Revenue

3 Months Ended

Mar. 31, 2024

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 with 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:

	Three months ended March 31, 2024						Three months ended March 31, 2023
			Cost-						Cost-
	Earning		Recovery		Total		Earning		Recovery		Total
(in millions)	Activities		Activities		Consolidated		Activities		Activities		Consolidated
Revenue from contracts with customers1	$	2,175	$	1,595	$	3,770	$	2,076	$	1,660	$	3,736
Alternative revenue programs and other operating revenue2		274		20		294		157		57		214
Total operating revenue	$	2,449	$	1,615	$	4,064	$	2,233	$	1,717	$	3,950

1 At March 31, 2024 and December 31, 2023, SCE's receivables related to contracts from customers were $2.6 billion and $2.5 billion, respectively, which include accrued unbilled revenue of $777 million and $741 million, respectively.

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

Deferred Revenue

As of March 31, 2024, SCE has deferred revenue of $364 million related to the 2021 sale of transmission line use, of which $351 million is included in "Other deferred credits and other long-term liabilities" on SCE's consolidated balance sheets and is being amortized straight-line over the period of use of 30 years.