Company: SCE-PL
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0000827052-25-000022
Chunk: 221

Company: SOUTHERN CALIFORNIA EDISON Co
Filing Date: 2025-02-27
Form: 10-K
Item: Item 1A
Chunk 221
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emaking procedures. Palo Verde nuclear fuel is amortized using the units of production method.Allowance for funds used during construction ("AFUDC") represents the estimated cost of debt and equity funds that finance utility-plant construction and is capitalized during certain plant construction. AFUDC is recovered in rates through depreciation expense over the useful life of the related asset. Equity AFUDC represents a method to compensate SCE for the estimated cost of equity used to finance utility plant additions and is recorded as part of construction in progress.The following table summarizes SCE's AFUDC related to debt and equity:Years ended December 31,(in millions)202420232022Debt AFUDC1$82 $74 $53 Equity AFUDC2187 157 137 1Reflected as a reduction of "Interest expense" on the consolidated statements of income.2Reflected in "Other income" on the consolidated statements of income.Major MaintenanceMajor maintenance costs for SCE's facilities and equipment are expensed as incurred.Impairment of Long-Lived AssetsImpairments of long-lived assets are evaluated based on a review of estimated future cash flows expected to be generated whenever events or changes in circumstances indicate that the carrying amount of such investments or assets may not be recoverable. If the carrying amount of a long-lived asset exceeds expected future cash flows, undiscounted and without interest charges, an impairment loss is recognized in the amount of the excess of fair value over the carrying amount. Fair value is determined via market, cost and income-based valuation techniques, as appropriate.Accounting principles for rate-regulated enterprises also require recognition of an impairment loss if it becomes probable that the regulated utility will abandon a plant investment, or if it becomes probable that the cost of a recently completed plant will be disallowed, either directly or indirectly, for ratemaking purposes, and a reasonable estimate of the disallowance amount can be made. Upon approval of the TKM Settlement Agreement, SCE will record an impairment charge of approximately $10 million in the first quarter of 2025. For further information on the TKM Settlement Agreement, see "Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides."Initial and annual contributions to the wildfire insurance fund established pursuant to California Assembly Bill 1054 (the "Wildfire Insurance Fund" and "AB 1054")Edison International and SCE accounted for the contributions to the Wildfire Insurance Fund similarly to prepaid insurance. No period of coverage was provided