Pepco 10-Q 6 Aug 09 2009 Q2 Quarterly report Financial data

Statement Of Income Alternative

Statement Of Income Alternative (USD $)
In Millions, except Per Share data	3 Months Ended Jun. 30, 2009	3 Months Ended Jun. 30, 2008	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
PEPCO HOLDINGS INC
Operating Revenue
Power Delivery	$1,095	$1,297	$2,467	$2,592
Competitive Energy	958	1,329	2,097	2,657
Other	12	(108)	21	(90)
Total Operating Revenue	2,065	2,518	4,585	5,159
Operating Expenses
Fuel and purchased energy	1,491	1,832	3,378	3,650
Other services cost of sales	82	180	178	360
Other operation and maintenance	237	231	473	450
Depreciation and amortization	95	93	191	184
Other taxes	90	85	181	173
Deferred electric service costs	(57)	(17)	(84)	8
Effect of settlement of Mirant bankruptcy claims	0	0	(14)	0
Gain on sale of assets	0	0	0	(3)
Total Operating Expenses	1,938	2,404	4,303	4,822
Operating Income	127	114	282	337
Other Income (Expenses)
Interest and dividend income	2	5	3	12
Interest expense	(96)	(80)	(186)	(161)
Gain (Loss) from equity investments	2	0	1	(2)
Other income	4	4	8	10
Other expenses	(1)	0	(1)	(1)
Total Other Expenses	(89)	(71)	(175)	(142)
Income Before Income Tax Expense	38	43	107	195
Income Tax Expense	13	28	37	81
Net Income	25	15	70	114
Retained Earnings at Beginning of Period	1,257	1,238	1,271	1,193
Dividends Paid	(60)	(55)	(119)	(109)
Retained Earnings at End of Period	1,222	1,198	1,222	1,198
Basic and Diluted Share Information
Weighted average shares outstanding	220	201	220	201
Earnings per share of common stock	0.11	0.07	0.32	0.57
POTOMAC ELECTRIC POWER CO
Operating Revenue
Operating Revenue	518	539	1,095	1,064
Operating Expenses
Purchased energy	273	294	622	602
Other operation and maintenance	81	77	160	147
Depreciation and amortization	37	35	72	69
Other taxes	74	69	147	139
Effect of settlement of Mirant bankruptcy claims	0	0	(14)	0
Total Operating Expenses	465	475	987	957
Operating Income	53	64	108	107
Other Income (Expenses)
Interest and dividend income	0	2	1	6
Interest expense	(25)	(23)	(50)	(47)
Other income	3	2	5	5
Other expenses	(1)	0	(1)	(1)
Total Other Expenses	(23)	(19)	(45)	(37)
Income Before Income Tax Expense	30	45	63	70
Income Tax Expense	13	14	27	24
Net Income	17	31	36	46
Retained Earnings at Beginning of Period	643	592	624	597
Dividends Paid	0	0	0	(20)
Retained Earnings at End of Period	660	623	660	623
Basic and Diluted Share Information
Operating Revenue	518	539	1,095	1,064
DELMARVA POWER & LIGHT CO /DE/
Operating Revenue
Electric	251	289	572	584
Natural Gas	40	83	171	199
Operating Revenue	291	372	743	783
Operating Expenses
Purchased energy	161	192	380	387
Gas purchased	27	69	128	157
Other operation and maintenance	59	54	118	110
Depreciation and amortization	18	18	37	36
Other taxes	9	8	19	18
Gain on sale of assets	0	0	0	(3)
Total Operating Expenses	274	341	682	705
Operating Income	17	31	61	78
Other Income (Expenses)
Interest and dividend income	0	1	0	2
Interest expense	(11)	(9)	(22)	(19)
Other income	1	1	1	2
Total Other Expenses	(10)	(7)	(21)	(15)
Income Before Income Tax Expense	7	24	40	63
Income Tax Expense	2	8	14	21
Net Income	5	16	26	42
Retained Earnings at Beginning of Period	441	431	448	432
Dividends Paid	0	(15)	(28)	(42)
Retained Earnings at End of Period	446	432	446	432
Basic and Diluted Share Information
Operating Revenue	291	372	743	783
ATLANTIC CITY ELECTRIC CO
Operating Revenue
Operating Revenue	287	387	631	748
Operating Expenses
Purchased energy	239	273	516	518
Other operation and maintenance	47	43	95	89
Depreciation and amortization	24	25	49	49
Other taxes	5	6	10	12
Deferred electric service costs	(57)	(17)	(84)	8
Total Operating Expenses	258	330	586	676
Operating Income	29	57	45	72
Other Income (Expenses)
Interest and dividend income	0	0	0	1
Interest expense	(17)	(15)	(34)	(30)
Other income	0	1	1	2
Total Other Expenses	(17)	(14)	(33)	(27)
Income Before Income Tax Expense	12	43	12	45
Income Tax Expense	4	16	2	13
Net Income	8	27	10	32
Retained Earnings at Beginning of Period	144	147	166	142
Dividends Paid	0	(31)	(24)	(31)
Retained Earnings at End of Period	152	143	152	143
Basic and Diluted Share Information
Operating Revenue	$287	$387	$631	$748

Statement Of Other Comprehensiv

Statement Of Other Comprehensive Income (USD $)
In Millions	3 Months Ended Jun. 30, 2009	3 Months Ended Jun. 30, 2008	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
PEPCO HOLDINGS INC
Net income	$25	$15	$70	$114
Gains (losses) on commodity derivatives designated as cash flow hedges:
(Losses) gains arising during period	(26)	427	(282)	639
Less: amount of (losses) gains reclassified into income	(108)	67	(212)	82
Net gains (losses) on commodity derivatives	82	360	(70)	557
Losses on Treasury Rate Locks reclassified into income	2	1	3	3
Amortization of gains and losses for prior service costs	(10)	(5)	(10)	(5)
Other comprehensive income (losses), before taxes	74	356	(77)	555
Income tax expense (benefit)	31	147	(31)	227
Other comprehensive income (losses), net of income taxes	43	209	(46)	328
Comprehensive income	68	224	24	442
POTOMAC ELECTRIC POWER CO
Net income	17	31	36	46
DELMARVA POWER & LIGHT CO /DE/
Net income	5	16	26	42
ATLANTIC CITY ELECTRIC CO
Net income	$8	$27	$10	$32

Statement Of Financial Position

Statement Of Financial Position Classified (USD $)
In Millions	Jun. 30, 2009	Dec. 31, 2008
PEPCO HOLDINGS INC
CURRENT ASSETS
Cash and cash equivalents	$120	$384
Restricted cash equivalents	9	10
Accounts receivable, less allowance for uncollectible accounts	1,158	1,392
Inventories	282	333
Derivative assets	83	98
Prepayments of income taxes	238	294
Prepaid expenses and other	165	115
Total Current Assets	2,055	2,626
INVESTMENTS AND OTHER ASSETS
Goodwill	1,411	1,411
Regulatory assets	1,993	2,088
Investment in finance leases held in trust	1,362	1,335
Income taxes receivable	314	191
Restricted cash equivalents	69	108
Assets and accrued interest related to uncertain tax positions	115	178
Derivative assets	29	9
Other	204	215
Total Investments and Other Assets	5,497	5,535
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment	13,298	12,926
Accumulated depreciation	(4,737)	(4,612)
Net Property, Plant and Equipment	8,561	8,314
TOTAL ASSETS	16,113	16,475
CURRENT LIABILITIES
Short-term debt	640	465
Current maturities of long-term debt	502	85
Accounts payable and accrued liabilities	658	847
Capital lease obligations due within one year	7	6
Taxes accrued	62	62
Interest accrued	69	71
Liabilities and accrued interest related to uncertain tax positions	4	71
Derivative liabilities	138	144
Other	302	279
Total Current Liabilities	2,382	2,030
DEFERRED CREDITS
Regulatory liabilities	754	893
Deferred income taxes, net	2,306	2,269
Investment tax credits	38	40
Pension benefit obligation	469	626
Other postretirement benefit obligation	447	461
Income taxes payable	186	176
Liabilities and accrued interest related to uncertain tax positions	175	163
Derivative liabilities	79	59
Other	151	184
Total Deferred Credits	4,605	4,871
LONG-TERM LIABILITIES
Long-term debt	4,502	4,859
Transition bonds issued by ACE Funding	385	401
Long-term project funding	18	19
Capital lease obligations	96	99
Total Long-Term Liabilities	5,001	5,378
COMMITMENTS AND CONTINGENCIES	0	0
EQUITY
Common stock	2	2
Premium on stock and other capital contributions	3,203	3,179
Accumulated other comprehensive loss	(308)	(262)
Retained earnings	1,222	1,271
Total Equity	4,119	4,190
Noncontrolling interest	6	6
Total Equity	4,125	4,196
TOTAL LIABILITIES AND EQUITY	16,113	16,475
POTOMAC ELECTRIC POWER CO
CURRENT ASSETS
Cash and cash equivalents	69	146
Accounts receivable, less allowance for uncollectible accounts	359	377
Inventories	46	45
Prepayments of income taxes	67	151
Prepaid expenses and other	22	37
Total Current Assets	563	756
INVESTMENTS AND OTHER ASSETS
Regulatory assets	154	169
Prepaid pension expense	280	142
Investment in trust	24	24
Income taxes receivable	194	166
Restricted cash equivalents	64	102
Assets and accrued interest related to uncertain tax positions	4	35
Other	72	70
Total Investments and Other Assets	792	708
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment	5,726	5,607
Accumulated depreciation	(2,428)	(2,371)
Net Property, Plant and Equipment	3,298	3,236
TOTAL ASSETS	4,653	4,700
CURRENT LIABILITIES
Short-term debt	0	125
Current maturities of long-term debt	16	50
Accounts payable and accrued liabilities	150	187
Accounts payable due to associated companies	64	70
Capital lease obligations due within one year	7	6
Taxes accrued	42	44
Interest accrued	18	19
Liabilities and accrued interest related to uncertain tax positions	0	38
Other	133	94
Total Current Liabilities	430	633
DEFERRED CREDITS
Regulatory liabilities	205	239
Deferred income taxes, net	794	788
Investment tax credits	9	10
Other postretirement benefit obligation	49	49
Income taxes payable	133	137
Other	78	65
Total Deferred Credits	1,268	1,288
LONG-TERM LIABILITIES
Long-term debt	1,538	1,445
Capital lease obligations	96	99
Total Long-Term Liabilities	1,634	1,544
COMMITMENTS AND CONTINGENCIES	0	0
EQUITY
Common stock	0	0
Premium on stock and other capital contributions	661	611
Retained earnings	660	624
Total Equity	1,321	1,235
TOTAL LIABILITIES AND EQUITY	4,653	4,700
DELMARVA POWER & LIGHT CO /DE/
CURRENT ASSETS
Cash and cash equivalents	115	138
Accounts receivable, less allowance for uncollectible accounts	170	202
Inventories	41	52
Prepayments of income taxes	54	34
Prepaid expenses and other	23	28
Total Current Assets	403	454
INVESTMENTS AND OTHER ASSETS
Goodwill	8	8
Regulatory assets	214	244
Prepaid pension expense	187	184
Other	47	33
Total Investments and Other Assets	456	469
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment	2,724	2,656
Accumulated depreciation	(845)	(827)
Net Property, Plant and Equipment	1,879	1,829
TOTAL ASSETS	2,738	2,752
CURRENT LIABILITIES
Short-term debt	255	246
Accounts payable and accrued liabilities	64	108
Accounts payable due to associated companies	22	34
Taxes accrued	4	7
Interest accrued	6	6
Liabilities and accrued interest related to uncertain tax positions	0	23
Derivative liabilities	11	13
Other	77	56
Total Current Liabilities	439	493
DEFERRED CREDITS
Regulatory liabilities	290	277
Deferred income taxes, net	467	446
Investment tax credits	8	8
Above-market purchased energy contracts and other electric restructuring liabilities	18	19
Derivative liabilities	19	14
Other	61	57
Total Deferred Credits	863	821
LONG-TERM LIABILITIES
Long-term debt	686	686
COMMITMENTS AND CONTINGENCIES	0	0
EQUITY
Common stock	0	0
Premium on stock and other capital contributions	304	304
Retained earnings	446	448
Total Equity	750	752
TOTAL LIABILITIES AND EQUITY	2,738	2,752
ATLANTIC CITY ELECTRIC CO
CURRENT ASSETS
Cash and cash equivalents	5	65
Restricted cash equivalents	9	10
Accounts receivable, less allowance for uncollectible accounts	163	195
Inventories	16	15
Prepayments of income taxes	40	47
Prepaid expenses and other	74	16
Total Current Assets	307	348
INVESTMENTS AND OTHER ASSETS
Regulatory assets	742	768
Prepaid pension expense	62	6
Income taxes receivable	75	12
Restricted cash equivalents	5	5
Assets and accrued interest related to uncertain tax positions	77	113
Other	12	12
Total Investments and Other Assets	973	916
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment	2,267	2,216
Accumulated depreciation	(684)	(666)
Net Property, Plant and Equipment	1,583	1,550
TOTAL ASSETS	2,863	2,814
CURRENT LIABILITIES
Short-term debt	139	23
Current maturities of long-term debt	33	32
Accounts payable and accrued liabilities	120	122
Accounts payable due to associated companies	29	28
Taxes accrued	15	7
Interest accrued	14	14
Liabilities and accrued interest related to uncertain tax positions	0	6
Other	38	35
Total Current Liabilities	388	267
DEFERRED CREDITS
Regulatory liabilities	259	377
Deferred income taxes, net	570	549
Investment tax credits	10	10
Other postretirement benefit obligation	43	41
Liabilities and accrued interest related to uncertain tax positions	12	3
Other	17	14
Total Deferred Credits	911	994
LONG-TERM LIABILITIES
Long-term debt	610	610
Transition bonds issued by ACE Funding	385	401
Total Long-Term Liabilities	995	1,011
COMMITMENTS AND CONTINGENCIES	0	0
REDEEMABLE SERIAL PREFERRED STOCK	6	6
EQUITY
Common stock	26	26
Premium on stock and other capital contributions	385	344
Retained earnings	152	166
Total Equity	563	536
TOTAL LIABILITIES AND EQUITY	$2,863	$2,814

1_Statement Of Financial Positi

Statement Of Financial Position Classified (Parenthetical) (USD $)
In Millions, except Share data	Jun. 30, 2009	Dec. 31, 2008
PEPCO HOLDINGS INC
Accounts receivable, allowance for uncollectible accounts	$43	$37
Common stock, par value	0.01	0.01
Common stock, shares authorized	400,000,000	400,000,000
Common stock, shares outstanding	220,820,630	218,906,220
POTOMAC ELECTRIC POWER CO
Accounts receivable, allowance for uncollectible accounts	14	15
Common stock, par value	0.01	0.01
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares outstanding	100	100
DELMARVA POWER & LIGHT CO /DE/
Accounts receivable, allowance for uncollectible accounts	14	10
Common stock, par value	2.25	2.25
Common stock, shares authorized	1,000	1,000
Common stock, shares outstanding	1,000	1,000
ATLANTIC CITY ELECTRIC CO
Accounts receivable, allowance for uncollectible accounts	$7	$6
Common stock, par value	$3	$3
Common stock, shares authorized	25,000,000	25,000,000
Common stock, shares outstanding	8,546,017	8,546,017

Statement Of Cash Flows Indirec

Statement Of Cash Flows Indirect (USD $)
In Millions	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
PEPCO HOLDINGS INC
OPERATING ACTIVITIES
Net income	$70	$114
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization	191	184
Gain on sale of assets	0	(3)
Effect of settlement of Mirant bankruptcy claims	(14)	0
Non-cash rents received from cross-border energy lease investments under income earned	(27)	(37)
Non-cash charge to reduce equity value of PHI's cross-border energy lease investments	0	124
Changes in restricted cash equivalents related to Mirant settlement	38	5
Deferred income taxes	82	1
Net unrealized losses (gains) on commodity derivatives accounted for at fair value	49	(31)
Changes in:
Accounts receivable	224	(201)
Inventories	23	(58)
Prepaid expenses	(59)	(47)
Regulatory assets and liabilities	(82)	(9)
Accounts payable and accrued liabilities	(241)	229
Pension contributions	(220)	0
Pension and other postretirement benefit obligations, excluding contributions	63	16
Cash collateral related to derivative activities	(104)	395
Taxes accrued	19	5
Interest accrued	(2)	(1)
Other assets and liabilities	(3)	7
Net Cash (Used By) From Operating Activities	7	693
INVESTING ACTIVITIES
Investment in property, plant and equipment	(388)	(366)
Proceeds from sale of assets	0	51
Changes in restricted cash	1	(48)
Net other investing activities	5	2
Net Cash Used By Investing Activities	(382)	(361)
FINANCING ACTIVITIES
Dividends paid	(119)	(109)
Common stock issued for the Dividend Reinvestment Plan	15	14
Issuances of common stock	11	15
Issuance of long-term debt	110	400
Reacquisition of long-term debt	(67)	(405)
Issuances (repayments) of short-term debt, net	175	20
Cost of issuances	(4)	(11)
Net other financing activities	(10)	(20)
Net Cash From (Used By) Financing Activities	111	(96)
Net (Decrease) Increase in Cash and Cash Equivalents	(264)	236
Cash and Cash Equivalents at Beginning of Period	384	55
CASH AND CASH EQUIVALENTS AT END OF PERIOD	120	291
NONCASH ACTIVITIES
Asset retirement obligations associated with removal costs transferred to regulatory liabilities	6	2
Recoverable pension/other postretirement benefit costs included in regulatory assets	(24)	95
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash (received) paid for income taxes, net	(66)	76
POTOMAC ELECTRIC POWER CO
OPERATING ACTIVITIES
Net income	36	46
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization	72	69
Effect of settlement of Mirant bankruptcy claims	(14)	0
Changes in restricted cash equivalents related to Mirant settlement	38	5
Deferred income taxes	18	37
Changes in:
Accounts receivable	18	(22)
Regulatory assets and liabilities	(11)	(33)
Accounts payable and accrued liabilities	(40)	53
Pension contributions	(150)	0
Taxes accrued	91	(15)
Interest accrued	(1)	0
Other assets and liabilities	19	5
Net Cash (Used By) From Operating Activities	76	145
INVESTING ACTIVITIES
Investment in property, plant and equipment	(130)	(121)
Changes in restricted cash	0	(17)
Net other investing activities	1	0
Net Cash Used By Investing Activities	(129)	(138)
FINANCING ACTIVITIES
Dividends paid	0	(20)
Capital contribution from Parent	50	78
Issuance of long-term debt	110	250
Reacquisition of long-term debt	(50)	(188)
Issuances (repayments) of short-term debt, net	(125)	(114)
Net other financing activities	(9)	(16)
Net Cash From (Used By) Financing Activities	(24)	(10)
Net (Decrease) Increase in Cash and Cash Equivalents	(77)	(3)
Cash and Cash Equivalents at Beginning of Period	146	19
CASH AND CASH EQUIVALENTS AT END OF PERIOD	69	16
NONCASH ACTIVITIES
Asset retirement obligations associated with removal costs transferred to regulatory liabilities	3	5
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash (received) paid for income taxes, net	(86)	2
DELMARVA POWER & LIGHT CO /DE/
OPERATING ACTIVITIES
Net income	26	42
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization	37	36
Gain on sale of assets	0	(3)
Deferred income taxes	22	31
Changes in:
Accounts receivable	28	(18)
Inventories	11	5
Regulatory assets and liabilities	38	21
Accounts payable and accrued liabilities	(47)	31
Pension contributions	(10)	0
Taxes accrued	(35)	(21)
Other assets and liabilities	12	4
Net Cash (Used By) From Operating Activities	82	128
INVESTING ACTIVITIES
Investment in property, plant and equipment	(84)	(72)
Proceeds from sale of assets	0	50
Changes in restricted cash	0	(32)
Net Cash Used By Investing Activities	(84)	(54)
FINANCING ACTIVITIES
Dividends paid	(28)	(42)
Capital contribution from Parent	0	62
Issuance of long-term debt	0	150
Reacquisition of long-term debt	0	(98)
Issuances (repayments) of short-term debt, net	9	(147)
Net other financing activities	(2)	(3)
Net Cash From (Used By) Financing Activities	(21)	(78)
Net (Decrease) Increase in Cash and Cash Equivalents	(23)	(4)
Cash and Cash Equivalents at Beginning of Period	138	11
CASH AND CASH EQUIVALENTS AT END OF PERIOD	115	7
NONCASH ACTIVITIES
Asset retirement obligations associated with removal costs transferred to regulatory liabilities	3	(3)
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash (received) paid for income taxes, net	28	11
ATLANTIC CITY ELECTRIC CO
OPERATING ACTIVITIES
Net income	10	32
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization	49	49
Deferred income taxes	23	34
Changes in:
Accounts receivable	32	(24)
Regulatory assets and liabilities	(109)	4
Accounts payable and accrued liabilities	2	117
Pension contributions	(60)	0
Prepaid New Jersey sales and excise tax	(58)	(54)
Taxes accrued	(3)	(27)
Interest accrued	0	(2)
Other assets and liabilities	6	4
Net Cash (Used By) From Operating Activities	(108)	133
INVESTING ACTIVITIES
Investment in property, plant and equipment	(67)	(89)
Proceeds from sale of assets	0	1
Net other investing activities	1	2
Net Cash Used By Investing Activities	(66)	(86)
FINANCING ACTIVITIES
Dividends paid	(24)	(31)
Capital contribution from Parent	40	35
Reacquisition of long-term debt	(15)	(119)
Issuances (repayments) of short-term debt, net	116	78
Net other financing activities	(3)	(8)
Net Cash From (Used By) Financing Activities	114	(45)
Net (Decrease) Increase in Cash and Cash Equivalents	(60)	2
Cash and Cash Equivalents at Beginning of Period	65	7
CASH AND CASH EQUIVALENTS AT END OF PERIOD	5	9
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash (received) paid for income taxes, net	($16)	$7

Notes to Financial Statements

Notes to Financial Statements
	6 Months Ended Jun. 30, 2009 USD / shares
PEPCO HOLDINGS INC
Notes to Financial Statements [Abstract]
ORGANIZATION	(1)ORGANIZATION Pepco Holdings, Inc. (PHI or Pepco Holdings), a Delaware corporation incorporated in 2001, is a diversified energy company that, through its operating subsidiaries, is engaged primarily in two businesses: the distribution, transmission and default supply of electricity and the delivery and supply of natural gas (Power Delivery), conducted through the following regulated public utility companies, each of which is a reporting company under the Securities Exchange Act of 1934, as amended: Potomac Electric Power Company (Pepco), which was incorporated in Washington, D.C. in 1896 and became a domestic Virginia corporation in 1949, Delmarva Power Light Company (DPL), which was incorporated in Delaware in 1909 and became a domestic Virginia corporation in 1979, and Atlantic City Electric Company (ACE), which was incorporated in New Jersey in 1924. competitive energy generation, marketing and supply (Competitive Energy) conducted through subsidiaries of Conectiv Energy Holding Company (collectively Conectiv Energy) and Pepco Energy Services, Inc. and its subsidiaries (collectively, Pepco Energy Services). PHI Service Company, a subsidiary service company of PHI, provides a variety of support services, including legal, accounting, treasury, tax, purchasing and information technology services to PHI and its operating subsidiaries. These services are provided pursuant to a service agreement among PHI, PHI Service Company, and the participating operating subsidiaries. The expenses of the PHI Service Company are charged to PHI and the participating operating subsidiaries in accordance with cost allocation methodologies set forth in the service agreement. The following is a description of each of PHIs two principal business operations: Power Delivery The largest component of PHIs business is Power Delivery. Each of Pepco, DPL and ACE is a regulated public utility in the jurisdictions that comprise its service territory. Each company owns and operates a network of wires, substations and other equipment that is classified either as transmission or distribution facilities. Transmission facilities are high-voltage systems that carry wholesale electricity into, or across, the utilitys service territory. Distribution facilities are low-voltage systems that carry electricity to end-use customers in the utilitys service territory. Together the three companies constitute a single segment for financial reporting purposes. Each company is responsible for the delivery of electricity and, in the case of DPL, natural gas, in its service territory, for which it is paid tariff rates established by the applicable local public service commissions. Each company also supplies electricity at regulated rates to retail customers in its service territory who do not elect to purchase electricity from a competitive energy supplier. The regulatory term for this supply service is Standard Offer Service (SOS) in Delaware, the District of Columbia and Maryland; and Basic Generation Service (BGS) in New Jersey. In this Form 10-Q, these supply services are referred to generally as Default Electr
SIGNIFICANT ACCOUNTING POLICIES	(2)SIGNIFICANT ACCOUNTING POLICIES Financial Statement Presentation Pepco Holdings unaudited consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). Pursuant to the rules and regulations of the Securities and Exchange Commission, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted. Therefore, these financial statements should be read along with the annual financial statements included in PHIs Annual Report on Form 10-K for the year ended December31, 2008. In the opinion of PHIs management, the consolidated financial statements contain all adjustments (which all are of a normal recurring nature) necessary to present fairly Pepco Holdings financial condition as of June30, 2009, in accordance with GAAP. The year-end balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. Interim results for the three and six months ended June30, 2009 may not be indicative of PHIs results that will be realized for the full year ending December31, 2009, since its Power Delivery and Competitive Energy business are seasonal. PHI has evaluated all subsequent events through August6, 2009, the date of issuance of the consolidated financial statements to which these Notes relate. Change in Accounting Principle Since PHIs adoption of Statement of Financial Accounting Standards No.142, Goodwill and Other Intangible Assets, PHI has conducted its annual impairment review of goodwill as of July1. After the completion of the July1, 2009 impairment test, PHI adopted a new accounting policy whereby PHIs annual impairment review of goodwill will be performed as of November1 each year. Management believes that the change in PHIs annual impairment testing date is preferable because it better aligns the timing of the test with managements annual update of its long-term financial forecast. The change in accounting principle had no effect on PHIs consolidated financial statements. Change in Accounting Estimate In the second quarter of 2008, PHI reassessed the sustainability of its tax position and revised its assumptions regarding the estimated timing of the tax benefits generated from its cross-border energy lease investments. Based on the reassessment, PHI for the quarter ended June30, 2008, recorded an after-tax charge to net income of $93 million. For additional discussion on this matter, see Notes (7), Leasing Activities and (14), Commitments and Contingencies. Consolidation of Variable Interest Entities In accordance with the provisions of Financial Accounting Standards Board (FASB) Interpretation No. (FIN) 46(R), Consolidation of Variable Interest Entities (FIN 46(R)), Pepco Holdings consolidates those variable interest entities where Pepco Holdings or a subsidiary has been determined to be the primary beneficiary. FIN 46(R) addresses conditions under which an entity should be consolidated based upon variable interests rather than voting interests. Subsidiaries of Pepco Holdings have power purchase agreements (P
NEWLY ADOPTED ACCOUNTING STANDARDS	(3) NEWLY ADOPTED ACCOUNTING STANDARDS Statement of Financial Accounting Standards (SFAS) No.141(R), Business Combinationsa Replacement of FASB Statement No.141 (SFAS No.141 (R)) SFAS No.141(R) replaces FASB Statement No.141, Business Combinations, and retains the fundamental requirements that the acquisition method of accounting be used for all business combinations and for an acquirer to be identified for each business combination. However, SFAS No.141(R) expands the definition of a business and amends FASB Statement No.109, Accounting for Income Taxes, to require the acquirer to recognize changes in the amount of its deferred tax benefits that are realizable because of a business combination either in income from continuing operations or directly in contributed capital, depending on the circumstances. On April1, 2009, the FASB issued FASB Staff Position (FSP) Financial Accounting Standards (FAS) 141(R)-1, Accounting for Assets and Liabilities Assumed in a Business Combination that Arise from Contingencies (FSP FAS 141(R)-1), to clarify the accounting for the initial recognition and measurement, subsequent measurement and accounting, and disclosure of assets and liabilities arising from contingencies in a business combination. FSP FAS 141(R)-1 requires that assets acquired and liabilities assumed in a business combination that arise from contingencies be measured at fair value if the acquisition date fair value of that asset and liability can be determined during the measurement period in accordance with SFAS No.157. If the acquisition date fair value cannot be determined, then the asset or liability would be measured in accordance with SFAS No.5, Accounting for Contingencies, and FIN No.14, Reasonable Estimate of the Amount of Loss. SFAS No.141(R) and the guidance provided in FSP FAS 141(R)-1 applies prospectively to business combinations for which the acquisition date is on or after January1, 2009. PHI adopted SFAS No.141(R) on January1, 2009, and it did not have a material impact on PHIs overall financial condition, results of operations, or cash flows. FSP 157-2, Effective Date of FASB Statement No.157 (FSP 157-2) FSP 157-2 deferred the effective date of SFAS No.157, Fair Value Measurements, (SFAS No.157) for all nonrecurring fair value measurements of non-financial assets and non-financial liabilities until January1, 2009 for PHI. The adoption of SFAS No.157 did not have a material impact on the fair value measurements of PHIs non-financial assets and non-financial liabilities. SFAS No.160, Noncontrolling Interests in Consolidated Financial Statementsan Amendment of ARB No.51 (SFAS No.160) SFAS No.160 establishes new accounting and reporting standards for a non-controlling interest (also called a minority interest) in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a non-controlling interest in a subsidiary is an ownership interest in the consolidated entity that should be separately reported in the consolidated financial statements. SFAS No.160 establishes accounting and reporting standards that require (i)the ownership interests and the related consolidated net income in subsidiaries
RECENTLY ISSUED ACCOUNTING STANDARDS, NOT YET ADOPTED	(4)RECENTLY ISSUED ACCOUNTING STANDARDS, NOT YET ADOPTED FSP FAS 132(R)-1, Employers Disclosures about Postretirement Benefit Plan Assets (FSP FAS 132(R)-1) In December 2008, the FASB issued FSP FAS 132(R)-1 to provide guidance on an employers disclosures about plan assets of a defined benefit pension or other postretirement plan. The required disclosures under this FSP would expand current disclosures under SFAS No.132(R), Employers Disclosures about Pensions and Other Postretirement Benefitsan amendment of FASB Statements No.87, 88, and 106, to be in line with SFAS No.157 required disclosures. The disclosures are to provide users an understanding of: (1)the investment allocation decisions made, (2)factors used in investment policies and strategies, (3)plan assets by major investment types, (4)inputs and valuation techniques used to measure fair value of plan assets, (5)significant concentrations of risk within the plan, and (6)the effects of fair value measurement using significant unobservable inputs (Level 3 as defined in SFAS No.157) on changes in the value of plan assets for the period. The new disclosures are required starting with financial statement reporting periods ending December31, 2009 for PHI and earlier application is permitted. Comparative disclosures under this provision are not required for earlier periods presented. PHI is evaluating the impact that it will have on PHIs financial statement footnote disclosures for year end reporting. Statement of Financial Accounting Standards (SFAS) No.166, Accounting for Transfers of Financial Assetsan amendment of SFAS No.140 (SFAS No.166) In June 2009, the FASB issued SFAS No.166 to remove the concept of a qualifying special-purpose entity (QSPE) from SFAS No.140 and the QSPE scope exception in FIN 46(R). The statement changes requirements for derecognizing financial assets and requires additional disclosures about a transferors continuing involvement in transferred financial assets. The new guidance is effective for transfers of financial assets occurring in fiscal periods beginning after November15, 2009; therefore, this guidance will be effective on January1, 2010 for PHI. Comparative disclosures are encouraged but not required for earlier periods presented. PHI is evaluating the impact that it will have on its overall financial condition and financial statements. Statement of Financial Accounting Standards (SFAS) No.167, Consolidation of Variable Interest Entitiesan amendment of FIN 46(R) (SFAS No.167) In June 2009, the FASB issued SFAS No.167 to amend FIN 46(R), Consolidation of Variable Interest Entities, which eliminates the existing quantitative analysis requirement and adds new qualitative factors to determine whether consolidation is required. The new qualitative factors would be applied on a quarterly basis to interests in variable interest entities. Under the new standard, the holder of the interest with the power to direct the most significant activities of the entity and the right to receive benefits or absorb losses significant to the entity would consolidate. The new standard retained the provision in FIN 46(R) that allowed entities created before D
SEGMENT INFORMATION	(5)SEGMENT INFORMATION Based on the provisions of SFAS No.131, Disclosures about Segments of an Enterprise and Related Information, Pepco Holdings management has identified its operating segments at June30, 2009 as Power Delivery, Conectiv Energy, Pepco Energy Services, and Other Non-Regulated. Segment information for the three and six months ended June30, 2009 and 2008, is as follows: Three Months Ended June30, 2009 (millions of dollars) Competitive Energy Segments Power Delivery Conectiv Energy Pepco Energy Services Other Non- Regulated Corp. Other(a) PHI Cons. Operating Revenue $ 1,095 $ 469 (b) $ 560 $ 14 $ (73 ) $ 2,065 Operating Expense (c) 995 (b) 487 531 1 (76 ) 1,938 Operating Income 100 (18 ) 29 13 3 127 Interest Income 1 1 1 1 (2 ) 2 Interest Expense 53 7 12 3 21 96 Other Income 3 1 1 5 Income Tax Expense (Benefit) 20 (10 ) 8 4 (9 ) 13 Net Income (Loss) 31 (14 ) 10 8 (10 ) 25 Total Assets 10,254 1,995 743 1,516 1,605 16,113 Construction Expenditures $ 149 $ 50 $ 3 $ $ 6 $ 208 Notes: (a) Includes unallocated Pepco Holdings (parent company) capital costs, such as acquisition financing costs, and the depreciation and amortization related to purchase accounting adjustments for the fair value of Conectiv assets and liabilities as of the August1, 2002 acquisition date. Additionally, the Total Assets line item in this column includes Pepco Holdings goodwill balance. Corp. Other includes intercompany amounts of $(73) million for Operating Revenue, $(71) million for Operating Expense, $(20) million for Interest Income, and $(19) million for Interest Expense. (b) Power Delivery purchased electric energy and capacity and natural gas from Conectiv Energy in the amount of $62 million for the three months ended June30, 2009. (c) Includes depreciation and amortization of $95 million, consisting of $79 million for Power Delivery, $10 million for Conectiv Energy, $5 million for Pepco Energy Services, and $1 million for Corp. Other. Three Months Ended June30, 2008 (millions of dollars) Competitive Energy Segments Power Delivery Conectiv Energy Pepco Energy Services Other Non- Regulated Corp. Other(a) PHI Cons. Operating Revenue $ 1,297 $ 789 (b) $ 631 $ (105 )(d) $ (94 ) $ 2,518 Operating Expense (c) 1,144 (b) 748 606 1 (95 ) 2,404 Operating Income 153 41 25 (106 ) 1 114 Interest Income 3 1 1 1 (1 ) 5 Interest Expense 46 6 5 23 80 Other Income (Expense) 3 1 (1 ) 1 4 Income Tax Expense (Benefit) 38 15 11 (27 )(d)
GOODWILL	(6)GOODWILL PHIs goodwill balance of $1.4 billion was unchanged during the three and six month period ended June30, 2009. Substantially all of PHIs goodwill was generated by Pepcos acquisition of Conectiv in 2002 and is allocated to the Power Delivery reporting unit based on the aggregation of its components for purposes of assessing impairment under SFAS No.142. PHIs July1, 2009 annual impairment test completed prior to the issuance of the June30, 2009 Form 10-Q, indicated that its goodwill was not impaired. PHI performed interim impairment tests as of December31, 2008 and March31, 2009, as its market capitalization was below book value at December31, 2008 and its market capitalization declined further below book value at March31, 2009. PHI concluded that its goodwill was not impaired at both December31, 2008 and March31, 2009, and again at June30, 2009 with the completion of the July1, 2009 annual impairment test. In order to estimate the fair value of its Power Delivery reporting unit, PHI reviews the results from two discounted cash flow models. The models differ in the method used to calculate the terminal value of the reporting unit. One model estimates terminal value based on a constant annual cash flow growth rate that is consistent with Power Deliverys long-term view of the business, and the other model estimates terminal value based on a multiple of earnings before interest, taxes, depreciation, and amortization (EBITDA) that management believes is consistent with EBITDA multiples for comparable utilities. The models use a cost of capital appropriate for a regulated utility as the discount rate for the estimated cash flows associated with the reporting unit. PHI has consistently used this valuation approach to estimate the fair value of Power Delivery since the adoption of SFAS No.142. The estimation of fair value is dependent on a number of factors that are sourced from the Power Delivery reporting units business forecast, including but not limited to interest rates, growth assumptions, returns on rate base, operating and capital expenditure requirements, and other factors, changes in which could materially impact the results of impairment testing. Assumptions and methodologies used in the models were consistent with historical experience, including assumptions concerning the recovery of operating costs and capital expenditures. Sensitive, interrelated and uncertain variables that could decrease the estimated fair value of the Power Delivery reporting unit include utility sector market performance, sustained adverse business conditions, changes in forecasted revenues, higher operating and capital expenditure requirements, a significant increase in the cost of capital and other factors. In addition to estimating the fair value of its Power Delivery reporting unit, PHI estimated the fair value of its other business segments (Conectiv Energy, Pepco Energy Services, Other Non-Regulated, and Corporate Other) at July1, 2009. The sum of the fair value of all business segments was reconciled to PHIs market capitalization at July1, 2009 to further substantiate the estimated fair value of its reporting units. The sum of the e
LEASING ACTIVITIES	(7)LEASING ACTIVITIES Investment in Finance Leases Held in Trust As of June30, 2009 and December31, 2008, Pepco Holdings had cross-border energy lease investments of $1.4 billion and $1.3 billion, consisting of hydroelectric generation and coal-fired electric generation facilities and natural gas distribution networks located outside of the United States. As further discussed in Note (14), Commitments and ContingenciesPHIs Cross-Border Energy Lease Investments, during the second quarter of 2008, PHI reassessed the sustainability of its tax position and revised its assumptions regarding the estimated timing of tax benefits generated from its cross-border energy lease investments. Based on this reassessment, PHI for the quarter ended June30, 2008, recorded a reduction in its cross-border energy lease investments of $124 million. No further charges were recorded in 2008 or in the first two quarters of 2009. The components of the cross-border energy lease investments at June30, 2009 and at December31, 2008 (reflecting the effects of recording this charge) are summarized below: June30, 2009 December31, 2008 (millions of dollars) Scheduled lease payments, net of non-recourse debt $ 2,281 $ 2,281 Less:Unearned and deferred income (919 ) (946 ) Investment in finance leases held in trust 1,362 1,335 Less:Deferred income taxes (656 ) (679 ) Net investment in finance leases held in trust $ 706 $ 656 Income recognized from cross-border energy lease investments was comprised of the following for the three and six months ended June30, 2009 and 2008: ThreeMonthsEnded June30, SixMonthsEnded June30, 2009 2008 2009 2008 (millions of dollars) Pre-tax income from PHIs cross-border energy lease investments (included in Other Revenue) $ 13 $ 18 $ 27 $ 37 Non-cash charge to reduce equity value of PHIs cross-border energy lease investments (124 ) (124 ) Pre-tax income (loss) from PHIs cross-border energy lease investments after adjustment 13 (106 ) 27 (87 ) Income tax expense (benefit) 3 (34 ) 7 (29 ) Net income (loss) from PHIs cross-border energy lease investments $ 10 $ (72 ) $ 20 $ (58 )
PENSION AND OTHER POSTRETIREMENT BENEFITS	(8)PENSIONS AND OTHER POSTRETIREMENT BENEFITS The following Pepco Holdings information is for the three months ended June30, 2009 and 2008: PensionBenefits OtherPostretirement Benefits 2009 2008 2009 2008 (millions of dollars) Service cost $ 9 $ 8 $ 1 $ 2 Interest cost 28 28 10 11 Expected return on plan assets (23 ) (32 ) (3 ) (6 ) Prior service credit component - (1 ) (1 ) Loss component 17 2 6 4 Net periodic benefit cost $ 31 $ 6 $ 13 $ 10 The following Pepco Holdings information is for the six months ended June30, 2009 and 2008: PensionBenefits OtherPostretirement Benefits 2009 2008 2009 2008 (millions of dollars) Service cost $ 18 $ 18 $ 3 $ 4 Interest cost 56 54 20 20 Expected return on plan assets (51 ) (65 ) (7 ) (8 ) Prior service credit component (2 ) (2 ) Loss component 29 5 9 6 Net periodic benefit cost $ 52 $ 12 $ 23 $ 20 Pension and Other Postretirement Benefits Net periodic benefit cost is included in other operation and maintenance expense, net of the portion of the net periodic benefit cost that is capitalized as part of the cost of labor for internal construction projects. After intercompany allocations, the three utility subsidiaries are generally responsible for approximately 80% to 85% of total PHI net periodic benefit cost. Pension Contributions PHIs funding policy with regard to PHIs non contributory retirement plan (the PHI Retirement Plan) is to maintain a funding level that is at least equal to the funding target as defined under the Pension Protection Act of 2006. During 2009, discretionary tax-deductible contributions totaling $300 million have been made to the PHI Retirement Plan which are expected to bring plan assets to at least the funding target level for 2009 under the Pension Protection Act. Of this amount, $220 million was contributed prior to June30, 2009, through tax-deductible contributions from Pepco, ACE and DPL in the amounts of $150 million, $60 million and $10 million, respectively. The remaining $80 million contribution was made in July 2009 through tax-deductible contributions from Pepco of $20 million and $60 million from the PHI Service Company. No contributions were made in 2008.
DEBT	(9)DEBT Credit Facilities PHIs principal credit source is an unsecured $1.5 billion syndicated credit facility, which can be used by PHI and its utility subsidiaries to borrow funds, obtain letters of credit and support the issuance of commercial paper. This facility is in effect until May 2012 and consists of commitments from 17 lenders, no one of which is responsible for more than 8.5% of the total $1.5 billion commitment. PHIs credit limit under the facility is $875 million. The credit limit of each of Pepco, DPL and ACE is the lesser of $500 million and the maximum amount of debt the company is permitted to have outstanding by its regulatory authorities, except that the aggregate amount of credit used by Pepco, DPL and ACE at any given time collectively may not exceed $625 million. In November 2008, PHI entered into a second unsecured credit facility in the amount of $400 million with a syndicate of nine lenders.Under the facility, PHI may obtain revolving loans and swingline loans over the term of the facility, which expires on November6, 2009. The facility does not provide for the issuance of letters of credit.These two facilities are referred to collectively as PHIs primary credit facilities. PHI and its utility subsidiaries historically have issued commercial paper to meet their short-term working capital requirements.As a result of the disruptions in the commercial paper market in 2008, the companies borrowed under the $1.5 billion credit facility to create a cash reserve for future short-term operating needs.At June30, 2009, PHI had an outstanding loan of $150 million and DPL had an outstanding loan of $50 million under the credit facility. DPL repaid its loan in July 2009. At June30, 2009 and December31, 2008, the amount of cash, plus borrowing capacity under PHIs primary credit facilities available to meet the future liquidity needs of PHI on a consolidated basis totaled $1.5 billion, of which the combined cash and borrowing capacity under the $1.5 billion credit facility of PHIs utility subsidiaries was $549 million and $843 million, respectively. Other Financing Activities During the three months ended June30, 2009, the following financing activities occurred: In April2009, Atlantic City Electric Transition Funding LLC (ACE Funding) made principal payments of $5.3 million on Series 2002-1 Bonds, ClassA-2, and $2.1 million on Series 2003-1 Bonds, ClassA-1. In April 2009, Pepco repaid, prior to maturity, a $25 million short-term loan. In April 2009, DPL resold $9 million of its Pollution Control Revenue Refunding Bonds, which previously had been issued for the benefit of DPL by the Delaware Economic Development Authority. These bonds were repurchased by DPL in November 2008 in response to disruption in the tax-exempt bond market that made it difficult for the remarketing agent to successfully remarket the bonds. As the owner of the bonds, DPL received the proceeds of the sale, which it intends to use for general corporate purposes. In April 2009, PHI and its utility subsidiaries entered into a $25 million line of credit that can be used by these entities for equipment le
INCOME TAXES	(10)INCOME TAXES A reconciliation of PHIs consolidated effective income tax rate is as follows: ForThe ThreeMonthsEnded June30, For The SixMonthsEnded June30, 2009 2008 2009 2008 Federal statutory rate 35.0 % 35.0 % 35.0 % 35.0 % Increases (decreases) resulting from: Depreciation 3.7 3.9 2.7 1.7 State income taxes, net of federal effect 5.5 22.2 5.7 9.1 Tax credits (2.6 ) (2.5 ) (2.0 ) (1.1 ) Leveraged leases (3.4 ) 9.0 (2.5 ) 1.1 Change in estimates and interest related to uncertain and effectively settled tax positions 1.1 3.9 (1.8 ) (2.7 ) Interest on state income tax refund, net of federal effect (5.3 ) (1.2 ) Permanent differences related to deferred compensation funding (3.4 ) 1.4 (.7 ) 1.0 Other, net (1.7 ) (2.3 ) (1.8 ) (1.5 ) Consolidated Effective Income Tax Rate 34.2 % 65.3 % 34.6 % 41.4 % PHIs effective tax rates for the three months ended June30, 2009 and 2008 were 34.2% and 65.3%, respectively. The decrease in the rate resulted from the second quarter 2008 charge related to the cross-border energy lease investments described in Note (7), and corresponding state tax benefits related to the charge, a 2008 benefit for interest received on a state income tax refund, and a 2009 change in deductions related to deferred compensation funding. PHIs effective tax rates for the six months ended June30, 2009 and 2008 were 34.6% and 41.4%, respectively. The decrease in the rate resulted from the second quarter 2008 charge related to the cross-border energy lease investments described in Note (7)and corresponding state tax benefits related to the charge. In March 2009, the Internal Revenue Service (IRS) issued a Revenue Agents Report (RAR) for the audit of PHIs consolidated federal income tax returns for the calendar years 2003 to 2005. The IRS has proposed adjustments to PHIs tax returns, including adjustments to PHIs deductions related to cross-border energy lease investments, the capitalization of overhead costs for tax purposes and the deductibility of certain casualty losses. PHI has appealed certain of the proposed adjustments and believes it has adequately reserved for the adjustments included in the RAR. See Note (14)Commitments and Contingencies PHIs Cross-Border Energy Lease Investments for additional discussion. During the second quarter of 2009, as a result of filing amended state returns, PHIs uncertain tax benefits related to prior year tax positions increased by $18 million.
EARNINGS PER SHARE	(11)EARNINGS PER SHARE Reconciliations of the numerator and denominator for basic and diluted EPS of common stock calculations are shown below: FortheThreeMonths Ended June30 , 2009 2008 (millionsofdollars,exceptpershare data) Income (Numerator): Earnings Applicable to Common Stock $ 25 $ 15 Shares (Denominator) (a): Weighted average shares outstanding for basic computation: Average shares outstanding 220 201 Adjustment to shares outstanding Weighted Average Shares Outstanding for Computation of Basic Earnings Per Share of Common Stock 220 201 Net effect of potentially dilutive shares Weighted Average Shares Outstanding for Computation of Diluted Earnings Per Share of Common Stock 220 201 Basic earnings per share of common stock $ .11 $ .07 Diluted earnings per share of common stock $ .11 $ .07 Notes: (a) The number of options to purchase shares of common stock that were excluded from the calculation of diluted EPS as they are considered to be anti-dilutive were 369,904 and 5,000 for the three months ended June30, 2009 and 2008, respectively. FortheSixMonths Ended June30, 2009 2008 (millionsofdollars,exceptpershare data) Income (Numerator): Earnings Applicable to Common Stock $ 70 $ 114 Shares (Denominator) (a): Weighted average shares outstanding for basic computation: Average shares outstanding 220 201 Adjustment to shares outstanding Weighted Average Shares Outstanding for Computation of Basic Earnings Per Share of Common Stock 220 201 Net effect of potentially dilutive shares Weighted Average Shares Outstanding for Computation of Diluted Earnings Per Share of Common Stock 220 201 Basic earnings per share of common stock $ .32 $ .57 Diluted earnings per share of common stock $ .32 $ .57 Notes: (a) The number of options to purchase shares of common stock that were excluded from the calculation of diluted EPS as they are considered to be anti-dilutive were 358,366 and 5,000 for the six months ended June30, 2009 and 2008, respectively.
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES	(12)DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES PHI accounts for its derivative activities in accordance with SFAS No.133, Accounting for Derivative Instruments and Hedging Activities, (SFAS No.133) as amended by subsequent pronouncements. PHIs Competitive Energy business uses derivative instruments primarily to reduce its financial exposure to changes in the value of its assets and obligations due to commodity price fluctuations. The derivative instruments used by the Competitive Energy business include forward contracts, futures, swaps, and exchange-traded and over-the-counter options. The Competitive Energy business also manages commodity risk with contracts that are not classified and not accounted for as derivatives. The two primary risk management objectives are (i)to manage the spread between the cost of fuel used to operate electric generating facilities and the revenue received from the sale of the power produced by those facilities, and (ii)to manage the spread between retail sales commitments and the cost of supply used to service those commitments to ensure stable cash flows and lock in favorable prices and margins when they become available. Conectiv Energy purchases energy commodity contracts in the form of futures, swaps, options and forward contracts to hedge price risk in connection with the purchase of physical natural gas, oil and coal to fuel its generation assets for sale to customers. Conectiv Energy also purchases energy commodity contracts in the form of electricity swaps, options and forward contracts to hedge price risk in connection with the purchase of electricity for delivery to requirements-load customers. Conectiv Energy sells electricity swaps, options and forward contracts to hedge price risk in connection with electric output from its generation fleet. Conectiv Energy accounts for most of its futures, swaps and certain forward contracts as cash flow hedges of forecasted transactions. Derivative contracts purchased or sold in excess of probable amounts of forecasted hedge transactions are marked-to-market through current earnings. All option contracts are marked-to-market through current earnings. Certain natural gas and oil futures and swaps are used as fair value hedges to protect physical fuel inventory. Some forward contracts are accounted for using standard accrual accounting since these contracts meet the requirements for normal purchase and normal sale accounting under SFAS No.133. Pepco Energy Services purchases energy commodity contracts in the form of electric and natural gas futures, swaps, options and forward contracts to hedge price risk in connection with the purchase of physical natural gas and electricity for delivery to customers. Pepco Energy Services accounts for its futures and swap contracts as cash flow hedges offorecasted transactions. Certain commodity contracts that do not qualify as cash flow hedges of forecasted transactions or do not meet the requirements for normal purchase and normal sale accounting are marked-to-market through current earnings. Forward contracts are accounted for using standard accrual accounting since these contracts meet the requirements for normal
FAIR VALUE DISCLOSURES	(13)FAIR VALUE DISCLOSURES Fair Value of Assets and Liabilities Excluding Debt Effective January1, 2008, PHI adopted SFAS No.157 which established a framework for measuring fair value and expanded disclosures about fair value measurements. As defined in SFAS No.157, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). PHI utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. Accordingly, PHI utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. PHI is able to classify fair value balances based on the observability of those inputs. SFAS No.157 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement). The three levels of the fair value hierarchy defined by SFAS No.157 are as follows: Level 1 Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using broker quotes in liquid markets, and other observable pricing data. Level 2 also includes those financial instruments that are valued using internally developed methodologies that have been corroborated by observable market data through correlation or by other means. Significant assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Level 3 Pricing inputs include significant inputs that are generally less observable than those from objective sources. Level 3 includes those financial instruments that are valued using models or other valuation methodologies. Level 3 instruments classified as derivative liabilities are primarily natural gas options. Some non-standard assumptions are used in their forward valuation to adjust for the pricing; otherwise, most of the options follow NYMEX valuation. A few of the options have no significant NYMEX components, and have to be priced using internal volatility assumptions. Some of the options do not expire until December2011. All of the options are part of the natural gas hedging program approved by the Delaware Public Service Commission. Level 3 instruments classified
COMMITMENTS AND CONTINGENCIES	(14)COMMITMENTS AND CONTINGENCIES Regulatory and Other Matters Proceeds from Settlement of Mirant Bankruptcy Claims In 2000, Pepco sold substantially all of its electricity generating assets to Mirant Corporation (Mirant). As part of the sale, Pepco and Mirant entered into a back-to-back arrangement, whereby Mirant agreed to purchase from Pepco the 230 megawatts of electricity and capacity that Pepco was obligated to purchase annually through 2021 from Panda under the Panda PPA at the purchase price Pepco was obligated to pay to Panda. In 2003, Mirant commenced a voluntary bankruptcy proceeding in which it sought to reject certain obligations that it had undertaken in connection with the asset sale. As part of the settlement of Pepcos claims against Mirant arising from the bankruptcy, Pepco agreed not to contest the rejection by Mirant of its obligations under the back-to-back arrangement in exchange for the payment by Mirant of damages corresponding to the estimated amount by which the purchase price that Pepco was obligated to pay Panda for the energy and capacity exceeded the market price. In 2007, Pepco received as damages $414million in net proceeds from the sale of shares of Mirant common stock issued to it by Mirant. In September 2008, Pepco transferred the Panda PPA to Sempra, along with a payment to Sempra, thereby terminating all further rights, obligations and liabilities of Pepco under the Panda PPA. In November 2008, Pepco filed with the District of Columbia Public Service Commission (DCPSC) and the Maryland Public Service Commission (MPSC) proposals to share with customers the remaining balance of proceeds from the Mirant settlement in accordance with divestiture sharing formulas approved previously by the respective commissions. In March 2009, the DCPSC issued an order approving Pepcos sharing proposal for the District of Columbia under which approximately $24million was distributed to District of Columbia customers as a one-time billing credit. As a result of this decision, Pepco recorded a pre-tax gain of approximately $14million for the quarter ended March31, 2009. On July2, 2009, the MPSC approved a settlement agreement among Pepco, the Maryland office of Peoples Counsel (the Maryland OPC) and the MPSC staff under which Pepco will distribute approximately $39million to Maryland customers during the billing month of August 2009 through a one-time billing credit. As a result of this decision, Pepco expects to record a pre-tax gain between $26million and $28million in the quarter ending September30, 2009. As of June30, 2009, approximately $64million in remaining proceeds from the Mirant settlement was accounted for as restricted cash and as a regulatory liability. In the third quarter of 2009, the restricted cash will be released and the regulatory liability will be extinguished as a consequence of the MPSC order. Rate Proceedings In recent electric service and natural gas distribution base rate cases, PHIs utility subsidiaries have proposed the adoption of a bill stabilization adjustment mechanism (BSA) for retail customers. To date: A BSA has been approved and implemented for both Pepco and DPL ele
POTOMAC ELECTRIC POWER CO
Notes to Financial Statements [Abstract]
ORGANIZATION	(1)ORGANIZATION Potomac Electric Power Company (Pepco) is engaged in the transmission and distribution of electricity in Washington, D.C. and major portions of Prince Georges County and Montgomery County in suburban Maryland. Pepco provides Default Electricity Supply, which is the supply of electricity at regulated rates to retail customers in its territories who do not elect to purchase electricity from a competitive supplier, in both the District of Columbia and Maryland. Default Electricity Supply is known as Standard Offer Service in both the District of Columbia and Maryland. Pepco is a wholly owned subsidiary of Pepco Holdings, Inc. (Pepco Holdings or PHI).
SIGNIFICANT ACCOUNTING POLICIES	(2)SIGNIFICANT ACCOUNTING POLICIES Financial Statement Presentation Pepcos unaudited financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). Pursuant to the rules and regulations of the Securities and Exchange Commission, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted. Therefore, these financial statements should be read along with the annual financial statements included in Pepcos Annual Report on Form 10-K for the year ended December31, 2008. In the opinion of Pepcos management, the financial statements contain all adjustments (which all are of a normal recurring nature) necessary to present fairly Pepcos financial condition as of June30, 2009, in accordance with GAAP. The year-end balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. Interim results for the three and six months ended June30, 2009 may not be indicative of results that will be realized for the full year ending December31, 2009 since the sales of electric energy are seasonal. Pepco has evaluated all subsequent events through August6, 2009, the date of issuance of the financial statements to which these Notes relate. Consolidation of Variable Interest Entities Due to a variable element in the pricing structure of Pepcos purchase power agreement with Panda-Brandywine, L.P. (Panda) entered into in 1991, pursuant to which Pepco was obligated to purchase from Panda 230 megawatts of capacity and energy annually through 2021 (Panda PPA), Pepco potentially assumed the variability in the operations of the plants related to the Panda PPA and therefore had a variable interest in the entity. During the third quarter of 2008, Pepco transferred the Panda PPA to Sempra Energy Trading LLP (Sempra). Net purchase activities with the counterparty to the Panda PPA for the three and six months ended June30, 2008 were approximately $22million and $42 million, respectively. Taxes Assessed by a Governmental Authority on Revenue-Producing Transactions Taxes included in Pepcos gross revenues were $62million and $58 million for the three months ended June30, 2009 and 2008, respectively and $123 million and $115 million for the six months ended June30, 2009 and 2008, respectively. Reclassifications Certain prior period amounts have been reclassified in order to conform period to current period presentation. In the second quarter of 2008, Pepco recorded an adjustment to correct errors in other operation and maintenance expenses for prior periods where late payment fees were incorrectly recognized. This adjustment resulted in an increase in other operation and maintenance expenses for the three and six months ended June30, 2008 of $4 million and $3 million, respectively. These adjustments were not considered material.
NEWLY ADOPTED ACCOUNTING STANDARDS	(3) NEWLY ADOPTED ACCOUNTING STANDARDS Statement of Financial Accounting Standards (SFAS) No.141(R), Business Combinationsa Replacement of FASB Statement No.141 (SFAS No.141 (R)) SFAS No.141(R) replaces Financial Accounting Standards Board (FASB) Statement No.141, Business Combinations, and retains the fundamental requirements that the acquisition method of accounting be used for all business combinations and for an acquirer to be identified for each business combination. However, SFAS No.141(R) expands the definition of a business and amends FASB Statement No.109, Accounting for Income Taxes, to require the acquirer to recognize changes in the amount of its deferred tax benefits that are realizable because of a business combination either in income from continuing operations or directly in contributed capital, depending on the circumstances. On April1, 2009, the FASB issued FASB Staff Position (FSP) Financial Accounting Standards (FAS) 141(R)-1, Accounting for Assets and Liabilities Assumed in a Business Combination that Arise from Contingencies (FSP FAS 141(R)-1), to clarify the accounting for the initial recognition and measurement, subsequent measurement and accounting, and disclosure of assets and liabilities arising from contingencies in a business combination. FSP FAS 141(R)-1 requires that assets acquired and liabilities assumed in a business combination that arise from contingencies be measured at fair value if the acquisition date fair value of that asset and liability can be determined during the measurement period in accordance with SFAS No.157. If the acquisition date fair value cannot be determined, then the asset or liability would be measured in accordance with SFAS No.5, Accounting for Contingencies, and FASB Interpretation Number 14, Reasonable Estimate of the Amount of Loss. SFAS No.141(R) and the guidance provided in FSP FAS 141(R)-1 applies prospectively to business combinations for which the acquisition date is on or after January1, 2009. Pepco adopted SFAS No.141(R) on January1, 2009, and it did not have a material impact on Pepcos overall financial condition, results of operations, or cash flows. FSP 157-2, Effective Date of FASB Statement No.157 (FSP 157-2) FSP 157-2 deferred the effective date of SFAS No.157, Fair Value Measurements, (SFAS No.157) for all nonrecurring fair value measurements of non-financial assets and non-financial liabilities until January1, 2009 for Pepco. The adoption of SFAS No.157 did not have a material impact on the fair value measurements of Pepcos non-financial assets and non-financial liabilities. SFAS No.160, Noncontrolling Interests in Consolidated Financial Statementsan Amendment of ARB No.51 (SFAS No.160) SFAS No.160 establishes new accounting and reporting standards for a non-controlling interest (also called a minority interest) in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a non-controlling interest in a subsidiary is an ownership interest in the consolidated entity that should be separately reported in the consolidated financial statements. SFAS No.160 establishes accounting and reporting standards that require (i)the ownership
RECENTLY ISSUED ACCOUNTING STANDARDS, NOT YET ADOPTED	(4)RECENTLY ISSUED ACCOUNTING STANDARDS, NOT YET ADOPTED Statement of Financial Accounting Standards (SFAS) No.166, Accounting for Transfers of Financial Assets an amendment of SFAS No.140 (SFAS No.166) In June 2009, the FASB issued SFAS No.166 to remove the concept of a qualifying special-purpose entity (QSPE) from SFAS No.140 and the QSPE scope exception in FASB Interpretation Number 46(R). The statement changes requirements for de-recognizing financial assets and requires additional disclosures about a transferors continuing involvement in transferred financial assets. The new guidance is effective for transfers of financial assets occurring in fiscal periods beginning after November15, 2009; therefore, this guidance will be effective on January1, 2010 for Pepco. Comparative disclosures are encouraged but not required for earlier periods presented. Pepco is evaluating the impact that it will have on its overall financial condition and financial statements. Statement of Financial Accounting Standards (SFAS) No.168, The FASB Accounting Standards CodificationTM and the Hierarchy of Generally Accepted Accounting Principles (SFAS No.168) In June 2009, the FASB issued SFAS No.168 to identify the sources of accounting principles and the framework for selecting the principles used in the preparation of non-governmental financial statements that are presented under U.S. GAAP. In addition, SFAS No.168 replaces the current reference system for standards and guidance with a new numerical designation system known as the Codification. The Codification will be the single source reference system for all authoritative non-governmental GAAP. The Codification is numerically organized by topic, subtopic, section, and subsection. SFAS No.168 replaces SFAS No.162, The Hierarchy of Generally Accepted Accounting Principles and is effective for financial statements issued for interim and annual periods ending after September15, 2009. There is an option to early adopt beginning with interim periods ending after June15, 2009. Pepco has not elected to early adopt and, therefore, the Codification referencing required by SFAS No.168 will become effective in its September30, 2009 financial statements. Entities are not required to revise previous financial statements for the change in references. The adoption of SFAS No.168 is not expected to result in a change in accounting for Pepco. Therefore, the provisions of SFAS No.168 are not expected to have a material impact on Pepcos overall financial condition, results of operations, or cash flows. However, there will be a change in how accounting standards are referenced in the financial statements.
SEGMENT INFORMATION	(5)SEGMENT INFORMATION In accordance with SFAS No.131 Disclosures about Segments of an Enterprise and Related Information, Pepco has one segment, its regulated utility business.
PENSION AND OTHER POSTRETIREMENT BENEFITS	(6)PENSIONS AND OTHER POSTRETIREMENT BENEFITS Pepco accounts for its participation in the Pepco Holdings benefit plans as participation in a multi-employer plan. PHIs pension and other postretirement net periodic benefit cost for the three months ended June30, 2009 before intercompany allocations from the PHI Service Company, of $44 million includes $11 million for Pepcos allocated share. PHIs pension and other postretirement net periodic benefit cost for the six months ended June30, 2009 of $75 million includes $19 million for Pepcos allocated share. PHIs pension and other postretirement net periodic benefit cost for the three months ended June30, 2008, of $17 million, before intercompany allocations, included $6 million for Pepcos allocated share. PHIs pension and other postretirement net periodic benefit cost for the six months ended June30, 2008 of $32 million includes $12 million for Pepcos allocated share.
DEBT	(7)DEBT Credit Facilities PHI, Pepco, Delmarva Power and Light Company (DPL) and Atlantic City Electric Company (ACE) maintain an unsecured credit facility to provide for their respective short-term liquidity needs. The aggregate borrowing limit under the facility is $1.5 billion, all or any portion of which may be used to obtain loans or to issue letters of credit. PHIs credit limit under the facility is $875 million. The credit limit of each of Pepco, DPL and ACE is the lesser of $500 million and the maximum amount of debt the company is permitted to have outstanding by its regulatory authorities, except that the aggregate amount of credit used by Pepco, DPL and ACE at any given time collectively may not exceed $625 million. Pepco historically has issued commercial paper to meet its short-term working capital requirements.As a result of disruptions in the commercial paper markets in 2008, Pepco has borrowed under the credit facility to create a cash reserve for future short-term operating needs.At March31, 2009, Pepco had an outstanding loan of $100 million.The loan was repaid at maturity in April 2009. At June30, 2009 and December31, 2008, the amount of cash, plus borrowing capacity under the $1.5 billion credit facility available to meet the liquidity needs of PHIs utility subsidiaries was $549 million and $843 million, respectively. Other Financing Activity During the three months ended June30, 2009, the following financing activity occurred: In April 2009, Pepco repaid, prior to maturity, a $25 million short-term loan.
INCOME TAXES	(8)INCOME TAXES A reconciliation of Pepcos effective income tax rate is as follows: ForThe ThreeMonthsEnded June30, For The SixMonthsEnded June30, 2009 2008 2009 2008 Federal statutory rate 35.0 % 35.0 % 35.0 % 35.0 % Increases (decreases) resulting from: Depreciation 4.0 2.9 4.0 3.8 Asset removal costs (2.0 ) (1.3 ) (1.7 ) (3.1 ) State income taxes, net of federal effect 6.0 5.5 5.9 6.1 Software amortization 1.3 1.1 1.3 1.5 Tax credits (1.3 ) (1.1 ) (1.4 ) (1.4 ) Change in estimates and interest related to uncertain and effectively settled tax positions 4.0 (6.1 ) 2.7 (4.9 ) Interest on state income tax refund, net of federal effect (5.0 ) (3.2 ) Permanent differences related to deferred compensation funding (1.0 ) (.8 ) .8 Other, net (2.7 ) .1 (2.1 ) (.2 ) Effective Income Tax Rate 43.3 % 31.1 % 42.9 % 34.4 % Pepcos effective tax rates for the three months ended June30, 2009 and 2008 were 43.3% and 31.1%, respectively. The increase in the rate resulted from the change in estimates and interest related to uncertain tax positions. During the second quarter of 2008, there was a reduction in previously accrued interest and estimates resulting from the settlement of the mixed service cost issue (see Footnote (10), Commitments and Contingencies for additional discussion) and a benefit was recorded for interest received on a state income tax refund. Pepcos effective tax rates for the six months ended June30, 2009 and 2008 were 42.9% and 34.4%, respectively. The increase in the rate resulted from the change in estimates and interest related to uncertain tax positions. During the second quarter of 2008, there was a reduction in previously accrued interest and estimates resulting from the settlement of the mixed service cost issue and a benefit was recorded for interest received on a state income tax refund. In March 2009, the Internal Revenue Service (IRS) issued a Revenue Agents Report (RAR) for the audit of PHIs consolidated federal income tax returns for the calendar years 2003 to 2005. The IRS has proposed adjustments to PHIs tax returns, including adjustments to Pepcos capitalization of overhead costs for tax purposes and the deductibility of certain Pepco casualty losses. In conjunction with PHI, Pepco has appealed certain of the proposed adjustments and believes it has adequately reserved for the adjustments included in the RAR.
FAIR VALUE DISCLOSURES	(9)FAIR VALUE DISCLOSURES Fair Value of Assets and Liabilities Excluding Debt Effective January1, 2008, Pepco adopted SFAS No.157 which established a framework for measuring fair value and expanded disclosures about fair value measurements. As defined in SFAS No.157, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Pepco utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. Accordingly, Pepco utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Pepco is able to classify fair value balances based on the observability of those inputs. SFAS No.157 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement). The three levels of the fair value hierarchy defined by SFAS No.157 are as follows: Level 1 Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using broker quotes in liquid markets, and other observable pricing data. Level 2 also includes those financial instruments that are valued using internally developed methodologies that have been corroborated by observable market data through correlation or by other means. Significant assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Level 3 Pricing inputs include significant inputs that are generally less observable than those from objective sources. Level 3 includes those financial investments that are valued using models or other valuation methodologies. Level 3 instruments classified as executive deferred compensation plan assets are life insurance policies that are valued using the cash surrender value of the policies. Since these values do not represent a quoted price in an active market they are considered level 3. The following tables sets forth by level within the fair value hierarchy Pepcos financial assets and liabilities that were accounted for at fair value on a recurring basis as of June30, 2009 and December31, 2008. As required by SFAS No.157, financial assets and liabilities are clas
COMMITMENTS AND CONTINGENCIES	(10) COMMITMENTS AND CONTINGENCIES Regulatory and Other Matters Proceeds from Settlement of Mirant Bankruptcy Claims In 2000, Pepco sold substantially all of its electricity generating assets to Mirant Corporation (Mirant). As part of the sale, Pepco and Mirant entered into a back-to-back arrangement, whereby Mirant agreed to purchase from Pepco the 230 megawatts of electricity and capacity that Pepco was obligated to purchase annually through 2021 from Panda under the Panda PPA at the purchase price Pepco was obligated to pay to Panda. In 2003, Mirant commenced a voluntary bankruptcy proceeding in which it sought to reject certain obligations that it had undertaken in connection with the asset sale. As part of the settlement of Pepcos claims against Mirant arising from the bankruptcy, Pepco agreed not to contest the rejection by Mirant of its obligations under the back-to-back arrangement in exchange for the payment by Mirant of damages corresponding to the estimated amount by which the purchase price that Pepco was obligated to pay Panda for the energy and capacity exceeded the market price. In 2007, Pepco received as damages $414million in net proceeds from the sale of shares of Mirant common stock issued to it by Mirant. In September 2008, Pepco transferred the Panda PPA to Sempra, along with a payment to Sempra, thereby terminating all further rights, obligations and liabilities of Pepco under the Panda PPA. In November 2008, Pepco filed with the District of Columbia Public Service Commission (DCPSC) and the Maryland Public Service Commission (MPSC) proposals to share with customers the remaining balance of proceeds from the Mirant settlement in accordance with divestiture sharing formulas approved previously by the respective commissions. In March 2009, the DCPSC issued an order approving Pepcos sharing proposal for the District of Columbia under which approximately $24million was distributed to District of Columbia customers as a one-time billing credit. As a result of this decision, Pepco recorded a pre-tax gain of approximately $14million for the quarter ended March31, 2009. On July2, 2009, the MPSC approved a settlement agreement among Pepco, the Maryland office of Peoples Counsel (the Maryland OPC) and the MPSC staff under which Pepco will distribute approximately $39million to Maryland customers during the billing month of August 2009 through a one-time billing credit. As a result of this decision, Pepco expects to record a pre-tax gain between $26million and $28million in the quarter ending September30, 2009. As of June30, 2009, approximately $64million in remaining proceeds from the Mirant settlement was accounted for as restricted cash and as a regulatory liability. In the third quarter of 2009, the restricted cash will be released and the regulatory liability will be extinguished as a consequence of the MPSC order. Rate Proceedings In recent electric service and natural gas distribution base rate cases, Pepco has proposed the adoption of a bill stabilization adjustment mechanism (BSA) for retail customers. To date, a BSA has been approved and implemented for Pepcos electric service in Maryland and a pro
RELATED PARTY TRANSACTIONS	(11)RELATED PARTY TRANSACTIONS PHI Service Company provides various administrative and professional services to PHI and its regulated and unregulated subsidiaries, including Pepco. The cost of these services is allocated in accordance with cost allocation methodologies set forth in the service agreement using a variety of factors, including the subsidiaries share of employees, operating expenses, assets, and other cost causal methods. These intercompany transactions are eliminated by PHI in consolidation and no profit results from these transactions at PHI. PHI Service Company costs directly charged or allocated to Pepco for the three months ended June30, 2009 and 2008 were approximately $41 million and $38 million, respectively. PHI Service Company costs directly charged or allocated to Pepco for the six months ended June30, 2009 and 2008 were approximately $83 million and $77 million, respectively. Certain subsidiaries of Pepco Energy Services Inc. (Pepco Energy Services) perform utility maintenance services, including services that are treated as capital costs, for Pepco. Amounts charged to Pepco by these companies for the three months ended June30, 2009 and 2008 were approximately $2 million and $3 million, respectively. Amounts charged to Pepco by these companies for the six months ended June30, 2009 and 2008 were approximately $4 million and $5 million, respectively. In addition to the transactions described above, Pepcos financial statements include the following related party transactions in its statements of income: FortheThreeMonths Ended June30, FortheSixMonths Ended June30, Income (Expense) 2009 2008 2009 2008 (millions of dollars) Intercompany power purchases Conectiv Energy Supply (a) $ 1 $ (8 ) $ 1 $ (23 ) (a) Included in purchased energy expense. As of June30, 2009 and December31, 2008, Pepco had the following balances on its Balance Sheets due (to) from related parties: June30, 2009 December31, 2008 Liability (millions of dollars) Payable to Related Party (current) PHI Service Company $ (18 ) $ (17 ) Pepco Energy Services (a) (45 ) (53 ) The items listed above are included in the Accounts payable due to associated companies balances on the Balance Sheets of $64 million and $70 million at June30, 2009 and December31, 2008, respectively. Money Pool Balance with Pepco Holdings (included in cash and cash equivalents) 33 (a) Pepco bills customers on behalf of Pepco Energy Services where customers have selected Pepco Energy Services as their alternative supplier or where Pepco Energy Services has performed work for certain government agencies under a General Services Administration area-wide agreement.
DELMARVA POWER & LIGHT CO /DE/
Notes to Financial Statements [Abstract]
ORGANIZATION	(1) ORGANIZATION Delmarva Power Light Company (DPL) is engaged in the transmission and distribution of electricity in Delaware and portions of Maryland and provides gas distribution service in northern Delaware. Additionally, DPL supplies electricity at regulated rates to retail customers in its territories who do not elect to purchase electricity from a competitive supplier. The regulatory term for this service is Standard Offer Service (SOS) in both Delaware and Maryland. DPL is a wholly owned subsidiary of Conectiv, which is wholly owned by Pepco Holdings, Inc. (Pepco Holdings or PHI). In January 2008, DPL completed the sale of its Virginia retail electric distribution assets and the sale of its Virginia wholesale electric transmission assets, both located on Virginias Eastern Shore.
SIGNIFICANT ACCOUNTING POLICIES	(2) SIGNIFICANT ACCOUNTING POLICIES Financial Statement Presentation DPLs unaudited financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). Pursuant to the rules and regulations of the Securities and Exchange Commission, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted. Therefore, these financial statements should be read along with the annual financial statements included in DPLs Annual Report on Form 10-K for the year ended December31, 2008. In the opinion of DPLs management, the financial statements contain all adjustments (which all are of a normal recurring nature) necessary to present fairly DPLs financial condition as of June30, 2009, in accordance with GAAP. The year-end balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. Interim results for the three and six months ended June30, 2009 may not be indicative of results that will be realized for the full year ending December31, 2009 since the sales of electric energy are seasonal. DPL has evaluated all subsequent events through August6, 2009, the date of issuance of the financial statements to which these Notes relate. Change in Accounting Principle Since DPLs adoption of Statement of Financial Accounting Standards No.142, Goodwill and Other Intangible Assets, DPL has conducted its annual impairment review of goodwill as of July1. After the completion of the July1, 2009 impairment test, DPL adopted a new accounting policy whereby DPLs annual impairment review of goodwill will be performed as of November1 each year. Management believes that the change in DPLs annual impairment testing date is preferable because it better aligns the timing of the test with managements annual update of its long-term financial forecast. The change in accounting principle has had no effect on DPLs financial statements. DPL Wind Transactions PHI, through its DPL subsidiary, has entered into four wind PPAs in amounts up to a total of 350 megawatts. Three of the PPAs are with onshore facilities and one of the PPAs is with an offshore facility. DPL would purchase energy and renewable energy credits (RECs) from the four wind facilities and capacity from one of the wind facilities. The RECs help DPL fulfill a portion of its requirements under the State of Delawares Renewable Energy Portfolio Standards Act, which requires that 20 percent of total load needed in Delaware be produced from renewable sources by 2019. The Delaware Public Service Commission (DPSC) has approved the four agreements, each of which sets forth the prices to be paid by DPL over the life of the respective contracts. Payments under the agreements are currently expected to start in late 2009 for one of the onshore contracts, 2010 for the other two onshore contracts, and 2014 for the offshore contract. The lengths of the contracts range between 15 and 25 years. DPL is obligated to purchase energy and RECs in amounts generated and delivered by the sellers at rates that are primarily fixed under
NEWLY ADOPTED ACCOUNTING STANDARDS	(3) NEWLY ADOPTED ACCOUNTING STANDARDS Statement of Financial Accounting Standards (SFAS) No.141(R), Business Combinationsa Replacement of FASB Statement No.141 (SFAS No.141 (R)) SFAS No.141(R) replaces FASB Statement No.141, Business Combinations, and retains the fundamental requirements that the acquisition method of accounting be used for all business combinations and for an acquirer to be identified for each business combination. However, SFAS No.141(R) expands the definition of a business and amends FASB Statement No.109, Accounting for Income Taxes, to require the acquirer to recognize changes in the amount of its deferred tax benefits that are realizable because of a business combination either in income from continuing operations or directly in contributed capital, depending on the circumstances. On April1, 2009, the FASB issued FASB Staff Position (FSP) Financial Accounting Standards (FAS) 141(R)-1, Accounting for Assets and Liabilities Assumed in a Business Combination that Arise from Contingencies (FSP FAS 141(R)-1), to clarify the accounting for the initial recognition and measurement, subsequent measurement and accounting, and disclosure of assets and liabilities arising from contingencies in a business combination. FSP FAS 141(R)-1 requires that assets acquired and liabilities assumed in a business combination that arise from contingencies be measured at fair value if the acquisition date fair value of that asset and liability can be determined during the measurement period in accordance with SFAS No.157. If the acquisition date fair value cannot be determined, then the asset or liability would be measured in accordance with SFAS No.5, Accounting for Contingencies, and FIN No.14, Reasonable Estimate of the Amount of Loss. SFAS No.141(R) and the guidance provided in FSP FAS 141(R)-1 applies prospectively to business combinations for which the acquisition date is on or after January1, 2009. DPL adopted SFAS No.141(R) on January1, 2009, and it did not have a material impact on DPLs overall financial condition, results of operations, or cash flows. FSP 157-2, Effective Date of FASB Statement No.157 (FSP 157-2) FSP 157-2 deferred the effective date of SFAS No.157, Fair Value Measurements, (SFAS No.157) for all nonrecurring fair value measurements of non-financial assets and non-financial liabilities until January1, 2009 for DPL. The adoption of SFAS No.157 did not have a material impact on the fair value measurements of DPLs non-financial assets and non-financial liabilities. SFAS No.160, Noncontrolling Interests in Consolidated Financial Statementsan Amendment of ARB No.51 (SFAS No.160) SFAS No.160 establishes new accounting and reporting standards for a non-controlling interest (also called a minority interest) in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a non-controlling interest in a subsidiary is an ownership interest in the consolidated entity that should be separately reported in the consolidated financial statements. SFAS No.160 establishes accounting and reporting standards that require (i)the ownership interests and the related consolidated net income in subsidiaries h
RECENTLY ISSUED ACCOUNTING STANDARDS, NOT YET ADOPTED	(4)RECENTLY ISSUED ACCOUNTING STANDARDS, NOT YET ADOPTED Statement of Financial Accounting Standards (SFAS) No.166, Accounting for Transfers of Financial Assetsan amendment of SFAS No.140 (SFAS No.166) In June 2009, the FASB issued SFAS No.166 to remove the concept of qualifying special-purpose entity (QSPE) from SFAS No.140 and the QSPE scope exception in FIN 46(R). The statement changes requirements for derecognizing financial assets and requires additional disclosures about a transferors continuing involvement in transferred financial assets. The new guidance is effective for transfers of financial assets occurring in fiscal periods beginning after November15, 2009; therefore, this guidance will be effective on January1, 2010 for DPL. Comparative disclosures are encouraged but not required for earlier periods presented. DPL is evaluating the impact that it will have on its overall financial condition and financial statements. Statement of Financial Accounting Standards (SFAS) No.167, Consolidation of Variable Interest Entitiesan amendment of FIN 46(R) (SFAS No.167) In June 2009, the FASB issued SFAS No.167 to amend FIN 46(R), Consolidation of Variable Interest Entities, which eliminates the existing quantitative analysis requirement and adds new qualitative factors to determine whether consolidation is required that would have to be applied on a quarterly basis to interests in variable interest entities. Under the new standard, the holder of the interest with the power to direct the most significant activities of the entity and the right to receive benefits or absorb losses significant to the entity would consolidate. The new standard retained the provision in FIN 46(R) that allowed entities created before December31, 2003 to be scoped out from a consolidation assessment if exhaustive efforts are taken and there is insufficient information to determine the primary beneficiary. The new guidance is effective for fiscal periods beginning after November15, 2009 for existing and newly created entities; therefore, this amendment will be effective on January1, 2010 for DPL. Comparative disclosures under this provision are encouraged but not required for earlier periods presented. DPL is evaluating the impact that it will have on its overall financial condition and financial statements. Statement of Financial Accounting Standards (SFAS) No.168, The FASB Accounting Standards CodificationTM and the Hierarchy of Generally Accepted Accounting Principles (SFAS No.168) In June 2009, the FASB issued SFAS No.168 to identify the sources of accounting principles and the framework for selecting the principles used in the preparation of non-governmental financial statements that are presented under U.S. GAAP. In addition, SFAS No.168 replaces the current reference system for standards and guidance with a new numerical designation system known as the Codification. The Codification will be the single source reference system for all authoritative non-governmental GAAP. The Codification is numerically organized by topic, subtopic, section, and subsection. SFAS No.168 replaces SFAS No.162, The Hierarchy of Generally Accepted Accounting Princi
SEGMENT INFORMATION	(5)SEGMENT INFORMATION In accordance with SFAS No.131, Disclosures about Segments of an Enterprise and Related Information, DPL has one segment, its regulated utility business.
GOODWILL	(6) GOODWILL As of June30, 2009 and December31, 2008, DPL had goodwill of approximately $8million, all of which was generated by DPLs acquisition of Conowingo Power Company in 1995. DPLs July1, 2009 annual impairment test indicated that its goodwill was not impaired. DPL performed an interim impairment test as of December31, 2008 which indicated that goodwill was not impaired. At March31, 2009, after review of its significant assumptions in the goodwill impairment analysis, DPL concluded that there was no triggering event requiring DPL to perform a comprehensive goodwill assessment during the first quarter of 2009. DPL also concluded that its goodwill was not impaired at June30, 2009, with the completion of the July1, 2009 annual impairment test. In order to estimate the fair value of DPLs business, DPL reviews the results from two discounted cash flow models. The models differ in the method used to calculate the terminal value. One model estimates terminal value based on a constant annual cash flow growth rate that is consistent with DPLs long-term view of the business, and the other model estimates terminal value based on a multiple of earnings before interest, taxes, depreciation, and amortization (EBITDA) that management believes is consistent with EBITDA multiples for comparable utilities. The models use a cost of capital appropriate for a regulated utility as the discount rate for the estimated cash flows. DPL has consistently used this valuation approach to estimate the fair value of DPLs business since the adoption of SFAS No.142. The estimation of fair value is dependent on a number of factors that are sourced from the DPL business forecast, including but not limited to interest rates, growth assumptions, returns on rate base, operating and capital expenditure requirements, and other factors, changes in which could materially impact the results of impairment testing. Assumptions and methodologies used in the models were consistent with historical experience, including assumptions concerning the recovery of operating costs and capital expenditures. Sensitive, interrelated and uncertain variables that could decrease the estimated fair value of the DPL business include utility sector market performance, sustained adverse business conditions, changes in forecasted revenues, higher operating and capital expenditure requirements, a significant increase in the cost of capital and other factors. With the continuing volatile general market conditions and the disruptions in the credit and capital markets, DPL will continue to closely monitor whether there is goodwill impairment.
PENSION AND OTHER POSTRETIREMENT BENEFITS	(7) PENSION AND OTHER POSTRETIREMENT BENEFITS DPL accounts for its participation in the Pepco Holdings benefit plans as participation in a multi-employer plan. PHIs pension and other postretirement net periodic benefit cost for the three months ended June30, 2009 before intercompany allocations from the PHI Service Company, of $44 million includes $7 million for DPLs allocated share. PHIs pension and other post retirement net periodic benefit cost for the six months ended June30, 2009 of $75 million includes $12 million for DPLs allocated share. PHIs pension and other postretirement net periodic benefit cost for the three months ended June30, 2008 before intercompany allocations, of $17 million included $1 million for DPLs allocated share. PHIs pension and other post retirement net periodic benefit cost for the six months ended June30, 2008 of $32 million includes $2 million for DPLs allocated share.
DEBT	(8) DEBT Credit Facilities PHI, Potomac Electric Power Company (Pepco), DPL and Atlantic City Electric Company (ACE) maintain an unsecured credit facility to provide for their respective short-term liquidity needs. The aggregate borrowing limit under the facility is $1.5 billion, all or any portion of which may be used to obtain loans or to issue letters of credit. PHIs credit limit under the facility is $875 million. The credit limit of each of Pepco, DPL and ACE is the lesser of $500 million and the maximum amount of debt the company is permitted to have outstanding by its regulatory authorities, except that the aggregate amount of credit used by Pepco, DPL and ACE at any given time collectively may not exceed $625 million. DPL historically has issued commercial paper to meet its short-term working capital requirements.As a result of disruptions in the commercial paper markets in 2008, DPL has borrowed under the credit facility to create a cash reserve for future short-term operating needs.At June30, 2009, DPL had an outstanding loan of $50 million under the credit facility, which it repaid in July 2009. At June30, 2009 and December31, 2008, the amount of cash, plus borrowing capacity under the $1.5 billion credit facility available to meet the liquidity needs of PHIs utility subsidiaries was $549 million and $843 million, respectively. Other Financing Activities During the three months ended June30, 2009, the following financing activities occurred: In April 2009, DPL resold $9 million of its Pollution Control Revenue Refunding Bonds, which previously had been issued for the benefit of DPL by the Delaware Economic Development Authority. These bonds were repurchased by DPL in November 2008 in response to disruption in the tax-exempt bond market that made it difficult for the remarketing agent to successfully remarket the bonds. As the owner of the bonds, DPL received the proceeds of the sale, which it intends to use for general corporate purposes. In May 2009, DPL repaid, prior to maturity, $50 million of a $150 million short-term loan, which matured in July 2009. Subsequent to June30, 2009, the following financing activity occurred: In July 2009, DPL repaid, at maturity, the remaining $100 million of its original $150 million short-term loan. In July 2009, DPL redeemed the $15 million Series 2003 A and $18.2 million Series 2003 B Delaware Economic Development Authority tax exempt bonds that were repurchased in 2008 due to the disruptions in the tax exempt capital markets.
INCOME TAXES	(9) INCOME TAXES A reconciliation of DPLs effective income tax rate is as follows: FortheThreeMonths Ended June30, FortheSixMonths Ended June30, 2009 2008 2009 2008 Federal statutory rate 35.0 % 35.0 % 35.0 % 35.0 % Increases (decreases) resulting from: Depreciation 5.7 2.5 2.0 1.9 State income taxes, net of federal effect 5.7 5.5 5.5 5.4 Tax credits (2.9 ) (1.0 ) (1.0 ) (.6 ) Change in estimates and interest related to uncertain and effectively settled tax positions (18.6 ) (10.5 ) (6.0 ) (8.9 ) Other, net 3.7 (.5 ) (.2 ) Effective Income Tax Rate 28.6 % 31.5 % 35.0 % 32.6 % DPLs effective tax rates for the three months ended June30, 2009 and 2008 were 28.6% and 31.5%, respectively. The decrease in the rate resulted from the change in estimates and interest related to uncertain and effectively settled tax positions due to the filing of an amended state income tax return to recover unused net operating losses, partially offset by the second quarter 2008 settlement of the mixed service cost issue. See Footnote (12), Commitments and Contingencies for additional discussion. DPLs effective tax rates for the six months ended June30, 2009 and 2008 were 35.0% and 32.6% respectively. The increase in the rate resulted from the change in estimates and interest related to uncertain and effectively settled tax positions due to the filing of an amended state income tax return to recover unused net operating losses, partially offset by the second quarter 2008 settlement of the mixed service cost issue and the filing of a claim with the IRS related to certain casualty losses. In March 2009, the IRS issued a Revenue Agents Report (RAR) for the audit of PHIs consolidated federal income tax returns for the calendar years 2003 to 2005. The IRS has proposed adjustments to PHIs tax returns, including adjustments to DPLs capitalization of overhead costs for tax purposes and the deductibility of certain DPL casualty losses. In conjunction with PHI, DPL has appealed certain of the proposed adjustments and believes it has adequately reserved for the adjustments included in the RAR. During the second quarter of 2009, as a result of filing amended state returns, DPLs uncertain tax benefits related to prior year tax positions increased by $18 million.
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES	(10) DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES DPL accounts for its derivative activities in accordance with SFAS No.133, Accounting for Derivative Instruments and Hedging Activities, (SFAS No.133) as amended by subsequent pronouncements. DPL uses derivative instruments in the form of forward contracts, futures, swaps, and exchange-traded and over-the-counter options primarily to reduce gas commodity price volatility and limit its customers exposure to increases in the market price of gas. DPL also manages commodity risk with physical natural gas and capacity contracts that are not classified as derivatives. All premiums paid and other transaction costs incurred as part of DPLs natural gas hedging activity, in addition to all gains and losses related to hedging activities, are deferred under Statement of Financial Accounting Standards (SFAS) No.71, Accounting for the Effects of Certain Types of Regulation, until recovered based on the Fuel Adjustment clause approved by the DPSC. The table below identifies the balance sheet location and fair values of derivative instruments as of June30, 2009 and December31, 2008: As of June30, 2009 Balance Sheet Caption Derivatives Designated as Hedging Instruments Other Derivative Instruments Gross Derivative Instruments Effects of Cash Collateral and Netting Net Derivative Instruments (millions of dollars) Derivative Assets (current assets) $ $ 7 $ 7 $ (7 ) $ Derivative Assets (non-current assets) Total Derivative Assets 7 7 (7 ) Derivative Liabilities (current liabilities) (21 ) (21 ) (42 ) 31 (11 ) Derivative Liabilities (non-current liabilities) (18 ) (18 ) (1 ) (19 ) Total Derivative Liabilities (21 ) (39 ) (60 ) 30 (30 ) Net Derivative (Liability) Asset $ (21 ) $ (32 ) $ (53 ) $ 23 $ (30 ) As of December31, 2008 Balance Sheet Caption Derivatives Designated as Hedging Instruments Other Derivative Instruments Gross Derivative Instruments Effects of Cash Collateral and Netting Net Derivative Instruments (millions of dollars) Derivative Assets (current assets) $ $ 3 $ 3 $ (3 ) $ Derivative Assets (non-current assets) Total Derivative Assets 3 3 (3 ) Derivative Liabilities (current liabilities) (31 ) (13 ) (44 ) 31 (13 ) Derivative Liabilities (non-current liabilities) (14 ) (14 ) (14 ) Total Derivative Liabilities (31 ) (27 ) (58 ) 31 (27 )
FAIR VALUE DISCLOSURES	(11)FAIR VALUE DISCLOSURES Fair Value of Assets and Liabilities Excluding Debt Effective January1, 2008, DPL adopted SFAS No.157 which established a framework for measuring fair value and expanded disclosures about fair value measurements. As defined in SFAS No.157, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). DPL utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. Accordingly, DPL utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. DPL is able to classify fair value balances based on the observability of those inputs. SFAS No.157 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement). The three levels of the fair value hierarchy defined by SFAS No.157 are as follows: Level 1 Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using broker quotes in liquid markets, and other observable pricing data. Level 2 also includes those financial instruments that are valued using internally developed methodologies that have been corroborated by observable market data through correlation or by other means. Significant assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Level 3 Pricing inputs include significant inputs that are generally less observable than those from objective sources. Level 3 includes those financial investments that are valued using models or other valuation methodologies. DPLs Level 3 instruments are natural gas options. Some non-standard assumptions are used in their forward valuation to adjust for the pricing; otherwise, most of the options follow NYMEX valuation. A few of the options have no significant NYMEX components, and have to be priced using internal volatility assumptions. Some of the options do not expire until December2011. All of the options are part of the natural gas hedging program approved by the Delaware Public Service Commission. Level 3 instruments classified as executive deferred compensation plan a
COMMITMENTS AND CONTINGENCIES	(12) COMMITMENTS AND CONTINGENCIES Regulatory and Other Matters Rate Proceedings In recent electric service and natural gas distribution base rate cases, DPL has proposed the adoption of a bill stabilization adjustment mechanism (BSA) for retail customers. To date, a BSA has been approved and implemented for DPL electric service in Maryland, and a method of revenue decoupling similar to a BSA, referred to as a modified fixed variable rate design (MFVRD), has been approved for DPL electric and natural gas service in Delaware, which will be implemented in the context of DPLs next Delaware base rate case. Under the BSA, customer delivery rates are subject to adjustment (through a surcharge or credit mechanism), depending on whether actual distribution revenue per customer exceeds or falls short of the approved revenue-per-customer amount. The BSA increases rates if actual distribution revenues fall below the level approved by the applicable commission and decreases rates if actual distribution revenues are above the approved level. The result is that, over time, DPL collects its authorized revenues for distribution deliveries. As a consequence, a BSA decouples revenue from unit sales consumption and ties the growth in revenues to the growth in the number of customers. Some advantages of the BSA are that it (i)eliminates revenue fluctuations due to weather and changes in customer usage patterns and, therefore, provides for more predictable utility distribution revenues that are better aligned with costs, (ii)provides for more reliable fixed-cost recovery, (iii)tends to stabilize customers delivery bills, and (iv)removes any disincentives for DPL to promote energy efficiency programs for its customers, because it breaks the link between overall sales volumes and delivery revenues. The MFVRD adopted in Delaware relies primarily upon a fixed customer charge (i.e., not tied to the customers volumetric consumption) to recover DPLs fixed costs, plus a reasonable rate of return. Although different from the BSA, DPL views the MFVRD as an appropriate revenue decoupling mechanism. Delaware In August2008, DPL submitted its 2008 Gas Cost Rate (GCR) filing to the DPSC, requesting an increase in the level of GCR. In September2008, the DPSC issued an initial order approving the requested increase, which became effective on November1, 2008, subject to refund pending final DPSC approval after evidentiary hearings. Due to a significant decrease in wholesale gas prices, in January2009, DPL submitted to the DPSC an interim GCR filing, requesting a decrease in the level of GCR. The proposed decrease, when combined with the increase that became effective November1, 2008, would have the net effect of a 13.8% increase in the level of GCR. On February5, 2009, the DPSC issued an initial order approving the net increase, effective on March1, 2009, subject to refund pending final DPSC approval after evidentiary hearings. A hearing was held on May27, 2009, during which a settlement agreement among DPL, DPSC staff and the Delaware Public Advocate was submitted to the Hearing Examiner. The settlement agreement provided that the proposed net increase would become f
RELATED PARTY TRANSACTIONS	(13)RELATED PARTY TRANSACTIONS PHI Service Company provides various administrative and professional services to PHI and its regulated and unregulated subsidiaries including DPL. The cost of these services is allocated in accordance with cost allocation methodologies set forth in the service agreement using a variety of factors, including the subsidiaries share of employees, operating expenses, assets, and other cost causal methods. These intercompany transactions are eliminated by PHI in consolidation and no profit results from these transactions at PHI. PHI Service Company costs directly charged or allocated to DPL for the three months ended June30, 2009 and 2008 were $31 million and $30 million, respectively. PHI Service Company costs directly charged or allocated to DPL for the six months ended June30, 2009 and 2008 were approximately $63 million and $60 million respectively. In addition to the PHI Service Company charges described above, DPLs financial statements include the following related party transactions in its statements of income: FortheThreeMonths Ended June30, FortheSixMonths Ended June30, Income (Expenses) 2009 2008 2009 2008 (millions of dollars) SOS with Conectiv Energy Supply (a) $ (22 ) $ (43 ) $ (59 ) $ (104 ) Intercompany lease transactions (b) 2 2 4 4 Transcompany pipeline gas purchases with Conectiv Energy Supply (c) (1 ) (1 ) (a) Included in purchased energy expense. (b) Included in electric revenue. (c) Included in gas purchased. As of June30, 2009 and December31, 2008, DPL had the following balances on its balance sheets due (to) from related parties: June30, 2009 December31, 2008 Liability (millions of dollars) Payable to Related Party (current) PHI Service Company $ (16 ) $ (15 ) Conectiv Energy Supply (3 ) (14 ) Pepco Energy Services (a) (2 ) (6 ) The items listed above are included in the Accounts payable due to associated companies balances on the Balance Sheets of $22 million and $34 million at June30, 2009 and December31, 2008, respectively. Money Pool Balance with Pepco Holdings (included in cash and cash equivalents) $ 40 $ (a) DPL bills customers on behalf of Pepco Energy Services where customers have selected Pepco Energy Services as their alternative supplier.
ATLANTIC CITY ELECTRIC CO
Notes to Financial Statements [Abstract]
ORGANIZATION	(1) ORGANIZATION Atlantic City Electric Company (ACE) is engaged in the transmission and distribution of electricity in southern New Jersey. ACE provides Default Electricity Supply, which is the supply of electricity at regulated rates to retail customers in its service territory who do not elect to purchase electricity from a competitive supplier. Default Electricity Supply is also known as Basic Generation Service. ACE is a wholly owned subsidiary of Conectiv, which is wholly owned by Pepco Holdings, Inc. (Pepco Holdings or PHI).
SIGNIFICANT ACCOUNTING POLICIES	(2)SIGNIFICANT ACCOUNTING POLICIES Financial Statement Presentation ACEs unaudited consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). Pursuant to the rules and regulations of the Securities and Exchange Commission, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted. Therefore, these financial statements should be read along with the annual financial statements included in ACEs Annual Report on Form 10-K for the year ended December31, 2008. In the opinion of ACEs management, the consolidated financial statements contain all adjustments (which all are of a normal recurring nature) necessary to present fairly ACEs financial condition as of June30, 2009, in accordance with GAAP. The year-end balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. Interim results for the three and six months ended June30, 2009 may not be indicative of results that will be realized for the full year ending December31, 2009 since the sales of electric energy are seasonal. ACE has evaluated all subsequent events through August6, 2009, the date of issuance of the consolidated financial statements to which these Notes relate. Consolidation of Variable Interest Entities ACE has power purchase agreements (PPAs) with a number of entities, including three contracts between unaffiliated non-utility generators (NUGs) and ACE. Due to a variable element in the pricing structure of the PPAs, ACE potentially assumes the variability in the operations of the plants operated by the NUGs and, therefore, has a variable interest in the entities. In accordance with the provisions of Financial Accounting Standards Board (FASB) Interpretation No. (FIN) 46(R) (revised December 2003), Consolidation of Variable Interest Entities (FIN 46(R)) and FASB Staff Position (FSP) FIN 46(R)-6, Determining the Variability to Be Considered in Applying FASB Interpretation No.46(R) (FSP FIN 46(R)-6), ACE continued, during the second quarter of 2009, to conduct its efforts to obtain information from these entities, but was unable to obtain sufficient information to conduct the analysis required under FIN 46(R) to determine whether these three entities were variable interest entities or if ACE was the primary beneficiary. As a result, ACE has applied the scope exemption from the application of FIN 46(R) for enterprises that have conducted exhaustive efforts to obtain the necessary information, but have not been able to obtain such information. Net purchase activities under the PPAs for the three months ended June30, 2009 and 2008 were approximately $61 million and $82 million, respectively, of which approximately $59 million and $74 million, respectively, consisted of power purchases under the PPAs. Net power purchase activities with the counterparties under the PPAs for the six months ended June30, 2009 and 2008 were approximately $144 million and $171 million, respectively, of which approximately $131 million and $150 million, respectively, c
NEWLY ADOPTED ACCOUNTING STANDARDS	(3) NEWLY ADOPTED ACCOUNTING STANDARDS Statement of Financial Accounting Standards (SFAS) No.141(R), Business Combinationsa Replacement of FASB Statement No.141 (SFAS No.141 (R)) SFAS No.141(R) replaces FASB Statement No.141, Business Combinations, and retains the fundamental requirements that the acquisition method of accounting be used for all business combinations and for an acquirer to be identified for each business combination. However, SFAS No.141(R) expands the definition of a business and amends FASB Statement No.109, Accounting for Income Taxes, to require the acquirer to recognize changes in the amount of its deferred tax benefits that are realizable because of a business combination either in income from continuing operations or directly in contributed capital, depending on the circumstances. On April1, 2009, the FASB issued FSP Financial Accounting Standards (FAS) 141(R)-1, Accounting for Assets and Liabilities Assumed in a Business Combination that Arise from Contingencies (FSP FAS 141(R)-1), to clarify the accounting for the initial recognition and measurement, subsequent measurement and accounting, and disclosure of assets and liabilities arising from contingencies in a business combination. FSP FAS 141(R)-1 requires that assets acquired and liabilities assumed in a business combination that arise from contingencies be measured at fair value if the acquisition date fair value of that asset and liability can be determined during the measurement period in accordance with SFAS No.157. If the acquisition date fair value cannot be determined, then the asset or liability would be measured in accordance with SFAS No.5, Accounting for Contingencies, and FIN No.14, Reasonable Estimate of the Amount of Loss. SFAS No.141(R) and the guidance provided in FSP FAS 141(R)-1 applies prospectively to business combinations for which the acquisition date is on or after January1, 2009. ACE adopted SFAS No.141(R) on January1, 2009, and it did not have a material impact on ACEs overall financial condition, results of operations, or cash flows. FSP 157-2, Effective Date of FASB Statement No.157 (FSP 157-2) FSP 157-2 deferred the effective date of SFAS No.157, Fair Value Measurements, (SFAS No.157) for all nonrecurring fair value measurements of non-financial assets and non-financial liabilities until January1, 2009 for ACE. The adoption of SFAS No.157 did not have a material impact on the fair value measurements of ACEs non-financial assets and non-financial liabilities. SFAS No.160, Noncontrolling Interests in Consolidated Financial Statementsan Amendment of ARB No.51 (SFAS No.160) SFAS No.160 establishes new accounting and reporting standards for a non-controlling interest (also called a minority interest) in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a non-controlling interest in a subsidiary is an ownership interest in the consolidated entity that should be separately reported in the consolidated financial statements. SFAS No.160 establishes accounting and reporting standards that require (i)the ownership interests and the related consolidated net income in subsidiaries held by parties other
RECENTLY ISSUED ACCOUNTING STANDARDS, NOT YET ADOPTED	(4)RECENTLY ISSUED ACCOUNTING STANDARDS, NOT YET ADOPTED Statement of Financial Accounting Standards (SFAS) No.166, Accounting for Transfers of Financial Assetsan amendment of SFAS No.140 (SFAS No.166) In June 2009, the FASB issued SFAS No.166 to remove the concept of a qualifying special-purpose entity (QSPE) from SFAS No.140 and the QSPE scope exception in FIN 46(R). The statement changes requirements for derecognizing financial assets and requires additional disclosures about a transferors continuing involvement in transferred financial assets. The new guidance is effective for transfers of financial assets occurring in fiscal periods beginning after November15, 2009; therefore, this guidance will be effective on January1, 2010 for ACE. Comparative disclosures are encouraged but not required for earlier periods presented. ACE is evaluating the impact that it will have on its overall financial condition and financial statements. Statement of Financial Accounting Standards (SFAS) No.167, Consolidation of Variable Interest Entitiesan amendment of FIN 46(R) (SFAS No.167) In June 2009, the FASB issued SFAS No.167 to amend FIN 46(R), Consolidation of Variable Interest Entities, which eliminates the existing quantitative analysis requirement and adds new qualitative factors to determine whether consolidationis required. The new qualitative factors would be applied on a quarterly basis to interests in variable interest entities. Under the new standard, the holder of the interest with the power to direct the most significant activities of the entity and the right to receive benefits or absorb losses significant to the entity would consolidate. The new standard retained the provision in FIN 46(R) that allowed entities created before December31, 2003 to be scoped out from a consolidation assessment if exhaustive efforts are taken and there is insufficient information to determine the primary beneficiary. The new guidance is effective for fiscal periods beginning after November15, 2009 for existing and newly created entities; therefore, this amendment will be effective on January1, 2010 for ACE. Comparative disclosures under this provision are encouraged but not required for earlier periods presented. ACE is evaluating the impact that it will have on its overall financial condition and financial statements. Statement of Financial Accounting Standards (SFAS) No.168, The FASB Accounting Standards CodificationTM and the Hierarchy of Generally Accepted Accounting Principles (SFAS No.168) In June 2009, the FASB issued SFAS No.168 to identify the sources of accounting principles and the framework for selecting the principles used in the preparation of non-governmental financial statements that are presented under U.S. GAAP. In addition, SFAS No.168 replaces the current reference system for standards and guidance with a new numerical designation system known as the Codification. The Codification will be the single source reference system for all authoritative non-governmental GAAP. The Codification is numerically organized by topic, subtopic, section, and subsection. SFAS No.168 replaces SFAS No.162, The Hierarchy of Generally Accepted
SEGMENT INFORMATION	(5)SEGMENT INFORMATION In accordance with SFAS No.131, Disclosures about Segments of an Enterprise and Related Information, ACE has one segment, its regulated utility business.
PENSION AND OTHER POSTRETIREMENT BENEFITS	(6)PENSION AND OTHER POSTRETIREMENT BENEFITS ACE accounts for its participation in the Pepco Holdings benefit plans as participation in a multi-employer plan. PHIs pension and other postretirement net periodic benefit cost for the three months ended June30, 2009 before intercompany allocations from the PHI Service Company, of $44 million includes $6 million for ACEs allocated share. PHIs pension and other postretirement net periodic benefit cost for the six months ended June30, 2009 of $75 million includes $10 million for ACEs allocated share. PHIs pension and other postretirement net periodic benefit cost for the three months ended June30, 2008 before intercompany allocations, of $17 million included $3 million for ACEs allocated share. PHIs pension and other postretirement net periodic benefit cost for the six months ended June30, 2008 of $32 million includes $6 million for ACEs allocated share.
DEBT	(7)DEBT Credit Facilities PHI, Potomac Electric Power Company (Pepco), Delmarva Power Light Company (DPL) and ACE maintain an unsecured credit facility to provide for their respective short-term liquidity needs. The aggregate borrowing limit under the facility is $1.5 billion, all or any portion of which may be used to obtain loans or to issue letters of credit. PHIs credit limit under the facility is $875 million. The credit limit of each of Pepco, DPL and ACE is the lesser of $500 million and the maximum amount of debt the company is permitted to have outstanding by its regulatory authorities, except that the aggregate amount of credit used by Pepco, DPL and ACE at any given time collectively may not exceed $625 million. At June30, 2009 and December31, 2008, the amount of cash, plus borrowing capacity under the $1.5 billion credit facility available to meet the liquidity needs of PHIs utility subsidiaries was $549 million and $843 million, respectively. Other Financing Activities During the three months ended June30, 2009, the following financing activities occurred: In April2009, ACE Funding made principal payments of $5.3 million on Series 2002-1 Bonds, ClassA-2, and $2.1 million on Series 2003-1 Bonds, ClassA-1. In June2009, ACE completed the remarketing of approximately $23 million of Pollution Control Revenue Refunding Bonds which previously had been issued for the benefit of ACE by The Pollution Control Financing Authority of Salem County, New Jersey. The bonds were purchased during late 2008 and early 2009 by the Bank of New York Mellon pursuant to a standby bond purchase agreement in response to disruption in the municipal variable rate demand bond market that made it difficult for the remarketing agent to successfully remarket the bonds. The proceeds of the remarketing were used to reimburse the Bank of New York Mellon. Subsequent to June30, 2009, the following financing activity occurred: In July2009, Atlantic City Electric Transition Funding LLC (ACE Funding) made principal payments of $5.2 million on Series 2002-1 Bonds, ClassA-2, $1.4 million on Series 2003-1 Bonds, ClassA-1, and $0.7 million on Series 2003-1 Bonds, ClassA-2. In July 2009, ACE redeemed the $25 million Series 2004 A and $6.5 million Series 2004 B Pollution Control Financing Authority of Cape May County tax exempt bonds that were repurchased in 2008 due to the disruptions in the tax exempt capital markets.
INCOME TAXES	(8)INCOME TAXES A reconciliation of ACEs consolidated effective income tax rate is as follows: FortheThreeMonths Ended June30, FortheSixMonths Ended June30, 2009 2008 2009 2008 Federal statutory rate 35.0 % 35.0 % 35.0 % 35.0 % Increases (decreases) resulting from: Depreciation (.8 ) (.5 ) (2.5 ) (1.1 ) State income taxes, net of federal effect 8.3 6.6 10.0 7.2 Tax credits (2.5 ) (.7 ) (4.2 ) (1.1 ) Change in estimates and interest related to uncertain and effectively settled tax positions (3.3 ) (5.0 ) (14.2 ) (13.3 ) Adjustment to prior year taxes (8.3 ) Other, net (3.4 ) .3 .9 (.3 ) Consolidated Effective Income Tax Rate 33.3 % 35.7 % 16.7 % 26.4 % ACEs consolidated effective tax rates for the three months ended June30, 2009 and 2008 were 33.3% and 35.7%, respectively. The decrease in the rate resulted from the amortization of tax credits as a percentage of pre-tax income, and changes in estimates and interest related to uncertain and effectively settled positions primarily due to the mixed service cost settlement (see Footnote (10), Commitments and Contingencies for additional discussion), partially offset by the settlement of certain fuel over and under recoveries and the impact of certain permanent state tax differences as a percentage of pre-tax income. ACEs consolidated effective tax rates for the six months ended June30, 2009 and 2008 were 16.7% and 26.4% respectively. The decrease in the rate resulted from non-recurring adjustments to prior year taxes and amortization of tax credits as a percentage of pre-tax income, partially offset by the impact of certain permanent state tax differences as a percentage of pre-tax income. In March 2009, the Internal Revenue Service (IRS) issued a Revenue Agents Report (RAR) for the audit of PHIs consolidated federal income tax returns for the calendar years 2003 to 2005. The IRS has proposed adjustments to PHIs tax returns, including adjustments to ACEs capitalization of overhead costs for tax purposes and the deductibility of certain ACE casualty losses. In conjunction with PHI, ACE has appealed certain of the proposed adjustments, such as casualty losses and believes it has adequately reserved for the adjustments included in the RAR.
FAIR VALUE DISCLOSURES	(9)FAIR VALUE DISCLOSURES Fair Value of Assets and Liabilities Excluding Debt Effective January1, 2008, ACE adopted SFAS No.157 which established a framework for measuring fair value and expanded disclosures about fair value measurements. As defined in SFAS No.157, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). ACE utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. Accordingly, ACE utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. ACE is able to classify fair value balances based on the observability of those inputs. SFAS No.157 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement). The three levels of the fair value hierarchy defined by SFAS No.157 are as follows: Level 1 Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using broker quotes in liquid markets, and other observable pricing data. Level 2 also includes those financial instruments that are valued using internally developed methodologies that have been corroborated by observable market data through correlation or by other means. Significant assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Level 3 Pricing inputs include significant inputs that are generally less observable than those from objective sources. Level 3 includes those financial investments that are valued using models or other valuation methodologies. The following tables set forth by level within the fair value hierarchy ACEs financial assets and liabilities that were accounted for at fair value on a recurring basis as of June30, 2009 and December31, 2008. As required by SFAS No.157, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. ACEs assessment of the significance of a particular input to the fair value measurement requires the exercise of judgment, and may affect the valuation of fair value ass
COMMITMENTS AND CONTINGENCIES	(10)COMMITMENTS AND CONTINGENCIES Regulatory and Other Matters New Jersey Rate Proceedings On February20, 2009, ACE filed an application with the New Jersey Board of Public Utilities (NJBPU) (supplemented on February23, 2009), which included a proposal for the implementation of a bill stabilization adjustment mechanism (BSA). Under New Jersey law, the NJBPU is required to approve, modify or deny the application within 180 days. The NJBPU has advised ACE that the 180-day period commenced on February23, 2009 and, therefore, unless otherwise extended by the parties by consent, ACE anticipates that NJBPU will act on ACEs application by late August 2009. Under the BSA, customer delivery rates are subject to adjustment (through a surcharge or credit mechanism), depending on whether actual distribution revenue per customer exceeds or falls short of the approved revenue-per-customer amount. The BSA increases rates if actual distribution revenues fall below the level approved by the applicable commission and decreases rates if actual distribution revenues are above the approved level. The result is that, over time, ACE collects its authorized revenues for distribution deliveries. As a consequence, a BSA decouples revenue from unit sales consumption and ties the growth in revenues to the growth in the number of customers. Some advantages of the BSA are that it (i)eliminates revenue fluctuations due to weather and changes in customer usage patterns and, therefore, provides for more predictable utility distribution revenues that are better aligned with costs, (ii)provides for more reliable fixed-cost recovery, (iii)tends to stabilize customers delivery bills, and (iv)removes any disincentives for ACE to promote energy efficiency programs for its customers, because it breaks the link between overall sales volumes and delivery revenues. ACE Sale of B.L. England Generating Facility In February2007, ACE completed the sale of the B.L. England generating facility to RC Cape May Holdings, LLC (RC Cape May), an affiliate of Rockland Capital Energy Investments, LLC. In July2007, ACE received a claim for indemnification from RC Cape May under the purchase agreement in the amount of $25million. RC Cape May contends that one of the assets it purchased, a contract for terminal services (TSA) between ACE and Citgo Asphalt Refining Co. (Citgo), has been declared by Citgo to have been terminated due to a failure by ACE to renew the contract in a timely manner. The claim for indemnification seeks payment from ACE in the event the TSA is held not to be enforceable against Citgo. RC Cape May commenced an arbitration proceeding against Citgo seeking a determination that the TSA remains in effect and notified ACE of the proceedings. On July1, 2009, the arbitrator issued its interim award, ruling that the TSA remains in effect and is enforceable by RC Cape May against Citgo. PHI believes this ruling invalidates RC Cape Mays indemnification claim against ACE, but cannot predict whether RC Cape May will continue to pursue indemnification. Environmental Litigation ACE is subject to regulation by various federal, regional, state, and local authorities with r
RELATED PARTY TRANSACTIONS	(11) RELATED PARTY TRANSACTIONS PHI Service Company provides various administrative and professional services to PHI and its regulated and unregulated subsidiaries including ACE. The cost of these services is allocated in accordance with cost allocation methodologies set forth in the service agreement using a variety of factors, including the subsidiaries share of employees, operating expenses, assets, and other cost causal methods. These intercompany transactions are eliminated by PHI in consolidation and no profit results from these transactions at PHI. PHI Service Company costs directly charged or allocated to ACE for the three and six months ended June30, 2009 and 2008 were $25 million and $23 million and $50 million and $46 million, respectively. In addition to the PHI Service Company charges described above, ACEs financial statements include the following related party transactions in the consolidated statements of income: FortheThreeMonths Ended June30, FortheSixMonths Ended June30, Income (Expense) 2009 2008 2009 2008 (millions in dollars) Purchased power from Conectiv Energy Supply (a) $ (41 ) $ (36 ) $ (87 ) $ (58 ) Meter reading services provided by Millennium Account Services LLC (b) (1 ) (1 ) (2 ) (2 ) Intercompany lease transactions (b) (1 ) (1 ) Intercompany use revenue (c) 1 1 3 1 Intercompany use expense (c) (1 ) (1 ) (1 ) (a) Included in purchased energy expense. (b) Included in other operation and maintenance expense. (c) Included in operating revenue. As of June30, 2009 and December31, 2008, ACE had the following balances due (to) from related parties: Liability June30, 2009 December31, 2008 (millions of dollars) Payable to Related Party (current) PHI Service Company $ (12 ) $ (11 ) Conectiv Energy Supply (16 ) (16 ) The items listed above are included in the Accounts payable due to associated companies balances on the Consolidated Balance Sheets of $29 million and $28 million at June30, 2009 and December31, 2008, respectively.

Document Information

Document Information
	6 Months Ended Jun. 30, 2009
Document Information [Text Block]
Document Type	10-Q
Amendment Flag	false
Amendment Description	N.A.
Document Period End Date	2009-06-30

Entity Information

Entity Information (USD $)
	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2009 PEPCO HOLDINGS INC	Jun. 30, 2008 PEPCO HOLDINGS INC	6 Months Ended Jun. 30, 2009 POTOMAC ELECTRIC POWER CO	6 Months Ended Jun. 30, 2009 DELMARVA POWER & LIGHT CO /DE/	6 Months Ended Jun. 30, 2009 ATLANTIC CITY ELECTRIC CO
Entity [Text Block]
Trading Symbol		POM
Entity Registrant Name		PEPCO HOLDINGS INC		POTOMAC ELECTRIC POWER CO	DELMARVA POWER & LIGHT CO /DE/	ATLANTIC CITY ELECTRIC CO
Entity Central Index Key	0001135971
Current Fiscal Year End Date		--12-31		--12-31	--12-31	--12-31
Entity Well-known Seasoned Issuer		Yes		No	No	No
Entity Current Reporting Status		Yes		Yes	Yes	Yes
Entity Voluntary Filers		No		No	No	No
Entity Filer Category		Large Accelerated Filer		Non-accelerated Filer	Non-accelerated Filer	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		220,820,630		100	1,000	8,546,017
Entity Public Float			$5,200,000,000