Company: SCE-PL
Filing Date: 2025-07-31
Form Type: 10-Q
Source: 0000827052-25-000074
Chunk: 108

Company: SOUTHERN CALIFORNIA EDISON Co
Filing Date: 2025-07-31
Form: 10-Q
Item: Item 7
Chunk 108
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ivative InstrumentsDerivative financial instruments are used to manage exposure to commodity price risk resulting from SCE's electricity, natural gas and resource adequacy procurement activities. The risks of fluctuating commodity prices are managed in part by entering into forward commodity transactions, including options, swaps, futures, and Fin Toll arrangements. To mitigate credit risk from counterparties in the event of nonperformance, master netting agreements are used whenever possible, and counterparties may be required to pledge collateral depending on the creditworthiness of each counterparty and the risk associated with the transaction.Certain power and gas contracts contain a provision that requires SCE to maintain an investment grade rating from the major credit rating agencies, referred to as a credit-risk-related contingent feature. If SCE's credit rating were to fall below investment grade, SCE may be required to post additional collateral to cover derivative liabilities and the related outstanding payables. The fair value of these derivative contracts and any related collateral were immaterial as of June 30, 2025 and December 31, 2024.SCE presents its derivative assets and liabilities, recorded at fair value, on a net basis on its condensed consolidated balance sheets when subject to master netting agreements or similar agreements. Derivative positions are also offset against margin and cash collateral deposits. See Note 4 for a discussion of fair value of derivative instruments. The following table summarizes the gross and net fair values of SCE's commodity derivative instruments:June 30, 2025(in millions)Derivative AssetsShort-Term1Derivative LiabilitiesShort-Term2Commodity derivative contractsGross amounts recognized$196 $20 Gross amounts offset in the condensed consolidated balance sheets(17)(17)Cash collateral posted— (3)Net amounts presented in the condensed consolidated balance sheets$179 $— December 31, 2024(in millions)Derivative AssetsShort-Term1Derivative LiabilitiesShort-Term2Commodity derivative contractsGross amounts recognized$213 $47 Gross amounts offset in the condensed consolidated balance sheets(1)(1)Cash collateral posted— (46)Net amounts presented in the condensed consolidated balance sheets$212 $— 1Included in "Other current assets" on SCE's condensed consolidated balance sheets.2Included in "Other current liabilities" on SCE's condensed consolidated balance sheets.At June 30, 2025, SCE posted $75 million of cash collateral, of which $3 million was offset against derivative liabilities and $72 million was reflected in "Other current assets" on SCE