Atlantic City Electric 10-K 26 Feb 10 2009 FY Annual report Financial data

Statement Of Income Alternative

Statement Of Income Alternative (USD $)
In Millions, except Per Share data	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
PEPCO HOLDINGS INC
Operating Revenue
Power Delivery	$4,980	$5,487	$5,244
Competitive Energy	4,237	5,279	4,054
Other	42	(66)	68
Total Operating Revenue	9,259	10,700	9,366
Operating Expenses
Fuel and purchased energy	6,646	7,571	6,336
Other services cost of sales	403	718	607
Other operation and maintenance	949	917	858
Depreciation and amortization	391	377	366
Other taxes	372	359	357
Deferred electric service costs	(161)	(9)	68
Impairment losses	4	2	2
Effect of settlement of Mirant bankruptcy claims	(40)	0	(33)
Gain on sale of assets	0	(3)	(1)
Total Operating Expenses	8,564	9,932	8,560
Operating Income	695	768	806
Other Income (Expenses)
Interest and dividend income	3	19	20
Interest expense	(370)	(330)	(340)
Gain (loss) from equity investments	2	(5)	10
Other income	16	19	28
Other expenses	(1)	(3)	(2)
Total Other Expenses	(350)	(300)	(284)
Income Before Income Tax Expense	345	468	522
Income Tax Expense	110	168	188
Net Income	235	300	334
Basic and Diluted Share Information
Weighted average shares outstanding	221	204	194
Earnings per share of common stock	1.06	1.47	1.72
PEPCO HOLDINGS INC | Retained Earnings
Other Income (Expenses)
Net Income	235	300	334
POTOMAC ELECTRIC POWER CO
Operating Revenue
Operating Revenue	2,231	2,322	2,201
Operating Expenses
Purchased energy	1,223	1,335	1,246
Other operation and maintenance	328	302	300
Depreciation and amortization	145	141	151
Other taxes	302	288	290
Effect of settlement of Mirant bankruptcy claims	(40)	0	(33)
Gain on sale of assets	0	0	(1)
Total Operating Expenses	1,958	2,066	1,953
Operating Income	273	256	248
Other Income (Expenses)
Interest and dividend income	1	9	9
Interest expense	(100)	(93)	(82)
Other income	9	10	12
Other expenses	(1)	(2)	0
Total Other Expenses	(91)	(76)	(61)
Income Before Income Tax Expense	182	180	187
Income Tax Expense	76	64	62
Net Income	106	116	125
POTOMAC ELECTRIC POWER CO | Retained Earnings
Other Income (Expenses)
Net Income	106	116	125
DELMARVA POWER & LIGHT CO /DE/
Operating Revenue
Electric	1,135	1,221	1,205
Natural Gas	268	318	291
Operating Revenue	1,403	1,539	1,496
Operating Expenses
Purchased energy	751	821	839
Gas purchased	193	245	220
Other operation and maintenance	238	222	206
Depreciation and amortization	76	72	74
Other taxes	35	35	36
Gain on sale of assets	0	(4)	(1)
Total Operating Expenses	1,293	1,391	1,374
Operating Income	110	148	122
Other Income (Expenses)
Interest and dividend income	1	2	1
Interest expense	(44)	(40)	(43)
Other income	1	3	2
Other expenses	0	0	0
Total Other Expenses	(42)	(35)	(40)
Income Before Income Tax Expense	68	113	82
Income Tax Expense	16	45	37
Net Income	52	68	45
DELMARVA POWER & LIGHT CO /DE/ | Retained Earnings
Other Income (Expenses)
Net Income	52	68	45
ATLANTIC CITY ELECTRIC CO
Operating Revenue
Operating Revenue	1,351	1,633	1,543
Operating Expenses
Purchased energy	1,076	1,178	1,051
Other operation and maintenance	190	183	165
Depreciation and amortization	102	104	80
Other taxes	21	24	22
Deferred electric service costs	(161)	(9)	66
Total Operating Expenses	1,228	1,480	1,384
Operating Income	123	153	159
Other Income (Expenses)
Interest and dividend income	0	1	1
Interest expense	(67)	(62)	(64)
Other income	2	3	5
Other expenses	0	(1)	0
Total Other Expenses	(65)	(59)	(58)
Income Before Income Tax Expense	58	94	101
Income Tax Expense	17	30	41
Net Income	41	64	60
ATLANTIC CITY ELECTRIC CO | Retained Earnings
Other Income (Expenses)
Net Income	$41	$64	$60

Statement Of Other Comprehensiv

Statement Of Other Comprehensive Income (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
PEPCO HOLDINGS INC
Net Income	$235	$300	$334
Gains (losses) on commodity derivatives designated as cash flow hedges:
Losses arising during period	(345)	(315)	(9)
Less: amount of (losses) gains reclassified into income	(390)	50	(93)
Net gains (losses) on commodity derivatives	45	(365)	84
Losses on Treasury Rate Locks reclassified into income	5	5	9
Amortization of gains and losses for prior service cost	(13)	(3)	2
Other comprehensive income (losses), before income taxes	37	(363)	95
Income tax expense (benefit)	16	(147)	38
Other comprehensive income (losses), net of income taxes	21	(216)	57
Comprehensive income	256	84	391
PEPCO HOLDINGS INC | Accumulated Other Comprehensive (Loss) Income
Gains (losses) on commodity derivatives designated as cash flow hedges:
Other comprehensive income (losses), net of income taxes	21	(216)	57
PEPCO HOLDINGS INC | Retained Earnings
Net Income	235	300	334
POTOMAC ELECTRIC POWER CO
Net Income	106	116	125
POTOMAC ELECTRIC POWER CO | Retained Earnings
Net Income	106	116	125
DELMARVA POWER & LIGHT CO /DE/
Net Income	52	68	45
DELMARVA POWER & LIGHT CO /DE/ | Retained Earnings
Net Income	52	68	45
ATLANTIC CITY ELECTRIC CO
Net Income	41	64	60
ATLANTIC CITY ELECTRIC CO | Retained Earnings
Net Income	$41	$64	$60

Statement Of Financial Position

Statement Of Financial Position Classified (USD $)
In Millions	Dec. 31, 2009	Dec. 31, 2008
PEPCO HOLDINGS INC
CURRENT ASSETS
Cash and cash equivalents	$46	$384
Restricted cash equivalents	11	10
Accounts receivable, less allowance for uncollectible accounts	1,213	1,392
Inventories	252	333
Derivative assets	43	98
Prepayments of income taxes	167	294
Deferred income tax assets, net	126	31
Prepaid expenses and other	68	56
Total Current Assets	1,926	2,598
INVESTMENTS AND OTHER ASSETS
Goodwill	1,407	1,411
Regulatory assets	1,801	2,088
Investment in finance leases held in trust	1,386	1,335
Income taxes receivable	141	23
Restricted cash equivalents	4	108
Assets and accrued interest related to uncertain tax positions	12	32
Derivative assets	43	9
Other	196	215
Total Investments and Other Assets	4,990	5,221
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment	13,717	12,926
Accumulated depreciation	(4,854)	(4,612)
Net Property, Plant and Equipment	8,863	8,314
TOTAL ASSETS	15,779	16,133
CURRENT LIABILITIES
Short-term debt	530	465
Current portion of long-term debt	536	85
Accounts payable and accrued liabilities	712	847
Capital lease obligations due within one year	7	6
Taxes accrued	48	62
Interest accrued	68	71
Liabilities and accrued interest related to uncertain tax positions	1	47
Derivative liabilities	104	144
Other	296	275
Total Current Liabilities	2,302	2,002
DEFERRED CREDITS
Regulatory liabilities	613	893
Deferred income taxes, net	2,600	2,269
Investment tax credits	35	40
Pension benefit obligation	290	626
Other postretirement benefit obligation	409	461
Income taxes payable	5	8
Liabilities and accrued interest related to uncertain tax positions	96	17
Derivative liabilities	62	59
Other	158	184
Total Deferred Credits	4,268	4,557
LONG-TERM LIABILITIES
Long-term debt	4,470	4,859
Transition bonds issued by ACE Funding	368	401
Long-term project funding	17	19
Capital lease obligations	92	99
Total Long-Term Liabilities	4,947	5,378
EQUITY
Common stock	2	2
Premium on stock and other capital contributions	3,227	3,179
Accumulated other comprehensive loss	(241)	(262)
Retained earnings	1,268	1,271
Total Equity	4,256	4,190
Non-controlling interest	6	6
Total Equity	4,262	4,196
TOTAL LIABILITIES AND EQUITY	15,779	16,133
PEPCO HOLDINGS INC | Common Stock
EQUITY
Total Equity	2	2
PEPCO HOLDINGS INC | Premium on Stock
EQUITY
Total Equity	3,227	3,179
PEPCO HOLDINGS INC | Accumulated Other Comprehensive (Loss) Income
EQUITY
Total Equity	(241)	(262)
PEPCO HOLDINGS INC | Retained Earnings
EQUITY
Total Equity	1,268	1,271
POTOMAC ELECTRIC POWER CO
CURRENT ASSETS
Cash and cash equivalents	213	146
Restricted cash equivalents	1	0
Accounts receivable, less allowance for uncollectible accounts	354	377
Inventories	43	45
Prepayments of income taxes	79	151
Prepaid expenses and other	48	23
Total Current Assets	738	742
INVESTMENTS AND OTHER ASSETS
Regulatory assets	166	169
Prepaid pension expense	295	142
Investment in trust	25	24
Income taxes receivable	64	36
Restricted cash equivalents	0	102
Assets and accrued interest related to uncertain tax positions	0	29
Other	70	70
Total Investments and Other Assets	620	572
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment	5,865	5,607
Accumulated depreciation	(2,481)	(2,371)
Net Property, Plant and Equipment	3,384	3,236
TOTAL ASSETS	4,742	4,550
CURRENT LIABILITIES
Short-term debt	0	125
Current portion of long-term debt	16	50
Accounts payable and accrued liabilities	154	187
Accounts payable due to associated companies	111	70
Capital lease obligations due within one year	7	6
Taxes accrued	37	44
Interest accrued	18	19
Liabilities and accrued interest related to uncertain tax positions	0	24
Other	124	94
Total Current Liabilities	467	619
DEFERRED CREDITS
Regulatory liabilities	145	239
Deferred income taxes, net	893	788
Investment tax credits	8	10
Other postretirement benefit obligation	71	49
Income taxes payable	5	7
Liabilities and accrued interest related to uncertain tax positions	29	0
Other	58	59
Total Deferred Credits	1,209	1,152
LONG-TERM LIABILITIES
Long-term debt	1,539	1,445
Capital lease obligations	92	99
Total Long-Term Liabilities	1,631	1,544
EQUITY
Common stock	0	0
Premium on stock and other capital contributions	705	611
Retained earnings	730	624
Total Equity	1,435	1,235
TOTAL LIABILITIES AND EQUITY	4,742	4,550
POTOMAC ELECTRIC POWER CO | Common Stock
EQUITY
Total Equity	0	0
POTOMAC ELECTRIC POWER CO | Premium on Stock
EQUITY
Total Equity	705	611
POTOMAC ELECTRIC POWER CO | Retained Earnings
EQUITY
Total Equity	730	624
DELMARVA POWER & LIGHT CO /DE/
CURRENT ASSETS
Cash and cash equivalents	26	138
Accounts receivable, less allowance for uncollectible accounts	193	202
Inventories	40	52
Prepayments of income taxes	64	34
Prepaid expenses and other	19	18
Total Current Assets	342	444
INVESTMENTS AND OTHER ASSETS
Goodwill	8	8
Regulatory assets	207	244
Prepaid pension expense	157	184
Other	28	21
Total Investments and Other Assets	400	457
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment	2,807	2,656
Accumulated depreciation	(860)	(827)
Net Property, Plant and Equipment	1,947	1,829
TOTAL ASSETS	2,689	2,730
CURRENT LIABILITIES
Short-term debt	105	246
Current portion of long-term debt	31	0
Accounts payable and accrued liabilities	106	108
Accounts payable due to associated companies	14	34
Taxes accrued	3	7
Interest accrued	6	6
Liabilities and accrued interest related to uncertain tax positions	0	13
Derivative liabilities	15	13
Other	64	56
Total Current Liabilities	344	483
DEFERRED CREDITS
Regulatory liabilities	290	277
Deferred income taxes, net	489	446
Investment tax credits	7	8
Other postretirement benefit obligation	23	4
Above-market purchased energy contracts and other electric restructuring liabilities	17	19
Liabilities and accrued interest related to uncertain tax positions	20	17
Derivative liabilities	13	14
Other	23	24
Total Deferred Credits	882	809
LONG-TERM LIABILITIES
Long-term debt	655	686
EQUITY
Common stock	0	0
Premium on stock and other capital contributions	336	304
Retained earnings	472	448
Total Equity	808	752
TOTAL LIABILITIES AND EQUITY	2,689	2,730
DELMARVA POWER & LIGHT CO /DE/ | Common Stock
EQUITY
Total Equity	0	0
DELMARVA POWER & LIGHT CO /DE/ | Premium on Stock
EQUITY
Total Equity	336	304
DELMARVA POWER & LIGHT CO /DE/ | Retained Earnings
EQUITY
Total Equity	472	448
ATLANTIC CITY ELECTRIC CO
CURRENT ASSETS
Cash and cash equivalents	7	65
Restricted cash equivalents	10	10
Accounts receivable, less allowance for uncollectible accounts	176	195
Inventories	15	15
Prepayments of income taxes	38	47
Prepaid expenses and other	12	16
Total Current Assets	258	348
INVESTMENTS AND OTHER ASSETS
Regulatory assets	712	768
Prepaid pension expense	63	6
Income taxes receivable	76	10
Restricted cash equivalents	4	5
Assets and accrued interest related to uncertain tax positions	57	110
Other	9	12
Total Investments and Other Assets	921	911
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment	2,328	2,216
Accumulated depreciation	(699)	(666)
Net Property, Plant and Equipment	1,629	1,550
TOTAL ASSETS	2,808	2,809
CURRENT LIABILITIES
Short-term debt	83	23
Current portion of long-term debt	35	32
Accounts payable and accrued liabilities	120	122
Accounts payable due to associated companies	58	28
Taxes accrued	5	7
Interest accrued	13	14
Liabilities and accrued interest related to uncertain tax positions	0	6
Other	42	35
Total Current Liabilities	356	267
DEFERRED CREDITS
Regulatory liabilities	178	377
Deferred income taxes, net	604	549
Investment tax credits	9	10
Other postretirement benefit obligation	25	41
Other	11	12
Total Deferred Credits	827	989
LONG-TERM LIABILITIES
Long-term debt	609	610
Transition bonds issued by ACE Funding	368	401
Total Long-Term Liabilities	977	1,011
COMMITMENTS AND CONTINGENCIES
REDEEMABLE SERIAL PREFERRED STOCK	6	6
EQUITY
Common stock	26	26
Premium on stock and other capital contributions	473	344
Retained earnings	143	166
Total Equity	642	536
TOTAL LIABILITIES AND EQUITY	2,808	2,809
ATLANTIC CITY ELECTRIC CO | Common Stock
EQUITY
Total Equity	26	26
ATLANTIC CITY ELECTRIC CO | Premium on Stock
EQUITY
Total Equity	473	344
ATLANTIC CITY ELECTRIC CO | Retained Earnings
EQUITY
Total Equity	$143	$166

1_Statement Of Financial Positi

Statement Of Financial Position Classified (Parenthetical) (USD $)
In Millions, except Share data	Dec. 31, 2009	Dec. 31, 2008
PEPCO HOLDINGS INC
Accounts receivable, allowance for uncollectible accounts	$45	$37
Common stock, par value	0.01	0.01
Common stock, shares authorized	400,000,000	400,000,000
Common stock, shares outstanding	222,269,895	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	12	10
Common stock, par value	2.25	2.25
Common stock, shares authorized	1,000	1,000
Common stock, shares outstanding	1,000	1,000
ATLANTIC CITY ELECTRIC CO
Accounts receivable, allowance for uncollectible accounts	$7	$6
Common stock, par value	$3	$3
Common stock, shares authorized	25,000,000	25,000,000
Common stock, shares outstanding	8,546,017	8,546,017

Statement Of Cash Flows Indirec

Statement Of Cash Flows Indirect (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
PEPCO HOLDINGS INC
OPERATING ACTIVITIES
Net Income	$235	$300	$334
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization	391	377	366
Non-cash rents from cross-border energy lease investments	(54)	(65)	(73)
Non-cash charge to reduce equity value of PHI's cross-border energy lease investments	3	124	0
Effect of settlement of Mirant bankruptcy claims	(40)	0	(33)
Proceeds from settlement of Mirant bankruptcy claims	0	0	507
Reimbursements to Mirant	0	0	(108)
Changes in restricted cash equivalents related to Mirant settlement	102	315	(417)
Deferred income taxes	247	329	83
Net unrealized losses (gains) on commodity derivatives	59	(22)	(2)
Other	(3)	(9)	(6)
Changes in:
Accounts receivable	171	(120)	(102)
Inventories	81	(46)	(4)
Prepaid expenses	(14)	(16)	(18)
Regulatory assets and liabilities, net	(221)	(325)	4
Accounts payable and accrued liabilities	(197)	77	60
Pension benefit obligation, excluding contributions	95	19	13
Pension contributions	(300)	0	0
Cash collateral related to derivative activities	(11)	(274)	62
Taxes accrued	78	(257)	39
Proceeds from sale of B.L. England emission allowances	0	0	48
Other assets and liabilities	(16)	6	42
Net Cash (Used By) From Operating Activities	606	413	795
INVESTING ACTIVITIES
Investment in property, plant and equipment	(864)	(781)	(623)
Proceeds from settlement of Mirant bankruptcy claims representing reimbursement for investment in property, plant and equipment	0	0	15
Proceeds from sale of assets	4	56	11
Net other investing activities	0	11	15
Net Cash Used By Investing Activities	(860)	(714)	(582)
FINANCING ACTIVITIES
Dividends paid on common stock	(238)	(222)	(203)
Common stock issued for the Dividend Reinvestment Plan	31	29	28
Issuance of common stock	18	287	200
Redemption of preferred stock	0	0	(18)
Issuances of long-term debt	110	1,150	704
Reacquisition of long-term debt	(83)	(590)	(855)
(Repayments) issuances of short-term debt, net	65	26	(61)
Cost of issuances	(4)	(30)	(7)
Net other financing activities	17	(20)	5
Net Cash (Used By) From Financing Activities	(84)	630	(207)
Net (Decrease) Increase In Cash and Cash Equivalents	(338)	329	6
Cash and Cash Equivalents at Beginning of Year	384	55	49
CASH AND CASH EQUIVALENTS AT END OF YEAR	46	384	55
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest, net of capitalized interest	353	316	338
Cash (received) paid for income taxes	(76)	99	36
PEPCO HOLDINGS INC | Retained Earnings
OPERATING ACTIVITIES
Net Income	235	300	334
POTOMAC ELECTRIC POWER CO
OPERATING ACTIVITIES
Net Income	106	116	125
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization	145	141	151
Effect of settlement of Mirant bankruptcy claims	(40)	0	(33)
Proceeds from settlement of Mirant bankruptcy claims	0	0	507
Reimbursements to Mirant	0	0	(108)
Changes in restricted cash equivalents related to Mirant settlement	102	315	(417)
Deferred income taxes	122	185	(3)
Investment tax credit adjustments	(2)	(2)	(2)
Other	0	0	(1)
Changes in:
Accounts receivable	23	(33)	(46)
Inventories	2	0	(3)
Prepaid expenses	(9)	(2)	(3)
Regulatory assets and liabilities, net	(66)	(309)	(33)
Accounts payable and accrued liabilities	4	(8)	52
Pension benefit obligation, excluding contributions	17	10	8
Pension contributions	(170)	0	0
Taxes accrued	77	(174)	12
Other assets and liabilities	21	(18)	(3)
Interest accrued	(1)	2	0
Net Cash (Used By) From Operating Activities	331	223	203
INVESTING ACTIVITIES
Investment in property, plant and equipment	(288)	(275)	(272)
Proceeds from settlement of Mirant bankruptcy claims representing reimbursement for investment in property, plant and equipment	0	0	15
Changes in restricted cash equivalents	(1)	1	(1)
Net other investing activities	(1)	1	2
Net Cash Used By Investing Activities	(290)	(273)	(256)
FINANCING ACTIVITIES
Dividends paid on common stock	0	(89)	(86)
Capital contribution from Parent	94	78	0
Issuances of long-term debt	110	500	250
Reacquisition of long-term debt	(50)	(238)	(210)
(Repayments) issuances of short-term debt, net	(125)	(55)	113
Net other financing activities	(3)	(19)	(7)
Net Cash (Used By) From Financing Activities	26	177	60
Net (Decrease) Increase In Cash and Cash Equivalents	67	127	7
Cash and Cash Equivalents at Beginning of Year	146	19	12
CASH AND CASH EQUIVALENTS AT END OF YEAR	213	146	19
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest, net of capitalized interest	97	87	78
Cash (received) paid for income taxes	(126)	60	61
POTOMAC ELECTRIC POWER CO | Retained Earnings
OPERATING ACTIVITIES
Net Income	106	116	125
DELMARVA POWER & LIGHT CO /DE/
OPERATING ACTIVITIES
Net Income	52	68	45
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization	76	72	74
Deferred income taxes	60	33	27
Investment tax credit adjustments	(1)	(1)	(1)
Other	0	(4)	(1)
Changes in:
Accounts receivable	10	(44)	(1)
Inventories	12	(7)	(5)
Prepaid expenses	1	(7)	7
Regulatory assets and liabilities, net	29	27	(18)
Accounts payable and accrued liabilities	(26)	(19)	62
Pension benefit obligation, excluding contributions	37	(6)	(6)
Pension contributions	(10)	0	0
Taxes accrued	(37)	12	(10)
Other assets and liabilities	10	(1)	(4)
Net Cash (Used By) From Operating Activities	213	123	169
INVESTING ACTIVITIES
Investment in property, plant and equipment	(193)	(150)	(133)
Proceeds from sale of assets	1	54	0
Changes in restricted cash equivalents	0	4	(4)
Net other investing activities	1	(1)	2
Net Cash Used By Investing Activities	(191)	(93)	(135)
FINANCING ACTIVITIES
Dividends paid on common stock	(28)	(52)	(39)
Capital contribution from Parent	32	62	0
Redemption of preferred stock	0	0	(18)
Issuances of long-term debt	0	400	0
Reacquisition of long-term debt	0	(116)	(65)
(Repayments) issuances of short-term debt, net	(141)	(190)	90
Net other financing activities	3	(7)	1
Net Cash (Used By) From Financing Activities	(134)	97	(31)
Net (Decrease) Increase In Cash and Cash Equivalents	(112)	127	3
Cash and Cash Equivalents at Beginning of Year	138	11	8
CASH AND CASH EQUIVALENTS AT END OF YEAR	26	138	11
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest, net of capitalized interest	41	37	42
Cash (received) paid for income taxes	(17)	1	20
DELMARVA POWER & LIGHT CO /DE/ | Retained Earnings
OPERATING ACTIVITIES
Net Income	52	68	45
ATLANTIC CITY ELECTRIC CO
OPERATING ACTIVITIES
Net Income	41	64	60
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization	102	104	80
Deferred income taxes	53	166	(31)
Investment tax credit adjustments	(1)	(1)	1
Changes in:
Accounts receivable	19	3	(35)
Inventories	0	(1)	(1)
Prepaid expenses	(5)	1	(1)
Regulatory assets and liabilities, net	(183)	(43)	55
Accounts payable and accrued liabilities	43	10	0
Pension contributions	(60)	0	0
Taxes accrued	(6)	(159)	24
Proceeds from sale of B.L. England emission allowances	0	0	48
Other assets and liabilities	(10)	8	(4)
Interest accrued	(1)	1	0
Net Cash (Used By) From Operating Activities	(8)	153	196
INVESTING ACTIVITIES
Investment in property, plant and equipment	(141)	(162)	(149)
Proceeds from sale of assets	0	1	9
Changes in restricted cash equivalents	1	(1)	(1)
Net other investing activities	(1)	1	10
Net Cash Used By Investing Activities	(141)	(161)	(131)
FINANCING ACTIVITIES
Dividends paid on common stock	(64)	(46)	(50)
Capital contribution from Parent	129	35	0
Issuances of long-term debt	0	250	0
Reacquisition of long-term debt	(32)	(136)	(46)
(Repayments) issuances of short-term debt, net	60	(29)	28
Cost of issuances	(1)	(2)	0
Net other financing activities	(1)	(6)	5
Net Cash (Used By) From Financing Activities	91	66	(63)
Net (Decrease) Increase In Cash and Cash Equivalents	(58)	58	2
Cash and Cash Equivalents at Beginning of Year	65	7	5
CASH AND CASH EQUIVALENTS AT END OF YEAR	7	65	7
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest, net of capitalized interest	65	58	62
Cash (received) paid for income taxes	(42)	21	38
ATLANTIC CITY ELECTRIC CO | Retained Earnings
OPERATING ACTIVITIES
Net Income	$41	$64	$60

2_Statement Of Cash Flows Indir

Statement Of Cash Flows Indirect (Parenthetical) (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
PEPCO HOLDINGS INC
Capitalized interest	$11	$11	$9
POTOMAC ELECTRIC POWER CO
Capitalized interest	4	2	5
DELMARVA POWER & LIGHT CO /DE/
Capitalized interest	1	1	1
ATLANTIC CITY ELECTRIC CO
Capitalized interest	$2	$2	$2

Statement Of Shareholders Equit

Statement Of Shareholders Equity And Other Comprehensive Income (USD $)
In Millions, except Share data	PEPCO HOLDINGS INC	PEPCO HOLDINGS INC Common Stock	PEPCO HOLDINGS INC Premium on Stock	PEPCO HOLDINGS INC Accumulated Other Comprehensive (Loss) Income	PEPCO HOLDINGS INC Retained Earnings	POTOMAC ELECTRIC POWER CO	POTOMAC ELECTRIC POWER CO Common Stock	POTOMAC ELECTRIC POWER CO Premium on Stock	POTOMAC ELECTRIC POWER CO Retained Earnings	DELMARVA POWER & LIGHT CO /DE/	DELMARVA POWER & LIGHT CO /DE/ Common Stock	DELMARVA POWER & LIGHT CO /DE/ Premium on Stock	DELMARVA POWER & LIGHT CO /DE/ Retained Earnings	ATLANTIC CITY ELECTRIC CO	ATLANTIC CITY ELECTRIC CO Common Stock	ATLANTIC CITY ELECTRIC CO Premium on Stock	ATLANTIC CITY ELECTRIC CO Retained Earnings
BEGINNING BALANCE at Dec. 31, 2006		$2	$2,645	($103)	$1,069
BEGINNING BALANCE at Dec. 31, 2006							0	532	560		0	243	427		26	306	132
BEGINNING BALANCE (in shares) at Dec. 31, 2006		191,932,445					100				1,000				8,546,017
Net Income	334				334	125			125	45			45	60			60
Preferred stock redemption													(1)
Other comprehensive income (loss)	57			57
Dividends on common stock ($1.08/sh. in 2009, $1.08/sh. in 2008 and $1.04/sh. in 2007 for PEPCO HOLDINGS INC)					(203)				(86)				(39)				(50)
Reacquisition of subsidiary preferred stock			(1)
Issuance of common stock:
Original issue shares, net (in shares)		7,601,290
Original issue shares, net			200
DRP original shares (in shares)		979,155
DRP original shares			28
Net activity related to stock-based awards			(3)
Cumulative effect adjustment - uncertain tax positions					(7)				(2)
Capital distribution to Parent												(1)
Capital contribution from Parent								1								3
ENDING BALANCE (in shares) at Dec. 31, 2007		200,512,890					100				1,000				8,546,017
ENDING BALANCE at Dec. 31, 2007		2	2,869	(46)	1,193
ENDING BALANCE at Dec. 31, 2007							0	533	597		0	242	432		26	309	142
Net Income	300				300	116			116	68			68	64			64
Other comprehensive income (loss)	(216)			(216)
Dividends on common stock ($1.08/sh. in 2009, $1.08/sh. in 2008 and $1.04/sh. in 2007 for PEPCO HOLDINGS INC)					(222)				(89)				(52)				(46)
Transfer of deferred income tax liabilities to Parent																	6
Issuance of common stock:
Original issue shares, net (in shares)		17,095,081
Original issue shares, net			277
DRP original shares (in shares)		1,298,249
DRP original shares			29
Net activity related to stock-based awards			4
Capital contribution from Parent								78				62				35
ENDING BALANCE (in shares) at Dec. 31, 2008		218,906,220					100				1,000				8,546,017
ENDING BALANCE at Dec. 31, 2008	4,196	2	3,179	(262)	1,271
ENDING BALANCE at Dec. 31, 2008	4,190					1,235	0	611	624	752	0	304	448	536	26	344	166
Net Income	235				235	106			106	52			52	41			41
Other comprehensive income (loss)	21			21
Dividends on common stock ($1.08/sh. in 2009, $1.08/sh. in 2008 and $1.04/sh. in 2007 for PEPCO HOLDINGS INC)					(238)				0				(28)				(64)
Issuance of common stock:
Original issue shares, net (in shares)		1,210,261
Original issue shares, net			18
DRP original shares (in shares)		2,153,414
DRP original shares			31
Net activity related to stock-based awards			(1)
Capital contribution from Parent								94				32				129
ENDING BALANCE (in shares) at Dec. 31, 2009		222,269,895					100				1,000				8,546,017
ENDING BALANCE at Dec. 31, 2009	4,262	2	3,227	(241)	1,268
ENDING BALANCE at Dec. 31, 2009	$4,256					$1,435	$0	$705	$730	$808	$0	$336	$472	$642	$26	$473	$143

3_Statement Of Shareholders Equ

Statement Of Shareholders Equity And Other Comprehensive Income (Parenthetical) (PEPCO HOLDINGS INC, Retained Earnings, USD $)
	Total
Dividends on common stock, per share	1.04
Dividends on common stock, per share	1.08
Dividends on common stock, per share	1.08

ORGANIZATION

ORGANIZATION
	12 Months Ended Dec. 31, 2009 USD / shares
PEPCO HOLDINGS INC
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, 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 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 Business 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 Office Service (SOS) in Delaware, the District of Columbia and Maryland, and Basic Generation Service (BGS) in New Jersey. In this Form 10-K, these supply services are referred to generally as Default Electri
POTOMAC ELECTRIC POWER CO
ORGANIZATION	(1) ORGANIZATION Potomac Electric Power Company (Pepco) is engaged in the transmission and distribution of electricity in the District of Columbia 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 (SOS) 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/
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 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 Delaware and Maryland. Default Electricity Supply is known as Standard Offer Service (SOS) in both Delaware and Maryland. DPL is a wholly owned subsidiary of Conectiv, which is wholly owned by Pepco Holdings, Inc. (Pepco Holdings or PHI). In January2008, DPL completed the sale of its retail electric distribution assets and the sale of its wholesale electric transmission assets, both located on Virginias Eastern Shore.
ATLANTIC CITY ELECTRIC CO
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 (BGS) in New Jersey. 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
	12 Months Ended Dec. 31, 2009 USD / shares
PEPCO HOLDINGS INC
SIGNIFICANT ACCOUNTING POLICIES	(2)SIGNIFICANT ACCOUNTING POLICIES Consolidation Policy The accompanying consolidated financial statements include the accounts of Pepco Holdings and its wholly owned subsidiaries. All material intercompany balances and transactions between subsidiaries have been eliminated. Pepco Holdings uses the equity method to report investments, corporate joint ventures, partnerships, and affiliated companies in which it holds a 20% to 50% voting interest and cannot exercise control over the operations and policies of the investment. Undivided interests in several jointly owned electric plants previously held by PHI, and certain transmission and other facilities currently held, are consolidated in proportion to PHIs percentage interest in the facility. Change in Accounting Principle Historically PHI performed its goodwill impairment test on July1 each year. 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 PHIs new 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. This change in accounting principle had no effect on PHIs consolidated financial statements. For additional discussion on this matter see Note (6), Goodwill. Consolidation of Variable Interest Entities In accordance with the provisions of FASB guidance on variable interest entities (Accounting Standards Codification (ASC) 810), Pepco Holdings consolidates those variable interest entities with respect to which Pepco Holdings or a subsidiary is 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 purchase agreements (PPAs) with several entities to which the guidance applies. ACE and Pepco PPAs Pepco Holdings, through its ACE subsidiary, is a party to three PPAs with unaffiliated, non-utility generators (NUGs). Due to a variable element in the pricing structure of the NUGs, Pepco Holdings potentially assumes the variability in the operations of the plants related to the NUGs and, therefore, has a variable interest in the entities. Pepco Holdings continued, during 2009, to conduct exhaustive efforts to obtain information from these three entities, but was unable to obtain sufficient information to conduct the analysis required under FASB guidance to determine whether these three entities were variable interest entities or if ACE was the primary beneficiary. As a result, Pepco Holdings 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 with the NUGs for the years ended December31, 2009, 2008, and 2007, were approximately $282 million, $349 million and $327 million, respectively, of which approximately $262 million, $305 million and $292 million, respectively, related to power purchas
POTOMAC ELECTRIC POWER CO
SIGNIFICANT ACCOUNTING POLICIES	(2) SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities in the financial statements and accompanying notes. Although Pepco believes that its estimates and assumptions are reasonable, they are based upon information available to management at the time the estimates are made. Actual results may differ significantly from these estimates. Significant matters that involve the use of estimates include the assessment of contingencies, the calculation of future cash flows and fair value amounts for use in asset impairment evaluations, pension and other postretirement benefits assumptions, unbilled revenue calculations, the assessment of the probability of recovery of regulatory assets, and income tax provisions and reserves. Additionally, Pepco is subject to legal, regulatory, and other proceedings and claims that arise in the ordinary course of its business. Pepco records an estimated liability for these proceedings and claims when the loss is determined to be probable and is reasonably estimable. Change in Accounting Estimates During 2007, as a result of the depreciation study presented as part of Pepcos Maryland rate case, the Maryland Public Service Commission (MPSC) approved new lower depreciation rates for Pepcos Maryland distribution assets. This change resulted in lower depreciation expense of approximately $19 million for the last six months of 2007. Revenue Recognition Pepco recognizes revenue upon delivery of electricity to its customers, including amounts for services rendered, but not yet billed (unbilled revenue). Pepco recorded amounts for unbilled revenue of $89 million and $98 million as of December31, 2009 and 2008, respectively. These amounts are included in Accounts Receivable. Pepco calculates unbilled revenue using an output based methodology. This methodology is based on the supply of electricity intended for distribution to customers. The unbilled revenue process requires management to make assumptions and judgments about input factors such as customer sales mix, temperature, and estimated line losses (estimates of electricity expected to be lost in the process of its transmission and distribution to customers), all of which are inherently uncertain and susceptible to change from period to period, and if actual results differ from projected results, the impact could be material. Taxes related to the consumption of electricity by its customers, such as fuel, energy, or other similar taxes, are components of Pepcos tariffs and, as such, are billed to customers and recorded in Operating Revenues. Accruals for these taxes by Pepco are recorded in Other Taxes. Excise tax related generally to the consumption of gasoline by Pepco in the normal course of business is charged to operations, maintenance or construction, and is not material. Taxes Assessed by a Governmental Authori
DELMARVA POWER & LIGHT CO /DE/
SIGNIFICANT ACCOUNTING POLICIES	(2)SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities in the financial statements and accompanying notes. Although DPL believes that its estimates and assumptions are reasonable, they are based upon information available to management at the time the estimates are made. Actual results may differ significantly from these estimates. Significant matters that involve the use of estimates include the assessment of contingencies, the calculation of future cash flows and fair value amounts for use in asset impairment evaluations, fair value calculations (based on estimated market pricing) associated with derivative instruments, pension and other postretirement benefits assumptions, unbilled revenue calculations, the assessment of the probability of recovery of regulatory assets, and income tax provisions and reserves. Additionally, DPL is subject to legal, regulatory, and other proceedings and claims that arise in the ordinary course of its business. DPL records an estimated liability for these proceedings and claims when the loss is determined to be probable and is reasonably estimable. 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 DPLs new 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. This change in accounting principle has had no effect on DPLs financial statements. Change in Accounting Estimates During 2007, as a result of the depreciation study presented as part of DPLs Maryland rate case, the Maryland Public Service Commission (MPSC) approved new lower depreciation rates for DPLs Maryland distribution assets. Revenue Recognition DPL recognizes revenues upon delivery of electricity and gas to its customers, including amounts for services rendered, but not yet billed (unbilled revenue). DPL recorded amounts for unbilled revenue of $68 million and $52 million as of December31, 2009 and 2008, respectively. These amounts are included in Accounts Receivable. DPL calculates unbilled revenue using an output based methodology. This methodology is based on the supply of electricity or gas intended for distribution to customers. The unbilled revenue process requires management to make assumptions and judgments about input factors such as customer sales mix, temperature, and estimated line losses (estimates of electricity and gas expected to be lost in the process of its transmission and distribution to customers), all of which are inherently uncertain and susceptible to change from period to period, and if the actual results differ from the projected results, the impact could be
ATLANTIC CITY ELECTRIC CO
SIGNIFICANT ACCOUNTING POLICIES	(2) SIGNIFICANT ACCOUNTING POLICIES Consolidation Policy The accompanying consolidated financial statements include the accounts of ACE and its wholly owned subsidiary ACE Transition Funding. All intercompany balances and transactions between subsidiaries have been eliminated. ACE uses the equity method to report investments, corporate joint ventures, partnerships, and affiliated companies where it holds a 20% to 50% voting interest and cannot exercise control over the operations and policies of the investee. Individual interests in several jointly owned electric plants previously held by ACE, and certain transmission and other facilities currently held are consolidated in proportion to ACEs percentage interest in the facility. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities in the consolidated financial statements and accompanying notes. Although ACE believes that its estimates and assumptions are reasonable, they are based upon information available to management at the time the estimates are made. Actual results may differ significantly from these estimates. Significant matters that involve the use of estimates include the assessment of contingencies, the calculation of future cash flows and fair value amounts for use in asset impairment evaluations, pension and other postretirement benefits assumptions, unbilled revenue calculations, the assessment of the probability of recovery of regulatory assets, and income tax provisions and reserves. Additionally, ACE is subject to legal, regulatory, and other proceedings and claims that arise in the ordinary course of its business. ACE records an estimated liability for these proceedings and claims when the loss is determined to be probable and is reasonably estimable. Revenue Recognition ACE recognizes revenue upon delivery of electricity to its customers, including amounts for electricity delivered but not yet billed (unbilled revenue). ACE recorded amounts for unbilled revenue of $42 million and $45 million as of December31, 2009 and December31, 2008, respectively. These amounts are included in Accounts Receivable. ACE calculates unbilled revenue using an output based methodology. This methodology is based on the supply of electricity intended for distribution to customers. The unbilled revenue process requires management to make assumptions and judgments about input factors such as customer sales mix, temperature, and estimated line losses (estimates of electricity expected to be lost in the process of its transmission and distribution to customers), all of which are inherently uncertain and susceptible to change from period to period, and if the actual results differ from the projected results, the impact could be material. Taxes related to the delivery of electricity to its customers are a component of ACEs tariffs and, as such, are billed to customers and recorded

NEWLY ADOPTED ACCOUNTING STANDA

NEWLY ADOPTED ACCOUNTING STANDARDS
	12 Months Ended Dec. 31, 2009 USD / shares
PEPCO HOLDINGS INC
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 applied prospectively to business combinations for which the acquisition date was 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 was 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 nonfinancial 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 v
POTOMAC ELECTRIC POWER CO
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 applied prospectively to business combinations for which the acquisition date was 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 was 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 nonfinancial 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 Pepco. 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 Pepcos overall financial condition, results of operations, or cash flows. Pepco 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 provid
DELMARVA POWER & LIGHT CO /DE/
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 applied prospectively to business combinations for which the acquisition date was 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 was 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 nonfinancial 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
ATLANTIC CITY ELECTRIC CO
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 applied prospectively to business combinations for which the acquisition date was 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 was 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 nonfinancial 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 ACE. 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 ACEs overall financial condition, results of operations, or cash flows. ACE 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

RECENTLY ISSUED ACCOUNTING STAN

RECENTLY ISSUED ACCOUNTING STANDARDS, NOT YET ADOPTED
	12 Months Ended Dec. 31, 2009 USD / shares
PEPCO HOLDINGS INC
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 PHI. PHI does not expect this standard will have a material impact on its overall financial condition, results of operations, or cash flows. 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. PHI does not expect that the new guidance will result in a material change in accounting or disclosures in its financial statements. Fair Value Measurement and Disclosures (ASC 820) The FASB issued new disclosure requirements for recurring and non-recurring fair value measurements. Some of the requirements will be effective for PHI beginning with its March31, 2010 financial statements and include: (i)a disaggregation of balance sheet categories that are measured at fair value into classes (i.e. subsets of assets or liabilities within a balance sheet line item), (ii)a description of pricing inputs and valuation methodologies for instruments with Level 2 and 3 valuation inputs, and (iii)a reconciliation of transfers of instruments between Level 1 and 2 valuation categories. Beginning with its March31, 2011 financial statements, PHI will be required to disaggregate the Level 3 fair value measurement reconciliations into separate categories for purchases, sales, issuances, and settlements. PHI is evaluating the impact of this new guidance on its financial statement footnote disclosures.
POTOMAC ELECTRIC POWER CO
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. Pepco does not expect this standard will have a material impact on its overall financial condition, results of operations, or cash flows. 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 Pepco. Pepco does not expect that the new guidance will result in a material change in accounting or disclosures in its financial statements. Fair Value Measurement and Disclosures (ASC 820) The FASB issued new disclosure requirements for recurring and non-recurring fair value measurements. Some of the requirements will be effective for Pepco beginning with its March31, 2010 financial statements and include: (i)a disaggregation of balance sheet categories that are measured at fair value into classes (i.e. subsets of assets or liabilities within a balance sheet line item), (ii)a description of pricing inputs and valuation methodologies for instruments with Level 2 and 3 valuation inputs, and (iii)a reconciliation of transfers of instruments between Level 1 and 2 valuation categories. Beginning with its March31, 2011 financial statements, Pepco will be required to disaggregate the Level 3 fair value measurement reconciliations into separate categories for purchases, sales, issuances, and settlements. Pepco is evaluating the impact of this new guidance on its financial statement footnote disclosures.
DELMARVA POWER & LIGHT CO /DE/
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. DPL does not expect this standard will have a material impact 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. DPL does not expect that the new guidance will result in a material change in accounting or disclosures in its financial statements. Fair Value Measurement and Disclosures (ASC 820) The FASB issued new disclosure requirements for recurring and non-recurring fair value measurements. Some of the requirements will be effective for DPL beginning with its March31, 2010 financial statements and include: (i)a disaggregation of balance sheet categories that are measured at fair value into classes (i.e. subsets of assets or liabilities within a balance sheet line item), (ii)a description of pricing inputs and valuation methodologies for instruments with Level 2 and 3 valuation inputs, and (iii)a reconciliation of transfers of instruments between Level 1 and 2 valuation categories. Beginning with its March31, 2011 financial statements, DPL will be required to disaggregate the Level 3 fair value measurement reconciliations into separate categories for purchases, sales, issuances, and settlements. DPL is evaluating the impact of this new guidance on its financial statement footnote disclosures.
ATLANTIC CITY ELECTRIC CO
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. ACE does not expect this standard will have a material impact 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. ACE does not expect that the new guidance will result in a material change in accounting or disclosures in its financial statements. Fair Value Measurement and Disclosures (ASC 820) The FASB issued new disclosure requirements for recurring and non-recurring fair value measurements. Some of the requirements will be effective for ACE beginning with its March31, 2010 financial statements and include: (i)a disaggregation of balance sheet categories that are measured at fair value into classes (i.e. subsets of assets or liabilities within a balance sheet line item), (ii)a description of pricing inputs and valuation methodologies for instruments with Level 2 and 3 valuation inputs, and (iii)a reconciliation of transfers of instruments between Level 1 and 2 valuation categories. Beginning with its March31, 2011 financial statements, ACE will be required to disaggregate the Level 3 fair value measurement reconciliations into separate categories for purchases, sales, issuances, and settlements. ACE is evaluating the impact of this new guidance on its financial statement footnote disclosures.

SEGMENT INFORMATION

SEGMENT INFORMATION
	12 Months Ended Dec. 31, 2009 USD / shares
PEPCO HOLDINGS INC
SEGMENT INFORMATION	(5)SEGMENT INFORMATION Pepco Holdings management has identified its operating segments at December31, 2009 as Power Delivery, Conectiv Energy, Pepco Energy Services, and Other Non-Regulated. Corporate and Other 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. Segment financial information for the years ended December31, 2009, 2008, and 2007, is as follows: Year Ended December31, 2009 (millions of dollars) Competitive Energy Segments Power Delivery Conectiv Energy Pepco Energy Services Other Non- Regulated Corporate andOther(a) PHI Consolidated Operating Revenue $ 4,980 $ 2,171 (b) $ 2,383 $ 51 $ (326 ) $ 9,259 Operating Expense (c) 4,475 (b)(d) 2,123 2,294 4 (332 ) 8,564 Operating Income 505 48 89 47 6 695 Interest Income 3 1 1 4 (6 ) 3 Interest Expense 211 30 30 14 85 370 Other Income 11 1 3 1 1 17 Preferred StockDividends 3 (3 ) Income Tax Expense (Benefit) 109 5 23 5 (32 ) 110 Net Income (Loss) 199 (e) 15 40 30 (49 ) 235 Total Assets 10,239 2,091 734 1,506 1,209 15,779 Construction Expenditures $ 622 $ 200 $ 12 $ $ 30 $ 864 (a) The Total Assets line item in this column includes Pepco Holdings goodwill balance which is primarily attributable to Power Delivery. Corporate and Other includes intercompany amounts of $(326) million for Operating Revenue, $(318) million for Operating Expense, $(76) million for Interest Income, $(73) million for Interest Expense, and $(3) million for Preferred Stock Dividends. (b) Power Delivery purchased electric energy and capacity and natural gas from Conectiv Energy in the amount of $272 million for the year ended December31, 2009. (c) Includes depreciation and amortization expense of $391 million, consisting of $323 million for Power Delivery, $40 million for Conectiv Energy, $18 million for Pepco Energy Services, $2 million for Other Non-Regulated, and $8 million for Corporate and Other. (d) Includes $40 million ($24 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. Year Ended December31, 2008 (millions of dollars) Competitive Energy Segments Power Delivery Conectiv Energy Pepco Energy Services Other Non-Regulated Corporate and Other(a) PHI Consolidated Operating Revenue $ 5,487 $ 3,047 (b) $ 2,648 $ (60 )(
POTOMAC ELECTRIC POWER CO
SEGMENT INFORMATION	(5) SEGMENT INFORMATION The company operates its business as one regulated utility segment, which includes all of its services as described above.
DELMARVA POWER & LIGHT CO /DE/
SEGMENT INFORMATION	(5) SEGMENT INFORMATION The company operates its business as one regulated utility segment, which includes all of its services as described above.
ATLANTIC CITY ELECTRIC CO
SEGMENT INFORMATION	(5)SEGMENT INFORMATION The company operates its business as one regulated utility segment, which includes all of its services as described above.

GOODWILL

GOODWILL
	12 Months Ended Dec. 31, 2009 USD / shares
PEPCO HOLDINGS INC
GOODWILL	(6) GOODWILL Substantially all of PHIs $1.4 billion goodwill balance 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 November1, 2009 indicated that goodwill was not impaired. As of December31, 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 at December31, 2009, PHIs market capitalization has improved compared to earlier periods. PHI performed its previous annual goodwill impairment test as of July1, 2009, and interim impairment tests as of March31, 2009 and December31, 2008 when its market capitalization was further below book value than at November1, 2009, and concluded that its goodwill was not impaired at those earlier dates. In order to estimate the fair value of its Power Delivery reporting unit, PHI uses 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 methodology to estimate the fair value of Power Delivery. The estimation of fair value is dependent on a number of factors that are derived 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 affect the results of impairment testing. Assumptions 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 Corporateand Other) at November1, 2009. The sum of the fair value of all reporting units was reconciled to PHIs market capitalization at November1, 2009 to corroborate estim
DELMARVA POWER & LIGHT CO /DE/
GOODWILL	(6) GOODWILL DPLs goodwill balance of $8 million was unchanged during the year ended December31, 2009. All of DPLs goodwill was generated by its acquisition of Conowingo Power Company in 1995. DPLs annual impairment test as of November1, 2009 indicated that goodwill was not impaired at October31, 2009. As of December31, 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. 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 of the reporting unit. 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. 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 derived 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 affect the results of impairment testing. Assumptions 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.

REGULATORY ASSETS AND REGULATOR

REGULATORY ASSETS AND REGULATORY LIABILITIES
	12 Months Ended Dec. 31, 2009 USD / shares
PEPCO HOLDINGS INC
REGULATORY ASSETS AND REGULATORY LIABILITIES	(7) REGULATORY ASSETS AND REGULATORY LIABILITIES The components of Pepco Holdings regulatory asset balances at December31, 2009 and 2008 are as follows: 2009 2008 (millions of dollars) Securitized stranded costs $ 620 $ 674 Pension and OPEB costs 752 944 Deferred energy supply costs 12 31 Deferred income taxes 135 153 Deferred debt extinguishment costs 67 72 Unrecovered purchased power contract costs 7 9 Deferred other postretirement benefit costs 7 10 Phase in credits 10 Gas derivatives 42 56 Other 159 129 Total Regulatory Assets $ 1,801 $ 2,088 The components of Pepco Holdings regulatory liability balances at December31, 2009 and 2008 are as follows: 2009 2008 (millionsofdollars) Deferred income taxes due to customers $ 53 $ 57 Deferred energy supply costs 116 257 Federal and New Jersey tax benefits,related to securitized stranded costs 25 28 Asset removal costs 352 341 Excess depreciation reserve 58 74 Settlement proceeds Mirant bankruptcy claims 102 Gain from sale of divested assets 26 Other 9 8 Total Regulatory Liabilities $ 613 $ 893 A description for each category of regulatory assets and regulatory liabilities follows: Securitized Stranded Costs: Includes contract termination payments under a contract between ACE and an unaffiliated non-utility generator and costs associated with the regulated operations of ACEs electricity generation business which are no longer recoverable through customer rates. The recovery of these stranded costs has been securitized through the issuance by Atlantic City Electric Transition Funding LLC (ACE Funding) of transition bonds (Transition Bonds). A customer surcharge is collected by ACE to fund principal and interest payments on the Transition Bonds. The stranded costs are amortized over the life of the Transition Bonds, which mature between 2010 and 2023. A return is earned on these deferrals with the exception of income tax balances. Pension and OPEB Costs: Represents the unfunded portion of Pepco Holdings defined benefit pension and other postretirement benefit (OPEB) plans that is probable of recovery by Pepco, DPL and ACE in rates. A return is earned on these deferrals. Deferred Energy Supply Costs: The regulatory asset represents primarily deferred costs associated with a net under-recovery of Default Electricity Supply costs incurred by Pepco and DPL. A return is earned on these deferrals. The regulatory liability represents primarily deferred costs associated with a net over-recovery by ACE of Default Electricity Supply costs and other restructuring related costs incurred by ACE. A return is not earned on these deferrals. Deferred Income Taxes: Represents a receivable from Power Deliverys customers for tax benefits applicable to utility operations of Pepco, DPL, and ACE previously flowed through before the companies were ordere
POTOMAC ELECTRIC POWER CO
REGULATORY ASSETS AND REGULATORY LIABILITIES	(6) REGULATORY ASSETS AND REGULATORY LIABILITIES The components of Pepcos regulatory asset balances at December31, 2009 and 2008 are as follows: 2009 2008 (millionsofdollars) Deferred energy supply costs $ 6 $ 12 Deferred income taxes 40 53 Deferred debt extinguishment costs 36 39 Other 84 65 Total Regulatory Assets $ 166 $ 169 The components of Pepcos regulatory liability balances at December31, 2009 and 2008 are as follows: 2009 2008 (millionsofdollars) Deferred income taxes due to customers $ 15 $ 18 Deferred energy supply costs 16 9 Asset removal costs 113 107 Settlement proceeds - Mirant bankruptcy claims 102 Other 1 3 Total Regulatory Liabilities $ 145 $ 239 A description of the regulatory assets and regulatory liabilities is as follows: Deferred Energy Supply Costs: This regulatory asset represents primarily deferred energy costs associated with a net under-recovery of Default Electricity Supply costs in the District of Columbia. The regulatory liability represents deferred transmission and energy costs associated with a net over-recovery of Default Electricity Supply costs incurred in the District of Columbia and Maryland. A return is earned on these deferrals. Deferred Income Taxes: Represents a receivable from our customers for tax benefits Pepco has previously flowed through before the company was ordered to account for the tax benefits as deferred income taxes. As the temporary differences between the financial statement basis and tax basis of assets reverse, the deferred recoverable balances are reversed. There is no return earned on these deferrals. Deferred Debt Extinguishment Costs: Represents the costs of debt extinguishment for which recovery through regulated utility rates is considered probable and, if approved, will be amortized to interest expense during the authorized rate recovery period. A return is earned on these deferrals. Other:Represents miscellaneous regulatory assets that generally are being amortized over 1 to 20 years. Also includes the under-recovery of administrative costs associated with Default Electricity Supply in the District of Columbia and Maryland. These regulatory assets generally do not earn a return. Deferred Income Taxes Due to Customers: Represents the portions of deferred income tax liabilities applicable to Pepcos utility operations that have not been reflected in current customer rates for which future payment to customers is probable. As temporary differences between the financial statement basis and tax basis of assets reverse, deferred recoverable income taxes are amortized. There is no return earned on these deferrals. Asset Removal Costs: Pepcos depreciation rates include a component for removal costs, as approved by its federal and state regulatory commissions. Pepco has recorded a regulatory liability for its estimate of the difference between incurred removal costs and the level of removal costs recovered through rates. There i
DELMARVA POWER & LIGHT CO /DE/
REGULATORY ASSETS AND REGULATORY LIABILITIES	(7) REGULATORY ASSETS AND REGULATORY LIABILITIES The components of DPLs regulatory asset balances at December31, 2009 and 2008 are as follows: 2009 2008 (millionsofdollars) Deferred energy supply costs $ 6 $ 19 Deferred income taxes 68 74 Deferred debt extinguishment costs 18 19 Phase in credits 10 COPCO acquisition adjustment 35 38 Gas derivatives 42 56 Other 38 28 Total Regulatory Assets $ 207 $ 244 The components of DPLs regulatory liability balances at December31, 2009 and 2008 are as follows: 2009 2008 (millionsofdollars) Deferred income taxes due to customers $ 38 $ 39 Deferred energy supply costs 11 1 Asset removal costs 239 234 Other 2 3 Total Regulatory Liabilities $ 290 $ 277 A description for each category of regulatory assets and regulatory liabilities follows: Deferred Energy Supply Costs: This regulatory asset represents primarily deferred energy costs associated with a net under-recovery of Default Electricity Supply costs incurred in Maryland and deferred fuel costs for DPLs gas business. The gas deferred fuel costs are recovered over a twelve month period and include a return component. The regulatory liability represents primarily deferred energy and transmission costs associated with a net over-recovery of Default Electricity Supply costs incurred in Delaware and does not earn a return. Deferred Income Taxes: Represents a receivable from our customers for tax benefits DPL has previously flowed through before the company was ordered to account for the tax benefits as deferred income taxes. As the temporary differences between the financial statement basis and tax basis of assets reverse, the deferred recoverable balances are reversed. There is no return earned on these deferrals. Deferred Debt Extinguishment Costs: Represents the costs of debt extinguishment for which recovery through regulated utility rates is considered probable and, if approved, will be amortized to interest expense during the authorized rate recovery period. A return is earned on these deferrals. Phase In Credits: Represented phase-in credits for participating Maryland and Delaware residential and small commercial customers to mitigate the immediate impact of significant rate increases due to energy costs in 2006. The deferral period for Delaware was May1, 2006 to January1, 2008 with recovery occurring over a 17-month period beginning January 2008. The Delaware deferral was recovered from participating customers on a straight-line basis. The deferral period for Maryland was June1, 2006 to June1, 2007, with the recovery occurring over an 18-month period beginning June 2007. Recovery of all deferred amounts was completed during 2009. There was no return earned on these deferrals. COPCO Acquisition Adjustment: On July19, 2007, the MPSC issued an order which provided for the recovery of a portion of DPLs goodwill. As a result of this order, $41 million in DPL goodwill w
ATLANTIC CITY ELECTRIC CO
REGULATORY ASSETS AND REGULATORY LIABILITIES	(6)REGULATORY ASSETS AND REGULATORY LIABILITIES The components of ACEs regulatory asset balances at December31, 2009 and 2008 are as follows: 2009 2008 (millionsofdollars) Securitized stranded costs $ 620 $ 674 Deferred income taxes 27 26 Deferred debt extinguishment costs 13 14 Unrecovered purchased power contract costs 7 9 Deferred other postretirement benefit costs 7 10 Other 38 35 Total Regulatory Assets $ 712 $ 768 The components of ACEs regulatory liability balances at December31, 2009 and 2008 are as follows: 2009 2008 (millionsofdollars) Deferred energy supply costs $ 89 $ 247 Federal and New Jersey tax benefits, related to securitized stranded costs 25 28 Excess depreciation reserve 58 74 Gain from sale of divested assets 26 Other 6 2 Total Regulatory Liabilities $ 178 $ 377 A description for each category of regulatory assets and regulatory liabilities follows: Securitized Stranded Costs: Includes contract termination payments under a contract between ACE and an unaffiliated non-utility generator and costs associated with the regulated operations of ACEs electricity generation business which are no longer recoverable through customer rates. The recovery of these stranded costs has been securitized through the issuance by Atlantic City Electric Transition Funding LLC (ACE Funding) of transition bonds (Transition Bonds). A customer surcharge is collected by ACE to fund principal and interest payments on the Transition Bonds. The stranded costs are amortized over the life of the Transition Bonds, which mature between 2010 and 2023. A return is earned on these deferrals with the exception of tax balances. Deferred Income Taxes: Represents a receivable from our customers for tax benefits ACE has previously flowed through before the company was ordered to account for the tax benefit as deferred income taxes. As the temporary differences between the financial statement basis and tax basis of assets reverse, the deferred recoverable balances are reversed. There is no return earned on these deferrals. Deferred Debt Extinguishment Costs: Represents the costs of debt extinguishment for which recovery through regulated utility rates is considered probable and, if approved, will be amortized to interest expense during the authorized rate recovery period. A return is earned on these deferrals. Unrecovered Purchased Power Contract Costs:Represents deferred costs related to purchase power contracts entered into by ACE. The amortization period began in July 1994 and will end in May 2014. A return is earned on these deferrals. Deferred Other Postretirement Benefit Costs: Represents the non-cash portion of other postretirement benefit costs deferred by ACE during 1993 through 1997. This cost is being recovered over a 15-year period that began on January1, 1998. There is no return earned on this deferral. Other: Represents miscellaneous regulatory assets that generally a

LEASING ACTIVITIES

LEASING ACTIVITIES
	12 Months Ended Dec. 31, 2009 USD / shares
PEPCO HOLDINGS INC
LEASING ACTIVITIES	(8)LEASING ACTIVITIES Investment in Finance Leases Held in Trust As of December31, 2009 and 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 (2), Significant Accounting Policies Changes in Accounting Estimates, and Note (17), Commitments and ContingenciesPHIs Cross-Border Energy Lease Investments, during 2009 and 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 these reassessments, PHI recorded a reduction in its cross-border energy lease investment revenue of $3 million in 2009 and $124 million in 2008. The components of the cross-border energy lease investments, as of December31, are summarized below: 2009 2008 (millions of dollars) Scheduled lease payments to PHI, net of non-recourse debt $ 2,281 $ 2,281 Less:Unearned and deferred income (895 ) (946 ) Investment in finance leases held in trust 1,386 1,335 Less:Deferred income tax liabilities (748 ) (679 ) Net investment in finance leases held in trust $ 638 $ 656 Income recognized from cross-border energy lease investments was comprised of the following for the years ended December31: 2009 2008 2007 (millions of dollars) Pre-tax income from PHIs cross-border energy leaseinvestments (included in Other Revenue) $ 54 $ 75 $ 76 Non-cash charge to reduce equity value of PHIs cross-border energy lease investments (3 ) (124 ) Pre-tax income (loss) from PHIs cross-border energy lease investments after adjustment 51 (49 ) 76 Income tax expense (benefit) 16 (12 ) 16 Net income (loss) from PHIs cross-border energy lease investments $ 35 $ (37 ) $ 60 Scheduled lease payments from the cross-border energy lease investments are net of non-recourse debt. Minimum lease payments receivable from the cross-border energy lease investments for each of the years 2010 through 2014 and thereafter are $16 million for 2010, zero for each of the years 2011 through 2014, and $1,370 million thereafter. Lease Commitments Pepco leases its consolidated control center, which is an integrated energy management center used by Pepco to centrally control the operation of its transmission and distribution systems. This lease is accounted for as a capital lease and was initially recorded at the present value of future lease payments, which totaled $152 million. The lease requires semi-annual payments of approximately $8 million over a 25-year period beginning in December 1994, and provides for transfer of ownership of the system to Pepco for $1 at the end of the lease term.
POTOMAC ELECTRIC POWER CO
LEASING ACTIVITIES	(7) LEASING ACTIVITIES Lease Commitments Pepco leases its consolidated control center, which is an integrated energy management center used by Pepco to centrally control the operation of its transmission and distribution systems. This lease is accounted for as a capital lease and was initially recorded at the present value of future lease payments, which totaled $152 million. The lease requires semi-annual payments of approximately $8 million over a 25-year period beginning in December 1994, and provides for transfer of ownership of the system to Pepco for $1 at the end of the lease term. Under FASB guidance on regulated operations, the amortization of leased assets is modified so that the total interest expense charged on the obligation and amortization expense of the leased asset is equal to the rental expense allowed for rate-making purposes. This lease has been treated as an operating lease for rate-making purposes. Capital lease assets recorded within Property, Plant and Equipment at December31, 2009 and 2008 are comprised of the following: Original Cost Accumulated Amortization NetBook Value (millions of dollars) At December31, 2009 Transmission $ 76 $ 27 $ 49 Distribution 76 26 50 Other 3 3 Total $ 155 $ 56 $ 99 At December 31, 2008 Transmission $ 76 $ 24 $ 52 Distribution 76 23 53 Other 3 3 Total $ 155 $ 50 $ 105 The approximate annual commitments under capital leases are $15 million for each year 2010 through 2014, and $77 million thereafter. Rental expense for operating leases was $3 million, $4 million and $4 million for the years ended December31, 2009, 2008 and 2007, respectively. Total future minimum operating lease payments for Pepco as of December31, 2009 are $8 million in 2010, $1 million in each of the years 2011 through 2014, and $2 million thereafter.
DELMARVA POWER & LIGHT CO /DE/
LEASING ACTIVITIES	(8) LEASING ACTIVITIES DPL leases an 11.9% interest in the Merrill Creek Reservoir. The lease is an operating lease and payments over the remaining lease term, which ends in 2032, are $102 million in the aggregate. DPL also has long-term leases for certain other facilities and equipment. Total future minimum operating lease payments for DPL, including the Merrill Creek Reservoir lease, as of December31, 2009, are $18 million in 2010, $7 million in each of the years 2011 through 2014, and $97 million thereafter. Rental expense for operating leases, including the Merrill Creek Reservoir lease, was $9 million, $9 million and $10 million for the years ended December31, 2009, 2008 and 2007, respectively.
ATLANTIC CITY ELECTRIC CO
LEASING ACTIVITIES	(7)LEASING ACTIVITIES ACE leases certain types of property and equipment for use in its operations. Rental expense for operating leases was $9 million, $9 million and $10 million for the years ended December31, 2009, 2008 and 2007, respectively. Total future minimum operating lease payments for ACE as of December31, 2009 are $9 million in 2010, $2 million in each of the years 2011 through 2014, and $19 million thereafter.

PROPERTY, PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT
	12 Months Ended Dec. 31, 2009 USD / shares
PEPCO HOLDINGS INC
PROPERTY, PLANT AND EQUIPMENT	(9)PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment is comprised of the following: At December31, 2009 OriginalCost Accumulated Depreciation Net BookValue (millions of dollars) Generation $ 1,930 $ 690 $ 1,240 Distribution 7,229 2,639 4,590 Transmission 2,193 751 1,442 Gas 398 116 282 Construction work in progress 733 733 Non-operating and other property 1,234 658 576 Total $ 13,717 $ 4,854 $ 8,863 At December31, 2008 Generation $ 1,782 $ 647 $ 1,135 Distribution 6,874 2,501 4,373 Transmission 2,101 739 1,362 Gas 386 110 276 Construction work in progress 584 584 Non-operating and other property 1,199 615 584 Total $ 12,926 $ 4,612 $ 8,314 The non-operating and other property amounts include balances for general plant, distribution and transmission plant held for future use as well as other property held by non-utility subsidiaries. Pepco Holdings utility subsidiaries use separate depreciation rates for each electric plant account. The rates vary from jurisdiction to jurisdiction. Asset Sales In January2008, DPL completed (i)the sale of its retail electric distribution assets on the Eastern Shore of Virginia for a purchase price of approximately $49 million, and (ii)the sale of its wholesale electric transmission assets located on the Eastern Shore of Virginia for a purchase price of approximately $5 million. In 2007, ACE completed the sale of the B.L. England generating facility for a price of $9 million. In 2008, ACE received an additional $4 million in settlement of an arbitration proceeding concerning the terms of the purchase agreement. See Note (7), Regulatory Assets and Regulatory Liabilities, for treatment of gains from these sales. Jointly Owned Plant PHIs Consolidated Balance Sheets include its proportionate share of assets and liabilities related to jointly owned plant. At December31, 2009 and 2008, PHIs subsidiaries had a $14 million and $15 million net book value ownership interest in transmission and other facilities in which various parties also have ownership interests, respectively. PHIs share of the operating and maintenance expenses of the jointly-owned plant is included in the corresponding expenses in the Consolidated Statements of Income. PHI is responsible for providing its share of the financing for the above jointly-owned facilities.
POTOMAC ELECTRIC POWER CO
PROPERTY, PLANT AND EQUIPMENT	(8) PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment is comprised of the following: Original Cost Accumulated Depreciation NetBook Value (millions of dollars) At December31, 2009 Distribution $ 4,386 $ 1,808 $ 2,578 Transmission 858 358 500 Construction work in progress 175 175 Non-operating and other property 446 315 131 Total $ 5,865 $ 2,481 $ 3,384 At December31, 2008 Distribution $ 4,201 $ 1,730 $ 2,471 Transmission 801 344 457 Construction work in progress 162 162 Non-operating and other property 443 297 146 Total $ 5,607 $ 2,371 $ 3,236 The non-operating and other property amounts include balances for general plant, distribution and transmission plant held for future use, intangible plant and non-utility property.
DELMARVA POWER & LIGHT CO /DE/
PROPERTY, PLANT AND EQUIPMENT	(9) PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment is comprised of the following: At December31, 2009 Original Cost Accumulated Depreciation Net BookValue (millions of dollars) Distribution $ 1,430 $ 411 $ 1,019 Transmission 684 211 473 Gas 398 116 282 Construction work in progress 92 92 Non-operating and other property 203 122 81 Total $ 2,807 $ 860 $ 1,947 At December31, 2008 Distribution $ 1,358 $ 393 $ 965 Transmission 641 205 436 Gas 386 110 276 Construction work in progress 71 71 Non-operating and other property 200 119 81 Total $ 2,656 $ 827 $ 1,829 The balances of all property, plant and equipment, which are primarily electric transmission and distribution property, are stated at original cost. Utility plant is generally subject to a first mortgage lien. Asset Sales In January 2008, DPL completed (i)the sale of its retail electric distribution assets on the Eastern Shore of Virginia for a purchase price of approximately $49 million, and (ii)the sale of its wholesale electric transmission assets located on the Eastern Shore of Virginia for a purchase price of approximately $5 million.
ATLANTIC CITY ELECTRIC CO
PROPERTY, PLANT AND EQUIPMENT	(8)PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment is comprised of the following: At December31, 2009 Original Cost Accumulated Depreciation NetBook Value (millions of dollars) Generation $ 10 $ 9 $ 1 Distribution 1,413 420 993 Transmission 651 182 469 Construction work in progress 94 94 Non-operating and other property 160 88 72 Total $ 2,328 $ 699 $ 1,629 At December31, 2008 Generation $ 10 $ 9 $ 1 Distribution 1,316 379 937 Transmission 658 190 468 Construction work in progress 71 71 Non-operating and other property 161 88 73 Total $ 2,216 $ 666 $ 1,550 The balances of all property, plant and equipment, which are primarily electric transmission and distribution property, are stated at original cost. Utility plant is generally subject to a first mortgage lien. Jointly Owned Plant ACEs Consolidated Balance Sheets include its proportionate share of assets and liabilities related to jointly owned plant. At December31, 2009 and 2008, ACEs subsidiaries had a $9 million net book value ownership interest in transmission and other facilities in which various parties also have ownership interests. ACEs share of the operating and maintenance expenses of the jointly-owned plant is included in the corresponding expenses in the Consolidated Statements of Income. ACE is responsible for providing its share of the financing for the above jointly-owned facilities. Asset Sales In 2007, ACE completed the sale of the B.L. England generating facility for a price of $9 million. In 2008, ACE received an additional $4 million in settlement of an arbitration proceeding concerning the terms of the purchase agreement. See Note (6), Regulatory Assets and Regulatory Liabilities, for treatment of gains from these sales.

PENSIONS AND OTHER POSTRETIREME

PENSIONS AND OTHER POSTRETIREMENT BENEFITS
	12 Months Ended Dec. 31, 2009 USD / shares
PEPCO HOLDINGS INC
PENSIONS AND OTHER POSTRETIREMENT BENEFITS	(10)PENSIONS AND OTHER POSTRETIREMENT BENEFITS Pension Benefits and Other Postretirement Benefits Pepco Holdings sponsors the PHI Retirement Plan, which covers substantially all employees of Pepco, DPL, ACE and certain employees of other Pepco Holdings subsidiaries. Pepco Holdings also provides supplemental retirement benefits to certain eligible executive and key employees through nonqualified retirement plans. Pepco Holdings provides certain postretirement health care and life insurance benefits for eligible retired employees. Most employees hired on January1, 2005 or later will not have company subsidized retiree medical coverage; however, they will be able to purchase coverage at full cost through PHI. 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. Pepco Holdings accounts for the PHI Retirement Plan, nonqualified retirement plans, and its postretirement health care and life insurance benefits for eligible employees in accordance with FASB guidance on retirement benefits. PHIs financial statement disclosures are also prepared in accordance with FASB guidance on retirement benefits. All amounts in the following tables are in millions of dollars: Pension Benefits OtherPostretirement Benefits At December31, 2009 2008 2009 2008 Change in Benefit Obligation Benefit obligation at beginning of year $ 1,753 $ 1,701 $ 653 $ 620 Service cost 36 36 7 7 Interest cost 111 108 40 40 Amendments 1 15 Actuarial loss (gain) 72 3 (10 ) 24 Benefits paid (a) (177 ) (110 ) (39 ) (38 ) Benefit obligation at end of year $ 1,796 $ 1,753 $ 651 $ 653 Change in Plan Assets Fair value of plan assets at beginning of year $ 1,123 $ 1,631 $ 192 $ 234 Actual return on plan assets 248 (403 ) 40 (56 ) Company contributions 306 5 49 52 Benefits paid (a) (177 ) (110 ) (39 ) (38 ) Fair value of plan assets at end of year $ 1,500 $ 1,123 $ 242 $ 192 Funded Status at end of year (plan assets less plan obligations) $ (296 ) $ (630 ) $ (409 ) $ (461 ) (a) Other Postretirement Benefits paid is net of Medicare Part D subsidy receipts of $3 million in 2009 and $2 million in 2008. At December31, 2009, PHI Retirement Plan assets were $1.5 billion and the accumulated benefit obligation (ABO) was approximately $1.6 billion. At December31, 2008, PHIs Retirement Plan assets were approximately $1.1 billion and
POTOMAC ELECTRIC POWER CO
PENSIONS AND OTHER POSTRETIREMENT BENEFITS	(9)PENSIONS AND OTHER POSTRETIREMENT BENEFITS Pepco accounts for its participation in the Pepco Holdings benefit plans as participation in a multi-employer plan. For 2009, 2008, and 2007, Pepco was responsible for $38 million, $24 million and $22 million, respectively, of the pension and other postretirement net periodic benefit cost incurred by Pepco Holdings. Pepco made discretionary, tax-deductible contributions of $170 million to the PHI Retirement Plan for the year ended December31, 2009. No contributions were made for the years ended December31, 2008 and 2007. In addition, Pepco made contributions of $8 million, $9 million, and $10 million, respectively, to the other postretirement benefit plans for the years ended December31, 2009, 2008 and 2007.At December31, 2009 and 2008, Pepcos prepaid pension expense of $295million and $142million, and other postretirement benefit obligation of $71million and $49million, effectively represent assets and benefit obligations resulting from Pepcos participation in the Pepco Holdings benefit plans.
DELMARVA POWER & LIGHT CO /DE/
PENSIONS AND OTHER POSTRETIREMENT BENEFITS	(10) PENSIONS AND OTHER POSTRETIREMENT BENEFITS DPL accounts for its participation in the Pepco Holdings benefit plans as participation in a multi-employer plan. For 2009, 2008, and 2007, DPL was responsible for $25 million, $3 million and $4 million, respectively, of the pension and other postretirement net periodic benefit cost incurred by Pepco Holdings. DPL made discretionary, tax-deductible contributions of $10 million to the PHI Retirement Plan for the year ended December31, 2009. No contributions were made for the years ended December31, 2008 and 2007. In addition, DPL made contributions of $10 million, $9million and $9 million, respectively to the other postretirement benefit plans for the years ended December31, 2009, 2008 and 2007. At December31, 2009 and 2008, DPLs prepaid pension expense of $157million and $184million, and other postretirement benefit obligation of $23 million and $4 million, effectively represent assets and benefit obligations resulting from DPLs participation in the Pepco Holdings benefit plans.
ATLANTIC CITY ELECTRIC CO
PENSIONS AND OTHER POSTRETIREMENT BENEFITS	(9)PENSIONS AND OTHER POSTRETIREMENT BENEFITS ACE accounts for its participation in the Pepco Holdings benefit plans as participation in a multi-employer plan. For 2009, 2008, and 2007, ACE was responsible for $20 million, $12 million and $11 million, respectively, of the pension and other postretirement net periodic benefit cost incurred by Pepco Holdings. ACE made discretionary tax-deductible contributions of $60 million to the PHI Retirement Plan for the year ended December31, 2009. No contributions were made for the years ended December31, 2008 and 2007. In addition, ACE made contributions of $6 million, $7million and $7 million, respectively, to the other postretirement benefit plans for the years ended December31, 2009, 2008 and 2007. At December31, 2009 and 2008, ACEs prepaid pension expense of $63million and $6million, and other postretirement benefit obligation of $25 million and $41million, respectively, effectively represent assets and benefit obligations resulting from ACEs participation in the Pepco Holdings benefit plans.

DEBT

DEBT
	12 Months Ended Dec. 31, 2009 USD / shares
PEPCO HOLDINGS INC
DEBT	(11)DEBT Long-Term Debt The components of long-term debt are shown below. At December31, Interest Rate Maturity 2009 2008 (millionsofdollars) First Mortgage Bonds Pepco: 5.75% (a) 2010 $ 16 $ 16 4.95% (a)(b) 2013 200 200 4.65% (a)(b) 2014 175 175 6.20% (a)(b) 2022 110 5.375% (a) 2024 38 38 5.75% (a)(b) 2034 100 100 5.40% (a)(b) 2035 175 175 6.50% (a)(b) 2037 500 500 7.90% 2038 250 250 ACE: 7.25% - 7.63% 2010-2014 8 8 6.63% 2013 69 69 7.68% 2015-2016 17 17 7.75% 2018 250 250 6.80% (a) 2021 39 39 5.60% (a) 2025 4 4 5.80% (a)(b) 2034 120 120 5.80% (a)(b) 2036 105 105 DPL: 6.40% 2013 250 250 5.22% (a) 2016 100 5.20% (a) 2019 31 4.90% (a)(e) 2026 35 Total First Mortgage Bonds $ 2,592 $ 2,316 Unsecured Tax-Exempt Bonds DPL: 5.20% (c) 2019 $ $ 31 5.50% (d) 2025 15 15 4.90% (c)(e) 2026 35 5.65% (d) 2028 16 16 Total Unsecured Tax-Exempt Bonds $ 31 $ 97 (a) Represents a series of First Mortgage Bonds issued by the indicated company (Collateral First Mortgage Bonds) as collateral for an outstanding series of senior notes issued by the company or tax-exempt bonds issued for the benefit of the company. The maturity date, optional and mandatory prepayment provisions, if any, interest rate, and interest payment dates on each series of senior notes or the obligations in respect of the tax-exempt bonds are identical to the terms of the corresponding series of Collateral First Mortgage Bonds. Payments of principal and interest on a series of senior notes or the companys obligations in respect of the tax-exempt bonds satisfy the corresponding payment obligations on the related series of Collateral First Mortgage Bonds. Because each series of senior notes and tax-exempt bonds and the corresponding series of Collateral First Mortgage Bonds securing that series of senior notes or tax-exempt bonds effectively represents a single financial obligation, the senior notes and the tax-exempt bonds are not separately shown on the table. (b) Represents a series of Collateral First Mortgage Bonds issued by the indicated company that will, at such time as there are no First Mortgage Bonds of the issuing company outstanding (other than Collateral First Mortgage Bonds securing payment of senior notes), cease to secure the corresponding series of senior notes and will be cancelled. (c) In September 2009, DPL issued Collateral First Mortgage Bonds to secure its reimbursement obligations under a bond insurance policy insuring the principal and interest payments on this series of tax-exempt bonds previously issued for the benefit of DPL. Because this series of tax-exempt
POTOMAC ELECTRIC POWER CO
DEBT	(10)DEBT Long-Term Debt Long-term debt outstanding as of December31, 2009 and 2008 is presented below. Type of Debt InterestRate Maturity 2009 2008 (millions of dollars) First Mortgage Bonds 5.75 %(a) 2010 $ 16 $ 16 4.95 %(a)(b) 2013 200 200 4.65 %(a)(b) 2014 175 175 6.20 %(a)(b) 2022 110 5.375 %(a) 2024 38 38 5.75 %(a)(b) 2034 100 100 5.40 %(a)(b) 2035 175 175 6.50 %(a)(b) 2037 500 500 7.90 % 2038 250 250 Total First Mortgage Bonds 1,564 1,454 Medium-Term Notes 6.25 % 2009 50 Total long-term debt 1,564 1,504 Net unamortized discount (9 ) (9 ) Current portion of long-term debt (16 ) (50 ) Total net long-term debt $ 1,539 $ 1,445 (a) Represents a series of First Mortgage Bonds issued by Pepco (Collateral First Mortgage Bonds) as collateral for an outstanding series of senior notes issued by the company or tax-exempt bonds issued by or for the benefit of Pepco. The maturity date, optional and mandatory prepayment provisions, if any, interest rate, and interest payment dates on each series of senior notes or the obligations in respect of the tax-exempt bonds are identical to the terms of the corresponding series of Collateral First Mortgage Bonds. Payments of principal and interest on a series of senior notes or the companys obligations in respect of the tax-exempt bonds satisfy the corresponding payment obligations on the related series of Collateral First Mortgage Bonds. Because each series of senior notes and tax-exempt bonds and the corresponding series of Collateral First Mortgage Bonds securing that series of senior notes or tax-exempt bonds effectively represents a single financial obligation, the senior notes and the tax-exempt bonds are not separately shown on the table. (b) Represents a series of Collateral First Mortgage Bonds issued by Pepco that will, at such time as there are no First Mortgage Bonds of Pepco outstanding (other than Collateral First Mortgage Collateral Bonds securing payment of senior notes), cease to secure the corresponding series of senior notes and will be cancelled. The outstanding First Mortgage Bonds are subject to a lien on substantially all of Pepcos property, plant and equipment. The aggregate principal amount of long-term debt outstanding at December31, 2009, that will mature in each of 2010 through 2014 and thereafter is as follows: $16 million in 2010, zero in 2011 and 2012, $200 million in 2013, $175 million in 2014, and $1,173 million thereafter. Pepcos long-term debt is subject to certain covenants. Pepco is in compliance with all requirements. Short-Term Debt Pepco has traditionally used a number of sources to fulfill short-term funding needs, such as commercial paper, shor
DELMARVA POWER & LIGHT CO /DE/
DEBT	(11)DEBT Long-Term Debt Long-term debt outstanding as of December31, 2009 and 2008 is presented below: Type of Debt InterestRate Maturity 2009 2008 (millionsofdollars) First Mortgage Bonds 6.40 % 2013 $ 250 $ 250 5.20 % 2019 (c) 31 4.90 % 2026 (b)(c) 35 5.22 % 2016 (c) 100 416 250 Unsecured Tax-Exempt Bonds 5.20 % 2019 (d) 31 5.50 % 2025 (a) 15 15 4.90 % 2026 (b)(d) 35 5.65 % 2028 (a) 16 16 31 97 Medium-Term Notes (unsecured) 7.56%-7.58 % 2017 14 14 6.81 % 2018 4 4 7.61 % 2019 12 12 7.72 % 2027 10 10 40 40 Notes (unsecured) 5.00 % 2014 100 100 5.00 % 2015 100 100 5.22 % 2016 (e) 100 200 300 Total long-term debt 687 687 Unamortized discount (1 ) (1 ) Current portion of long-term debt (31 ) Total net long-term debt $ 655 $ 686 (a) The bonds are subject to mandatory tender on July1, 2010. (b) The bonds are subject to mandatory tender on May1, 2011. (c) Represents a series of First Mortgage Bonds issued by DPL (Collateral First Mortgage Bonds) as collateral for an outstanding series of senior notes issued by the company or tax-exempt bonds issued for the benefit of the company. The maturity date, optional and mandatory prepayment provisions, if any, interest rate, and interest payment dates on each series of senior notes or the obligations in respect of the tax-exempt bonds are identical to the terms of the corresponding series of Collateral First Mortgage Bonds. Payments of principal and interest on a series of senior notes or the companys obligations in respect of the tax-exempt bonds satisfy the corresponding payment obligations on the related series of Collateral First Mortgage Bonds. Because each series of senior notes and tax-exempt bonds and the corresponding series of Collateral First Mortgage Bonds securing that series of senior notes or tax-exempt bonds effectively represents a single financial obligation, the senior notes and the tax-exempt bonds are not separately shown on the table. (d) In September 2009, DPL issued Collateral First Mortgage Bonds to secure its reimbursement obligations under a bond insurance policy insuring the principal and interest payments on this series of tax-exempt bonds previously issued for the benefit of DPL. Because this series of tax-exempt bonds and the related series of Collateral Fi
ATLANTIC CITY ELECTRIC CO
DEBT	(10)DEBT Long-Term Debt Long-term debt outstanding as of December31, 2009 and 2008 is presented below. Type of Debt Interest Rate Maturity 2009 2008 (millionsofdollars) First Mortgage Bonds 7.25%-7.63 % 2010-2014 $ 8 $ 8 6.63 % 2013 69 69 7.68 % 2015-2016 17 17 7.75 % 2018 250 250 6.80 % (a) 2021 39 39 5.60 % (a) 2025 4 4 5.80 %(a)(b) 2034 120 120 5.80 %(a)(b) 2036 105 105 Total long-term debt 612 612 Net unamortized discount (2 ) (2 ) Current portion of long-term debt (1 ) Total net long-term debt $ 609 $ 610 Transition Bonds Issued by ACE Funding 2.89 % 2011 $ $ 5 4.21 % 2013 34 57 4.46 % 2016 49 52 4.91 % 2017 118 118 5.05 % 2020 54 54 5.55 % 2023 147 147 402 433 Net unamortized discount Current portion of long-term debt (34 ) (32 ) Total net long-term Transition Bonds Issued by ACE Funding $ 368 $ 401 (a) Represents a series of First Mortgage Bonds issued by ACE (Collateral First Mortgage Bonds) as collateral for an outstanding series of senior notes issued by the company or tax-exempt bonds issued by or for the benefit of ACE. The maturity date, optional and mandatory prepayment provisions, if any, interest rate, and interest payment dates on each series of senior notes or the obligations in respect of the tax-exempt bonds are identical to the terms of the corresponding series of Collateral First Mortgage Bonds. Payments of principal and interest on a series of senior notes or the companys obligation in respect of the tax-exempt bonds satisfy the corresponding payment obligations on the related series of Collateral First Mortgage Bonds. Because each series of senior notes and tax-exempt bonds and the corresponding series of Collateral First Mortgage Bonds securing that series of senior notes or tax-exempt bonds effectively represents a single financial obligation, the senior notes and the tax-exempt bonds are not separately shown on the table. (b) Represents a series of Collateral First Mortgage Bonds issued by ACE that will, at such time as there are no First Mortgage Bonds of ACE outstanding (other than Collateral First Mortgage Bonds securing payment of senior notes), cease to secure the corresponding series of senior notes and will be cancelled. The outstanding First Mortgage Bonds issued by ACE are subject to a lien on substantially all of ACEs property, plant and equipment. ACE Funding was established in 2001 solely for the purpose of securitizing authorized portions of ACEs recoverable stranded costs through the issuance and sale of Transition Bonds.

INCOME TAXES

INCOME TAXES
	12 Months Ended Dec. 31, 2009 USD / shares
PEPCO HOLDINGS INC
INCOME TAXES	(12)INCOME TAXES PHI and the majority of its subsidiaries file a consolidated federal income tax return. Federal income taxes are allocated among PHI and the subsidiaries included in its consolidated group pursuant to a written tax sharing agreement that was approved by the SEC in connection with the establishment of PHI as a holding company. Under this tax sharing agreement, PHIs consolidated federal income tax liability is allocated based upon PHIs and its subsidiaries separate taxable income or loss. The provision for consolidated income taxes, reconciliation of consolidated income tax rate, and components of consolidated deferred tax liabilities (assets) are shown below. Provision for Consolidated Income Taxes FortheYearEndedDecember31, 2009 2008 2007 (millions of dollars) Current Tax (Benefit) Expense Federal $ (106 ) $ (103 ) $ 103 State and local (27 ) (54 ) 5 Total Current Tax (Benefit) Expense (133 ) (157 ) 108 Deferred Tax Expense (Benefit) Federal 211 234 82 State and local 36 95 1 Investment tax credits (4 ) (4 ) (3 ) Total Deferred Tax Expense 243 325 80 Total Consolidated Income Tax Expense $ 110 $ 168 $ 188 Reconciliation of Consolidated Income Tax Rate FortheYearEndedDecember31, 2009 2008 2007 Federal statutory rate 35.0 % 35.0 % 35.0 % Increases (decreases) resulting from Depreciation 2.0 1.3 1.8 State income taxes, net of federal effect 5.6 7.0 4.3 State tax benefits related to prior years asset dispositions (3.8 ) (0.6 ) (3.7 ) Cross-border energy lease investments (1.6 ) (0.1 ) (1.4 ) Change in estimates and interest related to uncertain and effectively settled tax positions (0.5 ) (3.2 ) 0.9 Other, net (4.8 ) (3.5 ) (0.9 ) Consolidated Effective Income Tax Rate 31.9 % 35.9 % 36.0 % During 2009, PHI received a refund of $6 million (after-tax) of state income taxes and established a state tax benefit carryforward of $7 million (after-tax), each related to a change in tax reporting for certain asset dispositions occurring in prior years. During 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 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 proposed in the RAR. See Note (17), Commitments and Contingencies PHIs Cross-Border Energy Lease Investments, for a
POTOMAC ELECTRIC POWER CO
INCOME TAXES	(11)INCOME TAXES Pepco, as a direct subsidiary of PHI, is included in the consolidated federal income tax return of PHI. Federal income taxes are allocated to Pepco pursuant to a written tax sharing agreement that was approved by the Securities and Exchange Commission in connection with the establishment of PHI as a holding company. Under this tax sharing agreement, PHIs consolidated federal income tax liability is allocated based upon PHIs and its subsidiaries separate taxable income or loss. The provision for income taxes, reconciliation of income tax rate, and components of deferred income tax liabilities (assets) are shown below. Provision for Income Taxes FortheYearEndedDecember31, 2009 2008 2007 (millions of dollars) Current Tax (Benefit) Expense Federal $ (33 ) $ (94 ) $ 81 State and local (11 ) (25 ) (14 ) Total Current Tax (Benefit) Expense (44 ) (119 ) 67 Deferred Tax Expense (Benefit) Federal 95 147 (4 ) State and local 27 38 1 Investment tax credits (2 ) (2 ) (2 ) Total Deferred Tax Expense (Benefit) 120 183 (5 ) Total Income Tax Expense $ 76 $ 64 $ 62 Reconciliation of Income Tax Rate FortheYearEndedDecember31, 2009 2008 2007 Federal statutory rate 35.0 % 35.0 % 35.0 % Increases (decreases) resulting from Depreciation 2.7 2.9 2.8 Asset removal costs (1.5 ) (2.0 ) (1.1 ) State income taxes, net of federal effect 5.7 5.8 5.2 Software amortization 0.9 1.3 1.8 Tax credits (1.0 ) (1.1 ) (1.0 ) Change in estimates and interest related to uncertain and effectively settled tax positions 1.9 (3.1 ) 0.2 Maryland state income tax refund and related interest, net of federal effect (1.4 ) (10.4 ) Adjustment to prior years taxes (0.5 ) (1.2 ) 1.9 Other, net (1.4 ) (0.6 ) (1.2 ) Effective Income Tax Rate 41.8 % 35.6 % 33.2 % 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 November 2009, Pepco received a refund of prior years Federal income taxes of $51 million. The refund results from the carry back of PHIs 2008 net operating loss for tax reporting purposes that reflected, among other things, significant tax deductions relate
DELMARVA POWER & LIGHT CO /DE/
INCOME TAXES	(12) INCOME TAXES DPL, as an indirect subsidiary of PHI, is included in the consolidated federal income tax return of PHI. Federal income taxes are allocated to DPL pursuant to a written tax sharing agreement that was approved by the Securities and Exchange Commission in connection with the establishment of PHI as a holding company. Under this tax sharing agreement, PHIs consolidated federal income tax liability is allocated based upon PHIs and its subsidiaries separate taxable income or loss. The provision for income taxes, reconciliation of income tax rate, and components of deferred income tax liabilities (assets) are shown below. Provision for Income Taxes FortheYearEndedDecember31, 2009 2008 2007 (millions of dollars) Current Tax (Benefit) Expense Federal $ (26 ) $ 11 $ 12 State and local (17 ) 2 (1 ) Total Current Tax (Benefit) Expense (43 ) 13 11 Deferred Tax Expense (Benefit) Federal 58 25 21 State and local 2 8 6 Investment tax credit amortization (1 ) (1 ) (1 ) Total Deferred Tax Expense 59 32 26 Total Income Tax Expense $ 16 $ 45 $ 37 Reconciliation of Income Tax Rate FortheYearEndedDecember31, 2009 2008 2007 Federal statutory rate 35.0 % 35.0 % 35.0 % Increases (decreases) resulting from Depreciation 3.1 1.0 2.9 State income taxes, net of federal effect 5.4 5.8 5.2 State tax benefit related to prior years asset dispositions (19.3 ) Tax credits (1.2 ) (0.7 ) (1.0 ) Change in estimates and interest related to uncertain and effectively settled tax positions (1.5 ) (2.6 ) (1.2 ) Adjustment to prior years taxes 2.5 2.0 3.9 Other, net (0.5 ) (0.7 ) 0.3 Effective Income Tax Rate 23.5 % 39.8 % 45.1 % 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 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 November 2009, DPL received a refund of prior years Federal income taxes of $10 million. 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 deducted in 2008) and the cumulative effect of adopting a new method of tax reporting f
ATLANTIC CITY ELECTRIC CO
INCOME TAXES	(11)INCOME TAXES ACE, as an indirect subsidiary of PHI, is included in the consolidated federal income tax return of PHI. Federal income taxes are allocated to ACE pursuant to a written tax sharing agreement that was approved by the Securities and Exchange Commission in connection with the establishment of PHI as a holding company. Under this tax sharing agreement, PHIs consolidated federal income tax liability is allocated based upon PHIs and its subsidiaries separate taxable income or loss. The provision for consolidated income taxes, reconciliation of consolidated income tax rate, and components of consolidated deferred income tax liabilities (assets) are shown below. Provision for Consolidated Income Taxes FortheYearEndedDecember31, 2009 2008 2007 (millions of dollars) Current Tax (Benefit) Expense Federal $ (32 ) $ (98 ) $ 57 State and local (3 ) (37 ) 15 Total Current Tax (Benefit) Expense (35 ) (135 ) 72 Deferred Tax Expense (Benefit) Federal 42 121 (27 ) State and local 11 45 (4 ) Investment tax credit amortization (1 ) (1 ) Total Deferred Tax Expense (Benefit) 52 165 (31 ) Total Consolidated Income Tax Expense $ 17 $ 30 $ 41 Reconciliation of Consolidated Income Tax Rate FortheYearEndedDecember31, 2009 2008 2007 Federal statutory rate 35.0 % 35.0 % 35.0 % Increases (decreases) resulting from State income taxes, net of federal effect 7.8 7.3 6.4 Tax credits (1.7 ) (1.1 ) 0.1 Change in estimates and interest related to uncertain and effectively settled tax positions (9.1 ) (14.1 ) 1.0 Deferred tax adjustments 0.2 7.4 (0.5 ) Adjustment to prior years taxes (2.1 ) (2.0 ) 0.1 Other, net (0.8 ) (0.6 ) (1.5 ) Consolidated Effective Income Tax Rate 29.3 % 31.9 % 40.6 % During the first quarter of 2009, the New Jersey Department of Treasury denied ACEs 2001-2003 amended returns requesting additional state only amortization of tax basis in those years. As a result, ACE recorded a $1.8 million charge to tax expense. The Company appealed the decision, and in December 2009 learned that New Jersey would in fact accept those returns. As a result, the $1.8 million charge recorded in the first quarter of 2009 was reversed. 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 ha

PREFERRED STOCK

PREFERRED STOCK (ATLANTIC CITY ELECTRIC CO)
	12 Months Ended Dec. 31, 2009
PREFERRED STOCK	(12) PREFERRED STOCK The preferred stock amounts outstanding as of December31, 2009 and 2008 are as follows: Redemption Price Shares Outstanding December31, 2009 2008 2009 2008 (millionsofdollars) 4.0% Series of 1944, $100 per share par value $ 105.50 24,268 24,268 $ 2 $ 2 4.35% Series of 1949, $100 per share par value $ 101.00 2,942 2,942 4.35% Series of 1953, $100 per share par value $ 101.00 1,680 1,680 4.10% Series of 1954, $100 per share par value $ 101.00 20,504 20,504 2 2 4.75% Series of 1958, $100 per share par value $ 101.00 8,631 8,631 1 1 5.0% Series of 1960, $100 per share par value $ 100.00 4,120 4,120 1 1 Total Preferred Stock 62,145 62,145 $ 6 $ 6 Under the terms of the Companys Articles of Incorporation, ACE has authority to issue up to 799,979 shares of its $100 par value Cumulative Preferred Stock. The shares of each of the series are redeemable solely at the option of the issuer. In addition, ACE has authority to issue up to two million shares of No Par Preferred Stock and three million shares of Preference Stock without par value.

NONCONTROLLING INTEREST

NONCONTROLLING INTEREST (PEPCO HOLDINGS INC)
	12 Months Ended Dec. 31, 2009 USD / shares
NONCONTROLLING INTEREST	(13)NONCONTROLLING INTEREST The outstanding preferred stock issued by subsidiaries of PHI as of December31, 2009 and 2008 consisted of the following series of serial preferred stock issued by ACE. The shares of each of the series are redeemable solely at the option of the issuer. Redemption Shares Outstanding December31, Price 2009 2008 2009 2008 (millionsofdollars) 4.0% Series of 1944, $100 per share par value $ 105.50 24,268 24,268 $ 2 $ 2 4.35% Series of 1949, $100 per share par value $ 101.00 2,942 2,942 4.35% Series of 1953, $100 per share par value $ 101.00 1,680 1,680 4.10% Series of 1954, $100 per share par value $ 101.00 20,504 20,504 2 2 4.75% Series of 1958, $100 per share par value $ 101.00 8,631 8,631 1 1 5.0% Series of 1960, $100 per share par value $ 100.00 4,120 4,120 1 1 Total Preferred Stock of Subsidiaries 62,145 62,145 $ 6 $ 6

STOCK-BASED COMPENSATION, DIVID

STOCK-BASED COMPENSATION, DIVIDEND RESTRICTIONS, AND CALCULATIONS OF EARNINGS PER SHARE OF COMMON STOCK (PEPCO HOLDINGS INC)
	12 Months Ended Dec. 31, 2009 USD / shares
STOCK-BASED COMPENSATION, DIVIDEND RESTRICTIONS, AND CALCULATIONS OF EARNINGS PER SHARE OF COMMON STOCK	(14) STOCK-BASED COMPENSATION, DIVIDEND RESTRICTIONS, AND CALCULATIONS OF EARNINGS PER SHARE OF COMMON STOCK Stock-Based Compensation PHI maintains a Long-Term Incentive Plan (LTIP), the objective of which is to increase shareholder value by providing a long-term incentive to reward officers, key employees, and directors of Pepco Holdings and its subsidiaries and to increase the ownership of Pepco Holdings common stock by such individuals. Any officer or key employee of Pepco Holdings or its subsidiaries may be designated by the PHI board of directors as a participant in the LTIP. Under the LTIP, awards to officers and key employees may be in the form of restricted stock, stock options, performance units, stock appreciation rights, and dividend equivalents. At inception, 10million shares of common stock were authorized for issuance under the LTIP. Total stock-based compensation expense recorded in the Consolidated Statements of Income for the years ended December31, 2009, 2008, and 2007 was as follows: 2009 2008 2007 (millions of dollars) Stock options $ $ $ Restricted stock awards 5 16 4 Total stock compensation expense $ 5 $ 16 $ 4 During 2008, PHI identified an error in the accounting for certain of its restricted stock awards granted under the LTIP that resulted in an understatement of stock-based compensation expense in 2006 and 2007. This error was corrected in 2008, resulting in an increase in stock-based compensation expense for the year ended December31, 2008 of $9million. No material amount of stock compensation expense was capitalized for the years ended December31, 2009, 2008 and 2007. Restricted Stock Awards Description of awards A number of programs have been established under the LTIP involving the issuance of Restricted Stock Awards, including awards of performance-based restricted stock units, time-based restricted stock, retention stock and the Conectiv performance accelerated restricted stock (PARS). A summary of each of these programs is as follows: Under the performance-based restricted stock program, performance criteria are selected and measured over a three-year period. Depending on the extent to which the performance criteria are satisfied, the participants are eligible to earn shares of common stock and dividends accrued thereon over the vesting period, ranging from 0% to 200% of the target stock unit award opportunities, inclusive of dividends accrued. Time-based restricted stock award opportunities have a requisite service period of three years and participants have the right to receive dividends on the shares. In connection with the acquisition of Conectiv by Pepco in 2002, Conectiv PARS were converted to shares of Pepco Holdings restricted stock. These shares typically vested over 5 to 7 years. In January 2009, all 6,669 remaining shares outstanding fully vested. In September 2007, retention awards in the form of 9,015 shares of restricted stock were granted to certain PHI executives, with vesting periods of two or three years. In Septe

DERIVATIVE INSTRUMENTS AND HEDG

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
	12 Months Ended Dec. 31, 2009 USD / shares
PEPCO HOLDINGS INC
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES	(15) 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 or 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 and 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 because 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 because 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, swap
DELMARVA POWER & LIGHT CO /DE/
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES	(13) 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 December31, 2009 and 2008: As of December31, 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) $ $ $ $ $ Derivative Assets (non-current assets) Total Derivative Assets Derivative Liabilities (current liabilities) (10 ) (15 ) (25 ) 10 (15 ) Derivative Liabilities (non-current liabilities) (14 ) (14 ) 1 (13 ) Total Derivative Liabilities (10 ) (29 ) (39 ) 11 (28 ) Net Derivative (Liability) Asset $ (10 ) $ (29 ) $ (39 ) $ 11 $ (28 ) 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), DPL offsets the fair value amounts recognized for derivative

FAIR VALUE DISCLOSURES

FAIR VALUE DISCLOSURES
	12 Months Ended Dec. 31, 2009 USD / shares
PEPCO HOLDINGS INC
FAIR VALUE DISCLOSURES	(16) 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 also include natural gas options purchased by DPL as part of a natural gas hedging program approved by the DPSC. Some non-standard assumptions are used in their forward valuation to adjust for the pricin
POTOMAC ELECTRIC POWER CO
FAIR VALUE DISCLOSURES	(12) 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 December31, 2009 and 2008. As required by the guidance, financial as
DELMARVA POWER & LIGHT CO /DE/
FAIR VALUE DISCLOSURES	(14)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 purchased as part of a natural gas hedging program approved by the DPSC. 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. Executive deferred compensation plan assets classified as Level 3 instruments consist of life insurance policies that are valued using
ATLANTIC CITY ELECTRIC CO
FAIR VALUE DISCLOSURES	(13) 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 December31, 2009 and 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 affect th

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES
	12 Months Ended Dec. 31, 2009 USD / shares
PEPCO HOLDINGS INC
COMMITMENTS AND CONTINGENCIES	(17) 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. 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 DCPSC and the 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 and the MPSC staff under which Pepco distributed approximately $38million 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 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 DPL electric service in Delaware and may be implemented in DPLs pending electric base rate case. A MFVRD has been approved in concept for DPL natural ga
POTOMAC ELECTRIC POWER CO
COMMITMENTS AND CONTINGENCIES	(13)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. 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 DCPSC and the 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 and the MPSC staff under which Pepco distributed approximately $38million 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, Pepco has proposed the adoption of revenue decoupling methods for retail customers. A BSA has been approved and implemented for Pepco electric service in Maryland and in 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 exceeds or falls short of the revenue-per-customer amount approved by the applicable public service commission. The BSA increases rates if actual distribution revenu
DELMARVA POWER & LIGHT CO /DE/
COMMITMENTS AND CONTINGENCIES	(15)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 service in Delaware and may be implemented in DPLs pending electric base rate case. A MFVRD has been approved in concept for DPL natural gas service in Delaware and may be implemented either in the context of a pending decoupling case or DPLs next Delaware natural gas distribution base rate case. 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 revenue-per-customer amount approved by the applicable public service commission. The BSA increases rates if actual distribution revenues fall below the approved level 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 distribution revenue from unit sales consumption and ties the growth in distribution 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 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 distribution revenues. The MFVRD adopted in Delaware provides for 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 distribution revenue decoupling mechanism. Delaware In August2008, DPL submitted its 2008 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, DPL in January2009 submitted to the DPSC an interim GCR filing, requesting a decrease in the level of GCR. The proposed decrease became effective on a temporary basis on March1, 2009, and when combined with the increase that became effective November1, 2008, had the net effect of a 13.8% increase in the level of GCR. On October6, 2009, the DPSC issued a final order approving the 13.8% net increase, reflecting a settlement agreement among DPL, the DPSC sta
ATLANTIC CITY ELECTRIC CO
COMMITMENTS AND CONTINGENCIES	(14) COMMITMENTS AND CONTINGENCIES Regulatory and Other Matters Rate Proceedings 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 bill stabilization adjustment mechanism (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 an increase of approximately $52million, based on an ROE of 11.25%, if the BSA is approved). Hearings are scheduled for late May and June 2010. 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 revenue-per-customer amount approved by the NJBPU. The BSA increases rates if actual distribution revenues fall below the approved level and decreases rates if actual distribution revenues are above the approved level. The result is that, over time, ACE would collect its authorized revenues for distribution deliveries. As a consequence, a BSA decouples distribution revenue from unit sales consumption and ties the growth in distribution 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 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 distribution revenues. Sale of B.L. England Generating Facility In February2007, ACE completed the sale of the B.L. England generating facility to RC Cape May Holdings, LLC (RC Cape May), an affiliate of Rockland Capital Energy Investments, LLC. In July2007, ACE received a claim for indemnification from RC Cape May under the purchase agreement in the amount of $25million. RC Cape May contends that one of the assets it purchased, a contract for terminal services (TSA) between ACE and Citgo Asphalt Refining Co. (Citgo), has been declared by Citgo to have been terminated due to a failure by ACE to renew the contract in a timely manner. The claim for indemnification seeks payment from ACE in the event the TSA is held not to be enforceable against Citgo. RC Cape May commenced an arbitration proceeding against Citgo seeking a determination that the TSA remains in effect and notified ACE of the proceedings. On July1, 2009, the arbitrator issued its interim award, ruling that the TSA remains in effect and is enforceable by RC Cape May against Citgo. ACE believes this ruling invalidates RC Cape Mays indemnification claim against ACE, but cannot predict whether RC Cape May will continue to pursue indem

ACCUMULATED OTHER COMPREHENSIVE

ACCUMULATED OTHER COMPREHENSIVE LOSS (PEPCO HOLDINGS INC)
	12 Months Ended Dec. 31, 2009 USD / shares
ACCUMULATED OTHER COMPREHENSIVE LOSS	(18) ACCUMULATED OTHER COMPREHENSIVE LOSS A detail of the components of Pepco Holdings Accumulated Other Comprehensive (Loss) Income is as follows. For additional information, see the Consolidated Statements of Comprehensive Income. Commodity Derivatives Treasury Lock Other Accumulated Other Comprehensive (Loss)Income (millions of dollars) Balance, December31, 2006 $ (62 ) $ (33 ) $ (8 ) $ (103 ) Current year change 53 4 57 Balance, December31, 2007 (9 ) (29 ) (8 ) (46 ) Current year change (218 ) 4 (2 ) (216 ) Balance, December31, 2008 (227 ) (25 ) (10 ) (262 ) Current year change 25 3 (7 ) 21 Balance, December31, 2009 $ (202 ) $ (22 ) $ (17 ) $ (241 ) A detail of the income tax expense (benefit) allocated to the components of Pepco Holdings Other Comprehensive (Loss) Income for each year is as follows. As of: Commodity Derivatives Treasury Lock Other Accumulated Other Comprehensive (Loss) Income (millions of dollars) December 31, 2007 $ 32 $ 5 $ 1 (a) $ 38 December 31, 2008 $ (147 ) $ 1 $ (1 )(a) $ (147 ) December 31, 2009 $ 19 $ 2 $ (5 )(a) $ 16 (a) Represents income tax expense on amortization of gains and losses for prior service costs.

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS
	12 Months Ended Dec. 31, 2009
POTOMAC ELECTRIC POWER CO
RELATED PARTY TRANSACTIONS	(14)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 years ended December31, 2009, 2008 and 2007 were approximately $175 million, $164 million, and $147 million, respectively. Certain subsidiaries of 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 years ended December31, 2009, 2008 and 2007 were approximately $9 million, $11 million and $26 million, respectively. In addition to the transactions described above, Pepcos financial statements include the following related party transactions in its Statements of Income: FortheYearEndedDecember31, 2009 2008 2007 (millions of dollars) Income (Expense) Purchased power under Default Electricity Supply contracts with Conectiv Energy Supply, Inc. (a) $ 1 $ (23 ) $ (63 ) (a) Included in purchased energy expense. As of December31, 2009 and 2008, Pepco had the following balances on its Balance Sheets due (to) from related parties: 2009 2008 (millionsofdollars) Asset (Liability) Payable to Related Party (current) PHI Parent Company $ (8 ) $ PHI Service Company (3 ) (17 ) Pepco Energy Services (a) (99 ) (53 ) The items listed above are included in the Accounts payable due to associated companies balances on the balance sheet of $111 million and $70 million at December31, 2009 and 2008, respectively. Money Pool Balance with Pepco Holdings (included in cash and cash equivalents ) 203 (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/
RELATED PARTY TRANSACTIONS	(16)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 years ended December31, 2009, 2008 and 2007 were $130 million, $121 million, and $118 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: FortheYearEndedDecember31, 2009 2008 2007 (millions of dollars) (Expense) Income Purchased power under Default Electricity Supply contracts with Conectiv Energy Supply, Inc. (a) $ (88 ) $ (180 ) $ (263 ) Purchased power under Default Electricity Supply contracts with Pepco Energy Services (a) (6 ) Intercompany lease transactions (b) 7 7 8 Transcompany pipeline gas sales with Conectiv Energy Supply, Inc. (c) 1 3 Transcompany pipeline gas purchases with Conectiv Energy Supply, Inc.(d) $ (1 ) $ (3 ) $ (2 ) (a) Included in purchased energy expense. (b) Included in electric revenue. (c) Included in gas revenue. (d) Included in gas purchased expense. As of December31, 2009 and 2008, DPL had the following balances on its balance sheets due (to) from related parties: 2009 2008 (millionsofdollars) Asset (Liability) Receivable from (Payable to) Related Party (current) PHI Service Company $ 22 $ (15 ) PHI Parent Company (27 ) Conectiv Energy Supply, Inc. (7 ) (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 sheet of $14 million and $34 million at December31, 2009 and 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
RELATED PARTY TRANSACTIONS	(15) 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 years ended December31, 2009, 2008 and 2007 were $100 million, $94 million and $87 million, respectively. In addition to the PHI Service Company charges described above, ACEs financial statements include the following related party transactions in its consolidated statements of income: FortheYearEndedDecember31, 2009 2008 2007 (millions of dollars) (Expense) Income Purchased power under Default Electricity supply contracts with Conectiv Energy Supply, Inc. (a) $ (185 ) $ (171 ) $ (99 ) Meter reading services provided by Millennium Account Services LLC (b) (4 ) (4 ) (4 ) Intercompany use revenue (c) 6 3 2 Intercompany use expense (c) (2 ) (2 ) (2 ) (a) Included in purchased energy expense. (b) Included in other operation and maintenance expense. (c) Included in operating revenue. As of December31, 2009 and 2008, ACE had the following balances due (to) from related parties: 2009 2008 (millionsofdollars) Asset (Liability) Payable to Related Party (current) PHI Service Company $ (38 ) $ (11 ) PHI Parent Company (3 ) Conectiv Energy Supply, Inc. (15 ) (16 ) The items listed above are included in the Accounts payable due to associated companies balance on the consolidated balancesheets of $58 million and $28 million at December31, 2009 and 2008, respectively.

QUARTERLY FINANCIAL INFORMATION

QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
	12 Months Ended Dec. 31, 2009 USD / shares
PEPCO HOLDINGS INC
QUARTERLY FINANCIAL INFORMATION (UNAUDITED)	(19) QUARTERLY FINANCIAL INFORMATION (UNAUDITED) The quarterly data presented below reflect all adjustments necessary in the opinion of management for a fair presentation of the interim results. Quarterly data normally vary seasonally because of temperature variations, differences between summer and winter rates, and the scheduled downtime and maintenance of electric generating units. The totals of the four quarterly basic and diluted earnings per common share amounts may not equal the basic and diluted earnings per common share for the year due to changes in the number of common shares outstanding during the year. 2009 First Quarter Second Quarter Third Quarter Fourth Quarter Total (millions, except per share amounts) Total Operating Revenue $ 2,520 $ 2,065 $ 2,539 $ 2,135 $ 9,259 Total Operating Expenses 2,365 (a) 1,938 2,262 (a) 1,999 8,564 Operating Income 155 127 277 136 695 Other Expenses (86 ) (89 ) (88 ) (87 ) (350 ) Income Before Income Tax Expense 69 38 189 49 345 Income Tax Expense 24 13 65 (b) 8 (c) 110 Net Income 45 25 124 41 235 Basic and Diluted Earnings Per Share of Common Stock .21 .11 .56 .18 1.06 Cash Dividends Per Common Share $ .27 $ .27 $ .27 $ .27 $ 1.08 2008 First Quarter Second Quarter Third Quarter Fourth Quarter Total (millions, except per share amounts) Total Operating Revenue $ 2,641 $ 2,518 (e) $ 3,060 $ 2,481 $ 10,700 Total Operating Expenses 2,418 2,404 (f) 2,785 (h) 2,325 9,932 Operating Income 223 114 275 156 768 Other Expenses (71 ) (71 ) (76 ) (82 ) (300 ) Income Before Income Tax Expense 152 43 199 74 468 Income Tax Expense 53 (d) 28 (g) 80 7 (i) 168 Net Income 99 15 119 67 300 Basic and Diluted Earnings Per Share of Common Stock .49 .07 .59 .32 1.47 Cash Dividends Per Common Share $ .27 $ .27 $ .27 $ .27 $ 1.08 (a) Includes gains during the first and third quarters related to settlement of Mirant bankruptcy claims of $14 million ($8 million after-tax) and $26 million ($16 million after-tax), respectively. (b) Includes benefit of $13 million related to a change in the Maryland state income tax reporting for the disposition of certain assets in prior years. (c) Includes a $6million benefit related to additional analysis of current and deferred income tax balances completed during the fourth quarter and a $2million benefit related to the resolution of an uncertain state income tax position. (d) Includes $7 million of after-tax net interest income on uncertain tax positions primarily related to casualty losses. (e) Includes a $124 million charge ($86 million afte
POTOMAC ELECTRIC POWER CO
QUARTERLY FINANCIAL INFORMATION (UNAUDITED)	(15) QUARTERLY FINANCIAL INFORMATION (UNAUDITED) The quarterly data presented below reflect all adjustments necessary in the opinion of management for a fair presentation of the interim results. Quarterly data normally vary seasonally because of temperature variations and differences between summer and winter rates. Therefore, comparisons by quarter within a year are not meaningful. 2009 First Quarter Second Quarter Third Quarter Fourth Quarter Total (millions of dollars) Total Operating Revenue $ 577 $ 518 $ 648 $ 488 $ 2,231 Total Operating Expenses 522 (a) 465 527 (a) 444 1,958 Operating Income 55 53 121 44 273 Other Expenses (22 ) (23 ) (23 ) (23 ) (91 ) Income Before Income Tax Expense 33 30 98 21 182 Income Tax Expense 14 13 40 9 76 Net Income $ 19 $ 17 $ 58 $ 12 $ 106 2008 First Quarter Second Quarter Third Quarter Fourth Quarter Total (millions of dollars) Total Operating Revenue $ 525 $ 539 $ 728 $ 530 $ 2,322 Total Operating Expenses 482 475 (b) 627 (d) 482 2,066 Operating Income 43 64 101 48 256 Other Expenses (18 ) (19 ) (21 ) (18 ) (76 ) Income Before Income Tax Expense 25 45 80 30 180 Income Tax Expense 10 14 (c) 34 6 (e) 64 Net Income $ 15 $ 31 $ 46 $ 24 $ 116 (a) Includes gains during the first and third quarters related to settlement of Mirant bankruptcy claims of $14 million ($8 million after-tax) and $26 million ($16 million after-tax), respectively. (b) Includes a $4 million adjustment to correct an understatement of operating expenses for prior periods dating back to February2005 where late payment fees were incorrectly recognized. (c) Includes $3 million of after-tax interest income related to the tentative settlement of the IRS mixed service cost issue and $2 million of after-tax interest income received in 2008 on the Maryland state tax refund. (d) Includes a $3 million charge related to an adjustment in the accounting for certain restricted stock awards granted under the Long-Term Incentive Plan (LTIP). (e) Includes $2 million of after-tax net interest income on uncertain and effectively settled tax positions, and a benefit of $3 million (including a $2 million correction of prior period errors) related to additional analysis of deferred tax balances completed in 2008.
DELMARVA POWER & LIGHT CO /DE/
QUARTERLY FINANCIAL INFORMATION (UNAUDITED)	(17) QUARTERLY FINANCIAL INFORMATION (UNAUDITED) The quarterly data presented below reflect all adjustments necessary in the opinion of management for a fair presentation of the interim results. Quarterly data normally vary seasonally because of temperature variations and differences between summer and winter rates. Therefore, comparisons by quarter within a year are not meaningful. 2009 First Quarter Second Quarter Third Quarter Fourth Quarter Total (millions of dollars) Total Operating Revenue $ 452 $ 291 $ 339 $ 321 $ 1,403 Total Operating Expenses 408 274 321 290 1,293 Operating Income 44 17 18 31 110 Other Expenses (11 ) (10 ) (11 ) (10 ) (42 ) Income Before Income Tax Expense 33 7 7 21 68 Income Tax Expense (Benefit) 12 2 (7 )(a) 9 16 Net Income $ 21 $ 5 $ 14 $ 12 $ 52 2008 First Quarter Second Quarter Third Quarter Fourth Quarter Total (millions of dollars) Total Operating Revenue $ 411 $ 372 $ 401 $ 355 $ 1,539 Total Operating Expenses 364 341 376 (d) 310 1,391 Operating Income 47 31 25 45 148 Other Expenses (8 ) (7 ) (8 ) (12 ) (35 ) Income Before Income Tax Expense 39 24 17 33 113 Income Tax Expense 13 (b) 8 (c) 6 18 (e) 45 Net Income $ 26 $ 16 $ 11 $ 15 $ 68 (a) Includes benefit of $13 million related to a change in the Maryland state income tax reporting for the disposition of certain assets in prior years. (b) Includes $3 million of after-tax net interest income on uncertain tax positions primarily related to casualty losses. (c) Includes $2 million of after-tax interest income related to the tentative settlement of the IRS mixed service cost issue. (d) Includes a $2 million charge related to an adjustment in the accounting for certain restricted stock awards granted under the Long-Term Incentive Plan (LTIP) and a $4 million adjustment to correct an understatement of operating expenses for prior periods dating back to May 2006 where late payment fees were incorrectly recognized. (e) Includes $3 million of after-tax net interest expense on uncertain and effectively settled tax positions (primarily associated with the reversal of the majority of the interest income recognized on uncertain tax positions related to casualty losses in the first quarter), and a charge of $2 million to correct prior period errors related to additional analysis of deferred tax balances completed in 2008.
ATLANTIC CITY ELECTRIC CO
QUARTERLY FINANCIAL INFORMATION (UNAUDITED)	(16) QUARTERLY FINANCIAL INFORMATION (UNAUDITED) The quarterly data presented below reflect all adjustments necessary in the opinion of management for a fair presentation of the interim results. Quarterly data normally vary seasonally because of temperature variations and differences between summer and winter rates. Therefore, comparisons by quarter within a year are not meaningful. 2009 First Quarter Second Quarter Third Quarter Fourth Quarter Total (millions of dollars) Total Operating Revenue $ 344 $ 287 $ 441 $ 279 $ 1,351 Total Operating Expenses 328 258 387 255 1,228 Operating Income 16 29 54 24 123 Other Expenses (16 ) (17 ) (16 ) (16 ) (65 ) Income Before Income Tax Expense 12 38 8 58 Income Tax (Benefit) Expense (2 ) 4 15 (a) 17 Net Income $ 2 $ 8 $ 23 $ 8 $ 41 2008 First Quarter Second Quarter Third Quarter Fourth Quarter Total (millions of dollars) Total Operating Revenue $ 361 $ 387 $ 540 $ 345 $ 1,633 Total Operating Expenses 346 330 494 (d) 310 1,480 Operating Income 15 57 46 35 153 Other Expenses (13 ) (14 ) (13 ) (19 ) (59 ) Income Before Income Tax Expense 2 43 33 16 94 Income Tax (Benefit) Expense (3 )(b) 16 (c) 13 4 (e) 30 Net Income $ 5 $ 27 $ 20 $ 12 $ 64 (a) Includes a $2million benefit related to the resolution of an uncertain state income tax position. (b) Includes $4 million of after-tax net interest income on uncertain tax positions primarily related to casualty losses. (c) Includes $2 million of after-tax interest income related to the tentative settlement of the IRS mixed service cost issue. (d) Includes a $1 million charge related to an adjustment in the accounting for certain restricted stock awards granted under the Long-Term Incentive Plan (LTIP). (e) Includes $8 million of after-tax net interest income on uncertain and effectively settled tax positions (primarily associated with a claim made with the IRS related to the tax reporting for fuel over- and under-recoveries, certain newly identified overpayments of income taxes in previously filed tax returns and the reversal of the majority of the interest income recognized on uncertain tax positions related to casualty losses in the first quarter), and a charge of $7 million to correct prior period errors related to additional analysis of deferred tax balances completed in 2008.

Schedule I Condensed Financial

Schedule I Condensed Financial Information of Parent Company (PEPCO HOLDINGS INC)
	12 Months Ended Dec. 31, 2009 USD / shares
Schedule I Condensed Financial Information of Parent Company	Schedule I, Condensed Financial Information of Parent Company is submitted below. PEPCO HOLDINGS, INC. (Parent Company) STATEMENTS OF INCOME For the Year Ended December31, 2009 2008 2007 (millionsofdollars,exceptsharedata) OPERATING REVENUE $ $ $ OPERATING EXPENSES Other operation and maintenance 5 5 3 Total operating expenses 5 5 3 OPERATING LOSS (5 ) (5 ) (3 ) OTHER INCOME (EXPENSES) Interest and dividend income 2 1 Interest expense (87 ) (90 ) (91 ) Income from equity investments 290 356 390 Total other income 203 268 300 INCOME BEFORE INCOME TAXES 198 263 297 INCOME TAX BENEFIT (37 ) (37 ) (37 ) NET INCOME $ 235 $ 300 $ 334 EARNINGS PER SHARE Basic and diluted earnings per share of common stock $ 1.06 $ 1.47 $ 1.72 BALANCE SHEETS As of December31, 2009 2008 (millionsofdollars,exceptsharedata) ASSETS Current Assets Cash and cash equivalents $ 585 $ 556 Prepayment of income taxes 8 4 Accounts receivable and other 33 16 626 576 Investments and Other Assets Goodwill 1,137 1,137 Notes receivable from subsidiary companies 472 628 Investment in consolidated companies 4,487 4,016 Other 16 19 6,112 5,800 Total Assets $ 6,738 $ 6,376 LIABILITIES AND EQUITY Current Liabilities Short-term debt $ 324 $ 50 Current portion of long-term debt 450 Accounts payable 4 Interest and taxes accrued 60 34 834 88 Deferred Credits Liabilities and accrued interest related to uncertain tax positions 1 Long-Term Debt 1,648 2,097 Commitments and Contingencies (Note 4) Equity Common stock, $.01 par value; authorized 400,000,000 shares; 222,269,895 and 218,906,220 shares outstanding, respectively 2 2 Premium on stock and other capital contributions 3,227 3,179 Accumulated other comprehensive loss (241 ) (262 ) Retained earnings 1,268 1,271 Total equity 4,256 4,190 Total Capitalization and Liabilities $ 6,738 $ 6,376 STATEMENTS OF CASH FLOWS For the Year Ended December31, 2009 2008 2007 (millions of

Schedule II Valuation and Quali

Schedule II Valuation and Qualifying Accounts
	12 Months Ended Dec. 31, 2009
Schedule II Valuation and Qualifying Accounts	Schedule II, Valuation and Qualifying Accounts, for each registrant is submitted below: Pepco Holdings, Inc. Col. A Col. B Col. C Col. D Col. E Additions Description Balanceat Beginning ofPeriod Chargedto Costs and Expenses Chargedto Other Accounts(a) Deductions(b) Balance at End ofPeriod (millions of dollars) Year Ended December31, 2009 Allowance for uncollectible accounts - customer and other accounts receivable $ 37 $ 51 $ 6 $ (49 ) $ 45 Year Ended December31, 2008 Allowance for uncollectible accounts - customer and other accounts receivable $ 31 $ 44 $ 6 $ (44 ) $ 37 Year Ended December31, 2007 Allowance for uncollectible accounts - customer and other accounts receivable $ 36 $ 34 $ 1 $ (40 ) $ 31 (a) Collection of accounts previously written off. (b) Uncollectible accounts written off. Potomac Electric Power Company Col. A Col. B Col. C Col. D Col. E Additions Description Balanceat Beginning ofPeriod Chargedto Costs and Expenses Charged to Other Accounts(a) Deductions(b) Balance at End ofPeriod (millions of dollars) Year Ended December31, 2009 Allowance for uncollectible accounts - customer and other accounts receivable $ 15 $ 23 $ 1 $ (22 ) $ 17 Year Ended December31, 2008 Allowance for uncollectible accounts - customer and other accounts receivable $ 13 $ 18 $ 1 $ (17 ) $ 15 Year Ended December31, 2007 Allowance for uncollectible accounts - customer and other accounts receivable $ 17 $ 15 $ 1 $ (20 ) $ 13 (a) Collection of accounts previously written off. (b) Uncollectible accounts written off. Delmarva Power Light Company Col. A Col. B Col. C Col. D Col. E Additions Description Balanceat Beginning ofPeriod Chargedto Costs and Expenses Charged to Other Accounts(a) Deductions(b) Balance at End ofPeriod (millions of dollars) Year Ended December31, 2009 Allowance for uncollectible accounts - customer and other accounts receivable $ 10 $ 15 $ 3 $ (16 ) $ 12 Year Ended December31, 2008 Allowance for uncollectible accounts - customer and other accounts receivable $ 8 $ 17 $ 3 $ (18 ) $ 10 Year Ended December31, 2007 Allowance for uncollectible accounts - customer and other accounts receivable $ 8 $ 12 $ $ (12 ) $ 8 (a) Collection of accounts previously written off. (b) Uncollectible accounts written off. Atlantic City Electric Company Col. A Col. B Col. C Col. D Col. E Additions Description Balanceat Beginning ofPeriod Chargedto Costs and Expenses Chargedto Other Accounts(a) Deductions(b) Balance at End ofPeriod (mill

Document Information

Document Information
	12 Months Ended Dec. 31, 2009
Document Type	10-K
Amendment Flag	false
Document Period End Date	2009-12-31

Entity Information

Entity Information (USD $)
	12 Months Ended Dec. 31, 2009	Feb. 01, 2010	Jun. 30, 2009
Trading Symbol	POM
Entity Registrant Name	PEPCO HOLDINGS INC
Entity Central Index Key	0001135971
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		222,357,258
Entity Public Float			$3,000,000,000
POTOMAC ELECTRIC POWER CO
Entity Registrant Name	POTOMAC ELECTRIC POWER CO
Entity Central Index Key	0000079732
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		100
DELMARVA POWER & LIGHT CO /DE/
Entity Registrant Name	DELMARVA POWER & LIGHT CO /DE/
Entity Central Index Key	0000027879
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		1,000
ATLANTIC CITY ELECTRIC CO
Entity Registrant Name	ATLANTIC CITY ELECTRIC CO
Entity Central Index Key	0000008192
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		8,546,017