Statements of Comprehensive Income; (iii) the Consolidated Balance Sheets; (iv) the Consolidated Statements of Cash Flows; and (v) the Notes to Consolidated Financial Statements
The cover page of this report formatted in Inline XBRL (included as Exhibit 101)
** Indicates a management contract or compensatory plan or arrangement as required by Item 15(a)(3).
Edison International and SCE will furnish a copy of any exhibit listed in the accompanying Exhibit Index upon written request and upon payment to Edison International or SCE of their reasonable expenses of furnishing such exhibit, which shall be limited to photocopying charges and, if mailed to the requesting party, the cost of first-class postage.
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned, thereunto duly authorized.
By:
/s/ Kara G. Ryan
Kara G. Ryan
Vice President, Chief Accounting Officer and Controller
(Duly Authorized Officer and Principal Accounting Officer)
Date:
October 29, 2024