Company: SCE-PL
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0000827052-25-000022
Chunk: 121

Company: SOUTHERN CALIFORNIA EDISON Co
Filing Date: 2025-02-27
Form: 10-K
Item: Item 7
Chunk 121
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 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 December 31, 2024 and 2023.SCE presents its derivative assets and liabilities, recorded at fair value, on a net basis on its 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:December 31, 2024(in millions)Derivative AssetsShort-Term1Derivative LiabilitiesShort-Term2Commodity derivative contractsGross amounts recognized$213 $47 Gross amounts offset in the consolidated balance sheets(1)(1)Cash collateral posted— (46)Net amounts presented in the consolidated balance sheets$212 $— December 31, 2023(in millions)Derivative AssetsShort-Term1Derivative LiabilitiesShort-Term2Commodity derivative contractsGross amounts recognized$94 $77 Gross amounts offset in the consolidated balance sheets(3)(3)Cash collateral posted— (74)Net amounts presented in the consolidated balance sheets$91 $— 1Included in "Other current assets" on SCE's consolidated balance sheets.2Included in "Other current liabilities" on SCE's consolidated balance sheets. At December 31, 2024, SCE posted $74 million of cash collateral, of which $46 million was offset against derivative liabilities and $28 million was reflected in "Other current assets" on the consolidated balance sheets. Financial Statement Impact of Derivative InstrumentsSCE recognizes realized gains and losses on derivative instruments as purchased power expense and unrealized gains and losses as regulatory assets or liabilities. Both realized and unrealized gains and losses are expected to be recovered from customers and therefore do not affect earnings. Cash flows from derivative activities, including cash collateral, are reported in cash flows from operating activities in SCE's consolidated statements of cash flows.The following table summarizes the gains/(losses) of SCE's economic hedging activity:Years ended December 31,(