Statement Of Income Alternative
Statement Of Income Alternative (USD $) | ||||
In Millions, except Per Share data | 3 Months Ended
Sep. 30, 2009 | 3 Months Ended
Sep. 30, 2008 | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
PEPCO HOLDINGS INC | ||||
Operating Revenue | ||||
Power Delivery | $1,428 | $1,668 | $3,895 | $4,260 |
Competitive Energy | 1,099 | 1,379 | 3,196 | 4,036 |
Other | 12 | 13 | 33 | (77) |
Total Operating Revenue | 2,539 | 3,060 | 7,124 | 8,219 |
Operating Expenses | ||||
Fuel and purchased energy | 1,784 | 2,124 | 5,162 | 5,774 |
Other services cost of sales | 92 | 209 | 270 | 569 |
Other operation and maintenance | 240 | 241 | 713 | 691 |
Depreciation and amortization | 103 | 99 | 294 | 283 |
Other taxes | 101 | 100 | 282 | 273 |
Deferred electric service costs | (32) | 12 | (116) | 20 |
Effect of settlement of Mirant bankruptcy claims | (26) | 0 | (40) | 0 |
Gain on sale of assets | 0 | 0 | 0 | (3) |
Total Operating Expenses | 2,262 | 2,785 | 6,565 | 7,607 |
Operating Income | 277 | 275 | 559 | 612 |
Other Income (Expenses) | ||||
Interest and dividend income | 0 | 4 | 3 | 16 |
Interest expense | (93) | (82) | (279) | (243) |
Gain (Loss) from equity investments | 1 | (1) | 2 | (3) |
Other income | 4 | 4 | 12 | 14 |
Other expenses | 0 | (1) | (1) | (2) |
Total Other Expenses | (88) | (76) | (263) | (218) |
Income Before Income Tax Expense | 189 | 199 | 296 | 394 |
Income Tax (Benefit) Expense | 65 | 80 | 102 | 161 |
Net Income | 124 | 119 | 194 | 233 |
Retained Earnings at Beginning of Period | 1,222 | 1,198 | 1,271 | 1,193 |
Dividends Paid | (59) | (54) | (178) | (163) |
Retained Earnings at End of Period | 1,287 | 1,263 | 1,287 | 1,263 |
Basic and Diluted Share Information | ||||
Weighted average shares outstanding | 221 | 202 | 220 | 201 |
Earnings per share of common stock | 0.56 | 0.59 | 0.88 | 1.16 |
POTOMAC ELECTRIC POWER CO | ||||
Operating Revenue | ||||
Total Operating Revenue | 648 | 728 | 1,743 | 1,792 |
Operating Expenses | ||||
Purchased Energy | 350 | 431 | 972 | 1,033 |
Other operation and maintenance | 84 | 80 | 244 | 227 |
Depreciation and amortization | 36 | 36 | 108 | 105 |
Other taxes | 83 | 80 | 230 | 219 |
Effect of settlement of Mirant bankruptcy claims | (26) | 0 | (40) | 0 |
Total Operating Expenses | 527 | 627 | 1,514 | 1,584 |
Operating Income | 121 | 101 | 229 | 208 |
Other Income (Expenses) | ||||
Interest and dividend income | 0 | 2 | 1 | 8 |
Interest expense | (25) | (23) | (75) | (70) |
Other income | 2 | 1 | 7 | 6 |
Other expenses | 0 | (1) | (1) | (2) |
Total Other Expenses | (23) | (21) | (68) | (58) |
Income Before Income Tax Expense | 98 | 80 | 161 | 150 |
Income Tax (Benefit) Expense | 40 | 34 | 67 | 58 |
Net Income | 58 | 46 | 94 | 92 |
Retained Earnings at Beginning of Period | 660 | 623 | 624 | 597 |
Dividends Paid | 0 | (44) | 0 | (64) |
Retained Earnings at End of Period | 718 | 625 | 718 | 625 |
DELMARVA POWER & LIGHT CO /DE/ | ||||
Operating Revenue | ||||
Electric | 311 | 348 | 883 | 932 |
Natural Gas | 28 | 53 | 199 | 252 |
Total Operating Revenue | 339 | 401 | 1,082 | 1,184 |
Operating Expenses | ||||
Purchased Energy | 211 | 243 | 591 | 630 |
Gas purchased | 19 | 43 | 147 | 200 |
Other operation and maintenance | 64 | 63 | 182 | 173 |
Depreciation and amortization | 19 | 18 | 56 | 54 |
Other taxes | 8 | 9 | 27 | 27 |
Gain on sale of assets | 0 | 0 | 0 | (3) |
Total Operating Expenses | 321 | 376 | 1,003 | 1,081 |
Operating Income | 18 | 25 | 79 | 103 |
Other Income (Expenses) | ||||
Interest and dividend income | 0 | 0 | 0 | 2 |
Interest expense | (11) | (9) | (33) | (28) |
Other income | 0 | 1 | 1 | 3 |
Total Other Expenses | (11) | (8) | (32) | (23) |
Income Before Income Tax Expense | 7 | 17 | 47 | 80 |
Income Tax (Benefit) Expense | (7) | 6 | 7 | 27 |
Net Income | 14 | 11 | 40 | 53 |
Retained Earnings at Beginning of Period | 446 | 432 | 448 | 432 |
Dividends Paid | 0 | 0 | (28) | (42) |
Retained Earnings at End of Period | 460 | 443 | 460 | 443 |
ATLANTIC CITY ELECTRIC CO | ||||
Operating Revenue | ||||
Total Operating Revenue | 441 | 540 | 1,072 | 1,288 |
Operating Expenses | ||||
Purchased Energy | 334 | 395 | 850 | 913 |
Other operation and maintenance | 50 | 50 | 145 | 139 |
Depreciation and amortization | 29 | 31 | 78 | 80 |
Other taxes | 6 | 6 | 16 | 18 |
Deferred electric service costs | (32) | 12 | (116) | 20 |
Total Operating Expenses | 387 | 494 | 973 | 1,170 |
Operating Income | 54 | 46 | 99 | 118 |
Other Income (Expenses) | ||||
Interest and dividend income | 0 | 0 | 0 | 1 |
Interest expense | (16) | (14) | (50) | (44) |
Other income | 0 | 1 | 1 | 3 |
Total Other Expenses | (16) | (13) | (49) | (40) |
Income Before Income Tax Expense | 38 | 33 | 50 | 78 |
Income Tax (Benefit) Expense | 15 | 13 | 17 | 26 |
Net Income | 23 | 20 | 33 | 52 |
Retained Earnings at Beginning of Period | 152 | 143 | 166 | 142 |
Dividends Paid | 0 | 0 | (24) | (31) |
Retained Earnings at End of Period | $175 | $163 | $175 | $163 |
Statement Of Other Comprehensiv
Statement Of Other Comprehensive Income (USD $) | ||||
In Millions | 3 Months Ended
Sep. 30, 2009 | 3 Months Ended
Sep. 30, 2008 | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
PEPCO HOLDINGS INC | ||||
Net income | $124 | $119 | $194 | $233 |
Gains (losses) on commodity derivatives designated as cash flow hedges: | ||||
Losses arising during period | (14) | (675) | (296) | (36) |
Less: amount of (losses) gains reclassified into income | (97) | 11 | (309) | 93 |
Net gains (losses) on commodity derivatives | 83 | (686) | 13 | (129) |
Losses on Treasury Rate Locks reclassified into income | 1 | 1 | 4 | 4 |
Amortization of gains and losses for prior service costs | 0 | 0 | (10) | (5) |
Other comprehensive income (loss), before income taxes | 84 | (685) | 7 | (130) |
Income tax expense (benefit) | 34 | (278) | 3 | (52) |
Other comprehensive income (loss), net of income taxes | 50 | (407) | 4 | (78) |
Comprehensive income (loss) | 174 | (288) | 198 | 155 |
POTOMAC ELECTRIC POWER CO | ||||
Net income | 58 | 46 | 94 | 92 |
DELMARVA POWER & LIGHT CO /DE/ | ||||
Net income | 14 | 11 | 40 | 53 |
ATLANTIC CITY ELECTRIC CO | ||||
Net income | $23 | $20 | $33 | $52 |
Statement Of Financial Position
Statement Of Financial Position Classified (USD $) | ||
In Millions | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Dec. 31, 2008 |
PEPCO HOLDINGS INC | ||
CURRENT ASSETS | ||
Cash and cash equivalents | $20 | $384 |
Restricted cash equivalents | 11 | 10 |
Accounts receivable, less allowance for uncollectible accounts | 1,184 | 1,392 |
Inventories | 286 | 333 |
Derivative assets | 62 | 98 |
Prepayments of income taxes | 365 | 294 |
Prepaid expenses and other | 111 | 87 |
Total Current Assets | 2,039 | 2,598 |
INVESTMENTS AND OTHER ASSETS | ||
Goodwill | 1,411 | 1,411 |
Regulatory assets | 1,951 | 2,088 |
Investment in finance leases held in trust | 1,376 | 1,335 |
Income taxes receivable | 128 | 23 |
Restricted cash equivalents | 4 | 108 |
Assets and accrued interest related to uncertain tax positions | 12 | 32 |
Derivative assets | 27 | 9 |
Other | 208 | 215 |
Total Investments and Other Assets | 5,117 | 5,221 |
PROPERTY, PLANT AND EQUIPMENT | ||
Property, plant and equipment | 13,476 | 12,926 |
Accumulated depreciation | (4,802) | (4,612) |
Net Property, Plant and Equipment | 8,674 | 8,314 |
TOTAL ASSETS | 15,830 | 16,133 |
CURRENT LIABILITIES | ||
Short-term debt | 493 | 465 |
Current maturities of long-term debt | 534 | 85 |
Accounts payable and accrued liabilities | 634 | 847 |
Capital lease obligations due within one year | 7 | 6 |
Taxes accrued | 58 | 62 |
Interest accrued | 93 | 71 |
Liabilities and accrued interest related to uncertain tax positions | 1 | 47 |
Derivative liabilities | 125 | 144 |
Other | 289 | 275 |
Total Current Liabilities | 2,234 | 2,002 |
DEFERRED CREDITS | ||
Regulatory liabilities | 662 | 893 |
Deferred income taxes, net | 2,505 | 2,269 |
Investment tax credits | 37 | 40 |
Pension benefit obligation | 399 | 626 |
Other postretirement benefit obligation | 451 | 461 |
Income taxes payable | 1 | 8 |
Liabilities and accrued interest related to uncertain tax positions | 110 | 17 |
Derivative liabilities | 63 | 59 |
Other | 155 | 184 |
Total Deferred Credits | 4,383 | 4,557 |
LONG-TERM LIABILITIES | ||
Long-term debt | 4,470 | 4,859 |
Transition bonds issued by ACE Funding | 378 | 401 |
Long-term project funding | 17 | 19 |
Capital lease obligations | 96 | 99 |
Total Long-Term Liabilities | 4,961 | 5,378 |
COMMITMENTS AND CONTINGENCIES | - | - |
EQUITY | ||
Common stock | 2 | 2 |
Premium on stock and other capital contributions | 3,215 | 3,179 |
Accumulated other comprehensive loss | (258) | (262) |
Retained earnings | 1,287 | 1,271 |
Total Equity | 4,246 | 4,190 |
Noncontrolling interest | 6 | 6 |
Total Equity | 4,252 | 4,196 |
TOTAL LIABILITIES AND EQUITY | 15,830 | 16,133 |
POTOMAC ELECTRIC POWER CO | ||
CURRENT ASSETS | ||
Cash and cash equivalents | 154 | 146 |
Accounts receivable, less allowance for uncollectible accounts | 389 | 377 |
Inventories | 47 | 45 |
Prepayments of income taxes | 120 | 151 |
Prepaid expenses and other | 23 | 23 |
Total Current Assets | 733 | 742 |
INVESTMENTS AND OTHER ASSETS | ||
Regulatory assets | 163 | 169 |
Income taxes receivable | 60 | 36 |
Restricted cash equivalents | 0 | 102 |
Assets and accrued interest related to uncertain tax positions | 0 | 29 |
Prepaid pension expense | 295 | 142 |
Investment in trust | 26 | 24 |
Other | 75 | 70 |
Total Investments and Other Assets | 619 | 572 |
PROPERTY, PLANT AND EQUIPMENT | ||
Property, plant and equipment | 5,780 | 5,607 |
Accumulated depreciation | (2,454) | (2,371) |
Net Property, Plant and Equipment | 3,326 | 3,236 |
TOTAL ASSETS | 4,678 | 4,550 |
CURRENT LIABILITIES | ||
Short-term debt | 0 | 125 |
Current maturities of long-term debt | 16 | 50 |
Accounts payable and accrued liabilities | 152 | 187 |
Accounts payable due to associated companies | 71 | 70 |
Capital lease obligations due within one year | 7 | 6 |
Taxes accrued | 45 | 44 |
Interest accrued | 37 | 19 |
Liabilities and accrued interest related to uncertain tax positions | 0 | 24 |
Other | 127 | 94 |
Total Current Liabilities | 455 | 619 |
DEFERRED CREDITS | ||
Regulatory liabilities | 145 | 239 |
Deferred income taxes, net | 876 | 788 |
Investment tax credits | 9 | 10 |
Other postretirement benefit obligation | 50 | 49 |
Income taxes payable | 0 | 7 |
Other | 85 | 59 |
Total Deferred Credits | 1,165 | 1,152 |
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 | - | - |
EQUITY | ||
Common stock | 0 | 0 |
Premium on stock and other capital contributions | 706 | 611 |
Retained earnings | 718 | 624 |
Total Equity | 1,424 | 1,235 |
TOTAL LIABILITIES AND EQUITY | 4,678 | 4,550 |
DELMARVA POWER & LIGHT CO /DE/ | ||
CURRENT ASSETS | ||
Cash and cash equivalents | 6 | 138 |
Accounts receivable, less allowance for uncollectible accounts | 172 | 202 |
Inventories | 46 | 52 |
Prepayments of income taxes | 91 | 34 |
Prepaid expenses and other | 20 | 18 |
Total Current Assets | 335 | 444 |
INVESTMENTS AND OTHER ASSETS | ||
Goodwill | 8 | 8 |
Regulatory assets | 200 | 244 |
Prepaid pension expense | 184 | 184 |
Other | 29 | 21 |
Total Investments and Other Assets | 421 | 457 |
PROPERTY, PLANT AND EQUIPMENT | ||
Property, plant and equipment | 2,760 | 2,656 |
Accumulated depreciation | (857) | (827) |
Net Property, Plant and Equipment | 1,903 | 1,829 |
TOTAL ASSETS | 2,659 | 2,730 |
CURRENT LIABILITIES | ||
Short-term debt | 105 | 246 |
Current maturities of long-term debt | 31 | 0 |
Accounts payable and accrued liabilities | 66 | 108 |
Accounts payable due to associated companies | 23 | 34 |
Taxes accrued | 7 | 7 |
Interest accrued | 13 | 6 |
Liabilities and accrued interest related to uncertain tax positions | 0 | 13 |
Derivative liabilities | 13 | 13 |
Other | 69 | 56 |
Total Current Liabilities | 327 | 483 |
DEFERRED CREDITS | ||
Regulatory liabilities | 293 | 277 |
Deferred income taxes, net | 492 | 446 |
Investment tax credits | 8 | 8 |
Above-market purchased energy contracts and other electric restructuring liabilities | 17 | 19 |
Derivative liabilities | 14 | 14 |
Other | 57 | 45 |
Total Deferred Credits | 881 | 809 |
LONG-TERM LIABILITIES | ||
Long-term debt | 655 | 686 |
COMMITMENTS AND CONTINGENCIES | - | - |
EQUITY | ||
Common stock | 0 | 0 |
Premium on stock and other capital contributions | 336 | 304 |
Retained earnings | 460 | 448 |
Total Equity | 796 | 752 |
TOTAL LIABILITIES AND EQUITY | 2,659 | 2,730 |
ATLANTIC CITY ELECTRIC CO | ||
CURRENT ASSETS | ||
Cash and cash equivalents | 5 | 65 |
Restricted cash equivalents | 11 | 10 |
Accounts receivable, less allowance for uncollectible accounts | 200 | 195 |
Inventories | 16 | 15 |
Prepayments of income taxes | 52 | 47 |
Prepaid expenses and other | 40 | 16 |
Total Current Assets | 324 | 348 |
INVESTMENTS AND OTHER ASSETS | ||
Regulatory assets | 721 | 768 |
Income taxes receivable | 71 | 10 |
Restricted cash equivalents | 4 | 5 |
Assets and accrued interest related to uncertain tax positions | 54 | 110 |
Prepaid pension expense | 59 | 6 |
Other | 10 | 12 |
Total Investments and Other Assets | 919 | 911 |
PROPERTY, PLANT AND EQUIPMENT | ||
Property, plant and equipment | 2,294 | 2,216 |
Accumulated depreciation | (693) | (666) |
Net Property, Plant and Equipment | 1,601 | 1,550 |
TOTAL ASSETS | 2,844 | 2,809 |
CURRENT LIABILITIES | ||
Short-term debt | 63 | 23 |
Current maturities of long-term debt | 34 | 32 |
Accounts payable and accrued liabilities | 111 | 122 |
Accounts payable due to associated companies | 28 | 28 |
Taxes accrued | 2 | 7 |
Interest accrued | 17 | 14 |
Liabilities and accrued interest related to uncertain tax positions | 0 | 6 |
Other | 39 | 35 |
Total Current Liabilities | 294 | 267 |
DEFERRED CREDITS | ||
Regulatory liabilities | 224 | 377 |
Deferred income taxes, net | 593 | 549 |
Investment tax credits | 9 | 10 |
Other postretirement benefit obligation | 45 | 41 |
Other | 11 | 12 |
Total Deferred Credits | 882 | 989 |
LONG-TERM LIABILITIES | ||
Long-term debt | 609 | 610 |
Transition bonds issued by ACE Funding | 378 | 401 |
Total Long-Term Liabilities | 987 | 1,011 |
COMMITMENTS AND CONTINGENCIES | - | - |
REDEEMABLE SERIAL PREFERRED STOCK | 6 | 6 |
EQUITY | ||
Common stock | 26 | 26 |
Premium on stock and other capital contributions | 474 | 344 |
Retained earnings | 175 | 166 |
Total Equity | 675 | 536 |
TOTAL LIABILITIES AND EQUITY | $2,844 | $2,809 |
1_Statement Of Financial Positi
Statement Of Financial Position Classified (Parenthetical) (USD $) | ||
In Millions, except Share data | Sep. 30, 2009
| Dec. 31, 2008
|
PEPCO HOLDINGS INC | ||
Accounts receivable, allowance for uncollectible accounts | $46 | $37 |
Common stock, par value | 0.01 | 0.01 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares outstanding | 221,592,782 | 218,906,220 |
POTOMAC ELECTRIC POWER CO | ||
Accounts receivable, allowance for uncollectible accounts | 17 | 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 | 15 | 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 | $8 | $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 | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
PEPCO HOLDINGS INC | ||
OPERATING ACTIVITIES | ||
Net income | $194 | $233 |
Adjustments to reconcile net income to net cash from operating activities: | ||
Depreciation and amortization | 294 | 283 |
Gain on sale of assets | 0 | (3) |
Effect of settlement of Mirant bankruptcy claims | (40) | 0 |
Non-cash rents from cross-border energy lease investments | (41) | (51) |
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 | 102 | 317 |
Deferred income taxes | 250 | 31 |
Net unrealized losses (gains) on commodity derivatives accounted for as fair value hedges | 57 | (26) |
Changes in: | ||
Accounts receivable | 177 | (130) |
Inventories | 24 | (72) |
Prepaid expenses | (31) | (37) |
Regulatory assets and liabilities, net | (157) | (284) |
Accounts payable and accrued liabilities | (261) | 87 |
Pension contributions | (300) | 0 |
Pension and other postretirement benefit obligations, excluding contributions | 94 | 21 |
Cash collateral related to derivative activities | 4 | (88) |
Taxes accrued | (74) | 60 |
Interest accrued | 22 | 10 |
Other assets and liabilities | (6) | (6) |
Net Cash (Used By) From Operating Activities | 308 | 469 |
INVESTING ACTIVITIES | ||
Investment in property, plant and equipment | (595) | (561) |
Proceeds from sale of assets | 4 | 52 |
Changes in restricted cash | (1) | (31) |
Net other investing activities | 2 | 2 |
Net Cash Used By Investing Activities | (590) | (538) |
FINANCING ACTIVITIES | ||
Dividends paid on common stock | (178) | (163) |
Common stock issued for the Dividend Reinvestment Plan | 23 | 25 |
Issuances of common stock | 14 | 15 |
Issuance of long-term debt | 110 | 400 |
Reacquisition of long-term debt | (75) | (438) |
Issuances of short-term debt, net | 28 | 441 |
Cost of issuances | (4) | (13) |
Net other financing activities | 0 | (26) |
Net Cash (Used By) From Financing Activities | (82) | 241 |
Net (Decrease) Increase in Cash and Cash Equivalents | (364) | 172 |
Cash and Cash Equivalents at Beginning of Period | 384 | 55 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 20 | 227 |
NONCASH ACTIVITIES | ||
Asset retirement obligations associated with removal costs transferred to regulatory liabilities | 9 | 5 |
Recoverable pension/other postretirement benefit costs included in regulatory assets | (41) | 90 |
Conversion of DPL long-term debt to short-term debt | 0 | 150 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash (received) paid for income taxes, net | (74) | 83 |
POTOMAC ELECTRIC POWER CO | ||
OPERATING ACTIVITIES | ||
Net income | 94 | 92 |
Adjustments to reconcile net income to net cash from operating activities: | ||
Depreciation and amortization | 108 | 105 |
Effect of settlement of Mirant bankruptcy claims | (40) | 0 |
Changes in restricted cash equivalents related to Mirant settlement | 102 | 317 |
Deferred income taxes | 101 | 60 |
Changes in: | ||
Accounts receivable | (12) | (61) |
Regulatory assets and liabilities, net | (55) | (315) |
Accounts payable and accrued liabilities | (25) | 14 |
Pension contributions | (170) | 0 |
Taxes accrued | 56 | (31) |
Interest accrued | 18 | 16 |
Other assets and liabilities | 5 | (5) |
Net Cash (Used By) From Operating Activities | 182 | 192 |
INVESTING ACTIVITIES | ||
Investment in property, plant and equipment | (196) | (202) |
Changes in restricted cash | 0 | (20) |
Net other investing activities | (3) | (1) |
Net Cash Used By Investing Activities | (199) | (223) |
FINANCING ACTIVITIES | ||
Dividends paid on common stock | 0 | (64) |
Capital contribution from Parent | 94 | 78 |
Issuance of long-term debt | 110 | 250 |
Reacquisition of long-term debt | (50) | (188) |
Issuances of short-term debt, net | (125) | (12) |
Net other financing activities | (4) | (13) |
Net Cash (Used By) From Financing Activities | 25 | 51 |
Net (Decrease) Increase in Cash and Cash Equivalents | 8 | 20 |
Cash and Cash Equivalents at Beginning of Period | 146 | 19 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 154 | 39 |
NONCASH ACTIVITIES | ||
Asset retirement obligations associated with removal costs transferred to regulatory liabilities | 4 | 6 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash (received) paid for income taxes, net | (86) | 41 |
DELMARVA POWER & LIGHT CO /DE/ | ||
OPERATING ACTIVITIES | ||
Net income | 40 | 53 |
Adjustments to reconcile net income to net cash from operating activities: | ||
Depreciation and amortization | 56 | 54 |
Gain on sale of assets | 0 | (3) |
Deferred income taxes | 50 | 41 |
Changes in: | ||
Accounts receivable | 31 | (25) |
Inventories | 6 | (7) |
Regulatory assets and liabilities, net | 38 | 32 |
Accounts payable and accrued liabilities | (38) | (21) |
Pension contributions | (10) | 0 |
Taxes accrued | (57) | (25) |
Other assets and liabilities | 15 | (1) |
Net Cash (Used By) From Operating Activities | 131 | 98 |
INVESTING ACTIVITIES | ||
Investment in property, plant and equipment | (125) | (109) |
Proceeds from sale of assets | 1 | 50 |
Changes in restricted cash | 0 | (8) |
Net Cash Used By Investing Activities | (124) | (67) |
FINANCING ACTIVITIES | ||
Dividends paid on common stock | (28) | (42) |
Capital contribution from Parent | 32 | 62 |
Issuance of long-term debt | 0 | 150 |
Reacquisition of long-term debt | 0 | (116) |
Issuances of short-term debt, net | (141) | (82) |
Net other financing activities | (2) | (6) |
Net Cash (Used By) From Financing Activities | (139) | (34) |
Net (Decrease) Increase in Cash and Cash Equivalents | (132) | (3) |
Cash and Cash Equivalents at Beginning of Period | 138 | 11 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 6 | 8 |
NONCASH ACTIVITIES | ||
Asset retirement obligations associated with removal costs transferred to regulatory liabilities | 5 | (1) |
Conversion of DPL long-term debt to short-term debt | 0 | 150 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash (received) paid for income taxes, net | 18 | 8 |
ATLANTIC CITY ELECTRIC CO | ||
OPERATING ACTIVITIES | ||
Net income | 33 | 52 |
Adjustments to reconcile net income to net cash from operating activities: | ||
Depreciation and amortization | 78 | 80 |
Deferred income taxes | 46 | 19 |
Changes in: | ||
Accounts receivable | (5) | (23) |
Regulatory assets and liabilities, net | (139) | (2) |
Accounts payable and accrued liabilities | (9) | 25 |
Pension contributions | (60) | 0 |
Taxes accrued | 3 | 20 |
Interest accrued | 3 | (3) |
Other assets and liabilities | 12 | 5 |
Prepaid New Jersey sales and excise tax | (44) | (48) |
Net Cash (Used By) From Operating Activities | (82) | 125 |
INVESTING ACTIVITIES | ||
Investment in property, plant and equipment | (98) | (122) |
Proceeds from sale of assets | 0 | 1 |
Net Cash Used By Investing Activities | (98) | (121) |
FINANCING ACTIVITIES | ||
Dividends paid on common stock | (24) | (31) |
Capital contribution from Parent | 129 | 35 |
Reacquisition of long-term debt | (23) | (126) |
Issuances of short-term debt, net | 40 | 167 |
Net other financing activities | (2) | (9) |
Net Cash (Used By) From Financing Activities | 120 | 36 |
Net (Decrease) Increase in Cash and Cash Equivalents | (60) | 40 |
Cash and Cash Equivalents at Beginning of Period | 65 | 7 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 5 | 47 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash (received) paid for income taxes, net | ($16) | $11 |
ORGANIZATION
ORGANIZATION | |
9 Months Ended
Sep. 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 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 Electricity Suppl |
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). |
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 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. |
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
SIGNIFICANT ACCOUNTING POLICIES | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
PEPCO HOLDINGS INC | |
Notes to Financial Statements [Abstract] | |
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). PHI adopted the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC), which is the single source reference system for all authorative U.S. GAAP, as discussed in Note (3), Newly Adopted Accounting Standards. 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 September30, 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 nine months ended September30, 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 October29, 2009, the date of issuance of the consolidated financial statements to which these Notes relate. Change in Accounting Principle After the completion of the July1, 2009 goodwill 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 FASB guidance on the consolidation of variable interest entities (ASC 810), Pepco Holdings consolidates those variable interest entities where Pepco Holdings or a subsidiary has been determined to be the primary beneficiary. The guidance addresses conditions under which an entity should be consolidated based upon variable interests rather than voting interests. Subsidiaries of Pepco Holdings have power p |
POTOMAC ELECTRIC POWER CO | |
Notes to Financial Statements [Abstract] | |
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). Pepco adopted the Financial Standards Accounting Board (FASB) Accounting Standards Codification (ASC), which is the single source reference system for all authorative U.S. GAAP, as discussed in Note 3, Newly Adopted Accounted Standards. 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 September30, 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 nine months ended September30, 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 October29, 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 nine months ended September30, 2008 were approximately $17million and $59 million, respectively. Taxes Assessed by a Governmental Authority on Revenue-Producing Transactions Taxes included in Pepcos gross revenues were $71million and $67 million for the three months ended September30, 2009 and 2008, respectively, and $194 million and $183 million for the nine months ended September30, 2009 and 2008, respectively. Reclassifications and Adjustments Certain prior period amounts have been reclassified in order to conform to current period presentation. The following adjustments have been recorded which are not considered material either individually or in the aggregate: During the third quarter of 2009, Pepco recorded an adjustment to correct amounts incorrectly recorded as an expense related to a new PJM Interconnection, LLC (PJM) program, which should have been deferred as a regulatory asset. The adjustment resulted |
DELMARVA POWER & LIGHT CO /DE/ | |
Notes to Financial Statements [Abstract] | |
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). DPL adopted the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC), which is the single source reference system for all authorative U.S. GAAP, as discussed in Note 3, Newly Adopted Accounting Standards. 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 September30, 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 nine months ended September30, 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 October29, 2009, the date of issuance of the financial statements to which these Notes relate. Change in Accounting Principle After the completion of the July1, 2009 goodwill 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 power purchase agreements (PPAs) in amounts up to a total of 350 megawatts. Three of the PPAs are with land-based facilities and one of the PPAs is with an offshore facility. When completed and operational, 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 land-based contracts, 2010 for the other two land-based contracts, and 2014 for the offshore contract, if the projects are ultimately completed and operation |
ATLANTIC CITY ELECTRIC CO | |
Notes to Financial Statements [Abstract] | |
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). ACE adopted the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC), which is the single source reference system for all authorative U.S. GAAP, as discussed in Note 3, Newly Adopted Accounting Standards. 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 September30, 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 nine months ended September30, 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 October29, 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 FASB guidance on the consolidation of variable interest entities (ASC 810), ACE continued, during the third 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 the guidance 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 guidance 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 September30, 2009 and 2008 were approximately $70 million and $93 million, respectively, of which approximately $66 million and $82 million, respectively, consisted of power purchases under the PPAs. Net power purchase activities with the counterparties under the PPAs for the nine months ended September30, 2009 and 2008 were approximately $214 million and $265 million, respectively, of which approximately $197 million and $233 millio |
NEWLY ADOPTED ACCOUNTING STANDA
NEWLY ADOPTED ACCOUNTING STANDARDS | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
PEPCO HOLDINGS INC | |
Notes to Financial Statements [Abstract] | |
NEWLY ADOPTED ACCOUNTING STANDARDS | (3) NEWLY ADOPTED ACCOUNTING STANDARDS Business Combinations (ASC 805) The accounting guidance on business combinations was amended by the FASB effective beginning January1, 2009. The amendment did not change the fundamental concepts that the acquisition method of accounting be used and that an acquirer must be identified for each business combination. However, the guidance expanded the definition of a business subject to this guidance and also requires 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 additional guidance 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. The additional guidance 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. If the acquisition date fair value cannot be determined, then the asset or liability would be measured in accordance with FASB guidance on contingencies (ASC 450). The new guidance applies prospectively to business combinations for which the acquisition date is on or after January1, 2009. The adoption of the guidance did not have a material impact on PHIs overall financial condition, results of operations, or cash flows. Fair Value Measurement and Disclosures (ASC 820) There is a variety of new accounting guidance from the FASB that is effective for different financial reporting periods during 2009. Nonrecurring fair value measurement guidance for non-financial assets and non-financial liabilities was effective beginning January1, 2009 for PHI. The adoption of this guidance did not have a material impact on the fair value measurements of PHIs non-financial assets and non-financial liabilities. New FASB guidance for the fair value measurement of liabilities issued with inseparable third-party credit enhancements was also effective beginning January1, 2009 for PHI. The guidance applies to liabilities such as debt, derivatives, and other instruments that are guaranteed by third parties. The effect of the credit enhancement may not be included in the fair value measurement of the liability, even if the liability has an inseparable third-party credit enhancement. The issuer is required to disclose the existence of the inseparable third-party credit enhancement on the issued liability. The adoption of the guidance did not have a material impact on PHIs overall financial condition, results of operations, or cash flows. PHI adopted new FASB guidance in the second quarter of 2009 for fair value measurement when markets are inactive and distressed. This guidance was effective for interim periods ending after June15, 2009. The guidance outlines a two-step test to identify inactive and distressed markets and provides a fair valu |
POTOMAC ELECTRIC POWER CO | |
Notes to Financial Statements [Abstract] | |
NEWLY ADOPTED ACCOUNTING STANDARDS | (3) NEWLY ADOPTED ACCOUNTING STANDARDS Business Combinations (ASC 805) The accounting guidance on business combinations was amended by the FASB effective beginning January1, 2009. The amendment did not change the fundamental concepts that the acquisition method of accounting be used and that an acquirer must be identified for each business combination. However, the guidance expanded the definition of a business subject to this guidance and also requires 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 additional guidance 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. The additional guidance 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. If the acquisition date fair value cannot be determined, then the asset or liability would be measured in accordance with FASB guidance on contingencies (ASC 450). The new guidance applies prospectively to business combinations for which the acquisition date is on or after January1, 2009. The adoption of the guidance did not have a material impact on Pepcos overall financial condition, results of operations, or cash flows. Fair Value Measurement and Disclosures (ASC 820) There is a variety of new accounting guidance from the FASB that is effective for different financial reporting periods during 2009. Nonrecurring fair value measurement guidance for non-financial assets and non-financial liabilities was effective beginning January1, 2009 for Pepco. The adoption of this guidance did not have a material impact on the fair value measurements of Pepcos non-financial assets and non-financial liabilities. Effective beginning with the June30, 2009 financial statements, Pepco began disclosing the fair values of its financial instruments each quarter in accordance with FASB guidance. This new guidance is effective for interim reporting periods ending after June15, 2009 and disclosures for the prior year-end balance sheet are required. The primary impact of the new guidance is disclosing the fair value of debt issued by Pepco on a quarterly basis in Note (9), Fair Value Disclosures. Consolidation (ASC 810) The FASB established 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. The new guidance clarified 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. The guidance was effective prospectively for financial statement reporting periods beginning January1, 2009 for Pepco, except for the fi |
DELMARVA POWER & LIGHT CO /DE/ | |
Notes to Financial Statements [Abstract] | |
NEWLY ADOPTED ACCOUNTING STANDARDS | (3) NEWLY ADOPTED ACCOUNTING STANDARDS Business Combinations (ASC 805) The accounting guidance on business combinations was amended by the FASB effective beginning January1, 2009. The amendment did not change the fundamental concepts that the acquisition method of accounting be used and that an acquirer must be identified for each business combination. However, the guidance expanded the definition of a business subject to this guidance and also requires 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 additional guidance 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. The additional guidance 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. If the acquisition date fair value cannot be determined, then the asset or liability would be measured in accordance with FASB guidance on contingencies (ASC 450). The new guidance applies prospectively to business combinations for which the acquisition date is on or after January1, 2009. The adoption of the guidance did not have a material impact on DPLs overall financial condition, results of operations, or cash flows. Fair Value Measurement and Disclosures (ASC 820) There is a variety of new accounting guidance from the FASB that is effective for different financial reporting periods during 2009. Nonrecurring fair value measurement guidance for non-financial assets and non-financial liabilities was effective beginning January1, 2009 for DPL. The adoption of this guidance did not have a material impact on the fair value measurements of DPLs non-financial assets and non-financial liabilities. New FASB guidance for the fair value measurement of liabilities issued with inseparable third-party credit enhancements was also effective beginning January1, 2009 for DPL. The guidance applies to liabilities such as debt, derivatives, and other instruments that are guaranteed by third parties. The effect of the credit enhancement may not be included in the fair value measurement of the liability, even if the liability has an inseparable third-party credit enhancement. The issuer is required to disclose the existence of the inseparable third-party credit enhancement on the issued liability. The adoption of the guidance did not have a material impact on DPLs overall financial condition, results of operations, or cash flows. DPL adopted new FASB guidance in the second quarter of 2009 for fair value measurement when markets are inactive and distressed. This guidance was effective for interim periods ending after June15, 2009. The guidance outlines a two-step test to identify inactive and distressed markets and provides a fair valu |
ATLANTIC CITY ELECTRIC CO | |
Notes to Financial Statements [Abstract] | |
NEWLY ADOPTED ACCOUNTING STANDARDS | (3) NEWLY ADOPTED ACCOUNTING STANDARDS Business Combinations (ASC 805) The accounting guidance on business combinations was amended by the FASB effective beginning January1, 2009. The amendment did not change the fundamental concepts that the acquisition method of accounting be used and that an acquirer must be identified for each business combination. However, the guidance expanded the definition of a business subject to this guidance and also requires 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 additional guidance 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. The additional guidance 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. If the acquisition date fair value cannot be determined, then the asset or liability would be measured in accordance with FASB guidance on contingencies (ASC 450). The new guidance applies prospectively to business combinations for which the acquisition date is on or after January1, 2009. The adoption of the guidance did not have a material impact on ACEs overall financial condition, results of operations, or cash flows. Fair Value Measurement and Disclosures (ASC 820) There is a variety of new accounting guidance from the FASB that is effective for different financial reporting periods during 2009. Nonrecurring fair value measurement guidance for non-financial assets and non-financial liabilities was effective beginning January1, 2009 for ACE. The adoption of this guidance did not have a material impact on the fair value measurements of ACEs non-financial assets and non-financial liabilities. Effective beginning with its June30, 2009 financial statements, ACE began disclosing the fair value of debt issued on a quarterly basis in Note (13), Fair Value Disclosures, in accordance with FASB guidance which is effective for interim reporting periods ending after June15, 2009. Disclosures for the prior year-end balance sheet were also required. Consolidation (ASC 810) The FASB established 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. The new guidance clarified 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. The guidance was effective prospectively for financial statement reporting periods beginning January1, 2009 for ACE, except for the financial statement presentation and disclosure requirements which also apply to prior reporting periods presented. As of January1, 2009, AC |
RECENTLY ISSUED ACCOUNTING STAN
RECENTLY ISSUED ACCOUNTING STANDARDS, NOT YET ADOPTED | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
PEPCO HOLDINGS INC | |
Notes to Financial Statements [Abstract] | |
RECENTLY ISSUED ACCOUNTING STANDARDS, NOT YET ADOPTED | (4)RECENTLY ISSUED ACCOUNTING STANDARDS, NOT YET ADOPTED Disclosures about Pension and Postretirement Plan Assets (ASC 715) The FASB issued new disclosure requirements about the plan assets of a defined benefit pension or other postretirement plan that will be effective starting with financial statement reporting periods ending December31, 2009 for PHI. Comparative disclosures are not required for earlier periods presented. The new requirements would expand current disclosures to be in line with FASB guidance on fair value measurement 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 the 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 on changes in the value of plan assets for the period. PHI is evaluating the impact that this new guidance will have on PHIs financial statement footnote disclosures. Transfers and Servicing (ASC 860) The FASB issued new guidance that removes the concept of a qualifying special-purpose entity (QSPE) from the current guidance on transfers and servicing and the QSPE scope exception in current guidance on consolidation. The new guidance also changes the 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 this new guidance will have on its overall financial condition and financial statements. Consolidation of Variable Interest Entities (ASC 810) The FASB issued new consolidation guidance regarding variable interest entities that 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 guidance, 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 guidance retained the existing provision 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 guidance will be effective on January1, 2010 for PHI. Comparative disclosures under this new guidance are encouraged but not required for earlier periods presented. PHI is evalua |
POTOMAC ELECTRIC POWER CO | |
Notes to Financial Statements [Abstract] | |
RECENTLY ISSUED ACCOUNTING STANDARDS, NOT YET ADOPTED | (4)RECENTLY ISSUED ACCOUNTING STANDARDS, NOT YET ADOPTED Transfers and Servicing (ASC 860) The FASB issued new guidance that removes the concept of a qualifying special-purpose entity (QSPE) from the current guidance on transfers and servicing and the QSPE scope exception in current guidance on consolidation. The new guidance also changes the 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 Pepco. Comparative disclosures are encouraged but not required for earlier periods presented. Pepco is evaluating the impact that this new guidance will have on its overall financial condition and financial statements. Fair Value Measurement of Liabilities (ASC 820) The FASB issued new guidance on the fair value measurement of liabilities when there is a lack of observable market information. The guidance clarifies that, when a quoted price is not available for the identical liability, an entity can use either the quoted price of the identical liability when it is traded as an asset, quoted price for a similar liability, or quoted price for a similar liability when traded as an asset. If these prices are not available, then entities can employ an income or market valuation approach that considers what the entity would pay to transfer the identical liability or would receive to enter into the identical liability. The guidance is effective for Pepco starting October1, 2009. We are assessing the impact of this new guidance on Pepcos overall financial condition and financial statements. |
DELMARVA POWER & LIGHT CO /DE/ | |
Notes to Financial Statements [Abstract] | |
RECENTLY ISSUED ACCOUNTING STANDARDS, NOT YET ADOPTED | (4)RECENTLY ISSUED ACCOUNTING STANDARDS, NOT YET ADOPTED Transfers and Servicing (ASC 860) The FASB issued new guidance that removes the concept of a qualifying special-purpose entity (QSPE) from the current guidance on transfers and servicing and the QSPE scope exception in current guidance on consolidation. The new guidance also changes the 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 this new guidance will have on its overall financial condition and financial statements. Consolidation of Variable Interest Entities (ASC 810) The FASB issued new consolidation guidance regarding variable interest entities that 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 guidance, 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 guidance retained the existing provision 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 guidance will be effective on January1, 2010 for DPL. Comparative disclosures under this new guidance are encouraged but not required for earlier periods presented. DPL is evaluating the impact that this new guidance will have on its overall financial condition and financial statements. Fair Value Measurement of Liabilities (ASC 820) The FASB issued new guidance on the fair value measurement of liabilities when there is a lack of observable market information. The guidance clarifies that, when a quoted price is not available for the identical liability, an entity can use either the quoted price of the identical liability when it is traded as an asset, quoted price for a similar liability, or quoted price for a similar liability when traded as an asset. If these prices are not available, then entities can employ an income or market valuation approach that considers what the entity would pay to transfer the identical liability or would receive to enter into the identical liability. The guidance is effective for DPL starting October1, 2009. We are assessing the impact of this new guidance on DPLs overall financial condition and financial statements. |
ATLANTIC CITY ELECTRIC CO | |
Notes to Financial Statements [Abstract] | |
RECENTLY ISSUED ACCOUNTING STANDARDS, NOT YET ADOPTED | (4)RECENTLY ISSUED ACCOUNTING STANDARDS, NOT YET ADOPTED Transfers and Servicing (ASC 860) The FASB issued new guidance that removes the concept of a qualifying special-purpose entity (QSPE) from the current guidance on transfers and servicing and the QSPE scope exception in current guidance on consolidation. The new guidance also changes the 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 this new guidance will have on its overall financial condition and financial statements. Consolidation of Variable Interest Entities (ASC 810) The FASB issued new consolidation guidance regarding variable interest entities that 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 guidance, 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 guidance retained the existing provision 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 guidance will be effective on January1, 2010 for ACE. Comparative disclosures under this new guidance are encouraged but not required for earlier periods presented. ACE is evaluating the impact that this new guidance will have on its overall financial condition and financial statements. Fair Value Measurement of Liabilities (ASC 820) The FASB issued new guidance on the fair value measurement of liabilities when there is a lack of observable market information. The guidance clarifies that, when a quoted price is not available for the identical liability, an entity can use either the quoted price of the identical liability when it is traded as an asset, quoted price for a similar liability, or quoted price for a similar liability when traded as an asset. If these prices are not available, then entities can employ an income or market valuation approach that considers what the entity would pay to transfer the identical liability or would receive to enter into the identical liability. The guidance is effective for PHI starting October1, 2009. We are assessing the impact of this new guidance on ACEs overall financial condition and financial statements. |
SEGMENT INFORMATION
SEGMENT INFORMATION | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
PEPCO HOLDINGS INC | |
Notes to Financial Statements [Abstract] | |
SEGMENT INFORMATION | (5)SEGMENT INFORMATION Based on the provisions of FASB guidance on segment reporting (ASC 280), Pepco Holdings management has identified its operating segments at September30, 2009 as Power Delivery, Conectiv Energy, Pepco Energy Services, and Other Non-Regulated. Segment information for the three and nine months ended September30, 2009 and 2008, is as follows: Three Months Ended September30, 2009 (millions of dollars) Competitive Energy Segments Power Delivery Conectiv Energy Pepco Energy Services Other Non- Regulated Corp. Other(a) PHI Cons. Operating Revenue $ 1,428 $ 581 (b) $ 611 $ 13 $ (94 ) $ 2,539 Operating Expense (c) 1,235 (b)(d) 539 584 (96 ) 2,262 Operating Income 193 42 27 13 2 277 Interest Income 1 (1 ) Interest Expense 53 9 6 4 21 93 Other Income 3 1 1 5 Preferred Stock Dividends 1 (1 ) Income Tax Expense (Benefit) 49 13 7 3 (7 ) 65 Net Income (Loss) 94 (e) 21 14 7 (12 ) 124 Total Assets 10,181 1,978 699 1,552 1,420 15,830 Construction Expenditures $ 138 $ 57 $ 2 $ $ 10 $ 207 Notes: (a) Includes unallocated Pepco Holdings (parent company) capital costs, such as acquisition financing costs, and the depreciation and amortization expense 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 $(94) million for Operating Revenue, $(92) million for Operating Expense, $(17) million for Interest Income, $(17) million for Interest Expense, and $(1) million of Preferred Stock Dividends. (b) Power Delivery purchased electric energy and capacity and natural gas from Conectiv Energy in the amount of $75 million for the three months ended September30, 2009. (c) Includes depreciation and amortization expense of $103 million, consisting of $84 million for Power Delivery, $10 million for Conectiv Energy, $4 million for Pepco Energy Services, and $5 million for Corp. Other. (d) Includes $26 million ($16 million after-tax) gain related to settlement of Mirant bankruptcy claims. (e) Includes $11 million after-tax state income tax benefit, net of fees, related to a change in the tax reporting for the disposition of certain assets in prior years. Three Months Ended September30, 2008 (millions of dollars) Competitive Energy Segments Power Delivery Conectiv Energy Pepco Energy Services Other Non- Regulated Corp. Other(a) PHI Cons. Operating Revenue $ 1,668 $ 783 (b) $ 716 $ 14 $ (121 ) $ 3,060 Operating Expense (c) 1,495 (b) 6 |
POTOMAC ELECTRIC POWER CO | |
Notes to Financial Statements [Abstract] | |
SEGMENT INFORMATION | (5)SEGMENT INFORMATION Based on the provisions of FASB guidance on segment reporting (ASC 280), Pepco has one segment, its regulated utility business. |
DELMARVA POWER & LIGHT CO /DE/ | |
Notes to Financial Statements [Abstract] | |
SEGMENT INFORMATION | (5)SEGMENT INFORMATION Based on the provisions of FASB guidance on segment reporting (ASC 280), DPL has one segment, its regulated utility business. |
ATLANTIC CITY ELECTRIC CO | |
Notes to Financial Statements [Abstract] | |
SEGMENT INFORMATION | (5)SEGMENT INFORMATION Based on the provisions of FASB guidance on segment reporting (ASC 280), ACE has one segment, its regulated utility business. |
GOODWILL
GOODWILL | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
PEPCO HOLDINGS INC | |
Notes to Financial Statements [Abstract] | |
GOODWILL | (6)GOODWILL PHIs goodwill balance of $1.4 billion was unchanged during the three and nine month period ended September30, 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 FASB guidance on goodwill and other intangibles (ASC 350). PHIs annual impairment test as of July1, 2009 indicated that goodwill was not impaired at June30, 2009. As of September30, 2009, after review of its significant assumptions in the goodwill impairment analysis, PHI concluded that there were no events requiring PHI to perform an interim goodwill impairment test. Although PHIs market capitalization was below book value as of September30, 2009, PHIs market capitalization has improved compared to earlier periods. PHI performed interim goodwill impairment tests as of March31, 2009 and December31, 2008 when its market capitalization was further below book value than at September30, 2009, and concluded that its goodwill was not impaired at those earlier dates. PHIs next annual impairment test will be as of November1, 2009. 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 PHIs 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. 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 reporting units (Conectiv Energy, Pepco Energy Services, Other Non-Regulated, and Corporate Other) at |
DELMARVA POWER & LIGHT CO /DE/ | |
Notes to Financial Statements [Abstract] | |
GOODWILL | (6) GOODWILL DPLs goodwill balance of $8million was unchanged during the three and nine month period ended September30, 2009. All of DPLs goodwill was generated by its acquisition of Conowingo Power Company in 1995. DPLs annual impairment test as of July1, 2009 indicated that goodwill was not impaired at June30, 2009. As of September30, 2009, after review of its significant assumptions in the goodwill impairment analysis, DPL concluded that there were no events requiring DPL to perform an interim goodwill impairment test. DPL performed an interim impairment test as of December31, 2008 which indicated that goodwill was not impaired. DPLs next annual impairment test will be as of November1, 2009. 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. 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 for indicators of goodwill impairment. |
LEASING ACTIVITIES
LEASING ACTIVITIES (PEPCO HOLDINGS INC) | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
LEASING ACTIVITIES | (7)LEASING ACTIVITIES Investment in Finance Leases Held in Trust As of September30, 2009 and December31, 2008, Pepco Holdings had cross-border energy lease investments of $1.4 billion and $1.3 billion, respectively, 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 Contingencies - PHIs 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 three quarters of 2009. The components of the cross-border energy lease investments at September30, 2009 and at December31, 2008 (reflecting the effects of recording this charge) are summarized below: September30, 2009 December31, 2008 (millions of dollars) Scheduled lease payments to PHI, net of non-recourse debt $ 2,281 $ 2,281 Less:Unearned and deferred income (905 ) (946 ) Investment in finance leases held in trust 1,376 1,335 Less:Deferred income tax liabilities (725 ) (679 ) Net investment in finance leases held in trust $ 651 $ 656 Income recognized from cross-border energy lease investments was comprised of the following for the three and nine months ended September30, 2009 and 2008: ThreeMonthsEnded September30, NineMonthsEnded September30, 2009 2008 2009 2008 (millions of dollars) Pre-tax income from PHIs cross-border energy lease investments (included in Other Revenue) $ 14 $ 14 $ 41 $ 51 Non-cash charge to reduce equity value of PHIs cross-border energy lease investments (124 ) Pre-tax income (loss) from PHIs cross-border energy lease investments after adjustment 14 14 41 (73 ) Income tax expense (benefit) 4 4 11 (25 ) Net income (loss) from PHIs cross-border energy lease investments $ 10 $ 10 $ 30 $ (48 ) |
PENSION AND OTHER POSTRETIREMEN
PENSION AND OTHER POSTRETIREMENT BENEFITS | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
PEPCO HOLDINGS INC | |
Notes to Financial Statements [Abstract] | |
PENSION AND OTHER POSTRETIREMENT BENEFITS | (8)PENSIONS AND OTHER POSTRETIREMENT BENEFITS The following Pepco Holdings information is for the three months ended September30, 2009 and 2008: PensionBenefits OtherPostretirement Benefits 2009 2008 2009 2008 (millions of dollars) Service cost $ 9 $ 9 $ 2 $ 2 Interest cost 27 27 10 10 Expected return on plan assets (25 ) (33 ) (3 ) (4 ) Prior service credit component (1 ) (1 ) Loss component 14 3 3 3 Net periodic benefit cost $ 25 $ 6 $ 11 $ 10 The following Pepco Holdings information is for the nine months ended September30, 2009 and 2008: PensionBenefits OtherPostretirement Benefits 2009 2008 2009 2008 (millions of dollars) Service cost $ 27 $ 27 $ 5 $ 5 Interest cost 83 81 30 30 Expected return on plan assets (76 ) (97 ) (10 ) (12 ) Prior service credit component (3 ) (3 ) Loss component 43 7 12 10 Net periodic benefit cost $ 77 $ 18 $ 34 $ 30 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, $240 million was contributed, through tax-deductible contributions from Pepco, ACE and DPL in the amounts of $170 million, $60 million and $10 million, respectively. The remaining $60 million was made through tax-deductible contributions from the PHI Service Company. No contributions were made in 2008. |
POTOMAC ELECTRIC POWER CO | |
Notes to Financial Statements [Abstract] | |
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 September30, 2009 before intercompany allocations from the PHI Service Company, of $36 million included $9 million for Pepcos allocated share. PHIs pension and other postretirement net periodic benefit cost for the nine months ended September30, 2009 of $111 million included $28 million for Pepcos allocated share. PHIs pension and other postretirement net periodic benefit cost for the three months ended September30, 2008, of $16 million, before intercompany allocations, included $6 million for Pepcos allocated share. PHIs pension and other postretirement net periodic benefit cost for the nine months ended September30, 2008 of $48 million included $18 million for Pepcos allocated share. |
DELMARVA POWER & LIGHT CO /DE/ | |
Notes to Financial Statements [Abstract] | |
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 September30, 2009 before intercompany allocations from the PHI Service Company, of $36 million included $6 million for DPLs allocated share. PHIs pension and other post retirement net periodic benefit cost for the nine months ended September30, 2009 of $111 million included $19 million for DPLs allocated share. PHIs pension and other postretirement net periodic benefit cost for the three months ended September30, 2008 before intercompany allocations, of $16 million included $1 million for DPLs allocated share. PHIs pension and other post retirement net periodic benefit cost for the nine months ended September30, 2008 of $48 million included $3 million for DPLs allocated share. |
ATLANTIC CITY ELECTRIC CO | |
Notes to Financial Statements [Abstract] | |
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 September30, 2009 before intercompany allocations from the PHI Service Company, of $36 million included $5 million for ACEs allocated share. PHIs pension and other postretirement net periodic benefit cost for the nine months ended September30, 2009 of $111 million included $15 million for ACEs allocated share. PHIs pension and other postretirement net periodic benefit cost for the three months ended September30, 2008 before intercompany allocations, of $16 million included $3 million for ACEs allocated share. PHIs pension and other postretirement net periodic benefit cost for the nine months ended September30, 2008 of $48 million included $9 million for ACEs allocated share. |
DEBT
DEBT | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
PEPCO HOLDINGS INC | |
Notes to Financial Statements [Abstract] | |
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. 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 meet short-term operating needs.At September30, 2009, PHI had an outstanding loan of $100 million under this facility. In November 2008, PHI entered into a second unsecured credit facility in the amount of $400 million with a syndicate of nine lenders, which was amended and restated in October 2009 to extend the facility termination date to October15, 2010. Under the facility, PHI has access to revolving and swingline loans over the term of the facility. The facility does not provide for the issuance of letters of credit.These two facilities are referred to collectively as PHIs primary credit facilities. At September30, 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 and its utility subsidiaries on a consolidated basis totaled $1.4 billion and $1.5 billion, respectively. PHIs utility subsidiaries had a combined cash and borrowing capacity under the $1.5 billion credit facility of $581 million and $843 million, respectively. Other Financing Activities During the three months ended September30, 2009, the following financing activities 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 $.7 million on Series 2003-1 Bonds, ClassA-2. In July 2009, DPL repaid, at maturity, the remaining $100 million of a short-term loan in the original amount of $150 million. In July 2009, PHIs utility subsidiaries entered into a $30 million line of credit that can be used by these entities for equipment leasing through July 2010. In July 2009, DPL redeemed $15 million of Series 2003A and $18.2 million of Series 2003B Exempt Facilities Refunding Revenue Bonds issued for the benefit of DPL by The Delaware Economic Development Authority. These tax-exempt bonds were purchased by DPL in 2008 due to the disruptions in the tax-exempt capital markets. In July 2009, ACE redeemed $25 million of Series 2004A and $6.5 million of Series 2004B Pol |
POTOMAC ELECTRIC POWER CO | |
Notes to Financial Statements [Abstract] | |
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. At September30, 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 $581 million and $843 million, respectively. |
DELMARVA POWER & LIGHT CO /DE/ | |
Notes to Financial Statements [Abstract] | |
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. At September30, 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 $581 million and $843 million, respectively. Other Financing Activities During the three months ended September30, 2009, the following financing activities occurred: In July 2009, DPL repaid, at maturity, the remaining $100 million of a short-term loan in the original amount of $150 million. In July 2009, DPL redeemed $15 million of Series 2003A and $18.2 million of Series 2003B Exempt Facilities Refunding Revenue Bonds issued for the benefit of DPL by The Delaware Economic Development Authority. These tax-exempt bonds were purchased by DPL in 2008 due to the disruptions in the tax-exempt capital markets. In September 2009, DPL issued $165.5 million of collateral first mortgage bonds in order to secure its reimbursement obligations under bond insurance policies insuring the principal and interest payments on a series of previously issued DPL notes and two series of pollution control bonds previously issued for the benefit of DPL. DPL did not receive any cash proceeds from the issuance of the collateral first mortgage bonds. The payment by DPL of its principal and interest obligations in respect of the DPL notes and the pollution control bonds satisfies the corresponding payment obligations on collateral first mortgage bonds, and accordingly DPLs outstanding debt did not increase as a result of these transactions. |
ATLANTIC CITY ELECTRIC CO | |
Notes to Financial Statements [Abstract] | |
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 September30, 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 $581 million and $843 million, respectively. Other Financing Activities During the three months ended September30, 2009, the following financing activities 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 $.7 million on Series 2003-1 Bonds, ClassA-2. In July 2009, ACE redeemed $25 million of Series 2004A and $6.5 million of Series 2004B Pollution Control Revenue Refunding Bonds issued for the benefit of ACE by the Pollution Control Financing Authority of Cape May County (collectively, the Cape May Bonds). The Cape May Bonds were purchased by ACE in 2008 due to the disruptions in the tax-exempt capital markets. The Cape May Bonds were insured by bond insurance policies purchased by ACE. At the time of the issuance of the Cape May Bonds, ACE issued to the bond insurer, as security for its reimbursement obligations under the bond insurance policies, a series of senior notes having terms substantially identical to the terms of the respective series of Cape May Bonds. ACEs obligations under the senior notes were, in turn, secured by a corresponding series of collateral first mortgage bonds issued by ACE under its Mortgage and Deed of Trust. Upon the redemption of the Cape May Bonds, the corresponding series of senior notes and first mortgage bonds were likewise redeemed. Subsequent to September30, 2009, the following financing activity occurred: In October2009, ACE Funding made principal payments of $7 million on Series 2002-1 Bonds, ClassA-2, and $2.7 million on Series 2003-1 Bonds, ClassA-2. |
INCOME TAXES
INCOME TAXES | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
PEPCO HOLDINGS INC | |
Notes to Financial Statements [Abstract] | |
INCOME TAXES | (10)INCOME TAXES A reconciliation of PHIs consolidated effective income tax rate is as follows: ForThe ThreeMonthsEnded September30, For The NineMonthsEnded September30, 2009 2008 2009 2008 Federal statutory rate 35.0 % 35.0 % 35.0 % 35.0 % Increases (decreases) resulting from: State income taxes, net of federal effect 5.6 5.9 5.6 7.5 Change in estimates and interest related to uncertain and effectively settled tax positions 1.2 1.2 .1 (.9 ) Depreciation 1.1 .9 1.7 1.3 Tax credits (.6 ) (.5 ) (1.1 ) (.8 ) Cross-border energy lease investments (.7 ) (.7 ) (1.4 ) .2 State tax benefits related to prior years asset dispositions (6.9 ) (4.4 ) Other, net (.3 ) (1.6 ) (1.0 ) (1.5 ) Consolidated Effective Income Tax Rate 34.4 % 40.2 % 34.5 % 40.8 % PHIs effective tax rates for the three months ended September30, 2009 and 2008 were 34.4% and 40.2%, respectively. The decrease in the rate primarily resulted from the refund of $6 million (after tax) of state income taxes and the establishment of a state tax benefit carryforward of $7 million (after tax) related to a change in the tax reporting for the disposition of certain assets in prior years. PHIs effective tax rates for the nine months ended September30, 2009 and 2008 were 34.5% and 40.8%, respectively. The decrease in the rate primarily resulted from the refund of $6 million (after tax) of state income taxes and the establishment of a state tax benefit carryforward of $7 million (after tax), each related to a change in tax reporting for the disposition of certain assets in prior years, and lower permanent and state income tax benefits in 2008 related to the charge taken in the second quarter of 2008 on the cross-border energy lease investments as described in Note (7), Leasing Activities. 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. In October 2009, PHI filed a claim with the IRS requesting a Federal income tax refund of approximately $138 million, a substantial portion of which is associated with PHIs utility subsidiaries. The refund results from the carry back of a 2008 net operating loss for tax reporting purposes that reflected, among other things, significant tax deductions related to accelerated depreciation, the pension plan contributions paid in 2009 (which were deductible for 200 |
POTOMAC ELECTRIC POWER CO | |
Notes to Financial Statements [Abstract] | |
INCOME TAXES | (8)INCOME TAXES A reconciliation of Pepcos effective income tax rate is as follows: For The ThreeMonthsEnded September30, For The NineMonthsEnded September30, 2009 2008 2009 2008 Federal statutory rate 35.0 % 35.0 % 35.0 % 35.0 % Increases (decreases) resulting from: Depreciation 1.2 1.6 2.2 2.6 Asset removal costs (1.1 ) (.7 ) (1.4 ) (1.9 ) State income taxes, net of federal effect 5.4 5.9 5.5 5.9 Software amortization .4 .6 .7 1.1 Tax credits (.4 ) (.6 ) (.8 ) (1.0 ) Change in estimates and interest related to uncertain and effectively settled tax positions .8 1.0 1.6 (1.8 ) Interest on state income tax refund, net of federal effect (.4 ) (1.7 ) Adjustment to prior years taxes .2 1.1 .1 .6 Permanent differences related to deferred compensation funding (.3 ) (.4 ) .4 Other, net (.4 ) (.2 ) (.9 ) (.1 ) Effective Income Tax Rate 40.8 % 43.3 % 41.6 % 39.1 % Pepcos effective tax rates for the three months ended September30, 2009 and 2008 were 40.8% and 43.3%, respectively. The decrease in the rate resulted from a lower adjustment for prior year taxes and depreciation in 2009 as compared to 2008. This is partially offset by the benefit related to the interest on the state income tax refund received in the third quarter of 2008. Pepcos effective tax rates for the nine months ended September30, 2009 and 2008 were 41.6% and 39.1%, respectively. The increase in the rate primarily resulted from the change in estimates and interest related to uncertain tax positions which was the result of the reduction in previously accrued interest and estimates resulting from the settlement of the mixed service cost issue. Also contributing to the increase in the rate was the 2008 benefit recorded for interest received on the 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. In October 2009, PHI filed a claim with the IRS requesting a Federal income tax refund of approximately $138 million, a substantial portion of which is associated with PHIs utility subsidiaries. The refund results from the carry back of a 2008 net operating loss for tax reporting purposes that reflected, among other things, significant tax deductions related to accelerated depreciation, the pension plan contributions paid in 2009 (which were deductible for 2008) and the cumulative effect of adopting a new method of tax reporting for certain repairs. |
DELMARVA POWER & LIGHT CO /DE/ | |
Notes to Financial Statements [Abstract] | |
INCOME TAXES | (9) INCOME TAXES A reconciliation of DPLs effective income tax rate is as follows: FortheThreeMonths EndedSeptember30, FortheNineMonths EndedSeptember30, 2009 2008 2009 2008 Federal statutory rate 35.0 % 35.0 % 35.0 % 35.0 % Increases (decreases) resulting from: Depreciation 11.4 (1.2 ) 3.4 1.0 State income taxes, net of federal effect 5.7 5.4 5.5 5.4 State tax benefit related to prior years asset dispositions (187.1 ) (27.9 ) Tax credits (2.9 ) (1.2 ) (1.3 ) (.8 ) Change in estimates and interest related to uncertain and effectively settled tax positions 21.4 (1.9 ) (7.0 ) Adjustments to prior years taxes 22.9 (5.3 ) 3.4 (1.1 ) Other, net (6.4 ) (1.3 ) .1 Effective Income Tax Rate (100.0 )% 32.7 % 14.9 % 32.6 % DPLs effective tax rates for the three months ended September30, 2009 and 2008 were (100.0)% and 32.7%, respectively. The decrease in the rate primarily resulted from the refund of $6 million (after tax) of state income taxes and the establishment of a state tax benefit carryforward of $7 million (after tax), each related to a change in the tax reporting for the disposition of certain assets in prior years. This decrease is partially offset by the changes in estimates and interest related to uncertain and effectively settled tax positions and the non-recurring adjustments to prior years taxes. DPLs effective tax rates for the nine months ended September30, 2009 and 2008 were 14.9% and 32.6% respectively. The decrease in the rate primarily resulted from the refund of $6 million (after tax) of state income taxes and the establishment of a state tax benefit carryforward of $7 million (after tax), each related to a change in the tax reporting for the disposition of certain assets in prior years. This decrease is partially offset by the changes in estimates and interest related to uncertain and effectively settled tax positions and the non-recurring adjustments to prior years taxes. 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. In October 2009, PHI filed a claim with the IRS requesting a Federal income tax refund of approximately $138 million, a substantial portion of which is associated with PHIs utility subsidiaries. The refund results from the carry back of a 2008 net operating loss for tax reporting purposes that reflected, among other things, significant tax deductions related to accelerated depreciation, the pension plan contributions paid in 2009 (which were deductible for 2008) and the cumulativ |
ATLANTIC CITY ELECTRIC CO | |
Notes to Financial Statements [Abstract] | |
INCOME TAXES | (8)INCOME TAXES A reconciliation of ACEs consolidated effective income tax rate is as follows: FortheThreeMonths EndedSeptember30, FortheNineMonths EndedSeptember30, 2009 2008 2009 2008 Federal statutory rate 35.0 % 35.0 % 35.0 % 35.0 % Increases (decreases) resulting from: Depreciation State income taxes, net of federal effect 7.1 7.4 7.8 7.1 Tax credits (.8 ) (.9 ) (1.6 ) (1.0 ) Change in estimates and interest related to uncertain and effectively settled tax positions (1.3 ) .3 (4.4 ) (7.4 ) Adjustment to prior years taxes (3.1 ) (2.0 ) (1.3 ) Other, net (.5 ) (.4 ) (.8 ) (1.0 ) Consolidated Effective Income Tax Rate 39.5 % 38.3 % 34.0 % 31.4 % ACEs consolidated effective tax rates for the three months ended September30, 2009 and 2008 were 39.5% and 38.3%, respectively. The increase in the rate primarily resulted from non-recurring adjustments to prior year taxes, partially offset by the impact of changes in estimates and interest related to uncertain and effectively settled positions and the effect of certain permanent state tax differences as a percentage of pre-tax income. ACEs consolidated effective tax rates for the nine months ended September30, 2009 and 2008 were 34.0% and 31.4% respectively. The increase in the rate resulted from changes in estimates and interest related to uncertain and effectively settled tax positions and the impact of certain permanent state tax differences as a percentage of pre-tax income, partially offset by the non-recurring adjustments to prior year taxes and amortization of tax credits. 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, and believes it has adequately reserved for the adjustments included in the RAR. In October 2009, PHI filed a claim with the IRS requesting a Federal income tax refund of approximately $138 million, a substantial portion of which is associated with PHIs utility subsidiaries. The refund results from the carry back of a 2008 net operating loss for tax reporting purposes that reflected, among other things, significant tax deductions related to accelerated depreciation, the pension plan contributions paid in 2009 (which were deductible for 2008) and the cumulative effect of adopting a new method of tax reporting for certain repairs. The timing of receipt of the refund is uncertain, however, after a 45-day period, interest would begin to accrue on the amount of the refund. During third quarter of 2009, as a result of changing its tax accounting method for certain repairs, ACEs uncertain tax benefits related to cur |
EARNINGS PER SHARE
EARNINGS PER SHARE (PEPCO HOLDINGS INC) | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
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 EndedSeptember30, 2009 2008 (millionsofdollars,exceptpershare data) Income (Numerator): Earnings Applicable to Common Stock $ 124 $ 119 Shares (Denominator) (a): Weighted average shares outstanding for basic computation: Average shares outstanding 221 202 Adjustment to shares outstanding Weighted Average Shares Outstanding for Computation of Basic Earnings Per Share of Common Stock 221 202 Net effect of potentially dilutive shares Weighted Average Shares Outstanding for Computation of Diluted Earnings Per Share of Common Stock 221 202 Basic earnings per share of common stock $ .56 $ .59 Diluted earnings per share of common stock $ .56 $ .59 Notes: (a) The number of options to purchase shares of common stock that were excluded from the calculation of diluted EPS because they were anti-dilutive were 340,066 and 171,000 for the three months ended September30, 2009 and 2008, respectively. FortheNineMonths EndedSeptember30, 2009 2008 (millionsofdollars,exceptpershare data) Income (Numerator): Earnings Applicable to Common Stock $ 194 $ 233 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 $ .88 $ 1.16 Diluted earnings per share of common stock $ .88 $ 1.16 Notes: (a) The number of options to purchase shares of common stock that were excluded from the calculation of diluted EPS because they were anti-dilutive were 340,066 and 5,000 for the nine months ended September30, 2009 and 2008, respectively. |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
PEPCO HOLDINGS INC | |
Notes to Financial Statements [Abstract] | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | (12)DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES 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 the value of natural gas transportation contracts and 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. 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 of forecasted 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 purchase and normal sale accounting. In the Power Delivery business, DPL uses derivative instruments in the form of forward contracts, futures, swaps, an |
DELMARVA POWER & LIGHT CO /DE/ | |
Notes to Financial Statements [Abstract] | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | (10) DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES 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 FASB guidance on regulated operations (ASC 980) 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 September30, 2009 and December31, 2008: As of September30, 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) $ $ 2 $ 2 $ (2 ) $ Derivative Assets (non-current assets) Total Derivative Assets 2 2 (2 ) Derivative Liabilities (current liabilities) (13 ) (16 ) (29 ) 16 (13 ) Derivative Liabilities (non-current liabilities) (14 ) (14 ) (14 ) Total Derivative Liabilities (13 ) (30 ) (43 ) 16 (27 ) Net Derivative (Liability) Asset $ (13 ) $ (28 ) $ (41 ) $ 14 $ (27 ) 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 ) Net Derivative (Liability) Asset $ (31 ) $ (24 ) $ (55 ) $ 28 $ (27 ) Under FASB guidance on the offsetting of balance sheet accounts (ASC 210-20), DPL offsets the fair value amounts recognized fo |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
PEPCO HOLDINGS INC | |
Notes to Financial Statements [Abstract] | |
FAIR VALUE DISCLOSURES | (13)FAIR VALUE DISCLOSURES Fair Value of Assets and Liabilities Excluding Debt Effective January1, 2008, PHI adopted FASB guidance on fair value measurement and disclosures (ASC 820) which established a framework for measuring fair value and expanded disclosures about fair value measurements. As defined in the guidance, 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. The guidance 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 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 assets are primarily power and capacity swaps. The majority of Conectiv Energys pricing information for its Level 3 valuations was obtained from a third party pricing system used widely throughout the energy industry. 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 ha |
POTOMAC ELECTRIC POWER CO | |
Notes to Financial Statements [Abstract] | |
FAIR VALUE DISCLOSURES | (9)FAIR VALUE DISCLOSURES Fair Value of Assets and Liabilities Excluding Debt Effective January1, 2008, Pepco adopted FASB guidance on fair value measurement and disclosures (ASC 820) which established a framework for measuring fair value and expanded disclosures about fair value measurements. As defined in the guidance, 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. The guidance 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 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 September30, 2009 and December31, 2008. As required by the guidance, fi |
DELMARVA POWER & LIGHT CO /DE/ | |
Notes to Financial Statements [Abstract] | |
FAIR VALUE DISCLOSURES | (11)FAIR VALUE DISCLOSURES Fair Value of Assets and Liabilities Excluding Debt Effective January1, 2008, DPL adopted FASB guidance on fair value measurement and disclosures (ASC 820) which established a framework for measuring fair value and expanded disclosures about fair value measurements. As defined in the guidance, 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. The guidance 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 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 execu |
ATLANTIC CITY ELECTRIC CO | |
Notes to Financial Statements [Abstract] | |
FAIR VALUE DISCLOSURES | (9)FAIR VALUE DISCLOSURES Fair Value of Assets and Liabilities Excluding Debt Effective January1, 2008, ACE adopted FASB guidance on fair value measurement and disclosures (ASC 820) which established a framework for measuring fair value and expanded disclosures about fair value measurements. As defined in the guidance, 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. The guidance 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 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 September30, 2009 and December31, 2008. As required by the guidance, 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 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
PEPCO HOLDINGS INC | |
Notes to Financial Statements [Abstract] | |
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 distributed 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 recorded a pre-tax gain of $26million in the quarter ended September30, 2009. As a consequence of the MPSC order, $64 million previously accounted for as restricted cash was released and the corresponding regulatory liability was extinguished. Rate Proceedings In recent electric service distribution base rate cases, PHIs utility subsidiaries have proposed the adoption of revenue decoupling methods for retail customers. To date: A bill stabilization adjustment mechanism (BSA) has been approved and implemented for both Pepco and DPL electric service in Maryland and for Pepco electric service in the District of Columbia. A modified fixed variable rate design (MFVRD) has been approved in concept for D |
POTOMAC ELECTRIC POWER CO | |
Notes to Financial Statements [Abstract] | |
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 distributed 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 recorded a pre-tax gain of $26million in the quarter ended September30, 2009. As a consequence of the MPSC order, $64 million previously accounted for as restricted cash was released and the corresponding regulatory liability was extinguished. Rate Proceedings In recent electric service distribution base rate cases, Pepso has proposed the adoption of revenue decoupling methods for retail customers. To date, a bill stabilization adjustment mechanism (BSA) has been approved and implemented for electric service in Maryland and the District of Columbia. Under the BSA, customer delivery rates are subject to adjustment (through a credit or surcharge mechanism), depending on whether actual distribution revenue per customer |
DELMARVA POWER & LIGHT CO /DE/ | |
Notes to Financial Statements [Abstract] | |
COMMITMENTS AND CONTINGENCIES | (12) COMMITMENTS AND CONTINGENCIES Regulatory and Other Matters Rate Proceedings In recent electric service distribution base rate cases, DPL has proposed the adoption of revenue decoupling methods for retail customers. To date: A BSA has been approved and implemented for DPL electric service in Maryland. A modified fixed variable rate design (MFVRD) has been approved in concept for DPL electric and natural gas service in Delaware and may be implemented either in the context of pending decoupling cases or DPLs next Delaware base rate cases. Under the BSA, customer delivery rates are subject to adjustment (through a credit or surcharge 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 the utilitys 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, which permits DPL to recover gas procurement costs through customer rates. 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 t |
ATLANTIC CITY ELECTRIC CO | |
Notes to Financial Statements [Abstract] | |
COMMITMENTS AND CONTINGENCIES | (10)COMMITMENTS AND CONTINGENCIES Regulatory and Other Matters Rate Proceedings As described below, ACE has proposed the adoption of a bill stabilization adjustment mechanism (BSA) for retail customers. The proposed BSA remains pending. Under the BSA, customer delivery rates are subject to adjustment (through a credit or surcharge 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. 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 BSA. However, because a BSA mechanism has been proposed in the electric distribution base rate proceeding discussed in the next paragraph, the implementation of a BSA will be considered instead in that proceeding. On August14, 2009, ACE submitted a petition to the NJBPU to increase its electric distribution base rates, including a request for the implementation of a BSA. Based on a test year ending December31, 2009, adjusted for known and measurable changes, ACE requested an annual net increase in its current retail distribution rates for electric service in the amount of approximately $54million (which includes a reduction to its Regulatory Asset Recovery Charge) based on a requested return on equity (ROE) of 11.50% (or, if the BSA is approved, the requested rate increase would be reduced to approximately $52million, based on an ROE of 11.25%). The procedural schedule has not yet been established. 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 indemnifica |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | |
9 Months Ended
Sep. 30, 2009 | |
POTOMAC ELECTRIC POWER CO | |
Notes to Financial Statements [Abstract] | |
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 September30, 2009 and 2008 were approximately $42 million and $43 million, respectively. PHI Service Company costs directly charged or allocated to Pepco for the nine months ended September30, 2009 and 2008 were approximately $124 million and $120 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 September30, 2009 and 2008 were approximately $2 million and $3 million, respectively. Amounts charged to Pepco by these companies for the nine months ended September30, 2009 and 2008 were approximately $5 million and $9 million, respectively. In addition to the transactions described above, Pepcos financial statements include the following related party transactions in its statements of income: ThreeMonths EndedSeptember30, NineMonths EndedSeptember30, Income (Expense) 2009 2008 2009 2008 (millions of dollars) Purchased power from Conectiv Energy Supply, Inc. (a) $ $ $ 1 $ (23 ) (a) Included in purchased energy expense. As of September30, 2009 and December31, 2008, Pepco had the following balances on its Balance Sheets due (to) from related parties: September30, 2009 December31, 2008 Liability (millions of dollars) Payable to Related Party (current) PHI Service Company $ (17 ) $ (17 ) Pepco Energy Services (a) $ (54 ) $ (53 ) The items listed above are included in the Accounts payable due to associated companies balances on the Balance Sheets of $71 million and $70 million at September30, 2009 and December31, 2008, respectively. Money Pool Balance with Pepco Holdings (included in cash and cash equivalents) $ 141 $ (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] | |
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 September30, 2009 and 2008 were $32 million and $31 million, respectively. PHI Service Company costs directly charged or allocated to DPL for the nine months ended September30, 2009 and 2008 were approximately $95 million and $92 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: Income (Expenses) ThreeMonths EndedSeptember30, NineMonths EndedSeptember30, 2009 2008 2009 2008 (millions of dollars) Purchased power from Conectiv Energy Supply, Inc. (a) $ (14 ) $ (43 ) $ (73 ) $ (147 ) Intercompany lease transactions (b) 2 2 6 5 Transcompany pipeline gas purchases with Conectiv Energy Supply, Inc. (c) (1 ) (2 ) (a) Included in purchased energy expense. (b) Included in electric revenue. (c) Included in gas purchased expense. As of September30, 2009 and December31, 2008, DPL had the following balances on its balance sheets due (to) from related parties: Liability September30, 2009 December31, 2008 (millions of dollars) Payable to Related Party (current) PHI Service Company $ (17 ) $ (15 ) Conectiv Energy Supply, Inc. (3 ) (14 ) Pepco Energy Services, Inc. and its subsidiaries (Pepco Energy Services) (a) (3 ) (6 ) The items listed above are included in the Accounts payable due to associated companies balances on the Balance Sheets of $23 million and $34 million at September30, 2009 and December31, 2008, respectively. (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] | |
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 months ended September30, 2009 and 2008 were $24 million and $25 million, respectively. PHI Service Company costs directly charged or allocated to ACE for the nine months ended September 30, 2009 and 2008 were $75 million and $71 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: ThreeMonths EndedSeptember30, NineMonths EndedSeptember30, Income (Expense) 2009 2008 2009 2008 (millions of dollars) Purchased power from Conectiv Energy Supply, Inc. (a) $ (61 ) $ (70 ) $ (148 ) $ (128 ) Meter reading services provided by Millennium Account Services LLC (b) (1 ) (1 ) (3 ) (3 ) Intercompany lease transactions (b) (1 ) (1 ) Intercompany use revenue (c) 2 1 5 2 Intercompany use expense (c) (1 ) (1 ) (2 ) (2 ) (a) Included in purchased energy expense. (b) Included in other operation and maintenance expense. (c) Included in operating revenue. As of September30, 2009 and December31, 2008, ACE had the following balances due (to) from related parties: Liability September30, 2009 December31, 2008 (millions of dollars) Payable to Related Party (current) PHI Service Company $ (10 ) $ (11 ) Conectiv Energy Supply, Inc. (15 ) (16 ) The items listed above are included in the Accounts payable due to associated companies balances on the Consolidated Balance Sheets of $28 million at each of September30, 2009 and December31, 2008. |
Document Information
Document Information | |
9 Months Ended
Sep. 30, 2009 | |
Document Information [Text Block] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | 2009-09-30 |
Entity Information
Entity Information (USD $) | |
9 Months Ended
Sep. 30, 2009 | |
Entity [Text Block] | |
Trading Symbol | POM |
Entity Registrant Name | PEPCO HOLDINGS INC |
Entity Central Index Key | 0001135971 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 221,592,782 |
POTOMAC ELECTRIC POWER CO | |
Entity [Text Block] | |
Entity Registrant Name | POTOMAC ELECTRIC POWER CO |
Entity Central Index Key | 0000079732 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | 100 |
DELMARVA POWER & LIGHT CO /DE/ | |
Entity [Text Block] | |
Entity Registrant Name | DELMARVA POWER & LIGHT CO /DE/ |
Entity Central Index Key | 0000027879 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | 1,000 |
ATLANTIC CITY ELECTRIC CO | |
Entity [Text Block] | |
Entity Registrant Name | ATLANTIC CITY ELECTRIC CO |
Entity Central Index Key | 0000008192 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | 8,546,017 |