SOUTHERN CALIFORNIA EDISON Co
For the period ended Dec 31, 2023. Filed Feb 22, 2024.
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FY2023 · Filed Feb 22, 2024
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Cost of Capital Trigger
The cost of capital adjustment mechanism set by the CPUC provides for an adjustment to SCE's authorized cost of capital that, when triggered, will impact SCE's results of operations and cash flows. In 2023, the cost of capital adjustment mechanism was triggered when the difference between the average Moody's Baa utility bond yield for the 12-month period from October 1, 2022 through September 30, 2023 and the mechanism's benchmark exceeded 100-basis points. As a result, SCE's CPUC-authorized ROE increased from 10.05% to 10.75% effective January 1, 2024. Additionally, SCE's authorized costs of long-term debt and preferred equity for 2024 were updated to 4.48% and 7.02%, respectively. The total resulting increase to SCE's 2024 GRC-related revenue requirement is $201 million, which will be implemented in rates starting in the first quarter of 2024. Certain parties have sought review or suspension of the 2024 adjustment, which could impact SCE's authorized cost of capital for 2024. For further information see "Business—SCE— Overview of Ratemaking Process."
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