Company: SCE-PL
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0000827052-25-000022
Chunk: 249

Company: SOUTHERN CALIFORNIA EDISON Co
Filing Date: 2025-02-27
Form: 10-K
Item: Item 1A
Chunk 249
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219)Corporate-owned life insurance cash surrender value(9)(8)(9)(9)(8)(9)Other1 — (3)6 — (1)Total income tax expense (benefit)$17 $108 $(162)$120 $184 $(109)Effective tax rate1.1 %7.1 %(24.5)%6.3 %10.3 %(12.9)%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 generated an investment tax credit of approximately $231 million, primarily from 200MW and 112.5MW utility owned storage projects. The tax benefits associated with these credits will be recognized and returned to customers as the credits are utilized.

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Table of Contents

Under the Inflation Reduction Act of 2022, 15% corporate alternative minimum tax ("CAMT") is imposed on corporations with average adjusted financial statement income exceeding $1.0 billion over a specified 3-year period. Both Edison International and SCE are not subject to CAMT in 2024.Accounting for Uncertainty in Income TaxesAuthoritative guidance related to accounting for uncertainty in income taxes requires an enterprise to recognize, in its financial statements, the best estimate of the impact of a tax position by determining if the weight of available evidence indicates it is more likely than not, based solely on the technical merits, that the position will be sustained upon examination. The guidance requires the disclosure of all unrecognized tax benefits, which includes both the reserves recorded for tax positions on filed tax returns and the unrecognized portion of affirmative claims.Unrecognized Tax BenefitsThe following table provides a reconciliation of unrecognized tax benefits:Edison InternationalSCE(in millions)202420232022202420232022Balance at January 1,$430 $646 $613 $418 $374 $340 Tax positions taken during the current year: