Related-Party Transactions

6 Months Ended

Jun. 30, 2022

Related Party Transactions [Abstract]

Related-Party Transactions

Note 17. Related-Party Transactions

SCE has previously purchased wildfire liability insurance from Edison Insurance Services, Inc. ("EIS"), a wholly-owned subsidiary of Edison International. In July 2022, SCE purchased wildfire liability insurance for premiums of $273 million, from EIS. EIS fully reinsured the exposure for these policies through the commercial reinsurance market, with reinsurance limits and premiums equal to those of the insurance purchased by SCE, except for a contract for a premium of $93 million under which EIS provided insurance protection to SCE. SCE will record the premium as insurance expense and will record equal revenue due to customer funding through regulatory cost recovery mechanisms, therefore there will be no earnings impact on SCE's consolidated statement of income. EIS will record the premium as insurance revenue. On the Edison International consolidated statement of income, the EIS insurance revenue will eliminate with SCE's insurance expense, therefore the SCE customer revenues will impact the earnings of Edison International.

The related-party transactions included in SCE's consolidated balance sheets for wildfire-related insurance purchased from EIS and related expected insurance recoveries were as follows:

	June 30,		December 31,
(in millions)	2022		2021
Prepaid insurance1	$	—	$	52
Long-term insurance receivable due from affiliate		119		—

¹ Reflected in "Prepaid expenses" on SCE's consolidated balance sheets.

The expense for wildfire-related insurance premiums paid to EIS was $40 million and $44 million for the three months ended June 30, 2022 and 2021, and $79 million and $87 million for the six months ended June 30, 2022 and 2021, respectively.