Company: SCE-PL
Filing Date: 2025-09-08
Form Type: SF-1
Source: 0001193125-25-198426
Chunk: 53

Company: SOUTHERN CALIFORNIA EDISON Co
Filing Date: 2025-09-08
Form: SF-1
Chunk 53
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federal or California cases addressing the repeal or amendment of statutory provisions analogous to those contained in the Wildfire Financing Law have been decided. There have been cases in which courts have applied the Contract Clause of the United
States constitution and the Contract Clause of the California constitution to strike down legislation regarding similar matters, such as legislation reducing or eliminating taxes, public charges or other sources of revenues servicing other types of
bonds issued by public instrumentalities or private issuers (or issuing entities), or otherwise substantially impairing or eliminating the security for bonds or other indebtedness. Based upon this case law, Norton Rose Fulbright US LLP expects to
deliver a reasoned opinion, prior to the closing of the offering of the bonds to the effect that, a reviewing court of competent jurisdiction, in a properly prepared and presented case, would conclude that the State pledge constitutes a contractual
relationship between the bondholders and the State of California, and that, absent a demonstration by the State of California that any legislative action by the State of California, whether by the State legislature or the voters pursuant to their
initiative rights, which becomes law (such action being referred to as a legislative action) that limits, alters, or reduces the value of the recovery property or the fixed recovery charges so as to impair (a) the terms of the indenture
or the bonds or (b) the rights and remedies of the bondholders (or the trustee acting on their behalf) (each such act, an impairment), the bondholders could successfully challenge under the Federal Contract Clause or the California
Contract Clause the constitutionality of any legislative action determined by such court to limit, alter or reduce the value of the recovery property or the fixed recovery charges so as to cause an impairment prior to the time that the bonds are
fully paid and discharged. The cases also indicate that the State’s justification would be subjected to a higher degree of scrutiny, and that the State would bear a more substantial burden, if the legislative action impairs a contract to which
the State is a party (which we believe to be the case here), as contrasted to a contract solely between private parties. It may be possible for the California legislature to repeal or amend the Wildfire Financing Law or for the California commission
to amend or revoke the financing order notwithstanding the State pledge, if the California legislature or the California commission acts in order to serve a significant and legitimate public purpose, such as protecting the public health and safety
or responding to a national or regional catastrophe affecting SCE, or if the California legislature otherwise