Income Taxes

9 Months Ended

Sep. 30, 2024

Income Taxes

Income Taxes

Note 8.Income Taxes

Effective Tax Rate

The table below provides a reconciliation of income tax expense computed at the federal statutory income tax rate to the income tax provision:

	Three months ended September 30,						Nine months ended September 30,
(in millions)	2024			2023			2024			2023
Edison International:
Income from operations before income taxes	$	645		$	189		$	1,152		$	1,027
Provision for income tax at federal statutory rate of 21%		136			40			242			216
Increase (decrease) in income tax from:
State tax, net of federal tax effect		12			(16)			(18)			(16)
Property-related		(78)			(47)			(195)			(152)
Other		(2)			—			(15)			(7)
Total income tax expense (benefit)	$	68		$	(23)		$	14		$	41
Effective tax rate		10.5	%		(12.2)	%		1.2	%		4.0	%
SCE:
Income from operations before income taxes	$	736		$	268		$	1,413		$	1,213
Provision for income tax at federal statutory rate of 21%		155			56			297			255
Increase (decrease) in income tax from:
State tax, net of federal tax effect		18			(11)			—			—
Property-related		(78)			(47)			(195)			(152)
Other		—			1			(8)			(7)
Total income tax expense (benefit)	$	95		$	(1)		$	94		$	96
Effective tax rate		12.9	%		(0.4)	%		6.7	%		7.9	%

The CPUC requires flow-through ratemaking treatment for the current tax benefit arising from certain property-related and other temporary differences which reverse over time. Flow-through items reduce current authorized revenue requirements in SCE's rate cases and result in a regulatory asset for recovery of deferred income taxes in future periods. The difference between the authorized amounts as determined in SCE's rate cases, adjusted for balancing and memorandum account activities, and the recorded flow-through items also result in increases or decreases in regulatory assets with a corresponding impact on the effective tax rate to the extent that recorded deferred amounts are expected to be recovered in future rates. For further information, see Note 11.

In the third quarter of 2024, SCE placed in-service two utility owned storage projects of 200MW and 112.5MW, generating an investment tax credit of approximately $210 million. The tax benefits associated with these credits will be recognized and returned to customers as the credits are utilized. 

Tax Disputes

The tax years that remain open for examination by the IRS and the California Franchise Tax Board are 2021 – 2023 and 2013 – 2023, respectively.