Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2017

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Carrying Amounts and Fair Values of Long-term Debt, Including Current Portion

The carrying value and fair value of Edison International's and SCE's long-term debt (including current portion of long-term debt) are as follows:

	September 30, 2017				December 31, 2016
(in millions)	Carrying Value1		Fair Value		Carrying Value1		Fair Value
SCE	$	11,005	$	12,554	$	10,333	$	11,539
Edison International	12,221		13,788		11,156		12,368

¹   Carrying value is net of debt issuance costs.

Southern California Edison

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Fair Value by Level

The following table sets forth assets and liabilities of SCE that were accounted for at fair value by level within the fair value hierarchy:

	September 30, 2017
(in millions)	Level 1		Level 2		Level 3		Netting and Collateral1		Total
Assets at fair value
Derivative contracts	$	—	$	14	$	24	$	—	$	38
Other	36		—		—		—		36
Nuclear decommissioning trusts:
Stocks2	1,655		—		—		—		1,655
Fixed Income3	1,057		1,588		—		—		2,645
Short-term investments, primarily cash equivalents	34		109		—		—		143
Subtotal of nuclear decommissioning trusts4	2,746		1,697		—		—		4,443
Total assets	2,782		1,711		24		—		4,517
Liabilities at fair value
Derivative contracts	—		1		2		—		3
Total liabilities	—		1		2		—		3
Net assets	$	2,782	$	1,710	$	22	$	—	$	4,514

	December 31, 2016
(in millions)	Level 1		Level 2		Level 3			Netting and Collateral1		Total
Assets at fair value
Derivative contracts	$	—	$	6	$	68		$	—	$	74
Other	33		—		—			—		33
Nuclear decommissioning trusts:
Stocks2	1,547		—		—			—		1,547
Fixed Income3	865		1,751		—			—		2,616
Short-term investments, primarily cash equivalents	36		170		—			—		206
Subtotal of nuclear decommissioning trusts4	2,448		1,921		—			—		4,369
Total assets	2,481		1,927		68			—		4,476
Liabilities at fair value
Derivative contracts	—		—		1,157			—		1,157
Total liabilities	—		—		1,157			—		1,157
Net assets (liabilities)	$	2,481	$	1,927	$	(1,089	)	$	—	$	3,319

¹  Represents the netting of assets and liabilities under master netting agreements and cash collateral across the levels of the fair value hierarchy. Netting among positions classified within the same level is included in that level.

²  Approximately 69% and 70% of SCE's equity investments were located in the United States at September 30, 2017 and December 31, 2016, respectively.

³  Includes corporate bonds, which were diversified and included collateralized mortgage obligations and other asset backed securities of $80 million and $79 million at September 30, 2017 and December 31, 2016, respectively.

⁴  Excludes net payables of $28 million and $127 million at September 30, 2017 and December 31, 2016, respectively, which consist of interest and dividend receivables as well as receivables and payables related to SCE's pending securities sales and purchases.

Summary of Changes in Fair Value of Level 3 Net Derivative Assets and Liabilities

The following table sets forth a summary of changes in SCE's fair value of Level 3 net derivative assets and liabilities:

	Three months ended September 30,						Nine months ended September 30,
(in millions)	2017			2016			2017			2016
Fair value of net liabilities at beginning of period	$	(1,012	)	$	(1,170	)	$	(1,089	)	$	(1,148	)
Total realized/unrealized gains (losses):
Included in regulatory assets and liabilities1	120			8			54			(14		)
Settlements	—			(1		)	—			(1		)
Contract amendment2	—			—			143			—
Normal purchase and normal sale designation3	$	914		$	—		$	914		$	—
Fair value of net assets (liabilities) at end of period	$	22		$	(1,163	)	$	22		$	(1,163	)
Change during the period in unrealized gains and losses related to assets and liabilities held at the end of the period	$	6		$	(57	)	$	6		$	(122	)

¹  Due to regulatory mechanisms, SCE's realized and unrealized gains and losses are recorded as regulatory assets and liabilities.

² Represents a tolling contract that was amended during the second quarter of 2017, which is no longer accounted for as a derivative as of September 30, 2017.

³  During the third quarter of 2017, SCE designated certain derivative contracts as normal purchase and normal sale contracts, which resulted in a reclassification of $914 million from derivative liabilities to other liabilities. These liabilities will be amortized over the remaining contract terms.

Valuation Techniques and Significant Unobservable Inputs Used to Determine Fair Value for Level 3 Assets and Liabilities

The following table sets forth SCE's valuation techniques and significant unobservable inputs used to determine fair value for significant Level 3 assets and liabilities:

	Fair Value (in millions)					Significant	Range
	Assets		Liabilities		Valuation Technique(s)	Unobservable Input	(Weighted Average)
Congestion revenue rights
September 30, 2017	$	24	$	—	Market simulation model and auction prices	Load forecast	3,708 MW - 22,840 MW
						Power prices1	$3.65 - $99.58
						Gas prices2	$2.51 - $4.87
December 31, 2016	67		—		Market simulation model and auction prices	Load forecast	3,708 MW - 22,840 MW
						Power prices1	$3.65 - $99.58
						Gas prices2	$2.51 - $4.87
Tolling3
December 31, 2016	—		1,154		Option model	Volatility of gas prices	15% - 48% (20%)
						Volatility of power prices	29% - 71% (40%)
						Power prices	$23.40 - $51.24 ($34.70)

¹  Prices are in dollars per megawatt-hour.

²  Prices are in dollars per million British thermal units.

³ During the third quarter of 2017, SCE designated certain derivative contracts as normal purchase and normal sale contracts, which resulted in a reclassification of $914 million from derivative liabilities to other liabilities. These liabilities will be amortized over the remaining contract terms.