Leases

12 Months Ended

Dec. 31, 2024

Leases as Lessee

SCE enters into various agreements to purchase power, electric capacity and other energy products that may be accounted for as leases when SCE has dispatch rights that determine when and how a plant runs. SCE also leases property and equipment primarily related to vehicles, office space and other equipment. The terms of the lease contracts included in the table below are primarily 15 to 20 years for PPA leases, 3 to 72 years for office leases, and 5 to 13 years for the remaining other operating leases. Finance leases are immaterial to the periods presented.

The following table summarizes SCE's future lease payments for operating leases as of December 31, 2024:


(in millions)	PPA Operating Leases		Other Operating Leases1
2025	$	106	$	64
2026	89		58
2027	84		54
2028	84		48
2029	85		41
Thereafter	698		104
Total lease payments	1,146		369
Amount representing interest	265		76
Lease liabilities	$	881	$	293

1Excludes escalation clauses based on consumer price or other indices and residual value guarantees that are not considered probable at the commencement date of the lease.

The timing of SCE's recognition of the lease expense conforms to ratemaking treatment for SCE's recovery of the cost of electricity and is included in purchased power for PPA operating leases. The following table summarizes the components of SCE's lease expense:


	Years ended December 31,
(in millions)	2024		2023		2022
PPA leases:
Operating lease cost	$	115	$	503	$	580
Variable lease cost1	1,700		2,277		2,661
Total PPA lease cost	1,815		2,780		3,241
Other operating leases cost	64		56		52
Total lease cost	$	1,879	$	2,836	$	3,293

1Includes lease costs from legacy renewable energy contracts where payments are based on contingent external factors such as wind, hydro and solar power generation.

Other information related to leases was as follows:


	Years ended December 31,
(in millions, except lease term and discount rate)	2024		2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from:
PPA operating leases	$	115	$	503	$	580
Other operating leases	62		55		50

ROU assets obtained in exchange for lease obligations:
PPA operating leases	$	11	$	226	$	20
Other operating leases	79		69		76

Weighted average remaining lease term (in years):
PPA operating leases	12.50		13.37		9.42
Other operating leases	8.86		9.56		10.38

Weighted average discount rate:
PPA operating leases	4.30%		4.30%		2.95%
Other operating leases	4.50%		4.22%		3.78%

Leases as Lessor

SCE also enters into operating leases to rent certain land and facilities as a lessor. These leases primarily have terms that range from 15 to 65 years. During the years ended December 31, 2024, 2023 and 2022, SCE recognized lease income of $18 million, $17 million and $18 million, respectively, which is included in operating revenue on the consolidated statements of income. At December 31, 2024, the undiscounted cash flow expected to be received from lease payments for the remaining years is as follows:


(in millions)
2025	$	12
2026	8
2027	8
2028	8
2029	7
Thereafter	118
Total	$	161