Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2013

Fair Value Disclosures [Abstract]

Fair Value by Level

The following table sets forth assets and liabilities of SCE that were accounted for at fair value by level within the fair value hierarchy:

	March 31, 2013
(in millions)	Level 1		Level 2		Level 3			Netting and Collateral1			Total
Assets at Fair Value
Money market funds	$	5	$	—	$	—		$	—		$	5
Derivative contracts:
Congestion Revenue Rights	—		—		170			—			170
Electricity	—		3		29			(14		)	18
Tolling	—		—		4			—			4
Subtotal of derivative contracts	—		3		203			(14		)	192
Long-term disability plan	8		—		—			—			8
Nuclear decommissioning trusts:
Stocks2	2,468		—		—			—			2,468
U.S. government and agency securities	571		75		—			—			646
Municipal bonds	—		631		—			—			631
Corporate bonds3	—		408		—			—			408
Short-term investments, primarily cash equivalents4	81		—		—			—			81
Subtotal of nuclear decommissioning trusts	3,120		1,114		—			—			4,234
Total assets	3,133		1,117		203			(14		)	4,439
Liabilities at Fair Value
Derivative contracts:
Electricity	—		—		1			—			1
Natural gas	—		77		—			(41		)	36
Tolling	—		—		1,084			—			1,084
Subtotal of derivative contracts	—		77		1,085			(41		)	1,121
Total liabilities	—		77		1,085			(41		)	1,121
Net assets (liabilities)	$	3,133	$	1,040	$	(882	)	$	27		$	3,318

	December 31, 2012
(in millions)	Level 1		Level 2		Level 3			Netting and Collateral1			Total
Assets at Fair Value
Money market funds	$	5	$	—	$	—		$	—		$	5
Derivative contracts:
Congestion Revenue Rights	—		—		186			—			186
Electricity	—		—		31			(13		)	18
Natural gas	—		8		—			(2		)	6
Tolling	—		—		4			—			4
Subtotal of derivative contracts	—		8		221			(15		)	214
Long-term disability plan	8		—		—			—			8
Nuclear decommissioning trusts:
Stocks2	2,271		—		—			—			2,271
Municipal bonds	—		644		—			—			644
U.S. government and agency securities	477		126		—			—			603
Corporate bonds3	—		410		—			—			410
Short-term investments, primarily cash equivalents4	121		—		—			—			121
Subtotal of nuclear decommissioning trusts	2,869		1,180		—			—			4,049
Total assets	2,882		1,188		221			(15		)	4,276
Liabilities at Fair Value
Derivative contracts:
Electricity	—		2		5			(2		)	5
Natural gas	—		113		2			(60		)	55
Tolling	—		—		1,005			—			1,005
Subtotal of derivative contracts	—		115		1,012			(62		)	1,065
Total liabilities	—		115		1,012			(62		)	1,065
Net assets (liabilities)	$	2,882	$	1,073	$	(791	)	$	47		$	3,211

¹  Represents the netting of assets and liabilities under master netting agreements and cash collateral across the levels of the fair value hierarchy. Netting among positions classified within the same level is included in that level.

²  Approximately 67% and 66% of SCE's equity investments were located in the United States at March 31, 2013 and December 31, 2012, respectively.

³  At March 31, 2013 and December 31, 2012, SCE's corporate bonds were diversified and included collateralized mortgage obligations and other asset backed securities of $62 million and $56 million, respectively.

⁴  Excludes net receivables of $12 million and net payables of $1 million at March 31, 2013 and December 31, 2012, respectively, of interest and dividend receivables as well as receivables and payables related to SCE's pending securities sales and purchases.

Summary of Changes in Fair Value of Level 3 Net Derivative Assets and Liabilities

The following table sets forth a summary of changes in SCE's fair value of Level 3 net derivative assets and liabilities:

	Three months ended March 31,
(in millions)	2013			2012
Fair value of net liabilities at beginning of period	$	(791	)	$	(754	)
Total realized/unrealized gains (losses):
Included in regulatory assets and liabilities1	(82		)	(356		)
Purchases	18			21
Settlements	(27		)	(8		)
Fair value of net liabilities at end of period	$	(882	)	$	(1,097	)
Change during the period in unrealized losses related to assets and liabilities held at the end of the period	$	(66	)	$	(351	)

¹  Due to regulatory mechanisms, SCE's realized and unrealized gains and losses are recorded as regulatory assets and liabilities.

Valuation Techniques and Significant Unobservable Inputs Used to Determine Fair Value for Level 3 Assets and Liabilities

The following table sets forth SCE's valuation techniques and significant unobservable inputs used to determine fair value for Level 3 assets and liabilities:

	Fair Value (in millions)							Significant	Range
March 31, 2013	Assets			Liabilities			Valuation Technique(s)	Unobservable Input	(Weighted Average)
Electricity:
Options	$	35		$	10		Option model	Volatility of gas prices	24% - 29% (27%)
								Volatility of power prices	28% - 58% (40%)
								Power prices	$47.30 - $60.70 ($52.90)
Forwards	4			1			Discounted cash flow	Power prices	$11.00 - $52.00 ($40.10)
CRRs	170			—			Market simulation model	Load forecast	7,597 MW - 26,612 MW
								Power prices	$(13.90) - $226.75
								Gas prices	$2.95 - $7.78
Tolling	4			1,084			Option model	Volatility of gas prices	16% - 29% (20%)
								Volatility of power prices	25% - 58% (28%)
								Power prices	$42.40 - $76.50 ($54.90)
Netting	(10		)	(10		)
Total derivative contracts	$	203		$	1,085

	Fair Value (in millions)							Significant	Range
December 31, 2012	Assets			Liabilities			Valuation Technique(s)	Unobservable Input	(Weighted Average)
Electricity:
Options	$	40		$	12		Option model	Volatility of gas prices	25% - 36% (33%)
								Volatility of power prices	29% - 64% (42%)
								Power prices	$41.70 - $59.20 ($47.00)
Forwards	2			4			Discounted cash flow	Power prices	$23.10 - $44.90 ($31.10)
CRRs	186			—			Market simulation model	Load forecast	7,597 MW - 26,612 MW
								Power prices	$(13.90) - $226.75
								Gas prices	$2.95 - $7.78
Gas options	—			2			Option model	Volatility of gas prices	28% - 36% (34%)
Tolling	4			1,005			Option model	Volatility of gas prices	17% - 36% (22%)
								Volatility of power prices	26% - 64% (29%)
								Power prices	$35.00 - $84.10 ($55.40)
Netting	(11		)	(11		)
Total derivative contracts	$	221		$	1,012

Carrying Amounts and Fair Values of Long-term Debt, Including Current Portion

The carrying value and fair value of Edison International and SCE's long-term debt is as follows:

	March 31, 2013				December 31, 2012
(in millions)	Carrying Value		Fair Value		Carrying Value		Fair Value
SCE	$	9,227	$	10,694	$	8,828	$	10,505
Edison International	9,629		11,127		9,231		10,944