Revenue

12 Months Ended

Dec. 31, 2023

Revenue

Revenue

Note 7.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 a reasonableness review or compliance with upfront standards as well as non-bypassable rates collected for SCE Recovery Funding LLC. Cost-recovery activities include rates which provide recovery, subject to a reasonableness review of, among other things, fuel costs, purchased power costs, public purpose related-program costs (including energy efficiency and demand-side management programs), certain operation and maintenance expenses, and repayment of bonds and financing costs of SCE Recovery Funding LLC. SCE earns no return on these activities.

The following table is a summary of SCE's revenue:

	Years ended December 31,
	2023						2022						2021
			Cost-						Cost-						Cost-
	Earning		Recovery		Total		Earning		Recovery		Total		Earning		Recovery		Total
(in millions)	Activities		Activities		Consolidated		Activities		Activities		Consolidated		Activities		Activities		Consolidated
Revenues from contracts with customers1	$	8,598		8,422	$	17,020	$	8,327		8,433		16,760	$	7,523	$	6,824	$	14,347
Alternative revenue programs and other operating revenue2		414		(1,159)		(745)		681		(269)		412		349		178		527
Total operating revenue	$	9,012	$	7,263	$	16,275	$	9,008	$	8,164	$	17,172	$	7,872	$	7,002	$	14,874

1 At December 31, 2023 and 2022, SCE's receivables related to contracts from customers were $2.5 billion and $2.3 billion, which included accrued unbilled revenue of $741 million and $638 million, respectively.

2 Includes differences between revenues from contracts with customers and authorized levels for certain CPUC and FERC revenues.

Deferred Revenue

As of December 31, 2023, SCE has deferred revenue of $368 million related to the sale of the use of transfer capability of West of Devers transmission line, of which $13 million and $355 million are included in "Other current liabilities" and "Other deferred credits and other long-term liabilities," respectively, on SCE's consolidated balance sheets. The deferred revenue is amortized straight-line over a period of 30 years starting 2021.