Company: SCE-PL
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0000827052-25-000022
Chunk: 47

Company: SOUTHERN CALIFORNIA EDISON Co
Filing Date: 2025-02-27
Form: 10-K
Item: Item 7
Chunk 47
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 the period it concludes that such costs are probable of future recovery in electric rates. 

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Table of Contents

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 and the CPUC made a prudency determination, is SDG&E's requests for cost recovery related to 2007 wildfire activity. 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. 

In January 2025, the CPUC approved the TKM Settlement Agreement and closed the proceeding. However, the CPUC did not make a determination regarding SCE's prudency when it approved the TKM Settlement Agreement. Therefore, notwithstanding CPUC approval of the TKM Settlement Agreement, SCE believes that the CPUC's interpretation and application of the prudency standard to SDG&E continues to create 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. Consequently, SCE is unable to estimate the uninsured CPUC-jurisdictional claims related costs related to the Woolsey Fire or Creek Fire, both pre-AB 1054 events, that are probable of future recovery, and will not record a regulatory asset for recoveries related to the Woolsey Fire or Creek Fire in connection with the approval of the TKM Settlement Agreement. SCE will continue to evaluate the facts and circumstances of the pre-AB 1054 cost recovery proceeding to determine if and when a regulatory asset for pre-AB 1054 events 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 wildfire and mudslide related costs and has recorded total expected recoveries within the FERC balancing account. 

Application to post-AB-1054 Other Wildfire Events 

Management judgment is required to assess the probability of recovery of SCE's losses realized, in excess of available insurance, in connection with wildfires ignited after the adoption of AB 1054 in July 2019. 

The CPUC and FERC may not allow SCE to recover uninsured