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Leases | 12 Months Ended
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Dec. 31, 2020
Leases [Abstract] |
Leases | Leases 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 contracts included in the table below are primarily 3 to 20 years for PPA leases, 5 to 72 years for office leases, and 5 to 13 years for the remaining other operating leases. The following table summarizes SCE's lease payments for operating and finance leases as of December 31, 2020:
(in millions) | PPA Operating Leases 1 |  | Other Operating Leases 2 |  | PPA Finance Leases 1
2021 | $ | 204 |  |  | $ | 39 |  |  | $ | 1 |
2022 | 208 |  |  | 32 |  |  | 1 |
2023 | 159 |  |  | 26 |  |  | 1 |
2024 | 47 |  |  | 21 |  |  | — |
2025 | 47 |  |  | 18 |  |  | — |
Thereafter | 443 |  |  | 104 |  |  | 5 |
Total lease payments | 1,108 |  |  | 240 |  |  | 8 |
Amount representing interest 3 | 203 |  |  | 60 |  |  | 4 |
Lease liabilities | $ | 905 |  |  | $ | 180 |  |  | $ | 4 |
1 Excludes expected purchases from most renewable energy contracts, which do not meet the definition of a lease payment since renewable power generation is contingent on external factors. 2 Excludes 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. 3 Lease payments are discounted to their present value using SCE's incremental borrowing rates. Supplemental balance sheet information related to SCE's leases was as follows:
(in millions) | December 31, 2020 |  | December 31, 2019
Operating leases: |  |  |
Operating lease ROU assets 1 | $ | 1,085 |  |  | $ | 689 |
Current portion of operating lease liabilities | 214 |  |  | 79 |
Operating lease liabilities | 871 |  |  | 610 |
Total operating lease liabilities 1 | $ | 1,085 |  |  | $ | 689 |
Finance leases included in: |  |  |
Utility property, plant and equipment, gross | $ | 4 |  |  | $ | 14 |
Accumulated depreciation | — |  |  | (5) |
Utility property, plant and equipment, net | 4 |  |  | 9 |
Other current liabilities | — |  |  | 1 |
Other long-term liabilities | 4 |  |  | 8 |
Total finance lease liabilities | $ | 4 |  |  | $ | 9 |
1 During the year ended 2020, a PPA operating lease commenced and one PPA was amended resulting in a total of $463 million additions in ROU assets and lease liabilities. 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 operating leases and interest and amortization expense for finance leases. The following table summarizes the components of SCE's lease expense:
(in millions) | Year ended December 31, 2020 |  | Year ended December 31, 2019
PPA leases: |  |  |
Operating lease cost | $ | 111 |  |  | $ | 118 |
Finance lease cost | 1 |  |  | 1 |
Variable lease cost 1 | 1,917 |  |  | 2,087 |
Total PPA lease cost | 2,029 |  |  | 2,206 |
Other operating leases cost | 47 |  |  | 46 |
Total lease cost | $ | 2,076 |  |  | $ | 2,252 |
1 Includes lease costs from 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:
(in millions, except lease term and discount rate) | Year ended December 31, 2020 |  | Year ended December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities: |  |  |
Operating cash flows from operating leases |  |  |
PPA leases | $ | 111 |  |  | $ | 118 |
Other leases | 44 |  |  | 44 |
Financing cash flows from PPA finance leases | 1 |  |  | 1 |
ROU assets obtained in exchange for lease obligations: |  |  |
PPA operating leases | $ | 463 |  |  | — |
Other operating leases | 58 |  |  | 34 |
Weighted average remaining lease term (in years): |  |  |
Operating leases |  |  |
PPA leases | 9.75 |  | 16.05
Other leases | 12.13 |  | 12.73
PPA Finance leases | 16.67 |  | 11.51
Weighted average discount rate: |  |  |
Operating leases |  |  |
PPA leases | 3.12 | % |  | 4.46 | %
Other leases | 3.63 | % |  | 3.88 | %
PPA Finance leases | 11.29 | % |  | 8.76 | %
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 twelve months ended December 31, 2020 and December 31, 2019, SCE recognized $17 million and $18 million, respectively, in lease income, which is included in operating revenue on the consolidated statements of income. At December 31, 2020, the undiscounted cash flow expected to be received from lease payments for the remaining years is as follows:
(in millions) |
2021 | $ | 11 |
2022 | 10 |
2023 | 8 |
2024 | 7 |
2025 | 6 |
Thereafter | 128 |
Total | $ | 170 |
EME, a wholly-owned subsidiary of Edison International, emerged from bankruptcy in 2014 and retained a lease investment in a hydroelectric power plant in Vidalia, Louisiana. In November 2020, the lessee exercised an option in the lease agreement and purchased the asset upon expiration of the lease term. Edison International recognized the net proceeds of $132 million as a pre-tax gain and has no remaining investment balance as of December 31, 2020 related to the lease investment. The revenue recognized for the lease in 2020 is immaterial to Edison International's consolidated financial statements.
Leases | Leases 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 contracts included in the table below are primarily 3 to 20 years for PPA leases, 5 to 72 years for office leases, and 5 to 13 years for the remaining other operating leases. The following table summarizes SCE's lease payments for operating and finance leases as of December 31, 2020:
(in millions) | PPA Operating Leases 1 |  | Other Operating Leases 2 |  | PPA Finance Leases 1
2021 | $ | 204 |  |  | $ | 39 |  |  | $ | 1 |
2022 | 208 |  |  | 32 |  |  | 1 |
2023 | 159 |  |  | 26 |  |  | 1 |
2024 | 47 |  |  | 21 |  |  | — |
2025 | 47 |  |  | 18 |  |  | — |
Thereafter | 443 |  |  | 104 |  |  | 5 |
Total lease payments | 1,108 |  |  | 240 |  |  | 8 |
Amount representing interest 3 | 203 |  |  | 60 |  |  | 4 |
Lease liabilities | $ | 905 |  |  | $ | 180 |  |  | $ | 4 |
1 Excludes expected purchases from most renewable energy contracts, which do not meet the definition of a lease payment since renewable power generation is contingent on external factors. 2 Excludes 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. 3 Lease payments are discounted to their present value using SCE's incremental borrowing rates. Supplemental balance sheet information related to SCE's leases was as follows:
(in millions) | December 31, 2020 |  | December 31, 2019
Operating leases: |  |  |
Operating lease ROU assets 1 | $ | 1,085 |  |  | $ | 689 |
Current portion of operating lease liabilities | 214 |  |  | 79 |
Operating lease liabilities | 871 |  |  | 610 |
Total operating lease liabilities 1 | $ | 1,085 |  |  | $ | 689 |
Finance leases included in: |  |  |
Utility property, plant and equipment, gross | $ | 4 |  |  | $ | 14 |
Accumulated depreciation | — |  |  | (5) |
Utility property, plant and equipment, net | 4 |  |  | 9 |
Other current liabilities | — |  |  | 1 |
Other long-term liabilities | 4 |  |  | 8 |
Total finance lease liabilities | $ | 4 |  |  | $ | 9 |
1 During the year ended 2020, a PPA operating lease commenced and one PPA was amended resulting in a total of $463 million additions in ROU assets and lease liabilities. 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 operating leases and interest and amortization expense for finance leases. The following table summarizes the components of SCE's lease expense:
(in millions) | Year ended December 31, 2020 |  | Year ended December 31, 2019
PPA leases: |  |  |
Operating lease cost | $ | 111 |  |  | $ | 118 |
Finance lease cost | 1 |  |  | 1 |
Variable lease cost 1 | 1,917 |  |  | 2,087 |
Total PPA lease cost | 2,029 |  |  | 2,206 |
Other operating leases cost | 47 |  |  | 46 |
Total lease cost | $ | 2,076 |  |  | $ | 2,252 |
1 Includes lease costs from 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:
(in millions, except lease term and discount rate) | Year ended December 31, 2020 |  | Year ended December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities: |  |  |
Operating cash flows from operating leases |  |  |
PPA leases | $ | 111 |  |  | $ | 118 |
Other leases | 44 |  |  | 44 |
Financing cash flows from PPA finance leases | 1 |  |  | 1 |
ROU assets obtained in exchange for lease obligations: |  |  |
PPA operating leases | $ | 463 |  |  | — |
Other operating leases | 58 |  |  | 34 |
Weighted average remaining lease term (in years): |  |  |
Operating leases |  |  |
PPA leases | 9.75 |  | 16.05
Other leases | 12.13 |  | 12.73
PPA Finance leases | 16.67 |  | 11.51
Weighted average discount rate: |  |  |
Operating leases |  |  |
PPA leases | 3.12 | % |  | 4.46 | %
Other leases | 3.63 | % |  | 3.88 | %
PPA Finance leases | 11.29 | % |  | 8.76 | %
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 twelve months ended December 31, 2020 and December 31, 2019, SCE recognized $17 million and $18 million, respectively, in lease income, which is included in operating revenue on the consolidated statements of income. At December 31, 2020, the undiscounted cash flow expected to be received from lease payments for the remaining years is as follows:
(in millions) |
2021 | $ | 11 |
2022 | 10 |
2023 | 8 |
2024 | 7 |
2025 | 6 |
Thereafter | 128 |
Total | $ | 170 |
EME, a wholly-owned subsidiary of Edison International, emerged from bankruptcy in 2014 and retained a lease investment in a hydroelectric power plant in Vidalia, Louisiana. In November 2020, the lessee exercised an option in the lease agreement and purchased the asset upon expiration of the lease term. Edison International recognized the net proceeds of $132 million as a pre-tax gain and has no remaining investment balance as of December 31, 2020 related to the lease investment. The revenue recognized for the lease in 2020 is immaterial to Edison International's consolidated financial statements.

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 842 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=77888251 + Details
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