Marked against last year's 10-K:
cut words struck through, new words highlighted and underlined.
MD&A 297 words changed in this paragraph; it is 32% similar to last year's version.
Edison International believes that California's 2045 goals can be achieved most economically through emissions reductions enabled by clean electricity to serve 100% of retail sales, electrifying approximately 90% of light-duty vehicles, 90% of medium-duty vehicles, 54% of heavy-duty vehicles, 80% of buses and 95% of buildings. Additionally, reducing emissions to near zero in the electric sector hinges on developing clean firm resources to replace natural gas. Clean firm resources, such as next-generation geothermal, small modular reactors, natural gas with carbon capture and storage, and clean hydrogen, produce constant power through any weather conditions or season with little or no greenhouse gas emissions. By 2045, Rising electricity demand across the U.S. economy is projected to increase by at least 80% as compared to 2022 per Edison International's analysis. In SCE’s service area, the increase in a primary force reshaping grid needs and investment planning. SCE projects electricity demand is materializing sooner than expected. SCE’s most recent 10-year load growth forecast has increased to nearly double between 2025 and 2045, driven by 35% compared to its 2022 distribution system plan. The key drivers of this increase are commercial developments, transportation electrification, and new residential housing. housing, and increases in commercial and industrial consumption. These economy-wide trends create broad customer and climate benefits by supporting long-term emissions reduction. Emerging market uncertainties, tighter resource timelines, and rising costs have increased the complexity of long‑term clean energy planning, adding pressure to California's climate goals. Despite this, California has demonstrated strong long-term support of transportation electrification as shown by the approval of SCE's Charge Ready programs and 2022 legislation banning sales of new gas vehicles by 2035. However, electrification. Edison International believes that more state policy support, along with public and private investment, is needed to enable California to reach its 2030 and 2045 GHG reduction targets. Additional policy and regulatory support is also needed to de-risk the development of clean firm resources, adjust planning processes to enable proactive grid build-out, and streamline permitting processes. The current federal administration has declared a national emergency on energy, stressing the need for a reliable, diversified, and affordable supply of energy. The integrity and expansion of energy infrastructure is an immediate and pressing priority. build-
Source: Item 7, 10-K 0000827052-26-000012 vs Item 7, 10-K 0000827052-25-000022
Risk Factors 188 words changed in this paragraph; it is 64% similar to last year's version.
SCE's infrastructure is aging and could pose a risk to system reliability if not sufficiently maintained and expanded to meet load growth and electrification needs. In addition, as described above, natural disasters such as wildfires in SCE's service area can cause significant public safety issues, property damage and operational issues. SCE is engaged in a significant and ongoing infrastructure investment program. This investment program, which includes transmission projects and constructing utility owned storage to mitigate possible state-wide capacity shortages in 2025 and later years, shortages, has inherent operational risks and elevates the need for effective execution in SCE's activities. For example, utility owned storage facilities utilize lithium-ion battery technology that in certain circumstances can and have caused a thermal event that can ignite nearby materials, including other lithium-ion cells particularly when deployed in indoor facilities. SCE's financial condition and results of operations could be materially affected if it is unable to successfully manage these risks as well as the risks inherent in constructing, operating, and maintaining its facilities, the operation of which can be hazardous and important for system reliability. SCE's inherent operating risks include such matters as the risks of human performance; availability of skilled workforce and workforce capabilities; contractor management; data and records accuracy; public opposition to infrastructure projects; delays; environmental remediation and mitigation costs; difficulty in estimating costs or in recovering costs that are above original estimates; system limitations and degradation; unexpected cascading critical system failure; maintaining physical security of workforce and assets; maintaining cybersecurity of data and assets; and delays and interruptions in necessary supplies. For example, SCE's financial condition may be materially affected as a result of safety incidents, delays, permitting violations and violations of regulatory requirements, among other things, caused by SCE's failure to appropriately manage its contractor workforce or from contractual violations by SCE's contractors and the inability for SCE to recover through contractual indemnities or insurance held by the contractor. SCE's financial condition may also be materially affected as a result of data or records inaccuracies, for example, inaccurate records could lead to missing or delayed compliance with SCE's policies and regulatory requirements, and could contribute to safety incidents.
Source: Item 1A, 10-K 0000827052-26-000012 vs Item 1A, 10-K 0000827052-25-000022
Legal Proceedings 81 words changed in this paragraph; it is 73% similar to last year's version.
As of February 20, 2025, SCE was aware of approximately 30 pending unsettled lawsuits representing approximately 70 individual plaintiffs related to the Thomas and Koenigstein Fires and the Montecito Mudslides naming SCE as a defendant. Approximately 10 of the approximately 30 lawsuits also name Edison International as a defendant based on its ownership and alleged control of SCE. One of the lawsuits was filed as a purported class action. The court has denied class certification in the one lawsuit that was filed as a purported class action and plaintiffs have appealed the denial. The lawsuits, which have been filed in the superior courts of Ventura, Santa Barbara and Los Angeles Counties allege, among other things, negligence, inverse condemnation, trespass, private nuisance, and violations of the public utilities and health and safety codes. SCE and certain of the individual plaintiffs in the Thomas and Koenigstein Fire litigation have been pursuing settlements of claims under a mediation program adopted to promote an efficient and orderly settlement process. As of February 20, 2025, 11, 2026, two damages only trials have been set for June May and August 2025 July 2026 for two individual plaintiff households in the TKM litigation.
Source: Item 3, 10-K 0000827052-26-000012 vs Item 3, 10-K 0000827052-25-000022
Accounting Policies 57 words changed in this paragraph; it is 85% similar to last year's version.
Edison International and SCE accounted for the contributions to the Wildfire Insurance Fund similarly to prepaid insurance. No period of coverage was provided in AB 1054, the California Wildfire Legislation, therefore expense is being allocated to periods ratably based on an estimated period of coverage. At December 31, 2024 2025 and 2023, 2024, Edison International and SCE had a $1.9 $1.7 billion and a $2.0 $1.9 billion long-term asset, respectively, as well as a $138 million and $204 million current asset, respectively, asset for both periods, reflected as "Wildfire Insurance Fund contributions" in their consolidated balance sheets for the initial $2.4 billion contribution made during 2019 and the present value of annual contributions SCE committed to make to the Wildfire Insurance Fund, reduced by amortization. At December 31, 2024 2025 and 2023, 2024, long-term liabilities of $363 $274 million and $450 $363 million, respectively, have been reflected in "Other deferred credits and other long-term liabilities" for the present value of unpaid contributions. Contributions were discounted to the present value using US treasury interest rates at the date SCE committed to participate in the Wildfire Insurance Fund. Edison International and SCE reassesses the period of coverage of the fund at least annually in the first quarter each year, and adjustments are applied on a prospective basis. At December 31, 2025, 2024 and 2023, the asset
Source: Item 8, Note 1 – Summary of Significant Accounting Policies, 10-K 0000827052-26-000012 vs Item 8, Note 1 – Summary of Significant Accounting Policies, 10-K 0000827052-25-000022
