Property, Plant and Equipment

12 Months Ended

Dec. 31, 2012

Property, Plant and Equipment [Abstract]

SCE's property, plant and equipment included on the consolidated balance sheets is composed of the following:



	December 31,
(in millions)	2012			2011
Transmission	$	7,059		$	6,109
Distribution	16,872			15,938
Generation	4,455			4,063
General plant and other	4,358			3,951
Accumulated depreciation	(7,424		)	(6,894		)
	25,320			23,167
Construction work in progress	4,271			3,922
Nuclear fuel, at amortized cost	609			480
Total utility property, plant and equipment	$	30,200		$	27,569

Capitalized Software Costs

SCE capitalizes costs incurred during the application development stage of internal use software projects to property, plant, and equipment. SCE amortizes capitalized software costs ratably over the expected lives of the software, ranging from 5 to 15 years and commencing upon operational use. At December 31, 2012 and 2011, capitalized software costs were $1.5 billion and $1.4 billion and accumulated amortization was $651 million and $491 million, respectively. Amortization expense for capitalized software was $217 million, $156 million and $129 million in 2012, 2011 and 2010, respectively. At December 31, 2012, amortization expense is estimated to be approximately $207 million annually for 2013 through 2017.

Jointly Owned Utility Projects

SCE owns interests in several generating stations and transmission systems for which each participant provides its own financing. SCE's proportionate share of these projects is reflected in the consolidated balance sheets and included in the above table. SCE's proportionate share of expenses for each project is reflected in the consolidated statements of income. All of the investments in the Mohave generating station and a portion of the investments in San Onofre and Palo Verde generating stations are included in regulatory assets on the consolidated balance sheets. For further information see Note 14.

The following is SCE's investment in each project as of December 31, 2012:



(in millions)	Plant in Service		Construction Work in Progress		Accumulated Depreciation		Nuclear Fuel (at amortized cost)		Net Book Value		Ownership Interest
Transmission systems:
Eldorado	$	73	$	11	$	14	$	—	$	70	60%
Pacific Intertie	189		6		70		—		125		50%
Generating stations:
Four Corners Units 4 and 5 (coal)	589		17		545		—		61		48%
Mohave (coal)	327		32		292		—		67		56%
Palo Verde (nuclear)	1,819		67		1,480		142		548		16%
San Onofre (nuclear)	5,300		223		4,017		467		1,973		78%
Total	$	8,297	$	356	$	6,418	$	609	$	2,844

In addition to the projects above, SCE has ownership interests in jointly owned power poles with other companies.

In November 2010, SCE entered into an agreement to sell its ownership interest in Units 4 and 5 of the Four Corners Generating Station, a coal-fired electric generating facility in New Mexico, to the operator of the facility, Arizona Public Service Company for approximately $294 million. During 2012, the CPUC and the Arizona Corporation Commission ("ACC") approved the transaction. The sale remains contingent upon APS obtaining a satisfactory long-term coal supply agreement for the plant. As of January 2013, the sale agreement may be terminated by either party. As of the date of this report, the agreement has not been terminated by either party. The purchase price is subject to certain adjustments under the sale agreement, which includes reduction in the purchase price of $7.5 million for each month between October 1, 2012 and the closing date. Any gain on the sale will be for the benefit of SCE's customers and, therefore, will not affect SCE's earnings.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

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