10-Q - Edison International

(Mark One)UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549________________________FORM 10-Q________________________QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended March 31, 2012TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period fromtoCommission File Number 1-2313________________________SOUTHERN CALIFORNIA EDISON COMPANY(Exact name of registrant as specified in its charter)________________________California(State or other jurisdiction ofincorporation or organization)2244 Walnut Grove Avenue(P.O. Box 800)Rosemead, California(Address of principal executive offices)95-1240335(I.R.S. EmployerIdentification No.)91770(Zip Code)(626) 302-1212(Registrant's telephone number, including area code)________________________Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of theSecurities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was requiredto file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes NoIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, everyInteractive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding12 months (or for such shorter period that the registrant was required to submit and post such files). Yes NoIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or asmaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reportingcompany" in Rule 12b-2 of the Exchange Act.Large accelerated filer Accelerated filer Non-accelerated filer(Do not check if a smallerreporting company)Smaller reporting companyIndicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the ExchangeAct). Yes NoIndicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:Class Outstanding at April 30, 2012Common Stock, no par value 434,888,104

GLOSSARYTABLE OF CONTENTSPART I. FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTS 1Consolidated Statements of Income 1Consolidated Statements of Comprehensive Income 1Consolidated Balance Sheets 2Consolidated Statements of Cash Flows 4NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 5Note 1. Summary of Significant Accounting Policies 5Note 2. Consolidated Statements of Changes in Equity 6Note 3. Variable Interest Entities 7Note 4. Fair Value Measurements 7Note 5. Debt and Credit Agreements 12Note 6. Derivative Instruments and Hedging Activities 12Note 7. Income Taxes 15Note 8. Pension Plans and Postretirement Benefits Other Than Pensions 15Note 9. Commitments and Contingencies 16Note 10. Environmental Developments 19Note 11. Supplemental Cash Flows Information 19Note 12. Preferred and Preference Stock 20Note 13. Regulatory Assets and Liabilities 20Note 14. Other Investments 21Note 15. Other Income and Expenses 22ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS 23FORWARD-LOOKING STATEMENTS 23MANAGEMENT OVERVIEW 24Highlights of Operating Results 242012 CPUC General Rate Case 24San Onofre Outage, Inspection and Repair Issues 252013 Cost of Capital Application 25Capital Program 26Environmental Developments 26RESULTS OF OPERATIONS 26Utility Earning Activities 27Utility Cost-Recovery Activities 28Supplemental Operating Revenue Information 28Income Taxes 28LIQUIDITY AND CAPITAL RESOURCES 29Available Liquidity 29Regulatory Proceedings 29Dividend Restrictions 29Margin and Collateral Deposits 29Workers Compensation Self-Insurance Fund 30Historical Consolidated Cash Flows 30iiii

Contractual Obligations and Contingencies 31MARKET RISK EXPOSURES 31Commodity Price Risk 31Credit Risk 32CRITICAL ACCOUNTING ESTIMATES AND POLICIES 32NEW ACCOUNTING GUIDANCE 32ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 32ITEM 4. CONTROLS AND PROCEDURES 32Disclosure Controls and Procedures 32Change in Internal Control Over Financial Reporting 32PART II. OTHER INFORMATIONITEM 1. LEGAL PROCEEDINGS 33ITEM 6. EXHIBITS 34SIGNATURE 35ii

GLOSSARYThe following terms and abbreviations appearing in the text of this report have the meanings indicated below.2011 Form 10-K SCE's Annual Report on Form 10-K for the year-ended December 31, 20112010 Tax Relief Act Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010AFUDCAPSARO(s)BcfBig 4CAACAIRCAISOCAMRCARBCDWRCECCPUCCRRsDOEERRAFASBFERCFGICFIP(s)Four CornersGAAPGHGGlobal SettlementGRCIRSISOkWh(s)MD&AMohaveMoody'sMRTUMWMWhNAAQSNERCNinth CircuitNO xallowance for funds used during constructionArizona Public Service Companyasset retirement obligation(s)billion cubic feetKern River, Midway-Sunset, Sycamore and Watson natural gas power projectsClean Air ActClean Air Interstate RuleCalifornia Independent System OperatorClean Air Mercury RuleCalifornia Air Resources BoardCalifornia Department of Water ResourcesCalifornia Energy CommissionCalifornia Public Utilities Commissioncongestion revenue rightsU. S. Department of Energyenergy resource recovery accountFinancial Accounting Standards BoardFederal Energy Regulatory CommissionFinancial Guarantee Insurance Companyfederal implementation plan(s)coal fueled electric generating facility located in Farmington, New Mexico in which SCEholds a 48% ownership interestgenerally accepted accounting principlesgreenhouse gasA settlement between Edison International and the IRS that resolves all of SCE's federalincome tax disputes and affirmative claims for tax years 1986 through 2002 and relatedmatters with state tax authorities.general rate caseInternal Revenue ServiceIndependent System Operatorkilowatt-hour(s)Management's Discussion and Analysis of Financial Condition and Results of Operations inthis reporttwo coal fueled electric generating facilities that no longer operate located in Clark County,Nevada in which SCE holds a 56% ownership interestMoody's Investors ServiceMarket Redesign Technology Upgrademegawattsmegawatt-hoursnational ambient air quality standardsNorth American Electric Reliability CorporationU.S. Court of Appeals for the Ninth Circuitnitrogen oxideiii

NRCNSRPalo VerdePBOP(s)PBRPG&EPSDQF(s)ROES&PSan OnofreSCAQMDSCESDG&ESECSIP(s)SO 2SRPUS EPAVIE(s)Nuclear Regulatory CommissionNew Source Reviewlarge pressurized water nuclear electric generating facility located near Phoenix, Arizona inwhich SCE holds a 15.8% ownership interestpostretirement benefits other than pension(s)Performance-based ratemakingPacific Gas & Electric CompanyPrevention of Significant Deteriorationqualifying facility(ies)return on equityStandard & Poor's Ratings Serviceslarge pressurized water nuclear electric generating facility located in south San Clemente,California in which SCE holds a 78.21% ownership interestSouth Coast Air Quality Management DistrictSouthern California Edison CompanySan Diego Gas & ElectricU.S. Securities and Exchange Commissionstate implementation plan(s)sulfur dioxideSalt River Project Agricultural Improvement and Power DistrictU.S. Environmental Protection Agencyvariable interest entity(ies)iv

PART I.ITEM 1.FINANCIAL INFORMATIONFINANCIAL STATEMENTSConsolidated Statements of IncomeSouthern California Edison CompanyThree months ended March 31,(in millions, unaudited) 2012 2011Operating revenue $ 2,412 $ 2,232Fuel 77 76Purchased power 615 508Operation and maintenance 851 784Depreciation, decommissioning and amortization 389 344Property and other taxes 83 77Total operating expenses 2,015 1,789Operating income 397 443Interest income 2 2Other income 31 38Interest expense (121) (111)Other expenses (9) (13)Income before income taxes 300 359Income tax expense 99 123Net income 201 236Less: Dividends on preferred and preference stock 19 14Net income available for common stock $ 182 $ 222Consolidated Statements of Comprehensive IncomeThree months ended March 31,(in millions, unaudited) 2012 2011Net income $ 201 $ 236Other comprehensive income, net of tax:Pension and postretirement benefits other than pensions:Amortization of net loss included in net income, net of income tax expense of $3 and$1 for 2012 and 2011, respectively 3 1Other comprehensive income 3 1Comprehensive income $ 204 $ 237The accompanying notes are an integral part of these consolidated financial statements.1

Consolidated Balance SheetsSouthern California Edison Company(in millions, unaudited)ASSETSMarch 31,2012December 31,2011Cash and cash equivalents $ 63 $ 57Receivables, less allowances of $76 and $75 for uncollectible accounts at respective dates 641 760Accrued unbilled revenue 508 519Inventory 340 350Prepaid taxes 279 278Derivative assets 51 65Regulatory assets 692 494Other current assets 188 89Total current assets 2,762 2,612Nuclear decommissioning trusts 3,853 3,592Other investments 102 93Total investments 3,955 3,685Utility property, plant and equipment, less accumulated depreciation of $7,088 and$6,894 at respective dates 28,133 27,569Nonutility property, plant and equipment, less accumulated depreciation of $110 and $107at respective dates 72 73Total property, plant and equipment 28,205 27,642Derivative assets 65 70Regulatory assets 6,124 5,815Other long-term assets 494 491Total long-term assets 6,683 6,376Total assets $ 41,605 $ 40,315The accompanying notes are an integral part of these consolidated financial statements.2

Consolidated Balance SheetsSouthern California Edison Company(in millions, except share amounts, unaudited)LIABILITIES AND EQUITYMarch 31,2012December 31,2011Short-term debt $ 330 $ 419Accounts payable 994 1,319Accrued taxes 111 49Accrued interest 125 167Customer deposits 195 199Derivative liabilities 254 266Regulatory liabilities 645 670Other current liabilities 538 759Total current liabilities 3,192 3,848Long-term debt 8,827 8,431Deferred income taxes 6,166 5,781Deferred investment tax credits 82 84Customer advances 141 138Derivative liabilities 1,135 805Pensions and benefits 2,356 2,461Asset retirement obligations 2,651 2,610Regulatory liabilities 5,103 4,670Other deferred credits and other long-term liabilities 1,589 1,529Total deferred credits and other liabilities 19,223 18,078Total liabilities 31,242 30,357Commitments and contingencies (Note 9)Common stock, no par value (560,000,000 shares authorized; 434,888,104 shares issuedand outstanding at each date) 2,168 2,168Additional paid-in capital 600 596Accumulated other comprehensive loss (21) (24)Retained earnings 6,221 6,173Total common shareholder's equity 8,968 8,913Preferred and preference stock 1,395 1,045Total equity 10,363 9,958Total liabilities and equity $ 41,605 $ 40,315The accompanying notes are an integral part of these consolidated financial statements.3

Consolidated Statements of Cash FlowsSouthern California Edison CompanyThree months ended March 31,(in millions, unaudited) 2012 2011Cash flows from operating activities:Net income $ 201 $ 236Adjustments to reconcile to net cash provided by operating activities:Depreciation, decommissioning and amortization 389 344Regulatory impacts of net nuclear decommissioning trust earnings 77 41Other amortization 20 28Stock-based compensation 4 4Deferred income taxes and investment tax credits 156 257Proceeds from U.S. treasury grants 29 —Changes in operating assets and liabilities:Receivables 90 90Inventory 11 4Margin and collateral deposits – net of collateral received (1) 2Prepaid taxes (1) (57)Other current assets 19 (4)Accounts payable (53) (88)Accrued taxes 62 2Other current liabilities (185) (244)Derivative assets and liabilities – net 336 102Regulatory assets and liabilities – net (317) (42)Other assets (10) (6)Other liabilities (52) 3Net cash provided by operating activities 775 672Cash flows from financing activities:Long-term debt issued 395 —Long-term debt issuance costs (4) —Long-term debt repaid (1) (1)Preference stock issued – net 345 123Short-term debt financing – net (89) 200Settlements of stock-based compensation – net (15) (4)Dividends paid (131) (128)Net cash provided by financing activities 500 190Cash flows from investing activities:Capital expenditures (1,189) (1,022)Proceeds from sale of nuclear decommissioning trust investments 602 622Purchases of nuclear decommissioning trust investments and other (684) (669)Customer advances for construction and other investments 2 3Net cash used by investing activities (1,269) (1,066)Net increase (decrease) in cash and cash equivalents 6 (204)Cash and cash equivalents, beginning of period 57 257Cash and cash equivalents, end of period $ 63 $ 53The accompanying notes are an integral part of these consolidated financial statements.4

Presentation of Comprehensive IncomeIn June 2011 and December 2011, the FASB issued accounting standards updates on the presentation of comprehensiveincome. An entity can elect to present items of net income and other comprehensive income in one continuous statement,referred to as the statement of comprehensive income, or in two separate but consecutive statements. SCE adopted thisguidance January 1, 2012, and elected to present two separate but consecutive statements. The adoption of these accountingstandards updates did not change the items that constitute net income and other comprehensive income.Accounting Guidance Not Yet AdoptedOffsetting Assets and LiabilitiesIn December 2011, the FASB issued an accounting standards update modifying the disclosure requirements about the natureof an entity's rights of offsetting assets and liabilities in the statement of financial position under master netting agreementsand related arrangements associated with financial and derivative instruments. The guidance requires increased disclosure ofthe gross and net recognized assets and liabilities, collateral positions and narrative descriptions of setoff rights. SCE willadopt this guidance effective January 1, 2013.Note 2.Consolidated Statements of Changes in EquityThe following table provides the changes in equity for the three months ended March 31, 2012.(in millions)CommonStockAdditionalPaid-inCapitalEquity Attributable to SCEAccumulatedOtherComprehensiveLossRetainedEarningsPreferredandPreferenceStockTotalEquityBalance at December 31, 2011 $ 2,168 $ 596 $ (24) $ 6,173 $ 1,045 $ 9,958Net income — — — 201 — 201Other comprehensive income — — 3 — — 3Dividends declared on common stock — — — (116) — (116)Dividends declared on preferred andpreference stock — — — (19) — (19)Stock-based compensation and other — 6 — (21) — (15)Noncash stock-based compensation andother — 3 — 3 — 6Issuance of preference stock — (5) — — 350 345Balance at March 31, 2012 $ 2,168 $ 600 $ (21) $ 6,221 $ 1,395 $ 10,363The following table provides the changes in equity for the three months ended March 31, 2011.(in millions)CommonStockAdditionalPaid-inCapitalEquity Attributable to SCEAccumulatedOtherComprehensiveLossRetainedEarningsPreferredandPreferenceStockTotalEquityBalance at December 31, 2010 $ 2,168 $ 572 $ (25) $ 5,572 $ 920 $ 9,207Net income — — — 236 — 236Other comprehensive income — — 1 — — 1Dividends declared on common stock — — — (115) — (115)Dividends declared on preferred andpreference stock — — — (14) — (14)Stock-based compensation and other — 1 — (5) — (4)Noncash stock-based compensation andother — 4 — (1) — 3Issuance of preference stock — (2) — — 125 123Balance at March 31, 2011 $ 2,168 $ 575 $ (24) $ 5,673 $ 1,045 $ 9,4376

The following table sets forth assets and liabilities that were accounted for at fair value by level within the fair valuehierarchy:March 31, 2012(in millions) Level 1 Level 2 Level 3Assets at Fair ValueNetting andCollateral 1Money market funds 2 $ 30 $ — $ — $ — $ 30Derivative contracts:Electricity — — 2 — 2Natural gas — 4 — (4) —CRRs — — 101 101Tolling — — 13 — 13Subtotal of derivative contracts — 4 116 (4) 116Long-term disability plan 8 — — — 8Nuclear decommissioning trusts:Stocks 3 2,124 — — — 2,124Municipal bonds — 696 — — 696U.S. government and agency securities 481 161 — — 642Corporate bonds 4 — 369 — — 369Short-term investments, primarily cashequivalents 5 2 34 — — 36Subtotal of nuclear decommissioning trusts 2,607 1,260 — — 3,867Total assets 6 2,645 1,264 116 (4) 4,021Liabilities at Fair ValueDerivative contracts:Electricity — 3 83 (4) 82Natural gas — 258 48 (81) 225Tolling — — 1,082 — 1,082Subtotal of derivative contracts — 261 1,213 (85) 1,389Total liabilities — 261 1,213 (85) 1,389Net assets (liabilities) $ 2,645 $ 1,003 $ (1,097) $ 81 $ 2,632Total8

December 31, 2011(in millions) Level 1 Level 2 Level 3Assets at Fair ValueNetting andCollateral 1Money market funds 2 $ 21 $ — $ — $ — $ 21Derivative contracts:Electricity — — 1 — 1Natural gas — 5 — (3) 2CRRs — — 122 — 122Tolling — — 10 — 10Subtotal of derivative contracts — 5 133 (3) 135Long-term disability plan 8 — — — 8Nuclear decommissioning trusts:Stocks 3 1,899 — — — 1,899Municipal bonds — 756 — — 756U.S. government and agency securities 433 147 — — 580Corporate bonds 4 — 317 — — 317Short-term investments, primarily cashequivalents 5 — 15 — — 15Subtotal of nuclear decommissioningtrusts 2,332 1,235 — — 3,567Total assets 6 2,361 1,240 133 (3) 3,731Liabilities at Fair ValueDerivative contracts:Electricity — 5 65 (2) 68Natural gas — 234 23 (53) 204Tolling — — 799 — 799Subtotal of derivative contracts — 239 887 (55) 1,071Total liabilities — 239 887 (55) 1,071Net assets (liabilities) $ 2,361 $ 1,001 $ (754) $ 52 $ 2,660Total123456Represents the netting of assets and liabilities under master netting agreements and cash collateral across the levels of the fair valuehierarchy. Netting among positions classified within the same level is included in that level.Money market funds are included in cash and cash equivalents on SCE's consolidated balance sheets.Approximately 69% and 70% of the equity investments were located in the United States at March 31, 2012 and December 31,2011, respectively.At March 31, 2012 and December 31, 2011, corporate bonds were diversified and included collateralized mortgage obligations andother asset backed securities of $38 million and $22 million, respectively.Excludes net payables of $14 million and net receivables of $25 million at March 31, 2012 and December 31, 2011, respectively, ofinterest and dividend receivables as well as receivables and payables related to pending securities sales and purchases.Excludes $30 million and $31 million at March 31, 2012 and December 31, 2011, respectively, of cash surrender value of lifeinsurance investments for deferred compensation.9

The following table sets forth a summary of changes in the fair value of Level 3 net derivative assets and liabilities:March 31,(in millions) 2012 2011Fair value of net assets (liabilities) at beginning of period $ (754) $ 6Total realized/unrealized (losses), net:Included in regulatory assets 1 (356) (134)Purchases 21 —Settlements (8) 1Transfers into Level 3 — —Transfers out of Level 3 — —Fair value of net liabilities at end of period $ (1,097) $ (127)Change during the period in unrealized losses related to assets and liabilitiesheld at the end of the period $ (351) $ (133)1Due to regulatory mechanisms, SCE's realized and unrealized gains and losses are recorded as regulatory assets and liabilities.The fair value for transfers in and transfers out of each level is determined at the end of each reporting period. There were notransfers between Levels 1 and 2 during 2012 and 2011.Valuation Techniques Used to Determine Fair ValueLevel 1The fair value of Level 1 assets and liabilities is determined using unadjusted quoted prices in active markets that areavailable at the measurement date for identical assets and liabilities. This level includes exchange-traded equity securities andderivatives, U.S. treasury securities and money market funds.Level 2The fair value of Level 2 assets and liabilities is determined using the income approach by obtaining quoted prices for similarassets and liabilities in active markets and inputs that are observable, either directly or indirectly, for substantially the fullterm of the instrument. This level includes fixed-income securities and over-the-counter derivatives. For further discussion onfixed-income securities, see "—Nuclear Decommissioning Trusts" below.Over-the-counter derivative contracts are valued using standard pricing models to determine the net present value ofestimated future cash flows. Inputs to the pricing models include forward published or posted clearing prices from exchanges(New York Mercantile Exchange and Intercontinental Exchange) for similar instruments and discount rates. A primary pricesource that best represents trade activity for each market is used to develop observable forward market prices in determiningthe fair value of these positions. Broker quotes, prices from exchanges or comparison to executed trades are used to validateand corroborate the primary price source. These price quotations reflect mid-market prices (average of bid and ask) and areobtained from sources believed to provide the most liquid market for the commodity.Level 3The fair value of Level 3 assets and liabilities is determined using the income approach through various models andtechniques that require significant unobservable inputs. This level includes over-the-counter options, tolling arrangementsand derivative contracts that trade infrequently such as congestion revenue rights ("CRRs") and long-term power agreements.Assumptions are made in order to value derivative contracts in which observable inputs are not available. Changes in fairvalue are based on changes to forward market prices, including extrapolation of short-term observable inputs into forecastedprices for illiquid forward periods. In circumstances where fair value cannot be verified with observable market transactions,it is possible that a different valuation model could produce a materially different estimate of fair value. Modelingmethodologies, inputs and techniques are reviewed and assessed as markets continue to develop and more pricinginformation becomes available and the fair value is adjusted when it is concluded that a change in inputs or techniques wouldresult in a new valuation that better reflects the fair value of those derivative contracts.Level 3 Valuation ProcessThe process of determining fair value is the responsibility of the risk department which reports to the chief financial officer.This department obtains observable and unobservable inputs through broker quotes, exchanges and internal valuation10

techniques that use both standard and proprietary models to determine fair value. Each reporting period, the risk and keyfinance departments collaborate to determine the appropriate fair value methodologies and classifications for each derivative.Inputs are validated for reasonableness by comparison against prior prices, other broker quotes and volatility fluctuationthresholds. Inputs used and valuations are reviewed period-over-period and compared with market conditions to determinereasonableness.The following table sets forth the valuation techniques and significant unobservable inputs used to determine fair value forLevel 3 assets and liabilities:March 31, 2012Quantitative Information About Level 3 Fair Value MeasurementsFair Value (in millions) Significant RangeAssets Liabilities Valuation Technique(s) Unobservable Input (Weighted Average)Electricity:Options $ 12 $ 86 Option model Volatility of gas prices 25% – 48% (38%)Volatility of power prices 29% – 60% (43%)Power prices $24.50 – $52.30 ($35.40)Forwards — 7 Discounted cash flow Power prices $2.10 – $33.90 ($20.70)Gas Options — 48 Option model Volatility of gas prices 26% – 48% (41%)CRRs 101 — Market simulation model Load forecast 7,645 MW – 26,334 MWPower prices $(46.19) – $240.30Gas prices $3.79 – $9.32Tolling 13 1,082 Option model Volatility of gas prices 18% – 48% (23%)Netting (10) (10)Total derivative contracts $ 116 $ 1,213Level 3 Fair Value SensitivityGas Options, Power Options, and Tolling ArrangementsVolatility of power prices 26% – 60% (30%)Power prices $20.00 – $89.50 ($53.40)The fair values of option contracts and tolling arrangements contain intrinsic value and time value. Intrinsic value is thedifference between the market price and strike price of the underlying commodity. Time value is made up of severalcomponents, including volatility, time to expiration, and interest rates. The fair value of option contracts changes as theunderlying commodity price moves away or towards the strike price. The option model for tolling arrangements reflects plantspecific information such as operating and start-up costs.For tolling arrangements and certain gas and power option contracts where SCE is the buyer, increases in volatility of theunderlying commodity prices would result in increases to fair value as it represents greater price movement risk. As powerand gas prices increase, the fair value of the option contracts and tolling arrangements tends to increase. The valuation ofpower option contracts and tolling arrangements is also impacted by the correlation between gas and power prices. As thecorrelation increases, the fair value of power option contracts and tolling arrangements tends to decline.Forward Power ContractsGenerally, an increase (decrease) in long term forward power prices at illiquid locations where SCE is the buyer relative tothe contract price will increase (decrease) the fair value.CRRsWhere SCE is the buyer, generally increases (decreases) in forecasted load in isolation would result in increases (decreases)to the fair value. In general, an increase (decrease) in electricity and gas prices at illiquid locations tends to result in increases(decreases) to fair value; however, changes in electricity and gas prices in opposite directions may have varying results onfair value.11

Nuclear Decommissioning TrustsSCE's nuclear decommissioning trust investments include equity securities, U.S. treasury securities and other fixed-incomesecurities. Equity and treasury securities are classified as Level 1 as fair value is determined by observable market prices inactive or highly liquid and transparent markets. The remaining fixed-income securities are classified as Level 2. The fairvalue of these financial instruments is based on evaluated prices that reflect significant observable market information such asreported trades, actual trade information of similar securities, benchmark yields, broker/dealer quotes, issuer spreads, bids,offers and relevant credit information.Fair Value of Long-Term Debt Recorded at Carrying ValueThe carrying value and fair value of long-term debt are:March 31, 2012 December 31, 2011(in millions)CarryingValueFairValueCarryingValueFairValueLong-term debt, including current portion $ 8,827 $ 10,095 $ 8,431 $ 10,129Fair value of short-term and long-term debt is classified as Level 2 and is based on evaluated prices that reflect significantobservable market information such as reported trades, actual trade information of similar securities, benchmark yields,broker/dealer quotes of new issue prices and relevant credit information.The carrying value of trade receivables, payables and short-term debt approximates fair value.Note 5.Debt and Credit AgreementsLong-Term DebtIn March 2012, SCE issued $400 million of 4.05% first and refunding mortgage bonds due in 2042. The proceeds from thesebonds were used to repay commercial paper borrowings and to fund SCE's capital program.Credit Agreements and Short-Term DebtAt March 31, 2012, SCE's outstanding commercial paper was $330 million at a weighted-average interest rate of 0.40%. Thiscommercial paper was supported by a $2.3 billion credit facility. At December 31, 2011, the outstanding short-term debt was$419 million at a weighted-average interest rate of 0.44%. At March 31, 2012, letters of credit issued under SCE's creditfacilities aggregated $63 million and are scheduled to expire in twelve months or less.Note 6.Derivative Instruments and Hedging ActivitiesCommodity Price RiskSCE is exposed to commodity price risk which represents the potential impact that can be caused by a change in the marketvalue of a particular commodity. SCE's hedging program reduces customer exposure to variability in market prices related toSCE's power and gas activities. As part of this program, SCE enters into options, swaps, forwards, tolling arrangements andCRRs. These transactions are approved by the CPUC or executed in compliance with CPUC-approved procurement plans.SCE recovers its related hedging costs through the energy resource recovery account ("ERRA") balancing account, and as aresult, exposure to commodity price risk is not expected to impact earnings, but may impact cash flows.SCE's electricity price exposure arises from energy purchased from and sold to wholesale markets as a result of differencesbetween SCE's load requirements and the amount of energy delivered from its generating facilities and power purchaseagreements.SCE's natural gas price exposure arises from natural gas purchased for the Mountainview power plant and peaker plants, QFcontracts where pricing is based on a monthly natural gas index and power purchase agreements in which SCE has agreed toprovide the natural gas needed for generation, referred to as tolling arrangements.12

Notional Volumes of Derivative InstrumentsThe following table summarizes the notional volumes of derivatives used for hedging activities:Economic HedgesUnit of March 31, December 31,CommodityMeasure 20122011Electricity options, swaps and forwards GWh 28,611 30,881Natural gas options, swaps and forwards Bcf 258 300Congestion revenue rights GWh 150,896 166,163Tolling arrangements GWh 103,491 104,154Fair Value of Derivative InstrumentsThe following table summarizes the gross and net fair values of commodity derivative instruments at March 31, 2012:Derivative Assets Derivative Liabilities(in millions) Short-Term Long-Term Subtotal Short-Term Long-Term SubtotalNon-trading activitiesNetLiabilityEconomic hedges $ 65 $ 72 $ 137 $ 338 $ 1,153 $ 1,491 $ 1,354Netting and collateral (14) (7) (21) (84) (18) (102) (81)Total $ 51 $ 65 $ 116 $ 254 $ 1,135 $ 1,389 $ 1,273The following table summarizes the gross and net fair values of commodity derivative instruments at December 31, 2011:Derivative Assets Derivative Liabilities(in millions) Short-Term Long-Term Subtotal Short-Term Long-Term SubtotalNetLiabilityNon-trading activitiesEconomic hedges $ 86 $ 85 $ 171 $ 303 $ 856 $ 1,159 $ 988Netting and collateral (21) (15) (36) (37) (51) (88) (52)Total $ 65 $ 70 $ 135 $ 266 $ 805 $ 1,071 $ 936Income Statement Impact of Derivative InstrumentsSCE recognizes realized gains and losses on derivative instruments as purchased power expense and expects that such gainsor losses will be part of the purchase power costs recovered from customers. As a result, realized gains and losses are notreflected in earnings, but may temporarily affect cash flows. Due to expected future recovery from customers, unrealizedgains and losses are recorded as regulatory assets and liabilities and therefore are also not reflected in earnings. The results ofderivative activities and related regulatory offsets are recorded in cash flows from operating activities in the consolidatedstatements of cash flows.The following table summarizes the components of economic hedging activity:Three months ended March 31,(in millions) 2012 2011Realized losses $ (55) $ (39)Unrealized losses (361) (96)13

Contingent Features/Credit Related ExposureCertain derivative instruments and power procurement contracts under SCE's power and natural gas hedging activitiescontain collateral requirements. SCE has provided collateral in the form of cash and/or letters of credit for the benefit ofcounterparties. These requirements can vary depending upon the level of unsecured credit extended by counterparties,changes in market prices relative to contractual commitments and other factors.Certain of these power contracts contain a provision that requires SCE to maintain an investment grade credit rating fromeach of the major credit rating agencies, referred to as a credit-risk-related contingent feature. If SCE's credit rating were tofall below investment grade, SCE may be required to pay the derivative liability or post additional collateral. The aggregatefair value of all derivative liabilities with these credit-risk-related contingent features was $285 million and $216 million asof March 31, 2012 and December 31, 2011, respectively, for which SCE has posted no collateral to its counterparties, for therespective periods. If the credit-risk-related contingent features underlying these agreements were triggered on March 31,2012, SCE would be required to post $67 million of collateral.Counterparty Default Risk ExposureAs part of SCE's procurement activities, SCE contracts with a number of utilities, energy companies, financial institutions,and other companies, collectively referred to as counterparties. If a counterparty were to default on its contractual obligations,SCE could be exposed to potentially volatile spot markets for buying replacement power or selling excess power. In addition,SCE would be exposed to the risk of non-payment of accounts receivable, primarily related to sales of excess energy andrealized gains on derivative instruments. Substantially all of the contracts that SCE has executed with counterparties areeither entered into under SCE's procurement plan which has been pre-approved by the CPUC, or the contracts are approvedby the CPUC before becoming effective. As a result of regulatory recovery mechanisms, losses from non-performance are notexpected to affect earnings, but may temporarily affect cash flows.To manage credit risk, SCE looks at the risk of a potential default by counterparties. Credit risk is measured by the loss thatwould be incurred if counterparties failed to perform pursuant to the terms of their contractual obligations. To mitigate creditrisk from counterparties, master netting agreements are used whenever possible and counterparties may be required to pledgecollateral when deemed necessary.Margin and Collateral DepositsMargin and collateral deposits include cash deposited with counterparties and brokers as credit support under energycontracts. The amount of margin and collateral deposits generally varies based on changes in the fair value of the relatedpositions. SCE nets counterparty receivables and payables where balances exist under master netting agreements. SCEpresents the portion of its margin and collateral deposits netted with its derivative positions on its consolidated balancesheets. The following table summarizes margin and collateral deposits provided to counterparties:(in millions)Collateral provided to counterparties:March 31,2012December 31,2011Offset against derivative liabilities $ 81 $ 51Reflected in other current assets 20 1714

Note 7.Income TaxesEffective Tax RateThe table below provides a reconciliation of income tax expense computed at the federal statutory income tax rate to theincome tax provision.Three months ended March 31,(in millions) 2012 2011Income before income taxes $ 300 $ 359Provision for income tax at federal statutory rate of 35% 105 125Increase (decrease) in income tax from:State tax – net of federal benefit 10 12Property-related (10) (11)Other (6) (3)Total income tax expense $ 99 $ 123Effective tax rate 33.0% 34.3%The CPUC requires flow-through ratemaking treatment for the current tax benefit arising from certain property-related andother temporary differences which reverse over time. The accounting treatment for these temporary differences results inrecording regulatory assets and liabilities for amounts that would otherwise be recorded to deferred income tax expense.Tax DisputeEdison International's federal income tax returns and its California combined franchise tax returns are currently open foryears subsequent to 2002. In addition, specific California refund claims made by Edison International for years 1991 through2002 are currently under review by the Franchise Tax Board. The IRS examination phase of tax years 2003 through 2006 wascompleted in the fourth quarter of 2010. This included a proposed adjustment to disallow a component of SCE's repairallowance deduction, which if sustained, would result in a federal tax payment of approximately $94 million, includinginterest through March 31, 2012. Edison International disagrees with the proposed adjustment and filed a protest with the IRSin the first quarter of 2011.Note 8.Pension Plans and Postretirement Benefits Other Than PensionsPension PlansSCE made contributions of $2 million during the three months ended March 31, 2012 and expects to make $261 million ofadditional contributions during the remainder of 2012. SCE's 2012 annual contributions made to most of its pension plans areanticipated to be recovered through CPUC-approved regulatory mechanisms, pending the outcome of the 2012 GRCdecision. Annual contributions to these plans are expected to be, at a minimum, equal to the related annual expense.Expense components are:Three months ended March 31,(in millions) 2012 2011Service cost $ 37 $ 38Interest cost 45 47Expected return on plan assets (55) (56)Amortization of prior service cost 1 2Amortization of net loss 15 4Expense under accounting standards $ 43 $ 35Regulatory adjustment (deferred) 25 (6)Total expense recognized $ 68 $ 2915

Postretirement Benefits Other Than PensionsSCE made contributions of $5 million during the three months ended March 31, 2012 and expects to make $57 million ofadditional contributions during the remainder of 2012. SCE's 2012 annual contributions are anticipated to be recoveredthrough CPUC-approved regulatory mechanisms, pending the outcome of the 2012 GRC decision. Annual contributions areexpected to be, at a minimum, equal to the total annual expense for these plans. Benefits under these plans, with someexceptions, are generally unvested and subject to change.Expense components are:Three months ended March 31,(in millions) 2012 2011Service cost $ 12 $ 10Interest cost 28 31Expected return on plan assets (27) (27)Amortization of prior service credit (9) (9)Amortization of net loss 11 9Total expense $ 15 $ 14Transfer of Certain Postretirement Benefits to Edison InternationalIn March 2012, Edison International agreed to assume the liabilities for active employees of SCE and its subsidiaries underthe specified plans related to deferred compensation and executive post retirement benefits. SCE is obligated to reimburseEdison International upon settlement of liabilities on an after tax basis. Included in the consolidated balance sheet at March31, 2012 was $111 million related to this obligation.Note 9.Commitments and ContingenciesIndemnitiesIndemnity Provided as Part of the Acquisition of MountainviewIn connection with the acquisition of the Mountainview power plant, SCE agreed to indemnify the seller with respect tospecific environmental claims related to SCE's previously owned San Bernardino Generating Station, divested by SCE in1998 and reacquired as part of the Mountainview acquisition. SCE retained certain responsibilities with respect toenvironmental claims as part of the original divestiture of the station. The aggregate liability for either party to the purchaseagreement for damages and other amounts is a maximum of $60 million. This indemnification for environmental liabilitiesexpires on or before March 12, 2033. SCE has not recorded a liability related to this indemnity.Mountainview Filter Cake IndemnitySCE has indemnified the City of Redlands, California in connection with Mountainview's California Energy Commissionpermit for cleanup or associated actions related to groundwater contaminated by perchlorate due to the disposal of filter cakeat the City's solid waste landfill. The obligations under this agreement are not limited to a specific time period or subject to amaximum liability. SCE has not recorded a liability related to this indemnity.Other IndemnitiesSCE provides other indemnifications through contracts entered into in the normal course of business. These are primarilyindemnifications against adverse litigation outcomes in connection with underwriting agreements, and indemnities forspecified environmental liabilities and income taxes with respect to assets sold. SCE's obligations under these agreementsmay or may not be limited in terms of time and/or amount, and in some instances SCE may have recourse against thirdparties. SCE has not recorded a liability related to these indemnities. The overall maximum amount of the obligations underthese indemnifications cannot be reasonably estimated.16

ContingenciesIn addition to the matters disclosed in these Notes, SCE is involved in other legal, tax and regulatory proceedings beforevarious courts and governmental agencies regarding matters arising in the ordinary course of business. SCE believes theoutcome of these other proceedings, individually and in the aggregate, will not materially affect its results of operations orliquidity.CPSD InvestigationsSan Gabriel Valley Windstorm InvestigationIn November 2011, a windstorm resulted in significant damage to SCE’s electric system and service outages for SCEcustomers primarily in the San Gabriel Valley. The CPUC directed its Consumer Protection and Safety Division (“CPSD”) toconduct an investigation focused on the cause of the outages, SCE’s service restoration effort, and SCE’s customercommunications during the outages. The CPSD issued its preliminary report on February 1, 2012. The report asserts that SCEand others with whom SCE shares utility poles violated certain CPUC safety rules applicable to overhead line construction,maintenance and operation, which may have caused the failures of affected poles and supporting cables. The report alsoconcludes that SCE’s restoration time was not adequate and makes other assertions. Additionally, the report contends thatSCE violated CPUC rules by failing to preserve evidence relevant to the investigation when it did not retain damaged polesthat were replaced following the windstorm. If the CPUC issues an Order Instituting Investigation ("OII") regarding thismatter and SCE is found to have violated any CPUC rules, it could face penalties. In addition, the cost of any large scalereview of poles or other equipment for safety compliance could be significant. SCE is unable to estimate a possible loss orrange of loss associated with any penalties that may be imposed by the CPUC on SCE.Malibu Fire Order Instituting InvestigationFollowing a 2007 wildfire in Malibu, California, the CPUC issued an OII to determine if any statutes, CPUC general orders,rules or regulations were violated by SCE or telecomm providers (“OII Respondents”) that shared the use of three failedpower poles in the wildfire area. The CPSD has alleged, among other things, that the poles were overloaded, that the OIIRespondents violated the CPUC's rules governing the design, construction and inspection of poles and misled the CPUCduring its investigation of the fire, and that SCE failed to preserve evidence relevant to the investigation. In October 2011, theCPSD proposed that the OII Respondents be assessed penalties of approximately $99 million, with SCE being allocatedapproximately $50 million of the total. SCE has denied the allegations and believes the proposed penalties are excessive.Four Corners New Source Review LitigationIn October 2011, four private environmental organizations filed a CAA citizen lawsuit against the co-owners of Four Corners.The complaint alleges that certain work performed at the Four Corners generating units 4 and 5, over the approximate periodsof 1985-1986 and 2007-present, constituted plant “major modifications” and the plant's failure to obtain permits and installbest available control technology ("BACT") violated the PSD requirements and the New Source Performance Standards ofthe CAA. The complaint also alleges subsequent and continuing violations of BACT air emissions limits. The lawsuit seeksinjunctive and declaratory relief, civil penalties, including a mitigation project and litigation costs. In November 2010, SCEentered into an agreement to sell its ownership interest in generating units 4 and 5 to APS. The sale is subject to certainclosing conditions and is expected to close in late 2012. Under the agreement SCE would remain responsible for its pro ratashare of certain environmental liabilities, including penalties arising from environmental violations prior to the sale, but SCEwould not be liable for any costs of installing BACT or other costs related to continuing or extending Four Cornersoperations. SCE is unable to estimate a possible loss or range of loss associated with this matter.Concurrently, the US EPA has proposed a regional haze federal implementation plan based on an APS proposal that wouldrequire shut down of units 1, 2 and 3 by 2016 and the installation of selective catalytic reduction technology on units 4 and 5by 2018. APS' proposal contemplated that these actions would both satisfy the federal regional haze requirements and resolveany New Source Review claims the US EPA might have. A final federal implementation plan is expected in 2012.Environmental RemediationSCE records its environmental remediation liabilities when site assessments and/or remedial actions are probable and a rangeof reasonably likely cleanup costs can be estimated. SCE reviews its sites and measures the liability quarterly, by assessing arange of reasonably likely costs for each identified site using currently available information, including existing technology,presently enacted laws and regulations, experience gained at similar sites, and the probable level of involvement and financialcondition of other potentially responsible parties. These estimates include costs for site investigations, remediation, operation17

and maintenance, monitoring and site closure. Unless there is a single probable amount, SCE records the lower end of thisreasonably likely range of costs (reflected in "Other long-term liabilities") at undiscounted amounts as timing of cash flows isuncertain.At March 31, 2012, SCE's recorded estimated minimum liability to remediate its 25 identified material sites (sites in whichthe upper end of the range of the costs is at least $1 million) and 33 identified immaterial sites was $43 million (whichincludes $12 million related to San Onofre) and $3 million, respectively. Of the $46 million total environmental remediationliability, $43 million has been recorded as a regulatory asset. SCE expects to recover $27 million through an incentivemechanism that allows SCE to recover 90% of its environmental remediation costs at certain sites (SCE may request toinclude additional sites) and $16 million through a mechanism that allows SCE to recover 100% of the costs incurred atcertain sites through customer rates. SCE's identified sites include several sites for which there is a lack of currently availableinformation, including the nature and magnitude of contamination, and the extent, if any, that SCE may be held responsiblefor contributing to any costs incurred for remediating these sites. Thus, no reasonable estimate of cleanup costs can be madefor these sites.The ultimate costs to clean up SCE's identified sites may vary from its recorded liability due to numerous uncertaintiesinherent in the estimation process, such as: the extent and nature of contamination; the scarcity of reliable data for identifiedsites; the varying costs of alternative cleanup methods; developments resulting from investigatory studies; the possibility ofidentifying additional sites; and the time periods over which site remediation is expected to occur. SCE believes that, due tothese uncertainties, it is reasonably possible that cleanup costs at the identified material sites and immaterial sites couldexceed its recorded liability by up to $214 million and $5 million, respectively. The upper limit of this range of costs wasestimated using assumptions least favorable to SCE among a range of reasonably possible outcomes.SCE expects to clean up its identified sites over a period of up to 30 years. Remediation costs in each of the next five yearsare expected to range from $7 million to $17 million. Costs incurred for the three months ended March 31, 2012 and 2011were $2 million and $4 million, respectively.Based upon the CPUC's regulatory treatment of environmental remediation costs, SCE believes that costs ultimately recordedwill not materially affect its results of operations, financial position or cash flows. There can be no assurance, however, thatfuture developments, including additional information about existing sites or the identification of new sites, will not requirematerial revisions to estimates.Nuclear InsuranceFederal law limits public liability claims from a nuclear incident to the amount of available financial protection, which iscurrently approximately $12.6 billion. SCE and other owners of San Onofre and Palo Verde have purchased the maximumprivate primary insurance available ($375 million). The balance is covered by a loss sharing program among nuclear reactorlicensees. If a nuclear incident at any licensed reactor in the United States results in claims and/or costs which exceed theprimary insurance at that plant site, all nuclear reactor licensees could be required to contribute their share of the liability inthe form of a deferred premium.Based on its ownership interests, SCE could be required to pay a maximum of approximately $235 million per nuclearincident. However, it would have to pay no more than approximately $35 million per incident in any one year. If the publicliability limit above is insufficient, federal law contemplates that additional funds may be appropriated by Congress. Thiscould include an additional assessment on all licensed reactor operators as a measure for raising further federal revenue.Property damage insurance covers losses up to $500 million, including decontamination costs, at San Onofre and Palo Verde.Decontamination liability and excess property damage coverage exceeding the primary $500 million also has been purchasedin amounts greater than the federal requirement of a minimum of approximately $1.1 billion. Property damage insurance alsocovers damages caused by acts of terrorism up to specified limits. Additional insurance covers part of replacement powerexpenses during an accident-related nuclear unit outage. A mutual insurance company owned by entities with nuclearfacilities issues these policies. If losses at any nuclear facility covered by the arrangement were to exceed the accumulatedfunds for these insurance programs, SCE could be assessed retrospective premium adjustments of up to approximately$49 million per year. Insurance premiums are charged to operating expense.Wildfire InsuranceSevere wildfires in California have given rise to large damage claims against California utilities for fire-related losses allegedto be the result of the failure of electric and other utility equipment. Invoking a California Court of Appeal decision, plaintiffspursuing these claims have relied on the doctrine of inverse condemnation, which can impose strict liability (includingliability for a claimant's attorneys' fees) for property damage. On September 1, 2011, SCE's parent, Edison International,18

enewed its insurance coverage, which included coverage for SCE's wildfire liabilities up to a $575 million limit (with a selfinsuredretention of $10 million per wildfire occurrence). Various coverage limitations within the policies that make up theinsurance coverage could result in additional self-insured costs in the event of multiple wildfire occurrences during the policyperiod (September 1, 2011 to August 31, 2012). SCE may experience coverage reductions and/or increased insurance costs infuture years. No assurance can be given that future losses will not exceed the limits of SCE's insurance coverage.Spent Nuclear FuelUnder federal law, the Department of Energy ("DOE") is responsible for the selection and construction of a facility for thepermanent disposal of spent nuclear fuel and high-level radioactive waste. The DOE did not meet its contractual obligation tobegin acceptance of spent nuclear fuel by January 31, 1998. Extended delays by the DOE have led to the construction ofcostly alternatives and associated siting and environmental issues. Currently, both San Onofre and Palo Verde have interimstorage for spent nuclear fuel on site sufficient for the current license period.In June 2010, the United States Court of Federal Claims issued a decision granting SCE and the San Onofre co-ownersdamages of approximately $142 million to recover costs incurred through December 31, 2005 for the DOE's failure to meetits obligation to begin accepting spent nuclear fuel from San Onofre. SCE received payment from the federal government inthe amount of the damage award in November 2011. SCE has returned to the San Onofre co-owners their respective share ofthe damage award paid. SCE, as operating agent, filed a lawsuit on behalf of the San Onofre owners against the DOE in theCourt of Federal Claims in December 2011 seeking damages of approximately $98 million for the period from January 1,2006 to December 31, 2010 for the DOE's failure to meet its obligation to begin accepting spent nuclear fuel. Additional legalaction would be necessary to recover damages incurred after December 31, 2010. Any damages recovered by SCE are subjectto CPUC review as to how these amounts would be distributed among customers, shareholders, or to offset fueldecommissioning or storage costs.Note 10.Environmental DevelopmentsGreenhouse Gas RegulationIn March 2012, the US EPA announced proposed carbon dioxide emissions limits for new power plants. The status of the USEPA's efforts to develop greenhouse gas emissions performance standards for existing plants is unknown.Greenhouse Gas LitigationIn March 2012, the federal district court in Mississippi dismissed, in its entirety, the purported class action complaint filed byprivate citizens in May 2011, naming a large number of defendants, including SCE and other Edison Internationalsubsidiaries, for damages allegedly arising from Hurricane Katrina. In April 2012, the plaintiffs filed an appeal with the FifthCircuit Court of Appeals. Plaintiffs allege that the defendants' activities resulted in emissions of substantial quantities ofgreenhouse gases that have contributed to climate change and sea level rise, which in turn are alleged to have increased thedestructive force of Hurricane Katrina. The lawsuit alleges causes of action for negligence, public and private nuisance, andtrespass, and seeks unspecified compensatory and punitive damages. The claims in this lawsuit are nearly identical to a subsetof the claims that were raised against many of the same defendants in a previous lawsuit that was filed in, and dismissed by,the same federal district court where the current case has been filed.Note 11.Supplemental Cash Flows InformationSCE's supplemental cash flows information is:Three months ended March 31,(in millions) 2012 2011Cash payments(receipts) for interest and taxes:Interest – net of amounts capitalized $ 151 $ 149Tax payments (refunds) – net (1) (102)Dividends declared but not paid:Preferred and preference stock $ 10 $ 10Accrued capital expenditures at March 31, 2012 and 2011 were $412 million and $423 million, respectively. Accrued capitalexpenditures will be included as an investing activity in the consolidated statements of cash flow in the period paid.19

Note 12.Preferred and Preference StockDuring the first quarter of 2012, SCE issued 350,000 shares of 6.25% Series E preference stock (cumulative, $1,000liquidation value). The Series E preference shares may not be redeemed prior to February 1, 2022. After February 1, 2022,SCE may at its option, redeem the shares, in whole or in part for a price of $1,000 per share plus accrued and unpaiddividends, if any. The shares are not subject to mandatory redemption. The proceeds from the sale of these shares were usedto repay commercial paper borrowings and to fund SCE's capital program.Note 13.Regulatory Assets and LiabilitiesRegulatory AssetsRegulatory assets included on the consolidated balance sheets are:March 31, December 31,(in millions) 2012 2011Current:Regulatory balancing accounts $ 362 $ 223Energy derivatives 320 264Other 10 7Total Current 692 494Long-term:Deferred income taxes – net 2,056 2,020Pensions and other postretirement benefits 1,688 1,703Energy derivatives 1,139 836Unamortized investments - net 497 484Unamortized loss on reacquired debt 244 249Nuclear-related investment – net 152 156Regulatory balancing accounts 84 69Other 264 298Total Long-term 6,124 5,815Total Regulatory Assets $ 6,816 $ 6,309Regulatory LiabilitiesRegulatory liabilities included on the consolidated balance sheets are:March 31, December 31,(in millions) 2012 2011Current:Regulatory balancing accounts $ 637 $ 661Other 8 9Total Current 645 670Long-term:Costs of removal 2,736 2,697Asset Retirement Obligations 1,322 1,105Regulatory balancing accounts 1,039 864Other 6 4Total Long-term 5,103 4,670Total Regulatory Liabilities $ 5,748 $ 5,34020

Note 14.Other InvestmentsNuclear Decommissioning TrustsFuture decommissioning costs of removal of nuclear assets are expected to be funded from independent decommissioningtrusts, which currently receive contributions of approximately $23 million per year through SCE customer rates.Contributions to the decommissioning trusts are reviewed every three years by the CPUC. If additional funds are needed fordecommissioning, it is probable that the additional funds will be recoverable through customer rates. Funds collected,together with accumulated earnings, will be utilized solely for decommissioning. The CPUC has set certain restrictionsrelated to the investments of these trusts.The following table sets forth amortized cost and fair value of the trust investments:Amortized CostFair Value(in millions)LongestMaturityDatesMarch 31,2012December 31,2011March 31,2012December 31,2011Stocks — $ 885 $ 865 $ 2,124 $ 1,899Municipal bonds 2051 574 625 696 756U.S. government and agency securities 2041 596 516 642 580Corporate bonds 2054 305 259 369 317Short-term investments and receivables/payables One-year 21 38 22 40Total $ 2,381 $ 2,303 $ 3,853 $ 3,592Trust fund earnings (based on specific identification) increase the trust fund balance and the ARO regulatory liability.Proceeds from sales of securities (which are reinvested) were $602 million and $622 million for the three months endedMarch 31, 2012 and 2011, respectively. Unrealized holding gains, net of losses, were $1.5 billion and $1.3 billion atMarch 31, 2012 and December 31, 2011, respectively.The following table sets forth a summary of changes in the fair value of the trust:Three months ended March 31,(in millions) 2012 2011Balance at beginning of period $ 3,592 $ 3,480Gross realized gains 25 23Gross realized losses (4) —Unrealized gains (losses) – net 184 102Other-than-temporary impairments (5) (9)Interest, dividends, contributions and other 61 23Balance at end of period $ 3,853 $ 3,619Due to regulatory mechanisms, earnings and realized gains and losses (including other-than-temporary impairments) have noimpact on operating revenue or earnings.21

Note 15.Other Income and ExpensesOther income and expenses are as follows:Three months ended March 31,(in millions) 2012 2011Other income:Equity allowance for funds used during construction $ 20 $ 29Increase in cash surrender value of life insurance policies 7 7Other 4 2Total other income $ 31 $ 38Other expenses:Civic, political and related activities and donations $ 6 $ 7Other 3 6Total other expenses $ 9 $ 1322

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONSFORWARD-LOOKING STATEMENTSThis quarterly report on Form 10-Q contains "forward-looking statements" within the meaning of the Private SecuritiesLitigation Reform Act of 1995. Forward-looking statements reflect SCE's current expectations and projections about futureevents based on SCE's knowledge of present facts and circumstances and assumptions about future events and include anystatement that does not directly relate to a historical or current fact. Other information distributed by SCE that is incorporatedin this report, or that refers to or incorporates this report, may also contain forward-looking statements. In this report andelsewhere, the words "expects," "believes," "anticipates," "estimates," "projects," "intends," "plans," "probable," "may,""will," "could," "would," "should," and variations of such words and similar expressions, or discussions of strategy or ofplans, are intended to identify forward-looking statements. Such statements necessarily involve risks and uncertainties thatcould cause actual results to differ materially from those anticipated. Some of the risks, uncertainties and other importantfactors that could cause results to differ from those currently expected, or that otherwise could impact SCE, include, but arenot limited to:• ability of SCE to recover its costs in a timely manner from its customers through regulated rates;• decisions and other actions by the CPUC, the FERC and other regulatory authorities and delays in regulatory actions;• possible customer bypass or departure due to technological advancements or cumulative rate impacts that make selfgenerationor use of alternative energy sources economically viable;• risks associated with the operation of transmission and distribution assets and nuclear and other power generatingfacilities including: nuclear fuel storage issues, public safety issues, failure, availability, efficiency, output, cost of repairsand retrofits of equipment and availability and cost of spare parts;• environmental laws and regulations, both at the state and federal levels, or changes in the application of those laws, thatcould require additional expenditures or otherwise affect the cost and manner of doing business;• cost of capital and the ability to borrow funds and access to capital markets on reasonable terms;• the cost and availability of electricity including the ability to procure sufficient resources to meet expected customerneeds in the event of nuclear or other power plant outages or significant counterparty defaults under power-purchaseagreements;• changes in the fair value of investments and other assets;• changes in interest rates and rates of inflation, including those rates which may be adjusted by public utility regulators;• governmental, statutory, regulatory or administrative changes or initiatives affecting the electricity industry, including themarket structure rules applicable to each market and price mitigation strategies adopted by Independent SystemOperators and Regional Transmission Organizations;• availability and creditworthiness of counterparties and the resulting effects on liquidity in the power and fuel marketsand/or the ability of counterparties to pay amounts owed in excess of collateral provided in support of their obligations;• cost and availability of labor, equipment and materials;• ability to obtain sufficient insurance, including insurance relating to SCE's nuclear facilities and wildfire-related liability,and to recover the costs of such insurance;• ability to recover uninsured losses in connection with wildfire-related liability;• effects of legal proceedings, changes in or interpretations of tax laws, rates or policies, and changes in accountingstandards;• potential for penalties or disallowances caused by non-compliance with applicable laws and regulations;• cost and availability of coal, natural gas, fuel oil, and nuclear fuel, and related transportation to the extent not recoveredthrough regulated rate cost escalation provisions or balancing accounts;• cost and availability of emission credits or allowances for emission credits;23

• transmission congestion in and to each market area and the resulting differences in prices between delivery points;• ability to provide sufficient collateral in support of hedging activities and power and fuel purchased;• risks inherent in the construction of transmission and distribution infrastructure replacement and expansion projects,including those related to project site identification, public opposition, environmental mitigation, construction,permitting, power curtailment costs (payments due under power contracts in the event there is insufficient transmissionto enable the acceptance of power delivery), and governmental approvals;• risks that competing transmission systems will be built by merchant transmission providers in SCE's service area; and• weather conditions and natural disasters.Additional information about risks and uncertainties, including more detail about the factors described above, is containedthroughout this MD&A and in SCE's 2011 Form 10-K, including the "Risk Factors" section in Part I, Item 1A. Readers areurged to read this entire report, including the information incorporated by reference, as well as the 2011 Form 10-K, andcarefully consider the risks, uncertainties and other factors that affect SCE's business. Forward-looking statements speak onlyas of the date they are made and SCE is not obligated to publicly update or revise forward-looking statements. Readersshould review future reports filed by SCE with the U.S. Securities and Exchange Commission.The MD&A for the three months ended March 31, 2012 discusses material changes in the consolidated financial condition,results of operations and other developments of SCE since December 31, 2011 and as compared to the three months endedMarch 31, 2011. This discussion presumes that the reader has read or has access to SCE's MD&A for the calendar year 2011(the "year-ended 2011 MD&A"), which was included in the 2011 Form 10-K.MANAGEMENT OVERVIEWHighlights of Operating ResultsThree months endedMarch 31,(in millions) 2012 2011 ChangeCore earnings $ 182 $ 222 $ (40)Non-core items — — —Net income available for common stock $ 182 $ 222 $ (40)SCE's earnings are prepared in accordance with generally accepted accounting principles used in the United States.Management uses core earnings for financial planning and for analysis of performance. Core earnings are also used whencommunicating with analysts and investors regarding SCE's earnings results to facilitate comparisons of the performancefrom period to period. Core earnings are a non-GAAP financial measure and may not be comparable to those of othercompanies. Core earnings are defined as earnings attributable to SCE less income or loss from significant discrete items thatmanagement does not consider representative of ongoing earnings, such as: settlement of certain tax, regulatory or legalmatters or proceedings.SCE's 2012 core earnings decreased $40 million primarily due to a delay in the 2012 CPUC General Rate Case decision ashigher depreciation and net interest expenses are not being recovered in currently authorized revenue. The revenuerequirement ultimately adopted by the CPUC will be retroactive to January 1, 2012. The variance also reflects a lowercapitalization rate on funds used during construction. SCE has incurred $20 million of incremental steam generatorinspection and repair costs related to outages at San Onofre which were offset by other operation and maintenance costreductions.2012 CPUC General Rate CaseAs discussed in the year-ended 2011 MD&A, SCE filed its 2012 GRC application in November 2010. In October 2011, SCEsubmitted updated testimony, which changed SCE's requested 2012 base rate revenue requirement to $6.3 billion. TheDivision of Ratepayer Advocates, The Utility Reform Network and other intervenors recommended substantially less than theamount requested by SCE. Intervenors have also recommended changes to SCE's proposed post-test year ratemakingmethodology to be used for 2013 and 2014 as well as limiting the recovery amount of SCE's pension costs. A decision on the24

GRC is expected in the second quarter of 2012. SCE is currently recognizing revenue largely based on the 2011 authorizedrevenue requirement, however, the CPUC has authorized the establishment of a GRC memorandum account, which willmake the 2012 revenue requirement ultimately adopted by the CPUC effective as of January 1, 2012.San Onofre Outage, Inspection and Repair IssuesAs discussed in the 2011 Form 10-K, in the first quarter of 2012, isolated areas of wear in some of the heat transfer tubes inSan Onofre's Unit 2 steam generators were found during a planned outage and a water leak was detected in one of the tubesin a Unit 3 steam generator. Unit 3 was safely taken offline and both Units remain offline for ongoing, extensive inspections,testing and analysis.The water leak in the Unit 3 steam generator was caused by excessive wear resulting from tube-to-tube contact in the area ofthe leak. Causal analysis of the tube to tube contact continues. The same area was re-inspected in the Unit 2 steam generatorsusing a more sensitive inspection method and similar tube-to-tube wear was found on two tubes in one of the steamgenerators at wear levels below the detection capability of the initial testing. Earlier tests performed on the Unit 2 steamgenerators during the planned outage additionally found high levels of wear in some tubes that were in contact with a tubesupport structure. As a result, all tubes in contact with the support structure in both Unit 2 steam generators were preventivelyremoved from service through plugging. Subsequent inspections on Unit 3 found similar tube-to-support structure wear, andthe affected tubes will also be plugged preventively.During the inspection and testing of the steam generators, additional pressure tests of certain tubes were completed todetermine the safety significance of the wear. Eight of the 129 tubes subjected to the additional tests failed the tests and theNRC was notified as required. Given these test results, the NRC launched an Augmented Inspection Team to assess the tubefailures and their causes, SCE's operation of the Units, and SCE's oversight of the design, fabrication, shipping, andconstruction process. The efforts of the Augmented Inspection Team remain in progress. Should the NRC find a deficiency inSCE's performance, SCE could be subject to additional regulatory action by the NRC, and the findings could be taken intoconsideration in the CPUC regulatory proceedings described below. In March 2012, the NRC issued a confirmatory actionletter that required NRC permission to restart Unit 2 and Unit 3 and outlined actions SCE must complete. Each Unit will onlybe restarted when repairs and appropriate mitigation plans on that Unit are completed in accordance with the NRC's letter,and SCE is satisfied that it is safe to do so.In 2005, the CPUC authorized expenditures of approximately $525 million ($665 million when adjusted for inflation) forSCE's 78.21% share of San Onofre to purchase and install the four new steam generators in Units 2 and 3 and remove anddispose of their predecessors. SCE has spent $592 million through March 31, 2012 on the steam generator replacementproject. Those expenditures remain subject to CPUC review upon submission of SCE's final costs for the overall project.Replacement power costs are recovered through the ERRA balancing account, subject to reasonableness review. Replacementpower costs for outages associated with the steam generator inspection and repair (commencing on February 1 for Unit 3 andMarch 5 for Unit 2) through March 31, 2012 were approximately $30 million. Total replacement power costs will not beknown until the Units are returned to service, but costs for power are likely to be higher during the summer months shouldreplacement power still be required at that time. Through mid-April 2012, incremental inspection and repair costs totaled$30 million. Subject to NRC review under the confirmatory action letter and any new developments that may result fromfurther analysis, testing and inspection, SCE's estimated share of the total incremental inspection and repair costs associatedwith returning the units to service remains uncertain, but is currently projected to be in the range of $55 million to$65 million.The steam generators were supplied by Mitsubishi Heavy Industries (“MHI”) and are warranted for an initial period of20 years from acceptance. Subject to certain exceptions, the purchase agreement obligates MHI to repair or replace defectiveitems, sets forth specified damages for certain repairs, and provides that MHI's liability under the purchase agreement isgenerally limited to $137 million in the aggregate and excludes consequential damages, defined to include the cost ofreplacement power.2013 Cost of Capital ApplicationIn April 2012, SCE filed its 2013 cost of capital application requesting a ratemaking capital structure of 43% long-term debt,9% preferred equity and 48% common equity consistent with the current capital structure. In addition, SCE is proposing toreduce its current cost of capital as follows: cost of long-term debt from 6.22% to 5.53%, authorized cost of preferred equityfrom 6.01% to 5.86% and authorized return on common equity from 11.5% to 11.1%. SCE estimates that this request will25

esult in a revenue requirement reduction of $128 million. The application requests continuation of the current multi-yearmechanism, which would retain the authorized capital structure through 2015. The cost of capital will be subject to annualadjustments if certain thresholds are reached. SCE is seeking a CPUC decision on its application by the end of 2012.Capital ProgramDuring the first three months of 2012, SCE's capital investment program focused on maintaining reliability and expanding thecapability of SCE's transmission and distribution system; upgrading and constructing new transmission lines and substations;installing digital meters; and replacing generation asset equipment. Total capital expenditures (including accruals) were$839 million during the first three months of 2012 compared to $765 million during the same period in 2011.As discussed under "Liquidity and Capital Resources—Capital Investment Plan" in the year-ended 2011 MD&A, SCEcontinues to project that 2012 capital expenditures will be in the range of $4.4 billion to $5.0 billion and that 2012 – 2014total capital expenditures will be in the range of $11.8 billion to $13.2 billion. Actual capital spending will be affected by:changes in regulatory, environmental and engineering design requirements; permitting and project delays; cost andavailability of labor, equipment and materials; and other factors.Environmental DevelopmentsFor a discussion of environmental developments, see "SCE Notes to Consolidated Financial Statements—Note 10.Environmental Developments."RESULTS OF OPERATIONSSCE's results of operations are derived mainly through two sources:• Utility earning activities – representing revenue authorized by the CPUC and FERC which is intended to provide SCE areasonable opportunity to recover its costs and earn a return on its net investment in generation, transmission anddistribution 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 utility earnings activities arerevenues or penalties related to incentive mechanisms, other operating revenue, and regulatory charges or disallowances,if any.• Utility cost-recovery activities – representing CPUC- and FERC-authorized balancing accounts which allow for recoveryof specific project or program costs, subject to reasonableness review or compliance with upfront standards.During the first quarter of 2012, SCE classified revenues and costs related to EdisonSmartConnect ® , San Onofre steamgenerator replacement project and similar programs that provide for recovery of actual costs plus a return on capital as utilityearning activities. Previously, SCE classified the recovery of actual costs incurred under these programs as utility costrecoveryactivities. The table presented below reflects a reclassification of the revenues and costs for the first quarter of 2011consistent with the presentation in 2012. The reclassification of revenues and costs had no impact on earnings.26

The following table is a summary of SCE's results of operations for the periods indicated. The presentation below separatelyidentifies utility earning activities and utility cost-recovery activities.(in millions)UtilityEarningActivitiesThree months endedMarch 31, 2012UtilityCost-RecoveryActivitiesTotalConsolidatedUtilityEarningActivitiesThree months endedMarch 31, 2011UtilityCost-RecoveryActivitiesTotalConsolidatedOperating revenue $ 1,456 $ 956 $ 2,412 $ 1,405 $ 827 $ 2,232Fuel and purchased power — 692 692 — 584 584Operations and maintenance 588 263 851 542 242 784Depreciation decommissioning andamortization 389 — 389 344 — 344Property taxes and other 82 1 83 76 1 77Total operating expenses 1,059 956 2,015 962 827 1,789Operating income 397 — 397 443 — 443Net interest expense and other (97) — (97) (84) — (84)Income before income taxes 300 — 300 359 — 359Income tax expense 99 — 99 123 — 123Net income 201 — 201 236 — 236Dividends on preferred and preferencestock 19 — 19 14 — 14Net income available for common stock $ 182 $ — $ 182 $ 222 $ — $ 222Core Earnings 1 $ 182 $ 222Non-Core Earnings — —Total SCE GAAP Earnings $ 182 $ 2221See use of Non-GAAP financial measures in "Management Overview—Highlights of Operating Results."Utility Earning ActivitiesDuring the first quarter of 2012, SCE recognized revenue from CPUC activities largely based on 2011 authorized baserevenue requirements included in customer rates pending the outcome of the GRC. The CPUC has authorized theestablishment of a GRC memorandum account, which will make the 2012 revenue requirement ultimately adopted by theCPUC effective as of January 1, 2012. Recognition of the revenue for the period January 1, 2012 through the date of a finaldecision, as well as any delays in certain expenditures and changes in authorized treatment of specific costs, will impact thetiming of earnings in 2012 (see "Management Overview—2012 CPUC General Rate Case" for further discussion).Utility earning activities were primarily affected by the following:• SCE had higher operating revenue of $51 million, primarily due to the following:• $40 million increase was primarily due to revenue related to authorized CPUC projects not included in SCE's GRCprocess including the EdisonSmartConnect ® project, San Onofre steam generator replacement project and the SolarPhotovoltaic project.• Revenue recognized in 2012 related to the San Onofre Unit 2 scheduled outage costs. In December 2011, the CPUCauthorized revenue requirements for 2012 refueling outages for San Onofre.• Higher operation and maintenance expense of $46 million was primarily due to $35 million of costs related to the 2012San Onofre Unit 2 scheduled maintenance and refueling outage as well as $20 million related to the steam generatorinspection and repair at San Onofre. These increases were partially offset by transmission and distribution reductions andEdisonSmartConnect ® benefits realized. See "Management Overview—San Onofre Outage, Inspection and RepairIssues" for further information.27

• Higher depreciation, decommissioning and amortization expense of $45 million was primarily related to increasedtransmission and distribution investments.• Higher net interest expense and other of $13 million was primarily due to higher outstanding balances on long-term debtand a lower AFUDC capitalization rate in 2012 mainly driven by lower cost of financing resulting from an increase inthe use of short-term debt. For details of other income and expenses, see "SCE Notes to Consolidated FinancialStatements—Note 15. Other Income and Expenses."• Lower income taxes due to lower pre-tax income. See "—Income Taxes" below for more information.Utility Cost-Recovery ActivitiesUtility cost-recovery activities were primarily affected by the following:• Higher purchased power expense of $108 million was primarily driven by the cost to replace CDWR contracts thatexpired in 2011, which were not previously recorded as an SCE cost but which were included as a separate componenton customer bills (see "—Supplemental Operating Revenue Information" below), and lower generation in 2012 from SanOnofre. These increases were offset by lower power prices in 2012.Supplemental Operating Revenue InformationSCE's retail billed and unbilled revenue (excluding wholesale sales and balancing account over/undercollections) was$2.3 billion and $2.1 billion for the three months ended March 31, 2012 and 2011 respectively. The increase in revenuereflects:• a sales volume increase of $288 million primarily due to SCE providing power that was previously provided by CDWRcontracts which expired in 2011. Prior to 2012, SCE remitted to CDWR and did not recognize as revenue the amountsthat SCE billed and collected from its customers for the portion of electric power purchased and sold by the CDWR toSCE's customers.• a rate decrease of $105 million resulting from a rate adjustment beginning on June 1, 2011, primarily reflecting therefund to customers of overcollected fuel and power procurement-related costs.As a result of the CPUC-authorized decoupling mechanism, SCE earnings are not affected by changes in retail electricitysales (see "Item 1. Business—Overview of Ratemaking Process" in the 2011 Form 10-K).Income TaxesThe table below provides a reconciliation of income tax expense computed at the federal statutory income tax rate to theincome tax provision.Three months ended March 31,(in millions) 2012 2011Income before income taxes $ 300 $ 359Provision for income tax at federal statutory rate of 35% $ 105 $ 125Increase (decrease) in income tax from:State tax – net of federal benefit 10 12Property-related (10) (11)Other (6) (3)Total income tax expense $ 99 $ 123Effective tax rate 33.0% 34.3%For a discussion of the status of Edison International's income tax audits, see "SCE Notes to Consolidated FinancialStatements—Note 7. Income Taxes."28

LIQUIDITY AND CAPITAL RESOURCESSCE's ability to operate its business, fund capital expenditures, and implement its business strategy are dependent upon itscash flow and access to the capital markets. SCE's overall cash flows fluctuate based on, among other things, its ability torecover its costs in a timely manner from its customers through regulated rates, changes in commodity prices and volumes,collateral requirements, interest and dividend payments to investors, and the outcome of tax and regulatory matters.SCE expects to fund its 2012 obligations, capital expenditures and dividends through operating cash flows and capital marketfinancings of debt and preferred equity, as needed. SCE also has availability under its credit facilities to meet operating andcapital requirements.Available LiquiditySCE has two credit facilities: a $2.3 billion five-year credit facility that matures in February 2013 and a $500 million threeyearcredit facility that matures in March 2013. SCE expects to complete negotiations for a replacement credit facility withsubstantially similar terms and current market rates in 2012.Debt Covenant(in millions)Credit FacilitiesCommitment $ 2,796Outstanding commercial paper supported by credit facilities (330)Outstanding letters of credit (63)Amount available $ 2,403SCE has a debt covenant in its credit facilities that limits its debt to total capitalization ratio to less than or equal to 0.65 to 1.At March 31, 2012, SCE's debt to total capitalization ratio was 0.48 to 1.Regulatory ProceedingsFERC Formula RatesAs discussed in the year-ended 2011 MD&A, the FERC has accepted, subject to refund and settlement procedures, SCE'srequest to implement formula rates as a means to determine SCE's FERC transmission revenue requirement effectiveJanuary 1, 2012. SCE's request would result in a total 2012 FERC weighted average ROE of 11.1% including a base ROE of9.93% and the previously authorized 50 basis point incentive for CAISO participation and individual authorized projectincentives. The formula rate mechanism, including the base ROE, is subject to final resolution as part of the settlementprocess or, if a settlement is not achieved, to determination by FERC in a litigated process. SCE and the other parties to theproceeding continue to engage in settlement negotiations.Dividend RestrictionsThe CPUC regulates SCE's capital structure which limits the dividends it may pay Edison International. In SCE's most recentcost of capital proceeding, the CPUC set an authorized capital structure for SCE which included a common equity componentof 48%. SCE may make distributions to Edison International as long as the common equity component of SCE's capitalstructure remains at or above the 48% authorized level on a 13-month weighted average basis. At March 31, 2012, SCE's13-month weighted-average common equity component of total capitalization was 50.0% resulting in the capacity to pay$377 million in additional dividends to Edison International.During the first quarter of 2012, SCE made $116 million in dividend payments to its parent, Edison International. Futuredividend amounts and timing of distributions are dependent upon several factors including the level of capital expenditures,operating cash flows and earnings.Margin and Collateral DepositsCertain derivative instruments, power procurement contracts and other contractual arrangements contain collateralrequirements. Future collateral requirements may differ from the requirements at March 31, 2012, due to the addition ofincremental power and energy procurement contracts with collateral requirements, if any, and the impact of changes inwholesale power and natural gas prices on SCE's contractual obligations.29

Some of the power procurement contracts contain provisions that require SCE to maintain an investment grade credit ratingfrom the major credit rating agencies. If SCE's credit rating were to fall below investment grade, SCE may be required to paythe liability or post additional collateral.The table below provides the amount of collateral posted by SCE to its counterparties as well as the potential collateral thatwould be required as of March 31, 2012.(in millions)Collateral posted as of March 31, 2012 1 $ 164Incremental collateral requirements for power procurement contracts resulting from apotential downgrade of SCE's credit rating to below investment grade 140Posted and potential collateral requirements 2 $ 30412Collateral provided to counterparties and other brokers consisted of $81 million of cash which was offset against netderivative liabilities on the consolidated balance sheets, $20 million of cash reflected in "Other current assets" on theconsolidated balance sheets and $63 million in letters of credit.There would be no increase to SCE's total posted and potential collateral requirements based on SCE's forwardpositions as of March 31, 2012 due to adverse market price movements over the remaining lives of the existing powerprocurement contracts using a 95% confidence level.Workers Compensation Self-Insurance FundFor a discussion of potential collateral requirements related to its self-insured workers compensation plan, refer to "Liquidityand Capital Resources—Workers Compensation Self-Insurance Fund" in the year ended 2011 MD&A.Historical Consolidated Cash FlowsThe table below sets forth condensed historical cash flow information for SCE.Three months ended March 31,(in millions) 2012 2011Net cash provided by operating activities $ 775 $ 672Net cash provided by financing activities 500 190Net cash used by investing activities (1,269) (1,066)Net increase (decrease) in cash and cash equivalents $ 6 $ (204)Net Cash Provided by Operating ActivitiesNet cash provided by operating activities increased $103 million in the first quarter of 2012 compared to the same period in2011. The increase in cash flows provided by operating activities was primarily due to the timing of cash receipts anddisbursements related to working capital items, partially offset by lower net tax receipts in 2012.30

Net Cash Provided by Financing ActivitiesThe following table summarizes cash provided by financing activities for the three months ended March 31, 2012 and 2011.Issuances of debt and preference stock are discussed in "SCE Notes to Consolidated Financial Statements—Note 5. Debt andCredit Agreements—Long-Term Debt" and "Note 12. Preferred and Preference Stock."Three months ended March 31,(in millions) 2012 2011Issuances of preference stock, net $ 345 $ 123Issuances of first and refunding mortgage bonds, net 391 —Payments of common stock dividends to Edison International (116) (115)Payments of preferred and preference stock dividends (15) (13)Net issuances of commercial paper 1 (89) 200Other (16) (5)Net cash provided by financing activities $ 500 $ 1901Issuances of commercial paper are supported by SCE's line of credit.The timing and amount of SCE's financing activities are largely driven by its capital program.Net Cash Used by Investing ActivitiesCash flows from investing activities are primarily due to capital expenditures and funding of nuclear decommissioning trusts.Capital expenditures were $1.2 billion and $1.0 billion for the three months ended March 31, 2012 and 2011, respectively(see "Liquidity and Capital Resources—Capital Investment Plan" in the year-ended 2011 MD&A for further information oncapital expenditures). Net purchases of nuclear decommissioning trust investments and other were $82 million and$47 million for the three months ended March 31, 2012 and 2011, respectively.Contractual Obligations and ContingenciesContingenciesSCE has contingencies related to the CPSD Investigations, Four Corners New Source Review Litigation, Nuclear Insurance,Wildfire Insurance and Spent Nuclear Fuel, which are discussed in "SCE Notes to Consolidated Financial Statements—Note 9. Commitments and Contingencies."Environmental RemediationAs of March 31, 2012, SCE had identified 25 material sites for remediation and recorded an estimated minimum liability of$43 million. SCE expects to recover 90% of its remediation costs at certain sites. See "SCE Notes to Consolidated FinancialStatements—Note 9. Commitments and Contingencies" for further discussion.MARKET RISK EXPOSURESSCE's primary market risks include fluctuations in interest rates, commodity prices and volumes, and counterparty credit.Fluctuations in interest rates can affect earnings and cash flows. Fluctuations in commodity prices and volumes andcounterparty credit losses may temporarily affect cash flows, but are not expected to affect earnings due to expected recoverythrough regulatory mechanisms. Derivative instruments are used, as appropriate, to manage market risks for customers andSCE. For a further discussion of SCE's market risk exposures, including commodity price risk, credit risk and interest raterisk, see "SCE Notes to Consolidated Financial Statements—Note 6. Derivative Instruments and Hedging Activities" and"—Note 4. Fair Value Measurements."Commodity Price RiskThe fair value of outstanding derivative instruments used to mitigate SCE's exposure to commodity price risk was a netliability of $1.3 billion and $936 million at March 31, 2012 and December 31, 2011, respectively. The increase in the netliability was related to changes in unrealized losses on economic hedging activities primarily due to declining power andnatural gas prices. For further discussion of fair value measurements and the fair value hierarchy, see "SCE Notes toConsolidated Financial Statements—Note 4. Fair Value Measurements."31

Credit RiskCredit risk exposure from counterparties for power and gas trading activities is measured as the sum of net accountsreceivable (accounts receivable less accounts payable) and the current fair value of net derivative assets (derivative assets lessderivative liabilities) reflected on the consolidated balance sheets. SCE enters into master agreements which typically providefor a right of setoff. Accordingly, SCE's credit risk exposure from counterparties is based on a net exposure under thesearrangements. SCE manages the credit risk on the portfolio for both rated and non-rated counterparties based on credit ratingsusing published ratings of counterparties and other publicly disclosed information, such as financial statements, regulatoryfilings, and press releases, to guide it in the process of setting credit levels, risk limits and contractual arrangements,including master netting agreements. As of March 31, 2012, the amount of balance sheet exposure as described above brokendown by the credit ratings of SCE's counterparties, was as follows:March 31, 2012(in millions) Exposure 2 Collateral Net ExposureS&P Credit Rating 1A or higher $ 101 $ — $ 101A- 1 — 1Not rated 3 14 (4) 10Total $ 116 $ (4) $ 112123SCE assigns a credit rating based on the lower of a counterparty's S&P or Moody's rating. For ease ofreference, the above table uses the S&P classifications to summarize risk, but reflects the lower of the twocredit ratings.Exposure excludes amounts related to contracts classified as normal purchases and sales and non-derivativecontractual commitments that are not recorded on the consolidated balance sheets, except for any related netaccounts receivable.The exposure in this category relates to long-term power purchase agreements. SCE's exposure is mitigatedby regulatory treatment.CRITICAL ACCOUNTING ESTIMATES AND POLICIESFor a discussion of SCE's critical accounting estimates and policies, see "Critical Accounting Estimates and Policies" in theyear ended 2011 MD&A.NEW ACCOUNTING GUIDANCENew accounting guidance is discussed in "SCE Notes to Consolidated Financial Statements—Note 1. Summary ofSignificant Accounting Policies—New Accounting Guidance."ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKInformation responding to this item is included in the MD&A under the heading "Market Risk Exposures" and isincorporated herein by reference.ITEM 4.CONTROLS AND PROCEDURESDisclosure Controls and ProceduresSCE's management, under the supervision and with the participation of the company's President and Chief Financial Officer,has evaluated the effectiveness of SCE's disclosure controls and procedures (as that term is defined in Rules 13a-15(e) or15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period coveredby this report. Based on that evaluation, the President and Chief Financial Officer concluded that, as of the end of the period,SCE's disclosure and procedures were effective.Change in Internal Control Over Financial ReportingThere were no changes in SCE's internal control over financial reporting during the period to which this report relates thathave materially affected, or are reasonably likely to materially affect, SCE's internal control over financial reporting.32

Jointly Owned Utility PlantSCE's scope of evaluation of internal control over financial reporting includes its Jointly Owned Utility Projects.PART II.ITEM 1.OTHER INFORMATIONLEGAL PROCEEDINGSNone.33

ITEM 6.EXHIBITSExhibitNumberDescription3.1 Certificate of Determination of Series of Preferences of the Series E Preference Stock effectiveJanuary 12, 2012 (File No. 1-2313, filed as Exhibit 4 to Southern California Edison Company's Form 8-Kdated January 11, 2012 and filed January 13, 2012)*3.2 Certificate of Increase in Authorized Shares of Series E Preference Stock effective January 31, 2012 (File No.1-2313, filed as Exhibit 4.1 to Southern California Edison Company's Form 8-K dated January 30, 2012 andfiled February 1, 2012)*10.1** Edison International 2012 Executive Annual Incentives Program (File No.1-9936, filed as Exhibit 10.1 to theEdison International Form 10-Q for the quarter ended March 31, 2012)*10.2** Edison International 2012 Long-Term Incentive Terms and Conditions (File No.1-9936, filed as Exhibit 10.2to the Edison International Form 10-Q for the quarter ended March 31, 2012)*10.3** Edison International Executive Incentive Compensation Plan (File No.1-9936, filed as Exhibit 10.3 to theEdison International Form 10-Q for the quarter ended March 31, 2012)*31.1 Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act31.2 Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act32 Statement Pursuant to 18 U.S.C. Section 1350101*** Financial statements from the quarterly report on Form 10-Q of Southern California Edison Company for thequarter ended March 31, 2012, filed on May 2, 2012, formatted in XBRL: (i) the Consolidated Statements ofIncome; (ii) the Consolidated Statements of Comprehensive Income; (iii) the Consolidated Balance Sheets;(iv) the Consolidated Statements of Cash Flows; and (v) the Notes to Consolidated Financial Statementstagged as blocks of text_____________________________* Incorporated by reference pursuant to Rule 12b-32.** Indicates a management contract or compensatory plan or arrangement, as required by Item 15(a)3.*** Furnished, not filed, pursuant to Rule 406T of SEC Regulation S-T.34

SIGNATUREPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly causedthis report to be signed on its behalf by the undersigned, thereunto duly authorized.SOUTHERN CALIFORNIA EDISON COMPANYBy:/s/ Chris C. DominskiChris C. DominskiVice President and Controller(Duly Authorized Officer and PrincipalAccounting Officer)Date: May 2, 201235

Document and Entity InformationApply YTD Duration tag tocolumn for Current ReportingPeriod DateShares Date fromCover PagePublic Float Datefrom Cover Pagefor 10K12/31/2011 2/27/2012 6/30/2011SOUTHERNCALIFORNIA EDISONEntity Registrant NameCOEntity Central Index Key 0000092103Current Fiscal Year End Date 12/31/2011Entity Filer CategoryNon-accelerated FilerDocument Type 10-KDocument Period End Date 12/31/2011Document Fiscal Year Focus 2011Document Fiscal Period FocusFYAmendment FlagfalseEntity Common Stock, Shares Outstanding 434,888,104Entity Well-known Seasoned IssuerEntity Voluntary FilersEntity Current Reporting StatusYesNoYesEntity Public Float $ —Instructions: (it is ok to leave this information here as only the xbrl tags will be filed) See the "XBRL Tagging the DEITable" help article for further information. Copy this URL into a browser: https://help.webfilings.com/article/xbrltagging-dei-tabFormatting and Inputting data:1. All above elements are required for 10K filings; Bold elements are required for 10Q filings and the remaining elementsare optional.2. Create a new section in the Workbook titled "DEI" and copy this table into the newly created DEI section of theworkbook. Then link that table directly to this table. (Note: do not link the dates in the "Dates" section of the workbook tothis table or to this table in the workbook)3. Update all information in red accordingly in the Workbook.3a. Entity Registrant Name must be your SEC registered name and in exact format .3b. Entity Filer Category input must be one of the following and in this exact format: "Large Accelerated Filer";"Accelerated Filer"; "Non-accelerated Filer"; or "Smaller Reporting Company".3c. Document Fiscal Period Focus should be Q1, Q2, Q3 for 10Q and FY for 10K.3d. Amendment Flag input must be all lowercase (ie., "false" or "true")Tagging:4. Tag Column B with a YTD duration date tag and Columns C&D with an instant date tag.4a. Shares Outstanding date must be same date as reported on Cover Page. (instant tag)4b. Public Float date must be as of the measurement date (measured as of Q2), also found on Cover Page of 10Ks.(instant tag)5. Ensure accuracy is set correctly for Shares Outstanding and Public Float. (typically shown in "ones"). Open XBRL FactProperties window to update accordingly.6. If reporting a Consolidated Registrant with Subsidiaries or Dual (or Multiple) Registrants, add the dei:LegalEntityAxisand appropriate member to each entity that is not the Consolidated Entity. See Question E.17 in the SEC Interpretation(http://www.sec.gov/spotlight/xbrl/staff-interps.shtml) for further information.7. If 2 classes of stock: apply Class of Stock [Axis] and Common Stock A [Member] and Common Stock B [Member], orappropriate member combination depending on type/name of stock.NOTE: This document will not get filed. It is used to generate the six XBRL instance documents that will be filed with theSEC. The XBRL Generation step takes place in the Project pane under the "XBRL" tab. See the "Generate XBRL" helparticle at the following URL: https://help.webfilings.com/article/generating-xbrl

Balance Sheet Parenthetical Starter TemplateDecember 31, 2011 December 31, 2010Receivables, less allowances of $[ ] and $85 for uncollectible accounts atrespective dates $ 75 $ 85Utility property, plant and equipment, less accumulated depreciation of $6,894and $6,319 at respective dates 6,894 6,319Nonutility property, plant and equipment, less accumulated depreciation of $107and $100 at respective dates 107 100Par value: — —Shares authorized: 560,000,000 560,000,000Shares issued: 434,888,104 434,888,104Shares outstanding: 434,888,104 434,888,104Instructions: (it is ok to leave this information here as only the xbrl tags will be filed) See the "XBRL TaggingParentheticals" help article for further information. Copy this URL into a browser: https://wf-staging-help.webfilings.com/article/xbrl-tagging-parentheticals1. The above template is a representation of how the below "SAMPLE" Current Assets and Shareholders' Investmentparenthetical portions of the balance sheet should be setup. (Note: This is an example to start with and should be updatedaccordingly based on the information included in each statement.)2. If you have additional statements that include parenthetical information, add another section in the Document Outline,insert a table with the relevant information, and proceed with setting up the XBRL Section Outline to begin tagging asmentioned in Step 2.3. Make sure parenthetical section name is same as financial statement name plus "Parenthetical" at the end. (ie.,Condensed Consolidated Balance Sheets Parenthetical).4. Make sure accuracy is set correctly for all parenthetical items. Open XBRL Fact Properties window to updateaccordingly.5. Reminder: Ensure the labels in the XBRL Outline of the 10Q document reflect the correct parenthetical values that aretagged in these parenthetical sections.

SAMPLEJune 30,2011December 31,2010Current Assets:Cash and cash equivalents $ 42,000 $ 70,000Accounts receivable, less allowance for doubtful accounts of $11,000 and$12,000, respectively 150,000 139,000Unbilled revenues, at estimated billable amounts 117,000 92,000Prepaid expenses and other current assets 26,000 21,000Total current assets 335,000 322,000Stockholders’ Equity:Common stock, $1.00 par value; 50,000 shares authorized; 28,000 and 27,000shares issued and outstanding, respectively 28,000 27,000Preferred stock, $1.00 par value; 50,000 shares authorized; 25,000 shares issuedand outstanding 25,000 25,000Additional paid-in capital 31,000 29,000Retained earnings 152,000 14,000Accumulated other comprehensive loss (160,000) (165,000)Total Stockholders’ Equity 76,000 (70,000)

2011 2010 2009Net loss arising during period, net of income taxbenefit of $2, $6 and $5 for 2011, 2010 and2009 respectively (2) (6) (5)Amortization of net loss included in net income,net of income tax expense of $2, $2 and $1 for2011, 2010 and 2009 respectively 2 2 1TASKEDGAR PRE-FILING CHECKLISTTaskCompleted?1. Do you have your CCC # and SEC Password (ensure password hasn't expired)? CCC# can be added to theAdmin screen so it will auto-populate in the filing wizard2. Validate document to check for any broken links. (Tools menu -> Validate document. This will often findmany items to auto-fix the first run through. The only ones you need to worry about are any that say "(Willnot auto-fix)" at the end. If you run it a second time and items still come up, those are the ones you'll need tomanually fix. If manual fixes are required, fix them and re-validate.3. Save As a PDF or Preview Document to check layout and page breaks. After adjusting page breaks, runPaginate document from the Tools menu so that Edgar page breaks line up with the PDF page breaks.(Validate Document also updates the page breaks, so if you didn't change anything since you last validated,you don't need to run Paginate.)4. Preview Edgar. Check that column headings wrap consistently and formatting looks good.5. Open project and check that all required exhibits and documents are included in project.6. Are Exhibits in separate files?7. Check that the signature date on the signature page of the 10-Q and all Exhibits is correct.8. If you want to review the Edgar documents that are actually getting filed, Open the Filing Wizard and runStep 1: Generate Edgar Documents. This will create a new folder in your project called “Edgar FilingDocuments” containing all your filing documents. Review Edgar from here.TASKXBRL Y1 PRE-FILING CHECKLISTTaskCompleted?1. Ensure tagging is in compliance with SEC filing requirements (main financials and notes)2. Ensure all necessary calculation assertions have been included3. Ensure XBRL fact value has appropriate signage (+/-) (Note - this is not referring to the presentation valuesigns)4. Run XBRL check document, and review messages in the Notifications panel.5. Generate the project and clear any validation errors noted. Review the Edgar/XBRL Preview document.Any errors should be highlighted in Red, warnings in yellow. Errors will also be listed at the bottom of eachsection they appear in, and all errors will be listed at the bottom of the All Facts section. Note that “trueinconsistencies” will likely exist and are expected (ie. Calculation Inconsistencies.)6. Regenerate XBRL documents at the project level and open the SEC viewer tie-out report7. SEC Viewer Tie-out7a. Compare EDGAR document with SEC Viewer (all levels)7b. Ensure full text block range is included in viewer (including note title)7c. Ensure labels in SEC Viewer match the line item descriptions in financial statements (especiallyparentheticals that may have changed from previous quarters); if changing any labels, use label editor inthe XBRL outline right-click menu and the “Include all outline usages of a concept?”7d. Ensure correct ordering of notes.

7e. Check section headings (including subsection titles)7f. Check the accuracy precisions shown (ones vs thousands/millions, etc.) (Use filter on EDGAR/XBRLreport to review)7g. Ensure all values match EDGAR presentation signs (+/-)8. Make any required changes based on the SEC Viewer tie-out9. Ensure Parenthetical tagging is complete and up to date in the Supplemental document.10. Review DEI close to filing date when all data is available10a. Are all of the dates appropriate (fiscal year end, document year end, outstanding shares, and publicfloat)?10b. Have the outstanding shares been updated and tie to cover page?10c. Has the public float been updated (if applicable) and ties to cover page?10d. Is the accuracy set correctly (ones vs thousands/millions, etc.)?10e. Are all required DEI disclosures made and updated for current quarter? (Check against template)11. Regenerate at the project level and clear any additional errors noted12. Test File (See Filing Wizard help articles for further details)

TASKEDGAR PRE-FILING CHECKLISTTaskCompleted?1. Do you have your CCC # and SEC Password (ensure password hasn't expired)? CCC# can beadded to the Admin screen so it will auto-populate in the filing wizard2. Validate document to check for any broken links. (Tools menu -> Validate document. This willoften find many items to auto-fix the first run through. The only ones you need to worry about areany that say "(Will not auto-fix)" at the end. If you run it a second time and items still come up,those are the ones you'll need to manually fix. If manual fixes are required, fix them and revalidate.3. Save As a PDF or Preview Document to check layout and page breaks. After adjusting pagebreaks, run Paginate document from the Tools menu so that Edgar page breaks line up with thePDF page breaks. (Validate Document also updates the page breaks, so if you didn't changeanything since you last validated, you don't need to run Paginate.)4. Preview Edgar. Check that column headings wrap consistently and formatting looks good.5. Open project and check that all required exhibits and documents are included in project.6. Are Exhibits in separate files?7. Check that the signature date on the signature page of the 10-Q and all Exhibits is correct.8. If you want to review the Edgar documents that are actually getting filed, Open the FilingWizard and run Step 1: Generate Edgar Documents. This will create a new folder in your projectcalled “Edgar Filing Documents” containing all your filing documents. Review Edgar from here.TASKXBRL Y2 PRE-FILING CHECKLISTTaskCompleted?1. Ensure tagging is in compliance with SEC filing requirements (main financials, notes, andschedules)2. Ensure all necessary calculation assertions have been included3. Ensure XBRL fact value has appropriate signage (+/-) (Note - this is not referring to thepresentation value signs)4. Run XBRL check document, and review messages in the Notifications panel.5. Generate the project and clear any validation errors noted. Review the Edgar/XBRL Previewdocument. Any errors should be highlighted in Red, warnings in yellow. Errors will also be listedat the bottom of each section they appear in, and all errors will be listed at the bottom of the AllFacts section. Note that “true inconsistencies” will likely exist and are expected (ie. CalculationInconsistencies.)6. Regenerate XBRL documents at the project level and open the SEC viewer tie-out report7. SEC Viewer Tie-out7a. Compare EDGAR document with SEC Viewer (all levels)7b. Level 1 - Ensure full text block range is included in viewer (including note title)7c. Level 2 - Ensure all policies (throughout the entire document) which have been tagged areincluded7d. Level 3 - Ensure all tables are included and generally include preceding sentence to providefurther context for the table. Also, ensure that any footnotes are included in the table text blockrange.7e. Level 4 - Tie-out all numbers in tables, textuals and phantoms. Note that there can beadditional line items included in the SEC Previewer if there are shared tags. This is ok - justneed to ensure that the amounts are actually included somewhere else in the filing.7f. Ensure labels in SEC Viewer match the line item descriptions in financial statements(especially parentheticals that may have changed from previous quarters); if changing anylabels, use label editor in the XBRL outline right-click menu and the “Include all outline usagesof a concept?”7g. Ensure correct ordering of notes and levels within.

7h. Check section headings (including subsection titles)7i. Check the accuracy precisions shown (ones vs thousands/millions, etc.) (Use filter onEDGAR/XBRL report to review)7j. Ensure all values match EDGAR presentation signs (+/-)8. Make any required changes based on the SEC Viewer tie-out9. Ensure Parenthetical tagging is complete and up to date in the Supplemental document.10. Review DEI close to filing date when all data is available10a. Are all of the dates appropriate (fiscal year end, document year end, outstanding shares,and public float)?10b. Have the outstanding shares been updated and tie to cover page?10c. Has the public float been updated (if applicable) and ties to cover page?10d. Is the accuracy set correctly (ones vs thousands/millions, etc.)?10e. Are all required DEI disclosures made and updated for current quarter? (Check againsttemplate)11. Regenerate at the project level and clear any additional errors noted12. Prior to test filing (1 week out), run an EDGAR blackline against the milestone created asdiscussed above. Review the SEC Viewer for any sections where changes have been noted. Makeany necessary XBRL changes and then regenerate project and clear any additional errors noted.Test File (See Filing Wizard help articles for further details)13. Continue to monitor any changes to EDGAR for corresponding changes to XBRL.14. Continue to update XBRL as necessary, clearing errors at the project level. Note that anychanges to XBRL which don't affect the EDGAR document, would not be noted in the subsequentblacklines

Exhibit 31.2CERTIFICATIONI, LINDA G. SULLIVAN, certify that:1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, of Southern CaliforniaEdison Company;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a materialfact necessary to make the statements made, in light of the circumstances under which such statements were made, notmisleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly presentin all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periodspresented in this report;4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controlsand procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (asdefined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to bedesigned under our supervision, to ensure that material information relating to the registrant, including its consolidatedsubsidiaries, is made known to us by others within those entities, particularly during the period in which this report is beingprepared;(b) Designed such internal control over financial reporting, or caused such internal control over financialreporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this reportour conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by thisreport based on such evaluation; and(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurredduring the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that hasmaterially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal controlover financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or personsperforming the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control overfinancial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize andreport financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have a significant rolein the registrant's internal control over financial reporting.Date: May 2, 2012/s/ LINDA G. SULLIVANLINDA G. SULLIVANChief Financial Officer

Exhibit 32STATEMENT PURSUANT TO 18 U.S.C. SECTION 1350, ASENACTED BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the accompanying Quarterly Report on Form 10-Q for the quarter ended March 31. 2012 (the “QuarterlyReport”), of Southern California Edison Company (the “Company”), and pursuant to 18 U.S.C. Section 1350, as enacted bySection 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned certifies, to the best of his or her knowledge, that:1. The Quarterly Report fully complies with the requirements of section 13(a) or 15(d) of the Securities ExchangeAct of 1934 (15 U.S.C. 78m(a) or 78o(d)); and2. The information contained in the Quarterly Report fairly presents, in all material respects, the financial conditionand results of operations of the Company.Date: May 2, 2012/s/ RONALD L. LITZINGERRONALD L. LITZINGERPresidentSouthern California Edison Company/s/ LINDA G. SULLIVANLINDA G. SULLIVANChief Financial OfficerSouthern California Edison CompanyThis statement accompanies the Quarterly Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not,except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18of the Securities Exchange Act of 1934, as amended.A signed original of this written statement has been provided to the Company and will be retained by the Company andfurnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 31.1CERTIFICATIONI, RONALD L. LITZINGER, certify that:1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, of Southern CaliforniaEdison Company;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a materialfact necessary to make the statements made, in light of the circumstances under which such statements were made, notmisleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairlypresent in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, theperiods presented in this report;4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controlsand procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (asdefined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to bedesigned under our supervision, to ensure that material information relating to the registrant, including its consolidatedsubsidiaries, is made known to us by others within those entities, particularly during the period in which this report is beingprepared;(b) Designed such internal control over financial reporting, or caused such internal control over financialreporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this reportour conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by thisreport based on such evaluation; and(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurredduring the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that hasmaterially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal controlover financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or personsperforming the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control overfinancial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize andreport financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have a significant rolein the registrant's internal control over financial reporting.Date: May 2, 2012/s/ RONALD L. LITZINGERRONALD L. LITZINGERPresident