Company: SCE-PL
Filing Date: 2025-07-31
Form Type: 10-Q
Source: 0000827052-25-000074
Chunk: 19

Company: SOUTHERN CALIFORNIA EDISON Co
Filing Date: 2025-07-31
Form: 10-Q
Item: Part I, Item 8
Chunk 19
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. SCE uses standard pricing models to determine the net present value of estimated future cash flows. Inputs to the pricing models include forward published or posted clearing prices from an exchange (Intercontinental Exchange) for similar instruments and discount rates. A primary price source that best represents trade activity for each market is used to develop observable forward market prices in determining the fair value of these positions. Broker quotes, prices from exchanges, or comparison to executed trades are used to validate and corroborate the primary price source. These price quotations reflect mid-market prices (average of bid and ask) and are obtained from sources believed to provide the most liquid market for the commodity.Level 3 – This level primarily consists of congestion revenue rights ("CRRs"), which are derivative contracts that trade infrequently with significant unobservable inputs (CAISO CRR auction prices). SCE employs a market valuation approach of utilizing historical CRR prices as a proxy for forward prices. SCE also enters into certain physically settled resource adequacy contracts with a financially settled electricity component ("Fin Toll arrangements"). For these Fin Toll arrangements, SCE uses an income model valuation approach to estimate the significant unobservable inputs (hourly power prices). Edison International Parent and Other does not have any Level 3 assets and liabilities.Assumptions are made in order to value derivative contracts in which observable inputs are not available. In circumstances where fair value cannot be verified with observable market transactions, it is possible that a different valuation model could produce a materially different estimate of fair value. Modeling methodologies, inputs, and techniques are reviewed and assessed as markets continue to develop and more pricing information becomes available, and the fair value is adjusted when it is concluded that a change in inputs or techniques would result in a new valuation that better reflects the fair value of those derivative contracts. See Note 6 for a discussion of derivative instruments.SCEThe following table sets forth assets and liabilities of SCE that were accounted for at fair value by level within the fair value hierarchy:

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June 30, 2025(in millions)Level 1Level 2Level 3NettingandCollateral1TotalAssets at fair valueDerivative contracts$— $12 $184 $(17)$179 Money market funds and other6 22 — — 28 Nuclear decommissioning trusts:Stocks21,721 — — — 1,721 Fixed Income3858 1,706 — — 2,564 Short-term investments, primarily cash equivalents79 140 — — 219