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Derivative Instruments | 9 Months Ended
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Sep. 30, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments | Derivative Instruments Derivative financial instruments are used to manage exposure to commodity price risk resulting from SCE's electricity, natural gas and resource adequacy procurement activities. The risks of fluctuating commodity prices are managed in part by entering into forward commodity transactions, including options, swaps, futures, and Fin Toll arrangements. To mitigate credit risk from counterparties in the event of nonperformance, master netting agreements are used whenever possible, and counterparties may be required to pledge collateral depending on the creditworthiness of each counterparty and the risk associated with the transaction. Certain power and gas contracts contain a provision that requires SCE to maintain an investment grade rating from the major credit rating agencies, referred to as a credit-risk-related contingent feature. If SCE's credit rating were to fall below investment grade, SCE may be required to post additional collateral to cover derivative liabilities and the related outstanding payables. The fair value of these derivative contracts and any related collateral were immaterial as of September 30, 2025 and December 31, 2024. SCE presents its derivative assets and liabilities, recorded at fair value, on a net basis on its condensed consolidated balance sheets when subject to master netting agreements or similar agreements. Derivative positions are also offset against margin and cash collateral deposits. See Note 4 for a discussion of fair value of derivative instruments. The following table summarizes the gross and net fair values of SCE's commodity derivative instruments:
| September 30, 2025
(in millions) | Derivative Assets Short-Term 1 |  | Derivative Liabilities Short-Term 2
Commodity derivative contracts |  |  |
Gross amounts recognized | $ | 140 |  |  | $ | 86 |
Gross amounts offset in the condensed consolidated balance sheets | (3) |  |  | (3) |
Cash collateral posted | — |  |  | (83) |
Net amounts presented in the condensed consolidated balance sheets | $ | 137 |  |  | $ | — |
| December 31, 2024
(in millions) | Derivative Assets Short-Term 1 |  | Derivative Liabilities Short-Term 2
Commodity derivative contracts |  |  |
Gross amounts recognized | $ | 213 |  |  | $ | 47 |
Gross amounts offset in the condensed consolidated balance sheets | (1) |  |  | (1) |
Cash collateral posted | — |  |  | (46) |
Net amounts presented in the condensed consolidated balance sheets | $ | 212 |  |  | $ | — |
1 Included in "Other current assets" on SCE's condensed consolidated balance sheets. 2 Included in "Other current liabilities" on SCE's condensed consolidated balance sheets. At September 30, 2025, SCE posted $114 million of cash collateral, of which $83 million was offset against derivative liabilities and $31 million was reflected in "Other current assets" on SCE's condensed consolidated balance sheets. At December 31, 2024, SCE posted $74 million of cash collateral, of which $46 million was offset against derivative liabilities and $28 million was reflected in "Other current assets" on the condensed consolidated balance sheets. Financial Statement Impact of Derivative Instruments SCE recognizes realized gains and losses on derivative instruments as purchased power expense and unrealized gains and losses as regulatory assets or liabilities. Both realized and unrealized gains and losses are expected to be refunded to or recovered from customers and therefore do not affect earnings. Cash flows from derivative activities, including cash collateral, are reported in cash flows from operating activities in SCE's condensed consolidated statements of cash flows. The following table summarizes the gains/(losses) of SCE's economic hedging activity:
| Three months ended September 30, |  | Nine months ended September 30,
(in millions) | 2025 |  | 2024 |  | 2025 |  | 2024
Realized | $ | (37) |  |  | $ | (187) |  |  | $ | (81) |  |  | $ | (313) |
Unrealized | (122) |  |  | (19) |  |  | (111) |  |  | (56) |
Notional Volumes of Derivative Instruments The following table summarizes the notional volumes of derivatives used for SCE's economic hedging activities:
Commodity | Unit of Measure |  | Economic Hedges
September 30, 2025 |  | December 31, 2024
Electricity options, swaps and forwards | Gigawatt hours |  | 5,679 |  | 3,295
Natural gas options, swaps and forwards | Billion cubic feet |  | 8 |  | 4
Congestion revenue rights | Gigawatt hours |  | 4,973 |  | 8,141
Fin Toll arrangements | Gigawatt hours |  | 236 |  | —

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