Company: SCE-PL
Filing Date: 2025-04-29
Form Type: 10-Q
Source: 0000827052-25-000043
Chunk: 55

Company: SOUTHERN CALIFORNIA EDISON Co
Filing Date: 2025-04-29
Form: 10-Q
Item: Item 7
Chunk 55
---
 over the 2024 revenue requirement of approximately $8.4 billion, which was adopted in Track 4 and prior to certain subsequent adjustments. This test year 2025 revenue requirement was subsequently updated to $10.4 billion, reflecting 2025 CPUC-authorized ROE and additional amendments and other revisions to rebuttal testimony. 

Since January 1, 2025, and until a GRC decision is issued, SCE is recognizing revenue based on the 2024 authorized revenue requirement, adjusted to reflect the 2025 CPUC-authorized ROE. The CPUC has also approved the establishment of a memorandum account to track changes in the authorized revenue requirement effective January 1, 2025. While SCE and certain parties have entered into stipulations to resolve certain contested areas in the 2025 GRC, SCE cannot predict the revenue requirement the CPUC will ultimately authorize or forecast the timing of a final decision.

4

Cost of Capital Application

SCE's 2025 CPUC-authorized ROE is 10.33% and weighted average return on rate base is 7.66%. 

On March 20, 2025, SCE filed its application with the CPUC for authority to establish its authorized cost of capital for utility operations for a three-year term beginning in 2026 and to reset the related annual cost of capital adjustment mechanism. In its application, SCE seeks an ROE of 11.75%, a cost of long-term debt of 4.75%, and a cost of preferred equity of 6.95%. SCE also seeks to maintain its current authorized capital structure, after CPUC-allowed exclusions, of 52% common equity, 43% long-term debt, and 5% preferred equity. Based on the capital structure and cost factors discussed above, SCE's weighted average return on rate base would be 8.50% for 2026. If approved, this application would increase SCE's revenue requirements by approximately $382 million compared to the cost of capital currently in rates.

Capital Program

Total capital expenditures (including accruals) were $1.5 billion and $1.2 billion for the three months ended March 31, 2025 and 2024, respectively. 

As discussed in the 2024 Form 10-K, in the absence of a 2025 GRC decision, SCE has developed, and is executing against, a capital expenditure plan that is expected to allow SCE to meet what is ultimately authorized in the 202