SOUTHERN CALIFORNIA EDISON (SCE-PN) 10-Q 7 Aug 09 2009 Q2 Quarterly report Financial data

CONSOLIDATED STATEMENTS OF INCO

CONSOLIDATED STATEMENTS OF INCOME (USD $)
In Millions	3 Months Ended Jun. 30, 2009	3 Months Ended Jun. 30, 2008	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
Operating revenue	$2,273	$2,850	$4,462	$5,231
Fuel	156	397	356	746
Purchased power	583	1,026	1,124	1,721
Other operation and maintenance	762	760	1,420	1,426
Depreciation, decommissioning and amortization	289	287	574	553
Property and other taxes	61	56	127	118
Gain on sale of assets	(1)	(7)	(1)	(8)
Total operating expenses	1,850	2,519	3,600	4,556
Operating income	423	331	862	675
Interest income	2	5	6	10
Other nonoperating income	29	25	56	44
Interest expense - net of amounts capitalized	(106)	(96)	(215)	(193)
Other nonoperating deductions	(12)	(14)	(20)	(26)
Income before income taxes	336	251	689	510
Income tax expense (benefit)	(198)	30	(77)	111
Net income	534	221	766	399
Less: Net income attributable to noncontrolling interests	22	51	34	67
Dividends on preferred and preference stock not subject to mandatory redemption	13	13	25	25
Net income available for common stock	$499	$157	$707	$307

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $)
In Millions	3 Months Ended Jun. 30, 2009	3 Months Ended Jun. 30, 2008	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
Net income	$534	$221	$766	$399
Pension and postretirement benefits other than pensions:
Amortization of net gain (loss) included in net income - net	1		1	(1)
Comprehensive income	535	221	767	398
Less: Comprehensive income attributable to noncontrolling interests	22	51	34	67
Comprehensive income attributable to Southern California Edison	$513	$170	$733	$331

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS (USD $)
In Millions	Jun. 30, 2009	Dec. 31, 2008
ASSETS
Cash and equivalents	$454	$1,611
Short-term investments	3	3
Receivables, less allowances of $41 and $39 for uncollectible accounts at respective dates	706	703
Accrued unbilled revenue	505	328
Inventory	325	365
Derivative assets	154	157
Regulatory assets	334	605
Deferred income taxes - net		147
Other current assets	125	283
Total current assets	2,606	4,202
Nonutility property - less accumulated depreciation of $798 and $765 at respective dates	910	953
Nuclear decommissioning trusts	2,673	2,524
Other investments	84	68
Total investments and other assets	3,667	3,545
Utility plant, at original cost:
Transmission and distribution	20,863	20,006
Generation	1,900	1,819
Accumulated depreciation	(5,573)	(5,570)
Construction work in progress	2,308	2,454
Nuclear fuel, at amortized cost	273	260
Total utility plant	19,771	18,969
Derivative assets	467	74
Regulatory assets	4,852	5,414
Other long-term assets	457	364
Total long-term assets	5,776	5,852
Total assets	31,820	32,568
LIABILITIES AND EQUITY
Short-term debt		1,893
Long-term debt due within one year	250	150
Accounts payable	753	948
Accrued taxes	63	340
Accrued interest	184	153
Customer deposits	239	227
Book overdrafts	177	224
Derivative liabilities	133	156
Regulatory liabilities	948	1,111
Deferred income taxes - net	90
Other current liabilities	483	572
Total current liabilities	3,320	5,774
Long-term debt	6,489	6,212
Deferred income taxes - net	3,249	2,918
Deferred investment tax credits	99	101
Customer advances	126	137
Derivative liabilities	524	738
Pensions and benefits	2,570	2,485
Asset retirement obligations	3,091	3,007
Regulatory liabilities	2,635	2,481
Other deferred credits and other long-term liabilities	1,303	902
Total deferred credits and other liabilities	13,597	12,769
Total liabilities	23,406	24,755
Commitments and contingencies (Note 6)
Common stock, no par value (434,888,104 shares outstanding at each date)	2,168	2,168
Additional paid-in capital	540	532
Accumulated other comprehensive loss	(13)	(14)
Retained earnings	4,430	3,827
Total common shareholder's equity	7,125	6,513
Preferred and preference stock not subject to mandatory redemption	920	920
Noncontrolling interests	369	380
Total equity	8,414	7,813
Total liabilities and equity	$31,820	$32,568

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
In Millions, except Share data	Jun. 30, 2009	Dec. 31, 2008
BALANCE SHEETS
Receivables, allowance for uncollectible accounts	$41	$39
Nonutility property, accumulated depreciation	$798	$765
Common stock, no par value (in dollars per share)	0	0
Common stock, shares outstanding (in shares)	434,888,104	434,888,104
Common stock, shares authorized (in shares)	560,000,000	560,000,000

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Millions	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
Cash flows from operating activities:
Net income	$766	$399
Adjustments to reconcile to net cash provided by operating activities:
Depreciation, decommissioning and amortization	574	553
Regulatory impacts of net nuclear decommissioning trust earnings (reflected in accumulated depreciation)	86	57
Other amortization	55	47
Stock-based compensation	6	8
Deferred income taxes and investment tax credits	447	6
Long-term regulatory assets and liabilities - net	654	184
Long-term derivative assets and liabilities - net	(606)	(184)
Other assets	(106)	(19)
Other liabilities	446	28
Changes in working capital:
Receivables and accrued unbilled revenue	(162)	(244)
Inventory	40	(26)
Other current assets	158	(15)
Book overdrafts	(47)	86
Accrued taxes	(277)	4
Accounts payable and other current liabilities	(67)	88
Current regulatory assets and liabilities - net	107	197
Current derivative assets and liabilities - net	(20)	(380)
Net cash provided by operating activities	2,054	789
Cash flows from financing activities:
Long-term debt issued	750	600
Long-term debt issuance costs	(11)	(9)
Long-term debt repaid	(151)	(1)
Bonds repurchased	(219)	(212)
Preferred stock redeemed		(7)
Short-term debt financing-net	(1,893)	300
Stock-based compensation - net		(8)
Distributions to noncontrolling interests	(45)	(65)
Dividends paid	(125)	(150)
Net cash provided (used) by financing activities	(1,694)	448
Cash flows from investing activities:
Capital expenditures	(1,402)	(1,241)
Proceeds from nuclear decommissioning trust sales	1,310	1,501
Purchases of nuclear decommissioning trust investments and other	(1,415)	(1,560)
Sales of short-term investments	1
Purchases of short-term investments	(1)	(2)
Customer advances for construction and other investments	(10)	(2)
Net cash used by investing activities	(1,517)	(1,304)
Net decrease in cash and equivalents	(1,157)	(67)
Cash and equivalents, beginning of period	1,611	252
Cash and equivalents, end of period	$454	$185

Managements Statement

Managements Statement
	6 Months Ended Jun. 30, 2009
Notes to Consolidated Financials
Management's Statement	Management's Statement In the opinion of management, all adjustments, including recurring accruals, have been made that are necessary for a fair statement of the consolidated financial position, results of operations and cash flows in accordance with accounting principles generally accepted in the United States of America for the periods covered by this quarterly report on Form10-Q. The results of operations for the six months ended June30, 2009 are not necessarily indicative of the operating results for the full year. This quarterly report should be read in conjunction with SCE's Annual Report to Shareholders incorporated by reference into SCE's Annual Report on Form10-K for the year ended December31, 2008 filed with the Securities and Exchange Commission.

Summary of Significant Accounti

Summary of Significant Accounting Policies
	6 Months Ended Jun. 30, 2009
Notes to Consolidated Financials
Summary of Significant Accounting Policies	Note1. Summary of Significant Accounting Policies Basis of Presentation SCE's significant accounting policies were described in Note1 of "Notes to consolidated financial statements" included in its 2008 Annual Report on Form10-K. SCE follows the same accounting policies for interim reporting purposes. The December31, 2008 condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. Certain prior-period reclassifications have been made to conform to the current year financial statement presentation mostly pertaining to the adoption of SFAS No.160 and the elimination of the previously reported income statement caption "Provision for regulatory adjustment clauses net" through classifications within relevant captions including "Operating revenue," "Purchased power," "Other operation and maintenance" and "Depreciation, decommissioning and amortization." SCE has performed an evaluation of subsequent events through August7, 2009, the date the financial statements were issued. Cash Equivalents Cash equivalents included money market funds totaling $326million and $1.49billion at June30, 2009 and December31, 2008, respectively. The carrying value of cash equivalents equals the fair value as all investments have maturities of less than three months. For further discussion of money market funds, see Note9. Additionally, cash and equivalents of $81million and $89million at June30, 2009 and December31, 2008, respectively are included for four projects that SCE is consolidating under an accounting interpretation for VIEs. Margin and Collateral Deposits Margin and collateral deposits include cash deposited with counterparties and brokers (reflected in "Other current assets" on the consolidated balance sheets) and cash received from counterparties (reflected in "Other current liabilities" on the consolidated balance sheets) as credit support under energy contracts. The amount of margin and collateral deposits generally varies based on changes in the fair value of the positions. In accordance with FIN No.39-1, "Amendment of FASB Interpretation No.39," SCE presents a portion of its margin and cash collateral deposits net with its derivative positions on its consolidated balance sheets. Amounts recognized for cash collateral provided to others that have been offset against derivative liabilities totaled $67million and $72million at June30, 2009 and December31, 2008, respectively. Amounts recognized for cash collateral provided to others that have not been offset against derivative liabilities totaled $33million and $17million at June30, 2009 and December31, 2008, respectively. Amounts recognized for cash collateral received from others that have not been offset against derivative assets totaled $7million and $8million at June30, 2009 and December31, 2008, respectively. New Accounting Pronouncements In May 2009, the FASB issued SFAS No.165, "Subsequent Events." SFAS No.165 sets forth the period after the balance sheet date during which management of a reporting entity should evaluate events

Derivative Instruments and Hedg

Derivative Instruments and Hedging Activities
	6 Months Ended Jun. 30, 2009
Notes to Consolidated Financials
Derivative Instruments and Hedging Activities	Note2. Derivative Instruments and Hedging Activities Commodity Price Risk SCE is exposed to commodity price risk from its purchases of capacity and ancillary services to meet peak energy requirements and from exposure to natural gas prices that affect costs associated with power purchased from QFs, fuel tolling arrangements, and its own gas-fired generation, including SCE's Mountainview and peaker plants. Contract energy prices for most nonrenewable QFs are based in large part on the monthly index price of natural gas delivered at the Southern California border. SCE also has power contracts, referred to as tolling arrangements, in which SCE has agreed to provide the natural gas needed for generation under those power contracts or pay for the natural gas based on published index prices. In addition to SCE's Mountainview and peaker plants, approximately 44% of SCE's purchased power supply is subject to natural gas price volatility. Fair value changes in SCE's derivative instruments are expected to be recovered from or refunded to ratepayers and therefore, fair value changes have no impact on earnings, but may temporarily affect cash flows. Natural Gas and Electricity Price Risk SCE has an active hedging program in place to minimize ratepayer exposure to variability in market prices; however, to the extent that SCE does not mitigate the exposure to commodity price risk, the unhedged portion is subject to the risks and benefits of spot-market price movements, which are ultimately passed-through to ratepayers. To mitigate SCE's exposure to variability in market prices, SCE enters into energy options, tolling arrangements, forward physical contracts and transmission congestion revenue rights (CRRs). SCE also enters into contracts for power and gas options, as well as swaps and futures, in order to mitigate its exposure to increases in natural gas and electricity pricing. These transactions are pre-approved by the CPUC or executed in compliance with CPUC-approved procurement plans. SCE records its derivative instruments on its consolidated balance sheets at fair value unless they meet the definition of a normal purchase or sale. The derivative instrument fair values are marked to market at the end of each reporting period. Any fair value changes are expected to be recovered from or refunded to customers through regulatory mechanisms and therefore, SCE's fair value changes have no impact on purchased-power expense or earnings. Hedge accounting is not used for these transactions due to this regulatory accounting treatment. Notional Volumes of Derivative Instruments The following table summarizes the notional volumes of derivatives used for hedging activities: Commodity Unit of Measure Economic Hedges (Unaudited) Electricity options, swaps and forward arrangements MW 23,058 Natural gas options, swaps and forward arrangements Bcf 296 Congestion revenue rights(1) MW 503,017 Tolling arrangements(2) MW 2,556 (1) In September 2007 and November 2008, the CAISO allocated CRRs for the period April 2009 through December 2017 based on SCE's load requirements. In ad

Liabilities and Lines of Credit

Liabilities and Lines of Credit
	6 Months Ended Jun. 30, 2009
Notes to Consolidated Financials
Liabilities and Lines of Credit	Note3. Liabilities and Lines of Credit Long-Term Debt In March 2009, SCE issued $500million of 6.05% and $250million of 4.15% first and refunding mortgage bonds due in 2039 and 2014, respectively. The bond proceeds were used for general corporate purposes and to finance fuel inventories. In February 2009, SCE repaid $150million of its first and refunding mortgage bonds. In March 2009, SCE purchased two issues of its tax-exempt pollution control bonds totaling $219million and converted the issues to a variable rate structure. SCE continues to hold the bonds which remain outstanding and have not been retired or cancelled. Credit Agreements On March17, 2009, SCE entered into a new $500million 364-day revolving credit facility, terminating on March16, 2010. The additional liquidity provided by the facility will be used to support SCE's ongoing power procurement-related needs. In June 2009, SCE amended its $2.5billion five-year credit facility to remove a subsidiary of Lehman Brothers Holding as a lender which resulted in a reduction of the total commitment under the facility to $2.4billion. The following table summarizes the status of the SCE credit facilities at June30, 2009: In millions (Unaudited) Commitment $ 2,894 Less: Outstanding letters of credit (88 ) Amount available $ 2,806

Income Taxes

Income Taxes
	6 Months Ended Jun. 30, 2009
Notes to Consolidated Financials
Income Taxes	Note4. Income Taxes SCE's composite federal and state statutory income tax rates were approximately 41% and 40% (net of the federal benefit for state income taxes) for 2009 and 2008 respectively. The effective tax rate was (63)% and (12)% for the three-and six-month periods ended June30, 2009, respectively, as compared to 15% and 25% for the respective periods in 2008. The 2009 effective tax rate was lower when compared to both the 2008 effective tax rate and the 2009 statutory rate mainly due to a $300million benefit related primarily to tax timing differences on certain affirmative claims as a result of the Global Settlement discussed below. The American Recovery and Reinvestment Act of 2009 ("ARRA") included a number of provisions that provide tax incentives to stimulate the economy, including incentives for energy-related investments and activities. ARRA extended for 1year the 50% bonus depreciation provision to eligible property placed in service prior to January1, 2010, provided for an option to claim cash grants in lieu of investment tax credits, including the solar energy investment tax credit. Cash grants would be obtained separately from the tax return under rules and regulations published by the U. S. Treasury Department. SCE anticipates utilizing the solar energy investment tax credit for its investment in its PV Solar Rooftop facilities. SCE will review this plan based on the rules and regulations regarding the grant payments in lieu of tax credits recently issued by the U. S. Treasury Department and based on tax planning activities during the second part of 2009. SCE accounts for investment tax credits on the deferred method and, accordingly, will recognize tax benefits related to such credits over the estimated useful life of the projects. Accounting for Uncertainty in Income Taxes The following table provides a reconciliation of unrecognized tax benefits from December31 to June30 for 2009 and 2008: In millions 2009 2008 (Unaudited) Balance at beginning of period $ 2,066 $ 1,950 Tax positions taken during the current year Increases 28 53 Decreases Tax positions taken during a prior year Increases 138 85 Decreases (25 ) (97 ) Decreases for settlements during the period (1,741 ) Reductions for lapses of applicable statute of limitations Balance at June30 $ 466 $ 1,991 Unrecognized tax benefits were reduced by $1.7billion during the second quarter of 2009 as a result of consummating the Global Settlement discussed below. Edison International believes it is reasonably possible that unrecognized tax benefits could be reduced by up to $70million within the next twelvemonths from settlement of state tax matters for periods through 2002. As of June30, 2009 and December31, 2008, respectively, if recognized, $73million and $60million of the unrecognized tax benefits would impact the effective tax rate. Accrued Interest and Penalties The total amount of accrued interest and penalty related to SCE's income tax reserve was $61million and $120million as

Compensation and Benefit Plans

Compensation and Benefit Plans
	6 Months Ended Jun. 30, 2009
Notes to Consolidated Financials
Compensation and Benefit Plans	Note5. Compensation and Benefits Plans Pension Plans As of June30, 2009, SCE has made no contributions related to 2008 and $25million related to 2009 and estimates to make $14million of additional contributions in the last six months of 2009. Net pension cost recognized is calculated under the actuarial method used for ratemaking. The difference between pension costs calculated for accounting and ratemaking is deferred. Expense components are: Three Months Ended June30, Six Months Ended June30, In millions 2009 2008 2009 2008 (Unaudited) Service cost $ 27 $ 27 $ 54 $ 54 Interest cost 48 46 96 93 Expected return on plan assets (40 ) (63 ) (80 ) (126 ) Amortization of prior service cost 4 4 8 8 Amortization of net (gain)/loss 13 26 (1 ) Subtotal $ 52 $ 14 $ 104 $ 28 Regulatory adjustment deferred (37 ) (74 ) Total expense recognized $ 15 $ 14 $ 30 $ 28 Postretirement Benefits Other Than Pensions As of June30, 2009, SCE has made no contributions related to 2008 and $9million related to 2009 and estimates to make $117million of additional contributions in the last six months of 2009. Expense components are: Three Months Ended June30, Six Months Ended June30, In millions 2009 2008 2009 2008 (Unaudited) Service cost $ 10 $ 11 $ 20 $ 22 Interest cost 34 33 68 66 Expected return on plan assets (21 ) (31 ) (42 ) (62 ) Amortization of prior service credit (7 ) (7 ) (14 ) (14 ) Amortization of net loss 15 4 30 8 Total expense recognized $ 31 $ 10 $ 62 $ 20 Stock-Based Compensation During the first quarter of 2009, Edison International granted its 2009 stock-based compensation awards, which included stock options, performance shares, deferred stock units and restricted stock units. Total stock-based compensation expense (reflected in the caption "Other operation and maintenance" on the consolidated statements of income) was $6million and $5million for the three months ended June30, 2009 and 2008, respectively, and was $9million and $10million for the six months ended June30, 2009 and 2008, respectively. The income tax benefit recognized in the consolidated statements of income was $2million for both the three months ended June30, 2009 and 2008 and was $4million for both the six months ended June30, 2009 and 2008. Total stock-based compensation cost capitalized was $1million and $2million for the three- and six-month periods ended June30, 2008. Consistent with SCE's 2009 GRC, no stock-based compensation was capitalized in 2009. Stock Options A summary of the status of Edison International stock options issued at SCE is as follows: Weighted-Average Stock Options Exercise Price Remaining Contractual Term (Years) Aggregate Intrinsic Value (Unaudited) Outstanding at December31, 2008 6,400,734 $ 34.58 Granted 2,783,741 $ 24.8

Commitments and Contingencies

Commitments and Contingencies
	6 Months Ended Jun. 30, 2009
Notes to Consolidated Financials
Commitments and Contingencies	Note6. Commitments and Contingencies The following is an update to SCE's commitments and contingencies. See Note6 of "Notes to Consolidated Financial Statements" included in SCE's 2008 Annual Report on Form10-K for a detailed discussion. Lease Commitments SCE has operating leases for power contracts and other operating leases for office space, vehicles, property and other equipment (with varying terms, provisions and expiration dates). SCE also has power purchase contracts which meet the requirements for capital leases and are reflected in "Utility plant" on the consolidated balance sheets. The gross amount of assets recorded in "Utility plant" for capital leases was $25million at both June30, 2009 and December31, 2008. The asset carrying amount, net of amortization, was $15million and $16million at June30, 2009 and December31, 2008. The related obligations are reflected on the consolidated balance sheets as "Other current liabilities" and "Other deferred credits and other long-term liabilities." In addition, SCE has power purchase contracts which meet the requirements for capital leases, but are not reflected on the consolidated balance sheets since the lease terms begin in 2010 and 2011. There are no sublease rentals and the contingent rentals for capital leases were less than $1million for both the six months ended June30, 2009 and 2008, respectively. For additional discussion of these lease commitments, see Note6 of "Notes to Consolidated Financial Statements" included in SCE's 2008 Annual Report on Form10-K. The following are the estimated remaining commitments for noncancelable operating leases and all contracts that meet the requirements for capital leases (whether or not recorded on the consolidated balance sheets): In millions Power Contracts Operating Leases Other Operating Leases Capital Leases (Unaudited) Year ending December31, 2009 (remaining six months) $ 435 $ 29 $ 3 2010 626 53 37 2011 498 46 120 2012 361 39 120 2013 356 34 120 Thereafter 2,186 111 2,526 Total future commitments $ 4,462 $ 312 $ 2,926 Amount representing executory costs (710 ) Amount representing interest (994 ) Net commitments $ 4,462 $ 312 $ 1,222 Operating lease expense was $77million and $83million for the three months ended June30, 2009 and 2008, respectively, and was $135million and $142million for the six months ended June30, 2009 and 2008, respectively. Other Commitments During the second quarter of 2009, SCE extended its power purchase agreement with Midway Sunset which resulted in additional commitments estimated to be: remainder of 2009 $13million, 2010$18million, 2011$18million, 2012$18million, 2013$18million and thereafter$129million. See Note11 for additional information related to the terms of the extended agreement. Indemnities Indemnity Provided as Part of the Acquisition of Mountainview In connection with the acquisition of Mountainview, SCE agreed to indemnify the seller with respect to specific environmental claims

Consolidated Statement of Chang

Consolidated Statement of Changes in Equity
	6 Months Ended Jun. 30, 2009
Notes to Consolidated Financials
Consolidated Statement of Changes in Equity	Note7. Consolidated Statement of Changes in Equity The following table provides changes in equity for the six months ended June30, 2009: Equity Attributable to SCE In millions Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income(Loss) Retained Earnings Preferred and Preference Stock Noncontrolling Interests Total Equity (Unaudited) Balance at December31, 2008 $ 2,168 $ 532 $ (14 ) $ 3,827 $ 920 $ 380 $ 7,813 Net income 732 34 766 Other comprehensive income 1 1 Dividends declared on common stock (100 ) (100 ) Dividends declared on preferred and preference stock not subject to mandatory redemption (25 ) (25 ) Distributions to noncontrolling interests (45 ) (45 ) Shares purchased for stock-based compensation (5 ) (5 ) Proceeds from stock option exercises 3 3 Noncash stock-based compensation and other 6 (2 ) 4 Excess tax benefits related to stock-based awards 2 2 Balance at June30, 2009 $ 2,168 $ 540 $ (13 ) $ 4,430 $ 920 $ 369 $ 8,414 The following table provides changes in equity for the six months ended June30, 2008: Equity Attributable to SCE In millions Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings Preferred and Preference Stock Noncontrolling Interests Total Equity (Unaudited) Balance at December31, 2007 $ 2,168 $ 507 $ (15 ) $ 3,568 $ 929 $ 446 $ 7,603 Net income 332 67 399 Other comprehensive loss (1 ) (1 ) Dividends declared on common stock (200 ) (200 ) Dividends declared on preferred and preference stock not subject to mandatory redemption (25 ) (25 ) Preferred stock redeemed, net of gain 2 (9 ) (7 ) Distributions to noncontrolling interests (65 ) (65 ) Shares purchased for stock-based compensation (25 ) (25 ) Proceeds from stock option exercises 9 9 Noncash stock-based compensation and other 8 (4 ) 4 Excess tax benefits related to stock-based awards 8 8 Balance at June30, 2008 $ 2,168 $ 525 $ (16 ) $ 3,655 $ 920 $ 448 $ 7,700

Supplemental Cash Flows Informa

Supplemental Cash Flows Information
	6 Months Ended Jun. 30, 2009
Notes to Consolidated Financials
Supplemental Cash Flows Information	Note8. Supplemental Cash Flows Information SCE's supplemental cash flows information is: Six Months Ended June30, In millions 2009 2008 (Unaudited) Cash payments for interest and taxes: Interest net of amounts capitalized $ 170 $ 139 Tax payments (receipts) $ (868 ) $ 46 Noncash investing and financing activities: Dividends declared but not paid: Common stock $ 100 $ 100 Preferred and preference stock not subject to mandatory redemption $ 13 $ 13

Fair Value Measurements

Fair Value Measurements
	6 Months Ended Jun. 30, 2009
Notes to Consolidated Financials
Fair Value Measurements	Note9. Fair Value Measurements SFAS No.157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (referred to as an "exit price" in SFAS No.157). SFAS No.157 clarifies that a fair value measurement for a liability should reflect the entity's non-performance risk. In addition, SFAS No.157 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted market prices in active markets for identical asset and liabilities (Level1 measurements) and the lowest priority to unobservable inputs (Level3 measurements). The three levels of the fair value hierarchy under SFAS No.157 are: Level1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets and liabilities; Level2 Pricing inputs that include quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the derivative instrument;and Level3 Prices or valuations that require inputs that are both significant to the fair value measurements and unobservable. SCE's assets and liabilities carried at fair value primarily consist of derivative contracts, SCE nuclear decommissioning trust investments and money market funds. Derivative contracts primarily relate to power and gas and include contracts for forward physical sales and purchases, options and forward price swaps which settle only on a financial basis (including futures contracts). Derivative contracts can be exchange traded or over-the-counter traded. The fair value of derivative contracts takes into account quoted market prices, time value of money, volatility of the underlying commodities, and other factors. Derivatives that are exchange traded in active markets for identical assets or liabilities are classified as Level1. SCE's Level2 derivatives primarily consist of financial natural gas swaps, fixed float swaps, and natural gas physical trades for which SCE obtains the applicable Henry Hub and basis forward market prices from the New York Mercantile Exchange and Intercontinental Exchange. Level3 includes the majority of SCE's derivatives, including over-the-counter options, bilateral contracts, capacity contracts, and QF contracts. The fair value of these SCE derivatives is determined using uncorroborated non-binding broker quotes (from one or more brokers) and models which may require SCE to extrapolate short-term observable inputs in order to calculate fair value. Broker quotes are obtained from several brokers and compared against each other for reasonableness. SCE has Level3 fixed float swaps for which SCE obtains the applicable Henry Hub and basis forward market prices from the New York Mercantile Exchange. However, these swaps have contract terms that extend beyond observable market data and the unobservable inputs incorporated in the fair value determination are considered significant compar

Regulatory Assets and Liabiliti

Regulatory Assets and Liabilities
	6 Months Ended Jun. 30, 2009
Notes to Consolidated Financials
Regulatory Assets and Liabilities	Note10. Regulatory Assets and Liabilities Regulatory assets included on the consolidated balance sheets are: In millions June30, 2009 December31, 2008 (Unaudited) Current: Regulatory balancing accounts $ 214 $ 455 Energy derivatives 120 138 Other 12 $ 334 $ 605 Long-term: Regulatory balancing accounts $ 35 $ 29 Flow-through taxes net 1,456 1,337 ARO 171 224 Unamortized nuclear investment net 360 375 Nuclear-related ARO investment net 268 278 Unamortized coal plant investment net 77 79 Unamortized loss on reacquired debt 298 309 SFAS No.158 pensions and postretirement benefits 1,898 1,882 Energy derivatives 111 723 Environmental remediation 39 40 Other 139 138 $ 4,852 $ 5,414 Total Regulatory Assets $ 5,186 $ 6,019 Regulatory liabilities included on the consolidated balance sheets are: In millions June30, 2009 December31, 2008 (Unaudited) Current: Regulatory balancing accounts $ 940 $ 1,068 Other 8 43 $ 948 $ 1,111 Long-term: Regulatory balancing accounts $ 34 $ 43 Costs of removal 2,456 2,368 Employee benefit plans 145 70 $ 2,635 $ 2,481 Total Regulatory Liabilities $ 3,583 $ 3,592

Variable Interest Entities

Variable Interest Entities
	6 Months Ended Jun. 30, 2009
Notes to Consolidated Financials
Variable Interest Entities	Note11. Variable Interest Entities Projects or Entities that are Consolidated SCE has variable interests in contracts with certain QFs that contain variable contract pricing provisions based on the price of natural gas. Four of these contracts are with entities that are partnerships owned in part by a related party, EME. These four contracts had 20-year terms at inception. The QFs sell electricity to SCE and steam to nonrelated parties. Under FIN46(R), SCE consolidates these four projects. In determining that SCE was the primary beneficiary, SCE considered the term of the contract, percentage of plant capacity, pricing, and other variable interests. SCE performed a quantitative assessment which included the analysis of the expected losses and expected residual returns of the entity by using the various estimated projected cash flow scenarios associated with the assets and activities of that entity. The quantitative analysis provided sufficient evidence to determine that SCE was the primary beneficiary absorbing a majority of the entity's expected losses, receiving a majority of the entity's expected residual returns, or both. Project Capacity Termination Date(1) EME Ownership (Unaudited) Kern River 300 MW June 2011 50% Midway-Sunset 225 MW May 2009 50% Sycamore 300 MW December 2007 50% Watson 385 MW December 2007 49% (1) SCE's power purchase agreements with Sycamore and Watson expired on December31, 2007. In addition, SCE's power purchase agreement with Midway-Sunset expired on May7, 2009. These three projects are currently selling electricity to SCE under the terms and conditions contained in its prior long-term power purchase agreement, with revised pricing terms as mandated by the CPUC. These four projects do not have any third party debt outstanding. SCE has no investment in, nor obligation to provide support to, these entities other than its requirement to make contract payments. Any profit or loss generated by these entities will not effect SCE's income statement, except that SCE would be required to recognize losses if these projects have negative equity in the future. These losses, if any, would not affect SCE's liquidity. Any liabilities of these projects are nonrecourse to SCE. See Note12 for carrying value and classification of the VIEs' assets and liabilities. Entities with Unavailable Financial Information SCE also has seven other contracts with QFs that contain variable pricing provisions based on the price of natural gas and are potential VIEs under FIN46(R). SCE might be considered to be the consolidating entity under this standard. SCE continues to attempt to obtain information for these projects in order to determine whether the projects should be consolidated by SCE. These entities are not legally obligated to provide the financial information to SCE and have declined to provide any financial information to SCE. Under the grandfather scope provisions of FIN46(R), SCE is not required to apply this rule to these entities as long as SCE continues to be unable to obtain this information. The aggregate capacit

Business Segments

Business Segments
	6 Months Ended Jun. 30, 2009
Notes to Consolidated Financials
Business Segments	Note12. Business Segments SCE's reportable business segments include the rate-regulated electric utility segment and the VIEs segment. The VIEs are gas-fired power plants that sell both electricity and steam. The VIE segment consists of non-rate-regulated entities (all in California). SCE's management has no control over the resources allocated to the VIE segment and does not make decisions about its performance. SCE's consolidated balance sheet captions impacted by VIE activities are presented below: In millions Electric Utility VIEs Eliminations SCE (Unaudited) Balance Sheet Items as of June30, 2009: Cash and equivalents $ 373 $ 81 $ $ 454 Accounts receivable net 687 60 (41 ) 706 Inventory 305 20 325 Other current assets 125 125 Nonutility property net of depreciation 644 266 910 Other long-term assets 456 1 457 Total assets $ 31,433 $ 428 $ (41 ) $ 31,820 Accounts payable $ 752 $ 42 $ (41 ) $ 753 Other current liabilities 482 1 483 Asset retirement obligations 3,075 16 3,091 Noncontrolling interests 369 369 Total liabilities and equity $ 31,433 $ 428 $ (41 ) $ 31,820 Balance Sheet Items as of December31, 2008: Cash and equivalents $ 1,522 $ 89 $ $ 1,611 Accounts receivable net 679 63 (39 ) 703 Inventory 346 19 365 Other current assets 279 4 283 Nonutility property net of depreciation 671 282 953 Other long-term assets 363 1 364 Total assets $ 32,149 $ 458 $ (39 ) $ 32,568 Accounts payable $ 926 $ 61 $ (39 ) $ 948 Other current liabilities 570 2 572 Asset retirement obligations 2,992 15 3,007 Noncontrolling interests 380 380 Total liabilities and equity $ 32,149 $ 458 $ (39 ) $ 32,568 SCE's consolidated statements of income, by business segment, are presented below: In millions Electric Utility VIEs Eliminations(1) SCE (Unaudited) Income Statement Items for the Three Months Ended June30, 2009: Operating revenue $ 2,227 $ 131 $ (85 ) $ 2,273 Fuel 80 76 156 Purchased power 668 (85 ) 583 Other operation and maintenance 737 25 762 Depreciation, decommissioning and amortization 281 8 289 Property and other taxes 61 61 Gain on sale of assets (1 ) (1 ) Total operating expenses 1,826 109 (85 ) 1,850 Operating income 401 22 423 Interest income 2 2 Other nonoperating income 29 29 Interest expense net of amounts capitalized (106 ) (106 ) Other nonoperating deductions (12 ) (12 ) Income tax benefit 198

Subsequent Events

Subsequent Events
	6 Months Ended Jun. 30, 2009
Notes to Consolidated Financials
Subsequent Events	Note13. Subsequent Events On March12, 2009, the CPUC issued a final decision in SCE's 2009 GRC, authorizing the transfer of the assets and liabilities of Mountainview Power Company,LLC, a subsidiary of SCE, to SCE. SCE received FERC and other necessary approvals, and on July1, 2009, terminated the FERC-approved power-purchase agreement between Mountainview Power Company,LLC and SCE, and transferred assets and liabilities valued at $705million and $173million, respectively. In addition, SCE recognized a one time, non-cash, accounting gain of approximately $46million resulting from the establishment of regulatory assets to recognize differences in the accounting treatment for non-regulated and rate-regulated entities mainly related to equity AFUDC. There was no economic impact to customers from this change as compared to the FERC-approved power-purchase agreement; as these amounts would have been recognized over the life of that agreement and have no impact on cash flows.

Document and Entity Information

Document and Entity Information (USD $)
In Millions, except Share data	6 Months Ended Jun. 30, 2009	Aug. 04, 2009	Jun. 30, 2008
Document and Entity Information [Abstract]
Entity Registrant Name	SOUTHERN CALIFORNIA EDISON CO
Entity Central Index Key	0000092103
Document Type	10-Q
Document Period End Date	2009-06-30
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Public Float			$0
Entity Common Stock, Shares Outstanding		434,888,104