Company: SCE-PL
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0000827052-25-000022
Chunk: 33

Company: SOUTHERN CALIFORNIA EDISON Co
Filing Date: 2025-02-27
Form: 10-K
Item: Item 7
Chunk 33
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5 decommissioning costs for San Onofre Units 2 and 3, of which SCE's share is approximately $245 million in 2025 dollars.

Margin and Collateral Deposits

Certain derivative instruments, power and energy procurement contracts, and other contractual arrangements contain collateral requirements. In addition, certain environmental remediation obligations require financial assurance that may be in the form of collateral postings. Future collateral requirements may differ from the requirements at December 31, 2024 due to the addition of incremental power and energy procurement contracts with collateral requirements, if any, the impact of changes in wholesale power and natural gas prices on SCE's contractual obligations, and the impact of SCE's credit ratings falling below investment grade.

The table below provides the amount of collateral posted by SCE to its counterparties as well as the potential collateral that would have been required as of December 31, 2024, if SCE's credit rating had been downgraded to below investment grade as of that date. The table below also provides the potential collateral that could be required due to adverse changes in wholesale power and natural gas prices over the remaining lives of existing power and fuel derivative contracts. 

In addition to amounts shown in the table, power and fuel contract counterparties may also institute new collateral requirements, applicable to future transactions to allow SCE to continue trading in power and fuel contracts at the time of a downgrade or upon significant increases in market prices. Furthermore, SCE may also be required to post up to $50 million in collateral in connection with its environmental remediation obligations, within 120 days of the end of the fiscal year in which a downgrade below investment grade occurs.

(in millions)Collateral posted as of December 31, 20241$209Incremental collateral requirements for purchased power and fuel contracts resulting from a potential downgrade of SCE's credit rating to below investment grade273Incremental collateral requirements for SCE's financial hedging activities resulting from adverse market price movement347Posted and potential collateral requirements$329

1Net collateral provided to counterparties and other brokers consisted of $128 million in letters of credit and surety bonds and $81 million of cash collateral. 

2Represents potential collateral requirements for accounts payable and mark-to-market valuation at December 31, 2024. Requirement varies throughout the period and is generally lower at the end of the month. 

3Incremental collateral requirements were based on potential changes in SCE's forward positions as of December 31, 2024 due to adverse market price movements over the remaining lives of the existing power and fuel derivative contracts