Company: SCE-PL
Filing Date: 2025-07-31
Form Type: 10-Q
Source: 0000827052-25-000074
Chunk: 79

Company: SOUTHERN CALIFORNIA EDISON Co
Filing Date: 2025-07-31
Form: 10-Q
Item: Item 7
Chunk 79
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 to successfully implement AB 1054 in a consistent and credit-supportive manner, or investigations into wildfire events or associated settlements that result in material utility liability exposure, particularly in the absence of credit-supportive legislative actions, such as modifications to AB 1054 that are supportive of the durability of the Wildfire Insurance Fund. Additionally, a persistent increase in the frequency and severity of wildfires in California may lead the credit rating agencies to reassess Edison International Parent's wildfire-related operational risk exposure or believe the Wildfire Insurance Fund is at risk of material depletion. Credit rating downgrades increase the cost and may impact the availability of short-term and long-term borrowings, including commercial paper, credit facilities, bond financings or other borrowings. 

Edison International Income Taxes

Inflation Reduction Act of 2022

The IRA imposes a 15% corporate alternative minimum tax ("CAMT") on adjusted financial statement income ("AFSI") of corporations with average AFSI exceeding $1.0 billion over the three preceding calendar years. The CAMT was effective beginning January 1, 2023. Based on the current interpretation of the law and historical financial data, Edison International estimates that it will exceed the $1.0 billion threshold and be subject to CAMT on its consolidated federal tax returns beginning in 2026. SCE expects to be subject to CAMT on its stand-alone Federal return beginning in 2026.

The law also includes significant extensions, expansions, and enhancements of numerous energy-related investment tax credits, as well as creating new credits applicable to electricity production which may apply to SCE's capital expenditures. Under the IRA, SCE generated investment tax credits of approximately $231 million in 2024 related to utility owned storage projects, and expects to generate an additional estimated $150 million as new projects are placed into service, which will be returned to customers as the credits are utilized.

The One Big Beautiful Bill Act of 2025

On July 4, 2025, the One Big Beautiful Bill Act of 2025 ("OBBBA") was enacted into law. The OBBBA, among other things, phases out various clean energy credits enacted as part of the IRA. These phase-outs are not expected to impact the investment tax credits related to SCE's utility owned storage projects discussed above under "—Inflation Reduction Act of 2022." Edison International and SCE are continuing to evaluate the full scope of potential financial impacts.

Historical Cash Flows

SCE

Six months ended June 30,Change(in millions)202520