Revenue

6 Months Ended

Jun. 30, 2021

Revenue from Contract with Customer [Abstract]

Revenue

Note 7.Revenue

SCE's revenue is disaggregated by two revenue sources:

● Earning activities – representing revenue authorized by the CPUC and FERC, which is intended to provide SCE a reasonable opportunity to recover its costs and earn a return on its net investment in generation, transmission and distribution assets. The annual revenue requirements are comprised of authorized operation and maintenance costs, depreciation, taxes and a return consistent with the capital structure. Also, included in earnings activities are revenue or penalties related to incentive mechanisms, other operating revenue, and regulatory charges or disallowances.

● Cost-recovery activities – representing CPUC- and FERC- authorized balancing accounts, which allow for recovery of specific project or program costs, subject to reasonableness review or compliance with upfront standards, as well as non-bypassable rates collected for SCE Recovery Funding LLC. Cost-recovery activities include rates which provide recovery, subject to reasonableness review of, among other things, fuel costs, purchased power costs, public purpose related-program costs (including energy efficiency and demand-side management programs), certain operation and maintenance expenses, and repayment of bonds and financing costs of SCE Recovery Funding LLC. SCE earns no return on these activities.

The following table is a summary of SCE's revenue:

	Three months ended June 30, 2021						Three months ended June 30, 2020
			Cost-						Cost-
	Earning		Recovery		Total		Earning		Recovery		Total
(in millions)	Activities		Activities		Consolidated		Activities		Activities		Consolidated
Revenues from contracts with customers1,2	$	1,703	$	1,423	$	3,126	$	1,658	$	1,220	$	2,878
Alternative revenue programs and other operating revenue3		127		53		180		117		(15)		102
Total operating revenue	$	1,830	$	1,476	$	3,306	$	1,775	$	1,205	$	2,980

	Six months ended June 30, 2021						Six months ended June 30, 2020
			Cost-						Cost-
	Earning		Recovery		Total		Earning		Recovery		Total
(in millions)	Activities		Activities		Consolidated		Activities		Activities		Consolidated
Revenues from contracts with customers1,2	$	3,407	$	2,618	$	6,025	$	3,282	$	1,938	$	5,220
Alternative revenue programs and other operating revenue3		190		44		234		234		306		540
Total operating revenue	$	3,597	$	2,662	$	6,259	$	3,516	$	2,244	$	5,760

1 SCE recorded CPUC revenue based on the 2020 authorized revenue requirements pending the receipt of a 2021 GRC Final Decision. For further information, see Note 1.

2 At June 30, 2021 and December 31, 2020, SCE's receivables related to contracts from customers were $2.1 billion and $1.5 billion, respectively, which include accrued unbilled revenue of $863 million and $521 million, respectively.

3 Includes differences between amounts billed and authorized levels for both the CPUC and FERC.

Subsequent Event

In July 2021, Morongo Transmission LLC ("Morongo") paid SCE $400 million for the use of a portion of the West of Devers transmission line transfer capability. Under the terms of the agreement with Morongo, SCE will provide Morongo with the use of a portion of the West of Devers transmission line transfer capability for a period of 30 years. After the 30-year contract term, the transfer capability will revert to SCE. SCE will amortize deferred revenues from the use of the transfer capability over the 30-year term.