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Revenue
9 Months Ended
Sep. 30, 2020
Revenue from Contract with Customer [Abstract]  
Revenue Revenue
SCE's revenue is disaggregated by two revenue sources:
Earning activities – representing revenue authorized by the CPUC and FERC, which is intended to provide SCE a reasonable opportunity to recover its costs and earn a return on its net investment in generation, transmission and distribution assets. The annual revenue requirements are comprised of authorized operation and maintenance costs, depreciation, taxes and a return consistent with the capital structure. Also, included in earnings activities are revenue or penalties related to incentive mechanisms, other operating revenue, and regulatory charges or disallowances.
Cost-recovery activities – representing CPUC- and FERC- authorized balancing accounts, which allow for recovery of specific project or program costs, subject to reasonableness review or compliance with upfront standards. Cost-recovery activities include rates which provide recovery, subject to reasonableness review of, among other things, fuel costs, purchased power costs, public purpose related-program costs (including energy efficiency and demand-side management programs) and certain operation and maintenance expenses. SCE earns no return on these activities.
The following table is a summary of SCE's revenue:
Three months ended September 30, 2020Three months ended September 30, 2019
(in millions)Earning
Activities
Cost-
Recovery
Activities
Total
Consolidated
Earning ActivitiesCost-Recovery ActivitiesTotal Consolidated
Revenues from contracts with customers1,2
$1,893 $2,327 $4,220 $1,862 $2,022 $3,884 
Alternative revenue programs and other operating revenue3
233 182 415 (30)(122)(152)
Total operating revenue$2,126 $2,509 $4,635 $1,832 $1,900 $3,732 
Nine months ended September 30, 2020Nine months ended September 30, 2019
(in millions)Earning ActivitiesCost- Recovery ActivitiesTotal ConsolidatedEarning ActivitiesCost-Recovery ActivitiesTotal Consolidated
Revenues from contracts with customers1,2
$5,175 $4,265 $9,440 $4,896 $3,746 $8,642 
Alternative revenue programs and other operating revenue3
467 488 955 23 683 706 
Total operating revenue$5,642 $4,753 $10,395 $4,919 $4,429 $9,348 
1    In the absence of a 2018 GRC decision, SCE recognized CPUC revenue in the first quarter of 2019 based on the 2017 authorized revenue requirement adjusted mainly for the July 2017 cost of capital decision and Tax Reform. SCE recorded the impact of the 2018 GRC decision in the second quarter of 2019.
2    At September 30, 2020 and December 31, 2019, SCE's receivables related to contracts from customers were $1.9 billion and $1.1 billion, respectively, which include accrued unbilled revenue of $708 million and $488 million, respectively.
3    Includes differences between amounts billed and authorized levels for both the CPUC and FERC.