Company: SCE-PL
Filing Date: 2025-10-28
Form Type: 10-Q
Source: 0000827052-25-000100
Chunk: 93

Company: SOUTHERN CALIFORNIA EDISON Co
Filing Date: 2025-10-28
Form: 10-Q
Item: Item 7
Chunk 93
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 collateral requirements. Future collateral requirements may differ from the requirements at September 30, 2025, 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. See "—SCE" above for further information on SCE's credit ratings.

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, 2025, if SCE's credit rating had been downgraded to below investment grade as of that date. The table below 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 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.

(in millions)Collateral posted as of September 30, 20251$316 Incremental collateral requirements for purchased power and fuel contracts resulting from a potential downgrade of SCE's credit rating to below investment grade223 Incremental collateral requirements for purchased power and fuel contracts resulting from adverse market price movements355 Posted and potential collateral requirements$394 

1Net collateral provided to counterparties and other brokers consisted of $203 million in letters of credit and surety bonds and $113 million of cash collateral.

2Represents potential collateral requirements for accounts payable and mark-to-market valuation at September 30, 2025. The requirements vary throughout the period and are generally lower at the end of the month.

3Incremental collateral requirements were based on potential changes in SCE's forward positions as of September 30, 2025, due to adverse market price movements over the remaining lives of the existing power and fuel contracts using a 95% confidence level.

Furthermore, SCE may be required to post collateral for workers' compensation in excess of standard formula amounts, currently up to $115 million, in the event of volatile credit rating conditions, during which the Office of Self-Insurance Plans, which oversees workers' compensation self-insurance within California, may exercise discretion to impose higher 

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collateral requirements. SCE posted $12 million under such discretionary authority in the second quarter of 2025. SCE may also be