2018 general rate case tax update · 3 the commission’s rate case plan6 outlines three general...

(U 338-E)

2018 General Rate Case

Tax Update

Before the

Public Utilities Commission of the State of California

Rosemead, California

February 16, 2018

Application No.: A.16-09-001 Exhibit No.: SCE-60 Witnesses: M. Childs

J. McCarson S. Menon D. Tessler

Tax Update Table Of Contents

Section Page Witness

-i-

I. INTRODUCTION .............................................................................................1 S. Menon

II. BACKGROUND ...............................................................................................2

III. SUMMARY OF UPDATED REVENUE REQUIREMENT REQUEST..........................................................................................................3 D. Tessler

IV. RESULTS OF OPERATIONS ..........................................................................4

V. TAX LEGISLATION CHANGE ......................................................................6 M. Childs

A. Change in the Federal income tax rate from 35% to 21% .....................6

1. Equity Return on Rate Base .......................................................7

2. Debt Return on Rate Base ..........................................................7

3. Current Year Flow-Through Tax Benefits .................................8

4. Prior Year Flow-Through Tax Benefits .....................................8

5. Change in Deferred Income Taxes ............................................9

B. Loss of IRC Section 199 Manufacturing Deduction..............................9

C. New IRC Section 168(k) Bonus Depreciation Rules Exclude Public Utility Property .............................................................9

D. Average Rate Assumption Method (“ARAM”) ...................................10

VI. CHANGES TO WORKING CASH ................................................................14 J. McCarson

VII. ADDED FACILITIES AND OTHER OPERATING REVENUE FORECAST .....................................................................................................16 D. Tessler

VIII. RATEMAKING CONSIDERATIONS ...........................................................18 S. Menon

Appendix A

1

I. 1

INTRODUCTION 2

Southern California Edison Company (SCE) respectfully presents this testimony that addresses 3

the various impacts that new Federal income tax legislation1 (Tax Legislation) has on SCE’s Test Year 4

2018 General Rate Case (GRC) request.2 SCE previously submitted update testimony on December 8, 5

2017, pursuant to the schedule established by Administrative Law Judges (ALJs) Roscow and 6

Wildgrube. 7

This Tax Legislation update reduces SCE’s Test Year 2018 Revenue Requirement by $139 8

million compared to our revenue requirement request as stated in our December 8, 2017 update 9

testimony.3 With this update, we are requesting a 2018 GRC revenue decrease of $22 million, which is 10

0.38% below the 2017 authorized GRC revenue requirement. 11

The key drivers of this reduction are changes in the Federal Income Tax Rate, Internal Revenue 12

Code (IRC) Section 199 Deduction, Bonus Depreciation, Average Rate Assumption Method (ARAM), 13

and Added Facilities Other Operating Revenue (OOR). This testimony provides the updated revenue 14

requirement request along with the details regarding each of these drivers and how they impact the 15

revenue requirement. 16

1 This new Federal income tax legislation is known as the Tax Cuts and Jobs Act (TCAJA). 2 As discussed at the last day of evidentiary hearings. See Evid. Hearing Transcript, Vol. 21, p. 3026 (hearing

date August 2, 2017). 3 This update also updates the material that was provided to intervenors and the CPUC’s Energy Division in

draft form on January 31, 2018.

2

II. 1

BACKGROUND 2

SCE submits this testimony pursuant to the guidance and direction that the ALJs provided in 3

their January 2, 2018 e-mail ruling concerning the Tax Legislation. In conformance with that ruling, 4

SCE hosted a meet and confer amongst the GRC parties on January 5, 2018. At the meet and confer, the 5

parties discussed and agreed upon a proposed schedule for SCE to provide: (a) a draft and a final version 6

of a revised Results of Operations (RO) model incorporating the changes triggered by the Tax 7

Legislation; and (b) prepared testimony addressing the changes. The parties’ proposed schedule also 8

encompassed other parties’ prepared testimony, evidentiary hearings, and post-hearing briefing as these 9

additional items may be needed. On January 9, 2018, SCE filed a report on the meet and confer, which 10

included the parties’ proposed schedule. 11

On January 16, 2018, the ALJs issued a Ruling Adopting Schedule Regarding New Federal 12

Income Tax Legislation (Ruling). The Ruling adopted the proposed procedural schedule, with one 13

addition to the parties that would receive SCE’s draft RO model. The ALJs directed that the draft RO 14

model also be served to the Commission’s Energy Division.4 SCE served its draft RO model on January 15

31, 2018. 16

The January 16th Ruling also directed SCE to coordinate with the Energy Division to facilitate a 17

workshop or webinar to explain the Results of Operations model changes and support the parties’ efforts 18

in analyzing how the model captures the changes triggered by the tax legislation.5 SCE noticed a 19

workshop, which occurred on February 12, 2018. 20

4 See Ruling, at Ordering Paragraph 2. 5 See Ruling, at Ordering Paragraph 3.

3

III. 1

SUMMARY OF UPDATED REVENUE REQUIREMENT REQUEST 2

The Commission’s Rate Case Plan6 outlines three general criteria for update testimony: 3

1. Known changes in cost of labor based on contract negotiations completed or known changes 4

that result from updated data using the same indices used in the original presentation during the hearing. 5

2. Changes in non-labor escalation factors based on the same indices the party used in its 6

original presentation during hearings. 7

3. Known changes due to governmental action such as changes in tax rates, postage rates, or 8

assessed valuation. 9

Table III-1 below summarizes the revenue requirement impact of the updates we have identified 10

and supported in this testimony. 11

Table III-1

6 See, e.g., D.89-01-040.

Line Item 2018 2019 2020

1. SCE-59 December 2017 Update Testimony 5,673,313 6,149,841 6,703,445

2. Revisions for Federal Income Tax Legislation (138,907) (184,662) (235,265) 3. SCE-60 Update for Tax Legislation 5,534,406 5,965,179 6,468,180

GRC CPUC

4

IV.

RESULTS OF OPERATIONS

This chapter presents our revised 2018 Test Year Results of Operations (RO) based on the

updated information presented in Chapters VI through VIII. We request that the Commission adopt a

2018 revenue requirement of $5.534 billion. Table IV-2 presents our revised Results of Operations for

Test Year 2018 and Post-Test Years 2019 and 2020.7

Table IV-2 Revised Results of Operations At Proposed Rates Commission Jurisdictional

(Thousands of Dollars)

7 Please refer to Appendix A for additional information.

GRC CPUCLine Item 2018 2019 2020

1. Total Operating Revenues 5,534,406 5,965,179 6,468,1802. Operating Expenses:3. Production4. Steam 7,845 7,845 7,8455. Nuclear 76,747 76,747 76,7476. Hydro 41,446 41,446 41,4467. Other 81,965 81,965 81,9658. Total Production O&M 208,003 208,003 208,0039. Transmission 91,118 91,118 91,118

10. Distribution 532,099 532,099 532,09911. Customer Accounts 159,329 159,329 159,32912. Uncollectibles 11,954 12,885 13,97113. Customer Service & Information 21,007 21,007 21,00714. Administrative & General 647,853 644,719 643,51615. Franchise Requirements 50,607 54,546 59,14516. Revenue Credits (153,070) (156,749) (159,711)17. Total O&M 1,568,900 1,566,957 1,568,47718. Escalation 103,952 154,691 203,66119. Depreciation 1,752,338 1,872,039 2,048,89820. Taxes Other Than On Income21. Property Taxes 258,451 277,288 300,84822. Payroll Taxes & Misc 66,350 68,453 70,87723. Taxes Based On Income 38,919 109,661 187,02424. Total Taxes 363,720 455,402 558,74925. Total Operating Expenses 3,788,910 4,049,089 4,379,78526. Net Operating Revenue 1,745,496 1,916,089 2,088,39527. Rate Base 22,939,281 25,181,218 27,445,65428. Rate Of Return 7.61% 7.61% 7.61%

5

The revenue reduction attributable to this proceeding is $22 million, as identified in Table IV-3

(line 18). This revenue change takes into account a $106 million decrease in Authorized Base Revenue

Requirement (ABRR), a $43 million increase to account for a decline in 2018 forecast GWh sales, and a

$41 million increase related to the recovery of the December 31, 2017 balances in five balancing and

memorandum accounts as supported in prior testimony.8 Table IV-3 also identifies the requested ABRR

and CPUC-jurisdictional base-related revenue changes estimated for Post-Test Years (PTYR) 2019 and

2020.

Table IV-3 2018, 2019 and 2020 Revenue Changes Resulting From the 2018 Test Year and 2019 and 2020

PTYR GRC Request – CPUC-Jurisdictional (Thousands of Dollars)

8 See SCE-09, Vol. 1, Ch. IV and SCE-59, Ch. IV.

2018 2019 2020 Cumulative SCE-9 Vol. 1 Reference

1. Proposed GRC Base Revenue Requirement 5,534,406 5,965,179 6,468,180 SCE-60, Table III-1

2. Estimated Present (Prior Year) Revenue Requirement 5,640,432 5,534,406 5,965,179 For 2018, AL 3514-E

3. GRC ABRR Change (106,026) 430,773 503,001

4. Less: GRC Revenue Growth GWhs5. 2017 GRC PRR 84,253 5,309,377 Table VI-276. 2018 GRC PRR 83,572 5,266,462 Table VI-27

7. 2018 GRC PRR 83,572 5,266,462 Table VI-278. 2019 GRC PRR 83,470 5,260,034 Table VI-27


11. GRC Revenue Growth (42,915) (6,428) (56,904)

12. Residential Rate OIR Implementation MA 18,854 (18,854) SCE-59, CH IV, plus FF&U13. SmartConnect Opt Out BA 11,457 (11,457) SCE-59, CH IV, plus FF&U14. 2012 - 2014 Bark Beetle CEMA 10,675 (10,675) SCE-12, Table VI-3 + FF&U15. Residential Service Disconnection MA 27 (27) Table IV-16 plus FF&U16. Energy Data Request Program MA 458 (458) SCE-59, CH IV, plus FF&U17. Subtotal - Balancing/Memo Account Recovery 41,471 (41,471) - -

18. GRC Revenue Change (Line 3 - Line 11 + Line 17) (21,640) 395,730 559,905 933,99519. Percent GRC Revenue Change (0.38%) 7.15% 9.39% 16.15%

20. Total System PRR 11,417,570 11,393,715 11,277,777 Table VI-2521. GRC Revenue Change - 2018 (21,640) (21,640) Line 18 (2018)22. GRC Revenue Change - 2019 395,730 Line 18 (2019)23. Total System PRR with GRC Revenue Changes 11,417,570 11,372,075 11,651,866 Line 20 + Line 21 + Line 22

24. Percent Total Revenue Change (0.19%) 3.48% 4.81% 8.10% Line 18 / Line 23

6

V. 1

TAX LEGISLATION CHANGE 2

On December 22, 2017, the Tax Legislation was signed into law. This legislation included three 3

changes that directly affect the computations of regulatory tax expense and rate base in SCE’s Test Year 4

2018 General Rate Case. Our customers will also see excess accumulated deferred income taxes 5

returned beginning in 2018. We have updated the RO model to reflect the following: 6

1. Change in the federal income tax rate from 35% to 21%. 7

2. Loss of Internal Revenue Code (IRC) Section 199 manufacturing deduction. 8

3. New IRC Section 168(k) Bonus Depreciation rules do not apply to public utility property. 9

4. The return of excess tax reserves on historical normalized tax differences. We have followed 10

the average rate assumption method (ARAM) as prescribed by the Internal Revenue Service 11

(IRS), to return these benefits to customers beginning in 2018. 12

As discussed in more detail below, these changes have significant impacts on tax expense and 13

rate base beginning in 2018. 14

A. Change in the Federal income tax rate from 35% to 21% 15

Regulatory tax expense is part of a regulated utility’s cost of service, and affects the revenue 16

requirement in five distinct ways: 17

1. Equity return on rate base 18

2. Debt return on rate base 19

3. Current year flow-through tax benefits generated and returned to customers 20

4. Recovery of prior year flow-through tax benefits from customers 21

5. Deferred income taxes impact on rate base 22

Though most readers may be familiar with the calculations, we provide a brief theoretical 23

overview of each of these factors to illustrate the underlying changes modeled. 24

Table V-4 shows the tax rates and tax gross-up amounts used in the ensuing examples. The tax 25

gross-up is the multiplier required to translate after-tax dollars into pretax revenue requirements.26

7

Table V-4

1. Equity Return on Rate Base 1

Revenues collected for the return on rate base are taxable. Therefore, to earn a $1,000 2

return, the utility must collect a “grossed up”9 revenue requirement to cover not only the return but the 3

tax expense. The gross-up factor for income taxes is a function of the statutory tax rates. Because the 4

recently enacted federal income tax legislation lowered the income tax rate, the gross-up factor and the 5

related revenue requirement will also be reduced. Prior to the tax legislation, $1,781 needed to be 6

collected from customers to recover $1,000 of return; with the legislation, the former amount drops to 7

$1,425. This is summarized in Table V-5. 8

Table V-5

2. Debt Return on Rate Base 9

A portion of the return on rate base is for interest expense on long-term debt used to 10

finance the rate base. Although revenues collected for that component of return are taxable, the interest 11

expense is tax deductible.10 This offsetting tax deduction means that a change to the tax rate does not 12

require a gross-up for the interest component of return on rate base. This category is only affected when 13

rate base changes. 14

9 The mathematical equation to covert after tax amounts into pretax amounts is the formula 1/(1 minus the

statutory tax rate) which under the new rate is 1/(1-0.21-.0884) = 1.425. 10 See discussion of Synchronized Interest at Exhibit SCE-09, Volume 2C, Section III.B.1.b.9, page 26.

Gross-Up FactorItem Old Rate New RateFederal Tax Rate 35.00% 21.00%State Tax Rate 8.84% 8.84%Combined Tax Rate 43.84% 29.84%Gross Up 1.781 1.425

Equity Return on Rate Base of $1,000Item Old Rate New RateRevenue Requirement 1,781 1,425Tax Rate 43.84% 29.84%Tax Expense/(Benefit) 781 425Net Operating Revenue 1,000 1,000

8

Table V-6

3. Current Year Flow-Through Tax Benefits 1

Flow-through ratemaking (as opposed to normalization) means that accelerated tax 2

deductions reduce customer rates in the same year they are deducted on a tax return. These savings are 3

converted into revenues using the gross-up factor, and reduce the test year revenue requirement. The 4

change in tax rates has two unfavorable effects on revenue requirements. First, the lower tax rate reduces 5

the after-tax benefit of the tax deduction. Second, the lower tax rate, through the gross-up factor, reduces 6

the value of the benefit when converted into the revenue requirement. 7

Table V-7

4. Prior Year Flow-Through Tax Benefits 8

Flow-through tax benefits are cash timing differences. Customers pay reduced revenues 9

in year 1 as the accelerated tax deductions are realized, but in the subsequent years, as the utility pays 10

higher taxes, customer rates are increased. Mathematically, this works the opposite of category three 11

discussed above. Therefore, the revenue requirement decreases as a result of a lower tax rate.12

Debt Return on Rate Base of $1,000Item Old Rate New RateRevenue Requirement 1,000 1,000Tax Rate 43.84% 29.84%Tax Expense/(Benefit) 438 298Interest Deduction (Tax Effected) (438) (298)Net Operating Revenue 1,000 1,000

Current Year Flow-Through Tax BenefitItem Old Rate New RateRevenue Requirement (1,781) (970)Tax Rate 43.84% 29.84%Tax Expense/(Benefit) (781) (289)Flow-Through Tax (Benefit) (1,000) (681)Net Operating Revenue – –

9

Table V-8

5. Change in Deferred Income Taxes 1

In addition to the direct changes to the revenue requirement arising from a change in tax 2

rates, as discussed above, a reduction to the tax rate also increases rate base. Normalized tax adjustments 3

are a component of rate base. Typically, this results in cash tax savings from an accelerated tax 4

deduction that is repaid over the book life of the depreciable asset. While the utility holds these cash tax 5

savings (accumulated deferred income taxes or “ADIT”), rate base is reduced. A reduction in the tax rate 6

reduces the cash tax benefits from future accelerated tax deductions. Therefore, rate base and the 7

corresponding revenue requirement will increase. This change is a direct result of changing the tax rate. 8

Other effects of the newly enacted federal income tax legislation are discussed below. 9

B. Loss of IRC Section 199 Manufacturing Deduction 10

The new income tax legislation eliminates the domestic production activities deduction under 11

IRC Section 199, beginning in 2018. This deduction was a permanent tax deduction that the utility 12

claimed on net income derived from generating electricity. The benefit of this deduction was reflected in 13

the utility’s cost of service. Its effect was to reduce regulatory income tax expense and lower the revenue 14

requirement. Due to the new legislation, we have removed the calculation of this deduction from our 15

2018 GRC cost of service estimates. 16

C. New IRC Section 168(k) Bonus Depreciation Rules Exclude Public Utility Property 17

The newly enacted tax legislation implemented new bonus depreciation rates applicable to 18

property acquired after September 27, 2017. However, public utility property is specifically excluded 19

from the definition of qualified bonus depreciation property. Therefore, utilities can no longer claim 20

bonus depreciation on assets acquired and placed in service after September 27, 2017. 21

The new tax legislation is not clear on what accelerated depreciation rules apply when a public 22

utility asset was acquired under a contract prior to September 27, 2017 but placed in service in 2018 or 23

later. While there is no consensus as yet among utilities or accounting firms on this issue, our position is 24

that bonus depreciation can still be claimed on public utility property in 2018 through 2020 under the 25

Prior Year Flow-Through Tax BenefitItem Old Rate New RateRevenue Requirement 1,781 970Tax Rate 43.84% 29.84%Tax Expense/(Benefit) 781 289Flow-Through Tax (Benefit) 1,000 681Net Operating Revenue – –

10

old bonus depreciation rules, but only for assets acquired under a contract prior to September 27, 2017. 1

We reviewed our work-in-progress balances as described below to identify what amounts would still be 2

eligible for bonus depreciation under this interpretation of the law. Our bonus depreciation estimates are 3

reduced due to the new tax legislation, which reduces ADIT and increases rate base. 4

To reflect the expected changes in Bonus Depreciation in the RO model, SCE separated its 5

Construction Work In Progress (“CWIP”) balances and forecast capital expenditures based on the 6

assets’ acquisition dates. SCE then estimated when the capital expenditures would close to plant in 7

service based on each projects’ in-service dates.11 Federal bonus depreciation was adjusted by the ratio 8

of projects remaining eligible for bonus depreciation to the total capital additions. This adjustment 9

resulted in 41%, 30%, and 32% of the capital additions in 2018-2020, respectively, remaining eligible 10

for bonus depreciation. 11

D. Average Rate Assumption Method (“ARAM”) 12

ARAM is a function of the normalization rules as dictated by the IRS. IRC Section 168 defines 13

and allows for the accelerated tax depreciation of fixed assets. Section 168 does not, however, apply to 14

public utility property unless the taxpayer uses a normalized method of accounting.12 This requirement 15

also applies to the regulator when setting the utility’s rates. A normalized method of accounting 16

effectively requires the use of book depreciation when establishing tax cost of service for ratemaking.13 17

Any excess tax depreciation must be reserved to reflect the deferral of taxes (i.e., deferred tax expense). 18

The deferral (cash tax savings, accumulated deferred income taxes or “ADIT”) is “unwound” in future 19

years when book depreciation exceeds tax depreciation. 20

With a reduction in tax rates, the future “unwinding” will not equal the tax benefits as originally 21

reserved. This creates an excess tax reserve.14 22

11 See Exhibit SCE-09, Vol. 02, Chapter I pp. 5-10 for SCE’s process for forecasting capital. 12 IRC Section 168(f)(2). 13 IRC Section 168(i)(9). 14 “Excess tax reserves” is defined in Section 13001(d) of the 2017 Tax Cuts and Jobs Act P.L 115-97 to be the

excess of the reserve for deferred income taxes computed at the tax rate in effect the day before the tax rate change (i.e., 35%) over the amount which would be the balance in such reserve if the amount of such reserve were determined by assuming that the corporate rate reductions (i.e., 21%) were in effect for all prior periods.

11

A normalized method of accounting shall not be treated as being used with respect to any 1 public utility property for purposes of section 167 or 168 of the Internal Revenue Code of 2 1986 if the taxpayer, in computing its cost of service for ratemaking purposes and reflecting 3 operating results in its regulated books of account, reduces the excess tax reserve more 4 rapidly or to a greater extent than such reserve would be reduced under the average rate 5 assumption method.15 6

The specifics of the ARAM calculation include: 7

1. Excess tax benefits are only computed when book depreciation exceeds tax depreciation. 8

This analysis is done on an asset-by-asset basis. 9

2. If book depreciation exceeds tax depreciation on an asset, then ADIT is reversed based on the 10

historical tax rates used to record the original ADIT. In 2018, this is a simple calculation, 11

since the ADIT in the prior years was all recorded at 35%. Beginning in 2019, some assets 12

will have deferred taxes with a mix of 35% and 21%. A ratio is then used to determine the 13

historical ADIT rate. 14

3. The excess between the historical ADIT amount and the ADIT at the tax rate of 21%, may be 15

returned to customers and reduces the revenue requirement for that year. 16

To estimate ARAM, SCE followed these steps: 17

1. We relied on data from our tax fixed asset system (“the system”) for the tax basis and ADIT 18

details as of December 31, 2017. We then computed tax depreciation on those assets for the 19

period 2018 through 2020. 20

2. Next, we computed the amount of book depreciation as requested in the 2018 GRC which 21

relates to the recovery of 2017 and earlier book vintages. This book depreciation was then 22

input by asset type into the tax fixed asset scenario developed in Step 1, and allocated to all 23

of the assets in that scenario (i.e., a scenario with only pre-2018 book and tax asset base). 24

3. Then the system identified assets for which book depreciation exceeded tax depreciation and 25

computed the change in ADIT at 35%, instead of the 21% tax rate in effect beginning in 26

2018. 27

4. The difference in step 3 was returned to customers as the excess tax benefits computed under 28

ARAM in 2018. 29

15 Section 13001(d) of the 2017 Tax Cuts and Jobs Act P.L. 115-97.

12

5. As ARAM is returned to customers, rate base is increased. This increase mirrors the rate base 1

increase that would have occurred had the deferred taxes been repaid to the IRS at 35%. 2

6. We then repeated the process for the 2019 and 2020 attrition years. 3

With respect to the steps above, identifying book depreciation related to 2017 and earlier book 4

vintages requires a more detailed description. Depreciation provides a mechanism to recover the original 5

cost of the capital expenditures as well as the future cost to retire those assets over their useful lives.16 6

Since ARAM addresses historical excess tax reserves, only the depreciation that relates to the recovery 7

of the original cost of those capital expenditures should be included. The depreciation related to 8

recovering future cost of removal, by its definition, is not a recovery of the original cost basis that gave 9

rise to the historical excess tax reserves from tax accelerated depreciation. The book depreciation that 10

does relate to the recovery of the original cost of the capital expenditures was further reduced to exclude 11

depreciation on assets placed in service beginning in 2018 and later, since the excess reserves result 12

from accelerated tax deductions that existed prior to the tax rate change. These adjustments do not 13

change the cumulative benefits customers will ultimately receive in rates over the remaining book lives 14

of the assets; they only help ensure that the benefits returned in a given year remain consistent with the 15

normalization requirements of ARAM. 16

The estimation of ARAM described above is too complex to embed within our RO model. 17

Therefore, ARAM will not automatically adjust if the Commission adopts levels of cost-of-service 18

expense, book depreciation, or capital expenditures different from SCE’s proposals. To the extent the 19

Commission adopts amounts that differ, the calculation steps described above would have to be repeated 20

using the new information, and a new ARAM adjustment included to avoid a normalization violation. 21

ARAM only applies to “protected” assets, that is, assets to which the IRS normalization rules 22

apply. Over the course of past rate case proceedings, certain timing differences have been and continue 23

to be treated as normalized differences, even though they fall outside of the IRS definition of 24

normalization.17 Since the normalization requirements do not apply to these adjustments, ARAM does 25

not apply either. However, since these adjustments have been afforded normalization treatment in prior 26

16 SCE-09 Vol. 02, Chapter II, page 17, Depreciation Expense. 17 The normalization rules are designed to prevent utilities from flowing through certain accelerated tax

deductions to customers. Outside of that, each Commission is free to determine ratemaking treatment on the other tax adjustments. Mixed service cost is an example of an unprotected deferred tax liability related to property.

13

rate case decisions, SCE proposes that an ARAM methodology should also be used to return these 1

benefits to customers. 2

14

VI. 1

CHANGES TO WORKING CASH 2

There are four items of cash working capital that are directly impacted by the Tax Legislation: 3

Long Term Incentive Plan (LTIP),18 Other Accounts Receivable (OAR),19 Workers’ Compensation,20 4

and Unfunded Pension Reserves.21 SCE has applied updated tax rates to these forecasts, which are 5

computed net of tax.22 The composite income tax rate (including state tax benefits) changed from 6

40.75% to 27.98%,23 reducing SCE’s rate base by $23.4 million in 2018 (Table VI-9, Lines 8-10 and 7

Line 14). 8

Table VI-9 Summary of Cash Working Capital Changes from Tax Legislation Rate Change

$000’s

18 See SCE-09, Vol. 2, Ch. IV, p. 57, lines 21-25 (LTIP). 19 See SCE-09, Vol. 2, Ch. IV, p. 56, lines 22-23; p. 58, lines 2-10 (OAR). 20 See SCE-09, Vol. 2, Ch. IV, p. 61, lines 4-8 (Workers Compensation). The tax rate for workers’

compensation is updated dynamically in the RO Model. 21 See SCE-09, Vol. 2, Ch. IV, p. 86, lines 5-8 (Unfunded Pension Reserve). 22 The tax rate is updated in workpapers and the results are inputs to the RO Model. 23 The composite income tax rate used in working cash includes state tax benefits, whereas the composite

income tax rate (excluding state tax benefits) changed from 43.84% to 29.84%.

Line No. SCE-59 SCE-60 ChangeWorking Cash

1. Income Tax Deferred 34,883 5,815 (29,068)2. California State Tax 6,400 4,211 (2,189)3. Federal Income Tax 5,976 5,853 (123)4. Uncollectibles 1,803 1,738 (66)5. Franchise Requirements (36,970) (35,624) 1,3466. Unchanged Lead Lag requirements 384,756 384,756 - 7. Total Lead-Lag Working Cash Requirement 396,848 366,748 (30,100)8. Other Accounts Receivable (OAR) 82,027 73,323 (8,704)9. Workers' Compensation (56,383) (61,680) (5,297)

10. Long-Term Incentive Plan (LTIP) (4,315) (5,244) (929)11. Unchanged Operational Cash Requirement (66,311) (66,311) - 12. Total Operational Cash Requirement (44,982) (59,912) (14,930)13. Total Working Cash Requirement 351,866 306,836 (45,030)

14. Unfunded Pension Reserves (76,201) (84,631) (8,429)15. Total Changes in Rate Base 275,665 222,205 (53,460)

15

There are also five items in the lead-lag working cash requirement that have corollary impacts 1

from the Tax Legislation: Franchise Requirement –GRC, Uncollectibles – GRC, Federal Income Tax, 2

Income Tax Deferred, and CA State Corporation Franchise Tax. Because the Tax Legislation income tax 3

rate change affects the GRC Operating Expense forecast for these items, there is a corollary impact to 4

the lead-lag working cash requirement. The lead-lag days to compute the working cash requirement did 5

not change, but these impacts result in a rate base reduction of $30.1 million in 2018 (Table VI-9 Lines 6

1-5).7

16

VII. 1

ADDED FACILITIES AND OTHER OPERATING REVENUE FORECAST 2

SCE’s revenue requirement recovers the costs of owning, operating, and maintaining standard 3

facilities. Customers may request facilities in addition to, or in substitution for, the standard facilities 4

that SCE would normally install. SCE may accommodate these requests by building such additional 5

facilities, which are called Added Facilities. Customers are charged for the cost of these additional 6

facilities through Added Facilities rates. In SCE-09, Volume 1, SCE proposed 2018 Added Facilities 7

Rates, which were updated in SCE-59 to account for the 2018 Cost of Capital Decision (D.) 17-07-005. 8

SCE has updated its Added Facilities rates to account for the impact of the Tax Legislation. 9

Table VII-10 below provides SCE’s revised Added Facilities Rate Components which reflect both the 10

2018 authorized Cost of Capital and Tax Legislation changes. 11

Table VII-10 Added Facilities Rate Components

Added facilities revenues are recorded in Other Operating Revenue (OOR) FERC Accounts 454 and 12

456. The revised Added Facilities Rate Components, as shown in Table VII-10, reduces SCE’s OOR 13

2018 GRC | Tax ReformSCE Financed Customer Financed

Replacement at Additional Cost

Replacement for 20 Years at

No Additional Cost

Replacement (Perpetuity) at

No Additional CostReplacement at Additional Cost


No Additional Cost


No Additional CostLine Rate (%) (%) (%) (%) (%) (%)No. Components (1) (2) (3) (4) (5) (6)

1 Overhead: A&G, 2.50 2.55 2.80 2.50 2.55 2.782 Ad Val., & Ins.34 Return, Depreciation,5 and Income Taxes 9.12 9.12 9.12 – – –67 Replacement: – 0.19 1.07 – 0.18 1.0789 Total 11.62 11.87 12.99 2.50 2.74 3.8510 Average O&M 1.61 1.65 1.81 1.61 1.65 1.791112 Annual 13.24 13.52 14.80 4.12 4.38 5.6513 Monthly 1.10 1.13 1.23 0.34 0.37 0.471415 One-Time-16 Payment Factor – 136.68 192.12 – 44.33 73.34

17

forecast by $4.277 million in 2018-2020.24 In developing each year’s revenue requirement, the OOR 1

forecast is subtracted from the total O&M forecast. Therefore, the reduced OOR forecast results in an 2

incremental increase in the revenue requirement in each year.3

24 See workpapers provided in Appendix A, which provide support for the underlying calculations.

18

VIII. 1

RATEMAKING CONSIDERATIONS 2

SCE’s Test Year 2018 revenue requirement request is now $106 million lower than our currently 3

authorized 2017 revenue requirement. Our request also reflects proposed PTYR increases of $431 4

million in 2019 and $503 million in 2020. SCE established a 2018 GRC Revenue Requirement 5

Memorandum Account (GRC RRMA) to determine and track the change in the revenue requirement 6

adopted in this proceeding from January 1, 2018 to the effective date of the final GRC decision.25 7

Assuming that the 2018 – 2020 revenue requirements the Commission ultimately adopts follow a 8

similar trend as the revenue requirements currently proposed by SCE (i.e., lower revenue requirement in 9

2018 as compared to 2017, with PTYR increases in 2019 and 2020), then if SCE reflects the entire GRC 10

RRMA balance in rates on January 1, 2019, customers should see a modest rate change in 2019 11

followed by a large rate increase in 2020. There will be an increase in the GRC revenue requirement in 12

2019, since the 2018 adopted test year revenue requirement is expected to be materially lower than the 13

2017 currently authorized revenue requirement. But the PTYR 2019 adopted revenue requirement is 14

expected to be substantially higher than the 2018 adopted revenue requirement, and the 2019 rates 15

would reflect the net effect of these two changes. This would be followed by a potentially substantial 16

rate increase in 2020 due to the PTYR 2020 adopted revenue requirement. 17

Moreover, SCE and other California investor-owned utilities are at a juncture where multiple 18

factors that significantly affect rates are simultaneously coming into play. The Tax Legislation changes 19

have the net effect of reducing revenue requirements, as reflected in the updated RO model analysis 20

shown in Table IV-2. At the same time, SCE has incurred and continues to incur extraordinary costs to 21

restore service and repair, replace, or restore damaged or destroyed facilities and infrastructure due to 22

the December 2017 wildfires and January 2018 mudslides. Additionally, we anticipate increasing costs 23

in the future to carry out fire mitigation strategies, grid hardening, event response, and recovery 24

activities to address the increasing risks associated with climate change and wildfires. Though the 25

magnitude of these incremental costs is not known at this time, it is expected to be substantial. 26

25 Advice 3719-E was filed on December 21, 2017 and approved by the Energy Division on January 16, 2018

with an effective date of January 1, 2018.

19

As the Commission decides how to implement the tax law changes into rates, SCE proposes 1

consideration of the impact of these factors on customer bill volatility, and suggests two potential rate 2

making options. 3

In a manner similar to the two-year amortization of the GRC RRMA balance the Commission 4

adopted in the 2015 GRC,26 SCE proposes the 2018 GRC RRMA balance be amortized over 2019 and 5

2020. This benefits customers by promoting some degree of rate stabilization over this two-year period. 6

If SCE’s updated revenue requirement is adopted and reflected in rates starting on January 1, 2019, and 7

the Commission adopts a two-year amortization of the 2018 GRC RRMA, it would amount to no change 8

in 2018 followed by a $272 million increase in 2019 and a $503 million increase in 2020.27 9

The Commission might also consider setting aside the reductions in revenue requirement 10

associated with the Tax Legislation in a new balancing account to be used for specific wildfire-related 11

risk mitigation activities. If the Commission agrees to such a mechanism, SCE will work closely with 12

Commission staff to facilitate the review of these costs annually, and include the net effects of the tax 13

benefits and the offsetting wildfire-related costs in SCE’s year-end consolidated revenue requirement 14

and rate change advice filing. 15

26 D.15-11-021, Ordering Paragraph (OP) 10. 27 A one-year amortization of the GRC RRMA in 2019 would amount to no change in 2018, followed by a $219

million increase in 2019 and a $609 million increase in 2020. Please refer to the workpapers provided in Appendix A, which provide support for the underlying calculations.

Appendix A

EXHIBIT SCE-60

CHAPTER IV

RESULTS OF OPERATIONS

A-1

AUTHORIZED BASE REVENUE REQUIREMENT (ABRR)

AND

REVENUE CHANGES

A-2

SOUTHERN CALIFORNIA EDISON COMPANYTable V-3, SCE-602018, 2019, and 2020 Revenue Changes Resulting FromThe 2018 Test Year and 2019 & 2020 PTYR GRC Request(thousands of dollars)

ABRR and Revenue Change Including the Impact of Previously Approved and Forecasted ABRR Changes:

2018 2019 2020 Cumulative SCE-9 Vol. 1 Reference

1. Proposed GRC Base Revenue Requirement 5,534,406 5,965,179 6,468,180 SCE-60, Table II-1

2. Estimated Present (Prior Year) Revenue Requirement 5,640,432 5,534,406 5,965,179 For 2018, AL 3514-E

3. GRC ABRR Change (106,026) 430,773 503,001

4. Less: GRC Revenue Growth GWhs5. 2017 GRC PRR 84,253 5,309,377 Table VI-276. 2018 GRC PRR 83,572 5,266,462 Table VI-27



11. GRC Revenue Growth (42,915) (6,428) (56,904)

12. Residential Rate OIR Implementation MA 18,854 (18,854) SCE-59, CH IV, plus FF&U13. SmartConnect Opt Out BA 11,457 (11,457) SCE-59, CH IV, plus FF&U14. 2012 - 2014 Bark Beetle CEMA 10,675 (10,675) SCE-12, Table VI-3 + FF&U15. Residential Service Disconnection MA 27 (27) Table IV-16 plus FF&U16. Energy Data Request Program MA 458 (458) SCE-59, CH IV, plus FF&U17. Subtotal - Balancing/Memo Account Recovery 41,471 (41,471) - -

18. GRC Revenue Change (Line 3 - Line 11 + Line 17) (21,640) 395,730 559,905 933,99519. Percent GRC Revenue Change -0.38% 7.15% 9.39% 16.15%

20. Total System PRR 11,417,570 11,393,715 11,277,777 Table VI-2521. GRC Revenue Change - 2018 (21,640) (21,640) Line 18 (2018)22. GRC Revenue Change - 2019 395,730 Line 18 (2019)23. Total System PRR with GRC Revenue Changes 11,417,570 11,372,075 11,651,866 Line 20 + Line 21 + Line 22

24. Percent Total Revenue Change -0.19% 3.48% 4.81% 8.10% Line 18 / Line 23

A-3

TOTAL COMPANY

SUMMARY OF EARNINGS AT

PROPOSED RATES

(EXCLUDES RATE BASE ADJUSTMENT)

2015 THROUGH 2020

A-4

SOUTHERN CALIFORNIA EDISON

TEST YEAR 2018 GENERAL RATE CASE

SUMMARY OF EARNINGS

ESTIMATED REVENUE REQUIREMENTS


Line Recorded Forecast Forecast Forecast Forecast ForecastNo. Description 2015 2016 2017 2018 2019 2020

1. Operating Revenues2. Electric Revenues 6,080,010 6,236,137 6,606,304 6,523,217 7,015,159 7,590,688

3. Operating Expenses4. Escalation 0 32,409 69,770 110,631 164,630 216,7455. Generation - Steam 7,338 7,444 7,124 7,845 7,845 7,8456. Generation - Nuclear 79,681 76,747 76,747 76,747 76,747 76,7477. Generation - Hydro 43,827 45,444 42,445 41,446 41,446 41,4468. Generation - Other 78,825 80,993 79,346 81,965 81,965 81,9659. Transmission 160,731 168,302 172,982 172,453 172,453 172,45310. Distribution 527,573 545,035 540,807 539,618 539,618 539,61811. Customer Accounts 165,163 150,041 144,487 159,329 159,329 159,32912. Customer Service and Information 23,327 20,638 21,074 21,007 21,007 21,00713. Total O&M Expenses 1,086,465 1,127,053 1,154,782 1,211,040 1,265,039 1,317,15414. Administrative and General 860,385 838,403 824,628 691,464 688,120 686,83515. Total A&G Expenses 860,385 838,403 824,628 691,464 688,120 686,83516. Revenue Credits 214,563 203,185 209,337 203,992 208,894 212,84217. Other 0 0 0 0 0 018. Uncollectibles 11,755 14,842 15,723 14,090 15,153 16,39619. Franchise Requirements 50,763 56,718 60,084 59,648 64,147 69,40920. Subtotal 1,794,805 1,833,830 1,845,880 1,772,252 1,823,564 1,876,953

A-5



SUMMARY OF EARNINGS (Continued)




21. Depreciation - System 1,653,598 1,750,011 1,853,858 2,008,270 2,144,517 2,342,650

22. Taxes Other Than On Income - System 336,788 351,253 373,922 391,954 416,284 447,016

23. Taxes Based On Income - System 326,371 334,156 397,443 154,677 233,116 321,384

24. Total Taxes - System 663,159 685,410 771,365 546,631 649,400 768,400

25. Total Operating Expenses - System 4,111,562 4,269,251 4,471,104 4,327,153 4,617,482 4,988,003

26. Net Operating Revenue - System 1,968,448 1,966,887 2,135,200 2,196,064 2,397,677 2,602,685

27. Rate Base - System (Average)-System 22,568,645 24,897,303 27,027,849 28,860,641 31,510,235 34,204,45428. Rate of Return-System 8.72% 7.90% 7.90% 7.61% 7.61% 7.61%

A-6



TAXES - OTHER




1. Ad Valorem Taxes

2. Ad Valorem Taxes 262,960 278,383 299,086 321,138 343,223 371,367 ________ ________ ________ ________ ________ ________

3. Total Ad Valorem Taxes 262,960 278,383 299,086 321,138 343,223 371,367

4. Payroll Taxes

5. Federal Insurance Contribution Act (FICA) 66,100 64,872 66,769 62,916 64,997 67,4136. Federal Unemployment Tax Act 365 352 347 318 318 3187. State Unemployment Tax Act 3,831 3,693 3,633 3,334 3,335 3,336 ________ ________ ________ ________ ________ ________8. Total Payroll Taxes 70,296 68,917 70,749 66,568 68,650 71,067

9. Misc. Taxes

10. Federal - All Other 4,145 4,566 4,699 4,842 4,994 5,153 ________ ________ ________ ________ ________ ________11. Total Miscellaneous Taxes 4,145 4,566 4,699 4,842 4,994 5,153

12. ITC Amortization on CTC Property (613) (613) (612) (594) (583) (571)

13. ARAM Expense on CTC Property 0 0 0 0 0 0

14. Total Taxes Other Than Income 336,788 351,253 373,922 391,954 416,284 447,016

A-7



INCOME TAX ADJUSTMENTS




1. California Income Tax Adjustments

2. Tax Depreciation 1,447,676 1,561,462 1,598,288 1,678,443 1,733,478 1,862,6133. Interest On Long-Term Debt 532,620 587,576 637,857 618,022 674,760 732,4544. Interest On Accumulated Deferred ITC (2,805) (2,506) (2,284) (1,878) (1,693) (1,515)5. Uniform Capitalization 130,245 117,263 127,732 201,168 209,551 208,4036. Capitalized Software 10,319 26,126 42,287 51,477 43,706 24,8647. Ad Valorem Lien Date Adjustment 8,226 7,196 13,506 8,547 13,536 14,6088. Removal Costs 524,303 440,155 438,236 562,882 568,006 562,0889. Amortization of Land Rights 0 0 0 0 0 010. Salvage Warehouse Expense 0 0 0 0 0 011. CIAC Revenues (186,558) (198,876) (219,968) (277,047) (291,320) (294,914)12. Non Deductible Meals (2,060) (2,070) (2,132) (2,102) (2,172) (2,217)13. Excess Compensation 3,291 3,398 3,489 3,587 3,691 3,79914. ESOP Dividends 0 0 0 0 0 015. Leased Vehicles 0 0 0 0 0 016. Repair Deduction 977,704 964,473 1,025,107 1,038,414 1,056,033 1,085,92817. Total CCFT Adjustments 3,442,962 3,504,197 3,662,118 3,881,513 4,007,576 4,196,111

A-8







1. Federal Income Tax Adjustments

2. Tax Depreciation 2,149,543 2,000,105 1,990,325 1,566,244 1,577,224 1,616,4443. Interest On Long-Term Debt 532,620 587,576 637,857 618,022 674,760 732,4544. Uniform Capitalization 130,245 117,263 127,732 201,168 209,551 208,4035. Capitalized Software 10,319 26,126 42,287 51,477 43,706 24,8646. Ad Valorem Lien Date Adjustment 8,226 7,196 13,506 8,547 13,536 14,6087. Repair Deduction 977,704 964,473 1,025,107 1,038,414 1,056,033 1,085,9288. Removal Costs 524,303 440,155 438,236 562,882 568,006 562,0889. Amortization of Land Rights 0 0 0 0 0 010. Salvage Warehouse Expense 0 0 0 0 0 011. CIAC Revenues (185,136) (197,454) (218,658) (276,006) (290,636) (294,575)12. Non Deductible Meals (2,060) (2,070) (2,132) (2,102) (2,172) (2,217)13. Leased Vehicles 0 0 0 0 0 014. ESOP Dividends 0 0 0 0 0 015. Preferred Dividend Deduction 0 809 809 1,348 1,348 1,34816. Section 199 Manufacturer's Deduction 0 5,278 16,587 0 0 017. Medicare D 0 0 0 0 0 018. Total FIT Adjustments 4,149,055 3,952,856 4,075,145 3,773,581 3,855,047 3,953,143

A-9




TAXES - INCOME ($000)


1. California Corporation Franchise Tax

2. Operating Revenues 6,080,010 6,236,137 6,606,304 6,523,217 7,015,159 7,590,6883. Operating Expenses 1,794,805 1,833,830 1,845,880 1,772,252 1,823,564 1,876,9534. Taxes Other Than Income 336,788 351,253 373,922 391,954 416,284 447,016 ________ ________ ________ ________ ________ ________5. Subtotal Expenses 2,131,593 2,185,083 2,219,803 2,164,206 2,239,849 2,323,9696. Income Tax Adjustments 3,442,962 3,504,197 3,662,118 3,881,513 4,007,576 4,196,1117. California Taxable Income 505,455 546,857 724,383 477,498 767,734 1,070,6088. CCFT Tax Rate 8.8400% 8.8400% 8.8400% 8.8400% 8.8400% 8.8400%9. CCFT 44,682 48,342 64,035 42,211 67,868 94,64210. California Alternate Minimum Tax 0 0 0 0 0 0

11. Arizona Income Tax Rate 0.0270% 0.0270% 0.0270% 0.0000% 0.0000% 0.0000%12. New Mexico Income Tax Rate 0.0000% 0.0000% 0.0000% 0.0000% 0.0000% 0.0000%13. Arizona Income Tax 136 148 195 0 0 0

14. New Mexico Income Tax 0 0 0 0 0 0

15. Total Other State State Income Taxes 136 148 195 0 0 0

16. Total State Income Taxes 44,818 48,490 64,230 42,211 67,868 94,642

A-10






1. Federal Income Tax2. Operating Revenues 6,080,010 6,236,137 6,606,304 6,523,217 7,015,159 7,590,6883. Operating Expenses 1,794,805 1,833,830 1,845,880 1,772,252 1,823,564 1,876,9534. Taxes Other Than Income 336,788 351,253 373,922 391,954 416,284 447,0165. Total State Income Taxes 44,818 48,490 64,230 42,211 67,868 94,6426. Less: Current Year's CCFT 44,682 48,342 64,035 42,211 67,868 94,6427. Plus: Prior Year's CCFT 83,455 44,682 48,342 64,035 42,211 67,868 ________ ________ ________ ________ ________ ________8. Subtotal - Expenses 2,215,184 2,229,913 2,268,340 2,228,241 2,282,060 2,391,8379. Income Tax Adjustments (Sch M) 4,149,055 3,952,856 4,075,145 3,773,581 3,855,047 3,953,14310. Federal Taxable Income (284,229) 53,369 262,820 521,395 878,052 1,245,70811. FIT Tax Rate 35% 35% 35% 21% 21% 21%12. Federal Income Tax (99,480) 18,679 91,987 109,493 184,391 261,59913. Federal Alternative Income Tax 0 0 0 0 0 014. Taxes Deferred-current (Plant) 408,291 296,460 272,372 47,152 35,036 21,60515. Taxes Deferred-current (AFUDC Debt) 0 0 0 0 0 016. Taxes Deferred-current (Cap. Int.) 0 0 0 0 0 017. Contributions in Aid of Construction (20,632) (20,980) (22,884) (41,205) (45,756) (48,427)18. Investment Tax Credit Amortization (7,968) (9,878) (9,685) (9,791) (9,456) (9,098)19. Accrued Vacation 1,342 1,385 1,422 6,816 1,033 1,06320. Total Federal Income Taxes 281,553 285,666 333,213 112,466 165,248 226,742

21. Total Taxes-Income (State and Fed) 326,371 334,156 397,443 154,677 233,116 321,384

A-11



DEPRECIATION EXPENSE




1. Depreciation Expense 1,653,598 1,750,011 1,853,858 2,008,270 2,144,517 2,342,650

A-12



WEIGHTED AVERAGE RATE BASE




1. Fixed Capital2. Plant in Service (Avg.) 38,342,620 40,832,678 43,743,307 46,537,145 49,818,535 53,123,4463. Capitalized Software (Avg.) 1,518,581 1,434,610 1,358,394 1,209,818 1,261,255 1,589,0164. Intangibles (Avg.) 196,275 211,967 222,903 226,958 236,696 238,7975. Property Held for Future Use (Avg.) 0 0 0 0 0 06. Total Fixed Capital (Avg.) 40,057,476 42,479,255 45,324,604 47,973,921 51,316,486 54,951,2597. Adjustments8. Customer Advance for Construction (Avg.) (69,490) (69,089) (67,745) (72,308) (79,137) (84,762)9. Total Adjustments (Avg.) (69,490) (69,089) (67,745) (72,308) (79,137) (84,762)10. Working Capital11. Materials and Supplies (Avg) 190,803 196,354 208,889 226,965 242,757 250,43812. Mountainview Emission Credits (Avg) 6,774 6,106 5,468 4,861 4,284 3,73413. Working Cash (Avg.) 356,156 334,560 340,644 306,836 347,053 402,52214. Total Working Capital (Avg.) 553,732 537,020 555,001 538,662 594,094 656,69515. Total Before Deductions for Reserves (Avg) 40,541,718 42,947,186 45,811,860 48,440,275 51,831,442 55,523,192

A-13



WEIGHTED AVERAGE RATE BASE (Continued)




16. Deductions for Reserves17. Depreciation Reserve (Avg) (12,145,461) (12,016,424) (12,561,022) (13,175,659) (13,873,335) (14,721,079)18. Accum. Amort. - Capitalized Software (Avg.) (984,700) (883,979) (753,411) (666,900) (665,848) (801,957)19. Accum. Taxes Def. - Plant ( Avg.) (4,891,503) (5,201,910) (5,527,655) (5,787,010) (5,830,383) (5,861,230)20. Accum. Def. Taxes for Uniform Capitalization 0 0 0 0 0 021. Accum. Taxes Def. - CIAC (Avg.) 99,483 104,899 114,009 121,216 135,732 155,77122. Accrued Vacation (Avg) 20,236 18,873 17,469 13,350 9,425 8,37723. Unfunded Pension Reserve (Avg.) (71,129) (71,342) (73,401) (84,631) (96,799) (98,622)24. Total Deductions for Reserves ( Avg.) (17,973,074) (18,049,883) (18,784,011) (19,579,634) (20,321,208) (21,318,739)

25. Total Rate Base (Avg) 22,568,645 24,897,303 27,027,849 28,860,641 31,510,235 34,204,454

A-14



N-T-G MULTIPLIER



1. Revenues 1.0000 1.0000 1.0000 1.0000 1.0000 1.00002. Uncollectibles Tax Rate 0.00238 0.00238 0.00238 0.00216 0.00216 0.002163. Uncollectibles Amount Applied 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 ________ ________ ________ ________ ________ ________4. Subtotal 0.9976 0.9976 0.9976 0.9978 0.9978 0.9978

5. Franchise Fees Tax Rate 0.009095 0.009095 0.009095 0.009144 0.009144 0.0091446. Franchise Fees Amount Applied 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 ________ ________ ________ ________ ________ ________7. Subtotal 0.9885 0.9885 0.9885 0.988696 0.988696 0.988696

8. Arizona/New Mexico/D.C. Income Tax Rates 0.000270 0.000270 0.000270 0.000000 0.000000 0.0000009. Other State I.T. Amount Applied 0.9885 0.9885 0.9885 0.9887 0.9887 0.9887 ________ ________ ________ ________ ________ ________

10. Subtotal 0.9883 0.9883 0.9883 0.9887 0.9887 0.9887

11. S. I. T. Rate 0.088400 0.088400 0.088400 0.088400 0.088400 0.08840012. S. I. T. Amount Applied 0.9885 0.9885 0.9885 0.9887 0.9887 0.9887 ________ ________ ________ ________ ________ ________13. Subtotal 0.9009 0.9009 0.9009 0.9013 0.9013 0.9013

14. Federal Income Tax 0.35 0.35 0.35 0.21 0.21 0.2115. Federal Income Tax Amount Applied 0.9883 0.9883 0.9883 0.9887 0.9887 0.9887 ________ ________ ________ ________ ________ ________16. Net Operating Revenues 0.5550 0.5550 0.5550 0.6937 0.6937 0.693717. Uncollectible and Franchise Fees Factor 1.011608 1.011608 1.011608 1.011433 1.011433 1.01143318. N-T-G MULTIPLIER 1.8019 1.8019 1.8019 1.4416 1.4416 1.4416

A-15



RATE OF RETURN



1. Cost Factor

2. Long-Term Debt 5.49% 5.49% 5.49% 4.98% 4.98% 4.98%3. Preferred Stock 5.79% 5.79% 5.79% 5.82% 5.82% 5.82%4. Equity 10.45% 10.45% 10.45% 10.30% 10.30% 10.30%

5. Capitalization Ratios


9. Weighted Cost


13. Return on Rate Base 7.90% 7.90% 7.90% 7.61% 7.61% 7.61%

A-16

SUMMARY OF ELECTRIC

RATE BASE

(EXCLUDES RATE BASE ADJUSTMENT)

A-17

Southern California EdisonSummary of Electric Rate Base - Total CompanyNominal $ in Thousands

Total Company Rate Base Recorded ForecastLine Item 2015 2016 2017 2018 2019 2020

Fixed Capital1 Plant in Service 38,342,620 40,832,678 43,743,307 46,537,145 49,818,535 53,123,4462 Capitalized Software 1,518,581 1,434,610 1,358,394 1,209,818 1,261,255 1,589,0163 Other Intangibles 196,275 211,967 222,903 226,958 236,696 238,7974 Total Fixed Capital 40,057,476 42,479,255 45,324,604 47,973,921 51,316,486 54,951,259

Adjustments5 Customer Advances for Construction (69,490) (69,089) (67,745) (72,308) (79,137) (84,762)6 Customer Deposits - - - - - -7 Total Adjustments (69,490) (69,089) (67,745) (72,308) (79,137) (84,762)

Working Capital8 Materials & Supplies 190,803 196,354 208,889 226,965 242,757 250,4389 Mountainview Emission Credits 6,774 6,106 5,468 4,861 4,284 3,73410 Working Cash 356,156 334,560 340,644 306,836 347,053 402,52211 Total Working Capital 553,732 537,020 555,001 538,662 594,094 656,695

Reserves12 Accumulated Depreciation Reserve (12,145,461) (12,016,424) (12,561,022) (13,175,659) (13,873,335) (14,721,079)13 Accumulated Amortization (984,700) (883,979) (753,411) (666,900) (665,848) (801,957)14 Accum. Def. Taxes - Plant (4,891,503) (5,201,910) (5,527,655) (5,787,010) (5,830,383) (5,861,230)15 Accum. Def. Taxes - Uniform Capitalization - - - - - -16 Accum. Def. Taxes - CIAC 99,483 104,899 114,009 121,216 135,732 155,77117 Accum. Def. Taxes - Vaca ion Accrual 20,236 18,873 17,469 13,350 9,425 8,37718 Unfunded Pension Reserve (71,129) (71,342) (73,401) (84,631) (96,799) (98,622)19 Total Deductions for Reserves (17,973,074) (18,049,883) (18,784,011) (19,579,634) (20,321,208) (21,318,739)20 Rate Base 22,568,645 24,897,303 27,027,849 28,860,641 31,510,235 34,204,454

21 Depreciation and Amortization 1,653,598 1,750,011 1,853,858 2,008,270 2,144,517 2,342,650

A-18

Southern California EdisonSummary of Electric Rate Base - CPUCNominal $ in Thousands

CPUC Rate Base Recorded ForecastLine Item 2015 2016 2017 2018 2019 2020

Fixed Capital1 Plant in Service 30,829,338 32,872,349 35,199,552 37,503,632 40,162,597 42,814,5462 Capitalized Software 1,422,803 1,344,128 1,272,719 1,133,514 1,181,706 1,488,7953 Other Intangibles 183,896 198,598 208,845 212,643 221,768 223,7364 Total Fixed Capital 32,436,037 34,415,075 36,681,115 38,849,789 41,566,071 44,527,078


Working Capital8 Materials & Supplies 178,768 183,970 195,714 212,650 227,446 234,6439 Mountainview Emission Credits 6,774 6,106 5,468 4,861 4,284 3,73410 Working Cash 333,693 313,459 319,159 287,483 325,164 377,13511 Total Working Capital 519,235 503,535 520,341 504,995 556,894 615,512

Reserves12 Accumulated Depreciation Reserve (10,720,526) (10,570,393) (10,963,163) (11,427,048) (11,965,497) (12,634,848)13 Accumulated Amortization (922,594) (828,226) (705,892) (624,838) (623,853) (751,377)14 Accum. Def. Taxes - Plant (3,595,222) (3,740,155) (3,917,255) (4,058,039) (4,051,416) (4,033,443)15 Accum. Def. Taxes - Capitalized Interest - - - - - -16 Accum. Def. Taxes - CIAC 99,483 104,899 114,009 121,216 135,732 155,77117 Accum. Def. Taxes - Vaca ion Accrual 18,960 17,683 16,367 12,508 8,831 7,84918 Unfunded Pension Reserve (66,643) (66,842) (68,772) (79,293) (90,694) (92,402)19 Total Deductions for Reserves (15,186,542) (15,083,035) (15,524,706) (16,055,494) (16,586,897) (17,348,449)20 Rate Base 17,699,240 19,766,486 21,609,006 23,226,981 25,456,930 27,709,379


A-19

Southern California EdisonSummary of Electric Rate Base - FERCNominal $ in Thousands

FERC Rate Base Recorded ForecastLine Item 2015 2016 2017 2018 2019 2020

Fixed Capital1 Plant in Service 7,513,282 7,960,329 8,543,755 9,033,513 9,655,938 10,308,9002 Capitalized Software 95,778 90,482 85,675 76,304 79,548 100,2203 Other Intangibles 12,379 13,369 14,059 14,314 14,929 15,0614 Total Fixed Capital 7,621,439 8,064,180 8,643,488 9,124,132 9,750,415 10,424,182

Adjustments5 Customer Advances for Construction - - - - - -6 Customer Deposits - - - - - -7 Total Adjustments 0 0 0 0 0 0

Working Capital8 Materials & Supplies 12,034.06 12,384 13,175 14,315 15,311 15,7959 Mountainview Emission Credits - - - - - -10 Working Cash 22,463 21,101 21,485 19,352 21,889 25,38711 Total Working Capital 34,497 33,485 34,659 33,667 37,200 41,183

Reserves12 Accumulated Depreciation Reserve (1,424,935) (1,446,031) (1,597,859) (1,748,611) (1,907,838) (2,086,231)13 Accumulated Amortization (62,106) (55,753) (47,518) (42,062) (41,996) (50,580)14 Accum. Def. Taxes - Plant (1,296,281) (1,461,755) (1,610,400) (1,728,971) (1,778,967) (1,827,787)15 Accum. Def. Taxes - Capitalized Interest - - - - - -16 Accum. Def. Taxes - CIAC - - - - - -17 Accum. Def. Taxes - Vaca ion Accrual 1,276 1,190 1,102 842 594 52818 Unfunded Pension Reserve (4,486) (4,500) (4,629) (5,338) (6,105) (6,220)19 Total Deductions for Reserves (2,786,532) (2,966,848) (3,259,304) (3,524,140) (3,734,311) (3,970,290)20 Rate Base 4,869,404 5,130,816 5,418,844 5,633,659 6,053,304 6,495,075

21 Depreciation and Amortization 216,954 229,811 245,055 255,933 272,478 293,752

A-20

TOTAL COMPANY

SUMMARY OF EARNINGS AT

PRESENT RATES

2015 THROUGH 2020

A-21



N-T-G MULTIPLIER

ESTIMATED REVENUE REQUIREMENTS AT AUTHORIZED BASE REVENUE REQUIREMENT


1. Revenues 1.0000 1.0000 1.0000 1.0000 1.0000 1.00002. Uncollectibles Tax Rate 0.00238 0.00238 0.00238 0.00216 0.00216 0.002163. Uncollectibles Amount Applied 1.0000 1.0000 1.0000 1.0000 1.0000 1.00004. Uncollectibles Juris. 0.0024 0.0024 0.0024 0.0022 0.0022 0.00225. Subtotal 0.9976 0.9976 0.9976 0.9978 0.9978 0.9978

6. Franchise Fees Tax Rate 0.009095 0.009095 0.009095 0.009144 0.009144 0.0091447. Franchise Fees Amount Applied 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 ________ ________ ________ ________ ________ ________8. Franchise Fees Juris. 0.0091 0.0091 0.0091 0.0091 0.0091 0.00919. Subtotal 0.9885 0.9885 0.9885 0.9887 0.9887 0.9887

10. Arizona/New Mexico/D.C. Income Tax Rates 0.000269738 0.000269738 0.000269738 0 0 011. Other State I.T. Amount Applied 0.9885 0.9885 0.9885 0.9887 0.9887 0.9887 ________ ________ ________ ________ ________ ________12. Other State I.T. Juris. 0.0003 0.0003 0.0003 0.0000 0.0000 0.000013. Subtotal 0.9883 0.9883 0.9883 0.9887 0.9887 0.9887

14. S. I. T. Rate 0.0884 0.0884 0.0884 0.0884 0.0884 0.088415. S. I. T. Amount Applied 0.9885 0.9885 0.9885 0.9887 0.9887 0.9887 ________ ________ ________ ________ ________ ________16. S. I. T. Juris. 0.0874 0.0874 0.0874 0.0874 0.0874 0.087417. Subtotal 0.9009 0.9009 0.9009 0.9013 0.9013 0.9013

18. Federal Income Tax 0.35 0.35 0.35 0.21 0.21 0.2119. Federal Income Tax Amount Applied 0.9883 0.9883 0.9883 0.9887 0.9887 0.9887 ________ ________ ________ ________ ________ ________20. Federal Income Tax Juris. 0.3459 0.3459 0.3459 0.2076 0.2076 0.207621. Net Operating Revenues 0.5550 0.5550 0.5550 0.6937 0.6937 0.693722. Uncollectible and Franchise Fees Factor 1.011608 1.011608 1.011608 1.011433 1.011433 1.01143323. N-T-G MULTIPLIER 1.8019 1.8019 1.8019 1.4416 1.4416 1.4416

A-22



RATE OF RETURN



1. Cost Factor


5. Capitalization Ratios


9. Weighted Cost


13. Return on Rate Base 7.90% 7.90% 7.90% 7.61% 7.61% 7.61%

A-23



TAXES - OTHER




1. Ad Valorem Taxes

2. Ad Valorem Taxes 262,960 278,383 299,086 321,138 343,223 371,367 ________ ________ ________ ________ ________ ________3. Total Ad Valorem Taxes 262,960 278,383 299,086 321,138 343,223 371,367

4. Payroll Taxes

5. Federal Insurance Contr bution Act (FICA) 66,100 64,872 66,769 62,916 64,997 67,4136. Federal Unemployment Tax Act 365 352 347 318 318 3187. State Unemployment Tax Act 3,831 3,693 3,633 3,334 3,335 3,336

8. Total Payroll Taxes 70,296 68,917 70,749 66,568 68,650 71,067

9. Misc. Taxes

10. Federal - All Other 4,145 4,566 4,699 4,842 4,994 5,153 ________ ________ ________ ________ ________ ________11. Total Miscellaneous Taxes 4,145 4,566 4,699 4,842 4,994 5,153

12. ITC Amortization on CTC Property (613) (613) (612) (594) (583) (571)

13. ARAM Expense on CTC Property 0 0 0 0 0 0

14. Total Taxes Other Than Income 336,788 351,253 373,922 391,954 416,284 447,016

A-24







1. California Income Tax Adjustments

2. Tax Depreciation 1,447,676 1,561,462 1,598,288 1,678,443 1,733,478 1,862,6133. Interest On Long-Term Debt 532,620 587,576 637,857 618,022 674,760 732,4544. Interest On Accumulated Deferred ITC (2,805) (2,506) (2,284) (1,878) (1,693) (1,515)5. Uniform Capitalization 130,245 117,263 127,732 201,168 209,551 208,4036. Capitalized Software 10,319 26,126 42,287 51,477 43,706 24,8647. Ad Valorem Lien Date Adjustment 8,226 7,196 13,506 8,547 13,536 14,6088. Percentage Repair Allowance 0 0 0 0 0 09. Removal Costs 524,303 440,155 438,236 562,882 568,006 562,08810. Amortization of Land Rights 0 0 0 0 0 011. Salvage Warehouse Expense 0 0 0 0 0 012. CIAC Revenues (186,558) (198,876) (219,968) (277,047) (291,320) (294,914)13. Non Deduct ble Meals (2,060) (2,070) (2,132) (2,102) (2,172) (2,217)14. Excess Compensation 3,291 3,398 3,489 3,587 3,691 3,79915. ESOP Dividends 0 0 0 0 0 016. Leased Vehicles 0 0 0 0 0 0 ________ ________ ________ ________ ________ ________17. Total CCFT Adjustments 3,442,962 3,504,197 3,662,118 3,881,513 4,007,576 4,196,111

A-25







1. Federal Income Tax Adjustments

2. Tax Depreciation 2,149,543 2,000,105 1,990,325 1,566,244 1,577,224 1,616,4443. Interest On Long-Term Debt 532,620 587,576 637,857 618,022 674,760 732,4544. Uniform Capitalization 130,245 117,263 127,732 201,168 209,551 208,4035. Capitalized Software 10,319 26,126 42,287 51,477 43,706 24,8646. Ad Valorem Lien Date Adjustment 8,226 7,196 13,506 8,547 13,536 14,6087. Percentage Repair Allowance 0 0 0 0 0 08. Repair Deduction 977,704 964,473 1,025,107 1,038,414 1,056,033 1,085,9289. Removal Costs 524,303 440,155 438,236 562,882 568,006 562,08810. Amortization of Land Rights 0 0 0 0 0 011. Salvage Warehouse Expense 0 0 0 0 0 012. CIAC Revenues (185,136) (197,454) (218,658) (276,006) (290,636) (294,575)13. Non Deduct ble Meals (2,060) (2,070) (2,132) (2,102) (2,172) (2,217)14. Excess Compensation 3,291 3,398 3,489 3,587 3,691 3,79915. Leased Vehicles 0 0 0 0 0 016. ESOP Dividends 0 0 0 0 0 017. Preferred Dividend Deduction 0 809 809 1,348 1,348 1,34818. Section 199 Manufacturer's Deduction 0 5,278 16,587 0 0 019. Medicare D 0 0 0 0 0 020. Total FIT Adjustments 4,149,055 3,952,856 4,075,145 3,773,581 3,855,047 3,953,143

A-26






1. California Corporation Franchise Tax

2. Operating Revenues 6,080,010 6,461,352 6,716,143 6,707,448 6,706,146 6,694,6173. Operating Expenses 1,794,805 1,836,414 1,847,141 1,774,334 1,820,071 1,866,8244. Taxes Other Than Income 336,788 351,253 373,922 391,954 416,284 447,016 ________ ________ ________ ________ ________ ________5. Subtotal Expenses 2,131,593 2,187,667 2,221,063 2,166,289 2,236,356 2,313,8396. Income Tax Adjustments 3,442,962 3,504,197 3,662,118 3,881,513 4,007,576 4,196,1117. California Taxable Income 505,455 769,487 832,962 659,647 462,214 184,6668. CCFT Tax Rate 8.8400% 8.8400% 8.8400% 8.8400% 8.8400% 8.8400%9. CCFT 44,682 68,023 73,634 58,313 40,860 16,32510. California Alternate Minimum Tax 0 0 0 0 0 0

11. Arizona Income Tax Rate 0.0270% 0.0270% 0.0270% 0.0000% 0.0000% 0.0000%12. New Mexico Income Tax Rate 0.0000% 0.0000% 0.0000% 0.0000% 0.0000% 0.0000%13. Arizona Income Tax 136 208 225 0 0 0

14. New Mexico Income Tax 0 0 0 0 0 0

15. Total Other State State Income Taxes 136 208 225 0 0 0

16. Total State Income Taxes 44,818 68,231 73,859 58,313 40,860 16,325

A-27






1. Federal Income Tax2. Operating Revenues 6,080,010 6,461,352 6,716,143 6,707,448 6,706,146 6,694,6173. Operating Expenses 1,794,805 1,836,414 1,847,141 1,774,334 1,820,071 1,866,8244. Taxes Other Than Income 336,788 351,253 373,922 391,954 416,284 447,0165. Taxes Other Than Income 336,788 351,253 373,922 391,954 416,284 447,0166. Total State Income Taxes 44,818 68,231 73,859 58,313 40,860 16,3257. Less: Current Year's CCFT 44,682 68,023 73,634 58,313 40,860 16,3258. Plus: Prior Year's CCFT 83,455 44,682 68,023 73,634 58,313 40,8609. Subtotal - Expenses 2,215,184 2,232,557 2,289,311 2,239,923 2,294,669 2,354,69910. Income Tax Adjustments (Sch M) 4,149,055 3,952,856 4,075,145 3,773,581 3,855,047 3,953,14311. Federal Taxable Income (284,229) 275,939 351,687 693,945 556,430 386,77412. FIT Tax Rate 35% 35% 35% 21% 21% 21%13. Federal Income Tax (99,480) 96,578 123,091 145,728 116,850 81,22314. Federal Alternative Income Tax 0 0 0 0 0 015. Taxes Deferred-current (Plant) 408,291 296,460 272,372 47,152 35,036 21,60516. Taxes Deferred-current (AFUDC Debt) 0 0 0 0 0 017. Taxes Deferred-current (Cap. Int.) 0 0 0 0 0 018. Contributions in Aid of Construction (20,632) (20,980) (22,884) (41,205) (45,756) (48,427)19. Investment Tax Credit Amortization (7,968) (9,878) (9,685) (9,791) (9,456) (9,098)20. Total Federal Income Taxes 280,211 362,180 362,895 141,884 96,674 45,303

21. Total Taxes-Income (State and Fed) 325,029 430,411 436,754 200,197 137,534 61,628

A-28



DEPRECIATION EXPENSE




1. Depreciation Expense 1,653,598 1,750,011 1,853,858 2,008,270 2,144,517 2,342,650

A-29







1. Fixed Capital2. Plant in Service (Avg.) 38,342,620 40,832,678 43,743,307 46,537,145 49,818,535 53,123,4463. Capitalized Software (Avg.) 1,518,581 1,434,610 1,358,394 1,209,818 1,261,255 1,589,0164. Intangibles (Avg.) 196,275 211,967 222,903 226,958 236,696 238,7975. Property Held for Future Use (Avg.) 0 0 0 0 0 06. Total Fixed Capital (Avg.) 40,057,476 42,479,255 45,324,604 47,973,921 51,316,486 54,951,2597. Adjustments8. Customer Advance for Construction (Avg.) (69,490) (69,089) (67,745) (72,308) (79,137) (84,762)9. Total Adjustments (Avg.) (69,490) (69,089) (67,745) (72,308) (79,137) (84,762)10. Working Capital11. Materials and Supplies (Avg) 190,803 196,354 208,889 226,965 242,757 250,43812. Mountainview Emission Credits (Avg) 6,774 6,106 5,468 4,86113. Working Cash (Avg.) 356,156 334,560 340,644 306,836 347,053 402,52214. Total Working Capital (Avg.) 553,732 537,020 555,001 538,662 589,810 652,96015. Total Before Deductions for Reserves (Avg) 40,541,718 42,947,186 45,811,860 48,440,275 51,827,159 55,519,458

A-30







16. Deductions for Reserves17. Depreciation Reserve (Avg) (12,145,461) (12,016,424) (12,561,022) (13,175,659) (13,873,335) (14,721,079)18. Accum. Amort. - Capitalized Software (Avg.) (984,700) (883,979) (753,411) (666,900) (665,848) (801,957)19. Taxes Def. - Plant ( Avg.) (4,891,503) (5,201,910) (5,527,655) (5,787,010) (5,830,383) (5,861,230)20. Capitalized Interest (Avg) 0 0 0 0 0 021. Taxes Def. - CIAC (Avg.) 99,483 104,899 114,009 121,216 135,732 155,77122. Accrued Vacation (Avg) 20,236 18,873 17,469 13,350 9,425 8,37723. Unfunded Pension Reserve (Avg.) (71,129) (71,342) (73,401) (84,631) (96,799) (98,622)24. Total Deductions for Reserves ( Avg.) (17,973,074) (18,049,883) (18,784,011) (19,579,634) (20,321,208) (21,318,739)

25. Total Rate Base (Avg) 22,568,645 24,897,303 27,027,849 28,860,641 31,505,951 34,200,719

A-31



SUMMARY OF EARNINGS




1. Operating Revenues2. Electric Revenues 6,080,010 6,461,352 6,716,143 6,707,448 6,706,146 6,694,617

3. Operating Expenses4. Escalation 0 32,409 69,770 110,631 164,630 216,7455. Generation - Steam 7,338 7,444 7,124 7,845 7,845 7,8456. Generation - Nuclear 79,681 76,747 76,747 76,747 76,747 76,7477. Generation - Hydro 43,827 45,444 42,445 41,446 41,446 41,4468. Generation - Other 78,825 80,993 79,346 81,965 81,965 81,9659. Transmission 160,731 168,302 172,982 172,453 172,453 172,45310. Distribution 527,573 545,035 540,807 539,618 539,618 539,61811. Customer Accounts 165,163 150,041 144,487 159,329 159,329 159,32912. Customer Service and Information 23,327 20,638 21,074 21,007 21,007 21,00713. Total O&M Expenses 1,086,465 1,127,053 1,154,782 1,211,040 1,265,039 1,317,15414. O&M Jurisdictional Factor 100.000% 100.000% 100.000% 100.000% 100.000% 100.000%15. O&M Expenses Juris. 1,086,465 1,127,053 1,154,782 1,211,040 1,265,039 1,317,15414. Administrative and General 860,385 838,403 824,628 691,464 688,120 686,83515. Total A&G Expenses 860,385 838,403 824,628 691,464 688,120 686,83516. Revenue Credits 214,563 203,185 209,337 203,992 208,894 212,84217. Other 0 0 0 0 0 018. Uncollectibles 11,755 15,378 15,984 14,488 14,485 14,46019. Franchise Requirements 50,763 58,766 61,083 61,333 61,321 61,21620. Subtotal 1,794,805 1,836,414 1,847,141 1,774,334 1,820,071 1,866,824

A-32



SUMMARY OF EARNINGS




21. Depreciation 1,653,598 1,750,011 1,853,858 2,008,270 2,144,517 2,342,650

22. Taxes Other Than On Income 336,788 351,253 373,922 391,954 416,284 447,016

23. Taxes Based On Income 325,029 430,411 436,754 200,197 137,534 61,628

24. Total Taxes 661,817 781,665 810,676 592,152 553,818 508,644

25. Total Operating Expenses 4,110,220 4,368,090 4,511,675 4,374,756 4,518,407 4,718,117

26. Net Operating Revenue 1,969,790 2,093,262 2,204,468 2,332,692 2,187,739 1,976,499

27. Rate Base - System (Average) 22,568,645 24,897,303 27,027,849 28,860,641 31,505,951 34,200,71928. Rate of Return 8.73% 8.41% 8.16% 8.08% 6.94% 5.78%29. Rate of Return Juris. 8.74% 8.41% 8.16% 8.09% 6.95% 5.78%

A-33

CPUC

JURISDICTIONALIZATION & FUNCTIONALIZATION

2018 THROUGH 2020

A-34

Southern California EdisonResults of Operations - CPUC and FERC $ in ThousandsLine Estimated 2018 % for 2018No. Item Total FERC CPUC FERC CPUC Total

1. Total Operating Revenues 6,494,892 960,486 5,534,406 14.79% 85.21% 100.00%

2. Operating Expenses:3. Production4. Steam 7,845 - 7,845 0.00% 100.00% 100.00%5. Nuclear 76,747 - 76,747 0.00% 100.00% 100.00%6. Hydro 41,446 - 41,446 0.00% 100.00% 100.00%7. Other 81,965 - 81,965 0.00% 100.00% 100.00%8. Total Production O&M 208,003 - 208,003 0.00% 100.00% 100.00%

9. Transmission 172,453 81,335 91,118 47.16% 52.84% 100.00%10. Distribution 539,618 7,519 532,099 1.39% 98.61% 100.00%11. Customer Accounts 159,329 - 159,329 0.00% 100.00% 100.00%12. Uncollectibles 14,029 2,075 11,954 14.79% 85.21% 100.00%13. Customer Service & Information 21,007 - 21,007 0.00% 100.00% 100.00%14. Administrative & General 691,464 43,611 647,853 6.31% 93.69% 100.00%15. Franchise Requirements 59,389 8,783 50,607 14.79% 85.21% 100.00%16. Revenue Credits (203,992) (50,921) (153,070) 24.96% 75.04% 100.00%17. Subtotal 1,661,300 92,401 1,568,900 5.56% 94.44% 100.00%

18. Escalation 110,631 6,679 103,952 6.04% 93.96% 100.00%

19. Depreciation 2,008,270 255,933 1,752,338 12.74% 87.26% 100.00%

20. Taxes Other Than On Income21. Taxes Other Than On Income - Property 321,138 62,687 258,451 19.52% 80.48% 100.00%22. Taxes Other Than On Income - Payroll 70,816 4,466 66,350 6.31% 93.69% 100.00%23. Taxes Based On Income 148,564 109,645 38,919 73.80% 26.20% 100.00%24. Total Taxes 540,518 176,798 363,720 32.71% 67.29% 100.00%

25. Total Operating Expenses 4,320,720 531,810 3,788,910 12.31% 87.69% 100.00%

26. Net Operating Revenue 2,174,172 428,676 1,745,496 19.72% 80.28% 100.00%

27. Rate Base 28,572,941 5,633,659 22,939,281 19.72% 80.28% 100.00%

28. Rate Of Return 7.61% 7.61% 7.61%

A-35

Southern California Edison2018 Results of Operations$ in Thousands

2018 Results of OperationsLineNo. Item CPUC Generation Peakers Distribution

1. Total Operating Revenues 5,534,406 673,386 57,033 4,803,987

2. Operating Expenses:3. Production4. Steam 7,845 7,845 – –5. Nuclear 76,747 76,747 – –6. Hydro 41,446 41,446 – –7. Other 81,965 74,514 7,451 –8. Total Production O&M 208,003 200,552 7,451 –

9. Transmission 91,118 – – 91,11810. Distribution 532,099 – – 532,09911. Customer Accounts 159,329 – – 159,32912. Uncollectibles 11,954 1,455 123 10,37713. Customer Service & Information 21,007 1,597 – 19,41014. Administrative & General 647,853 83,915 4,452 559,48715. Franchise Requirements 50,607 6,157 522 43,92816. Revenue Credits (153,070) (1,836) – (151,234)17. Total O&M 1,568,900 291,839 12,548 1,264,513

18. Escalation 103,952 20,496 425 83,032

19. Depreciation 1,752,338 181,863 14,531 1,555,944

20. Taxes Other Than On Income21. Property Taxes 258,451 21,384 3,535 233,53222. Payroll Taxes & Misc 66,350 8,999 51 57,30023. Taxes Based On Income 38,919 (3,274) 7,616 34,57724. Total Taxes 363,720 27,109 11,202 325,409

25. Total Operating Expenses 3,788,910 521,307 38,706 3,228,897

26. Net Operating Revenue 1,745,496 152,079 18,327 1,575,090

27. Rate Base 22,939,281 1,998,610 240,858 20,699,813

28. Rate Of Return 7.61% 7.61% 7.61% 7.61%

A-38






18. Escalation 154,691 29,721 604 124,366

19. Depreciation 1,872,039 188,625 14,804 1,668,609

20. Taxes Other Than On Income21. Property Taxes 277,288 21,326 3,467 252,49522. Payroll Taxes & Misc 68,453 9,285 52 59,11623. Taxes Based On Income 109,661 2,825 7,504 99,33224. Total Taxes 455,402 33,435 11,024 410,943



27. Rate Base 25,181,218 2,043,076 233,083 22,905,059

28. Rate Of Return 7.61% 7.61% 7.61% 7.61%

A-39






18. Escalation 203,661 38,861 810 163,989

19. Depreciation 2,048,898 203,059 15,456 1,830,383

20. Taxes Other Than On Income21. Property Taxes 300,848 21,713 3,386 275,74922. Payroll Taxes & Misc 70,877 9,613 54 61,21023. Taxes Based On Income 187,024 8,523 7,548 170,95324. Total Taxes 558,749 39,849 10,988 507,913



27. Rate Base 27,445,654 2,085,807 225,907 25,133,939

28. Rate Of Return 7.61% 7.61% 7.61% 7.61%

A-40

CHAPTER V

TAX LEGISLATION CHANGES

A-41

SCE-59 SCE-59 SCE-60 SCE-59 SCE-59 SCE-60 SCE-59 SCE-59 SCE-60Current Current Rate Base New Current Current Rate Base New Current Current Rate Base New

EQUITY RETURN ON RATE BASE Model @ 35% Model @ 21% Changes Model Model @ 35% Model @ 21% Changes Model Model @ 35% Model @ 21% Changes Model

Original Rate Base 22,939,852 22,939,852 (570) 22,939,281 25,034,971 25,034,971 146,247 25,181,218 27,177,582 27,177,582 268,072 27,445,654Equity Rate of Return 5.47% 5.47% 5.47% 5.47% 5.47% 5.47% 5.47% 5.47% 5.47% 5.47% 5.47% 5.47%Equity Return 1,254,305 1,254,305 (31) 1,254,274 1,368,862 1,368,862 7,996 1,376,859 1,486,016 1,486,016 14,658 1,500,673Gross Up 1.7806 1.4253 1.4253 1.4253 1.7806 1.4253 1.4253 1.4253 1.7806 1.4253 1.4253 1.4253Revenue Requirement 2,233,449 1,787,778 (45) 1,787,733 2,437,432 1,951,058 11,397 1,962,455 2,646,039 2,118,039 20,892 2,138,931

Total Revenue Requirement 2,233,449 1,787,778 (45) 1,787,733 2,437,432 1,951,058 11,397 1,962,455 2,646,039 2,118,039 20,892 2,138,931

Increase/(Decrease) in Revenue (445,671) (45) (445,716) (486,374) 11,397 (474,977) (528,000) 20,892 (507,108)

Current Current Rate Base New Current Current Rate Base New Current Current Rate Base New DEBT RETURN ON RATE BASE Model @ 35% Model @ 21% Changes Model Model @ 35% Model @ 21% Changes Model Model @ 35% Model @ 21% Changes Model

Original Rate Base 22,939,852 22,939,852 (570) 22,939,281 25,034,971 25,034,971 146,247 25,181,218 27,177,582 27,177,582 268,072 27,445,654Debt Rate of Return 2.14% 2.14% 2.14% 2.14% 2.14% 2.14% 2.14% 2.14% 2.14% 2.14% 2.14% 2.14%

Total Revenue Requirement 491,234 491,234 (12) 491,222 536,099 536,099 3,132 539,231 581,981 581,981 5,740 587,721

Increase/(Decrease) in Revenue - (12) (12) - 3,132 3,132 - 5,740 5,740

Current Current F/T Tax New Current Current F/T Tax New Current Current F/T Tax New CURRENT YEAR F/T BENEFITS Model @ 35% Model @ 21% Changes Model Model @ 35% Model @ 21% Changes Model Model @ 35% Model @ 21% Changes Model

Total F/T Tax Deductions (1,345,734) (1,345,734) 17,097 (1,328,636) (1,351,908) (1,351,908) 34,156 (1,317,752) (1,387,210) (1,387,210) 180,153 (1,207,057)Federal Tax Rate 35.00% 21.00% 21.00% 21.00% 35.00% 21.00% 21.00% 21.00% 35.00% 21.00% 21.00% 21.00%Federal F/T Tax Benefits (471,007) (282,604) 3,590 (279,014) (473,168) (283,901) 7,173 (276,728) (485,523) (291,314) 37,832 (253,482)Federal Credits (9,791) (9,791) (9,791) (9,456) (9,456) (9,456) (9,098) (9,098) (9,098)State F/T Tax Benefits (100,544) (100,544) 683 (99,861) (96,917) (96,917) 107 (96,810) (89,837) (89,837) (994) (90,831)Total Tax Adjustments (581,342) (392,939) 4,273 (388,666) (579,541) (390,274) 7,280 (382,994) (584,458) (390,249) 36,838 (353,411)Gross Up 1.7806 1.4253 1.4253 1.4253 1.7806 1.4253 1.4253 1.4253 1.7806 1.4253 1.4253 1.4253

Total Revenue Requirement (1,035,153) (560,062) 6,091 (553,971) (1,031,945) (556,263) 10,377 (545,886) (1,040,702) (556,227) 52,505 (503,722)

Increase/(Decrease) in Revenue 475,091 6,091 481,182 475,682 10,377 486,059 484,475 52,505 536,980

Current Current New Current Current New Current Current New RECOVER P/Y TAX BENEFITS Model @ 35% Model @ 21% ARAM Model Model @ 35% Model @ 21% ARAM Model Model @ 35% Model @ 21% ARAM Model

F/T Tax Deductions 391,097 391,097 (220,218) 170,879 452,558 452,558 (218,856) 233,702 555,362 555,362 (380,000) 175,362Federal Tax Rate 35.00% 21.00% 21.00% 21.00% 35.00% 21.00% 21.00% 21.00% 35.00% 21.00% 21.00% 21.00%Federal F/T Tax Benefits 136,884 82,130 (46,246) 35,885 158,395 95,037 (45,960) 49,077 194,377 116,626 (79,800) 36,826Vacation ARAM 5,812 5,812 -

82,130 (40,434) 41,697 95,037 (45,960) 49,077 116,626 (79,800) 36,826Gross Up 1.7806 1.4253 1.4253 1.4253 1.7806 1.4253 1.4253 1.4253 1.7806 1.4253 1.4253 1.4253

Total Revenue Requirement 243,739 117,061 (57,630) 59,431 282,042 135,458 (65,507) 69,951 346,113 166,229 (113,740) 52,489

Increase/(Decrease) in Revenue (126,678) (57,630) (184,308) (146,584) (65,507) (212,091) (179,884) (113,740) (293,624)

Current Updated Current Updated Current UpdatedRevenue Restated @ Other Revenue Revenue Restated @ Other Revenue Revenue Restated @ Other Revenue

Requirement 21% Changes Requirement Requirement 21% Changes Requirement Requirement 21% Changes Requirement

Recovery of Expenses (excluding in 3,740,044 0 9,947 3,749,991 3,926,213 0 13,215 3,939,428 4,170,014 0 22,747 4,192,761Equity Return on Rate Base 2,233,449 (445,671) (45) 1,787,733 2,437,432 (486,374) 11,397 1,962,455 2,646,039 (528,000) 20,892 2,138,931Debt Return on Rate Base 491,234 - (12) 491,222 536,099 - 3,132 539,231 581,981 - 5,740 587,7212018 F/T Tax Benefits (1,035,153) 475,091 6,091 (553,971) (1,031,945) 475,682 10,377 (545,886) (1,040,702) 484,475 52,505 (503,722)Recovery of P/Y F/T Tax Benefits 243,739 (126,678) (57,630) 59,431 282,042 (146,584) (65,507) 69,951 346,113 (179,884) (113,740) 52,489

5,673,313 (97,258) (41,649) 5,534,406 6,149,841 (157,276) (27,386) 5,965,179 6,703,445 (223,409) (11,856) 6,468,1805,673,313 5,534,406 6,149,841 5,965,179 6,703,445 6,468,180

-

2018 2019 2020

A-42

Rate BaseFERC CPUC Total FERC CPUC Total FERC CPUC Total FERC CPUC Total FERC CPUC Total FERC CPUC Total FERC CPUC Total FERC CPUC Total FERC CPUC Total

Original Rate Base 5,618,892 22,939,852 28,558,7 5,97 ,798 25,03 ,971 31,009,769 6,3 7,928 27,177,582 33,525,510 5,633,659 22,939,281 28,572,9 1 6,053,30 25,181,218 31,23 ,522 6, 95,075 27, 5,65 33,9 0,729 1 767 (570) 1 ,197 78,506 1 6,2 7 22 ,753 1 7,1 7 268,072 15,219Total Rate of Return 7.61% 7.61% 7.61% 7.61% 7.61% 7.61% 7.61% 7.61% 7.61% 7.61% 7.61% 7.61% 7 61% 7.61% 7.61% 7.61% 7.61% 7.61%Return 27,553 1,7 5,539 2,173,092 5 ,63 1,90 ,961 2,359,595 83,027 2,067,997 2,551,023 28,676 1,7 5, 96 2,17 ,172 60,608 1,916,089 2,376,697 9 ,223 2,088,395 2,582,618 1,12 ( 3) 1,081 5,97 11,128 17,102 11,197 20,398 31,595Debt Rate 2.1 % 2.1 % 2.1 % 2.1 % 2.1 % 2.1 % 2.1 % 2.1 % 2.1 % 2.1 % 2.1 % 2.1 % 2.1 % 2.1 % 2.1 % 2.1 % 2.1 % 2.1 %Debt Return 120,323 91,23 611,557 127,9 536,099 66 ,0 3 135,935 581,981 717,916 120,639 91,222 611,861 129,625 539,231 668,856 139,086 587,721 726,807 316 (12) 30 1,681 3,132 ,813 3,151 5,7 0 8,891Equity Return 307,230 1,25 ,305 1,561,535 326,690 1,368,862 1,695,552 3 7,092 1, 86,016 1,833,107 308,037 1,25 ,27 1,562,311 330,983 1,376,858 1,707,8 1 355,137 1,500,67 1,855,811 808 (31) 777 ,293 7,996 12,289 8,0 6 1 ,658 22,70

Equity Return 307,230 1,25 ,305 1,561,535 326,690 1,368,862 1,695,552 3 7,092 1, 86,016 1,833,107 308,037 1,25 ,27 1,562,311 330,983 1,376,858 1,707,8 1 355,137 1,500,67 1,855,811 808 (31) 777 ,293 7,996 12,289 8,0 6 1 ,658 22,70Gross Up 1.7806 1.7806 1.7806 1.7806 1.7806 1.7806 1. 253 1. 253 1. 253 1. 253 1. 253 1. 253

5 7,062 2,233, 9 2,780,511 581,71 2, 37, 32 3,019,1 6 618,0 0 2,6 6,039 3,26 ,080 39,0 9 1,787,733 2,226,783 71,755 1,962, 55 2, 3 ,209 506,182 2,138,931 2,6 5,112 (108 013) ( 5,716) (553,729) (109,959) ( 7 ,978) (58 ,937) (111,859) (507,109) (618,967)Flow Through Taxes

FERC CPUC Total FERC CPUC Total FERC CPUC Total FERC CPUC Total FERC CPUC Total FERC CPUC Total FERC CPUC Total FERC CPUC Total FERC CPUC TotalFederal 2,379 (927,856) (925, 77) 2,5 8 (878,127) (875,579) 2,753 (782,5 2) (779,789) (35,228) (1,121,562) (1,156,790) (38,590) (1,075,190) (1,113,780) (32,573) (1,000,189) (1,032,762) (37 607) (193,706) (231,313) ( 1,138) (197,063) (238,201) (35,326) (217,6 7) (252,973)P/Y State Taxes on F/T Revenue (26,273) (37,763) (6 ,036) (30,893) (33,265) (6 ,158) (33,797) (61,370) (95,167) (17,267) ( 6,768) (6 ,035) (21,709) (20,502) ( 2,211) (2 ,682) ( 3,186) (67,868) 9 006 (9,005) 1 9,18 12,763 21,9 7 9,115 18,18 27,299State Taxes on Rate Base Adj 2,3 8 2,3 8 2,250 2,250 2,156 2,156 1,938 1,938 1,851 1,851 1,772 1,772 - ( 10) ( 10) - (399) (399) - (38 ) (38 )C/Y CA Normal zed Dif erences (19,959) 8,635 (11,325) (18,266) 9,792 (8, 75) (18, 31) 9,908 (8,523) (19,959) 8,635 (11,325) (18,266) 9,792 (8, 75) (18, 31) 9,908 (8,523) - - - - - - - (0) (0)

( 3,853) (95 ,637) (998, 90) ( 6,611) (899,350) (9 5,961) ( 9, 75) (831,8 8) (881,323) (72, 5 ) (1,157,758) (1,230,212) (78,565) (1,08 ,0 9) (1,162,615) (75,686) (1,031,695) (1,107,381) (28 601) (203,121) (231,722) (31,95 ) (18 ,699) (216,653) (26,211) (199,8 7) (226,058)Tax Rate 35% 35% 35% 35% 35% 35% 21% 21% 21% 21% 21% 21%

(15,3 9) (33 ,123) (3 9, 71) (16,31 ) (31 ,772) (331,087) (17,316) (291,1 7) (308, 63) (15,215) (2 3,129) (258,3 ) (16, 99) (227,650) (2 ,1 9) (15,89 ) (216,656) (232,550) 133 90,99 91,127 (185) 87,122 86,937 1, 22 7 , 91 75,913

State 2,536 (1,137,380) (1,13 ,8 ) 2,702 (1,096,3 5) (1,093,6 3) 2,905 (1,016,251) (1,013,3 6) 2,536 (1,129,651) (1,127,115) 2,702 (1,095,133) (1,092, 31) 2,905 (1,027,500) (1,02 ,595) - 7,729 7,729 - 1,212 1,212 - (11,2 9) (11,2 9)Tax Rate 8.8 % 8.8 % 8.8 % 8.8 % 8.8 % 8.8 % 8.8 % 8.8 % 8.8 % 8.8 % 8.8 % 8.8 % 8 8 % 8.8 % 8.8 % 8.8 % 8.8 % 8.8 %

22 (100,5 ) (100,320) 239 (96,917) (96,678) 257 (89,837) (89,580) 22 (99,861) (99,637) 239 (96,810) (96,571) 257 (90,831) (90,57 ) - 683 683 - 107 107 - (99 ) (99 )

Tax Credits (9,791) (9,791) (9, 56) (9, 56) (9,098) (9,098) (9,791) (9,791) (9, 56) (9, 56) (9,098) (9,098) - - - - - - - - -Vacation ARAM 5,812 5,812 - 5,812 5,812 - - - - - -

(15,12 ) ( , 58) ( 59,583) (16,075) ( 21,1 5) ( 37,221) (17,059) (390,081) ( 07,1 1) (1 ,991) (3 6,969) (361,960) (16,260) (333,916) (350,176) (15,637) (316,585) (332,222) 133 97, 89 97,622 (185) 87,229 87,0 5 1, 22 73, 96 7 ,919Gross Up 1.7806 1.7806 1.7806 1.7806 1.7806 1.7806 1. 253 1. 253 1. 253 1. 253 1. 253 1. 253Total Revenue Adjustment (26,931) (791, 1 ) (818,3 5) (28,62 ) (7 9,903) (778,527) (30,377) (69 ,589) (72 ,966) (21,367) ( 9 ,5 0) (515,907) (23,175) ( 75,935) ( 99,110) (22,288) ( 51,233) ( 73,521) 5 56 296,87 302, 38 5, 9 273,968 279, 17 8,089 2 3,356 251, 5

Equity Return 5 7,062 2,233, 9 2,780,511 581,71 2, 37, 32 3,019,1 6 618,0 0 2,6 6,039 3,26 ,080 39,0 9 1,787,733 2,226,783 71,755 1,962, 55 2, 3 ,209 506,182 2,138,931 2,6 5,112 (108 013) ( 5,716) (553,729) (109,959) ( 7 ,978) (58 ,937) (111,859) (507,109) (618,967)Debt Return 120,323 91,23 611,557 127,9 536,099 66 ,0 3 135,935 581,981 717,916 120,639 91,222 611,861 129,625 539,231 668,856 139,086 587,721 726,807 316 (12) 30 1,681 3,132 ,813 3,151 5,7 0 8,891F/T Taxes (26,931) (791, 1 ) (818,3 5) (28,62 ) (7 9,903) (778,527) (30,377) (69 ,589) (72 ,966) (21,367) ( 9 ,5 0) (515,907) (23,175) ( 75,935) ( 99,110) (22,288) ( 51,233) ( 73,521) 5 56 296,87 302, 38 5, 9 273,968 279, 17 8,089 2 3,356 251, 5

6 0, 5 1,933,269 2,573,723 681,03 2,223,628 2,90 ,662 723,598 2,533, 31 3,257,030 538,321 1,78 , 15 2,322,737 578,205 2,025,751 2,603,955 622,980 2,275, 19 2,898,398 (102,133) (1 8,85 ) (250,987) (102,829) (197,878) (300,707) (100,619) (258,013) (358,631)

Revenue from above 6 0, 5 1,933,269 2,573,723 681,03 2,223,628 2,90 ,662 723,598 2,533, 31 3,257,029 538,321 1,78 , 15 2,322,736 578,205 2,025,751 2,603,956 622,980 2,275, 19 2,898,399 (102,133) (1 8,85 ) (250,987) (102,829) (197,877) (300,706) (100,618) (258,012) (358,630)Other expenses 22,839 3,7 0,0 ,162,883 3,95 3,926,213 ,370,167 69, 62 ,170,01 ,639, 76 22,165 3,7 9,991 ,172,156 ,631 3,939, 28 ,38 ,059 73,56 ,192,761 ,666,325 (67 ) 9,9 7 9,273 677 13,215 13,892 ,102 22,7 7 26,8 9Total Revenue computed 1,063,293 5,673,313 6,736,606 1,12 ,988 6,1 9,8 1 7,27 ,829 1,193,060 6,703, 5 7,896,505 960, 86 5,53 , 06 6, 9 ,892 1,022,836 5,965,179 6,988,015 1,096,5 6, 68,180 7,56 ,72 (102 807) (138,907) (2 1,71 ) (102,152) (18 ,662) (286,81 ) (96,516) (235,265) (331,781)Check Total GRC Revenue 1,063,293 5,673,313 6,736,606 1,12 ,988 6,1 9,8 1 7,27 ,829 1,193,060 6,703, 5 7,896,505 960, 86 5,53 , 06 6, 9 ,892 1,022,836 5,965,179 6,988,015 1,096,5 6, 68,180 7,56 ,72 (102 807) (138,907) (2 1,71 ) (102,152) (18 ,662) (286,81 ) (96,516) (235,265) (331,781)

Difference - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - -

2019 2020SCE-59 SCE-60 CHANGES

2018 2019 2020 20 8 2019 2020 2018

A-43

Federal State Tax Effected Federal State Tax Effected Federal State Tax Effected Federal State Tax Effected Federal State Tax Effected Federal State Tax Effected Federal State Tax Effected Federal State Tax Effected Federal State Tax EffectedPretax Income 2,350,7 0 2 350 740 701, 61 2,606, 33 2 606 433 1,1 2,660 (255 692) (255 692) (441 199) 2,630,793 2 630 793 785,029 2 936 008 2 936 008 1,287,1 6 (305 216) (305 216) (502 1 8) 2,92 ,069 2 924 069 872,5 2 3 287 011 3 287 011 1, 1,026 (362 942) (362 942) (568 483)

Interest (618,022) (618 022) (18 , 18) (617,718) (617 718) (270,807) (304) ( 04) 86 390 (67 ,760) (674 760) (201,3 8) (669 947) (669 947) (293 705) (4 813) (4 81 ) 92 356 (732, 5 ) (732 454) (218,56 ) (723 563) (723 563) (317,210) (8 891) (8 891) 98 646

F/T DifferencesBook Depreciation 3 3,352 1,719,370 22 ,096 601,072 1,719,370 362,367 (257 719) - (138 271) 391, 19 1,837, 31 2 ,627 651 309 1 837 431 390 387 (259 889) - (145 760) 83,055 2,012,263 279,326 747 278 2 012 263 39, 31 (264 223) - (160 106) Tax Depreciation (229,533) (1,30 , 89) (163,519) (229,533) (1,30 , 89) (195,653) - - 32 135 (212,881) (1,3 8,727) (163,932) (212 881) (1 348 727) (193 736) - - 29 803 (231,208) (1, ,961) (176,288) (231 208) (1 444 961) (208,657) - - 32 369 Cost of Removal (253,775) (529, 28) (100,09 ) (253,775) (529, 28) (135,623) - - 35 528 (2 3,010) (535,551) (98,375) (243 010) (535 551) (132 396) - - 34 021 (22 ,363) (53 ,851) (9 ,397) (224 363) (534 851) (125,808) - - 31 411 Repairs (989,8 8) (989,8 8) (295,371) (989,8 8) (989,8 8) ( 33,950) - - 138 579 (1,022,826) (1,022,826) (305,211) (1 022 826) (1 022 826) ( 8, 07) - - 143 196 (1,0 9,135) (1,0 9,135) (313,062) (1 049 135) (1 049 135) ( 59,9 1) - - 146 879 ITCC 29,038 30,078 8,757 21,309 22,3 9 9, 3 7 729 7 729 (677) 27,179 27,863 8,171 24 492 25 176 10 798 2 687 2 687 (2 627) 25,922 26,261 7,765 35 710 36 049 15,685 (9 788) (9 788) (7 920) Cap Software ( 8,230) ( 8,230) (1 ,392) ( 8,230) ( 8,230) (21,1 ) - - 6 752 ( 0,950) ( 0,950) (12,219) (40 950) (40 950) (17 952) - - 5 733 (23,295) (23,295) (6,951) (23 295) (23 295) (10,213) - - 3 261 Interest 1,878 166 1,878 166 - - - 1,693 150 1 693 150 - - - 1,515 13 1 515 13 - - - M&E 2,102 2,102 627 2,102 2,102 922 - - (294) 2,172 2,172 6 8 2 172 2 172 952 - - (304) 2,217 2,217 662 2 217 2 217 972 - - (310) Ad Valorem (8,5 7) (8,5 7) (2,550) (8,5 7) (8,5 7) (3,7 7) - - 1 197 (13,536) (13,536) ( ,039) (12 061) (12 061) (5 288) (1 475) (1 475) 1 248 (1 ,608) (1 ,608) ( ,359) (13 147) (13 147) (5,76 ) (1 461) (1 461) 1 405 Preferred Dividends (1,3 8) (283) (809) (283) (539) - - (1,3 8) (283) (809) (283) (539) - - (1,3 8) (283) (809) (283) (539) - - Section 199 - - (19,217) (6,726) 19 217 - 6 726 - - (21 015) (7 355) 21 015 - 7 355 - - (23 038) (8,063) 23 038 - 8 063 State Taxes (6 ,035) (15,826) (6 ,036) (26,376) 1 - 10 551 ( 2,211) (10,6 ) (64 158) (25, 21) 21 947 - 14 777 (67,868) (16,0 2) (95 167) (36,291) 27 299 - 20 249

(1 220 825) (1 127 115) (358 388) (989 513) (1 134 844) (450 613) (231 312) 7 729 92 225 (1 155 991) (1 092 431) (341 109) (939 737) (1 093 643) (428 552) (216 254) 1 212 87 443 (1 100 630) (1 024 595) (323 496) (874 956) (1 013 346) (398 797) (225 674) (11 249) 75 301

Normalized Differences- CPUCBook Depreciation 1,389, 73 50,956 295,3 8 1,169,25 50,956 12,167 220 218 - (116 819) 1, 58,109 53,131 309,913 1 239 253 53 131 36 791 218 856 - (126 878) 1,550,575 56,59 329,573 1 321 578 56 594 65,80 228 997 - (136 231) Tax Depreciation (1,015,782) (29, 20) (215,369) (1,375,032) (29, 20) ( 82,952) 359 250 - 267 583 (1,017, 96) (37,9 3) (216,32 ) (1 325 952) (37 943) ( 66 263) 308 455 - 249 939 (1,029,313) ( 7, 5 ) (219, 70) (1 008 608) (47 454) (355,7 0) (20 705) - 136 270 AFUDC Debt ( 8, 57) (48 457) (13,560) ( 8, 57) (48 457) (19,7 ) - - 6 84 (52,182) (52 182) (1 ,602) (52 182) (52 82) (21 262) - - 6 660 (51,251) (51 251) (1 ,3 2) (51 251) (51 251) (20,883) - - 6 541 CPI 100,691 100 691 28,177 100,691 100 691 1,028 - - (12 851) 99,200 99 200 27,760 99 200 99 200 0, 20 - - (12 660) 106,006 106 006 29,66 106 006 106 006 3,193 - - (13 529) CIAC 2 6,969 246 969 69,111 2 6,969 246 969 100,630 - - (31 519) 263, 57 263 457 73,725 263 457 263 457 107 3 8 - - (33 623) 268,653 268 653 75,179 268 653 268 653 109, 65 - - (34 287) MSC (219, 7 ) (219 474) (61, 17) (219, 7 ) (219 474) (89, 27) - - 28 010 (211,20 ) (211 204) (59,103) (211 204) (211 204) (86 057) - - 26 955 (216,663) (216 663) (60,630) (216 663) (216 663) (88,282) - - 27 651 Cost of Removal (275,653) (57,887) (275,653) (96, 79) - - 38 591 (292,5 0) (61, 33) (292 540) (102 389) - - 40 956 (310, 89) (65,203) (310 489) (108,671) - - 43 468 Accured Vacation (3,587) (3 587) (1,00 ) (3,587) (3 587) (1, 62) - - 458 (3,691) (3 691) (1,033) (3 691) (3 691) (1 50 ) - - 471 (3,799) (3 799) (1,063) (3 799) (3 799) (1,5 8) - - 485

174 179 97 677 43 399 (405 289) 97 677 (1 6 239) 579 469 - 179 638 243 652 110 767 58 902 (283 660) 110 767 (92 916) 527 311 - 151 819 313 719 112 085 73 709 105 427 112 085 43 340 208 292 - 30 369

Normalized Differences- FERCBook Depreciation 275, 6 237 945 7 , 61 237,9 5 237 945 96,953 37 501 - (22 492) 29 ,989 253 956 79,683 253 956 253 956 103, 77 41 034 - (23 794) 309,019 273 793 8 ,015 273 793 273 793 111,560 35 226 - (27 545) Tax Depreciation (320,928) (3 ,533) (91, 56) (393,237) (3 ,533) (157, 30) 72 308 - 65 974 (3 6,8 7) (3 6,808) (97,058) (472 164) (346 808) (185,185) 125 317 - 88 127 (355,923) (370,199) (100,597) (393 241) (370 199) (158,906) 37 318 - 58 309 AFUDC Debt (16,535) (16 535) ( ,627) (16,535) (16 535) (6,737) - - 2 110 (19,381) (19 381) (5, 23) (19 381) (19 81) (7 897) - - 2 473 (20,269) (20 269) (5,672) (20 269) (20 269) (8,259) - - 2 587 CPI 1 ,7 14 744 ,126 1 ,7 14 744 6,008 - - (1 882) 23,013 23 013 6, 0 23 013 23 013 9 377 - - (2 937) 25,123 25 123 7,030 25 123 25 123 10,237 - - (3 206) MSC (32,137) (32 137) (8,993) (32,137) (32 137) (13,095) - - 4 01 ( 8,996) (48 996) (13,711) (48 996) (48 996) (19 96 ) - - 6 253 (51,3 8) (51 348) (1 ,369) (51 348) (51 348) (20,922) - - 6 553 Cost of Removal (33, 53) (33 453) (9,361) (33, 53) (33 453) (13,631) - - 4 269 (32, 55) (32 455) (9,082) (32 455) (32 455) (13 22 ) - - 4 142 (27,237) (27 237) (7,622) (27 237) (27 237) (11,098) - - 3 476 Repairs ( 8,566) (48 566) (13,590) ( 8,566) (48 566) (19,789) - - 6 198 (33,207) (33 207) (9,292) (33 207) (33 207) (13 530) - - 4 2 8 (36,792) (36 792) (10,296) (36 792) (36 792) (1 ,991) - - 4 696 Capitalized Software (3,2 7) (3 247) (909) (3,2 7) (3 247) (1,323) - - 414 (2,757) (2 757) (771) (2 757) (2 757) (1,123) - - 352 (1,568) (1 568) ( 39) (1 568) (1 568) (639) - - 200

(164 677) (225 783) (50 350) (274 486) (225 783) (109 044) 109 810 - 58 694 (165 640) (206 634) (49 215) (331 991) (206 634) (128 070) 166 351 - 78 855 (158 996) (208 497) (47 950) (231 539) (208 497) (93 019) 72 544 - 45 069

521 396 477 498 319 426 725 766 201 970 (248 268) 878 053 767 735 710 674 1 076 551 167 379 (308 816) 1 245 708 1 070 609 1 562 380 1 453 691 (316 671) (383 082) 521,396 77, 98 319, 26 725,766 201 970 (248 268) 878,053 767,735 710 674 1 076 551 167 379 (308 816) 1,2 5,708 1,070,609 1 562 380 1 453 691 (316 672) (383 082)

Check 0 - - - 0 - - - (0) 0 0 (0) - - (0) 0 0 (0)

21% 8.8 % 35% 8.8 % 21% 8.8 % 35% 8.8 % 21% 8.8 % 35% 8.8 %Tax on Pretax 93,655 207,805 701 461 912,251 230, 09 1 142 660 (418 596) (22 603) (441 199) 552, 67 232,562 785 029 1,027,603 259,5 3 1 287 146 (475 136) (26 98 ) (502 1 8) 61 ,055 258, 88 872 542 1,150, 5 290,572 1 441 026 (536 399) (32 084) (568 483) Interest Benefit (129,785) (5 ,633) (184 418) (216,201) (5 ,606) (270 807) 86 417 (27) 86 390 (1 1,700) (59,6 9) (201 348) (23 , 82) (59,223) (293 705) 92 782 (425) 92 356 (153,815) (6 ,7 9) (218 564) (253,2 7) (63,963) (317 210) 99 432 (786) 98 646 F/T Taxes (2 2,926) (99,637) (342 563) (323,917) (100,320) (424 237) 80 991 683 81 674 (233,89 ) (96,571) (330 465) (306, 53) (96,678) (403 131) 72 559 107 72 666 (216,880) (90,57 ) (307 454) (272,926) (89,580) (362 506) 56 046 (994) 55 052 Fed Benefit of St Taxes (13, 7) (2 378) (15 826) (22, 13) (3 964) (26 376) 8 965 1 585 10 551 (8,86 ) (1 780) (10 644) (22, 55) (2 966) (25 421) 13 591 1 186 14 777 (1 ,252) (1 790) (16 042) (33,308) (2 983) (36 291) 19 056 1 193 20 249 Tax Credits (9,791) (9 791) (9,791) - (9 791) 0 - 0 (9 456) (9 456) (9 456) - (9 456) (0) - (0) (9,098) (9 098) (9 098) - (9 098) 0 - 0

97 707 51 157 148 864 339 930 71 519 411 448 (242 223) (20 61) (262 584) 158 553 74 563 233 115 454 758 100 676 555 433 (296 205) (26 11 ) (322 3 8) 220 009 101 375 321 84 581 874 134 046 715 920 (361 865) (32 671) (394 537)

CPUC Norma ized 36,578 5,613 2,190 (1 1,851) 5,613 (136,239) 178 429 - 178, 29 51,167 6,365 57,532 (99,281) 6,365 (92 916) 150 448 - 150, 8 65,881 6, 0 72,321 36,899 6, 0 3,3 0 28 982 - 28,982FERC Normalized (3 ,582) (12,973) ( 7,556) (96,070) (12,973) (109,0 ) 61 488 - 61, 88 (3 ,78 ) (11,873) ( 6,658) (116,197) (11,873) (128 070) 81 412 - 81, 12 (33,389) (11,980) ( 5,369) (81,039) (11,980) (93,019) 47 650 - 7,650

1 996 (7 361) (5 365) (237 921) (7 361) (245 282) 239 917 - 239 917 16 382 (5 509) 10 874 (215 478) (5 509) (220 986) 231 860 - 231 860 32 492 (5 540) 26 952 (44 139) (5 540) (49 679) 76 631 - 76 631

2020 2020- Prior Version Changes2018 2018- Prior Version Changes 2019 2019-Prior Version ChangesSCE-59 SCE-60SCE-59 SCE-60 SCE-59 SCE-60

A-44

Southern California EdisonSummary of Electric Rate Base CPUCNominal $ in Thousands


Fixed Capital1 Plant in Service 30,829,338 32,872,349 35,199,552 37,503,632 40,162,597 42,814,5462 Cap ta ized Software 1,422,803 1,344,128 1,272,719 1,133,514 1,181,706 1,488,7953 Other Intangibles 183 896 198 598 208 845 212 643 221 768 223 7364 Total Fixed Capital 32,436,037 34,415,075 36,681,115 38,849,789 41,566,071 44,527,078


Working Capital8 Materials & Supp ies 178,768 183,970 195,714 212,650 227,446 234,6439 Mountainview Emission Cred ts 6,774 6,106 5,468 4,861 4,284 3,734

10 Working Cash 333 693 313 459 319 159 287 483 325 164 377 13511 Total Working Capital 519,235 503,535 520,341 504,995 556,894 615,512

Reserves12 Accumulated Depreciation Reserve (10,720,526) (10,570,393) (10,963,163) (11,427,048) (11,965,497) (12,634,848) 13 Accumulated Amortization (922,594) (828,226) (705,892) (624,838) (623,853) (751,377)14 Accum. Def. Taxes - Plant (3,595,222) (3,740,155) (3,917,255) (4,058,039) (4,051,416) (4,033,443)15 Accum. Def. Taxes - Capitalized Interest - - - - - -16 Accum. Def. Taxes - CIAC 99,483 104,899 114,009 121,216 135,732 155,77117 Accum. Def. Taxes - Vacation Accrual 18,960 17,683 16,367 12,508 8,831 7,84918 Unfunded Pension Reserve (66 643) (66 842) (68 772) (79 293) (90 694) (92 402)19 Total Deductions for Reserves (15,186,542) (15,083,035) (15,524,706) (16,055,494) (16,586,897) (17,348,449)

20 Rate Base 17,699,240 19,766,486 21,609,006 23,226,981 25,456,930 27,709,379


Southern California EdisonSummary of Electric Rate Base CPUCNominal $ in Thousands


Fixed Capital1 Plant in Service 30,829,338 32,872,349 35,199,552 37,503,632 40,162,597 42,814,5462 Cap ta ized Software 1,422,803 1,344,128 1,272,719 1,133,514 1,181,706 1,488,7953 Other Intangibles 183 896 198 598 208 845 212 643 221 768 223 7364 Total Fixed Capital 32,436,037 34,415,075 36,681,115 38,849,789 41,566,071 44,527,078


Working Capital8 Materials & Supp ies 178,768 183,970 195,714 212,650 227,446 234,6439 Mountainview Emission Cred ts 6,774 6,106 5,468 4,861 4,284 3,734

10 Working Cash 333 693 313 459 319 159 329 674 375 365 422 66711 Total Working Capital 519,235 503,535 520,341 547,185 607,095 661,045

Reserves12 Accumulated Depreciation Reserve (10,720,526) (10,570,393) (10,963,163) (11,427,048) (11,965,497) (12,634,848) 13 Accumulated Amortization (922,594) (828,226) (705,892) (624,838) (623,853) (751,377)14 Accum. Def. Taxes - Plant (3,595,222) (3,740,155) (3,917,255) (4,113,258) (4,276,619) (4,382,115)15 Accum. Def. Taxes - Capitalized Interest - - - - - -16 Accum. Def. Taxes - CIAC 99,483 104,899 114,009 124,409 143,618 170,11617 Accum. Def. Taxes - Vacation Accrual 18,960 17,683 16,367 15,016 13,627 12,19718 Unfunded Pension Reserve (66 643) (66 842) (68 772) (71 395) (74 622) (76 027)19 Total Deductions for Reserves (15,186,542) (15,083,035) (15,524,706) (16,097,114) (16,783,345) (17,662,053)

20 Rate Base 17,699,240 19,766,486 21,609,006 23,227,552 25,310,683 27,441,307



Fixed Capital1 Plant in Service - - -2 Capita ized Software - - -3 Other Intangibles - - -4 Total Fixed Capital 32,436,037 34,415,075 36,681,115 0 0 0

Adjustments5 Customer Advances for Construction - - -6 Customer Deposits - - -7 Total Adjustments (69,490) (69,089) (67,745) 0 0 0

Working Capital8 Materials & Supp ies - - -9 Mountainview Emission Cred ts - - -

10 Working Cash (42 190) (50 201) (45 533)11 Total Working Capital 519,235 503,535 520,341 (42,190) (50,201) (45,533)

Reserves12 Accumulated Depreciation Reserve (10,720,526) (10,570,393) (10,963,163) - - -13 Accumulated Amortization (922,594) (828,226) (705,892) - - -14 Accum. Def. Taxes - Plant (3,595,222) (3,740,155) (3,917,255) 55,219 225,202 348,67215 Accum. Def. Taxes - Capitalized Interest - - - - - -16 Accum. Def. Taxes - CIAC 99,483 104,899 114,009 (3,193) (7,886) (14,345)17 Accum. Def. Taxes - Vacation Accrual 18,960 17,683 16,367 (2,508) (4,796) (4,348)18 Unfunded Pension Reserve (66 643) (66 842) (68 772) (7 898) (16 072) (16 375)19 Total Deductions for Reserves (15,186,542) (15,083,035) (15,524,706) 41,620 196,448 313,604

20 Rate Base 17,699,240 19,766,486 21,609,006 (570) 146,247 268,072


A-46

CHAPTER VI

SUMMARY OF CHANGES

TO

WORKING CASH

A-48

SOUTHERN CALIFORNIA EDISONChanges in Cash Working Capital | Total Company (CPUC + FERC)$ in Thousands

Line No. SCE-59 SCE-60 ChangeWorking Cash

1. Income Tax Deferred 34,883 5,815 (29,068)2. California State Tax 6,400 4,211 (2,189)3. Federal Income Tax 5,976 5,853 (123)4. Uncollectibles 1,803 1,738 (66)5. Franchise Requirements (36,970) (35,624) 1,3466. Unchanged Lead Lag requirements 384,756 384,756 - 7. Total Lead-Lag Working Cash Requirement 396,848 366,748 (30,100)8. Other Accounts Receivable (OAR) 82,027 73,323 (8,704)9. Workers' Compensation (56,383) (61,680) (5,297)

10. Long-Term Incentive Plan (LTIP) (4,315) (5,244) (929)11. Unchanged Operational Cash Requirement (66,311) (66,311) - 12. Total Operational Cash Requirement (44,982) (59,912) (14,930)13. Total Working Cash Requirement 351,866 306,836 (45,030)

14. Unfunded Pension Reserves (76,201) (84,631) (8,429)15. Total Changes in Rate Base1/ (53,460)

1/ Excludes changes to Deferred Taxes

A-49

Southern California EdisonWorking Cash Capital - Other Accounts Receivable | Total Company (CPUC + FERC)$ in Thousands

LineNo. Account Account Description 2018 2019 2020 2018 2019 2020 2018 2019 20201 1151010 Other Accounts Receivable - Reconciliation Account 40,271,587 41,124,917 41,981,431 40,271,587 41,124,917 41,981,431 - - - 2 1151085 Accounts Receivable - Damage Claims Recon 15,743,115 16,076,702 16,411,533 15,743,115 16,076,702 16,411,533 - - - 3 1151177 Cal CDP Trust Receivable (97,576) (99,644) (101,719) (97,576) (99,644) (101,719) - - - 4 1151200 HCRA Trust Receivable - Prior Year 68,944 73,770 78,934 68,944 73,770 78,934 - - - 5 1151205 DCRA Trust Receivable - Prior Year 67,277 68,703 70,134 67,277 68,703 70,134 - - - 6 1151220 PBOP Trust Reimbursement Receivable 64,449,351 68,960,805 73,788,062 64,449,351 68,960,805 73,788,062 - - - 7 1151225 Employee Tools/Safety Receivable (57,168) (58,379) (59,595) (57,168) (58,379) (59,595) - - - 8 1151235 Medicare RX Reimbursements 196,680 210,447 225,178 196,680 210,447 225,178 - - - 9 1151250 Pension Plan Trustee 1,168,048 1,192,798 1,217,641 1,168,048 1,192,798 1,217,641 - - - 10 1151260 OAR - Northern Trust - VEBA 628,503 641,820 655,188 628,503 641,820 655,188 - - - 11 Total Other Accounts Receivable 122,438,759 128,191,939 134,266,786 122,438,759 128,191,939 134,266,786 - - -

12 1153020 Provision for Doubtful Accounts - CRE (7,392,986) (7,549,639) (7,706,876) (7,392,986) (7,549,639) (7,706,876) - - - 13 1153040 Provision for Doubtful Accounts - PWRD (908,895) (928,154) (947,485) (908,895) (928,154) (947,485) - - - 14 1153080 Provision for Doubtful Accounts - PMO (1,595,265) (1,629,068) (1,662,997) (1,595,265) (1,629,068) (1,662,997) - - - 15 1153090 Provision for Doubtful Accounts - Catalina Island (1,301) (1,328) (1,356) (1,301) (1,328) (1,356) - - - 16 1153100 Provision for Doubtful Accounts - Damage Claims (5,982,384) (6,109,147) (6,236,383) (5,982,384) (6,109,147) (6,236,383) - - - 17 1153110 Provision for Doubtful Accounts - Accruals (246,591,684) (251,816,811) (257,061,433) (246,591,684) (251,816,811) (257,061,433) - - - 18 1153150 Provision for Doubtful Accounts - Write Off 194,271,338 198,387,828 202,519,678 194,271,338 198,387,828 202,519,678 - - - 19 Total Provision for Doubtful Accounts (68,201,177) (69,646,318) (71,096,851) (68,201,177) (69,646,318) (71,096,851) - - - 20 Tax Rate 40.75% 40.75% 40.75% 27.98% 27.98% 27.98% -12.76% -12.76% -12.76%21=19*20 Tax Adjustment 27,789,252 28,378,089 28,969,123 19,085,417 19,489,826 19,895,743 (8,703,834) (8,888,263) (9,073,380) 22=11+19+21 Total Other Accounts Receivable 82,026,834 86,923,710 92,139,058 73,323,000 78,035,447 83,065,678 (8,703,834) (8,888,263) (9,073,380)

SCE-59 SCE-60 Change

A-50

Southern California EdisonWorking Cash Capital - Workers Compensation | Total Company (CPUC + FERC)$ in Thousands

LineNo. 2017 2018 2019 2020 2017 2018 2019 2020 2017 2018 2019 2020

1 925 Expense 35,758 30,608 31,283 31,993 35,758 30,608 31,283 31,993 - - - - 2 Less: Payments (51,374) (54,897) (56,311) (36,435) (51,374) (54,897) (56,311) (36,435) - - - - 3 Net Expense (15,616) (24,289) (25,029) (4,442) (15,616) (24,289) (25,029) (4,442) - - - - 4 Pre Tax Balance (107,299) (83,010) (57,981) (53,539) (107,299) (83,010) (57,981) (53,539) - - - - 5 Tax Rate 40.746% 40.746% 40.746% 40.746% 40.746% 27.984% 27.984% 27.984% 0.000% -12.762% -12.762% -12.762%6 After Tax Balance (63,579) (49,187) (34,356) (31,724) (63,579) (59,780) (41,756) (38,557) - (10,594) (7,400) (6,833) 7 Avg After Tax Balance (56,383) (41,771) (33,040) (61,680) (50,768) (40,156) (5,297) (8,997) (7,116)

ItemSCE-59 ChangeSCE-60

A-51

Southern California EdisonWorking Cash Capital - Long-Term Incentive Plan | Total Company (CPUC + FERC)$ in Thousands

SCE-59 SCE-60 ChangeLine No. Item 2018 2019 2020 2018 2019 2020 2018 2019 2020

Pre Tax1 Stock Options (4,056) (10,947) (16,852) (4,056) (10,947) (16,852) - - - 2 Restricted Stock Units (1,612) (3,629) (4,545) (1,612) (3,629) (4,545) - - - 3 Performance Shares (1,614) (3,632) (4,550) (1,614) (3,632) (4,550) - - - 4= (1:3) Pretax Total LTIP (7,282) (18,208) (25,948) (7,282) (18,208) (25,948) - - -

5 Tax Rate 40.75% 40.75% 40.75% 27.98% 27.98% 27.98% -12.76% -12.76% -12.76%After Tax6=1*(1-tax rate) Stock Options (2,404) (6,486) (9,986) (2,921) (7,883) (12,136) (518) (1,397) (2,151)7=2*(1-tax rate) Restricted Stock Units (955) (2,150) (2,693) (1,161) (2,613) (3,273) (206) (463) (580)

8=3*(1-tax rate) Performance Shares (956) (2,152) (2,696) (1,162) (2,616) (3,277) (206) (464) (581)9= Pretax Total LTIP (4,315) (10,789) (15,375) (5,244) (13,113) (18,686) (929) (2,324) (3,311)

A-52

Southern California EdisonWorking Cash Capital - Unfunded Pension Reserve | Total Company (CPUC + FERC)$ in Thousands

Line SCENo. Account Description Share 2017 2018 2019 2020 2017 2018 2019 2020 2017 2018 2019 2020

Actuary Forecast1 2245025 EXECUTIVE RETIREMENT PLAN 99% (109,899) (117,949) (123,505) (124,835) (109,899) (117,949) (123,505) (124,835) - - - - 2 2245115 SPECIAL PENSION PROV-ACCRUAL 100% - - - - - - - - - - - - 3 2245120 1963 EMPLMT AGRMT SURV BNFT 100% - - - - - - - - - - - - 4 2245125 SPECIAL PEN PROV-SURV BEN-JFD 100% - - - - - - - - - - - - 5 2245030 EXEC SURVIVOR BENEFIT 0% - - - - - - - - - - - - 6 2245035 SURVIVOR INCOME CONTINUATION 100% (7,189) (6,786) (6,497) (6,189) (7,189) (6,786) (6,497) (6,189) - - - - 7 2245050 EXEC 1985 DEF COMP DEATH BNFT 100% (6,545) (6,352) (6,163) (6,001) (6,545) (6,352) (6,163) (6,001) - - - - 8 2245040 SUPPL SURV INC/RETIR INC 100% (2,832) (2,473) (2,088) (1,678) (2,832) (2,473) (2,088) (1,678) - - - - 9 2245045 SUPPLEMENTAL LTD 100% - - - - - - - - - - - -

10 Total Actuary Forecast (126,465) (133,560) (138,253) (138,703) (126,465) (133,560) (138,253) (138,703) - - - - Less: Non-SCE Share 1,363 1,460 1,526 1,541 1,363 1,460 1,526 1,541 - - - - Total SCE Long Term Incentives (125,102) (132,100) (136,727) (137,162) (125,102) (132,100) (136,727) (137,162) - - - - Tax Rate 40.75% 40.75% 40.75% 40.75% 40.75% 27.98% 27.98% 27.98% 0.00% -12.76% -12.76% -12.76%Tax Adjustment 50,974 53,826 55,711 55,888 50,974 36,967 38,262 38,383 - (16,859) (17,449) (17,505) Total LTIP Net of Tax (74,128) (78,275) (81,016) (81,274) (74,128) (95,133) (98,465) (98,778) - (16,859) (17,449) (17,505) Average (76,201) (79,645) (81,145) (84,631) (96,799) (98,622) (8,429) (17,154) (17,477)

SCE-59 SCE-60 Change

A-53

BONUS DEPRECIATION ELIGIBLE

CAPITAL ADDITIONS

A-54

Southern California Edison2018 GRC ApplicationBonus Eligible Additions

Bonus Eligible AdditionsLine No. 2018 2019 2020

Specifics1 Bonus Eligible Adds 812,076 893,740 1,123,112 2 Total Adds 835,859 926,017 1,275,187

3=1/2 Percent Eligible 97% 97% 88%

Blanket Specifics4 Bonus Eligible Adds 296,345 - - 5 Total Adds 1,554,201 1,789,278 1,884,075


Blankets7 Bonus Eligible Adds - - - 8 Total Adds 321,016 308,925 315,866


Composite10 Bonus Eligible Adds 1,108,421 893,740 1,123,112 11 Total Adds 2,711,077 3,024,220 3,475,128

12=10/11 Composite 41% 30% 32%

A-55

CHAPTER VII

ADDED FACILITIES

A-56

Southern California Edison2018 GRC ApplicationAdded Facilities Rates | OOR Total Company$ in Thousands

1 2018 GRC | CoC Update SCE-Financed SCE-Financed Customer-FinancedFERC 454.300 FERC 454.350 FERC 456.700

Added Facilities Rates:CoC Update (Avg) 1/ 14.69 14.69 4.75Application (Avg) 1/ 15.16 15.16 4.70Change Factor 96.90% 96.90% 101.04%

Added Facilities OOR Forecast:Application 34,909 15,365 20,550Change Factor 96.90% 96.90% 101.04%CoC Update 33,827 14,889 20,764

OOR Forecast Adjustment (1,082) (476) 214

1 2018 GRC | Tax Update Testimony SCE-Financed SCE-Financed Customer-FinancedFERC 454.300 FERC 454.350 FERC 456.700

Added Facilities Rates:Tax Update Testimony (Avg) 1/ 13.85 13.85 4.72CoC Update (Avg) 1/ 14.69 14.69 4.75Change Factor 94.30% 94.30% 99.24%

Added Facilities OOR Forecast:CoC Update 33,827 14,889 20,764Change Factor 94.30% 94.30% 99.24%Tax Update Testimony 31,900 14,041 20,606

OOR Forecast Adjustment (1,927) (848) (158)

1/ Represents the simple average of rates across replacement coverage options

SCE-Financed SCE-Financed Customer-Financed TotalFERC 454.300 FERC 454.350 FERC 456.700

Application OOR 34,909 15,365 20,550 70,824Change (1,082) (476) 214 (1,344)CoC OOR 33,827 14,889 20,764 69,480Change (1,927) (848) (158) (2,933)Tax Update OOR 31,900 14,041 20,606 66,547

Total OOR Change (3,009) (1,324) 56 (4,277)

A-57

2018 GRC | ApplicationSCE Financed Customer Financed



No Additional Cost




No Additional Cost


No Additional CostLine Rate (%) (%) (%) (%) (%) (%)No. Components (1) (2) (3) (4) (5) (6)

1 Overhead A&G, 2.51 2.56 2.77 2.51 2.55 2.752 Ad Val., & Ins.34 Return, Depreciation,5 and Income Taxes 10.44 10.44 10.44 – – –67 Replacement – 0.20 1.08 – 0.19 1.0889 Total 12.95 13.19 14.29 2.51 2.74 3.83

10 Average O&M 1.61 1.64 1.78 1.61 1.64 1.771112 Annual 14.56 14.84 16.07 4.12 4.38 5.6013 Monthly 1.21 1.24 1.34 0.34 0.37 0.471415 One-Time-16 Payment Factor – 146.76 201.31 – 43.36 70.21

2018 GRC | CoC Update CoC Update vs Application Variance ($)SCE Financed Customer Financed SCE Financed Customer Financed



No Additional Cost




No Additional Cost




No Additional Cost




No Add tional Cost


No Additional CostLine Rate (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%)No. Components (1) (2) (3) (4) (5) (6) (1) (2) (3) (4) (5) (6)

1 Overhead A&G, 2.50 2.55 2.80 2.50 2.55 2.78 (0.01) (0.00) 0.03 (0.01) (0.00) 0.032 Ad Val., & Ins.34 Return, Depreciation,5 and Income Taxes 9.92 9.92 9.92 – – – (0.52) (0.52) (0.52) – – –67 Replacement – 0.21 1.16 – 0.20 1.16 – 0.01 0.08 – 0.01 0.0889 Total 12.42 12.69 13.89 2.50 2.75 3.95 (0.53) (0.51) (0.40) (0.01) 0.01 0.11

10 Average O&M 1.61 1.65 1.81 1.61 1.65 1.79 – 0.00 0.02 – 0.00 0.021112 Annual 14.04 14.33 15.69 4.12 4.40 5.74 (0.53) (0.50) (0.38) (0.01) 0.02 0.1413 Monthly 1.17 1.19 1.31 0.34 0.37 0.48 (0.04) (0.04) (0.03) (0.00) 0.00 0.011415 One-Time-16 Payment Factor – 144.94 203.71 – 44.49 74.54 (1.82) 2.39 1.14 4.34

2018 GRC | Tax Reform Tax Reform vs CoC Update Variance ($) Tax Reform vs Application Variance ($)SCE Financed Customer Financed SCE Financed Customer Financed SCE Financed Customer Financed



No Additional Cost




No Additional Cost




No Additional Cost




No Add tional Cost




No Additional Cost

Replacement (Perpetu ty) at

No Add tional CostReplacement at Additional Cost


No Additional Cost


No Additional CostLine Rate (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%)No. Components (1) (2) (3) (4) (5) (6) (1) (2) (3) (4) (5) (6) (1) (2) (3) (4) (5) (6)

1 Overhead A&G, 2.50 2.55 2.80 2.50 2.55 2.78 – – – – – – (0.01) (0.00) 0.03 (0.01) (0.00) 0.032 Ad Val., & Ins.34 Return, Depreciation,5 and Income Taxes 9.12 9.12 9.12 – – – (0.80) (0.80) (0.80) – – – (1.32) (1.32) (1.32)67 Replacement – 0.19 1.07 – 0.18 1.07 – (0.02) (0.09) – (0.02) (0.09) – (0.00) (0.01) – (0.00) (0.01)89 Total 11.62 11.87 12.99 2.50 2.74 3.85 (0.80) (0.82) (0.89) – (0.02) (0.09) (1.33) (1.32) (1.30) (0.01) (0.00) 0.02

10 Average O&M 1.61 1.65 1.81 1.61 1.65 1.79 – – – – – – – 0.00 0.02 – 0.00 0.021112 Annual 13.24 13.52 14.80 4.12 4.38 5.65 (0.80) (0.82) (0.89) – (0.02) (0.09) (1.33) (1.32) (1.27) (0.01) 0.00 0.0413 Monthly 1.10 1.13 1.23 0.34 0.37 0.47 (0.07) (0.07) (0.07) – (0.00) (0.01) (0.11) (0.11) (0.11) (0.00) 0.00 0.001415 One-Time-16 Payment Factor – 136.68 192.12 – 44.33 73.34 (8.26) (11.59) (0.16) (1.20) (10.09) (9.19) 0.97 3.13

A-58

SUPPLEMENTAL SUPPORT

COMPARISON TABLES

A-59

RATEBASE

A-60

Southern California Edison2018 GRCRate Base | Total Company (CPUC + FERC) Thousands of Dollars

LineNo. Item CPUC FERC Total CPUC FERC Total CPUC FERC Total

FIXED CAPITAL1 Plant in Service 37,503,632 9,033,513 46,537,145 40,162,597 9,655,938 49,818,535 42,814,546 10,308,900 53,123,4462 Capitalized Software 1,133,514 76,304 1,209,818 1,181,706 79,548 1,261,255 1,488,795 100,220 1,589,0163 Other Intangibles 212,643 14,314 226,958 221,768 14,929 236,696 223,736 15,061 238,7974 Total Fixed Capital 38,849,789 9,124,132 47,973,921 41,566,071 9,750,415 51,316,486 44,527,078 10,424,182 54,951,259

ADJUSTMENTS5 Customer Advances for Construction (72,308) – (72,308) (79,137) – (79,137) (84,762) – (84,762)7 Customer Deposits – – – – – – – – –

Total Adjustments (72,308) – (72,308) (79,137) – (79,137) (84,762) – (84,762)

WORKING CAPITAL6 Materials & Supplies 212,650 14,315 226,965 227,446 15,311 242,757 234,643 15,795 250,4387 Mountainview Emission Credits 4,861 – 4,861 4,284 – 4,284 3,734 – 3,7348 Working Cash 329,674 22,192 351,866 375,365 25,268 400,633 422,667 28,452 451,1209 Total Working Capital 547,185 36,507 583,692 607,095 40,579 647,674 661,045 44,248 705,293

DEDUCTIONS FOR RESERVES10 Accumulated Depreciation Reserve (11,427,048) (1,748,611) (13,175,659) (11,965,497) (1,907,838) (13,873,335) (12,634,848) (2,086,231) (14,721,079)11 Accumulated Amortization (624,838) (42,062) (666,900) (623,853) (41,996) (665,848) (751,377) (50,580) (801,957)12 Accum. Def. Taxes - Plant (4,113,258) (1,747,278) (5,860,535) (4,276,618) (1,862,256) (6,138,874) (4,382,114) (1,979,393) (6,361,507)13 Accum. Def. Taxes - Capitalized Interest – – – – – – – – –14 Accum. Def. Taxes - CIAC 124,409 – 124,409 143,618 – 143,618 170,116 – 170,11615 Accum. Def. Taxes - Vacation Accrual 15,016 1,011 16,027 13,627 917 14,544 12,197 821 13,01816 Unfunded Pension Reserve (71,395) (4,806) (76,201) (74,622) (5,023) (79,645) (76,027) (5,118) (81,145)17 Total Deductions for Reserves (16,097,114) (3,541,746) (19,638,860) (16,783,345) (3,816,195) (20,599,541) (17,662,053) (4,120,501) (21,782,554)

18 RATE BASE 23,227,552 5,618,893 28,846,445 25,310,683 5,974,799 31,285,482 27,441,307 6,347,929 33,789,236Plus: Legacy Meters – – – – – – – – –Plus: Rate Base Adjustment – – – – – – – – –Total Rate Base 23,227,552 5,618,893 28,846,445 25,310,683 5,974,799 31,285,482 27,441,307 6,347,929 33,789,236

SCE-592018 2019 2020

A-61


LineNo. Item

FIXED CAPITAL1 Plant in Service2 Capitalized Software3 Other Intangibles4 Total Fixed Capital

ADJUSTMENTS5 Customer Advances for Construction7 Customer Deposits

Total Adjustments

WORKING CAPITAL6 Materials & Supplies7 Mountainview Emission Credits8 Working Cash9 Total Working Capital

DEDUCTIONS FOR RESERVES10 Accumulated Depreciation Reserve11 Accumulated Amortization12 Accum. Def. Taxes - Plant13 Accum. Def. Taxes - Capitalized Interest14 Accum. Def. Taxes - CIAC15 Accum. Def. Taxes - Vacation Accrual16 Unfunded Pension Reserve17 Total Deductions for Reserves

18 RATE BASEPlus: Legacy MetersPlus: Rate Base AdjustmentTotal Rate Base

CPUC FERC Total CPUC FERC Total CPUC FERC Total

37,503,632 9,033,513 46,537,145 40,162,597 9,655,938 49,818,535 42,814,546 10,308,900 53,123,4461,133,514 76,304 1,209,818 1,181,706 79,548 1,261,255 1,488,795 100,220 1,589,016212,643 14,314 226,958 221,768 14,929 236,696 223,736 15,061 238,797

38,849,789 9,124,132 47,973,921 41,566,071 9,750,415 51,316,486 44,527,078 10,424,182 54,951,259

(72,308) – (72,308) (79,137) – (79,137) (84,762) – (84,762)– – – – – – – – –

(72,308) – (72,308) (79,137) – (79,137) (84,762) – (84,762)

212,650 14,315 226,965 227,446 15,311 242,757 234,643 15,795 250,4384,861 – 4,861 4,284 – 4,284 3,734 – 3,734

287,483 19,352 306,836 325,164 21,889 347,053 377,135 25,387 402,522504,995 33,667 538,662 556,894 37,200 594,094 615,512 41,183 656,695

(11,427,048) (1,748,611) (13,175,659) (11,965,497) (1,907,838) (13,873,335) (12,634,848) (2,086,231) (14,721,079)(624,838) (42,062) (666,900) (623,853) (41,996) (665,848) (751,377) (50,580) (801,957)

(4,058,039) (1,728,971) (5,787,010) (4,051,416) (1,778,967) (5,830,383) (4,033,443) (1,827,787) (5,861,230)– – – – – – – – –

121,216 – 121,216 135,732 – 135,732 155,771 – 155,77112,508 842 13,350 8,831 594 9,425 7,849 528 8,377(79,293) (5,338) (84,631) (90,694) (6,105) (96,799) (92,402) (6,220) (98,622)

(16,055,494) (3,524,140) (19,579,634) (16,586,897) (3,734,311) (20,321,208) (17,348,449) (3,970,290) (21,318,739)

23,226,981 5,633,659 28,860,641 25,456,930 6,053,304 31,510,235 27,709,379 6,495,075 34,204,454– – – – – – – – –– – – – – – – – –

23,226,981 5,633,659 28,860,641 25,456,930 6,053,304 31,510,235 27,709,379 6,495,075 34,204,454

SCE-602018 2019 2020

A-62


LineNo. Item

FIXED CAPITAL1 Plant in Service2 Capitalized Software3 Other Intangibles4 Total Fixed Capital

ADJUSTMENTS5 Customer Advances for Construction7 Customer Deposits

Total Adjustments

WORKING CAPITAL6 Materials & Supplies7 Mountainview Emission Credits8 Working Cash9 Total Working Capital

DEDUCTIONS FOR RESERVES10 Accumulated Depreciation Reserve11 Accumulated Amortization12 Accum. Def. Taxes - Plant13 Accum. Def. Taxes - Capitalized Interest14 Accum. Def. Taxes - CIAC15 Accum. Def. Taxes - Vacation Accrual16 Unfunded Pension Reserve17 Total Deductions for Reserves

18 RATE BASEPlus: Legacy MetersPlus: Rate Base AdjustmentTotal Rate Base

CPUC FERC Total CPUC FERC Total CPUC FERC Total

– – – – – – – – –– – – – – – – – –– – – – – – – – –– – – – – – – – –

– – – – – – – – –– – – – – – – – –– – – – – – – – –

– – – – – – – – –– – – – – – – – –

(42,190) (2,840) (45,030) (50,201) (3,379) (53,580) (45,533) (3,065) (48,598)(42,190) (2,840) (45,030) (50,201) (3,379) (53,580) (45,533) (3,065) (48,598)

– – – – – – – – –– – – – – – – – –

55,218 18,307 73,525 225,202 83,289 308,491 348,671 151,606 500,278– – – – – – – – –

(3,193) – (3,193) (7,886) – (7,886) (14,344) – (14,344)(2,508) (169) (2,677) (4,796) (323) (5,119) (4,348) (293) (4,641)(7,898) (532) (8,429) (16,072) (1,082) (17,154) (16,375) (1,102) (17,477)41,620 17,606 59,226 196,448 81,885 278,333 313,604 150,211 463,815

(570) 14,766 14,196 146,247 78,505 224,753 268,072 147,146 415,218– – – – – – – – –– – – – – – – – –

(570) 14,766 14,196 146,247 78,505 224,753 268,072 147,146 415,218

2019 2020Change

2018

A-63

INCOME TAXES

A-64

Southern California Edison2018 GRCIncome Taxes | Total Company (CPUC + FERC)Thousands of Dollars

Income Tax Adjustments SCE-59 SCE-60 ChangeCalifornia Income Tax Adjustments 2018 2019 2020 2018 2019 2020 2018 2019 2020Tax Depreciation 1,678,443 1,733,478 1,862,613 1,678,443 1,733,478 1,862,613 – – –Interest On Long-Term Debt 617,718 669,947 723,563 618,022 674,760 732,454 304 4,813 8,891Interest On Accumulated Deferred ITC (1,878) (1,693) (1,515) (1,878) (1,693) (1,515) – – –Uniform Capitalization 201,168 209,551 208,403 201,168 209,551 208,403 – – –Capitalized Software 51,477 43,706 24,864 51,477 43,706 24,864 – – –Ad Valorem Lien Date Adjustment 8,547 12,061 13,147 8,547 13,536 14,608 – 1,475 1,461Removal Costs 562,882 568,006 562,088 562,882 568,006 562,088 – – –Amortization of Land Rights – – – – – – – – –CIAC Revenues (269,318) (288,633) (304,702) (277,047) (291,320) (294,914) (7,729) (2,687) 9,788Non Deductible Meals (2,102) (2,172) (2,217) (2,102) (2,172) (2,217) – – –Excess Compensation 3,587 3,691 3,799 3,587 3,691 3,799 – – –ESOP Dividends – – – – – – – – –Leased Vehicles – – – – – – – – –Repair Deduction 1,038,414 1,056,033 1,085,928 1,038,414 1,056,033 1,085,928 – – –Total CCFT Adjustments 3,888,938 4,003,975 4,175,971 3,881,513 4,007,576 4,196,111 (7,425) 3,601 20,140

Federal Income Tax Adjustments 2018 2019 2020 2018 2019 2020 2018 2019 2020Tax Depreciation 1,997,802 2,010,997 1,633,057 1,566,244 1,577,224 1,616,444 (431,559) (433,772) (16,613)Interest On Long-Term Debt 617,718 669,947 723,563 618,022 674,760 732,454 304 4,813 8,891Uniform Capitalization 201,168 209,551 208,403 201,168 209,551 208,403 – – –Capitalized Software 51,477 43,706 24,864 51,477 43,706 24,864 – – –Ad Valorem Lien Date Adjustment 8,547 12,061 13,147 8,547 13,536 14,608 – 1,475 1,461Repair Deduction 1,038,414 1,056,033 1,085,928 1,038,414 1,056,033 1,085,928 – – –Removal Costs 562,882 568,006 562,088 562,882 568,006 562,088 – – –Amortization of Land Rights – – – – – – – – –CIAC Revenues (268,278) (287,949) (304,363) (276,006) (290,636) (294,575) (7,728) (2,687) 9,788Non Deductible Meals (2,102) (2,172) (2,217) (2,102) (2,172) (2,217) – – –Excess Compensation 3,587 3,691 3,799 3,587 3,691 3,799 – – –Leased Vehicles – – – – – – – – –ESOP Dividends – – – – – – – – –Preferred Dividend Deduction 809 809 809 1,348 1,348 1,348 539 539 539Section 199 Manufacturer's Deduction 19,217 21,015 23,038 – – – (19,217) (21,015) (23,038)Total FIT Adjustments 4,231,241 4,305,695 3,972,114 3,773,581 3,855,047 3,953,143 (457,661) (450,648) (18,971)

A-65


California Corporation Franchise Tax 2018 2019 2020 2018 2019 2020 2018 2019 2020Operating Revenues 6,769,689 7,306,534 7,926,830 6,523,217 7,015,159 7,590,688 (246,472) (291,375) (336,143)

Operating Expenses 1,763,031 1,811,199 1,854,566 1,772,252 1,823,564 1,876,953 9,220 12,366 22,387Taxes Other Than Income 391,954 414,809 442,604 391,954 416,284 447,016 – 1,475 4,412Subtotal Expenses 2,154,986 2,226,008 2,297,169 2,164,206 2,239,849 2,323,969 9,220 13,841 26,799Income Tax Adjustments 3,888,938 4,003,975 4,175,971 3,881,513 4,007,576 4,196,111 (7,425) 3,601 20,140California Taxable Income 725,766 1,076,551 1,453,691 477,498 767,734 1,070,608 (248,267) (308,816) (383,082)CCFT Tax Rate 8.8400% 8.8400% 8.8400% 8.8400% 8.8400% 8.8400% 8.8400% 8.8400% 8.8400%CCFT 64,158 95,167 128,506 42,211 67,868 94,642 (21,947) (27,299) (33,864)California Alternate Minimum Tax – – – – – – – – –

Arizona Income Tax Rate – – – – – – – – –Arizona Income Tax – – – – – – – – –Total Other State State Income Taxes – – – – – – – – –Total State Income Taxes 64,158 95,167 128,506 42,211 67,868 94,642 (21,947) (27,299) (33,864)

Federal Income Tax 2018 2019 2020 2018 2019 2020 2018 2019 2020Operating Revenues 6,769,689 7,306,534 7,926,830 6,523,217 7,015,159 7,590,688 (246,472) (291,375) (336,143)

Operating Expenses 1,763,031 1,811,199 1,854,566 1,772,252 1,823,564 1,876,953 9,220 12,366 22,387Taxes Other Than Income 391,954 414,809 442,604 391,954 416,284 447,016 – 1,475 4,412Total State Income Taxes 64,158 95,167 128,506 42,211 67,868 94,642 (21,947) (27,299) (33,864)Less: Current Year's CCFT 64,158 95,167 128,506 42,211 67,868 94,642 (21,947) (27,299) (33,864)Plus: Prior Year's CCFT 64,036 64,158 95,167 64,035 42,211 67,868 (1) (21,947) (27,299)Subtotal - Expenses 2,219,022 2,290,166 2,392,336 2,228,241 2,282,060 2,391,837 9,219 (8,106) (500)

Income Tax Adjustments (Sch M) 4,231,241 4,305,695 3,972,114 3,773,581 3,855,047 3,953,143 (457,661) (450,648) (18,971)

Federal Taxable Income 319,426 710,673 1,562,380 521,395 878,052 1,245,708 201,969 167,379 (316,672)FIT Tax Rate 35.0% 35.0% 35.0% 21.0% 21.0% 21.0% (14.0%) (14.0%) (14.0%)Federal Income Tax 111,799 248,736 546,833 109,493 184,391 261,599 (2,306) (64,345) (285,234)Taxes Deferred-current (Plant) 282,874 268,335 121,818 47,152 35,036 21,605 (235,722) (233,298) (100,213)Taxes Deferred-current (AFUDC Debt) – – – – – – – – –Taxes Deferred-current (Cap. Int.) – – – – – – – – –Contributions in Aid of Construction (39,053) (48,852) (73,686) (41,205) (45,756) (48,427) (2,152) 3,096 25,259Investment Tax Credit Amortization (9,791) (9,456) (9,098) (9,791) (9,456) (9,098) – – –Accrued Vacation 1,462 1,504 1,548 6,816 1,033 1,063 5,354 (471) (485)Total Federal Income Taxes 347,291 460,266 587,415 112,466 165,248 226,742 (234,826) (295,018) (360,673)

Total Taxes-Income (State and Fed) 411,449 555,433 715,921 154,676 233,116 321,384 (256,773) (322,318) (394,537)

A-66


Additional Detail Supporting Variances SCE-59 SCE-60 ChangeContributions in Aid of Construction (Federal) 2018 2019 2020 2018 2019 2020 2018 2019 2020CIAC Taxable IncomeCIAC Taxable Income 246,969 263,457 268,653 246,969 263,457 268,653 – – –Net ITCC CollectedEnd of Year Balance 731,948 803,248 898,042 731,948 795,325 860,327 – (7,922) (37,715)Beginning of Year Balance (669,028) (731,948) (803,248) (669,028) (731,948) (795,325) – – 7,922Reverse Book Income (Other Operating Revenue) (41,611) (46,808) (59,085) (33,882) (36,199) (39,080) 7,729 10,609 20,005Total CIAC 268,278 287,949 304,363 276,006 290,636 294,575 7,729 2,687 (9,788)

Section 199 Deduction 2018 2019 2020 2018 2019 2020 2018 2019 2020Other Generation - Net Rate Base 2,240,533 2,261,724 2,285,989 2,239,469 2,276,159 2,311,715 (1,064) 14,435 25,726After- Tax Rate of Return on Equity 5.54% 5.54% 5.54% 5.54% 5.54% 5.47% 5.54% 5.54% 5.47%Return on Equity 124,126 125,300 126,644 124,067 126,099 126,400 (59) 800 (244)Composite Tax Rate 40.75% 40.75% 40.75% 27.98% 27.98% 27.98% 27.98% 27.98% 27.98%Pre-Tax Book Income on Return on Equity 209,480 211,462 213,730 172,276 175,099 175,516 (37,204) (36,363) (38,214)Other Generation - Annual Book Depreciation 131,317 135,519 139,234 131,317 135,519 139,234 – – –Other Generation - Annual Tax Depreciation (108,753) (97,305) (83,746) (93,916) (87,438) (85,525) 14,837 9,867 (1,778)Generation - Repairs Deduction (18,525) (16,177) (13,238) (18,525) (16,177) (13,238) – – –Preliminary QPA/Limitation - Gross 213,519 233,499 255,980 191,152 207,003 215,988 (22,367) (26,495) (39,992)§199 Rate 9.0% 9.0% 9.0% – – – – – –Preliminary §199 (Deduction) 19,217 21,015 23,038 – – – (19,217) (21,015) (23,038)

Federal Taxable Income/(Loss) Before §199 (Deduction) 338,643 731,688 1,585,418 521,395 878,052 1,245,708 182,752 146,364 (339,710)§199 Rate 9.0% 9.0% 9.0% – – – – – –Preliminary §199 (Deduction) 30,478 65,852 142,688 – – – (30,478) (65,852) (142,688)

§199 (Deduction) 19,217 21,015 23,038 – – – (19,217) (21,015) (23,038)

Investment Tax Credit Amortization 2018 2019 2020 2018 2019 2020 2018 2019 2020Federal Income Tax 111,799 248,736 546,833 109,493 184,391 261,599 (2,306) (64,345) (285,234)

Total Amortization (10,385) (10,039) (9,669) (10,385) (10,039) (9,669) – – –Less: CTC Related Amortization (594) (583) (571) (594) (583) (571) – – –Net Amortization (9,791) (9,456) (9,098) (9,791) (9,456) (9,098) – – –ITC Factor 78.9% 78.9% 78.9% 78.9% 78.9% 78.9% 78.9% 78.9% 78.9%ITC Amortization (7,723) (7,459) (7,176) (7,723) (7,459) (7,176) – – –

Annual ITC Amortization (9,791) (9,456) (9,098) (9,791) (9,456) (9,098) – – –

FERC Taxes Based on Income 2018 2019 2020 2018 2019 2020 2018 2019 2020Taxes Based on IncomeRate Base 5,618,893 5,974,799 6,347,929 5,633,659 6,053,304 6,495,075 14,766 78,505 147,146Rate of Return on Rate Base 5.47% 5.47% 5.47% 5.47% 5.47% 5.47% 5.47% 5.47% 5.47%Return on Rate Base 307,230 326,690 347,092 308,037 330,983 355,138 807 4,293 8,046Book Depreciation on AFUDC 2,403 2,565 2,766 2,403 2,565 2,766 0 – –ESOP Dividend Deduction – – – – – – – – –Preferred Dividend Deduction (158) (154) (152) (263) (259) (256) (106) (104) (104)Non-Deductible Meals 133 137 140 133 137 140 – – –Total Adjustments to Calculate Income Tax 309,608 329,238 349,846 310,310 333,426 357,787 702 4,188 7,942Tax Gross Up 1.6876 1.6876 1.6876 1.3886 1.3886 1.3886 1.3886 1.3886 1.3886Composite Rate 40.75% 40.75% 40.75% 27.98% 27.98% 27.98% 27.98% 27.98% 27.98%FERC Taxes Based on Income 212,902 226,400 240,571 120,580 129,562 139,028 (92,322) (96,838) (101,543)

A-67

WORKING CASH

A-68

Southern California Edison2018 GRCWorking Cash Total Company (CPUC + FERC) Thousands of Dollars

Line Item 2018 2019 2020 2018 2019 2020 2018 2019 2020Line Item SCE-59 SCE-59 SCE-59 SCE-60 SCE-60 SCE-60 Change Change Change

A Franchise Req. -- GRC (36,970) (39,902) (43,289) (35,624) (38,310) (41,453) 1,346 1,591 1,836B Uncollectibles -- GRC 1,803 1,946 2,111 1,738 1,869 2,022 (66) (78) (90)C Ad Valorem Taxes - California 9,794 10,453 11,230 9,794 10,499 11,369 – 47 139D Federal Income Tax 5,976 13,295 29,229 5,853 9,856 13,983 (123) (3,439) (15,246)E Income Tax Deferred 34,883 33,090 15,022 5,815 4,320 2,664 (29,068) (28,769) (12,358)F California State Corporation Franchise Tax 6,400 9,493 12,819 4,211 6,770 9,441 (2,189) (2,723) (3,378)

Other Working Cash Components 374 962 403 747 446 255 374 962 403 747 446 255 – – –Working Cash Required 396,848 432,123 473,377 366,748 398,751 444,280 (30,100) (33,372) (29,097)Operational Cash Requirement (44,982) (31,490) (22,257) (59,912) (51,698) (41,758) (14,930) (20,209) (19,501)Total Cash Working Capital Requirement 351,866 400,633 451,120 306,836 347,053 402,522 (45,030) (53,580) (48,598)

Total Working CashAverage Days Lag in Collection of Revenues 45 01 45.01 45.01 45 01 45.01 45 01 – – –Average Days Lag in Payment of Expenses 31 59 31.15 31.00 32 30 31.85 31.40 0.71 0.69 0.40Net Avg. Days Lag 13.42 13.86 14.01 12.71 13.16 13.61 (0.71) (0.69) (0.40)Amount of Payments for Expenses 10,796,632 11,383,227 12,333,709 10,533,871 11,056,465 11,915,011 (262,761) (326,761) (418,698)Average Daily Expenses 29,580 31,187 33,791 28,860 30,292 32,644 (720) (895) (1,147)Working Cash Required 396,848 432,123 473,377 366,748 398,751 444,280 (30,100) (33,372) (29,097)

A Franchise Fees 61,902 66,811 72,483 59,648 64,147 69,409 (2,254) (2,664) (3,074)365 170 183 199 163 176 190 (6) (7) (8)(Lag Estimate - Avg. Lag in Rev. Collection) (218) (218) (218) (218) (218) (218) – – –Franchise Fees (36,970) (39,902) (43,289) (35,624) (38,310) (41,453) 1,346 1,591 1,836

B Uncollectibles 14,623 15,782 17,122 14,090 15,153 16,396 (532) (629) (726)365 40 43 47 39 42 45 (1) (2) (2)(Lag Estimate - Avg. Lag in Rev. Collection) 45 45 45 45 45 45 – – –Uncollectibles 1,803 1,946 2,111 1,738 1,869 2,022 (66) (78) (90)

C Ad Valorem Taxes - California 310,594 331,469 356,123 310,594 332,944 360,535 – 1,475 4,412/ 365 851 908 976 851 912 988 – 4 12x (Lag Estimate - Avg. Lag in Rev. Collection) 12 12 12 12 12 12 – – –

Ad Valorem Taxes - California 9,794 10,453 11,230 9,794 10,499 11,369 – 47 139

D Federal Income Tax 111,799 248,736 546,833 109,493 184,391 261,599 (2,306) (64,345) (285,234)/ 365 306 681 1 498 300 505 717 (6) (176) (781)x (Lag Estimate - Avg. Lag in Rev. Collection) 20 20 20 20 20 20 – – –

Federal Income Tax 5,976 13,295 29,229 5,853 9,856 13,983 (123) (3,439) (15,246)

E Income Tax Deferred – – –Income Tax Expense/(Benefit) - Current Fed – – – – – – – – –Property Related Deferred Tax 282,874 268,335 121,818 47,152 35,036 21,605 (235,722) (233,298) (100,213)Income Tax Deferred 282,874 268,335 121,818 47,152 35,036 21,605 (235,722) (233,298) (100,213)

/ 365 775 735 334 129 96 59 (646) (639) (275)x (Lag Estimate - Avg. Lag in Rev. Collection) 45 45 45 45 45 45 – – –

Income Tax Deferred 34,883 33,090 15,022 5,815 4,320 2,664 (29,068) (28,769) (12,358)– – –

F State Income Tax 64,158 95,167 128,506 42,211 67,868 94,642 (21,947) (27,299) (33,864)/ 365 176 261 352 116 186 259 (60) (75) (93)x (Lag Estimate - Avg. Lag in Rev. Collection) 36 36 36 36 36 36 – – –

State Income Tax 6,400 9,493 12,819 4,211 6,770 9,441 (2,189) (2,723) (3,378)

Working Cash Required (30,100) (33,372) (29,097)

A-69

CHAPTER VIII

RATEMAKING

CONSIDERATIONS

A-70

2018 general rate case tax update · 3 the commission’s rate case plan6 outlines three general...

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