Company: SCE-PL
Filing Date: 2025-04-29
Form Type: 10-Q
Source: 0000827052-25-000043
Chunk: 65

Company: SOUTHERN CALIFORNIA EDISON Co
Filing Date: 2025-04-29
Form: 10-Q
Item: Item 7
Chunk 65
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 same period in 2024, primarily due to expenses from wildfire claims insured by an EIS insurance contract (see "Notes to Condensed Consolidated Financial Statements— Note 12. Commitments and Contingencies and Note 17. Related-Party Transactions" for further information) and higher interest expense.

LIQUIDITY AND CAPITAL RESOURCES

SCE

SCE's ability to operate its business, fund capital expenditures, and implement its business strategy is dependent upon its operating cash flow and access to the bank and capital markets. SCE's overall cash flows fluctuate based on, among other things, its ability to recover its costs in a timely manner from its customers through regulated rates, changes in commodity prices and volumes, collateral requirements, interest obligations, dividend payments to and equity contributions from Edison International, obligations to preference shareholders, and the outcome of tax, regulatory and legal matters.

In the next 12 months, SCE expects to fund its cash requirements through operating cash flows, and capital market and bank financings. SCE also has availability under its credit facility to fund cash requirements. SCE may issue additional debt for general corporate purposes.

SCE expects to securitize approximately $1.6 billion of cost recoveries authorized under the TKM Settlement Agreement, subject to the filing and approval of a securitization financing order. For further details, see "Management Overview—Southern California Wildfires and Mudslides." 

During the three months ended March 31, 2025, SCE issued a total of $3.0 billion of first and refunding mortgage bonds. For further details, see "Notes to Condensed Consolidated Financial Statements—Note 5. Debt and Credit Agreements."

SCE's credit ratings may be affected by various factors. These include, among other things, if regulators fail to successfully implement AB 1054 in a consistent and credit supportive manner, or if there is a persistent increase in the frequency and severity of wildfires in California, which may lead the credit rating agencies to reassess SCE's wildfire-related operational risk exposure or believe the Wildfire Insurance Fund is at risk of a 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. In addition, some of SCE's power procurement contracts and environmental remediation obligations would require SCE to pay related liabilities or post additional collateral if SCE's credit rating were to fall below investment grade. For further details, see "—Margin and Coll