Company: SCE-PL
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0000827052-25-000022
Chunk: 621

Company: SOUTHERN CALIFORNIA EDISON Co
Filing Date: 2025-02-27
Form: 10-K
Item: Item 8
Chunk 621
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IE conditions discussed above and in which SCE has variable interests, including: agreements through which SCE provides natural gas to fuel the plants, fixed price contracts for renewable energy, and resource adequacy agreements that allow purchase of energy at fixed prices upon the seller's election. Since payments for capacity are the primary source of income, the most significant economic activity for these VIEs is typically the operation and maintenance of the power plants, which SCE does not perform. Therefore, SCE has concluded that it is not the primary beneficiary of any of these VIEs because it does not control the commercial and operating activities that most significantly impact the economic performance of these entities. 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. 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 5,200 MW and 3,343 MW at December 31, 2024 and 2023, respectively, and the amounts that SCE paid to these projects were $778 million and $528 million for the years ended December 31, 2024 and 2023, respectively. These amounts are recoverable in customer rates, subject to a reasonableness review.

Note 4. Fair Value Measurements

Recurring Fair Value MeasurementsFair 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 December 31, 2024 and 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 un