Cost-recovery activities in 2023 compared to 2022 were primarily affected by the following:
| ● | Lower purchased power and fuel costs of $889 million, primarily due to lower prices and volumes for both purchased power and gas, partially offset by hedging activities. |
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| ● | Lower operation and maintenance costs of $106 million primarily due to: |
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| ● | Lower insurance costs of $218 million due to expansion of SCE's use of customer-funded self-insurance for wildfire-related claims in July 2023. |
| ● | A net decrease of $114 million due to lower recognition of previously deferred expenses primarily related to wildfire mitigation, drought restoration, and COVID-19. |
| ● | Lower uncollectible expenses of $79 million primarily due to the recognition of $109 million previously deferred uncollectible expenses in the first quarter of 2022. |
| ● | In 2023, SCE recognized $209 million of previously deferred incremental wildfire insurance premiums that provided coverage for the last six months of 2020. |
| ● | $76 million of disallowed costs were reclassified to earnings activities related to Upstream Lighting Program in 2022. See "—Earnings Activities" above. |
| ● | Higher amortization expense, property and other taxes and interest expenses of $26 million, $12 million, and $16 million, respectively, primarily due to recovery of expenses associated with AB 1054 Excluded Capital Expenditures financed through securitization. |
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| ● | Lower other income of $37 million primarily driven by lower net periodic benefit income related to the non-service cost components for SCE's pension and PBOP. See "Notes to Consolidated Financial Statements—Note 9. Compensation and Benefit Plans" for further information. |
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