Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Feb. 13, 2015 | Jun. 30, 2014 |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | POM | ||
Entity Registrant Name | PEPCO HOLDINGS INC | ||
Entity Central Index Key | 1135971 | ||
Current Fiscal Year End Date | -19 | ||
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 | 252,815,448 | ||
Entity Public Float | $6,893.80 | ||
Potomac Electric Power Co [Member] | |||
Document Information [Line Items] | |||
Entity Registrant Name | POTOMAC ELECTRIC POWER CO | ||
Entity Central Index Key | 79732 | ||
Current Fiscal Year End Date | -19 | ||
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 | ||
Entity Public Float | 0 | ||
Delmarva Power & Light Co/De [Member] | |||
Document Information [Line Items] | |||
Entity Registrant Name | DELMARVA POWER & LIGHT CO /DE/ | ||
Entity Central Index Key | 27879 | ||
Current Fiscal Year End Date | -19 | ||
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 | ||
Entity Public Float | 0 | ||
Atlantic City Electric Co [Member] | |||
Document Information [Line Items] | |||
Entity Registrant Name | ATLANTIC CITY ELECTRIC CO | ||
Entity Central Index Key | 8192 | ||
Current Fiscal Year End Date | -19 | ||
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 | ||
Entity Public Float | $0 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (Loss) (USD $) | 12 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Operating Revenue | $4,878 | $4,666 | $4,625 |
Operating Expenses | |||
Fuel and purchased energy | 2,080 | 2,070 | 2,123 |
Other services cost of sales | 207 | 146 | 170 |
Other operation and maintenance | 924 | 851 | 898 |
Depreciation and amortization | 549 | 473 | 454 |
Other taxes | 413 | 428 | 432 |
Deferred electric service costs | 20 | 26 | -5 |
Impairment losses | 81 | 4 | 12 |
Total Operating Expenses | 4,274 | 3,998 | 4,084 |
Operating Income (Loss) | 604 | 668 | 541 |
Other Income (Expenses) | |||
Interest and dividend income | 1 | ||
Interest expense | -268 | -273 | -256 |
Gain from equity investments | 2 | 1 | |
Impairment losses | -1 | ||
Other income | 44 | 32 | 35 |
Total Other Income (Expenses) | -224 | -239 | -220 |
Income from Continuing Operations Before Income Tax Expense | 380 | 429 | 321 |
Income Tax Expense Related to Continuing Operations | 138 | 319 | 103 |
Net Income from Continuing Operations | 242 | 110 | 218 |
(Loss) Income from Discontinued Operations, net of Income Taxes | -322 | 67 | |
Net Income (Loss) | 242 | -212 | 285 |
Basic Share Information | |||
Weighted average shares outstanding-Basic (millions) | 251 | 246 | 229 |
Earnings per share of common stock from Continuing Operations-Basic | $0.96 | $0.45 | $0.95 |
(Loss) earnings per share of common stock from Discontinued Operations-Basic | ($1.31) | $0.30 | |
Earnings (loss) per share-Basic | $0.96 | ($0.86) | $1.25 |
Diluted Share Information | |||
Weighted average shares outstanding-Diluted (millions) | 252 | 246 | 230 |
Earnings per share of common stock from Continuing Operations-Diluted | $0.96 | $0.45 | $0.95 |
(Loss) earnings per share of common stock from Discontinued Operations-Diluted | ($1.31) | $0.29 | |
Earnings (loss) per share-Diluted | $0.96 | ($0.86) | $1.24 |
Potomac Electric Power Co [Member] | |||
Operating Revenue | |||
Total Operating Revenue | 2,101 | 2,026 | 1,948 |
Operating Revenue | 2,101 | 2,026 | 1,948 |
Operating Expenses | |||
Fuel and purchased energy | 771 | 750 | 726 |
Other operation and maintenance | 390 | 391 | 403 |
Depreciation and amortization | 229 | 196 | 190 |
Other taxes | 363 | 368 | 372 |
Total Operating Expenses | 1,753 | 1,705 | 1,691 |
Operating Income (Loss) | 348 | 321 | 257 |
Other Income (Expenses) | |||
Interest expense | -115 | -110 | -101 |
Other income | 30 | 18 | 18 |
Total Other Income (Expenses) | -85 | -92 | -83 |
Income from Continuing Operations Before Income Tax Expense | 263 | 229 | 174 |
Income Tax Expense Related to Continuing Operations | 92 | 79 | 48 |
Net Income (Loss) | 171 | 150 | 126 |
Delmarva Power & Light Co/De [Member] | |||
Operating Revenue | |||
Electric | 1,099 | 1,053 | 1,050 |
Natural gas | 194 | 191 | 183 |
Total Operating Revenue | 1,293 | 1,244 | 1,233 |
Operating Revenue | 1,293 | 1,244 | 1,233 |
Operating Expenses | |||
Fuel and purchased energy | 546 | 552 | 568 |
Gas purchased | 104 | 109 | 113 |
Other operation and maintenance | 269 | 251 | 260 |
Depreciation and amortization | 125 | 107 | 102 |
Other taxes | 42 | 40 | 36 |
Total Operating Expenses | 1,086 | 1,059 | 1,079 |
Operating Income (Loss) | 207 | 185 | 154 |
Other Income (Expenses) | |||
Interest expense | -48 | -50 | -47 |
Other income | 10 | 10 | 10 |
Total Other Income (Expenses) | -38 | -40 | -37 |
Income from Continuing Operations Before Income Tax Expense | 169 | 145 | 117 |
Income Tax Expense Related to Continuing Operations | 65 | 56 | 44 |
Net Income (Loss) | 104 | 89 | 73 |
Atlantic City Electric Co [Member] | |||
Operating Revenue | |||
Total Operating Revenue | 1,213 | 1,202 | 1,198 |
Operating Revenue | 1,213 | 1,202 | 1,198 |
Operating Expenses | |||
Fuel and purchased energy | 653 | 660 | 703 |
Other operation and maintenance | 246 | 230 | 239 |
Depreciation and amortization | 157 | 136 | 124 |
Other taxes | 2 | 14 | 18 |
Deferred electric service costs | 20 | 26 | -5 |
Total Operating Expenses | 1,078 | 1,066 | 1,079 |
Operating Income (Loss) | 135 | 136 | 119 |
Other Income (Expenses) | |||
Interest expense | -63 | -68 | -70 |
Other income | 1 | 1 | 4 |
Total Other Income (Expenses) | -62 | -67 | -66 |
Income from Continuing Operations Before Income Tax Expense | 73 | 69 | 53 |
Income Tax Expense Related to Continuing Operations | 28 | 19 | 18 |
Net Income (Loss) | $45 | $50 | $35 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (Loss) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statement of Comprehensive Income [Abstract] | |||
Net Income (loss) | $242 | ($212) | $285 |
Other Comprehensive Income (Loss) from Continuing Operations | |||
Losses on treasury rate locks reclassified into income | 1 | 1 | |
Pension and other postretirement benefit plans | -20 | 13 | -14 |
Other comprehensive (loss) income, before income taxes | -19 | 14 | -14 |
Income tax (benefit) expense related to other comprehensive income | -7 | 6 | -6 |
Other comprehensive (loss) income from continuing operations, net of income taxes | -12 | 8 | -8 |
Other Comprehensive Income from Discontinued Operations, Net of Income Taxes | 6 | 23 | |
Comprehensive Income (Loss) | $230 | ($198) | $300 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
CURRENT ASSETS | ||
Cash and cash equivalents | $14 | $23 |
Restricted cash equivalents | 25 | 13 |
Accounts receivable, less allowance for uncollectible accounts | 782 | 835 |
Inventories | 141 | 148 |
Deferred income tax assets, net | 50 | 51 |
Income taxes and related accrued interest receivable | 9 | 274 |
Prepaid expenses and other | 63 | 54 |
Total Current Assets | 1,084 | 1,398 |
OTHER ASSETS | ||
Goodwill | 1,407 | 1,407 |
Regulatory assets | 2,409 | 2,087 |
Income taxes and related accrued interest receivable | 81 | 75 |
Restricted cash equivalents | 14 | 14 |
Other | 166 | 163 |
Total Other Assets | 4,077 | 3,746 |
PROPERTY, PLANT AND EQUIPMENT | ||
Property, plant and equipment | 15,465 | 14,567 |
Accumulated depreciation | -4,959 | -4,863 |
Net Property, Plant and Equipment | 10,506 | 9,704 |
TOTAL ASSETS | 15,667 | 14,848 |
CURRENT LIABILITIES | ||
Short-term debt | 729 | 565 |
Current portion of long-term debt and project funding | 431 | 446 |
Accounts payable | 174 | 215 |
Accrued liabilities | 313 | 301 |
Capital lease obligations due within one year | 10 | 9 |
Taxes accrued | 41 | 56 |
Interest accrued | 47 | 47 |
Liabilities and accrued interest related to uncertain tax positions | 6 | 397 |
Other | 314 | 277 |
Total Current Liabilities | 2,065 | 2,313 |
DEFERRED CREDITS | ||
Regulatory liabilities | 343 | 399 |
Deferred income tax liabilities, net | 3,266 | 2,928 |
Investment tax credits | 16 | 17 |
Pension benefit obligation | 396 | 116 |
Other postretirement benefit obligations | 265 | 206 |
Liabilities and accrued interest related to uncertain tax positions | 2 | 28 |
Other | 193 | 189 |
Total Deferred Credits | 4,481 | 3,883 |
OTHER LONG-TERM LIABILITIES | ||
Long-term debt | 4,441 | 4,053 |
Transition bonds issued by ACE Funding | 171 | 214 |
Long-term project funding | 8 | 10 |
Capital lease obligations | 50 | 60 |
Total Other Long-Term Liabilities | 4,670 | 4,337 |
COMMITMENTS AND CONTINGENCIES | ||
PREFERRED STOCK | ||
Series A preferred stock, $.01 par value, 18,000 shares authorized, 12,600 and zero shares outstanding, respectively | 129 | |
EQUITY | ||
Common stock | 3 | 3 |
Premium on stock and other capital contributions | 3,800 | 3,751 |
Accumulated other comprehensive loss | -46 | -34 |
Retained earnings | 565 | 595 |
Total Equity | 4,322 | 4,315 |
TOTAL LIABILITIES AND EQUITY | 15,667 | 14,848 |
Potomac Electric Power Co [Member] | ||
CURRENT ASSETS | ||
Cash and cash equivalents | 6 | 9 |
Restricted cash equivalents | 5 | 3 |
Accounts receivable, less allowance for uncollectible accounts | 315 | 345 |
Inventories | 62 | 67 |
Deferred income tax assets, net | 14 | 48 |
Income taxes and related accrued interest receivable | 94 | 113 |
Prepaid expenses and other | 21 | 18 |
Total Current Assets | 517 | 603 |
OTHER ASSETS | ||
Regulatory assets | 697 | 563 |
Prepaid pension expense | 316 | 332 |
Investment in trust | 34 | 33 |
Income taxes and related accrued interest receivable | 30 | 36 |
Other | 71 | 66 |
Total Other Assets | 1,148 | 1,030 |
PROPERTY, PLANT AND EQUIPMENT | ||
Property, plant and equipment | 7,764 | 7,310 |
Accumulated depreciation | -2,816 | -2,772 |
Net Property, Plant and Equipment | 4,948 | 4,538 |
TOTAL ASSETS | 6,613 | 6,171 |
CURRENT LIABILITIES | ||
Short-term debt | 104 | 151 |
Current portion of long-term debt and project funding | 12 | 175 |
Accounts payable | 94 | 132 |
Accrued liabilities | 91 | 90 |
Accounts payable due to associated companies | 30 | 32 |
Capital lease obligations due within one year | 10 | 9 |
Taxes accrued | 32 | 34 |
Interest accrued | 19 | 20 |
Liabilities and accrued interest related to uncertain tax positions | 37 | |
Customer deposits | 44 | 46 |
Other | 102 | 75 |
Total Current Liabilities | 538 | 801 |
DEFERRED CREDITS | ||
Regulatory liabilities | 104 | 113 |
Deferred income tax liabilities, net | 1,584 | 1,412 |
Investment tax credits | 2 | 3 |
Other postretirement benefit obligations | 57 | 61 |
Liabilities and accrued interest related to uncertain tax positions | 10 | |
Other | 67 | 65 |
Total Deferred Credits | 1,814 | 1,664 |
OTHER LONG-TERM LIABILITIES | ||
Long-term debt | 2,124 | 1,724 |
Capital lease obligations | 50 | 60 |
Total Other Long-Term Liabilities | 2,174 | 1,784 |
COMMITMENTS AND CONTINGENCIES | ||
EQUITY | ||
Common stock | ||
Premium on stock and other capital contributions | 1,010 | 930 |
Retained earnings | 1,077 | 992 |
Total Equity | 2,087 | 1,922 |
TOTAL LIABILITIES AND EQUITY | 6,613 | 6,171 |
Delmarva Power & Light Co/De [Member] | ||
CURRENT ASSETS | ||
Cash and cash equivalents | 4 | 2 |
Restricted cash equivalents | 5 | |
Accounts receivable, less allowance for uncollectible accounts | 193 | 208 |
Inventories | 55 | 51 |
Deferred income tax assets, net | 16 | 59 |
Income taxes and related accrued interest receivable | 34 | 32 |
Prepaid expenses and other | 12 | 9 |
Total Current Assets | 319 | 361 |
OTHER ASSETS | ||
Goodwill | 8 | 8 |
Regulatory assets | 356 | 311 |
Prepaid pension expense | 220 | 228 |
Income taxes and related accrued interest receivable | 4 | 4 |
Other | 12 | 12 |
Total Other Assets | 600 | 563 |
PROPERTY, PLANT AND EQUIPMENT | ||
Property, plant and equipment | 3,946 | 3,673 |
Accumulated depreciation | -1,021 | -1,016 |
Net Property, Plant and Equipment | 2,925 | 2,657 |
TOTAL ASSETS | 3,844 | 3,581 |
CURRENT LIABILITIES | ||
Short-term debt | 211 | 252 |
Current portion of long-term debt and project funding | 100 | 100 |
Accounts payable | 39 | 46 |
Accrued liabilities | 74 | 71 |
Accounts payable due to associated companies | 17 | 22 |
Taxes accrued | 3 | 4 |
Interest accrued | 7 | 6 |
Customer deposits | 24 | 25 |
Other | 42 | 35 |
Total Current Liabilities | 517 | 561 |
DEFERRED CREDITS | ||
Regulatory liabilities | 225 | 229 |
Deferred income tax liabilities, net | 893 | 816 |
Investment tax credits | 4 | 5 |
Other postretirement benefit obligations | 21 | 23 |
Other | 35 | 36 |
Total Deferred Credits | 1,178 | 1,109 |
OTHER LONG-TERM LIABILITIES | ||
Long-term debt | 971 | 867 |
COMMITMENTS AND CONTINGENCIES | ||
EQUITY | ||
Common stock | ||
Premium on stock and other capital contributions | 537 | 407 |
Retained earnings | 641 | 637 |
Total Equity | 1,178 | 1,044 |
TOTAL LIABILITIES AND EQUITY | 3,844 | 3,581 |
Atlantic City Electric Co [Member] | ||
CURRENT ASSETS | ||
Cash and cash equivalents | 2 | 3 |
Restricted cash equivalents | 10 | 10 |
Accounts receivable, less allowance for uncollectible accounts | 167 | 186 |
Inventories | 23 | 28 |
Deferred income tax assets, net | 10 | 15 |
Income taxes and related accrued interest receivable | 151 | 147 |
Prepaid expenses and other | 13 | 16 |
Total Current Assets | 366 | 390 |
OTHER ASSETS | ||
Regulatory assets | 427 | 569 |
Prepaid pension expense | 96 | 106 |
Income taxes and related accrued interest receivable | 34 | 34 |
Restricted cash equivalents | 14 | 14 |
Other | 12 | 12 |
Total Other Assets | 583 | 735 |
PROPERTY, PLANT AND EQUIPMENT | ||
Property, plant and equipment | 3,073 | 2,901 |
Accumulated depreciation | -760 | -751 |
Net Property, Plant and Equipment | 2,313 | 2,150 |
TOTAL ASSETS | 3,262 | 3,275 |
CURRENT LIABILITIES | ||
Short-term debt | 127 | 138 |
Current portion of long-term debt and project funding | 59 | 148 |
Accounts payable | 20 | 21 |
Accrued liabilities | 103 | 105 |
Accounts payable due to associated companies | 15 | 15 |
Taxes accrued | 1 | 12 |
Interest accrued | 13 | 13 |
Customer deposits | 21 | 22 |
Other | 22 | 23 |
Total Current Liabilities | 381 | 497 |
DEFERRED CREDITS | ||
Regulatory liabilities | 14 | 57 |
Deferred income tax liabilities, net | 865 | 833 |
Investment tax credits | 5 | 5 |
Other postretirement benefit obligations | 36 | 35 |
Other | 16 | 14 |
Total Deferred Credits | 936 | 944 |
OTHER LONG-TERM LIABILITIES | ||
Long-term debt | 888 | 753 |
Transition bonds issued by ACE Funding | 171 | 214 |
Total Other Long-Term Liabilities | 1,059 | 967 |
COMMITMENTS AND CONTINGENCIES | ||
EQUITY | ||
Common stock | 26 | 26 |
Premium on stock and other capital contributions | 651 | 651 |
Retained earnings | 209 | 190 |
Total Equity | 886 | 867 |
TOTAL LIABILITIES AND EQUITY | $3,262 | $3,275 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, except Share data, unless otherwise specified | ||
Accounts receivable, allowance for uncollectible accounts | $40 | $38 |
Series A preferred stock, par value | $0.01 | |
Series A preferred stock, shares authorized | 18,000 | |
Series A preferred stock, shares outstanding | 12,600 | 0 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares outstanding | 252,728,684 | 250,324,898 |
Potomac Electric Power Co [Member] | ||
Accounts receivable, allowance for uncollectible accounts | 16 | 16 |
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 [Member] | ||
Accounts receivable, allowance for uncollectible accounts | 11 | 12 |
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 [Member] | ||
Accounts receivable, allowance for uncollectible accounts | $9 | $10 |
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 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
OPERATING ACTIVITIES | |||
Net Income (loss) | $242,000,000 | ($212,000,000) | $285,000,000 |
Loss (income) from discontinued operations, net of income taxes | 322,000,000 | -67,000,000 | |
Adjustments to reconcile net income to net cash from operating activities: | |||
Depreciation and amortization | 549,000,000 | 473,000,000 | 454,000,000 |
Deferred income taxes | 302,000,000 | 458,000,000 | 312,000,000 |
Gains on sales of land | -9,000,000 | ||
Losses on treasury rate locks reclassified into income | 1,000,000 | 1,000,000 | |
Impairment losses | 81,000,000 | 4,000,000 | 12,000,000 |
Other | 3,000,000 | -13,000,000 | -15,000,000 |
Changes in: | |||
Accounts receivable | 48,000,000 | -46,000,000 | -2,000,000 |
Inventories | 7,000,000 | 5,000,000 | -28,000,000 |
Prepaid expenses | -8,000,000 | 17,000,000 | -12,000,000 |
Regulatory assets and liabilities, net | -216,000,000 | -121,000,000 | -174,000,000 |
Accounts payable and accrued liabilities | -22,000,000 | 1,000,000 | 43,000,000 |
Pension contributions | -120,000,000 | -200,000,000 | |
Pension benefit obligation, excluding contributions | 48,000,000 | 65,000,000 | 65,000,000 |
Cash collateral related to derivative activities | -9,000,000 | 31,000,000 | 88,000,000 |
Income tax-related prepayments, receivables and payables | -173,000,000 | -182,000,000 | -160,000,000 |
Advanced payment made to taxing authority | -242,000,000 | ||
Other assets and liabilities | 10,000,000 | 9,000,000 | 16,000,000 |
Net current assets held for disposition or sale | 47,000,000 | -25,000,000 | |
Net Cash From Operating Activities | 854,000,000 | 497,000,000 | 592,000,000 |
INVESTING ACTIVITIES | |||
Investment in property, plant and equipment | -1,223,000,000 | -1,310,000,000 | -1,216,000,000 |
Department of Energy capital reimbursement awards received | 4,000,000 | 22,000,000 | 40,000,000 |
Proceeds from sales of land | 9,000,000 | ||
Changes in restricted cash equivalents | -12,000,000 | 1,000,000 | -1,000,000 |
Net other investing activities | -4,000,000 | 3,000,000 | 6,000,000 |
Proceeds from discontinued operations, early termination of finance leases held in trust | 873,000,000 | 202,000,000 | |
Net Cash Used By Investing Activities | -1,226,000,000 | -411,000,000 | -969,000,000 |
FINANCING ACTIVITIES | |||
Dividends paid on common stock | -272,000,000 | -270,000,000 | -248,000,000 |
Common stock issued for the Direct Stock Purchase and Dividend Reinvestment Plan (DRP) and employee-related compensation | 34,000,000 | 50,000,000 | 51,000,000 |
Issuances of common stock | 324,000,000 | ||
Issuances of Series A preferred stock | 126,000,000 | ||
Issuances of long-term debt | 766,000,000 | 800,000,000 | 450,000,000 |
Reacquisitions of long-term debt | -334,000,000 | -558,000,000 | -176,000,000 |
Issuances (repayments) of short-term debt, net | 164,000,000 | -200,000,000 | 33,000,000 |
Issuances of term loans | 250,000,000 | 200,000,000 | |
Repayments of term loans | -100,000,000 | -450,000,000 | |
Cost of issuances | -10,000,000 | -23,000,000 | -9,000,000 |
Net other financing activities | -11,000,000 | -11,000,000 | -8,000,000 |
Net Cash From (Used By) Financing Activities | 363,000,000 | -88,000,000 | 293,000,000 |
Net Increase (Decrease) In Cash and Cash Equivalents | -9,000,000 | -2,000,000 | -84,000,000 |
Cash and Cash Equivalents at Beginning of Year | 23,000,000 | 25,000,000 | 109,000,000 |
CASH AND CASH EQUIVALENTS AT END OF YEAR | 14,000,000 | 23,000,000 | 25,000,000 |
SUPPLEMENTAL CASH FLOW INFORMATION | |||
Cash paid for interest | 257,000,000 | 260,000,000 | 253,000,000 |
Cash (received) paid for income taxes (includes payments to (from) PHI for Federal income taxes) | -2,000,000 | 228,000,000 | |
Non-cash activities: | |||
Reclassification of property, plant and equipment to regulatory assets | 88,000,000 | ||
Reclassification of asset removal costs regulatory liability to accumulated depreciation | 61,000,000 | ||
Potomac Electric Power Co [Member] | |||
OPERATING ACTIVITIES | |||
Net Income (loss) | 171,000,000 | 150,000,000 | 126,000,000 |
Adjustments to reconcile net income to net cash from operating activities: | |||
Depreciation and amortization | 229,000,000 | 196,000,000 | 190,000,000 |
Deferred income taxes | 174,000,000 | 120,000,000 | 160,000,000 |
Gains on sales of land | -9,000,000 | ||
Investment tax credit amortization | -1,000,000 | -1,000,000 | |
Changes in: | |||
Accounts receivable | 27,000,000 | -39,000,000 | 22,000,000 |
Inventories | 5,000,000 | 2,000,000 | -19,000,000 |
Prepaid expenses | -2,000,000 | -1,000,000 | 6,000,000 |
Regulatory assets and liabilities, net | -163,000,000 | -99,000,000 | -110,000,000 |
Accounts payable and accrued liabilities | -34,000,000 | 26,000,000 | -10,000,000 |
Pension contributions | 0 | 0 | -85,000,000 |
Pension benefit obligation, excluding contributions | 16,000,000 | 21,000,000 | 21,000,000 |
Income tax-related prepayments, receivables and payables | -25,000,000 | -36,000,000 | -69,000,000 |
Interest accrued | 2,000,000 | ||
Other assets and liabilities | -3,000,000 | -11,000,000 | -8,000,000 |
Net Cash From Operating Activities | 386,000,000 | 330,000,000 | 223,000,000 |
INVESTING ACTIVITIES | |||
Investment in property, plant and equipment | -567,000,000 | -576,000,000 | -592,000,000 |
Department of Energy capital reimbursement awards received | 3,000,000 | 20,000,000 | 38,000,000 |
Proceeds from sales of land | 9,000,000 | ||
Changes in restricted cash equivalents | -3,000,000 | -3,000,000 | |
Net other investing activities | -2,000,000 | -5,000,000 | 4,000,000 |
Net Cash Used By Investing Activities | -560,000,000 | -564,000,000 | -550,000,000 |
FINANCING ACTIVITIES | |||
Dividends paid on common stock | -86,000,000 | -46,000,000 | -35,000,000 |
Capital contributions from Parent | 80,000,000 | 175,000,000 | 50,000,000 |
Issuances of long-term debt | 412,000,000 | 400,000,000 | 200,000,000 |
Reacquisitions of long-term debt | -175,000,000 | -200,000,000 | -38,000,000 |
Issuances (repayments) of short-term debt, net | -47,000,000 | -80,000,000 | 157,000,000 |
Cost of issuances | -7,000,000 | -7,000,000 | -4,000,000 |
Net other financing activities | -6,000,000 | -8,000,000 | -6,000,000 |
Net Cash From (Used By) Financing Activities | 171,000,000 | 234,000,000 | 324,000,000 |
Net Increase (Decrease) In Cash and Cash Equivalents | -3,000,000 | -3,000,000 | |
Cash and Cash Equivalents at Beginning of Year | 9,000,000 | 9,000,000 | 12,000,000 |
CASH AND CASH EQUIVALENTS AT END OF YEAR | 6,000,000 | 9,000,000 | 9,000,000 |
SUPPLEMENTAL CASH FLOW INFORMATION | |||
Cash paid for interest | 111,000,000 | 102,000,000 | 97,000,000 |
Cash (received) paid for income taxes (includes payments to (from) PHI for Federal income taxes) | -58,000,000 | -28,000,000 | -40,000,000 |
Non-cash activities: | |||
Reclassification of property, plant and equipment to regulatory assets | 50,000,000 | ||
Reclassification of asset removal costs regulatory liability to accumulated depreciation | 19,000,000 | ||
Delmarva Power & Light Co/De [Member] | |||
OPERATING ACTIVITIES | |||
Net Income (loss) | 104,000,000 | 89,000,000 | 73,000,000 |
Adjustments to reconcile net income to net cash from operating activities: | |||
Depreciation and amortization | 125,000,000 | 107,000,000 | 102,000,000 |
Deferred income taxes | 111,000,000 | 65,000,000 | 55,000,000 |
Investment tax credit amortization | -1,000,000 | -1,000,000 | -1,000,000 |
Changes in: | |||
Accounts receivable | 15,000,000 | -7,000,000 | -15,000,000 |
Inventories | -4,000,000 | 2,000,000 | -9,000,000 |
Regulatory assets and liabilities, net | -66,000,000 | -42,000,000 | -29,000,000 |
Accounts payable and accrued liabilities | -15,000,000 | -1,000,000 | 26,000,000 |
Pension contributions | 0 | -10,000,000 | -85,000,000 |
Pension benefit obligation, excluding contributions | 8,000,000 | 14,000,000 | 15,000,000 |
Income tax-related prepayments, receivables and payables | -3,000,000 | -1,000,000 | 8,000,000 |
Other assets and liabilities | -6,000,000 | -1,000,000 | -9,000,000 |
Net Cash From Operating Activities | 268,000,000 | 214,000,000 | 131,000,000 |
INVESTING ACTIVITIES | |||
Investment in property, plant and equipment | -352,000,000 | -357,000,000 | -320,000,000 |
Net other investing activities | -6,000,000 | 2,000,000 | |
Net Cash Used By Investing Activities | -358,000,000 | -355,000,000 | -320,000,000 |
FINANCING ACTIVITIES | |||
Dividends paid on common stock | -100,000,000 | -30,000,000 | |
Capital contributions from Parent | 130,000,000 | 60,000,000 | |
Issuances of long-term debt | 204,000,000 | 300,000,000 | 250,000,000 |
Reacquisitions of long-term debt | -100,000,000 | -250,000,000 | -97,000,000 |
Issuances (repayments) of short-term debt, net | -41,000,000 | 115,000,000 | -15,000,000 |
Cost of issuances | -2,000,000 | -3,000,000 | -3,000,000 |
Net other financing activities | 1,000,000 | 5,000,000 | -5,000,000 |
Net Cash From (Used By) Financing Activities | 92,000,000 | 137,000,000 | 190,000,000 |
Net Increase (Decrease) In Cash and Cash Equivalents | 2,000,000 | -4,000,000 | 1,000,000 |
Cash and Cash Equivalents at Beginning of Year | 2,000,000 | 6,000,000 | 5,000,000 |
CASH AND CASH EQUIVALENTS AT END OF YEAR | 4,000,000 | 2,000,000 | 6,000,000 |
SUPPLEMENTAL CASH FLOW INFORMATION | |||
Cash paid for interest | 45,000,000 | 47,000,000 | 44,000,000 |
Cash (received) paid for income taxes (includes payments to (from) PHI for Federal income taxes) | -43,000,000 | -8,000,000 | -24,000,000 |
Non-cash activities: | |||
Reclassification of property, plant and equipment to regulatory assets | 38,000,000 | ||
Reclassification of asset removal costs regulatory liability to accumulated depreciation | 42,000,000 | ||
Atlantic City Electric Co [Member] | |||
OPERATING ACTIVITIES | |||
Net Income (loss) | 45,000,000 | 50,000,000 | 35,000,000 |
Adjustments to reconcile net income to net cash from operating activities: | |||
Depreciation and amortization | 157,000,000 | 136,000,000 | 124,000,000 |
Deferred income taxes | 37,000,000 | 53,000,000 | 62,000,000 |
Investment tax credit amortization | -1,000,000 | -1,000,000 | |
Changes in: | |||
Accounts receivable | 18,000,000 | 7,000,000 | -7,000,000 |
Inventories | 5,000,000 | 2,000,000 | -5,000,000 |
Regulatory assets and liabilities, net | 13,000,000 | 19,000,000 | -33,000,000 |
Accounts payable and accrued liabilities | -13,000,000 | -1,000,000 | 15,000,000 |
Pension contributions | 0 | -30,000,000 | -30,000,000 |
Income tax-related prepayments, receivables and payables | -16,000,000 | -6,000,000 | -43,000,000 |
Other assets and liabilities | 13,000,000 | 12,000,000 | 19,000,000 |
Net Cash From Operating Activities | 259,000,000 | 241,000,000 | 136,000,000 |
INVESTING ACTIVITIES | |||
Investment in property, plant and equipment | -225,000,000 | -261,000,000 | -256,000,000 |
Department of Energy capital reimbursement awards received | 1,000,000 | 2,000,000 | 2,000,000 |
Net other investing activities | 3,000,000 | -1,000,000 | |
Net Cash Used By Investing Activities | -224,000,000 | -256,000,000 | -255,000,000 |
FINANCING ACTIVITIES | |||
Dividends paid on common stock | -26,000,000 | -60,000,000 | -35,000,000 |
Capital contributions from Parent | 75,000,000 | ||
Issuances of long-term debt | 150,000,000 | 100,000,000 | |
Reacquisitions of long-term debt | -48,000,000 | -108,000,000 | -41,000,000 |
Issuances (repayments) of short-term debt, net | -11,000,000 | 6,000,000 | 110,000,000 |
Repayments of term loans | -100,000,000 | ||
Net other financing activities | -1,000,000 | -1,000,000 | |
Net Cash From (Used By) Financing Activities | -36,000,000 | 12,000,000 | 34,000,000 |
Net Increase (Decrease) In Cash and Cash Equivalents | -1,000,000 | -3,000,000 | -85,000,000 |
Cash and Cash Equivalents at Beginning of Year | 3,000,000 | 6,000,000 | 91,000,000 |
CASH AND CASH EQUIVALENTS AT END OF YEAR | 2,000,000 | 3,000,000 | 6,000,000 |
SUPPLEMENTAL CASH FLOW INFORMATION | |||
Cash paid for interest | 61,000,000 | 67,000,000 | 68,000,000 |
Cash (received) paid for income taxes (includes payments to (from) PHI for Federal income taxes) | ($3,000,000) | ($21,000,000) | $1,000,000 |
Consolidated_Statements_of_Cas1
Consolidated Statements of Cash Flows (Parenthetical) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Capitalized interest | $8 | $7 | $8 |
Potomac Electric Power Co [Member] | |||
Capitalized interest | 5 | 5 | 4 |
Delmarva Power & Light Co/De [Member] | |||
Capitalized interest | 1 | 2 | 2 |
Atlantic City Electric Co [Member] | |||
Capitalized interest | $1 | $1 | $2 |
Consolidated_Statements_of_Equ
Consolidated Statements of Equity (USD $) | Total | Common Stock [Member] | Premium on Stock [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive (Loss) Income [Member] | Potomac Electric Power Co [Member] | Potomac Electric Power Co [Member] | Potomac Electric Power Co [Member] | Potomac Electric Power Co [Member] | Delmarva Power & Light Co/De [Member] | Delmarva Power & Light Co/De [Member] | Delmarva Power & Light Co/De [Member] | Delmarva Power & Light Co/De [Member] | Atlantic City Electric Co [Member] | Atlantic City Electric Co [Member] | Atlantic City Electric Co [Member] | Atlantic City Electric Co [Member] |
In Millions, except Share data, unless otherwise specified | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Common Stock [Member] | Premium on Stock [Member] | Retained Earnings [Member] | USD ($) | Common Stock [Member] | Premium on Stock [Member] | Retained Earnings [Member] | USD ($) | Common Stock [Member] | Premium on Stock [Member] | Retained Earnings [Member] |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | |||||||||||
Balance at Dec. 31, 2011 | $4,304 | $2 | $3,325 | $1,040 | ($63) | $1,502 | $705 | $797 | $852 | $347 | $505 | $802 | $26 | $576 | $200 | ||
Balance, Shares at Dec. 31, 2011 | 227,500,190 | 100 | 1,000 | 8,546,017 | |||||||||||||
Net Income (loss) | 285 | 285 | 126 | 126 | 73 | 73 | 35 | 35 | |||||||||
Other comprehensive income (loss) | 15 | 15 | |||||||||||||||
Capital contribution from Parent | 50 | 50 | 60 | 60 | |||||||||||||
Dividends on common stock | -248 | -248 | -35 | -35 | -35 | -35 | |||||||||||
Issuance of common stock: | |||||||||||||||||
Original issue shares, net | 19 | 19 | |||||||||||||||
Original issue shares, net, shares | 854,060 | ||||||||||||||||
DRP original shares | 32 | 32 | |||||||||||||||
DRP original shares, shares | 2,000,000 | 1,661,177 | |||||||||||||||
Net activity related to stock-based awards | 7 | 7 | |||||||||||||||
Balance at Dec. 31, 2012 | 4,414 | 2 | 3,383 | 1,077 | -48 | 1,643 | 755 | 888 | 985 | 407 | 578 | 802 | 26 | 200 | |||
Balance, Shares at Dec. 31, 2012 | 230,015,427 | 100 | 1,000 | 8,546,017 | |||||||||||||
Net Income (loss) | -430 | 23 | 26 | 9 | |||||||||||||
Balance at Mar. 31, 2013 | |||||||||||||||||
Balance at Dec. 31, 2012 | 4,414 | 2 | 3,383 | 1,077 | -48 | 1,643 | 755 | 888 | 985 | 578 | 802 | 26 | 576 | 200 | |||
Balance, Shares at Dec. 31, 2012 | 230,015,427 | 100 | 1,000 | 8,546,017 | |||||||||||||
Net Income (loss) | -212 | -212 | 150 | 150 | 89 | 89 | 50 | 50 | |||||||||
Other comprehensive income (loss) | 14 | 14 | |||||||||||||||
Capital contribution from Parent | 175 | 175 | 75 | 75 | |||||||||||||
Dividends on common stock | -270 | -270 | -46 | -46 | -30 | -30 | -60 | -60 | |||||||||
Issuance of common stock: | |||||||||||||||||
Original issue shares, net | 332 | 1 | 331 | ||||||||||||||
Original issue shares, net, shares | 18,734,128 | ||||||||||||||||
DRP original shares | 30 | 30 | |||||||||||||||
DRP original shares, shares | 2,000,000 | 1,575,343 | |||||||||||||||
Net activity related to stock-based awards | 7 | 7 | |||||||||||||||
Balance at Dec. 31, 2013 | 4,315 | 3 | 3,751 | 595 | -34 | 1,922 | 930 | 992 | 1,044 | 637 | 867 | 26 | 651 | 190 | |||
Balance, Shares at Dec. 31, 2013 | 250,324,898 | 250,324,898 | 100 | 100 | 1,000 | 1,000 | 8,546,017 | 8,546,017 | |||||||||
Balance at Sep. 30, 2013 | |||||||||||||||||
Net Income (loss) | 58 | 24 | 28 | 9 | |||||||||||||
Balance at Dec. 31, 2013 | 4,315 | 1,922 | 1,044 | 867 | 26 | ||||||||||||
Balance, Shares at Dec. 31, 2013 | 250,324,898 | 100 | 100 | 1,000 | 1,000 | 8,546,017 | 8,546,017 | ||||||||||
Net Income (loss) | 75 | 32 | 37 | 10 | |||||||||||||
Balance at Mar. 31, 2014 | |||||||||||||||||
Balance at Dec. 31, 2013 | 4,315 | 3 | 3,751 | 595 | -34 | 1,922 | 930 | 992 | 1,044 | 407 | 637 | 867 | 26 | 190 | |||
Balance, Shares at Dec. 31, 2013 | 250,324,898 | 250,324,898 | 100 | 100 | 1,000 | 1,000 | 8,546,017 | 8,546,017 | |||||||||
Net Income (loss) | 242 | 242 | 171 | 171 | 104 | 104 | 45 | 45 | |||||||||
Other comprehensive income (loss) | -12 | -12 | |||||||||||||||
Capital contribution from Parent | 80 | 80 | 130 | 130 | |||||||||||||
Dividends on common stock | -272 | -272 | -86 | -86 | -100 | -100 | -26 | -26 | |||||||||
Issuance of common stock: | |||||||||||||||||
Original issue shares, net | 14 | 14 | |||||||||||||||
Original issue shares, net, shares | 1,310,276 | ||||||||||||||||
DRP original shares | 28 | 28 | |||||||||||||||
DRP original shares, shares | 1,000,000 | 1,122,575 | |||||||||||||||
Net activity related to stock-based awards | 7 | 7 | |||||||||||||||
Net activity related to stock-based awards, shares | -29,065 | ||||||||||||||||
Balance at Dec. 31, 2014 | 4,322 | 3 | 3,800 | 565 | -46 | 2,087 | 1,010 | 1,077 | 1,178 | 537 | 641 | 886 | 26 | 651 | 209 | ||
Balance, Shares at Dec. 31, 2014 | 252,728,684 | 252,728,684 | 100 | 100 | 1,000 | 1,000 | 8,546,017 | 8,546,017 | |||||||||
Balance at Sep. 30, 2014 | |||||||||||||||||
Net Income (loss) | 35 | 26 | 25 | 6 | |||||||||||||
Balance at Dec. 31, 2014 | $4,322 | $2,087 | $1,178 | $886 | $26 | $651 | |||||||||||
Balance, Shares at Dec. 31, 2014 | 252,728,684 | 100 | 100 | 1,000 | 1,000 | 8,546,017 | 8,546,017 |
Consolidated_Statements_of_Equ1
Consolidated Statements of Equity (Parenthetical) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Statement of Stockholders' Equity [Abstract] | |||||||||||
Dividends on common stock, per share | $0.27 | $0.27 | $0.27 | $0.27 | $0.27 | $0.27 | $0.27 | $0.27 | $1.08 | $1.08 | $1.08 |
Organization
Organization | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Organization | (1) ORGANIZATION | |||
Pepco Holdings, Inc. (PHI or Pepco Holdings), a Delaware corporation incorporated in 2001, is a holding company that, through the following regulated public utility subsidiaries, is engaged primarily in the transmission, distribution and default supply of electricity and the distribution and supply of natural gas (Power Delivery): | ||||
• | Potomac Electric Power Company (Pepco), which was incorporated in Washington, D.C. in 1896 and became a domestic Virginia corporation in 1949, | |||
• | Delmarva Power & Light Company (DPL), which was incorporated in Delaware in 1909 and became a domestic Virginia corporation in 1979, and | |||
• | Atlantic City Electric Company (ACE), which was incorporated in New Jersey in 1924. | |||
Each of PHI, Pepco, DPL and ACE is also a reporting company under the Securities Exchange Act of 1934, as amended. Together, Pepco, DPL and ACE constitute the Power Delivery segment for financial reporting purposes. | ||||
Through Pepco Energy Services, Inc. and its subsidiaries (collectively, Pepco Energy Services), PHI provides energy savings performance contracting services, underground transmission and distribution construction and maintenance services, and steam and chilled water under long-term contracts. | ||||
PHI Service Company, a wholly owned 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 service agreements 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 agreements. | ||||
Agreement and Plan of Merger with Exelon Corporation | ||||
PHI entered into an Agreement and Plan of Merger, dated April 29, 2014, as amended and restated on July 18, 2014 (the Merger Agreement), with Exelon Corporation, a Pennsylvania corporation (Exelon), and Purple Acquisition Corp., a Delaware corporation and an indirect, wholly owned subsidiary of Exelon (Merger Sub), providing for the merger of Merger Sub with and into PHI (the Merger), with PHI surviving the Merger as an indirect, wholly owned subsidiary of Exelon. Pursuant to the Merger Agreement, at the effective time of the Merger, each outstanding share of common stock, par value $0.01 per share, of PHI (other than (i) shares owned by Exelon, Merger Sub or any other direct or indirect wholly owned subsidiary of Exelon and shares owned by PHI or any direct or indirect, wholly owned subsidiary of PHI, and in each case not held on behalf of third parties (but not including shares held by PHI in any rabbi trust or similar arrangement in respect of any compensation plan or arrangement) and (ii) shares that are owned by stockholders who have perfected and not withdrawn a demand for appraisal rights pursuant to Delaware law), will be canceled and converted into the right to receive $27.25 in cash, without interest. | ||||
In connection with entering into the Merger Agreement, as further described in Note (13), “Preferred Stock,” PHI entered into a Subscription Agreement with Exelon dated April 29, 2014 (the Subscription Agreement), pursuant to which PHI issued to Exelon 9,000 originally issued shares of non-voting, non-convertible and non-transferable Series A preferred stock, par value $0.01 per share (the Preferred Stock), for a purchase price of $90 million on April 30, 2014. Exelon also committed, pursuant to the Subscription Agreement, to purchase 1,800 originally issued shares of Preferred Stock for a purchase price of $18 million at the end of each 90-day period following the date of the Subscription Agreement until the Merger closes or is terminated, up to a maximum of 18,000 shares of Preferred Stock for a maximum aggregate consideration of $180 million. In accordance with the Subscription Agreement, on each of July 29, 2014, October 27, 2014 and January 26, 2015, an additional 1,800 shares of Preferred Stock were issued by PHI to Exelon for a purchase price of $18 million. | ||||
Consummation of the Merger is subject to the satisfaction or waiver of specified closing conditions, including (i) the approval of the Merger by the holders of a majority of the outstanding shares of common stock of PHI; (ii) the receipt of regulatory approvals required to consummate the Merger, including approvals from the Federal Energy Regulatory Commission (FERC), the Federal Communications Commission (FCC), the Delaware Public Service Commission (DPSC), the District of Columbia Public Service Commission (DCPSC), the Maryland Public Service Commission (MPSC), the New Jersey Board of Public Utilities (NJBPU) and the Virginia State Corporation Commission (VSCC); (iii) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the HSR Act); and (iv) other customary closing conditions, including (a) the accuracy of each party’s representations and warranties (subject to customary materiality qualifiers) and (b) each party’s compliance with its obligations and covenants contained in the Merger Agreement (including covenants that may limit, restrict or prohibit PHI and its subsidiaries from taking specified actions during the period between the date of the Merger Agreement and the closing of the Merger or the termination of the Merger Agreement). In addition, the obligations of Exelon and Merger Sub to consummate the Merger are subject to the required regulatory approvals not imposing terms, conditions, obligations or commitments, individually or in the aggregate, that constitute a burdensome condition (as defined in the Merger Agreement). For additional discussion, see Note (7), “Regulatory Matters – Merger Approval Proceedings.” | ||||
On September 23, 2014, the stockholders of PHI approved the Merger, on October 7, 2014, the VSCC approved the Merger, and on November 20, 2014, FERC approved the Merger. On December 22, 2014, the applicable waiting period under the HSR Act expired, and the HSR Act no longer precludes completion of the Merger. Although the Department of Justice (DOJ) allowed the waiting period under the HSR Act to expire without taking any action with respect to the Merger, the DOJ has not advised PHI that it has concluded its investigation. In addition, the transfer of control of certain communications licenses held by certain of PHI’s subsidiaries has been approved by the FCC. The NJBPU approved the Merger on February 11, 2015. On February 13, 2015, Pepco Holdings, DPL, Exelon, certain of Exelon’s affiliates, the Staff of the DPSC and certain other parties, filed a settlement agreement with the DPSC with respect to the Merger. This settlement agreement is subject to approval by the DPSC. | ||||
The Merger Agreement may be terminated by each of PHI and Exelon under certain circumstances, including if the Merger is not consummated by July 29, 2015 (subject to extension by PHI or Exelon to October 29, 2015, if all of the conditions to closing, other than the conditions related to obtaining regulatory approvals, have been satisfied). The Merger Agreement also provides for certain termination rights for both PHI and Exelon, and further provides that, upon termination of the Merger Agreement under certain specified circumstances, PHI will be required to pay Exelon a termination fee of $259 million or reimburse Exelon for its expenses up to $40 million (which reimbursement of expenses shall reduce on a dollar for dollar basis any termination fee subsequently payable by PHI), provided, however, that if the Merger Agreement is terminated in connection with an acquisition proposal made under certain circumstances by a person who made an acquisition proposal between April 1, 2014 and the date of the Merger Agreement, the termination fee will be $293 million plus reimbursement of Exelon for its expenses up to $40 million (not subject to offset). In addition, if the Merger Agreement is terminated under certain circumstances due to the failure to obtain such regulatory approvals with respect to the Merger or the breach by Exelon of its obligations in respect of obtaining such regulatory approvals (a Regulatory Termination), PHI will be able to redeem any issued and outstanding Preferred Stock at par value. If the Merger Agreement is terminated, other than for a Regulatory Termination, PHI will be required to redeem the Preferred Stock at the purchase price of $10,000 per share, plus any unpaid accrued and accumulated dividends thereupon. | ||||
Power Delivery | ||||
Each of Pepco, DPL and ACE is a regulated public utility in the jurisdictions that comprise its service territory. Each utility owns and operates a network of wires, substations and other equipment that is classified as transmission facilities, distribution facilities or common facilities (which are used for both transmission and distribution). Transmission facilities are high-voltage systems that carry wholesale electricity into, or across, the utility’s service territory. Distribution facilities are low-voltage systems that carry electricity to end-use customers in the utility’s service territory. | ||||
Each utility is responsible for the distribution of electricity, and in the case of DPL, the distribution and supply of natural gas, in its service territory, for which it is paid tariff rates established by the applicable local public service commissions. Each utility also supplies electricity at regulated rates to retail customers in its service territory who do not elect to purchase electricity from a competitive energy supplier. The regulatory term for this supply service is Standard Offer Service (SOS) in Delaware, the District of Columbia and Maryland, and Basic Generation Service (BGS) in New Jersey. In these Notes to the consolidated financial statements, these supply service obligations are referred to generally as Default Electricity Supply. | ||||
Pepco Energy Services | ||||
Pepco Energy Services is engaged in the following businesses: | ||||
• | Energy savings performance contracting business: designing, constructing and operating energy efficiency projects and distributed generation equipment, including combined heat and power plants, principally for federal, state and local government customers; | |||
• | Underground transmission and distribution business: providing underground transmission and distribution construction and maintenance services for electric utilities in North America; and | |||
• | Thermal business: providing steam and chilled water under long-term contracts through systems owned and operated by Pepco Energy Services, primarily to hotels and casinos in Atlantic City, New Jersey. | |||
During 2012, Pepco Energy Services deactivated its Buzzard Point and Benning Road oil-fired generation facilities. Pepco Energy Services is demolishing the Benning Road generation facility and realizing the scrap metal salvage value of the facility. The demolition of the facility commenced in the fourth quarter of 2013 and is expected to be completed in the first quarter of 2015. Pepco Energy Services is recognizing the salvage proceeds associated with the scrap metals at the facility as realized. | ||||
Corporate and Other | ||||
Between 1990 and 1999, Potomac Capital Investment Corporation (PCI), a wholly owned subsidiary of PHI, through various subsidiaries, entered into certain transactions involving investments in aircraft and aircraft equipment, railcars and other assets. In connection with these transactions, PCI recorded deferred tax assets in prior years of $101 million in the aggregate. Following events that took place during the first quarter of 2013, which included (i) court decisions in favor of the Internal Revenue Service (IRS) with respect to other taxpayers’ cross-border lease and other structured transactions (see “Discontinued Operations – Cross-Border Energy Lease Investments” below), (ii) the change in PHI’s tax position with respect to the tax benefits associated with its cross-border energy leases, and (iii) PHI’s decision in March 2013 to begin to pursue the early termination of its remaining cross-border energy lease investments (which represented a substantial portion of the remaining assets within PCI) without the intent to reinvest these proceeds in income-producing assets, management evaluated the likelihood that PCI would be able to realize the $101 million of deferred tax assets in the future. Based on this evaluation, PCI established valuation allowances against these deferred tax assets totaling $101 million in the first quarter of 2013. Further, during the fourth quarter of 2013, in light of additional court decisions in favor of the IRS involving other taxpayers, and after consideration of all relevant factors, management determined that it would abandon the further pursuit of these deferred tax assets, and these assets totaling $101 million were charged off against the previously established valuation allowances. | ||||
Discontinued Operations | ||||
Cross-Border Energy Lease Investments | ||||
Through its subsidiary PCI, PHI held a portfolio of cross-border energy lease investments. During 2013, PHI completed the termination of its interest in its cross-border energy lease investments and, as a result, these investments have been accounted for as discontinued operations. | ||||
Pepco Energy Services | ||||
In December 2009, PHI announced the wind-down of the retail energy supply component of the Pepco Energy Services business which was comprised of the retail electric and natural gas supply businesses. Pepco Energy Services implemented the wind-down by not entering into any new retail electric or natural gas supply contracts while continuing to perform under its existing retail electric and natural gas supply contracts through their respective expiration dates. On March 21, 2013, Pepco Energy Services entered into an agreement whereby a third party assumed all the rights and obligations of the remaining retail natural gas supply customer contracts, and the associated supply obligations, inventory and derivative contracts. The transaction was completed on April 1, 2013. In addition, Pepco Energy Services completed the wind-down of its retail electric supply business in the second quarter of 2013 by terminating its remaining customer supply and wholesale purchase obligations beyond June 30, 2013. | ||||
The operations of Pepco Energy Services’ retail electric and natural gas supply businesses have been classified as discontinued operations and are no longer a part of the Pepco Energy Services segment for financial reporting purposes. | ||||
Delmarva Power & Light Co/De [Member] | ||||
Organization | (1) ORGANIZATION | |||
Delmarva Power & Light Company (DPL) is engaged in the transmission and distribution of electricity in portions of Delaware and Maryland and provides natural 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 service territories who do not elect to purchase electricity from a competitive supplier. Default Electricity Supply is known as Standard Offer Service in both Delaware and Maryland. DPL is a wholly owned subsidiary of Conectiv, LLC (Conectiv), which is wholly owned by Pepco Holdings, Inc. (Pepco Holdings or PHI). | ||||
PHI entered into an Agreement and Plan of Merger, dated April 29, 2014, as amended and restated on July 18, 2014 (the Merger Agreement), with Exelon Corporation, a Pennsylvania corporation (Exelon), and Purple Acquisition Corp., a Delaware corporation and an indirect, wholly owned subsidiary of Exelon (Merger Sub), providing for the merger of Merger Sub with and into PHI (the Merger), with PHI surviving the Merger as an indirect, wholly owned subsidiary of Exelon. Pursuant to the Merger Agreement, at the effective time of the Merger, each outstanding share of common stock, par value $0.01 per share, of PHI (other than (i) shares owned by Exelon, Merger Sub or any other direct or indirect wholly owned subsidiary of Exelon and shares owned by PHI or any direct or indirect wholly owned subsidiary of PHI, and in each case not held on behalf of third parties (but not including shares held by PHI in any rabbi trust or similar arrangement in respect of any compensation plan or arrangement) and (ii) shares that are owned by stockholders who have perfected and not withdrawn a demand for appraisal rights pursuant to Delaware law), will be canceled and converted into the right to receive $27.25 in cash, without interest. | ||||
In connection with entering into the Merger Agreement, PHI entered into a Subscription Agreement, dated April 29, 2014 (the Subscription Agreement), with Exelon, pursuant to which on April 30, 2014, PHI issued to Exelon 9,000 originally issued shares of non-voting, non-convertible and non-transferable Series A preferred stock, par value $0.01 per share (the Preferred Stock), for a purchase price of $90 million. Exelon also committed pursuant to the Subscription Agreement to purchase 1,800 originally issued shares of Preferred Stock for a purchase price of $18 million at the end of each 90-day period following the date of the Subscription Agreement until the Merger closes or is terminated, up to a maximum of 18,000 shares of Preferred Stock for a maximum aggregate consideration of $180 million. In accordance with the Subscription Agreement, on each of July 29, 2014, October 27, 2014 and January 26, 2015, an additional 1,800 shares of Preferred Stock were issued by PHI to Exelon for a purchase price of $18 million. The holders of the Preferred Stock will be entitled to receive a cumulative, non-participating cash dividend of 0.1% per annum, payable quarterly, when, as and if declared by PHI’s board of directors. The proceeds from the issuance of the Preferred Stock are not subject to restrictions and are intended to serve as a prepayment of any applicable reverse termination fee payable from Exelon to PHI. The Preferred Stock will be redeemable on the terms and in the circumstances set forth in the Merger Agreement and the Subscription Agreement. | ||||
Consummation of the Merger is subject to the satisfaction or waiver of specified closing conditions, including (i) the approval of the Merger by the holders of a majority of the outstanding shares of common stock of PHI; (ii) the receipt of regulatory approvals required to consummate the Merger, including approvals from the Federal Energy Regulatory Commission (FERC), the Federal Communications Commission (FCC), the Delaware Public Service Commission (DPSC), the District of Columbia Public Service Commission, the Maryland Public Service Commission (MPSC), the New Jersey Board of Public Utilities (NJBPU) and the Virginia State Corporation Commission (VSCC); (iii) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the HSR Act); and (iv) other customary closing conditions, including (a) the accuracy of each party’s representations and warranties (subject to customary materiality qualifiers) and (b) each party’s compliance with its obligations and covenants contained in the Merger Agreement (including covenants that may limit, restrict or prohibit PHI and its subsidiaries from taking specified actions during the period between the date of the Merger Agreement and the closing of the Merger or the termination of the Merger Agreement). In addition, the obligations of Exelon and Merger Sub to consummate the Merger are subject to the required regulatory approvals not imposing terms, conditions, obligations or commitments, individually or in the aggregate, that constitute a burdensome condition (as defined in the Merger Agreement). For additional discussion, see Note (7), “Regulatory Matters – Merger Approval Proceedings.” | ||||
On September 23, 2014, the stockholders of PHI approved the Merger, on October 7, 2014, the VSCC approved the Merger, and on November 20, 2014, FERC approved the Merger. On December 22, 2014, the applicable waiting period under the HSR Act expired, and the HSR Act no longer precludes completion of the Merger. Although the Department of Justice (DOJ) allowed the waiting period under the HSR Act to expire without taking any action with respect to the Merger, the DOJ has not advised PHI that it has concluded its investigation. In addition, the transfer of control of certain communications licenses held by certain of PHI’s subsidiaries has been approved by the FCC. The NJBPU approved the Merger on February 11, 2015. On February 13, 2015, Pepco Holdings, DPL, Exelon, certain of Exelon’s affiliates, the Staff of the DPSC and certain other parties, filed a settlement agreement with the DPSC with respect to the Merger. This settlement agreement is subject to approval by the DPSC. | ||||
The Merger Agreement may be terminated by each of PHI and Exelon under certain circumstances, including if the Merger is not consummated by July 29, 2015 (subject to extension by PHI or Exelon to October 29, 2015, if all of the conditions to closing, other than the conditions related to obtaining regulatory approvals, have been satisfied). The Merger Agreement also provides for certain termination rights for both PHI and Exelon, and further provides that, upon termination of the Merger Agreement under certain specified circumstances, PHI will be required to pay Exelon a termination fee of $259 million or reimburse Exelon for its expenses up to $40 million (which reimbursement of expenses shall reduce on a dollar for dollar basis any termination fee subsequently payable by PHI), provided, however, that if the Merger Agreement is terminated in connection with an acquisition proposal made under certain circumstances by a person who made an acquisition proposal between April 1, 2014 and the date of the Merger Agreement, the termination fee will be $293 million plus reimbursement of Exelon for its expenses up to $40 million (not subject to offset). In addition, if the Merger Agreement is terminated under certain circumstances due to the failure to obtain regulatory approvals with respect to the Merger or the breach by Exelon of its obligations in respect of obtaining such regulatory approvals (a Regulatory Termination), Exelon will pay PHI a reverse termination fee equal to the purchase price paid up to the date of termination by Exelon to purchase the Preferred Stock, through PHI’s redemption of the Preferred Stock for nominal consideration. If the Merger Agreement is terminated, other than for a Regulatory Termination, PHI will be required to redeem the Preferred Stock at the purchase price of $10,000 per share, plus any unpaid accrued and accumulated dividends thereupon. | ||||
Potomac Electric Power Co [Member] | ||||
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 George’s County and Montgomery County in suburban Maryland. Pepco also provides Default Electricity Supply, which is the supply of electricity at regulated rates to retail customers in its service territories who do not elect to purchase electricity from a competitive energy supplier. Default Electricity Supply is known as Standard Offer Service in both the District of Columbia and Maryland. Pepco is a wholly owned subsidiary of Pepco Holdings, Inc. (Pepco Holdings or PHI). | ||||
PHI entered into an Agreement and Plan of Merger, dated April 29, 2014, as amended and restated on July 18, 2014 (the Merger Agreement), with Exelon Corporation, a Pennsylvania corporation (Exelon), and Purple Acquisition Corp., a Delaware corporation and an indirect, wholly owned subsidiary of Exelon (Merger Sub), providing for the merger of Merger Sub with and into PHI (the Merger), with PHI surviving the Merger as an indirect, wholly owned subsidiary of Exelon. Pursuant to the Merger Agreement, at the effective time of the Merger, each outstanding share of common stock, par value $0.01 per share, of PHI (other than (i) shares owned by Exelon, Merger Sub or any other direct or indirect wholly owned subsidiary of Exelon and shares owned by PHI or any direct or indirect wholly owned subsidiary of PHI, and in each case not held on behalf of third parties (but not including shares held by PHI in any rabbi trust or similar arrangement in respect of any compensation plan or arrangement) and (ii) shares that are owned by stockholders who have perfected and not withdrawn a demand for appraisal rights pursuant to Delaware law), will be canceled and converted into the right to receive $27.25 in cash, without interest. | ||||
In connection with entering into the Merger Agreement, PHI entered into a Subscription Agreement, dated April 29, 2014 (the Subscription Agreement), with Exelon, pursuant to which on April 30, 2014, PHI issued to Exelon 9,000 originally issued shares of non-voting, non-convertible and non-transferable Series A preferred stock, par value $0.01 per share (the Preferred Stock), for a purchase price of $90 million. Exelon also committed pursuant to the Subscription Agreement to purchase 1,800 originally issued shares of Preferred Stock for a purchase price of $18 million at the end of each 90-day period following the date of the Subscription Agreement until the Merger closes or is terminated, up to a maximum of 18,000 shares of Preferred Stock for a maximum aggregate consideration of $180 million. In accordance with the Subscription Agreement, on each of July 29, 2014, October 27, 2014 and January 26, 2015, an additional 1,800 shares of Preferred Stock were issued by PHI to Exelon for a purchase price of $18 million. The holders of the Preferred Stock will be entitled to receive a cumulative, non-participating cash dividend of 0.1% per annum, payable quarterly, when, as and if declared by PHI’s board of directors. The proceeds from the issuance of the Preferred Stock are not subject to restrictions and are intended to serve as a prepayment of any applicable reverse termination fee payable from Exelon to PHI. The Preferred Stock will be redeemable on the terms and in the circumstances set forth in the Merger Agreement and the Subscription Agreement. | ||||
Consummation of the Merger is subject to the satisfaction or waiver of specified closing conditions, including (i) the approval of the Merger by the holders of a majority of the outstanding shares of common stock of PHI; (ii) the receipt of regulatory approvals required to consummate the Merger, including approvals from the Federal Energy Regulatory Commission (FERC), the Federal Communications Commission (FCC), the Delaware Public Service Commission (DPSC), the District of Columbia Public Service Commission (DCPSC), the Maryland Public Service Commission (MPSC), the New Jersey Board of Public Utilities (NJBPU) and the Virginia State Corporation Commission (VSCC); (iii) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the HSR Act); and (iv) other customary closing conditions, including (a) the accuracy of each party’s representations and warranties (subject to customary materiality qualifiers) and (b) each party’s compliance with its obligations and covenants contained in the Merger Agreement (including covenants that may limit, restrict or prohibit PHI and its subsidiaries from taking specified actions during the period between the date of the Merger Agreement and the closing of the Merger or the termination of the Merger Agreement). In addition, the obligations of Exelon and Merger Sub to consummate the Merger are subject to the required regulatory approvals not imposing terms, conditions, obligations or commitments, individually or in the aggregate, that constitute a burdensome condition (as defined in the Merger Agreement). For additional discussion, see Note (6), “Regulatory Matters – Merger Approval Proceedings.” | ||||
On September 23, 2014, the stockholders of PHI approved the Merger, on October 7, 2014, the VSCC approved the Merger, and on November 20, 2014, FERC approved the Merger. On December 22, 2014, the applicable waiting period under the HSR Act expired, and the HSR Act no longer precludes completion of the Merger. Although the Department of Justice (DOJ) allowed the waiting period under the HSR Act to expire without taking any action with respect to the Merger, the DOJ has not advised PHI that it has concluded its investigation. In addition, the transfer of control of certain communications licenses held by certain of PHI’s subsidiaries has been approved by the FCC. The NJBPU approved the Merger on February 11, 2015. On February 13, 2015, Pepco Holdings, Delmarva Power & Light Company (DPL), Exelon, certain of Exelon’s affiliates, the Staff of the DPSC and certain other parties, filed a settlement agreement with the DPSC with respect to the Merger. This settlement agreement is subject to approval by the DPSC. | ||||
The Merger Agreement may be terminated by each of PHI and Exelon under certain circumstances, including if the Merger is not consummated by July 29, 2015 (subject to extension by PHI or Exelon to October 29, 2015, if all of the conditions to closing, other than the conditions related to obtaining regulatory approvals, have been satisfied). The Merger Agreement also provides for certain termination rights for both PHI and Exelon, and further provides that, upon termination of the Merger Agreement under certain specified circumstances, PHI will be required to pay Exelon a termination fee of $259 million or reimburse Exelon for its expenses up to $40 million (which reimbursement of expenses shall reduce on a dollar for dollar basis any termination fee subsequently payable by PHI), provided, however, that if the Merger Agreement is terminated in connection with an acquisition proposal made under certain circumstances by a person who made an acquisition proposal between April 1, 2014 and the date of the Merger Agreement, the termination fee will be $293 million plus reimbursement of Exelon for its expenses up to $40 million (not subject to offset). In addition, if the Merger Agreement is terminated under certain circumstances due to the failure to obtain regulatory approvals with the respect to the Merger or the breach by Exelon of its obligations in respect of obtaining such regulatory approvals (a Regulatory Termination), Exelon will pay PHI a reverse termination fee equal to the purchase price paid up to the date of termination by Exelon to purchase the Preferred Stock, through PHI’s redemption of the Preferred Stock for nominal consideration. If the Merger Agreement is terminated, other than for a Regulatory Termination, PHI will be required to redeem the Preferred Stock at the purchase price of $10,000 per share, plus any unpaid accrued and accumulated dividends thereupon. | ||||
Atlantic City Electric Co [Member] | ||||
Organization | (1) ORGANIZATION | |||
Atlantic City Electric Company (ACE) is engaged in the transmission and distribution of electricity in southern New Jersey. ACE also 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 energy supplier. Default Electricity Supply is known as Basic Generation Service in New Jersey. ACE is a wholly owned subsidiary of Conectiv, LLC (Conectiv), which is wholly owned by Pepco Holdings, Inc. (Pepco Holdings or PHI). | ||||
PHI entered into an Agreement and Plan of Merger, dated April 29, 2014, as amended and restated on July 18, 2014 (the Merger Agreement), with Exelon Corporation, a Pennsylvania corporation (Exelon), and Purple Acquisition Corp., a Delaware corporation and an indirect, wholly owned subsidiary of Exelon (Merger Sub), providing for the merger of Merger Sub with and into PHI (the Merger), with PHI surviving the Merger as an indirect, wholly owned subsidiary of Exelon. Pursuant to the Merger Agreement, at the effective time of the Merger, each outstanding share of common stock, par value $0.01 per share, of PHI (other than (i) shares owned by Exelon, Merger Sub or any other direct or indirect wholly owned subsidiary of Exelon and shares owned by PHI or any direct or indirect wholly owned subsidiary of PHI, and in each case not held on behalf of third parties (but not including shares held by PHI in any rabbi trust or similar arrangement in respect of any compensation plan or arrangement) and (ii) shares that are owned by stockholders who have perfected and not withdrawn a demand for appraisal rights pursuant to Delaware law), will be canceled and converted into the right to receive $27.25 in cash, without interest. | ||||
In connection with entering into the Merger Agreement, PHI entered into a Subscription Agreement, dated April 29, 2014 (the Subscription Agreement), with Exelon, pursuant to which on April 30, 2014, PHI issued to Exelon 9,000 originally issued shares of non-voting, non-convertible and non-transferable Series A preferred stock, par value $0.01 per share (the Preferred Stock), for a purchase price of $90 million. Exelon also committed pursuant to the Subscription Agreement to purchase 1,800 originally issued shares of Preferred Stock for a purchase price of $18 million at the end of each 90-day period following the date of the Subscription Agreement until the Merger closes or is terminated, up to a maximum of 18,000 shares of Preferred Stock for a maximum aggregate consideration of $180 million. In accordance with the Subscription Agreement, on each of July 29, 2014, October 27, 2014 and January 26, 2015, an additional 1,800 shares of Preferred Stock were issued by PHI to Exelon for a purchase price of $18 million. The holders of the Preferred Stock will be entitled to receive a cumulative, non-participating cash dividend of 0.1% per annum, payable quarterly, when, as and if declared by PHI’s board of directors. The proceeds from the issuance of the Preferred Stock are not subject to restrictions and are intended to serve as a prepayment of any applicable reverse termination fee payable from Exelon to PHI. The Preferred Stock will be redeemable on the terms and in the circumstances set forth in the Merger Agreement and the Subscription Agreement. | ||||
Consummation of the Merger is subject to the satisfaction or waiver of specified closing conditions, including (i) the approval of the Merger by the holders of a majority of the outstanding shares of common stock of PHI; (ii) the receipt of regulatory approvals required to consummate the Merger, including approvals from the Federal Energy Regulatory Commission (FERC), the Federal Communications Commission (FCC), the Delaware Public Service Commission (DPSC), the District of Columbia Public Service Commission, the Maryland Public Service Commission, the New Jersey Board of Public Utilities (NJBPU) and the Virginia State Corporation Commission (VSCC); (iii) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the HSR Act); and (iv) other customary closing conditions, including (a) the accuracy of each party’s representations and warranties (subject to customary materiality qualifiers) and (b) each party’s compliance with its obligations and covenants contained in the Merger Agreement (including covenants that may limit, restrict or prohibit PHI and its subsidiaries from taking specified actions during the period between the date of the Merger Agreement and the closing of the Merger or the termination of the Merger Agreement). In addition, the obligations of Exelon and Merger Sub to consummate the Merger are subject to the required regulatory approvals not imposing terms, conditions, obligations or commitments, individually or in the aggregate, that constitute a burdensome condition (as defined in the Merger Agreement). For additional discussion, see Note (6), “Regulatory Matters – Merger Approval Proceedings.” | ||||
On September 23, 2014, the stockholders of PHI approved the Merger, on October 7, 2014, the VSCC approved the Merger, and on November 20, 2014, FERC approved the Merger. On December 22, 2014, the applicable waiting period under the HSR Act expired, and the HSR Act no longer precludes completion of the Merger. Although the Department of Justice (DOJ) allowed the waiting period under the HSR Act to expire without taking any action with respect to the Merger, the DOJ has not advised PHI that it has concluded its investigation. In addition, the transfer of control of certain communications licenses held by certain of PHI’s subsidiaries has been approved by the FCC. The NJBPU approved the Merger on February 11, 2015. On February 13, 2015, Pepco Holdings, Delmarva Power & Light Company (DPL), Exelon, certain of Exelon’s affiliates, the Staff of the DPSC and certain other parties, filed a settlement agreement with the DPSC with respect to the Merger. This settlement agreement is subject to approval by the DPSC. | ||||
The Merger Agreement may be terminated by each of PHI and Exelon under certain circumstances, including if the Merger is not consummated by July 29, 2015 (subject to extension by PHI or Exelon to October 29, 2015, if all of the conditions to closing, other than the conditions related to obtaining regulatory approvals, have been satisfied). The Merger Agreement also provides for certain termination rights for both PHI and Exelon, and further provides that, upon termination of the Merger Agreement under certain specified circumstances, PHI will be required to pay Exelon a termination fee of $259 million or reimburse Exelon for its expenses up to $40 million (which reimbursement of expenses shall reduce on a dollar for dollar basis any termination fee subsequently payable by PHI), provided, however, that if the Merger Agreement is terminated in connection with an acquisition proposal made under certain circumstances by a person who made an acquisition proposal between April 1, 2014 and the date of the Merger Agreement, the termination fee will be $293 million plus reimbursement of Exelon for its expenses up to $40 million (not subject to offset). In addition, if the Merger Agreement is terminated under certain circumstances due to the failure to obtain regulatory approvals with respect to the Merger or the breach by Exelon of its obligations in respect of obtaining such regulatory approvals (a Regulatory Termination), Exelon will pay PHI a reverse termination fee equal to the purchase price paid up to the date of termination by Exelon to purchase the Preferred Stock, through PHI’s redemption of the Preferred Stock for nominal consideration. If the Merger Agreement is terminated, other than for a Regulatory Termination, PHI will be required to redeem the Preferred Stock at the purchase price of $10,000 per share, plus any unpaid accrued and accumulated dividends thereupon. |
Significant_Accounting_Policie
Significant Accounting Policies | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
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 an interest and can exercise significant influence over the operations and policies of the entity. Certain transmission and other facilities currently held are consolidated in proportion to PHI’s percentage interest in the facility. | |||||||||||||||||||||||||
Consolidation of Variable Interest Entities | |||||||||||||||||||||||||
PHI assesses its contractual arrangements with variable interest entities (VIEs) to determine whether it is the primary beneficiary and thereby has to consolidate the entities in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 810. The guidance addresses conditions under which an entity should be consolidated based upon variable interests rather than voting interests. See Note (17), “Variable Interest Entities,” for additional information. | |||||||||||||||||||||||||
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 Pepco Holdings 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 and goodwill impairment calculations, fair value calculations for derivative instruments, pension and other postretirement benefit assumptions, the assessment of the probability of recovery of regulatory assets, accrual of storm restoration costs, accrual of unbilled revenue, recognition of changes in network service transmission rates for prior service year costs, accrual of loss contingency liabilities for general litigation and auto and other liability claims, accrual of interest related to income taxes, the recognition of lease income and income tax benefits for investments in finance leases held in trust associated with PHI’s former cross-border energy lease investments (see Note (20), “Discontinued Operations – Cross-Border Energy Lease Investments”), and income tax provisions and reserves. Additionally, PHI is subject to legal, regulatory and other proceedings and claims that arise in the ordinary course of its business. PHI records an estimated liability for these proceedings and claims when it is probable that a loss has been incurred and the loss is reasonably estimable. | |||||||||||||||||||||||||
Revenue Recognition | |||||||||||||||||||||||||
Regulated Revenue | |||||||||||||||||||||||||
Power Delivery recognizes revenue upon distribution of electricity and natural gas to its customers, including unbilled revenue for services rendered but not yet billed. PHI’s unbilled revenue was $172 million and $177 million as of December 31, 2014 and 2013, respectively, and these amounts are included in Accounts receivable. PHI’s utility subsidiaries calculate unbilled revenue using an output-based methodology. This methodology is based on the supply of electricity or natural 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 natural gas expected to be lost in the process of its transmission and distribution to customers). The assumptions and judgments 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 consumption of electricity and natural gas by the utility customers, such as fuel, energy, or other similar taxes, are components of the tariff rates charged by PHI’s utility subsidiaries and, as such, are billed to customers and recorded in Operating revenue. Accruals for the remittance of these taxes are recorded in Other taxes. | |||||||||||||||||||||||||
Pepco Energy Services Revenue | |||||||||||||||||||||||||
Revenue for Pepco Energy Services’ energy savings performance construction business and certain construction contracts in its underground transmission and distribution business is recognized using the percentage-of-completion method which recognizes revenue as work is completed and costs are incurred on its contracts. Under this method, Pepco Energy Services recognizes these contractual revenues based on the percentage of incurred costs relative to the estimated costs to complete a contract. Revenues from its operation and maintenance activities and measurement and verification activities in its energy savings business and certain construction contracts in its underground transmission and distribution business are recognized when earned. | |||||||||||||||||||||||||
Taxes Assessed by a Governmental Authority on Revenue-Producing Transactions | |||||||||||||||||||||||||
Taxes included in PHI’s gross revenues were $321 million, $346 million and $356 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||||||
Accounting for Derivatives | |||||||||||||||||||||||||
PHI and its subsidiaries may use derivative instruments primarily to manage risk associated with commodity prices and interest rates. Risk management policies are determined by PHI’s Corporate Risk Management Committee (CRMC). The CRMC monitors interest rate fluctuation, commodity price fluctuation and credit risk exposure, and sets risk management policies that establish limits on unhedged risk. | |||||||||||||||||||||||||
PHI accounts for its derivative activities in accordance with FASB guidance on derivatives and hedging. Derivatives are recorded on the consolidated balance sheets as Derivative assets or Derivative liabilities and measured at fair value. | |||||||||||||||||||||||||
Changes in the fair value of derivatives held by DPL that do not qualify for hedge accounting or are not designated as hedges are presented on the consolidated statements of income (loss) as Fuel and purchased energy expense or Operating revenue, respectively. Changes in the fair value of derivatives held by DPL are deferred as regulatory assets or liabilities under the accounting guidance for regulated operations. | |||||||||||||||||||||||||
The gain or loss on a derivative that qualifies as a cash flow hedge of an exposure to variable cash flows of a forecasted transaction is initially recorded in accumulated other comprehensive loss (AOCL) (a separate component of equity) to the extent that the hedge is effective and is subsequently reclassified into earnings, in the same category as the item being hedged, when the gain or loss from the forecasted transaction occurs. If it is probable that a forecasted transaction will not occur, the deferred gain or loss in AOCL is immediately reclassified to earnings. Gains or losses related to any ineffective portion of cash flow hedges are also recognized in earnings immediately. | |||||||||||||||||||||||||
Changes in the fair value of derivatives designated as fair value hedges, as well as changes in the fair value of the hedged asset, liability or firm commitment, are recorded in the consolidated statements of income (loss). | |||||||||||||||||||||||||
The impact of derivatives that are marked to market through current earnings, the ineffective portion of cash flow hedges, and the portion of fair value hedges that flows to current earnings are presented on a net basis in the consolidated statements of income (loss) as Operating revenue or as Fuel and purchased energy expense. When a hedging gain or loss is realized, it is presented on a net basis in the same line item as the underlying item being hedged. Unrealized derivative gains and losses are presented gross on the consolidated balance sheets except where contractual netting agreements are in place with individual counterparties. | |||||||||||||||||||||||||
The fair value of derivatives is determined using quoted exchange prices where available. For instruments that are not traded on an exchange, pricing services and external broker quotes may also be used to determine fair value. For some custom and complex instruments, internal models use market-based information when external broker quotes are not available. For certain long-dated instruments, broker or exchange data are extrapolated, or capacity prices are forecasted, for future periods where information is limited. Models are also used to estimate volumes for certain transactions. | |||||||||||||||||||||||||
PHI may enter into master netting arrangements to mitigate credit risk related to its derivatives. Under FASB guidance on offsetting of balance sheet accounts (ASC 210-20), amounts recognized for derivative assets and liabilities and the fair value amounts recognized for any related collateral positions executed with the same counterparty under such master netting agreements are offset. | |||||||||||||||||||||||||
See Note (14), “Derivative Instruments and Hedging Activities,” for more information about the types of derivatives employed by PHI, the components of any unrealized and realized gains and losses and Note (15), “Fair Value Disclosures,” for the methodologies used to value them. | |||||||||||||||||||||||||
Stock-Based Compensation | |||||||||||||||||||||||||
PHI recognizes compensation expense for stock-based awards, modifications or cancellations based on the grant-date fair value. Compensation expense is recognized over the requisite service period. A deferred tax asset and deferred tax benefit are also recognized concurrently with compensation expense for the tax effect of the deduction of stock options, restricted stock and restricted stock unit awards, which are deductible only upon exercise and/or vesting. | |||||||||||||||||||||||||
Historically, PHI’s compensation awards had included both time-based restricted stock awards that vest over a three-year service period and performance-based restricted stock units that were earned based on performance over a three-year period. Beginning in 2011, stock-based compensation awards have been granted primarily in the form of restricted stock units. The compensation expense associated with these awards is calculated based on the estimated fair value of the awards at the grant date and is recognized over the service or performance period. | |||||||||||||||||||||||||
PHI estimated the fair value of stock option awards on the date of grant using the Black-Scholes-Merton option pricing model. This model used assumptions related to expected term, expected volatility, expected dividend yield, and the risk-free interest rate. PHI used historical data to estimate award exercises and employee terminations within the valuation model; groups of employees that have similar historical exercise behavior were considered separately for valuation purposes. | |||||||||||||||||||||||||
PHI’s current policy is to issue new shares to satisfy vested awards of restricted stock units. | |||||||||||||||||||||||||
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, which was approved by the Securities and Exchange Commission (SEC) in 2002 in connection with the establishment of PHI as a public utility holding company. Under this tax sharing agreement, PHI’s consolidated federal income tax liability is allocated based upon PHI’s and its subsidiaries’ separate taxable income or loss amounts. | |||||||||||||||||||||||||
The consolidated financial statements include current and deferred income taxes. Current income taxes represent the amount of tax expected to be reported on PHI’s and its subsidiaries’ federal and state income tax returns. Deferred income tax assets and liabilities represent the tax effects of temporary differences between the financial statement basis and tax basis of existing assets and liabilities, and they are measured using presently enacted tax rates. See Note (11), “Income Taxes,” for a listing of primary deferred tax assets and liabilities. The portions of Pepco’s, DPL’s and ACE’s deferred tax liabilities applicable to their utility operations that have not been recovered from utility customers represent income taxes recoverable in the future and are included in Regulatory Assets on the consolidated balance sheets. See Note (7), “Regulatory Matters – Regulatory Assets and Regulatory Liabilities,” for additional information. | |||||||||||||||||||||||||
PHI recognizes interest on underpayments and overpayments of income taxes, interest on uncertain tax positions and tax-related penalties in income tax expense. Deferred income tax expense generally represents the net change during the reporting period in the net deferred tax liability and deferred recoverable income taxes. | |||||||||||||||||||||||||
Investment tax credits are amortized to income over the useful lives of the related property. | |||||||||||||||||||||||||
Cash and Cash Equivalents | |||||||||||||||||||||||||
Cash and cash equivalents include cash on hand, cash invested in money market funds and commercial paper held with original maturities of three months or less. | |||||||||||||||||||||||||
Restricted Cash Equivalents | |||||||||||||||||||||||||
The Restricted cash equivalents included in Current assets and the Restricted cash equivalents included in Other assets consist of (i) cash held as collateral that is restricted from use for general corporate purposes and (ii) cash equivalents that are specifically segregated based on management’s intent to use such cash equivalents for a particular purpose. The classification as current or non-current conforms to the classification of the related liabilities. | |||||||||||||||||||||||||
Accounts Receivable and Allowance for Uncollectible Accounts | |||||||||||||||||||||||||
PHI’s Accounts receivable balances primarily consist of customer accounts receivable arising from the sale of goods and services to customers within PHI’s service territories, other accounts receivable, and accrued unbilled revenue. Accrued unbilled revenue represents revenue earned in the current period but not billed to the customer until a future date (usually within one month after the receivable is recorded). | |||||||||||||||||||||||||
PHI maintains an allowance for uncollectible accounts and changes in the allowance are recorded as an adjustment to Other operation and maintenance expense in the consolidated statements of income (loss). PHI determines the amount of the allowance based on specific identification of material amounts at risk by customer and maintains a reserve based on its historical collection experience. The adequacy of this allowance is assessed on a quarterly basis by evaluating all known factors, such as the aging of the receivables, historical collection experience, the economic and competitive environment and changes in the creditworthiness of its customers. Accounts receivable are written off in the period in which the receivable is deemed uncollectible and collection efforts have been exhausted. Recoveries of Accounts receivable previously written off are recorded when received. Although PHI believes its allowance is adequate, it cannot anticipate with any certainty the changes in the financial condition of its customers. As a result, PHI records adjustments to the allowance for uncollectible accounts in the period in which the new information that requires an adjustment to the reserve becomes known. | |||||||||||||||||||||||||
Inventories | |||||||||||||||||||||||||
PHI utilizes the weighted average cost method of accounting for inventory items. Under this method, an average price is determined for the quantity of units acquired at each price level and is applied to the ending quantity to calculate the total ending inventory balance. Materials and supplies are recorded in Inventory when purchased and then expensed or capitalized to plant, as appropriate, when installed. | |||||||||||||||||||||||||
The cost of natural gas, including transportation costs, is included in Inventory when purchased and charged to Fuel and Purchased Energy expense when used. | |||||||||||||||||||||||||
Goodwill | |||||||||||||||||||||||||
Goodwill represents the excess of the purchase price of an acquisition over the fair value of the net assets acquired at the acquisition date. PHI tests its goodwill for impairment annually as of November 1 and whenever an event occurs or circumstances change in the interim that would more likely than not (that is, a greater than 50% chance) reduce the estimated fair value of a reporting unit below the carrying amount of its net assets. Factors that may result in an interim impairment test include, but are not limited to: a change in the identified reporting units; an adverse change in business conditions; a protracted decline in PHI’s stock price causing market capitalization to fall significantly below book value; an adverse regulatory action; or an impairment of long-lived assets in the reporting unit. PHI performed its most recent annual impairment test as of November 1, 2014, and its goodwill was not impaired as described in Note (6), “Goodwill.” | |||||||||||||||||||||||||
Regulatory Assets and Regulatory Liabilities | |||||||||||||||||||||||||
The operations of Pepco are regulated by the DCPSC and the MPSC. The operations of DPL are regulated by the DPSC and the MPSC. DPL’s interstate transportation and wholesale sale of natural gas are regulated by FERC. The operations of ACE are regulated by the NJBPU. The transmission of electricity by Pepco, DPL and ACE is regulated by FERC. | |||||||||||||||||||||||||
The FASB guidance on regulated operations (ASC 980) applies to Power Delivery. It allows regulated entities, in appropriate circumstances, to defer the income statement impact of certain costs that are expected to be recovered in future rates through the establishment of regulatory assets and defer certain revenues that are expected to be refunded to customers through the establishment of regulatory liabilities. Management’s assessment of the probability of recovery of regulatory assets requires judgment and interpretation of laws, regulatory commission orders and other factors. If management subsequently determines, based on changes in facts or circumstances, that a regulatory asset is not probable of recovery, then the regulatory asset would be eliminated through a charge to earnings. | |||||||||||||||||||||||||
Effective June 2007, the MPSC approved a bill stabilization adjustment (BSA) mechanism for retail customers of Pepco and DPL. Effective November 2009, the DCPSC approved a BSA for Pepco’s retail customers. For customers to whom the BSA applies, Pepco and DPL recognize distribution revenue based on an approved distribution charge per customer. From a revenue recognition standpoint, the BSA has the effect of decoupling the distribution revenue recognized in a reporting period from the amount of power delivered during that period. Pursuant to this mechanism, Pepco and DPL recognize either (i) a positive adjustment equal to the amount by which revenue from Maryland and the District of Columbia retail distribution sales falls short of the revenue that Pepco and DPL are entitled to earn based on the approved distribution charge per customer, or (ii) a negative adjustment equal to the amount by which revenue from such distribution sales exceeds the revenue that Pepco and DPL are entitled to earn based on the approved distribution charge per customer (a Revenue Decoupling Adjustment). A net positive Revenue Decoupling Adjustment is recorded as a regulatory asset and a net negative Revenue Decoupling Adjustment is recorded as a regulatory liability. | |||||||||||||||||||||||||
Leasing Activities | |||||||||||||||||||||||||
Pepco Holdings’ lease transactions include plant, office space, equipment, software, vehicles and elements of power purchase agreements (PPAs). In accordance with FASB guidance on leases (ASC 840), these leases are classified as either leveraged leases, operating leases or capital leases. | |||||||||||||||||||||||||
Leveraged Leases | |||||||||||||||||||||||||
Income from investments in leveraged lease transactions, in which PHI was an equity participant, was accounted for using the financing method. In accordance with the financing method, investments in leased property were recorded as a receivable from the lessee to be recovered through the collection of future rentals. Income was recognized over the life of the lease at a constant rate of return on the positive net investment. Each quarter, PHI reviewed the carrying value of each lease, which included a review of the underlying financial assumptions, the timing and collectibility of cash flows, and the credit quality of the lessee. Changes to the underlying assumptions, if any, were accounted for in accordance with FASB guidance on leases and reflected in the carrying value of the lease effective for the quarter within which they occurred. | |||||||||||||||||||||||||
Operating Leases | |||||||||||||||||||||||||
An operating lease in which PHI or a subsidiary is the lessee generally results in a level income statement charge over the term of the lease, reflecting the rental payments required by the lease agreement. If rental payments are not made on a straight-line basis, PHI’s policy is to recognize rent expense on a straight-line basis over the lease term unless another systematic and rational allocation basis is more representative of the time pattern in which the leased property is physically employed. | |||||||||||||||||||||||||
Capital Leases | |||||||||||||||||||||||||
For ratemaking purposes, capital leases in which PHI or a subsidiary is the lessee are treated as operating leases; therefore, in accordance with FASB guidance on regulated operations (ASC 980), the amortization of the leased asset is based on the recovery of rental payments through customer rates. Investments in equipment under capital leases are stated at cost, less accumulated depreciation. Depreciation is recorded on a straight-line basis over the equipment’s estimated useful life. | |||||||||||||||||||||||||
Arrangements Containing a Lease | |||||||||||||||||||||||||
PPAs are deemed to contain a lease if the arrangement conveys the right to control the use of property, plant or equipment. If so, PHI determines the appropriate lease accounting classification. | |||||||||||||||||||||||||
Property, Plant and Equipment | |||||||||||||||||||||||||
Property, plant and equipment is recorded at original cost, including labor, materials, asset retirement costs and other direct and indirect costs including capitalized interest. The carrying value of Property, plant and equipment is evaluated for impairment whenever circumstances indicate the carrying value of those assets may not be recoverable. Upon retirement, the cost of regulated property, net of salvage, is charged to Accumulated depreciation. For non-regulated property, the cost and accumulated depreciation of the property, plant and equipment retired or otherwise disposed of are removed from the related accounts and included in the determination of any gain or loss on disposition. | |||||||||||||||||||||||||
The annual provision for depreciation on electric and natural gas property, plant and equipment is computed on a straight-line basis using composite rates by classes of depreciable property. Non-operating and other property is generally depreciated on a straight-line basis over the useful lives of the assets. The table below provides system-wide composite annual depreciation rates for the years ended December 31, 2014, 2013 and 2012. | |||||||||||||||||||||||||
Transmission and | Generation | ||||||||||||||||||||||||
Distribution | |||||||||||||||||||||||||
2014 | 2013 | 2012 | 2014 | 2013 | 2012 | ||||||||||||||||||||
Pepco | 2.3 | % | 2.2 | % | 2.5 | % | — | — | — | ||||||||||||||||
DPL | 2.6 | % | 2.6 | % | 2.7 | % | — | — | — | ||||||||||||||||
ACE | 2.6 | % | 2.8 | % | 3 | % | — | — | — | ||||||||||||||||
Pepco Energy Services | — | — | — | 1.2 | % | 0.4 | % | 6.4 | %(a) | ||||||||||||||||
(a) | Percentage reflects accelerated depreciation of the Benning Road and Buzzard Point generating facilities retired during 2012. | ||||||||||||||||||||||||
In 2010, subsidiaries of PHI received awards from the U.S. Department of Energy (DOE) under the American Recovery and Reinvestment Act of 2009. Pepco was awarded $149 million from DOE to fund a portion of the costs incurred for the implementation of an advanced metering infrastructure (AMI) system (a system that collects, measures and analyzes energy usage data from advanced digital meters known as smart meters), direct load control, distribution automation and communications infrastructure in its Maryland and District of Columbia service territories. ACE was awarded $19 million from DOE to fund a portion of the costs incurred for the implementation of direct load control, distribution automation and communications infrastructure in its New Jersey service territory. PHI has elected to recognize the award proceeds as a reduction in the carrying value of the assets acquired rather than grant income over the service period. | |||||||||||||||||||||||||
Long-Lived Asset Impairment Evaluation | |||||||||||||||||||||||||
PHI evaluates long-lived assets to be held and used, such as generating property and equipment, and real estate, for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable. Examples of such events or changes include a significant decrease in the market price of a long-lived asset or a significant adverse change in the manner in which an asset is being used or its physical condition. A long-lived asset to be held and used is written down to its estimated fair value if the expected future undiscounted cash flow from the asset is less than its carrying value. | |||||||||||||||||||||||||
For long-lived assets held for sale, an impairment loss is recognized to the extent that the asset’s carrying value exceeds its estimated fair value including costs to sell. | |||||||||||||||||||||||||
Capitalized Interest and Allowance for Funds Used During Construction | |||||||||||||||||||||||||
In accordance with FASB guidance on regulated operations (ASC 980), PHI’s utility subsidiaries may capitalize the capital costs of financing the construction of plant and equipment as allowance for funds used during construction (AFUDC). This results in the debt portion of AFUDC being recorded as a reduction of Interest expense and the equity portion of AFUDC being recorded as an increase to Other income in the accompanying consolidated statements of income (loss). | |||||||||||||||||||||||||
Pepco Holdings recorded AFUDC for borrowed funds of $7 million, $7 million and $7 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||||||
Pepco Holdings recorded amounts for the equity component of AFUDC of $13 million, $11 million and $14 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||||||
Amortization of Debt Issuance and Reacquisition Costs | |||||||||||||||||||||||||
Pepco Holdings defers and amortizes debt issuance costs and long-term debt premiums and discounts over the lives of the respective debt issuances. When PHI utility subsidiaries refinance existing debt or redeem existing debt, any unamortized premiums, discounts and debt issuance costs, as well as debt redemption costs, are classified as Regulatory assets and are amortized over the life of the original or new issue. | |||||||||||||||||||||||||
Asset Removal Costs | |||||||||||||||||||||||||
In accordance with FASB guidance, asset removal costs are recorded by PHI utility subsidiaries as Regulatory liabilities. At December 31, 2014 and 2013, $250 million and $275 million, respectively, of asset removal costs are included in Regulatory liabilities in the accompanying consolidated balance sheets. | |||||||||||||||||||||||||
Pension and Postretirement Benefit Plans | |||||||||||||||||||||||||
PHI sponsors a non-contributory, defined benefit pension plan that covers substantially all employees of Pepco, DPL, ACE and certain employees of other PHI subsidiaries (the PHI Retirement Plan). PHI also provides supplemental retirement benefits to certain eligible executives and key employees through nonqualified retirement plans and provides certain postretirement health care and life insurance benefits for eligible retired employees. Most employees hired after January 1, 2005 will not have retiree health care coverage. | |||||||||||||||||||||||||
Net periodic benefit cost is included in Other operation and maintenance expense, net of the portion of the net periodic benefit cost capitalized as part of the cost of labor for internal construction projects. After intercompany allocations, the three utility subsidiaries are responsible for substantially all of the total PHI net periodic benefit cost. | |||||||||||||||||||||||||
PHI accounts for the PHI Retirement Plan, the nonqualified retirement plans, and the retirement health care and life insurance benefit plans in accordance with FASB guidance on retirement benefits (ASC 715). | |||||||||||||||||||||||||
See Note (9), “Pension and Other Postretirement Benefits,” for additional information. | |||||||||||||||||||||||||
Reclassifications | |||||||||||||||||||||||||
Certain prior period amounts have been reclassified in order to conform to the current period presentation. | |||||||||||||||||||||||||
Delmarva Power & Light Co/De [Member] | |||||||||||||||||||||||||
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 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 and goodwill impairment evaluations, fair value calculations for derivative instruments, pension and other postretirement benefits assumptions, the assessment of the probability of recovery of regulatory assets, accrual of storm restoration costs, accrual of unbilled revenue, recognition of changes in network service transmission rates for prior service year costs, accrual of loss contingency liabilities for general litigation and auto and other liability claims, 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 it is probable that a loss has been incurred and the loss is reasonably estimable. | |||||||||||||||||||||||||
Revenue Recognition | |||||||||||||||||||||||||
DPL recognizes revenues upon distribution of electricity and natural gas to its customers, including unbilled revenue for services rendered, but not yet billed. DPL’s unbilled revenue was $63 million and $61 million as of December 31, 2014 and 2013, respectively, and 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 natural 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 natural gas expected to be lost in the process of its transmission and distribution to customers). The assumptions and judgments 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. Revenues from non-regulated electricity and natural gas sales are included in Electric revenues and Natural gas revenues, respectively. | |||||||||||||||||||||||||
Taxes related to the consumption of electricity and natural gas by its customers, such as fuel, energy, or other similar taxes, are components of DPL’s tariffs and, as such, are billed to customers and recorded in Operating revenue. Accruals for the remittance of these taxes by DPL are recorded in Other taxes. | |||||||||||||||||||||||||
Taxes Assessed by a Governmental Authority on Revenue-Producing Transactions | |||||||||||||||||||||||||
Taxes included in DPL’s gross revenues were $16 million, $17 million and $15 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||||||
Accounting for Derivatives | |||||||||||||||||||||||||
DPL uses derivative instruments primarily to reduce natural gas commodity price volatility and to limit its customers’ exposure to natural gas price fluctuations under a hedging program approved by the DPSC. Derivatives are recorded in the balance sheets as Derivative assets or Derivative liabilities and measured at fair value. DPL enters physical natural gas contracts as part of the hedging program that qualify as normal purchases or normal sales, which are not required to be recorded in the financial statements until settled. DPL’s capacity contracts are not classified as derivatives. Changes in the fair value of derivatives that are not designated as cash flow hedges are reflected in income. | |||||||||||||||||||||||||
All premiums paid and other transaction costs incurred as part of DPL’s natural gas hedging activity, in addition to all gains and losses related to hedging activities, are fully recoverable through the fuel adjustment clause approved by the DPSC, and are deferred under Financial Accounting Standards Board (FASB) guidance on regulated operations (Accounting Standards Codification (ASC) 980) until recovered. | |||||||||||||||||||||||||
Long-Lived Asset Impairment Evaluation | |||||||||||||||||||||||||
DPL evaluates certain long-lived assets to be held and used (for example, equipment and real estate) for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable. Examples of such events or changes include a significant decrease in the market price of a long-lived asset or a significant adverse change in the manner in which an asset is being used or its physical condition. A long-lived asset to be held and used is written down to its estimated fair value if the expected future undiscounted cash flow from the asset is less than its carrying value. | |||||||||||||||||||||||||
For long-lived assets that can be classified as assets to be disposed of by sale, an impairment loss is recognized to the extent that the assets’ carrying value exceeds its estimated fair value including costs to sell. | |||||||||||||||||||||||||
Income Taxes | |||||||||||||||||||||||||
DPL, as an indirect subsidiary of Pepco Holdings, is included in the consolidated federal income tax return of PHI. Federal income taxes are allocated to DPL based upon the taxable income or loss amounts, determined on a separate return basis. | |||||||||||||||||||||||||
The financial statements include current and deferred income taxes. Current income taxes represent the amount of tax expected to be reported on DPL’s state income tax returns and the amount of federal income tax allocated from Pepco Holdings. | |||||||||||||||||||||||||
Deferred income tax assets and liabilities represent the tax effects of temporary differences between the financial statement basis and tax basis of existing assets and liabilities, and they are measured using presently enacted tax rates. The portion of DPL’s deferred tax liability applicable to its utility operations that has not been recovered from utility customers represents income taxes recoverable in the future and is included in Regulatory assets on the balance sheets. See Note (7), “Regulatory Matters,” for additional information. | |||||||||||||||||||||||||
Deferred income tax expense generally represents the net change during the reporting period in the net deferred tax liability and deferred recoverable income taxes. | |||||||||||||||||||||||||
DPL recognizes interest on underpayments and overpayments of income taxes, interest on uncertain tax positions, and tax-related penalties in income tax expense. | |||||||||||||||||||||||||
Investment tax credits are being amortized to income over the useful lives of the related property. | |||||||||||||||||||||||||
Consolidation of Variable Interest Entities | |||||||||||||||||||||||||
DPL assesses its contractual arrangements with variable interest entities (VIEs) to determine whether it is the primary beneficiary and thereby has to consolidate the entities in accordance with ASC 810. The guidance addresses conditions under which an entity should be consolidated based upon variable interests rather than voting interests. See Note (17), “Variable Interest Entities, “ for additional information. | |||||||||||||||||||||||||
Cash and Cash Equivalents | |||||||||||||||||||||||||
Cash and cash equivalents include cash on hand, cash invested in money market funds and commercial paper held with original maturities of three months or less. Additionally, deposits in PHI’s money pool, which DPL and certain other PHI subsidiaries use to manage short-term cash management requirements, are considered cash equivalents. Deposits in the money pool are guaranteed by PHI. PHI deposits funds in the money pool to the extent that the pool has insufficient funds to meet the needs of its participants, which may require PHI to borrow funds for deposit from external sources. | |||||||||||||||||||||||||
Accounts Receivable and Allowance for Uncollectible Accounts | |||||||||||||||||||||||||
DPL’s Accounts receivable balance primarily consists of customer accounts receivable arising from the sale of goods and services to customers within its service territory, other accounts receivable, and accrued unbilled revenue. Accrued unbilled revenue represents revenue earned in the current period but not billed to the customer until a future date (usually within one month after the receivable is recorded). | |||||||||||||||||||||||||
DPL maintains an allowance for uncollectible accounts and changes in the allowance are recorded as an adjustment to Other operation and maintenance expense in the statements of income. DPL determines the amount of the allowance based on specific identification of material amounts at risk by customer and maintains a reserve based on its historical collection experience. The adequacy of this allowance is assessed on a quarterly basis by evaluating all known factors such as the aging of the receivables, historical collection experience, the economic and competitive environment and changes in the creditworthiness of its customers. Accounts receivable are written off in the period in which the receivable is deemed uncollectible and collection efforts have been exhausted. Recoveries of Accounts receivable previously written off are recorded when received. Although DPL believes its allowance is adequate, it cannot anticipate with any certainty the changes in the financial condition of its customers. As a result, DPL records adjustments to the allowance for uncollectible accounts in the period in which the new information that requires an adjustment to the reserve becomes known. | |||||||||||||||||||||||||
Inventories | |||||||||||||||||||||||||
Included in Inventories are transmission and distribution materials and supplies and natural gas. DPL utilizes the weighted average cost method of accounting for inventory items. Under this method, an average price is determined for the quantity of units acquired at each price level and is applied to the ending quantity to calculate the total ending inventory balance. Materials and supplies are recorded in Inventory when purchased and then expensed or capitalized to plant, as appropriate, when installed. | |||||||||||||||||||||||||
The cost of natural gas, including transportation costs, is included in Inventory when purchased and charged to Gas purchased expense when used. | |||||||||||||||||||||||||
Goodwill | |||||||||||||||||||||||||
Goodwill represents the excess of the purchase price of an acquisition over the fair value of the net assets acquired at the acquisition date. DPL tests its goodwill for impairment annually as of November 1 and whenever an event occurs or circumstances change in the interim that would more likely than not (that is, a greater than 50% chance) reduce the estimated fair value of DPL below the carrying amount of its net assets. Factors that may result in an interim impairment test include, but are not limited to: a change in the identified reporting unit; an adverse change in business conditions; an adverse regulatory action; or an impairment of DPL’s long-lived assets. DPL performed its most recent annual impairment test as of November 1, 2014, and its goodwill was not impaired as described in Note (6), “Goodwill.” | |||||||||||||||||||||||||
Regulatory Assets and Regulatory Liabilities | |||||||||||||||||||||||||
Certain aspects of DPL’s business are subject to regulation by the DPSC and the MPSC. The transmission of electricity by DPL is regulated by FERC. DPL’s interstate transportation and wholesale sale of natural gas are regulated by FERC. | |||||||||||||||||||||||||
Based on the regulatory framework in which it has operated, DPL has historically applied, and in connection with its transmission and distribution business continues to apply, FASB guidance on regulated operations (ASC 980). The guidance allows regulated entities, in appropriate circumstances, to defer the income statement impact of certain costs that are expected to be recovered in future rates through the establishment of regulatory assets and defer certain revenues that are expected to be refunded to customers through the establishment of regulatory liabilities. Management’s assessment of the probability of recovery of regulatory assets requires judgment and interpretation of laws, regulatory commission orders and other factors. If management subsequently determines, based on changes in facts or circumstances, that a regulatory asset is not probable of recovery, the regulatory asset would be eliminated through a charge to earnings. | |||||||||||||||||||||||||
Effective June 2007, the MPSC approved a bill stabilization adjustment (BSA) mechanism for retail customers. For customers to whom the BSA applies, DPL recognizes distribution revenue based on an approved distribution charge per customer. From a revenue recognition standpoint, the BSA has the effect of decoupling the distribution revenue recognized in a reporting period from the amount of power delivered during that period. Pursuant to this mechanism, DPL recognizes either (i) a positive adjustment equal to the amount by which revenue from Maryland retail distribution sales falls short of the revenue that DPL is entitled to earn based on the approved distribution charge per customer, or (ii) a negative adjustment equal to the amount by which revenue from such distribution sales exceeds the revenue that DPL is entitled to earn based on the approved distribution charge per customer (a Revenue Decoupling Adjustment). A net positive Revenue Decoupling Adjustment is recorded as a regulatory asset and a net negative Revenue Decoupling Adjustment is recorded as a regulatory liability. | |||||||||||||||||||||||||
Property, Plant and Equipment | |||||||||||||||||||||||||
Property, plant and equipment is recorded at original cost, including labor, materials, asset retirement costs and other direct and indirect costs including capitalized interest. The carrying value of Property, plant and equipment is evaluated for impairment whenever circumstances indicate that the carrying value of those assets may not be recoverable. Upon retirement, the cost of regulated property, net of salvage, is charged to Accumulated depreciation. For additional information regarding the treatment of asset retirement obligations, see the “Asset Removal Costs” section included in this Note. | |||||||||||||||||||||||||
The annual provision for depreciation on electric and natural gas property, plant and equipment is computed on a straight-line basis using composite rates by classes of depreciable property. Non-operating and other property is generally depreciated on a straight-line basis over the useful lives of the assets. The system-wide composite annual depreciation rates for the years ended December 31, 2014, 2013 and 2012 for DPL’s property were approximately 2.6%, 2.6% and 2.7%, respectively. | |||||||||||||||||||||||||
Capitalized Interest and Allowance for Funds Used During Construction | |||||||||||||||||||||||||
In accordance with FASB guidance on regulated operations (ASC 980), utilities may capitalize the capital costs of financing the construction of plant and equipment as allowance for funds used during construction (AFUDC). This results in the debt portion of AFUDC being recorded as a reduction of Interest expense and the equity portion of AFUDC being recorded as an increase to Other income in the accompanying statements of income. | |||||||||||||||||||||||||
DPL recorded AFUDC for borrowed funds of $1 million, $2 million and $2 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||||||
DPL recorded amounts for the equity component of AFUDC of $2 million, $2 million and $3 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||||||
Leasing Activities | |||||||||||||||||||||||||
DPL’s lease transactions include plant, office space, equipment, software, vehicles and elements of power purchase agreements (PPAs). In accordance with FASB guidance on leases (ASC 840), these leases are classified as operating leases. | |||||||||||||||||||||||||
Operating Leases | |||||||||||||||||||||||||
An operating lease in which DPL is the lessee generally results in a level income statement charge over the term of the lease, reflecting the rental payments required by the lease agreement. If rental payments are not made on a straight-line basis, DPL’s policy is to recognize rent expense on a straight-line basis over the lease term unless another systematic and rational allocation basis is more representative of the time pattern in which the leased property is physically employed. | |||||||||||||||||||||||||
Arrangements Containing a Lease | |||||||||||||||||||||||||
PPAs are deemed to contain a lease if the arrangement conveys the right to control the use of property, plant or equipment. If so, DPL determines the appropriate lease accounting classification. | |||||||||||||||||||||||||
Amortization of Debt Issuance and Reacquisition Costs | |||||||||||||||||||||||||
DPL defers and amortizes debt issuance costs and long-term debt premiums and discounts over the lives of the respective debt issuances. When refinancing or redeeming existing debt, any unamortized premiums, discounts and debt issuance costs, as well as debt redemption costs, are classified as Regulatory assets and are amortized generally over the life of the original issue. | |||||||||||||||||||||||||
Asset Removal Costs | |||||||||||||||||||||||||
In accordance with FASB guidance, asset removal costs are recorded as regulatory liabilities. At December 31, 2014 and 2013, $166 million and $173 million, respectively, of asset removal costs are included in Regulatory liabilities in the accompanying balance sheets. | |||||||||||||||||||||||||
Pension and Postretirement Benefit Plans | |||||||||||||||||||||||||
Pepco Holdings sponsors a non-contributory, defined benefit pension plan that covers substantially all employees of DPL and certain employees of other Pepco Holdings subsidiaries (the PHI Retirement Plan). Pepco Holdings also provides supplemental retirement benefits to certain eligible executives and key employees through nonqualified retirement plans and provides certain postretirement health care and life insurance benefits for eligible retired employees. | |||||||||||||||||||||||||
The PHI Retirement Plan is accounted for in accordance with FASB guidance on retirement benefits (ASC 715). | |||||||||||||||||||||||||
Dividend Restrictions | |||||||||||||||||||||||||
All of DPL’s shares of outstanding common stock are held by Conectiv, its parent company. In addition to its future financial performance, the ability of DPL to pay dividends to its parent company is subject to limits imposed by: (i) state corporate laws, which impose limitations on the funds that can be used to pay dividends, and (ii) the prior rights of holders of existing and future preferred stock, mortgage bonds and other long-term debt issued by DPL and any other restrictions imposed in connection with the incurrence of liabilities. DPL has no shares of preferred stock outstanding. DPL had approximately $641 million and $637 million of retained earnings available for payment of common stock dividends at December 31, 2014 and 2013, respectively. These amounts represent the total retained earnings balances at those dates. | |||||||||||||||||||||||||
Reclassifications | |||||||||||||||||||||||||
Certain prior period amounts have been reclassified in order to conform to the current period presentation. | |||||||||||||||||||||||||
Potomac Electric Power Co [Member] | |||||||||||||||||||||||||
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 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, the assessment of the probability of recovery of regulatory assets, accrual of storm restoration costs, accrual of unbilled revenue, recognition of changes in network service transmission rates for prior service year costs, accrual of loss contingency liabilities for general litigation and auto and other liability claims 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 it is probable that a loss has been incurred and the loss is reasonably estimable. | |||||||||||||||||||||||||
Revenue Recognition | |||||||||||||||||||||||||
Pepco recognizes revenue upon distribution of electricity to its customers, including unbilled revenue for services rendered, but not yet billed. Pepco’s unbilled revenue was $77 million and $80 million as of December 31, 2014 and 2013, respectively, and 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). The assumptions and judgments 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 Pepco’s tariffs and, as such, are billed to customers and recorded in Operating revenue. Accruals for the remittance of these taxes by Pepco are recorded in Other taxes. | |||||||||||||||||||||||||
Taxes Assessed by a Governmental Authority on Revenue-Producing Transactions | |||||||||||||||||||||||||
Taxes included in Pepco’s gross revenues were $304 million, $318 million and $324 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||||||
Long-Lived Assets Impairment Evaluation | |||||||||||||||||||||||||
Pepco evaluates certain long-lived assets to be held and used (for example, equipment and real estate) for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable. Examples of such events or changes include a significant decrease in the market price of a long-lived asset or a significant adverse change in the manner in which an asset is being used or its physical condition. A long-lived asset to be held and used is written down to its estimated fair value if the expected future undiscounted cash flow from the asset is less than its carrying value. | |||||||||||||||||||||||||
For long-lived assets that can be classified as assets to be disposed of by sale, an impairment loss is recognized to the extent that the asset’s carrying value exceeds its estimated fair value including costs to sell. | |||||||||||||||||||||||||
Income Taxes | |||||||||||||||||||||||||
Pepco, as a direct subsidiary of Pepco Holdings, is included in the consolidated federal income tax return of PHI. Federal income taxes are allocated to Pepco based upon the taxable income or loss amounts, determined on a separate return basis. | |||||||||||||||||||||||||
The financial statements include current and deferred income taxes. Current income taxes represent the amount of tax expected to be reported on Pepco’s state income tax returns and the amount of federal income tax allocated from Pepco Holdings. | |||||||||||||||||||||||||
Deferred income tax assets and liabilities represent the tax effects of temporary differences between the financial statement basis and tax basis of existing assets and liabilities and they are measured using presently enacted tax rates. The portion of Pepco’s deferred tax liability applicable to its utility operations that has not been recovered from utility customers represents income taxes recoverable in the future and is included in Regulatory assets on the balance sheets. See Note (6), “Regulatory Matters,” for additional information. | |||||||||||||||||||||||||
Deferred income tax expense generally represents the net change during the reporting period in the net deferred tax liability and deferred recoverable income taxes. | |||||||||||||||||||||||||
Pepco recognizes interest on underpayments and overpayments of income taxes, interest on uncertain tax positions, and tax-related penalties in income tax expense. | |||||||||||||||||||||||||
Investment tax credits are being amortized to income over the useful lives of the related property. | |||||||||||||||||||||||||
Cash and Cash Equivalents | |||||||||||||||||||||||||
Cash and cash equivalents include cash on hand, cash invested in money market funds and commercial paper held with original maturities of three months or less. Additionally, deposits in PHI’s money pool, which Pepco and certain other PHI subsidiaries use to manage short-term cash management requirements, are considered cash equivalents. Deposits in the money pool are guaranteed by PHI. PHI deposits funds in the money pool to the extent that the pool has insufficient funds to meet the needs of its participants, which may require PHI to borrow funds for deposit from external sources. | |||||||||||||||||||||||||
Restricted Cash Equivalents | |||||||||||||||||||||||||
The Restricted cash equivalents included in Current assets consist of (i) cash held as collateral that is restricted from use for general corporate purposes and (ii) cash equivalents that are specifically segregated based on management’s intent to use such cash equivalents for a particular purpose. The classification as current conforms to the classification of the related liabilities. | |||||||||||||||||||||||||
Accounts Receivable and Allowance for Uncollectible Accounts | |||||||||||||||||||||||||
Pepco’s Accounts receivable balance primarily consists of customer accounts receivable arising from the sale of goods and services to customers within its service territory, other accounts receivable, and accrued unbilled revenue. Accrued unbilled revenue represents revenue earned in the current period but not billed to the customer until a future date (usually within one month after the receivable is recorded). | |||||||||||||||||||||||||
Pepco maintains an allowance for uncollectible accounts and changes in the allowance are recorded as an adjustment to Other operation and maintenance expense in the statements of income. Pepco determines the amount of the allowance based on specific identification of material amounts at risk by customer and maintains a reserve based on its historical collection experience. The adequacy of this allowance is assessed on a quarterly basis by evaluating all known factors such as the aging of the receivables, historical collection experience, the economic and competitive environment and changes in the creditworthiness of its customers. Accounts receivable are written off in the period in which the receivable is deemed uncollectible and collection efforts have been exhausted. Recoveries of Accounts receivable previously written off are recorded when received. Although Pepco believes its allowance is adequate, it cannot anticipate with any certainty the changes in the financial condition of its customers. As a result, Pepco records adjustments to the allowance for uncollectible accounts in the period in which the new information that requires an adjustment to the reserve becomes known. | |||||||||||||||||||||||||
Inventories | |||||||||||||||||||||||||
Included in Inventories are transmission and distribution materials and supplies. Pepco utilizes the weighted average cost method of accounting for inventory items. Under this method, an average price is determined for the quantity of units acquired at each price level and is applied to the ending quantity to calculate the total ending inventory balance. Materials and supplies are recorded in Inventory when purchased and then expensed or capitalized to plant, as appropriate, when installed. | |||||||||||||||||||||||||
Regulatory Assets and Regulatory Liabilities | |||||||||||||||||||||||||
Pepco is regulated by the MPSC and the DCPSC. The transmission of electricity by Pepco is regulated by FERC. | |||||||||||||||||||||||||
Based on the regulatory framework in which it has operated, Pepco has historically applied, and in connection with its transmission and distribution business continues to apply, the Financial Accounting Standards Board (FASB) guidance on regulated operations (Accounting Standards Codification (ASC) 980). The guidance allows regulated entities, in appropriate circumstances, to defer the income statement impact of certain costs that are expected to be recovered in future rates through the establishment of regulatory assets and defer certain revenues that are expected to be refunded to customers through the establishment of regulatory liabilities. Management’s assessment of the probability of recovery of regulatory assets requires judgment and interpretation of laws, regulatory commission orders and other factors. If management subsequently determines, based on changes in facts or circumstances, that a regulatory asset is not probable of recovery, the regulatory asset would be eliminated through a charge to earnings. | |||||||||||||||||||||||||
Effective June 2007, the MPSC approved a bill stabilization adjustment (BSA) mechanism for retail customers. Effective November 2009, the DCPSC approved a BSA for retail customers. For customers to whom the BSA applies, Pepco recognizes distribution revenue based on an approved distribution charge per customer. From a revenue recognition standpoint, the BSA has the effect of decoupling the distribution revenue recognized in a reporting period from the amount of power delivered during that period. Pursuant to this mechanism, Pepco recognizes either (i) a positive adjustment equal to the amount by which revenue from Maryland and the District of Columbia retail distribution sales falls short of the revenue that Pepco is entitled to earn based on the approved distribution charge per customer, or (ii) a negative adjustment equal to the amount by which revenue from such distribution sales exceeds the revenue that Pepco is entitled to earn based on the approved distribution charge per customer (a Revenue Decoupling Adjustment). A net positive Revenue Decoupling Adjustment is recorded as a regulatory asset and a net negative Revenue Decoupling Adjustment is recorded as a regulatory liability. | |||||||||||||||||||||||||
Investment in Trust | |||||||||||||||||||||||||
Represents assets held in a trust for the benefit of participants in the Pepco Owned Life Insurance plan. | |||||||||||||||||||||||||
Property, Plant and Equipment | |||||||||||||||||||||||||
Property, plant and equipment is recorded at original cost, including labor, materials, asset retirement costs and other direct and indirect costs including capitalized interest. The carrying value of Property, plant and equipment is evaluated for impairment whenever circumstances indicate that the carrying value of those assets may not be recoverable. Upon retirement, the cost of regulated property, net of salvage, is charged to Accumulated depreciation. For additional information regarding the treatment of asset removal obligations, see the “Asset Removal Costs” section included in this Note. | |||||||||||||||||||||||||
The annual provision for depreciation on electric property, plant and equipment is computed on a straight-line basis using composite rates by classes of depreciable property. Non-operating and other property is generally depreciated on a straight-line basis over the useful lives of the assets. The system-wide composite annual depreciation rates for the years ended December 31, 2014, 2013 and 2012 for Pepco’s property were approximately 2.3%, 2.2% and 2.5%, respectively. | |||||||||||||||||||||||||
Capitalized Interest and Allowance for Funds Used During Construction | |||||||||||||||||||||||||
In accordance with FASB guidance on regulated operations (ASC 980), utilities may capitalize the capital costs of financing the construction of plant and equipment as allowance for funds used during construction (AFUDC). This results in the debt portion of AFUDC being recorded as a reduction of Interest expense and the equity portion of AFUDC being recorded as an increase to Other income in the accompanying statements of income. | |||||||||||||||||||||||||
Pepco recorded AFUDC for borrowed funds of $5 million, $5 million and $4 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||||||
Pepco recorded amounts for the equity component of AFUDC of $10 million, $9 million and $8 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||||||
Leasing Activities | |||||||||||||||||||||||||
Pepco’s lease transactions include office space, equipment, software and vehicles. In accordance with FASB guidance on leases (ASC 840), these leases are classified as either operating leases or capital leases. | |||||||||||||||||||||||||
Operating Leases | |||||||||||||||||||||||||
An operating lease in which Pepco is the lessee generally results in a level income statement charge over the term of the lease, reflecting the rental payments required by the lease agreement. If rental payments are not made on a straight-line basis, Pepco’s policy is to recognize rent expense on a straight-line basis over the lease term unless another systematic and rational allocation basis is more representative of the time pattern in which the leased property is physically employed. | |||||||||||||||||||||||||
Capital Leases | |||||||||||||||||||||||||
For ratemaking purposes, capital leases in which Pepco is the lessee are treated as operating leases; therefore, in accordance with FASB guidance on regulated operations (ASC 980), the amortization of the leased asset is based on the recovery of rental payments through customer rates. Investments in equipment under capital leases are stated at cost, less accumulated depreciation. Depreciation is recorded on a straight-line basis over the equipment’s estimated useful life. | |||||||||||||||||||||||||
Amortization of Debt Issuance and Reacquisition Costs | |||||||||||||||||||||||||
Pepco defers and amortizes debt issuance costs and long-term debt premiums and discounts over the lives of the respective debt issuances. When refinancing or redeeming existing debt, any unamortized premiums, discounts and debt issuance costs, as well as debt redemption costs, are classified as Regulatory assets and are amortized generally over the life of the new issue. | |||||||||||||||||||||||||
Asset Removal Costs | |||||||||||||||||||||||||
In accordance with FASB guidance, asset removal costs are recorded as regulatory liabilities. At December 31, 2014 and 2013, $84 million and $102 million, respectively, of asset removal costs are included in Regulatory liabilities in the accompanying balance sheets. | |||||||||||||||||||||||||
Pension and Postretirement Benefit Plans | |||||||||||||||||||||||||
Pepco Holdings sponsors a non-contributory, defined benefit pension plan that covers substantially all employees of Pepco and certain employees of other Pepco Holdings subsidiaries (the PHI Retirement Plan). Pepco Holdings also provides supplemental retirement benefits to certain eligible executives and key employees through nonqualified retirement plans and provides certain postretirement health care and life insurance benefits for eligible retired employees. | |||||||||||||||||||||||||
The PHI Retirement Plan is accounted for in accordance with FASB guidance on retirement benefits (ASC 715). | |||||||||||||||||||||||||
Dividend Restrictions | |||||||||||||||||||||||||
All of Pepco’s shares of outstanding common stock are held by PHI, its parent company. In addition to its future financial performance, the ability of Pepco to pay dividends to its parent company is subject to limits imposed by: (i) state corporate laws, which impose limitations on the funds that can be used to pay dividends, and (ii) the prior rights of holders of future preferred stock, if any, and existing and future mortgage bonds and other long-term debt issued by Pepco and any other restrictions imposed in connection with the incurrence of liabilities. Pepco has no shares of preferred stock outstanding. Pepco had approximately $1,077 million and $992 million of retained earnings available for payment of common stock dividends at December 31, 2014 and 2013, respectively. These amounts represent the total retained earnings balances at those dates. | |||||||||||||||||||||||||
Reclassifications | |||||||||||||||||||||||||
Certain prior period amounts have been reclassified in order to conform to the current period presentation. | |||||||||||||||||||||||||
Atlantic City Electric Co [Member] | |||||||||||||||||||||||||
Significant Accounting Policies | (2) SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||||||||||||
Consolidation Policy | |||||||||||||||||||||||||
The accompanying consolidated financial statements include the accounts of ACE and its wholly owned subsidiary Atlantic City Electric Transition Funding, LLC (ACE 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 an interest and can exercise significant influence over the operations and policies of the entity. Certain transmission and other facilities currently held are consolidated in proportion to ACE’s 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 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, fair value calculations for derivative instruments, pension and other postretirement benefits assumptions, the assessment of the probability of recovery of regulatory assets, accrual of storm restoration costs, accrual of unbilled revenue, recognition of changes in network service transmission rates for prior service year costs, accrual of loss contingency liabilities for general litigation and auto and other liability claims, 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 it is probable that a loss has been incurred and the loss is reasonably estimable. | |||||||||||||||||||||||||
Revenue Recognition | |||||||||||||||||||||||||
ACE recognizes revenue upon distribution of electricity to its customers, including unbilled revenue for electricity delivered but not yet billed. ACE’s unbilled revenue was $32 million and $36 million as of December 31, 2014 and 2013, respectively, and 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). The assumptions and judgments 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 consumption of electricity by its customers are a component of ACE’s tariffs and, as such, are billed to customers and recorded in Operating revenue. Accruals for the remittance of these taxes by ACE are recorded in Other taxes. | |||||||||||||||||||||||||
Taxes Assessed by a Governmental Authority on Revenue-Producing Transactions | |||||||||||||||||||||||||
Taxes included in ACE’s gross revenues were $1 million, $11 million and $15 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||||||
Long-Lived Asset Impairment Evaluation | |||||||||||||||||||||||||
ACE evaluates certain long-lived assets to be held and used (for example, equipment and real estate) for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable. Examples of such events or changes include a significant decrease in the market price of a long-lived asset or a significant adverse change in the manner in which an asset is being used or its physical condition. A long-lived asset to be held and used is written down to its estimated fair value if the expected future undiscounted cash flow from the asset is less than its carrying value. | |||||||||||||||||||||||||
For long-lived assets that can be classified as assets to be disposed of by sale, an impairment loss is recognized to the extent that the asset’s carrying value exceeds its estimated fair value including costs to sell. | |||||||||||||||||||||||||
Income Taxes | |||||||||||||||||||||||||
ACE, as an indirect subsidiary of Pepco Holdings, is included in the consolidated federal income tax return of PHI. Federal income taxes are allocated to ACE based upon the taxable income or loss amounts, determined on a separate return basis. | |||||||||||||||||||||||||
The consolidated financial statements include current and deferred income taxes. Current income taxes represent the amount of tax expected to be reported on ACE’s state income tax returns and the amount of federal income tax allocated from Pepco Holdings. | |||||||||||||||||||||||||
Deferred income tax assets and liabilities represent the tax effects of temporary differences between the financial statement basis and tax basis of existing assets and liabilities, and they are measured using presently enacted tax rates. The portion of ACE’s deferred tax liability applicable to its utility operations that has not been recovered from utility customers represents income taxes recoverable in the future and is included in Regulatory assets on the consolidated balance sheets. See Note (6), “Regulatory Matters,” for additional information. | |||||||||||||||||||||||||
Deferred income tax expense generally represents the net change during the reporting period in the net deferred tax liability and deferred recoverable income taxes. | |||||||||||||||||||||||||
ACE recognizes interest on underpayments and overpayments of income taxes, interest on uncertain tax positions, and tax-related penalties in income tax expense. | |||||||||||||||||||||||||
Investment tax credits are being amortized to income over the useful lives of the related property. | |||||||||||||||||||||||||
Consolidation of Variable Interest Entities | |||||||||||||||||||||||||
ACE assesses its contractual arrangements with variable interest entities (VIEs) to determine whether it is the primary beneficiary and thereby has to consolidate the entities in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 810. The guidance addresses conditions under which an entity should be consolidated based upon variable interests rather than voting interests. See Note (16), “Variable Interest Entities,” for additional information. | |||||||||||||||||||||||||
Cash and Cash Equivalents | |||||||||||||||||||||||||
Cash and cash equivalents include cash on hand, cash invested in money market funds and commercial paper held with original maturities of three months or less. Additionally, deposits in PHI’s money pool, which ACE and certain other PHI subsidiaries use to manage short-term cash management requirements, are considered cash equivalents. Deposits in the money pool are guaranteed by PHI. PHI deposits funds in the money pool to the extent that the pool has insufficient funds to meet the needs of its participants, which may require PHI to borrow funds for deposit from external sources. | |||||||||||||||||||||||||
Restricted Cash Equivalents | |||||||||||||||||||||||||
The Restricted cash equivalents included in Current assets and the Restricted cash equivalents included in Other assets consist of (i) cash held as collateral that is restricted from use for general corporate purposes and (ii) cash equivalents that are specifically segregated based on management’s intent to use such cash equivalents for a particular purpose. The classification as current or non-current conforms to the classification of the related liabilities. | |||||||||||||||||||||||||
Accounts Receivable and Allowance for Uncollectible Accounts | |||||||||||||||||||||||||
ACE’s Accounts receivable balance primarily consists of customer accounts receivable arising from the sale of goods and services to customers within its service territories, other accounts receivable, and accrued unbilled revenue. Accrued unbilled revenue represents revenue earned in the current period but not billed to the customer until a future date (usually within one month after the receivable is recorded). | |||||||||||||||||||||||||
ACE maintains an allowance for uncollectible accounts and changes in the allowance are recorded as an adjustment to Other operation and maintenance expense in the consolidated statements of income. ACE determines the amount of the allowance based on specific identification of material amounts at risk by customer and maintains a reserve based on its historical collection experience. The adequacy of this allowance is assessed on a quarterly basis by evaluating all known factors such as the aging of the receivables, historical collection experience, the economic and competitive environment and changes in the creditworthiness of its customers. Accounts receivable are written off in the period in which the receivable is deemed uncollectible and collection efforts have been exhausted. Recoveries of Accounts receivable previously written off are recorded when received. Although ACE believes its allowance is adequate, it cannot anticipate with any certainty the changes in the financial condition of its customers. As a result, ACE records adjustments to the allowance for uncollectible accounts in the period in which the new information that requires an adjustment to the reserve becomes known. | |||||||||||||||||||||||||
Inventories | |||||||||||||||||||||||||
Included in inventories are transmission and distribution materials and supplies. ACE utilizes the weighted average cost method of accounting for inventory items. Under this method, an average price is determined for the quantity of units acquired at each price level and is applied to the ending quantity to calculate the total ending inventory balance. Materials and supplies are recorded in Inventory when purchased and then expensed or capitalized to plant, as appropriate, when installed. | |||||||||||||||||||||||||
Regulatory Assets and Regulatory Liabilities | |||||||||||||||||||||||||
Certain aspects of ACE’s business are subject to regulation by the NJBPU. The transmission of electricity by ACE is regulated by FERC. | |||||||||||||||||||||||||
Based on the regulatory framework in which it has operated, ACE has historically applied, and in connection with its transmission and distribution business continues to apply, FASB guidance on regulated operations (ASC 980). The guidance allows regulated entities, in appropriate circumstances, to defer the income statement impact of certain costs that are expected to be recovered in future rates through the establishment of regulatory assets and defer certain revenues that are expected to be refunded to customers through the establishment of regulatory liabilities. Management’s assessment of the probability of recovery of regulatory assets requires judgment and interpretation of laws, regulatory commission orders and other factors. If management subsequently determines, based on changes in facts or circumstances, that a regulatory asset is not probable of recovery, the regulatory asset would be eliminated through a charge to earnings. | |||||||||||||||||||||||||
Property, Plant and Equipment | |||||||||||||||||||||||||
Property, plant and equipment is recorded at original cost, including labor, materials, asset retirement costs and other direct and indirect costs, including capitalized interest. The carrying value of Property, plant and equipment is evaluated for impairment whenever circumstances indicate that the carrying value of those assets may not be recoverable. Upon retirement, the cost of regulated property, net of salvage, is charged to accumulated depreciation. | |||||||||||||||||||||||||
The annual provision for depreciation on electric property, plant and equipment is computed on a straight-line basis using composite rates by classes of depreciable property. Non-operating and other property is generally depreciated on a straight-line basis over the useful lives of the assets. The system-wide composite annual depreciation rates for the years ended December 31, 2014, 2013 and 2012 for ACE’s property were approximately 2.6%, 2.8% and 3.0%, respectively. | |||||||||||||||||||||||||
Capitalized Interest and Allowance for Funds Used During Construction | |||||||||||||||||||||||||
In accordance with FASB guidance on regulated operations (ASC 980), utilities may capitalize the capital costs of financing the construction of plant and equipment as allowance for funds used during construction (AFUDC). This results in the debt portion of AFUDC being recorded as a reduction of Interest expense and the equity portion of AFUDC being recorded as an increase to Other income in the accompanying consolidated statements of income. | |||||||||||||||||||||||||
ACE recorded AFUDC for borrowed funds of $1 million for the year ended December 31, 2014, less than $1 million for the year ended December 31, 2013 and $2 million for the year ended December 31, 2012. | |||||||||||||||||||||||||
ACE recorded amounts for the equity component of AFUDC of $1 million for the year ended December 31, 2014, less than $1 million for the year ended December 31, 2013 and $3 million for the year ended December 31, 2012. | |||||||||||||||||||||||||
Leasing Activities | |||||||||||||||||||||||||
ACE’s lease transactions include plant, office space, equipment, software, vehicles and elements of power purchase agreements (PPAs). In accordance with FASB guidance on leases (ASC 840), these leases are classified as operating leases. | |||||||||||||||||||||||||
Operating Leases | |||||||||||||||||||||||||
An operating lease in which ACE is the lessee generally results in a level income statement charge over the term of the lease, reflecting the rental payments required by the lease agreement. If rental payments are not made on a straight-line basis, ACE’s policy is to recognize rent expense on a straight-line basis over the lease term unless another systematic and rational allocation basis is more representative of the time pattern in which the leased property is physically employed. | |||||||||||||||||||||||||
Arrangements Containing a Lease | |||||||||||||||||||||||||
PPAs are deemed to contain a lease if the arrangement conveys the right to control the use of property, plant or equipment. If so, ACE determines the appropriate lease accounting classification. | |||||||||||||||||||||||||
Amortization of Debt Issuance and Reacquisition Costs | |||||||||||||||||||||||||
ACE defers and amortizes debt issuance costs and long-term debt premiums and discounts over the lives of the respective debt issuances. When refinancing or redeeming existing debt, any unamortized premiums, discounts and debt issuance costs, as well as debt redemption costs, are classified as regulatory assets and are amortized generally over the life of the original issue. | |||||||||||||||||||||||||
Pension and Postretirement Benefit Plans | |||||||||||||||||||||||||
Pepco Holdings sponsors a non-contributory, defined benefit pension plan that covers substantially all employees of ACE and certain employees of other Pepco Holdings subsidiaries (the PHI Retirement Plan). Pepco Holdings also provides supplemental retirement benefits to certain eligible executives and key employees through nonqualified retirement plans and provides certain postretirement health care and life insurance benefits for eligible retired employees. | |||||||||||||||||||||||||
The PHI Retirement Plan is accounted for in accordance with FASB guidance on retirement benefits (ASC 715). | |||||||||||||||||||||||||
Dividend Restrictions | |||||||||||||||||||||||||
All of ACE’s shares of outstanding common stock are held by Conectiv, its parent company. In addition to its future financial performance, the ability of ACE to pay dividends to its parent company is subject to limits imposed by: (i) state corporate laws, which impose limitations on the funds that can be used to pay dividends and the regulatory requirement that ACE obtain the prior approval of the NJBPU before dividends can be paid if its equity as a percent of its total capitalization, excluding securitization debt, falls below 30%; (ii) the prior rights of holders of existing and future preferred stock, mortgage bonds and other long-term debt issued by ACE and any other restrictions imposed in connection with the incurrence of liabilities; and (iii) certain provisions of the charter of ACE which impose restrictions on payment of common stock dividends for the benefit of preferred stockholders. Currently, the restriction in the ACE charter does not limit its ability to pay common stock dividends. ACE had approximately $209 million and $190 million of retained earnings available for payment of common stock dividends at December 31, 2014 and 2013, respectively. These amounts represent the total retained earnings balances at those dates. | |||||||||||||||||||||||||
Reclassifications | |||||||||||||||||||||||||
Certain prior period amounts have been reclassified in order to conform to the current period presentation. | |||||||||||||||||||||||||
Revisions of Prior Period Financial Statements | |||||||||||||||||||||||||
Operating and Financing Cash Flows | |||||||||||||||||||||||||
The consolidated statements of cash flows for the years ended December 31, 2013 and 2012 have been revised to correctly present changes in book overdraft balances as operating activities (included in Changes in accounts payable and accrued liabilities) rather than financing activities (included previously in Net other financing activities). For the year ended December 31, 2013, the effect of the revision was to decrease Net cash from operating activities by $5 million from $246 million to $241 million, and increase Net cash from financing activities by $5 million from $7 million to $12 million. For the year ended December 31, 2012, the effect of the revision was to increase Net cash from operating activities by $3 million from $133 million to $136 million, and decrease Net cash from financing activities by $3 million from $37 million to $34 million. The revision was not considered to be material, individually or in the aggregate, to previously issued financial statements. |
Newly_Adopted_Accounting_Stand
Newly Adopted Accounting Standards | 12 Months Ended |
Dec. 31, 2014 | |
Newly Adopted Accounting Standards | (3) NEWLY ADOPTED ACCOUNTING STANDARDS |
Liabilities (ASC 405) | |
In February 2013, the FASB issued new recognition and disclosure requirements for certain joint and several liability arrangements where the total amount of the obligation is fixed at the reporting date. For arrangements within the scope of this standard, PHI is required to measure such obligations as the sum of the amount it agreed to pay on the basis of its arrangement among co-obligors and any additional amount it expects to pay on behalf of its co-obligors. Adoption of this guidance during the first quarter of 2014 did not have a material impact on PHI’s consolidated financial statements. | |
Income Taxes (ASC 740) | |
In July 2013, the FASB issued new guidance requiring netting of certain unrecognized tax benefits against a deferred tax asset for a loss or other similar tax carryforward that would apply upon settlement of the uncertain tax position. The prospective adoption of this guidance at March 31, 2014 resulted in PHI netting liabilities related to uncertain tax positions with deferred tax assets for net operating loss and other carryforwards (included in Deferred income tax liabilities, net) and income taxes receivable (including income tax deposits) related to effectively settled uncertain tax positions. | |
Delmarva Power & Light Co/De [Member] | |
Newly Adopted Accounting Standards | (3) NEWLY ADOPTED ACCOUNTING STANDARDS |
Liabilities (ASC 405) | |
In February 2013, the FASB issued new recognition and disclosure requirements for certain joint and several liability arrangements where the total amount of the obligation is fixed at the reporting date. For arrangements within the scope of this standard, DPL is required to measure such obligations as the sum of the amount it agreed to pay on the basis of its arrangement among co-obligors and any additional amount it expects to pay on behalf of its co-obligors. Adoption of this guidance during the first quarter of 2014 did not have a material impact on DPL’s financial statements. | |
Income Taxes (ASC 740) | |
In July 2013, the FASB issued new guidance requiring netting of certain unrecognized tax benefits against a deferred tax asset for a loss or other similar tax carryforward that would apply upon settlement of the uncertain tax position. The prospective adoption of this guidance at March 31, 2014 resulted in DPL netting liabilities related to uncertain tax positions with deferred tax assets for net operating loss and other carryforwards (included in Deferred income tax liabilities, net) and income taxes receivable (including income tax deposits) related to effectively settled uncertain tax positions. | |
Potomac Electric Power Co [Member] | |
Newly Adopted Accounting Standards | (3) NEWLY ADOPTED ACCOUNTING STANDARDS |
Liabilities (ASC 405) | |
In February 2013, FASB issued new recognition and disclosure requirements for certain joint and several liability arrangements where the total amount of the obligation is fixed at the reporting date. For arrangements within the scope of this standard, Pepco is required to measure such obligations as the sum of the amount it agreed to pay on the basis of its arrangement among co-obligors and any additional amount it expects to pay on behalf of its co-obligors. Adoption of this guidance during the first quarter of 2014 did not have a material impact on Pepco’s financial statements. | |
Income Taxes (ASC 740) | |
In July 2013, the FASB issued new guidance requiring netting of certain unrecognized tax benefits against a deferred tax asset for a loss or other similar tax carryforward that would apply upon settlement of the uncertain tax position. The prospective adoption of this guidance at March 31, 2014 resulted in Pepco netting liabilities related to uncertain tax positions with deferred tax assets for net operating loss and other carryforwards (included in Deferred income tax liabilities, net) and income taxes receivable (including income tax deposits) related to effectively settled uncertain tax positions. | |
Atlantic City Electric Co [Member] | |
Newly Adopted Accounting Standards | (3) NEWLY ADOPTED ACCOUNTING STANDARDS |
Liabilities (ASC 405) | |
In February 2013, the FASB issued new recognition and disclosure requirements for certain joint and several liability arrangements where the total amount of the obligation is fixed at the reporting date. For arrangements within the scope of this standard, ACE is required to measure such obligations as the sum of the amount it agreed to pay on the basis of its arrangement among co-obligors and any additional amount it expects to pay on behalf of its co-obligors. Adoption of this guidance during the first quarter of 2014 did not have a material impact on ACE’s consolidated financial statements. | |
Income Taxes (ASC 740) | |
In July 2013, the FASB issued new guidance requiring netting of certain unrecognized tax benefits against a deferred tax asset for a loss or other similar tax carryforward that would apply upon settlement of the uncertain tax position. The prospective adoption of this guidance at March 31, 2014 resulted in ACE netting liabilities related to uncertain tax positions with deferred tax assets for net operating loss and other carryforwards (included in Deferred income tax liabilities, net) and income taxes receivable (including income tax deposits) related to effectively settled uncertain tax positions. |
Recently_Issued_Accounting_Sta
Recently Issued Accounting Standards, Not Yet Adopted | 12 Months Ended |
Dec. 31, 2014 | |
Recently Issued Accounting Standards, Not Yet Adopted | (4) RECENTLY ISSUED ACCOUNTING STANDARDS, NOT YET ADOPTED |
Revenue from Contracts with Customers (ASC 606) | |
In May 2014, the FASB issued new recognition and disclosure requirements for revenue from contracts with customers, which supersedes the existing revenue recognition guidance. The new recognition requirements focus on when the customer obtains control of the goods or services, rather than the current risks and rewards model of recognition. The core principle of the new standard is that an entity will recognize revenue when it transfers goods or services to its customers in an amount that reflects the consideration an entity expects to be entitled to for those goods or services. The new disclosure requirements will include information intended to communicate the nature, amount, timing and any uncertainty of revenue and cash flows from applicable contracts, including any significant judgments and changes in judgments and assets recognized from the costs to obtain or fulfill a contract. Entities will generally be required to make more estimates and use more judgment under the new standard. | |
The new requirements are effective for PHI beginning January 1, 2017, and may be implemented either retrospectively for all periods presented, or as a cumulative-effect adjustment as of January 1, 2017. Early adoption is not permitted. PHI is currently evaluating the potential impact of this new guidance on its consolidated financial statements and which implementation approach to select. | |
Business Combinations (ASC 805) | |
In November 2014, the FASB issued new recognition and disclosure requirements related to pushdown accounting. The new recognition requirements grant an acquired entity (or its subsidiaries) the option to elect whether and when a new accounting and reporting basis (pushdown accounting) will be applied when an acquirer obtains control of the acquired entity. This election may be made by the acquired entity (or its subsidiaries) for future change-in-control events or for its most recent change-in-control event, and the acquired entity will be required to determine whether pushdown accounting will be applied in the reporting period in which the change-in-control event occurs or in a subsequent reporting period. | |
The new required disclosures include information that enables financial statement users to evaluate the effects of pushdown accounting. Disclosures are required to be made in the period in which pushdown accounting is applied and are expected to include both qualitative and quantitative information. | |
The new recognition and disclosure requirements became effective on a prospective basis on November 18, 2014. PHI currently anticipates it may be affected by the new guidance if its Merger with Exelon closes. | |
Delmarva Power & Light Co/De [Member] | |
Recently Issued Accounting Standards, Not Yet Adopted | (4) RECENTLY ISSUED ACCOUNTING STANDARDS, NOT YET ADOPTED |
Revenue from Contracts with Customers (ASC 606) | |
In May 2014, the FASB issued new recognition and disclosure requirements for revenue from contracts with customers, which supersedes the existing revenue recognition guidance. The new recognition requirements focus on when the customer obtains control of the goods or services, rather than the current risks and rewards model of recognition. The core principle of the new standard is that an entity will recognize revenue when it transfers goods or services to its customers in an amount that reflects the consideration an entity expects to be entitled to for those goods or services. The new disclosure requirements will include information intended to communicate the nature, amount, timing and any uncertainty of revenue and cash flows from applicable contracts, including any significant judgments and changes in judgments and assets recognized from the costs to obtain or fulfill a contract. Entities will generally be required to make more estimates and use more judgment under the new standard. | |
The new requirements are effective for DPL beginning January 1, 2017, and may be implemented either retrospectively for all periods presented, or as a cumulative-effect adjustment as of January 1, 2017. Early adoption is not permitted. DPL is currently evaluating the potential impact of this new guidance on its financial statements and which implementation approach to select. | |
Business Combinations (ASC 805) | |
In November 2014, the FASB issued new recognition and disclosure requirements related to pushdown accounting. The new recognition requirements grant an acquired entity (or its subsidiaries) the option to elect whether and when a new accounting and reporting basis (pushdown accounting) will be applied when an acquirer obtains control of the acquired entity. This election may be made by the acquired entity (or its subsidiaries) for future change-in-control events or for its most recent change-in-control event, and the acquired entity will be required to determine whether pushdown accounting will be applied in the reporting period in which the change-in-control event occurs or in a subsequent reporting period. | |
The new required disclosures include information that enables financial statement users to evaluate the effects of pushdown accounting. Disclosures are required to be made in the period in which pushdown accounting is applied and are expected to include both qualitative and quantitative information. | |
The new recognition and disclosure requirements became effective on a prospective basis on November 18, 2014. | |
Potomac Electric Power Co [Member] | |
Recently Issued Accounting Standards, Not Yet Adopted | (4) RECENTLY ISSUED ACCOUNTING STANDARDS, NOT YET ADOPTED |
Revenue from Contracts with Customers (ASC 606) | |
In May 2014, the FASB issued new recognition and disclosure requirements for revenue from contracts with customers, which supersedes the existing revenue recognition guidance. The new recognition requirements focus on when the customer obtains control of the goods or services, rather than the current risks and rewards model of recognition. The core principle of the new standard is that an entity will recognize revenue when it transfers goods or services to its customers in an amount that reflects the consideration an entity expects to be entitled to for those goods or services. The new disclosure requirements will include information intended to communicate the nature, amount, timing and any uncertainty of revenue and cash flows from applicable contracts, including any significant judgments and changes in judgments and assets recognized from the costs to obtain or fulfill a contract. Entities will generally be required to make more estimates and use more judgment under the new standard. | |
The new requirements are effective for Pepco beginning January 1, 2017, and may be implemented either retrospectively for all periods presented, or as a cumulative-effect adjustment as of January 1, 2017. Early adoption is not permitted. Pepco is currently evaluating the potential impact of this new guidance on its financial statements and which implementation approach to select. | |
Business Combinations (ASC 805) | |
In November 2014, the FASB issued new recognition and disclosure requirements related to pushdown accounting. The new recognition requirements grant an acquired entity (or its subsidiaries) the option to elect whether and when a new accounting and reporting basis (pushdown accounting) will be applied when an acquirer obtains control of the acquired entity. This election may be made by the acquired entity (or its subsidiaries) for future change-in-control events or for its most recent change-in-control event, and the acquired entity will be required to determine whether pushdown accounting will be applied in the reporting period in which the change-in-control event occurs or in a subsequent reporting period. | |
The new required disclosures include information that enables financial statement users to evaluate the effects of pushdown accounting. Disclosures are required to be made in the period in which pushdown accounting is applied and are expected to include both qualitative and quantitative information. | |
The new recognition and disclosure requirements became effective on a prospective basis on November 18, 2014. | |
Atlantic City Electric Co [Member] | |
Recently Issued Accounting Standards, Not Yet Adopted | (4) RECENTLY ISSUED ACCOUNTING STANDARDS, NOT YET ADOPTED |
Revenue from Contracts with Customers (ASC 606) | |
In May 2014, the FASB issued new recognition and disclosure requirements for revenue from contracts with customers, which supersedes the existing revenue recognition guidance. The new recognition requirements focus on when the customer obtains control of the goods or services, rather than the current risks and rewards model of recognition. The core principle of the new standard is that an entity will recognize revenue when it transfers goods or services to its customers in an amount that reflects the consideration an entity expects to be entitled to for those goods or services. The new disclosure requirements will include information intended to communicate the nature, amount, timing and any uncertainty of revenue and cash flows from applicable contracts, including any significant judgments and changes in judgments and assets recognized from the costs to obtain or fulfill a contract. Entities will generally be required to make more estimates and use more judgment under the new standard. | |
The new requirements are effective for ACE beginning January 1, 2017, and may be implemented either retrospectively for all periods presented, or as a cumulative-effect adjustment as of January 1, 2017. Early adoption is not permitted. ACE is currently evaluating the potential impact of this new guidance on its consolidated financial statements and which implementation approach to select. | |
Business Combinations (ASC 805) | |
In November 2014, the FASB issued new recognition and disclosure requirements related to pushdown accounting. The new recognition requirements grant an acquired entity (or its subsidiaries) the option to elect whether and when a new accounting and reporting basis (pushdown accounting) will be applied when an acquirer obtains control of the acquired entity. This election may be made by the acquired entity (or its subsidiaries) for future change-in-control events or for its most recent change-in-control event, and the acquired entity will be required to determine whether pushdown accounting will be applied in the reporting period in which the change-in-control event occurs or in a subsequent reporting period. | |
The new required disclosures include information that enables financial statement users to evaluate the effects of pushdown accounting. Disclosures are required to be made in the period in which pushdown accounting is applied and are expected to include both qualitative and quantitative information. | |
The new recognition and disclosure requirements became effective on a prospective basis on November 18, 2014. |
Segment_Information
Segment Information | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Segment Information | (5) SEGMENT INFORMATION | ||||||||||||||||
Pepco Holdings’ management has identified its operating segments at December 31, 2014 as Power Delivery and Pepco Energy Services. In the tables below, the Corporate and Other column is included to reconcile the segment data with consolidated data and includes unallocated Pepco Holdings’ (parent company) capital costs, such as financing costs. During 2013, PHI completed the termination of its interests in its cross-border energy lease investments that had been maintained by PHI through its wholly- owned subsidiary, PCI. As a result, the cross-border energy lease investments, which comprised substantially all of the operations of the former Other Non-Regulated segment, have been accounted for as discontinued operations. The remaining operations of the former Other Non-Regulated segment, which no longer meet the definition of a separate segment for financial reporting purposes, have been included in Corporate and Other. Segment financial information for continuing operations at and for the years ended December 31, 2014, 2013 and 2012, is as follows: | |||||||||||||||||
Year Ended December 31, 2014 | |||||||||||||||||
Power | Pepco | Corporate | PHI | ||||||||||||||
Delivery | Energy | and | Consolidated | ||||||||||||||
Services | Other (a) | ||||||||||||||||
(millions of dollars) | |||||||||||||||||
Operating Revenue | $ | 4,607 | $ | 278 | $ | (7 | ) | $ | 4,878 | ||||||||
Operating Expenses (b) | 3,916 | 354 | (c) | 4 | 4,274 | ||||||||||||
Operating Income (Loss) | 691 | (76 | ) | (11 | ) | 604 | |||||||||||
Interest Expense | 226 | 1 | 41 | 268 | |||||||||||||
Other Income | 40 | 2 | 2 | 44 | |||||||||||||
Income Tax Expense (Benefit) | 185 | (36 | ) | (11 | ) | 138 | |||||||||||
Net Income (Loss) from Continuing Operations | 320 | (39 | ) | (39 | ) | 242 | |||||||||||
Total Assets | 13,719 | 244 | 1,704 | 15,667 | |||||||||||||
Construction Expenditures | $ | 1,144 | $ | 3 | $ | 76 | $ | 1,223 | |||||||||
(a) | Total Assets in this column includes Pepco Holdings’ goodwill balance of $1.4 billion, all of which is allocated to Power Delivery for purposes of assessing impairment. Total assets also include capital expenditures related to certain hardware and software expenditures which primarily benefit Power Delivery. These expenditures are recorded as incurred in Corporate and Other and are allocated to Power Delivery once the assets are placed in service. Corporate and Other includes intercompany amounts of $(7) million for Operating Revenue, $(7) million for Operating Expenses and $(4) million for Interest Expense. | ||||||||||||||||
(b) | Includes depreciation and amortization expense of $549 million, consisting of $511 million for Power Delivery, $7 million for Pepco Energy Services and $31 million for Corporate and Other. | ||||||||||||||||
(c) | Includes impairment losses of $81 million ($48 million after-tax) associated with Pepco Energy Services’ combined heat and power thermal generating facilities and operations in Atlantic City. | ||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||
Power | Pepco | Corporate | PHI | ||||||||||||||
Delivery | Energy | and | Consolidated | ||||||||||||||
Services | Other (a) | ||||||||||||||||
(millions of dollars) | |||||||||||||||||
Operating Revenue | $ | 4,472 | $ | 203 | $ | (9 | ) | $ | 4,666 | ||||||||
Operating Expenses (b) | 3,828 | 201 | (c) | (31 | ) | 3,998 | |||||||||||
Operating Income | 644 | 2 | 22 | 668 | |||||||||||||
Interest Expense | 228 | 1 | 44 | 273 | |||||||||||||
Other Income | 28 | 3 | 3 | 34 | |||||||||||||
Income Tax Expense (d) | 155 | 1 | 163 | (e) | 319 | ||||||||||||
Net Income (Loss) from Continuing Operations | 289 | 3 | (182 | ) | 110 | ||||||||||||
Total Assets | 13,027 | 335 | 1,486 | 14,848 | |||||||||||||
Construction Expenditures | $ | 1,194 | $ | 4 | $ | 112 | $ | 1,310 | |||||||||
(a) | Total Assets in this column includes Pepco Holdings’ goodwill balance of $1.4 billion, all of which is allocated to Power Delivery for purposes of assessing impairment. Total assets also include capital expenditures related to certain hardware and software expenditures which primarily benefit Power Delivery. These expenditures are recorded as incurred in Corporate and Other and are allocated to Power Delivery once the assets are placed in service. Corporate and Other includes intercompany amounts of $(10) million for Operating Revenue, $(9) million for Operating Expenses and $(5) million for Interest Expense. | ||||||||||||||||
(b) | Includes depreciation and amortization expense of $473 million, consisting of $439 million for Power Delivery, $6 million for Pepco Energy Services and $28 million for Corporate and Other. | ||||||||||||||||
(c) | Includes impairment losses of $4 million ($3 million after-tax) associated with Pepco Energy Services’ landfill gas-fired electric generation facility. | ||||||||||||||||
(d) | Includes after-tax interest associated with uncertain and effectively settled tax positions allocated to each member of the consolidated group, including a $12 million interest benefit for Power Delivery and interest expense of $66 million for Corporate and Other. | ||||||||||||||||
(e) | Includes non-cash charges of $101 million representing the establishment of valuation allowances against certain deferred tax assets of PCI included in Corporate and Other. | ||||||||||||||||
Year Ended December 31, 2012 | |||||||||||||||||
Power | Pepco | Corporate | PHI | ||||||||||||||
Delivery | Energy | and | Consolidated | ||||||||||||||
Services | Other (a) | ||||||||||||||||
(millions of dollars) | |||||||||||||||||
Operating Revenue | $ | 4,378 | $ | 256 | (b) | $ | (9 | ) | $ | 4,625 | |||||||
Operating Expenses (c) | 3,847 | 271 | (b)(d) | (34 | ) | 4,084 | |||||||||||
Operating Income (Loss) | 531 | (15 | ) | 25 | 541 | ||||||||||||
Interest Income | 1 | 1 | (1 | ) | 1 | ||||||||||||
Interest Expense | 219 | 2 | 35 | 256 | |||||||||||||
Impairment Losses | — | — | (1 | ) | (1 | ) | |||||||||||
Other Income | 32 | 1 | 3 | 36 | |||||||||||||
Income Tax Expense (Benefit) | 110 | (7 | ) | — | 103 | ||||||||||||
Net Income (Loss) from Continuing Operations | 235 | (8 | ) | (9 | ) | 218 | |||||||||||
Total Assets (excluding Assets Held for Disposition) | 12,149 | 342 | 2,028 | 14,519 | |||||||||||||
Construction Expenditures | $ | 1,168 | $ | 11 | $ | 37 | $ | 1,216 | |||||||||
(a) | Total Assets in this column includes Pepco Holdings’ goodwill balance of $1.4 billion, all of which is allocated to Power Delivery for purposes of assessing impairment. Total assets also include capital expenditures related to certain hardware and software expenditures which primarily benefit Power Delivery. These expenditures are recorded as incurred in Corporate and Other and are allocated to Power Delivery once the assets are placed in service. Corporate and Other includes intercompany amounts of $(11) million for Operating Revenue, $(10) million for Operating Expenses, $(21) million for Interest Income and $(18) million for Interest Expense. | ||||||||||||||||
(b) | Includes $9 million of intra-company revenues (and associated costs) previously eliminated in consolidation which will continue to be recognized from third parties subsequent to the completion of the wind-down of the Pepco Energy Services’ retail electric and natural gas supply businesses. | ||||||||||||||||
(c) | Includes depreciation and amortization expense of $454 million, consisting of $416 million for Power Delivery, $14 million for Pepco Energy Services and $24 million for Corporate and Other. | ||||||||||||||||
(d) | Includes impairment losses of $12 million ($7 million after-tax) associated primarily with investments in Pepco Energy Services’ landfill gas-fired electric generation facilities and its combustion turbines at Buzzard Point. | ||||||||||||||||
Delmarva Power & Light Co/De [Member] | |||||||||||||||||
Segment Information | (5) SEGMENT INFORMATION | ||||||||||||||||
The company operates its business as one regulated utility segment, which includes all of its services as described above. | |||||||||||||||||
Potomac Electric Power Co [Member] | |||||||||||||||||
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 [Member] | |||||||||||||||||
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, 2014 | |
Goodwill | (6) GOODWILL |
Substantially all of PHI’s goodwill balance as of December 31, 2014 and 2013 was generated by Pepco’s acquisition of Conectiv in 2002 and is allocated entirely to the Power Delivery reporting unit based on the aggregation of its regulated public utility company components for purposes of assessing impairment under FASB guidance on goodwill and other intangibles (ASC 350). | |
PHI performs an annual impairment assessment as of November 1 each year, or more frequently if indicators of potential impairment exist, to determine whether it is more likely than not that the fair value of a reporting unit to which goodwill relates is less than its carrying value. In evaluating goodwill for impairment, PHI first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. For reporting units in which PHI concludes that it is more likely than not that the fair value is more than its carrying value, goodwill is not considered impaired and PHI is not required to perform the two-step goodwill impairment test. Qualitative factors considered in this assessment include industry and market considerations, including the price per share offered by potential acquirers of PHI during 2014, overall financial performance, lack of significant changes in any key inputs to the prior year impairment test, including the discount rate and forecasted cash flows, and other relevant events and factors affecting the reporting unit. | |
For reporting units in which PHI concludes that it is more likely than not that the fair value is less than its carrying value, PHI performs the first step of the goodwill impairment test, which compares the fair value of the reporting unit to its carrying value. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is not considered impaired and PHI is not required to perform additional testing. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then PHI must perform the second step of the goodwill impairment test to determine the implied fair value of the reporting unit’s goodwill. If PHI determines during this second step that the carrying value of a reporting unit’s goodwill exceeds its implied fair value, PHI records an impairment loss equal to the difference. | |
For the annual impairment assessment in 2014, PHI qualitatively determined for each of its reporting units that it was more likely than not that fair value exceeded carrying value. As a result, PHI did not perform the two-step goodwill impairment test on those reporting units. | |
As of December 31, 2014 and 2013, PHI’s goodwill balance was $1,407 million, which is net of accumulated impairment losses of $18 million. | |
Delmarva Power & Light Co/De [Member] | |
Goodwill | (6) GOODWILL |
All of DPL’s goodwill was generated by its acquisition of Conowingo Power Company in 1995. | |
DPL performs an annual impairment assessment as of November 1 of each year, or more frequently if indicators of potential impairment exist, to determine whether it is more likely than not that the fair value of the DPL reporting unit to which goodwill relates is less than its carrying value. In evaluating goodwill for impairment, DPL first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If DPL concludes that it is more likely than not that the fair value is more than its carrying value, goodwill is not considered impaired and DPL is not required to perform the two-step goodwill impairment test. Qualitative factors considered in this assessment include industry and market considerations, overall financial performance, changes in any key inputs to the prior year impairment test, including the discount rate, and other relevant events and factors affecting the reporting unit. | |
If DPL concludes that it is more likely than not that the fair value is less than its carrying value, DPL performs the first step of the goodwill impairment test, which compares DPL’s fair value to its carrying value. If DPL’s fair value exceeds the carrying value of DPL’s net assets, goodwill is not considered impaired and DPL is not required to perform additional testing. If the carrying value of DPL’s net assets exceeds DPL’s fair value, then DPL must perform the second step of the goodwill impairment test to determine the implied fair value of DPL’s goodwill. If DPL determines during this second step that the carrying value of DPL’s goodwill exceeds its implied fair value, DPL records an impairment loss equal to the difference. | |
For the annual impairment assessment in 2014, DPL qualitatively determined that it was more likely than not that fair value exceeded carrying value. As a result, DPL did not perform the two-step goodwill impairment test on that reporting unit. | |
As of December 31, 2014 and 2013, DPL’s goodwill balance was $8 million. There are no accumulated impairment losses. |
Regulatory_Matters
Regulatory Matters | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Regulatory Matters | (7) REGULATORY MATTERS | ||||||||||||
Regulatory Assets and Regulatory Liabilities | |||||||||||||
The components of Pepco Holdings’ regulatory asset and liability balances at December 31, 2014 and 2013 are as follows: | |||||||||||||
2014 | 2013 | ||||||||||||
(millions of dollars) | |||||||||||||
Regulatory Assets | |||||||||||||
Pension and other postretirement benefit costs | $ | 946 | $ | 667 | |||||||||
Securitized stranded costs | 278 | 350 | |||||||||||
Recoverable income taxes | 274 | 225 | |||||||||||
Demand-side management costs | 264 | 125 | |||||||||||
Smart Grid costs | 261 | 251 | |||||||||||
Deferred energy supply costs | 73 | 136 | |||||||||||
Incremental storm restoration costs | 51 | 72 | |||||||||||
Deferred debt extinguishment costs | 42 | 47 | |||||||||||
MAPP abandonment costs | 33 | 68 | |||||||||||
Recoverable workers’ compensation and long-term disability costs | 30 | 26 | |||||||||||
Deferred losses on gas derivatives | 4 | — | |||||||||||
Other | 153 | 120 | |||||||||||
Total Regulatory Assets | $ | 2,409 | $ | 2,087 | |||||||||
Regulatory Liabilities | |||||||||||||
Asset removal costs | $ | 250 | $ | 275 | |||||||||
Deferred income taxes due to customers | 44 | 45 | |||||||||||
Deferred energy supply costs | 3 | 46 | |||||||||||
Deferred gains on gas derivatives | — | 1 | |||||||||||
Other | 46 | 32 | |||||||||||
Total Regulatory Liabilities | $ | 343 | $ | 399 | |||||||||
A description for each category of regulatory assets and regulatory liabilities follows: | |||||||||||||
Pension and OPEB Costs: Represents unrecognized net actuarial losses and prior service cost (credit) for Pepco Holdings’ defined benefit pension and other postretirement benefit (OPEB) plans that are expected to be recovered by Pepco, DPL and ACE in rates. The utilities have historically included these items as a part of its cost of service in its customer rates. This regulatory asset is adjusted at least annually when the funded status of Pepco Holdings’ defined benefit pension and OPEB plans are re-measured. See Note (9), “Pension and Other Postretirement Benefits,” for more information about the components of the unrecognized pension and OPEB costs. PHI does not earn a return on these regulatory assets. | |||||||||||||
Securitized Stranded Costs: Certain contract termination payments under a contract between ACE and an unaffiliated non-utility generator (NUG) and costs associated with the regulated operations of ACE’s electricity generation business are no longer recoverable through customer rates (collectively referred to as “stranded costs”). The stranded costs are amortized over the life of Transition Bonds issued by Atlantic City Electric Transition Funding LLC (ACE Funding) (Transition Bonds) to securitize the recoverability of these stranded costs. These bonds mature between 2015 and 2023. A customer surcharge is collected by ACE to fund principal and interest payments on the Transition Bonds. PHI earns a return on these regulatory assets. | |||||||||||||
Recoverable Income Taxes: Represents amounts recoverable from Power Delivery’s customers for tax benefits applicable to utility operations of Pepco, DPL and ACE previously recognized in income tax expense before the companies were ordered to record 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. | |||||||||||||
Demand-Side Management Costs: Represents costs associated with customer energy efficiency and conservation programs in all jurisdictions that are being recovered from customers. PHI earns a return on these regulatory assets. | |||||||||||||
Smart Grid Costs: Represents AMI costs associated with the installation of smart meters and the early retirement of legacy meters throughout Pepco’s and DPL’s service territories that are recoverable from customers. AMI has not been approved by the NJBPU for ACE in New Jersey. PHI generally is deferring carrying charges on these regulatory assets. | |||||||||||||
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, DPL and ACE that are being or are expected to be recovered from customers. PHI generally earns a return on these regulatory assets. The regulatory liability represents primarily deferred costs associated with a net over-recovery of Default Electricity Supply costs incurred that will be refunded by Pepco, DPL and ACE to customers. | |||||||||||||
Incremental Storm Restoration Costs: Represents total incremental storm restoration costs incurred for repair work due to major storm events in 2012 and 2011, including Hurricane Sandy, the June 2012 derecho, Hurricane Irene and the 2011 severe winter storm (for Pepco), that are recoverable from customers in the Maryland and New Jersey jurisdictions. Pepco’s and DPL’s costs related to Hurricane Sandy, the June 2012 derecho, Hurricane Irene and Pepco’s costs related to the 2011 severe winter storm are being amortized and recovered from customers, each over a five-year period. ACE’s costs related to Hurricane Sandy, the June 2012 derecho and Hurricane Irene are being amortized and recovered from customers, each over a three-year period. PHI does not earn a return on these regulatory assets. | |||||||||||||
Deferred Debt Extinguishment Costs: Represents deferred costs of debt extinguishment of Pepco, DPL and ACE that are amortized to interest expense and recovered from customers. PHI generally earns a return on these regulatory assets. | |||||||||||||
MAPP Abandonment Costs: Represents abandonment costs incurred in connection with the Mid-Atlantic Power Pathway (MAPP) transmission line construction project which was terminated by PJM Interconnection, LLC (PJM) on August 24, 2012. For additional information, see “MAPP Settlement Agreement” discussion below. These regulatory assets are being amortized and recovered in transmission rates through May 2016. PHI generally does not earn a return on these regulatory assets. | |||||||||||||
Recoverable Workers’ Compensation and Long-Term Disability Costs: Represents accrued workers’ compensation and long-term disability costs for Pepco, which are recoverable from customers when actual claims are paid to employees. PHI does not earn a return on these regulatory assets. | |||||||||||||
Deferred Losses on Gas Derivatives: Represents losses associated with hedges of natural gas purchases that are recoverable from customers through the Gas Cost Rate (GCR) approved by the DPSC. PHI does not earn a return on these regulatory assets. | |||||||||||||
Other: Represents miscellaneous regulatory assets that generally are being amortized over 1 to 20 years. | |||||||||||||
Asset Removal Costs: The depreciation rates for Pepco and DPL include a component for removal costs, as approved by the relevant federal and state regulatory commissions. Accordingly, Pepco and DPL have recorded regulatory liabilities for their estimate of the difference between incurred removal costs and the amount of removal costs recovered through depreciation rates. | |||||||||||||
Deferred Income Taxes Due to Customers: Represents the portions of deferred income tax assets applicable to utility operations of Pepco and DPL that have not been reflected in current customer rates for which future payment to customers is probable. As the temporary differences between the financial statement basis and tax basis of assets reverse, deferred recoverable income taxes are amortized. | |||||||||||||
Deferred Gains on Gas Derivatives: Represents gains associated with hedges of natural gas purchases that will be refunded to customers through the GCR approved by the DPSC. | |||||||||||||
Other: Represents miscellaneous regulatory liabilities. | |||||||||||||
Rate Proceedings | |||||||||||||
The following table shows, for each of PHI’s utility subsidiaries, the distribution base rate cases completed in 2014. Additional information concerning each of these cases is provided in the discussion below. | |||||||||||||
Jurisdiction/Company | Approved Revenue | Approved Return | Completion | Rate Effective | |||||||||
Requirement Increase | on Equity | Date | Date | ||||||||||
(millions of dollars) | |||||||||||||
DC – Pepco | $ | 23.4 | 9.4 | % | March 26, 2014 | April 16, 2014 | |||||||
DE – DPL (Electric) | $ | 15.1 | 9.7 | % | August 5, 2014 | May 1, 2014 | |||||||
MD – Pepco | $ | 8.8 | 9.62 | % | July 2, 2014 | July 4, 2014 | |||||||
NJ – ACE | $ | 19.0 | 9.75 | % | August 20, 2014 | September 1, 2014 | |||||||
As further described in Note (1), “Organization,” on April 29, 2014, PHI entered into the Merger Agreement with Exelon and Merger Sub. Subject to certain exceptions, prior to the Merger or the termination of the Merger Agreement, PHI and its subsidiaries may not, without the consent of Exelon, initiate, file or pursue any rate cases, other than pursuing the conclusion of certain proceedings, as described below. | |||||||||||||
Bill Stabilization Adjustment | |||||||||||||
PHI’s utility subsidiaries have proposed in each of their respective jurisdictions the adoption of a mechanism to decouple retail distribution revenue from the amount of power delivered to retail customers. To date: | |||||||||||||
• | A BSA has been approved and implemented for Pepco and DPL electric service in Maryland and for Pepco electric service in the District of Columbia. | ||||||||||||
• | A proposed modified fixed variable rate design (MFVRD) for DPL electric and natural gas service in Delaware was filed in 2009 for consideration by the DPSC and while there was little to no activity associated with this filing in 2014 or to date in 2015, the proceeding remains open. | ||||||||||||
• | In New Jersey, a BSA proposed by ACE in 2009 was not approved and there is no BSA proposal currently pending. | ||||||||||||
Under the BSA, customer distribution 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 MFVRD proposed in Delaware contemplates a fixed customer charge (i.e., not tied to the customer’s volumetric consumption of electricity or natural gas) to recover the utility’s fixed costs, plus a reasonable rate of return. | |||||||||||||
Delaware | |||||||||||||
Electric Distribution Base Rates | |||||||||||||
On March 22, 2013, DPL submitted an application with the DPSC to increase its electric distribution base rates. The application sought approval of an annual rate increase of approximately $42 million (adjusted by DPL to approximately $39 million on September 20, 2013), based on a requested return on equity (ROE) of 10.25%. The requested rate increase sought to recover expenses associated with DPL’s ongoing investments in reliability enhancement improvements and efforts to maintain safe and reliable service. On August 5, 2014, the DPSC issued a final order in this proceeding providing for an annual increase in DPL’s electric distribution base rates of approximately $15.1 million, based on an ROE of 9.70%. The new rates became effective on May 1, 2014. | |||||||||||||
On September 4, 2014, DPL filed an appeal with the Delaware Superior Court of the DPSC’s August 5, 2014 order in this proceeding, seeking the court’s review of the DPSC’s decision relating to the recovery of costs associated with one component of employee compensation, certain retirement benefits and recovery of credit facility expenses. The Division of the Public Advocate filed a cross-appeal on September 8, 2014, pertaining to the treatment of a prepaid pension expense and other postretirement benefit obligations in base rates. Under the settlement agreement related to the Merger described below in “Merger Approval Proceedings – Delaware,” the parties have agreed to suspend the appeal and to withdraw the appeal with prejudice upon the closing of the Merger. | |||||||||||||
Under the Merger Agreement, DPL is not permitted to initiate or file any new electric distribution base rate cases in Delaware without Exelon’s consent. | |||||||||||||
Forward Looking Rate Plan | |||||||||||||
On October 2, 2013, DPL filed a multi-year rate plan, referred to as the Forward Looking Rate Plan (FLRP). As proposed, the FLRP would provide for annual electric distribution base rate increases over a four-year period in the aggregate amount of approximately $56 million. The FLRP as proposed provides the opportunity to achieve estimated earned ROEs of 7.41% and 8.80% in years one and two, respectively, and 9.75% in both years three and four of the plan. | |||||||||||||
In addition, DPL proposed that as part of the FLRP, in order to provide a higher minimum required standard of reliability for DPL’s customers than that to which DPL is currently subject, the standards by which DPL’s reliability is measured would be made more stringent in each year of the FLRP. DPL has also offered to refund an aggregate of $500,000 to customers in each year of the FLRP that it fails to meet the proposed stricter minimum reliability standards. | |||||||||||||
On October 22, 2013, the DPSC opened a docket for the purpose of reviewing the details of the FLRP, but stated that it would not address the FLRP until the electric distribution base rate case discussed above was concluded. A schedule for the FLRP docket has not yet been established. | |||||||||||||
Under the Merger Agreement, DPL is permitted to pursue this matter; however, under the settlement agreement related to the Merger described below in “Merger Approval Proceedings – Delaware,” DPL has agreed to withdraw the FLRP without prejudice to refile it in a subsequent base rate case. | |||||||||||||
Gas Distribution Base Rates | |||||||||||||
A settlement approved in October 2013 by the DPSC in a proceeding filed by DPL in December 2012 to increase its natural gas distribution base rates provides in part for a phase-in of the recovery of the deferred costs associated with DPL’s deployment of the interface management unit (IMU). The IMU is part of DPL’s AMI and allows for the remote reading of gas meters. Filing for recovery of such costs will occur in two phases, subject to compliance with specific metrics, with recovery over a 15-year period. For the first phase, 50% of the IMU-related portion of DPL’s AMI costs were put into rates on July 11, 2014. The remainder of these costs will be put into rates in the second phase when the specific metrics allowing for recovery are met. | |||||||||||||
Under the Merger Agreement, DPL is not permitted to initiate or file any new gas distribution base rate cases without Exelon’s consent. | |||||||||||||
Gas Cost Rates | |||||||||||||
DPL makes an annual GCR filing with the DPSC for the purpose of allowing DPL to recover natural gas procurement costs through customer rates. On August 29, 2014, DPL made its 2014 GCR filing in which it proposed a GCR decrease of approximately 7.4%. On September 30, 2014, the DPSC issued an order authorizing DPL to place the new rates into effect on November 1, 2014, subject to refund and pending final DPSC approval. | |||||||||||||
Under the Merger Agreement, DPL is permitted and intends to continue to file its required annual GCR cases in Delaware. | |||||||||||||
District of Columbia | |||||||||||||
On March 8, 2013, Pepco filed an application with the DCPSC to increase its annual electric distribution base rates by approximately $52.1 million (adjusted by Pepco to approximately $44.8 million on December 3, 2013), based on a requested ROE of 10.25%. The requested rate increase sought to recover expenses associated with Pepco’s ongoing investments in reliability enhancement improvements and efforts to maintain safe and reliable service. On March 26, 2014, the DCPSC issued an order approving an increase in base rates of approximately $23.4 million, based on an ROE of 9.40%. The new rates became effective on April 16, 2014. | |||||||||||||
Under the Merger Agreement, Pepco is not permitted to initiate or file any new electric distribution base rate cases in the District of Columbia without Exelon’s consent. | |||||||||||||
Maryland | |||||||||||||
Pepco Electric Distribution Base Rates | |||||||||||||
Under the Merger Agreement, Pepco is permitted, and intends to continue, to pursue the conclusion of the following matters. However, Pepco is not permitted to initiate or file any new electric distribution base rate cases in Maryland without Exelon’s consent. | |||||||||||||
2011 Base Rate Proceeding | |||||||||||||
In December 2011, Pepco submitted an application with the MPSC to increase its electric distribution base rates. The filing sought approval of an annual rate increase of approximately $68.4 million (subsequently adjusted by Pepco to approximately $66.2 million), based on a requested ROE of 10.75%. In July 2012, the MPSC issued an order approving an annual rate increase of approximately $18.1 million, based on an ROE of 9.31%. Among other things, the order also authorized Pepco to recover the actual cost of AMI meters installed during the 2011 test year, stating that cost recovery for AMI deployment will be allowed in future rate cases in which Pepco demonstrates that the system is cost effective. The new rates became effective on July 20, 2012. The Maryland Office of People’s Counsel (OPC) has sought rehearing on the portion of the order allowing Pepco to recover the costs of AMI meters installed during the test year; that motion remains pending. | |||||||||||||
2012 Base Rate Proceeding | |||||||||||||
On November 30, 2012, Pepco submitted an application with the MPSC to increase its electric distribution base rates. The filing sought approval of an annual rate increase of approximately $60.8 million, based on a requested ROE of 10.25%. | |||||||||||||
On July 12, 2013, the MPSC issued an order related to Pepco’s November 30, 2012 application approving an annual rate increase of approximately $27.9 million, based on an ROE of 9.36%. The order excludes the cost of AMI meters from Pepco’s rate base until such time as Pepco demonstrates the cost effectiveness of the AMI system; as a result, costs for AMI meters incurred with respect to the 2012 test year and beyond will be treated as other incremental AMI costs incurred in conjunction with the deployment of the AMI system that are deferred and on which a carrying charge is deferred, but only until such cost effectiveness has been demonstrated and such costs are included in rates. However, the MPSC’s July 2012 order in Pepco’s previous electric distribution base rate case, which allowed Pepco to recover the costs of meters installed during the 2011 test year for that case, remains in effect, and the Maryland OPC’s motion for rehearing in that case remains pending. | |||||||||||||
The July 12, 2013 order also approved a Grid Resiliency Charge, which went into effect on January 1, 2014, for recovery of costs totaling approximately $24.0 million associated with Pepco’s proposed plan to accelerate investments related to certain priority feeders, provided that, before implementing the surcharge, Pepco (i) provides additional information to the MPSC related to performance objectives, milestones and costs, and (ii) makes annual filings with the MPSC thereafter concerning this project, which will permit the MPSC to establish the applicable Grid Resiliency Charge rider for each following year. The MPSC rejected certain other cost recovery mechanisms, including Pepco’s proposed reliability performance-based mechanism. The new rates were effective on July 12, 2013. | |||||||||||||
On July 26, 2013, Pepco filed a notice of appeal of the July 12, 2013 order in the Circuit Court for Baltimore City. Other parties also filed notices of appeal, which were consolidated with Pepco’s appeal. In its appeal, Pepco asserted that the MPSC erred in failing to grant Pepco an adequate ROE, denying a number of other cost recovery mechanisms and limiting Pepco’s test year data to no more than four months of forecasted data in future rate cases. The other parties primarily asserted that the MPSC erred or acted arbitrarily and capriciously in allowing the recovery of certain costs by Pepco, in approving the Grid Resiliency Charge, and in refusing to reduce Pepco’s rate base by known and measurable accumulated depreciation. On November 14, 2014, the Circuit Court issued an order reversing the MPSC’s decision on Pepco’s ROE and directing the MPSC to make more specific findings regarding the impact of improved service reliability and the BSA in calculating Pepco’s ROE. On all other issues appealed, the Circuit Court affirmed the MPSC’s July 12, 2013 order. Pepco will not appeal this decision, but other parties have filed notices of appeal of the Circuit Court’s decision to the Court of Special Appeals. | |||||||||||||
Phase II Proceeding to 2012 Base Rate Proceeding | |||||||||||||
On August 26, 2014, the MPSC issued an order establishing a Phase II proceeding pertaining to the base rate case filed in November 2012 to address an issue regarding Pepco’s net operating loss carryforward (NOLC). The issue in this Phase II proceeding is the same as for the Phase II proceeding described below. Pepco filed a motion to dismiss this Phase II proceeding, asserting that the MPSC no longer has jurisdiction over the 2012 base rate case due to appeals having been filed by numerous parties. On September 11, 2014, the MPSC issued an order staying this Phase II proceeding until further notice. | |||||||||||||
2013 Base Rate Proceeding | |||||||||||||
On December 4, 2013, Pepco submitted an application with the MPSC to increase its electric distribution base rates. The filing sought approval of an annual rate increase of approximately $43.3 million (adjusted by Pepco to approximately $37.4 million on April 15, 2014), based on a requested ROE of 10.25%. The requested rate increase sought to recover expenses associated with Pepco’s ongoing investments in reliability enhancement improvements and efforts to maintain safe and reliable service. On July 2, 2014, the MPSC issued an order approving an annual rate increase of approximately $8.75 million, based on an ROE of 9.62%. The new rates became effective on July 4, 2014. On July 31, 2014, Pepco filed a petition for rehearing seeking reconsideration of the recovery of certain expenses, which the MPSC denied by its order dated November 13, 2014. On December 11, 2014, Pepco filed a petition for judicial review of this MPSC order with the Circuit Court for Baltimore City. This petition remains pending. | |||||||||||||
Phase II Proceeding to 2013 Base Rate Proceeding | |||||||||||||
On August 26, 2014, the MPSC issued an order establishing a Phase II proceeding pertaining to the base rate case filed in December 2013 to address an issue regarding Pepco’s NOLC. Specifically, the MPSC considered the tax implications of Pepco’s NOLC, which had impacted certain of Pepco’s rate adjustments in the 2013 base rate proceeding. On November 13, 2014, the MPSC issued its order in this Phase II proceeding upholding Pepco’s treatment of the NOLC. | |||||||||||||
New Jersey | |||||||||||||
Electric Distribution Base Rates | |||||||||||||
On March 14, 2014, ACE submitted an application with the NJBPU to increase its electric distribution base rates by approximately $61.7 million (excluding sales and use taxes), based on a requested ROE of 10.25%. The requested rate increase sought to recover expenses associated with ACE’s ongoing investments in reliability enhancement improvements and efforts to maintain safe and reliable service. On August 20, 2014, the NJBPU approved a Stipulation of Settlement entered into by ACE, NJBPU staff and the Division of Rate Counsel (DRC). The approved stipulation of settlement provides for an annual increase in ACE’s electric distribution base rates by the net amount of approximately $19.0 million (excluding sales and use taxes), based on a specified ROE of 9.75%. The new electric distribution base rates became effective for service rendered by ACE on and after September 1, 2014. The annual pre-tax earnings impact of the rate increase is approximately $19.0 million. | |||||||||||||
Under the Merger Agreement, ACE is not permitted to initiate or file any new electric distribution base rate cases in New Jersey without Exelon’s consent. | |||||||||||||
Update and Reconciliation of Certain Under-Recovered Balances | |||||||||||||
On March 3, 2014, ACE submitted a petition with the NJBPU seeking to reconcile and update (i) charges related to the recovery of above-market costs associated with ACE’s long-term power purchase contracts with the NUGs, (ii) costs related to surcharges for the New Jersey Societal Benefit Program (a statewide public interest program that is intended to benefit low income customers and address other public policy goals) and ACE’s uncollected accounts and (iii) operating costs associated with ACE’s residential appliance cycling program. The net impact of adjusting the charges as proposed would have been an overall annual rate decrease of approximately $24.5 million (revised to a decrease of approximately $41.1 million on April 16, 2014, based upon an update for actual data through March 2014). In May 2014, the NJBPU approved a stipulation of settlement entered into by the parties in this proceeding providing for an overall annual rate decrease of $41.1 million. The rate decrease was placed into effect provisionally on June 1, 2014, subject to a review by the NJBPU of the final underlying costs for reasonableness and prudence. On January 21, 2015, the NJBPU approved a stipulation of settlement in this proceeding, which made final the provisional rates that were placed into effect on June 1, 2014. The rate decrease will have no effect on ACE’s operating income. | |||||||||||||
This proceeding is not expected to be affected by the Merger Agreement. | |||||||||||||
Service Extension Contributions Refund Order | |||||||||||||
On July 19, 2013, in compliance with a 2012 Superior Court of New Jersey Appellate Division (Appellate Division) court decision, the NJBPU released an order requiring utilities to issue refunds to persons or entities that paid non-refundable contributions for utility service extensions to certain areas described as “Areas Not Designated for Growth.” The order is limited to eligible contributions paid between March 20, 2005 and December 20, 2009. ACE is processing the refund requests that meet the eligibility criteria established in the order as they are received. Although ACE estimates that it received approximately $11 million of contributions between March 20, 2005 and December 20, 2009, it is currently unable to reasonably estimate the amount that it may be required to refund using the eligibility criteria established by the order. Since the July 2013 order was released, ACE has received less than $1 million in refund claims, the validity of which is being investigated by ACE prior to making any such refunds. At this time, ACE does not expect that any such amount refunded will have a material effect on its consolidated financial condition, results of operations or cash flows, as any amounts that may be refunded will generally increase the value of ACE’s property, plant and equipment and may ultimately be recovered through depreciation and cost of service. On September 30, 2014, the NJBPU commenced a rulemaking proceeding to further implement the directives of the Appellate Division decision and, on December 1, 2014, published a rule proposal for comment. The changes proposed by the NJBPU remove provisions distinguishing between growth areas and not-for-growth areas and provide formulae for allocating extension costs. | |||||||||||||
Under the Merger Agreement, ACE is permitted to pursue the conclusion of this matter and intends to continue to do so. | |||||||||||||
Generic Consolidated Tax Adjustment Proceeding | |||||||||||||
In January 2013, the NJBPU initiated a generic proceeding to examine whether a consolidated tax adjustment (CTA) should continue to be used, and if so, how it should be calculated in determining a utility’s cost of service. Under the NJBPU’s current policy, when a New Jersey utility is included in a consolidated group income tax return, an allocated amount of any reduction in the consolidated group’s taxes as a result of losses by affiliates is used to reduce the utility’s rate base, upon which the utility earns a return. This policy has negatively impacted ACE’s electric distribution base rate case outcomes and ACE’s position is that the CTA should be eliminated. In an order dated October 22, 2014, the NJBPU determined that it is appropriate for affected consolidated groups to continue to include a CTA in New Jersey base rate filings, but that the CTA calculation will be modified to limit the look-back period for the calculation to five years, exclude transmission assets from the calculation and allocate 25 percent of the final CTA amount as a reduction to the distribution revenue requirement. With this revised methodology, ACE anticipates that the negative effects of the CTA in future base rate cases will be significantly reduced. | |||||||||||||
On November 5, 2014, the DRC filed an appeal of the NJBPU’s CTA order in the Appellate Division. This appeal remains pending. | |||||||||||||
Under the Merger Agreement, ACE is permitted to pursue the conclusion of this matter and intends to continue to do so. | |||||||||||||
Federal Energy Regulatory Commission | |||||||||||||
Transmission Annual Formula Rate Update Challenges | |||||||||||||
In October 2013, FERC issued a ruling on challenges filed by the Delaware Municipal Electric Corporation, Inc. (DEMEC) to DPL’s 2011 and 2012 annual formula rate updates for transmission service. In 2006, FERC approved a formula rate for DPL that is incorporated into the PJM tariff. The formula rate establishes the treatment of costs and revenues and the resulting rates for DPL. Pursuant to the protocols approved by FERC and after a period of discovery, interested parties have an opportunity to file challenges regarding the application of the formula rate. The October 2013 FERC order set various issues in this proceeding for hearing, including challenges regarding formula rate inputs, deferred income items, prepayments of estimated income taxes, rate base reductions, various administrative and general expenses and the inclusion in rate base of construction work in progress related to the MAPP project abandoned by PJM. Settlement discussions began in this matter in November 2013 before an administrative law judge at FERC. | |||||||||||||
In December 2013, DEMEC filed a formal challenge to the DPL 2013 annual formula rate update for transmission service, including a request to consolidate the 2013 challenge with the two prior challenges. The issues in the challenges for 2011, 2012 and 2013 are similar. On April 8, 2014, FERC issued an order setting the 2013 challenge issues for hearing and on April 15, 2014, those issues were consolidated with the 2011 and 2012 challenges. A settlement agreement was filed with FERC on August 25, 2014. On January 9, 2015, FERC issued an order approving the settlement, thereby resolving all of the issues set for hearing in the proceeding. Pursuant to the settlement, DPL will provide a one-time reduction of $225,000 to DPL’s 2015 annual formula rate update and will provide a one-time payment of $258,500 to DEMEC. In addition, the settlement resolves certain ratemaking and accounting treatments prospectively and provides that certain items will not be challenged in the future. | |||||||||||||
Transmission ROE Challenges | |||||||||||||
In February 2013, the public service commissions and public advocates of the District of Columbia, Maryland, Delaware and New Jersey, as well as DEMEC, filed a joint complaint at FERC against Pepco, DPL and ACE, as well as Baltimore Gas and Electric Company (BGE). The complainants challenged the base ROE and the application of the formula rate process, each associated with the transmission service that PHI’s utilities provide. The complainants support an ROE within a zone of reasonableness of 6.78% and 10.33%, and have argued for a base ROE of 8.7%. The base ROE currently authorized by FERC for PHI’s utilities is (i) 11.3% for facilities placed into service after January 1, 2006, and (ii) 10.8% for facilities placed into service prior to 2006. The 10.8% base ROE for facilities placed into service prior to 2006 receives a 50-basis-point incentive adder for being a member of a regional transmission organization. PHI, Pepco, DPL and ACE believe the allegations in this complaint are without merit and are vigorously contesting it. In August 2014, FERC issued an order setting the matters in this proceeding for hearing, but holding the hearing in abeyance pending settlement discussions. The order also (i) directed that the evidence and analysis presented concerning ROE be guided by the new ROE methodology adopted by FERC in another proceeding (discussed below), and (ii) set February 27, 2013 as the refund effective date, should a refund result from this proceeding. After settlement discussions among the parties in this matter reached an impasse, on November 24, 2014, the settlement judge issued an order terminating the settlement discussions. The matter is now before a hearing judge and a procedural schedule will be established for both the February 2013 complaint and a second complaint (discussed below) that has been consolidated with the February 2013 complaint. | |||||||||||||
On June 19, 2014, FERC issued an order in a proceeding in which the PHI utilities were not involved, in which it adopted a new ROE methodology for electric utilities. This new methodology replaces the existing one-step discounted cash flow analysis (which incorporates only short-term growth rates) traditionally used to derive ROE for electric utilities with the two-step discounted cash flow analysis (which incorporates both short-term and long-term measures of growth) used for natural gas and oil pipelines. As a result of the August 2014 FERC order discussed in the preceding paragraph, Pepco, DPL and ACE applied an estimated ROE based on the two-step methodology announced by FERC for the period over which each of their transmission revenues would be subject to refund as a result of the challenge, and recorded estimated reserves in the second quarter of 2014 related to this matter. To the extent that the final ROE determined by FERC is lower than the ROE used to record the estimated reserves, each ten basis point reduction in the ROE would result in a reduction of PHI’s operating income of $1.5 million. | |||||||||||||
A second complaint against Pepco, DPL and ACE challenging the base ROE was filed at FERC on December 8, 2014 by the same parties. Employing the new ROE methodology referenced above, the complainants contend that the resulting base ROE should be 8.8%, and request consolidation of this complaint with the February 2013 complaint. Consistent with the prior challenge, Pepco, DPL and ACE applied an estimated ROE based on the two-step methodology described above, and recorded estimated reserves in the fourth quarter of 2014 using a refund effective date of December 8, 2014. | |||||||||||||
Under the Merger Agreement, PHI is permitted to pursue the conclusion of these FERC matters and intends to continue to do so. | |||||||||||||
MPSC New Generation Contract Requirement | |||||||||||||
In April 2012, the MPSC issued an order that requires Pepco, DPL and BGE (collectively, the Contract EDCs) to negotiate and enter into a contract with the winning bidder of a competitive bidding process to build one new power plant in the range of 650 to 700 megawatts (MWs) beginning in 2015, in amounts proportional to their relative SOS loads. Under the terms of the order, the winning bidder will construct a 661 MW natural gas-fired combined cycle generation plant in Waldorf, Maryland, with an expected commercial operation date of June 1, 2015, and each of the Contract EDCs will recover its costs associated with the contract through surcharges on its respective SOS customers. | |||||||||||||
In response to a complaint filed by a group of generating companies in the PJM region, on September 30, 2013, the U.S. District Court for the District of Maryland issued a ruling that the MPSC’s April 2012 order violated the Supremacy Clause of the U.S. Constitution by attempting to regulate wholesale prices. In contrast, on October 1, 2013, in response to appeals filed by the Contract EDCs and other parties, the Maryland Circuit Court for Baltimore City upheld the MPSC’s orders requiring the Contract EDCs to enter into the contracts. | |||||||||||||
On October 24, 2013, the Federal district court issued an order ruling that the contracts are illegal and unenforceable. The Federal district court order and its associated ruling could impact the state circuit court appeal, to which the Contract EDCs are parties, although such impact, if any, cannot be determined at this time. The Contract EDCs, the Maryland Office of People’s Counsel and one generating company have appealed the Maryland Circuit Court’s decision to the Maryland Court of Special Appeals. In addition, in November 2013 both the winning bidder and the MPSC appealed the Federal district court decision to the U.S. Court of Appeals for the Fourth Circuit, which affirmed the lower Federal court ruling. On November 26, 2014, both the winning bidder and the MPSC petitioned the U.S. Supreme Court to consider hearing an appeal of the Fourth Circuit decision. | |||||||||||||
The Maryland Court of Special Appeals has stayed the appeal of the Baltimore City Circuit Court decision until July 23, 2015. | |||||||||||||
On June 2, 2014, the winning bidder filed the contracts at FERC requesting that they be accepted pursuant to Section 205 of the Federal Power Act (FPA). On August 5, 2014, FERC issued an order rejecting the filings made by the winning bidder, finding that the contracts cannot be accepted as valid contracts, given the decisions reached in the Federal court proceedings discussed above. | |||||||||||||
Assuming the contracts, as currently written, were to become effective by the expected commercial operation date of June 1, 2015, PHI continues to believe that Pepco and DPL may be required to record their proportional share of the contracts as derivative instruments at fair value and record related regulatory assets of approximately the same amount because Pepco and DPL would recover any payments under the contracts from SOS customers. PHI, Pepco and DPL have concluded that any accounting for these contracts would not be required until all legal proceedings related to these contracts and the actions of the MPSC in the related proceeding have been resolved. | |||||||||||||
Under the Merger Agreement, PHI is permitted to pursue the conclusion of this matter and intends to continue to do so. | |||||||||||||
ACE Standard Offer Capacity Agreements | |||||||||||||
In April 2011, ACE entered into three Standard Offer Capacity Agreements (SOCAs) by order of the NJBPU, each with a different generation company. ACE and the other New Jersey EDCs entered into the SOCAs under protest, arguing that the EDCs were denied due process and that the SOCAs violate certain of the requirements under the New Jersey law under which the SOCAs were established (the NJ SOCA Law). On October 22, 2013, in light of the decision of the U.S. District Court for the District of New Jersey described below, the state appeals of the NJBPU implementation orders filed by the EDCs and generators were dismissed without prejudice subject to the parties exercising their appellate rights in the Federal courts. | |||||||||||||
In February 2011, ACE joined other plaintiffs in an action filed in the U.S. District Court for the District of New Jersey challenging the NJ SOCA Law on the grounds that it violates the Commerce Clause and the Supremacy Clause of the U.S. Constitution. On October 11, 2013, the Federal district court issued a ruling that the NJ SOCA Law is preempted by the FPA and violates the Supremacy Clause, and is therefore null and void. On October 25, 2013, the Federal district court issued an order ruling that the SOCAs are void, invalid and unenforceable, which order was affirmed by the U.S. Court of Appeals for the Third Circuit in September 2014. On November 26, 2014 and December 10, 2014, respectively, one of the generation companies and the NJBPU petitioned the U.S. Supreme Court to consider hearing an appeal of the Third Circuit decision. | |||||||||||||
One of the three SOCAs was terminated effective July 1, 2013 because of an event of default of the generation company that was a party to the SOCA. The remaining two SOCAs were terminated effective November 19, 2013, as a result of a termination notice delivered by ACE after the Federal district court’s October 25, 2013 decision. | |||||||||||||
Despite the terminated status of the SOCAs, on June 2, 2014, one of the generation companies that was a party to a SOCA filed the SOCA at FERC seeking to have the SOCA accepted under Section 205 of the FPA. The EDCs intervened in the proceeding and requested that the generation company’s filing be rejected on the grounds that the SOCA never came into effect. On August 5, 2014, FERC issued an order rejecting the filings made by the generation company, finding that the contracts cannot be accepted as valid contracts, given the decisions reached in the Federal court proceedings discussed above. | |||||||||||||
In light of the October 25, 2013 Federal district court order, ACE derecognized both the derivative assets (liabilities) for the estimated fair value of the SOCAs and the related regulatory liabilities (assets) in the fourth quarter of 2013. | |||||||||||||
District of Columbia Power Line Undergrounding Initiative | |||||||||||||
On May 3, 2014, the Council of the District of Columbia enacted the Electric Company Infrastructure Improvement Financing Act of 2014 (the Improvement Financing Act), which provides enabling legislation for the District of Columbia Power Line Undergrounding (DC PLUG) initiative. This $1 billion initiative seeks to selectively place underground some of the District of Columbia’s most outage-prone power lines, which lines and surrounding conduit would be owned and maintained by Pepco. | |||||||||||||
The Improvement Financing Act provides that: (i) Pepco is to fund approximately $500 million of the estimated cost to complete the DC PLUG initiative, recovering those costs through a surcharge on the electric bills of Pepco District of Columbia customers; (ii) $375 million of the DC PLUG initiative cost is to be financed by the District of Columbia’s issuance of securitized bonds, which bonds will be repaid through a surcharge on the electric bills of Pepco District of Columbia customers that Pepco will remit to the District of Columbia; and (iii) the remaining amount is to be covered by the existing capital projects program of the District of Columbia Department of Transportation (DDOT). Pepco will not earn a return on or a return of the cost of the assets funded with the proceeds of the securitized bonds or assets that are constructed by DDOT under its capital projects program, but ownership and responsibility for the operation and maintenance of such assets will be transferred to Pepco for a nominal amount. | |||||||||||||
On June 17, 2014, Pepco and DDOT filed a Triennial Plan related to the construction of selected underground feeders in the District of Columbia and recovery of Pepco’s investment through a volumetric surcharge (the Triennial Plan), all in accordance with the Improvement Financing Act. On August 1, 2014, Pepco filed an application for the issuance of a financing order to provide for the issuance of the District’s bonds and a volumetric surcharge for the District to recover the costs associated with the bond issuance. | |||||||||||||
On November 12, 2014, the DCPSC issued an order approving the Triennial Plan and Pepco’s volumetric surcharge, and on November 24, 2014, the DCPSC issued the financing order. Together these orders permit (i) Pepco and DDOT to commence proposed construction under the Triennial Plan; (ii) the District of Columbia to issue the necessary bonds to fund the District of Columbia’s portion of the DC PLUG initiative; and (iii) the establishment of the customer surcharges contemplated by the Improvement Financing Act. In December 2014, a party to the proceeding sought reconsideration from the DCPSC of both decisions. Final decisions denying both requests for reconsideration were issued on January 22, 2015 and February 2, 2015, respectively. | |||||||||||||
On December 4, 2014, a party filed a petition for review with the District of Columbia Court of Appeals disputing the DCPSC’s denial of its motion to intervene. The procedural schedule for the petition has not yet been set. | |||||||||||||
Under the Merger Agreement, Pepco is permitted to pursue the DC PLUG initiative and intends to continue to do so. | |||||||||||||
MAPP Settlement Agreement | |||||||||||||
In February 2014, FERC issued an order approving the settlement agreement submitted by Pepco and DPL in connection with Pepco’s and DPL’s proceeding seeking recovery of approximately $88 million in abandonment costs related to the MAPP project. PHI had been directed by PJM to construct the MAPP project, a 152-mile high-voltage interstate transmission line, and in August 2012 was directed by PJM to cancel it. The abandonment costs sought for recovery were subsequently reduced to $82 million as a result of write-offs of certain disallowed costs in 2013 and transfers of materials to inventories for use on other projects. Under the terms of the FERC-approved settlement agreement, Pepco and DPL will receive $80.5 million of transmission revenues over a three-year period, which began on June 1, 2013, and will retain title to all real property and property rights acquired in connection with the MAPP project, which had an estimated fair value of $8 million. The FERC-approved settlement agreement resolves all issues concerning the recovery of abandonment costs associated with the cancellation of the MAPP project, and the terms of the settlement agreement are not subject to modification through any other FERC proceeding. As of December 31, 2014, PHI had recorded a regulatory asset related to the MAPP abandonment costs of approximately $33 million, net of amortization, and land of $8 million. PHI expects to recognize pre-tax income related to the MAPP abandonment costs of $1 million in 2015. | |||||||||||||
Merger Approval Proceedings | |||||||||||||
Delaware | |||||||||||||
On June 18, 2014, Exelon, PHI and DPL, and certain of their respective affiliates, filed an application with the DPSC seeking approval of the Merger. Delaware law requires the DPSC to approve the Merger when it determines that the transaction is in accordance with law, for a proper purpose, and is consistent with the public interest. The DPSC must further find that the successor will continue to provide safe and reliable service, will not terminate or impair existing collective bargaining agreements and will engage in good faith bargaining with organized labor. On February 13, 2015, Exelon, DPL, the DPSC staff, the Division of the Public Advocate and certain other parties filed a settlement agreement with the DPSC. The settling parties also requested that the scheduled hearings be suspended. The settlement requests that hearings regarding DPSC approval of the settlement be held in April 2015 and that the decision of the DPSC be issued thereafter in April 2015. | |||||||||||||
District of Columbia | |||||||||||||
On June 18, 2014, Exelon, PHI and Pepco, and certain of their respective affiliates, filed an application with the DCPSC seeking approval of the Merger. To approve the Merger, the DCPSC must find that the Merger is in the public interest. In an order issued August 22, 2014, the DCPSC stated that to make the determination of whether the transaction is in the public interest, it will analyze the transaction in the context of seven factors to determine whether the transaction balances the interests of shareholders and investors with ratepayers and the community, whether the benefits to shareholders do or do not come at the expense of the ratepayers, and whether the transaction produces a direct and tangible benefit to ratepayers. The seven factors identified by the DCPSC are the effects of the transaction on: (i) ratepayers, shareholders, the financial health of the utility standing alone and as merged, and the local economy; (ii) utility management and administrative operations; (iii) the public safety and the safety and reliability of services; (iv) risks associated with all of the affiliated non-jurisdictional business operations, including nuclear operations, of the applicants; (v) the DCPSC’s ability to regulate the utility effectively following the Merger; (vi) competition in the local retail and wholesale markets that impacts the District and District ratepayers; and (vii) conservation of natural resources and preservation of environmental quality. District of Columbia law does not impose any time limit on the DCPSC’s review of the Merger. The DCPSC has scheduled evidentiary hearings for March 30, 2015 to April 8, 2015. | |||||||||||||
Maryland | |||||||||||||
On August 19, 2014, Exelon, PHI, Pepco and DPL, and certain of their respective affiliates, filed an application with the MPSC seeking approval of the Merger. Maryland law requires the MPSC to approve a merger subject to its review if it finds that the merger is consistent with the public interest, convenience and necessity, including its benefits to and impact on consumers. In making this determination, the MPSC is required to consider the following 12 criteria: (i) the potential impact of the merger on rates and charges paid by customers and on the services and conditions of operation of the utility; (ii) the potential impact of the merger on continuing investment needs for the maintenance of utility services, plant and related infrastructure; (iii) the proposed capital structure that will result from the merger, including allocation of earnings from the utility; (iv) the potential effects on employment by the utility; (v) the projected allocation between the utility’s shareholders and ratepayers of any savings that are expected; (vi) issues of reliability, quality of service and quality of customer service; (vii) the potential impact of the merger on community investment; (viii) affiliate and cross-subsidization issues; (ix) the use or pledge of utility assets for the benefit of an affiliate; (x) jurisdictional and choice-of-law issues; (xi) whether it is necessary to revise the MPSC’s ring-fencing and affiliate code of conduct regulations in light of the merger; and (xii) any other issues the MPSC considers relevant to the assessment of the merger. The MPSC is required to issue an order within 180 days of the August 19, 2014 filing date. However, the MPSC can grant a 45-day extension for good cause. If no order is issued by the statutory deadline, then the Merger would be deemed to be approved. On September 22, 2014, the MPSC issued an order setting the procedural schedule for this matter. Pursuant to that schedule, evidentiary hearings were held beginning on January 26, 2015, and all briefs are scheduled to be filed in March 2015. The deadline for the MPSC’s decision is April 8, 2015. | |||||||||||||
New Jersey | |||||||||||||
On June 18, 2014, Exelon, PHI and ACE, and certain of their respective affiliates, filed a petition with the NJBPU seeking approval of the Merger. To approve the Merger, the NJBPU must find the Merger is in the public interest, and consider the impact of the Merger on (i) competition, (ii) rates of ratepayers affected by the Merger, (iii) ACE’s employees, and (iv) the provision of safe and reliable service at just and reasonable rates. On July 23, 2014, the NJBPU voted to retain this matter, rather than assigning it to an administrative law judge. On January 14, 2015, PHI, ACE, Exelon, certain of Exelon’s affiliates, the Staff of the NJBPU, and the Independent Energy Producers of New Jersey filed a stipulation of settlement (the Stipulation) with the NJBPU in this proceeding. On February 11, 2015, the NJBPU approved the Stipulation and the Merger. | |||||||||||||
Virginia | |||||||||||||
On June 3, 2014, Exelon, PHI, Pepco and DPL, and certain of their respective affiliates, filed an application with the VSCC seeking approval of the Merger. Virginia law provides that, if the VSCC determines, with or without hearing, that adequate service to the public at just and reasonable rates will not be impaired or jeopardized by granting the application for approval, then the VSCC shall approve a merger with such conditions that the VSCC deems to be appropriate in order to satisfy this standard. On October 7, 2014, the VSCC issued an order approving the Merger. | |||||||||||||
Federal Energy Regulatory Commission | |||||||||||||
On May 30, 2014, Exelon, PHI, Pepco, DPL and ACE, and certain of their respective affiliates, submitted to FERC a Joint Application for Authorization of Disposition of Jurisdictional Assets and Merger under Section 203 of the FPA. Under that section, FERC shall approve a merger if it finds that the proposed transaction will be consistent with the public interest. On November 20, 2014, FERC issued an order approving the Merger. | |||||||||||||
Hart-Scott-Rodino Act | |||||||||||||
The HSR Act, which is the U.S. federal pre-merger notification statute, and its related rules and regulations provide that acquisition transactions that meet the HSR Act’s coverage thresholds may not be completed until a Notification and Report Form has been furnished to the DOJ and the Federal Trade Commission (FTC), and that the waiting period required by the HSR Act has been terminated or has expired. Pursuant to the HSR Act requirements, Pepco Holdings and Exelon filed the required Notification and Report Forms with the DOJ and the FTC on August 6, 2014. Following informal discussions with the DOJ, effective as of September 5, 2014, Exelon withdrew its Notification and Report Form and refiled it on September 9, 2014, which restarted the waiting period required by the HSR Act. On October 9, 2014, each of Pepco Holdings and Exelon received a request for additional information and documentary material from the DOJ, which had the effect of extending the DOJ review period until 30 days after each of Pepco Holdings and Exelon certified that it has substantially complied with the request. On November 21, 2014, each of Pepco Holdings and Exelon certified that it had substantially complied with the request. Accordingly, the HSR Act waiting period expired on December 22, 2014, and the HSR Act no longer precludes completion of the Merger. Although the DOJ allowed the waiting period under the HSR Act to expire without taking any action with respect to the Merger, the DOJ has not advised Pepco Holdings or Exelon that it has concluded its investigation. | |||||||||||||
Delmarva Power & Light Co/De [Member] | |||||||||||||
Regulatory Matters | (7) REGULATORY MATTERS | ||||||||||||
Regulatory Assets and Regulatory Liabilities | |||||||||||||
The components of DPL’s regulatory asset and liability balances at December 31, 2014 and 2013 are as follows: | |||||||||||||
2014 | 2013 | ||||||||||||
(millions of dollars) | |||||||||||||
Regulatory Assets | |||||||||||||
Smart Grid costs | $ | 86 | $ | 83 | |||||||||
Recoverable income taxes | 84 | 76 | |||||||||||
Demand-side management costs | 67 | 27 | |||||||||||
COPCO acquisition adjustment | 18 | 22 | |||||||||||
MAPP abandonment costs | 14 | 31 | |||||||||||
Deferred debt extinguishment costs | 12 | 13 | |||||||||||
Deferred energy supply costs | 12 | 13 | |||||||||||
Incremental storm restoration costs | 7 | 9 | |||||||||||
Deferred losses on gas derivatives | 4 | — | |||||||||||
Other | 52 | 37 | |||||||||||
Total Regulatory Assets | $ | 356 | $ | 311 | |||||||||
Regulatory Liabilities | |||||||||||||
Asset removal costs | $ | 166 | $ | 173 | |||||||||
Deferred income taxes due to customers | 37 | 37 | |||||||||||
Deferred energy supply costs | — | 3 | |||||||||||
Deferred gains on gas derivatives | — | 1 | |||||||||||
Other | 22 | 15 | |||||||||||
Total Regulatory Liabilities | $ | 225 | $ | 229 | |||||||||
A description for each category of regulatory assets and regulatory liabilities follows: | |||||||||||||
Smart Grid Costs: Represents advanced metering infrastructure (AMI) costs associated with the installation of smart meters and the early retirement of legacy meters throughout DPL’s service territory that are recoverable from customers. DPL generally is deferring carrying charges on these regulatory assets. | |||||||||||||
Recoverable Income Taxes: Represents amounts recoverable from DPL’s customers for tax benefits applicable to utility operations that were previously recognized in income tax expense before the company was ordered to record 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. | |||||||||||||
Demand-Side Management Costs: Represents recoverable costs associated with customer energy efficiency and conservation programs in all jurisdictions that are being recovered from customers. DPL earns a return on these regulatory assets. | |||||||||||||
COPCO Acquisition Adjustment: On July 19, 2007, the MPSC issued an order which provided for the recovery of a portion of DPL’s goodwill. As a result of this order, $41 million in DPL goodwill was transferred to a regulatory asset. This item is being amortized from August 2007 through August 2018. DPL earns a return of 12.95% on these regulatory assets. | |||||||||||||
MAPP Abandonment Costs: Represents abandonment costs incurred in connection with the Mid-Atlantic Power Pathway (MAPP) transmission line construction project which was terminated on August 24, 2012. For additional information, see “MAPP Settlement Agreement” discussion below. These regulatory assets are being amortized and recovered in transmission rates through May 2016. DPL generally does not earn a return on these regulatory assets. | |||||||||||||
Deferred Debt Extinguishment Costs: Represents deferred costs of debt extinguishment that are amortized to interest expense and recovered from customers. DPL generally earns a return on these regulatory assets. | |||||||||||||
Deferred Energy Supply Costs: The regulatory asset represents primarily deferred costs associated with a net under-recovery of Default Electricity Supply costs incurred by DPL that are being or are expected to be recovered from customers. DPL earns a return on these regulatory assets in Delaware. The regulatory liability represents primarily deferred costs associated with a net over-recovery of Default Electricity Supply costs incurred that will be refunded by DPL to customers. | |||||||||||||
Incremental Storm Restoration Costs: Represents total incremental storm restoration costs incurred for repair work due to major storm events in 2012 and 2011, including Hurricane Sandy, the June 2012 derecho, and Hurricane Irene, that are recoverable from customers in the Maryland jurisdiction. DPL’s costs related to Hurricane Sandy, the June 2012 derecho and Hurricane Irene are being amortized and recovered from customers, each over a five-year period. DPL generally earns a return on these regulatory assets. | |||||||||||||
Deferred Losses on Gas Derivatives: Represents losses associated with hedges of natural gas purchases that are recoverable from customers through the Gas Cost Rate (GCR) approved by the DPSC. DPL does not earn a return on these regulatory assets. | |||||||||||||
Other: Represents miscellaneous regulatory assets that generally are being amortized over 1 to 20 years. | |||||||||||||
Asset Removal Costs: The depreciation rates for DPL include a component for removal costs, as approved by the relevant federal and state regulatory commissions. Accordingly, DPL has recorded regulatory liabilities for its estimate of the difference between incurred removal costs and the amount of removal costs recovered through depreciation rates. | |||||||||||||
Deferred Income Taxes Due to Customers: Represents the portions of deferred income tax assets applicable to utility operations of DPL that have not been reflected in current customer rates for which future payment to customers is probable. As the temporary differences between the financial statement basis and tax basis of assets reverse, deferred recoverable income taxes are amortized. | |||||||||||||
Deferred Gains on Gas Derivatives: Represents gains associated with hedges of natural gas purchases that will be refunded to customers through the GCR approved by the DPSC. | |||||||||||||
Other: Represents miscellaneous regulatory liabilities. | |||||||||||||
Rate Proceedings | |||||||||||||
As further described in Note (1), “Organization,” on April 29, 2014, PHI entered into the Merger Agreement with Exelon and Merger Sub. Subject to certain exceptions, prior to the Merger or the termination of the Merger Agreement, PHI and its subsidiaries may not, without the consent of Exelon, initiate, file or pursue any rate cases, other than pursuing the conclusion of the pending filings indicated below. | |||||||||||||
Bill Stabilization Adjustment | |||||||||||||
DPL has proposed in each of its respective jurisdictions the adoption of a mechanism to decouple retail distribution revenue from the amount of power delivered to retail customers. To date: | |||||||||||||
• | A BSA has been approved and implemented for DPL electric service in Maryland. | ||||||||||||
• | A proposed modified fixed variable rate design (MFVRD) for DPL electric and natural gas service in Delaware was filed in 2009 for consideration by the DPSC and while there was little to no activity associated with this filing in 2014, or to date in 2015, the proceeding remains open. | ||||||||||||
Under a BSA, customer distribution 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 MFVRD proposed in Delaware contemplates a fixed customer charge (i.e., not tied to the customer’s volumetric consumption of electricity or natural gas) to recover the utility’s fixed costs, plus a reasonable rate of return. | |||||||||||||
Delaware | |||||||||||||
Electric Distribution Base Rates | |||||||||||||
On March 22, 2013, DPL submitted an application with the DPSC to increase its electric distribution base rates. The application sought approval of an annual rate increase of approximately $42 million (adjusted by DPL to approximately $39 million on September 20, 2013), based on a requested return on equity (ROE) of 10.25%. The requested rate increase sought to recover expenses associated with DPL’s ongoing investments in reliability enhancement improvements and efforts to maintain safe and reliable service. On August 5, 2014, the DPSC issued a final order in this proceeding providing for an annual increase in DPL’s electric distribution base rates of approximately $15.1 million, based on an ROE of 9.70%. The new rates became effective on May 1, 2014. | |||||||||||||
On September 4, 2014, DPL filed an appeal with the Delaware Superior Court of the DPSC’s August 5, 2014 order in this proceeding, seeking the court’s review of the DPSC’s decision relating to the recovery of costs associated with one component of employee compensation, certain retirement benefits and recovery of credit facility expenses. The Division of the Public Advocate filed a cross-appeal on September 8, 2014, pertaining to the treatment of prepaid pension expense and other postretirement benefit obligations in base rates. Under the settlement agreement related to the Merger described below in “Merger Approval Proceedings – Delaware,” the parties have agreed to suspend the appeal and to withdraw the appeal with prejudice upon the closing of the Merger. | |||||||||||||
Forward Looking Rate Plan | |||||||||||||
On October 2, 2013, DPL filed a multi-year rate plan, referred to as the Forward Looking Rate Plan (FLRP). As proposed, the FLRP would provide for annual electric distribution base rate increases over a four-year period in the aggregate amount of approximately $56 million. The FLRP as proposed provides the opportunity to achieve estimated earned ROEs of 7.41% and 8.80% in years one and two, respectively, and 9.75% in both years three and four of the plan. | |||||||||||||
In addition, DPL proposed that as part of the FLRP, in order to provide a higher minimum required standard of reliability for DPL’s customers than that to which DPL is currently subject, the standards by which DPL’s reliability is measured would be made more stringent in each year of the FLRP. DPL has also offered to refund an aggregate of $500,000 to customers in each year of the FLRP that it fails to meet the proposed stricter minimum reliability standards. | |||||||||||||
On October 22, 2013, the DPSC opened a docket for the purpose of reviewing the details of the FLRP, but stated that it would not address the FLRP until the electric distribution base rate case discussed above was concluded. A schedule for the FLRP docket has not yet been established. | |||||||||||||
Under the Merger Agreement, DPL is permitted to pursue this matter; however, under the settlement agreement related to the Merger described below in “Merger Approval Proceedings – Delaware,” DPL has agreed to withdraw the FLRP without prejudice to refile it in a subsequent base rate case. | |||||||||||||
Gas Distribution Base Rates | |||||||||||||
A settlement approved in October 2013 by the DPSC in a proceeding filed by DPL in December 2012 to increase its natural gas distribution base rates provides in part for a phase-in of the recovery of the deferred costs associated with DPL’s deployment of the interface management unit (IMU). The IMU is part of DPL’s AMI and allows for the remote reading of gas meters. Filing for recovery of such costs will occur in two phases, subject to compliance with specific metrics, with recovery over a 15-year period. For the first phase, 50% of the IMU-related portion of DPL’s AMI costs were put into rates on July 11, 2014. The remainder of these costs will be put into rates in the second phase when the specific metrics allowing for recovery are met. | |||||||||||||
Gas Cost Rates | |||||||||||||
DPL makes an annual GCR filing with the DPSC for the purpose of allowing DPL to recover natural gas procurement costs through customer rates. On August 29, 2014, DPL made its 2014 GCR filing in which it proposed a GCR decrease of approximately 7.4%. On September 30, 2014, the DPSC issued an order authorizing DPL to place the new rates into effect on November 1, 2014, subject to refund and pending final DPSC approval. | |||||||||||||
Under the Merger Agreement, DPL is permitted and intends to continue to file its required annual GCR cases in Delaware. | |||||||||||||
Federal Energy Regulatory Commission | |||||||||||||
Transmission Annual Formula Rate Update Challenges | |||||||||||||
In October 2013, FERC issued a ruling on challenges filed by the Delaware Municipal Electric Corporation, Inc. (DEMEC) to DPL’s 2011 and 2012 annual formula rate updates for transmission service. In 2006, FERC approved a formula rate for DPL that is incorporated into the PJM Interconnection, LLC (PJM) tariff. The formula rate establishes the treatment of costs and revenues and the resulting rates for DPL. Pursuant to the protocols approved by FERC and after a period of discovery, interested parties have an opportunity to file challenges regarding the application of the formula rate. The October 2013 FERC order set various issues in this proceeding for hearing, including challenges regarding formula rate inputs, deferred income items, prepayments of estimated income taxes, rate base reductions, various administrative and general expenses and the inclusion in rate base of construction work in progress related to the MAPP project abandoned by PJM. Settlement discussions began in this matter in November 2013 before an administrative law judge at FERC. | |||||||||||||
In December 2013, DEMEC filed a formal challenge to the DPL 2013 annual formula rate update for transmission service, including a request to consolidate the 2013 challenge with the two prior challenges. The issues in the challenges for 2011, 2012 and 2013 are similar. On April 8, 2014, FERC issued an order setting the 2013 challenge issues for hearing and on April 15, 2014, those issues were consolidated with the 2011 and 2012 challenges. A settlement agreement was filed with FERC on August 25, 2014. On January 9, 2015, FERC issued an order approving the settlement, thereby resolving all of the issues set for hearing in the proceeding. Pursuant to the settlement, DPL will provide a one-time reduction of $225,000 to DPL’s 2015 annual formula rate update and will provide a one-time payment of $258,500 to DEMEC. In addition, the settlement resolves certain ratemaking and accounting treatments prospectively and provides that certain items will not be challenged in the future. | |||||||||||||
Transmission ROE Challenges | |||||||||||||
In February 2013, the public service commissions and public advocates of the District of Columbia, Maryland, Delaware and New Jersey, as well as DEMEC, filed a joint complaint at FERC against DPL and its affiliates Potomac Electric Power Company (Pepco) and Atlantic City Electric Company (ACE), as well as Baltimore Gas and Electric Company (BGE). The complainants challenged the base ROE and the application of the formula rate process, each associated with the transmission service that PHI’s utilities provide. The complainants support an ROE within a zone of reasonableness of 6.78% and 10.33%, and have argued for a base ROE of 8.7%. The base ROE currently authorized by FERC for DPL and its utility affiliates is (i) 11.3% for facilities placed into service after January 1, 2006, and (ii) 10.8% for facilities placed into service prior to 2006. The 10.8% base ROE for facilities placed into service prior to 2006 is eligible for a 50-basis-point incentive adder for being a member of a regional transmission organization. DPL believes the allegations in this complaint are without merit and is vigorously contesting it. In August 2014, FERC issued an order setting the matters in this proceeding for hearing, but holding the hearing in abeyance pending settlement discussions. The order also (i) directed that the evidence and analysis presented concerning ROE be guided by the new ROE methodology adopted by FERC in another proceeding (discussed below), and (ii) set February 27, 2013 as the refund effective date, should a refund result from this proceeding. After settlement discussions among the parties in this matter reached an impasse, on November 24, 2014, the settlement judge issued an order terminating the settlement discussions. The matter is now before a hearing judge and a procedural schedule will be established for both the February 2013 complaint and a second complaint (discussed below) that has been consolidated with the February 2013 complaint. | |||||||||||||
On June 19, 2014, FERC issued an order in a proceeding in which DPL was not involved, in which it adopted a new ROE methodology for electric utilities. This new methodology replaces the existing one-step discounted cash flow analysis (which incorporates only short-term growth rates) traditionally used to derive ROE for electric utilities with the two-step discounted cash flow analysis (which incorporates both short-term and long-term measures of growth) used for natural gas and oil pipelines. As a result of the August 2014 FERC order discussed in the preceding paragraph, DPL applied an estimated ROE based on the two-step methodology announced by FERC for the period over which its transmission revenues would be subject to refund as a result of the challenge, and recorded estimated reserves in the second quarter of 2014 related to this matter. To the extent that the final ROE determined by FERC is lower than the ROE used to record the estimated reserves, each ten basis point reduction in the ROE would result in a reduction of DPL’s operating income of $0.5 million. | |||||||||||||
A second complaint against Pepco, DPL and ACE challenging the base ROE was filed at FERC on December 8, 2014 by the same parties. Employing the new ROE methodology referenced above, the complainants contend that the resulting base ROE should be 8.8%, and request consolidation of this complaint with the February 2013 complaint. Consistent with the prior challenge, DPL applied an estimated ROE based on the two-step methodology described above, and recorded estimated reserves in the fourth quarter of 2014 using a refund effective date of December 8, 2014. | |||||||||||||
Under the Merger Agreement, DPL is permitted to pursue the conclusion of these FERC matters and intends to continue to do so. | |||||||||||||
MPSC New Generation Contract Requirement | |||||||||||||
In April 2012, the MPSC issued an order that requires Pepco, DPL and BGE (collectively, the Contract EDCs) to negotiate and enter into a contract with the winning bidder of a competitive bidding process to build one new power plant in the range of 650 to 700 megawatts (MWs) beginning in 2015, in amounts proportional to their relative SOS loads. Under the terms of the order, the winning bidder will construct a 661 MW natural gas-fired combined cycle generation plant in Waldorf, Maryland, with an expected commercial operation date of June 1, 2015, and each of the Contract EDCs will recover its costs associated with the contract through surcharges on its respective SOS customers. | |||||||||||||
In response to a complaint filed by a group of generating companies in the PJM region, on September 30, 2013, the U.S. District Court for the District of Maryland issued a ruling that the MPSC’s April 2012 order violated the Supremacy Clause of the U.S. Constitution by attempting to regulate wholesale prices. In contrast, on October 1, 2013, in response to appeals filed by the Contract EDCs and other parties, the Maryland Circuit Court for Baltimore City upheld the MPSC’s orders requiring the Contract EDCs to enter into the contracts. | |||||||||||||
On October 24, 2013, the Federal district court issued an order ruling that the contracts are illegal and unenforceable. The Federal district court order and its associated ruling could impact the state circuit court appeal, to which the Contract EDCs are parties, although such impact, if any, cannot be determined at this time. The Contract EDCs, the Maryland Office of People’s Counsel and one generating company have appealed the Maryland Circuit Court’s decision to the Maryland Court of Special Appeals. In addition, in November 2013 both the winning bidder and the MPSC appealed the Federal district court decision to the U.S. Court of Appeals for the Fourth Circuit, which affirmed the lower Federal court ruling. On November 26, 2014, both the winning bidder and the MPSC petitioned the U.S. Supreme Court to consider hearing an appeal of the Fourth Circuit decision. | |||||||||||||
The Maryland Court of Special Appeals has stayed the appeal of the Baltimore City Circuit Court decision until July 23, 2015. | |||||||||||||
On June 2, 2014, the winning bidder filed the contracts at FERC requesting that they be accepted pursuant to Section 205 of the Federal Power Act (FPA). On August 5, 2014, FERC issued an order rejecting the filings made by the winning bidder, finding that the contracts cannot be accepted as valid contracts, given the decisions reached in the Federal court proceedings discussed above. | |||||||||||||
Assuming the contracts, as currently written, were to become effective by the expected commercial operation date of June 1, 2015, DPL continues to believe that it may be required to record its proportional share of the contracts as derivative instruments at fair value and record related regulatory assets of approximately the same amount because DPL would recover any payments under the contracts from SOS customers. DPL has concluded that any accounting for these contracts would not be required until all legal proceedings related to these contracts and the actions of the MPSC in the related proceeding have been resolved. | |||||||||||||
Under the Merger Agreement, DPL is permitted to pursue the conclusion of this matter and intends to continue to do so. | |||||||||||||
MAPP Settlement Agreement | |||||||||||||
In February 2014, FERC issued an order approving the settlement agreement submitted by DPL in connection with DPL’s proceeding seeking recovery of approximately $38 million in abandonment costs related to the MAPP project. DPL had been directed by PJM to construct the MAPP project, a 152-mile high-voltage interstate transmission line, and in August 2012 was directed by PJM to cancel it. The abandonment costs sought for recovery were subsequently reduced to $37 million as a result of write-offs of certain disallowed costs in 2013. Under the terms of the FERC-approved settlement agreement, DPL will receive $36.6 million of transmission revenues over a three-year period, which began on June 1, 2013, and will retain title to all real property and property rights acquired in connection with the MAPP project, which had an estimated fair value of $6 million. The FERC-approved settlement agreement resolves all issues concerning the recovery of abandonment costs associated with the cancellation of the MAPP project, and the terms of the settlement agreement are not subject to modification through any other FERC proceeding. As of December 31, 2014, DPL had a regulatory asset related to the MAPP abandonment costs of approximately $14 million, net of amortization, and land of $6 million. DPL expects to recognize pre-tax income related to the MAPP abandonment costs of $1 million in 2015. | |||||||||||||
Merger Approval Proceedings | |||||||||||||
Delaware | |||||||||||||
On June 18, 2014, Exelon, PHI and DPL, and certain of their respective affiliates, filed an application with the DPSC seeking approval of the Merger. Delaware law requires the DPSC to approve the Merger when it determines that the transaction is in accordance with law, for a proper purpose, and is consistent with the public interest. The DPSC must further find that the successor will continue to provide safe and reliable service, will not terminate or impair existing collective bargaining agreements and will engage in good faith bargaining with organized labor. | |||||||||||||
On February 13, 2015, Exelon, DPL, the DPSC staff, the Division of the Public Advocate and certain other parties filed a settlement agreement with the DPSC. The settling parties also requested that the scheduled hearings be suspended. The settlement requests that hearings regarding DPSC approval of the settlement be held in April 2015 and that the decision of the DPSC be issued thereafter in April 2015. | |||||||||||||
Maryland | |||||||||||||
On August 19, 2014, Exelon, PHI, Pepco and DPL, and certain of their respective affiliates, filed an application with the MPSC seeking approval of the Merger. Maryland law requires the MPSC to approve a merger subject to its review if it finds that the merger is consistent with the public interest, convenience and necessity, including its benefits to and impact on consumers. In making this determination, the MPSC is required to consider the following 12 criteria: (i) the potential impact of the merger on rates and charges paid by customers and on the services and conditions of operation of the utility; (ii) the potential impact of the merger on continuing investment needs for the maintenance of utility services, plant and related infrastructure; (iii) the proposed capital structure that will result from the merger, including allocation of earnings from the utility; (iv) the potential effects on employment by the utility; (v) the projected allocation between the utility’s shareholders and ratepayers of any savings that are expected; (vi) issues of reliability, quality of service and quality of customer service; (vii) the potential impact of the merger on community investment; (viii) affiliate and cross-subsidization issues; (ix) the use or pledge of utility assets for the benefit of an affiliate; (x) jurisdictional and choice-of-law issues; (xi) whether it is necessary to revise the MPSC’s ring-fencing and affiliate code of conduct regulations in light of the merger; and (xii) any other issues the MPSC considers relevant to the assessment of the merger. The MPSC is required to issue an order within 180 days of the August 19, 2014 filing date. However, the MPSC can grant a 45-day extension for good cause. If no order is issued by the statutory deadline, then the Merger would be deemed to be approved. On September 22, 2014, the MPSC issued an order setting the procedural schedule for this matter. Pursuant to that schedule, evidentiary hearings were held beginning on January 26, 2015, and all briefs are scheduled to be filed in March 2015. The deadline for the MPSC’s decision is April 8, 2015. | |||||||||||||
Virginia | |||||||||||||
On June 3, 2014, Exelon, PHI, Pepco and DPL, and certain of their respective affiliates, filed an application with the VSCC seeking approval of the Merger. Virginia law provides that, if the VSCC determines, with or without hearing, that adequate service to the public at just and reasonable rates will not be impaired or jeopardized by granting the application for approval, then the VSCC shall approve a merger with such conditions that the VSCC deems to be appropriate in order to satisfy this standard. On October 7, 2015, the VSCC issued an order approving the Merger. | |||||||||||||
Federal Energy Regulatory Commission | |||||||||||||
On May 30, 2014, Exelon, PHI, Pepco, DPL and ACE, and certain of their respective affiliates, submitted to FERC a Joint Application for Authorization of Disposition of Jurisdictional Assets and Merger under Section 203 of the FPA. Under that section, FERC shall approve a merger if it finds that the proposed transaction will be consistent with the public interest. On November 20, 2014, FERC issued an order approving the Merger. | |||||||||||||
Potomac Electric Power Co [Member] | |||||||||||||
Regulatory Matters | (6) REGULATORY MATTERS | ||||||||||||
Regulatory Assets and Regulatory Liabilities | |||||||||||||
The components of Pepco’s regulatory asset and liability balances at December 31, 2014 and 2013 are as follows: | |||||||||||||
2014 | 2013 | ||||||||||||
(millions of dollars) | |||||||||||||
Regulatory Assets | |||||||||||||
Demand-side management costs | $ | 197 | $ | 98 | |||||||||
Smart Grid costs | 175 | 168 | |||||||||||
Recoverable income taxes | 148 | 107 | |||||||||||
Recoverable workers’ compensation and long-term disability costs | 30 | 26 | |||||||||||
Incremental storm restoration costs | 29 | 37 | |||||||||||
Deferred debt extinguishment costs | 22 | 25 | |||||||||||
MAPP abandonment costs | 19 | 37 | |||||||||||
Deferred energy supply costs | 3 | 6 | |||||||||||
Other | 74 | 59 | |||||||||||
Total Regulatory Assets | $ | 697 | $ | 563 | |||||||||
Regulatory Liabilities | |||||||||||||
Asset removal costs | $ | 84 | $ | 102 | |||||||||
Other | 20 | 11 | |||||||||||
Total Regulatory Liabilities | $ | 104 | $ | 113 | |||||||||
A description for each category of regulatory assets and regulatory liabilities follows: | |||||||||||||
Demand-Side Management Costs: Represents costs associated with customer energy efficiency and conservation programs in all jurisdictions that are being recovered from customers. Pepco earns a return on these regulatory assets. | |||||||||||||
Smart Grid Costs: Represents advanced metering infrastructure (AMI) costs associated with the installation of smart meters and the early retirement of legacy meters throughout Pepco’s service territory that are recoverable from customers. Pepco generally is deferring carrying charges on these regulatory assets. | |||||||||||||
Recoverable Income Taxes: Represents amounts recoverable from Pepco’s customers for tax benefits applicable to utility operations that were previously recognized in income tax expense before the company was ordered to record 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. | |||||||||||||
Recoverable Workers’ Compensation and Long-Term Disability Costs: Represents accrued workers’ compensation and long-term disability costs for Pepco, which are recoverable from customers when actual claims are paid to employees. Pepco does not earn a return on these regulatory assets. | |||||||||||||
Incremental Storm Restoration Costs: Represents total incremental storm restoration costs incurred for repair work due to major storm events in 2012 and 2011, including Hurricane Sandy, the June 2012 derecho, Hurricane Irene, and the 2011 severe winter storm, that are recoverable from customers in the Maryland jurisdiction. Pepco’s costs related to Hurricane Sandy, the June 2012 derecho, Hurricane Irene and the 2011 severe winter storm are being amortized and recovered from customers, each over a five-year period. Pepco does not earn a return on these regulatory assets. | |||||||||||||
Deferred Debt Extinguishment Costs: Represents deferred costs of debt extinguishment that are amortized to interest expense and recovered from customers. Pepco generally earns a return on these regulatory assets. | |||||||||||||
MAPP Abandonment Costs: Represents abandonment costs incurred in connection with the Mid-Atlantic Power Pathway (MAPP) transmission line construction project which was terminated on August 24, 2012. For additional information, see “MAPP Settlement Agreement” discussion below. These regulatory assets are being amortized and recovered in transmission rates through May 2016. Pepco generally does not earn a return on these regulatory assets. | |||||||||||||
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 are being or are expected to be recovered from customers. Pepco does not earn a return on these regulatory assets. | |||||||||||||
Other: Represents miscellaneous regulatory assets that generally are being amortized over 1 to 20 years. | |||||||||||||
Asset Removal Costs: The depreciation rates for Pepco include a component for removal costs, as approved by the relevant federal and state regulatory commissions. Accordingly, Pepco has recorded regulatory liabilities for its estimate of the difference between incurred removal costs and the amount of removal costs recovered through depreciation rates. | |||||||||||||
Other: Represents miscellaneous regulatory liabilities. | |||||||||||||
Rate Proceedings | |||||||||||||
As further described in Note (1), “Organization,” on April 29, 2014, PHI entered into the Merger Agreement with Exelon and Merger Sub. Subject to certain exceptions, prior to the Merger or the termination of the Merger Agreement, PHI and its subsidiaries may not, without the consent of Exelon, initiate, file or pursue any rate cases, other than pursuing the conclusion of the pending filings indicated below. | |||||||||||||
Bill Stabilization Adjustment | |||||||||||||
Pepco proposed in each of its respective jurisdictions the adoption of a BSA mechanism to decouple retail distribution revenue from the amount of power delivered to retail customers. The BSA proposal has been approved and implemented for Pepco electric service in Maryland and in the District of Columbia. | |||||||||||||
Under the BSA, customer distribution 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. | |||||||||||||
District of Columbia | |||||||||||||
On March 8, 2013, Pepco filed an application with the DCPSC to increase its annual electric distribution base rates by approximately $52.1 million (adjusted by Pepco to approximately $44.8 million on December 3, 2013), based on a requested ROE of 10.25%. The requested rate increase sought to recover expenses associated with Pepco’s ongoing investments in reliability enhancement improvements and efforts to maintain safe and reliable service. On March 26, 2014, the DCPSC issued an order approving an increase in base rates of approximately $23.4 million, based on an ROE of 9.40%. The new rates became effective on April 16, 2014. | |||||||||||||
Maryland | |||||||||||||
Electric Distribution Base Rates | |||||||||||||
2011 Base Rate Proceeding | |||||||||||||
In December 2011, Pepco submitted an application with the MPSC to increase its electric distribution base rates. The filing sought approval of an annual rate increase of approximately $68.4 million (subsequently adjusted by Pepco to approximately $66.2 million), based on a requested ROE of 10.75%. In July 2012, the MPSC issued an order approving an annual rate increase of approximately $18.1 million, based on an ROE of 9.31%. Among other things, the order also authorized Pepco to recover the actual cost of AMI meters installed during the 2011 test year, stating that cost recovery for AMI deployment will be allowed in future rate cases in which Pepco demonstrates that the system is cost effective. The new rates became effective on July 20, 2012. The Maryland Office of People’s Counsel (OPC) has sought rehearing on the portion of the order allowing Pepco to recover the costs of AMI meters installed during the test year; that motion remains pending. | |||||||||||||
2012 Base Rate Proceeding | |||||||||||||
On November 30, 2012, Pepco submitted an application with the MPSC to increase its electric distribution base rates. The filing sought approval of an annual rate increase of approximately $60.8 million, based on a requested ROE of 10.25%. | |||||||||||||
On July 12, 2013, the MPSC issued an order related to Pepco’s November 30, 2012 application approving an annual rate increase of approximately $27.9 million, based on an ROE of 9.36%. The order excludes the cost of AMI meters from Pepco’s rate base until such time as Pepco demonstrates the cost effectiveness of the AMI system; as a result, costs for AMI meters incurred with respect to the 2012 test year and beyond will be treated as other incremental AMI costs incurred in conjunction with the deployment of the AMI system that are deferred and on which a carrying charge is deferred, but only until such cost effectiveness has been demonstrated and such costs are included in rates. However, the MPSC’s July 2012 order in Pepco’s previous electric distribution base rate case, which allowed Pepco to recover the costs of meters installed during the 2011 test year for that case, remains in effect, and the Maryland OPC’s motion for rehearing in that case remains pending. | |||||||||||||
The July 12, 2013 order also approved a Grid Resiliency Charge, which went into effect on January 1, 2014, for recovery of costs totaling approximately $24.0 million associated with Pepco’s proposed plan to accelerate investments related to certain priority feeders, provided that, before implementing the surcharge, Pepco (i) provides additional information to the MPSC related to performance objectives, milestones and costs, and (ii) makes annual filings with the MPSC thereafter concerning this project, which will permit the MPSC to establish the applicable Grid Resiliency Charge rider for each following year. The MPSC rejected certain other cost recovery mechanisms, including Pepco’s proposed reliability performance-based mechanism. The new rates were effective on July 12, 2013. | |||||||||||||
On July 26, 2013, Pepco filed a notice of appeal of the July 12, 2013 order in the Circuit Court for Baltimore City. Other parties also filed notices of appeal, which were consolidated with Pepco’s appeal. In its appeal, Pepco asserted that the MPSC erred in failing to grant Pepco an adequate ROE, denying a number of other cost recovery mechanisms and limiting Pepco’s test year data to no more than four months of forecasted data in future rate cases. The other parties primarily asserted that the MPSC erred or acted arbitrarily and capriciously in allowing the recovery of certain costs by Pepco, in approving the Grid Resiliency Charge, and in refusing to reduce Pepco’s rate base by known and measurable accumulated depreciation. On November 14, 2014, the Circuit Court issued an order reversing the MPSC’s decision on Pepco’s ROE and directing the MPSC to make more specific findings regarding the impact of improved service reliability and the BSA in calculating Pepco’s ROE. On all other issues appealed, the Circuit Court affirmed the MPSC’s July 12, 2013 order. Pepco will not appeal this decision, but other parties have filed notices of appeal of the Circuit Court’s decision to the Court of Special Appeals. | |||||||||||||
Phase II Proceeding to 2012 Base Rate Proceeding | |||||||||||||
On August 26, 2014, the MPSC issued an order establishing a Phase II proceeding pertaining to the base rate case filed in November 2012 to address an issue regarding Pepco’s net operating loss carryforward (NOLC). The issue in this Phase II proceeding is the same as for the Phase II proceeding described below. Pepco filed a motion to dismiss this Phase II proceeding, asserting that the MPSC no longer has jurisdiction over the 2012 base rate case due to appeals having been filed by numerous parties. On September 11, 2014, the MPSC issued an order staying this Phase II proceeding until further notice. | |||||||||||||
2013 Base Rate Proceeding | |||||||||||||
On December 4, 2013, Pepco submitted an application with the MPSC to increase its electric distribution base rates. The filing sought approval of an annual rate increase of approximately $43.3 million (adjusted by Pepco to approximately $37.4 million on April 15, 2014), based on a requested ROE of 10.25%. The requested rate increase sought to recover expenses associated with Pepco’s ongoing investments in reliability enhancement improvements and efforts to maintain safe and reliable service. On July 2, 2014, the MPSC issued an order approving an annual rate increase of approximately $8.75 million, based on an ROE of 9.62%. The new rates became effective on July 4, 2014. On July 31, 2014, Pepco filed a petition for rehearing seeking reconsideration of the recovery of certain expenses, which the MPSC denied by its order dated November 13, 2014. On December 11, 2014, Pepco filed a petition for judicial review of this MPSC order with the Circuit Court for Baltimore City. This petition remains pending. | |||||||||||||
Phase II Proceeding to 2013 Base Rate Proceeding | |||||||||||||
On August 26, 2014, the MPSC issued an order establishing a Phase II proceeding pertaining to the base rate case filed in December 2013 to address an issue regarding Pepco’s NOLC. Specifically, the MPSC considered the tax implications of Pepco’s NOLC, which had impacted certain of Pepco’s rate adjustments in the 2013 base rate proceeding. On November 13, 2014, the MPSC issued its order in this Phase II proceeding upholding Pepco’s treatment of the NOLC. | |||||||||||||
FERC Transmission ROE Challenges | |||||||||||||
In February 2013, the public service commissions and public advocates of the District of Columbia, Maryland, Delaware and New Jersey, as well as Delaware Municipal Electric Corporation, Inc., filed a joint complaint at FERC against Pepco, and its affiliates Delmarva Power & Light Company (DPL) and ACE, as well as Baltimore Gas and Electric Company (BGE). The complainants challenged the base ROE and the application of the formula rate process, each associated with the transmission service that PHI’s utilities provide. The complainants support an ROE within a zone of reasonableness of 6.78% and 10.33%, and have argued for a base ROE of 8.7%. The base ROE currently authorized by FERC for PHI’s utilities is (i) 11.3% for facilities placed into service after January 1, 2006, and (ii) 10.8% for facilities placed into service prior to 2006. The 10.8% base ROE for facilities placed into service prior to 2006 receives a 50-basis-point incentive adder for being a member of a regional transmission organization. Pepco believes the allegations in this complaint are without merit and is vigorously contesting it. In August 2014, FERC issued an order setting the matters in this proceeding for hearing, but holding the hearing in abeyance pending settlement discussions. The order also (i) directed that the evidence and analysis presented concerning ROE be guided by the new ROE methodology adopted by FERC in another proceeding (discussed below), and (ii) set February 27, 2013 as the refund effective date, should a refund result from this proceeding. After settlement discussions among the parties in this matter reached an impasse, on November 24, 2014, the settlement judge issued an order terminating the settlement discussions. The matter is now before a hearing judge and a procedural schedule will be established for both the February 2013 complaint and a second complaint (discussed below) that has been consolidated with the February 2013 complaint. | |||||||||||||
On June 19, 2014, FERC issued an order in a proceeding in which Pepco was not involved, in which it adopted a new ROE methodology for electric utilities. This new methodology replaces the existing one-step discounted cash flow analysis (which incorporates only short-term growth rates) traditionally used to derive ROE for electric utilities with the two-step discounted cash flow analysis (which incorporates both short-term and long-term measures of growth) used for natural gas and oil pipelines. As a result of the August 2014 FERC order discussed in the preceding paragraph, Pepco applied an estimated ROE based on the two-step methodology announced by FERC for the period over which its transmission revenues would be subject to refund as a result of the challenge, and recorded estimated reserves in the second quarter of 2014 related to this matter. To the extent that the final ROE determined by FERC is lower than the ROE used to record the estimated reserves, each ten basis point reduction in the ROE would result in a reduction of Pepco’s operating income of $0.6 million. | |||||||||||||
A second complaint against Pepco, DPL and ACE challenging the base ROE was filed at FERC on December 8, 2014 by the same parties. Employing the new ROE methodology referenced above, the complainants contend that the resulting base ROE should be 8.8%, and request consolidation of this complaint with the February 2013 complaint. Consistent with the prior challenge, Pepco applied an estimated ROE based on the two-step methodology described above, and recorded estimated reserves in the fourth quarter of 2014 using a refund effective date of December 8, 2014. | |||||||||||||
Under the Merger Agreement, ACE is permitted to pursue the conclusion of these FERC matters and intends to continue to do so. | |||||||||||||
MPSC New Generation Contract Requirement | |||||||||||||
In April 2012, the MPSC issued an order that requires Pepco, DPL and BGE (collectively, the Contract EDCs) to negotiate and enter into a contract with the winning bidder of a competitive bidding process to build one new power plant in the range of 650 to 700 megawatts (MWs) beginning in 2015, in amounts proportional to their relative Standard Offer Service (SOS) loads. Under the terms of the order, the winning bidder will construct a 661 MW natural gas-fired combined cycle generation plant in Waldorf, Maryland, with an expected commercial operation date of June 1, 2015, and each of the Contract EDCs will recover its costs associated with the contract through surcharges on its respective SOS customers. | |||||||||||||
In response to a complaint filed by a group of generating companies in the PJM Interconnection, LLC (PJM) region, on September 30, 2013, the U.S. District Court for the District of Maryland issued a ruling that the MPSC’s April 2012 order violated the Supremacy Clause of the U.S. Constitution by attempting to regulate wholesale prices. In contrast, on October 1, 2013, in response to appeals filed by the Contract EDCs and other parties, the Maryland Circuit Court for Baltimore City upheld the MPSC’s orders requiring the Contract EDCs to enter into the contracts. | |||||||||||||
On October 24, 2013, the Federal district court issued an order ruling that the contracts are illegal and unenforceable. The Federal district court order and its associated ruling could impact the state circuit court appeal, to which the Contract EDCs are parties, although such impact, if any, cannot be determined at this time. The Contract EDCs, the Maryland Office of People’s Counsel and one generating company have appealed the Maryland Circuit Court’s decision to the Maryland Court of Special Appeals. In addition, in November 2013 both the winning bidder and the MPSC appealed the Federal district court decision to the U.S. Court of Appeals for the Fourth Circuit, which affirmed the lower Federal court ruling. On November 26, 2014, both the winning bidder and the MPSC petitioned the U.S. Supreme Court to consider hearing an appeal of the Fourth Circuit decision. | |||||||||||||
The Maryland Court of Special Appeals has stayed the appeal of the Baltimore City Circuit Court decision until July 23, 2015. | |||||||||||||
On June 2, 2014, the winning bidder filed the contracts at FERC requesting that they be accepted pursuant to Section 205 of the Federal Power Act (FPA). On August 5, 2014, FERC issued an order rejecting the filings made by the winning bidder, finding that the contracts cannot be accepted as valid contracts, given the decisions reached in the Federal court proceedings discussed above. | |||||||||||||
Assuming the contracts, as currently written, were to become effective by the expected commercial operation date of June 1, 2015, Pepco continues to believe that it may be required to record its proportional share of the contracts as derivative instruments at fair value and record related regulatory assets of approximately the same amount because Pepco would recover any payments under the contracts from SOS customers. Pepco has concluded that any accounting for these contracts would not be required until all legal proceedings related to these contracts and the actions of the MPSC in the related proceeding have been resolved. | |||||||||||||
Under the Merger Agreement, Pepco is permitted to pursue the conclusion of this matter and intends to continue to do so. | |||||||||||||
District of Columbia Power Line Undergrounding Initiative | |||||||||||||
On May 3, 2014, the Council of the District of Columbia enacted the Electric Company Infrastructure Improvement Financing Act of 2014 (the Improvement Financing Act), which provides enabling legislation for the District of Columbia Power Line Undergrounding (DC PLUG) initiative. This $1 billion initiative seeks to selectively place underground some of the District of Columbia’s most outage-prone power lines, which lines and surrounding conduit would be owned and maintained by Pepco. | |||||||||||||
The Improvement Financing Act provides that: (i) Pepco is to fund approximately $500 million of the estimated cost to complete the DC PLUG initiative, recovering those costs through a surcharge on the electric bills of Pepco District of Columbia customers; (ii) $375 million of the DC PLUG initiative cost is to be financed by the District of Columbia’s issuance of securitized bonds, which bonds will be repaid through a surcharge on the electric bills of Pepco District of Columbia customers that Pepco will remit to the District of Columbia; and (iii) the remaining amount is to be covered by the existing capital projects program of the District of Columbia Department of Transportation (DDOT). Pepco will not earn a return on or a return of the cost of the assets funded with the proceeds of the securitized bonds or assets that are constructed by DDOT under its capital projects program, but ownership and responsibility for the operation and maintenance of such assets will be transferred to Pepco for a nominal amount. | |||||||||||||
On June 17, 2014, Pepco and DDOT filed a Triennial Plan related to the construction of selected underground feeders in the District of Columbia and recovery of Pepco’s investment through a volumetric surcharge (the Triennial Plan), all in accordance with the Improvement Financing Act. On August 1, 2014, Pepco filed an application for the issuance of a financing order to provide for the issuance of the District’s bonds and a volumetric surcharge for the District to recover the costs associated with the bond issuance. | |||||||||||||
On November 12, 2014, the DCPSC issued an order approving the Triennial Plan and Pepco’s volumetric surcharge, and on November 24, 2014, the DCPSC issued the financing order. Together these orders permit (i) Pepco and DDOT to commence proposed construction under the Triennial Plan; (ii) the District of Columbia to issue the necessary bonds to fund the District of Columbia’s portion of the DC PLUG initiative; and (iii) the establishment of the customer surcharges contemplated by the Improvement Financing Act. In December 2014, a party to the proceeding sought reconsideration from the DCPSC of both decisions. Final decisions denying both requests for reconsideration were issued on January 22, 2015 and February 2, 2015, respectively. | |||||||||||||
On December 4, 2014, a party filed a petition for review with the District of Columbia Court of Appeals disputing the DCPSC’s denial of its motion to intervene. The procedural schedule for the petition has not yet been set. | |||||||||||||
Under the Merger Agreement, Pepco is permitted to pursue the DC PLUG initiative and intends to continue to do so. | |||||||||||||
MAPP Settlement Agreement | |||||||||||||
In February 2014, FERC issued an order approving the settlement agreement submitted by Pepco connection with Pepco’s proceeding seeking recovery of approximately $88 million in abandonment costs related to the MAPP project. Pepco had been directed by PJM to construct the MAPP project, a 152-mile high-voltage interstate transmission line, and in August 2012 was directed by PJM to cancel it. The abandonment costs sought for recovery were subsequently reduced to $45 million as a result of write-offs of certain disallowed costs in 2013 and transfers of materials to inventories for use on other projects. Under the terms of the FERC-approved settlement agreement, Pepco will receive approximately $43.9 million of transmission revenues over a three-year period, which began on June 1, 2013, and will retain title to all real property and property rights acquired in connection with the MAPP project, which had an estimated fair value of $2 million. The FERC-approved settlement agreement resolves all issues concerning the recovery of abandonment costs associated with the cancellation of the MAPP project, and the terms of the settlement agreement are not subject to modification through any other FERC proceeding. As of December 31, 2014, Pepco had a regulatory asset related to the MAPP abandonment costs of approximately $19 million, net of amortization, and land of $2 million. Pepco does not expect to recognize any further pre-tax income related to the MAPP abandonment costs. | |||||||||||||
Merger Approval Proceedings | |||||||||||||
District of Columbia | |||||||||||||
On June 18, 2014, Exelon, PHI and Pepco, and certain of their respective affiliates, filed an application with the DCPSC seeking approval of the Merger. To approve the Merger, the DCPSC must find that the Merger is in the public interest. In an order issued August 22, 2014, the DCPSC stated that to make the determination of whether the transaction is in the public interest, it will analyze the transaction in the context of seven factors to determine whether the transaction balances the interests of shareholders and investors with ratepayers and the community, whether the benefits to shareholders do or do not come at the expense of the ratepayers, and whether the transaction produces a direct and tangible benefit to ratepayers. The seven factors identified by the DCPSC are the effects of the transaction on: (i) ratepayers, shareholders, the financial health of the utility standing alone and as merged, and the local economy; (ii) utility management and administrative operations; (iii) the public safety and the safety and reliability of services; (iv) risks associated with all of the affiliated non-jurisdictional business operations, including nuclear operations, of the applicants; (v) the DCPSC’s ability to regulate the utility effectively following the Merger; (vi) competition in the local retail and wholesale markets that impacts the District and District ratepayers; and (vii) conservation of natural resources and preservation of environmental quality. District of Columbia law does not impose any time limit on the DCPSC’s review of the Merger. The DCPSC has scheduled evidentiary hearings for March 30, 2015 to April 8, 2015. | |||||||||||||
Maryland | |||||||||||||
On August 19, 2014, Exelon, PHI, Pepco and DPL, and certain of their respective affiliates, filed an application with the MPSC seeking approval of the Merger. Maryland law requires the MPSC to approve a merger subject to its review if it finds that the merger is consistent with the public interest, convenience and necessity, including its benefits to and impact on consumers. In making this determination, the MPSC is required to consider the following 12 criteria: (i) the potential impact of the merger on rates and charges paid by customers and on the services and conditions of operation of the utility; (ii) the potential impact of the merger on continuing investment needs for the maintenance of utility services, plant and related infrastructure; (iii) the proposed capital structure that will result from the merger, including allocation of earnings from the utility; (iv) the potential effects on employment by the utility; (v) the projected allocation between the utility’s shareholders and ratepayers of any savings that are expected; (vi) issues of reliability, quality of service and quality of customer service; (vii) the potential impact of the merger on community investment; (viii) affiliate and cross-subsidization issues; (ix) the use or pledge of utility assets for the benefit of an affiliate; (x) jurisdictional and choice-of-law issues; (xi) whether it is necessary to revise the MPSC’s ring-fencing and affiliate code of conduct regulations in light of the merger; and (xii) any other issues the MPSC considers relevant to the assessment of the merger. The MPSC is required to issue an order within 180 days of the August 19, 2014 filing date. However, the MPSC can grant a 45-day extension for good cause. If no order is issued by the statutory deadline, then the Merger would be deemed to be approved. On September 22, 2014, the MPSC issued an order setting the procedural schedule for this matter. Pursuant to that schedule, evidentiary hearings were held beginning on January 26, 2015, and all briefs are scheduled to be filed in March 2015. The deadline for the MPSC’s decision is April 8, 2015. | |||||||||||||
Virginia | |||||||||||||
On June 3, 2014, Exelon, PHI, Pepco and DPL, and certain of their respective affiliates, filed an application with the VSCC seeking approval of the Merger. Virginia law provides that, if the VSCC determines, with or without hearing, that adequate service to the public at just and reasonable rates will not be impaired or jeopardized by granting the application for approval, then the VSCC shall approve a merger with such conditions that the VSCC deems to be appropriate in order to satisfy this standard. On October 7, 2014, the VSCC issued an order approving the Merger. | |||||||||||||
Federal Energy Regulatory Commission | |||||||||||||
On May 30, 2014, Exelon, PHI, Pepco, DPL and ACE, and certain of their respective affiliates, submitted to FERC a Joint Application for Authorization of Disposition of Jurisdictional Assets and Merger under Section 203 of the FPA. Under that section, FERC shall approve a merger if it finds that the proposed transaction will be consistent with the public interest. On November 20, 2014, FERC issued an order approving the Merger. | |||||||||||||
Atlantic City Electric Co [Member] | |||||||||||||
Regulatory Matters | (6) REGULATORY MATTERS | ||||||||||||
Regulatory Assets and Regulatory Liabilities | |||||||||||||
The components of ACE’s regulatory asset and liability balances at December 31, 2014 and 2013 are as follows: | |||||||||||||
2014 | 2013 | ||||||||||||
(millions of dollars) | |||||||||||||
Regulatory Assets | |||||||||||||
Securitized stranded costs | $ | 278 | $ | 350 | |||||||||
Deferred energy supply costs | 58 | 117 | |||||||||||
Recoverable income taxes | 42 | 42 | |||||||||||
Incremental storm restoration costs | 15 | 26 | |||||||||||
Other | 34 | 34 | |||||||||||
Total Regulatory Assets | $ | 427 | $ | 569 | |||||||||
Regulatory Liabilities | |||||||||||||
Federal and state tax benefits, related to securitized stranded costs | $ | 8 | $ | 13 | |||||||||
Deferred energy supply costs | — | 38 | |||||||||||
Other | 6 | 6 | |||||||||||
Total Regulatory Liabilities | $ | 14 | $ | 57 | |||||||||
A description for each category of regulatory assets and regulatory liabilities follows: | |||||||||||||
Securitized Stranded Costs: Certain contract termination payments under a contract between ACE and an unaffiliated non-utility generator (NUG) and costs associated with the regulated operations of ACE’s electricity generation business are no longer recoverable through customer rates (collectively referred to as “stranded costs”). The stranded costs are amortized over the life of Transition Bonds issued by ACE Funding to securitize the recoverability of these stranded costs (the Transition Bonds). These Transition Bonds mature between 2015 and 2023. A customer surcharge is collected by ACE to fund principal and interest payments on the Transition Bonds. ACE earns a return on these regulatory assets. | |||||||||||||
Deferred Energy Supply Costs: The regulatory asset represents primarily deferred costs associated with a net under-recovery of energy supply costs incurred by ACE that are being or are expected to be recovered from customers. ACE earns a return on these regulatory assets. The regulatory liability represents primarily deferred costs associated with a net over-recovery of energy supply costs incurred that will be refunded by ACE to customers. | |||||||||||||
Recoverable Income Taxes: Represents amounts recoverable from ACE’s customers for tax benefits applicable to utility operations previously recognized in income tax expense before the company was ordered to record 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. | |||||||||||||
Incremental Storm Restoration Costs: Represents total incremental storm restoration costs incurred for repair work due to major storm events in 2012 and 2011, including Hurricane Sandy, the June 2012 derecho, and Hurricane Irene, that are recoverable from customers. ACE’s costs related to Hurricane Sandy, the June 2012 derecho and Hurricane Irene are being amortized and recovered from customers, each over a three-year period. ACE does not earn a return on these regulatory assets. | |||||||||||||
Other: Represents miscellaneous regulatory assets that generally are being amortized over 1 to 20 years. | |||||||||||||
Federal and State Tax Benefits, Related to Securitized Stranded Costs: Securitized stranded costs include a portion attributable to the future tax benefit expected to be realized when the higher tax basis of the generating facilities divested by ACE is deducted for New Jersey state income tax purposes, as well as the future benefit to be realized through the reversal of federal excess deferred taxes. To account for the possibility that these tax benefits may be given to ACE’s customers through lower rates in the future, ACE established a regulatory liability. The regulatory liability related to federal excess deferred taxes will remain until such time as the Internal Revenue Service (IRS) issues its final regulations with respect to normalization of these federal excess deferred taxes. | |||||||||||||
Other: Represents miscellaneous regulatory liabilities. | |||||||||||||
Rate Proceedings | |||||||||||||
As further described in Note (1), “Organization,” on April 29, 2014, PHI entered into the Merger Agreement with Exelon and Merger Sub. Subject to certain exceptions, prior to the Merger or the termination of the Merger Agreement, PHI and its subsidiaries may not, without the consent of Exelon, initiate, file or pursue any rate cases, other than pursuing the conclusion of the pending filings indicated below. | |||||||||||||
Bill Stabilization Adjustment | |||||||||||||
In 2009, ACE proposed in New Jersey the adoption of a bill stabilization adjustment (BSA) mechanism to decouple retail distribution revenue from the amount of power delivered to retail customers. The BSA proposal was not approved and there is no BSA proposal currently pending. Under a BSA, customer distribution rates would be 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. | |||||||||||||
Electric Distribution Base Rates | |||||||||||||
On March 14, 2014, ACE submitted an application with the NJBPU to increase its electric distribution base rates by approximately $61.7 million (excluding sales and use taxes), based on a requested return on equity (ROE) of 10.25%. The requested rate increase sought to recover expenses associated with ACE’s ongoing investments in reliability enhancement improvements and efforts to maintain safe and reliable service. On August 20, 2014, the NJBPU approved a Stipulation of Settlement entered into by ACE, NJBPU staff and the Division of Rate Counsel (DRC). The approved stipulation of settlement provides for an annual increase in ACE’s electric distribution base rates by the net amount of approximately $19.0 million (excluding sales and use taxes), based on a specified ROE of 9.75%. The new electric distribution base rates became effective for service rendered by ACE on and after September 1, 2014. The annual pre-tax earnings impact of the rate increase is approximately $19.0 million. | |||||||||||||
Update and Reconciliation of Certain Under-Recovered Balances | |||||||||||||
On March 3, 2014, ACE submitted a petition with the NJBPU seeking to reconcile and update (i) charges related to the recovery of above-market costs associated with ACE’s long-term power purchase contracts with the NUGs, (ii) costs related to surcharges for the New Jersey Societal Benefit Program (a statewide public interest program that is intended to benefit low income customers and address other public policy goals) and ACE’s uncollected accounts and (iii) operating costs associated with ACE’s residential appliance cycling program. The net impact of adjusting the charges as proposed would have been an overall annual rate decrease of approximately $24.5 million (revised to a decrease of approximately $41.1 million on April 16, 2014, based upon an update for actual data through March 2014). In May 2014, the NJBPU approved a stipulation of settlement entered into by the parties in this proceeding providing for an overall annual rate decrease of $41.1 million. The rate decrease was placed into effect provisionally on June 1, 2014, subject to a review by the NJBPU of the final underlying costs for reasonableness and prudence. On January 21, 2015, the NJBPU approved a stipulation of settlement in this proceeding, which made final the provisional rates that were placed into effect on June 1, 2014. The rate decrease will have no effect on ACE’s operating income. | |||||||||||||
This proceeding is not expected to be affected by the Merger Agreement. | |||||||||||||
Service Extension Contributions Refund Order | |||||||||||||
On July 19, 2013, in compliance with a 2012 Superior Court of New Jersey Appellate Division (Appellate Division) court decision, the NJBPU released an order requiring utilities to issue refunds to persons or entities that paid non-refundable contributions for utility service extensions to certain areas described as “Areas Not Designated for Growth.” The order is limited to eligible contributions paid between March 20, 2005 and December 20, 2009. ACE is processing the refund requests that meet the eligibility criteria established in the order as they are received. Although ACE estimates that it received approximately $11 million of contributions between March 20, 2005 and December 20, 2009, it is currently unable to reasonably estimate the amount that it may be required to refund using the eligibility criteria established by the order. Since the July 2013 order was released, ACE has received less than $1 million in refund claims, the validity of which is being investigated by ACE prior to making any such refunds. At this time, ACE does not expect that any such amount refunded will have a material effect on its consolidated financial condition, results of operations or cash flows, as any amounts that may be refunded will generally increase the value of ACE’s property, plant and equipment and may ultimately be recovered through depreciation and cost of service. On September 30, 2014, the NJBPU commenced a rulemaking proceeding to further implement the directives of the Appellate Division decision and on December 1, 2014, published a rule proposal for comment. The changes proposed by the NJBPU remove provisions distinguishing between growth areas and not-for-growth areas and provide formulae for allocating extension costs. | |||||||||||||
Under the Merger Agreement, ACE is permitted to pursue the conclusion of this matter and intends to continue to do so. | |||||||||||||
Generic Consolidated Tax Adjustment Proceeding | |||||||||||||
In January 2013, the NJBPU initiated a generic proceeding to examine whether a consolidated tax adjustment (CTA) should continue to be used, and if so, how it should be calculated in determining a utility’s cost of service. Under the NJBPU’s current policy, when a New Jersey utility is included in a consolidated group income tax return, an allocated amount of any reduction in the consolidated group’s taxes as a result of losses by affiliates is used to reduce the utility’s rate base, upon which the utility earns a return. This policy has negatively impacted ACE’s electric distribution base rate case outcomes and ACE’s position is that the CTA should be eliminated. In an order dated October 22, 2014, the NJBPU determined that it is appropriate for affected consolidated groups to continue to include a CTA in New Jersey base rate filings, but that the CTA calculation will be modified to limit the look-back period for the calculation to five years, exclude transmission assets from the calculation and allocate 25 percent of the final CTA amount as a reduction to the distribution revenue requirement. With this revised methodology, ACE anticipates that the negative effects of the CTA in future base rate cases will be significantly reduced. | |||||||||||||
On November 5, 2014, the DRC filed an appeal of the NJBPU’s CTA order in the Appellate Division. This appeal remains pending. | |||||||||||||
Under the Merger Agreement, ACE is permitted to pursue the conclusion of this matter and intends to continue to do so. | |||||||||||||
FERC Transmission ROE Challenges | |||||||||||||
In February 2013, the public service commissions and public advocates of the District of Columbia, Maryland, Delaware and New Jersey, as well as DEMEC, filed a joint complaint at FERC against ACE and its affiliates Potomac Electric Power Company (Pepco) and Delmarva Power & Light Company (DPL), as well as Baltimore Gas and Electric Company (BGE). The complainants challenged the base ROE and the application of the formula rate process, each associated with the transmission service that PHI’s utilities provide. The complainants support an ROE within a zone of reasonableness of 6.78% and 10.33%, and have argued for a base ROE of 8.7%. The base ROE currently authorized by FERC for PHI’s utilities is (i) 11.3% for facilities placed into service after January 1, 2006, and (ii) 10.8% for facilities placed into service prior to 2006. The 10.8% base ROE for facilities placed into service prior to 2006 receives a 50-basis-point incentive adder for being a member of a regional transmission organization. PHI, Pepco, DPL and ACE believe the allegations in this complaint are without merit and are vigorously contesting it. In August 2014, FERC issued an order setting the matters in this proceeding for hearing, but holding the hearing in abeyance pending settlement discussions. The order also (i) directed that the evidence and analysis presented concerning ROE be guided by the new ROE methodology adopted by FERC in another proceeding (discussed below), and (ii) set February 27, 2013 as the refund effective date, should a refund result from this proceeding. After settlement discussions among the parties in this matter reached an impasse, on November 24, 2014, the settlement judge issued an order terminating the settlement discussions. The matter is now before a hearing judge and a procedural schedule will be established for both the February 2013 complaint and a second complaint (discussed below) that has been consolidated with the February 2013 complaint. | |||||||||||||
On June 19, 2014, FERC issued an order in a proceeding in which ACE was not involved, in which it adopted a new ROE methodology for electric utilities. This new methodology replaces the existing one-step discounted cash flow analysis (which incorporates only short-term growth rates) traditionally used to derive ROE for electric utilities with the two-step discounted cash flow analysis (which incorporates both short-term and long-term measures of growth) used for natural gas and oil pipelines. As a result of the August 2014 FERC order discussed in the preceding paragraph, ACE applied an estimated ROE based on the two-step methodology announced by FERC for the period over which its transmission revenues would be subject to refund as a result of the challenge, and recorded estimated reserves in the second quarter of 2014 related to this matter. To the extent that the final ROE determined by FERC is lower than the ROE used to record the estimated reserves, each ten basis point reduction in the ROE would result in a reduction of ACE’s operating income of $0.4 million. | |||||||||||||
A second complaint against Pepco, DPL and ACE challenging the base ROE was filed at FERC on December 8, 2014 by the same parties. Employing the new ROE methodology referenced above, the complainants contend that the resulting base ROE should be 8.8%, and request consolidation of this complaint with the February 2013 complaint. Consistent with the prior challenge, ACE applied an estimated ROE based on the two-step methodology described above, and recorded estimated reserves in the fourth quarter of 2014 using a refund effective date of December 8, 2014. | |||||||||||||
Under the Merger Agreement, ACE is permitted to pursue the conclusion of these FERC matters and intends to continue to do so. | |||||||||||||
Standard Offer Capacity Agreements | |||||||||||||
In April 2011, ACE entered into three Standard Offer Capacity Agreements (SOCAs) by order of the NJBPU, each with a different generation company. ACE and the other New Jersey EDCs entered into the SOCAs under protest, arguing that the EDCs were denied due process and that the SOCAs violate certain of the requirements under the New Jersey law under which the SOCAs were established (the NJ SOCA Law). On October 22, 2013, in light of the decision of the U.S. District Court for the District of New Jersey described below, the state appeals of the NJBPU implementation orders filed by the EDCs and generators were dismissed without prejudice subject to the parties exercising their appellate rights in the Federal courts. | |||||||||||||
In February 2011, ACE joined other plaintiffs in an action filed in the U.S. District Court for the District of New Jersey challenging the NJ SOCA Law on the grounds that it violates the Commerce Clause and the Supremacy Clause of the U.S. Constitution. On October 11, 2013, the Federal district court issued a ruling that the NJ SOCA Law is preempted by the Federal Power Act (FPA) and violates the Supremacy Clause, and is therefore null and void. On October 25, 2013, the Federal district court issued an order ruling that the SOCAs are void, invalid and unenforceable, which order was affirmed by the U.S. Court of Appeals for the Third Circuit in September 2014. On November 26, 2014 and December 10, 2014, respectively, one of the generation companies and the NJBPU petitioned the U.S. Supreme Court to consider hearing an appeal of the Third Circuit decision. | |||||||||||||
One of the three SOCAs was terminated effective July 1, 2013 because of an event of default of the generation company that was a party to the SOCA. The remaining two SOCAs were terminated effective November 19, 2013, as a result of a termination notice delivered by ACE after the Federal district court’s October 25, 2013 decision. | |||||||||||||
Despite the terminated status of the SOCAs, on June 2, 2014, one of the generation companies that was a party to a SOCA filed the SOCA at FERC seeking to have the SOCA accepted under Section 205 of the FPA. The EDCs intervened in the proceeding and requested that the generation company’s filing be rejected on the grounds that the SOCA never came into effect. On August 5, 2014, FERC issued an order rejecting the filings made by the generation company, finding that the contracts cannot be accepted as valid contracts, given the decisions reached in the Federal court proceedings discussed above. | |||||||||||||
In light of the October 25, 2013 Federal district court order, ACE derecognized both the derivative assets (liabilities) for the estimated fair value of the SOCAs and the related regulatory liabilities (assets) in the fourth quarter of 2013. | |||||||||||||
Merger Approval Proceedings | |||||||||||||
New Jersey | |||||||||||||
On June 18, 2014, Exelon, PHI and ACE, and certain of their respective affiliates, filed a petition with the NJBPU seeking approval of the Merger. To approve the Merger, the NJBPU must find the Merger is in the public interest, and consider the impact of the Merger on (i) competition, (ii) rates of ratepayers affected by the Merger, (iii) ACE’s employees, and (iv) the provision of safe and reliable service at just and reasonable rates. On July 23, 2014, the NJBPU voted to retain this matter, rather than assigning it to an administrative law judge. On January 14, 2015, PHI, ACE, Exelon, certain of Exelon’s affiliates, the Staff of the NJBPU, and the Independent Energy Producers of New Jersey filed a stipulation of settlement (the Stipulation) with the NJBPU in this proceeding. On February 11, 2015, the NJBPU approved the Stipulation and the Merger. | |||||||||||||
Federal Energy Regulatory Commission | |||||||||||||
On May 30, 2014, Exelon, PHI, Pepco, DPL and ACE, and certain of their respective affiliates, submitted to FERC a Joint Application for Authorization of Disposition of Jurisdictional Assets and Merger under Section 203 of the FPA. Under that section, FERC shall approve a merger if it finds that the proposed transaction will be consistent with the public interest. On November 20, 2014, FERC issued an order approving the Merger. |
Property_Plant_and_Equipment
Property, Plant and Equipment | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
PROPERTY, PLANT AND EQUIPMENT | (8) PROPERTY, PLANT AND EQUIPMENT | ||||||||||||
Property, plant and equipment is comprised of the following: | |||||||||||||
Original | Accumulated | Net | |||||||||||
Cost | Depreciation | Book Value | |||||||||||
(millions of dollars) | |||||||||||||
At December 31, 2014 | |||||||||||||
Generation | $ | 104 | $ | 100 | $ | 4 | |||||||
Distribution | 9,527 | 3,021 | 6,506 | ||||||||||
Transmission | 3,252 | 934 | 2,318 | ||||||||||
Gas | 511 | 153 | 358 | ||||||||||
Construction work in progress | 688 | — | 688 | ||||||||||
Non-operating and other property | 1,383 | 751 | 632 | ||||||||||
Total | $ | 15,465 | $ | 4,959 | $ | 10,506 | |||||||
At December 31, 2013 | |||||||||||||
Generation | $ | 105 | $ | 99 | $ | 6 | |||||||
Distribution | 8,896 | 2,961 | 5,935 | ||||||||||
Transmission | 2,991 | 908 | 2,083 | ||||||||||
Gas | 481 | 142 | 339 | ||||||||||
Construction work in progress | 677 | — | 677 | ||||||||||
Non-operating and other property | 1,417 | 753 | 664 | ||||||||||
Total | $ | 14,567 | $ | 4,863 | $ | 9,704 | |||||||
The non-operating and other property amounts include balances for general plant, intangible plant, distribution plant and transmission plant held for future use as well as other property held by non-utility subsidiaries. Utility plant is generally subject to a first mortgage lien. | |||||||||||||
Pepco Holdings’ utility subsidiaries use separate depreciation rates for each electric plant account. The rates vary from jurisdiction to jurisdiction. | |||||||||||||
Jointly Owned Plant | |||||||||||||
PHI’s consolidated balance sheets include its proportionate share of assets and liabilities related to jointly owned plant. At December 31, 2014 and 2013, PHI’s subsidiaries had a net book value ownership interest of $15 million and $12 million, respectively, in transmission and other facilities in which various parties also have ownership interests. PHI’s share of the operating and maintenance expenses of the jointly owned plant is included in the corresponding expenses in the consolidated statements of income (loss). PHI is responsible for providing its share of the financing for the above jointly owned facilities. | |||||||||||||
Capital Leases | |||||||||||||
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 that began 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. The amortization expense is included within Depreciation and amortization in the consolidated statements of income (loss). This lease is treated as an operating lease for rate-making purposes. | |||||||||||||
Capital lease assets recorded within Property, Plant and Equipment at December 31, 2014 and 2013 are comprised of the following: | |||||||||||||
Original | Accumulated | Net Book | |||||||||||
Cost | Amortization | Value | |||||||||||
(millions of dollars) | |||||||||||||
At December 31, 2014 | |||||||||||||
Transmission | $ | 76 | $ | 46 | $ | 30 | |||||||
Distribution | 76 | 46 | 30 | ||||||||||
Total | $ | 152 | $ | 92 | $ | 60 | |||||||
At December 31, 2013 | |||||||||||||
Transmission | $ | 76 | $ | 41 | $ | 35 | |||||||
Distribution | 76 | 42 | 34 | ||||||||||
General | 3 | 3 | — | ||||||||||
Total | $ | 155 | $ | 86 | $ | 69 | |||||||
The approximate annual commitments under all capital leases are $15 million in each of the years 2015 through 2018 and $16 million in 2019. | |||||||||||||
Deactivation of Pepco Energy Services’ Generating Facilities | |||||||||||||
During 2012, Pepco Energy Services deactivated its Buzzard Point and Benning Road oil-fired generation facilities. Pepco Energy Services is demolishing the Benning Road generation facility and realizing the scrap metal salvage value of the facility. The demolition of the facility commenced in the fourth quarter of 2013 and is expected to be completed in the first quarter of 2015. Pepco Energy Services is recognizing the salvage proceeds associated with the scrap metals at the facility as realized. | |||||||||||||
Long-Lived Asset Impairment | |||||||||||||
During 2014, PHI recorded impairment losses of $81 million ($48 million after-tax) at Pepco Energy Services associated with its combined heat and power thermal generating facilities and operations in Atlantic City, which reduced the carrying amount of its long-lived assets in Atlantic City from $83 million to $2 million at December 31, 2014. PHI performed long-lived asset impairment tests on asset groups comprising substantially all of the long-lived assets in Atlantic City as a result of significant adverse changes in the financial condition of its customers and the business climate in Atlantic City. The assets were written down to their estimated fair values because the future estimated undiscounted cash flows from the asset groups were significantly lower than their carrying value. PHI estimated the fair values of the asset groups from a market participant’s perspective by calculating the present value of estimated future cash flows over the useful lives of the assets using an appropriate discount rate. Both the estimated future cash flows and the discount rate were based on primarily unobservable, Level 3 inputs. The estimated future cash flows were probability weighted based on several potential outcomes regarding forecasted revenues and expenses associated with each asset group. Forecasted revenues and expenses were, in part, based on estimated future commodity prices from an external valuation specialist. In addition, PHI forecasted customer usage volumes and the associated operations and maintenance expenses and capital expenditures. A 10 percent change in the estimated cash flows would not have a significant impact on the estimated fair value of the assets. PHI also selected a discount rate that would reflect a market return on the estimated cash flows. PHI considered a range of discount rates between 10 percent and 16 percent. A one percent change in the discount rate assumptions would not have a significant impact on the estimated fair value of the assets. | |||||||||||||
During 2013, PHI recorded impairment losses of $4 million ($3 million after-tax) at Pepco Energy Services associated primarily with its investments in landfill gas-fired electric generation facilities. PHI performed a long-lived asset impairment test on the landfill generation facilities of Pepco Energy Services as a result of a sustained decline in energy prices and recent production levels. The asset value of the facilities was written down to the estimated fair value because the future expected cash flows of the facilities were not sufficient to provide recovery of the facilities’ carrying value. PHI estimated the fair value of the facilities by calculating the present value of expected future cash flows using an appropriate discount rate. Both the expected future cash flows and the discount rate used primarily unobservable inputs. | |||||||||||||
Asset Retirement Obligations | |||||||||||||
PHI recognizes liabilities related to the retirement of long-lived assets in accordance with ASC 410. In connection with Pepco Energy Services’ decommissioning of the Buzzard Point and Benning Road generation facilities, PHI had asset retirement obligations of zero and $2 million as of December 31, 2014 and 2013, respectively, on its consolidated balance sheets. | |||||||||||||
During 2013, Pepco Energy Services determined to pursue the demolition of the Benning Road generation facility. As a result of this determination, Pepco Energy Services reduced its asset retirement obligation related to the facility by $2 million. | |||||||||||||
The sale of the wholesale power generation business of Conectiv Energy Holding Company and its subsidiaries (collectively, Conectiv Energy) to Calpine Corporation (Calpine) did not include a coal ash landfill site located at the Edge Moor generating facility, which PHI intends to close. The preliminary estimate of the costs for PHI to close the coal ash landfill ranges from approximately $2 million to $3 million, plus annual post-closure operations, maintenance and monitoring costs for 30 years. PHI has recorded an asset retirement obligation of $6 million on its consolidated balance sheet related to the Edge Moor landfill. | |||||||||||||
Delmarva Power & Light Co/De [Member] | |||||||||||||
PROPERTY, PLANT AND EQUIPMENT | (8) PROPERTY, PLANT AND EQUIPMENT | ||||||||||||
Property, plant and equipment is comprised of the following: | |||||||||||||
Original | Accumulated | Net | |||||||||||
Cost | Depreciation | Book Value | |||||||||||
(millions of dollars) | |||||||||||||
At December 31, 2014 | |||||||||||||
Distribution | $ | 1,928 | $ | 489 | $ | 1,439 | |||||||
Transmission | 1,107 | 248 | 859 | ||||||||||
Gas | 511 | 153 | 358 | ||||||||||
Construction work in progress | 125 | — | 125 | ||||||||||
Non-operating and other property | 275 | 131 | 144 | ||||||||||
Total | $ | 3,946 | $ | 1,021 | $ | 2,925 | |||||||
At December 31, 2013 | |||||||||||||
Distribution | $ | 1,788 | $ | 492 | $ | 1,296 | |||||||
Transmission | 982 | 243 | 739 | ||||||||||
Gas | 481 | 142 | 339 | ||||||||||
Construction work in progress | 158 | — | 158 | ||||||||||
Non-operating and other property | 264 | 139 | 125 | ||||||||||
Total | $ | 3,673 | $ | 1,016 | $ | 2,657 | |||||||
The non-operating and other property amounts include balances for general plant, plant held for future use, intangible plant and non-utility property. Utility plant is generally subject to a first mortgage lien. | |||||||||||||
Potomac Electric Power Co [Member] | |||||||||||||
PROPERTY, PLANT AND EQUIPMENT | (7) PROPERTY, PLANT AND EQUIPMENT | ||||||||||||
Property, plant and equipment is comprised of the following: | |||||||||||||
Original | Accumulated | Net Book | |||||||||||
Cost | Depreciation | Value | |||||||||||
(millions of dollars) | |||||||||||||
At December 31, 2014 | |||||||||||||
Distribution | $ | 5,668 | $ | 2,082 | $ | 3,586 | |||||||
Transmission | 1,306 | 463 | 843 | ||||||||||
Construction work in progress | 312 | — | 312 | ||||||||||
Non-operating and other property | 478 | 271 | 207 | ||||||||||
Total | $ | 7,764 | $ | 2,816 | $ | 4,948 | |||||||
At December 31, 2013 | |||||||||||||
Distribution | $ | 5,287 | $ | 2,027 | $ | 3,260 | |||||||
Transmission | 1,223 | 444 | 779 | ||||||||||
Construction work in progress | 312 | — | 312 | ||||||||||
Non-operating and other property | 488 | 301 | 187 | ||||||||||
Total | $ | 7,310 | $ | 2,772 | $ | 4,538 | |||||||
The non-operating and other property amounts include balances for general plant, distribution plant and transmission plant held for future use, intangible plant and non-utility property. Utility plant is generally subject to a first mortgage lien. | |||||||||||||
Capital Leases | |||||||||||||
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. The lease requires semi-annual payments of approximately $8 million over a 25-year period that began 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. The amortization expense is included within Depreciation and amortization in the statements of income. This lease is treated as an operating lease for rate-making purposes. | |||||||||||||
Capital lease assets recorded within Property, plant and equipment at December 31, 2014 and 2013 are comprised of the following: | |||||||||||||
Original | Accumulated | Net Book | |||||||||||
Cost | Amortization | Value | |||||||||||
At December 31, 2014 | (millions of dollars) | ||||||||||||
Transmission | $ | 76 | $ | 46 | $ | 30 | |||||||
Distribution | 76 | 46 | 30 | ||||||||||
Total | $ | 152 | $ | 92 | $ | 60 | |||||||
At December 31, 2013 | |||||||||||||
Transmission | $ | 76 | $ | 41 | $ | 35 | |||||||
Distribution | 76 | 42 | 34 | ||||||||||
Other | 3 | 3 | — | ||||||||||
Total | $ | 155 | $ | 86 | $ | 69 | |||||||
The approximate annual commitments under all capital leases are $15 million in each of the years 2015 through 2018, and $16 million thereafter. | |||||||||||||
Atlantic City Electric Co [Member] | |||||||||||||
PROPERTY, PLANT AND EQUIPMENT | (7) PROPERTY, PLANT AND EQUIPMENT | ||||||||||||
Property, plant and equipment is comprised of the following: | |||||||||||||
Original | Accumulated | Net | |||||||||||
Cost | Depreciation | Book Value | |||||||||||
(millions of dollars) | |||||||||||||
At December 31, 2014 | |||||||||||||
Generation | $ | 10 | $ | 9 | $ | 1 | |||||||
Distribution | 1,931 | 450 | 1,481 | ||||||||||
Transmission | 839 | 223 | 616 | ||||||||||
Construction work in progress | 115 | — | 115 | ||||||||||
Non-operating and other property | 178 | 78 | 100 | ||||||||||
Total | $ | 3,073 | $ | 760 | $ | 2,313 | |||||||
At December 31, 2013 | |||||||||||||
Generation | $ | 10 | $ | 9 | $ | 1 | |||||||
Distribution | 1,821 | 442 | 1,379 | ||||||||||
Transmission | 786 | 221 | 565 | ||||||||||
Construction work in progress | 110 | — | 110 | ||||||||||
Non-operating and other property | 174 | 79 | 95 | ||||||||||
Total | $ | 2,901 | $ | 751 | $ | 2,150 | |||||||
The non-operating and other property amounts include balances for general plant, plant held for future use, intangible plant and non-utility property. Utility plant is generally subject to a first mortgage lien. | |||||||||||||
Jointly Owned Plant | |||||||||||||
ACE’s consolidated balance sheets include its proportionate share of assets and liabilities related to jointly owned plant. At December 31, 2014 and 2013, ACE’s subsidiaries had a net book value ownership interest of $11 million and $8 million, respectively, in transmission and other facilities in which various parties also have ownership interests. ACE’s 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. |
Pension_and_Other_Postretireme
Pension and Other Postretirement Benefits | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Pension and Other Postretirement Benefits | (9) PENSION AND OTHER POSTRETIREMENT BENEFITS | ||||||||||||||||||||||||
The following table shows changes in the benefit obligation and plan assets for the years ended December 31, 2014 and 2013: | |||||||||||||||||||||||||
Pension | Other Postretirement | ||||||||||||||||||||||||
Benefits | Benefits | ||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Change in Benefit Obligation | |||||||||||||||||||||||||
Benefit obligation as of January 1 | $ | 2,238 | $ | 2,494 | $ | 574 | $ | 775 | |||||||||||||||||
Service cost | 44 | 53 | 7 | 8 | |||||||||||||||||||||
Interest cost | 109 | 100 | 26 | 29 | |||||||||||||||||||||
Amendments | — | 3 | — | (124 | ) | ||||||||||||||||||||
Actuarial loss (gain) | 401 | (277 | ) | 59 | (71 | ) | |||||||||||||||||||
Benefits paid | (154 | ) | (135 | ) | (34 | ) | (43 | ) | |||||||||||||||||
Benefit obligation as of December 31 | $ | 2,638 | $ | 2,238 | $ | 632 | $ | 574 | |||||||||||||||||
Change in Plan Assets | |||||||||||||||||||||||||
Fair value of plan assets as of January 1 | $ | 2,116 | $ | 2,039 | $ | 368 | $ | 321 | |||||||||||||||||
Actual return on plan assets | 268 | 86 | 21 | 56 | |||||||||||||||||||||
Company and participant contributions | 6 | 126 | 12 | 34 | |||||||||||||||||||||
Benefits paid | (154 | ) | (135 | ) | (34 | ) | (43 | ) | |||||||||||||||||
Fair value of plan assets as of December 31 | $ | 2,236 | $ | 2,116 | $ | 367 | $ | 368 | |||||||||||||||||
Funded Status at end of year (plan assets less plan obligations) | $ | (402 | ) | $ | (122 | ) | $ | (265 | ) | $ | (206 | ) | |||||||||||||
At December 31, 2014 and 2013, the PHI Retirement Plan’s accumulated benefit obligation was approximately $2.4 billion and $2.1 billion, respectively. The accumulated benefit obligation differs from the pension benefit obligation presented in the table above in that the accumulated benefit obligation includes no assumption about future compensation levels. | |||||||||||||||||||||||||
The following table provides the amounts recorded in PHI’s consolidated balance sheets as of December 31, 2014 and 2013: | |||||||||||||||||||||||||
Pension | Other Postretirement | ||||||||||||||||||||||||
Benefits | Benefits | ||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Regulatory asset | $ | 871 | $ | 664 | $ | 75 | $ | 3 | |||||||||||||||||
Current liabilities | (6 | ) | (6 | ) | — | — | |||||||||||||||||||
Pension benefit obligation | (396 | ) | (116 | ) | — | — | |||||||||||||||||||
Other postretirement benefit obligations | — | — | (265 | ) | (206 | ) | |||||||||||||||||||
Deferred income taxes liabilities | (193 | ) | (217 | ) | 77 | 82 | |||||||||||||||||||
Accumulated other comprehensive loss, net of tax | 37 | 25 | — | — | |||||||||||||||||||||
Net amount recorded | $ | 313 | $ | 350 | $ | (113 | ) | $ | (121 | ) | |||||||||||||||
Amounts included in AOCL (pre-tax) and Regulatory assets at December 31, 2014 and 2013, consist of: | |||||||||||||||||||||||||
Pension | Other Postretirement | ||||||||||||||||||||||||
Benefits | Benefits | ||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Unrecognized net actuarial loss | $ | 925 | $ | 694 | $ | 176 | $ | 117 | |||||||||||||||||
Unamortized prior service cost (credit) | 8 | 10 | (101 | ) | (114 | ) | |||||||||||||||||||
Total | $ | 933 | $ | 704 | $ | 75 | $ | 3 | |||||||||||||||||
Accumulated other comprehensive loss ($37 million and $25 million, net of tax, at December 31, 2014 and 2013, respectively) | $ | 62 | $ | 40 | $ | — | $ | — | |||||||||||||||||
Regulatory assets | 871 | 664 | 75 | 3 | |||||||||||||||||||||
Total | $ | 933 | $ | 704 | $ | 75 | $ | 3 | |||||||||||||||||
Under FASB guidance on regulated operations, a portion of actuarial gains and losses and prior service costs (credits) are included in Regulatory assets (liabilities) in the consolidated balance sheets to reflect expected regulatory recovery of such amounts, which otherwise would be recorded to AOCL. The table below provides the changes in plan assets and benefit obligations recognized in AOCL and Regulatory assets for the years ended December 31, 2014, 2013 and 2012: | |||||||||||||||||||||||||
Pension | Other Postretirement | ||||||||||||||||||||||||
Benefits | Benefits | ||||||||||||||||||||||||
2014 | 2013 | 2012 | 2014 | 2013 | 2012 | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Amounts amortized during the year: | |||||||||||||||||||||||||
Amortization of prior service (cost) credit | $ | (2 | ) | $ | (2 | ) | $ | (1 | ) | $ | 13 | $ | 11 | $ | 4 | ||||||||||
Amortization of net actuarial (loss) | (45 | ) | (67 | ) | (64 | ) | (3 | ) | (12 | ) | (14 | ) | |||||||||||||
Amounts arising during the year: | |||||||||||||||||||||||||
Current year prior service cost (credit) | — | 3 | — | — | (124 | ) | — | ||||||||||||||||||
Current year actuarial loss (gain) | 276 | (218 | ) | 220 | 62 | (109 | ) | 4 | |||||||||||||||||
Total recognized in AOCL and Regulatory assets for the year ended December 31 | $ | 229 | $ | (284 | ) | $ | 155 | $ | 72 | $ | (234 | ) | $ | (6 | ) | ||||||||||
The estimated net actuarial loss and prior service cost for the defined benefit pension plans that will be amortized from AOCL or Regulatory assets into net periodic benefit cost over the next reporting year are $63 million and $2 million, respectively. The estimated net actuarial loss and prior service credit for the OPEB plan that will be amortized from AOCL or Regulatory assets into net periodic benefit cost over the next reporting year are $11 million and $13 million, respectively. | |||||||||||||||||||||||||
The table below provides the components of net periodic benefit costs recognized for the years ended December 31, 2014, 2013 and 2012: | |||||||||||||||||||||||||
Pension | Other Postretirement | ||||||||||||||||||||||||
Benefits | Benefits | ||||||||||||||||||||||||
2014 | 2013 | 2012 | 2014 | 2013 | 2012 | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Service cost | $ | 44 | $ | 53 | $ | 35 | $ | 7 | $ | 8 | $ | 7 | |||||||||||||
Interest cost | 109 | 100 | 107 | 26 | 29 | 35 | |||||||||||||||||||
Expected return on plan assets | (141 | ) | (145 | ) | (132 | ) | (24 | ) | (20 | ) | (18 | ) | |||||||||||||
Amortization of prior service cost (credit) | 2 | 2 | 1 | (13 | ) | (11 | ) | (4 | ) | ||||||||||||||||
Amortization of net actuarial loss | 45 | 67 | 64 | 3 | 12 | 14 | |||||||||||||||||||
Termination benefits | — | — | — | — | — | 1 | |||||||||||||||||||
Net periodic benefit cost | $ | 59 | $ | 77 | $ | 75 | $ | (1 | ) | $ | 18 | $ | 35 | ||||||||||||
The table below provides the split of the combined pension and other postretirement net periodic benefit costs among subsidiaries for the years ended December 31, 2014, 2013 and 2012: | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Pepco | $ | 22 | $ | 34 | $ | 39 | |||||||||||||||||||
DPL | 7 | 18 | 23 | ||||||||||||||||||||||
ACE | 13 | 17 | 24 | ||||||||||||||||||||||
Other subsidiaries | 16 | 26 | 24 | ||||||||||||||||||||||
Total | $ | 58 | $ | 95 | $ | 110 | |||||||||||||||||||
The following weighted average assumptions were used to determine the benefit obligations at December 31: | |||||||||||||||||||||||||
Pension | Other Postretirement | ||||||||||||||||||||||||
Benefits | Benefits | ||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
Discount rate | 4.2 | % | 5.05 | % | 4.15 | % | 5 | % | |||||||||||||||||
Rate of compensation increase | 5 | % | 5 | % | 5 | % | 5 | % | |||||||||||||||||
Health care cost trend rate assumed for current year – pre 65 | — | — | 6.67 | % | 7 | % | |||||||||||||||||||
Health care cost trend rate assumed for current year – post 65 | — | — | 5.5 | % | 5.6 | % | |||||||||||||||||||
Rate to which the cost trend rate is assumed to decline for all eligible retirees (the ultimate trend rate) | — | — | 5 | % | 5 | % | |||||||||||||||||||
Year that the cost trend rate reaches the ultimate trend rate | — | — | 2020 | 2020 | |||||||||||||||||||||
Assumed health care cost trend rates may have a significant effect on the amounts reported for the health care plans. A one-percentage-point change in assumed health care cost trend rates would have the following effects, in millions of dollars: | |||||||||||||||||||||||||
1-Percentage- | 1-Percentage- | ||||||||||||||||||||||||
Point Increase | Point Decrease | ||||||||||||||||||||||||
Increase (decrease) in total service and interest cost | $ | 1 | $ | (1 | ) | ||||||||||||||||||||
Increase (decrease) in postretirement benefit obligation | $ | 18 | $ | (20 | ) | ||||||||||||||||||||
The following weighted average assumptions were used to determine the net periodic benefit cost for the years ended December 31: | |||||||||||||||||||||||||
Pension | Other Postretirement | ||||||||||||||||||||||||
Benefits | Benefits | ||||||||||||||||||||||||
2014 | 2013 | 2012 | 2014 | 2013 | 2012 | ||||||||||||||||||||
Discount rate | 5.05 | % | 4.15 | % | 5 | % | 5 | % | 4.10%/4.95 | % (a) | 4.9 | % | |||||||||||||
Expected long-term return on plan assets | 7 | % | 7 | % | 7.25 | % | 7.25 | % | 7 | % | 7.25 | % | |||||||||||||
Rate of compensation increase | 5 | % | 5 | % | 5 | % | 5 | % | 5 | % | 5 | % | |||||||||||||
Health care cost trend rate | — | — | — | 7 | % | 7.5 | % | 8 | % | ||||||||||||||||
(a) | The discount rate was updated for remeasurement to 4.95% on July 1, 2013. | ||||||||||||||||||||||||
PHI utilizes an analytical tool developed by its actuaries to select the discount rate. The analytical tool utilizes a high-quality bond portfolio with cash flows that match the benefit payments expected to be made under the plans. | |||||||||||||||||||||||||
PHI uses a building block approach to estimate the expected rate of return on plan assets. Under this approach, the percentage of plan assets in each asset class according to PHI’s target asset allocation, at the beginning of the year, is applied to the expected asset return for the related asset class. PHI incorporates long-term assumptions for real returns, inflation expectations, volatility and correlations among asset classes to determine expected returns for a given asset allocation. The pension and postretirement benefit plan assets consist of equity, fixed income, real estate and private equity investments. PHI periodically reviews its asset mix and rebalances assets to the target allocation. | |||||||||||||||||||||||||
The average remaining service periods for participating employees of the benefit plans was approximately 11 years for both 2014 and 2013. PHI utilizes plan census data to estimate these average remaining service periods. PHI uses the IRS prescribed mortality tables to estimate the average life expectancy. The IRS prescribed tables for 2014 and 2013 were used to determine net periodic pension and OPEB cost for the same respective years. The IRS prescribed mortality tables for 2013 were used for determining the benefit obligations as of December 31, 2013. In 2014, the Society of Actuaries issued new mortality tables which PHI applied in determining its benefit obligations as of December 31, 2014. | |||||||||||||||||||||||||
Benefit Plan Modifications | |||||||||||||||||||||||||
During 2013, PHI approved two amendments to its other postretirement benefits plan. These amendments impacted the retiree health care and the retiree life insurance benefits, and were effective on January 1, 2014. As a result of the amendments, which were cumulatively significant, PHI remeasured its accumulated postretirement benefit obligation for other postretirement benefits as of July 1, 2013. The remeasurement resulted in a $193 million reduction of the accumulated postretirement benefit obligation, which included recording a prior service credit of $124 million, which will be amortized over approximately ten years, and a $69 million reduction from a change in the discount rate from 4.10% as of December 31, 2012 to 4.95% as of July 1, 2013. The remeasurement resulted in a $19 million reduction in net periodic benefit cost for other postretirement benefits during 2014, when compared to 2013. Approximately 36% of net periodic other postretirement benefit costs were capitalized in 2014. | |||||||||||||||||||||||||
Plan Assets | |||||||||||||||||||||||||
Investment Policies and Strategies | |||||||||||||||||||||||||
In developing its allocation policy for the assets in the PHI Retirement Plan and the other postretirement benefit plan, PHI examined projections of asset returns and volatility over a long-term horizon. In connection with this analysis, PHI evaluated the risk and return tradeoffs of alternative asset classes and asset mixes given long-term historical relationships as well as prospective capital market returns. PHI also conducted an asset-liability study to match projected asset growth with projected liability growth to determine whether there is sufficient liquidity for projected benefit payments. PHI developed its asset mix guidelines by incorporating the results of these analyses with an assessment of its risk posture, and taking into account industry practices. PHI periodically evaluates its investment strategy to ensure that plan assets are sufficient to meet the benefit obligations of the plans. As part of the ongoing evaluation, PHI may make changes to its targeted asset allocations and investment strategy. | |||||||||||||||||||||||||
PHI’s pension investment strategy is designed to meet the following investment objectives: | |||||||||||||||||||||||||
• | Generate investment returns that, in combination with funding contributions from PHI, provide adequate funding to meet all current and future benefit obligations of the plan, | ||||||||||||||||||||||||
• | Provide investment results that meet or exceed the assumed long-term rate of return, while maintaining the funded status of the plan at acceptable levels, | ||||||||||||||||||||||||
• | Improve funded status over time, and | ||||||||||||||||||||||||
• | Decrease contribution and expense volatility as funded status improves. | ||||||||||||||||||||||||
To achieve these investment objectives, PHI’s investment strategy divides the pension program into two primary portfolios: | |||||||||||||||||||||||||
Return-Seeking Assets—These assets are intended to provide investment returns in excess of pension liability growth and reduce existing deficits in the funded status of the plan. The category includes a diversified mix of U.S. large and small cap equities, non-U.S. developed and emerging market equities, real estate, and private equity. | |||||||||||||||||||||||||
Liability-Hedging Assets—These assets are intended to reflect the sensitivity of the plan’s liabilities to changes in discount rates. This category includes a diversified mix of long duration, primarily investment grade credit and U.S. treasury securities. | |||||||||||||||||||||||||
PHI follows an asset-liability management strategy for PHI Retirement Plan assets in order to reduce the effects of future volatility of the fair value of its pension plan assets relative to its pension plan liabilities. For example, in 2014, this strategy uses a 68% target allocation to fixed income investments, primarily in high quality, longer-maturity fixed income securities. The PHI Retirement Plan asset allocations at December 31, 2014 and 2013, by asset category, were as follows: | |||||||||||||||||||||||||
Asset Category | Plan Assets | Target Plan | |||||||||||||||||||||||
at December 31, | Asset Allocation | ||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
Equity | 28 | % | 31 | % | 27 | % | 28 | % | |||||||||||||||||
Fixed Income | 65 | % | 62 | % | 68 | % | 66 | % | |||||||||||||||||
Other (real estate, private equity) | 7 | % | 7 | % | 5 | % | 6 | % | |||||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||||
PHI’s other postretirement benefit plan asset allocations at December 31, 2014 and 2013, by asset category, were as follows: | |||||||||||||||||||||||||
Asset Category | Plan Assets | Target Plan | |||||||||||||||||||||||
at December 31, | Asset Allocation | ||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
Equity | 64 | % | 63 | % | 60 | % | 60 | % | |||||||||||||||||
Fixed Income | 34 | % | 31 | % | 35 | % | 35 | % | |||||||||||||||||
Cash | 2 | % | 6 | % | 5 | % | 5 | % | |||||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||||
PHI will rebalance the plan asset portfolios when the actual allocations fall outside the ranges outlined in the investment policy or as funded status improves over a reasonable period of time. | |||||||||||||||||||||||||
Risk Management | |||||||||||||||||||||||||
Pension and other postretirement benefit plan assets may be invested in separately managed accounts in which there is ownership of individual securities, shares of commingled funds or mutual funds, or limited partnerships. Commingled funds and mutual funds are subject to detailed policy guidelines set forth in the fund’s prospectus or fund declaration, and limited partnerships are subject to the terms of the partnership agreement. | |||||||||||||||||||||||||
Separate account investment managers are responsible for achieving a level of diversification in their portfolio that is consistent with their investment approach and their role in PHI’s overall investment structure. Separate account investment managers must follow risk management guidelines established by PHI unless authorized in writing by PHI. | |||||||||||||||||||||||||
Derivative instruments are permissible in an investment portfolio to the extent they comply with policy guidelines and are consistent with risk and return objectives. Under no circumstances may such instruments be used speculatively or to leverage the portfolio. Separately managed accounts are prohibited from holding securities issued by the following firms: | |||||||||||||||||||||||||
• | PHI and its subsidiaries, | ||||||||||||||||||||||||
• | PHI’s pension plan trustee, its parent or its affiliates, | ||||||||||||||||||||||||
• | PHI’s pension plan consultant, its parent or its affiliates, and | ||||||||||||||||||||||||
• | PHI’s pension plan investment manager, its parent or its affiliates. | ||||||||||||||||||||||||
Fair Value of Plan Assets | |||||||||||||||||||||||||
As defined in the FASB guidance on fair value measurement (ASC 820), 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. The FASB’s fair value framework includes a hierarchy that prioritizes the inputs to valuation techniques 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) and the lowest priority to unobservable inputs (level 3). If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. Investments are classified within the fair value hierarchy as follows: | |||||||||||||||||||||||||
Level 1: Investments are valued using quoted prices in active markets for identical instruments. | |||||||||||||||||||||||||
Level 2: Investments are valued using other significant observable inputs (e.g., quoted prices for similar investments, interest rates, credit risks, etc). | |||||||||||||||||||||||||
Level 3: Investments are valued using significant unobservable inputs, including internal assumptions. | |||||||||||||||||||||||||
There were no significant transfers between level 1 and level 2 during the years ended December 31, 2014 and 2013. | |||||||||||||||||||||||||
The following tables present the fair values of PHI’s pension and other postretirement benefit plan assets by asset category within the fair value hierarchy levels, as of December 31, 2014 and 2013: | |||||||||||||||||||||||||
Fair Value Measurements at December 31, 2014 | |||||||||||||||||||||||||
Total | Quoted Prices | Significant | Significant | ||||||||||||||||||||||
in Active | Other | Unobservable | |||||||||||||||||||||||
Markets for | Observable | Inputs | |||||||||||||||||||||||
Identical | Inputs | (Level 3) | |||||||||||||||||||||||
Instruments | (Level 2) | ||||||||||||||||||||||||
(Level 1) | |||||||||||||||||||||||||
Asset Category | (millions of dollars) | ||||||||||||||||||||||||
Pension Plan Assets: | |||||||||||||||||||||||||
Equity | |||||||||||||||||||||||||
Domestic (a) | $ | 376 | $ | 128 | $ | 213 | $ | 35 | |||||||||||||||||
International (b) | 255 | 254 | — | 1 | |||||||||||||||||||||
Fixed Income (c) | 1,459 | — | 1,448 | 11 | |||||||||||||||||||||
Other | |||||||||||||||||||||||||
Private Equity | 47 | — | — | 47 | |||||||||||||||||||||
Real Estate | 54 | — | — | 54 | |||||||||||||||||||||
Cash Equivalents (d) | 45 | 45 | — | — | |||||||||||||||||||||
Pension Plan Assets Subtotal | 2,236 | 427 | 1,661 | 148 | |||||||||||||||||||||
Other Postretirement Plan Assets: | |||||||||||||||||||||||||
Equity (e) | 235 | 208 | 27 | — | |||||||||||||||||||||
Fixed Income (f) | 126 | 126 | — | — | |||||||||||||||||||||
Cash Equivalents | 6 | 6 | — | — | |||||||||||||||||||||
Postretirement Plan Assets Subtotal | 367 | 340 | 27 | — | |||||||||||||||||||||
Total Pension and Other Postretirement Plan Assets | $ | 2,603 | $ | 767 | $ | 1,688 | $ | 148 | |||||||||||||||||
(a) | Domestic equity assets predominantly include domestic common stock and commingled funds. | ||||||||||||||||||||||||
(b) | International equity assets predominantly include foreign common and preferred stock and warrants. | ||||||||||||||||||||||||
(c) | Fixed income assets predominantly include corporate bonds, government bonds, municipal/provincial bonds, collateralized mortgage obligations and commingled funds. | ||||||||||||||||||||||||
(d) | Cash equivalents predominantly include cash investments in short-term investment funds. | ||||||||||||||||||||||||
(e) | Equity assets include domestic and international commingled funds. | ||||||||||||||||||||||||
(f) | Fixed income assets include fixed income commingled funds. | ||||||||||||||||||||||||
Fair Value Measurements at December 31, 2013 | |||||||||||||||||||||||||
Total | Quoted Prices | Significant | Significant | ||||||||||||||||||||||
in Active | Other | Unobservable | |||||||||||||||||||||||
Markets for | Observable | Inputs | |||||||||||||||||||||||
Identical | Inputs | (Level 3) | |||||||||||||||||||||||
Instruments | (Level 2) | ||||||||||||||||||||||||
(Level 1) | |||||||||||||||||||||||||
Asset Category | (millions of dollars) | ||||||||||||||||||||||||
Pension Plan Assets: | |||||||||||||||||||||||||
Equity | |||||||||||||||||||||||||
Domestic (a) | $ | 389 | $ | 142 | (g) | $ | 213 | $ | 34 | ||||||||||||||||
International (b) | 260 | 258 | (g) | 1 | 1 | ||||||||||||||||||||
Fixed Income (c) | 1,309 | — | 1,298 | 11 | |||||||||||||||||||||
Other | |||||||||||||||||||||||||
Private Equity | 53 | — | — | 53 | |||||||||||||||||||||
Real Estate | 61 | — | — | 61 | |||||||||||||||||||||
Cash Equivalents (d) | 44 | 44 | — | — | |||||||||||||||||||||
Pension Plan Assets Subtotal | 2,116 | 444 | 1,512 | 160 | |||||||||||||||||||||
Other Postretirement Plan Assets: | |||||||||||||||||||||||||
Equity (e) | 233 | 204 | 29 | — | |||||||||||||||||||||
Fixed Income (f) | 113 | 113 | — | — | |||||||||||||||||||||
Cash Equivalents | 22 | 22 | — | — | |||||||||||||||||||||
Postretirement Plan Assets Subtotal | 368 | 339 | 29 | — | |||||||||||||||||||||
Total Pension and Other Postretirement Plan Assets | $ | 2,484 | $ | 783 | $ | 1,541 | $ | 160 | |||||||||||||||||
(a) | Domestic equity assets predominantly include domestic common stock and commingled funds. | ||||||||||||||||||||||||
(b) | International equity assets predominantly include foreign common and preferred stock and warrants. | ||||||||||||||||||||||||
(c) | Fixed income assets predominantly include corporate bonds, government bonds, municipal/provincial bonds, collateralized mortgage obligations and commingled funds. | ||||||||||||||||||||||||
(d) | Cash equivalents predominantly include cash investments in short-term investment funds. | ||||||||||||||||||||||||
(e) | Equity assets include domestic and international commingled funds. | ||||||||||||||||||||||||
(f) | Fixed income assets include fixed income commingled funds. | ||||||||||||||||||||||||
(g) | Certain equity assets totaling $43 million have been reclassified from domestic equity to international equity to conform to the currect period presentation. | ||||||||||||||||||||||||
There were no significant concentrations of risk in pension and OPEB plan assets at December 31, 2014 and 2013. | |||||||||||||||||||||||||
Valuation Techniques Used to Determine Fair Value | |||||||||||||||||||||||||
Equity | |||||||||||||||||||||||||
Equity securities are primarily comprised of securities issued by public companies in domestic and foreign markets plus investments in commingled funds, which are valued on a daily basis. PHI can exchange shares of the publicly traded securities and the fair values are primarily sourced from the closing prices on stock exchanges where there is active trading, therefore they would be classified as level 1 investments. If there is less active trading, then the publicly traded securities would typically be priced using observable data, such as bid/ask prices, and these measurements would be classified as level 2 investments. Investments that are not publicly traded and valued using unobservable inputs would be classified as level 3 investments. | |||||||||||||||||||||||||
Commingled funds with publicly quoted prices and active trading are classified as level 1 investments. For commingled funds that are not publicly traded and have ongoing subscription and redemption activity, the fair value of the investment is the net asset value (NAV) per fund share, derived from the underlying securities’ quoted prices in active markets, and are classified as level 2 investments. Investments in commingled funds with redemption restrictions that use NAV are classified as level 3 investments. | |||||||||||||||||||||||||
Fixed Income | |||||||||||||||||||||||||
Fixed income investments are primarily comprised of fixed income securities and fixed income commingled funds. The prices for direct investments in fixed income securities are generated on a daily basis. Like the equity securities, fair values generated from active trading on exchanges are classified as level 1 investments. Prices generated from less active trading with wider bid/ask prices are classified as level 2 investments. If prices are based on uncorroborated and unobservable inputs, then the investments are classified as level 3 investments. | |||||||||||||||||||||||||
Commingled funds with publicly quoted prices and active trading are classified as level 1 investments. For commingled funds that are not publicly traded and have ongoing subscription and redemption activity, the fair value of the investment is the NAV per fund share, derived from the underlying securities’ quoted prices in active markets, and are classified as level 2 investments. Investments in commingled funds with redemption restrictions that use NAV are classified as level 3 investments. | |||||||||||||||||||||||||
Other – Private Equity and Real Estate | |||||||||||||||||||||||||
Investments in private equity and real estate funds are primarily invested in privately held real estate investment properties, trusts and partnerships, as well as equity and debt issued by public or private companies. As a practical expedient, PHI’s interest in the fund or partnership is estimated at NAV. PHI’s interest in these funds cannot be readily redeemed due to the inherent lack of liquidity and the primarily long-term nature of the underlying assets. Distribution is made through the liquidation of the underlying assets. PHI views these investments as part of a long-term investment strategy. These investments are valued by each investment manager based on the underlying assets. The majority of the underlying assets are valued using significant unobservable inputs and often require significant management judgment or estimation based on the best available information. Market data includes observations of the trading multiples of public companies considered comparable to the private companies being valued. The funds utilize valuation techniques consistent with the market, income and cost approaches to measure the fair value of certain real estate investments. As a result, PHI classifies these investments as level 3 investments. | |||||||||||||||||||||||||
The investments in private equity and real estate funds require capital commitments, which may be called over a specific number of years. Unfunded capital commitments as of December 31, 2014 and 2013 totaled $11 million and $12 million, respectively. | |||||||||||||||||||||||||
Reconciliations of the beginning and ending balances of PHI’s fair value measurements using significant unobservable inputs (level 3) for investments in the pension plan for the years ended December 31, 2014 and 2013 are shown below: | |||||||||||||||||||||||||
Fair Value Measurements Using Significant Unobservable Inputs | |||||||||||||||||||||||||
(Level 3) | |||||||||||||||||||||||||
Equity | Fixed | Private | Real | Total | |||||||||||||||||||||
Income | Equity | Estate | Level 3 | ||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Balance as of January 1, 2014 | $ | 35 | $ | 11 | $ | 53 | $ | 61 | $ | 160 | |||||||||||||||
Transfer in (out) of Level 3 | — | — | — | — | — | ||||||||||||||||||||
Purchases | — | — | 3 | 1 | 4 | ||||||||||||||||||||
Sales | (3 | ) | — | — | (5 | ) | (8 | ) | |||||||||||||||||
Settlements | — | — | (6 | ) | (9 | ) | (15 | ) | |||||||||||||||||
Unrealized gain (loss) | 2 | — | (12 | ) | 2 | (8 | ) | ||||||||||||||||||
Realized gain | 2 | — | 9 | 4 | 15 | ||||||||||||||||||||
Balance as of December 31, 2014 | $ | 36 | $ | 11 | $ | 47 | $ | 54 | $ | 148 | |||||||||||||||
Fair Value Measurements Using Significant Unobservable Inputs | |||||||||||||||||||||||||
(Level 3) | |||||||||||||||||||||||||
Equity | Fixed | Private | Real | Total | |||||||||||||||||||||
Income | Equity | Estate | Level 3 | ||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Balance as of January 1, 2013 | $ | 31 | $ | 13 | $ | 56 | $ | 74 | $ | 174 | |||||||||||||||
Transfer in (out) of Level 3 | — | (3 | ) | — | — | (3 | ) | ||||||||||||||||||
Purchases | — | — | 2 | 2 | 4 | ||||||||||||||||||||
Sales | (5 | ) | (1 | ) | — | (13 | ) | (19 | ) | ||||||||||||||||
Settlements | — | 2 | (4 | ) | (10 | ) | (12 | ) | |||||||||||||||||
Unrealized gain (loss) | 7 | — | (7 | ) | 7 | 7 | |||||||||||||||||||
Realized gain | 2 | — | 6 | 1 | 9 | ||||||||||||||||||||
Balance as of December 31, 2013 | $ | 35 | $ | 11 | $ | 53 | $ | 61 | $ | 160 | |||||||||||||||
Cash Flows | |||||||||||||||||||||||||
Contributions—PHI Retirement Plan | |||||||||||||||||||||||||
PHI’s funding policy with regard to the PHI Retirement Plan is to maintain a funding level that is at least equal to the target liability as defined under the Pension Protection Act of 2006, as modified by subsequent legislation. During 2014, PHI, Pepco, DPL and ACE did not make any discretionary tax-deductible contributions to the PHI Retirement Plan as its assets met or exceeded the funding target level for 2014. During 2013, PHI, DPL and ACE made discretionary tax-deductible contributions to the PHI Retirement Plan in the amounts of $80 million, $10 million and $30 million, respectively, which brought the PHI Retirement Plan assets to the funding target level for 2013 under the Pension Protection Act. | |||||||||||||||||||||||||
Contributions—Other Postretirement Benefit Plan | |||||||||||||||||||||||||
In 2014 and 2013, Pepco contributed $1 million and $6 million, respectively, DPL contributed zero and $3 million, respectively, and ACE contributed $3 million and $6 million, respectively, to the other postretirement benefit plan. In 2014 and 2013, contributions of zero and $7 million, respectively, were made by other PHI subsidiaries. | |||||||||||||||||||||||||
Expected Benefit Payments | |||||||||||||||||||||||||
Estimated future benefit payments to participants in PHI’s pension and other postretirement benefit plans, which reflect expected future service as appropriate, are as follows: | |||||||||||||||||||||||||
Years | Pension Benefits | Other | |||||||||||||||||||||||
Postretirement | |||||||||||||||||||||||||
Benefits | |||||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
2015 | $ | 134 | $ | 38 | |||||||||||||||||||||
2016 | 140 | 38 | |||||||||||||||||||||||
2017 | 142 | 39 | |||||||||||||||||||||||
2018 | 148 | 39 | |||||||||||||||||||||||
2019 | 153 | 39 | |||||||||||||||||||||||
2020 through 2023 | 826 | 193 | |||||||||||||||||||||||
Pepco Holdings Retirement Savings Plan | |||||||||||||||||||||||||
Pepco Holdings has a defined contribution retirement savings plan. Participation in the plan is voluntary. All participants are 100% vested and have a nonforfeitable interest in their own contributions and in the Pepco Holdings’ company matching contributions, including any earnings or losses thereon. Pepco Holdings’ matching contributions were $13 million, $12 million and $12 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||||||
Delmarva Power & Light Co/De [Member] | |||||||||||||||||||||||||
Pension and Other Postretirement Benefits | (9) PENSION AND OTHER POSTRETIREMENT BENEFITS | ||||||||||||||||||||||||
DPL accounts for its participation in PHI’s single-employer plans, the PHI Retirement Plan and its other postretirement benefits plan, the Pepco Holdings, Inc. Welfare Plan for Retirees (the PHI OPEB Plan), as participation in multiemployer plans. For 2014, 2013 and 2012, DPL was responsible for $7 million, $18 million and $23 million, respectively, of the pension and other postretirement net periodic benefit cost incurred by PHI. DPL made a discretionary tax-deductible contribution to the PHI Retirement Plan of zero, $10 million and $85 million for the years ended December 31, 2014, 2013 and 2012, respectively. In addition, DPL made contributions of zero, $3 million and $7 million, respectively, to the PHI OPEB Plan for the years ended December 31, 2014, 2013 and 2012. At December 31, 2014 and 2013, DPL’s Prepaid pension expense of $220 million and $228 million, respectively, and Other postretirement benefit obligations of $21 million and $23 million, respectively, effectively represent assets and benefit obligations resulting from DPL’s participation in the PHI benefit plans. | |||||||||||||||||||||||||
Other Postretirement Benefit Plan Amendments | |||||||||||||||||||||||||
During 2013, PHI approved two amendments to its other postretirement benefits plan. These amendments impacted the retiree medical plan and the retiree life insurance benefits, and became effective on January 1, 2014. As a result of the amendments, which were cumulatively significant, PHI remeasured its projected benefit obligation for other postretirement benefits as of July 1, 2013. The remeasurement resulted in a $4 million reduction in DPL’s net periodic benefit cost for other postretirement benefits in 2014, when compared to 2013. | |||||||||||||||||||||||||
Potomac Electric Power Co [Member] | |||||||||||||||||||||||||
Pension and Other Postretirement Benefits | (8) PENSION AND OTHER POSTRETIREMENT BENEFITS | ||||||||||||||||||||||||
Pepco accounts for its participation in PHI’s single-employer plans, the PHI Retirement Plan and its other postretirement benefits plan, the Pepco Holdings, Inc. Welfare Plan for Retirees (the PHI OPEB Plan), as participation in multiemployer plans. For 2014, 2013 and 2012, Pepco was responsible for $22 million, $34 million and $39 million, respectively, of the pension and other postretirement net periodic benefit cost incurred by PHI. Pepco made a discretionary, tax-deductible contribution of zero, zero and $85 million to the PHI Retirement Plan for the years ended December 31, 2014, 2013 and 2012, respectively. In addition, Pepco made contributions of $1 million, $6 million and $5 million, respectively, to the PHI OPEB Plan for the years ended December 31, 2014, 2013 and 2012. At December 31, 2014 and 2013, Pepco’s Prepaid pension expense of $316 million and $332 million, respectively, and Other postretirement benefit obligations of $57 million and $61 million, respectively, effectively represent assets and benefit obligations resulting from Pepco’s participation in the Pepco Holdings benefit plans. | |||||||||||||||||||||||||
Other Postretirement Benefit Plan Amendments | |||||||||||||||||||||||||
During 2013, PHI approved two amendments to its other postretirement benefits plan. These amendments impacted the retiree medical plan and the retiree life insurance benefits, and became effective on January 1, 2014. As a result of the amendments, which were cumulatively significant, PHI remeasured its projected benefit obligation for other postretirement benefits as of July 1, 2013. The remeasurement resulted in a $7 million reduction in Pepco’s net periodic benefit cost for other postretirement benefits in 2014, when compared to 2013. Approximately 40% of net periodic other postretirement benefit costs were capitalized in 2014. | |||||||||||||||||||||||||
Atlantic City Electric Co [Member] | |||||||||||||||||||||||||
Pension and Other Postretirement Benefits | (8) PENSION AND OTHER POSTRETIREMENT BENEFITS | ||||||||||||||||||||||||
ACE accounts for its participation in PHI’s single-employer plans, the PHI Retirement Plan and its other postretirement benefits plan, the Pepco Holdings, Inc. Welfare Plan for Retirees (the PHI OPEB Plan), as participation in multiemployer plans. For 2014, 2013 and 2012, ACE was responsible for $13 million, $17 million and $24 million, respectively, of the pension and other postretirement net periodic benefit cost incurred by PHI. ACE made discretionary tax-deductible contributions of zero, $30 million and $30 million to the PHI Retirement Plan for the years ended December 31, 2014, 2013 and 2012, respectively. In addition, ACE made contributions of $3 million, $6 million and $7 million to the PHI OPEB Plan for the years ended December 31, 2014, 2013 and 2012, respectively. At December 31, 2014 and 2013, ACE’s Prepaid pension expense of $96 million and $106 million, and Other postretirement benefit obligations of $36 million and $35 million, respectively, effectively represent assets and benefit obligations resulting from ACE’s participation in these PHI benefit plans. | |||||||||||||||||||||||||
Other Postretirement Benefit Plan Amendments | |||||||||||||||||||||||||
During 2013, PHI approved two amendments to its other postretirement benefits plan. These amendments impacted the retiree medical plan and the retiree life insurance benefits, and became effective on January 1, 2014. As a result of the amendments, which were cumulatively significant, PHI remeasured its projected benefit obligation for other postretirement benefits as of July 1, 2013. The remeasurement resulted in a $3 million reduction in ACE’s net periodic benefit cost for other postretirement benefits in 2014, when compared to 2013. Approximately 45% of net periodic other postretirement benefit costs were capitalized in 2014. |
Debt
Debt | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Debt | (10) DEBT | ||||||||||||||||
Long-Term Debt | |||||||||||||||||
The components of long-term debt are shown in the table below: | |||||||||||||||||
At December 31, | |||||||||||||||||
Interest Rate | Maturity | 2014 | 2013 | ||||||||||||||
(millions of dollars) | |||||||||||||||||
First Mortgage Bonds | |||||||||||||||||
Pepco: | |||||||||||||||||
4.65% (a)(b) | 2014 | $ | — | $ | 175 | ||||||||||||
3.05% | 2022 | 200 | 200 | ||||||||||||||
6.20% (c)(d) | 2022 | 110 | 110 | ||||||||||||||
3.60% | 2024 | 400 | — | ||||||||||||||
5.75% (a)(b) | 2034 | 100 | 100 | ||||||||||||||
5.40% (a)(b) | 2035 | 175 | 175 | ||||||||||||||
6.50% (a)(c) | 2037 | 500 | 500 | ||||||||||||||
7.90% | 2038 | 250 | 250 | ||||||||||||||
4.15% | 2043 | 250 | 250 | ||||||||||||||
4.95% | 2043 | 150 | 150 | ||||||||||||||
ACE: | |||||||||||||||||
7.63% (e) | 2014 | — | 7 | ||||||||||||||
7.68% (e) | 2015 - 2016 | 17 | 17 | ||||||||||||||
7.75% | 2018 | 250 | 250 | ||||||||||||||
6.80% (b)(f) | 2021 | 39 | 39 | ||||||||||||||
4.35% | 2021 | 200 | 200 | ||||||||||||||
3.38% | 2024 | 150 | — | ||||||||||||||
4.875% (c)(f) | 2029 | 23 | 23 | ||||||||||||||
5.80% (b)(g) | 2034 | 120 | 120 | ||||||||||||||
5.80% (b)(g) | 2036 | 105 | 105 | ||||||||||||||
DPL: | |||||||||||||||||
5.22% (h) | 2016 | 100 | 100 | ||||||||||||||
3.50% | 2023 | 500 | 300 | ||||||||||||||
4.00% | 2042 | 250 | 250 | ||||||||||||||
Total First Mortgage Bonds | 3,889 | 3,321 | |||||||||||||||
Unsecured Tax-Exempt Bonds | |||||||||||||||||
DPL: | |||||||||||||||||
5.40% | 2031 | 78 | 78 | ||||||||||||||
Total Unsecured Tax-Exempt Bonds | 78 | 78 | |||||||||||||||
NOTE: Schedule is continued on next page. | |||||||||||||||||
At December 31, | |||||||||||||||||
Interest Rate | Maturity | 2014 | 2013 | ||||||||||||||
(millions of dollars) | |||||||||||||||||
Medium-Term Notes (unsecured) | |||||||||||||||||
DPL: | |||||||||||||||||
7.56% - 7.58% | 2017 | $ | 14 | $ | 14 | ||||||||||||
6.81% | 2018 | 4 | 4 | ||||||||||||||
7.61% | 2019 | 12 | 12 | ||||||||||||||
7.72% | 2027 | 10 | 10 | ||||||||||||||
Total Medium-Term Notes (unsecured) | 40 | 40 | |||||||||||||||
ACE Variable Rate Term Loan | 2014 | — | 100 | ||||||||||||||
Recourse Debt | |||||||||||||||||
PCI: | |||||||||||||||||
6.59% - 6.69% | 2014 | — | 11 | ||||||||||||||
Notes (secured) | |||||||||||||||||
Pepco Energy Services: | |||||||||||||||||
6.70% - 7.46% | 2015-2018 | 4 | 14 | ||||||||||||||
Notes (unsecured) | |||||||||||||||||
PHI: | |||||||||||||||||
2.70% | 2015 | 250 | 250 | ||||||||||||||
5.90% | 2016 | 190 | 190 | ||||||||||||||
6.13% | 2017 | 81 | 81 | ||||||||||||||
7.45% | 2032 | 185 | 185 | ||||||||||||||
DPL: | |||||||||||||||||
5.00% | 2014 | — | 100 | ||||||||||||||
5.00% | 2015 | 100 | 100 | ||||||||||||||
Total Notes (unsecured) | 806 | 906 | |||||||||||||||
Total Long-Term Debt | 4,817 | 4,470 | |||||||||||||||
Net unamortized discount | (10 | ) | (14 | ) | |||||||||||||
Current portion of long-term debt | (366 | ) | (403 | ) | |||||||||||||
Total Net Long-Term Debt | $ | 4,441 | $ | 4,053 | |||||||||||||
(a) | Represents a series of Collateral First Mortgage Bonds (as defined herein) securing a series of senior notes issued by Pepco. | ||||||||||||||||
(b) | Represents a series of Collateral First Mortgage Bonds which must be cancelled and released as security for the issuer’s obligations under the corresponding series of issuer notes (as defined herein) or tax-exempt bonds, at such time as the issuer does not have any first mortgage bonds outstanding (other than its Collateral First Mortgage Bonds). | ||||||||||||||||
(c) | Represents a series of Collateral First Mortgage Bonds which must be cancelled and released as security for the issuer’s obligations under the corresponding series of issuer notes or tax-exempt bonds, at such time as the issuer does not have any first mortgage bonds outstanding (other than its Collateral First Mortgage Bonds), except that the issuer may not permit such release of collateral unless the issuer substitutes comparable obligations for such collateral. | ||||||||||||||||
(d) | Represents a series of Collateral First Mortgage Bonds securing a series of senior notes issued by Pepco, which in turn secures a series of tax-exempt bonds issued for the benefit of Pepco. | ||||||||||||||||
(e) | Represents a series of Collateral First Mortgage Bonds securing a series of medium-term notes issued by ACE. | ||||||||||||||||
(f) | Represents a series of Collateral First Mortgage Bonds securing a series of tax-exempt bonds issued for the benefit of ACE. | ||||||||||||||||
(g) | Represents a series of Collateral First Mortgage Bonds securing a series of senior notes issued by ACE. | ||||||||||||||||
(h) | Represents a series of Collateral First Mortgage Bonds securing a series of debt securities issued by DPL. | ||||||||||||||||
The outstanding first mortgage bonds issued by each of Pepco, DPL and ACE are issued under a mortgage and deed of trust and are secured by a first lien on substantially all of the issuing company’s property, plant and equipment, except for certain property excluded from the lien of the respective mortgage. | |||||||||||||||||
PHI’s long-term debt is subject to certain covenants. As of December 31, 2014, PHI and its subsidiaries were in compliance with all such covenants. | |||||||||||||||||
The table above does not separately identify $885 million, $100 million and $242 million in aggregate principal amount of senior notes, medium term notes and other debt securities (issuer notes) issued by each of Pepco, DPL and ACE, respectively, and $110 million and $62 million in aggregate principal amount of tax-exempt bonds issued for the benefit of Pepco and ACE, respectively. These issuer notes are secured by a like amount of first mortgage bonds (Collateral First Mortgage Bonds) of each respective issuer. In addition, these tax-exempt bonds are secured by a like amount of Collateral First Mortgage Bonds issued by the utility subsidiary for whose benefit the tax-exempt bonds were issued. The principal terms of each such series of issuer notes, or the issuer’s obligations in respect of each such series of tax-exempt bonds, are identical to the same terms of the corresponding series of Collateral First Mortgage Bonds. Payments of principal and interest made on a series of such issuer notes, or the satisfaction of the issuer’s obligations in respect of a series of such tax-exempt bonds, satisfy the corresponding obligations on the related series of Collateral First Mortgage Bonds. For these reasons, each such series of Collateral First Mortgage Bonds and the corresponding issuer notes and/or tax-exempt bonds together effectively represent a single financial obligation and are not identified in the table above separately. | |||||||||||||||||
Bond Issuances | |||||||||||||||||
During 2014, Pepco issued $400 million of 3.60% first mortgage bonds due March 15, 2024. Pepco used a portion of the net proceeds of the offering to repay in full at maturity $175 million in aggregate principal amount of its 4.65% senior notes due April 15, 2014, plus accrued and unpaid interest. | |||||||||||||||||
During 2014, DPL issued $200 million of its 3.50% first mortgage bonds due November 15, 2023. Net proceeds from the issuance of the bonds, which included a premium of $4 million, were used to repay DPL’s outstanding commercial paper and for general corporate purposes. | |||||||||||||||||
During 2014, ACE issued $150 million of its 3.375% first mortgage bonds due September 1, 2024. ACE used $7.2 million of the net proceeds from the issuance of the bonds to repay in full at maturity $7.0 million in aggregate principal amount of ACE’s 7.63% secured medium term notes due August 29, 2014, plus accrued and unpaid interest thereon. ACE used the remainder of the net proceeds to repay its outstanding commercial paper, including commercial paper that ACE issued to prepay in full its $100 million term loan, and for general corporate purposes. | |||||||||||||||||
Debt Retirements | |||||||||||||||||
During 2014, Pepco retired, at maturity, $175 million of its 4.65% senior notes. The senior notes were secured by a like principal amount of its 4.65% first mortgage bonds due April 15, 2014, which under Pepco’s mortgage and deed of trust were deemed to be satisfied when the senior notes were repaid. | |||||||||||||||||
During 2014, DPL retired, at maturity, $100 million of its 5.00% unsecured notes. | |||||||||||||||||
During 2014, ACE retired, at maturity, $7 million of its 7.63% medium term notes due August 29, 2014. The notes were secured by a like principal amount of first mortgage bonds due August 29, 2014, which under ACE’s mortgage and deed of trust were deemed to be satisfied when the notes were repaid. | |||||||||||||||||
During 2014, PCI retired, at maturity, $11 million of bank loans. | |||||||||||||||||
Transition Bonds Issued by ACE Funding | |||||||||||||||||
The components of transition bonds are shown in the table below: | |||||||||||||||||
At December 31, | |||||||||||||||||
Interest Rate | Maturity | 2014 | 2013 | ||||||||||||||
(millions of dollars) | |||||||||||||||||
4.46% | 2016 | $ | — | $ | 8 | ||||||||||||
4.91% | 2017 | 17 | 46 | ||||||||||||||
5.05% | 2020 | 51 | 54 | ||||||||||||||
5.55% | 2023 | 147 | 147 | ||||||||||||||
Total Transition Bonds | 215 | 255 | |||||||||||||||
Current portion of long-term debt | (44 | ) | (41 | ) | |||||||||||||
Total Net Long-Term Transition Bonds | $ | 171 | $ | 214 | |||||||||||||
For a description of the Transition Bonds, see Note (17), “Variable Interest Entities – ACE Funding.” | |||||||||||||||||
Maturities of PHI’s long-term debt and Transition Bonds outstanding at December 31, 2014 are $410 million in 2015, $340 million in 2016, $131 million in 2017, $285 million in 2018, $30 million in 2019 and $3,836 million thereafter. | |||||||||||||||||
Long-Term Project Funding | |||||||||||||||||
As of December 31, 2014 and 2013, Pepco Energy Services had total outstanding long-term project funding (including current maturities) of $10 million and $12 million, respectively, related to energy savings contracts performed by Pepco Energy Services. The aggregate amounts of maturities for the project funding debt outstanding at December 31, 2014 are $2 million in 2015, $1 million in each of the years 2016, 2017 and 2018, $2 million in 2019 and $3 million thereafter. | |||||||||||||||||
Short-Term Debt | |||||||||||||||||
PHI and its regulated utility subsidiaries have traditionally used a number of sources to fulfill short-term funding needs, such as commercial paper, short-term notes, and bank lines of credit. Proceeds from short-term borrowings are used primarily to meet working capital needs, but may also be used to temporarily fund long-term capital requirements. The components of PHI’s short-term debt at December 31, 2014 and 2013 are as follows: | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
(millions of dollars) | |||||||||||||||||
Commercial paper | $ | 624 | $ | 442 | |||||||||||||
Variable rate demand bonds | 105 | 123 | |||||||||||||||
Total | $ | 729 | $ | 565 | |||||||||||||
Commercial Paper | |||||||||||||||||
PHI, Pepco, DPL and ACE maintain ongoing commercial paper programs to address short-term liquidity needs. As of December 31, 2014, the maximum capacity available under these programs was $875 million, $500 million, $500 million and $350 million, respectively, subject to available borrowing capacity under the credit facility. | |||||||||||||||||
PHI, Pepco, DPL and ACE had $287 million, $104 million, $106 million and $127 million, respectively, of commercial paper outstanding at December 31, 2014. The weighted average interest rate for commercial paper issued by PHI, Pepco, DPL and ACE during 2014 was 0.57%, 0.28%, 0.26% and 0.27%, respectively. The weighted average maturity of all commercial paper issued by PHI, Pepco, DPL and ACE during 2014 was six, six, five and five days, respectively. | |||||||||||||||||
PHI, Pepco, DPL and ACE had $24 million, $151 million, $147 million and $120 million, respectively, of commercial paper outstanding at December 31, 2013. The weighted average interest rate for commercial paper issued by PHI, Pepco, DPL and ACE during 2013 was 0.70%, 0.34%, 0.29% and 0.31%, respectively. The weighted average maturity of all commercial paper issued by PHI, Pepco, DPL and ACE during 2013 was five, five, three and four days, respectively. | |||||||||||||||||
Variable Rate Demand Bonds | |||||||||||||||||
PHI’s utility subsidiaries DPL and ACE, each have outstanding obligations in respect of Variable Rate Demand Bonds (VRDB). VRDBs are subject to repayment on the demand of the holders and, for this reason, are accounted for as short-term debt in accordance with GAAP. However, bonds submitted for purchase are remarketed by a remarketing agent on a best efforts basis. PHI expects that any bonds submitted for purchase will be remarketed successfully due to the creditworthiness of the issuer and, as applicable, the credit support, and because the remarketing resets the interest rate to the then-current market rate. The bonds may be converted to a fixed-rate, fixed-term option to establish a maturity which corresponds to the date of final maturity of the bonds. On this basis, PHI views VRDBs as a source of long-term financing. As of December 31, 2014, $105 million of VRDBs issued on behalf of DPL were outstanding (of which $72 million were secured by Collateral First Mortgage Bonds issued by DPL). During 2014, ACE retired, at maturity, its last remaining VRDBs in the amount of $18 million. | |||||||||||||||||
The VRDBs outstanding at December 31, 2014 mature as follows: 2015 to 2017 ($26 million), 2024 ($33 million) and 2028 to 2029 ($46 million). The weighted average interest rate for VRDBs outstanding on December 31, 2014 was 0.19% during 2014 and 0.24% during 2013. | |||||||||||||||||
Credit Facility | |||||||||||||||||
PHI, Pepco, DPL and ACE maintain an unsecured syndicated credit facility to provide for their respective liquidity needs, including obtaining letters of credit, borrowing for general corporate purposes and supporting their commercial paper programs. The termination date of this credit facility is currently August 1, 2018. | |||||||||||||||||
The aggregate borrowing limit under the amended and restated credit facility is $1.5 billion, all or any portion of which may be used to obtain loans and up to $500 million of which may be used to obtain letters of credit. The facility also includes a swingline loan sub-facility, pursuant to which each company may make same day borrowings in an aggregate amount not to exceed 10% of the total amount of the facility. Any swingline loan must be repaid by the borrower within fourteen days of receipt. The credit sublimit is $750 million for PHI and $250 million for each of Pepco, DPL and ACE. The sublimits may be increased or decreased by the individual borrower during the term of the facility, except that (i) the sum of all of the borrower sublimits following any such increase or decrease must equal the total amount of the facility and (ii) the aggregate amount of credit used at any given time by (a) PHI may not exceed $1.25 billion and (b) each of Pepco, DPL or ACE may not exceed the lesser of $500 million and the maximum amount of short-term debt the company is permitted to have outstanding by its regulatory authorities. The total number of the sublimit reallocations may not exceed eight per year during the term of the facility. | |||||||||||||||||
The interest rate payable by each company on utilized funds is, at the borrowing company’s election, (i) the greater of the prevailing prime rate, the federal funds effective rate plus 0.5% and the one-month London Interbank Offered Rate (LIBOR) plus 1.0%, or (ii) the prevailing Eurodollar rate, plus a margin that varies according to the credit rating of the borrower. | |||||||||||||||||
In order for a borrower to use the facility, certain representations and warranties must be true and correct, and the borrower must be in compliance with specified financial and other covenants, including (i) the requirement that each borrowing company maintain a ratio of total indebtedness to total capitalization of 65% or less, computed in accordance with the terms of the credit agreement, which calculation excludes from the definition of total indebtedness certain trust preferred securities and deferrable interest subordinated debt (not to exceed 15% of total capitalization), (ii) with certain exceptions, a restriction on sales or other dispositions of assets, and (iii) a restriction on the incurrence of liens on the assets of a borrower or any of its significant subsidiaries other than permitted liens. The credit agreement contains certain covenants and other customary agreements and requirements that, if not complied with, could result in an event of default and the acceleration of repayment obligations of one or more of the borrowers thereunder. Each of the borrowers was in compliance with all covenants under this facility as of December 31, 2014. | |||||||||||||||||
The absence of a material adverse change in PHI’s business, property, results of operations or financial condition is not a condition to the availability of credit under the credit agreement. The credit agreement does not include any rating triggers. | |||||||||||||||||
As of December 31, 2014 and 2013, the amount of cash plus unused borrowing capacity under the credit facility available to meet the future liquidity needs of PHI and its utility subsidiaries on a consolidated basis totaled $875 million and $1,063 million, respectively. PHI’s utility subsidiaries had combined cash and unused borrowing capacity under the credit facility of $413 million and $332 million at December 31, 2014 and 2013, respectively. | |||||||||||||||||
Credit Facility Amendment | |||||||||||||||||
During 2014, PHI, Pepco, DPL and ACE entered into an amendment of and consent with respect to the credit agreement (the Consent). PHI was required to obtain the consent of certain of the lenders under the credit facility in order to permit the consummation of the Merger. Pursuant to the Consent, certain of the lenders consented to the consummation of the Merger and the subsequent conversion of PHI from a Delaware corporation to a Delaware limited liability company, provided that the Merger and subsequent conversion are consummated on or before October 29, 2015. In addition, the Consent amends the definition of “Change in Control” in the credit agreement to mean, following consummation of the Merger, an event or series of events by which Exelon no longer owns, directly or indirectly, 100% of the outstanding shares of voting stock of Pepco Holdings. | |||||||||||||||||
Other Financing Activities | |||||||||||||||||
Sale of Receivables | |||||||||||||||||
During 2014, Pepco, as seller, entered into a purchase agreement with a buyer to sell receivables from an energy savings project pursuant to a Task Order entered into under a General Services Administration area-wide agreement. The purchase price received by Pepco was $12 million. The energy savings project, which is being performed by Pepco Energy Services, was completed in 2014. Pursuant to the purchase agreement, following acceptance of the energy savings project, the buyer will be entitled to receive the contract payments under the Task Order payable by the customer over approximately 9 years. At December 31, 2014, Pepco included the $12 million received in the Current portion of long-term debt and project funding. | |||||||||||||||||
On October 24, 2013, Pepco Energy Services, as seller, entered into a purchase agreement with a buyer to sell receivables from an energy savings project over a period of time pursuant to a Task Order. The purchase price received by Pepco Energy Services was $7 million. Pursuant to the purchase agreement, following acceptance of the energy savings project, the buyer will be entitled to receive the contract payments under the Task Order payable by the customer over approximately 23 years. At December 31, 2014, Pepco Energy Services included the $7 million received in the Current portion of long-term debt and project funding. | |||||||||||||||||
ACE Term Loan Agreement | |||||||||||||||||
On May 10, 2013, ACE entered into a $100 million term loan agreement, pursuant to which ACE borrowed $100 million at a rate of interest equal to the prevailing Eurodollar rate, which was determined by reference to the LIBOR with respect to the relevant interest period, all as defined in the loan agreement, plus a margin of 0.75%. On August 21, 2014, ACE repaid the term loan in full. | |||||||||||||||||
Delmarva Power & Light Co/De [Member] | |||||||||||||||||
Debt | (10) DEBT | ||||||||||||||||
Long-Term Debt | |||||||||||||||||
The components of long-term debt are shown in the table below: | |||||||||||||||||
Type of Debt | Interest Rate | Maturity | 2014 | 2013 | |||||||||||||
(millions of dollars) | |||||||||||||||||
First Mortgage Bonds | |||||||||||||||||
5.22%(a) | 2016 | $ | 100 | $ | 100 | ||||||||||||
3.50% | 2023 | 500 | 300 | ||||||||||||||
4.00% | 2042 | 250 | 250 | ||||||||||||||
850 | 650 | ||||||||||||||||
Unsecured Tax-Exempt Bonds | |||||||||||||||||
5.40% | 2031 | 78 | 78 | ||||||||||||||
78 | 78 | ||||||||||||||||
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 | ||||||||||||||
5.00% | 2015 | 100 | 100 | ||||||||||||||
100 | 200 | ||||||||||||||||
Total long-term debt | 1,068 | 968 | |||||||||||||||
Net unamortized premium (discount) | 3 | (1 | ) | ||||||||||||||
Current portion of long-term debt | (100 | ) | (100 | ) | |||||||||||||
Total net long-term debt | $ | 971 | $ | 867 | |||||||||||||
(a) | Represents a series of Collateral First Mortgage Bonds securing a series of debt securities issued by DPL. | ||||||||||||||||
The outstanding first mortgage bonds issued by DPL are issued under a Mortgage and Deed of Trust and are secured by a first lien on substantially all of DPL’s property, plant and equipment, except for certain property excluded from the lien of the mortgage. | |||||||||||||||||
Maturities of DPL’s long-term debt outstanding at December 31, 2014 are $100 million in each of the years 2015 and 2016, $14 million in 2017, $4 million in 2018, $12 million in 2019 and $838 million thereafter. | |||||||||||||||||
DPL’s long-term debt is subject to certain covenants. As of December 31, 2014, DPL is in compliance with all such covenants. | |||||||||||||||||
The table above does not separately identify $100 million in aggregate principal amount of debt securities issued by DPL. These debt securities are secured by a like amount of first mortgage bonds (Collateral First Mortgage Bonds) of DPL. The principal terms of each such series of debt securities are identical to the same terms of the corresponding series of Collateral First Mortgage Bonds. Payments of principal and interest made on a series of such debt securities, satisfy the corresponding obligations on the related series of Collateral First Mortgage Bonds. For these reasons, each such series of Collateral First Mortgage Bonds and the corresponding debt securities together effectively represent a single financial obligation and are not identified in the table above separately. | |||||||||||||||||
Bond Issuance | |||||||||||||||||
During 2014, DPL issued $200 million of its 3.50% first mortgage bonds due November 15, 2023. Net proceeds from the issuance of the bonds, which included a premium of $4 million, were used to repay DPL’s outstanding commercial paper and for general corporate purposes. | |||||||||||||||||
Note Retirement | |||||||||||||||||
During 2014, DPL retired, at maturity, $100 million of its 5.00% unsecured notes. | |||||||||||||||||
Short-Term Debt | |||||||||||||||||
DPL has traditionally used a number of sources to fulfill short-term funding needs, such as commercial paper, short-term notes, and bank lines of credit. Proceeds from short-term borrowings are used primarily to meet working capital needs, but may also be used to temporarily fund long-term capital requirements. The components of DPL’s short-term debt at December 31, 2014 and 2013 are as follows: | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
(millions of dollars) | |||||||||||||||||
Commercial paper | $ | 106 | $ | 147 | |||||||||||||
Variable rate demand bonds | 105 | 105 | |||||||||||||||
Total | $ | 211 | $ | 252 | |||||||||||||
Commercial Paper | |||||||||||||||||
DPL maintains an ongoing commercial paper program to address its short-term liquidity needs. As of December 31, 2014, the maximum capacity available under the program was $500 million, subject to available borrowing capacity under the credit facility. | |||||||||||||||||
DPL had $106 million and $147 million of commercial paper outstanding at December 31, 2014 and 2013, respectively. The weighted average interest rates for commercial paper issued by DPL during 2014 and 2013 were 0.26% and 0.29%, respectively. The weighted average maturity of all commercial paper issued by DPL during 2014 and 2013 was five days and three days, respectively. | |||||||||||||||||
Variable Rate Demand Bonds | |||||||||||||||||
Variable Rate Demand Bonds (VRDBs) are subject to repayment on the demand of the holders and, for this reason, are accounted for as short-term debt in accordance with GAAP. However, bonds submitted for purchase are remarketed by a remarketing agent on a best efforts basis. DPL expects that any bonds submitted for purchase will continue to be remarketed successfully due to the creditworthiness of the company and because the remarketing agent resets the interest rate to the then-current market rate. The bonds may be converted to a fixed rate, fixed term option to establish a maturity which corresponds to the date of final maturity of the bonds. On this basis, DPL views VRDBs as a source of long-term financing. The VRDBs outstanding in 2014 mature as follows: 2017 ($26 million), 2024 ($33 million), 2028 ($16 million), and 2029 ($30 million). The weighted average interest rate for VRDBs was 0.19% during 2014 and 0.26% during 2013. As of December 31, 2014, $105 million in VRDBs issued on behalf of DPL were outstanding (of which $72 million were secured by Collateral First Mortgage Bonds issued by DPL). | |||||||||||||||||
Credit Facility | |||||||||||||||||
PHI, Pepco, DPL and ACE maintain an unsecured syndicated credit facility to provide for their respective liquidity needs, including obtaining letters of credit, borrowing for general corporate purposes and supporting their commercial paper programs. The termination date of this credit facility is currently August 1, 2018. | |||||||||||||||||
The aggregate borrowing limit under the amended and restated credit facility is $1.5 billion, all or any portion of which may be used to obtain loans and up to $500 million of which may be used to obtain letters of credit. The facility also includes a swingline loan sub-facility, pursuant to which each company may make same day borrowings in an aggregate amount not to exceed 10% of the total amount of the facility. Any swingline loan must be repaid by the borrower within fourteen days of receipt. The credit sublimit is $750 million for PHI and $250 million for each of Pepco, DPL and ACE. The sublimits may be increased or decreased by the individual borrower during the term of the facility, except that (i) the sum of all of the borrower sublimits following any such increase or decrease must equal the total amount of the facility, and (ii) the aggregate amount of credit used at any given time by (a) PHI may not exceed $1.25 billion, and (b) each of Pepco, DPL or ACE may not exceed the lesser of $500 million or the maximum amount of short-term debt the company is permitted to have outstanding by its regulatory authorities. The total number of the sublimit reallocations may not exceed eight per year during the term of the facility. | |||||||||||||||||
The interest rate payable by each company on utilized funds is, at the borrowing company’s election, (i) the greater of the prevailing prime rate, the federal funds effective rate plus 0.5% and the one-month London Interbank Offered Rate plus 1.0%, or (ii) the prevailing Eurodollar rate, plus a margin that varies according to the credit rating of the borrower. | |||||||||||||||||
In order for a borrower to use the facility, certain representations and warranties must be true and correct, and the borrower must be in compliance with specified financial and other covenants, including (i) the requirement that each borrowing company maintain a ratio of total indebtedness to total capitalization of 65% or less, computed in accordance with the terms of the credit agreement, which calculation excludes from the definition of total indebtedness certain trust preferred securities and deferrable interest subordinated debt (not to exceed 15% of total capitalization), (ii) with certain exceptions, a restriction on sales or other dispositions of assets, and (iii) a restriction on the incurrence of liens on the assets of a borrower or any of its significant subsidiaries other than permitted liens. The credit agreement contains certain covenants and other customary agreements and requirements that, if not complied with, could result in an event of default and the acceleration of repayment obligations of one or more of the borrowers thereunder. Each of the borrowers was in compliance with all covenants under this facility as of December 31, 2014. | |||||||||||||||||
The absence of a material adverse change in PHI’s business, property, results of operations or financial condition is not a condition to the availability of credit under the credit agreement. The credit agreement does not include any rating triggers. | |||||||||||||||||
As of December 31, 2014 and 2013, the amount of cash plus borrowing capacity under the credit facility available to meet the liquidity needs of PHI’s utility subsidiaries in the aggregate was $413 million and $332 million, respectively. DPL’s borrowing capacity under the credit facility at any given time depends on the amount of the subsidiary borrowing capacity being utilized by Pepco and ACE and the portion of the total capacity being used by PHI. | |||||||||||||||||
Credit Facility Amendment | |||||||||||||||||
During 2014, PHI, Pepco, DPL and ACE entered into an amendment of and consent with respect to the credit agreement (the Consent). PHI was required to obtain the consent of certain of the lenders under the credit facility in order to permit the consummation of the Merger. Pursuant to the Consent, certain of the lenders consented to the consummation of the Merger and the subsequent conversion of PHI from a Delaware corporation to a Delaware limited liability company, provided that the Merger and subsequent conversion are consummated on or before October 29, 2015. In addition, the Consent amends the definition of “Change in Control” in the credit agreement to mean, following consummation of the Merger, an event or series of events by which Exelon no longer owns, directly or indirectly, 100% of the outstanding shares of voting stock of Pepco Holdings. | |||||||||||||||||
Potomac Electric Power Co [Member] | |||||||||||||||||
Debt | (9) DEBT | ||||||||||||||||
Long-Term Debt | |||||||||||||||||
The components of long-term debt are shown in the table below: | |||||||||||||||||
Type of Debt | Interest Rate | Maturity | 2014 | 2013 | |||||||||||||
(millions of dollars) | |||||||||||||||||
First Mortgage Bonds | |||||||||||||||||
4.65 | %(a)(b) | 2014 | $ | — | $ | 175 | |||||||||||
3.05 | % | 2022 | 200 | 200 | |||||||||||||
6.2 | %(c)(d) | 2022 | 110 | 110 | |||||||||||||
3.6 | % | 2024 | 400 | — | |||||||||||||
5.75 | %(a)(b) | 2034 | 100 | 100 | |||||||||||||
5.4 | %(a)(b) | 2035 | 175 | 175 | |||||||||||||
6.5 | %(a)(c) | 2037 | 500 | 500 | |||||||||||||
7.9 | % | 2038 | 250 | 250 | |||||||||||||
4.15 | % | 2043 | 250 | 250 | |||||||||||||
4.95 | % | 2043 | 150 | 150 | |||||||||||||
Total long-term debt | 2,135 | 1,910 | |||||||||||||||
Net unamortized discount | (11 | ) | (11 | ) | |||||||||||||
Current portion of long-term debt | — | (175 | ) | ||||||||||||||
Total net long-term debt | $ | 2,124 | $ | 1,724 | |||||||||||||
(a) | Represents a series of Collateral First Mortgage Bonds (as defined herein) securing a series of senior notes issued by Pepco. | ||||||||||||||||
(b) | Represents a series of Collateral First Mortgage Bonds which must be cancelled and released as security for Pepco’s obligations under the corresponding series of senior notes or tax-exempt bonds, at such time as Pepco does not have any first mortgage bonds outstanding (other than its Collateral First Mortgage Bonds). | ||||||||||||||||
(c) | Represents a series of Collateral First Mortgage Bonds which must be cancelled and released as security for Pepco’s obligations under the corresponding series of senior notes or tax-exempt bonds, at such time as Pepco does not have any first mortgage bonds outstanding (other than its Collateral First Mortgage Bonds), except that Pepco may not permit such release of collateral unless Pepco substitutes comparable obligations for such collateral. | ||||||||||||||||
(d) | Represents a series of Collateral First Mortgage Bonds securing a series of senior notes issued by Pepco, which in turn secures a series of tax-exempt bonds issued for the benefit of Pepco. | ||||||||||||||||
The outstanding first mortgage bonds are issued under a mortgage and deed of trust and are secured by a first lien on substantially all of Pepco’s property, plant and equipment, except for certain property excluded from the lien of the mortgage. | |||||||||||||||||
Maturities of Pepco’s long-term debt outstanding at December 31, 2014, are zero in 2015 through 2019 and $2,135 million thereafter. | |||||||||||||||||
Pepco’s long-term debt is subject to certain covenants. As of December 31, 2014, Pepco is in compliance with all such covenants. | |||||||||||||||||
The table above does not separately identify $885 million in aggregate principal amount of senior notes issued by Pepco and $110 million in aggregate principal amount of tax-exempt bonds issued for the benefit of Pepco. These senior notes are secured by a like amount of first mortgage bonds (Collateral First Mortgage Bonds) of Pepco. In addition, these tax-exempt bonds are secured by a like amount of Collateral First Mortgage Bonds issued by Pepco. The principal terms of each such series of senior notes, or Pepco’s obligations in respect of each such series of tax-exempt bonds, are identical to the same terms of the corresponding series of Collateral First Mortgage Bonds. Payments of principal and interest made on a series of such senior notes, or the satisfaction of Pepco’s obligations in respect of a series of such tax-exempt bonds, satisfy the corresponding obligations on the related series of Collateral First Mortgage Bonds. For these reasons, each such series of Collateral First Mortgage Bonds and the corresponding senior notes and/or tax-exempt bonds together effectively represent a single financial obligation and are not identified in the table above separately. | |||||||||||||||||
Bond Issuance | |||||||||||||||||
During 2014, Pepco issued $400 million of 3.60% first mortgage bonds due March 15, 2024. Pepco used a portion of the net proceeds of the offering to repay in full at maturity $175 million in aggregate principal amount of its 4.65% senior notes due April 15, 2014, plus accrued and unpaid interest. | |||||||||||||||||
Bond Retirement | |||||||||||||||||
During 2014, Pepco retired, at maturity, $175 million of its 4.65% senior notes. The senior notes were secured by a like principal amount of its 4.65% first mortgage bonds due April 15, 2014, which under the mortgage and deed of trust were deemed to be satisfied when the senior notes were repaid. | |||||||||||||||||
Short-Term Debt | |||||||||||||||||
Pepco has traditionally used a number of sources to fulfill short-term funding needs, such as commercial paper, short-term notes, and bank lines of credit. Proceeds from short-term borrowings are used primarily to meet working capital needs, but may also be used to temporarily fund long-term capital requirements. | |||||||||||||||||
Pepco’s short-term debt at December 31, 2014 and 2013 consisted of the following: | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
(millions of dollars) | |||||||||||||||||
Commercial paper | $ | 104 | $ | 151 | |||||||||||||
Commercial Paper | |||||||||||||||||
Pepco maintains an ongoing commercial paper program to address its short-term liquidity needs. As of December 31, 2014, the maximum capacity available under the program was $500 million, subject to available borrowing capacity under the credit facility. | |||||||||||||||||
Pepco had $104 million and $151 million of commercial paper outstanding at December 31, 2014 and 2013, respectively. The weighted average interest rates for commercial paper issued by Pepco during 2014 and 2013 were 0.28% and 0.34%, respectively. The weighted average maturity of all commercial paper issued by Pepco during each of 2014 and 2013 was six days and five days, respectively. | |||||||||||||||||
Credit Facility | |||||||||||||||||
PHI, Pepco, DPL and ACE maintain an unsecured syndicated credit facility to provide for their respective liquidity needs, including obtaining letters of credit, borrowing for general corporate purposes and supporting their commercial paper programs. The termination date of this credit facility is currently August 1, 2018. | |||||||||||||||||
The aggregate borrowing limit under the amended and restated credit facility is $1.5 billion, all or any portion of which may be used to obtain loans and up to $500 million of which may be used to obtain letters of credit. The facility also includes a swingline loan sub-facility, pursuant to which each company may make same day borrowings in an aggregate amount not to exceed 10% of the total amount of the facility. Any swingline loan must be repaid by the borrower within fourteen days of receipt. The credit sublimit is $750 million for PHI and $250 million for each of Pepco, DPL and ACE. The sublimits may be increased or decreased by the individual borrower during the term of the facility, except that (i) the sum of all of the borrower sublimits following any such increase or decrease must equal the total amount of the facility and (ii) the aggregate amount of credit used at any given time by (a) PHI may not exceed $1.25 billion and (b) each of Pepco, DPL or ACE may not exceed the lesser of $500 million and the maximum amount of short-term debt the company is permitted to have outstanding by its regulatory authorities. The total number of the sublimit reallocations may not exceed eight per year during the term of the facility. | |||||||||||||||||
The interest rate payable by each company on utilized funds is, at the borrowing company’s election, (i) the greater of the prevailing prime rate, the federal funds effective rate plus 0.5% and the one month London Interbank Offered Rate plus 1.0%, or (ii) the prevailing Eurodollar rate, plus a margin that varies according to the credit rating of the borrower. | |||||||||||||||||
In order for a borrower to use the facility, certain representations and warranties must be true and correct, and the borrower must be in compliance with specified financial and other covenants, including (i) the requirement that each borrowing company maintain a ratio of total indebtedness to total capitalization of 65% or less, computed in accordance with the terms of the credit agreement, which calculation excludes from the definition of total indebtedness certain trust preferred securities and deferrable interest subordinated debt (not to exceed 15% of total capitalization), (ii) with certain exceptions, a restriction on sales or other dispositions of assets, and (iii) a restriction on the incurrence of liens on the assets of a borrower or any of its significant subsidiaries other than permitted liens. The credit agreement contains certain covenants and other customary agreements and requirements that, if not complied with, could result in an event of default and the acceleration of repayment obligations of one or more of the borrowers thereunder. Each of the borrowers was in compliance with all covenants under this facility as of December 31, 2014. | |||||||||||||||||
The absence of a material adverse change in PHI’s business, property, results of operations or financial condition is not a condition to the availability of credit under the credit agreement. The credit agreement does not include any rating triggers. | |||||||||||||||||
As of December 31, 2014 and 2013, the amount of cash plus borrowing capacity under the credit facility available to meet the liquidity needs of PHI’s utility subsidiaries in the aggregate was $413 million and $332 million, respectively. Pepco’s borrowing capacity under the credit facility at any given time depends on the amount of the subsidiary borrowing capacity being utilized by DPL and ACE and the portion of the total capacity being used by PHI. | |||||||||||||||||
Credit Facility Amendment | |||||||||||||||||
During 2014, PHI, Pepco, DPL and ACE entered into an amendment of and consent with respect to the credit agreement (the Consent). PHI was required to obtain the consent of certain of the lenders under the credit facility in order to permit the consummation of the Merger. Pursuant to the Consent, certain of the lenders consented to the consummation of the Merger and the subsequent conversion of PHI from a Delaware corporation to a Delaware limited liability company, provided that the Merger and subsequent conversion are consummated on or before October 29, 2015. In addition, the Consent amends the definition of “Change in Control” in the credit agreement to mean, following consummation of the Merger, an event or series of events by which Exelon no longer owns, directly or indirectly, 100% of the outstanding shares of voting stock of Pepco Holdings. | |||||||||||||||||
Other Financing Activities | |||||||||||||||||
Sale of Receivables | |||||||||||||||||
During 2014, Pepco, as seller, entered into a purchase agreement with a buyer to sell receivables from an energy savings project over a period of time pursuant to a Task Order entered into under a General Services Administration area-wide agreement. The purchase price received by Pepco was $12 million. The energy savings project, which is being performed by Pepco Energy Services, was completed in 2014. Pursuant to the purchase agreement, following acceptance of the energy savings project, the buyer will be entitled to receive the contract payments under the Task Order payable by the customer over approximately 9 years. At December 31, 2014, Pepco included the $12 million received in the Current portion of long-term debt and project funding. | |||||||||||||||||
Atlantic City Electric Co [Member] | |||||||||||||||||
Debt | (9) DEBT | ||||||||||||||||
Long-Term Debt | |||||||||||||||||
The components of long-term debt are shown in the table below: | |||||||||||||||||
Type of Debt | Interest Rate | Maturity | 2014 | 2013 | |||||||||||||
(millions of dollars) | |||||||||||||||||
First Mortgage Bonds | |||||||||||||||||
7.63 | % (a) | 2014 | $ | — | $ | 7 | |||||||||||
7.68 | % (a) | 2015-2016 | 17 | 17 | |||||||||||||
7.75 | % | 2018 | 250 | 250 | |||||||||||||
6.8 | % (b)(c) | 2021 | 39 | 39 | |||||||||||||
4.35 | % | 2021 | 200 | 200 | |||||||||||||
3.375 | % | 2024 | 150 | — | |||||||||||||
4.875 | % (c)(d) | 2029 | 23 | 23 | |||||||||||||
5.8 | % (b)(e) | 2034 | 120 | 120 | |||||||||||||
5.8 | % (b)(e) | 2036 | 105 | 105 | |||||||||||||
904 | 761 | ||||||||||||||||
Variable Rate Term Loan | — | 100 | |||||||||||||||
Total long-term debt | 904 | 861 | |||||||||||||||
Net unamortized discount | (1 | ) | (1 | ) | |||||||||||||
Current portion of long-term debt | (15 | ) | (107 | ) | |||||||||||||
Total net long-term debt | $ | 888 | $ | 753 | |||||||||||||
(a) | Represents a series of Collateral First Mortgage Bonds (as defined herein) securing a series of medium-term notes issued by ACE. | ||||||||||||||||
(b) | Represents a series of Collateral First Mortgage Bonds which must be cancelled and released as security for ACE’s obligations under the corresponding series of issuer notes (as defined herein) or tax-exempt bonds, at such time as ACE does not have any first mortgage bonds outstanding (other than its Collateral First Mortgage Bonds). | ||||||||||||||||
(c) | Represents a series of Collateral First Mortgage Bonds securing a series of tax-exempt bonds issued for the benefit of ACE. | ||||||||||||||||
(d) | Represents a series of Collateral First Mortgage Bonds which must be cancelled and released as security for ACE’s obligations under the corresponding series of issuer notes or tax-exempt bonds, at such time as ACE does not have any first mortgage bonds outstanding (other than its Collateral First Mortgage Bonds), except that ACE may not permit such release of collateral unless ACE substitutes comparable obligations for such collateral. | ||||||||||||||||
(e) | Represents a series of Collateral First Mortgage Bonds securing a series of senior notes issued by ACE. | ||||||||||||||||
The outstanding first mortgage bonds issued by ACE are issued under a mortgage and deed of trust and are secured by a first lien on substantially all of ACE’s property, plant and equipment, except for certain property excluded from the lien of the mortgage. | |||||||||||||||||
Maturities of ACE’s long-term debt outstanding at December 31, 2014 are $15 million in 2015, $2 million in 2016, zero in 2017, $250 million in 2018, zero in 2019 and $637 million thereafter. | |||||||||||||||||
ACE’s long-term debt is subject to certain covenants. As of December 31, 2014, ACE was in compliance with all such covenants. | |||||||||||||||||
The table above does not separately identify $242 million in aggregate principal amount of senior notes and medium term notes (issuer notes) issued by ACE and $62 million in aggregate principal amount of tax-exempt bonds issued for the benefit of ACE. These issuer notes and tax-exempt bonds are secured by a like amount of first mortgage bonds (Collateral First Mortgage Bonds) of ACE. The principal terms of each such series of issuer notes, or ACE’s obligations in respect of each such series of tax-exempt bonds, are identical to the same terms of the corresponding series of Collateral First Mortgage Bonds. Payments of principal and interest made on a series of such issuer notes, or the satisfaction of ACE obligations in respect of a series of such tax-exempt bonds, satisfy the corresponding obligations on the related series of Collateral First Mortgage Bonds. For these reasons, each such series of Collateral First Mortgage Bonds and the corresponding issuer notes or tax-exempt bonds together effectively represent a single financial obligation and are not identified in the table above separately. | |||||||||||||||||
Bond Issuance | |||||||||||||||||
During 2014, ACE issued $150 million of its 3.375% first mortgage bonds due September 1, 2024. ACE used $7.2 million of the net proceeds from the issuance of the bonds to repay in full at maturity $7.0 million in aggregate principal amount of ACE’s 7.63% secured medium term notes due August 29, 2014, plus accrued and unpaid interest thereon. ACE used the remainder of the net proceeds to repay its outstanding commercial paper, including commercial paper that ACE issued to prepay in full its $100 million term loan, and for general corporate purposes. | |||||||||||||||||
Bond Retirement | |||||||||||||||||
During 2014, ACE retired, at maturity, $7 million of its 7.63% medium term notes due August 29, 2014. The notes were secured by a like principal amount of first mortgage bonds due August 29, 2014, which under ACE’s mortgage and deed of trust were deemed to be satisfied when the notes were repaid. | |||||||||||||||||
Term Loan Agreement | |||||||||||||||||
On May 10, 2013, ACE entered into a $100 million term loan agreement, pursuant to which ACE borrowed $100 million at a rate of interest equal to the prevailing Eurodollar rate, which was determined by reference to the London Interbank Offered Rate (LIBOR) with respect to the relevant interest period, all as defined in the loan agreement, plus a margin of 0.75%. On August 21, 2014, ACE repaid the term loan in full. | |||||||||||||||||
Transition Bonds Issued by ACE Funding | |||||||||||||||||
The components of transition bonds are shown in the table below: | |||||||||||||||||
Type of Debt | Interest Rate | Maturity | 2014 | 2013 | |||||||||||||
(millions of dollars) | |||||||||||||||||
Transition Bonds | |||||||||||||||||
4.46 | % | 2016 | $ | — | $ | 8 | |||||||||||
4.91 | % | 2017 | 17 | 46 | |||||||||||||
5.05 | % | 2020 | 51 | 54 | |||||||||||||
5.55 | % | 2023 | 147 | 147 | |||||||||||||
215 | 255 | ||||||||||||||||
Current portion of long-term debt | (44 | ) | (41 | ) | |||||||||||||
Total net long-term Transition Bonds | $ | 171 | $ | 214 | |||||||||||||
For a description of the Transition Bonds, see Note (16), “Variable Interest Entities – ACE Funding.” Maturities of ACE’s Transition Bonds outstanding at December 31, 2014 are $44 million in 2015, $46 million in 2016, $35 million in 2017, $31 million in 2018, $18 million in 2019 and $41 million thereafter. | |||||||||||||||||
Short-Term Debt | |||||||||||||||||
ACE has traditionally used a number of sources to fulfill short-term funding needs, such as commercial paper, short-term notes, and bank lines of credit. Proceeds from short-term borrowings are used primarily to meet working capital needs, but may also be used to temporarily fund long-term capital requirements. The components of ACE’s short-term debt at December 31, 2014 and 2013 are as follows: | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
(millions of dollars) | |||||||||||||||||
Commercial paper | $ | 127 | $ | 120 | |||||||||||||
Variable rate demand bonds | — | 18 | |||||||||||||||
Total | $ | 127 | $ | 138 | |||||||||||||
Commercial Paper | |||||||||||||||||
ACE maintains an ongoing commercial paper program to address its short-term liquidity needs. As of December 31, 2014, the maximum capacity available under the program was $350 million, subject to available borrowing capacity under the credit facility. | |||||||||||||||||
ACE had $127 million and $120 million of commercial paper outstanding at December 31, 2014 and 2013, respectively. The weighted average interest rates for commercial paper issued by ACE during 2014 and 2013 were 0.27% and 0.31%, respectively. The weighted average maturity of all commercial paper issued by ACE during 2014 and 2013 was five days and four days, respectively. | |||||||||||||||||
Variable Rate Demand Bonds | |||||||||||||||||
During 2014, ACE retired, at maturity, its last remaining Variable Rate Demand Bonds (VRDBs) in the amount of $18 million. The weighted average interest rate for VRDBs was 0.05% and 0.11% during 2014 and 2013, respectively. | |||||||||||||||||
Credit Facility | |||||||||||||||||
PHI, Pepco, DPL and ACE maintain an unsecured syndicated credit facility to provide for their respective liquidity needs, including obtaining letters of credit, borrowing for general corporate purposes and supporting their commercial paper programs. The termination date of this credit facility is currently August 1, 2018. | |||||||||||||||||
The aggregate borrowing limit under the amended and restated credit facility is $1.5 billion, all or any portion of which may be used to obtain loans and up to $500 million of which may be used to obtain letters of credit. The facility also includes a swingline loan sub-facility, pursuant to which each company may make same day borrowings in an aggregate amount not to exceed 10% of the total amount of the facility. Any swingline loan must be repaid by the borrower within fourteen days of receipt. The credit sublimit is $750 million for PHI and $250 million for each of Pepco, DPL and ACE. The sublimits may be increased or decreased by the individual borrower during the term of the facility, except that (i) the sum of all of the borrower sublimits following any such increase or decrease must equal the total amount of the facility, and (ii) the aggregate amount of credit used at any given time by (a) PHI may not exceed $1.25 billion, and (b) each of Pepco, DPL or ACE may not exceed the lesser of $500 million or the maximum amount of short-term debt the company is permitted to have outstanding by its regulatory authorities. The total number of the sublimit reallocations may not exceed eight per year during the term of the facility. | |||||||||||||||||
The interest rate payable by each company on utilized funds is, at the borrowing company’s election, (i) the greater of the prevailing prime rate, the federal funds effective rate plus 0.5% and the one-month LIBOR plus 1.0%, or (ii) the prevailing Eurodollar rate, plus a margin that varies according to the credit rating of the borrower. | |||||||||||||||||
In order for a borrower to use the facility, certain representations and warranties must be true and correct, and the borrower must be in compliance with specified financial and other covenants, including (i) the requirement that each borrowing company maintain a ratio of total indebtedness to total capitalization of 65% or less, computed in accordance with the terms of the credit agreement, which calculation excludes from the definition of total indebtedness certain trust preferred securities and deferrable interest subordinated debt (not to exceed 15% of total capitalization), (ii) with certain exceptions, a restriction on sales or other dispositions of assets, and (iii) a restriction on the incurrence of liens on the assets of a borrower or any of its significant subsidiaries other than permitted liens. The credit agreement contains certain covenants and other customary agreements and requirements that, if not complied with, could result in an event of default and the acceleration of repayment obligations of one or more of the borrowers thereunder. Each of the borrowers was in compliance with all covenants under this facility at December 31, 2014. | |||||||||||||||||
The absence of a material adverse change in PHI’s business, property, results of operations or financial condition is not a condition to the availability of credit under the credit agreement. The credit agreement does not include any rating triggers. | |||||||||||||||||
As of December 31, 2014 and 2013, the amount of cash plus borrowing capacity under the credit facility available to meet the liquidity needs of PHI’s utility subsidiaries in the aggregate was $413 million and $332 million, respectively. ACE’s borrowing capacity under the credit facility at any given time depends on the amount of the subsidiary borrowing capacity being utilized by Pepco and DPL and the portion of the total capacity being used by PHI. | |||||||||||||||||
Credit Facility Amendment | |||||||||||||||||
During 2014, PHI, Pepco, DPL and ACE entered into an amendment of and consent with respect to the credit agreement (the Consent). PHI was required to obtain the consent of certain of the lenders under the credit facility in order to permit the consummation of the Merger. Pursuant to the Consent, certain of the lenders consented to the consummation of the Merger and the subsequent conversion of PHI from a Delaware corporation to a Delaware limited liability company, provided that the Merger and subsequent conversion are consummated on or before October 29, 2015. In addition, the Consent amends the definition of “Change in Control” in the credit agreement to mean, following consummation of the Merger, an event or series of events by which Exelon no longer owns, directly or indirectly, 100% of the outstanding shares of voting stock of Pepco Holdings. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
INCOME TAXES | (11) 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 2002 in connection with the establishment of PHI as a public utility holding company. Under this tax sharing agreement, PHI’s consolidated federal income tax liability is allocated based upon PHI’s and its subsidiaries’ separate taxable income or loss. | |||||||||||||||||||||||||
The provision for consolidated income taxes, reconciliation of consolidated income tax expense, and components of consolidated deferred tax liabilities (assets) are shown below. | |||||||||||||||||||||||||
Provision for Consolidated Income Taxes – Continuing Operations | |||||||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Current Tax (Benefit) Expense | |||||||||||||||||||||||||
Federal | $ | (137 | ) | $ | (128 | ) | $ | (166 | ) | ||||||||||||||||
State and local | (26 | ) | (9 | ) | (40 | ) | |||||||||||||||||||
Total Current Tax (Benefit) Expense | (163 | ) | (137 | ) | (206 | ) | |||||||||||||||||||
Deferred Tax Expense (Benefit) | |||||||||||||||||||||||||
Federal | 261 | 393 | 254 | ||||||||||||||||||||||
State and local | 41 | 65 | 58 | ||||||||||||||||||||||
Investment tax credit amortization | (1 | ) | (2 | ) | (3 | ) | |||||||||||||||||||
Total Deferred Tax Expense | 301 | 456 | 309 | ||||||||||||||||||||||
Total Consolidated Income Tax Expense Related to Continuing Operations | $ | 138 | $ | 319 | $ | 103 | |||||||||||||||||||
Reconciliation of Consolidated Income Tax Expense – Continuing Operations | |||||||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Income tax at Federal statutory rate | $ | 133 | 35 | % | $ | 150 | 35 | % | $ | 112 | 35 | % | |||||||||||||
Increases (decreases) resulting from: | |||||||||||||||||||||||||
State income taxes, net of federal effect | 23 | 6.1 | % | 27 | 6.3 | % | 19 | 6 | % | ||||||||||||||||
Asset removal costs | (12 | ) | (3.2 | )% | (14 | ) | (3.3 | )% | (11 | ) | (3.4 | )% | |||||||||||||
Change in estimates and interest related to uncertain and effectively settled tax positions | — | — | 56 | 13.1 | % | (8 | ) | (2.6 | )% | ||||||||||||||||
Establishment of valuation allowances related to deferred tax assets | — | — | 101 | 23.5 | % | — | — | ||||||||||||||||||
Merger related costs | 7 | 1.8 | % | — | — | — | — | ||||||||||||||||||
Other, net | (13 | ) | (3.4 | )% | (1 | ) | (0.2 | )% | (9 | ) | (2.9 | )% | |||||||||||||
Consolidated Income Tax Expense Related to Continuing Operations | $ | 138 | 36.3 | % | $ | 319 | 74.4 | % | $ | 103 | 32.1 | % | |||||||||||||
During 2014, PHI recorded a tax benefit of $5 million related to certain energy efficiency tax deductions associated with Pepco Energy Services’ energy savings performance contracting services. | |||||||||||||||||||||||||
In connection with entering into the Merger Agreement (as further described in Note (1), “Organization”), PHI incurred certain merger-related costs in 2014 which are not tax deductible. | |||||||||||||||||||||||||
During 2013, PHI recorded a $56 million charge for a change in estimates and interest related to uncertain and effectively settled tax positions, primarily representing the anticipated additional interest expense on estimated federal and state income tax obligations that was allocated to PHI’s continuing operations resulting from a change in assessment of tax benefits associated with the former cross-border energy lease investments of PCI in the first quarter of 2013. | |||||||||||||||||||||||||
Also, in 2013, PHI established valuation allowances of $101 million related to deferred tax assets. Between 1990 and 1999, PCI, through various subsidiaries, entered into certain transactions involving investments in aircraft and aircraft equipment, railcars and other assets. In connection with these transactions, PCI recorded deferred tax assets in prior years of $101 million in the aggregate. Following events that took place during the first quarter of 2013, which included (i) court decisions in favor of the IRS with respect to other taxpayers’ cross-border lease and other structured transactions (as discussed in Note (20), “Discontinued Operations – Cross-Border Energy Lease Investments”), (ii) the change in PHI’s tax position with respect to the tax benefits associated with its cross-border energy leases, and (iii) PHI’s decision in March 2013 to begin to pursue the early termination of its remaining cross-border energy lease investments (which represented a substantial portion of the remaining assets within PCI) without the intent to reinvest these proceeds in income-producing assets, management evaluated the likelihood that PCI would be able to realize the $101 million of deferred tax assets in the future. Based on this evaluation, PCI established valuation allowances against these deferred tax assets totaling $101 million in the first quarter of 2013. Further, during the fourth quarter of 2013, in light of additional court decisions in favor of the IRS involving other taxpayers, and after consideration of all relevant factors, management determined that it would abandon the further pursuit of these deferred tax assets, and these assets totaling $101 million were charged off against the previously established valuation allowances. | |||||||||||||||||||||||||
PHI’s consolidated effective income tax rate for the year ended December 31, 2012 includes income tax benefits totaling $8 million related to uncertain and effectively settled tax positions, primarily due to the effective settlement with the IRS in the first quarter of 2012 with respect to the methodology used historically to calculate deductible mixed service costs and the expiration of the statute of limitations associated with an uncertain tax position in Pepco. | |||||||||||||||||||||||||
Components of Consolidated Deferred Tax Liabilities (Assets) | |||||||||||||||||||||||||
At December 31, | |||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Deferred Tax Liabilities (Assets) | |||||||||||||||||||||||||
Depreciation and other basis differences related to plant and equipment | $ | 2,962 | $ | 2,628 | |||||||||||||||||||||
Deferred electric service and electric restructuring liabilities | 67 | 91 | |||||||||||||||||||||||
Cross-border energy lease investments | — | (6 | ) | ||||||||||||||||||||||
Federal and state net operating losses | (400 | ) | (350 | ) | |||||||||||||||||||||
Valuation allowances on state net operating losses | 61 | 21 | |||||||||||||||||||||||
Pension and other postretirement benefits | 116 | 135 | |||||||||||||||||||||||
Deferred taxes on amounts to be collected through future rates | 94 | 75 | |||||||||||||||||||||||
Other (a) | 325 | 285 | |||||||||||||||||||||||
Total Deferred Tax Liabilities, net | 3,225 | 2,879 | |||||||||||||||||||||||
Deferred tax assets included in Current Assets | 50 | 51 | |||||||||||||||||||||||
Deferred tax liabilities included in Other Current Liabilities | (9 | ) | (2 | ) | |||||||||||||||||||||
Total Consolidated Deferred Tax Liabilities, net non-current | $ | 3,266 | $ | 2,928 | |||||||||||||||||||||
(a) | PCI established valuation allowances against certain of these other deferred taxes totaling $101 million in the first quarter of 2013. Management determined during the fourth quarter of 2013 to abandon the further pursuit of the related deferred tax assets and, accordingly, these assets were charged off against the valuation allowances. | ||||||||||||||||||||||||
The net deferred tax liability represents the tax effect, at presently enacted tax rates, of temporary differences between the financial statement basis and tax basis of assets and liabilities. The portion of the net deferred tax liability applicable to PHI’s utility operations, which has not been reflected in current service rates, represents income taxes recoverable through future rates, net, and is recorded as a Regulatory asset on the balance sheet. Federal and state net operating losses generally expire over 20 years from 2029 to 2034. | |||||||||||||||||||||||||
The Tax Reform Act of 1986 repealed the investment tax credit for property placed in service after December 31, 1985, except for certain transition property. Investment tax credits previously earned on Pepco’s, DPL’s and ACE’s property continue to be amortized to income over the useful lives of the related property. | |||||||||||||||||||||||||
Reconciliation of Beginning and Ending Balances of Unrecognized Tax Benefits | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Balance as of January 1, | $ | 831 | $ | 200 | $ | 357 | |||||||||||||||||||
Tax positions related to current year: | |||||||||||||||||||||||||
Additions | 4 | 3 | 1 | ||||||||||||||||||||||
Reductions | (2 | ) | — | — | |||||||||||||||||||||
Tax positions related to prior years: | |||||||||||||||||||||||||
Additions | 27 | 646 | (a) | 79 | |||||||||||||||||||||
Reductions | (10 | ) | (12 | ) | (235 | )(b) | |||||||||||||||||||
Settlements | — | (6 | ) | (2 | ) | ||||||||||||||||||||
Balance as of December 31, | $ | 850 | $ | 831 | $ | 200 | |||||||||||||||||||
(a) | These additions of unrecognized tax benefits in 2013 primarily relate to the former cross-border energy lease investments of PCI. | ||||||||||||||||||||||||
(b) | These reductions of unrecognized tax benefits in 2012 primarily relate to a resolution reached with the IRS for determining deductible mixed service costs for additions to property, plant and equipment. | ||||||||||||||||||||||||
Unrecognized Benefits That, If Recognized, Would Affect the Effective Tax Rate | |||||||||||||||||||||||||
Unrecognized tax benefits are related to tax positions that have been taken or are expected to be taken in tax returns that are not recognized in the financial statements because management has either measured the tax benefit at an amount less than the benefit claimed or expected to be claimed, or has concluded that it is not more likely than not that the tax position will be ultimately sustained. For the majority of these tax positions, the ultimate deductibility is highly certain, but there is uncertainty about the timing of such deductibility. Unrecognized tax benefits at December 31, 2014 included $12 million that, if recognized, would lower the effective tax rate. | |||||||||||||||||||||||||
Interest and Penalties | |||||||||||||||||||||||||
PHI recognizes interest and penalties relating to its uncertain tax positions as an element of income tax expense. For the years ended December 31, 2014, 2013 and 2012, PHI recognized less than $1 million of pre-tax interest expense, $125 million of pre-tax interest expense ($75 million after-tax), and $23 million of pre-tax interest income ($14 million after-tax), respectively, as a component of income tax expense related to continuing and discontinued operations. As of December 31, 2014, 2013 and 2012, PHI had accrued interest receivable of $2 million, $2 million and $10 million, respectively, related to effectively settled and uncertain tax positions. | |||||||||||||||||||||||||
Possible Changes to Unrecognized Tax Benefits | |||||||||||||||||||||||||
It is reasonably possible that the amount of unrecognized tax benefits with respect to PHI’s uncertain tax positions will significantly increase or decrease within the next 12 months. In order to mitigate the cost of continued litigation of tax matters related to the former cross-border energy lease investments, PHI and its subsidiaries have entered into discussions with the IRS with the intention of seeking a settlement of all tax issues for open tax years 2001 through 2011. PHI currently believes that it is possible that a settlement with the IRS may be reached in 2015, which could significantly impact the balances of unrecognized tax benefits and the related interest accruals. At this time, it is estimated that there will be a $700 million to $800 million decrease in unrecognized tax benefits within the next 12 months. See Note (16), “Commitments and Contingencies – PHI’s Cross-Border Energy Lease Investments,” for additional discussion. | |||||||||||||||||||||||||
Tax Years Open to Examination | |||||||||||||||||||||||||
PHI’s federal income tax liabilities for Pepco legacy companies for all years through 2002, and for Conectiv legacy companies for all years through 2002, have been determined by the IRS, subject to adjustment to the extent of any net operating loss or other loss or credit carrybacks from subsequent years. PHI has not reached final settlement with the IRS with respect to the cross-border energy lease deductions. The open tax years for the significant states where PHI files state income tax returns (District of Columbia, Maryland, Delaware, New Jersey, Pennsylvania and Virginia) are the same as for the Federal returns. | |||||||||||||||||||||||||
Final IRS Regulations on Repair of Tangible Property | |||||||||||||||||||||||||
In August 2011, the IRS issued Revenue Procedure 2011-43 providing a safe harbor method of tax accounting for repair costs associated with electric transmission and distribution property. In September 2012, with the filing of its 2011 tax return, PHI adopted the safe harbor for the 2011 tax year. In September 2013, the IRS published final regulations regarding the tax treatment of costs incurred to acquire, produce or improve tangible property. In February 2014, the IRS issued revenue procedures that describe how taxpayers should implement the final regulations. The final repair regulations and the related revenue procedures did not modify the guidance set forth in Revenue Procedure 2011-43 that the Unit of Property for electric transmission and distribution network assets is determined by the taxpayer’s particular facts and circumstances. The final regulations did not have a material impact on PHI’s consolidated financial statements. | |||||||||||||||||||||||||
Other Taxes | |||||||||||||||||||||||||
Other taxes for continuing operations are shown below. The annual amounts include $407 million, $422 million and $426 million for the years ended December 31, 2014, 2013 and 2012, respectively, related to Power Delivery, which are recoverable through rates. | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Gross Receipts/Delivery | $ | 123 | $ | 133 | $ | 135 | |||||||||||||||||||
Property | 84 | 77 | 75 | ||||||||||||||||||||||
County Fuel and Energy | 143 | 153 | 160 | ||||||||||||||||||||||
Environmental, Use and Other | 63 | 65 | 62 | ||||||||||||||||||||||
Total | $ | 413 | $ | 428 | $ | 432 | |||||||||||||||||||
Delmarva Power & Light Co/De [Member] | |||||||||||||||||||||||||
INCOME TAXES | (11) 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, PHI’s consolidated federal income tax liability is allocated based upon PHI’s and its subsidiaries’ separate taxable income or loss. | |||||||||||||||||||||||||
The provision for income taxes, reconciliation of income tax expense, and components of deferred income tax liabilities (assets) are shown below. | |||||||||||||||||||||||||
Provision for Income Taxes | |||||||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Current Tax (Benefit) Expense | |||||||||||||||||||||||||
Federal | $ | (45 | ) | $ | (8 | ) | $ | (9 | ) | ||||||||||||||||
State and local | — | — | (1 | ) | |||||||||||||||||||||
Total Current Tax Benefit | (45 | ) | (8 | ) | (10 | ) | |||||||||||||||||||
Deferred Tax Expense (Benefit) | |||||||||||||||||||||||||
Federal | 99 | 53 | 44 | ||||||||||||||||||||||
State and local | 12 | 12 | 11 | ||||||||||||||||||||||
Investment tax credit amortization | (1 | ) | (1 | ) | (1 | ) | |||||||||||||||||||
Total Deferred Tax Expense | 110 | 64 | 54 | ||||||||||||||||||||||
Total Income Tax Expense | $ | 65 | $ | 56 | $ | 44 | |||||||||||||||||||
Reconciliation of Income Tax Expense | |||||||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Income tax at Federal statutory rate | $ | 59 | 35 | % | $ | 51 | 35 | % | $ | 41 | 35 | % | |||||||||||||
Increases (decreases) resulting from: | |||||||||||||||||||||||||
State income taxes, net of federal effect | 9 | 5.3 | % | 8 | 5.5 | % | 6 | 5.1 | % | ||||||||||||||||
Other, net | (3 | ) | (1.8 | )% | (3 | ) | (1.9 | )% | (3 | ) | (2.5 | )% | |||||||||||||
Income Tax Expense | $ | 65 | 38.5 | % | $ | 56 | 38.6 | % | $ | 44 | 37.6 | % | |||||||||||||
On January 9, 2013, the U.S. Court of Appeals for the Federal Circuit issued an opinion in Consolidated Edison Company of New York, Inc. & Subsidiaries v. United States (to which DPL is not a party) that disallowed tax benefits associated with Consolidated Edison’s cross-border lease transaction. As a result of the court’s ruling in this case, PHI determined in the first quarter of 2013 that it could no longer support its current assessment with respect to the likely outcome of tax positions associated with its cross-border energy lease investments held by its wholly owned subsidiary Potomac Capital Investment Corporation, and PHI recorded an after-tax charge of $377 million in the first quarter of 2013. Included in the $377 million charge was an after-tax interest charge of $54 million and this amount was allocated to each member of PHI’s consolidated group as if each member was a separate taxpayer, resulting in DPL recording a $1 million (after-tax) interest benefit in the first quarter of 2013, which is included above in Other, net. | |||||||||||||||||||||||||
Components of Deferred Income Tax Liabilities (Assets) | |||||||||||||||||||||||||
As of December 31, | |||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Deferred Tax Liabilities (Assets) | |||||||||||||||||||||||||
Depreciation and other basis differences related to plant and equipment | $ | 797 | $ | 712 | |||||||||||||||||||||
Deferred taxes on amounts to be collected through future rates | 19 | 16 | |||||||||||||||||||||||
Federal and state net operating losses | (115 | ) | (125 | ) | |||||||||||||||||||||
Pension and other postretirement benefits | 80 | 80 | |||||||||||||||||||||||
Electric restructuring liabilities | (4 | ) | (5 | ) | |||||||||||||||||||||
Other | 101 | 80 | |||||||||||||||||||||||
Total Deferred Tax Liabilities, net | 878 | 758 | |||||||||||||||||||||||
Deferred tax assets included in Current Assets | 16 | 59 | |||||||||||||||||||||||
Deferred tax liabilities included in Other Current Liabilities | (1 | ) | (1 | ) | |||||||||||||||||||||
Total Deferred Tax Liabilities, net non-current | $ | 893 | $ | 816 | |||||||||||||||||||||
The net deferred tax liability represents the tax effect, at presently enacted tax rates, of temporary differences between the financial statement basis and tax basis of assets and liabilities. The portion of the net deferred tax liability applicable to DPL’s operations, which has not been reflected in current service rates, represents income taxes recoverable through future rates, net, and is recorded as a regulatory asset on the balance sheet. No valuation allowance for deferred tax assets was required or recorded at December 31, 2014 and 2013. Federal and state net operating losses generally expire over 20 years from 2029 to 2034. | |||||||||||||||||||||||||
The Tax Reform Act of 1986 repealed the investment tax credit for property placed in service after December 31, 1985, except for certain transition property. Investment tax credits previously earned on DPL’s property continue to be amortized to income over the useful lives of the related property. | |||||||||||||||||||||||||
Reconciliation of Beginning and Ending Balances of Unrecognized Tax Benefits | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Balance as of January 1 | $ | 9 | $ | 9 | $ | 35 | |||||||||||||||||||
Tax positions related to current year: | |||||||||||||||||||||||||
Additions | 1 | — | — | ||||||||||||||||||||||
Reductions | — | — | — | ||||||||||||||||||||||
Tax positions related to prior years: | |||||||||||||||||||||||||
Additions | 13 | — | — | ||||||||||||||||||||||
Reductions | (1 | ) | — | (26 | )(a) | ||||||||||||||||||||
Settlements | — | — | — | ||||||||||||||||||||||
Balance as of December 31 | $ | 22 | $ | 9 | $ | 9 | |||||||||||||||||||
(a) | These reductions of unrecognized tax benefits in 2012 primarily relate to a resolution reached with the Internal Revenue Service (IRS) for determining deductible mixed service costs for additions to property, plant and equipment. | ||||||||||||||||||||||||
Unrecognized Benefits That, If Recognized, Would Affect the Effective Tax Rate | |||||||||||||||||||||||||
Unrecognized tax benefits are related to tax positions that have been taken or are expected to be taken in tax returns that are not recognized in the financial statements because management has either measured the tax benefit at an amount less than the benefit claimed, or expected to be claimed, or has concluded that it is not more likely than not that the tax position will be ultimately sustained. For the majority of these tax positions, the ultimate deductibility is highly certain, but there is uncertainty about the timing of such deductibility. At December 31, 2014, DPL had $1 million of unrecognized tax benefits that, if recognized, would lower the effective tax rate. | |||||||||||||||||||||||||
Interest and Penalties | |||||||||||||||||||||||||
DPL recognizes interest and penalties relating to its uncertain tax positions as an element of income tax expense. For each of the years ended December 31, 2014, 2013 and 2012, DPL recognized less than $1 million of pre-tax interest income as a component of income tax expense. As of December 31, 2014, 2013 and 2012, DPL had accrued interest receivable of $2 million, $2 million and $1 million, respectively, related to effectively settled and uncertain tax positions. | |||||||||||||||||||||||||
Possible Changes to Unrecognized Tax Benefits | |||||||||||||||||||||||||
It is reasonably possible that the amount of the unrecognized tax benefit with respect to some of DPL’s uncertain tax positions will significantly increase or decrease within the next 12 months. PHI and its subsidiaries have entered into discussions with the IRS with the intention of seeking a settlement of all tax issues of DPL for open tax years 2001 through 2011. PHI currently believes that it is possible that a settlement with the IRS may be reached in 2015, which could significantly impact the balances of unrecognized tax benefits and the related interest accruals of DPL. At this time, it is estimated that there will be a $14 million to $18 million decrease in unrecognized tax benefits within the next 12 months. | |||||||||||||||||||||||||
Tax Years Open to Examination | |||||||||||||||||||||||||
DPL, as an indirect subsidiary of PHI, is included on PHI’s consolidated Federal tax return. DPL’s federal income tax liabilities for all years through 2002 have been determined, subject to adjustment to the extent of any net operating loss or other loss or credit carrybacks from subsequent years. The open tax years for the significant states where DPL files state income tax returns (Maryland and Delaware) are the same as for the Federal returns. | |||||||||||||||||||||||||
Final IRS Regulations on Repair of Tangible Property | |||||||||||||||||||||||||
In August 2011, the IRS issued Revenue Procedure 2011-43 providing a safe harbor method of tax accounting for repair costs associated with electric transmission and distribution property. In September 2012, with the filing of its 2011 tax return, PHI adopted the safe harbor for the 2011 tax year. In September 2013, the IRS published final regulations regarding the tax treatment of costs incurred to acquire, produce or improve tangible property. In February 2014, the IRS issued revenue procedures that describe how taxpayers should implement the final regulations. The final repair regulations and the related revenue procedures did not modify the guidance set forth in Revenue Procedure 2011-43 that the Unit of Property for electric transmission and distribution network assets is determined by the taxpayer’s particular facts and circumstances. The final regulations did not have a material impact on DPL’s financial statements. | |||||||||||||||||||||||||
Other Taxes | |||||||||||||||||||||||||
Taxes other than income taxes for each year are shown below. These amounts are recoverable through rates. | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Gross Receipts/Delivery | $ | 16 | $ | 15 | $ | 14 | |||||||||||||||||||
Property | 24 | 24 | 21 | ||||||||||||||||||||||
Environmental, Use and Other | 2 | 1 | 1 | ||||||||||||||||||||||
Total | $ | 42 | $ | 40 | $ | 36 | |||||||||||||||||||
Potomac Electric Power Co [Member] | |||||||||||||||||||||||||
INCOME TAXES | (10) 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, PHI’s consolidated federal income tax liability is allocated based upon PHI’s and its subsidiaries’ separate taxable income or loss. | |||||||||||||||||||||||||
The provision for income taxes, reconciliation of income tax expense, and components of deferred income tax liabilities (assets) are shown below. | |||||||||||||||||||||||||
Provision for Income Taxes | |||||||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Current Tax Benefit | |||||||||||||||||||||||||
Federal | $ | (79 | ) | $ | (39 | ) | $ | (84 | ) | ||||||||||||||||
State and local | (3 | ) | (1 | ) | (27 | ) | |||||||||||||||||||
Total Current Tax Benefit | (82 | ) | (40 | ) | (111 | ) | |||||||||||||||||||
Deferred Tax Expense (Benefit) | |||||||||||||||||||||||||
Federal | 150 | 96 | 127 | ||||||||||||||||||||||
State and local | 24 | 24 | 33 | ||||||||||||||||||||||
Investment tax credit amortization | — | (1 | ) | (1 | ) | ||||||||||||||||||||
Total Deferred Tax Expense | 174 | 119 | 159 | ||||||||||||||||||||||
Total Income Tax Expense | $ | 92 | $ | 79 | $ | 48 | |||||||||||||||||||
Reconciliation of Income Tax Expense | |||||||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Income tax at Federal statutory rate | $ | 92 | 35 | % | $ | 80 | 35 | % | $ | 61 | 35 | % | |||||||||||||
Increases (decreases) resulting from: | |||||||||||||||||||||||||
State income taxes, net of federal effect | 15 | 5.7 | % | 13 | 5.7 | % | 10 | 5.7 | % | ||||||||||||||||
Asset removal costs | (12 | ) | (4.6 | )% | (14 | ) | (6.1 | )% | (11 | ) | (6.3 | )% | |||||||||||||
Change in estimates and interest related to uncertain and effectively settled tax positions | (1 | ) | (0.4 | )% | (3 | ) | (1.3 | )% | (11 | ) | (6.3 | )% | |||||||||||||
Other, net | (2 | ) | (0.7 | )% | 3 | 1.2 | % | (1 | ) | (0.5 | )% | ||||||||||||||
Income Tax Expense | $ | 92 | 35 | % | $ | 79 | 34.5 | % | $ | 48 | 27.6 | % | |||||||||||||
On January 9, 2013, the U.S. Court of Appeals for the Federal Circuit issued an opinion in Consolidated Edison Company of New York, Inc. & Subsidiaries v. United States (to which Pepco is not a party) that disallowed tax benefits associated with Consolidated Edison’s cross-border lease transaction. As a result of the court’s ruling in this case, PHI determined in the first quarter of 2013 that it could no longer support its current assessment with respect to the likely outcome of tax positions associated with its cross-border energy lease investments held by its wholly owned subsidiary Potomac Capital Investment Corporation, and PHI recorded an after-tax charge of $377 million in the first quarter of 2013. Included in the $377 million charge was an after-tax interest charge of $54 million and this amount was allocated to each member of PHI’s consolidated group as if each member was a separate taxpayer, resulting in Pepco recording a $5 million (after-tax) interest benefit in the first quarter of 2013, which is included above in Change in estimates and interest related to uncertain and effectively settled tax positions. | |||||||||||||||||||||||||
During 2012, Pepco recorded income tax benefits of $10 million (after-tax) related to uncertain and effectively settled tax positions primarily due to the effective settlement with the Internal Revenue Service (IRS) with respect to the methodology used historically to calculate deductible mixed service costs and the expiration of the statute of limitations associated with an uncertain tax position. The effective income tax rate also reflects an increase in deductible asset removal costs for Pepco in 2012 related to a higher level of asset retirements. | |||||||||||||||||||||||||
Components of Deferred Income Tax Liabilities (Assets) | |||||||||||||||||||||||||
At December 31, | |||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Deferred Tax Liabilities (Assets) | |||||||||||||||||||||||||
Depreciation and other basis differences related to plant and equipment | $ | 1,423 | $ | 1,240 | |||||||||||||||||||||
Pension and other postretirement benefits | 103 | 105 | |||||||||||||||||||||||
Deferred taxes on amounts to be collected through future rates | 59 | 43 | |||||||||||||||||||||||
Federal and state net operating losses | (186 | ) | (169 | ) | |||||||||||||||||||||
Other | 180 | 145 | |||||||||||||||||||||||
Total Deferred Tax Liabilities, net | 1,579 | 1,364 | |||||||||||||||||||||||
Deferred tax assets included in Current Assets | 14 | 48 | |||||||||||||||||||||||
Deferred tax liabilities included in Other Current Liabilities | (9 | ) | — | ||||||||||||||||||||||
Total Deferred Tax Liabilities, net non-current | $ | 1,584 | $ | 1,412 | |||||||||||||||||||||
The net deferred tax liability represents the tax effect, at presently enacted tax rates, of temporary differences between the financial statement basis and tax basis of assets and liabilities. The portion of the net deferred tax liability applicable to Pepco’s operations, which has not been reflected in current service rates, represents income taxes recoverable through future rates, net, and is recorded as a regulatory asset on the balance sheet. No valuation allowance for deferred tax assets was required or recorded at December 31, 2014 and 2013. Federal and state net operating losses generally expire over 20 years from 2029 to 2034. | |||||||||||||||||||||||||
The Tax Reform Act of 1986 repealed the investment tax credit for property placed in service after December 31, 1985, except for certain transition property. Investment tax credits previously earned on Pepco’s property continue to be amortized to income over the useful lives of the related property. | |||||||||||||||||||||||||
Reconciliation of Beginning and Ending Balances of Unrecognized Tax Benefits | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Balance as of January 1 | $ | 101 | $ | 91 | $ | 173 | |||||||||||||||||||
Tax positions related to current year: | |||||||||||||||||||||||||
Additions | 1 | 1 | — | ||||||||||||||||||||||
Reductions | (2 | ) | — | — | |||||||||||||||||||||
Tax positions related to prior years: | |||||||||||||||||||||||||
Additions | 1 | 12 | 60 | ||||||||||||||||||||||
Reductions | (4 | ) | (3 | ) | (142 | )(a) | |||||||||||||||||||
Settlements | — | — | — | ||||||||||||||||||||||
Balance as of December 31 | $ | 97 | $ | 101 | $ | 91 | |||||||||||||||||||
(a) | These reductions of unrecognized tax benefits in 2012 primarily relate to a resolution reached with the IRS for determining deductible mixed service costs for additions to property, plant and equipment. | ||||||||||||||||||||||||
Unrecognized Benefits That, If Recognized, Would Affect the Effective Tax Rate | |||||||||||||||||||||||||
Unrecognized tax benefits are related to tax positions that have been taken or are expected to be taken in tax returns that are not recognized in the financial statements because management has either measured the tax benefit at an amount less than the benefit claimed, or expected to be claimed, or has concluded that it is not more likely than not that the tax position will be ultimately sustained. For the majority of these tax positions, the ultimate deductibility is highly certain, but there is uncertainty about the timing of such deductibility. At December 31, 2014, Pepco had less than $1 million of unrecognized tax benefits that, if recognized, would lower the effective tax rate. | |||||||||||||||||||||||||
Interest and Penalties | |||||||||||||||||||||||||
Pepco recognizes interest and penalties relating to its uncertain tax positions as an element of income tax expense. For the years ended December 31, 2014, 2013 and 2012, Pepco recognized $2 million of pre-tax interest income ($1 million after-tax), $5 million of pre-tax interest income ($3 million after-tax), and $18 million of pre-tax interest income ($11 million after-tax), respectively, as a component of income tax expense. As of December 31, 2014, 2013 and 2012, Pepco had accrued interest receivable of $9 million, $9 million and $5 million, respectively, related to effectively settled and uncertain tax positions. | |||||||||||||||||||||||||
Possible Changes to Unrecognized Tax Benefits | |||||||||||||||||||||||||
It is reasonably possible that the amount of the unrecognized tax benefit with respect to some of Pepco’s uncertain tax positions will significantly increase or decrease within the next 12 months. PHI and its subsidiaries have entered into discussions with the IRS with the intention of seeking a settlement of all tax issues of Pepco for open tax years 2001 through 2011. PHI currently believes that it is possible that a settlement with the IRS may be reached in 2015, which could significantly impact the balances of unrecognized tax benefits and the related interest accruals of Pepco. At this time, it is estimated that there will be a $65 million to $85 million decrease in unrecognized tax benefits within the next 12 months. | |||||||||||||||||||||||||
Tax Years Open to Examination | |||||||||||||||||||||||||
Pepco, as a direct subsidiary of PHI, is included on PHI’s consolidated Federal income tax return. Pepco’s federal income tax liabilities for all years through 2002 have been determined, subject to adjustment to the extent of any net operating loss or other loss or credit carrybacks from subsequent years. The open tax years for the significant states where Pepco files state income tax returns (District of Columbia and Maryland) are the same as for the Federal returns. As a result of the final determination of these years, Pepco filed amended state returns requesting $20 million in refunds which are subject to review by the various states. To date, Pepco has received $4 million in refunds and legislation has been enacted in the District of Columbia (subject to a 30-day Congressional review period before becoming law) which will allow for the recovery of the remaining $16 million in refunds. | |||||||||||||||||||||||||
Final IRS Regulations on Repair of Tangible Property | |||||||||||||||||||||||||
In August 2011, the IRS issued Revenue Procedure 2011-43 providing a safe harbor method of tax accounting for repair costs associated with electric transmission and distribution property. In September 2012, with the filing of its 2011 tax return, PHI adopted the safe harbor for the 2011 tax year. In September 2013, the IRS published final regulations regarding the tax treatment of costs incurred to acquire, produce or improve tangible property. In February 2014, the IRS issued revenue procedures that describe how taxpayers should implement the final regulations. The final repair regulations and the related revenue procedures did not modify the guidance set forth in Revenue Procedure 2011-43 that the Unit of Property for electric transmission and distribution network assets is determined by the taxpayer’s particular facts and circumstances. The final regulations did not have a material impact on Pepco’s financial statements. | |||||||||||||||||||||||||
Other Taxes | |||||||||||||||||||||||||
Taxes other than income taxes for each year are shown below. These amounts are recoverable through rates. | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Gross Receipts/Delivery | $ | 107 | $ | 108 | $ | 106 | |||||||||||||||||||
Property | 51 | 45 | 46 | ||||||||||||||||||||||
County Fuel and Energy | 143 | 153 | 160 | ||||||||||||||||||||||
Environmental, Use and Other | 62 | 62 | 60 | ||||||||||||||||||||||
Total | $ | 363 | $ | 368 | $ | 372 | |||||||||||||||||||
Atlantic City Electric Co [Member] | |||||||||||||||||||||||||
INCOME TAXES | (10) 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, PHI’s consolidated federal income tax liability is allocated based upon PHI’s and its subsidiaries’ separate taxable income or loss. | |||||||||||||||||||||||||
The provision for consolidated income taxes, reconciliation of consolidated income tax expense, and components of consolidated deferred income tax liabilities (assets) are shown below. | |||||||||||||||||||||||||
Provision for Consolidated Income Taxes | |||||||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Current Tax (Benefit) Expense | |||||||||||||||||||||||||
Federal | $ | (7 | ) | $ | (23 | ) | $ | (31 | ) | ||||||||||||||||
State and local | (2 | ) | (10 | ) | (12 | ) | |||||||||||||||||||
Total Current Tax Benefit | (9 | ) | (33 | ) | (43 | ) | |||||||||||||||||||
Deferred Tax Expense (Benefit) | |||||||||||||||||||||||||
Federal | 30 | 28 | 46 | ||||||||||||||||||||||
State and local | 7 | 25 | 16 | ||||||||||||||||||||||
Investment tax credit amortization | — | (1 | ) | (1 | ) | ||||||||||||||||||||
Total Deferred Tax Expense | 37 | 52 | 61 | ||||||||||||||||||||||
Total Consolidated Income Tax Expense | $ | 28 | $ | 19 | $ | 18 | |||||||||||||||||||
Reconciliation of Consolidated Income Tax Expense | |||||||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Income tax at Federal statutory rate | $ | 26 | 35 | % | $ | 24 | 35 | % | $ | 19 | 35 | % | |||||||||||||
Increases (decreases) resulting from: | |||||||||||||||||||||||||
State income taxes, net of federal effect | 4 | 5.5 | % | 5 | 7.2 | % | 3 | 5.7 | % | ||||||||||||||||
Change in estimates and interest related to uncertain and effectively settled tax positions | (1 | ) | (1.4 | ) | (9 | ) | (13.0 | )% | (1 | ) | (1.9 | )% | |||||||||||||
Plant basis adjustments | — | — | (2 | ) | (2.9 | )% | (1 | ) | (1.9 | )% | |||||||||||||||
Investment tax credit amortization | — | — | (1 | ) | (1.4 | )% | (1 | ) | (1.9 | )% | |||||||||||||||
Other, net | (1 | ) | (0.7 | )% | 2 | 2.6 | % | (1 | ) | (1.0 | )% | ||||||||||||||
Consolidated Income Tax Expense | $ | 28 | 38.4 | % | $ | 19 | 27.5 | % | $ | 18 | 34 | % | |||||||||||||
On January 9, 2013, the U.S. Court of Appeals for the Federal Circuit issued an opinion in Consolidated Edison Company of New York, Inc. & Subsidiaries v. United States (to which ACE is not a party) that disallowed tax benefits associated with Consolidated Edison’s cross-border lease transaction. As a result of the court’s ruling in this case, PHI determined in the first quarter of 2013 that it could no longer support its current assessment with respect to the likely outcome of tax positions associated with its cross-border energy lease investments held by its wholly owned subsidiary Potomac Capital Investment Corporation, and PHI recorded an after-tax charge of $377 million in the first quarter of 2013. Included in the $377 million charge was an after-tax interest charge of $54 million and this amount was allocated to each member of PHI’s consolidated group as if each member was a separate taxpayer, resulting in ACE recording a $6 million (after-tax) interest benefit in the first quarter of 2013, which is included above in Change in estimates and interest related to uncertain and effectively settled tax positions. | |||||||||||||||||||||||||
During 2012, ACE recorded a $1 million benefit associated with the effective settlement with the IRS with respect to the methodology used historically to calculate deductible mixed service costs. | |||||||||||||||||||||||||
Components of Consolidated Deferred Income Tax Liabilities (Assets) | |||||||||||||||||||||||||
As of December 31, | |||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Deferred Tax Liabilities (Assets) | |||||||||||||||||||||||||
Depreciation and other basis differences related to plant and equipment | $ | 691 | $ | 627 | |||||||||||||||||||||
Deferred taxes on amounts to be collected through future rates | 16 | 16 | |||||||||||||||||||||||
Payment for termination of purchased power contracts with NUGs | 38 | 43 | |||||||||||||||||||||||
Deferred electric service and electric restructuring liabilities | 71 | 96 | |||||||||||||||||||||||
Pension and other postretirement benefits | 25 | 29 | |||||||||||||||||||||||
Purchased energy | 1 | 2 | |||||||||||||||||||||||
Federal and state net operating losses | (26 | ) | (49 | ) | |||||||||||||||||||||
Other | 39 | 55 | |||||||||||||||||||||||
Total Deferred Tax Liabilities, net | 855 | 819 | |||||||||||||||||||||||
Deferred tax assets included in Current Assets | 10 | 15 | |||||||||||||||||||||||
Deferred tax liabilities included in Other Current Liabilities | — | (1 | ) | ||||||||||||||||||||||
Total Consolidated Deferred Tax Liabilities, net non-current | $ | 865 | $ | 833 | |||||||||||||||||||||
The net deferred tax liability represents the tax effect, at presently enacted tax rates, of temporary differences between the financial statement basis and tax basis of assets and liabilities. The portion of the net deferred tax liability applicable to ACE’s operations, which has not been reflected in current service rates, represents income taxes recoverable through future rates, net, and is recorded as a regulatory asset on the balance sheet. No valuation allowance for deferred tax assets was required or recorded at December 31, 2014 and 2013. Federal and State net operating losses generally expire over 20 years from 2029 to 2032. | |||||||||||||||||||||||||
The Tax Reform Act of 1986 repealed the investment tax credit for property placed in service after December 31, 1985, except for certain transition property. Investment tax credits previously earned on ACE’s property continue to be amortized to income over the useful lives of the related property. | |||||||||||||||||||||||||
Reconciliation of Beginning and Ending Balances of Unrecognized Tax Benefits | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Balance as of January 1 | $ | 9 | $ | 17 | $ | 79 | |||||||||||||||||||
Tax positions related to current year: | |||||||||||||||||||||||||
Additions | 1 | 2 | 1 | ||||||||||||||||||||||
Reductions | — | — | — | ||||||||||||||||||||||
Tax positions related to prior years: | |||||||||||||||||||||||||
Additions | 5 | 1 | 8 | ||||||||||||||||||||||
Reductions | (2 | ) | (5 | ) | (69 | )(a) | |||||||||||||||||||
Settlements | — | (6 | ) | (2 | ) | ||||||||||||||||||||
Balance as of December 31 | $ | 13 | $ | 9 | $ | 17 | |||||||||||||||||||
(a) | These reductions of unrecognized tax benefits in 2012 primarily relate to a resolution reached with the IRS for determining deductible mixed service costs for additions to property, plant and equipment. | ||||||||||||||||||||||||
Unrecognized Benefits That, If Recognized, Would Affect the Effective Tax Rate | |||||||||||||||||||||||||
Unrecognized tax benefits are related to tax positions that have been taken or are expected to be taken in tax returns that are not recognized in the financial statements because management has either measured the tax benefit at an amount less than the benefit claimed, or expected to be claimed, or has concluded that it is not more likely than not that the tax position will be ultimately sustained. For the majority of these tax positions, the ultimate deductibility is highly certain, but there is uncertainty about the timing of such deductibility. At December 31, 2014, ACE had no unrecognized tax benefits that, if recognized, would lower the effective tax rate. | |||||||||||||||||||||||||
Interest and Penalties | |||||||||||||||||||||||||
ACE recognizes interest and penalties relating to its uncertain tax positions as an element of income tax expense. For the years ended December 31, 2014, 2013 and 2012, ACE recognized $1 million of pre-tax interest income (less than $1 million after-tax), $12 million of pre-tax interest income ($7 million after-tax), and $2 million of pre-tax interest income ($1 million after-tax), respectively, as a component of income tax expense. As of December 31, 2014, 2013 and 2012, ACE had accrued interest receivable of $14 million, $14 million and $7 million, respectively, related to effectively settled and uncertain tax positions. | |||||||||||||||||||||||||
Possible Changes to Unrecognized Tax Benefits | |||||||||||||||||||||||||
It is reasonably possible that the amount of the unrecognized tax benefit with respect to some of ACE’s uncertain tax positions will significantly increase or decrease within the next 12 months. PHI and its subsidiaries have entered into discussions with the IRS with the intention of seeking a settlement of all tax issues of ACE for open tax years 2001 through 2011. PHI currently believes that it is possible that a settlement with the IRS may be reached in 2015, which could significantly impact the balances of unrecognized tax benefits and the related interest accruals of ACE. At this time, it is estimated that there will be a $6 million to $8 million decrease in unrecognized tax benefits within the next 12 months. | |||||||||||||||||||||||||
Tax Years Open to Examination | |||||||||||||||||||||||||
ACE, as an indirect subsidiary of PHI, is included on PHI’s consolidated Federal tax return. ACE’s federal income tax liabilities for all years through 2002 have been determined, subject to adjustment to the extent of any net operating loss or other loss or credit carrybacks from subsequent years. The open tax years for the significant states where ACE files state income tax returns (New Jersey and Pennsylvania) are the same as for the Federal returns. As a result of the final determination of these years, ACE filed amended state returns receiving $1 million in refunds. | |||||||||||||||||||||||||
Final IRS Regulations on Repair of Tangible Property | |||||||||||||||||||||||||
In August 2011, the IRS issued Revenue Procedure 2011-43 providing a safe harbor method of tax accounting for repair costs associated with electric transmission and distribution property. In September 2012, with the filing of its 2011 tax return, PHI adopted the safe harbor for the 2011 tax year. In September 2013, the IRS published final regulations regarding the tax treatment of costs incurred to acquire, produce or improve tangible property. In February 2014, the IRS issued revenue procedures that describe how taxpayers should implement the final regulations. The final repair regulations and the related revenue procedures did not modify the guidance set forth in Revenue Procedure 2011-43 that the Unit of Property for electric transmission and distribution network assets is determined by the taxpayer’s particular facts and circumstances. The final regulations did not have a material impact on ACE’s consolidated financial statements. | |||||||||||||||||||||||||
Other Taxes | |||||||||||||||||||||||||
Taxes other than income taxes for each year are shown below. These amounts are recoverable through rates. | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Gross Receipts/Delivery | $ | — | $ | 10 | $ | 14 | |||||||||||||||||||
Property | 3 | 3 | 3 | ||||||||||||||||||||||
Environmental, Use and Other | (1 | ) | 1 | 1 | |||||||||||||||||||||
Total | $ | 2 | $ | 14 | $ | 18 | |||||||||||||||||||
StockBased_Compensation_Divide
Stock-Based Compensation, Dividend Restrictions, and Calculations of Earnings Per Share of Common Stock | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||
Stock-Based Compensation, Dividend Restrictions, and Calculations of Earnings Per Share of Common Stock | (12) STOCK-BASED COMPENSATION, DIVIDEND RESTRICTIONS, AND CALCULATIONS OF EARNINGS PER SHARE OF COMMON STOCK | ||||||||||||
Stock-Based Compensation | |||||||||||||
Pepco Holdings maintains the 2012 Long-Term Incentive Plan (2012 LTIP), the successor plan to the Long-Term Incentive Plan (LTIP), the objective of which is to increase shareholder value by providing long-term and equity incentives to reward officers, key employees and non-employee directors of Pepco Holdings and its subsidiaries and to increase the ownership of Pepco Holdings common stock by such individuals. Any officer, key employee or non-employee director of Pepco Holdings or its subsidiaries may be designated as a participant. Under these plans, awards to officers, key employees and non-employee directors may be in the form of restricted stock, restricted stock units, stock options, performance shares and/or units, stock appreciation rights, unrestricted stock and dividend equivalents. At inception, 10 million and 8 million shares of common stock were authorized for issuance under the LTIP and the 2012 LTIP, respectively. The LTIP expired in accordance with its terms in 2012 and no new awards may be granted thereunder. | |||||||||||||
Total stock-based compensation expense recorded in the consolidated statements of income (loss) for the years ended December 31, 2014, 2013 and 2012 was $18 million, $12 million and $11 million, respectively, all of which was associated with restricted stock, restricted stock unit and unrestricted stock awards. | |||||||||||||
No material amount of stock compensation expense was capitalized for the years ended December 31, 2014, 2013 and 2012. | |||||||||||||
Restricted Stock and Restricted Stock Unit Awards | |||||||||||||
Description of Awards | |||||||||||||
A number of programs have been established under the LTIP and the 2012 LTIP involving the issuance of restricted stock and restricted stock unit awards, including awards of performance-based restricted stock and restricted stock units, and time-based restricted stock and restricted stock units. A summary of each of these programs is as follows: | |||||||||||||
• | Under the performance-based program, performance criteria are selected and measured over the specified performance period. Depending on the extent to which the performance criteria are satisfied, the participants are eligible to earn shares of common stock at the end of the performance period, ranging from 25% to 200% of the target award, and dividend equivalents accrued thereon. | ||||||||||||
• | Generally, time-based restricted stock and restricted stock unit award opportunities have a requisite service period of up to three years and, with respect to restricted stock awards, participants have the right to receive dividends on the shares during the vesting period. Under restricted stock unit awards, dividends are credited quarterly in the form of additional restricted stock units, which are paid when vested at the end of the service period. | ||||||||||||
• | PHI granted a total of 21,138 and 37,735 restricted stock units in 2014 and 2013, respectively, to its non-employee directors under the 2012 LTIP. These restricted stock units vest over a service period which ends upon the first to occur of (i) one year after the date of grant or (ii) the date of the next annual meeting of stockholders. These awards represent the equity portion of the annual retainer paid to non-employee directors for their service as a director of PHI. | ||||||||||||
Activity for the year | |||||||||||||
The 2014 activity for restricted stock, performance-based restricted stock, time-based restricted stock units and performance-based restricted stock unit awards, is summarized in the table below. For performance-based restricted stock and restricted stock unit awards, the table reflects awards projected, for purposes of computing the weighted average grant date fair value, to achieve 100% of targeted performance criteria for each outstanding award cycle. | |||||||||||||
Weighted | |||||||||||||
Number | Average Grant | ||||||||||||
of Shares | Date Fair Value | ||||||||||||
Balance as of January 1, 2014 (a) | |||||||||||||
Restricted stock | — | $ | — | ||||||||||
Performance-based restricted stock | — | — | |||||||||||
Time-based restricted stock units | 583,554 | 19.34 | |||||||||||
Performance-based restricted stock units | 1,069,830 | 19.06 | |||||||||||
Total | 1,653,384 | ||||||||||||
Granted during 2014 | |||||||||||||
Restricted stock | 183,486 | 26.8 | |||||||||||
Performance-based restricted stock | 70,276 | 27.01 | |||||||||||
Time-based restricted stock units | 222,350 | 19.77 | |||||||||||
Performance-based restricted stock units | 448,107 | 18.53 | |||||||||||
Total | 924,219 | ||||||||||||
Vested during 2014 | |||||||||||||
Restricted stock | (129,321 | ) | 26.8 | ||||||||||
Time-based restricted stock units | (336,946 | ) | 19.25 | ||||||||||
Performance-based restricted stock units | (349,020 | ) | 21.07 | ||||||||||
Total | (815,287 | ) | |||||||||||
Forfeited during 2014 | |||||||||||||
Performance-based restricted stock units | (340,936 | ) | 19.54 | ||||||||||
Total | (340,936 | ) | |||||||||||
Balance as of December 31, 2014 (b) | |||||||||||||
Restricted stock | 54,165 | 26.8 | |||||||||||
Performance-based restricted stock | 70,276 | 27.01 | |||||||||||
Time-based restricted stock units | 468,958 | 19.61 | |||||||||||
Performance-based restricted stock units | 827,981 | 17.73 | |||||||||||
Total | 1,421,380 | ||||||||||||
(a) | The balance as of January 1, 2014 does not include 59,523 time-based restricted stock units and 31,403 performance-based restricted stock units that were vested but had not yet settled. | ||||||||||||
(b) | The balance as of December 31, 2014 does not include 36,110 shares of restricted stock, 94,685 time-based restricted stock units and 59,797 performance-based restricted stock units that were vested but had not yet settled. | ||||||||||||
Grants included in the table above reflect 2014 grants of restricted stock, performance-based restricted stock, time-based restricted stock units and performance-based restricted stock unit awards. PHI recognizes compensation expense related to restricted stock, performance-based restricted stock, time-based restricted stock units and performance-based restricted stock unit awards based on the fair value of the awards at date of grant. The fair value is based on the market value of PHI common stock at the date the award opportunity is granted. The estimated fair value of the performance-based awards is also a function of PHI’s projected future performance relative to established performance criteria and the resulting payout of shares based on the achieved performance levels. PHI employed a Monte Carlo simulation to forecast PHI’s performance relative to the performance criteria and to estimate the potential payout of shares under the performance-based awards. | |||||||||||||
The following table provides the weighted average grant date fair value per share of those awards granted during each of the years ended December 31, 2014, 2013 and 2012: | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Weighted average grant-date fair value of each restricted stock award granted during the year | $ | 26.8 | $ | — | $ | — | |||||||
Weighted average grant-date fair value of each performance-based restricted stock award granted during the year | $ | 27.01 | $ | — | $ | — | |||||||
Weighted average grant-date fair value of each unrestricted stock award granted during the year | $ | — | $ | — | $ | 18.85 | |||||||
Weighted average grant-date fair value of each time-based restricted stock unit award granted during the year | $ | 19.77 | $ | 19.7 | $ | 19.69 | |||||||
Weighted average grant-date fair value of each performance-based restricted stock unit award granted during the year | $ | 18.53 | $ | 17.03 | $ | 21.13 | |||||||
As of December 31, 2014, there was approximately $12 million of future compensation cost (net of estimated forfeitures) related to restricted stock unit awards granted under the LTIP and the 2012 LTIP that PHI expects to recognize over a weighted-average period of approximately two years. | |||||||||||||
Stock Options | |||||||||||||
Stock options to purchase shares of PHI’s common stock granted under the LTIP and the 2012 LTIP must have an exercise price at least equal to the fair market value of the underlying stock on the grant date. Stock options generally become exercisable on a specified vesting date or dates. All stock options must have an expiration date of no greater than ten years from the date of grant. No options have been granted under the LTIP or the 2012 LTIP since 2002. As of December 31, 2012, all outstanding stock options under predecessor plans have been exercised or expired. Total intrinsic value and tax benefits recognized for stock options exercised in 2012 were immaterial. | |||||||||||||
Directors’ Deferred Compensation | |||||||||||||
Under the Pepco Holdings’ Executive and Director Deferred Compensation Plan, Pepco Holdings non-employee directors may elect to defer all or part of their cash retainer and meeting fees. Deferred retainer or meeting fees, at the election of the director, can be credited with interest at the prime rate or the return on selected investment funds or can be deemed invested in phantom shares of Pepco Holdings common stock on which dividend equivalent accruals are credited when dividends are paid on the common stock (or a combination of these options). All deferrals are settled in cash. The amount deferred by directors for each of the years ended December 31, 2014, 2013 and 2012 was not material. | |||||||||||||
Compensation expense recognized in respect of dividends and the increase in fair value was $1 million for the year ended December 31, 2014 and not material for each of the years ended December 31, 2013 and 2012. The deferred compensation balances under this program were approximately $2 million at December 31, 2014 and 2013. | |||||||||||||
A separate deferral option under the 2012 LTIP gives non-employee directors the right to elect to defer the receipt of common stock upon vesting of restricted stock unit awards. | |||||||||||||
Dividend Restrictions | |||||||||||||
PHI, on a stand-alone basis, generates no operating income of its own. Accordingly, its ability to pay dividends to its shareholders depends on dividends received from its subsidiaries. In addition to their future financial performance, the ability of PHI’s direct and indirect subsidiaries to pay dividends is subject to limits imposed by: (i) state corporate laws, which impose limitations on the funds that can be used to pay dividends and, in the case of ACE, the regulatory requirement that it obtain the prior approval of the NJBPU before dividends can be paid if its equity as a percent of its total capitalization, excluding securitization debt, falls below 30%; (ii) the prior rights of holders of mortgage bonds and other long-term debt issued by the subsidiaries, and any other restrictions imposed in connection with the incurrence of liabilities; and (iii) certain provisions of ACE’s charter that impose restrictions on payment of common stock dividends for the benefit of preferred stockholders. Pepco, DPL and ACE have no shares of preferred stock outstanding at December 31, 2014. Currently, the capitalization ratio limitation to which ACE is subject and the restriction in the ACE charter do not limit ACE’s ability to pay common stock dividends. As further described in Note (10), “Debt,” PHI, Pepco, DPL and ACE have restrictions on total indebtedness in relation to total capitalization under the credit facility. | |||||||||||||
PHI had approximately $565 million and $595 million of retained earnings free of restrictions at December 31, 2014 and 2013, respectively. These amounts represent the total retained earnings balances at those dates. The amount of restricted net assets for PHI’s consolidated subsidiaries at December 31, 2014 is $2,547 million. | |||||||||||||
For the years ended December 31, 2014, 2013 and 2012, dividends paid by PHI’s subsidiaries were as follows: | |||||||||||||
Subsidiary | 2014 | 2013 | 2012 | ||||||||||
(millions of dollars) | |||||||||||||
Pepco (paid to PHI) | $ | 86 | $ | 46 | $ | 35 | |||||||
DPL (paid to Conectiv) | 100 | 30 | — | ||||||||||
ACE (paid to Conectiv) | 26 | 60 | 35 | ||||||||||
Total | $ | 212 | $ | 136 | $ | 70 | |||||||
Calculations of Earnings per Share of Common Stock | |||||||||||||
The numerator and denominator for basic and diluted earnings per share of common stock calculations are shown below. | |||||||||||||
For the Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(millions of dollars, except per share data) | |||||||||||||
Income (Numerator): | |||||||||||||
Net income from continuing operations | $ | 242 | $ | 110 | $ | 218 | |||||||
Net (loss) income from discontinued operations | — | (322 | ) | 67 | |||||||||
Net income (loss) | $ | 242 | $ | (212 | ) | $ | 285 | ||||||
Shares (Denominator) (in millions): | |||||||||||||
Weighted average shares outstanding for basic computation: | |||||||||||||
Average shares outstanding | 251 | 246 | 229 | ||||||||||
Adjustment to shares outstanding | — | — | — | ||||||||||
Weighted Average Shares Outstanding for Computation of Basic Earnings Per Share of Common Stock | 251 | 246 | 229 | ||||||||||
Net effect of potentially dilutive shares (a) | 1 | — | 1 | ||||||||||
Weighted Average Shares Outstanding for Computation of Diluted Earnings Per Share of Common Stock | 252 | 246 | 230 | ||||||||||
Basic earnings per share of common stock from continuing operations | $ | 0.96 | $ | 0.45 | $ | 0.95 | |||||||
Basic (loss) earnings per share of common stock from discontinued operations | — | (1.31 | ) | 0.3 | |||||||||
Basic earnings (loss) per share | $ | 0.96 | $ | (0.86 | ) | $ | 1.25 | ||||||
Diluted earnings per share of common stock from continuing operations | $ | 0.96 | $ | 0.45 | $ | 0.95 | |||||||
Diluted (loss) earnings per share of common stock from discontinued operations | — | (1.31 | ) | 0.29 | |||||||||
Diluted earnings (loss) per share | $ | 0.96 | $ | (0.86 | ) | $ | 1.24 | ||||||
(a) | There were no options to purchase shares of common stock that were excluded from the calculation of diluted earnings per share for the years ended December 31, 2014, 2013 and 2012. | ||||||||||||
Equity Forward Transaction | |||||||||||||
During 2012, PHI entered into an equity forward transaction in connection with a public offering of PHI common stock. Pursuant to the terms of this transaction, a forward counterparty borrowed 17,922,077 shares of PHI’s common stock from third parties and sold them to a group of underwriters for $19.25 per share, less an underwriting discount equal to $0.67375 per share. Under the terms of the equity forward transaction, upon physical settlement thereof, PHI was required to issue and deliver shares of PHI common stock to the forward counterparty at the then applicable forward sale price. The forward sale price was initially determined to be $18.57625 per share at the time the equity forward transaction was entered into and was subject to reduction from time to time in accordance with the terms of the equity forward transaction. PHI believed that the equity forward transaction substantially eliminated future equity price risk because the forward sale price was determinable as of the date that PHI entered into the equity forward transaction and was only reduced pursuant to the contractual terms of the equity forward transaction through the settlement date, which reductions were not affected by a future change in the market price of the PHI common stock. On February 27, 2013, PHI physically settled the equity forward at the then applicable forward sale price of $17.39 per share. The proceeds of approximately $312 million were used to repay outstanding commercial paper, a portion of which had been issued in order to make capital contributions to the utilities, and for general corporate purposes. | |||||||||||||
Direct Stock Purchase and Dividend Reinvestment Plan | |||||||||||||
PHI maintains a Direct Stock Purchase and Dividend Reinvestment Plan (DRP) through which participants may reinvest cash dividends. In addition, participants can make purchases of shares of PHI common stock through the investment of not less than $25 per purchase nor more than $300,000 each calendar year. Shares of common stock purchased through the DRP may be new shares, treasury shares held by PHI, or, at the election of PHI, shares purchased in the open market. Approximately 1 million, 2 million and 2 million new shares were issued and sold under the DRP in 2014, 2013 and 2012, respectively. | |||||||||||||
Pepco Holdings Common Stock Reserved and Unissued | |||||||||||||
The following table presents Pepco Holdings’ common stock reserved and unissued at December 31, 2014: | |||||||||||||
Name of Plan | Number of | ||||||||||||
Shares | |||||||||||||
DRP | 4,982,016 | ||||||||||||
Pepco Holdings Long-Term Incentive Plan (a) | 6,946,614 | ||||||||||||
Pepco Holdings 2012 Long-Term Incentive Plan | 7,746,773 | ||||||||||||
Pepco Holdings Non-Management Directors Compensation Plan (b) | 457,211 | ||||||||||||
Pepco Holdings Retirement Savings Plan | 4,003,652 | ||||||||||||
Total | 24,136,266 | ||||||||||||
(a) | No further awards will be made under this plan. | ||||||||||||
(b) | This plan expired by its terms on December 31, 2014. |
Preferred_Stock
Preferred Stock | 12 Months Ended |
Dec. 31, 2014 | |
Equity [Abstract] | |
Preferred Stock | (13) PREFERRED STOCK |
In connection with entering into the Merger Agreement (as further described in Note (1), “Organization”), PHI entered into a Subscription Agreement with Exelon, dated April 29, 2014, pursuant to which PHI issued to Exelon 9,000 originally issued shares of Preferred Stock for a purchase price of $90 million on April 30, 2014. In connection with these agreements, Exelon also committed to purchase 1,800 originally issued shares of Preferred Stock for a purchase price of $18 million at the end of each 90-day period following April 29, 2014, up to a maximum of 18,000 shares of Preferred Stock for a maximum aggregate consideration of $180 million. In accordance with the Subscription Agreement, on each of July 29, 2014, October 27, 2014 and January 26, 2015, an additional 1,800 shares of Preferred Stock were issued by PHI to Exelon for a purchase price of $18 million. If the Merger closes or terminates for any reason, no additional shares of Preferred Stock will be issued pursuant to the Subscription Agreement. The holders of the Preferred Stock will be entitled to receive a cumulative, non-participating cash dividend of 0.1% per annum, payable quarterly, when, as and if declared by PHI’s board of directors. The proceeds from the issuance of the Preferred Stock are not subject to restrictions and are intended to serve as a prepayment of any applicable reverse termination fee payable from Exelon to PHI. The Preferred Stock will be redeemable on the terms and in the circumstances set forth in the Merger Agreement and the Subscription Agreement. | |
If the Merger Agreement is terminated under certain circumstances due to the failure to obtain regulatory approvals with respect to the Merger or the breach by Exelon of its obligations in respect of obtaining such regulatory approvals (a Regulatory Termination), PHI will be able to redeem any issued and outstanding Preferred Stock at par value. If the Merger Agreement is terminated for any other reason, PHI will be required to redeem all issued and outstanding Preferred Stock at the purchase price of $10,000 per share, plus any unpaid accrued and accumulated dividends thereupon. | |
PHI has excluded the Preferred Stock from equity at December 31, 2014 since the Preferred Stock contains conditions for redemption that are not solely within the control of PHI. Management determined that the Preferred Stock contains embedded features requiring separate accounting consideration to reflect the potential value to PHI that any issued and outstanding Preferred Stock could be called and redeemed at a nominal par value upon a Regulatory Termination. The embedded call and redemption features on the shares of the Preferred Stock in the event of a Regulatory Termination are separately accounted for as derivatives. The estimated fair value of the derivatives related to the Preferred Stock was $3 million and has been included in current assets (Prepaid expenses and other) with a corresponding increase in Preferred Stock on the consolidated balance sheet at December 31, 2014, representing an increase in the fair value of the Preferred Stock as of such date. These Preferred Stock derivatives were valued using quantitative and qualitative factors at both the issuance date and December 31, 2014, including management’s assessment of the likelihood of a Regulatory Termination. There was no material change in the fair value of these derivatives during the fourth quarter of 2014. The fair value of these derivatives will be determined quarterly, and any increases or decreases in such fair value in future periods would be recorded as income or loss. |
Derivative_Instruments_and_Hed
Derivative Instruments and Hedging Activities | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Derivative Instruments and Hedging Activities | (14) DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||||||||||||||||||||
Derivative Instruments | |||||||||||||||||||||
DPL uses derivative instruments in the form of swaps and over-the-counter options primarily to reduce natural gas commodity price volatility and to limit its customers’ exposure to increases in the market price of natural gas under a hedging program approved by the DPSC. DPL uses these derivatives to manage the commodity price risk associated with its physical natural gas purchase contracts. The natural gas purchase contracts qualify as normal purchases, which are not required to be recorded in the financial statements until settled. All premiums paid and other transaction costs incurred as part of DPL’s 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 from its customers through a fuel adjustment clause approved by the DPSC. In addition, included in derivative assets are PHI Preferred Stock derivatives which are further described in Note (13), “Preferred Stock.” | |||||||||||||||||||||
ACE was ordered to enter into the SOCAs by the NJBPU, and under the SOCAs, ACE would have received payments from or made payments to electric generation facilities based on (i) the difference between the fixed price in the SOCAs and the price for capacity that clears PJM and (ii) ACE’s annual proportion of the total New Jersey load relative to the other EDCs in New Jersey. ACE began applying derivative accounting to two of its SOCAs as of June 30, 2012 because these generators cleared the 2015-2016 PJM capacity auction in May 2012. The fair value of the derivatives embedded in these SOCAs were deferred as regulatory assets or regulatory liabilities because the NJBPU allowed full recovery from ACE’s distribution customers for any payments made by ACE, and ACE’s distribution customers would be entitled to payments received by ACE. | |||||||||||||||||||||
As further discussed in Note (7), “Regulatory Matters,” in light of a Federal district court order, which ruled that the SOCAs are void, invalid and unenforceable, and ACE’s subsequent termination of the SOCAs in the fourth quarter of 2013, ACE derecognized the derivative assets and derivative liabilities related to the SOCAs. | |||||||||||||||||||||
The tables below identify the balance sheet location and fair values of derivative instruments as of December 31, 2014 and 2013: | |||||||||||||||||||||
As of December 31, 2014 | |||||||||||||||||||||
Balance Sheet Caption | Derivatives | Other | Gross | Effects of | Net | ||||||||||||||||
Designated | Derivative | Derivative | Cash | Derivative | |||||||||||||||||
as Hedging | Instruments | Instruments | Collateral | Instruments | |||||||||||||||||
Instruments | and | ||||||||||||||||||||
Netting | |||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Derivative assets (current assets) | $ | — | $ | 3 | $ | 3 | $ | — | $ | 3 | |||||||||||
Derivative liabilities (current liabilities) | — | (4 | ) | (4 | ) | 4 | — | ||||||||||||||
Net Derivative (liability) asset | $ | — | $ | (1 | ) | $ | (1 | ) | $ | 4 | $ | 3 | |||||||||
As of December 31, 2013 | |||||||||||||||||||||
Balance Sheet Caption | Derivatives | Other | Gross | Effects of | Net | ||||||||||||||||
Designated | Derivative | Derivative | Cash | Derivative | |||||||||||||||||
as Hedging | Instruments | Instruments | Collateral | Instruments | |||||||||||||||||
Instruments | and | ||||||||||||||||||||
Netting | |||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Derivative assets (current assets) | $ | — | $ | 1 | $ | 1 | $ | (1 | ) | $ | — | ||||||||||
All derivative assets and liabilities available to be offset under master netting arrangements were netted as of December 31, 2014 and 2013. The amount of cash collateral that was offset against these derivative positions is as follows: | |||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Cash collateral pledged to counterparties with the right to reclaim (a) | $ | 4 | $ | — | |||||||||||||||||
Cash collateral received from counterparties with the obligation to return | $ | — | $ | (1 | ) | ||||||||||||||||
(a) | Includes cash deposits on commodity brokerage accounts. | ||||||||||||||||||||
As of December 31, 2014 and 2013, all PHI cash collateral pledged related to derivative instruments accounted for at fair value was entitled to be offset under master netting agreements. | |||||||||||||||||||||
Derivatives Designated as Hedging Instruments | |||||||||||||||||||||
Cash Flow Hedges Included in Accumulated Other Comprehensive Loss | |||||||||||||||||||||
PHI also may use derivative instruments from time to time to mitigate the effects of fluctuating interest rates on debt issued in connection with the operation of its businesses. In June 2002, PHI entered into several treasury rate lock transactions in anticipation of the issuance of several series of fixed-rate debt commencing in August 2002. Upon issuance of the fixed-rate debt in August 2002, the treasury rate locks were terminated at a loss. The loss has been deferred in AOCL and is being recognized in interest expense over the life of the debt issued as interest payments are made. | |||||||||||||||||||||
The tables below provide details regarding terminated cash flow hedges included in PHI’s consolidated balance sheets as of December 31, 2014 and 2013. The data in the following tables indicate the cumulative net loss after-tax related to terminated cash flow hedges by contract type included in AOCL, the portion of AOCL expected to be reclassified to income during the next 12 months, and the maximum hedge or deferral term: | |||||||||||||||||||||
Contracts | As of December 31, 2014 | Maximum | |||||||||||||||||||
Accumulated | Portion Expected | Term | |||||||||||||||||||
Other | to be Reclassified | ||||||||||||||||||||
Comprehensive Loss | to Income during | ||||||||||||||||||||
After-tax | the Next 12 Months | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Interest rate | $ | 9 | $ | 1 | 212 months | ||||||||||||||||
Contracts | As of December 31, 2013 | Maximum | |||||||||||||||||||
Accumulated | Portion Expected | Term | |||||||||||||||||||
Other | to be Reclassified | ||||||||||||||||||||
Comprehensive Loss | to Income during | ||||||||||||||||||||
After-tax | the Next 12 Months | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Interest rate | $ | 9 | $ | 1 | 224 months | ||||||||||||||||
Other Derivative Activity | |||||||||||||||||||||
PHI, DPL and ACE have certain derivatives that are not in hedge accounting relationships and are not designated as normal purchases or normal sales. These derivatives are recorded at fair value on the consolidated balance sheets with the gain or loss for changes in fair value recorded in income. In addition, in accordance with FASB guidance on regulated operations, regulatory liabilities or regulatory assets of the same amount are recorded on the consolidated balance sheets and the recognition of the derivative gain or loss is deferred because of the DPSC-approved fuel adjustment clause for DPL’s derivatives and the NJBPU order pertaining to the ACE SOCA derivatives. During 2012, ACE had recognized derivative assets and derivative liabilities in connection with the SOCAs referred to in Note (7), “Regulatory Matters.” In 2013, the Federal district court issued an order as described in Note (7), “Regulatory Matters” which caused ACE to derecognize the derivative assets and derivatives liabilities related to the SOCAs in the fourth quarter of 2013. The following table shows the net unrealized and net realized derivative gains and losses arising during the period associated with these derivatives that were recognized in the consolidated statements of income (loss) (through Fuel and purchased energy expense) and that were also deferred as Regulatory liabilities and Regulatory assets for the years ended December 31, 2014, 2013 and 2012: | |||||||||||||||||||||
For the Year Ended | |||||||||||||||||||||
December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Net unrealized (loss) gain arising during the period | $ | (3 | ) | $ | 4 | $ | (6 | ) | |||||||||||||
Net realized gain (loss) recognized during the period | 2 | (4 | ) | (16 | ) | ||||||||||||||||
As of December 31, 2014 and 2013, the quantities and positions of DPL’s net outstanding natural gas commodity forward contracts that did not qualify for hedge accounting were: | |||||||||||||||||||||
December 31, 2014 | December 31, 2013 | ||||||||||||||||||||
Commodity | Quantity | Net Position | Quantity | Net Position | |||||||||||||||||
DPL – Natural gas (one Million British Thermal Units (MMBtu)) | 3,892,500 | Long | 3,977,500 | Long | |||||||||||||||||
In addition, PHI recorded derivative assets for the embedded call and redemption features on the shares of Preferred Stock as further described in Note (13), “Preferred Stock.” | |||||||||||||||||||||
Delmarva Power & Light Co/De [Member] | |||||||||||||||||||||
Derivative Instruments and Hedging Activities | (12) DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||||||||||||||||||||
DPL uses derivative instruments in the form of swaps and over-the-counter options primarily to reduce natural gas commodity price volatility and limit its customers’ exposure to increases in the market price of natural gas under a hedging program approved by the DPSC. DPL uses these derivatives to manage the commodity price risk associated with its physical natural gas purchase contracts. The natural gas purchase contracts qualify as normal purchases, which are not required to be recorded in the financial statements until settled. All premiums paid and other transaction costs incurred as part of DPL’s 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 from its customers through a fuel adjustment clause approved by the DPSC. | |||||||||||||||||||||
The tables below identify the balance sheet location and fair values of derivative instruments as of December 31, 2014 and 2013: | |||||||||||||||||||||
As of December 31, 2014 | |||||||||||||||||||||
Balance Sheet Caption | Derivatives | Other | Gross | Effects of | Net | ||||||||||||||||
Designated | Derivative | Derivative | Cash | Derivative | |||||||||||||||||
as Hedging | Instruments | Instruments | Collateral | Instruments | |||||||||||||||||
Instruments | and | ||||||||||||||||||||
Netting | |||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Derivative liabilities (current liabilities) | $ | — | $ | (4 | ) | $ | (4 | ) | $ | 4 | $ | — | |||||||||
As of December 31, 2013 | |||||||||||||||||||||
Balance Sheet Caption | Derivatives | Other | Gross | Effects of | Net | ||||||||||||||||
Designated | Derivative | Derivative | Cash | Derivative | |||||||||||||||||
as Hedging | Instruments | Instruments | Collateral | Instruments | |||||||||||||||||
Instruments | and | ||||||||||||||||||||
Netting | |||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Derivative assets (current assets) | $ | — | $ | 1 | $ | 1 | $ | (1 | ) | $ | — | ||||||||||
All derivative assets and liabilities available to be offset under master netting arrangements were netted as of December 31, 2014 and 2013. The amount of cash collateral that was offset against these derivative positions is as follows: | |||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Cash collateral pledged to counterparities with the right reclaim (a) | $ | 4 | $ | — | |||||||||||||||||
Cash collateral received from counterparties with the obligation to return | $ | — | $ | (1 | ) | ||||||||||||||||
(a) | Includes cash deposits on commodity brokerage accounts. | ||||||||||||||||||||
As of December 31, 2014 and 2013, all DPL cash collateral pledged related to derivative instruments accounted for at fair value was entitled to be offset under master netting agreements. | |||||||||||||||||||||
Other Derivative Activity | |||||||||||||||||||||
DPL has certain derivatives that are not in hedge accounting relationships and are not designated as normal purchases or normal sales. These derivatives are recorded at fair value on the balance sheets with the gain or loss for changes in the fair value recorded in income. In addition, in accordance with FASB guidance on regulated operations, regulatory liabilities or regulatory assets of the same amount are recorded on the balance sheets and the recognition of the derivative gain or loss is deferred because of the DPSC-approved fuel adjustment clause. The following table shows the net unrealized and net realized derivative gains and losses arising during the period associated with these derivatives that were recognized in the statements of income (through Purchased energy and Gas purchased expense) and that were also deferred as Regulatory liabilities and Regulatory assets, respectively, for the years ended December 31, 2014, 2013 and 2012: | |||||||||||||||||||||
For the Year Ended | |||||||||||||||||||||
December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Net unrealized (loss) gain arising during the period | $ | (3 | ) | $ | 1 | $ | (3 | ) | |||||||||||||
Net realized gain (loss) recognized during the period | 2 | (4 | ) | (16 | ) | ||||||||||||||||
As of December 31, 2014 and 2013, DPL had the following net outstanding natural gas commodity forward contracts that did not qualify for hedge accounting: | |||||||||||||||||||||
December 31, 2014 | December 31, 2013 | ||||||||||||||||||||
Commodity | Quantity | Net Position | Quantity | Net Position | |||||||||||||||||
Natural Gas (One Million British Thermal Units (MMBtu)) | 3,892,500 | Long | 3,977,500 | Long | |||||||||||||||||
Atlantic City Electric Co [Member] | |||||||||||||||||||||
Derivative Instruments and Hedging Activities | (11) DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||||||||||||||||||||
ACE was ordered to enter into the SOCAs by the NJBPU, and under the SOCAs, ACE would have received payments from or made payments to electric generation facilities based on (i) the difference between the fixed price in the SOCAs and the price for capacity that clears PJM and (ii) ACE’s annual proportion of the total New Jersey load relative to the other EDCs in New Jersey. ACE began applying derivative accounting to two of its SOCAs as of June 30, 2012 because these generators cleared the 2015-2016 PJM capacity auction in May 2012. The fair value of the derivatives embedded in the SOCAs were deferred as Regulatory assets or Regulatory liabilities because the NJBPU allowed full recovery from ACE’s distribution customers for any payments made by ACE, and ACE’s distribution customers would be entitled to any payments received by ACE. | |||||||||||||||||||||
As further discussed in Note (6), “Regulatory Matters,” in light of a Federal district court order, which ruled that the SOCAs are void, invalid and unenforceable, and ACE’s subsequent termination of the SOCAs in the fourth quarter of 2013, ACE derecognized the derivative assets and derivative liabilities related to the SOCAs in the fourth quarter of 2013. |
Fair_Value_Disclosures
Fair Value Disclosures | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Fair Value Disclosures | (15) FAIR VALUE DISCLOSURES | ||||||||||||||||||||
Financial Instruments Measured at Fair Value on a Recurring Basis | |||||||||||||||||||||
PHI applies FASB guidance on fair value measurement (ASC 820) that 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. 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) and the lowest priority to unobservable inputs (level 3). | |||||||||||||||||||||
The following tables set forth, by level within the fair value hierarchy, PHI’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2014 and 2013. 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. PHI’s assessment of the significance of a particular input to the fair value measurement requires the exercise of judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. | |||||||||||||||||||||
Fair Value Measurements at December 31, 2014 | |||||||||||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | |||||||||||||||||
Active Markets | Other | Unobservable | |||||||||||||||||||
for Identical | Observable | Inputs | |||||||||||||||||||
Instruments | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) (a) | (Level 2) (a) | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
ASSETS | |||||||||||||||||||||
Derivative instruments | |||||||||||||||||||||
Preferred stock | $ | 3 | $ | — | $ | — | $ | 3 | |||||||||||||
Restricted cash equivalents | |||||||||||||||||||||
Treasury fund | 38 | 38 | — | — | |||||||||||||||||
Executive deferred compensation plan assets | |||||||||||||||||||||
Money market funds and short-term investments | 35 | 14 | 21 | — | |||||||||||||||||
Life insurance contracts | 46 | — | 27 | 19 | |||||||||||||||||
Total | $ | 122 | $ | 52 | $ | 48 | $ | 22 | |||||||||||||
LIABILITIES | |||||||||||||||||||||
Derivative instruments (b) | |||||||||||||||||||||
Natural gas (c) | $ | 4 | $ | 4 | $ | — | $ | — | |||||||||||||
Executive deferred compensation plan liabilities | |||||||||||||||||||||
Life insurance contracts | 30 | — | 30 | — | |||||||||||||||||
Total | $ | 34 | $ | 4 | $ | 30 | $ | — | |||||||||||||
(a) | There were no transfers of instruments between level 1 and level 2 valuation categories during the year ended December 31, 2014. | ||||||||||||||||||||
(b) | The fair values of derivative liabilities reflect netting by counterparty before the impact of collateral. | ||||||||||||||||||||
(c) | Represents natural gas swaps purchased by DPL as part of a natural gas hedging program approved by the DPSC. | ||||||||||||||||||||
Fair Value Measurements at December 31, 2013 | |||||||||||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | |||||||||||||||||
Active Markets | Other | Unobservable | |||||||||||||||||||
for Identical | Observable | Inputs | |||||||||||||||||||
Instruments | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) (a) | (Level 2) (a) | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
ASSETS | |||||||||||||||||||||
Derivative instruments (b) | |||||||||||||||||||||
Natural gas (c) | $ | 1 | $ | 1 | $ | — | $ | — | |||||||||||||
Restricted cash and cash equivalents | |||||||||||||||||||||
Treasury fund | 34 | 34 | — | — | |||||||||||||||||
Executive deferred compensation plan assets | |||||||||||||||||||||
Money market funds and short-term investments | 35 | 15 | 20 | — | |||||||||||||||||
Life insurance contracts | 46 | — | 27 | 19 | |||||||||||||||||
Total | $ | 116 | $ | 50 | $ | 47 | $ | 19 | |||||||||||||
LIABILITIES | |||||||||||||||||||||
Executive deferred compensation plan liabilities | |||||||||||||||||||||
Life insurance contracts | $ | 30 | $ | — | $ | 30 | $ | — | |||||||||||||
Total | $ | 30 | $ | — | $ | 30 | $ | — | |||||||||||||
(a) | There were no transfers of instruments between level 1 and level 2 valuation categories during the year ended December 31, 2013. | ||||||||||||||||||||
(b) | The fair values of derivative assets reflect netting by counterparty before the impact of collateral. | ||||||||||||||||||||
(c) | Represents natural gas swaps purchased by DPL as part of a natural gas hedging program approved by the DPSC. | ||||||||||||||||||||
PHI classifies its fair value balances in the fair value hierarchy based on the observability of the inputs used in the fair value calculation 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, such as the New York Mercantile Exchange (NYMEX). | |||||||||||||||||||||
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 data. Level 2 also includes those financial instruments that are valued using 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 and can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. | |||||||||||||||||||||
Executive deferred compensation plan assets and liabilities categorized as level 2 consist of life insurance policies and certain employment agreement obligations. The life insurance policies are categorized as level 2 assets because they are valued based on the assets underlying the policies, which consist of short-term cash equivalents and fixed income securities that are priced using observable market data and can be liquidated for the value of the underlying assets as of December 31, 2014. The level 2 liability associated with the life insurance policies represents a deferred compensation obligation, the value of which is tracked via underlying insurance sub-accounts. The sub-accounts are designed to mirror existing mutual funds and money market funds that are observable and actively traded. | |||||||||||||||||||||
The value of certain employment agreement obligations (which are included with life insurance contracts in the tables above) is derived using a discounted cash flow valuation technique. The discounted cash flow calculations are based on a known and certain stream of payments to be made over time that are discounted to determine their net present value. The primary variable input, the discount rate, is based on market-corroborated and observable published rates. These obligations have been classified as level 2 within the fair value hierarchy because the payment streams represent contractually known and certain amounts and the discount rate is based on published, observable data. | |||||||||||||||||||||
Level 3 – Pricing inputs that are significant and generally less observable than those from objective sources. Level 3 includes those financial instruments that are valued using models or other valuation methodologies. | |||||||||||||||||||||
Derivative instruments classified as level 3 include embedded call and redemption features on the Preferred Stock as further discussed in Note (13), “Preferred Stock.” | |||||||||||||||||||||
Executive deferred compensation plan assets include certain life insurance policies that are valued using the cash surrender value of the policies, net of loans against those policies. The cash surrender values do not represent a quoted price in an active market; therefore, those inputs are unobservable and the policies are categorized as level 3. Cash surrender values are provided by third parties and reviewed by PHI for reasonableness. | |||||||||||||||||||||
Reconciliations of the beginning and ending balances of PHI’s fair value measurements using significant unobservable inputs (Level 3) for the years ended December 31, 2014 and 2013 are shown below: | |||||||||||||||||||||
Year Ended | Year Ended | ||||||||||||||||||||
31-Dec-14 | 31-Dec-13 | ||||||||||||||||||||
Preferred | Life | Natural | Life | Capacity | |||||||||||||||||
Stock | Insurance | Gas | Insurance | ||||||||||||||||||
Contracts | Contracts | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Balance as of January 1 | $ | — | $ | 19 | $ | (4 | ) | $ | 18 | $ | (3 | ) | |||||||||
Total gains (losses) (realized and unrealized): | |||||||||||||||||||||
Included in income | — | 3 | — | 4 | — | ||||||||||||||||
Included in accumulated other comprehensive loss | — | — | — | — | — | ||||||||||||||||
Included in regulatory liabilities | — | — | — | — | 3 | ||||||||||||||||
Purchases | — | — | — | — | — | ||||||||||||||||
Issuances | 3 | (3 | ) | — | (3 | ) | — | ||||||||||||||
Settlements | — | — | 4 | — | — | ||||||||||||||||
Transfers in (out) of level 3 | — | — | — | — | — | ||||||||||||||||
Balance as of December 31 | $ | 3 | $ | 19 | $ | — | $ | 19 | $ | — | |||||||||||
The breakdown of realized and unrealized gains on level 3 instruments included in income as a component of Other income or Other operation and maintenance expense for the periods below were as follows: | |||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Total net gains included in income for the period | $ | 3 | $ | 4 | |||||||||||||||||
Change in unrealized gains relating to assets still held at reporting date | $ | 3 | $ | 4 | |||||||||||||||||
Other Financial Instruments | |||||||||||||||||||||
The estimated fair values of PHI’s Long-term debt instruments that are measured at amortized cost in PHI’s consolidated financial statements and the associated level of the estimates within the fair value hierarchy as of December 31, 2014 and 2013 are shown in the tables below. As required by the fair value measurement guidance, debt instruments are classified in their entirety within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. PHI’s assessment of the significance of a particular input to the fair value measurement requires the exercise of judgment, which may affect the valuation of fair value debt instruments and their placement within the fair value hierarchy levels. | |||||||||||||||||||||
The fair value of Long-term debt and Transition bonds issued by ACE Funding categorized as level 2 is based on a blend of quoted prices for the debt and quoted prices for similar debt on the measurement date. The blend places more weight on current pricing information when determining the final fair value measurement. The fair value information is provided by brokers, and PHI reviews the methodologies and results. | |||||||||||||||||||||
The fair value of Long-term debt categorized as level 3 is based on a discounted cash flow methodology using observable inputs, such as the U.S. Treasury yield, and unobservable inputs, such as credit spreads, because quoted prices for the debt or similar debt in active markets were insufficient. The Long-term project funding represents debt instruments issued by Pepco and Pepco Energy Services related to energy savings and construction contracts. Long-term project funding is categorized as level 3 because PHI concluded that the amortized cost carrying amounts for these instruments approximate fair value, which does not represent a quoted price in an active market. | |||||||||||||||||||||
Fair Value Measurements at December 31, 2014 | |||||||||||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | |||||||||||||||||
Active Markets | Other | Unobservable | |||||||||||||||||||
for Identical | Observable | Inputs | |||||||||||||||||||
Instruments | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
LIABILITIES | |||||||||||||||||||||
Debt instruments | |||||||||||||||||||||
Long-term debt (a) | $ | 5,583 | $ | — | $ | 5,136 | $ | 447 | |||||||||||||
Transition Bonds (b) | 235 | — | 235 | — | |||||||||||||||||
Long-term project funding | 28 | — | — | 28 | |||||||||||||||||
Total | $ | 5,846 | $ | — | $ | 5,371 | $ | 475 | |||||||||||||
(a) | The carrying amount for Long-term debt was $4,807 million as of December 31, 2014. | ||||||||||||||||||||
(b) | The carrying amount for Transition Bonds, including amounts due within one year, was $215 million as of December 31, 2014. | ||||||||||||||||||||
Fair Value Measurements at December 31, 2013 | |||||||||||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | |||||||||||||||||
Active Markets | Other | Unobservable | |||||||||||||||||||
for Identical | Observable | Inputs | |||||||||||||||||||
Instruments | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
LIABILITIES | |||||||||||||||||||||
Debt instruments | |||||||||||||||||||||
Long-term debt (a) | $ | 4,850 | $ | — | $ | 4,289 | $ | 561 | |||||||||||||
Transition Bonds (b) | 284 | — | 284 | — | |||||||||||||||||
Long-term project funding | 12 | — | — | 12 | |||||||||||||||||
Total | $ | 5,146 | $ | — | $ | 4,573 | $ | 573 | |||||||||||||
(a) | The carrying amount for Long-term debt was $4,456 million as of December 31, 2013. | ||||||||||||||||||||
(b) | The carrying amount for Transition Bonds, including amounts due within one year, was $255 million as of December 31, 2013. | ||||||||||||||||||||
The carrying amounts of all other financial instruments in the accompanying consolidated financial statements approximate fair value. | |||||||||||||||||||||
Delmarva Power & Light Co/De [Member] | |||||||||||||||||||||
Fair Value Disclosures | (13) FAIR VALUE DISCLOSURES | ||||||||||||||||||||
Financial Instruments Measured at Fair Value on a Recurring Basis | |||||||||||||||||||||
DPL applies FASB guidance on fair value measurement (ASC 820) that 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. 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) and the lowest priority to unobservable inputs (level 3). | |||||||||||||||||||||
The following tables set forth, by level within the fair value hierarchy, DPL’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2014 and 2013. 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. DPL’s assessment of the significance of a particular input to the fair value measurement requires the exercise of judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. | |||||||||||||||||||||
Fair Value Measurements at December 31, 2014 | |||||||||||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | |||||||||||||||||
Active Markets | Other | Unobservable | |||||||||||||||||||
for Identical | Observable | Inputs | |||||||||||||||||||
Instruments | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) (a) | (Level 2) (a) | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
ASSETS | |||||||||||||||||||||
Restricted cash equivalents | |||||||||||||||||||||
Treasury funds | $ | 5 | $ | 5 | $ | — | $ | — | |||||||||||||
Executive deferred compensation plan assets | |||||||||||||||||||||
Money market funds | 1 | 1 | — | — | |||||||||||||||||
Life insurance contracts | 1 | — | — | 1 | |||||||||||||||||
Total | $ | 7 | $ | 6 | $ | — | $ | 1 | |||||||||||||
LIABILITIES | |||||||||||||||||||||
Derivative instruments (b) | |||||||||||||||||||||
Natural gas (c) | $ | 4 | $ | 4 | $ | — | $ | — | |||||||||||||
Executive deferred compensation plan assets | |||||||||||||||||||||
Life insurance contracts | 1 | — | 1 | — | |||||||||||||||||
Total | $ | 5 | $ | 4 | $ | 1 | $ | — | |||||||||||||
(a) | There were no transfers of instruments between level 1 and level 2 valuation categories during the year ended December 31, 2014. | ||||||||||||||||||||
(b) | The fair value of derivative liabilities reflect netting by counterparty before the impact of collateral. | ||||||||||||||||||||
(c) | Represents natural gas swaps purchased by DPL as part of a natural gas hedging program approved by the DPSC. | ||||||||||||||||||||
Fair Value Measurements at December 31, 2013 | |||||||||||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | |||||||||||||||||
Active Markets | Other | Unobservable | |||||||||||||||||||
for Identical | Observable | Inputs | |||||||||||||||||||
Instruments | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) (a) | (Level 2) (a) | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
ASSETS | |||||||||||||||||||||
Derivative instruments (b) | |||||||||||||||||||||
Natural gas (c) | $ | 1 | $ | 1 | $ | — | $ | — | |||||||||||||
Executive deferred compensation plan assets | |||||||||||||||||||||
Money market funds | 1 | 1 | — | — | |||||||||||||||||
Life insurance contracts | 1 | — | — | 1 | |||||||||||||||||
Total | $ | 3 | $ | 2 | $ | — | $ | 1 | |||||||||||||
LIABILITIES | |||||||||||||||||||||
Executive deferred compensation plan assets | |||||||||||||||||||||
Life insurance contracts | $ | 1 | $ | — | $ | 1 | $ | — | |||||||||||||
Total | $ | 1 | $ | — | $ | 1 | $ | — | |||||||||||||
(a) | There were no transfers of instruments between level 1 and level 2 valuation categories during the year ended December 31, 2013. | ||||||||||||||||||||
(b) | The fair value of derivative assets reflect netting by counterparty before the impact of collateral. | ||||||||||||||||||||
(c) | Represents natural gas swaps purchased by DPL as part of a natural gas hedging program approved by the DPSC. | ||||||||||||||||||||
DPL classifies its fair value balances in the fair value hierarchy based on the observability of the inputs used in the fair value calculation 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, such as the New York Mercantile Exchange (NYMEX). | |||||||||||||||||||||
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 data. Level 2 also includes those financial instruments that are valued using 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 and can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. | |||||||||||||||||||||
Level 2 executive deferred compensation plan liabilities associated with the life insurance policies represent a deferred compensation obligation, the value of which is tracked via underlying insurance sub-accounts. The sub-accounts are designed to mirror existing mutual funds and money market funds that are observable and actively traded. | |||||||||||||||||||||
Level 3 – Pricing inputs that are significant and generally less observable than those from objective sources. Level 3 includes those financial instruments that are valued using models or other valuation methodologies. | |||||||||||||||||||||
Executive deferred compensation plan assets include certain life insurance policies that are valued using the cash surrender value of the policies, net of loans against those policies. The cash surrender values do not represent a quoted price in an active market; therefore, those inputs are unobservable and the policies are categorized as level 3. Cash surrender values are provided by third parties and reviewed by DPL for reasonableness. | |||||||||||||||||||||
Reconciliations of the beginning and ending balances of DPL’s fair value measurements using significant unobservable inputs (Level 3) for the years ended December 31, 2014 and 2013 are shown below: | |||||||||||||||||||||
Year Ended | Year Ended | ||||||||||||||||||||
December 31, 2014 | December 31, 2013 | ||||||||||||||||||||
Life | Natural | Life | |||||||||||||||||||
Insurance | Gas | Insurance | |||||||||||||||||||
Contracts | Contracts | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Balance as of January 1 | $ | 1 | $ | (4 | ) | $ | 1 | ||||||||||||||
Total gains (losses) (realized and unrealized): | |||||||||||||||||||||
Included in income | — | — | — | ||||||||||||||||||
Included in accumulated other comprehensive loss | — | — | — | ||||||||||||||||||
Included in regulatory liabilities | — | — | — | ||||||||||||||||||
Purchases | — | — | — | ||||||||||||||||||
Issuances | — | — | — | ||||||||||||||||||
Settlements | — | 4 | — | ||||||||||||||||||
Transfers in (out) of Level 3 | — | — | — | ||||||||||||||||||
Balance as of December 31 | $ | 1 | $ | — | $ | 1 | |||||||||||||||
Other Financial Instruments | |||||||||||||||||||||
The estimated fair values of DPL’s Long-term debt instruments that are measured at amortized cost in DPL’s financial statements and the associated level of the estimates within the fair value hierarchy as of December 31, 2014 and 2013 are shown in the tables below. As required by the fair value measurement guidance, debt instruments are classified in their entirety within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. DPL’s assessment of the significance of a particular input to the fair value measurement requires the exercise of judgment, which may affect the valuation of fair value debt instruments and their placement within the fair value hierarchy levels. | |||||||||||||||||||||
The fair value of Long-term debt categorized as level 2 is based on a blend of quoted prices for the debt and quoted prices for similar debt on the measurement date. The blend places more weight on current pricing information when determining the final fair value measurement. The fair value information is provided by brokers and DPL reviews the methodologies and results. | |||||||||||||||||||||
The fair value of Long-term debt categorized as level 3 is based on a discounted cash flow methodology using observable inputs, such as the U.S. Treasury yield, and unobservable inputs, such as credit spreads, because quoted prices for the debt or similar debt in active markets were insufficient. | |||||||||||||||||||||
Fair Value Measurements at December 31, 2014 | |||||||||||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | |||||||||||||||||
Active Markets | Other | Unobservable | |||||||||||||||||||
for Identical | Observable | Inputs | |||||||||||||||||||
Instruments | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
LIABILITIES | |||||||||||||||||||||
Debt instruments | |||||||||||||||||||||
Long-term debt (a) | $ | 1,123 | $ | — | $ | 1,016 | $ | 107 | |||||||||||||
(a) | The carrying amount for Long-term debt was $1,071 million as of December 31, 2014. | ||||||||||||||||||||
Fair Value Measurements at December 31, 2013 | |||||||||||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | |||||||||||||||||
Active Markets | Other | Unobservable | |||||||||||||||||||
for Identical | Observable | Inputs | |||||||||||||||||||
Instruments | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
LIABILITIES | |||||||||||||||||||||
Debt instruments | |||||||||||||||||||||
Long-term debt (a) | $ | 960 | $ | — | $ | 850 | $ | 110 | |||||||||||||
(a) | The carrying amount for Long-term debt was $967 million as of December 31, 2013. | ||||||||||||||||||||
The carrying amounts of all other financial instruments in the accompanying financial statements approximate fair value. | |||||||||||||||||||||
Potomac Electric Power Co [Member] | |||||||||||||||||||||
Fair Value Disclosures | (11) FAIR VALUE DISCLOSURES | ||||||||||||||||||||
Financial Instruments Measured at Fair Value on a Recurring Basis | |||||||||||||||||||||
Pepco applies FASB guidance on fair value measurement (ASC 820) that 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. 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) and the lowest priority to unobservable inputs (level 3). | |||||||||||||||||||||
The following tables set forth, by level within the fair value hierarchy, Pepco’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2014 and 2013. 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. Pepco’s assessment of the significance of a particular input to the fair value measurement requires the exercise of judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. | |||||||||||||||||||||
Fair Value Measurements at December 31, 2014 | |||||||||||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | |||||||||||||||||
Active Markets | Other | Unobservable | |||||||||||||||||||
for Identical | Observable | Inputs | |||||||||||||||||||
Instruments | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) (a) | (Level 2) (a) | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
ASSETS | |||||||||||||||||||||
Restricted cash equivalents | |||||||||||||||||||||
Treasury fund | $ | 5 | $ | 5 | $ | — | $ | — | |||||||||||||
Executive deferred compensation plan assets | |||||||||||||||||||||
Money market funds and short-term investments | 34 | 13 | 21 | — | |||||||||||||||||
Life insurance contracts | 41 | — | 23 | 18 | |||||||||||||||||
Total | $ | 80 | $ | 18 | $ | 44 | $ | 18 | |||||||||||||
LIABILITIES | |||||||||||||||||||||
Executive deferred compensation plan liabilities | |||||||||||||||||||||
Life insurance contracts | $ | 7 | $ | — | $ | 7 | $ | — | |||||||||||||
Total | $ | 7 | $ | — | $ | 7 | $ | — | |||||||||||||
(a) | There were no transfers of instruments between level 1 and level 2 valuation categories during the year ended December 31, 2014. | ||||||||||||||||||||
Fair Value Measurements at December 31, 2013 | |||||||||||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | |||||||||||||||||
Active Markets | Other | Unobservable | |||||||||||||||||||
for Identical | Observable | Inputs | |||||||||||||||||||
Instruments | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) (a) | (Level 2) (a) | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
ASSETS | |||||||||||||||||||||
Restricted cash equivalents | |||||||||||||||||||||
Treasury fund | $ | 3 | $ | 3 | $ | — | $ | — | |||||||||||||
Executive deferred compensation plan assets | |||||||||||||||||||||
Money market funds and short-term investments | 33 | 13 | 20 | — | |||||||||||||||||
Life insurance contracts | 41 | — | 23 | 18 | |||||||||||||||||
Total | $ | 77 | $ | 16 | $ | 43 | $ | 18 | |||||||||||||
LIABILITIES | |||||||||||||||||||||
Executive deferred compensation plan liabilities | |||||||||||||||||||||
Life insurance contracts | $ | 7 | $ | — | $ | 7 | $ | — | |||||||||||||
Total | $ | 7 | $ | — | $ | 7 | $ | — | |||||||||||||
(a) | There were no transfers of instruments between level 1 and level 2 valuation categories during the year ended December 31, 2013. | ||||||||||||||||||||
Pepco classifies its fair value balances in the fair value hierarchy based on the observability of the inputs used in the fair value calculation 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 data. Level 2 also includes those financial instruments that are valued using 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 and can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. | |||||||||||||||||||||
Executive deferred compensation plan assets and liabilities categorized as level 2 consist of life insurance policies and certain employment agreement obligations. The life insurance policies are categorized as level 2 assets because they are valued based on the assets underlying the policies, which consist of short-term cash equivalents and fixed income securities that are priced using observable market data and can be liquidated for the value of the underlying assets as of December 31, 2014. The level 2 liability associated with the life insurance policies represents a deferred compensation obligation, the value of which is tracked via underlying insurance sub-accounts. The sub-accounts are designed to mirror existing mutual funds and money market funds that are observable and actively traded. | |||||||||||||||||||||
The value of certain employment agreement obligations (which are included in life insurance contracts in the tables above) is derived using a discounted cash flow valuation technique. The discounted cash flow calculations are based on a known and certain stream of payments to be made over time that are discounted to determine their net present value. The primary variable input, the discount rate, is based on market-corroborated and observable published rates. These obligations have been classified as level 2 within the fair value hierarchy because the payment streams represent contractually known and certain amounts and the discount rate is based on published, observable data. | |||||||||||||||||||||
Level 3 – Pricing inputs that are significant and generally less observable than those from objective sources. Level 3 includes those financial instruments that are valued using models or other valuation methodologies. | |||||||||||||||||||||
Executive deferred compensation plan assets include certain life insurance policies that are valued using the cash surrender value of the policies, net of loans against those policies. The cash surrender values do not represent a quoted price in an active market; therefore, those inputs are unobservable and the policies are categorized as level 3. Cash surrender values are provided by third parties and reviewed by Pepco for reasonableness. | |||||||||||||||||||||
Reconciliations of the beginning and ending balances of Pepco’s fair value measurements using significant unobservable inputs (Level 3) for the years ended December 31, 2014 and 2013 are shown below. | |||||||||||||||||||||
Year Ended | Year Ended | ||||||||||||||||||||
December 31, 2014 | December 31, 2013 | ||||||||||||||||||||
Life Insurance | Life Insurance | ||||||||||||||||||||
Contracts | Contracts | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Balance as of January 1 | $ | 18 | $ | 18 | |||||||||||||||||
Total gains (losses) (realized and unrealized): | |||||||||||||||||||||
Included in income | 3 | 4 | |||||||||||||||||||
Included in accumulated other comprehensive loss | — | — | |||||||||||||||||||
Purchases | — | — | |||||||||||||||||||
Issuances | (3 | ) | (3 | ) | |||||||||||||||||
Settlements | — | (1 | ) | ||||||||||||||||||
Transfers in (out) of level 3 | — | — | |||||||||||||||||||
Balance as of December 31 | $ | 18 | $ | 18 | |||||||||||||||||
The breakdown of realized and unrealized gains on level 3 instruments included in income as a component of Other operation and maintenance expense for the periods below were as follows: | |||||||||||||||||||||
Year Ended | |||||||||||||||||||||
December 31, | |||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Total gains included in income for the period | $ | 3 | $ | 4 | |||||||||||||||||
Change in unrealized gains relating to assets still held at reporting date | $ | 3 | $ | 4 | |||||||||||||||||
Other Financial Instruments | |||||||||||||||||||||
The estimated fair values of Pepco’s Long-term debt instruments that are measured at amortized cost in Pepco’s financial statements and the associated level of the estimates within the fair value hierarchy as of December 31, 2014 and 2013 are shown in the tables below. As required by the fair value measurement guidance, debt instruments are classified in their entirety within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. Pepco’s assessment of the significance of a particular input to the fair value measurement requires the exercise of judgment, which may affect the valuation of fair value debt instruments and their placement within the fair value hierarchy levels. | |||||||||||||||||||||
The fair value of Long-term debt categorized as level 2 is based on a blend of quoted prices for the debt and quoted prices for similar debt on the measurement date. The blend places more weight on current pricing information when determining the final fair value measurement. The fair value information is provided by brokers and Pepco reviews the methodologies and results. | |||||||||||||||||||||
The Project funding represents debt instruments issued by Pepco related to its construction contracts. Project funding is categorized as level 3 because PHI concluded that the amortized cost carrying amounts for these instruments approximate fair value, which does not represent a quoted price in an active market. | |||||||||||||||||||||
Fair Value Measurements at December 31, 2014 | |||||||||||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | |||||||||||||||||
Active Markets | Other | Unobservable | |||||||||||||||||||
for Identical | Observable | Inputs | |||||||||||||||||||
Instruments | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
LIABILITIES | |||||||||||||||||||||
Debt instruments | |||||||||||||||||||||
Long-term debt (a) | $ | 2,624 | $ | — | $ | 2,624 | $ | — | |||||||||||||
Project funding | 12 | — | — | 12 | |||||||||||||||||
Total | $ | 2,636 | $ | — | $ | 2,624 | $ | 12 | |||||||||||||
(a) | The carrying amount for Long-term debt was $2,124 million as of December 31, 2014. | ||||||||||||||||||||
Fair Value Measurements at December 31, 2013 | |||||||||||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | |||||||||||||||||
Active Markets | Other | Unobservable | |||||||||||||||||||
for Identical | Observable | Inputs | |||||||||||||||||||
Instruments | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
LIABILITIES | |||||||||||||||||||||
Debt instruments | |||||||||||||||||||||
Long-term debt (a) | $ | 2,127 | $ | — | $ | 2,127 | $ | — | |||||||||||||
(a) | The carrying amount for Long-term debt was $1,899 million as of December 31, 2013. | ||||||||||||||||||||
The carrying amount of all other financial instruments in the accompanying financial statements approximate fair value. | |||||||||||||||||||||
Atlantic City Electric Co [Member] | |||||||||||||||||||||
Fair Value Disclosures | (12) FAIR VALUE DISCLOSURES | ||||||||||||||||||||
Financial Instruments Measured at Fair Value on a Recurring Basis | |||||||||||||||||||||
ACE applies FASB guidance on fair value measurement (ASC 820) that 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. 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) and the lowest priority to unobservable inputs (level 3). | |||||||||||||||||||||
The following tables set forth by level within the fair value hierarchy ACE’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2014 and 2013. 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. ACE’s assessment of the significance of a particular input to the fair value measurement requires the exercise of judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. | |||||||||||||||||||||
Fair Value Measurements at December 31, 2014 | |||||||||||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | |||||||||||||||||
Active Markets | Other | Unobservable | |||||||||||||||||||
for Identical | Observable | Inputs | |||||||||||||||||||
Instruments | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) (a) | (Level 2) (a) | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
ASSETS | |||||||||||||||||||||
Restricted cash equivalents | |||||||||||||||||||||
Treasury fund | $ | 24 | $ | 24 | $ | — | $ | — | |||||||||||||
(a) | There were no transfers of instruments between level 1 and level 2 valuation categories during the year ended December 31, 2014. | ||||||||||||||||||||
Fair Value Measurements at December 31, 2013 | |||||||||||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | |||||||||||||||||
Active Markets | Other | Unobservable | |||||||||||||||||||
for Identical | Observable | Inputs | |||||||||||||||||||
Instruments | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) (a) | (Level 2) (a) | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
ASSETS | |||||||||||||||||||||
Restricted cash equivalents | |||||||||||||||||||||
Treasury fund | $ | 24 | $ | 24 | $ | — | $ | — | |||||||||||||
(a) | There were no transfers of instruments between level 1 and level 2 valuation categories during the year ended December 31, 2013. | ||||||||||||||||||||
ACE classifies its fair value balances in the fair value hierarchy based on the observability of the inputs used in the fair value calculation 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 data. Level 2 also includes those financial instruments that are valued using 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 and can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. | |||||||||||||||||||||
Level 3 – Pricing inputs that are significant and generally less observable than those from objective sources. Level 3 includes those financial instruments that are valued using models or other valuation methodologies. | |||||||||||||||||||||
A reconciliation of the beginning and ending balances of ACE’s fair value measurements using significant unobservable inputs (level 3) for the year ended December 31, 2013 is shown below: | |||||||||||||||||||||
Year Ended | |||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||
Capacity | |||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Balance as of January 1 | $ | (3 | ) | ||||||||||||||||||
Total gains (losses) (realized and unrealized): | |||||||||||||||||||||
Included in income | — | ||||||||||||||||||||
Included in accumulated other comprehensive loss | — | ||||||||||||||||||||
Included in regulatory liabilities and regulatory assets | 3 | ||||||||||||||||||||
Purchases | — | ||||||||||||||||||||
Issuances | — | ||||||||||||||||||||
Settlements | — | ||||||||||||||||||||
Transfers in (out) of level 3 | — | ||||||||||||||||||||
Balance as of December 31 | $ | — | |||||||||||||||||||
Other Financial Instruments | |||||||||||||||||||||
The estimated fair values of ACE’s Long-term debt instruments that are measured at amortized cost in ACE’s consolidated financial statements and the associated level of the estimates within the fair value hierarchy as of December 31, 2014 and 2013 are shown in the table below. As required by the fair value measurement guidance, debt instruments are classified in their entirety within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. ACE’s assessment of the significance of a particular input to the fair value measurement requires the exercise of judgment, which may affect the valuation of fair value debt instruments and their placement within the fair value hierarchy levels. | |||||||||||||||||||||
The fair value of Long-term debt and Transition bonds issued by ACE Funding categorized as level 2 is based on a blend of quoted prices for the debt and quoted prices for similar debt on the measurement date. The blend places more weight on current pricing information when determining the final fair value measurement. The fair value information is provided by brokers and ACE reviews the methodologies and results. | |||||||||||||||||||||
The fair value of Long-term debt categorized as level 3 is based on a discounted cash flow methodology using observable inputs, such as the U.S. Treasury yield, and unobservable inputs, such as credit spreads, because quoted prices for the debt or similar debt in active markets were insufficient. | |||||||||||||||||||||
Fair Value Measurements at December 31, 2014 | |||||||||||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | |||||||||||||||||
Active Markets | Other | Unobservable | |||||||||||||||||||
for Identical | Observable | Inputs | |||||||||||||||||||
Instruments | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
LIABILITIES | |||||||||||||||||||||
Debt instruments | |||||||||||||||||||||
Long-term debt (a) | $ | 1,035 | $ | — | $ | 903 | $ | 132 | |||||||||||||
Transition Bonds (b) | 235 | — | 235 | — | |||||||||||||||||
Total | $ | 1,270 | $ | — | $ | 1,138 | $ | 132 | |||||||||||||
(a) | The carrying amount for Long-term debt was $903 million as of December 31, 2014. | ||||||||||||||||||||
(b) | The carrying amount for Transition Bonds, including amounts due within one year, was $215 million as of December 31, 2014. | ||||||||||||||||||||
Fair Value Measurements at December 31, 2013 | |||||||||||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | |||||||||||||||||
Active Markets | Other | Unobservable | |||||||||||||||||||
for Identical | Observable | Inputs | |||||||||||||||||||
Instruments | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
LIABILITIES | |||||||||||||||||||||
Debt instruments | |||||||||||||||||||||
Long-term debt (a) | $ | 959 | $ | — | $ | 744 | $ | 215 | |||||||||||||
Transition Bonds (b) | 285 | — | 285 | — | |||||||||||||||||
Total | $ | 1,244 | $ | — | $ | 1,029 | $ | 215 | |||||||||||||
(a) | The carrying amount for Long-term debt was $860 million as of December 31, 2013. | ||||||||||||||||||||
(b) | The carrying amount for Transition Bonds, including amounts due within one year, was $255 million as of December 31, 2013. | ||||||||||||||||||||
The carrying amounts of all other financial instruments in the accompanying consolidated financial statements approximate fair value. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Commitments and Contingencies | (16) COMMITMENTS AND CONTINGENCIES | ||||||||||||||||||||
General Litigation and Other Matters | |||||||||||||||||||||
From time to time, PHI and its subsidiaries are named as defendants in litigation, usually relating to general liability or auto liability claims that resulted in personal injury or property damage to third parties. PHI and each of its subsidiaries are self-insured against such claims up to a certain self-insured retention amount and maintain insurance coverage against such claims at higher levels, to the extent deemed prudent by management. In addition, PHI’s contracts with its vendors generally require the vendors to name PHI and/or its subsidiaries as additional insureds for the amounts at least equal to PHI’s self-insured retention. Further, PHI’s contracts with its vendors require the vendors to indemnify PHI for various acts and activities that may give rise to claims against PHI. Loss contingency liabilities for both asserted and unasserted claims are recognized if it is probable that a loss will result from such a claim and if the amounts of the losses can be reasonably estimated. Although the outcome of the claims and proceedings cannot be predicted with any certainty, management believes that there are no existing claims or proceedings that are likely to have a material adverse effect on PHI’s or its subsidiaries’ financial condition, results of operations or cash flows. At December 31, 2014, PHI had recorded estimated loss contingency liabilities for general litigation totaling approximately $33 million (including amounts related to the matters specifically described below), and the portion of these estimated loss contingency liabilities in excess of the self-insured retention amount was substantially offset by estimated insurance receivables. | |||||||||||||||||||||
Pepco Substation Injury Claim | |||||||||||||||||||||
In May 2013, a worker employed by a subcontractor to erect a scaffold at a Pepco substation came into contact with an energized transformer and suffered serious injuries. In August 2013, the individual filed suit against Pepco in the Circuit Court for Montgomery County, Maryland, seeking damages for past and future medical expenses, past and future lost wages, pain and suffering and the cost of a life care plan. On October 22, 2014, an award of approximately $21.7 million was entered in favor of the plaintiff in this matter. Pepco has recorded this liability as of December 31, 2014, which is included in the liability for general litigation referred to above. Pepco’s insurer and the contractor’s insurer have acknowledged insurance coverage for the incident, including coverage of Pepco’s self-insured retention amount. Pepco has concluded as of December 31, 2014, that realization of its insurance claims associated with this matter is probable and, accordingly, has recorded an estimated insurance receivable of the same amount as the related liability. | |||||||||||||||||||||
ACE Asbestos Claim | |||||||||||||||||||||
In September 2011, an asbestos complaint was filed in the New Jersey Superior Court, Law Division, against ACE (among other defendants) asserting claims under New Jersey’s Wrongful Death and Survival statutes. The complaint, filed by the estate of a decedent who was the wife of a former employee of ACE, alleges that the decedent’s mesothelioma was caused by exposure to asbestos brought home by her husband on his work clothes. New Jersey courts have recognized a cause of action against a premise owner in a so-called “take home” case if it can be shown that the harm was foreseeable. In this case, the complaint seeks recovery of an unspecified amount of damages for, among other things, the decedent’s past medical expenses, loss of earnings, and pain and suffering between the time of injury and death, and asserts a punitive damage claim. At December 31, 2014, ACE has concluded that a loss is probable with respect to this matter and has recorded an estimated loss contingency liability, which is included in the liability for general litigation referred to above as of December 31, 2014. However, due to the inherent uncertainty of litigation, ACE is unable to estimate a maximum amount of possible loss because the damages sought are indeterminate and the matter involves facts that ACE believes are distinguishable from the facts of the “take-home” cause of action recognized by the New Jersey courts. | |||||||||||||||||||||
ACE Electrical Contact Injury Claims | |||||||||||||||||||||
In October 2010, a farm combine came into and remained in contact with a primary electric line in ACE’s service territory in New Jersey. As a result, two individuals operating the combine received fatal electrical contact injuries. While attempting to rescue those two individuals, another individual sustained third-degree burns to his torso and upper extremities. In September 2012, the individual who received third-degree burns filed suit in New Jersey Superior Court, Salem County. In October 2012, additional suits were filed in the same court by or on behalf of the estates of the deceased individuals. Plaintiffs in each of the cases sought indeterminate damages and alleged that ACE was negligent in the design, construction, erection, operation and maintenance of its poles, power lines, and equipment, and that ACE failed to warn and protect the public from the foreseeable dangers of farm equipment contacting electric lines. The litigation involved a number of other defendants and the filing of numerous cross-claims. On September 23, 2014, ACE entered into a confidential settlement with each of the plaintiffs regarding this matter. On November 5, 2014, ACE received reimbursement from its insurers for the amounts of this settlement above its $2 million self-insured retention amount. | |||||||||||||||||||||
Pepco Energy Services Billing Claims | |||||||||||||||||||||
During 2012, Pepco Energy Services received letters on behalf of two school districts in Maryland, which claim that they had paid invoices in connection with electricity supply contracts that included certain allegedly unauthorized charges, totaling approximately $7 million, for which they were entitled to reimbursement. The school districts also claim additional compounded interest totaling approximately $9 million. Although no litigation involving Pepco Energy Services related to these claims has commenced, in August and September 2013, Pepco Energy Services received correspondence from the Superintendent of each of the school districts advising of the intention to render a decision regarding an unresolved dispute between the school district and Pepco Energy Services. Pepco Energy Services filed timely answers to the Superintendents challenging their authority to render decisions on the claims and also disputing the merits of the allegations regarding unauthorized charges as well as the claims of entitlement to compounded interest. | |||||||||||||||||||||
With respect to the claim of one of the school districts, in July 2014 its Superintendent determined that Pepco Energy Services should reimburse the allegedly unauthorized charges related to that district, totaling approximately $3 million, but rejected the school district’s claim for interest (representing $4 million of the $9 million of total compounded interest originally claimed by both school districts). Throughout these proceedings, the Superintendent acknowledged the availability of administrative and judicial review of the merits of any decision. Pepco Energy Services appealed the Superintendent’s determination to the district’s Board of Education. On November 19, 2014, that district’s Board of Education voted to sustain the Superintendent’s ruling and Pepco Energy Services has filed a timely notice of appeal of that ruling with the Maryland State Board of Education. The Board of Education sought to enter judgment against Pepco Energy Services in a Maryland circuit court. On December 17, 2014, Pepco Energy Services filed petitions in the U.S. District Court for the District of Maryland seeking declaratory judgment and to vacate the Board of Education’s award, thereby challenging both the action of the Board of Education to enter judgment against Pepco Energy Services without further review and the determination of the Board of Education on the merits. The Superintendent of the other school district has not yet acted on the matter. Both Superintendents and the district Board of Education from whose determination an administrative appeal has been taken have acknowledged the availability of administrative and judicial review of the merits of any decision. As of December 31, 2014, Pepco Energy Services has concluded that a loss is reasonably possible with respect to these claims, but the amount of loss, if any, is not reasonably estimable. | |||||||||||||||||||||
Environmental Matters | |||||||||||||||||||||
PHI, through its subsidiaries, is subject to regulation by various federal, regional, state and local authorities with respect to the environmental effects of its operations, including air and water quality control, solid and hazardous waste disposal and limitations on land use. Although penalties assessed for violations of environmental laws and regulations are not recoverable from customers of PHI’s utility subsidiaries, environmental clean-up costs incurred by Pepco, DPL and ACE generally are included by each company in its respective cost of service for ratemaking purposes. The total accrued liabilities for the environmental contingencies described below of PHI and its subsidiaries at December 31, 2014 are summarized as follows: | |||||||||||||||||||||
Legacy Generation | |||||||||||||||||||||
Transmission | Regulated | Non-Regulated | Total | ||||||||||||||||||
and Distribution | |||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Balance as of January 1 | $ | 19 | $ | 6 | $ | 5 | $ | 30 | |||||||||||||
Accruals | — | — | — | — | |||||||||||||||||
Payments | 2 | — | — | 2 | |||||||||||||||||
Balance as of December 31 | 17 | 6 | 5 | 28 | |||||||||||||||||
Less amounts in Other Current Liabilities | 3 | 1 | — | 4 | |||||||||||||||||
Amounts in Other Deferred Credits | $ | 14 | $ | 5 | $ | 5 | $ | 24 | |||||||||||||
Conectiv Energy Wholesale Power Generation Sites | |||||||||||||||||||||
In July 2010, PHI sold the wholesale power generation business of Conectiv Energy to Calpine. Under New Jersey’s Industrial Site Recovery Act (ISRA), the transfer of ownership triggered an obligation on the part of Conectiv Energy to remediate any environmental contamination at each of the nine Conectiv Energy generating facility sites located in New Jersey. Under the terms of the sale, Calpine has assumed responsibility for performing the ISRA-required remediation and for the payment of all related ISRA compliance costs up to $10 million. PHI is obligated to indemnify Calpine for any ISRA compliance remediation costs in excess of $10 million. According to PHI’s estimates, the costs of ISRA-required remediation activities at the nine generating facility sites located in New Jersey are in the range of approximately $7 million to $18 million. The amount accrued by PHI for the ISRA-required remediation activities at the nine generating facility sites is included in the table above in the column entitled “Legacy Generation – Non-Regulated.” | |||||||||||||||||||||
In September 2011, PHI received a request for data from the U.S. Environmental Protection Agency (EPA) regarding operations at the Deepwater generating facility in New Jersey (which was included in the sale to Calpine) between February 2004 and July 1, 2010, to demonstrate compliance with the Clean Air Act’s new source review permitting program. PHI responded to the data request. Under the terms of the Calpine sale, PHI is obligated to indemnify Calpine for any failure of PHI, on or prior to the closing date of the sale, to comply with environmental laws attributable to the construction of new, or modification of existing, sources of air emissions. At this time, PHI does not expect this inquiry to have a material adverse effect on its consolidated financial condition, results of operations or cash flows. | |||||||||||||||||||||
Franklin Slag Pile Site | |||||||||||||||||||||
In November 2008, ACE received a general notice letter from EPA concerning the Franklin Slag Pile site in Philadelphia, Pennsylvania, asserting that ACE is a potentially responsible party (PRP) that may have liability for clean-up costs with respect to the site and for the costs of implementing an EPA-mandated remedy. EPA’s claims are based on ACE’s sale of boiler slag from the B.L. England generating facility, then owned by ACE, to MDC Industries, Inc. (MDC) during the period June 1978 to May 1983. EPA claims that the boiler slag ACE sold to MDC contained copper and lead, which are hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), and that the sales transactions may have constituted an arrangement for the disposal or treatment of hazardous substances at the site, which could be a basis for liability under CERCLA. The EPA letter also states that, as of the date of the letter, EPA’s expenditures for response measures at the site have exceeded $6 million. EPA’s feasibility study for this site conducted in 2007 identified a range of alternatives for permanent remedial measures with varying cost estimates, and the estimated cost of EPA’s preferred alternative is approximately $6 million. | |||||||||||||||||||||
ACE believes that the B.L. England boiler slag sold to MDC was a valuable material with various industrial applications and, therefore, the sale was not an arrangement for the disposal or treatment of any hazardous substances as would be necessary to constitute a basis for liability under CERCLA. ACE intends to contest any claims to the contrary made by EPA. In a May 2009 decision arising under CERCLA, which did not involve ACE, the U.S. Supreme Court rejected an EPA argument that the sale of a useful product constituted an arrangement for disposal or treatment of hazardous substances. While this decision supports ACE’s position, at this time ACE cannot predict how EPA will proceed with respect to the Franklin Slag Pile site, or what portion, if any, of the Franklin Slag Pile site response costs EPA would seek to recover from ACE. Costs to resolve this matter are not expected to be material and are expensed as incurred. | |||||||||||||||||||||
Peck Iron and Metal Site | |||||||||||||||||||||
EPA informed Pepco in a May 2009 letter that Pepco may be a PRP under CERCLA with respect to the cleanup of the Peck Iron and Metal site in Portsmouth, Virginia, and for costs EPA has incurred in cleaning up the site. The EPA letter states that Peck Iron and Metal purchased, processed, stored and shipped metal scrap from military bases, governmental agencies and businesses and that the Peck Iron and Metal scrap operations resulted in the improper storage and disposal of hazardous substances. EPA bases its allegation that Pepco arranged for disposal or treatment of hazardous substances sent to the site on information provided by former Peck Iron and Metal personnel, who informed EPA that Pepco was a customer at the site. Pepco has advised EPA by letter that its records show no evidence of any sale of scrap metal by Pepco to the site. Even if EPA has such records and such sales did occur, Pepco believes that any such scrap metal sales may be entitled to the recyclable material exemption from CERCLA liability. In a Federal Register notice published in November 2009, EPA placed the Peck Iron and Metal site on the National Priorities List. The National Priorities List, among other things, serves as a guide to EPA in determining which sites warrant further investigation to assess the nature and extent of the human health and environmental risks associated with a site. In September 2011, EPA initiated a remedial investigation/feasibility study (RI/FS) using federal funds. Pepco cannot at this time estimate an amount or range of reasonably possible loss associated with this RI/FS, any remediation activities to be performed at the site or any other costs that EPA might seek to impose on Pepco. | |||||||||||||||||||||
Ward Transformer Site | |||||||||||||||||||||
In April 2009, a group of PRPs with respect to the Ward Transformer site in Raleigh, North Carolina, filed a complaint in the U.S. District Court for the Eastern District of North Carolina, alleging cost recovery and/or contribution claims against a number of entities, including Pepco, DPL and ACE, based on their alleged sale of transformers to Ward Transformer, with respect to past and future response costs incurred by the PRP group in performing a removal action at the site. In a March 2010 order, the court denied the defendants’ motion to dismiss. The litigation is moving forward with certain “test case” defendants (not including Pepco, DPL and ACE) filing summary judgment motions regarding liability. The case has been stayed as to the remaining defendants pending rulings upon the test cases. In a January 31, 2013 order, the Federal district court granted summary judgment for the test case defendant whom plaintiffs alleged was liable based on its sale of transformers to Ward Transformer. The Federal district court’s order addresses only the liability of the test case defendant. Plaintiffs have appealed the district court’s order to the U.S. Court of Appeals for the Fourth Circuit. PHI has concluded that a loss is reasonably possible with respect to this matter, but is unable to estimate an amount or range of reasonably possible losses to which it may be exposed. PHI does not believe that any of its three utility subsidiaries had extensive business transactions, if any, with the Ward Transformer site. | |||||||||||||||||||||
Benning Road Site | |||||||||||||||||||||
Contamination of Lower Anacostia River | |||||||||||||||||||||
In September 2010, PHI received a letter from EPA identifying the Benning Road location, consisting of a generation facility formerly operated by Pepco Energy Services, and a transmission and distribution service center facility operated by Pepco, as one of six land-based sites potentially contributing to contamination of the lower Anacostia River. The generation facility was deactivated in June 2012 and the plant structures are currently in the process of being demolished, but the service center remains in operation. The principal contaminants of concern are polychlorinated biphenyls and polycyclic aromatic hydrocarbons. In December 2011, the U.S. District Court for the District of Columbia approved a consent decree entered into by Pepco and Pepco Energy Services with the District of Columbia Department of the Environment (DDOE), which requires Pepco and Pepco Energy Services to conduct a RI/FS for the Benning Road site and an approximately 10 to 15 acre portion of the adjacent Anacostia River. The RI/FS will form the basis for DDOE’s selection of a remedial action for the Benning Road site and for the Anacostia River sediment associated with the site. The consent decree does not obligate Pepco or Pepco Energy Services to pay for or perform any remediation work, but it is anticipated that DDOE will look to Pepco and Pepco Energy Services to assume responsibility for cleanup of any conditions in the river that are determined to be attributable to past activities at the Benning Road site. | |||||||||||||||||||||
The final phase of remedial investigation field work, consisting of the installation of monitoring wells and groundwater sampling and analysis, began in May 2014. In addition, as part of the remaining remedial investigation field work and in conjunction with the power plant demolition activities, Pepco and Pepco Energy Services collected soil samples adjacent to and beneath the concrete basins for the cooling towers previously dismantled and removed from the site of the generating facility. This sampling showed localized areas of soil contamination associated with the cooling tower basins, and Pepco has submitted a plan to DDOE for the removal of contaminated soil in conjunction with the demolition and removal of the concrete basins. The remedial investigation field sampling was completed in December 2014. Pepco and Pepco Energy Services will prepare RI/FS reports for review and approval by DDOE after solicitation and consideration of public comment. The next status report to the court is due on May 25, 2015. | |||||||||||||||||||||
The remediation costs accrued for this matter are included in the table above in the columns entitled “Transmission and Distribution,” “Legacy Generation – Regulated,” and “Legacy Generation – Non-Regulated.” | |||||||||||||||||||||
NPDES Permit Limit Exceedances | |||||||||||||||||||||
Pepco holds a National Pollutant Discharge Elimination System (NPDES) permit issued by EPA with a June 19, 2009 effective date, which authorizes discharges from the Benning Road facility, including the now deactivated Pepco Energy Services generating facility located at that site. The 2009 permit imposed compliance monitoring and storm water best management practices to satisfy the District of Columbia’s Total Maximum Daily Load (TMDL) standards for polychlorinated biphenyls, oil and grease, metals and other substances. As part of the implementation of the TMDL requirements, the permit also imposed numerical limits on certain substances in storm water discharges to the Anacostia River. Quarterly monitoring results since the issuance of the permit have shown consistent exceedances of the limits for copper and zinc, as well as occasional exceedances for iron and lead. As required by the permit, Pepco initiated a study to identify the potential sources of these substances at the site and to determine appropriate best management practices for minimizing the presence of the substances in storm water discharges from the facility. The initial study report was completed in May 2012. Pepco has completed the implementation of the first two phases of the best management practices recommended in the study report (consisting principally of installing metal absorbing filters to capture contaminants from storm water flows, removing stored equipment from areas exposed to the weather, covering and painting exposed metal pipes, and covering and cleaning dumpsters). These measures have been effective in reducing metal concentrations in stormwater discharges; however, additional measures will be required to be implemented by Pepco to reduce the concentrations to levels required by the permit. | |||||||||||||||||||||
The NPDES permit was due to expire on June 19, 2014. Pepco submitted a permit renewal application on December 17, 2013. In November 2014, EPA advised Pepco that it will not renew the permit until the Benning Road facility has come into compliance with the existing permit limits. The current permit remains in effect pending EPA’s action on the renewal application. Pepco has prepared a plan to implement the third phase of the best management practices recommended in the study report with the objective of achieving full compliance with the permit limits by the end of 2015. The plan was submitted to EPA on December 30, 2014, and Pepco has begun implementing those best practices in accordance with the plan. Pepco anticipates that EPA may request that Pepco enter into an administrative compliance agreement with respect to the implementation of these additional control measures, and may seek administrative penalties for past noncompliance with the permit limits for metals in storm water. Whether such penalties will be imposed and, if so, the amount of any such penalties, is not known or estimable at this time. At present, Pepco expects that compliance with the permit limits can be achieved through a combination of enhanced storm drain inlet controls (filters and metal absorbing booms), enhanced site housekeeping, and enhanced inspection and maintenance of storm water controls. If these measures are not adequate to achieve compliance with the permit limits, however, it is possible that a capital project to install a storm water treatment system may be required. The need for any such capital expenditures will not be known until Pepco has implemented the third phase of the best management practices. | |||||||||||||||||||||
Indian River Oil Release | |||||||||||||||||||||
In 2001, DPL entered into a consent agreement with the Delaware Department of Natural Resources and Environmental Control for remediation, site restoration, natural resource damage compensatory projects and other costs associated with environmental contamination resulting from an oil release at the Indian River generating facility, which was sold in June 2001. The amount of remediation costs accrued for this matter is included in the table above in the column entitled “Legacy Generation – Regulated.” | |||||||||||||||||||||
Potomac River Mineral Oil Release | |||||||||||||||||||||
In January 2011, a coupling failure on a transformer cooler pipe resulted in a release of non-toxic mineral oil at Pepco’s Potomac River substation in Alexandria, Virginia. An overflow of an underground secondary containment reservoir resulted in approximately 4,500 gallons of mineral oil flowing into the Potomac River. | |||||||||||||||||||||
In March 2014, Pepco and DDOE entered into a consent decree to resolve a threatened DDOE enforcement action, the terms of which include a combination of a civil penalty and a Supplemental Environmental Project (SEP) with a total cost to Pepco of $875,000. The consent decree was approved and entered by the District of Columbia Superior Court on April 4, 2014. Pepco has paid the $250,000 civil penalty imposed under the consent decree and, pursuant to the consent decree, has made a one-time donation in the amount of $25,000 to the Northeast Environmental Enforcement Training Fund, Inc., a non-profit organization that funds scholarships for environmental enforcement training. The consent decree confirmed that no further actions are required by Pepco to investigate, assess or remediate impacts to the river from the mineral oil release. To implement the SEP, Pepco has entered into an agreement with Living Classrooms Foundation, Inc., a non-profit educational organization, to provide $600,000 to fund the design, installation and operation of a trash collection system at a storm water outfall that drains to the Anacostia River. The design for the trash collection system is currently under review by DDOE, and Pepco expects that this system will be constructed and placed into operation by the end of 2015, which will satisfy Pepco’s obligations under the consent decree. The next status hearing in this matter has been set for September 18, 2015. | |||||||||||||||||||||
The consent decree does not resolve potential claims under federal law for natural resource damages resulting from the oil release. Pepco has engaged in separate discussions with DDOE and the federal resource trustees regarding the settlement of a possible natural resource damages claim under federal law. The federal trustees are still evaluating the claim and the terms of a possible settlement. At this time, it is uncertain whether or when the settlement discussions may resume or if the trustees will continue to pursue the natural resource damages claim. Based on discussions to date, PHI and Pepco do not believe that the resolution of the federal natural resource damages claim will have a material adverse effect on their respective financial condition, results of operations or cash flows. | |||||||||||||||||||||
As a result of the mineral oil release, Pepco implemented certain interim operational changes to the secondary containment systems at the facility which involve pumping accumulated storm water to an above-ground holding tank for off-site disposal. In December 2011, Pepco completed the installation of a treatment system designed to allow automatic discharge of accumulated storm water from the secondary containment system. Pepco currently is seeking DDOE’s and EPA’s approval to commence operation of the new system on a pilot basis to demonstrate its effectiveness in meeting both secondary containment requirements and water quality standards related to the discharge of storm water from the facility. In the meantime, Pepco is continuing to use the aboveground holding tank to manage storm water from the secondary containment system. Pepco also is evaluating other technical and regulatory options for managing storm water from the secondary containment system as alternatives to the proposed treatment system discharge currently under discussion with EPA and DDOE. | |||||||||||||||||||||
The amount accrued for this matter is included in the table above in the column entitled “Transmission and Distribution.” | |||||||||||||||||||||
Metal Bank Site | |||||||||||||||||||||
In the first quarter of 2013, the National Oceanic and Atmospheric Administration (NOAA) contacted Pepco and DPL on behalf of itself and other federal and state trustees to request that Pepco and DPL execute a tolling agreement to facilitate settlement negotiations concerning natural resource damages allegedly caused by releases of hazardous substances, including polychlorinated biphenyls, at the Metal Bank Superfund Site located in Philadelphia, Pennsylvania. Pepco and DPL executed a tolling agreement, which has been extended to March 15, 2015, and will continue settlement discussions with the NOAA, the trustees and other PRPs. | |||||||||||||||||||||
The amount accrued for this matter is included in the table above in the column entitled “Transmission and Distribution.” | |||||||||||||||||||||
Brandywine Fly Ash Disposal Site | |||||||||||||||||||||
In February 2013, Pepco received a letter from the Maryland Department of the Environment (MDE) requesting that Pepco investigate the extent of waste on a Pepco right-of-way that traverses the Brandywine fly ash disposal site in Brandywine, Prince George’s County, Maryland, owned by NRG Energy, Inc. (as successor to GenOn MD Ash Management, LLC) (NRG). In July 2013, while reserving its rights and related defenses under a 2000 agreement covering the sale of this site, Pepco indicated its willingness to investigate the extent of, and propose an appropriate closure plan to address, ash on the right-of-way. Pepco submitted a schedule for development of a closure plan to MDE on September 30, 2013 and, by letter dated October 18, 2013, MDE approved the schedule. | |||||||||||||||||||||
PHI and Pepco have determined that a loss associated with this matter for PHI and Pepco is probable and have estimated that the costs for implementation of a closure plan and cap on the site are in the range of approximately $3 million to $6 million. PHI and Pepco believe that the costs incurred in this matter will be recoverable from NRG under the 2000 sale agreement. | |||||||||||||||||||||
The amount accrued for this matter is included in the table above in the column entitled “Transmission and Distribution.” | |||||||||||||||||||||
Virginia Department of Environmental Quality Notice of Violation | |||||||||||||||||||||
On February 2, 2015, the Virginia Department of Environmental Quality (VDEQ) issued a notice of violation (NOV) to DPL in connection with alleged violations of state water control laws and regulations associated with recent construction activities undertaken to replace certain transmission facilities. The NOV informs DPL of information on which VDEQ may rely to institute an administrative or judicial enforcement action, requests a meeting, and states that DPL may be asked to enter into a consent order to formalize a plan and schedule of corrective action and settle any outstanding issues regarding the matter including the assessment of civil charges. Whether any such charges will be assessed is not known or estimable at this time. PHI and DPL do not believe that the remediation costs to resolve this matter will have a material adverse effect on their respective financial condition, results of operations or cash flows. | |||||||||||||||||||||
PHI’s Cross-Border Energy Lease Investments | |||||||||||||||||||||
As discussed in Note (20), “Discontinued Operations – Cross-Border Energy Lease Investments,” PHI held a portfolio of cross-border energy lease investments involving public utility assets located outside of the United States. Each of these investments was comprised of multiple leases and was structured as a sale and leaseback transaction commonly referred to by the IRS as a sale-in, lease-out, or SILO, transaction. | |||||||||||||||||||||
Since 2005, PHI’s cross-border energy lease investments have been under examination by the IRS as part of the PHI federal income tax audits. In connection with the audit of PHI’s 2001-2002 income tax returns, the IRS disallowed the depreciation and interest deductions in excess of rental income claimed by PHI for six of the eight lease investments and, in connection with the audits of PHI’s 2003-2005 and 2006-2008 income tax returns, the IRS disallowed such deductions in excess of rental income for all eight of the lease investments. In addition, the IRS has sought to recharacterize each of the leases as a loan transaction in each of the years under audit as to which PHI would be subject to original issue discount income. PHI has disagreed with the IRS’ proposed adjustments to the 2001-2008 income tax returns and has filed protests of these findings for each year with the Office of Appeals of the IRS. In November 2010, PHI entered into a settlement agreement with the IRS for the 2001 and 2002 tax years for the purpose of commencing litigation associated with this matter and subsequently filed refund claims in July 2011 for the disallowed tax deductions relating to the leases for these years. In January 2011, as part of this settlement, PHI paid $74 million of additional tax for 2001 and 2002, penalties of $1 million, and $28 million in interest associated with the disallowed deductions. Since the July 2011 refund claims were not approved by the IRS within the statutory six-month period, in January 2012 PHI filed complaints in the U.S. Court of Federal Claims seeking recovery of the tax payment, interest and penalties. The 2003-2005 and 2006-2011 income tax return audits continue to be in process with the IRS Office of Appeals and the IRS Exam Division, respectively, and are not presently a part of the U.S. Court of Federal Claims litigation. | |||||||||||||||||||||
On January 9, 2013, the U.S. Court of Appeals for the Federal Circuit issued an opinion in Consolidated Edison Company of New York, Inc. & Subsidiaries v. United States (to which PHI is not a party) that disallowed tax benefits associated with Consolidated Edison’s cross-border lease transaction. While PHI believes that its tax position with regard to its cross-border energy lease investments is appropriate, after analyzing the recent U.S. Court of Appeals ruling, PHI determined in the first quarter of 2013 that its tax position with respect to the tax benefits associated with the cross-border energy leases no longer met the more-likely-than-not standard of recognition for accounting purposes. Accordingly, PHI recorded a non-cash after-tax charge of $377 million in the first quarter of 2013 (as discussed in Note (20), “Discontinued Operations – Cross-Border Energy Lease Investments”), consisting of a charge to reduce the carrying value of the cross-border energy lease investments and a charge to reflect the anticipated additional interest expense related to changes in PHI’s estimated federal and state income tax obligations for the period over which the tax benefits ultimately may be disallowed. PHI had also previously made certain business assumptions regarding foreign investment opportunities available at the end of the full lease terms. During the first quarter of 2013, management believed that its conclusions regarding these business assumptions were no longer supportable, and the tax effects of this change in conclusion were included in the charge. While the IRS could require PHI to pay a penalty of up to 20% of the amount of additional taxes due, PHI believes that it is more likely than not that no such penalty will be incurred, and therefore no amount for any potential penalty has been recorded. | |||||||||||||||||||||
In the event that the IRS were to be successful in disallowing 100% of the tax benefits associated with these lease investments and recharacterize these lease investments as loans, PHI estimated that, as of March 31, 2013, it would have been obligated to pay approximately $192 million in additional federal taxes (net of the $74 million tax payment described above) and approximately $50 million of interest on the additional federal taxes. These amounts, totaling $242 million, were estimated after consideration of certain tax benefits arising from matters unrelated to the leases that would offset the taxes and interest due, including PHI’s best estimate of the expected resolution of other uncertain and effectively settled tax positions, the carrying back and carrying forward of any existing net operating losses, and the application of certain amounts paid in advance to the IRS. In order to mitigate PHI’s ongoing interest costs associated with the $242 million estimate of additional taxes and interest, PHI made an advanced payment to the IRS of $242 million in the first quarter of 2013. This advanced payment was funded from currently available sources of liquidity and short-term borrowings. A portion of the proceeds from lease terminations (discussed in Note (20), “Discontinued Operations – Cross-Border Energy Lease Investments”) was used to repay the short-term borrowings utilized to fund the advanced payment. | |||||||||||||||||||||
In order to mitigate the cost of continued litigation related to the cross-border energy lease investments, PHI and its subsidiaries have entered into discussions with the IRS with the intention of seeking a settlement of all tax issues for open tax years 2001 through 2011, including the cross-border energy lease issue. PHI currently believes that it is possible that a settlement with the IRS may be reached in 2015. If a settlement of all tax issues or a standalone settlement on the leases is not reached, PHI may move forward with its litigation with the IRS. Further discovery in the case is stayed until March 19, 2015, pursuant to an order issued by the court on December 2, 2014. | |||||||||||||||||||||
Third Party Guarantees, Indemnifications, and Off-Balance Sheet Arrangements | |||||||||||||||||||||
PHI and certain of its subsidiaries have various financial and performance guarantees and indemnification obligations that they have entered into in the normal course of business to facilitate commercial transactions with third parties as discussed below. | |||||||||||||||||||||
As of December 31, 2014, PHI and its subsidiaries were parties to a variety of agreements pursuant to which they were guarantors for standby letters of credit, energy procurement obligations, and other commitments and obligations. The commitments and obligations, in millions of dollars, were as follows: | |||||||||||||||||||||
Guarantor | |||||||||||||||||||||
PHI | Pepco | DPL | ACE | Total | |||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Guarantees associated with disposal of Conectiv Energy assets (a) | $ | 13 | $ | — | $ | — | $ | — | $ | 13 | |||||||||||
Guaranteed lease residual values (b) | 3 | 5 | 7 | 5 | 20 | ||||||||||||||||
Total | $ | 16 | $ | 5 | $ | 7 | $ | 5 | $ | 33 | |||||||||||
(a) | Represents guarantees by PHI of Conectiv Energy’s derivatives portfolio transferred in connection with the disposition of Conectiv Energy’s wholesale business. The derivative portfolio guarantee is currently $13 million and covers Conectiv Energy’s performance prior to the assignment. This guarantee will remain in effect until the end of 2015. | ||||||||||||||||||||
(b) | Represents the maximum potential obligation in the event that the fair value of certain leased equipment and fleet vehicles is zero at the end of the maximum lease term. The maximum lease term associated with these assets ranges from 3 to 8 years. The maximum potential obligation at the end of the minimum lease term would be $52 million, $10 million of which is a guarantee by PHI, $13 million by Pepco, $16 million by DPL and $13 million by ACE. The minimum lease term associated with these assets ranges from 1 to 4 years. Historically, payments under the guarantees have not been made and PHI believes the likelihood of payments being required under the guarantees is remote. | ||||||||||||||||||||
PHI and certain of its subsidiaries have entered into various indemnification agreements related to purchase and sale agreements and other types of contractual agreements with vendors and other third parties. These indemnification agreements typically cover environmental, tax, litigation and other matters, as well as breaches of representations, warranties and covenants set forth in these agreements. Typically, claims may be made by third parties under these indemnification agreements over various periods of time depending on the nature of the claim. The maximum potential exposure under these indemnification agreements can range from a specified dollar amount to an unlimited amount depending on the nature of the claim and the particular transaction. The total maximum potential amount of future payments under these indemnification agreements is not estimable due to several factors, including uncertainty as to whether or when claims may be made under these indemnities. | |||||||||||||||||||||
Energy Savings Performance Contracts | |||||||||||||||||||||
Pepco Energy Services has a diverse portfolio of energy savings performance contracts that are associated with the installation of energy savings equipment or combined heat and power facilities for federal, state and local government customers. As part of the energy savings contracts, Pepco Energy Services typically guarantees that the equipment or systems it installs will generate a specified amount of energy savings on an annual basis over a multi-year period. As of December 31, 2014, the remaining notional amount of Pepco Energy Services’ energy savings guarantees over the life of the multi-year performance contracts on: (i) completed projects was $356 million with the longest guarantee having a remaining term of 23 years; and, (ii) projects under construction was $61 million with the longest guarantee having a term of 13 years after completion of construction. On an annual basis, Pepco Energy Services undertakes a measurement and verification process to determine the amount of energy savings for the year and whether there is any shortfall in the annual energy savings compared to the guaranteed amount. | |||||||||||||||||||||
As of December 31, 2014, Pepco Energy Services had a performance guarantee contract associated with the production at a combined heat and power facility that is under construction totaling $15 million in notional value over 20 years. | |||||||||||||||||||||
Pepco Energy Services recognizes a liability for the value of the estimated energy savings or production shortfalls when it is probable that the guaranteed amounts will not be achieved and the amount is reasonably estimable. As of December 31, 2014, Pepco Energy Services had an accrued liability of $1 million for an energy savings contract under which construction was completed in 2012. There was no significant change in the type of contracts issued during the year ended December 31, 2014 as compared to the year ended December 31, 2013. | |||||||||||||||||||||
Dividends | |||||||||||||||||||||
On January 22, 2015, Pepco Holdings’ Board of Directors declared a dividend on common stock of 27 cents per share payable March 31, 2015, to stockholders of record on March 10, 2015. | |||||||||||||||||||||
Contractual Obligations | |||||||||||||||||||||
Power Purchase Contracts | |||||||||||||||||||||
As of December 31, 2014, Pepco Holdings’ contractual obligations under non-derivative power purchase contracts were $276 million in 2015, $509 million in 2016 to 2017, and $478 million in 2018 to 2019 and $1,177 million thereafter. | |||||||||||||||||||||
Lease Commitments | |||||||||||||||||||||
Rental expense for operating leases was $59 million, $54 million and $52 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||
Total future minimum operating lease payments for Pepco Holdings as of December 31, 2014 are $45 million in 2015, $43 million in 2016, $40 million in 2017, $40 million in 2018, $28 million in 2019 and $329 million thereafter. | |||||||||||||||||||||
Delmarva Power & Light Co/De [Member] | |||||||||||||||||||||
Commitments and Contingencies | (14) COMMITMENTS AND CONTINGENCIES | ||||||||||||||||||||
General Litigation | |||||||||||||||||||||
From time to time, DPL is named as a defendant in litigation, usually relating to general liability or auto liability claims that resulted in personal injury or property damage to third parties. DPL is self-insured against such claims up to a certain self-insured retention amount and maintains insurance coverage against such claims at higher levels, to the extent deemed prudent by management. In addition, DPL’s contracts with its vendors generally require the vendors to name DPL as an additional insured for the amount at least equal to DPL’s self-insured retention. Further, DPL’s contracts with its vendors require the vendors to indemnify DPL for various acts and activities that may give rise to claims against DPL. Loss contingency liabilities for both asserted and unasserted claims are recognized if it is probable that a loss will result from such a claim and if the amounts of the losses can be reasonably estimated. Although the outcome of the claims and proceedings cannot be predicted with any certainty, management believes that there are no existing claims or proceedings that are likely to have a material adverse effect on DPL’s financial condition, results of operations or cash flows. At December 31, 2014, DPL had recorded estimated loss contingency liabilities for general litigation totaling approximately $2 million. | |||||||||||||||||||||
Environmental Matters | |||||||||||||||||||||
DPL is subject to regulation by various federal, regional, state, and local authorities with respect to the environmental effects of its operations, including air and water quality control, solid and hazardous waste disposal, and limitations on land use. Although penalties assessed for violations of environmental laws and regulations are not recoverable from DPL’s customers, environmental clean-up costs incurred by DPL generally are included in its cost of service for ratemaking purposes. The total accrued liabilities for the environmental contingencies of DPL described below at December 31, 2014 are summarized as follows: | |||||||||||||||||||||
Transmission | Legacy | Total | |||||||||||||||||||
and Distribution | Generation - | ||||||||||||||||||||
Regulated | |||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Balance as of January 1 | $ | 1 | $ | 2 | $ | 3 | |||||||||||||||
Accruals | — | — | — | ||||||||||||||||||
Payments | — | — | — | ||||||||||||||||||
Balance as of December 31 | 1 | 2 | 3 | ||||||||||||||||||
Less amounts in Other Current Liabilities | 1 | 1 | 2 | ||||||||||||||||||
Amounts in Other Deferred Credits | $ | — | $ | 1 | $ | 1 | |||||||||||||||
Ward Transformer Site | |||||||||||||||||||||
In April 2009, a group of potentially responsible parties (PRPs) with respect to the Ward Transformer site in Raleigh, North Carolina, filed a complaint in the U.S. District Court for the Eastern District of North Carolina, alleging cost recovery and/or contribution claims against a number of entities, including DPL, based on their alleged sale of transformers to Ward Transformer, with respect to past and future response costs incurred by the PRP group in performing a removal action at the site. In a March 2010 order, the court denied the defendants’ motion to dismiss. The litigation is moving forward with certain “test case” defendants (not including DPL) filing summary judgment motions regarding liability. The case has been stayed as to the remaining defendants pending rulings upon the test cases. In a January 31, 2013 order, the Federal district court granted summary judgment for the test case defendant whom plaintiffs alleged was liable based on its sale of transformers to Ward Transformer. The Federal district court’s order addresses only the liability of the test case defendant. Plaintiffs have appealed the district court’s order to the U.S. Court of Appeals for the Fourth Circuit. DPL has concluded that a loss is reasonably possible with respect to this matter, but is unable to estimate an amount or range of reasonably possible losses to which it may be exposed. DPL does not believe that it had extensive business transactions, if any, with the Ward Transformer site. | |||||||||||||||||||||
Indian River Oil Release | |||||||||||||||||||||
In 2001, DPL entered into a consent agreement with the Delaware Department of Natural Resources and Environmental Control for remediation, site restoration, natural resource damage compensatory projects and other costs associated with environmental contamination resulting from an oil release at the Indian River generating facility, which was sold in June 2001. The amount of remediation costs accrued for this matter is included in the table above in the column entitled “Legacy Generation – Regulated.” | |||||||||||||||||||||
Metal Bank Site | |||||||||||||||||||||
In the first quarter of 2013, the National Oceanic and Atmospheric Administration (NOAA) contacted DPL on behalf of itself and other federal and state trustees to request that DPL execute a tolling agreement to facilitate settlement negotiations concerning natural resource damages allegedly caused by releases of hazardous substances, including polychlorinated biphenyls, at the Metal Bank Superfund Site located in Philadelphia, Pennsylvania. DPL executed a tolling agreement, which has been extended to March 15, 2015, and will continue settlement discussions with the NOAA, the trustees and other PRPs. | |||||||||||||||||||||
The amount accrued for this matter is included in the table above in the column entitled “Transmission and Distribution.” | |||||||||||||||||||||
Virginia Department of Environmental Quality Notice of Violation | |||||||||||||||||||||
On February 2, 2015, the Virginia Department of Environmental Quality (VDEQ) issued a notice of violation (NOV) to DPL in connection with alleged violations of state water control laws and regulations associated with recent construction activities undertaken to replace certain transmission facilities. The NOV informs DPL of information on which VDEQ may rely to institute an administrative or judicial enforcement action, requests a meeting, and states that DPL may be asked to enter into a consent order to formalize a plan and schedule of corrective action and settle any outstanding issues regarding the matter including the assessment of civil charges. Whether any such charges will be assessed is not known or estimable at this time. DPL does not believe that the remediation costs to resolve this matter will have a material adverse effect on its financial condition, results of operations or cash flows. | |||||||||||||||||||||
Contractual Obligations | |||||||||||||||||||||
Power Purchase Contracts | |||||||||||||||||||||
As of December 31, 2014, DPL’s contractual obligations under non-derivative power purchase contracts were $64 million in 2015, $129 million in 2016 to 2017, $128 million in 2018 to 2019 and $291 million thereafter. | |||||||||||||||||||||
Lease Commitments | |||||||||||||||||||||
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 $79 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 December 31, 2014, are $13 million in 2015, $12 million in 2016, $11 million in 2017, $14 million in 2018, $5 million in 2019 and $114 million thereafter. | |||||||||||||||||||||
Rental expense for operating leases, including the Merrill Creek Reservoir lease, was $14 million, $13 million and $12 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||
Potomac Electric Power Co [Member] | |||||||||||||||||||||
Commitments and Contingencies | (12) COMMITMENTS AND CONTINGENCIES | ||||||||||||||||||||
General Litigation | |||||||||||||||||||||
From time to time, Pepco is named as a defendant in litigation, usually relating to general liability or auto liability claims that resulted in personal injury or property damage to third parties. Pepco is self-insured against such claims up to a certain self-insured retention amount and maintains insurance coverage against such claims at higher levels, to the extent deemed prudent by management. In addition, Pepco’s contracts with its vendors generally require the vendors to name Pepco as an additional insured for the amount at least equal to Pepco’s self-insured retention. Further, Pepco’s contracts with its vendors require the vendors to indemnify Pepco for various acts and activities that may give rise to claims against Pepco. Loss contingency liabilities for both asserted and unasserted claims are recognized if it is probable that a loss will result from such a claim and if the amounts of the losses can be reasonably estimated. Although the outcome of the claims and proceedings cannot be predicted with any certainty, management believes that there are no existing claims or proceedings that are likely to have a material adverse effect on Pepco’s financial condition, results of operations or cash flows. At December 31, 2014, Pepco had recorded estimated loss contingency liabilities for general litigation totaling approximately $25 million (including amounts related to the matter specifically described below), and the portion of these estimated loss contingency liabilities in excess of the self-insured retention amount was substantially offset by estimated insurance receivables. | |||||||||||||||||||||
Pepco Substation Injury Claim | |||||||||||||||||||||
In May 2013, a worker employed by a subcontractor to erect a scaffold at a Pepco substation came into contact with an energized transformer and suffered serious injuries. In August 2013, the individual filed suit against Pepco in the Circuit Court for Montgomery County, Maryland, seeking damages for past and future medical expenses, past and future lost wages, pain and suffering and the cost of a life care plan. On October 22, 2014, an award of approximately $21.7 million was entered in favor of the plaintiff in this matter. Pepco has recorded this liability as of December 31, 2014, which is included in the liability for general litigation referred to above. Pepco’s insurer and the contractor’s insurer have acknowledged insurance coverage for the incident, including coverage of Pepco’s self-insured retention amount. Pepco has concluded as of December 31, 2014, that realization of its insurance claims associated with this matter is probable and, accordingly, has recorded an estimated insurance receivable of the same amount as the related liability. | |||||||||||||||||||||
Environmental Matters | |||||||||||||||||||||
Pepco is subject to regulation by various federal, regional, state and local authorities with respect to the environmental effects of its operations, including air and water quality control, solid and hazardous waste disposal and limitations on land use. Although penalties assessed for violations of environmental laws and regulations are not recoverable from customers of Pepco, environmental clean-up costs incurred by Pepco generally are included in its cost of service for ratemaking purposes. The total accrued liabilities for the environmental contingencies of Pepco described below at December 31, 2014 are summarized as follows: | |||||||||||||||||||||
Transmission | Legacy | Total | |||||||||||||||||||
and | Generation - | ||||||||||||||||||||
Distribution | Regulated | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Balance as of January 1 | $ | 18 | $ | 3 | $ | 21 | |||||||||||||||
Accruals | — | — | — | ||||||||||||||||||
Payments | 2 | — | 2 | ||||||||||||||||||
Balance as of December 31 | 16 | 3 | 19 | ||||||||||||||||||
Less amounts in Other Current Liabilities | 2 | — | 2 | ||||||||||||||||||
Amounts in Other Deferred Credits | $ | 14 | $ | 3 | $ | 17 | |||||||||||||||
Peck Iron and Metal Site | |||||||||||||||||||||
The U.S. Environmental Protection Agency (EPA) informed Pepco in a May 2009 letter that Pepco may be a potentially responsible party (PRP) under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) with respect to the cleanup of the Peck Iron and Metal site in Portsmouth, Virginia, and for costs EPA has incurred in cleaning up the site. The EPA letter states that Peck Iron and Metal purchased, processed, stored and shipped metal scrap from military bases, governmental agencies and businesses and that the Peck Iron and Metal scrap operations resulted in the improper storage and disposal of hazardous substances. EPA bases its allegation that Pepco arranged for disposal or treatment of hazardous substances sent to the site on information provided by former Peck Iron and Metal personnel, who informed EPA that Pepco was a customer at the site. Pepco has advised EPA by letter that its records show no evidence of any sale of scrap metal by Pepco to the site. Even if EPA has such records and such sales did occur, Pepco believes that any such scrap metal sales may be entitled to the recyclable material exemption from CERCLA liability. In a Federal Register notice published in November 2009, EPA placed the Peck Iron and Metal site on the National Priorities List. The National Priorities List, among other things, serves as a guide to EPA in determining which sites warrant further investigation to assess the nature and extent of the human health and environmental risks associated with a site. In September 2011, EPA initiated a remedial investigation/feasibility study (RI/FS) using federal funds. Pepco cannot at this time estimate an amount or range of reasonably possible loss associated with this RI/FS, any remediation activities to be performed at the site or any other costs that EPA might seek to impose on Pepco. | |||||||||||||||||||||
Ward Transformer Site | |||||||||||||||||||||
In April 2009, a group of PRPs with respect to the Ward Transformer site in Raleigh, North Carolina, filed a complaint in the U.S. District Court for the Eastern District of North Carolina, alleging cost recovery and/or contribution claims against a number of entities, including Pepco, based on their alleged sale of transformers to Ward Transformer, with respect to past and future response costs incurred by the PRP group in performing a removal action at the site. In a March 2010 order, the court denied the defendants’ motion to dismiss. The litigation is moving forward with certain “test case” defendants (not including Pepco) filing summary judgment motions regarding liability. The case has been stayed as to the remaining defendants pending rulings upon the test cases. In a January 31, 2013 order, the Federal district court granted summary judgment for the test case defendant whom plaintiffs alleged was liable based on its sale of transformers to Ward Transformer. The Federal district court’s order addresses only the liability of the test case defendant. Plaintiffs have appealed the district court’s order to the U.S. Court of Appeals for the Fourth Circuit. Pepco has concluded that a loss is reasonably possible with respect to this matter, but is unable to estimate an amount or range of reasonably possible losses to which it may be exposed. Pepco does not believe that it had extensive business transactions, if any, with the Ward Transformer site. | |||||||||||||||||||||
Benning Road Site | |||||||||||||||||||||
Contamination of Lower Anacosita River | |||||||||||||||||||||
In September 2010, PHI received a letter from EPA identifying the Benning Road location, consisting of a generation facility formerly operated by Pepco’s affiliate, Pepco Energy Services, Inc. (Pepco Energy Services), and a transmission and distribution service center facility operated by Pepco, as one of six land-based sites potentially contributing to contamination of the lower Anacostia River. The generation facility was deactivated in June 2012 and the plant structures are currently in the process of being demolished, but the service center remains in operation. The principal contaminants of concern are polychlorinated biphenyls and polycyclic aromatic hydrocarbons. In December 2011, the U.S. District Court for the District of Columbia approved a consent decree entered into by Pepco and Pepco Energy Services with the District of Columbia Department of the Environment (DDOE), which requires Pepco and Pepco Energy Services to conduct a RI/FS for the Benning Road site and an approximately 10 to 15 acre portion of the adjacent Anacostia River. The RI/FS will form the basis for DDOE’s selection of a remedial action for the Benning Road site and for the Anacostia River sediment associated with the site. The consent decree does not obligate Pepco or Pepco Energy Services to pay for or perform any remediation work, but it is anticipated that DDOE will look to Pepco and Pepco Energy Services to assume responsibility for cleanup of any conditions in the river that are determined to be attributable to past activities at the Benning Road site. | |||||||||||||||||||||
The final phase of remedial investigation field work, consisting of the installation of monitoring wells and groundwater sampling and analysis, began in May 2014. In addition, as part of the remaining remedial investigation field work and in conjunction with the power plant demolition activities, Pepco and Pepco Energy Services collected soil samples adjacent to and beneath the concrete basins for the cooling towers previously dismantled and removed from the site of the generating facility. This sampling showed localized areas of soil contamination associated with the cooling tower basins, and Pepco has submitted a plan to DDOE for the removal of contaminated soil in conjunction with the demolition and removal of the concrete basins. The remedial investigation field sampling was completed in December 2014. Pepco and Pepco Energy Services will prepare RI/FS reports for review and approval by DDOE after solicitation and consideration of public comment. The next status report to the court is due on May 25, 2015. | |||||||||||||||||||||
The remediation costs accrued for this matter are included in the table above in the columns entitled “Transmission and Distribution” and “Legacy Generation – Regulated.” | |||||||||||||||||||||
NPDES Permit Limit Exceedances | |||||||||||||||||||||
Pepco holds a National Pollutant Discharge Elimination System (NPDES) permit issued by EPA with a June 19, 2009 effective date, which authorizes discharges from the Benning Road facility, including the now deactivated Pepco Energy Services generating facility located at that site. The 2009 permit imposed compliance monitoring and storm water best management practices to satisfy the District of Columbia’s Total Maximum Daily Load (TMDL) standards for polychlorinated biphenyls, oil and grease, metals and other substances. As part of the implementation of the TMDL requirements, the permit also imposed numerical limits on certain substances in storm water discharges to the Anacostia River. Quarterly monitoring results since the issuance of the permit have shown consistent exceedances of the limits for copper and zinc, as well as occasional exceedances for iron and lead. As required by the permit, Pepco initiated a study to identify the potential sources of these substances at the site and to determine appropriate best management practices for minimizing the presence of the substances in storm water discharges from the facility. The initial study report was completed in May 2012. Pepco has completed the implementation of the first two phases of the best management practices recommended in the study report (consisting principally of installing metal absorbing filters to capture contaminants from storm water flows, removing stored equipment from areas exposed to the weather, covering and painting exposed metal pipes, and covering and cleaning dumpsters). These measures have been effective in reducing metal concentrations in stormwater discharges; however, additional measures will be required to be implemented by Pepco to reduce the concentrations to levels required by the permit. | |||||||||||||||||||||
The NPDES permit was due to expire on June 19, 2014. Pepco submitted a permit renewal application on December 17, 2013. In November 2014, EPA advised Pepco that it will not renew the permit until the Benning Road facility has come into compliance with the existing permit limits. The current permit remains in effect pending EPA’s action on the renewal application. Pepco has prepared a plan to implement the third phase of the best management practices recommended in the study report with the objective of achieving full compliance with the permit limits by the end of 2015. The plan was submitted to EPA on December 30, 2014, and Pepco has begun implementing those best practices in accordance with the plan. Pepco anticipates that EPA may request that Pepco enter into an administrative compliance agreement with respect to the implementation of these additional control measures, and may seek administrative penalties for past noncompliance with the permit limits for metals in storm water. Whether such penalties will be imposed and, if so, the amount of any such penalties, is not known or estimable at this time. At present, Pepco expects that compliance with the permit limits can be achieved through a combination of enhanced storm drain inlet controls (filters and metal absorbing booms), enhanced site housekeeping, and enhanced inspection and maintenance of storm water controls. If these measures are not adequate to achieve compliance with the permit limits, however, it is possible that a capital project to install a storm water treatment system may be required. The need for any such capital expenditures will not be known until Pepco has implemented the third phase of the best management practices. | |||||||||||||||||||||
Potomac River Mineral Oil Release | |||||||||||||||||||||
In January 2011, a coupling failure on a transformer cooler pipe resulted in a release of non-toxic mineral oil at Pepco’s Potomac River substation in Alexandria, Virginia. An overflow of an underground secondary containment reservoir resulted in approximately 4,500 gallons of mineral oil flowing into the Potomac River. | |||||||||||||||||||||
In March 2014, Pepco and DDOE entered into a consent decree to resolve a threatened DDOE enforcement action, the terms of which include a combination of a civil penalty and a Supplemental Environmental Project (SEP) with a total cost to Pepco of $875,000. The consent decree was approved and entered by the District of Columbia Superior Court on April 4, 2014. Pepco has paid the $250,000 civil penalty imposed under the consent decree and, pursuant to the consent decree, has made a one-time donation in the amount of $25,000 to the Northeast Environmental Enforcement Training Fund, Inc., a non-profit organization that funds scholarships for environmental enforcement training. The consent decree confirmed that no further actions are required by Pepco to investigate, assess or remediate impacts to the river from the mineral oil release. To implement the SEP, Pepco has entered into an agreement with Living Classrooms Foundation, Inc., a non-profit educational organization, to provide $600,000 to fund the design, installation and operation of a trash collection system at a storm water outfall that drains to the Anacostia River. The design for the trash collection system is currently under review by DDOE, and Pepco expects that this system will be constructed and placed into operation by the end of 2015, which will satisfy Pepco’s obligations under the consent decree. The next status hearing in this matter has been set for September 18, 2015. | |||||||||||||||||||||
The consent decree does not resolve potential claims under federal law for natural resource damages resulting from the oil release. Pepco has engaged in separate discussions with DDOE and the federal resource trustees regarding the settlement of a possible natural resource damages claim under federal law. The federal trustees are still evaluating the claim and the terms of a possible settlement. At this time, it is uncertain whether or when the settlement discussions may resume or if the trustees will continue to pursue the natural resource damages claim. Based on discussions to date, Pepco does not believe that the resolution of the federal natural resource damages claim will have a material adverse effect on its financial condition, results of operations or cash flows. | |||||||||||||||||||||
As a result of the mineral oil release, Pepco implemented certain interim operational changes to the secondary containment systems at the facility which involve pumping accumulated storm water to an above-ground holding tank for off-site disposal. In December 2011, Pepco completed the installation of a treatment system designed to allow automatic discharge of accumulated storm water from the secondary containment system. Pepco currently is seeking DDOE’s and EPA’s approval to commence operation of the new system on a pilot basis to demonstrate its effectiveness in meeting both secondary containment requirements and water quality standards related to the discharge of storm water from the facility. In the meantime, Pepco is continuing to use the aboveground holding tank to manage storm water from the secondary containment system. Pepco also is evaluating other technical and regulatory options for managing storm water from the secondary containment system as alternatives to the proposed treatment system discharge currently under discussion with EPA and DDOE. | |||||||||||||||||||||
The amount accrued for this matter is included in the table above in the column entitled “Transmission and Distribution.” | |||||||||||||||||||||
Metal Bank Site | |||||||||||||||||||||
In the first quarter of 2013, the National Oceanic and Atmospheric Administration (NOAA) contacted Pepco on behalf of itself and other federal and state trustees to request that Pepco execute a tolling agreement to facilitate settlement negotiations concerning natural resource damages allegedly caused by releases of hazardous substances, including polychlorinated biphenyls, at the Metal Bank Superfund Site located in Philadelphia, Pennsylvania. Pepco executed a tolling agreement, which has been extended to March 15, 2015, and will continue settlement discussions with the NOAA, the trustees and other PRPs. | |||||||||||||||||||||
The amount accrued for this matter is included in the table above in the column entitled “Transmission and Distribution.” | |||||||||||||||||||||
Brandywine Fly Ash Disposal Site | |||||||||||||||||||||
In February 2013, Pepco received a letter from the Maryland Department of the Environment (MDE) requesting that Pepco investigate the extent of waste on a Pepco right-of-way that traverses the Brandywine fly ash disposal site in Brandywine, Prince George’s County, Maryland, owned by NRG Energy, Inc. (as successor to GenOn MD Ash Management, LLC) (NRG). In July 2013, while reserving its rights and related defenses under a 2000 agreement covering the sale of this site, Pepco indicated its willingness to investigate the extent of, and propose an appropriate closure plan to address, ash on the right-of-way. Pepco submitted a schedule for development of a closure plan to MDE on September 30, 2013 and, by letter dated October 18, 2013, MDE approved the schedule. | |||||||||||||||||||||
Pepco has determined that a loss associated with this matter is probable and have estimated that the costs for implementation of a closure plan and cap on the site are in the range of approximately $3 million to $6 million. Pepco believes that the costs incurred in this matter will be recoverable from NRG under the 2000 sale agreement. | |||||||||||||||||||||
The amount accrued for this matter is included in the table above in the column entitled “Transmission and Distribution.” | |||||||||||||||||||||
Contractual Obligations | |||||||||||||||||||||
Power Purchase Contracts | |||||||||||||||||||||
As of December 31, 2014, Pepco had no contractual obligations under non-derivative power purchase contracts. | |||||||||||||||||||||
Lease Commitments | |||||||||||||||||||||
Rental expense for operating leases was $8 million, $7 million and $6 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||
Total future minimum operating lease payments for Pepco as of December 31, 2014 are $7 million in 2015, $6 million in 2016, $5 million in 2017, $4 million in 2018, $3 million in 2019 and $22 million thereafter. | |||||||||||||||||||||
Atlantic City Electric Co [Member] | |||||||||||||||||||||
Commitments and Contingencies | (13) COMMITMENTS AND CONTINGENCIES | ||||||||||||||||||||
General Litigation | |||||||||||||||||||||
From time to time, ACE is named as a defendant in litigation, usually relating to general liability or auto liability claims that resulted in personal injury or property damage to third parties. ACE is self-insured against such claims up to a certain self-insured retention amount and maintains insurance coverage against such claims at higher levels, to the extent deemed prudent by management. In addition, ACE’s contracts with its vendors generally require the vendors to name ACE as an additional insured for the amount at least equal to ACE’s self-insured retention. Further, ACE’s contracts with its vendors require the vendors to indemnify ACE for various acts and activities that may give rise to claims against ACE. Loss contingency liabilities for both asserted and unasserted claims are recognized if it is probable that a loss will result from such a claim and if the amounts of the losses can be reasonably estimated. Although the outcome of the claims and proceedings cannot be predicted with any certainty, management believes that there are no existing claims or proceedings that are likely to have a material adverse effect on ACE’s financial condition, results of operations or cash flows. At December 31, 2014, ACE had recorded estimated loss contingency liabilities for general litigation totaling approximately $6 million (including amounts related to the matters specifically described below), and the portion of these estimated loss contingency liabilities in excess of the self-insured retention amount was substantially offset by estimated insurance receivables. | |||||||||||||||||||||
Asbestos Claim | |||||||||||||||||||||
In September 2011, an asbestos complaint was filed in the New Jersey Superior Court, Law Division, against ACE (among other defendants) asserting claims under New Jersey’s Wrongful Death and Survival statutes. The complaint, filed by the estate of a decedent who was the wife of a former employee of ACE, alleges that the decedent’s mesothelioma was caused by exposure to asbestos brought home by her husband on his work clothes. New Jersey courts have recognized a cause of action against a premise owner in a so-called “take home” case if it can be shown that the harm was foreseeable. In this case, the complaint seeks recovery of an unspecified amount of damages for, among other things, the decedent’s past medical expenses, loss of earnings, and pain and suffering between the time of injury and death, and asserts a punitive damage claim. At December 31, 2014, ACE has concluded that a loss is probable with respect to this matter and has recorded an estimated loss contingency liability, which is included in the liability for general litigation referred to above as of December 31, 2014. However, due to the inherent uncertainty of litigation, ACE is unable to estimate a maximum amount of possible loss because the damages sought are indeterminate and the matter involves facts that ACE believes are distinguishable from the facts of the “take-home” cause of action recognized by the New Jersey courts. | |||||||||||||||||||||
Electrical Contact Injury Claims | |||||||||||||||||||||
In October 2010, a farm combine came into and remained in contact with a primary electric line in ACE’s service territory in New Jersey. As a result, two individuals operating the combine received fatal electrical contact injuries. While attempting to rescue those two individuals, another individual sustained third-degree burns to his torso and upper extremities. In September 2012, the individual who received third-degree burns filed suit in New Jersey Superior Court, Salem County. In October 2012, additional suits were filed in the same court by or on behalf of the estates of the deceased individuals. Plaintiffs in each of the cases sought indeterminate damages and alleged that ACE was negligent in the design, construction, erection, operation and maintenance of its poles, power lines, and equipment, and that ACE failed to warn and protect the public from the foreseeable dangers of farm equipment contacting electric lines. The litigation involved a number of other defendants and the filing of numerous cross-claims. On September 23, 2014, ACE entered into a confidential settlement with each of the plaintiffs regarding this matter. On November 5, 2014, ACE received reimbursement from its insurers for the amounts of this settlement above its $2 million self-insured retention amount. | |||||||||||||||||||||
Environmental Matters | |||||||||||||||||||||
ACE is subject to regulation by various federal, regional, state and local authorities with respect to the environmental effects of its operations, including air and water quality control, solid and hazardous waste disposal and limitations on land use. Although penalties assessed for violations of environmental laws and regulations are not recoverable from customers of ACE, environmental clean-up costs incurred by ACE generally are included in its cost of service for ratemaking purposes. The total accrued liabilities for the environmental contingencies of ACE described below at December 31, 2014 are summarized as follows: | |||||||||||||||||||||
Legacy Generation - | |||||||||||||||||||||
Regulated | |||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Balance as of January 1 | $ | 1 | |||||||||||||||||||
Accruals | — | ||||||||||||||||||||
Payments | — | ||||||||||||||||||||
Balance as of December 31 | 1 | ||||||||||||||||||||
Less amounts in Other Current Liabilities | — | ||||||||||||||||||||
Amounts in Other Deferred Credits | $ | 1 | |||||||||||||||||||
Franklin Slag Pile Site | |||||||||||||||||||||
In November 2008, ACE received a general notice letter from the U.S. Environmental Protection Agency (EPA) concerning the Franklin Slag Pile site in Philadelphia, Pennsylvania, asserting that ACE is a potentially responsible party (PRP) that may have liability for clean-up costs with respect to the site and for the costs of implementing an EPA-mandated remedy. EPA’s claims are based on ACE’s sale of boiler slag from the B.L. England generating facility, then owned by ACE, to MDC Industries, Inc. (MDC) during the period June 1978 to May 1983. EPA claims that the boiler slag ACE sold to MDC contained copper and lead, which are hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), and that the sales transactions may have constituted an arrangement for the disposal or treatment of hazardous substances at the site, which could be a basis for liability under CERCLA. The EPA letter also states that, as of the date of the letter, EPA’s expenditures for response measures at the site have exceeded $6 million. EPA’s feasibility study for this site conducted in 2007 identified a range of alternatives for permanent remedial measures with varying cost estimates, and the estimated cost of EPA’s preferred alternative is approximately $6 million. | |||||||||||||||||||||
ACE believes that the B.L. England boiler slag sold to MDC was a valuable material with various industrial applications and, therefore, the sale was not an arrangement for the disposal or treatment of any hazardous substances as would be necessary to constitute a basis for liability under CERCLA. ACE intends to contest any claims to the contrary made by EPA. In a May 2009 decision arising under CERCLA, which did not involve ACE, the U.S. Supreme Court rejected an EPA argument that the sale of a useful product constituted an arrangement for disposal or treatment of hazardous substances. While this decision supports ACE’s position, at this time ACE cannot predict how EPA will proceed with respect to the Franklin Slag Pile site, or what portion, if any, of the Franklin Slag Pile site response costs EPA would seek to recover from ACE. Costs to resolve this matter are not expected to be material and are expensed as incurred. | |||||||||||||||||||||
Ward Transformer Site | |||||||||||||||||||||
In April 2009, a group of PRPs with respect to the Ward Transformer site in Raleigh, North Carolina, filed a complaint in the U.S. District Court for the Eastern District of North Carolina, alleging cost recovery and/or contribution claims against a number of entities, including ACE, based on their alleged sale of transformers to Ward Transformer, with respect to past and future response costs incurred by the PRP group in performing a removal action at the site. In a March 2010 order, the court denied the defendants’ motion to dismiss. The litigation is moving forward with certain “test case” defendants (not including ACE) filing summary judgment motions regarding liability. The case has been stayed as to the remaining defendants pending rulings upon the test cases. In a January 31, 2013 order, the Federal district court granted summary judgment for the test case defendant whom plaintiffs alleged was liable based on its sale of transformers to Ward Transformer. The Federal district court’s order addresses only the liability of the test case defendant. Plaintiffs have appealed the district court’s order to the U.S. Court of Appeals for the Fourth Circuit. ACE has concluded that a loss is reasonably possible with respect to this matter, but is unable to estimate an amount or range of reasonably possible losses to which it may be exposed. ACE does not believe that it had extensive business transactions, if any, with the Ward Transformer site. | |||||||||||||||||||||
Contractual Obligations | |||||||||||||||||||||
Power Purchase Contracts | |||||||||||||||||||||
As of December 31, 2014, ACE’s contractual obligations under non-derivative power purchase contracts were $210 million in 2015, $381 million in 2016 to 2017, $349 million in 2018 to 2019 and $886 million thereafter. | |||||||||||||||||||||
Lease Commitments | |||||||||||||||||||||
ACE leases certain types of property and equipment for use in its operations. Rental expense for operating leases was $12 million, $12 million and $11 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||
Total future minimum operating lease payments for ACE as of December 31, 2014 are $6 million in 2015, $6 million 2016, $5 million in 2017, $4 million in 2018, $4 million in 2019 and $30 million thereafter. |
Variable_Interest_Entities
Variable Interest Entities | 12 Months Ended |
Dec. 31, 2014 | |
Variable Interest Entities | (17) VARIABLE INTEREST ENTITIES |
PHI is required to consolidate a VIE in accordance with FASB ASC 810 if PHI or a subsidiary is the primary beneficiary of the VIE. The primary beneficiary of a VIE is typically the entity with both the power to direct activities most significantly impacting economic performance of the VIE and the obligation to absorb losses or receive benefits of the VIE that could potentially be significant to the VIE. PHI performs a qualitative analysis to determine whether a variable interest provides a controlling financial interest in any of the VIEs in which PHI or its subsidiaries have an interest. Set forth below are the relationships with respect to which PHI conducted a VIE analysis as of December 31, 2014: | |
DPL Renewable Energy Transactions | |
DPL is subject to Renewable Energy Portfolio Standards (RPS) in the state of Delaware that require it to obtain renewable energy credits (RECs) for energy delivered to its customers. DPL’s costs associated with obtaining RECs to fulfill its RPS obligations are recoverable from its customers by law. As of December 31, 2014, PHI, through its DPL subsidiary, is a party to three land-based wind PPAs in the aggregate amount of 128 MWs, one solar PPA with a 10 MW facility, and a PPA with the Delaware Sustainable Energy Utility (DSEU) to purchase solar renewable energy credits (SRECs). Each of the facilities associated with these PPAs is operational, and DPL is obligated to purchase energy and RECs in amounts generated and delivered by the wind facilities and SRECs from the solar facility and DSEU, up to certain amounts (as set forth below) at rates that are primarily fixed under the respective agreements. PHI and DPL have concluded that while VIEs exist under these contracts, consolidation is not required under the FASB guidance on the consolidation of VIEs as DPL is not the primary beneficiary. DPL has not provided financial or other support under these arrangements that it was not previously contractually required to provide during the periods presented, nor does DPL have any intention to provide such additional support. | |
Because DPL has no equity or debt interest in these renewable energy transactions, the maximum exposure to loss relates primarily to any above-market costs incurred for power, RECs or SRECs. Due to unpredictability in the amount of MWs ultimately purchased under the agreements for purchased renewable energy, RECs and SRECs, PHI and DPL are unable to quantify the maximum exposure to loss. The power purchase, REC and SREC costs are recoverable from DPL’s customers through regulated rates. | |
Wind PPAs | |
DPL is obligated to purchase energy and RECs from one of the wind facilities through 2024 in amounts not to exceed 50 MWs, from the second wind facility through 2031 in amounts not to exceed 40 MWs, and from the third wind facility through 2031 in amounts not to exceed 38 MWs. DPL’s aggregate purchases under the three wind PPAs totaled $31 million, $30 million and $27 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |
Solar PPAs | |
The term of the PPA with the solar facility is through 2030 and DPL is obligated to purchase SRECs in an amount up to 70 percent of the energy output at a fixed price. The DSEU may enter into 20-year contracts with solar facilities to purchase SRECs for resale to DPL. Under the DSEU PPA, DPL is obligated to purchase SRECs in amounts not to exceed 19 MWs at annually determined auction rates. DPL’s purchases under these solar PPAs totaled $6 million, $3 million and $2 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |
Fuel Cell Facilities | |
On October 18, 2011, the DPSC approved a tariff submitted by DPL in accordance with the requirements of the RPS specific to fuel cell facilities totaling 30 MWs to be constructed by a qualified fuel cell provider. The tariff and the RPS establish that DPL acts solely as an agent to collect payments in advance from its distribution customers and remit them to the qualified fuel cell provider for each MW hour of energy produced by the fuel cell facilities through 2033. The RPS provides for a reduction in DPL’s REC requirements based upon the actual energy output of the facilities. At December 31, 2014 and 2013, 30 MWs and 15 MWs of capacity were available from fuel cell facilities placed in service under the tariff, respectively. DPL billed $36 million, $23 million and $4 million to distribution customers for the years ended December 31, 2014, 2013 and 2012, respectively. | |
ACE Power Purchase Agreements | |
PHI, through its ACE subsidiary, is a party to three PPAs with unaffiliated NUGs totaling 459 MWs. One of the agreements ends in 2016 and the other two end in 2024. PHI and ACE have no equity or debt invested in these entities. In performing its VIE analysis, PHI has been unable to obtain sufficient information to determine whether these three entities were variable interest entities or if ACE was the primary beneficiary. As a result, PHI has applied the scope exemption from the consolidation guidance. | |
Because ACE has no equity or debt invested in the NUGs, the maximum exposure to loss relates primarily to any above-market costs incurred for power. Due to unpredictability in the pricing for purchased energy under the PPAs, PHI and ACE are unable to quantify the maximum exposure to loss. The power purchase costs are recoverable from ACE’s customers through regulated rates. Purchase activities with the NUGs, including excess power purchases not covered by the PPAs, for the years ended December 31, 2014, 2013 and 2012, were approximately $233 million, $221 million and $206 million, respectively, of which approximately $208 million, $206 million and $201 million, respectively, consisted of power purchases under the PPAs. | |
ACE Funding | |
In 2001, ACE established ACE Funding solely for the purpose of securitizing authorized portions of ACE’s recoverable stranded costs through the issuance and sale of Transition Bonds. The proceeds of the sale of each series of Transition Bonds were transferred to ACE in exchange for the transfer by ACE to ACE Funding of the right to collect a non-bypassable Transition Bond Charge (representing revenue ACE receives, and pays to ACE Funding, to fund the principal and interest payments on Transition Bonds and related taxes, expenses and fees) from ACE customers pursuant to bondable stranded costs rate orders issued by the NJBPU in an amount sufficient to fund the principal and interest payments on the Transition Bonds and related taxes, expenses and fees (Bondable Transition Property). The assets of ACE Funding, including the Bondable Transition Property, and the Transition Bond Charges collected from ACE’s customers, are not available to creditors of ACE. The holders of Transition Bonds have recourse only to the assets of ACE Funding. ACE owns 100 percent of the equity of ACE Funding, and PHI and ACE consolidate ACE Funding in their consolidated financial statements as ACE is the primary beneficiary of ACE Funding under the variable interest entity consolidation guidance. | |
Delmarva Power & Light Co/De [Member] | |
Variable Interest Entities | (17) VARIABLE INTEREST ENTITIES |
DPL is required to consolidate a VIE in accordance with FASB ASC 810 if DPL is the primary beneficiary of the VIE. The primary beneficiary of a VIE is typically the entity with both the power to direct activities most significantly impacting economic performance of the VIE and the obligation to absorb losses or receive benefits of the VIE that could potentially be significant to the VIE. DPL performed a qualitative analysis to determine whether a variable interest provided a controlling financial interest in any of the VIE’s in which DPL has an interest at December 31, 2014, as described below. | |
DPL is subject to Renewable Energy Portfolio Standards (RPS) in the state of Delaware that require it to obtain renewable energy credits (RECs) for energy delivered to its customers. DPL’s costs associated with obtaining RECs to fulfill its RPS obligations are recoverable from its customers by law. As of December 31, 2014, DPL is a party to three land-based wind PPAs in the aggregate amount of 128 MWs, one solar PPA with a 10 MW facility, and a PPA with the Delaware Sustainable Energy Utility (DSEU) to purchase solar renewable energy credits (SRECs). Each of the facilities associated with these PPAs is operational, and DPL is obligated to purchase energy and RECs in amounts generated and delivered by the wind facilities and SRECs from the solar facility and DSEU, up to certain amounts (as set forth below) at rates that are primarily fixed under the respective agreements. DPL has concluded that while VIEs exist under these contracts, consolidation is not required under the FASB guidance on the consolidation of VIEs as DPL is not the primary beneficiary. DPL has not provided financial or other support under these arrangements that it was not previously contractually required to provide during the periods presented, nor does DPL have any intention to provide such additional support. | |
Because DPL has no equity or debt interest in these renewable energy transactions, the maximum exposure to loss relates primarily to any above-market costs incurred for power, RECs or SRECs. Due to unpredictability in the amount of MWs ultimately purchased under the agreements for purchased renewable energy, RECs and SRECs, DPL is unable to quantify the maximum exposure to loss. The power purchase, REC and SREC costs are recoverable from DPL’s customers through regulated rates. | |
Wind PPAs | |
DPL is obligated to purchase energy and RECs from one of the wind facilities through 2024 in amounts not to exceed 50 MWs, from the second wind facility through 2031 in amounts not to exceed 40 MWs, and from the third wind facility through 2031 in amounts not to exceed 38 MWs. DPL’s aggregate purchases under the three wind PPAs totaled $31million, $30 million and $27 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |
Solar PPAs | |
The term of the PPA with the solar facility is through 2030 and DPL is obligated to purchase SRECs in an amount up to 70 percent of the energy output at a fixed price. The DSEU may enter into 20-year contracts with solar facilities to purchase SRECs for resale to DPL. Under the DSEU PPA, DPL is obligated to purchase SRECs in amounts not to exceed 19 MWs at annually determined auction rates. DPL’s purchases under these solar PPAs totaled $6 million, $3 million and $2 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |
Fuel Cell Facilities | |
On October 18, 2011, the DPSC approved a tariff submitted by DPL in accordance with the requirements of the RPS specific to fuel cell facilities totaling 30 MWs to be constructed by a qualified fuel cell provider. The tariff and the RPS establish that DPL acts solely as an agent to collect payments in advance from its distribution customers and remit them to the qualified fuel cell provider for each MW hour of energy produced by the fuel cell facilities through 2033. The RPS provides for a reduction in DPL’s REC requirements based upon the actual energy output of the facilities. At December 31, 2014 and 2013, 30 MWs and 15 MWs of capacity were available from fuel cell facilities placed in service under the tariff, respectively. DPL billed $36 million, $23 million and $4 million to distribution customers for the years ended December 31, 2014, 2013 and 2012, respectively. | |
Atlantic City Electric Co [Member] | |
Variable Interest Entities | (16) VARIABLE INTEREST ENTITIES |
ACE is required to consolidate a VIE in accordance with FASB ASC 810 if ACE or a subsidiary is the primary beneficiary of the VIE. The primary beneficiary of a VIE is typically the entity with both the power to direct activities most significantly impacting economic performance of the VIE and the obligation to absorb losses or receive benefits of the VIE that could potentially be significant to the VIE. ACE performed a qualitative analysis to determine whether a variable interest provided a controlling financial interest in any of the VIE’s in which ACE has an interest at December 31, 2014, as described below. | |
Power Purchase Agreements | |
ACE is a party to three PPAs with unaffiliated NUGs totaling 459 megawatts. One of the agreements ends in 2016 and the other two end in 2024. ACE has no equity or debt invested in these entities. In performing its VIE analysis, ACE has been unable to obtain sufficient information to determine whether these three entities were variable interest entities or if ACE was the primary beneficiary. As a result, ACE has applied the scope exemption from the consolidation guidance. | |
Because ACE has no equity or debt invested in the NUGs, the maximum exposure to loss relates primarily to any above-market costs incurred for power. Due to unpredictability in the pricing for purchased energy under the PPAs, ACE is unable to quantify the maximum exposure to loss. The power purchase costs are recoverable from ACE’s customers through regulated rates. Purchase activities with the NUGs, including excess power purchases not covered by the PPAs, for the years ended December 31, 2014, 2013 and 2012, were approximately $233 million, $221 million and $206 million, respectively, of which approximately $208 million, $206 million and $201 million, respectively, consisted of power purchases under the PPAs. | |
ACE Funding | |
In 2001, ACE established ACE Funding solely for the purpose of securitizing authorized portions of ACE’s recoverable stranded costs through the issuance and sale of Transition Bonds. The proceeds of the sale of each series of Transition Bonds were transferred to ACE in exchange for the transfer by ACE to ACE Funding of the right to collect a non-bypassable Transition Bond Charge (representing revenue ACE receives, and pays to ACE Funding, to fund the principal and interest payments on Transition Bonds and related taxes, expenses and fees) from ACE customers pursuant to bondable stranded costs rate orders issued by the NJBPU in an amount sufficient to fund the principal and interest payments on the Transition Bonds and related taxes, expenses and fees (Bondable Transition Property). The assets of ACE Funding, including the Bondable Transition Property, and the Transition Bond Charges collected from ACE’s customers, are not available to creditors of ACE. The holders of Transition Bonds have recourse only to the assets of ACE Funding. ACE owns 100 percent of the equity of ACE Funding, and PHI and ACE consolidate ACE Funding in their consolidated financial statements as ACE is the primary beneficiary of ACE Funding under the variable interest entity consolidation guidance. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Loss | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Equity [Abstract] | |||||||||||||
Accumulated Other Comprehensive Loss | (18) ACCUMULATED OTHER COMPREHENSIVE LOSS | ||||||||||||
The components of Pepco Holdings’ AOCL relating to continuing and discontinued operations are as follows. For additional information, see the consolidated statements of comprehensive income. | |||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(millions of dollars) | |||||||||||||
Balance as of January 1 | $ | (34 | ) | $ | (48 | ) | $ | (63 | ) | ||||
Treasury Lock | |||||||||||||
Balance as of January 1 | (9 | ) | (10 | ) | (10 | ) | |||||||
Amount of pre-tax loss reclassified to Interest expense | 1 | 1 | — | ||||||||||
Income tax expense | 1 | — | — | ||||||||||
Balance as of December 31 | (9 | ) | (9 | ) | (10 | ) | |||||||
Pension and Other Postretirement Benefits | |||||||||||||
Balance as of January 1 | (25 | ) | (32 | ) | (24 | ) | |||||||
Amount of amortization of net prior service cost and actuarial loss reclassified to Other operation and maintenance expense | 5 | 5 | 5 | ||||||||||
Amount of net prior service cost and actuarial (loss) gain arising during the year | (25 | ) | 8 | (19 | ) | ||||||||
Income tax (benefit) expense | (8 | ) | 6 | (6 | ) | ||||||||
Balance as of December 31 | (37 | ) | (25 | ) | (32 | ) | |||||||
Commodity Derivatives | |||||||||||||
Balance as of January 1 | — | (6 | ) | (29 | ) | ||||||||
Amount of net pre-tax loss reclassified to (Loss) income from discontinued operations before income tax | — | 10 | 39 | ||||||||||
Income tax expense | — | 4 | 16 | ||||||||||
Balance as of December 31 | — | — | (6 | ) | |||||||||
Balance as of December 31 | $ | (46 | ) | $ | (34 | ) | $ | (48 | ) | ||||
Quarterly_Financial_Informatio
Quarterly Financial Information | 12 Months Ended | ||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||
Quarterly Financial Information | (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 and differences between summer and winter rates. 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 shares of common stock outstanding during the year. | |||||||||||||||||||||||||||
2014 | |||||||||||||||||||||||||||
First | Second | Third | Fourth | Total | |||||||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||||||||||||
(millions of dollars, except per share amounts) | |||||||||||||||||||||||||||
Total Operating Revenue (a) | $ | 1,330 | $ | 1,117 | $ | 1,313 | $ | 1,118 | $ | 4,878 | |||||||||||||||||
Total Operating Expenses (b) | 1,157 | 966 | 1,147 | 1,004 | (c) | 4,274 | |||||||||||||||||||||
Operating Income | 173 | 151 | 166 | 114 | 604 | ||||||||||||||||||||||
Other Expenses | (52 | ) | (53 | ) | (53 | ) | (66 | ) | (224 | ) | |||||||||||||||||
Income from Continuing Operations Before Income Tax Expense | 121 | 98 | 113 | 48 | 380 | ||||||||||||||||||||||
Income Tax Expense Related to Continuing Operations | 46 | 45 | 34 | 13 | 138 | ||||||||||||||||||||||
Net Income | $ | 75 | $ | 53 | $ | 79 | $ | 35 | $ | 242 | |||||||||||||||||
Basic and Diluted Earnings Per Share of Common Stock: | |||||||||||||||||||||||||||
Earnings Per Share of Common Stock | $ | 0.3 | $ | 0.21 | $ | 0.31 | $ | 0.14 | $ | 0.96 | |||||||||||||||||
Cash Dividends Per Share of Common Stock | $ | 0.27 | $ | 0.27 | $ | 0.27 | $ | 0.27 | $ | 1.08 | |||||||||||||||||
(a) | During the fourth quarter of 2014, ACE reversed unbilled revenue of $3 million ($2 million after-tax) to correct an error that had overstated operating revenue in the third quarter of 2014. | ||||||||||||||||||||||||||
(b) | Includes pre-tax impairment losses of $53 million ($32 million after-tax) and $28 million ($16 million after-tax) in the third and fourth quarters of 2014, respectively, at Pepco Energy Services associated with its combined heat and power thermal generating facilities and operations in Atlantic City. | ||||||||||||||||||||||||||
(c) | Includes a charge of $3 million ($2 million after-tax) to correct a prior period error related to the recoverability of certain regulatory assets at ACE. | ||||||||||||||||||||||||||
2013 | |||||||||||||||||||||||||||
First | Second | Third | Fourth | Total | |||||||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||||||||||||
(millions of dollars, except per share amounts) | |||||||||||||||||||||||||||
Total Operating Revenue | $ | 1,180 | $ | 1,051 | $ | 1,344 | $ | 1,091 | $ | 4,666 | |||||||||||||||||
Total Operating Expenses | 1,047 | 906 | 1,109 | 936 | (a) | 3,998 | |||||||||||||||||||||
Operating Income | 133 | 145 | 235 | 155 | 668 | ||||||||||||||||||||||
Other Expenses | (59 | ) | (62 | ) | (60 | ) | (58 | ) | (239 | ) | |||||||||||||||||
Income From Continuing Operations Before Income Tax Expense | 74 | 83 | 175 | 97 | 429 | ||||||||||||||||||||||
Income Tax Expense Related to Continuing Operations | 185 | (b) | 30 | 65 | 39 | (c) | 319 | ||||||||||||||||||||
Net (Loss) Income From Continuing Operations | (111 | ) | 53 | 110 | 58 | 110 | |||||||||||||||||||||
(Loss) Income from Discontinued Operations, net of taxes | (319 | ) | (11 | ) | 8 | — | (322 | ) | |||||||||||||||||||
Net (Loss) Income | $ | (430 | ) | $ | 42 | $ | 118 | $ | 58 | $ | (212 | ) | |||||||||||||||
Basic and Diluted Earnings Per Share of Common Stock: | |||||||||||||||||||||||||||
(Loss) Earnings Per Share of Common Stock from Continuing Operations | $ | (0.47 | ) | $ | 0.21 | $ | 0.44 | $ | 0.23 | $ | 0.45 | ||||||||||||||||
(Loss) Earnings Per Share of Common Stock from Discontinued Operations | $ | (1.35 | ) | $ | (0.04 | ) | $ | 0.04 | $ | — | $ | (1.31 | ) | ||||||||||||||
(Loss) Earnings Per Share of Common Stock | $ | (1.82 | ) | $ | 0.17 | $ | 0.48 | $ | 0.23 | $ | (0.86 | ) | |||||||||||||||
Cash Dividends Per Share of Common Stock | $ | 0.27 | $ | 0.27 | $ | 0.27 | $ | 0.27 | $ | 1.08 | |||||||||||||||||
(a) | Includes a pre-tax impairment loss of $4 million ($3 million after-tax) at Pepco Energy Services associated with a landfill gas-fired electric generation facility. | ||||||||||||||||||||||||||
(b) | Includes an income tax charge of $56 million (after-tax) primarily associated with interest on uncertain and effectively settled tax positions and an income tax charge of $101 million associated with the establishment of valuation allowances against certain deferred tax assets of PCI. | ||||||||||||||||||||||||||
(c) | Includes an income tax charge of $4 million (after-tax) to correct a prior period error related to Pepco’s deferred income taxes. | ||||||||||||||||||||||||||
Delmarva Power & Light Co/De [Member] | |||||||||||||||||||||||||||
Quarterly Financial Information | (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. | |||||||||||||||||||||||||||
2014 | |||||||||||||||||||||||||||
First | Second | Third | Fourth | Total | |||||||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||||
Total Operating Revenue | $ | 397 | $ | 279 | $ | 309 | $ | 308 | $ | 1,293 | |||||||||||||||||
Total Operating Expenses | 326 | 239 | 264 | 257 | 1,086 | ||||||||||||||||||||||
Operating Income | 71 | 40 | 45 | 51 | 207 | ||||||||||||||||||||||
Other Expenses | (9 | ) | (8 | ) | (9 | ) | (12 | ) | (38 | ) | |||||||||||||||||
Income Before Income Tax Expense | 62 | 32 | 36 | 39 | 169 | ||||||||||||||||||||||
Income Tax Expense | 25 | 13 | 13 | 14 | 65 | ||||||||||||||||||||||
Net Income | $ | 37 | $ | 19 | $ | 23 | $ | 25 | $ | 104 | |||||||||||||||||
2013 | |||||||||||||||||||||||||||
First | Second | Third | Fourth | Total | |||||||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||||
Total Operating Revenue | $ | 370 | $ | 266 | $ | 296 | $ | 312 | $ | 1,244 | |||||||||||||||||
Total Operating Expenses | 317 | 235 | 249 | 258 | 1,059 | ||||||||||||||||||||||
Operating Income | 53 | 31 | 47 | 54 | 185 | ||||||||||||||||||||||
Other Expenses | (11 | ) | (10 | ) | (10 | ) | (9 | ) | (40 | ) | |||||||||||||||||
Income Before Income Tax Expense | 42 | 21 | 37 | 45 | 145 | ||||||||||||||||||||||
Income Tax Expense | 16 | 9 | 14 | 17 | 56 | ||||||||||||||||||||||
Net Income | $ | 26 | $ | 12 | $ | 23 | $ | 28 | $ | 89 | |||||||||||||||||
Potomac Electric Power Co [Member] | |||||||||||||||||||||||||||
Quarterly Financial Information | (14) 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. | |||||||||||||||||||||||||||
2014 | |||||||||||||||||||||||||||
First | Second | Third | Fourth | Total | |||||||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||||
Total Operating Revenue | $ | 535 | $ | 508 | $ | 587 | $ | 471 | $ | 2,101 | |||||||||||||||||
Total Operating Expenses | 469 | 414 | 462 | 408 | 1,753 | ||||||||||||||||||||||
Operating Income | 66 | 94 | 125 | 63 | 348 | ||||||||||||||||||||||
Other Expenses | (18 | ) | (20 | ) | (20 | ) | (27 | ) | (85 | ) | |||||||||||||||||
Income Before Income Tax Expense | 48 | 74 | 105 | 36 | 263 | ||||||||||||||||||||||
Income Tax Expense | 16 | 28 | 38 | 10 | 92 | ||||||||||||||||||||||
Net Income | $ | 32 | $ | 46 | $ | 67 | $ | 26 | $ | 171 | |||||||||||||||||
2013 | |||||||||||||||||||||||||||
First | Second | Third | Fourth | Total | |||||||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||||
Total Operating Revenue | $ | 477 | $ | 469 | $ | 605 | $ | 475 | $ | 2,026 | |||||||||||||||||
Total Operating Expenses | 430 | 389 | 476 | 410 | 1,705 | ||||||||||||||||||||||
Operating Income | 47 | 80 | 129 | 65 | 321 | ||||||||||||||||||||||
Other Expenses | (22 | ) | (23 | ) | (23 | ) | (24 | ) | (92 | ) | |||||||||||||||||
Income Before Income Tax Expense | 25 | 57 | 106 | 41 | 229 | ||||||||||||||||||||||
Income Tax Expense | 2 | (a) | 20 | 40 | 17 | (b) | 79 | ||||||||||||||||||||
Net Income | $ | 23 | $ | 37 | $ | 66 | $ | 24 | $ | 150 | |||||||||||||||||
(a) | Includes tax benefits of $5 million (after-tax) allocated to Pepco associated with interest on uncertain and effectively settled tax positions resulting from a change in assessment of tax benefits associated with the cross-border energy leases of a PHI affiliate. | ||||||||||||||||||||||||||
(b) | Includes an income tax charge of $4 million (after-tax) to correct a prior period error related to Pepco’s deferred income taxes. | ||||||||||||||||||||||||||
Atlantic City Electric Co [Member] | |||||||||||||||||||||||||||
Quarterly Financial Information | (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. | |||||||||||||||||||||||||||
2014 | |||||||||||||||||||||||||||
First | Second | Third | Fourth | Total | |||||||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||||
Total Operating Revenue(a) | $ | 340 | $ | 253 | $ | 347 | $ | 273 | $ | 1,213 | |||||||||||||||||
Total Operating Expenses | 309 | 228 | 295 | 246 | (b) | 1,078 | |||||||||||||||||||||
Operating Income | 31 | 25 | 52 | 27 | 135 | ||||||||||||||||||||||
Other Expenses | (15 | ) | (15 | ) | (15 | ) | (17 | ) | (62 | ) | |||||||||||||||||
Income Before Income Tax Expense | 16 | 10 | 37 | 10 | 73 | ||||||||||||||||||||||
Income Tax Expense | 6 | 4 | 14 | 4 | 28 | ||||||||||||||||||||||
Net Income | $ | 10 | $ | 6 | $ | 23 | $ | 6 | $ | 45 | |||||||||||||||||
(a) | During the fourth quarter of 2014, ACE reversed unbilled revenue of $3 million ($2 million after-tax) to correct an error that had overstated operating revenue in the third quarter of 2014. | ||||||||||||||||||||||||||
(b) | Includes a charge of $3 million ($2 million after-tax) to correct a prior period error related to the recoverability of certain regulatory assets. | ||||||||||||||||||||||||||
2013 | |||||||||||||||||||||||||||
First | Second | Third | Fourth | Total | |||||||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||||
Total Operating Revenue | $ | 277 | $ | 271 | $ | 396 | $ | 258 | $ | 1,202 | |||||||||||||||||
Total Operating Expenses | 254 | 242 | 341 | 229 | 1,066 | ||||||||||||||||||||||
Operating Income | 23 | 29 | 55 | 29 | 136 | ||||||||||||||||||||||
Other Expenses | (17 | ) | (18 | ) | (17 | ) | (15 | ) | (67 | ) | |||||||||||||||||
Income Before Income Tax (Benefit) Expense | 6 | 11 | 38 | 14 | 69 | ||||||||||||||||||||||
Income Tax (Benefit) Expense | (3 | ) | 4 | 13 | 5 | 19 | |||||||||||||||||||||
Net Income | $ | 9 | $ | 7 | $ | 25 | $ | 9 | $ | 50 |
Discontinued_Operations
Discontinued Operations | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||
Discontinued Operations | (20) DISCONTINUED OPERATIONS | ||||||||||||
PHI’s (loss) income from discontinued operations, net of income taxes, is comprised of the following: | |||||||||||||
For the Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(millions of dollars) | |||||||||||||
Cross-border energy lease investments | $ | — | $ | (327 | ) | $ | 41 | ||||||
Pepco Energy Services’ retail electric and natural gas supply businesses | — | 5 | 26 | ||||||||||
(Loss) income from discontinued operations, net of income taxes | $ | — | $ | (322 | ) | $ | 67 | ||||||
Cross-Border Energy Lease Investments | |||||||||||||
Between 1994 and 2002, PCI entered into cross-border energy lease investments consisting of hydroelectric generation facilities, coal-fired electric generation facilities and natural gas distribution networks located outside of the United States. Each of these lease investments was structured as a sale and leaseback transaction commonly referred to as a sale-in, lease-out, or SILO, transaction. During the second and third quarters of 2013, PHI terminated early all of its interests in the remaining lease investments. PHI received aggregate net cash proceeds from these early terminations of $873 million (net of aggregate termination payments of $2.0 billion used to retire the non-recourse debt associated with the terminated leases) and recorded an aggregate pre-tax loss, including transaction costs, of approximately $3 million ($2 million after-tax), representing the excess of the carrying value of the terminated leases over the net cash proceeds received. As a result, PHI has reported the results of operations of the cross-border energy lease investments as discontinued operations in all periods presented in the accompanying consolidated statements of income (loss). | |||||||||||||
Operating Results | |||||||||||||
The operating results for the cross-border energy lease investments are as follows: | |||||||||||||
For the Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(millions of dollars) | |||||||||||||
Operating revenue from PHI’s cross-border energy lease investments | $ | — | $ | 7 | $ | 50 | |||||||
Non-cash charge to reduce carrying value of PHI’s cross-border energy lease investments | — | (373 | ) | — | |||||||||
Total operating revenue | $ | — | $ | (366 | ) | $ | 50 | ||||||
(Loss) income from operations of discontinued operations, net of | $ | — | $ | (325 | ) | $ | 32 | ||||||
income taxes (a) | |||||||||||||
Net (losses) gains associated with the early termination of the cross-border energy lease investments, net of income taxes (b) | — | (2 | ) | 9 | |||||||||
(Loss) income from discontinued operations, net of income taxes | $ | — | $ | (327 | ) | $ | 41 | ||||||
(a) | Includes income tax (benefit) expense of approximately zero, $(44) million and $5 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||||||
(b) | Includes income tax (benefit) expense of approximately zero, $(1) million and $30 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||||||
On January 9, 2013, the U.S. Court of Appeals for the Federal Circuit issued an opinion in Consolidated Edison Company of New York, Inc. & Subsidiaries v. United States (to which PHI is not a party) that disallowed tax benefits associated with Consolidated Edison’s cross-border lease transaction. As a result of the court’s ruling in this case, PHI determined in the first quarter of 2013 that its tax position with respect to the benefits associated with its cross-border energy leases no longer met the more-likely-than-not standard of recognition for accounting purposes, and PCI recorded after-tax non-cash charges of $323 million in the first quarter of 2013 and $6 million in the second quarter of 2013, consisting of the following components: | |||||||||||||
• | A non-cash pre-tax charge of $373 million ($313 million after-tax) to reduce the carrying value of these cross-border energy lease investments under FASB guidance on leases (ASC 840). This pre-tax charge was originally recorded in the consolidated statements of income (loss) as a reduction in operating revenue and is now reflected in income (loss) from discontinued operations, net of income taxes. | ||||||||||||
• | A non-cash charge of $16 million after-tax to reflect the anticipated additional net interest expense under FASB guidance for income taxes (ASC 740) related to estimated federal and state income tax obligations for the period over which the tax benefits may be disallowed. This after-tax charge was originally recorded in the consolidated statements of income (loss) as an increase in income tax expense and is now reflected in income (loss) from discontinued operations, net of income taxes. The after-tax interest charge for PHI on a consolidated basis was $70 million and this amount was allocated to each member of PHI’s consolidated group as if each member was a separate taxpayer, resulting in the recognition of a $12 million interest benefit for the Power Delivery segment, and interest expense of $16 million for PCI and $66 million for Corporate and Other, respectively. | ||||||||||||
PHI had also previously made certain business assumptions regarding foreign investment opportunities available at the end of the full lease terms. In view of the change in PHI’s tax position with respect to the tax benefits associated with the cross-border energy lease investments and PHI’s resulting decision to pursue the early termination of these investments, management concluded in the first quarter of 2013 that these business assumptions were no longer supportable and the tax effects of this conclusion were reflected in the after-tax charge of $313 million described above. | |||||||||||||
PHI accrued no penalties associated with its re-assessment of the likely outcome of tax positions associated with the cross-border energy lease investments. While the IRS could require PHI to pay a penalty of up to 20% of the amount of additional taxes due, PHI believes that it is more likely than not that no such penalty will be incurred, and therefore no amount for any potential penalty was included in the charge. | |||||||||||||
For additional information concerning these cross-border energy lease investments, see Note (16), “Commitments and Contingencies – PHI’s Cross-Border Energy Lease Investments.” | |||||||||||||
Retail Electric and Natural Gas Supply Businesses of Pepco Energy Services | |||||||||||||
On March 21, 2013, Pepco Energy Services entered into an agreement whereby a third party assumed all the rights and obligations of the remaining natural gas supply customer contracts, and the associated supply obligations, inventory and derivative contracts. The transaction was completed on April 1, 2013. In addition, in the second quarter of 2013, Pepco Energy Services completed the wind-down of its retail electric supply business by terminating its remaining customer supply and wholesale purchase obligations beyond June 30, 2013. As a result, PHI has reported the results of operations of Pepco Energy Services’ retail electric and natural gas supply businesses as discontinued operations in all periods presented in the accompanying consolidated statements of income (loss). | |||||||||||||
Operating Results | |||||||||||||
The operating results for the retail electric and natural gas supply businesses of Pepco Energy Services are as follows: | |||||||||||||
For the Year Ended | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(millions of dollars) | |||||||||||||
Operating revenue | $ | — | $ | 84 | $ | 415 | |||||||
Income from operations of discontinued operations, net of income taxes | $ | — | $ | 4 | $ | 26 | |||||||
Net gains associated with accelerated disposition of retail electric and natural gas contracts, net of income taxes | 1 | — | |||||||||||
Income from discontinued operations, net of income taxes (a) | $ | — | $ | 5 | $ | 26 | |||||||
(a) | Includes income tax expense of approximately zero, $3 million and $18 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||||||
Derivative Instruments and Hedging Activities | |||||||||||||
Derivatives were used by the retail electric and natural gas supply businesses of Pepco Energy Services to hedge commodity price risk. There were no outstanding forward contracts or derivative positions for Pepco Energy Services as of December 31, 2014 and December 31, 2013. | |||||||||||||
Derivatives Designated as Hedging Instruments | |||||||||||||
At December 31, 2012, the cumulative net pre-tax loss related to effective cash flow hedges of the retail electric and natural gas supply businesses of Pepco Energy Services included in AOCL was $10 million ($6 million after-tax). With the assumption by a third party, on April 1, 2013, of all the rights and obligations of the derivative contracts associated with the retail natural gas supply business, PHI determined that the hedged forecasted purchases of supply for retail natural gas customers were probable not to occur. Accordingly, during the first quarter of 2013, PHI recognized $4 million of pre-tax unrealized derivative losses ($2 million after-tax) that were previously included in AOCL as cash flow hedges. The remaining pre-tax loss of $6 million included in AOCL was reclassified into income on completion of the wind-down of the retail electric business in the second quarter of 2013. | |||||||||||||
Other Derivative Activity | |||||||||||||
The retail electric and natural gas supply businesses of Pepco Energy Services held certain derivatives that were not in hedge accounting relationships and were not designated as normal purchases or normal sales. These derivatives were recorded at fair value on the balance sheet with the gain or loss for changes in fair value recorded through Income (loss) from discontinued operations, net of income taxes. | |||||||||||||
For the years ended December 31, 2014, 2013, and 2012, the amount of the derivative gain (loss) for the retail electric and natural gas supply businesses of Pepco Energy Services recognized in Income (loss) from discontinued operations, net of income taxes is provided in the table below: | |||||||||||||
For the Year Ended | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(millions of dollars) | |||||||||||||
Reclassification of mark-to-market to realized on settlement of contracts | $ | — | $ | 10 | $ | 27 | |||||||
Unrealized mark-to-market loss | — | — | (3 | ) | |||||||||
Total net gain | $ | — | $ | 10 | $ | 24 | |||||||
As of December 31, 2014 and 2013, the retail electric and natural gas supply businesses of Pepco Energy Services had no outstanding commodity forward contracts or derivative positions. | |||||||||||||
As of December 31, 2014, Pepco Energy Services had posted net cash collateral of $2 million and letters of credit of zero. As of December 31, 2013, Pepco Energy Services had posted net cash collateral of $3 million and letters of credit of less than $1 million. |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Delmarva Power & Light Co/De [Member] | |||||||||||||
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 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 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 December 31, 2014, 2013 and 2012 were $163 million, $154 million and $153 million, respectively. | |||||||||||||
In addition to the PHI Service Company charges described above, DPL’s financial statements include the following related party transactions in its statements of income: | |||||||||||||
For the Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(millions of dollars) | |||||||||||||
Intercompany lease transactions (a) | $ | 5 | $ | 4 | $ | 4 | |||||||
(a) | Included in Electric revenue. | ||||||||||||
As of December 31, 2014 and 2013, DPL had the following balances on its balance sheets due to related parties: | |||||||||||||
2014 | 2013 | ||||||||||||
(millions of dollars) | |||||||||||||
Payable to Related Party (current) (a) | |||||||||||||
PHI Service Company | $ | (18 | ) | $ | (22 | ) | |||||||
Other | 1 | — | |||||||||||
Total | $ | (17 | ) | $ | (22 | ) | |||||||
(a) | Included in Accounts payable due to associated companies. | ||||||||||||
Potomac Electric Power Co [Member] | |||||||||||||
Related Party Transactions | (13) RELATED PARTY TRANSACTIONS | ||||||||||||
PHI Service Company provides various administrative and professional services to PHI and its regulated and unregulated subsidiaries, including 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 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 December 31, 2014, 2013 and 2012 were approximately $220 million, $209 million and $211 million, respectively. | |||||||||||||
Pepco Energy Services performs utility maintenance services and high voltage underground transmission cabling, including services that are treated as capital costs, for Pepco. Amounts charged to Pepco by Pepco Energy Services for the years ended December 31, 2014, 2013 and 2012 were approximately $30 million, $20 million and $16 million, respectively. | |||||||||||||
As of December 31, 2014 and 2013, Pepco had the following balances on its balance sheets due to related parties: | |||||||||||||
2014 | 2013 | ||||||||||||
(millions of dollars) | |||||||||||||
Payable to Related Party (current) (a) | |||||||||||||
PHI Service Company | $ | (27 | ) | $ | (25 | ) | |||||||
Pepco Energy Services (b) | (2 | ) | (7 | ) | |||||||||
Other | (1 | ) | — | ||||||||||
Total | $ | (30 | ) | $ | (32 | ) | |||||||
(a) | Included in Accounts payable due to associated companies. | ||||||||||||
(b) | Pepco bills customers on behalf of Pepco Energy Services where Pepco Energy Services has performed work for certain government agencies under a General Services Administration area-wide agreement. Amount also includes charges for utility work performed by Pepco Energy Services on behalf of Pepco. Prior to the wind-down of Pepco Energy Services’ retail electric and natural gas businesses, Pepco billed customers on behalf of Pepco Energy Services where customers had selected Pepco Energy Services as their alternative energy supplier. | ||||||||||||
Atlantic City Electric Co [Member] | |||||||||||||
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 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 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 December 31, 2014, 2013 and 2012 were $124 million, $115 million and $117 million, respectively. | |||||||||||||
In addition to the PHI Service Company charges described above, ACE’s consolidated financial statements include the following related party transactions in its consolidated statements of income: | |||||||||||||
For the Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(millions of dollars) | |||||||||||||
Meter reading services provided by Millennium Account Services LLC (an ACE affiliate) (a) | $ | (4 | ) | $ | (4 | ) | $ | (4 | ) | ||||
Intercompany use revenue (b) | 2 | 3 | 3 | ||||||||||
(a) | Included in Other operation and maintenance expense. | ||||||||||||
(b) | Included in Operating revenue. | ||||||||||||
As of December 31, 2014 and 2013, ACE had the following balances on its consolidated balance sheets due to related parties: | |||||||||||||
2014 | 2013 | ||||||||||||
(millions of dollars) | |||||||||||||
Payable to Related Party (current) (a) | |||||||||||||
PHI Service Company | $ | (14 | ) | $ | (15 | ) | |||||||
Other | (1 | ) | — | ||||||||||
Total | $ | (15 | ) | $ | (15 | ) | |||||||
(a) | Included in Accounts payable due to associated companies. |
Schedule_I
Schedule I | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||
Schedule I | Schedule I, Condensed Financial Information of Parent Company is submitted below. | ||||||||||||
PEPCO HOLDINGS, INC. (Parent Company) | |||||||||||||
STATEMENTS OF INCOME (LOSS) | |||||||||||||
For the Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(millions of dollars, except share data) | |||||||||||||
Operating Revenue | $ | — | $ | — | $ | — | |||||||
Operating Expenses | |||||||||||||
Other operation and maintenance | 31 | 1 | 1 | ||||||||||
Total operating expenses | 31 | 1 | 1 | ||||||||||
Operating Loss | (31 | ) | (1 | ) | (1 | ) | |||||||
Other Income (Expenses) | |||||||||||||
Interest expense | (43 | ) | (42 | ) | (33 | ) | |||||||
Income from equity investments | 291 | 204 | 237 | ||||||||||
Total other income | 248 | 162 | 204 | ||||||||||
Income from Continuing Operations Before Income Tax | 217 | 161 | 203 | ||||||||||
Income Tax (Benefit) Expense Related to Continuing Operations | (25 | ) | 51 | (15 | ) | ||||||||
Net Income from Continuing Operations | 242 | 110 | 218 | ||||||||||
(Loss) Income from Discontinued Operations, net of Income Taxes | — | (322 | ) | 67 | |||||||||
Net Income (Loss) | $ | 242 | $ | (212 | ) | $ | 285 | ||||||
Comprehensive Income (Loss) | $ | 230 | $ | (198 | ) | $ | 300 | ||||||
Earnings Per Share | |||||||||||||
Basic earnings per share of common stock from Continuing Operations | $ | 0.96 | $ | 0.45 | $ | 0.95 | |||||||
Basic (loss) earnings per share of common stock from Discontinued Operations | — | (1.31 | ) | 0.3 | |||||||||
Basic earnings (loss) per share of common stock | $ | 0.96 | $ | (0.86 | ) | $ | 1.25 | ||||||
Diluted earnings per share of common stock from Continuing Operations | $ | 0.96 | $ | 0.45 | $ | 0.95 | |||||||
Diluted (loss) earnings per share of common stock from Discontinued Operations | — | (1.31 | ) | 0.29 | |||||||||
Diluted earnings (loss) per share of common stock | $ | 0.96 | $ | (0.86 | ) | $ | 1.24 | ||||||
The accompanying Notes are an integral part of these Financial Statements. | |||||||||||||
PEPCO HOLDINGS, INC. (Parent Company) | |||||||||||||
BALANCE SHEETS | |||||||||||||
As of December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
(millions of dollars, except share data) | |||||||||||||
ASSETS | |||||||||||||
CURRENT ASSETS | |||||||||||||
Cash and cash equivalents | $ | 65 | $ | — | |||||||||
Prepayments of income taxes | 152 | 151 | |||||||||||
Accounts receivable and other | 9 | 28 | |||||||||||
Total Current Assets | 226 | 179 | |||||||||||
INVESTMENTS AND OTHER ASSETS | |||||||||||||
Goodwill | 1,398 | 1,398 | |||||||||||
Investment in consolidated companies | 4,256 | 3,935 | |||||||||||
Other | 84 | 37 | |||||||||||
Total Investments and Other Assets | 5,738 | 5,370 | |||||||||||
TOTAL ASSETS | $ | 5,964 | $ | 5,549 | |||||||||
LIABILITIES AND EQUITY | |||||||||||||
CURRENT LIABILITIES | |||||||||||||
Short-term debt | $ | 287 | $ | 24 | |||||||||
Current portion of long-term debt | 250 | — | |||||||||||
Interest and taxes accrued | 9 | 10 | |||||||||||
Accounts payable due to associated companies | 13 | 1 | |||||||||||
Total Current Liabilities | 559 | 35 | |||||||||||
DEFERRED CREDITS | |||||||||||||
Notes payable due to subsidiary companies | 494 | 491 | |||||||||||
Liabilities and accrued interest related to uncertain tax positions | 4 | 3 | |||||||||||
Total Deferred Credits | 498 | 494 | |||||||||||
LONG-TERM DEBT | 456 | 705 | |||||||||||
COMMITMENTS AND CONTINGENCIES (NOTE 4) | |||||||||||||
PREFERRED STOCK | |||||||||||||
Series A preferred stock, $.01 par value, 18,000 shares authorized, 12,600 and zero shares outstanding, respectively | 129 | — | |||||||||||
EQUITY | |||||||||||||
Common stock, $.01 par value—400,000,000 shares authorized, 252,728,684 and 250,324,898 shares outstanding, respectively | 3 | 3 | |||||||||||
Premium on stock and other capital contributions | 3,800 | 3,751 | |||||||||||
Accumulated other comprehensive loss | (46 | ) | (34 | ) | |||||||||
Retained earnings | 565 | 595 | |||||||||||
Total Equity | 4,322 | 4,315 | |||||||||||
TOTAL LIABILITIES AND EQUITY | $ | 5,964 | $ | 5,549 | |||||||||
The accompanying Notes are an integral part of these Financial Statements. | |||||||||||||
PEPCO HOLDINGS, INC. (Parent Company) | |||||||||||||
STATEMENTS OF CASH FLOWS | |||||||||||||
For the Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(millions of dollars) | |||||||||||||
OPERATING ACTIVITIES | |||||||||||||
Net income (loss) | $ | 242 | $ | (212 | ) | $ | 285 | ||||||
Loss (income) from discontinued operations, net of income taxes | — | 322 | (67 | ) | |||||||||
Adjustments to reconcile net income to net cash from operating activities: | |||||||||||||
Distributions from related parties less than earnings | (149 | ) | (127 | ) | (52 | ) | |||||||
Deferred income taxes | (5 | ) | (7 | ) | (31 | ) | |||||||
Other | 18 | — | — | ||||||||||
Changes in: | |||||||||||||
Prepaid and other | 13 | 2 | (23 | ) | |||||||||
Accounts payable | 1 | 6 | 6 | ||||||||||
Interest and taxes | — | (141 | ) | 39 | |||||||||
Other assets and liabilities | 1 | 3 | 4 | ||||||||||
Net Cash From (Used By) Operating Activities | 121 | (154 | ) | 161 | |||||||||
FINANCING ACTIVITIES | |||||||||||||
Dividends paid on common stock | (272 | ) | (270 | ) | (248 | ) | |||||||
Common stock issued for the Direct Stock Purchase and Dividend Reinvestment Plan and employee-related compensation | 34 | 50 | 51 | ||||||||||
Issuances of common stock | — | 324 | — | ||||||||||
Issuances of Series A preferred stock | 126 | — | — | ||||||||||
Capital contributions to subsidiaries, net | (210 | ) | (250 | ) | (110 | ) | |||||||
Decrease in notes receivable from associated companies | — | — | 154 | ||||||||||
Increase in notes payable due to associated companies | 3 | 491 | — | ||||||||||
Issuances (repayments) of short-term debt, net | 263 | (240 | ) | (201 | ) | ||||||||
Issuance of term loan | — | 250 | 200 | ||||||||||
Repayments of term loans | — | (450 | ) | — | |||||||||
Costs of issuances | — | (13 | ) | (2 | ) | ||||||||
Net Cash Used By Financing Activities | (56 | ) | (108 | ) | (156 | ) | |||||||
Net Increase (Decrease) In Cash and Cash Equivalents | 65 | (262 | ) | 5 | |||||||||
Cash and Cash Equivalents at Beginning of Year | — | 262 | 257 | ||||||||||
CASH AND CASH EQUIVALENTS AT END OF YEAR | $ | 65 | $ | — | $ | 262 | |||||||
The accompanying Notes are an integral part of these Financial Statements. | |||||||||||||
NOTES TO FINANCIAL INFORMATION | |||||||||||||
(1) BASIS OF PRESENTATION | |||||||||||||
Pepco Holdings, Inc. (Pepco Holdings or PHI) is a holding company and conducts substantially all of its business operations through its subsidiaries. These condensed financial statements and related footnotes have been prepared in accordance with Rule 12-04, Schedule I of Regulation S-X. These statements should be read in conjunction with the consolidated financial statements and notes thereto of Pepco Holdings included in Part II, Item 8 of this Form 10-K. | |||||||||||||
Pepco Holdings owns 100% of the common stock of all its significant subsidiaries. | |||||||||||||
(2) RECLASSIFICATIONS | |||||||||||||
Certain prior period amounts have been reclassified in order to conform to the current period presentation. | |||||||||||||
(3) DEBT | |||||||||||||
For information concerning Pepco Holdings’ long-term debt obligations, see Note (10), “Debt,” to the consolidated financial statements of Pepco Holdings. | |||||||||||||
(4) COMMITMENTS AND CONTINGENCIES | |||||||||||||
For information concerning Pepco Holdings’ material contingencies and guarantees, see Note (16), “Commitments and Contingencies” to the consolidated financial statements of Pepco Holdings. | |||||||||||||
Pepco Holdings guarantees the obligations of Pepco Energy Services, Inc., its wholly owned subsidiary, under certain contracts in its energy savings performance contracting businesses and underground transmission and distribution construction business. At December 31, 2014, Pepco Holdings’ guarantees of Pepco Energy Services’ obligations under these contracts totaled $336 million. PHI also guarantees the obligations of Pepco Energy Services under surety bonds obtained by Pepco Energy Services for construction projects in these businesses. These guarantees totaled $185 million at December 31, 2014. | |||||||||||||
In addition, Pepco Holdings guarantees certain obligations of Potomac Electric Power Company (Pepco), Delmarva Power & Light Company (DPL), and Atlantic City Electric Company (ACE) under surety bonds obtained by these subsidiaries, for construction projects and self-insured workers compensation matters. These guarantees totaled $53 million at December 31, 2014. | |||||||||||||
Pepco Holdings, pursuant to an intercompany guarantee agreement with Potomac Capital Investment Corporation (PCI), guarantees certain intercompany obligations of PCI to its subsidiaries. This guarantee totaled $725 million at December 31, 2014. | |||||||||||||
(5) INVESTMENT IN CONSOLIDATED COMPANIES | |||||||||||||
Pepco Holdings’ majority owned subsidiaries are recorded using the equity method of accounting. A breakout of the balance in Investment in consolidated companies is as follows: | |||||||||||||
2014 | 2013 | ||||||||||||
(millions of dollars) | |||||||||||||
Conectiv, LLC (a) | $ | 1,984 | $ | 1,730 | |||||||||
Potomac Electric Power Company | 2,087 | 1,922 | |||||||||||
Potomac Capital Investment Corporation | 30 | 29 | |||||||||||
Pepco Energy Services, Inc. | 153 | 250 | |||||||||||
PHI Service Company | 2 | 4 | |||||||||||
Total investment in consolidated companies | $ | 4,256 | $ | 3,935 | |||||||||
(a) | Conectiv, LLC is the parent company of Delmarva Power & Light Company and Atlantic City Electric Company. | ||||||||||||
(6) DISCONTINUED OPERATIONS | |||||||||||||
During 2013, PHI completed the termination of its interest in its cross-border energy lease investments and, as a result, these investments have been accounted for as discontinued operations. | |||||||||||||
In December 2009, PHI announced the wind-down of the retail energy supply component of the Pepco Energy Services business which was comprised of the retail electric and natural gas supply businesses. In 2013, Pepco Energy Services completed the wind-down and, accordingly, the operations of Pepco Energy Services’ retail electric and natural gas supply businesses have been classified as discontinued operations. | |||||||||||||
(7) RELATED PARTY TRANSACTIONS | |||||||||||||
As of December 31, 2014 and 2013, PHI had the following balances on its balance sheets due (to) from related parties: | |||||||||||||
2014 | 2013 | ||||||||||||
(millions of dollars) | |||||||||||||
(Payable to) Receivable from Related Party (current) (a) | |||||||||||||
Conectiv Communications, Inc. | $ | (4 | ) | $ | (4 | ) | |||||||
PHI Service Company | (10 | ) | 3 | ||||||||||
Other | 1 | — | |||||||||||
Total | $ | (13 | ) | $ | (1 | ) | |||||||
Payable to Related Party (non-current) (b) | |||||||||||||
Potomac Capital Investment Corporation | $ | (494 | ) | $ | (491 | ) | |||||||
Money Pool Balance (included in cash and cash equivalents) | $ | 65 | $ | — | |||||||||
(a) | Included in Accounts payable due to associated companies. | ||||||||||||
(b) | Included in Notes payable due to subsidiary companies. | ||||||||||||
(8) DIVIDEND RESTRICTIONS | |||||||||||||
PHI, on a stand-alone basis, generates no operating income of its own. Accordingly, its ability to pay dividends to its shareholders depends on dividends received from its subsidiaries. In addition to their future financial performance, the ability of PHI’s direct and indirect subsidiaries to pay dividends is subject to limits imposed by: (i) state corporate laws, which impose limitations on the funds that can be used to pay dividends and, in the case of ACE, the regulatory requirement that it obtain the prior approval of the New Jersey Board of Public Utilities before dividends can be paid if its equity as a percent of its total capitalization, excluding securitization debt, falls below 30%; (ii) the prior rights of holders of mortgage bonds and other long-term debt issued by the subsidiaries, and any other restrictions imposed in connection with the incurrence of liabilities; and (iii) certain provisions of ACE’s charter that impose restrictions on payment of common stock dividends for the benefit of preferred stockholders. Pepco, DPL and ACE have no shares of preferred stock outstanding at December 31, 2014. Currently, the capitalization ratio limitation to which ACE is subject and the restriction in the ACE charter do not limit ACE’s ability to pay common stock dividends. As further described in Note (10), “Debt,” to the consolidated financial statements of Pepco Holdings, PHI, Pepco, DPL and ACE have restrictions on total indebtedness in relation to total capitalization under the credit facility. | |||||||||||||
PHI had approximately $565 million and $595 million of retained earnings free of restrictions at December 31, 2014 and 2013, respectively. These amounts represent the total retained earnings balances at those dates. The amount of restricted net assets for PHI’s consolidated subsidiaries at December 31, 2014 is $2,547 million. |
Schedule_II
Schedule II | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Schedule II | 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 | Balance at | Charged to | Charged to | Deductions(b) | Balance | ||||||||||||||||
Beginning | Costs and | Other | at End | ||||||||||||||||||
of Period | Expenses | Accounts (a) | of Period | ||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Year Ended December 31, 2014 Allowance for uncollectible accounts—customer and other accounts receivable | $ | 38 | $ | 46 | $ | 9 | $ | (53 | ) | $ | 40 | ||||||||||
Year Ended December 31, 2013 Allowance for uncollectible accounts—customer and other accounts receivable | $ | 34 | $ | 37 | $ | 5 | $ | (38 | ) | $ | 38 | ||||||||||
Year Ended December 31, 2012 Allowance for uncollectible accounts—customer and other accounts receivable | $ | 43 | $ | 35 | $ | 8 | $ | (52 | ) | $ | 34 | ||||||||||
(a) | Collection of accounts previously written off. | ||||||||||||||||||||
(b) | Uncollectible accounts written off. | ||||||||||||||||||||
Delmarva Power & Light Co/De [Member] | |||||||||||||||||||||
Schedule II | Delmarva Power & Light Company | ||||||||||||||||||||
Col. A | Col. B | Col. C | Col. D | Col. E | |||||||||||||||||
Additions | |||||||||||||||||||||
Description | Balance at | Charged to | Charged to | Deductions(b) | Balance | ||||||||||||||||
Beginning | Costs and | Other | at End | ||||||||||||||||||
of Period | Expenses | Accounts (a) | of Period | ||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Year Ended December 31, 2014 Allowance for uncollectible accounts—customer and other accounts receivable | $ | 12 | $ | 13 | $ | 4 | $ | (18 | ) | $ | 11 | ||||||||||
Year Ended December 31, 2013 Allowance for uncollectible accounts—customer and other accounts receivable | $ | 9 | $ | 11 | $ | 1 | $ | (9 | ) | $ | 12 | ||||||||||
Year Ended December 31, 2012 Allowance for uncollectible accounts—customer and other accounts receivable | $ | 12 | $ | 11 | $ | 3 | $ | (17 | ) | $ | 9 | ||||||||||
(a) | Collection of accounts previously written off. | ||||||||||||||||||||
(b) | Uncollectible accounts written off. | ||||||||||||||||||||
Potomac Electric Power Co [Member] | |||||||||||||||||||||
Schedule II | Potomac Electric Power Company | ||||||||||||||||||||
Col. A | Col. B | Col. C | Col. D | Col. E | |||||||||||||||||
Additions | |||||||||||||||||||||
Description | Balance at | Charged to | Charged to | Deductions(b) | Balance | ||||||||||||||||
Beginning | Costs and | Other | at End | ||||||||||||||||||
of Period | Expenses | Accounts (a) | of Period | ||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Year Ended December 31, 2014 Allowance for uncollectible accounts—customer and other accounts receivable | $ | 16 | $ | 17 | $ | 2 | $ | (19 | ) | $ | 16 | ||||||||||
Year Ended December 31, 2013 Allowance for uncollectible accounts—customer and other accounts receivable | $ | 13 | $ | 15 | $ | 1 | $ | (13 | ) | $ | 16 | ||||||||||
Year Ended December 31, 2012 Allowance for uncollectible accounts—customer and other accounts receivable | $ | 18 | $ | 13 | $ | 2 | $ | (20 | ) | $ | 13 | ||||||||||
(a) | Collection of accounts previously written off. | ||||||||||||||||||||
(b) | Uncollectible accounts written off. | ||||||||||||||||||||
Atlantic City Electric Co [Member] | |||||||||||||||||||||
Schedule II | Atlantic City Electric Company | ||||||||||||||||||||
Col. A | Col. B | Col. C | Col. D | Col. E | |||||||||||||||||
Additions | |||||||||||||||||||||
Description | Balance at | Charged to | Charged to | Deductions(b) | Balance | ||||||||||||||||
Beginning | Costs and | Other | at End | ||||||||||||||||||
of Period | Expenses | Accounts (a) | of Period | ||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Year Ended December 31, 2014 Allowance for uncollectible accounts—customer and other accounts receivable | $ | 10 | $ | 12 | $ | 3 | $ | (16 | ) | $ | 9 | ||||||||||
Year Ended December 31, 2013 Allowance for uncollectible accounts—customer and other accounts receivable | $ | 11 | $ | 11 | $ | 3 | $ | (15 | ) | $ | 10 | ||||||||||
Year Ended December 31, 2012 Allowance for uncollectible accounts—customer and other accounts receivable | $ | 12 | $ | 12 | $ | 3 | $ | (16 | ) | $ | 11 | ||||||||||
(a) | Collection of accounts previously written off. | ||||||||||||||||||||
(b) | Uncollectible accounts written off. |
Significant_Accounting_Policie1
Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Consolidation Policy | 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 an interest and can exercise significant influence over the operations and policies of the entity. Certain transmission and other facilities currently held are consolidated in proportion to PHI’s percentage interest in the facility. | |||||||||||||||||||||||||
Consolidation of Variable Interest Entities | Consolidation of Variable Interest Entities | ||||||||||||||||||||||||
PHI assesses its contractual arrangements with variable interest entities (VIEs) to determine whether it is the primary beneficiary and thereby has to consolidate the entities in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 810. The guidance addresses conditions under which an entity should be consolidated based upon variable interests rather than voting interests. See Note (17), “Variable Interest Entities,” for additional information. | |||||||||||||||||||||||||
Use of Estimates | 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 Pepco Holdings 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 and goodwill impairment calculations, fair value calculations for derivative instruments, pension and other postretirement benefit assumptions, the assessment of the probability of recovery of regulatory assets, accrual of storm restoration costs, accrual of unbilled revenue, recognition of changes in network service transmission rates for prior service year costs, accrual of loss contingency liabilities for general litigation and auto and other liability claims, accrual of interest related to income taxes, the recognition of lease income and income tax benefits for investments in finance leases held in trust associated with PHI’s former cross-border energy lease investments (see Note (20), “Discontinued Operations – Cross-Border Energy Lease Investments”), and income tax provisions and reserves. Additionally, PHI is subject to legal, regulatory and other proceedings and claims that arise in the ordinary course of its business. PHI records an estimated liability for these proceedings and claims when it is probable that a loss has been incurred and the loss is reasonably estimable. | |||||||||||||||||||||||||
Revenue Recognition | Revenue Recognition | ||||||||||||||||||||||||
Regulated Revenue | |||||||||||||||||||||||||
Power Delivery recognizes revenue upon distribution of electricity and natural gas to its customers, including unbilled revenue for services rendered but not yet billed. PHI’s unbilled revenue was $172 million and $177 million as of December 31, 2014 and 2013, respectively, and these amounts are included in Accounts receivable. PHI’s utility subsidiaries calculate unbilled revenue using an output-based methodology. This methodology is based on the supply of electricity or natural 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 natural gas expected to be lost in the process of its transmission and distribution to customers). The assumptions and judgments 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 consumption of electricity and natural gas by the utility customers, such as fuel, energy, or other similar taxes, are components of the tariff rates charged by PHI’s utility subsidiaries and, as such, are billed to customers and recorded in Operating revenue. Accruals for the remittance of these taxes are recorded in Other taxes. | |||||||||||||||||||||||||
Pepco Energy Services Revenue | |||||||||||||||||||||||||
Revenue for Pepco Energy Services’ energy savings performance construction business and certain construction contracts in its underground transmission and distribution business is recognized using the percentage-of-completion method which recognizes revenue as work is completed and costs are incurred on its contracts. Under this method, Pepco Energy Services recognizes these contractual revenues based on the percentage of incurred costs relative to the estimated costs to complete a contract. Revenues from its operation and maintenance activities and measurement and verification activities in its energy savings business and certain construction contracts in its underground transmission and distribution business are recognized when earned. | |||||||||||||||||||||||||
Taxes Assessed by a Governmental Authority on Revenue-Producing Transactions | Taxes Assessed by a Governmental Authority on Revenue-Producing Transactions | ||||||||||||||||||||||||
Taxes included in PHI’s gross revenues were $321 million, $346 million and $356 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||||||
Accounting for Derivatives | Accounting for Derivatives | ||||||||||||||||||||||||
PHI and its subsidiaries may use derivative instruments primarily to manage risk associated with commodity prices and interest rates. Risk management policies are determined by PHI’s Corporate Risk Management Committee (CRMC). The CRMC monitors interest rate fluctuation, commodity price fluctuation and credit risk exposure, and sets risk management policies that establish limits on unhedged risk. | |||||||||||||||||||||||||
PHI accounts for its derivative activities in accordance with FASB guidance on derivatives and hedging. Derivatives are recorded on the consolidated balance sheets as Derivative assets or Derivative liabilities and measured at fair value. | |||||||||||||||||||||||||
Changes in the fair value of derivatives held by DPL that do not qualify for hedge accounting or are not designated as hedges are presented on the consolidated statements of income (loss) as Fuel and purchased energy expense or Operating revenue, respectively. Changes in the fair value of derivatives held by DPL are deferred as regulatory assets or liabilities under the accounting guidance for regulated operations. | |||||||||||||||||||||||||
The gain or loss on a derivative that qualifies as a cash flow hedge of an exposure to variable cash flows of a forecasted transaction is initially recorded in accumulated other comprehensive loss (AOCL) (a separate component of equity) to the extent that the hedge is effective and is subsequently reclassified into earnings, in the same category as the item being hedged, when the gain or loss from the forecasted transaction occurs. If it is probable that a forecasted transaction will not occur, the deferred gain or loss in AOCL is immediately reclassified to earnings. Gains or losses related to any ineffective portion of cash flow hedges are also recognized in earnings immediately. | |||||||||||||||||||||||||
Changes in the fair value of derivatives designated as fair value hedges, as well as changes in the fair value of the hedged asset, liability or firm commitment, are recorded in the consolidated statements of income (loss). | |||||||||||||||||||||||||
The impact of derivatives that are marked to market through current earnings, the ineffective portion of cash flow hedges, and the portion of fair value hedges that flows to current earnings are presented on a net basis in the consolidated statements of income (loss) as Operating revenue or as Fuel and purchased energy expense. When a hedging gain or loss is realized, it is presented on a net basis in the same line item as the underlying item being hedged. Unrealized derivative gains and losses are presented gross on the consolidated balance sheets except where contractual netting agreements are in place with individual counterparties. | |||||||||||||||||||||||||
The fair value of derivatives is determined using quoted exchange prices where available. For instruments that are not traded on an exchange, pricing services and external broker quotes may also be used to determine fair value. For some custom and complex instruments, internal models use market-based information when external broker quotes are not available. For certain long-dated instruments, broker or exchange data are extrapolated, or capacity prices are forecasted, for future periods where information is limited. Models are also used to estimate volumes for certain transactions. | |||||||||||||||||||||||||
PHI may enter into master netting arrangements to mitigate credit risk related to its derivatives. Under FASB guidance on offsetting of balance sheet accounts (ASC 210-20), amounts recognized for derivative assets and liabilities and the fair value amounts recognized for any related collateral positions executed with the same counterparty under such master netting agreements are offset. | |||||||||||||||||||||||||
See Note (14), “Derivative Instruments and Hedging Activities,” for more information about the types of derivatives employed by PHI, the components of any unrealized and realized gains and losses and Note (15), “Fair Value Disclosures,” for the methodologies used to value them. | |||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation | ||||||||||||||||||||||||
PHI recognizes compensation expense for stock-based awards, modifications or cancellations based on the grant-date fair value. Compensation expense is recognized over the requisite service period. A deferred tax asset and deferred tax benefit are also recognized concurrently with compensation expense for the tax effect of the deduction of stock options, restricted stock and restricted stock unit awards, which are deductible only upon exercise and/or vesting. | |||||||||||||||||||||||||
Historically, PHI’s compensation awards had included both time-based restricted stock awards that vest over a three-year service period and performance-based restricted stock units that were earned based on performance over a three-year period. Beginning in 2011, stock-based compensation awards have been granted primarily in the form of restricted stock units. The compensation expense associated with these awards is calculated based on the estimated fair value of the awards at the grant date and is recognized over the service or performance period. | |||||||||||||||||||||||||
PHI estimated the fair value of stock option awards on the date of grant using the Black-Scholes-Merton option pricing model. This model used assumptions related to expected term, expected volatility, expected dividend yield, and the risk-free interest rate. PHI used historical data to estimate award exercises and employee terminations within the valuation model; groups of employees that have similar historical exercise behavior were considered separately for valuation purposes. | |||||||||||||||||||||||||
PHI’s current policy is to issue new shares to satisfy vested awards of restricted stock units. | |||||||||||||||||||||||||
Income Taxes | 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, which was approved by the Securities and Exchange Commission (SEC) in 2002 in connection with the establishment of PHI as a public utility holding company. Under this tax sharing agreement, PHI’s consolidated federal income tax liability is allocated based upon PHI’s and its subsidiaries’ separate taxable income or loss amounts. | |||||||||||||||||||||||||
The consolidated financial statements include current and deferred income taxes. Current income taxes represent the amount of tax expected to be reported on PHI’s and its subsidiaries’ federal and state income tax returns. Deferred income tax assets and liabilities represent the tax effects of temporary differences between the financial statement basis and tax basis of existing assets and liabilities, and they are measured using presently enacted tax rates. See Note (11), “Income Taxes,” for a listing of primary deferred tax assets and liabilities. The portions of Pepco’s, DPL’s and ACE’s deferred tax liabilities applicable to their utility operations that have not been recovered from utility customers represent income taxes recoverable in the future and are included in Regulatory Assets on the consolidated balance sheets. See Note (7), “Regulatory Matters – Regulatory Assets and Regulatory Liabilities,” for additional information. | |||||||||||||||||||||||||
PHI recognizes interest on underpayments and overpayments of income taxes, interest on uncertain tax positions and tax-related penalties in income tax expense. Deferred income tax expense generally represents the net change during the reporting period in the net deferred tax liability and deferred recoverable income taxes. | |||||||||||||||||||||||||
Investment tax credits are amortized to income over the useful lives of the related property. | |||||||||||||||||||||||||
Cash and Cash Equivalents | Cash and Cash Equivalents | ||||||||||||||||||||||||
Cash and cash equivalents include cash on hand, cash invested in money market funds and commercial paper held with original maturities of three months or less. | |||||||||||||||||||||||||
Restricted Cash Equivalents | Restricted Cash Equivalents | ||||||||||||||||||||||||
The Restricted cash equivalents included in Current assets and the Restricted cash equivalents included in Other assets consist of (i) cash held as collateral that is restricted from use for general corporate purposes and (ii) cash equivalents that are specifically segregated based on management’s intent to use such cash equivalents for a particular purpose. The classification as current or non-current conforms to the classification of the related liabilities. | |||||||||||||||||||||||||
Accounts Receivable and Allowance for Uncollectible Accounts | Accounts Receivable and Allowance for Uncollectible Accounts | ||||||||||||||||||||||||
PHI’s Accounts receivable balances primarily consist of customer accounts receivable arising from the sale of goods and services to customers within PHI’s service territories, other accounts receivable, and accrued unbilled revenue. Accrued unbilled revenue represents revenue earned in the current period but not billed to the customer until a future date (usually within one month after the receivable is recorded). | |||||||||||||||||||||||||
PHI maintains an allowance for uncollectible accounts and changes in the allowance are recorded as an adjustment to Other operation and maintenance expense in the consolidated statements of income (loss). PHI determines the amount of the allowance based on specific identification of material amounts at risk by customer and maintains a reserve based on its historical collection experience. The adequacy of this allowance is assessed on a quarterly basis by evaluating all known factors, such as the aging of the receivables, historical collection experience, the economic and competitive environment and changes in the creditworthiness of its customers. Accounts receivable are written off in the period in which the receivable is deemed uncollectible and collection efforts have been exhausted. Recoveries of Accounts receivable previously written off are recorded when received. Although PHI believes its allowance is adequate, it cannot anticipate with any certainty the changes in the financial condition of its customers. As a result, PHI records adjustments to the allowance for uncollectible accounts in the period in which the new information that requires an adjustment to the reserve becomes known. | |||||||||||||||||||||||||
Inventories | Inventories | ||||||||||||||||||||||||
PHI utilizes the weighted average cost method of accounting for inventory items. Under this method, an average price is determined for the quantity of units acquired at each price level and is applied to the ending quantity to calculate the total ending inventory balance. Materials and supplies are recorded in Inventory when purchased and then expensed or capitalized to plant, as appropriate, when installed. | |||||||||||||||||||||||||
The cost of natural gas, including transportation costs, is included in Inventory when purchased and charged to Fuel and Purchased Energy expense when used. | |||||||||||||||||||||||||
Goodwill | Goodwill | ||||||||||||||||||||||||
Goodwill represents the excess of the purchase price of an acquisition over the fair value of the net assets acquired at the acquisition date. PHI tests its goodwill for impairment annually as of November 1 and whenever an event occurs or circumstances change in the interim that would more likely than not (that is, a greater than 50% chance) reduce the estimated fair value of a reporting unit below the carrying amount of its net assets. Factors that may result in an interim impairment test include, but are not limited to: a change in the identified reporting units; an adverse change in business conditions; a protracted decline in PHI’s stock price causing market capitalization to fall significantly below book value; an adverse regulatory action; or an impairment of long-lived assets in the reporting unit. PHI performed its most recent annual impairment test as of November 1, 2014, and its goodwill was not impaired as described in Note (6), “Goodwill.” | |||||||||||||||||||||||||
Regulatory Assets and Regulatory Liabilities | Regulatory Assets and Regulatory Liabilities | ||||||||||||||||||||||||
The operations of Pepco are regulated by the DCPSC and the MPSC. The operations of DPL are regulated by the DPSC and the MPSC. DPL’s interstate transportation and wholesale sale of natural gas are regulated by FERC. The operations of ACE are regulated by the NJBPU. The transmission of electricity by Pepco, DPL and ACE is regulated by FERC. | |||||||||||||||||||||||||
The FASB guidance on regulated operations (ASC 980) applies to Power Delivery. It allows regulated entities, in appropriate circumstances, to defer the income statement impact of certain costs that are expected to be recovered in future rates through the establishment of regulatory assets and defer certain revenues that are expected to be refunded to customers through the establishment of regulatory liabilities. Management’s assessment of the probability of recovery of regulatory assets requires judgment and interpretation of laws, regulatory commission orders and other factors. If management subsequently determines, based on changes in facts or circumstances, that a regulatory asset is not probable of recovery, then the regulatory asset would be eliminated through a charge to earnings. | |||||||||||||||||||||||||
Effective June 2007, the MPSC approved a bill stabilization adjustment (BSA) mechanism for retail customers of Pepco and DPL. Effective November 2009, the DCPSC approved a BSA for Pepco’s retail customers. For customers to whom the BSA applies, Pepco and DPL recognize distribution revenue based on an approved distribution charge per customer. From a revenue recognition standpoint, the BSA has the effect of decoupling the distribution revenue recognized in a reporting period from the amount of power delivered during that period. Pursuant to this mechanism, Pepco and DPL recognize either (i) a positive adjustment equal to the amount by which revenue from Maryland and the District of Columbia retail distribution sales falls short of the revenue that Pepco and DPL are entitled to earn based on the approved distribution charge per customer, or (ii) a negative adjustment equal to the amount by which revenue from such distribution sales exceeds the revenue that Pepco and DPL are entitled to earn based on the approved distribution charge per customer (a Revenue Decoupling Adjustment). A net positive Revenue Decoupling Adjustment is recorded as a regulatory asset and a net negative Revenue Decoupling Adjustment is recorded as a regulatory liability. | |||||||||||||||||||||||||
Leasing Activities | Leasing Activities | ||||||||||||||||||||||||
Pepco Holdings’ lease transactions include plant, office space, equipment, software, vehicles and elements of power purchase agreements (PPAs). In accordance with FASB guidance on leases (ASC 840), these leases are classified as either leveraged leases, operating leases or capital leases. | |||||||||||||||||||||||||
Leveraged Leases | |||||||||||||||||||||||||
Income from investments in leveraged lease transactions, in which PHI was an equity participant, was accounted for using the financing method. In accordance with the financing method, investments in leased property were recorded as a receivable from the lessee to be recovered through the collection of future rentals. Income was recognized over the life of the lease at a constant rate of return on the positive net investment. Each quarter, PHI reviewed the carrying value of each lease, which included a review of the underlying financial assumptions, the timing and collectibility of cash flows, and the credit quality of the lessee. Changes to the underlying assumptions, if any, were accounted for in accordance with FASB guidance on leases and reflected in the carrying value of the lease effective for the quarter within which they occurred. | |||||||||||||||||||||||||
Operating Leases | |||||||||||||||||||||||||
An operating lease in which PHI or a subsidiary is the lessee generally results in a level income statement charge over the term of the lease, reflecting the rental payments required by the lease agreement. If rental payments are not made on a straight-line basis, PHI’s policy is to recognize rent expense on a straight-line basis over the lease term unless another systematic and rational allocation basis is more representative of the time pattern in which the leased property is physically employed. | |||||||||||||||||||||||||
Capital Leases | |||||||||||||||||||||||||
For ratemaking purposes, capital leases in which PHI or a subsidiary is the lessee are treated as operating leases; therefore, in accordance with FASB guidance on regulated operations (ASC 980), the amortization of the leased asset is based on the recovery of rental payments through customer rates. Investments in equipment under capital leases are stated at cost, less accumulated depreciation. Depreciation is recorded on a straight-line basis over the equipment’s estimated useful life. | |||||||||||||||||||||||||
Arrangements Containing a Lease | |||||||||||||||||||||||||
PPAs are deemed to contain a lease if the arrangement conveys the right to control the use of property, plant or equipment. If so, PHI determines the appropriate lease accounting classification. | |||||||||||||||||||||||||
Property, Plant and Equipment | Property, Plant and Equipment | ||||||||||||||||||||||||
Property, plant and equipment is recorded at original cost, including labor, materials, asset retirement costs and other direct and indirect costs including capitalized interest. The carrying value of Property, plant and equipment is evaluated for impairment whenever circumstances indicate the carrying value of those assets may not be recoverable. Upon retirement, the cost of regulated property, net of salvage, is charged to Accumulated depreciation. For non-regulated property, the cost and accumulated depreciation of the property, plant and equipment retired or otherwise disposed of are removed from the related accounts and included in the determination of any gain or loss on disposition. | |||||||||||||||||||||||||
The annual provision for depreciation on electric and natural gas property, plant and equipment is computed on a straight-line basis using composite rates by classes of depreciable property. Non-operating and other property is generally depreciated on a straight-line basis over the useful lives of the assets. The table below provides system-wide composite annual depreciation rates for the years ended December 31, 2014, 2013 and 2012. | |||||||||||||||||||||||||
Transmission and | Generation | ||||||||||||||||||||||||
Distribution | |||||||||||||||||||||||||
2014 | 2013 | 2012 | 2014 | 2013 | 2012 | ||||||||||||||||||||
Pepco | 2.3 | % | 2.2 | % | 2.5 | % | — | — | — | ||||||||||||||||
DPL | 2.6 | % | 2.6 | % | 2.7 | % | — | — | — | ||||||||||||||||
ACE | 2.6 | % | 2.8 | % | 3 | % | — | — | — | ||||||||||||||||
Pepco Energy Services | — | — | — | 1.2 | % | 0.4 | % | 6.4 | %(a) | ||||||||||||||||
(a) | Percentage reflects accelerated depreciation of the Benning Road and Buzzard Point generating facilities retired during 2012. | ||||||||||||||||||||||||
In 2010, subsidiaries of PHI received awards from the U.S. Department of Energy (DOE) under the American Recovery and Reinvestment Act of 2009. Pepco was awarded $149 million from DOE to fund a portion of the costs incurred for the implementation of an advanced metering infrastructure (AMI) system (a system that collects, measures and analyzes energy usage data from advanced digital meters known as smart meters), direct load control, distribution automation and communications infrastructure in its Maryland and District of Columbia service territories. ACE was awarded $19 million from DOE to fund a portion of the costs incurred for the implementation of direct load control, distribution automation and communications infrastructure in its New Jersey service territory. PHI has elected to recognize the award proceeds as a reduction in the carrying value of the assets acquired rather than grant income over the service period. | |||||||||||||||||||||||||
Long-Lived Asset Impairment Evaluation | Long-Lived Asset Impairment Evaluation | ||||||||||||||||||||||||
PHI evaluates long-lived assets to be held and used, such as generating property and equipment, and real estate, for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable. Examples of such events or changes include a significant decrease in the market price of a long-lived asset or a significant adverse change in the manner in which an asset is being used or its physical condition. A long-lived asset to be held and used is written down to its estimated fair value if the expected future undiscounted cash flow from the asset is less than its carrying value. | |||||||||||||||||||||||||
For long-lived assets held for sale, an impairment loss is recognized to the extent that the asset’s carrying value exceeds its estimated fair value including costs to sell. | |||||||||||||||||||||||||
Capitalized Interest and Allowance for Funds Used During Construction | Capitalized Interest and Allowance for Funds Used During Construction | ||||||||||||||||||||||||
In accordance with FASB guidance on regulated operations (ASC 980), PHI’s utility subsidiaries may capitalize the capital costs of financing the construction of plant and equipment as allowance for funds used during construction (AFUDC). This results in the debt portion of AFUDC being recorded as a reduction of Interest expense and the equity portion of AFUDC being recorded as an increase to Other income in the accompanying consolidated statements of income (loss). | |||||||||||||||||||||||||
Pepco Holdings recorded AFUDC for borrowed funds of $7 million, $7 million and $7 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||||||
Pepco Holdings recorded amounts for the equity component of AFUDC of $13 million, $11 million and $14 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||||||
Amortization of Debt Issuance and Reacquisition Costs | Amortization of Debt Issuance and Reacquisition Costs | ||||||||||||||||||||||||
Pepco Holdings defers and amortizes debt issuance costs and long-term debt premiums and discounts over the lives of the respective debt issuances. When PHI utility subsidiaries refinance existing debt or redeem existing debt, any unamortized premiums, discounts and debt issuance costs, as well as debt redemption costs, are classified as Regulatory assets and are amortized over the life of the original or new issue. | |||||||||||||||||||||||||
Asset Removal Costs | Asset Removal Costs | ||||||||||||||||||||||||
In accordance with FASB guidance, asset removal costs are recorded by PHI utility subsidiaries as Regulatory liabilities. At December 31, 2014 and 2013, $250 million and $275 million, respectively, of asset removal costs are included in Regulatory liabilities in the accompanying consolidated balance sheets. | |||||||||||||||||||||||||
Pension and Postretirement Benefit Plans | Pension and Postretirement Benefit Plans | ||||||||||||||||||||||||
PHI sponsors a non-contributory, defined benefit pension plan that covers substantially all employees of Pepco, DPL, ACE and certain employees of other PHI subsidiaries (the PHI Retirement Plan). PHI also provides supplemental retirement benefits to certain eligible executives and key employees through nonqualified retirement plans and provides certain postretirement health care and life insurance benefits for eligible retired employees. Most employees hired after January 1, 2005 will not have retiree health care coverage. | |||||||||||||||||||||||||
Net periodic benefit cost is included in Other operation and maintenance expense, net of the portion of the net periodic benefit cost capitalized as part of the cost of labor for internal construction projects. After intercompany allocations, the three utility subsidiaries are responsible for substantially all of the total PHI net periodic benefit cost. | |||||||||||||||||||||||||
PHI accounts for the PHI Retirement Plan, the nonqualified retirement plans, and the retirement health care and life insurance benefit plans in accordance with FASB guidance on retirement benefits (ASC 715). | |||||||||||||||||||||||||
See Note (9), “Pension and Other Postretirement Benefits,” for additional information. | |||||||||||||||||||||||||
Reclassifications | Reclassifications | ||||||||||||||||||||||||
Certain prior period amounts have been reclassified in order to conform to the current period presentation. | |||||||||||||||||||||||||
Liabilities | Liabilities (ASC 405) | ||||||||||||||||||||||||
In February 2013, the FASB issued new recognition and disclosure requirements for certain joint and several liability arrangements where the total amount of the obligation is fixed at the reporting date. For arrangements within the scope of this standard, PHI is required to measure such obligations as the sum of the amount it agreed to pay on the basis of its arrangement among co-obligors and any additional amount it expects to pay on behalf of its co-obligors. Adoption of this guidance during the first quarter of 2014 did not have a material impact on PHI’s consolidated financial statements. | |||||||||||||||||||||||||
Income Taxes | Income Taxes (ASC 740) | ||||||||||||||||||||||||
In July 2013, the FASB issued new guidance requiring netting of certain unrecognized tax benefits against a deferred tax asset for a loss or other similar tax carryforward that would apply upon settlement of the uncertain tax position. The prospective adoption of this guidance at March 31, 2014 resulted in PHI netting liabilities related to uncertain tax positions with deferred tax assets for net operating loss and other carryforwards (included in Deferred income tax liabilities, net) and income taxes receivable (including income tax deposits) related to effectively settled uncertain tax positions. | |||||||||||||||||||||||||
Revenue from Contracts with Customers | Revenue from Contracts with Customers (ASC 606) | ||||||||||||||||||||||||
In May 2014, the FASB issued new recognition and disclosure requirements for revenue from contracts with customers, which supersedes the existing revenue recognition guidance. The new recognition requirements focus on when the customer obtains control of the goods or services, rather than the current risks and rewards model of recognition. The core principle of the new standard is that an entity will recognize revenue when it transfers goods or services to its customers in an amount that reflects the consideration an entity expects to be entitled to for those goods or services. The new disclosure requirements will include information intended to communicate the nature, amount, timing and any uncertainty of revenue and cash flows from applicable contracts, including any significant judgments and changes in judgments and assets recognized from the costs to obtain or fulfill a contract. Entities will generally be required to make more estimates and use more judgment under the new standard. | |||||||||||||||||||||||||
The new requirements are effective for PHI beginning January 1, 2017, and may be implemented either retrospectively for all periods presented, or as a cumulative-effect adjustment as of January 1, 2017. Early adoption is not permitted. PHI is currently evaluating the potential impact of this new guidance on its consolidated financial statements and which implementation approach to select. | |||||||||||||||||||||||||
Business Combinations | Business Combinations (ASC 805) | ||||||||||||||||||||||||
In November 2014, the FASB issued new recognition and disclosure requirements related to pushdown accounting. The new recognition requirements grant an acquired entity (or its subsidiaries) the option to elect whether and when a new accounting and reporting basis (pushdown accounting) will be applied when an acquirer obtains control of the acquired entity. This election may be made by the acquired entity (or its subsidiaries) for future change-in-control events or for its most recent change-in-control event, and the acquired entity will be required to determine whether pushdown accounting will be applied in the reporting period in which the change-in-control event occurs or in a subsequent reporting period. | |||||||||||||||||||||||||
The new required disclosures include information that enables financial statement users to evaluate the effects of pushdown accounting. Disclosures are required to be made in the period in which pushdown accounting is applied and are expected to include both qualitative and quantitative information. | |||||||||||||||||||||||||
The new recognition and disclosure requirements became effective on a prospective basis on November 18, 2014. PHI currently anticipates it may be affected by the new guidance if its Merger with Exelon closes. | |||||||||||||||||||||||||
Potomac Electric Power Co [Member] | |||||||||||||||||||||||||
Use of Estimates | Use of Estimates | ||||||||||||||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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, the assessment of the probability of recovery of regulatory assets, accrual of storm restoration costs, accrual of unbilled revenue, recognition of changes in network service transmission rates for prior service year costs, accrual of loss contingency liabilities for general litigation and auto and other liability claims 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 it is probable that a loss has been incurred and the loss is reasonably estimable. | |||||||||||||||||||||||||
Revenue Recognition | Revenue Recognition | ||||||||||||||||||||||||
Pepco recognizes revenue upon distribution of electricity to its customers, including unbilled revenue for services rendered, but not yet billed. Pepco’s unbilled revenue was $77 million and $80 million as of December 31, 2014 and 2013, respectively, and 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). The assumptions and judgments 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 Pepco’s tariffs and, as such, are billed to customers and recorded in Operating revenue. Accruals for the remittance of these taxes by Pepco are recorded in Other taxes. | |||||||||||||||||||||||||
Taxes Assessed by a Governmental Authority on Revenue-Producing Transactions | Taxes Assessed by a Governmental Authority on Revenue-Producing Transactions | ||||||||||||||||||||||||
Taxes included in Pepco’s gross revenues were $304 million, $318 million and $324 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||||||
Income Taxes | Income Taxes | ||||||||||||||||||||||||
Pepco, as a direct subsidiary of Pepco Holdings, is included in the consolidated federal income tax return of PHI. Federal income taxes are allocated to Pepco based upon the taxable income or loss amounts, determined on a separate return basis. | |||||||||||||||||||||||||
The financial statements include current and deferred income taxes. Current income taxes represent the amount of tax expected to be reported on Pepco’s state income tax returns and the amount of federal income tax allocated from Pepco Holdings. | |||||||||||||||||||||||||
Deferred income tax assets and liabilities represent the tax effects of temporary differences between the financial statement basis and tax basis of existing assets and liabilities and they are measured using presently enacted tax rates. The portion of Pepco’s deferred tax liability applicable to its utility operations that has not been recovered from utility customers represents income taxes recoverable in the future and is included in Regulatory assets on the balance sheets. See Note (6), “Regulatory Matters,” for additional information. | |||||||||||||||||||||||||
Deferred income tax expense generally represents the net change during the reporting period in the net deferred tax liability and deferred recoverable income taxes. | |||||||||||||||||||||||||
Pepco recognizes interest on underpayments and overpayments of income taxes, interest on uncertain tax positions, and tax-related penalties in income tax expense. | |||||||||||||||||||||||||
Investment tax credits are being amortized to income over the useful lives of the related property. | |||||||||||||||||||||||||
Cash and Cash Equivalents | Cash and Cash Equivalents | ||||||||||||||||||||||||
Cash and cash equivalents include cash on hand, cash invested in money market funds and commercial paper held with original maturities of three months or less. Additionally, deposits in PHI’s money pool, which Pepco and certain other PHI subsidiaries use to manage short-term cash management requirements, are considered cash equivalents. Deposits in the money pool are guaranteed by PHI. PHI deposits funds in the money pool to the extent that the pool has insufficient funds to meet the needs of its participants, which may require PHI to borrow funds for deposit from external sources. | |||||||||||||||||||||||||
Restricted Cash Equivalents | Restricted Cash Equivalents | ||||||||||||||||||||||||
The Restricted cash equivalents included in Current assets consist of (i) cash held as collateral that is restricted from use for general corporate purposes and (ii) cash equivalents that are specifically segregated based on management’s intent to use such cash equivalents for a particular purpose. The classification as current conforms to the classification of the related liabilities. | |||||||||||||||||||||||||
Accounts Receivable and Allowance for Uncollectible Accounts | Accounts Receivable and Allowance for Uncollectible Accounts | ||||||||||||||||||||||||
Pepco’s Accounts receivable balance primarily consists of customer accounts receivable arising from the sale of goods and services to customers within its service territory, other accounts receivable, and accrued unbilled revenue. Accrued unbilled revenue represents revenue earned in the current period but not billed to the customer until a future date (usually within one month after the receivable is recorded). | |||||||||||||||||||||||||
Pepco maintains an allowance for uncollectible accounts and changes in the allowance are recorded as an adjustment to Other operation and maintenance expense in the statements of income. Pepco determines the amount of the allowance based on specific identification of material amounts at risk by customer and maintains a reserve based on its historical collection experience. The adequacy of this allowance is assessed on a quarterly basis by evaluating all known factors such as the aging of the receivables, historical collection experience, the economic and competitive environment and changes in the creditworthiness of its customers. Accounts receivable are written off in the period in which the receivable is deemed uncollectible and collection efforts have been exhausted. Recoveries of Accounts receivable previously written off are recorded when received. Although Pepco believes its allowance is adequate, it cannot anticipate with any certainty the changes in the financial condition of its customers. As a result, Pepco records adjustments to the allowance for uncollectible accounts in the period in which the new information that requires an adjustment to the reserve becomes known. | |||||||||||||||||||||||||
Inventories | Inventories | ||||||||||||||||||||||||
Included in Inventories are transmission and distribution materials and supplies. Pepco utilizes the weighted average cost method of accounting for inventory items. Under this method, an average price is determined for the quantity of units acquired at each price level and is applied to the ending quantity to calculate the total ending inventory balance. Materials and supplies are recorded in Inventory when purchased and then expensed or capitalized to plant, as appropriate, when installed. | |||||||||||||||||||||||||
Regulatory Assets and Regulatory Liabilities | Regulatory Assets and Regulatory Liabilities | ||||||||||||||||||||||||
Pepco is regulated by the MPSC and the DCPSC. The transmission of electricity by Pepco is regulated by FERC. | |||||||||||||||||||||||||
Based on the regulatory framework in which it has operated, Pepco has historically applied, and in connection with its transmission and distribution business continues to apply, the Financial Accounting Standards Board (FASB) guidance on regulated operations (Accounting Standards Codification (ASC) 980). The guidance allows regulated entities, in appropriate circumstances, to defer the income statement impact of certain costs that are expected to be recovered in future rates through the establishment of regulatory assets and defer certain revenues that are expected to be refunded to customers through the establishment of regulatory liabilities. Management’s assessment of the probability of recovery of regulatory assets requires judgment and interpretation of laws, regulatory commission orders and other factors. If management subsequently determines, based on changes in facts or circumstances, that a regulatory asset is not probable of recovery, the regulatory asset would be eliminated through a charge to earnings. | |||||||||||||||||||||||||
Effective June 2007, the MPSC approved a bill stabilization adjustment (BSA) mechanism for retail customers. Effective November 2009, the DCPSC approved a BSA for retail customers. For customers to whom the BSA applies, Pepco recognizes distribution revenue based on an approved distribution charge per customer. From a revenue recognition standpoint, the BSA has the effect of decoupling the distribution revenue recognized in a reporting period from the amount of power delivered during that period. Pursuant to this mechanism, Pepco recognizes either (i) a positive adjustment equal to the amount by which revenue from Maryland and the District of Columbia retail distribution sales falls short of the revenue that Pepco is entitled to earn based on the approved distribution charge per customer, or (ii) a negative adjustment equal to the amount by which revenue from such distribution sales exceeds the revenue that Pepco is entitled to earn based on the approved distribution charge per customer (a Revenue Decoupling Adjustment). A net positive Revenue Decoupling Adjustment is recorded as a regulatory asset and a net negative Revenue Decoupling Adjustment is recorded as a regulatory liability. | |||||||||||||||||||||||||
Leasing Activities | Leasing Activities | ||||||||||||||||||||||||
Pepco’s lease transactions include office space, equipment, software and vehicles. In accordance with FASB guidance on leases (ASC 840), these leases are classified as either operating leases or capital leases. | |||||||||||||||||||||||||
Operating Leases | |||||||||||||||||||||||||
An operating lease in which Pepco is the lessee generally results in a level income statement charge over the term of the lease, reflecting the rental payments required by the lease agreement. If rental payments are not made on a straight-line basis, Pepco’s policy is to recognize rent expense on a straight-line basis over the lease term unless another systematic and rational allocation basis is more representative of the time pattern in which the leased property is physically employed. | |||||||||||||||||||||||||
Capital Leases | |||||||||||||||||||||||||
For ratemaking purposes, capital leases in which Pepco is the lessee are treated as operating leases; therefore, in accordance with FASB guidance on regulated operations (ASC 980), the amortization of the leased asset is based on the recovery of rental payments through customer rates. Investments in equipment under capital leases are stated at cost, less accumulated depreciation. Depreciation is recorded on a straight-line basis over the equipment’s estimated useful life. | |||||||||||||||||||||||||
Property, Plant and Equipment | Property, Plant and Equipment | ||||||||||||||||||||||||
Property, plant and equipment is recorded at original cost, including labor, materials, asset retirement costs and other direct and indirect costs including capitalized interest. The carrying value of Property, plant and equipment is evaluated for impairment whenever circumstances indicate that the carrying value of those assets may not be recoverable. Upon retirement, the cost of regulated property, net of salvage, is charged to Accumulated depreciation. For additional information regarding the treatment of asset removal obligations, see the “Asset Removal Costs” section included in this Note. | |||||||||||||||||||||||||
The annual provision for depreciation on electric property, plant and equipment is computed on a straight-line basis using composite rates by classes of depreciable property. Non-operating and other property is generally depreciated on a straight-line basis over the useful lives of the assets. The system-wide composite annual depreciation rates for the years ended December 31, 2014, 2013 and 2012 for Pepco’s property were approximately 2.3%, 2.2% and 2.5%, respectively. | |||||||||||||||||||||||||
Long-Lived Asset Impairment Evaluation | Long-Lived Assets Impairment Evaluation | ||||||||||||||||||||||||
Pepco evaluates certain long-lived assets to be held and used (for example, equipment and real estate) for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable. Examples of such events or changes include a significant decrease in the market price of a long-lived asset or a significant adverse change in the manner in which an asset is being used or its physical condition. A long-lived asset to be held and used is written down to its estimated fair value if the expected future undiscounted cash flow from the asset is less than its carrying value. | |||||||||||||||||||||||||
For long-lived assets that can be classified as assets to be disposed of by sale, an impairment loss is recognized to the extent that the asset’s carrying value exceeds its estimated fair value including costs to sell. | |||||||||||||||||||||||||
Capitalized Interest and Allowance for Funds Used During Construction | Capitalized Interest and Allowance for Funds Used During Construction | ||||||||||||||||||||||||
In accordance with FASB guidance on regulated operations (ASC 980), utilities may capitalize the capital costs of financing the construction of plant and equipment as allowance for funds used during construction (AFUDC). This results in the debt portion of AFUDC being recorded as a reduction of Interest expense and the equity portion of AFUDC being recorded as an increase to Other income in the accompanying statements of income. | |||||||||||||||||||||||||
Pepco recorded AFUDC for borrowed funds of $5 million, $5 million and $4 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||||||
Pepco recorded amounts for the equity component of AFUDC of $10 million, $9 million and $8 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||||||
Amortization of Debt Issuance and Reacquisition Costs | Amortization of Debt Issuance and Reacquisition Costs | ||||||||||||||||||||||||
Pepco defers and amortizes debt issuance costs and long-term debt premiums and discounts over the lives of the respective debt issuances. When refinancing or redeeming existing debt, any unamortized premiums, discounts and debt issuance costs, as well as debt redemption costs, are classified as Regulatory assets and are amortized generally over the life of the new issue. | |||||||||||||||||||||||||
Asset Removal Costs | Asset Removal Costs | ||||||||||||||||||||||||
In accordance with FASB guidance, asset removal costs are recorded as regulatory liabilities. At December 31, 2014 and 2013, $84 million and $102 million, respectively, of asset removal costs are included in Regulatory liabilities in the accompanying balance sheets. | |||||||||||||||||||||||||
Pension and Postretirement Benefit Plans | Pension and Postretirement Benefit Plans | ||||||||||||||||||||||||
Pepco Holdings sponsors a non-contributory, defined benefit pension plan that covers substantially all employees of Pepco and certain employees of other Pepco Holdings subsidiaries (the PHI Retirement Plan). Pepco Holdings also provides supplemental retirement benefits to certain eligible executives and key employees through nonqualified retirement plans and provides certain postretirement health care and life insurance benefits for eligible retired employees. | |||||||||||||||||||||||||
The PHI Retirement Plan is accounted for in accordance with FASB guidance on retirement benefits (ASC 715). | |||||||||||||||||||||||||
Reclassifications | Reclassifications | ||||||||||||||||||||||||
Certain prior period amounts have been reclassified in order to conform to the current period presentation. | |||||||||||||||||||||||||
Liabilities | Liabilities (ASC 405) | ||||||||||||||||||||||||
In February 2013, FASB issued new recognition and disclosure requirements for certain joint and several liability arrangements where the total amount of the obligation is fixed at the reporting date. For arrangements within the scope of this standard, Pepco is required to measure such obligations as the sum of the amount it agreed to pay on the basis of its arrangement among co-obligors and any additional amount it expects to pay on behalf of its co-obligors. Adoption of this guidance during the first quarter of 2014 did not have a material impact on Pepco’s financial statements. | |||||||||||||||||||||||||
Income Taxes | Income Taxes (ASC 740) | ||||||||||||||||||||||||
In July 2013, the FASB issued new guidance requiring netting of certain unrecognized tax benefits against a deferred tax asset for a loss or other similar tax carryforward that would apply upon settlement of the uncertain tax position. The prospective adoption of this guidance at March 31, 2014 resulted in Pepco netting liabilities related to uncertain tax positions with deferred tax assets for net operating loss and other carryforwards (included in Deferred income tax liabilities, net) and income taxes receivable (including income tax deposits) related to effectively settled uncertain tax positions. | |||||||||||||||||||||||||
Revenue from Contracts with Customers | Revenue from Contracts with Customers (ASC 606) | ||||||||||||||||||||||||
In May 2014, the FASB issued new recognition and disclosure requirements for revenue from contracts with customers, which supersedes the existing revenue recognition guidance. The new recognition requirements focus on when the customer obtains control of the goods or services, rather than the current risks and rewards model of recognition. The core principle of the new standard is that an entity will recognize revenue when it transfers goods or services to its customers in an amount that reflects the consideration an entity expects to be entitled to for those goods or services. The new disclosure requirements will include information intended to communicate the nature, amount, timing and any uncertainty of revenue and cash flows from applicable contracts, including any significant judgments and changes in judgments and assets recognized from the costs to obtain or fulfill a contract. Entities will generally be required to make more estimates and use more judgment under the new standard. | |||||||||||||||||||||||||
The new requirements are effective for Pepco beginning January 1, 2017, and may be implemented either retrospectively for all periods presented, or as a cumulative-effect adjustment as of January 1, 2017. Early adoption is not permitted. Pepco is currently evaluating the potential impact of this new guidance on its financial statements and which implementation approach to select. | |||||||||||||||||||||||||
Business Combinations | Business Combinations (ASC 805) | ||||||||||||||||||||||||
In November 2014, the FASB issued new recognition and disclosure requirements related to pushdown accounting. The new recognition requirements grant an acquired entity (or its subsidiaries) the option to elect whether and when a new accounting and reporting basis (pushdown accounting) will be applied when an acquirer obtains control of the acquired entity. This election may be made by the acquired entity (or its subsidiaries) for future change-in-control events or for its most recent change-in-control event, and the acquired entity will be required to determine whether pushdown accounting will be applied in the reporting period in which the change-in-control event occurs or in a subsequent reporting period. | |||||||||||||||||||||||||
The new required disclosures include information that enables financial statement users to evaluate the effects of pushdown accounting. Disclosures are required to be made in the period in which pushdown accounting is applied and are expected to include both qualitative and quantitative information. | |||||||||||||||||||||||||
The new recognition and disclosure requirements became effective on a prospective basis on November 18, 2014. | |||||||||||||||||||||||||
Investment in Trust | Investment in Trust | ||||||||||||||||||||||||
Represents assets held in a trust for the benefit of participants in the Pepco Owned Life Insurance plan. | |||||||||||||||||||||||||
Dividend Restrictions | Dividend Restrictions | ||||||||||||||||||||||||
All of Pepco’s shares of outstanding common stock are held by PHI, its parent company. In addition to its future financial performance, the ability of Pepco to pay dividends to its parent company is subject to limits imposed by: (i) state corporate laws, which impose limitations on the funds that can be used to pay dividends, and (ii) the prior rights of holders of future preferred stock, if any, and existing and future mortgage bonds and other long-term debt issued by Pepco and any other restrictions imposed in connection with the incurrence of liabilities. Pepco has no shares of preferred stock outstanding. Pepco had approximately $1,077 million and $992 million of retained earnings available for payment of common stock dividends at December 31, 2014 and 2013, respectively. These amounts represent the total retained earnings balances at those dates. | |||||||||||||||||||||||||
Delmarva Power & Light Co/De [Member] | |||||||||||||||||||||||||
Consolidation of Variable Interest Entities | Consolidation of Variable Interest Entities | ||||||||||||||||||||||||
DPL assesses its contractual arrangements with variable interest entities (VIEs) to determine whether it is the primary beneficiary and thereby has to consolidate the entities in accordance with ASC 810. The guidance addresses conditions under which an entity should be consolidated based upon variable interests rather than voting interests. See Note (17), “Variable Interest Entities, “ for additional information. | |||||||||||||||||||||||||
Use of Estimates | Use of Estimates | ||||||||||||||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 and goodwill impairment evaluations, fair value calculations for derivative instruments, pension and other postretirement benefits assumptions, the assessment of the probability of recovery of regulatory assets, accrual of storm restoration costs, accrual of unbilled revenue, recognition of changes in network service transmission rates for prior service year costs, accrual of loss contingency liabilities for general litigation and auto and other liability claims, 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 it is probable that a loss has been incurred and the loss is reasonably estimable. | |||||||||||||||||||||||||
Revenue Recognition | Revenue Recognition | ||||||||||||||||||||||||
DPL recognizes revenues upon distribution of electricity and natural gas to its customers, including unbilled revenue for services rendered, but not yet billed. DPL’s unbilled revenue was $63 million and $61 million as of December 31, 2014 and 2013, respectively, and 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 natural 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 natural gas expected to be lost in the process of its transmission and distribution to customers). The assumptions and judgments 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. Revenues from non-regulated electricity and natural gas sales are included in Electric revenues and Natural gas revenues, respectively. | |||||||||||||||||||||||||
Taxes related to the consumption of electricity and natural gas by its customers, such as fuel, energy, or other similar taxes, are components of DPL’s tariffs and, as such, are billed to customers and recorded in Operating revenue. Accruals for the remittance of these taxes by DPL are recorded in Other taxes. | |||||||||||||||||||||||||
Taxes Assessed by a Governmental Authority on Revenue-Producing Transactions | Taxes Assessed by a Governmental Authority on Revenue-Producing Transactions | ||||||||||||||||||||||||
Taxes included in DPL’s gross revenues were $16 million, $17 million and $15 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||||||
Accounting for Derivatives | Accounting for Derivatives | ||||||||||||||||||||||||
DPL uses derivative instruments primarily to reduce natural gas commodity price volatility and to limit its customers’ exposure to natural gas price fluctuations under a hedging program approved by the DPSC. Derivatives are recorded in the balance sheets as Derivative assets or Derivative liabilities and measured at fair value. DPL enters physical natural gas contracts as part of the hedging program that qualify as normal purchases or normal sales, which are not required to be recorded in the financial statements until settled. DPL’s capacity contracts are not classified as derivatives. Changes in the fair value of derivatives that are not designated as cash flow hedges are reflected in income. | |||||||||||||||||||||||||
All premiums paid and other transaction costs incurred as part of DPL’s natural gas hedging activity, in addition to all gains and losses related to hedging activities, are fully recoverable through the fuel adjustment clause approved by the DPSC, and are deferred under Financial Accounting Standards Board (FASB) guidance on regulated operations (Accounting Standards Codification (ASC) 980) until recovered. | |||||||||||||||||||||||||
Income Taxes | Income Taxes | ||||||||||||||||||||||||
DPL, as an indirect subsidiary of Pepco Holdings, is included in the consolidated federal income tax return of PHI. Federal income taxes are allocated to DPL based upon the taxable income or loss amounts, determined on a separate return basis. | |||||||||||||||||||||||||
The financial statements include current and deferred income taxes. Current income taxes represent the amount of tax expected to be reported on DPL’s state income tax returns and the amount of federal income tax allocated from Pepco Holdings. | |||||||||||||||||||||||||
Deferred income tax assets and liabilities represent the tax effects of temporary differences between the financial statement basis and tax basis of existing assets and liabilities, and they are measured using presently enacted tax rates. The portion of DPL’s deferred tax liability applicable to its utility operations that has not been recovered from utility customers represents income taxes recoverable in the future and is included in Regulatory assets on the balance sheets. See Note (7), “Regulatory Matters,” for additional information. | |||||||||||||||||||||||||
Deferred income tax expense generally represents the net change during the reporting period in the net deferred tax liability and deferred recoverable income taxes. | |||||||||||||||||||||||||
DPL recognizes interest on underpayments and overpayments of income taxes, interest on uncertain tax positions, and tax-related penalties in income tax expense. | |||||||||||||||||||||||||
Investment tax credits are being amortized to income over the useful lives of the related property. | |||||||||||||||||||||||||
Cash and Cash Equivalents | Cash and Cash Equivalents | ||||||||||||||||||||||||
Cash and cash equivalents include cash on hand, cash invested in money market funds and commercial paper held with original maturities of three months or less. Additionally, deposits in PHI’s money pool, which DPL and certain other PHI subsidiaries use to manage short-term cash management requirements, are considered cash equivalents. Deposits in the money pool are guaranteed by PHI. PHI deposits funds in the money pool to the extent that the pool has insufficient funds to meet the needs of its participants, which may require PHI to borrow funds for deposit from external sources. | |||||||||||||||||||||||||
Accounts Receivable and Allowance for Uncollectible Accounts | Accounts Receivable and Allowance for Uncollectible Accounts | ||||||||||||||||||||||||
DPL’s Accounts receivable balance primarily consists of customer accounts receivable arising from the sale of goods and services to customers within its service territory, other accounts receivable, and accrued unbilled revenue. Accrued unbilled revenue represents revenue earned in the current period but not billed to the customer until a future date (usually within one month after the receivable is recorded). | |||||||||||||||||||||||||
DPL maintains an allowance for uncollectible accounts and changes in the allowance are recorded as an adjustment to Other operation and maintenance expense in the statements of income. DPL determines the amount of the allowance based on specific identification of material amounts at risk by customer and maintains a reserve based on its historical collection experience. The adequacy of this allowance is assessed on a quarterly basis by evaluating all known factors such as the aging of the receivables, historical collection experience, the economic and competitive environment and changes in the creditworthiness of its customers. Accounts receivable are written off in the period in which the receivable is deemed uncollectible and collection efforts have been exhausted. Recoveries of Accounts receivable previously written off are recorded when received. Although DPL believes its allowance is adequate, it cannot anticipate with any certainty the changes in the financial condition of its customers. As a result, DPL records adjustments to the allowance for uncollectible accounts in the period in which the new information that requires an adjustment to the reserve becomes known. | |||||||||||||||||||||||||
Inventories | Inventories | ||||||||||||||||||||||||
Included in Inventories are transmission and distribution materials and supplies and natural gas. DPL utilizes the weighted average cost method of accounting for inventory items. Under this method, an average price is determined for the quantity of units acquired at each price level and is applied to the ending quantity to calculate the total ending inventory balance. Materials and supplies are recorded in Inventory when purchased and then expensed or capitalized to plant, as appropriate, when installed. | |||||||||||||||||||||||||
The cost of natural gas, including transportation costs, is included in Inventory when purchased and charged to Gas purchased expense when used. | |||||||||||||||||||||||||
Goodwill | Goodwill | ||||||||||||||||||||||||
Goodwill represents the excess of the purchase price of an acquisition over the fair value of the net assets acquired at the acquisition date. DPL tests its goodwill for impairment annually as of November 1 and whenever an event occurs or circumstances change in the interim that would more likely than not (that is, a greater than 50% chance) reduce the estimated fair value of DPL below the carrying amount of its net assets. Factors that may result in an interim impairment test include, but are not limited to: a change in the identified reporting unit; an adverse change in business conditions; an adverse regulatory action; or an impairment of DPL’s long-lived assets. DPL performed its most recent annual impairment test as of November 1, 2014, and its goodwill was not impaired as described in Note (6), “Goodwill.” | |||||||||||||||||||||||||
Regulatory Assets and Regulatory Liabilities | Regulatory Assets and Regulatory Liabilities | ||||||||||||||||||||||||
Certain aspects of DPL’s business are subject to regulation by the DPSC and the MPSC. The transmission of electricity by DPL is regulated by FERC. DPL’s interstate transportation and wholesale sale of natural gas are regulated by FERC. | |||||||||||||||||||||||||
Based on the regulatory framework in which it has operated, DPL has historically applied, and in connection with its transmission and distribution business continues to apply, FASB guidance on regulated operations (ASC 980). The guidance allows regulated entities, in appropriate circumstances, to defer the income statement impact of certain costs that are expected to be recovered in future rates through the establishment of regulatory assets and defer certain revenues that are expected to be refunded to customers through the establishment of regulatory liabilities. Management’s assessment of the probability of recovery of regulatory assets requires judgment and interpretation of laws, regulatory commission orders and other factors. If management subsequently determines, based on changes in facts or circumstances, that a regulatory asset is not probable of recovery, the regulatory asset would be eliminated through a charge to earnings. | |||||||||||||||||||||||||
Effective June 2007, the MPSC approved a bill stabilization adjustment (BSA) mechanism for retail customers. For customers to whom the BSA applies, DPL recognizes distribution revenue based on an approved distribution charge per customer. From a revenue recognition standpoint, the BSA has the effect of decoupling the distribution revenue recognized in a reporting period from the amount of power delivered during that period. Pursuant to this mechanism, DPL recognizes either (i) a positive adjustment equal to the amount by which revenue from Maryland retail distribution sales falls short of the revenue that DPL is entitled to earn based on the approved distribution charge per customer, or (ii) a negative adjustment equal to the amount by which revenue from such distribution sales exceeds the revenue that DPL is entitled to earn based on the approved distribution charge per customer (a Revenue Decoupling Adjustment). A net positive Revenue Decoupling Adjustment is recorded as a regulatory asset and a net negative Revenue Decoupling Adjustment is recorded as a regulatory liability | |||||||||||||||||||||||||
Leasing Activities | Leasing Activities | ||||||||||||||||||||||||
DPL’s lease transactions include plant, office space, equipment, software, vehicles and elements of power purchase agreements (PPAs). In accordance with FASB guidance on leases (ASC 840), these leases are classified as operating leases. | |||||||||||||||||||||||||
Operating Leases | |||||||||||||||||||||||||
An operating lease in which DPL is the lessee generally results in a level income statement charge over the term of the lease, reflecting the rental payments required by the lease agreement. If rental payments are not made on a straight-line basis, DPL’s policy is to recognize rent expense on a straight-line basis over the lease term unless another systematic and rational allocation basis is more representative of the time pattern in which the leased property is physically employed. | |||||||||||||||||||||||||
Arrangements Containing a Lease | |||||||||||||||||||||||||
PPAs are deemed to contain a lease if the arrangement conveys the right to control the use of property, plant or equipment. If so, DPL determines the appropriate lease accounting classification. | |||||||||||||||||||||||||
Property, Plant and Equipment | Property, Plant and Equipment | ||||||||||||||||||||||||
Property, plant and equipment is recorded at original cost, including labor, materials, asset retirement costs and other direct and indirect costs including capitalized interest. The carrying value of Property, plant and equipment is evaluated for impairment whenever circumstances indicate that the carrying value of those assets may not be recoverable. Upon retirement, the cost of regulated property, net of salvage, is charged to Accumulated depreciation. For additional information regarding the treatment of asset retirement obligations, see the “Asset Removal Costs” section included in this Note. | |||||||||||||||||||||||||
The annual provision for depreciation on electric and natural gas property, plant and equipment is computed on a straight-line basis using composite rates by classes of depreciable property. Non-operating and other property is generally depreciated on a straight-line basis over the useful lives of the assets. The system-wide composite annual depreciation rates for the years ended December 31, 2014, 2013 and 2012 for DPL’s property were approximately 2.6%, 2.6% and 2.7%, respectively. | |||||||||||||||||||||||||
Long-Lived Asset Impairment Evaluation | Long-Lived Asset Impairment Evaluation | ||||||||||||||||||||||||
DPL evaluates certain long-lived assets to be held and used (for example, equipment and real estate) for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable. Examples of such events or changes include a significant decrease in the market price of a long-lived asset or a significant adverse change in the manner in which an asset is being used or its physical condition. A long-lived asset to be held and used is written down to its estimated fair value if the expected future undiscounted cash flow from the asset is less than its carrying value. | |||||||||||||||||||||||||
For long-lived assets that can be classified as assets to be disposed of by sale, an impairment loss is recognized to the extent that the assets’ carrying value exceeds its estimated fair value including costs to sell. | |||||||||||||||||||||||||
Capitalized Interest and Allowance for Funds Used During Construction | Capitalized Interest and Allowance for Funds Used During Construction | ||||||||||||||||||||||||
In accordance with FASB guidance on regulated operations (ASC 980), utilities may capitalize the capital costs of financing the construction of plant and equipment as allowance for funds used during construction (AFUDC). This results in the debt portion of AFUDC being recorded as a reduction of Interest expense and the equity portion of AFUDC being recorded as an increase to Other income in the accompanying statements of income. | |||||||||||||||||||||||||
DPL recorded AFUDC for borrowed funds of $1 million, $2 million and $2 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||||||
DPL recorded amounts for the equity component of AFUDC of $2 million, $2 million and $3 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||||||
Amortization of Debt Issuance and Reacquisition Costs | Amortization of Debt Issuance and Reacquisition Costs | ||||||||||||||||||||||||
DPL defers and amortizes debt issuance costs and long-term debt premiums and discounts over the lives of the respective debt issuances. When refinancing or redeeming existing debt, any unamortized premiums, discounts and debt issuance costs, as well as debt redemption costs, are classified as Regulatory assets and are amortized generally over the life of the original issue. | |||||||||||||||||||||||||
Asset Removal Costs | Asset Removal Costs | ||||||||||||||||||||||||
In accordance with FASB guidance, asset removal costs are recorded as regulatory liabilities. At December 31, 2014 and 2013, $166 million and $173 million, respectively, of asset removal costs are included in Regulatory liabilities in the accompanying balance sheets. | |||||||||||||||||||||||||
Pension and Postretirement Benefit Plans | Pension and Postretirement Benefit Plans | ||||||||||||||||||||||||
Pepco Holdings sponsors a non-contributory, defined benefit pension plan that covers substantially all employees of DPL and certain employees of other Pepco Holdings subsidiaries (the PHI Retirement Plan). Pepco Holdings also provides supplemental retirement benefits to certain eligible executives and key employees through nonqualified retirement plans and provides certain postretirement health care and life insurance benefits for eligible retired employees. | |||||||||||||||||||||||||
The PHI Retirement Plan is accounted for in accordance with FASB guidance on retirement benefits (ASC 715). | |||||||||||||||||||||||||
Reclassifications | Reclassifications | ||||||||||||||||||||||||
Certain prior period amounts have been reclassified in order to conform to the current period presentation. | |||||||||||||||||||||||||
Liabilities | Liabilities (ASC 405) | ||||||||||||||||||||||||
In February 2013, the FASB issued new recognition and disclosure requirements for certain joint and several liability arrangements where the total amount of the obligation is fixed at the reporting date. For arrangements within the scope of this standard, DPL is required to measure such obligations as the sum of the amount it agreed to pay on the basis of its arrangement among co-obligors and any additional amount it expects to pay on behalf of its co-obligors. Adoption of this guidance during the first quarter of 2014 did not have a material impact on DPL’s financial statements. | |||||||||||||||||||||||||
Income Taxes | Income Taxes (ASC 740) | ||||||||||||||||||||||||
In July 2013, the FASB issued new guidance requiring netting of certain unrecognized tax benefits against a deferred tax asset for a loss or other similar tax carryforward that would apply upon settlement of the uncertain tax position. The prospective adoption of this guidance at March 31, 2014 resulted in DPL netting liabilities related to uncertain tax positions with deferred tax assets for net operating loss and other carryforwards (included in Deferred income tax liabilities, net) and income taxes receivable (including income tax deposits) related to effectively settled uncertain tax positions. | |||||||||||||||||||||||||
Revenue from Contracts with Customers | Revenue from Contracts with Customers (ASC 606) | ||||||||||||||||||||||||
In May 2014, the FASB issued new recognition and disclosure requirements for revenue from contracts with customers, which supersedes the existing revenue recognition guidance. The new recognition requirements focus on when the customer obtains control of the goods or services, rather than the current risks and rewards model of recognition. The core principle of the new standard is that an entity will recognize revenue when it transfers goods or services to its customers in an amount that reflects the consideration an entity expects to be entitled to for those goods or services. The new disclosure requirements will include information intended to communicate the nature, amount, timing and any uncertainty of revenue and cash flows from applicable contracts, including any significant judgments and changes in judgments and assets recognized from the costs to obtain or fulfill a contract. Entities will generally be required to make more estimates and use more judgment under the new standard. | |||||||||||||||||||||||||
The new requirements are effective for DPL beginning January 1, 2017, and may be implemented either retrospectively for all periods presented, or as a cumulative-effect adjustment as of January 1, 2017. Early adoption is not permitted. DPL is currently evaluating the potential impact of this new guidance on its financial statements and which implementation approach to select. | |||||||||||||||||||||||||
Business Combinations | Business Combinations (ASC 805) | ||||||||||||||||||||||||
In November 2014, the FASB issued new recognition and disclosure requirements related to pushdown accounting. The new recognition requirements grant an acquired entity (or its subsidiaries) the option to elect whether and when a new accounting and reporting basis (pushdown accounting) will be applied when an acquirer obtains control of the acquired entity. This election may be made by the acquired entity (or its subsidiaries) for future change-in-control events or for its most recent change-in-control event, and the acquired entity will be required to determine whether pushdown accounting will be applied in the reporting period in which the change-in-control event occurs or in a subsequent reporting period. | |||||||||||||||||||||||||
The new required disclosures include information that enables financial statement users to evaluate the effects of pushdown accounting. Disclosures are required to be made in the period in which pushdown accounting is applied and are expected to include both qualitative and quantitative information. | |||||||||||||||||||||||||
The new recognition and disclosure requirements became effective on a prospective basis on November 18, 2014. | |||||||||||||||||||||||||
Dividend Restrictions | Dividend Restrictions | ||||||||||||||||||||||||
All of DPL’s shares of outstanding common stock are held by Conectiv, its parent company. In addition to its future financial performance, the ability of DPL to pay dividends to its parent company is subject to limits imposed by: (i) state corporate laws, which impose limitations on the funds that can be used to pay dividends, and (ii) the prior rights of holders of existing and future preferred stock, mortgage bonds and other long-term debt issued by DPL and any other restrictions imposed in connection with the incurrence of liabilities. DPL has no shares of preferred stock outstanding. DPL had approximately $641 million and $637 million of retained earnings available for payment of common stock dividends at December 31, 2014 and 2013, respectively. These amounts represent the total retained earnings balances at those dates. | |||||||||||||||||||||||||
Atlantic City Electric Co [Member] | |||||||||||||||||||||||||
Consolidation Policy | Consolidation Policy | ||||||||||||||||||||||||
The accompanying consolidated financial statements include the accounts of ACE and its wholly owned subsidiary Atlantic City Electric Transition Funding, LLC (ACE 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 an interest and can exercise significant influence over the operations and policies of the entity. Certain transmission and other facilities currently held are consolidated in proportion to ACE’s percentage interest in the facility. | |||||||||||||||||||||||||
Consolidation of Variable Interest Entities | Consolidation of Variable Interest Entities | ||||||||||||||||||||||||
ACE assesses its contractual arrangements with variable interest entities (VIEs) to determine whether it is the primary beneficiary and thereby has to consolidate the entities in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 810. The guidance addresses conditions under which an entity should be consolidated based upon variable interests rather than voting interests. See Note (16), “Variable Interest Entities,” for additional information. | |||||||||||||||||||||||||
Use of Estimates | Use of Estimates | ||||||||||||||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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, fair value calculations for derivative instruments, pension and other postretirement benefits assumptions, the assessment of the probability of recovery of regulatory assets, accrual of storm restoration costs, accrual of unbilled revenue, recognition of changes in network service transmission rates for prior service year costs, accrual of loss contingency liabilities for general litigation and auto and other liability claims, 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 it is probable that a loss has been incurred and the loss is reasonably estimable. | |||||||||||||||||||||||||
Revenue Recognition | Revenue Recognition | ||||||||||||||||||||||||
ACE recognizes revenue upon distribution of electricity to its customers, including unbilled revenue for electricity delivered but not yet billed. ACE’s unbilled revenue was $32 million and $36 million as of December 31, 2014 and 2013, respectively, and 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). The assumptions and judgments 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 consumption of electricity by its customers are a component of ACE’s tariffs and, as such, are billed to customers and recorded in Operating revenue. Accruals for the remittance of these taxes by ACE are recorded in Other taxes. | |||||||||||||||||||||||||
Taxes Assessed by a Governmental Authority on Revenue-Producing Transactions | Taxes Assessed by a Governmental Authority on Revenue-Producing Transactions | ||||||||||||||||||||||||
Taxes included in ACE’s gross revenues were $1 million, $11 million and $15 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||||||
Income Taxes | Income Taxes | ||||||||||||||||||||||||
ACE, as an indirect subsidiary of Pepco Holdings, is included in the consolidated federal income tax return of PHI. Federal income taxes are allocated to ACE based upon the taxable income or loss amounts, determined on a separate return basis. | |||||||||||||||||||||||||
The consolidated financial statements include current and deferred income taxes. Current income taxes represent the amount of tax expected to be reported on ACE’s state income tax returns and the amount of federal income tax allocated from Pepco Holdings. | |||||||||||||||||||||||||
Deferred income tax assets and liabilities represent the tax effects of temporary differences between the financial statement basis and tax basis of existing assets and liabilities, and they are measured using presently enacted tax rates. The portion of ACE’s deferred tax liability applicable to its utility operations that has not been recovered from utility customers represents income taxes recoverable in the future and is included in Regulatory assets on the consolidated balance sheets. See Note (6), “Regulatory Matters,” for additional information. | |||||||||||||||||||||||||
Deferred income tax expense generally represents the net change during the reporting period in the net deferred tax liability and deferred recoverable income taxes. | |||||||||||||||||||||||||
ACE recognizes interest on underpayments and overpayments of income taxes, interest on uncertain tax positions, and tax-related penalties in income tax expense. | |||||||||||||||||||||||||
Investment tax credits are being amortized to income over the useful lives of the related property. | |||||||||||||||||||||||||
Cash and Cash Equivalents | Cash and Cash Equivalents | ||||||||||||||||||||||||
Cash and cash equivalents include cash on hand, cash invested in money market funds and commercial paper held with original maturities of three months or less. Additionally, deposits in PHI’s money pool, which ACE and certain other PHI subsidiaries use to manage short-term cash management requirements, are considered cash equivalents. Deposits in the money pool are guaranteed by PHI. PHI deposits funds in the money pool to the extent that the pool has insufficient funds to meet the needs of its participants, which may require PHI to borrow funds for deposit from external sources. | |||||||||||||||||||||||||
Restricted Cash Equivalents | Restricted Cash Equivalents | ||||||||||||||||||||||||
The Restricted cash equivalents included in Current assets and the Restricted cash equivalents included in Other assets consist of (i) cash held as collateral that is restricted from use for general corporate purposes and (ii) cash equivalents that are specifically segregated based on management’s intent to use such cash equivalents for a particular purpose. The classification as current or non-current conforms to the classification of the related liabilities. | |||||||||||||||||||||||||
Accounts Receivable and Allowance for Uncollectible Accounts | Accounts Receivable and Allowance for Uncollectible Accounts | ||||||||||||||||||||||||
ACE’s Accounts receivable balance primarily consists of customer accounts receivable arising from the sale of goods and services to customers within its service territories, other accounts receivable, and accrued unbilled revenue. Accrued unbilled revenue represents revenue earned in the current period but not billed to the customer until a future date (usually within one month after the receivable is recorded). | |||||||||||||||||||||||||
ACE maintains an allowance for uncollectible accounts and changes in the allowance are recorded as an adjustment to Other operation and maintenance expense in the consolidated statements of income. ACE determines the amount of the allowance based on specific identification of material amounts at risk by customer and maintains a reserve based on its historical collection experience. The adequacy of this allowance is assessed on a quarterly basis by evaluating all known factors such as the aging of the receivables, historical collection experience, the economic and competitive environment and changes in the creditworthiness of its customers. Accounts receivable are written off in the period in which the receivable is deemed uncollectible and collection efforts have been exhausted. Recoveries of Accounts receivable previously written off are recorded when received. Although ACE believes its allowance is adequate, it cannot anticipate with any certainty the changes in the financial condition of its customers. As a result, ACE records adjustments to the allowance for uncollectible accounts in the period in which the new information that requires an adjustment to the reserve becomes known. | |||||||||||||||||||||||||
Inventories | Inventories | ||||||||||||||||||||||||
Included in inventories are transmission and distribution materials and supplies. ACE utilizes the weighted average cost method of accounting for inventory items. Under this method, an average price is determined for the quantity of units acquired at each price level and is applied to the ending quantity to calculate the total ending inventory balance. Materials and supplies are recorded in Inventory when purchased and then expensed or capitalized to plant, as appropriate, when installed. | |||||||||||||||||||||||||
Regulatory Assets and Regulatory Liabilities | Regulatory Assets and Regulatory Liabilities | ||||||||||||||||||||||||
Certain aspects of ACE’s business are subject to regulation by the NJBPU. The transmission of electricity by ACE is regulated by FERC. | |||||||||||||||||||||||||
Based on the regulatory framework in which it has operated, ACE has historically applied, and in connection with its transmission and distribution business continues to apply, FASB guidance on regulated operations (ASC 980). The guidance allows regulated entities, in appropriate circumstances, to defer the income statement impact of certain costs that are expected to be recovered in future rates through the establishment of regulatory assets and defer certain revenues that are expected to be refunded to customers through the establishment of regulatory liabilities. Management’s assessment of the probability of recovery of regulatory assets requires judgment and interpretation of laws, regulatory commission orders and other factors. If management subsequently determines, based on changes in facts or circumstances, that a regulatory asset is not probable of recovery, the regulatory asset would be eliminated through a charge to earnings. | |||||||||||||||||||||||||
Leasing Activities | Leasing Activities | ||||||||||||||||||||||||
ACE’s lease transactions include plant, office space, equipment, software, vehicles and elements of power purchase agreements (PPAs). In accordance with FASB guidance on leases (ASC 840), these leases are classified as operating leases. | |||||||||||||||||||||||||
Operating Leases | |||||||||||||||||||||||||
An operating lease in which ACE is the lessee generally results in a level income statement charge over the term of the lease, reflecting the rental payments required by the lease agreement. If rental payments are not made on a straight-line basis, ACE’s policy is to recognize rent expense on a straight-line basis over the lease term unless another systematic and rational allocation basis is more representative of the time pattern in which the leased property is physically employed. | |||||||||||||||||||||||||
Arrangements Containing a Lease | |||||||||||||||||||||||||
PPAs are deemed to contain a lease if the arrangement conveys the right to control the use of property, plant or equipment. If so, ACE determines the appropriate lease accounting classification. | |||||||||||||||||||||||||
Property, Plant and Equipment | Property, Plant and Equipment | ||||||||||||||||||||||||
Property, plant and equipment is recorded at original cost, including labor, materials, asset retirement costs and other direct and indirect costs, including capitalized interest. The carrying value of Property, plant and equipment is evaluated for impairment whenever circumstances indicate that the carrying value of those assets may not be recoverable. Upon retirement, the cost of regulated property, net of salvage, is charged to accumulated depreciation. | |||||||||||||||||||||||||
The annual provision for depreciation on electric property, plant and equipment is computed on a straight-line basis using composite rates by classes of depreciable property. Non-operating and other property is generally depreciated on a straight-line basis over the useful lives of the assets. The system-wide composite annual depreciation rates for the years ended December 31, 2014, 2013 and 2012 for ACE’s property were approximately 2.6%, 2.8% and 3.0%, respectively. | |||||||||||||||||||||||||
Long-Lived Asset Impairment Evaluation | Long-Lived Asset Impairment Evaluation | ||||||||||||||||||||||||
ACE evaluates certain long-lived assets to be held and used (for example, equipment and real estate) for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable. Examples of such events or changes include a significant decrease in the market price of a long-lived asset or a significant adverse change in the manner in which an asset is being used or its physical condition. A long-lived asset to be held and used is written down to its estimated fair value if the expected future undiscounted cash flow from the asset is less than its carrying value. | |||||||||||||||||||||||||
For long-lived assets that can be classified as assets to be disposed of by sale, an impairment loss is recognized to the extent that the asset’s carrying value exceeds its estimated fair value including costs to sell. | |||||||||||||||||||||||||
Capitalized Interest and Allowance for Funds Used During Construction | Capitalized Interest and Allowance for Funds Used During Construction | ||||||||||||||||||||||||
In accordance with FASB guidance on regulated operations (ASC 980), utilities may capitalize the capital costs of financing the construction of plant and equipment as allowance for funds used during construction (AFUDC). This results in the debt portion of AFUDC being recorded as a reduction of Interest expense and the equity portion of AFUDC being recorded as an increase to Other income in the accompanying consolidated statements of income. | |||||||||||||||||||||||||
ACE recorded AFUDC for borrowed funds of $1 million for the year ended December 31, 2014, less than $1 million for the year ended December 31, 2013 and $2 million for the year ended December 31, 2012. | |||||||||||||||||||||||||
ACE recorded amounts for the equity component of AFUDC of $1 million for the year ended December 31, 2014, less than $1 million for the year ended December 31, 2013 and $3 million for the year ended December 31, 2012. | |||||||||||||||||||||||||
Amortization of Debt Issuance and Reacquisition Costs | Amortization of Debt Issuance and Reacquisition Costs | ||||||||||||||||||||||||
ACE defers and amortizes debt issuance costs and long-term debt premiums and discounts over the lives of the respective debt issuances. When refinancing or redeeming existing debt, any unamortized premiums, discounts and debt issuance costs, as well as debt redemption costs, are classified as regulatory assets and are amortized generally over the life of the original issue. | |||||||||||||||||||||||||
Pension and Postretirement Benefit Plans | Pension and Postretirement Benefit Plans | ||||||||||||||||||||||||
Pepco Holdings sponsors a non-contributory, defined benefit pension plan that covers substantially all employees of ACE and certain employees of other Pepco Holdings subsidiaries (the PHI Retirement Plan). Pepco Holdings also provides supplemental retirement benefits to certain eligible executives and key employees through nonqualified retirement plans and provides certain postretirement health care and life insurance benefits for eligible retired employees. | |||||||||||||||||||||||||
The PHI Retirement Plan is accounted for in accordance with FASB guidance on retirement benefits (ASC 715). | |||||||||||||||||||||||||
Reclassifications | Reclassifications | ||||||||||||||||||||||||
Certain prior period amounts have been reclassified in order to conform to the current period presentation. | |||||||||||||||||||||||||
Liabilities | Liabilities (ASC 405) | ||||||||||||||||||||||||
In February 2013, the FASB issued new recognition and disclosure requirements for certain joint and several liability arrangements where the total amount of the obligation is fixed at the reporting date. For arrangements within the scope of this standard, ACE is required to measure such obligations as the sum of the amount it agreed to pay on the basis of its arrangement among co-obligors and any additional amount it expects to pay on behalf of its co-obligors. Adoption of this guidance during the first quarter of 2014 did not have a material impact on ACE’s consolidated financial statements. | |||||||||||||||||||||||||
Income Taxes | Income Taxes (ASC 740) | ||||||||||||||||||||||||
In July 2013, the FASB issued new guidance requiring netting of certain unrecognized tax benefits against a deferred tax asset for a loss or other similar tax carryforward that would apply upon settlement of the uncertain tax position. The prospective adoption of this guidance at March 31, 2014 resulted in ACE netting liabilities related to uncertain tax positions with deferred tax assets for net operating loss and other carryforwards (included in Deferred income tax liabilities, net) and income taxes receivable (including income tax deposits) related to effectively settled uncertain tax positions. | |||||||||||||||||||||||||
Revenue from Contracts with Customers | Revenue from Contracts with Customers (ASC 606) | ||||||||||||||||||||||||
In May 2014, the FASB issued new recognition and disclosure requirements for revenue from contracts with customers, which supersedes the existing revenue recognition guidance. The new recognition requirements focus on when the customer obtains control of the goods or services, rather than the current risks and rewards model of recognition. The core principle of the new standard is that an entity will recognize revenue when it transfers goods or services to its customers in an amount that reflects the consideration an entity expects to be entitled to for those goods or services. The new disclosure requirements will include information intended to communicate the nature, amount, timing and any uncertainty of revenue and cash flows from applicable contracts, including any significant judgments and changes in judgments and assets recognized from the costs to obtain or fulfill a contract. Entities will generally be required to make more estimates and use more judgment under the new standard. | |||||||||||||||||||||||||
The new requirements are effective for ACE beginning January 1, 2017, and may be implemented either retrospectively for all periods presented, or as a cumulative-effect adjustment as of January 1, 2017. Early adoption is not permitted. ACE is currently evaluating the potential impact of this new guidance on its consolidated financial statements and which implementation approach to select. | |||||||||||||||||||||||||
Business Combinations | Business Combinations (ASC 805) | ||||||||||||||||||||||||
In November 2014, the FASB issued new recognition and disclosure requirements related to pushdown accounting. The new recognition requirements grant an acquired entity (or its subsidiaries) the option to elect whether and when a new accounting and reporting basis (pushdown accounting) will be applied when an acquirer obtains control of the acquired entity. This election may be made by the acquired entity (or its subsidiaries) for future change-in-control events or for its most recent change-in-control event, and the acquired entity will be required to determine whether pushdown accounting will be applied in the reporting period in which the change-in-control event occurs or in a subsequent reporting period. | |||||||||||||||||||||||||
The new required disclosures include information that enables financial statement users to evaluate the effects of pushdown accounting. Disclosures are required to be made in the period in which pushdown accounting is applied and are expected to include both qualitative and quantitative information. | |||||||||||||||||||||||||
The new recognition and disclosure requirements became effective on a prospective basis on November 18, 2014. | |||||||||||||||||||||||||
Dividend Restrictions | Dividend Restrictions | ||||||||||||||||||||||||
All of ACE’s shares of outstanding common stock are held by Conectiv, its parent company. In addition to its future financial performance, the ability of ACE to pay dividends to its parent company is subject to limits imposed by: (i) state corporate laws, which impose limitations on the funds that can be used to pay dividends and the regulatory requirement that ACE obtain the prior approval of the NJBPU before dividends can be paid if its equity as a percent of its total capitalization, excluding securitization debt, falls below 30%; (ii) the prior rights of holders of existing and future preferred stock, mortgage bonds and other long-term debt issued by ACE and any other restrictions imposed in connection with the incurrence of liabilities; and (iii) certain provisions of the charter of ACE which impose restrictions on payment of common stock dividends for the benefit of preferred stockholders. Currently, the restriction in the ACE charter does not limit its ability to pay common stock dividends. ACE had approximately $209 million and $190 million of retained earnings available for payment of common stock dividends at December 31, 2014 and 2013, respectively. These amounts represent the total retained earnings balances at those dates. | |||||||||||||||||||||||||
Revision of Prior Period Financial Statements | Revisions of Prior Period Financial Statements | ||||||||||||||||||||||||
Operating and Financing Cash Flows | |||||||||||||||||||||||||
The consolidated statements of cash flows for the years ended December 31, 2013 and 2012 have been revised to correctly present changes in book overdraft balances as operating activities (included in Changes in accounts payable and accrued liabilities) rather than financing activities (included previously in Net other financing activities). For the year ended December 31, 2013, the effect of the revision was to decrease Net cash from operating activities by $5 million from $246 million to $241 million, and increase Net cash from financing activities by $5 million from $7 million to $12 million. For the year ended December 31, 2012, the effect of the revision was to increase Net cash from operating activities by $3 million from $133 million to $136 million, and decrease Net cash from financing activities by $3 million from $37 million to $34 million. The revision was not considered to be material, individually or in the aggregate, to previously issued financial statements. |
Significant_Accounting_Policie2
Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||
Annual Depreciation Rates | The table below provides system-wide composite annual depreciation rates for the years ended December 31, 2014, 2013 and 2012. | ||||||||||||||||||||||||
Transmission and | Generation | ||||||||||||||||||||||||
Distribution | |||||||||||||||||||||||||
2014 | 2013 | 2012 | 2014 | 2013 | 2012 | ||||||||||||||||||||
Pepco | 2.3 | % | 2.2 | % | 2.5 | % | — | — | — | ||||||||||||||||
DPL | 2.6 | % | 2.6 | % | 2.7 | % | — | — | — | ||||||||||||||||
ACE | 2.6 | % | 2.8 | % | 3 | % | — | — | — | ||||||||||||||||
Pepco Energy Services | — | — | — | 1.2 | % | 0.4 | % | 6.4 | %(a) | ||||||||||||||||
(a) | Percentage reflects accelerated depreciation of the Benning Road and Buzzard Point generating facilities retired during 2012. |
Segment_Information_Tables
Segment Information (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||
Segment Financial Information for Continuing Operations | Segment financial information for continuing operations at and for the years ended December 31, 2014, 2013 and 2012, is as follows: | ||||||||||||||||
Year Ended December 31, 2014 | |||||||||||||||||
Power | Pepco | Corporate | PHI | ||||||||||||||
Delivery | Energy | and | Consolidated | ||||||||||||||
Services | Other (a) | ||||||||||||||||
(millions of dollars) | |||||||||||||||||
Operating Revenue | $ | 4,607 | $ | 278 | $ | (7 | ) | $ | 4,878 | ||||||||
Operating Expenses (b) | 3,916 | 354 | (c) | 4 | 4,274 | ||||||||||||
Operating Income (Loss) | 691 | (76 | ) | (11 | ) | 604 | |||||||||||
Interest Expense | 226 | 1 | 41 | 268 | |||||||||||||
Other Income | 40 | 2 | 2 | 44 | |||||||||||||
Income Tax Expense (Benefit) | 185 | (36 | ) | (11 | ) | 138 | |||||||||||
Net Income (Loss) from Continuing Operations | 320 | (39 | ) | (39 | ) | 242 | |||||||||||
Total Assets | 13,719 | 244 | 1,704 | 15,667 | |||||||||||||
Construction Expenditures | $ | 1,144 | $ | 3 | $ | 76 | $ | 1,223 | |||||||||
(a) | Total Assets in this column includes Pepco Holdings’ goodwill balance of $1.4 billion, all of which is allocated to Power Delivery for purposes of assessing impairment. Total assets also include capital expenditures related to certain hardware and software expenditures which primarily benefit Power Delivery. These expenditures are recorded as incurred in Corporate and Other and are allocated to Power Delivery once the assets are placed in service. Corporate and Other includes intercompany amounts of $(7) million for Operating Revenue, $(7) million for Operating Expenses and $(4) million for Interest Expense. | ||||||||||||||||
(b) | Includes depreciation and amortization expense of $549 million, consisting of $511 million for Power Delivery, $7 million for Pepco Energy Services and $31 million for Corporate and Other. | ||||||||||||||||
(c) | Includes impairment losses of $81 million ($48 million after-tax) associated with Pepco Energy Services’ combined heat and power thermal generating facilities and operations in Atlantic City. | ||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||
Power | Pepco | Corporate | PHI | ||||||||||||||
Delivery | Energy | and | Consolidated | ||||||||||||||
Services | Other (a) | ||||||||||||||||
(millions of dollars) | |||||||||||||||||
Operating Revenue | $ | 4,472 | $ | 203 | $ | (9 | ) | $ | 4,666 | ||||||||
Operating Expenses (b) | 3,828 | 201 | (c) | (31 | ) | 3,998 | |||||||||||
Operating Income | 644 | 2 | 22 | 668 | |||||||||||||
Interest Expense | 228 | 1 | 44 | 273 | |||||||||||||
Other Income | 28 | 3 | 3 | 34 | |||||||||||||
Income Tax Expense (d) | 155 | 1 | 163 | (e) | 319 | ||||||||||||
Net Income (Loss) from Continuing Operations | 289 | 3 | (182 | ) | 110 | ||||||||||||
Total Assets | 13,027 | 335 | 1,486 | 14,848 | |||||||||||||
Construction Expenditures | $ | 1,194 | $ | 4 | $ | 112 | $ | 1,310 | |||||||||
(a) | Total Assets in this column includes Pepco Holdings’ goodwill balance of $1.4 billion, all of which is allocated to Power Delivery for purposes of assessing impairment. Total assets also include capital expenditures related to certain hardware and software expenditures which primarily benefit Power Delivery. These expenditures are recorded as incurred in Corporate and Other and are allocated to Power Delivery once the assets are placed in service. Corporate and Other includes intercompany amounts of $(10) million for Operating Revenue, $(9) million for Operating Expenses and $(5) million for Interest Expense. | ||||||||||||||||
(b) | Includes depreciation and amortization expense of $473 million, consisting of $439 million for Power Delivery, $6 million for Pepco Energy Services and $28 million for Corporate and Other. | ||||||||||||||||
(c) | Includes impairment losses of $4 million ($3 million after-tax) associated with Pepco Energy Services’ landfill gas-fired electric generation facility. | ||||||||||||||||
(d) | Includes after-tax interest associated with uncertain and effectively settled tax positions allocated to each member of the consolidated group, including a $12 million interest benefit for Power Delivery and interest expense of $66 million for Corporate and Other. | ||||||||||||||||
(e) | Includes non-cash charges of $101 million representing the establishment of valuation allowances against certain deferred tax assets of PCI included in Corporate and Other. | ||||||||||||||||
Year Ended December 31, 2012 | |||||||||||||||||
Power | Pepco | Corporate | PHI | ||||||||||||||
Delivery | Energy | and | Consolidated | ||||||||||||||
Services | Other (a) | ||||||||||||||||
(millions of dollars) | |||||||||||||||||
Operating Revenue | $ | 4,378 | $ | 256 | (b) | $ | (9 | ) | $ | 4,625 | |||||||
Operating Expenses (c) | 3,847 | 271 | (b)(d) | (34 | ) | 4,084 | |||||||||||
Operating Income (Loss) | 531 | (15 | ) | 25 | 541 | ||||||||||||
Interest Income | 1 | 1 | (1 | ) | 1 | ||||||||||||
Interest Expense | 219 | 2 | 35 | 256 | |||||||||||||
Impairment Losses | — | — | (1 | ) | (1 | ) | |||||||||||
Other Income | 32 | 1 | 3 | 36 | |||||||||||||
Income Tax Expense (Benefit) | 110 | (7 | ) | — | 103 | ||||||||||||
Net Income (Loss) from Continuing Operations | 235 | (8 | ) | (9 | ) | 218 | |||||||||||
Total Assets (excluding Assets Held for Disposition) | 12,149 | 342 | 2,028 | 14,519 | |||||||||||||
Construction Expenditures | $ | 1,168 | $ | 11 | $ | 37 | $ | 1,216 | |||||||||
(a) | Total Assets in this column includes Pepco Holdings’ goodwill balance of $1.4 billion, all of which is allocated to Power Delivery for purposes of assessing impairment. Total assets also include capital expenditures related to certain hardware and software expenditures which primarily benefit Power Delivery. These expenditures are recorded as incurred in Corporate and Other and are allocated to Power Delivery once the assets are placed in service. Corporate and Other includes intercompany amounts of $(11) million for Operating Revenue, $(10) million for Operating Expenses, $(21) million for Interest Income and $(18) million for Interest Expense. | ||||||||||||||||
(b) | Includes $9 million of intra-company revenues (and associated costs) previously eliminated in consolidation which will continue to be recognized from third parties subsequent to the completion of the wind-down of the Pepco Energy Services’ retail electric and natural gas supply businesses. | ||||||||||||||||
(c) | Includes depreciation and amortization expense of $454 million, consisting of $416 million for Power Delivery, $14 million for Pepco Energy Services and $24 million for Corporate and Other. | ||||||||||||||||
(d) | Includes impairment losses of $12 million ($7 million after-tax) associated primarily with investments in Pepco Energy Services’ landfill gas-fired electric generation facilities and its combustion turbines at Buzzard Point. |
Regulatory_Matters_Tables
Regulatory Matters (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Schedule of Regulatory Assets and Regulatory Liabilities | The components of Pepco Holdings’ regulatory asset and liability balances at December 31, 2014 and 2013 are as follows: | ||||||||||||
2014 | 2013 | ||||||||||||
(millions of dollars) | |||||||||||||
Regulatory Assets | |||||||||||||
Pension and other postretirement benefit costs | $ | 946 | $ | 667 | |||||||||
Securitized stranded costs | 278 | 350 | |||||||||||
Recoverable income taxes | 274 | 225 | |||||||||||
Demand-side management costs | 264 | 125 | |||||||||||
Smart Grid costs | 261 | 251 | |||||||||||
Deferred energy supply costs | 73 | 136 | |||||||||||
Incremental storm restoration costs | 51 | 72 | |||||||||||
Deferred debt extinguishment costs | 42 | 47 | |||||||||||
MAPP abandonment costs | 33 | 68 | |||||||||||
Recoverable workers’ compensation and long-term disability costs | 30 | 26 | |||||||||||
Deferred losses on gas derivatives | 4 | — | |||||||||||
Other | 153 | 120 | |||||||||||
Total Regulatory Assets | $ | 2,409 | $ | 2,087 | |||||||||
Regulatory Liabilities | |||||||||||||
Asset removal costs | $ | 250 | $ | 275 | |||||||||
Deferred income taxes due to customers | 44 | 45 | |||||||||||
Deferred energy supply costs | 3 | 46 | |||||||||||
Deferred gains on gas derivatives | — | 1 | |||||||||||
Other | 46 | 32 | |||||||||||
Total Regulatory Liabilities | $ | 343 | $ | 399 | |||||||||
Schedule of Current Base Rate Approval to Increase Annual Revenue | The following table shows, for each of PHI’s utility subsidiaries, the distribution base rate cases completed in 2014. Additional information concerning each of these cases is provided in the discussion below. | ||||||||||||
Jurisdiction/Company | Approved Revenue | Approved Return | Completion | Rate Effective | |||||||||
Requirement Increase | on Equity | Date | Date | ||||||||||
(millions of dollars) | |||||||||||||
DC – Pepco | $ | 23.4 | 9.4 | % | March 26, 2014 | April 16, 2014 | |||||||
DE – DPL (Electric) | $ | 15.1 | 9.7 | % | August 5, 2014 | May 1, 2014 | |||||||
MD – Pepco | $ | 8.8 | 9.62 | % | July 2, 2014 | July 4, 2014 | |||||||
NJ – ACE | $ | 19.0 | 9.75 | % | August 20, 2014 | September 1, 2014 | |||||||
Potomac Electric Power Co [Member] | |||||||||||||
Schedule of Regulatory Assets and Regulatory Liabilities | The components of Pepco’s regulatory asset and liability balances at December 31, 2014 and 2013 are as follows: | ||||||||||||
2014 | 2013 | ||||||||||||
(millions of dollars) | |||||||||||||
Regulatory Assets | |||||||||||||
Demand-side management costs | $ | 197 | $ | 98 | |||||||||
Smart Grid costs | 175 | 168 | |||||||||||
Recoverable income taxes | 148 | 107 | |||||||||||
Recoverable workers’ compensation and long-term disability costs | 30 | 26 | |||||||||||
Incremental storm restoration costs | 29 | 37 | |||||||||||
Deferred debt extinguishment costs | 22 | 25 | |||||||||||
MAPP abandonment costs | 19 | 37 | |||||||||||
Deferred energy supply costs | 3 | 6 | |||||||||||
Other | 74 | 59 | |||||||||||
Total Regulatory Assets | $ | 697 | $ | 563 | |||||||||
Regulatory Liabilities | |||||||||||||
Asset removal costs | $ | 84 | $ | 102 | |||||||||
Other | 20 | 11 | |||||||||||
Total Regulatory Liabilities | $ | 104 | $ | 113 | |||||||||
Delmarva Power & Light Co/De [Member] | |||||||||||||
Schedule of Regulatory Assets and Regulatory Liabilities | The components of DPL’s regulatory asset and liability balances at December 31, 2014 and 2013 are as follows: | ||||||||||||
2014 | 2013 | ||||||||||||
(millions of dollars) | |||||||||||||
Regulatory Assets | |||||||||||||
Smart Grid costs | $ | 86 | $ | 83 | |||||||||
Recoverable income taxes | 84 | 76 | |||||||||||
Demand-side management costs | 67 | 27 | |||||||||||
COPCO acquisition adjustment | 18 | 22 | |||||||||||
MAPP abandonment costs | 14 | 31 | |||||||||||
Deferred debt extinguishment costs | 12 | 13 | |||||||||||
Deferred energy supply costs | 12 | 13 | |||||||||||
Incremental storm restoration costs | 7 | 9 | |||||||||||
Deferred losses on gas derivatives | 4 | — | |||||||||||
Other | 52 | 37 | |||||||||||
Total Regulatory Assets | $ | 356 | $ | 311 | |||||||||
Regulatory Liabilities | |||||||||||||
Asset removal costs | $ | 166 | $ | 173 | |||||||||
Deferred income taxes due to customers | 37 | 37 | |||||||||||
Deferred energy supply costs | — | 3 | |||||||||||
Deferred gains on gas derivatives | — | 1 | |||||||||||
Other | 22 | 15 | |||||||||||
Total Regulatory Liabilities | $ | 225 | $ | 229 | |||||||||
Atlantic City Electric Co [Member] | |||||||||||||
Schedule of Regulatory Assets and Regulatory Liabilities | The components of ACE’s regulatory asset and liability balances at December 31, 2014 and 2013 are as follows: | ||||||||||||
2014 | 2013 | ||||||||||||
(millions of dollars) | |||||||||||||
Regulatory Assets | |||||||||||||
Securitized stranded costs | $ | 278 | $ | 350 | |||||||||
Deferred energy supply costs | 58 | 117 | |||||||||||
Recoverable income taxes | 42 | 42 | |||||||||||
Incremental storm restoration costs | 15 | 26 | |||||||||||
Other | 34 | 34 | |||||||||||
Total Regulatory Assets | $ | 427 | $ | 569 | |||||||||
Regulatory Liabilities | |||||||||||||
Federal and state tax benefits, related to securitized stranded costs | $ | 8 | $ | 13 | |||||||||
Deferred energy supply costs | — | 38 | |||||||||||
Other | 6 | 6 | |||||||||||
Total Regulatory Liabilities | $ | 14 | $ | 57 | |||||||||
Property_Plant_and_Equipment_T
Property, Plant and Equipment (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Schedule of Property, Plant and Equipment | Property, plant and equipment is comprised of the following: | ||||||||||||
Original | Accumulated | Net | |||||||||||
Cost | Depreciation | Book Value | |||||||||||
(millions of dollars) | |||||||||||||
At December 31, 2014 | |||||||||||||
Generation | $ | 104 | $ | 100 | $ | 4 | |||||||
Distribution | 9,527 | 3,021 | 6,506 | ||||||||||
Transmission | 3,252 | 934 | 2,318 | ||||||||||
Gas | 511 | 153 | 358 | ||||||||||
Construction work in progress | 688 | — | 688 | ||||||||||
Non-operating and other property | 1,383 | 751 | 632 | ||||||||||
Total | $ | 15,465 | $ | 4,959 | $ | 10,506 | |||||||
At December 31, 2013 | |||||||||||||
Generation | $ | 105 | $ | 99 | $ | 6 | |||||||
Distribution | 8,896 | 2,961 | 5,935 | ||||||||||
Transmission | 2,991 | 908 | 2,083 | ||||||||||
Gas | 481 | 142 | 339 | ||||||||||
Construction work in progress | 677 | — | 677 | ||||||||||
Non-operating and other property | 1,417 | 753 | 664 | ||||||||||
Total | $ | 14,567 | $ | 4,863 | $ | 9,704 | |||||||
Capital Lease Assets Recorded within Property, Plant and Equipment | Capital lease assets recorded within Property, Plant and Equipment at December 31, 2014 and 2013 are comprised of the following: | ||||||||||||
Original | Accumulated | Net Book | |||||||||||
Cost | Amortization | Value | |||||||||||
(millions of dollars) | |||||||||||||
At December 31, 2014 | |||||||||||||
Transmission | $ | 76 | $ | 46 | $ | 30 | |||||||
Distribution | 76 | 46 | 30 | ||||||||||
Total | $ | 152 | $ | 92 | $ | 60 | |||||||
At December 31, 2013 | |||||||||||||
Transmission | $ | 76 | $ | 41 | $ | 35 | |||||||
Distribution | 76 | 42 | 34 | ||||||||||
General | 3 | 3 | — | ||||||||||
Total | $ | 155 | $ | 86 | $ | 69 | |||||||
Potomac Electric Power Co [Member] | |||||||||||||
Schedule of Property, Plant and Equipment | Property, plant and equipment is comprised of the following: | ||||||||||||
Original | Accumulated | Net Book | |||||||||||
Cost | Depreciation | Value | |||||||||||
(millions of dollars) | |||||||||||||
At December 31, 2014 | |||||||||||||
Distribution | $ | 5,668 | $ | 2,082 | $ | 3,586 | |||||||
Transmission | 1,306 | 463 | 843 | ||||||||||
Construction work in progress | 312 | — | 312 | ||||||||||
Non-operating and other property | 478 | 271 | 207 | ||||||||||
Total | $ | 7,764 | $ | 2,816 | $ | 4,948 | |||||||
At December 31, 2013 | |||||||||||||
Distribution | $ | 5,287 | $ | 2,027 | $ | 3,260 | |||||||
Transmission | 1,223 | 444 | 779 | ||||||||||
Construction work in progress | 312 | — | 312 | ||||||||||
Non-operating and other property | 488 | 301 | 187 | ||||||||||
Total | $ | 7,310 | $ | 2,772 | $ | 4,538 | |||||||
Capital Lease Assets Recorded within Property, Plant and Equipment | Capital lease assets recorded within Property, plant and equipment at December 31, 2014 and 2013 are comprised of the following: | ||||||||||||
Original | Accumulated | Net Book | |||||||||||
Cost | Amortization | Value | |||||||||||
At December 31, 2014 | (millions of dollars) | ||||||||||||
Transmission | $ | 76 | $ | 46 | $ | 30 | |||||||
Distribution | 76 | 46 | 30 | ||||||||||
Total | $ | 152 | $ | 92 | $ | 60 | |||||||
At December 31, 2013 | |||||||||||||
Transmission | $ | 76 | $ | 41 | $ | 35 | |||||||
Distribution | 76 | 42 | 34 | ||||||||||
Other | 3 | 3 | — | ||||||||||
Total | $ | 155 | $ | 86 | $ | 69 | |||||||
Delmarva Power & Light Co/De [Member] | |||||||||||||
Schedule of Property, Plant and Equipment | Property, plant and equipment is comprised of the following: | ||||||||||||
Original | Accumulated | Net | |||||||||||
Cost | Depreciation | Book Value | |||||||||||
(millions of dollars) | |||||||||||||
At December 31, 2014 | |||||||||||||
Distribution | $ | 1,928 | $ | 489 | $ | 1,439 | |||||||
Transmission | 1,107 | 248 | 859 | ||||||||||
Gas | 511 | 153 | 358 | ||||||||||
Construction work in progress | 125 | — | 125 | ||||||||||
Non-operating and other property | 275 | 131 | 144 | ||||||||||
Total | $ | 3,946 | $ | 1,021 | $ | 2,925 | |||||||
At December 31, 2013 | |||||||||||||
Distribution | $ | 1,788 | $ | 492 | $ | 1,296 | |||||||
Transmission | 982 | 243 | 739 | ||||||||||
Gas | 481 | 142 | 339 | ||||||||||
Construction work in progress | 158 | — | 158 | ||||||||||
Non-operating and other property | 264 | 139 | 125 | ||||||||||
Total | $ | 3,673 | $ | 1,016 | $ | 2,657 | |||||||
Atlantic City Electric Co [Member] | |||||||||||||
Schedule of Property, Plant and Equipment | Property, plant and equipment is comprised of the following: | ||||||||||||
Original | Accumulated | Net | |||||||||||
Cost | Depreciation | Book Value | |||||||||||
(millions of dollars) | |||||||||||||
At December 31, 2014 | |||||||||||||
Generation | $ | 10 | $ | 9 | $ | 1 | |||||||
Distribution | 1,931 | 450 | 1,481 | ||||||||||
Transmission | 839 | 223 | 616 | ||||||||||
Construction work in progress | 115 | — | 115 | ||||||||||
Non-operating and other property | 178 | 78 | 100 | ||||||||||
Total | $ | 3,073 | $ | 760 | $ | 2,313 | |||||||
At December 31, 2013 | |||||||||||||
Generation | $ | 10 | $ | 9 | $ | 1 | |||||||
Distribution | 1,821 | 442 | 1,379 | ||||||||||
Transmission | 786 | 221 | 565 | ||||||||||
Construction work in progress | 110 | — | 110 | ||||||||||
Non-operating and other property | 174 | 79 | 95 | ||||||||||
Total | $ | 2,901 | $ | 751 | $ | 2,150 | |||||||
Pension_and_Other_Postretireme1
Pension and Other Postretirement Benefits (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Schedule of Changes in Benefit Obligations and Plan Assets | The following table shows changes in the benefit obligation and plan assets for the years ended December 31, 2014 and 2013: | ||||||||||||||||||||||||
Pension | Other Postretirement | ||||||||||||||||||||||||
Benefits | Benefits | ||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Change in Benefit Obligation | |||||||||||||||||||||||||
Benefit obligation as of January 1 | $ | 2,238 | $ | 2,494 | $ | 574 | $ | 775 | |||||||||||||||||
Service cost | 44 | 53 | 7 | 8 | |||||||||||||||||||||
Interest cost | 109 | 100 | 26 | 29 | |||||||||||||||||||||
Amendments | — | 3 | — | (124 | ) | ||||||||||||||||||||
Actuarial loss (gain) | 401 | (277 | ) | 59 | (71 | ) | |||||||||||||||||||
Benefits paid | (154 | ) | (135 | ) | (34 | ) | (43 | ) | |||||||||||||||||
Benefit obligation as of December 31 | $ | 2,638 | $ | 2,238 | $ | 632 | $ | 574 | |||||||||||||||||
Change in Plan Assets | |||||||||||||||||||||||||
Fair value of plan assets as of January 1 | $ | 2,116 | $ | 2,039 | $ | 368 | $ | 321 | |||||||||||||||||
Actual return on plan assets | 268 | 86 | 21 | 56 | |||||||||||||||||||||
Company and participant contributions | 6 | 126 | 12 | 34 | |||||||||||||||||||||
Benefits paid | (154 | ) | (135 | ) | (34 | ) | (43 | ) | |||||||||||||||||
Fair value of plan assets as of December 31 | $ | 2,236 | $ | 2,116 | $ | 367 | $ | 368 | |||||||||||||||||
Funded Status at end of year (plan assets less plan obligations) | $ | (402 | ) | $ | (122 | ) | $ | (265 | ) | $ | (206 | ) | |||||||||||||
Amounts Recognized in Consolidated Balance Sheets | The following table provides the amounts recorded in PHI’s consolidated balance sheets as of December 31, 2014 and 2013: | ||||||||||||||||||||||||
Pension | Other Postretirement | ||||||||||||||||||||||||
Benefits | Benefits | ||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Regulatory asset | $ | 871 | $ | 664 | $ | 75 | $ | 3 | |||||||||||||||||
Current liabilities | (6 | ) | (6 | ) | — | — | |||||||||||||||||||
Pension benefit obligation | (396 | ) | (116 | ) | — | — | |||||||||||||||||||
Other postretirement benefit obligations | — | — | (265 | ) | (206 | ) | |||||||||||||||||||
Deferred income taxes liabilities | (193 | ) | (217 | ) | 77 | 82 | |||||||||||||||||||
Accumulated other comprehensive loss, net of tax | 37 | 25 | — | — | |||||||||||||||||||||
Net amount recorded | $ | 313 | $ | 350 | $ | (113 | ) | $ | (121 | ) | |||||||||||||||
Schedule of Amounts Included in AOCL and Regulatory Assets | Amounts included in AOCL (pre-tax) and Regulatory assets at December 31, 2014 and 2013, consist of: | ||||||||||||||||||||||||
Pension | Other Postretirement | ||||||||||||||||||||||||
Benefits | Benefits | ||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Unrecognized net actuarial loss | $ | 925 | $ | 694 | $ | 176 | $ | 117 | |||||||||||||||||
Unamortized prior service cost (credit) | 8 | 10 | (101 | ) | (114 | ) | |||||||||||||||||||
Total | $ | 933 | $ | 704 | $ | 75 | $ | 3 | |||||||||||||||||
Accumulated other comprehensive loss ($37 million and $25 million, net of tax, at December 31, 2014 and 2013, respectively) | $ | 62 | $ | 40 | $ | — | $ | — | |||||||||||||||||
Regulatory assets | 871 | 664 | 75 | 3 | |||||||||||||||||||||
Total | $ | 933 | $ | 704 | $ | 75 | $ | 3 | |||||||||||||||||
Summary of Changes in Plan Assets and Benefit Obligations Recognized in AOCL and Regulatory Assets | The table below provides the changes in plan assets and benefit obligations recognized in AOCL and Regulatory assets for the years ended December 31, 2014, 2013 and 2012: | ||||||||||||||||||||||||
Pension | Other Postretirement | ||||||||||||||||||||||||
Benefits | Benefits | ||||||||||||||||||||||||
2014 | 2013 | 2012 | 2014 | 2013 | 2012 | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Amounts amortized during the year: | |||||||||||||||||||||||||
Amortization of prior service (cost) credit | $ | (2 | ) | $ | (2 | ) | $ | (1 | ) | $ | 13 | $ | 11 | $ | 4 | ||||||||||
Amortization of net actuarial (loss) | (45 | ) | (67 | ) | (64 | ) | (3 | ) | (12 | ) | (14 | ) | |||||||||||||
Amounts arising during the year: | |||||||||||||||||||||||||
Current year prior service cost (credit) | — | 3 | — | — | (124 | ) | — | ||||||||||||||||||
Current year actuarial loss (gain) | 276 | (218 | ) | 220 | 62 | (109 | ) | 4 | |||||||||||||||||
Total recognized in AOCL and Regulatory assets for the year ended December 31 | $ | 229 | $ | (284 | ) | $ | 155 | $ | 72 | $ | (234 | ) | $ | (6 | ) | ||||||||||
Components of Net Periodic Benefit Costs | The table below provides the components of net periodic benefit costs recognized for the years ended December 31, 2014, 2013 and 2012: | ||||||||||||||||||||||||
Pension | Other Postretirement | ||||||||||||||||||||||||
Benefits | Benefits | ||||||||||||||||||||||||
2014 | 2013 | 2012 | 2014 | 2013 | 2012 | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Service cost | $ | 44 | $ | 53 | $ | 35 | $ | 7 | $ | 8 | $ | 7 | |||||||||||||
Interest cost | 109 | 100 | 107 | 26 | 29 | 35 | |||||||||||||||||||
Expected return on plan assets | (141 | ) | (145 | ) | (132 | ) | (24 | ) | (20 | ) | (18 | ) | |||||||||||||
Amortization of prior service cost (credit) | 2 | 2 | 1 | (13 | ) | (11 | ) | (4 | ) | ||||||||||||||||
Amortization of net actuarial loss | 45 | 67 | 64 | 3 | 12 | 14 | |||||||||||||||||||
Termination benefits | — | — | — | — | — | 1 | |||||||||||||||||||
Net periodic benefit cost | $ | 59 | $ | 77 | $ | 75 | $ | (1 | ) | $ | 18 | $ | 35 | ||||||||||||
Split of Combined Pension and Other Postretirement Net Periodic Benefit Costs | The table below provides the split of the combined pension and other postretirement net periodic benefit costs among subsidiaries for the years ended December 31, 2014, 2013 and 2012: | ||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Pepco | $ | 22 | $ | 34 | $ | 39 | |||||||||||||||||||
DPL | 7 | 18 | 23 | ||||||||||||||||||||||
ACE | 13 | 17 | 24 | ||||||||||||||||||||||
Other subsidiaries | 16 | 26 | 24 | ||||||||||||||||||||||
Total | $ | 58 | $ | 95 | $ | 110 | |||||||||||||||||||
Weighted Average Assumptions Used to Determine Benefit Obligations | The following weighted average assumptions were used to determine the benefit obligations at December 31: | ||||||||||||||||||||||||
Pension | Other Postretirement | ||||||||||||||||||||||||
Benefits | Benefits | ||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
Discount rate | 4.2 | % | 5.05 | % | 4.15 | % | 5 | % | |||||||||||||||||
Rate of compensation increase | 5 | % | 5 | % | 5 | % | 5 | % | |||||||||||||||||
Health care cost trend rate assumed for current year – pre 65 | — | — | 6.67 | % | 7 | % | |||||||||||||||||||
Health care cost trend rate assumed for current year – post 65 | — | — | 5.5 | % | 5.6 | % | |||||||||||||||||||
Rate to which the cost trend rate is assumed to decline for all eligible retirees (the ultimate trend rate) | — | — | 5 | % | 5 | % | |||||||||||||||||||
Year that the cost trend rate reaches the ultimate trend rate | — | — | 2020 | 2020 | |||||||||||||||||||||
Summary of Effect of One Percent Change in Assumed Health Care Cost | A one-percentage-point change in assumed health care cost trend rates would have the following effects, in millions of dollars: | ||||||||||||||||||||||||
1-Percentage- | 1-Percentage- | ||||||||||||||||||||||||
Point Increase | Point Decrease | ||||||||||||||||||||||||
Increase (decrease) in total service and interest cost | $ | 1 | $ | (1 | ) | ||||||||||||||||||||
Increase (decrease) in postretirement benefit obligation | $ | 18 | $ | (20 | ) | ||||||||||||||||||||
Weighted Average Assumptions Used to Determine Net Periodic Benefit Costs | The following weighted average assumptions were used to determine the net periodic benefit cost for the years ended December 31: | ||||||||||||||||||||||||
Pension | Other Postretirement | ||||||||||||||||||||||||
Benefits | Benefits | ||||||||||||||||||||||||
2014 | 2013 | 2012 | 2014 | 2013 | 2012 | ||||||||||||||||||||
Discount rate | 5.05 | % | 4.15 | % | 5 | % | 5 | % | 4.10%/4.95 | % (a) | 4.9 | % | |||||||||||||
Expected long-term return on plan assets | 7 | % | 7 | % | 7.25 | % | 7.25 | % | 7 | % | 7.25 | % | |||||||||||||
Rate of compensation increase | 5 | % | 5 | % | 5 | % | 5 | % | 5 | % | 5 | % | |||||||||||||
Health care cost trend rate | — | — | — | 7 | % | 7.5 | % | 8 | % | ||||||||||||||||
(a) | The discount rate was updated for remeasurement to 4.95% on July 1, 2013. | ||||||||||||||||||||||||
Schedule of Fair Value of Plan Assets | The following tables present the fair values of PHI’s pension and other postretirement benefit plan assets by asset category within the fair value hierarchy levels, as of December 31, 2014 and 2013: | ||||||||||||||||||||||||
Fair Value Measurements at December 31, 2014 | |||||||||||||||||||||||||
Total | Quoted Prices | Significant | Significant | ||||||||||||||||||||||
in Active | Other | Unobservable | |||||||||||||||||||||||
Markets for | Observable | Inputs | |||||||||||||||||||||||
Identical | Inputs | (Level 3) | |||||||||||||||||||||||
Instruments | (Level 2) | ||||||||||||||||||||||||
(Level 1) | |||||||||||||||||||||||||
Asset Category | (millions of dollars) | ||||||||||||||||||||||||
Pension Plan Assets: | |||||||||||||||||||||||||
Equity | |||||||||||||||||||||||||
Domestic (a) | $ | 376 | $ | 128 | $ | 213 | $ | 35 | |||||||||||||||||
International (b) | 255 | 254 | — | 1 | |||||||||||||||||||||
Fixed Income (c) | 1,459 | — | 1,448 | 11 | |||||||||||||||||||||
Other | |||||||||||||||||||||||||
Private Equity | 47 | — | — | 47 | |||||||||||||||||||||
Real Estate | 54 | — | — | 54 | |||||||||||||||||||||
Cash Equivalents (d) | 45 | 45 | — | — | |||||||||||||||||||||
Pension Plan Assets Subtotal | 2,236 | 427 | 1,661 | 148 | |||||||||||||||||||||
Other Postretirement Plan Assets: | |||||||||||||||||||||||||
Equity (e) | 235 | 208 | 27 | — | |||||||||||||||||||||
Fixed Income (f) | 126 | 126 | — | — | |||||||||||||||||||||
Cash Equivalents | 6 | 6 | — | — | |||||||||||||||||||||
Postretirement Plan Assets Subtotal | 367 | 340 | 27 | — | |||||||||||||||||||||
Total Pension and Other Postretirement Plan Assets | $ | 2,603 | $ | 767 | $ | 1,688 | $ | 148 | |||||||||||||||||
(a) | Domestic equity assets predominantly include domestic common stock and commingled funds. | ||||||||||||||||||||||||
(b) | International equity assets predominantly include foreign common and preferred stock and warrants. | ||||||||||||||||||||||||
(c) | Fixed income assets predominantly include corporate bonds, government bonds, municipal/provincial bonds, collateralized mortgage obligations and commingled funds. | ||||||||||||||||||||||||
(d) | Cash equivalents predominantly include cash investments in short-term investment funds. | ||||||||||||||||||||||||
(e) | Equity assets include domestic and international commingled funds. | ||||||||||||||||||||||||
(f) | Fixed income assets include fixed income commingled funds. | ||||||||||||||||||||||||
Fair Value Measurements at December 31, 2013 | |||||||||||||||||||||||||
Total | Quoted Prices | Significant | Significant | ||||||||||||||||||||||
in Active | Other | Unobservable | |||||||||||||||||||||||
Markets for | Observable | Inputs | |||||||||||||||||||||||
Identical | Inputs | (Level 3) | |||||||||||||||||||||||
Instruments | (Level 2) | ||||||||||||||||||||||||
(Level 1) | |||||||||||||||||||||||||
Asset Category | (millions of dollars) | ||||||||||||||||||||||||
Pension Plan Assets: | |||||||||||||||||||||||||
Equity | |||||||||||||||||||||||||
Domestic (a) | $ | 389 | $ | 142 | (g) | $ | 213 | $ | 34 | ||||||||||||||||
International (b) | 260 | 258 | (g) | 1 | 1 | ||||||||||||||||||||
Fixed Income (c) | 1,309 | — | 1,298 | 11 | |||||||||||||||||||||
Other | |||||||||||||||||||||||||
Private Equity | 53 | — | — | 53 | |||||||||||||||||||||
Real Estate | 61 | — | — | 61 | |||||||||||||||||||||
Cash Equivalents (d) | 44 | 44 | — | — | |||||||||||||||||||||
Pension Plan Assets Subtotal | 2,116 | 444 | 1,512 | 160 | |||||||||||||||||||||
Other Postretirement Plan Assets: | |||||||||||||||||||||||||
Equity (e) | 233 | 204 | 29 | — | |||||||||||||||||||||
Fixed Income (f) | 113 | 113 | — | — | |||||||||||||||||||||
Cash Equivalents | 22 | 22 | — | — | |||||||||||||||||||||
Postretirement Plan Assets Subtotal | 368 | 339 | 29 | — | |||||||||||||||||||||
Total Pension and Other Postretirement Plan Assets | $ | 2,484 | $ | 783 | $ | 1,541 | $ | 160 | |||||||||||||||||
(a) | Domestic equity assets predominantly include domestic common stock and commingled funds. | ||||||||||||||||||||||||
(b) | International equity assets predominantly include foreign common and preferred stock and warrants. | ||||||||||||||||||||||||
(c) | Fixed income assets predominantly include corporate bonds, government bonds, municipal/provincial bonds, collateralized mortgage obligations and commingled funds. | ||||||||||||||||||||||||
(d) | Cash equivalents predominantly include cash investments in short-term investment funds. | ||||||||||||||||||||||||
(e) | Equity assets include domestic and international commingled funds. | ||||||||||||||||||||||||
(f) | Fixed income assets include fixed income commingled funds. | ||||||||||||||||||||||||
(g) | Certain equity assets totaling $43 million have been reclassified from domestic equity to international equity to conform to the currect period presentation. | ||||||||||||||||||||||||
Reconciliation of Fair Value Measurements Using Significant Unobservable Inputs | Reconciliations of the beginning and ending balances of PHI’s fair value measurements using significant unobservable inputs (level 3) for investments in the pension plan for the years ended December 31, 2014 and 2013 are shown below: | ||||||||||||||||||||||||
Fair Value Measurements Using Significant Unobservable Inputs | |||||||||||||||||||||||||
(Level 3) | |||||||||||||||||||||||||
Equity | Fixed | Private | Real | Total | |||||||||||||||||||||
Income | Equity | Estate | Level 3 | ||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Balance as of January 1, 2014 | $ | 35 | $ | 11 | $ | 53 | $ | 61 | $ | 160 | |||||||||||||||
Transfer in (out) of Level 3 | — | — | — | — | — | ||||||||||||||||||||
Purchases | — | — | 3 | 1 | 4 | ||||||||||||||||||||
Sales | (3 | ) | — | — | (5 | ) | (8 | ) | |||||||||||||||||
Settlements | — | — | (6 | ) | (9 | ) | (15 | ) | |||||||||||||||||
Unrealized gain (loss) | 2 | — | (12 | ) | 2 | (8 | ) | ||||||||||||||||||
Realized gain | 2 | — | 9 | 4 | 15 | ||||||||||||||||||||
Balance as of December 31, 2014 | $ | 36 | $ | 11 | $ | 47 | $ | 54 | $ | 148 | |||||||||||||||
Fair Value Measurements Using Significant Unobservable Inputs | |||||||||||||||||||||||||
(Level 3) | |||||||||||||||||||||||||
Equity | Fixed | Private | Real | Total | |||||||||||||||||||||
Income | Equity | Estate | Level 3 | ||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Balance as of January 1, 2013 | $ | 31 | $ | 13 | $ | 56 | $ | 74 | $ | 174 | |||||||||||||||
Transfer in (out) of Level 3 | — | (3 | ) | — | — | (3 | ) | ||||||||||||||||||
Purchases | — | — | 2 | 2 | 4 | ||||||||||||||||||||
Sales | (5 | ) | (1 | ) | — | (13 | ) | (19 | ) | ||||||||||||||||
Settlements | — | 2 | (4 | ) | (10 | ) | (12 | ) | |||||||||||||||||
Unrealized gain (loss) | 7 | — | (7 | ) | 7 | 7 | |||||||||||||||||||
Realized gain | 2 | — | 6 | 1 | 9 | ||||||||||||||||||||
Balance as of December 31, 2013 | $ | 35 | $ | 11 | $ | 53 | $ | 61 | $ | 160 | |||||||||||||||
Schedule of Estimated Benefit Payments | Estimated future benefit payments to participants in PHI’s pension and other postretirement benefit plans, which reflect expected future service as appropriate, are as follows: | ||||||||||||||||||||||||
Years | Pension Benefits | Other | |||||||||||||||||||||||
Postretirement | |||||||||||||||||||||||||
Benefits | |||||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
2015 | $ | 134 | $ | 38 | |||||||||||||||||||||
2016 | 140 | 38 | |||||||||||||||||||||||
2017 | 142 | 39 | |||||||||||||||||||||||
2018 | 148 | 39 | |||||||||||||||||||||||
2019 | 153 | 39 | |||||||||||||||||||||||
2020 through 2023 | 826 | 193 | |||||||||||||||||||||||
Pension Benefits [Member] | |||||||||||||||||||||||||
Summary of Plan Asset Allocations | The PHI Retirement Plan asset allocations at December 31, 2014 and 2013, by asset category, were as follows: | ||||||||||||||||||||||||
Asset Category | Plan Assets | Target Plan | |||||||||||||||||||||||
at December 31, | Asset Allocation | ||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
Equity | 28 | % | 31 | % | 27 | % | 28 | % | |||||||||||||||||
Fixed Income | 65 | % | 62 | % | 68 | % | 66 | % | |||||||||||||||||
Other (real estate, private equity) | 7 | % | 7 | % | 5 | % | 6 | % | |||||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||||
Other Postretirement Benefits [Member] | |||||||||||||||||||||||||
Summary of Plan Asset Allocations | PHI’s other postretirement benefit plan asset allocations at December 31, 2014 and 2013, by asset category, were as follows: | ||||||||||||||||||||||||
Asset Category | Plan Assets | Target Plan | |||||||||||||||||||||||
at December 31, | Asset Allocation | ||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
Equity | 64 | % | 63 | % | 60 | % | 60 | % | |||||||||||||||||
Fixed Income | 34 | % | 31 | % | 35 | % | 35 | % | |||||||||||||||||
Cash | 2 | % | 6 | % | 5 | % | 5 | % | |||||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||||
Debt_Tables
Debt (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Components of Long-Term Debt | The components of long-term debt are shown in the table below: | ||||||||||||||||
At December 31, | |||||||||||||||||
Interest Rate | Maturity | 2014 | 2013 | ||||||||||||||
(millions of dollars) | |||||||||||||||||
First Mortgage Bonds | |||||||||||||||||
Pepco: | |||||||||||||||||
4.65% (a)(b) | 2014 | $ | — | $ | 175 | ||||||||||||
3.05% | 2022 | 200 | 200 | ||||||||||||||
6.20% (c)(d) | 2022 | 110 | 110 | ||||||||||||||
3.60% | 2024 | 400 | — | ||||||||||||||
5.75% (a)(b) | 2034 | 100 | 100 | ||||||||||||||
5.40% (a)(b) | 2035 | 175 | 175 | ||||||||||||||
6.50% (a)(c) | 2037 | 500 | 500 | ||||||||||||||
7.90% | 2038 | 250 | 250 | ||||||||||||||
4.15% | 2043 | 250 | 250 | ||||||||||||||
4.95% | 2043 | 150 | 150 | ||||||||||||||
ACE: | |||||||||||||||||
7.63% (e) | 2014 | — | 7 | ||||||||||||||
7.68% (e) | 2015 - 2016 | 17 | 17 | ||||||||||||||
7.75% | 2018 | 250 | 250 | ||||||||||||||
6.80% (b)(f) | 2021 | 39 | 39 | ||||||||||||||
4.35% | 2021 | 200 | 200 | ||||||||||||||
3.38% | 2024 | 150 | — | ||||||||||||||
4.875% (c)(f) | 2029 | 23 | 23 | ||||||||||||||
5.80% (b)(g) | 2034 | 120 | 120 | ||||||||||||||
5.80% (b)(g) | 2036 | 105 | 105 | ||||||||||||||
DPL: | |||||||||||||||||
5.22% (h) | 2016 | 100 | 100 | ||||||||||||||
3.50% | 2023 | 500 | 300 | ||||||||||||||
4.00% | 2042 | 250 | 250 | ||||||||||||||
Total First Mortgage Bonds | 3,889 | 3,321 | |||||||||||||||
Unsecured Tax-Exempt Bonds | |||||||||||||||||
DPL: | |||||||||||||||||
5.40% | 2031 | 78 | 78 | ||||||||||||||
Total Unsecured Tax-Exempt Bonds | 78 | 78 | |||||||||||||||
At December 31, | |||||||||||||||||
Interest Rate | Maturity | 2014 | 2013 | ||||||||||||||
(millions of dollars) | |||||||||||||||||
Medium-Term Notes (unsecured) | |||||||||||||||||
DPL: | |||||||||||||||||
7.56% - 7.58% | 2017 | $ | 14 | $ | 14 | ||||||||||||
6.81% | 2018 | 4 | 4 | ||||||||||||||
7.61% | 2019 | 12 | 12 | ||||||||||||||
7.72% | 2027 | 10 | 10 | ||||||||||||||
Total Medium-Term Notes (unsecured) | 40 | 40 | |||||||||||||||
ACE Variable Rate Term Loan | 2014 | — | 100 | ||||||||||||||
Recourse Debt | |||||||||||||||||
PCI: | |||||||||||||||||
6.59% - 6.69% | 2014 | — | 11 | ||||||||||||||
Notes (secured) | |||||||||||||||||
Pepco Energy Services: | |||||||||||||||||
6.70% - 7.46% | 2015-2018 | 4 | 14 | ||||||||||||||
Notes (unsecured) | |||||||||||||||||
PHI: | |||||||||||||||||
2.70% | 2015 | 250 | 250 | ||||||||||||||
5.90% | 2016 | 190 | 190 | ||||||||||||||
6.13% | 2017 | 81 | 81 | ||||||||||||||
7.45% | 2032 | 185 | 185 | ||||||||||||||
DPL: | |||||||||||||||||
5.00% | 2014 | — | 100 | ||||||||||||||
5.00% | 2015 | 100 | 100 | ||||||||||||||
Total Notes (unsecured) | 806 | 906 | |||||||||||||||
Total Long-Term Debt | 4,817 | 4,470 | |||||||||||||||
Net unamortized discount | (10 | ) | (14 | ) | |||||||||||||
Current portion of long-term debt | (366 | ) | (403 | ) | |||||||||||||
Total Net Long-Term Debt | $ | 4,441 | $ | 4,053 | |||||||||||||
(a) | Represents a series of Collateral First Mortgage Bonds (as defined herein) securing a series of senior notes issued by Pepco. | ||||||||||||||||
(b) | Represents a series of Collateral First Mortgage Bonds which must be cancelled and released as security for the issuer’s obligations under the corresponding series of issuer notes (as defined herein) or tax-exempt bonds, at such time as the issuer does not have any first mortgage bonds outstanding (other than its Collateral First Mortgage Bonds). | ||||||||||||||||
(c) | Represents a series of Collateral First Mortgage Bonds which must be cancelled and released as security for the issuer’s obligations under the corresponding series of issuer notes or tax-exempt bonds, at such time as the issuer does not have any first mortgage bonds outstanding (other than its Collateral First Mortgage Bonds), except that the issuer may not permit such release of collateral unless the issuer substitutes comparable obligations for such collateral. | ||||||||||||||||
(d) | Represents a series of Collateral First Mortgage Bonds securing a series of senior notes issued by Pepco, which in turn secures a series of tax-exempt bonds issued for the benefit of Pepco. | ||||||||||||||||
(e) | Represents a series of Collateral First Mortgage Bonds securing a series of medium-term notes issued by ACE. | ||||||||||||||||
(f) | Represents a series of Collateral First Mortgage Bonds securing a series of tax-exempt bonds issued for the benefit of ACE. | ||||||||||||||||
(g) | Represents a series of Collateral First Mortgage Bonds securing a series of senior notes issued by ACE. | ||||||||||||||||
(h) | Represents a series of Collateral First Mortgage Bonds securing a series of debt securities issued by DPL. | ||||||||||||||||
The components of transition bonds are shown in the table below: | |||||||||||||||||
At December 31, | |||||||||||||||||
Interest Rate | Maturity | 2014 | 2013 | ||||||||||||||
(millions of dollars) | |||||||||||||||||
4.46% | 2016 | $ | — | $ | 8 | ||||||||||||
4.91% | 2017 | 17 | 46 | ||||||||||||||
5.05% | 2020 | 51 | 54 | ||||||||||||||
5.55% | 2023 | 147 | 147 | ||||||||||||||
Total Transition Bonds | 215 | 255 | |||||||||||||||
Current portion of long-term debt | (44 | ) | (41 | ) | |||||||||||||
Total Net Long-Term Transition Bonds | $ | 171 | $ | 214 | |||||||||||||
Components of Short-Term Debt | The components of PHI’s short-term debt at December 31, 2014 and 2013 are as follows: | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
(millions of dollars) | |||||||||||||||||
Commercial paper | $ | 624 | $ | 442 | |||||||||||||
Variable rate demand bonds | 105 | 123 | |||||||||||||||
Total | $ | 729 | $ | 565 | |||||||||||||
Potomac Electric Power Co [Member] | |||||||||||||||||
Components of Long-Term Debt | The components of long-term debt are shown in the table below: | ||||||||||||||||
Type of Debt | Interest Rate | Maturity | 2014 | 2013 | |||||||||||||
(millions of dollars) | |||||||||||||||||
First Mortgage Bonds | |||||||||||||||||
4.65 | %(a)(b) | 2014 | $ | — | $ | 175 | |||||||||||
3.05 | % | 2022 | 200 | 200 | |||||||||||||
6.2 | %(c)(d) | 2022 | 110 | 110 | |||||||||||||
3.6 | % | 2024 | 400 | — | |||||||||||||
5.75 | %(a)(b) | 2034 | 100 | 100 | |||||||||||||
5.4 | %(a)(b) | 2035 | 175 | 175 | |||||||||||||
6.5 | %(a)(c) | 2037 | 500 | 500 | |||||||||||||
7.9 | % | 2038 | 250 | 250 | |||||||||||||
4.15 | % | 2043 | 250 | 250 | |||||||||||||
4.95 | % | 2043 | 150 | 150 | |||||||||||||
Total long-term debt | 2,135 | 1,910 | |||||||||||||||
Net unamortized discount | (11 | ) | (11 | ) | |||||||||||||
Current portion of long-term debt | — | (175 | ) | ||||||||||||||
Total net long-term debt | $ | 2,124 | $ | 1,724 | |||||||||||||
(a) | Represents a series of Collateral First Mortgage Bonds (as defined herein) securing a series of senior notes issued by Pepco. | ||||||||||||||||
(b) | Represents a series of Collateral First Mortgage Bonds which must be cancelled and released as security for Pepco’s obligations under the corresponding series of senior notes or tax-exempt bonds, at such time as Pepco does not have any first mortgage bonds outstanding (other than its Collateral First Mortgage Bonds). | ||||||||||||||||
(c) | Represents a series of Collateral First Mortgage Bonds which must be cancelled and released as security for Pepco’s obligations under the corresponding series of senior notes or tax-exempt bonds, at such time as Pepco does not have any first mortgage bonds outstanding (other than its Collateral First Mortgage Bonds), except that Pepco may not permit such release of collateral unless Pepco substitutes comparable obligations for such collateral. | ||||||||||||||||
(d) | Represents a series of Collateral First Mortgage Bonds securing a series of senior notes issued by Pepco, which in turn secures a series of tax-exempt bonds issued for the benefit of Pepco. | ||||||||||||||||
Components of Short-Term Debt | Pepco’s short-term debt at December 31, 2014 and 2013 consisted of the following: | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
(millions of dollars) | |||||||||||||||||
Commercial paper | $ | 104 | $ | 151 | |||||||||||||
Delmarva Power & Light Co/De [Member] | |||||||||||||||||
Components of Long-Term Debt | The components of long-term debt are shown in the table below: | ||||||||||||||||
Type of Debt | Interest Rate | Maturity | 2014 | 2013 | |||||||||||||
(millions of dollars) | |||||||||||||||||
First Mortgage Bonds | |||||||||||||||||
5.22%(a) | 2016 | $ | 100 | $ | 100 | ||||||||||||
3.50% | 2023 | 500 | 300 | ||||||||||||||
4.00% | 2042 | 250 | 250 | ||||||||||||||
850 | 650 | ||||||||||||||||
Unsecured Tax-Exempt Bonds | |||||||||||||||||
5.40% | 2031 | 78 | 78 | ||||||||||||||
78 | 78 | ||||||||||||||||
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 | ||||||||||||||
5.00% | 2015 | 100 | 100 | ||||||||||||||
100 | 200 | ||||||||||||||||
Total long-term debt | 1,068 | 968 | |||||||||||||||
Net unamortized premium (discount) | 3 | (1 | ) | ||||||||||||||
Current portion of long-term debt | (100 | ) | (100 | ) | |||||||||||||
Total net long-term debt | $ | 971 | $ | 867 | |||||||||||||
(a) | Represents a series of Collateral First Mortgage Bonds securing a series of debt securities issued by DPL. | ||||||||||||||||
Components of Short-Term Debt | The components of DPL’s short-term debt at December 31, 2014 and 2013 are as follows: | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
(millions of dollars) | |||||||||||||||||
Commercial paper | $ | 106 | $ | 147 | |||||||||||||
Variable rate demand bonds | 105 | 105 | |||||||||||||||
Total | $ | 211 | $ | 252 | |||||||||||||
Atlantic City Electric Co [Member] | |||||||||||||||||
Components of Long-Term Debt | The components of long-term debt are shown in the table below: | ||||||||||||||||
Type of Debt | Interest Rate | Maturity | 2014 | 2013 | |||||||||||||
(millions of dollars) | |||||||||||||||||
First Mortgage Bonds | |||||||||||||||||
7.63 | % (a) | 2014 | $ | — | $ | 7 | |||||||||||
7.68 | % (a) | 2015-2016 | 17 | 17 | |||||||||||||
7.75 | % | 2018 | 250 | 250 | |||||||||||||
6.8 | % (b)(c) | 2021 | 39 | 39 | |||||||||||||
4.35 | % | 2021 | 200 | 200 | |||||||||||||
3.375 | % | 2024 | 150 | — | |||||||||||||
4.875 | % (c)(d) | 2029 | 23 | 23 | |||||||||||||
5.8 | % (b)(e) | 2034 | 120 | 120 | |||||||||||||
5.8 | % (b)(e) | 2036 | 105 | 105 | |||||||||||||
904 | 761 | ||||||||||||||||
Variable Rate Term Loan | — | 100 | |||||||||||||||
Total long-term debt | 904 | 861 | |||||||||||||||
Net unamortized discount | (1 | ) | (1 | ) | |||||||||||||
Current portion of long-term debt | (15 | ) | (107 | ) | |||||||||||||
Total net long-term debt | $ | 888 | $ | 753 | |||||||||||||
(a) | Represents a series of Collateral First Mortgage Bonds (as defined herein) securing a series of medium-term notes issued by ACE. | ||||||||||||||||
(b) | Represents a series of Collateral First Mortgage Bonds which must be cancelled and released as security for ACE’s obligations under the corresponding series of issuer notes (as defined herein) or tax-exempt bonds, at such time as ACE does not have any first mortgage bonds outstanding (other than its Collateral First Mortgage Bonds). | ||||||||||||||||
(c) | Represents a series of Collateral First Mortgage Bonds securing a series of tax-exempt bonds issued for the benefit of ACE. | ||||||||||||||||
(d) | Represents a series of Collateral First Mortgage Bonds which must be cancelled and released as security for ACE’s obligations under the corresponding series of issuer notes or tax-exempt bonds, at such time as ACE does not have any first mortgage bonds outstanding (other than its Collateral First Mortgage Bonds), except that ACE may not permit such release of collateral unless ACE substitutes comparable obligations for such collateral. | ||||||||||||||||
(e) | Represents a series of Collateral First Mortgage Bonds securing a series of senior notes issued by ACE. | ||||||||||||||||
The components of transition bonds are shown in the table below: | |||||||||||||||||
Type of Debt | Interest Rate | Maturity | 2014 | 2013 | |||||||||||||
(millions of dollars) | |||||||||||||||||
Transition Bonds | |||||||||||||||||
4.46 | % | 2016 | $ | — | $ | 8 | |||||||||||
4.91 | % | 2017 | 17 | 46 | |||||||||||||
5.05 | % | 2020 | 51 | 54 | |||||||||||||
5.55 | % | 2023 | 147 | 147 | |||||||||||||
215 | 255 | ||||||||||||||||
Current portion of long-term debt | (44 | ) | (41 | ) | |||||||||||||
Total net long-term Transition Bonds | $ | 171 | $ | 214 | |||||||||||||
Components of Short-Term Debt | The components of ACE’s short-term debt at December 31, 2014 and 2013 are as follows: | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
(millions of dollars) | |||||||||||||||||
Commercial paper | $ | 127 | $ | 120 | |||||||||||||
Variable rate demand bonds | — | 18 | |||||||||||||||
Total | $ | 127 | $ | 138 | |||||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Provision for Consolidated Income Taxes from Continuing Operations | Provision for Consolidated Income Taxes – Continuing Operations | ||||||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Current Tax (Benefit) Expense | |||||||||||||||||||||||||
Federal | $ | (137 | ) | $ | (128 | ) | $ | (166 | ) | ||||||||||||||||
State and local | (26 | ) | (9 | ) | (40 | ) | |||||||||||||||||||
Total Current Tax (Benefit) Expense | (163 | ) | (137 | ) | (206 | ) | |||||||||||||||||||
Deferred Tax Expense (Benefit) | |||||||||||||||||||||||||
Federal | 261 | 393 | 254 | ||||||||||||||||||||||
State and local | 41 | 65 | 58 | ||||||||||||||||||||||
Investment tax credit amortization | (1 | ) | (2 | ) | (3 | ) | |||||||||||||||||||
Total Deferred Tax Expense | 301 | 456 | 309 | ||||||||||||||||||||||
Total Consolidated Income Tax Expense Related to Continuing Operations | $ | 138 | $ | 319 | $ | 103 | |||||||||||||||||||
Reconciliation of Consolidated Income Tax Expense from Continuing Operations | Reconciliation of Consolidated Income Tax Expense – Continuing Operations | ||||||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Income tax at Federal statutory rate | $ | 133 | 35 | % | $ | 150 | 35 | % | $ | 112 | 35 | % | |||||||||||||
Increases (decreases) resulting from: | |||||||||||||||||||||||||
State income taxes, net of federal effect | 23 | 6.1 | % | 27 | 6.3 | % | 19 | 6 | % | ||||||||||||||||
Asset removal costs | (12 | ) | (3.2 | )% | (14 | ) | (3.3 | )% | (11 | ) | (3.4 | )% | |||||||||||||
Change in estimates and interest related to uncertain and effectively settled tax positions | — | — | 56 | 13.1 | % | (8 | ) | (2.6 | )% | ||||||||||||||||
Establishment of valuation allowances related to deferred tax assets | — | — | 101 | 23.5 | % | — | — | ||||||||||||||||||
Merger related costs | 7 | 1.8 | % | — | — | — | — | ||||||||||||||||||
Other, net | (13 | ) | (3.4 | )% | (1 | ) | (0.2 | )% | (9 | ) | (2.9 | )% | |||||||||||||
Consolidated Income Tax Expense Related to Continuing Operations | $ | 138 | 36.3 | % | $ | 319 | 74.4 | % | $ | 103 | 32.1 | % | |||||||||||||
Components of Consolidated Deferred Income Tax Liabilities (Assets) | Components of Consolidated Deferred Tax Liabilities (Assets) | ||||||||||||||||||||||||
At December 31, | |||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Deferred Tax Liabilities (Assets) | |||||||||||||||||||||||||
Depreciation and other basis differences related to plant and equipment | $ | 2,962 | $ | 2,628 | |||||||||||||||||||||
Deferred electric service and electric restructuring liabilities | 67 | 91 | |||||||||||||||||||||||
Cross-border energy lease investments | — | (6 | ) | ||||||||||||||||||||||
Federal and state net operating losses | (400 | ) | (350 | ) | |||||||||||||||||||||
Valuation allowances on state net operating losses | 61 | 21 | |||||||||||||||||||||||
Pension and other postretirement benefits | 116 | 135 | |||||||||||||||||||||||
Deferred taxes on amounts to be collected through future rates | 94 | 75 | |||||||||||||||||||||||
Other (a) | 325 | 285 | |||||||||||||||||||||||
Total Deferred Tax Liabilities, net | 3,225 | 2,879 | |||||||||||||||||||||||
Deferred tax assets included in Current Assets | 50 | 51 | |||||||||||||||||||||||
Deferred tax liabilities included in Other Current Liabilities | (9 | ) | (2 | ) | |||||||||||||||||||||
Total Consolidated Deferred Tax Liabilities, net non-current | $ | 3,266 | $ | 2,928 | |||||||||||||||||||||
(a) | PCI established valuation allowances against certain of these other deferred taxes totaling $101 million in the first quarter of 2013. Management determined during the fourth quarter of 2013 to abandon the further pursuit of the related deferred tax assets and, accordingly, these assets were charged off against the valuation allowances. | ||||||||||||||||||||||||
Reconciliation of Beginning and Ending Balances of Unrecognized Tax Benefits | Reconciliation of Beginning and Ending Balances of Unrecognized Tax Benefits | ||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Balance as of January 1, | $ | 831 | $ | 200 | $ | 357 | |||||||||||||||||||
Tax positions related to current year: | |||||||||||||||||||||||||
Additions | 4 | 3 | 1 | ||||||||||||||||||||||
Reductions | (2 | ) | — | — | |||||||||||||||||||||
Tax positions related to prior years: | |||||||||||||||||||||||||
Additions | 27 | 646 | (a) | 79 | |||||||||||||||||||||
Reductions | (10 | ) | (12 | ) | (235 | )(b) | |||||||||||||||||||
Settlements | — | (6 | ) | (2 | ) | ||||||||||||||||||||
Balance as of December 31, | $ | 850 | $ | 831 | $ | 200 | |||||||||||||||||||
(a) | These additions of unrecognized tax benefits in 2013 primarily relate to the former cross-border energy lease investments of PCI. | ||||||||||||||||||||||||
(b) | These reductions of unrecognized tax benefits in 2012 primarily relate to a resolution reached with the IRS for determining deductible mixed service costs for additions to property, plant and equipment. | ||||||||||||||||||||||||
Other Taxes | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Gross Receipts/Delivery | $ | 123 | $ | 133 | $ | 135 | |||||||||||||||||||
Property | 84 | 77 | 75 | ||||||||||||||||||||||
County Fuel and Energy | 143 | 153 | 160 | ||||||||||||||||||||||
Environmental, Use and Other | 63 | 65 | 62 | ||||||||||||||||||||||
Total | $ | 413 | $ | 428 | $ | 432 | |||||||||||||||||||
Potomac Electric Power Co [Member] | |||||||||||||||||||||||||
Provision for Consolidated Income Taxes from Continuing Operations | Provision for Income Taxes | ||||||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Current Tax Benefit | |||||||||||||||||||||||||
Federal | $ | (79 | ) | $ | (39 | ) | $ | (84 | ) | ||||||||||||||||
State and local | (3 | ) | (1 | ) | (27 | ) | |||||||||||||||||||
Total Current Tax Benefit | (82 | ) | (40 | ) | (111 | ) | |||||||||||||||||||
Deferred Tax Expense (Benefit) | |||||||||||||||||||||||||
Federal | 150 | 96 | 127 | ||||||||||||||||||||||
State and local | 24 | 24 | 33 | ||||||||||||||||||||||
Investment tax credit amortization | — | (1 | ) | (1 | ) | ||||||||||||||||||||
Total Deferred Tax Expense | 174 | 119 | 159 | ||||||||||||||||||||||
Total Income Tax Expense | $ | 92 | $ | 79 | $ | 48 | |||||||||||||||||||
Reconciliation of Consolidated Income Tax Expense from Continuing Operations | Reconciliation of Income Tax Expense | ||||||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Income tax at Federal statutory rate | $ | 92 | 35 | % | $ | 80 | 35 | % | $ | 61 | 35 | % | |||||||||||||
Increases (decreases) resulting from: | |||||||||||||||||||||||||
State income taxes, net of federal effect | 15 | 5.7 | % | 13 | 5.7 | % | 10 | 5.7 | % | ||||||||||||||||
Asset removal costs | (12 | ) | (4.6 | )% | (14 | ) | (6.1 | )% | (11 | ) | (6.3 | )% | |||||||||||||
Change in estimates and interest related to uncertain and effectively settled tax positions | (1 | ) | (0.4 | )% | (3 | ) | (1.3 | )% | (11 | ) | (6.3 | )% | |||||||||||||
Other, net | (2 | ) | (0.7 | )% | 3 | 1.2 | % | (1 | ) | (0.5 | )% | ||||||||||||||
Income Tax Expense | $ | 92 | 35 | % | $ | 79 | 34.5 | % | $ | 48 | 27.6 | % | |||||||||||||
Components of Consolidated Deferred Income Tax Liabilities (Assets) | Components of Deferred Income Tax Liabilities (Assets) | ||||||||||||||||||||||||
At December 31, | |||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Deferred Tax Liabilities (Assets) | |||||||||||||||||||||||||
Depreciation and other basis differences related to plant and equipment | $ | 1,423 | $ | 1,240 | |||||||||||||||||||||
Pension and other postretirement benefits | 103 | 105 | |||||||||||||||||||||||
Deferred taxes on amounts to be collected through future rates | 59 | 43 | |||||||||||||||||||||||
Federal and state net operating losses | (186 | ) | (169 | ) | |||||||||||||||||||||
Other | 180 | 145 | |||||||||||||||||||||||
Total Deferred Tax Liabilities, net | 1,579 | 1,364 | |||||||||||||||||||||||
Deferred tax assets included in Current Assets | 14 | 48 | |||||||||||||||||||||||
Deferred tax liabilities included in Other Current Liabilities | (9 | ) | — | ||||||||||||||||||||||
Total Deferred Tax Liabilities, net non-current | $ | 1,584 | $ | 1,412 | |||||||||||||||||||||
Reconciliation of Beginning and Ending Balances of Unrecognized Tax Benefits | Reconciliation of Beginning and Ending Balances of Unrecognized Tax Benefits | ||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Balance as of January 1 | $ | 101 | $ | 91 | $ | 173 | |||||||||||||||||||
Tax positions related to current year: | |||||||||||||||||||||||||
Additions | 1 | 1 | — | ||||||||||||||||||||||
Reductions | (2 | ) | — | — | |||||||||||||||||||||
Tax positions related to prior years: | |||||||||||||||||||||||||
Additions | 1 | 12 | 60 | ||||||||||||||||||||||
Reductions | (4 | ) | (3 | ) | (142 | )(a) | |||||||||||||||||||
Settlements | — | — | — | ||||||||||||||||||||||
Balance as of December 31 | $ | 97 | $ | 101 | $ | 91 | |||||||||||||||||||
(a) | These reductions of unrecognized tax benefits in 2012 primarily relate to a resolution reached with the IRS for determining deductible mixed service costs for additions to property, plant and equipment. | ||||||||||||||||||||||||
Other Taxes | These amounts are recoverable through rates. | ||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Gross Receipts/Delivery | $ | 107 | $ | 108 | $ | 106 | |||||||||||||||||||
Property | 51 | 45 | 46 | ||||||||||||||||||||||
County Fuel and Energy | 143 | 153 | 160 | ||||||||||||||||||||||
Environmental, Use and Other | 62 | 62 | 60 | ||||||||||||||||||||||
Total | $ | 363 | $ | 368 | $ | 372 | |||||||||||||||||||
Delmarva Power & Light Co/De [Member] | |||||||||||||||||||||||||
Provision for Consolidated Income Taxes from Continuing Operations | Provision for Income Taxes | ||||||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Current Tax (Benefit) Expense | |||||||||||||||||||||||||
Federal | $ | (45 | ) | $ | (8 | ) | $ | (9 | ) | ||||||||||||||||
State and local | — | — | (1 | ) | |||||||||||||||||||||
Total Current Tax Benefit | (45 | ) | (8 | ) | (10 | ) | |||||||||||||||||||
Deferred Tax Expense (Benefit) | |||||||||||||||||||||||||
Federal | 99 | 53 | 44 | ||||||||||||||||||||||
State and local | 12 | 12 | 11 | ||||||||||||||||||||||
Investment tax credit amortization | (1 | ) | (1 | ) | (1 | ) | |||||||||||||||||||
Total Deferred Tax Expense | 110 | 64 | 54 | ||||||||||||||||||||||
Total Income Tax Expense | $ | 65 | $ | 56 | $ | 44 | |||||||||||||||||||
Reconciliation of Consolidated Income Tax Expense from Continuing Operations | Reconciliation of Income Tax Expense | ||||||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Income tax at Federal statutory rate | $ | 59 | 35 | % | $ | 51 | 35 | % | $ | 41 | 35 | % | |||||||||||||
Increases (decreases) resulting from: | |||||||||||||||||||||||||
State income taxes, net of federal effect | 9 | 5.3 | % | 8 | 5.5 | % | 6 | 5.1 | % | ||||||||||||||||
Other, net | (3 | ) | (1.8 | )% | (3 | ) | (1.9 | )% | (3 | ) | (2.5 | )% | |||||||||||||
Income Tax Expense | $ | 65 | 38.5 | % | $ | 56 | 38.6 | % | $ | 44 | 37.6 | % | |||||||||||||
Components of Consolidated Deferred Income Tax Liabilities (Assets) | Components of Deferred Income Tax Liabilities (Assets) | ||||||||||||||||||||||||
As of December 31, | |||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Deferred Tax Liabilities (Assets) | |||||||||||||||||||||||||
Depreciation and other basis differences related to plant and equipment | $ | 797 | $ | 712 | |||||||||||||||||||||
Deferred taxes on amounts to be collected through future rates | 19 | 16 | |||||||||||||||||||||||
Federal and state net operating losses | (115 | ) | (125 | ) | |||||||||||||||||||||
Pension and other postretirement benefits | 80 | 80 | |||||||||||||||||||||||
Electric restructuring liabilities | (4 | ) | (5 | ) | |||||||||||||||||||||
Other | 101 | 80 | |||||||||||||||||||||||
Total Deferred Tax Liabilities, net | 878 | 758 | |||||||||||||||||||||||
Deferred tax assets included in Current Assets | 16 | 59 | |||||||||||||||||||||||
Deferred tax liabilities included in Other Current Liabilities | (1 | ) | (1 | ) | |||||||||||||||||||||
Total Deferred Tax Liabilities, net non-current | $ | 893 | $ | 816 | |||||||||||||||||||||
Reconciliation of Beginning and Ending Balances of Unrecognized Tax Benefits | Reconciliation of Beginning and Ending Balances of Unrecognized Tax Benefits | ||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Balance as of January 1 | $ | 9 | $ | 9 | $ | 35 | |||||||||||||||||||
Tax positions related to current year: | |||||||||||||||||||||||||
Additions | 1 | — | — | ||||||||||||||||||||||
Reductions | — | — | — | ||||||||||||||||||||||
Tax positions related to prior years: | |||||||||||||||||||||||||
Additions | 13 | — | — | ||||||||||||||||||||||
Reductions | (1 | ) | — | (26 | )(a) | ||||||||||||||||||||
Settlements | — | — | — | ||||||||||||||||||||||
Balance as of December 31 | $ | 22 | $ | 9 | $ | 9 | |||||||||||||||||||
(a) | These reductions of unrecognized tax benefits in 2012 primarily relate to a resolution reached with the Internal Revenue Service (IRS) for determining deductible mixed service costs for additions to property, plant and equipment. | ||||||||||||||||||||||||
Other Taxes | These amounts are recoverable through rates. | ||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Gross Receipts/Delivery | $ | 16 | $ | 15 | $ | 14 | |||||||||||||||||||
Property | 24 | 24 | 21 | ||||||||||||||||||||||
Environmental, Use and Other | 2 | 1 | 1 | ||||||||||||||||||||||
Total | $ | 42 | $ | 40 | $ | 36 | |||||||||||||||||||
Atlantic City Electric Co [Member] | |||||||||||||||||||||||||
Provision for Consolidated Income Taxes from Continuing Operations | Provision for Consolidated Income Taxes | ||||||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Current Tax (Benefit) Expense | |||||||||||||||||||||||||
Federal | $ | (7 | ) | $ | (23 | ) | $ | (31 | ) | ||||||||||||||||
State and local | (2 | ) | (10 | ) | (12 | ) | |||||||||||||||||||
Total Current Tax Benefit | (9 | ) | (33 | ) | (43 | ) | |||||||||||||||||||
Deferred Tax Expense (Benefit) | |||||||||||||||||||||||||
Federal | 30 | 28 | 46 | ||||||||||||||||||||||
State and local | 7 | 25 | 16 | ||||||||||||||||||||||
Investment tax credit amortization | — | (1 | ) | (1 | ) | ||||||||||||||||||||
Total Deferred Tax Expense | 37 | 52 | 61 | ||||||||||||||||||||||
Total Consolidated Income Tax Expense | $ | 28 | $ | 19 | $ | 18 | |||||||||||||||||||
Reconciliation of Consolidated Income Tax Expense from Continuing Operations | Reconciliation of Consolidated Income Tax Expense | ||||||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Income tax at Federal statutory rate | $ | 26 | 35 | % | $ | 24 | 35 | % | $ | 19 | 35 | % | |||||||||||||
Increases (decreases) resulting from: | |||||||||||||||||||||||||
State income taxes, net of federal effect | 4 | 5.5 | % | 5 | 7.2 | % | 3 | 5.7 | % | ||||||||||||||||
Change in estimates and interest related to uncertain and effectively settled tax positions | (1 | ) | (1.4 | ) | (9 | ) | (13.0 | )% | (1 | ) | (1.9 | )% | |||||||||||||
Plant basis adjustments | — | — | (2 | ) | (2.9 | )% | (1 | ) | (1.9 | )% | |||||||||||||||
Investment tax credit amortization | — | — | (1 | ) | (1.4 | )% | (1 | ) | (1.9 | )% | |||||||||||||||
Other, net | (1 | ) | (0.7 | )% | 2 | 2.6 | % | (1 | ) | (1.0 | )% | ||||||||||||||
Consolidated Income Tax Expense | $ | 28 | 38.4 | % | $ | 19 | 27.5 | % | $ | 18 | 34 | % | |||||||||||||
Components of Consolidated Deferred Income Tax Liabilities (Assets) | Components of Consolidated Deferred Income Tax Liabilities (Assets) | ||||||||||||||||||||||||
As of December 31, | |||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Deferred Tax Liabilities (Assets) | |||||||||||||||||||||||||
Depreciation and other basis differences related to plant and equipment | $ | 691 | $ | 627 | |||||||||||||||||||||
Deferred taxes on amounts to be collected through future rates | 16 | 16 | |||||||||||||||||||||||
Payment for termination of purchased power contracts with NUGs | 38 | 43 | |||||||||||||||||||||||
Deferred electric service and electric restructuring liabilities | 71 | 96 | |||||||||||||||||||||||
Pension and other postretirement benefits | 25 | 29 | |||||||||||||||||||||||
Purchased energy | 1 | 2 | |||||||||||||||||||||||
Federal and state net operating losses | (26 | ) | (49 | ) | |||||||||||||||||||||
Other | 39 | 55 | |||||||||||||||||||||||
Total Deferred Tax Liabilities, net | 855 | 819 | |||||||||||||||||||||||
Deferred tax assets included in Current Assets | 10 | 15 | |||||||||||||||||||||||
Deferred tax liabilities included in Other Current Liabilities | — | (1 | ) | ||||||||||||||||||||||
Total Consolidated Deferred Tax Liabilities, net non-current | $ | 865 | $ | 833 | |||||||||||||||||||||
Reconciliation of Beginning and Ending Balances of Unrecognized Tax Benefits | Reconciliation of Beginning and Ending Balances of Unrecognized Tax Benefits | ||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Balance as of January 1 | $ | 9 | $ | 17 | $ | 79 | |||||||||||||||||||
Tax positions related to current year: | |||||||||||||||||||||||||
Additions | 1 | 2 | 1 | ||||||||||||||||||||||
Reductions | — | — | — | ||||||||||||||||||||||
Tax positions related to prior years: | |||||||||||||||||||||||||
Additions | 5 | 1 | 8 | ||||||||||||||||||||||
Reductions | (2 | ) | (5 | ) | (69 | )(a) | |||||||||||||||||||
Settlements | — | (6 | ) | (2 | ) | ||||||||||||||||||||
Balance as of December 31 | $ | 13 | $ | 9 | $ | 17 | |||||||||||||||||||
(a) | These reductions of unrecognized tax benefits in 2012 primarily relate to a resolution reached with the IRS for determining deductible mixed service costs for additions to property, plant and equipment. | ||||||||||||||||||||||||
Other Taxes | These amounts are recoverable through rates. | ||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||
Gross Receipts/Delivery | $ | — | $ | 10 | $ | 14 | |||||||||||||||||||
Property | 3 | 3 | 3 | ||||||||||||||||||||||
Environmental, Use and Other | (1 | ) | 1 | 1 | |||||||||||||||||||||
Total | $ | 2 | $ | 14 | $ | 18 | |||||||||||||||||||
StockBased_Compensation_Divide1
Stock-Based Compensation, Dividend Restrictions, and Calculations of Earnings Per Share of Common Stock (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||
Schedule of Restricted Stock and Restricted Stock Units | For performance-based restricted stock and restricted stock unit awards, the table reflects awards projected, for purposes of computing the weighted average grant date fair value, to achieve 100% of targeted performance criteria for each outstanding award cycle. | ||||||||||||
Weighted | |||||||||||||
Number | Average Grant | ||||||||||||
of Shares | Date Fair Value | ||||||||||||
Balance as of January 1, 2014 (a) | |||||||||||||
Restricted stock | — | $ | — | ||||||||||
Performance-based restricted stock | — | — | |||||||||||
Time-based restricted stock units | 583,554 | 19.34 | |||||||||||
Performance-based restricted stock units | 1,069,830 | 19.06 | |||||||||||
Total | 1,653,384 | ||||||||||||
Granted during 2014 | |||||||||||||
Restricted stock | 183,486 | 26.8 | |||||||||||
Performance-based restricted stock | 70,276 | 27.01 | |||||||||||
Time-based restricted stock units | 222,350 | 19.77 | |||||||||||
Performance-based restricted stock units | 448,107 | 18.53 | |||||||||||
Total | 924,219 | ||||||||||||
Vested during 2014 | |||||||||||||
Restricted stock | (129,321 | ) | 26.8 | ||||||||||
Time-based restricted stock units | (336,946 | ) | 19.25 | ||||||||||
Performance-based restricted stock units | (349,020 | ) | 21.07 | ||||||||||
Total | (815,287 | ) | |||||||||||
Forfeited during 2014 | |||||||||||||
Performance-based restricted stock units | (340,936 | ) | 19.54 | ||||||||||
Total | (340,936 | ) | |||||||||||
Balance as of December 31, 2014 (b) | |||||||||||||
Restricted stock | 54,165 | 26.8 | |||||||||||
Performance-based restricted stock | 70,276 | 27.01 | |||||||||||
Time-based restricted stock units | 468,958 | 19.61 | |||||||||||
Performance-based restricted stock units | 827,981 | 17.73 | |||||||||||
Total | 1,421,380 | ||||||||||||
(a) | The balance as of January 1, 2014 does not include 59,523 time-based restricted stock units and 31,403 performance-based restricted stock units that were vested but had not yet settled. | ||||||||||||
(b) | The balance as of December 31, 2014 does not include 36,110 shares of restricted stock, 94,685 time-based restricted stock units and 59,797 performance-based restricted stock units that were vested but had not yet settled. | ||||||||||||
Weighted Average Grant Date Fair Value Per Share | The following table provides the weighted average grant date fair value per share of those awards granted during each of the years ended December 31, 2014, 2013 and 2012: | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
Weighted average grant-date fair value of each restricted stock award granted during the year | $ | 26.8 | $ | — | $ | — | |||||||
Weighted average grant-date fair value of each performance-based restricted stock award granted during the year | $ | 27.01 | $ | — | $ | — | |||||||
Weighted average grant-date fair value of each unrestricted stock award granted during the year | $ | — | $ | — | $ | 18.85 | |||||||
Weighted average grant-date fair value of each time-based restricted stock unit award granted during the year | $ | 19.77 | $ | 19.7 | $ | 19.69 | |||||||
Weighted average grant-date fair value of each performance-based restricted stock unit award granted during the year | $ | 18.53 | $ | 17.03 | $ | 21.13 | |||||||
Dividends Received from Subsidiaries | For the years ended December 31, 2014, 2013 and 2012, dividends paid by PHI’s subsidiaries were as follows: | ||||||||||||
Subsidiary | 2014 | 2013 | 2012 | ||||||||||
(millions of dollars) | |||||||||||||
Pepco (paid to PHI) | $ | 86 | $ | 46 | $ | 35 | |||||||
DPL (paid to Conectiv) | 100 | 30 | — | ||||||||||
ACE (paid to Conectiv) | 26 | 60 | 35 | ||||||||||
Total | $ | 212 | $ | 136 | $ | 70 | |||||||
Calculation of Earnings Per Share of Common Stock | The numerator and denominator for basic and diluted earnings per share of common stock calculations are shown below. | ||||||||||||
For the Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(millions of dollars, except per share data) | |||||||||||||
Income (Numerator): | |||||||||||||
Net income from continuing operations | $ | 242 | $ | 110 | $ | 218 | |||||||
Net (loss) income from discontinued operations | — | (322 | ) | 67 | |||||||||
Net income (loss) | $ | 242 | $ | (212 | ) | $ | 285 | ||||||
Shares (Denominator) (in millions): | |||||||||||||
Weighted average shares outstanding for basic computation: | |||||||||||||
Average shares outstanding | 251 | 246 | 229 | ||||||||||
Adjustment to shares outstanding | — | — | — | ||||||||||
Weighted Average Shares Outstanding for Computation of Basic Earnings Per Share of Common Stock | 251 | 246 | 229 | ||||||||||
Net effect of potentially dilutive shares (a) | 1 | — | 1 | ||||||||||
Weighted Average Shares Outstanding for Computation of Diluted Earnings Per Share of Common Stock | 252 | 246 | 230 | ||||||||||
Basic earnings per share of common stock from continuing operations | $ | 0.96 | $ | 0.45 | $ | 0.95 | |||||||
Basic (loss) earnings per share of common stock from discontinued operations | — | (1.31 | ) | 0.3 | |||||||||
Basic earnings (loss) per share | $ | 0.96 | $ | (0.86 | ) | $ | 1.25 | ||||||
Diluted earnings per share of common stock from continuing operations | $ | 0.96 | $ | 0.45 | $ | 0.95 | |||||||
Diluted (loss) earnings per share of common stock from discontinued operations | — | (1.31 | ) | 0.29 | |||||||||
Diluted earnings (loss) per share | $ | 0.96 | $ | (0.86 | ) | $ | 1.24 | ||||||
(a) | There were no options to purchase shares of common stock that were excluded from the calculation of diluted earnings per share for the years ended December 31, 2014, 2013 and 2012. | ||||||||||||
Common Stock Reserved and Unissued | The following table presents Pepco Holdings’ common stock reserved and unissued at December 31, 2014: | ||||||||||||
Name of Plan | Number of | ||||||||||||
Shares | |||||||||||||
DRP | 4,982,016 | ||||||||||||
Pepco Holdings Long-Term Incentive Plan (a) | 6,946,614 | ||||||||||||
Pepco Holdings 2012 Long-Term Incentive Plan | 7,746,773 | ||||||||||||
Pepco Holdings Non-Management Directors Compensation Plan (b) | 457,211 | ||||||||||||
Pepco Holdings Retirement Savings Plan | 4,003,652 | ||||||||||||
Total | 24,136,266 | ||||||||||||
(a) | No further awards will be made under this plan. | ||||||||||||
(b) | This plan expired by its terms on December 31, 2014. |
Derivative_Instruments_and_Hed1
Derivative Instruments and Hedging Activities (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Fair Values of Derivative Instruments by Balance Sheet Location | The tables below identify the balance sheet location and fair values of derivative instruments as of December 31, 2014 and 2013: | ||||||||||||||||||||
As of December 31, 2014 | |||||||||||||||||||||
Balance Sheet Caption | Derivatives | Other | Gross | Effects of | Net | ||||||||||||||||
Designated | Derivative | Derivative | Cash | Derivative | |||||||||||||||||
as Hedging | Instruments | Instruments | Collateral | Instruments | |||||||||||||||||
Instruments | and | ||||||||||||||||||||
Netting | |||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Derivative assets (current assets) | $ | — | $ | 3 | $ | 3 | $ | — | $ | 3 | |||||||||||
Derivative liabilities (current liabilities) | — | (4 | ) | (4 | ) | 4 | — | ||||||||||||||
Net Derivative (liability) asset | $ | — | $ | (1 | ) | $ | (1 | ) | $ | 4 | $ | 3 | |||||||||
As of December 31, 2013 | |||||||||||||||||||||
Balance Sheet Caption | Derivatives | Other | Gross | Effects of | Net | ||||||||||||||||
Designated | Derivative | Derivative | Cash | Derivative | |||||||||||||||||
as Hedging | Instruments | Instruments | Collateral | Instruments | |||||||||||||||||
Instruments | and | ||||||||||||||||||||
Netting | |||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Derivative assets (current assets) | $ | — | $ | 1 | $ | 1 | $ | (1 | ) | $ | — | ||||||||||
Schedule of Cash Collateral Offset Against Derivative Positions | The amount of cash collateral that was offset against these derivative positions is as follows: | ||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Cash collateral pledged to counterparties with the right to reclaim (a) | $ | 4 | $ | — | |||||||||||||||||
Cash collateral received from counterparties with the obligation to return | $ | — | $ | (1 | ) | ||||||||||||||||
(a) | Includes cash deposits on commodity brokerage accounts. | ||||||||||||||||||||
Cash Flow Hedges Included in Accumulated Other Comprehensive Loss | The data in the following tables indicate the cumulative net loss after-tax related to terminated cash flow hedges by contract type included in AOCL, the portion of AOCL expected to be reclassified to income during the next 12 months, and the maximum hedge or deferral term: | ||||||||||||||||||||
Contracts | As of December 31, 2014 | Maximum | |||||||||||||||||||
Accumulated | Portion Expected | Term | |||||||||||||||||||
Other | to be Reclassified | ||||||||||||||||||||
Comprehensive Loss | to Income during | ||||||||||||||||||||
After-tax | the Next 12 Months | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Interest rate | $ | 9 | $ | 1 | 212 months | ||||||||||||||||
Contracts | As of December 31, 2013 | Maximum | |||||||||||||||||||
Accumulated | Portion Expected | Term | |||||||||||||||||||
Other | to be Reclassified | ||||||||||||||||||||
Comprehensive Loss | to Income during | ||||||||||||||||||||
After-tax | the Next 12 Months | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Interest rate | $ | 9 | $ | 1 | 224 months | ||||||||||||||||
Net Unrealized and Realized Derivative Gains (Losses) Deferred as Regulatory Liabilities and Regulatory Assets | The following table shows the net unrealized and net realized derivative gains and losses arising during the period associated with these derivatives that were recognized in the consolidated statements of income (loss) (through Fuel and purchased energy expense) and that were also deferred as Regulatory liabilities and Regulatory assets for the years ended December 31, 2014, 2013 and 2012: | ||||||||||||||||||||
For the Year Ended | |||||||||||||||||||||
December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Net unrealized (loss) gain arising during the period | $ | (3 | ) | $ | 4 | $ | (6 | ) | |||||||||||||
Net realized gain (loss) recognized during the period | 2 | (4 | ) | (16 | ) | ||||||||||||||||
Net Outstanding Commodity Forward Contracts That Did Not Qualify for Hedge Accounting | As of December 31, 2014 and 2013, the quantities and positions of DPL’s net outstanding natural gas commodity forward contracts that did not qualify for hedge accounting were: | ||||||||||||||||||||
December 31, 2014 | December 31, 2013 | ||||||||||||||||||||
Commodity | Quantity | Net Position | Quantity | Net Position | |||||||||||||||||
DPL – Natural gas (one Million British Thermal Units (MMBtu)) | 3,892,500 | Long | 3,977,500 | Long | |||||||||||||||||
Delmarva Power & Light Co/De [Member] | |||||||||||||||||||||
Fair Values of Derivative Instruments by Balance Sheet Location | The tables below identify the balance sheet location and fair values of derivative instruments as of December 31, 2014 and 2013: | ||||||||||||||||||||
As of December 31, 2014 | |||||||||||||||||||||
Balance Sheet Caption | Derivatives | Other | Gross | Effects of | Net | ||||||||||||||||
Designated | Derivative | Derivative | Cash | Derivative | |||||||||||||||||
as Hedging | Instruments | Instruments | Collateral | Instruments | |||||||||||||||||
Instruments | and | ||||||||||||||||||||
Netting | |||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Derivative liabilities (current liabilities) | $ | — | $ | (4 | ) | $ | (4 | ) | $ | 4 | $ | — | |||||||||
As of December 31, 2013 | |||||||||||||||||||||
Balance Sheet Caption | Derivatives | Other | Gross | Effects of | Net | ||||||||||||||||
Designated | Derivative | Derivative | Cash | Derivative | |||||||||||||||||
as Hedging | Instruments | Instruments | Collateral | Instruments | |||||||||||||||||
Instruments | and | ||||||||||||||||||||
Netting | |||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Derivative assets (current assets) | $ | — | $ | 1 | $ | 1 | $ | (1 | ) | $ | — | ||||||||||
Schedule of Cash Collateral Offset Against Derivative Positions | The amount of cash collateral that was offset against these derivative positions is as follows: | ||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Cash collateral pledged to counterparities with the right reclaim (a) | $ | 4 | $ | — | |||||||||||||||||
Cash collateral received from counterparties with the obligation to return | $ | — | $ | (1 | ) | ||||||||||||||||
(a) | Includes cash deposits on commodity brokerage accounts. | ||||||||||||||||||||
Net Unrealized and Realized Derivative Gains (Losses) Deferred as Regulatory Liabilities and Regulatory Assets | The following table shows the net unrealized and net realized derivative gains and losses arising during the period associated with these derivatives that were recognized in the statements of income (through Purchased energy and Gas purchased expense) and that were also deferred as Regulatory liabilities and Regulatory assets, respectively, for the years ended December 31, 2014, 2013 and 2012: | ||||||||||||||||||||
For the Year Ended | |||||||||||||||||||||
December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Net unrealized (loss) gain arising during the period | $ | (3 | ) | $ | 1 | $ | (3 | ) | |||||||||||||
Net realized gain (loss) recognized during the period | 2 | (4 | ) | (16 | ) | ||||||||||||||||
Net Outstanding Commodity Forward Contracts That Did Not Qualify for Hedge Accounting | As of December 31, 2014 and 2013, DPL had the following net outstanding natural gas commodity forward contracts that did not qualify for hedge accounting: | ||||||||||||||||||||
December 31, 2014 | December 31, 2013 | ||||||||||||||||||||
Commodity | Quantity | Net Position | Quantity | Net Position | |||||||||||||||||
Natural Gas (One Million British Thermal Units (MMBtu)) | 3,892,500 | Long | 3,977,500 | Long |
Fair_Value_Disclosures_Tables
Fair Value Disclosures (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Fair Value of Financial Assets and Liabilities Measured on Recurring Basis | The following tables set forth, by level within the fair value hierarchy, PHI’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2014 and 2013. 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. PHI’s assessment of the significance of a particular input to the fair value measurement requires the exercise of judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. | ||||||||||||||||||||
Fair Value Measurements at December 31, 2014 | |||||||||||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | |||||||||||||||||
Active Markets | Other | Unobservable | |||||||||||||||||||
for Identical | Observable | Inputs | |||||||||||||||||||
Instruments | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) (a) | (Level 2) (a) | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
ASSETS | |||||||||||||||||||||
Derivative instruments | |||||||||||||||||||||
Preferred stock | $ | 3 | $ | — | $ | — | $ | 3 | |||||||||||||
Restricted cash equivalents | |||||||||||||||||||||
Treasury fund | 38 | 38 | — | — | |||||||||||||||||
Executive deferred compensation plan assets | |||||||||||||||||||||
Money market funds and short-term investments | 35 | 14 | 21 | — | |||||||||||||||||
Life insurance contracts | 46 | — | 27 | 19 | |||||||||||||||||
Total | $ | 122 | $ | 52 | $ | 48 | $ | 22 | |||||||||||||
LIABILITIES | |||||||||||||||||||||
Derivative instruments (b) | |||||||||||||||||||||
Natural gas (c) | $ | 4 | $ | 4 | $ | — | $ | — | |||||||||||||
Executive deferred compensation plan liabilities | |||||||||||||||||||||
Life insurance contracts | 30 | — | 30 | — | |||||||||||||||||
Total | $ | 34 | $ | 4 | $ | 30 | $ | — | |||||||||||||
(a) | There were no transfers of instruments between level 1 and level 2 valuation categories during the year ended December 31, 2014. | ||||||||||||||||||||
(b) | The fair values of derivative liabilities reflect netting by counterparty before the impact of collateral. | ||||||||||||||||||||
(c) | Represents natural gas swaps purchased by DPL as part of a natural gas hedging program approved by the DPSC. | ||||||||||||||||||||
Fair Value Measurements at December 31, 2013 | |||||||||||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | |||||||||||||||||
Active Markets | Other | Unobservable | |||||||||||||||||||
for Identical | Observable | Inputs | |||||||||||||||||||
Instruments | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) (a) | (Level 2) (a) | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
ASSETS | |||||||||||||||||||||
Derivative instruments (b) | |||||||||||||||||||||
Natural gas (c) | $ | 1 | $ | 1 | $ | — | $ | — | |||||||||||||
Restricted cash and cash equivalents | |||||||||||||||||||||
Treasury fund | 34 | 34 | — | — | |||||||||||||||||
Executive deferred compensation plan assets | |||||||||||||||||||||
Money market funds and short-term investments | 35 | 15 | 20 | — | |||||||||||||||||
Life insurance contracts | 46 | — | 27 | 19 | |||||||||||||||||
Total | $ | 116 | $ | 50 | $ | 47 | $ | 19 | |||||||||||||
LIABILITIES | |||||||||||||||||||||
Executive deferred compensation plan liabilities | |||||||||||||||||||||
Life insurance contracts | $ | 30 | $ | — | $ | 30 | $ | — | |||||||||||||
Total | $ | 30 | $ | — | $ | 30 | $ | — | |||||||||||||
(a) | There were no transfers of instruments between level 1 and level 2 valuation categories during the year ended December 31, 2013. | ||||||||||||||||||||
(b) | The fair values of derivative assets reflect netting by counterparty before the impact of collateral. | ||||||||||||||||||||
(c) | Represents natural gas swaps purchased by DPL as part of a natural gas hedging program approved by the DPSC. | ||||||||||||||||||||
Reconciliations of Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | Reconciliations of the beginning and ending balances of PHI’s fair value measurements using significant unobservable inputs (Level 3) for the years ended December 31, 2014 and 2013 are shown below: | ||||||||||||||||||||
Year Ended | Year Ended | ||||||||||||||||||||
31-Dec-14 | 31-Dec-13 | ||||||||||||||||||||
Preferred | Life | Natural | Life | Capacity | |||||||||||||||||
Stock | Insurance | Gas | Insurance | ||||||||||||||||||
Contracts | Contracts | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Balance as of January 1 | $ | — | $ | 19 | $ | (4 | ) | $ | 18 | $ | (3 | ) | |||||||||
Total gains (losses) (realized and unrealized): | |||||||||||||||||||||
Included in income | — | 3 | — | 4 | — | ||||||||||||||||
Included in accumulated other comprehensive loss | — | — | — | — | — | ||||||||||||||||
Included in regulatory liabilities | — | — | — | — | 3 | ||||||||||||||||
Purchases | — | — | — | — | — | ||||||||||||||||
Issuances | 3 | (3 | ) | — | (3 | ) | — | ||||||||||||||
Settlements | — | — | 4 | — | — | ||||||||||||||||
Transfers in (out) of level 3 | — | — | — | — | — | ||||||||||||||||
Balance as of December 31 | $ | 3 | $ | 19 | $ | — | $ | 19 | $ | — | |||||||||||
Gains on Level 3 Instruments Included in Income | The breakdown of realized and unrealized gains on level 3 instruments included in income as a component of Other income or Other operation and maintenance expense for the periods below were as follows: | ||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Total net gains included in income for the period | $ | 3 | $ | 4 | |||||||||||||||||
Change in unrealized gains relating to assets still held at reporting date | $ | 3 | $ | 4 | |||||||||||||||||
Fair Value of Financial Liabilities Measured on Recurring Basis | |||||||||||||||||||||
Fair Value Measurements at December 31, 2014 | |||||||||||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | |||||||||||||||||
Active Markets | Other | Unobservable | |||||||||||||||||||
for Identical | Observable | Inputs | |||||||||||||||||||
Instruments | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
LIABILITIES | |||||||||||||||||||||
Debt instruments | |||||||||||||||||||||
Long-term debt (a) | $ | 5,583 | $ | — | $ | 5,136 | $ | 447 | |||||||||||||
Transition Bonds (b) | 235 | — | 235 | — | |||||||||||||||||
Long-term project funding | 28 | — | — | 28 | |||||||||||||||||
Total | $ | 5,846 | $ | — | $ | 5,371 | $ | 475 | |||||||||||||
(a) | The carrying amount for Long-term debt was $4,807 million as of December 31, 2014. | ||||||||||||||||||||
(b) | The carrying amount for Transition Bonds, including amounts due within one year, was $215 million as of December 31, 2014. | ||||||||||||||||||||
Fair Value Measurements at December 31, 2013 | |||||||||||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | |||||||||||||||||
Active Markets | Other | Unobservable | |||||||||||||||||||
for Identical | Observable | Inputs | |||||||||||||||||||
Instruments | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
LIABILITIES | |||||||||||||||||||||
Debt instruments | |||||||||||||||||||||
Long-term debt (a) | $ | 4,850 | $ | — | $ | 4,289 | $ | 561 | |||||||||||||
Transition Bonds (b) | 284 | — | 284 | — | |||||||||||||||||
Long-term project funding | 12 | — | — | 12 | |||||||||||||||||
Total | $ | 5,146 | $ | — | $ | 4,573 | $ | 573 | |||||||||||||
(a) | The carrying amount for Long-term debt was $4,456 million as of December 31, 2013. | ||||||||||||||||||||
(b) | The carrying amount for Transition Bonds, including amounts due within one year, was $255 million as of December 31, 2013. | ||||||||||||||||||||
Potomac Electric Power Co [Member] | |||||||||||||||||||||
Fair Value of Financial Assets and Liabilities Measured on Recurring Basis | The following tables set forth, by level within the fair value hierarchy, Pepco’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2014 and 2013. 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. Pepco’s assessment of the significance of a particular input to the fair value measurement requires the exercise of judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. | ||||||||||||||||||||
Fair Value Measurements at December 31, 2014 | |||||||||||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | |||||||||||||||||
Active Markets | Other | Unobservable | |||||||||||||||||||
for Identical | Observable | Inputs | |||||||||||||||||||
Instruments | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) (a) | (Level 2) (a) | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
ASSETS | |||||||||||||||||||||
Restricted cash equivalents | |||||||||||||||||||||
Treasury fund | $ | 5 | $ | 5 | $ | — | $ | — | |||||||||||||
Executive deferred compensation plan assets | |||||||||||||||||||||
Money market funds and short-term investments | 34 | 13 | 21 | — | |||||||||||||||||
Life insurance contracts | 41 | — | 23 | 18 | |||||||||||||||||
Total | $ | 80 | $ | 18 | $ | 44 | $ | 18 | |||||||||||||
LIABILITIES | |||||||||||||||||||||
Executive deferred compensation plan liabilities | |||||||||||||||||||||
Life insurance contracts | $ | 7 | $ | — | $ | 7 | $ | — | |||||||||||||
Total | $ | 7 | $ | — | $ | 7 | $ | — | |||||||||||||
(a) | There were no transfers of instruments between level 1 and level 2 valuation categories during the year ended December 31, 2014. | ||||||||||||||||||||
Fair Value Measurements at December 31, 2013 | |||||||||||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | |||||||||||||||||
Active Markets | Other | Unobservable | |||||||||||||||||||
for Identical | Observable | Inputs | |||||||||||||||||||
Instruments | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) (a) | (Level 2) (a) | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
ASSETS | |||||||||||||||||||||
Restricted cash equivalents | |||||||||||||||||||||
Treasury fund | $ | 3 | $ | 3 | $ | — | $ | — | |||||||||||||
Executive deferred compensation plan assets | |||||||||||||||||||||
Money market funds and short-term investments | 33 | 13 | 20 | — | |||||||||||||||||
Life insurance contracts | 41 | — | 23 | 18 | |||||||||||||||||
Total | $ | 77 | $ | 16 | $ | 43 | $ | 18 | |||||||||||||
LIABILITIES | |||||||||||||||||||||
Executive deferred compensation plan liabilities | |||||||||||||||||||||
Life insurance contracts | $ | 7 | $ | — | $ | 7 | $ | — | |||||||||||||
Total | $ | 7 | $ | — | $ | 7 | $ | — | |||||||||||||
(a) | There were no transfers of instruments between level 1 and level 2 valuation categories during the year ended December 31, 2013. | ||||||||||||||||||||
Reconciliations of Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | Reconciliations of the beginning and ending balances of Pepco’s fair value measurements using significant unobservable inputs (Level 3) for the years ended December 31, 2014 and 2013 are shown below. | ||||||||||||||||||||
Year Ended | Year Ended | ||||||||||||||||||||
December 31, 2014 | December 31, 2013 | ||||||||||||||||||||
Life Insurance | Life Insurance | ||||||||||||||||||||
Contracts | Contracts | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Balance as of January 1 | $ | 18 | $ | 18 | |||||||||||||||||
Total gains (losses) (realized and unrealized): | |||||||||||||||||||||
Included in income | 3 | 4 | |||||||||||||||||||
Included in accumulated other comprehensive loss | — | — | |||||||||||||||||||
Purchases | — | — | |||||||||||||||||||
Issuances | (3 | ) | (3 | ) | |||||||||||||||||
Settlements | — | (1 | ) | ||||||||||||||||||
Transfers in (out) of level 3 | — | — | |||||||||||||||||||
Balance as of December 31 | $ | 18 | $ | 18 | |||||||||||||||||
Gains on Level 3 Instruments Included in Income | The breakdown of realized and unrealized gains on level 3 instruments included in income as a component of Other operation and maintenance expense for the periods below were as follows: | ||||||||||||||||||||
Year Ended | |||||||||||||||||||||
December 31, | |||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Total gains included in income for the period | $ | 3 | $ | 4 | |||||||||||||||||
Change in unrealized gains relating to assets still held at reporting date | $ | 3 | $ | 4 | |||||||||||||||||
Fair Value of Financial Liabilities Measured on Recurring Basis | |||||||||||||||||||||
Fair Value Measurements at December 31, 2014 | |||||||||||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | |||||||||||||||||
Active Markets | Other | Unobservable | |||||||||||||||||||
for Identical | Observable | Inputs | |||||||||||||||||||
Instruments | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
LIABILITIES | |||||||||||||||||||||
Debt instruments | |||||||||||||||||||||
Long-term debt (a) | $ | 2,624 | $ | — | $ | 2,624 | $ | — | |||||||||||||
Project funding | 12 | — | — | 12 | |||||||||||||||||
Total | $ | 2,636 | $ | — | $ | 2,624 | $ | 12 | |||||||||||||
(a) | The carrying amount for Long-term debt was $2,124 million as of December 31, 2014. | ||||||||||||||||||||
Fair Value Measurements at December 31, 2013 | |||||||||||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | |||||||||||||||||
Active Markets | Other | Unobservable | |||||||||||||||||||
for Identical | Observable | Inputs | |||||||||||||||||||
Instruments | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
LIABILITIES | |||||||||||||||||||||
Debt instruments | |||||||||||||||||||||
Long-term debt (a) | $ | 2,127 | $ | — | $ | 2,127 | $ | — | |||||||||||||
(a) | The carrying amount for Long-term debt was $1,899 million as of December 31, 2013. | ||||||||||||||||||||
Delmarva Power & Light Co/De [Member] | |||||||||||||||||||||
Fair Value of Financial Assets and Liabilities Measured on Recurring Basis | The following tables set forth, by level within the fair value hierarchy, DPL’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2014 and 2013. 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. DPL’s assessment of the significance of a particular input to the fair value measurement requires the exercise of judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. | ||||||||||||||||||||
Fair Value Measurements at December 31, 2014 | |||||||||||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | |||||||||||||||||
Active Markets | Other | Unobservable | |||||||||||||||||||
for Identical | Observable | Inputs | |||||||||||||||||||
Instruments | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) (a) | (Level 2) (a) | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
ASSETS | |||||||||||||||||||||
Restricted cash equivalents | |||||||||||||||||||||
Treasury funds | $ | 5 | $ | 5 | $ | — | $ | — | |||||||||||||
Executive deferred compensation plan assets | |||||||||||||||||||||
Money market funds | 1 | 1 | — | — | |||||||||||||||||
Life insurance contracts | 1 | — | — | 1 | |||||||||||||||||
Total | $ | 7 | $ | 6 | $ | — | $ | 1 | |||||||||||||
LIABILITIES | |||||||||||||||||||||
Derivative instruments (b) | |||||||||||||||||||||
Natural gas (c) | $ | 4 | $ | 4 | $ | — | $ | — | |||||||||||||
Executive deferred compensation plan assets | |||||||||||||||||||||
Life insurance contracts | 1 | — | 1 | — | |||||||||||||||||
Total | $ | 5 | $ | 4 | $ | 1 | $ | — | |||||||||||||
(a) | There were no transfers of instruments between level 1 and level 2 valuation categories during the year ended December 31, 2014. | ||||||||||||||||||||
(b) | The fair value of derivative liabilities reflect netting by counterparty before the impact of collateral. | ||||||||||||||||||||
(c) | Represents natural gas swaps purchased by DPL as part of a natural gas hedging program approved by the DPSC. | ||||||||||||||||||||
Fair Value Measurements at December 31, 2013 | |||||||||||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | |||||||||||||||||
Active Markets | Other | Unobservable | |||||||||||||||||||
for Identical | Observable | Inputs | |||||||||||||||||||
Instruments | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) (a) | (Level 2) (a) | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
ASSETS | |||||||||||||||||||||
Derivative instruments (b) | |||||||||||||||||||||
Natural gas (c) | $ | 1 | $ | 1 | $ | — | $ | — | |||||||||||||
Executive deferred compensation plan assets | |||||||||||||||||||||
Money market funds | 1 | 1 | — | — | |||||||||||||||||
Life insurance contracts | 1 | — | — | 1 | |||||||||||||||||
Total | $ | 3 | $ | 2 | $ | — | $ | 1 | |||||||||||||
LIABILITIES | |||||||||||||||||||||
Executive deferred compensation plan assets | |||||||||||||||||||||
Life insurance contracts | $ | 1 | $ | — | $ | 1 | $ | — | |||||||||||||
Total | $ | 1 | $ | — | $ | 1 | $ | — | |||||||||||||
(a) | There were no transfers of instruments between level 1 and level 2 valuation categories during the year ended December 31, 2013. | ||||||||||||||||||||
(b) | The fair value of derivative assets reflect netting by counterparty before the impact of collateral. | ||||||||||||||||||||
(c) | Represents natural gas swaps purchased by DPL as part of a natural gas hedging program approved by the DPSC. | ||||||||||||||||||||
Reconciliations of Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | Reconciliations of the beginning and ending balances of DPL’s fair value measurements using significant unobservable inputs (Level 3) for the years ended December 31, 2014 and 2013 are shown below: | ||||||||||||||||||||
Year Ended | Year Ended | ||||||||||||||||||||
December 31, 2014 | December 31, 2013 | ||||||||||||||||||||
Life | Natural | Life | |||||||||||||||||||
Insurance | Gas | Insurance | |||||||||||||||||||
Contracts | Contracts | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Balance as of January 1 | $ | 1 | $ | (4 | ) | $ | 1 | ||||||||||||||
Total gains (losses) (realized and unrealized): | |||||||||||||||||||||
Included in income | — | — | — | ||||||||||||||||||
Included in accumulated other comprehensive loss | — | — | — | ||||||||||||||||||
Included in regulatory liabilities | — | — | — | ||||||||||||||||||
Purchases | — | — | — | ||||||||||||||||||
Issuances | — | — | — | ||||||||||||||||||
Settlements | — | 4 | — | ||||||||||||||||||
Transfers in (out) of Level 3 | — | — | — | ||||||||||||||||||
Balance as of December 31 | $ | 1 | $ | — | $ | 1 | |||||||||||||||
Fair Value of Financial Liabilities Measured on Recurring Basis | |||||||||||||||||||||
Fair Value Measurements at December 31, 2014 | |||||||||||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | |||||||||||||||||
Active Markets | Other | Unobservable | |||||||||||||||||||
for Identical | Observable | Inputs | |||||||||||||||||||
Instruments | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
LIABILITIES | |||||||||||||||||||||
Debt instruments | |||||||||||||||||||||
Long-term debt (a) | $ | 1,123 | $ | — | $ | 1,016 | $ | 107 | |||||||||||||
(a) | The carrying amount for Long-term debt was $1,071 million as of December 31, 2014. | ||||||||||||||||||||
Fair Value Measurements at December 31, 2013 | |||||||||||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | |||||||||||||||||
Active Markets | Other | Unobservable | |||||||||||||||||||
for Identical | Observable | Inputs | |||||||||||||||||||
Instruments | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
LIABILITIES | |||||||||||||||||||||
Debt instruments | |||||||||||||||||||||
Long-term debt (a) | $ | 960 | $ | — | $ | 850 | $ | 110 | |||||||||||||
(a) | The carrying amount for Long-term debt was $967 million as of December 31, 2013. | ||||||||||||||||||||
Atlantic City Electric Co [Member] | |||||||||||||||||||||
Fair Value of Financial Assets and Liabilities Measured on Recurring Basis | The following tables set forth by level within the fair value hierarchy ACE’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2014 and 2013. 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. ACE’s assessment of the significance of a particular input to the fair value measurement requires the exercise of judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. | ||||||||||||||||||||
Fair Value Measurements at December 31, 2014 | |||||||||||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | |||||||||||||||||
Active Markets | Other | Unobservable | |||||||||||||||||||
for Identical | Observable | Inputs | |||||||||||||||||||
Instruments | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) (a) | (Level 2) (a) | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
ASSETS | |||||||||||||||||||||
Restricted cash equivalents | |||||||||||||||||||||
Treasury fund | $ | 24 | $ | 24 | $ | — | $ | — | |||||||||||||
(a) | There were no transfers of instruments between level 1 and level 2 valuation categories during the year ended December 31, 2014. | ||||||||||||||||||||
Fair Value Measurements at December 31, 2013 | |||||||||||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | |||||||||||||||||
Active Markets | Other | Unobservable | |||||||||||||||||||
for Identical | Observable | Inputs | |||||||||||||||||||
Instruments | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) (a) | (Level 2) (a) | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
ASSETS | |||||||||||||||||||||
Restricted cash equivalents | |||||||||||||||||||||
Treasury fund | $ | 24 | $ | 24 | $ | — | $ | — | |||||||||||||
(a) | There were no transfers of instruments between level 1 and level 2 valuation categories during the year ended December 31, 2013. | ||||||||||||||||||||
Reconciliations of Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | A reconciliation of the beginning and ending balances of ACE’s fair value measurements using significant unobservable inputs (level 3) for the year ended December 31, 2013 is shown below: | ||||||||||||||||||||
Year Ended | |||||||||||||||||||||
December 31, 2013 | |||||||||||||||||||||
Capacity | |||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Balance as of January 1 | $ | (3 | ) | ||||||||||||||||||
Total gains (losses) (realized and unrealized): | |||||||||||||||||||||
Included in income | — | ||||||||||||||||||||
Included in accumulated other comprehensive loss | — | ||||||||||||||||||||
Included in regulatory liabilities and regulatory assets | 3 | ||||||||||||||||||||
Purchases | — | ||||||||||||||||||||
Issuances | — | ||||||||||||||||||||
Settlements | — | ||||||||||||||||||||
Transfers in (out) of level 3 | — | ||||||||||||||||||||
Balance as of December 31 | $ | — | |||||||||||||||||||
Fair Value of Financial Liabilities Measured on Recurring Basis | |||||||||||||||||||||
Fair Value Measurements at December 31, 2014 | |||||||||||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | |||||||||||||||||
Active Markets | Other | Unobservable | |||||||||||||||||||
for Identical | Observable | Inputs | |||||||||||||||||||
Instruments | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
LIABILITIES | |||||||||||||||||||||
Debt instruments | |||||||||||||||||||||
Long-term debt (a) | $ | 1,035 | $ | — | $ | 903 | $ | 132 | |||||||||||||
Transition Bonds (b) | 235 | — | 235 | — | |||||||||||||||||
Total | $ | 1,270 | $ | — | $ | 1,138 | $ | 132 | |||||||||||||
(a) | The carrying amount for Long-term debt was $903 million as of December 31, 2014. | ||||||||||||||||||||
(b) | The carrying amount for Transition Bonds, including amounts due within one year, was $215 million as of December 31, 2014. | ||||||||||||||||||||
Fair Value Measurements at December 31, 2013 | |||||||||||||||||||||
Description | Total | Quoted Prices in | Significant | Significant | |||||||||||||||||
Active Markets | Other | Unobservable | |||||||||||||||||||
for Identical | Observable | Inputs | |||||||||||||||||||
Instruments | Inputs | (Level 3) | |||||||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
LIABILITIES | |||||||||||||||||||||
Debt instruments | |||||||||||||||||||||
Long-term debt (a) | $ | 959 | $ | — | $ | 744 | $ | 215 | |||||||||||||
Transition Bonds (b) | 285 | — | 285 | — | |||||||||||||||||
Total | $ | 1,244 | $ | — | $ | 1,029 | $ | 215 | |||||||||||||
(a) | The carrying amount for Long-term debt was $860 million as of December 31, 2013. | ||||||||||||||||||||
(b) | The carrying amount for Transition Bonds, including amounts due within one year, was $255 million as of December 31, 2013. |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Schedule of Accrued Liabilities for Environmental Exposures | The total accrued liabilities for the environmental contingencies described below of PHI and its subsidiaries at December 31, 2014 are summarized as follows: | ||||||||||||||||||||
Legacy Generation | |||||||||||||||||||||
Transmission | Regulated | Non-Regulated | Total | ||||||||||||||||||
and Distribution | |||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Balance as of January 1 | $ | 19 | $ | 6 | $ | 5 | $ | 30 | |||||||||||||
Accruals | — | — | — | — | |||||||||||||||||
Payments | 2 | — | — | 2 | |||||||||||||||||
Balance as of December 31 | 17 | 6 | 5 | 28 | |||||||||||||||||
Less amounts in Other Current Liabilities | 3 | 1 | — | 4 | |||||||||||||||||
Amounts in Other Deferred Credits | $ | 14 | $ | 5 | $ | 5 | $ | 24 | |||||||||||||
Schedule of Commitments and Obligations | As of December 31, 2014, PHI and its subsidiaries were parties to a variety of agreements pursuant to which they were guarantors for standby letters of credit, energy procurement obligations, and other commitments and obligations. The commitments and obligations, in millions of dollars, were as follows: | ||||||||||||||||||||
Guarantor | |||||||||||||||||||||
PHI | Pepco | DPL | ACE | Total | |||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Guarantees associated with disposal of Conectiv Energy assets (a) | $ | 13 | $ | — | $ | — | $ | — | $ | 13 | |||||||||||
Guaranteed lease residual values (b) | 3 | 5 | 7 | 5 | 20 | ||||||||||||||||
Total | $ | 16 | $ | 5 | $ | 7 | $ | 5 | $ | 33 | |||||||||||
(a) | Represents guarantees by PHI of Conectiv Energy’s derivatives portfolio transferred in connection with the disposition of Conectiv Energy’s wholesale business. The derivative portfolio guarantee is currently $13 million and covers Conectiv Energy’s performance prior to the assignment. This guarantee will remain in effect until the end of 2015. | ||||||||||||||||||||
(b) | Represents the maximum potential obligation in the event that the fair value of certain leased equipment and fleet vehicles is zero at the end of the maximum lease term. The maximum lease term associated with these assets ranges from 3 to 8 years. The maximum potential obligation at the end of the minimum lease term would be $52 million, $10 million of which is a guarantee by PHI, $13 million by Pepco, $16 million by DPL and $13 million by ACE. The minimum lease term associated with these assets ranges from 1 to 4 years. Historically, payments under the guarantees have not been made and PHI believes the likelihood of payments being required under the guarantees is remote. | ||||||||||||||||||||
Potomac Electric Power Co [Member] | |||||||||||||||||||||
Schedule of Accrued Liabilities for Environmental Exposures | The total accrued liabilities for the environmental contingencies of Pepco described below at December 31, 2014 are summarized as follows: | ||||||||||||||||||||
Transmission | Legacy | Total | |||||||||||||||||||
and | Generation - | ||||||||||||||||||||
Distribution | Regulated | ||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Balance as of January 1 | $ | 18 | $ | 3 | $ | 21 | |||||||||||||||
Accruals | — | — | — | ||||||||||||||||||
Payments | 2 | — | 2 | ||||||||||||||||||
Balance as of December 31 | 16 | 3 | 19 | ||||||||||||||||||
Less amounts in Other Current Liabilities | 2 | — | 2 | ||||||||||||||||||
Amounts in Other Deferred Credits | $ | 14 | $ | 3 | $ | 17 | |||||||||||||||
Delmarva Power & Light Co/De [Member] | |||||||||||||||||||||
Schedule of Accrued Liabilities for Environmental Exposures | The total accrued liabilities for the environmental contingencies of DPL described below at December 31, 2014 are summarized as follows: | ||||||||||||||||||||
Transmission | Legacy | Total | |||||||||||||||||||
and Distribution | Generation - | ||||||||||||||||||||
Regulated | |||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Balance as of January 1 | $ | 1 | $ | 2 | $ | 3 | |||||||||||||||
Accruals | — | — | — | ||||||||||||||||||
Payments | — | — | — | ||||||||||||||||||
Balance as of December 31 | 1 | 2 | 3 | ||||||||||||||||||
Less amounts in Other Current Liabilities | 1 | 1 | 2 | ||||||||||||||||||
Amounts in Other Deferred Credits | $ | — | $ | 1 | $ | 1 | |||||||||||||||
Atlantic City Electric Co [Member] | |||||||||||||||||||||
Schedule of Accrued Liabilities for Environmental Exposures | The total accrued liabilities for the environmental contingencies of ACE described below at December 31, 2014 are summarized as follows: | ||||||||||||||||||||
Legacy Generation - | |||||||||||||||||||||
Regulated | |||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||
Balance as of January 1 | $ | 1 | |||||||||||||||||||
Accruals | — | ||||||||||||||||||||
Payments | — | ||||||||||||||||||||
Balance as of December 31 | 1 | ||||||||||||||||||||
Less amounts in Other Current Liabilities | — | ||||||||||||||||||||
Amounts in Other Deferred Credits | $ | 1 | |||||||||||||||||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Equity [Abstract] | |||||||||||||
Schedule of Components of Other Comprehensive Loss | The components of Pepco Holdings’ AOCL relating to continuing and discontinued operations are as follows. For additional information, see the consolidated statements of comprehensive income. | ||||||||||||
Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(millions of dollars) | |||||||||||||
Balance as of January 1 | $ | (34 | ) | $ | (48 | ) | $ | (63 | ) | ||||
Treasury Lock | |||||||||||||
Balance as of January 1 | (9 | ) | (10 | ) | (10 | ) | |||||||
Amount of pre-tax loss reclassified to Interest expense | 1 | 1 | — | ||||||||||
Income tax expense | 1 | — | — | ||||||||||
Balance as of December 31 | (9 | ) | (9 | ) | (10 | ) | |||||||
Pension and Other Postretirement Benefits | |||||||||||||
Balance as of January 1 | (25 | ) | (32 | ) | (24 | ) | |||||||
Amount of amortization of net prior service cost and actuarial loss reclassified to Other operation and maintenance expense | 5 | 5 | 5 | ||||||||||
Amount of net prior service cost and actuarial (loss) gain arising during the year | (25 | ) | 8 | (19 | ) | ||||||||
Income tax (benefit) expense | (8 | ) | 6 | (6 | ) | ||||||||
Balance as of December 31 | (37 | ) | (25 | ) | (32 | ) | |||||||
Commodity Derivatives | |||||||||||||
Balance as of January 1 | — | (6 | ) | (29 | ) | ||||||||
Amount of net pre-tax loss reclassified to (Loss) income from discontinued operations before income tax | — | 10 | 39 | ||||||||||
Income tax expense | — | 4 | 16 | ||||||||||
Balance as of December 31 | — | — | (6 | ) | |||||||||
Balance as of December 31 | $ | (46 | ) | $ | (34 | ) | $ | (48 | ) | ||||
Quarterly_Financial_Informatio1
Quarterly Financial Information (Tables) | 12 Months Ended | ||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||
Schedule of Quarterly Financial Information | 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 shares of common stock outstanding during the year. | ||||||||||||||||||||||||||
2014 | |||||||||||||||||||||||||||
First | Second | Third | Fourth | Total | |||||||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||||||||||||
(millions of dollars, except per share amounts) | |||||||||||||||||||||||||||
Total Operating Revenue (a) | $ | 1,330 | $ | 1,117 | $ | 1,313 | $ | 1,118 | $ | 4,878 | |||||||||||||||||
Total Operating Expenses (b) | 1,157 | 966 | 1,147 | 1,004 | (c) | 4,274 | |||||||||||||||||||||
Operating Income | 173 | 151 | 166 | 114 | 604 | ||||||||||||||||||||||
Other Expenses | (52 | ) | (53 | ) | (53 | ) | (66 | ) | (224 | ) | |||||||||||||||||
Income from Continuing Operations Before Income Tax Expense | 121 | 98 | 113 | 48 | 380 | ||||||||||||||||||||||
Income Tax Expense Related to Continuing Operations | 46 | 45 | 34 | 13 | 138 | ||||||||||||||||||||||
Net Income | $ | 75 | $ | 53 | $ | 79 | $ | 35 | $ | 242 | |||||||||||||||||
Basic and Diluted Earnings Per Share of Common Stock: | |||||||||||||||||||||||||||
Earnings Per Share of Common Stock | $ | 0.3 | $ | 0.21 | $ | 0.31 | $ | 0.14 | $ | 0.96 | |||||||||||||||||
Cash Dividends Per Share of Common Stock | $ | 0.27 | $ | 0.27 | $ | 0.27 | $ | 0.27 | $ | 1.08 | |||||||||||||||||
(a) | During the fourth quarter of 2014, ACE reversed unbilled revenue of $3 million ($2 million after-tax) to correct an error that had overstated operating revenue in the third quarter of 2014. | ||||||||||||||||||||||||||
(b) | Includes pre-tax impairment losses of $53 million ($32 million after-tax) and $28 million ($16 million after-tax) in the third and fourth quarters of 2014, respectively, at Pepco Energy Services associated with its combined heat and power thermal generating facilities and operations in Atlantic City. | ||||||||||||||||||||||||||
(c) | Includes a charge of $3 million ($2 million after-tax) to correct a prior period error related to the recoverability of certain regulatory assets at ACE. | ||||||||||||||||||||||||||
2013 | |||||||||||||||||||||||||||
First | Second | Third | Fourth | Total | |||||||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||||||||||||
(millions of dollars, except per share amounts) | |||||||||||||||||||||||||||
Total Operating Revenue | $ | 1,180 | $ | 1,051 | $ | 1,344 | $ | 1,091 | $ | 4,666 | |||||||||||||||||
Total Operating Expenses | 1,047 | 906 | 1,109 | 936 | (a) | 3,998 | |||||||||||||||||||||
Operating Income | 133 | 145 | 235 | 155 | 668 | ||||||||||||||||||||||
Other Expenses | (59 | ) | (62 | ) | (60 | ) | (58 | ) | (239 | ) | |||||||||||||||||
Income From Continuing Operations Before Income Tax Expense | 74 | 83 | 175 | 97 | 429 | ||||||||||||||||||||||
Income Tax Expense Related to Continuing Operations | 185 | (b) | 30 | 65 | 39 | (c) | 319 | ||||||||||||||||||||
Net (Loss) Income From Continuing Operations | (111 | ) | 53 | 110 | 58 | 110 | |||||||||||||||||||||
(Loss) Income from Discontinued Operations, net of taxes | (319 | ) | (11 | ) | 8 | — | (322 | ) | |||||||||||||||||||
Net (Loss) Income | $ | (430 | ) | $ | 42 | $ | 118 | $ | 58 | $ | (212 | ) | |||||||||||||||
Basic and Diluted Earnings Per Share of Common Stock: | |||||||||||||||||||||||||||
(Loss) Earnings Per Share of Common Stock from Continuing Operations | $ | (0.47 | ) | $ | 0.21 | $ | 0.44 | $ | 0.23 | $ | 0.45 | ||||||||||||||||
(Loss) Earnings Per Share of Common Stock from Discontinued Operations | $ | (1.35 | ) | $ | (0.04 | ) | $ | 0.04 | $ | — | $ | (1.31 | ) | ||||||||||||||
(Loss) Earnings Per Share of Common Stock | $ | (1.82 | ) | $ | 0.17 | $ | 0.48 | $ | 0.23 | $ | (0.86 | ) | |||||||||||||||
Cash Dividends Per Share of Common Stock | $ | 0.27 | $ | 0.27 | $ | 0.27 | $ | 0.27 | $ | 1.08 | |||||||||||||||||
(a) | Includes a pre-tax impairment loss of $4 million ($3 million after-tax) at Pepco Energy Services associated with a landfill gas-fired electric generation facility. | ||||||||||||||||||||||||||
(b) | Includes an income tax charge of $56 million (after-tax) primarily associated with interest on uncertain and effectively settled tax positions and an income tax charge of $101 million associated with the establishment of valuation allowances against certain deferred tax assets of PCI. | ||||||||||||||||||||||||||
(c) | Includes an income tax charge of $4 million (after-tax) to correct a prior period error related to Pepco’s deferred income taxes. | ||||||||||||||||||||||||||
Potomac Electric Power Co [Member] | |||||||||||||||||||||||||||
Schedule of Quarterly Financial Information | 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. | ||||||||||||||||||||||||||
2014 | |||||||||||||||||||||||||||
First | Second | Third | Fourth | Total | |||||||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||||
Total Operating Revenue | $ | 535 | $ | 508 | $ | 587 | $ | 471 | $ | 2,101 | |||||||||||||||||
Total Operating Expenses | 469 | 414 | 462 | 408 | 1,753 | ||||||||||||||||||||||
Operating Income | 66 | 94 | 125 | 63 | 348 | ||||||||||||||||||||||
Other Expenses | (18 | ) | (20 | ) | (20 | ) | (27 | ) | (85 | ) | |||||||||||||||||
Income Before Income Tax Expense | 48 | 74 | 105 | 36 | 263 | ||||||||||||||||||||||
Income Tax Expense | 16 | 28 | 38 | 10 | 92 | ||||||||||||||||||||||
Net Income | $ | 32 | $ | 46 | $ | 67 | $ | 26 | $ | 171 | |||||||||||||||||
2013 | |||||||||||||||||||||||||||
First | Second | Third | Fourth | Total | |||||||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||||
Total Operating Revenue | $ | 477 | $ | 469 | $ | 605 | $ | 475 | $ | 2,026 | |||||||||||||||||
Total Operating Expenses | 430 | 389 | 476 | 410 | 1,705 | ||||||||||||||||||||||
Operating Income | 47 | 80 | 129 | 65 | 321 | ||||||||||||||||||||||
Other Expenses | (22 | ) | (23 | ) | (23 | ) | (24 | ) | (92 | ) | |||||||||||||||||
Income Before Income Tax Expense | 25 | 57 | 106 | 41 | 229 | ||||||||||||||||||||||
Income Tax Expense | 2 | (a) | 20 | 40 | 17 | (b) | 79 | ||||||||||||||||||||
Net Income | $ | 23 | $ | 37 | $ | 66 | $ | 24 | $ | 150 | |||||||||||||||||
(a) | Includes tax benefits of $5 million (after-tax) allocated to Pepco associated with interest on uncertain and effectively settled tax positions resulting from a change in assessment of tax benefits associated with the cross-border energy leases of a PHI affiliate. | ||||||||||||||||||||||||||
(b) | Includes an income tax charge of $4 million (after-tax) to correct a prior period error related to Pepco’s deferred income taxes. | ||||||||||||||||||||||||||
Delmarva Power & Light Co/De [Member] | |||||||||||||||||||||||||||
Schedule of Quarterly Financial Information | 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. | ||||||||||||||||||||||||||
2014 | |||||||||||||||||||||||||||
First | Second | Third | Fourth | Total | |||||||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||||
Total Operating Revenue | $ | 397 | $ | 279 | $ | 309 | $ | 308 | $ | 1,293 | |||||||||||||||||
Total Operating Expenses | 326 | 239 | 264 | 257 | 1,086 | ||||||||||||||||||||||
Operating Income | 71 | 40 | 45 | 51 | 207 | ||||||||||||||||||||||
Other Expenses | (9 | ) | (8 | ) | (9 | ) | (12 | ) | (38 | ) | |||||||||||||||||
Income Before Income Tax Expense | 62 | 32 | 36 | 39 | 169 | ||||||||||||||||||||||
Income Tax Expense | 25 | 13 | 13 | 14 | 65 | ||||||||||||||||||||||
Net Income | $ | 37 | $ | 19 | $ | 23 | $ | 25 | $ | 104 | |||||||||||||||||
2013 | |||||||||||||||||||||||||||
First | Second | Third | Fourth | Total | |||||||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||||
Total Operating Revenue | $ | 370 | $ | 266 | $ | 296 | $ | 312 | $ | 1,244 | |||||||||||||||||
Total Operating Expenses | 317 | 235 | 249 | 258 | 1,059 | ||||||||||||||||||||||
Operating Income | 53 | 31 | 47 | 54 | 185 | ||||||||||||||||||||||
Other Expenses | (11 | ) | (10 | ) | (10 | ) | (9 | ) | (40 | ) | |||||||||||||||||
Income Before Income Tax Expense | 42 | 21 | 37 | 45 | 145 | ||||||||||||||||||||||
Income Tax Expense | 16 | 9 | 14 | 17 | 56 | ||||||||||||||||||||||
Net Income | $ | 26 | $ | 12 | $ | 23 | $ | 28 | $ | 89 | |||||||||||||||||
Atlantic City Electric Co [Member] | |||||||||||||||||||||||||||
Schedule of Quarterly Financial Information | 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. | ||||||||||||||||||||||||||
2014 | |||||||||||||||||||||||||||
First | Second | Third | Fourth | Total | |||||||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||||
Total Operating Revenue(a) | $ | 340 | $ | 253 | $ | 347 | $ | 273 | $ | 1,213 | |||||||||||||||||
Total Operating Expenses | 309 | 228 | 295 | 246 | (b) | 1,078 | |||||||||||||||||||||
Operating Income | 31 | 25 | 52 | 27 | 135 | ||||||||||||||||||||||
Other Expenses | (15 | ) | (15 | ) | (15 | ) | (17 | ) | (62 | ) | |||||||||||||||||
Income Before Income Tax Expense | 16 | 10 | 37 | 10 | 73 | ||||||||||||||||||||||
Income Tax Expense | 6 | 4 | 14 | 4 | 28 | ||||||||||||||||||||||
Net Income | $ | 10 | $ | 6 | $ | 23 | $ | 6 | $ | 45 | |||||||||||||||||
(a) | During the fourth quarter of 2014, ACE reversed unbilled revenue of $3 million ($2 million after-tax) to correct an error that had overstated operating revenue in the third quarter of 2014. | ||||||||||||||||||||||||||
(b) | Includes a charge of $3 million ($2 million after-tax) to correct a prior period error related to the recoverability of certain regulatory assets. | ||||||||||||||||||||||||||
2013 | |||||||||||||||||||||||||||
First | Second | Third | Fourth | Total | |||||||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||||||||||||
(millions of dollars) | |||||||||||||||||||||||||||
Total Operating Revenue | $ | 277 | $ | 271 | $ | 396 | $ | 258 | $ | 1,202 | |||||||||||||||||
Total Operating Expenses | 254 | 242 | 341 | 229 | 1,066 | ||||||||||||||||||||||
Operating Income | 23 | 29 | 55 | 29 | 136 | ||||||||||||||||||||||
Other Expenses | (17 | ) | (18 | ) | (17 | ) | (15 | ) | (67 | ) | |||||||||||||||||
Income Before Income Tax (Benefit) Expense | 6 | 11 | 38 | 14 | 69 | ||||||||||||||||||||||
Income Tax (Benefit) Expense | (3 | ) | 4 | 13 | 5 | 19 | |||||||||||||||||||||
Net Income | $ | 9 | $ | 7 | $ | 25 | $ | 9 | $ | 50 |
Discontinued_Operations_Tables
Discontinued Operations (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
(Loss) Income from Discontinued Operations, Net of Income Taxes | PHI’s (loss) income from discontinued operations, net of income taxes, is comprised of the following: | ||||||||||||
For the Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(millions of dollars) | |||||||||||||
Cross-border energy lease investments | $ | — | $ | (327 | ) | $ | 41 | ||||||
Pepco Energy Services’ retail electric and natural gas supply businesses | — | 5 | 26 | ||||||||||
(Loss) income from discontinued operations, net of income taxes | $ | — | $ | (322 | ) | $ | 67 | ||||||
Operating Results for Cross-Border Energy Lease Investments | The operating results for the cross-border energy lease investments are as follows: | ||||||||||||
For the Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(millions of dollars) | |||||||||||||
Operating revenue from PHI’s cross-border energy lease investments | $ | — | $ | 7 | $ | 50 | |||||||
Non-cash charge to reduce carrying value of PHI’s cross-border energy lease investments | — | (373 | ) | — | |||||||||
Total operating revenue | $ | — | $ | (366 | ) | $ | 50 | ||||||
(Loss) income from operations of discontinued operations, net of | $ | — | $ | (325 | ) | $ | 32 | ||||||
income taxes (a) | |||||||||||||
Net (losses) gains associated with the early termination of the cross-border energy lease investments, net of income taxes (b) | — | (2 | ) | 9 | |||||||||
(Loss) income from discontinued operations, net of income taxes | $ | — | $ | (327 | ) | $ | 41 | ||||||
(a) | Includes income tax (benefit) expense of approximately zero, $(44) million and $5 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||||||
(b) | Includes income tax (benefit) expense of approximately zero, $(1) million and $30 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||||||
Operating Results for Retail Electric and Natural Gas Supply Businesses | The operating results for the retail electric and natural gas supply businesses of Pepco Energy Services are as follows: | ||||||||||||
For the Year Ended | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(millions of dollars) | |||||||||||||
Operating revenue | $ | — | $ | 84 | $ | 415 | |||||||
Income from operations of discontinued operations, net of income taxes | $ | — | $ | 4 | $ | 26 | |||||||
Net gains associated with accelerated disposition of retail electric and natural gas contracts, net of income taxes | 1 | — | |||||||||||
Income from discontinued operations, net of income taxes (a) | $ | — | $ | 5 | $ | 26 | |||||||
(a) | Includes income tax expense of approximately zero, $3 million and $18 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||||||
Discontinued Operations [Member] | |||||||||||||
Derivative Gain (Loss) for Retail Electric and Natural Gas Supply Businesses | For the years ended December 31, 2014, 2013, and 2012, the amount of the derivative gain (loss) for the retail electric and natural gas supply businesses of Pepco Energy Services recognized in Income (loss) from discontinued operations, net of income taxes is provided in the table below: | ||||||||||||
For the Year Ended | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(millions of dollars) | |||||||||||||
Reclassification of mark-to-market to realized on settlement of contracts | $ | — | $ | 10 | $ | 27 | |||||||
Unrealized mark-to-market loss | — | — | (3 | ) | |||||||||
Total net gain | $ | — | $ | 10 | $ | 24 | |||||||
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Potomac Electric Power Co [Member] | |||||||||||||
Schedule of Related Party Transactions Included in Financial Statements | As of December 31, 2014 and 2013, Pepco had the following balances on its balance sheets due to related parties: | ||||||||||||
2014 | 2013 | ||||||||||||
(millions of dollars) | |||||||||||||
Payable to Related Party (current) (a) | |||||||||||||
PHI Service Company | $ | (27 | ) | $ | (25 | ) | |||||||
Pepco Energy Services (b) | (2 | ) | (7 | ) | |||||||||
Other | (1 | ) | — | ||||||||||
Total | $ | (30 | ) | $ | (32 | ) | |||||||
(a) | Included in Accounts payable due to associated companies. | ||||||||||||
(b) | Pepco bills customers on behalf of Pepco Energy Services where Pepco Energy Services has performed work for certain government agencies under a General Services Administration area-wide agreement. Amount also includes charges for utility work performed by Pepco Energy Services on behalf of Pepco. Prior to the wind-down of Pepco Energy Services’ retail electric and natural gas businesses, Pepco billed customers on behalf of Pepco Energy Services where customers had selected Pepco Energy Services as their alternative energy supplier. | ||||||||||||
Delmarva Power & Light Co/De [Member] | |||||||||||||
Schedule of Related Party Transactions Included in Financial Statements | In addition to the PHI Service Company charges described above, DPL’s financial statements include the following related party transactions in its statements of income: | ||||||||||||
For the Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(millions of dollars) | |||||||||||||
Intercompany lease transactions (a) | $ | 5 | $ | 4 | $ | 4 | |||||||
(a) | Included in Electric revenue. | ||||||||||||
As of December 31, 2014 and 2013, DPL had the following balances on its balance sheets due to related parties: | |||||||||||||
2014 | 2013 | ||||||||||||
(millions of dollars) | |||||||||||||
Payable to Related Party (current) (a) | |||||||||||||
PHI Service Company | $ | (18 | ) | $ | (22 | ) | |||||||
Other | 1 | — | |||||||||||
Total | $ | (17 | ) | $ | (22 | ) | |||||||
(a) | Included in Accounts payable due to associated companies. | ||||||||||||
Atlantic City Electric Co [Member] | |||||||||||||
Schedule of Related Party Transactions Included in Financial Statements | In addition to the PHI Service Company charges described above, ACE’s consolidated financial statements include the following related party transactions in its consolidated statements of income: | ||||||||||||
For the Year Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
(millions of dollars) | |||||||||||||
Meter reading services provided by Millennium Account Services LLC (an ACE affiliate) (a) | $ | (4 | ) | $ | (4 | ) | $ | (4 | ) | ||||
Intercompany use revenue (b) | 2 | 3 | 3 | ||||||||||
(a) | Included in Other operation and maintenance expense. | ||||||||||||
(b) | Included in Operating revenue. | ||||||||||||
As of December 31, 2014 and 2013, ACE had the following balances on its consolidated balance sheets due to related parties: | |||||||||||||
2014 | 2013 | ||||||||||||
(millions of dollars) | |||||||||||||
Payable to Related Party (current) (a) | |||||||||||||
PHI Service Company | $ | (14 | ) | $ | (15 | ) | |||||||
Other | (1 | ) | — | ||||||||||
Total | $ | (15 | ) | $ | (15 | ) | |||||||
(a) | Included in Accounts payable due to associated companies. |
Organization_Additional_Inform
Organization - Additional Information (Detail) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended | 0 Months Ended | ||||
Apr. 29, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Oct. 27, 2014 | Jul. 29, 2014 | Apr. 30, 2014 | Jan. 26, 2015 | Mar. 31, 2013 | |
Reorganization [Line Items] | ||||||||
Common stock, par value | $0.01 | $0.01 | $0.01 | |||||
Right to receive cash under cancellation of shares | $27.25 | |||||||
Non-voting Series A Preferred Stock, maximum number of shares issued | 1,800 | 1,800 | ||||||
Amount Of Non Voting Series A Preferred Stock Purchase price | $126,000,000 | |||||||
Non-voting Series A Preferred Stock, maximum aggregate consideration | 180,000,000 | |||||||
Termination fee | 259,000,000 | |||||||
Reimbursement of termination related expenses | 40,000,000 | |||||||
Redemption of preferred stock at purchase price | $10,000 | |||||||
PCI recorded deferred tax asset in prior years | 101,000,000 | 101,000,000 | ||||||
Establishment of valuation allowances on deferred tax assets | 101,000,000 | 101,000,000 | ||||||
Deferred tax assets valuation allowances charged off | 101,000,000 | |||||||
Potomac Electric Power Co [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Common stock, par value | $0.01 | $0.01 | $0.01 | |||||
Right to receive cash under cancellation of shares | $27.25 | |||||||
Non-voting Series A Preferred Stock, maximum number of shares issued | 1,800 | 1,800 | ||||||
Non-voting Series A Preferred Stock, maximum aggregate consideration | 180,000,000 | |||||||
Termination fee | 259,000,000 | |||||||
Reimbursement of termination related expenses | 40,000,000 | |||||||
Redemption of preferred stock at purchase price | $10,000 | |||||||
Delmarva Power & Light Co/De [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Common stock, par value | $0.01 | $2.25 | $2.25 | |||||
Right to receive cash under cancellation of shares | $27.25 | |||||||
Non-voting Series A Preferred Stock, maximum number of shares issued | 1,800 | 1,800 | ||||||
Non-voting Series A Preferred Stock, maximum aggregate consideration | 180,000,000 | |||||||
Termination fee | 259,000,000 | |||||||
Reimbursement of termination related expenses | 40,000,000 | |||||||
Redemption of preferred stock at purchase price | $10,000 | |||||||
Atlantic City Electric Co [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Common stock, par value | $0.01 | $3 | $3 | |||||
Right to receive cash under cancellation of shares | $27.25 | |||||||
Non-voting Series A Preferred Stock, maximum number of shares issued | 1,800 | 1,800 | ||||||
Non-voting Series A Preferred Stock, maximum aggregate consideration | 180,000,000 | |||||||
Termination fee | 259,000,000 | |||||||
Reimbursement of termination related expenses | 40,000,000 | |||||||
Redemption of preferred stock at purchase price | $10,000 | |||||||
Non-Voting Series A Preferred Stock [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Issuance of non-voting Series A Preferred Stock, shares issued | 9,000 | |||||||
Non-voting Series A Preferred Stock, par value | $0.01 | |||||||
Non-voting Series A Preferred Stock, shares purchased price | 90,000,000 | |||||||
Amount Of Non Voting Series A Preferred Stock Purchase price | 18,000,000 | 18,000,000 | ||||||
Non-voting Series A Preferred Stock, cumulative, non-participating cash dividend | 0.10% | |||||||
Non-Voting Series A Preferred Stock [Member] | Potomac Electric Power Co [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Issuance of non-voting Series A Preferred Stock, shares issued | 9,000 | |||||||
Non-voting Series A Preferred Stock, par value | $0.01 | |||||||
Non-voting Series A Preferred Stock, shares purchased price | 90,000,000 | |||||||
Amount Of Non Voting Series A Preferred Stock Purchase price | 18,000,000 | 18,000,000 | ||||||
Non-voting Series A Preferred Stock, cumulative, non-participating cash dividend | 0.10% | |||||||
Non-Voting Series A Preferred Stock [Member] | Delmarva Power & Light Co/De [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Issuance of non-voting Series A Preferred Stock, shares issued | 9,000 | |||||||
Non-voting Series A Preferred Stock, par value | $0.01 | |||||||
Non-voting Series A Preferred Stock, shares purchased price | 90,000,000 | |||||||
Amount Of Non Voting Series A Preferred Stock Purchase price | 18,000,000 | 18,000,000 | ||||||
Non-voting Series A Preferred Stock, cumulative, non-participating cash dividend | 0.10% | |||||||
Non-Voting Series A Preferred Stock [Member] | Atlantic City Electric Co [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Issuance of non-voting Series A Preferred Stock, shares issued | 9,000 | |||||||
Non-voting Series A Preferred Stock, par value | $0.01 | |||||||
Non-voting Series A Preferred Stock, shares purchased price | 90,000,000 | |||||||
Amount Of Non Voting Series A Preferred Stock Purchase price | 18,000,000 | 18,000,000 | ||||||
Non-voting Series A Preferred Stock, cumulative, non-participating cash dividend | 0.10% | |||||||
Terminations Due to New Acquisition Proposal [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Termination fee | 293,000,000 | |||||||
Terminations Due to New Acquisition Proposal [Member] | Potomac Electric Power Co [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Termination fee | 293,000,000 | |||||||
Terminations Due to New Acquisition Proposal [Member] | Delmarva Power & Light Co/De [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Termination fee | 293,000,000 | |||||||
Terminations Due to New Acquisition Proposal [Member] | Atlantic City Electric Co [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Termination fee | 293,000,000 | |||||||
Subsequent Event [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Non-voting Series A Preferred Stock, maximum number of shares issued | 1,800 | |||||||
Subsequent Event [Member] | Potomac Electric Power Co [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Non-voting Series A Preferred Stock, maximum number of shares issued | 1,800 | |||||||
Subsequent Event [Member] | Delmarva Power & Light Co/De [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Non-voting Series A Preferred Stock, maximum number of shares issued | 1,800 | |||||||
Subsequent Event [Member] | Atlantic City Electric Co [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Non-voting Series A Preferred Stock, maximum number of shares issued | 1,800 | |||||||
Subsequent Event [Member] | Non-Voting Series A Preferred Stock [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Amount Of Non Voting Series A Preferred Stock Purchase price | 18,000,000 | |||||||
Subsequent Event [Member] | Non-Voting Series A Preferred Stock [Member] | Potomac Electric Power Co [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Amount Of Non Voting Series A Preferred Stock Purchase price | 18,000,000 | |||||||
Subsequent Event [Member] | Non-Voting Series A Preferred Stock [Member] | Delmarva Power & Light Co/De [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Amount Of Non Voting Series A Preferred Stock Purchase price | 18,000,000 | |||||||
Subsequent Event [Member] | Non-Voting Series A Preferred Stock [Member] | Atlantic City Electric Co [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Amount Of Non Voting Series A Preferred Stock Purchase price | $18,000,000 | |||||||
Maximum [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Non-voting Series A Preferred Stock, maximum number of shares issued | 18,000 | |||||||
Maximum [Member] | Potomac Electric Power Co [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Non-voting Series A Preferred Stock, maximum number of shares issued | 18,000 | |||||||
Maximum [Member] | Delmarva Power & Light Co/De [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Non-voting Series A Preferred Stock, maximum number of shares issued | 18,000 | |||||||
Maximum [Member] | Atlantic City Electric Co [Member] | ||||||||
Reorganization [Line Items] | ||||||||
Non-voting Series A Preferred Stock, maximum number of shares issued | 18,000 |
Significant_Accounting_Policie3
Significant Accounting Policies - Additional Information (Detail) (USD $) | 12 Months Ended | |||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2010 |
Significant Accounting Policies [Line Items] | ||||
Unbilled revenue | $172 | $177 | ||
Taxes included in gross revenues | 321 | 346 | 356 | |
Restricted stock awards vesting period | 1 year | 1 year | ||
Unbilled receivables billing period | 1 month | |||
Estimated fair value of an asset | Greater than 50% | |||
AFUDC for borrowed funds | 7 | 7 | 7 | |
AFUDC for equity component | 13 | 11 | 14 | |
Number of subsidiaries, allocated | 3 | |||
Retained earnings | 565 | 595 | ||
Asset Removal Costs [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Regulatory liabilities | 250 | 275 | ||
Maximum [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Original maturities of cash and cash equivalents | 3 months | |||
Time-Based Restricted Stock [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Restricted stock awards vesting period | 3 years | |||
Performance Based Restricted Stock Units [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Restricted stock awards vesting period | 3 years | |||
Potomac Electric Power Co [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Unbilled revenue | 77 | 80 | ||
Taxes included in gross revenues | 304 | 318 | 324 | |
Unbilled receivables billing period | 1 month | |||
Awards received from the U.S. DOE | 149 | |||
AFUDC for borrowed funds | 5 | 5 | 4 | |
AFUDC for equity component | 10 | 9 | 8 | |
Preferred stock, shares outstanding | 0 | |||
Retained earnings | 1,077 | 992 | ||
Potomac Electric Power Co [Member] | Asset Removal Costs [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Regulatory liabilities | 84 | 102 | ||
Potomac Electric Power Co [Member] | Maximum [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Original maturities of cash and cash equivalents | 3 months | |||
Potomac Electric Power Co [Member] | Transmission and Distribution [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Annual Depreciation Rate | 2.30% | 2.20% | 2.50% | |
Atlantic City Electric Co [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Unbilled revenue | 32 | 36 | ||
Taxes included in gross revenues | 1 | 11 | 15 | |
Unbilled receivables billing period | 1 month | |||
Awards received from the U.S. DOE | 19 | |||
AFUDC for borrowed funds | 1 | 2 | ||
AFUDC for equity component | 1 | 3 | ||
Retained earnings | 209 | 190 | ||
Securitization debt capitalization rate | 30.00% | |||
Prior period item reclassification adjustment in Net cash from operating activities | 246 | 133 | ||
Prior period item reclassification adjustment change in Net cash from operating activities | 5 | 3 | ||
Net Cash From Operating Activities | 241 | 136 | ||
Prior period item reclassification adjustment in cash from financing activities | 7 | 37 | ||
Prior period item reclassification adjustment Change in cash from financing activities | 5 | 3 | ||
Net Cash From Financing Activities | 12 | 34 | ||
Atlantic City Electric Co [Member] | Maximum [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Original maturities of cash and cash equivalents | 3 months | |||
AFUDC for borrowed funds | 1 | |||
AFUDC for equity component | 1 | |||
Atlantic City Electric Co [Member] | Transmission and Distribution [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Annual Depreciation Rate | 2.60% | 2.80% | 3.00% | |
Delmarva Power & Light Co/De [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Unbilled revenue | 63 | 61 | ||
Taxes included in gross revenues | 16 | 17 | 15 | |
Unbilled receivables billing period | 1 month | |||
Estimated fair value of an asset | Greater than 50% | |||
AFUDC for borrowed funds | 1 | 2 | 2 | |
AFUDC for equity component | 2 | 2 | 3 | |
Preferred stock, shares outstanding | 0 | |||
Retained earnings | 641 | 637 | ||
Delmarva Power & Light Co/De [Member] | Asset Removal Costs [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Regulatory liabilities | $166 | $173 | ||
Delmarva Power & Light Co/De [Member] | Maximum [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Original maturities of cash and cash equivalents | 3 months | |||
Delmarva Power & Light Co/De [Member] | Transmission and Distribution [Member] | ||||
Significant Accounting Policies [Line Items] | ||||
Annual Depreciation Rate | 2.60% | 2.60% | 2.70% |
Significant_Accounting_Policie4
Significant Accounting Policies - Annual Depreciation Rates (Detail) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Transmission and Distribution [Member] | Potomac Electric Power Co [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Annual Depreciation Rate | 2.30% | 2.20% | 2.50% |
Transmission and Distribution [Member] | Delmarva Power & Light Co/De [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Annual Depreciation Rate | 2.60% | 2.60% | 2.70% |
Transmission and Distribution [Member] | Atlantic City Electric Co [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Annual Depreciation Rate | 2.60% | 2.80% | 3.00% |
Transmission and Distribution [Member] | Pepco Energy Services [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Annual Depreciation Rate | 0.00% | ||
Generation [Member] | Potomac Electric Power Co [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Annual Depreciation Rate | 0.00% | ||
Generation [Member] | Delmarva Power & Light Co/De [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Annual Depreciation Rate | 0.00% | ||
Generation [Member] | Atlantic City Electric Co [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Annual Depreciation Rate | 0.00% | ||
Generation [Member] | Pepco Energy Services [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Annual Depreciation Rate | 1.20% | 0.40% | 6.40% |
Segment_Information_Segment_Fi
Segment Information - Segment Financial Information for Continuing Operations (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Segment Reporting Information [Line Items] | |||||||||||
Operating Revenue | $1,118 | $1,313 | $1,117 | $1,330 | $1,091 | $1,344 | $1,051 | $1,180 | $4,878 | $4,666 | $4,625 |
Operating Expenses | 1,004 | 1,147 | 966 | 1,157 | 936 | 1,109 | 906 | 1,047 | 4,274 | 3,998 | 4,084 |
Operating Income (Loss) | 114 | 166 | 151 | 173 | 155 | 235 | 145 | 133 | 604 | 668 | 541 |
Interest Expense | 268 | 273 | 256 | ||||||||
Other Income | 44 | 34 | 36 | ||||||||
Income Tax Expense (Benefit) | 13 | 34 | 45 | 46 | 39 | 65 | 30 | 185 | 138 | 319 | 103 |
Net Income from Continuing Operations | 58 | 110 | 53 | -111 | 242 | 110 | 218 | ||||
Total Assets | 15,667 | 14,848 | 15,667 | 14,848 | 14,519 | ||||||
Construction Expenditures | 1,223 | 1,310 | 1,216 | ||||||||
Interest Income | 1 | ||||||||||
Impairment Losses | -1 | ||||||||||
Corporate and Other [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating Revenue | -7 | -9 | -9 | ||||||||
Operating Expenses | 4 | -31 | -34 | ||||||||
Operating Income (Loss) | -11 | 22 | 25 | ||||||||
Interest Expense | 41 | 44 | 35 | ||||||||
Other Income | 2 | 3 | 3 | ||||||||
Income Tax Expense (Benefit) | -11 | 163 | |||||||||
Net Income from Continuing Operations | -39 | -182 | -9 | ||||||||
Total Assets | 1,704 | 1,486 | 1,704 | 1,486 | 2,028 | ||||||
Construction Expenditures | 76 | 112 | 37 | ||||||||
Interest Income | -1 | ||||||||||
Impairment Losses | -1 | ||||||||||
Operating Segments [Member] | Power Delivery [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating Revenue | 4,607 | 4,472 | 4,378 | ||||||||
Operating Expenses | 3,916 | 3,828 | 3,847 | ||||||||
Operating Income (Loss) | 691 | 644 | 531 | ||||||||
Interest Expense | 226 | 228 | 219 | ||||||||
Other Income | 40 | 28 | 32 | ||||||||
Income Tax Expense (Benefit) | 185 | 155 | 110 | ||||||||
Net Income from Continuing Operations | 320 | 289 | 235 | ||||||||
Total Assets | 13,719 | 13,027 | 13,719 | 13,027 | 12,149 | ||||||
Construction Expenditures | 1,144 | 1,194 | 1,168 | ||||||||
Interest Income | 1 | ||||||||||
Operating Segments [Member] | Pepco Energy Services [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating Revenue | 278 | 203 | 256 | ||||||||
Operating Expenses | 354 | 201 | 271 | ||||||||
Operating Income (Loss) | -76 | 2 | -15 | ||||||||
Interest Expense | 1 | 1 | 2 | ||||||||
Other Income | 2 | 3 | 1 | ||||||||
Income Tax Expense (Benefit) | -36 | 1 | -7 | ||||||||
Net Income from Continuing Operations | -39 | 3 | -8 | ||||||||
Total Assets | 244 | 335 | 244 | 335 | 342 | ||||||
Construction Expenditures | 3 | 4 | 11 | ||||||||
Interest Income | $1 |
Segment_Information_Segment_Fi1
Segment Information - Segment Financial Information for Continuing Operations (Parenthetical) (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Segment Reporting Information [Line Items] | |||||||||||
Goodwill | $1,407 | $1,407 | $1,407 | $1,407 | |||||||
Operating Revenue | 1,118 | 1,313 | 1,117 | 1,330 | 1,091 | 1,344 | 1,051 | 1,180 | 4,878 | 4,666 | 4,625 |
Operating Expenses | 1,004 | 1,147 | 966 | 1,157 | 936 | 1,109 | 906 | 1,047 | 4,274 | 3,998 | 4,084 |
Interest Expense | 268 | 273 | 256 | ||||||||
Depreciation and amortization | 549 | 473 | 454 | ||||||||
Impairment losses | 81 | 4 | 12 | ||||||||
Corporate and Other [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating Revenue | -7 | -9 | -9 | ||||||||
Operating Expenses | 4 | -31 | -34 | ||||||||
Interest Expense | 41 | 44 | 35 | ||||||||
Pepco Energy Services [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Impairment losses | 81 | 4 | 12 | ||||||||
Impairment loss, after-tax | 48 | 3 | 7 | ||||||||
Pepco Energy Services' Retail Electric and Natural Gas Supply Businesses [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating Revenue | 9 | ||||||||||
Operating Segments [Member] | Power Delivery [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Goodwill | 1,400 | 1,400 | 1,400 | 1,400 | 1,400 | ||||||
Operating Revenue | 4,607 | 4,472 | 4,378 | ||||||||
Operating Expenses | 3,916 | 3,828 | 3,847 | ||||||||
Interest Expense | 226 | 228 | 219 | ||||||||
Depreciation and amortization | 511 | 439 | 416 | ||||||||
Interest benefit on uncertain tax positions | 12 | ||||||||||
Operating Segments [Member] | Pepco Energy Services [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating Revenue | 278 | 203 | 256 | ||||||||
Operating Expenses | 354 | 201 | 271 | ||||||||
Interest Expense | 1 | 1 | 2 | ||||||||
Depreciation and amortization | 7 | 6 | 14 | ||||||||
Intersegment [Member] | Corporate and Other [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating Revenue | -7 | -10 | -11 | ||||||||
Operating Expenses | -7 | -9 | -10 | ||||||||
Interest Expense | -4 | -5 | -18 | ||||||||
Depreciation and amortization | 31 | 28 | 24 | ||||||||
Interest expense on uncertain tax positions | 66 | ||||||||||
Valuation allowances against deferred tax assets | 101 | ||||||||||
Interest Income | ($21) |
Goodwill_Additional_Informatio
Goodwill - Additional Information (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Goodwill [Line Items] | ||
Goodwill | $1,407,000,000 | $1,407,000,000 |
Accumulated impairment loss | 18,000,000 | 18,000,000 |
Delmarva Power & Light Co/De [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 8,000,000 | 8,000,000 |
Accumulated impairment loss | $0 | $0 |
Regulatory_Matters_Schedule_of
Regulatory Matters - Schedule of Regulatory Assets and Regulatory Liabilities (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | $2,409 | $2,087 |
Regulatory Liabilities | 343 | 399 |
Pension and Other Postretirement Benefit Costs [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 946 | 667 |
Securitized Stranded Costs [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 278 | 350 |
Recoverable Income Taxes [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 274 | 225 |
Demand-Side Management Costs [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 264 | 125 |
Smart Grid Costs [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 261 | 251 |
Deferred Energy Supply Costs [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 73 | 136 |
Incremental Storm Restoration Costs [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 51 | 72 |
Deferred Debt Extinguishment Costs [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 42 | 47 |
MAPP Abandonment Costs [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 33 | 68 |
Recoverable Workers' Compensation and Long-Term Disability Costs [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 30 | 26 |
Deferred Losses on Gas Derivatives [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 4 | |
Other Regulatory Assets [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 153 | 120 |
Asset Removal Costs [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Liabilities | 250 | 275 |
Deferred Income Taxes Due to Customers [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Liabilities | 44 | 45 |
Deferred Energy Supply Costs [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Liabilities | 3 | 46 |
Deferred Gains on Gas Derivatives [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Liabilities | 1 | |
Other Regulatory Liabilities [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Liabilities | 46 | 32 |
Potomac Electric Power Co [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 697 | 563 |
Regulatory Liabilities | 104 | 113 |
Potomac Electric Power Co [Member] | Recoverable Income Taxes [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 148 | 107 |
Potomac Electric Power Co [Member] | Demand-Side Management Costs [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 197 | 98 |
Potomac Electric Power Co [Member] | Smart Grid Costs [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 175 | 168 |
Potomac Electric Power Co [Member] | Deferred Energy Supply Costs [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 3 | 6 |
Potomac Electric Power Co [Member] | Incremental Storm Restoration Costs [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 29 | 37 |
Potomac Electric Power Co [Member] | Deferred Debt Extinguishment Costs [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 22 | 25 |
Potomac Electric Power Co [Member] | MAPP Abandonment Costs [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 19 | 37 |
Potomac Electric Power Co [Member] | Recoverable Workers' Compensation and Long-Term Disability Costs [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 30 | 26 |
Potomac Electric Power Co [Member] | Other Regulatory Assets [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 74 | 59 |
Potomac Electric Power Co [Member] | Asset Removal Costs [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Liabilities | 84 | 102 |
Potomac Electric Power Co [Member] | Other Regulatory Liabilities [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Liabilities | 20 | 11 |
Delmarva Power & Light Co/De [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 356 | 311 |
Regulatory Liabilities | 225 | 229 |
Delmarva Power & Light Co/De [Member] | Recoverable Income Taxes [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 84 | 76 |
Delmarva Power & Light Co/De [Member] | Demand-Side Management Costs [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 67 | 27 |
Delmarva Power & Light Co/De [Member] | Smart Grid Costs [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 86 | 83 |
Delmarva Power & Light Co/De [Member] | Deferred Energy Supply Costs [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 12 | 13 |
Delmarva Power & Light Co/De [Member] | Incremental Storm Restoration Costs [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 7 | 9 |
Delmarva Power & Light Co/De [Member] | Deferred Debt Extinguishment Costs [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 12 | 13 |
Delmarva Power & Light Co/De [Member] | MAPP Abandonment Costs [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 14 | 31 |
Delmarva Power & Light Co/De [Member] | Deferred Losses on Gas Derivatives [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 4 | |
Delmarva Power & Light Co/De [Member] | Other Regulatory Assets [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 52 | 37 |
Delmarva Power & Light Co/De [Member] | COPCO Acquisition Adjustment [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 18 | 22 |
Delmarva Power & Light Co/De [Member] | Asset Removal Costs [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Liabilities | 166 | 173 |
Delmarva Power & Light Co/De [Member] | Deferred Income Taxes Due to Customers [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Liabilities | 37 | 37 |
Delmarva Power & Light Co/De [Member] | Deferred Energy Supply Costs [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Liabilities | 3 | |
Delmarva Power & Light Co/De [Member] | Deferred Gains on Gas Derivatives [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Liabilities | 1 | |
Delmarva Power & Light Co/De [Member] | Other Regulatory Liabilities [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Liabilities | 22 | 15 |
Atlantic City Electric Co [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 427 | 569 |
Regulatory Liabilities | 14 | 57 |
Atlantic City Electric Co [Member] | Securitized Stranded Costs [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 278 | 350 |
Atlantic City Electric Co [Member] | Recoverable Income Taxes [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 42 | 42 |
Atlantic City Electric Co [Member] | Deferred Energy Supply Costs [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 58 | 117 |
Atlantic City Electric Co [Member] | Incremental Storm Restoration Costs [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 15 | 26 |
Atlantic City Electric Co [Member] | Other Regulatory Assets [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory assets | 34 | 34 |
Atlantic City Electric Co [Member] | Deferred Energy Supply Costs [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Liabilities | 38 | |
Atlantic City Electric Co [Member] | Other Regulatory Liabilities [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Liabilities | 6 | 6 |
Atlantic City Electric Co [Member] | Federal and State Tax Benefits, Related to Securitized Stranded Costs [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Regulatory Liabilities | $8 | $13 |
Regulatory_Matters_Additional_
Regulatory Matters - Additional Information (Detail) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 3 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | |||||||||||||||||||||||||||
Oct. 22, 2014 | Aug. 29, 2014 | Aug. 20, 2014 | 3-May-14 | Apr. 15, 2014 | Mar. 31, 2014 | Mar. 26, 2014 | Sep. 20, 2013 | Feb. 28, 2014 | Jul. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2014 | Dec. 31, 2013 | Jul. 02, 2014 | Dec. 04, 2013 | Dec. 08, 2014 | Aug. 25, 2014 | Jun. 30, 2014 | Dec. 31, 2011 | Dec. 31, 2014 | Aug. 19, 2014 | Aug. 05, 2014 | Oct. 02, 2013 | Mar. 22, 2013 | Feb. 28, 2013 | Dec. 03, 2013 | Jul. 12, 2013 | Mar. 08, 2013 | Nov. 30, 2012 | Aug. 24, 2012 | Feb. 28, 2013 | Apr. 16, 2014 | Mar. 14, 2014 | Mar. 03, 2014 | 31-May-14 | Apr. 30, 2012 | Jul. 11, 2014 | |
mi | mi | MW | |||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
Transition bond maturity, lower range | 2015 | ||||||||||||||||||||||||||||||||||||
Transition bond maturity, upper range | 2023 | ||||||||||||||||||||||||||||||||||||
Requested rate change | $19,000,000 | $61,700,000 | $23,400,000 | $39,000,000 | $18,100,000 | ||||||||||||||||||||||||||||||||
Return on equity, percentage | 9.75% | 10.25% | 9.40% | 9.31% | 10.75% | ||||||||||||||||||||||||||||||||
Effect of proposed change on Gas Cost Rate | 7.40% | ||||||||||||||||||||||||||||||||||||
Adjusted rate change | 37,400,000 | ||||||||||||||||||||||||||||||||||||
Consolidated tax adjustment calculation review period | 5 years | ||||||||||||||||||||||||||||||||||||
Percentage of revenue requirement related to consolidated tax adjustment calculation | 25.00% | ||||||||||||||||||||||||||||||||||||
New power plant output | 661 | ||||||||||||||||||||||||||||||||||||
Undergrounding project cost | 1,000,000,000 | ||||||||||||||||||||||||||||||||||||
Bear estimated complete project | 500,000,000 | ||||||||||||||||||||||||||||||||||||
Abandonment costs sought | 88,000,000 | 80,500,000 | 82,000,000 | ||||||||||||||||||||||||||||||||||
Recovery period | 3 years | ||||||||||||||||||||||||||||||||||||
Estimated fair value of real property acquired | 8,000,000 | ||||||||||||||||||||||||||||||||||||
Length transmission line | 152 | ||||||||||||||||||||||||||||||||||||
Abandonment costs | 33,000,000 | 33,000,000 | |||||||||||||||||||||||||||||||||||
Land held for future use in utility operations | 8,000,000 | 8,000,000 | |||||||||||||||||||||||||||||||||||
Period to issue decision | 180 days | ||||||||||||||||||||||||||||||||||||
Merger agreement | Following informal discussions with the DOJ, effective as of September 5, 2014, Exelon withdrew its Notification and Report Form and refiled it on September 9, 2014, which restarted the waiting period required by the HSR Act. On October 9, 2014, each of Pepco Holdings and Exelon received a request for additional information and documentary material from the DOJ, which had the effect of extending the DOJ review period until 30 days after each of Pepco Holdings and Exelon certified that it has substantially complied with the request. | ||||||||||||||||||||||||||||||||||||
Expected [Member] | |||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
Requested rate change | 68,400,000 | 8,750,000 | 43,300,000 | ||||||||||||||||||||||||||||||||||
Return on equity, percentage | 9.62% | 10.25% | |||||||||||||||||||||||||||||||||||
Actual [Member] | |||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
Requested rate change | 66,200,000 | ||||||||||||||||||||||||||||||||||||
Federal Energy Regulatory Commission Return On Equity Complaint [Member] | |||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
Return on equity, percentage | 8.80% | ||||||||||||||||||||||||||||||||||||
One-time reduction on settlement | 225,000 | ||||||||||||||||||||||||||||||||||||
One-time payment on settlement | 258,500 | ||||||||||||||||||||||||||||||||||||
ROE determined, description | Each ten basis point reduction in the ROE would result in a reduction of PHI's operating income of $1.5 million. | ||||||||||||||||||||||||||||||||||||
Reduction in operating income | 1,500,000 | ||||||||||||||||||||||||||||||||||||
2015 [Member] | |||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
Expected pre-tax income related to abandonment costs | 1,000,000 | ||||||||||||||||||||||||||||||||||||
District of Columbia [Member] | DC Undergrounding Task Force [Member] | |||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
Underground project cost | 375,000,000 | ||||||||||||||||||||||||||||||||||||
Advanced Metering Infrastructure Costs [Member] | |||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
Base rates period | 15 years | ||||||||||||||||||||||||||||||||||||
Related portion of advanced metering infrastructure | 50.00% | ||||||||||||||||||||||||||||||||||||
Minimum [Member] | |||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
Incremental Storm Restoration Costs Amortization and recovery period | 3 years | ||||||||||||||||||||||||||||||||||||
Regulatory asset, amortization period, years | 1 year | ||||||||||||||||||||||||||||||||||||
New power plant output | 650 | ||||||||||||||||||||||||||||||||||||
Maximum [Member] | |||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
Incremental Storm Restoration Costs Amortization and recovery period | 5 years | ||||||||||||||||||||||||||||||||||||
Regulatory asset, amortization period, years | 20 years | ||||||||||||||||||||||||||||||||||||
New power plant output | 700 | ||||||||||||||||||||||||||||||||||||
Delmarva Power & Light Co/De [Member] | |||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
Requested rate change | 39,000,000 | 15,100,000 | 56,000,000 | 42,000,000 | |||||||||||||||||||||||||||||||||
Return on equity, percentage | 10.80% | 9.70% | 10.25% | ||||||||||||||||||||||||||||||||||
Increased distribution base period | 4 years | ||||||||||||||||||||||||||||||||||||
Estimated return on equity, year one | 7.41% | ||||||||||||||||||||||||||||||||||||
Estimated return on equity, year two | 8.80% | ||||||||||||||||||||||||||||||||||||
Estimated return on equity, year three | 9.75% | ||||||||||||||||||||||||||||||||||||
Estimated return on equity, year four | 9.75% | ||||||||||||||||||||||||||||||||||||
Customer refundable fees | 500,000 | ||||||||||||||||||||||||||||||||||||
Effect of proposed change on Gas Cost Rate | 7.40% | ||||||||||||||||||||||||||||||||||||
Basis-point | 50.00% | 50.00% | |||||||||||||||||||||||||||||||||||
New power plant output | 661 | ||||||||||||||||||||||||||||||||||||
Abandonment costs sought | 38,000,000 | 36,600,000 | 37,000,000 | ||||||||||||||||||||||||||||||||||
Recovery period | 3 years | ||||||||||||||||||||||||||||||||||||
Estimated fair value of real property acquired | 6,000,000 | ||||||||||||||||||||||||||||||||||||
Length transmission line | 152 | ||||||||||||||||||||||||||||||||||||
Land held for future use in utility operations | 6,000,000 | 6,000,000 | |||||||||||||||||||||||||||||||||||
Period to issue decision | 180 days | ||||||||||||||||||||||||||||||||||||
Regulatory asset related to MAPP abandonment costs | 14,000,000 | ||||||||||||||||||||||||||||||||||||
Goodwill transferred to a regulatory asset | 41,000,000 | 41,000,000 | |||||||||||||||||||||||||||||||||||
Return earned on regulatory assets | 12.95% | 12.95% | |||||||||||||||||||||||||||||||||||
Additional interim rate increase implemented | 15,100,000 | ||||||||||||||||||||||||||||||||||||
Delmarva Power & Light Co/De [Member] | Federal Energy Regulatory Commission Return On Equity Complaint [Member] | |||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
Return on equity, percentage | 11.30% | 8.80% | 8.70% | ||||||||||||||||||||||||||||||||||
One-time reduction on settlement | 225,000 | ||||||||||||||||||||||||||||||||||||
One-time payment on settlement | 258,500 | ||||||||||||||||||||||||||||||||||||
ROE determined, description | Each ten basis point reduction in the ROE would result in a reduction of DPL's operating income of $0.5 million. | ||||||||||||||||||||||||||||||||||||
Reduction in operating income | 500,000 | ||||||||||||||||||||||||||||||||||||
Delmarva Power & Light Co/De [Member] | 2015 [Member] | |||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
Expected pre-tax income related to abandonment costs | 1,000,000 | ||||||||||||||||||||||||||||||||||||
Delmarva Power & Light Co/De [Member] | Advanced Metering Infrastructure Costs [Member] | |||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
Base rates period | 15 years | ||||||||||||||||||||||||||||||||||||
Related portion of advanced metering infrastructure | 50.00% | ||||||||||||||||||||||||||||||||||||
Delmarva Power & Light Co/De [Member] | Minimum [Member] | |||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
Regulatory asset, amortization period, years | 1 year | ||||||||||||||||||||||||||||||||||||
New power plant output | 650 | ||||||||||||||||||||||||||||||||||||
Delmarva Power & Light Co/De [Member] | Minimum [Member] | Federal Energy Regulatory Commission Return On Equity Complaint [Member] | |||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
Return on equity, percentage | 6.78% | ||||||||||||||||||||||||||||||||||||
Delmarva Power & Light Co/De [Member] | Maximum [Member] | |||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
Regulatory asset, amortization period, years | 20 years | ||||||||||||||||||||||||||||||||||||
New power plant output | 700 | ||||||||||||||||||||||||||||||||||||
Delmarva Power & Light Co/De [Member] | Maximum [Member] | Federal Energy Regulatory Commission Return On Equity Complaint [Member] | |||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
Return on equity, percentage | 10.33% | ||||||||||||||||||||||||||||||||||||
Potomac Electric Power Co [Member] | |||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
Requested rate change | 18,100,000 | 68,400,000 | 44,800,000 | 52,100,000 | |||||||||||||||||||||||||||||||||
Return on equity, percentage | 9.40% | 9.31% | 10.75% | 10.80% | 10.25% | 9.36% | 10.25% | 10.25% | |||||||||||||||||||||||||||||
Requested rate change | 27,900,000 | ||||||||||||||||||||||||||||||||||||
Charges on cost of recovery | 24,000,000 | ||||||||||||||||||||||||||||||||||||
Adjusted rate change | 37,400,000 | ||||||||||||||||||||||||||||||||||||
Basis-point | 50.00% | 50.00% | |||||||||||||||||||||||||||||||||||
New power plant output | 661 | ||||||||||||||||||||||||||||||||||||
Undergrounding project cost | 1,000,000,000 | ||||||||||||||||||||||||||||||||||||
Bear estimated complete project | 500,000,000 | ||||||||||||||||||||||||||||||||||||
Abandonment costs sought | 88,000,000 | 43,900,000 | 45,000,000 | ||||||||||||||||||||||||||||||||||
Recovery period | 3 years | ||||||||||||||||||||||||||||||||||||
Estimated fair value of real property acquired | 2,000,000 | ||||||||||||||||||||||||||||||||||||
Length transmission line | 152 | ||||||||||||||||||||||||||||||||||||
Land held for future use in utility operations | 2,000,000 | 2,000,000 | |||||||||||||||||||||||||||||||||||
Period to issue decision | 180 days | ||||||||||||||||||||||||||||||||||||
Return on equity, percentage | 9.36% | ||||||||||||||||||||||||||||||||||||
Regulatory asset related to MAPP abandonment costs | 19,000,000 | ||||||||||||||||||||||||||||||||||||
Potomac Electric Power Co [Member] | Adjusted [Member] | |||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
Requested rate change | 44,800,000 | ||||||||||||||||||||||||||||||||||||
Potomac Electric Power Co [Member] | Expected [Member] | |||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
Requested rate change | 23,400,000 | 8,750,000 | 43,300,000 | 60,800,000 | |||||||||||||||||||||||||||||||||
Return on equity, percentage | 9.62% | 10.25% | |||||||||||||||||||||||||||||||||||
Potomac Electric Power Co [Member] | Actual [Member] | |||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
Requested rate change | 66,200,000 | ||||||||||||||||||||||||||||||||||||
Potomac Electric Power Co [Member] | Federal Energy Regulatory Commission Return On Equity Complaint [Member] | |||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
Return on equity, percentage | 11.30% | 8.80% | 8.70% | 8.70% | |||||||||||||||||||||||||||||||||
Potomac Electric Power Co [Member] | District of Columbia [Member] | |||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
Requested rate change | 23,400,000 | ||||||||||||||||||||||||||||||||||||
Return on equity, percentage | 9.40% | ||||||||||||||||||||||||||||||||||||
Potomac Electric Power Co [Member] | District of Columbia [Member] | DC Undergrounding Task Force [Member] | |||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
Underground project cost | 375,000,000 | ||||||||||||||||||||||||||||||||||||
Potomac Electric Power Co [Member] | Minimum [Member] | |||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
Regulatory asset, amortization period, years | 1 year | ||||||||||||||||||||||||||||||||||||
New power plant output | 650 | ||||||||||||||||||||||||||||||||||||
Potomac Electric Power Co [Member] | Minimum [Member] | Federal Energy Regulatory Commission Return On Equity Complaint [Member] | |||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
Return on equity, percentage | 6.78% | 6.78% | |||||||||||||||||||||||||||||||||||
Potomac Electric Power Co [Member] | Maximum [Member] | |||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
Regulatory asset, amortization period, years | 20 years | ||||||||||||||||||||||||||||||||||||
New power plant output | 700 | ||||||||||||||||||||||||||||||||||||
Potomac Electric Power Co [Member] | Maximum [Member] | Federal Energy Regulatory Commission Return On Equity Complaint [Member] | |||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
Return on equity, percentage | 10.33% | 10.33% | |||||||||||||||||||||||||||||||||||
Atlantic City Electric Co [Member] | |||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
Transition bond maturity, lower range | 2015 | ||||||||||||||||||||||||||||||||||||
Transition bond maturity, upper range | 2023 | ||||||||||||||||||||||||||||||||||||
Requested rate change | 19,000,000 | 61,700,000 | |||||||||||||||||||||||||||||||||||
Return on equity, percentage | 9.75% | 10.80% | 10.25% | ||||||||||||||||||||||||||||||||||
Overall annual rate decrease as net impact of adjusting charges | 41,100,000 | 24,500,000 | 41,100,000 | ||||||||||||||||||||||||||||||||||
Contributions received by ACE | 11,000,000 | 11,000,000 | |||||||||||||||||||||||||||||||||||
Consolidated tax adjustment calculation review period | 5 years | ||||||||||||||||||||||||||||||||||||
Percentage of revenue requirement related to consolidated tax adjustment calculation | 25.00% | ||||||||||||||||||||||||||||||||||||
Basis-point | 50.00% | 50.00% | |||||||||||||||||||||||||||||||||||
Atlantic City Electric Co [Member] | Federal Energy Regulatory Commission Return On Equity Complaint [Member] | |||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
Return on equity, percentage | 11.30% | 8.80% | 8.70% | ||||||||||||||||||||||||||||||||||
ROE determined, description | Each ten basis point reduction in the ROE would result in a reduction of ACE's operating income of $0.4 million. | ||||||||||||||||||||||||||||||||||||
Reduction in operating income | 400,000 | ||||||||||||||||||||||||||||||||||||
Atlantic City Electric Co [Member] | Minimum [Member] | |||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
Regulatory asset, amortization period, years | 1 year | ||||||||||||||||||||||||||||||||||||
Contributions received by ACE | 1,000,000 | 1,000,000 | |||||||||||||||||||||||||||||||||||
Atlantic City Electric Co [Member] | Minimum [Member] | Federal Energy Regulatory Commission Return On Equity Complaint [Member] | |||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
Return on equity, percentage | 6.78% | ||||||||||||||||||||||||||||||||||||
Atlantic City Electric Co [Member] | Maximum [Member] | |||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
Regulatory asset, amortization period, years | 20 years | ||||||||||||||||||||||||||||||||||||
Contributions received by ACE | 1,000,000 | 1,000,000 | |||||||||||||||||||||||||||||||||||
Atlantic City Electric Co [Member] | Maximum [Member] | Federal Energy Regulatory Commission Return On Equity Complaint [Member] | |||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
Return on equity, percentage | 10.33% | ||||||||||||||||||||||||||||||||||||
PHI [Member] | Federal Energy Regulatory Commission Return On Equity Complaint [Member] | |||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||
ROE determined, description | Each ten basis point reduction in the ROE would result in a reduction of Pepco's operating income of $0.6 million. | ||||||||||||||||||||||||||||||||||||
Reduction in operating income | $600,000 |
Regulatory_Matters_Schedule_of1
Regulatory Matters - Schedule of Current Base Rate Approval to Increase Annual Revenue (Detail) (USD $) | 0 Months Ended | 12 Months Ended |
In Millions, unless otherwise specified | Jul. 12, 2013 | Dec. 31, 2014 |
Potomac Electric Power Co [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Approved Revenue Requirement Increase | $27.90 | |
Approved Return on Equity | 9.36% | |
Potomac Electric Power Co [Member] | District of Columbia [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Approved Revenue Requirement Increase | 23.4 | |
Approved Return on Equity | 9.40% | |
Completion Date | 26-Mar-14 | |
Rate Effective Date | 16-Apr-14 | |
Potomac Electric Power Co [Member] | MD [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Approved Revenue Requirement Increase | 8.8 | |
Approved Return on Equity | 9.62% | |
Completion Date | 2-Jul-14 | |
Rate Effective Date | 4-Jul-14 | |
Delmarva Power Light Co Electric [Member] | DE [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Approved Revenue Requirement Increase | 15.1 | |
Approved Return on Equity | 9.70% | |
Completion Date | 5-Aug-14 | |
Rate Effective Date | 1-May-14 | |
Atlantic City Electric Co [Member] | NJ [Member] | ||
Public Utilities, General Disclosures [Line Items] | ||
Approved Revenue Requirement Increase | $19 | |
Approved Return on Equity | 9.75% | |
Completion Date | 20-Aug-14 | |
Rate Effective Date | 1-Sep-14 |
Property_Plant_and_Equipment_S
Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ||
Original Cost | $15,465 | $14,567 |
Accumulated Depreciation | 4,959 | 4,863 |
Net Book Value | 10,506 | 9,704 |
Generation [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Original Cost | 104 | 105 |
Accumulated Depreciation | 100 | 99 |
Net Book Value | 4 | 6 |
Distribution [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Original Cost | 9,527 | 8,896 |
Accumulated Depreciation | 3,021 | 2,961 |
Net Book Value | 6,506 | 5,935 |
Transmission [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Original Cost | 3,252 | 2,991 |
Accumulated Depreciation | 934 | 908 |
Net Book Value | 2,318 | 2,083 |
Gas [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Original Cost | 511 | 481 |
Accumulated Depreciation | 153 | 142 |
Net Book Value | 358 | 339 |
Construction Work in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Original Cost | 688 | 677 |
Net Book Value | 688 | 677 |
Non-Operating and Other Property [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Original Cost | 1,383 | 1,417 |
Accumulated Depreciation | 751 | 753 |
Net Book Value | 632 | 664 |
Potomac Electric Power Co [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Original Cost | 7,764 | 7,310 |
Accumulated Depreciation | 2,816 | 2,772 |
Net Book Value | 4,948 | 4,538 |
Potomac Electric Power Co [Member] | Distribution [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Original Cost | 5,668 | 5,287 |
Accumulated Depreciation | 2,082 | 2,027 |
Net Book Value | 3,586 | 3,260 |
Potomac Electric Power Co [Member] | Transmission [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Original Cost | 1,306 | 1,223 |
Accumulated Depreciation | 463 | 444 |
Net Book Value | 843 | 779 |
Potomac Electric Power Co [Member] | Construction Work in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Original Cost | 312 | 312 |
Net Book Value | 312 | 312 |
Potomac Electric Power Co [Member] | Non-Operating and Other Property [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Original Cost | 478 | 488 |
Accumulated Depreciation | 271 | 301 |
Net Book Value | 207 | 187 |
Delmarva Power & Light Co/De [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Original Cost | 3,946 | 3,673 |
Accumulated Depreciation | 1,021 | 1,016 |
Net Book Value | 2,925 | 2,657 |
Delmarva Power & Light Co/De [Member] | Distribution [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Original Cost | 1,928 | 1,788 |
Accumulated Depreciation | 489 | 492 |
Net Book Value | 1,439 | 1,296 |
Delmarva Power & Light Co/De [Member] | Transmission [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Original Cost | 1,107 | 982 |
Accumulated Depreciation | 248 | 243 |
Net Book Value | 859 | 739 |
Delmarva Power & Light Co/De [Member] | Gas [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Original Cost | 511 | 481 |
Accumulated Depreciation | 153 | 142 |
Net Book Value | 358 | 339 |
Delmarva Power & Light Co/De [Member] | Construction Work in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Original Cost | 125 | 158 |
Net Book Value | 125 | 158 |
Delmarva Power & Light Co/De [Member] | Non-Operating and Other Property [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Original Cost | 275 | 264 |
Accumulated Depreciation | 131 | 139 |
Net Book Value | 144 | 125 |
Atlantic City Electric Co [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Original Cost | 3,073 | 2,901 |
Accumulated Depreciation | 760 | 751 |
Net Book Value | 2,313 | 2,150 |
Atlantic City Electric Co [Member] | Generation [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Original Cost | 10 | 10 |
Accumulated Depreciation | 9 | 9 |
Net Book Value | 1 | 1 |
Atlantic City Electric Co [Member] | Distribution [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Original Cost | 1,931 | 1,821 |
Accumulated Depreciation | 450 | 442 |
Net Book Value | 1,481 | 1,379 |
Atlantic City Electric Co [Member] | Transmission [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Original Cost | 839 | 786 |
Accumulated Depreciation | 223 | 221 |
Net Book Value | 616 | 565 |
Atlantic City Electric Co [Member] | Construction Work in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Original Cost | 115 | 110 |
Net Book Value | 115 | 110 |
Atlantic City Electric Co [Member] | Non-Operating and Other Property [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Original Cost | 178 | 174 |
Accumulated Depreciation | 78 | 79 |
Net Book Value | $100 | $95 |
Property_Plant_and_Equipment_A
Property, Plant and Equipment - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Property, Plant and Equipment [Line Items] | |||
Present value of future minimum lease payments | $152,000,000 | ||
Semi-annual payments | 8,000,000 | ||
Description of lease term | Over a 25-year period that began in December 1994 | ||
Guaranteed residual value due at end of lease term | 1 | ||
Approximate annual commitments, 2015 | 15,000,000 | ||
Approximate annual commitments, 2016 | 15,000,000 | ||
Approximate annual commitments, 2017 | 15,000,000 | ||
Approximate annual commitments, 2018 | 15,000,000 | ||
Approximate annual commitments, 2019 | 16,000,000 | ||
Impairment losses | 81,000,000 | 4,000,000 | 12,000,000 |
Long-lived assets before impairment, carrying amount | 83,000,000 | ||
Long lived assets after impairment, carrying amount | 2,000,000 | ||
Percentage of change in the estimated cash flows | 10.00% | ||
Percentage of change in discount rate assumptions | 1.00% | ||
Asset retirement obligation | 2,000,000 | ||
Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Range of discount rates | 10.00% | ||
Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Range of discount rates | 16.00% | ||
Pepco Energy Services [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Impairment losses | 81,000,000 | 4,000,000 | 12,000,000 |
Impairment losses, after-tax | 48,000,000 | 3,000,000 | 7,000,000 |
Buzzard Point and Benning Road [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Asset retirement obligation | 0 | 2,000,000 | |
Subsidiaries [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Jointly owned plant, net book value ownership | 15,000,000 | 12,000,000 | |
Impairment losses | 4,000,000 | ||
Impairment losses, after-tax | 3,000,000 | ||
Conectiv Energy [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Asset retirement obligation | 6,000,000 | ||
Minimum estimated costs for closure of the operations | 2,000,000 | ||
Maximum estimated costs for closure of the operations | 3,000,000 | ||
Annual post-closure operations, maintenance and monitoring period | 30 years | ||
Potomac Electric Power Co [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Semi-annual payments | 8,000,000 | ||
Description of lease term | Over a 25-year period that began in December 1994 | ||
Guaranteed residual value due at end of lease term | 1 | ||
Approximate annual commitments, 2015 | 15,000,000 | ||
Approximate annual commitments, 2016 | 15,000,000 | ||
Approximate annual commitments, 2017 | 15,000,000 | ||
Approximate annual commitments, 2018 | 15,000,000 | ||
Approximate annual commitments, thereafter | 16,000,000 | ||
Atlantic City Electric Co [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Jointly owned plant, net book value ownership | $11,000,000 | $8,000,000 |
Property_Plant_and_Equipment_C
Property, Plant and Equipment - Capital Lease Assets Recorded within Property, Plant and Equipment (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Leases [Line Items] | ||
Original Cost | $152 | $155 |
Accumulated Amortization | 92 | 86 |
Net Book Value | 60 | 69 |
Potomac Electric Power Co [Member] | ||
Leases [Line Items] | ||
Original Cost | 152 | 155 |
Accumulated Amortization | 92 | 86 |
Net Book Value | 60 | 69 |
Transmission [Member] | ||
Leases [Line Items] | ||
Original Cost | 76 | 76 |
Accumulated Amortization | 46 | 41 |
Net Book Value | 30 | 35 |
Transmission [Member] | Potomac Electric Power Co [Member] | ||
Leases [Line Items] | ||
Original Cost | 76 | 76 |
Accumulated Amortization | 46 | 41 |
Net Book Value | 30 | 35 |
Distribution [Member] | ||
Leases [Line Items] | ||
Original Cost | 76 | 76 |
Accumulated Amortization | 46 | 42 |
Net Book Value | 30 | 34 |
Distribution [Member] | Potomac Electric Power Co [Member] | ||
Leases [Line Items] | ||
Original Cost | 76 | 76 |
Accumulated Amortization | 46 | 42 |
Net Book Value | 30 | 34 |
General [Member] | ||
Leases [Line Items] | ||
Original Cost | 3 | |
Accumulated Amortization | 3 | |
General [Member] | Potomac Electric Power Co [Member] | ||
Leases [Line Items] | ||
Original Cost | 3 | |
Accumulated Amortization | $3 |
Pension_and_Other_Postretireme2
Pension and Other Postretirement Benefits - Schedule of Changes in Benefit Obligations and Plan Assets (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Change in Plan Assets | |||
Fair value of plan assets at end of year | $2,603 | $2,484 | |
Pension Benefits [Member] | |||
Change in Benefit Obligation | |||
Benefit obligation at beginning of year | 2,238 | 2,494 | |
Service cost | 44 | 53 | 35 |
Interest cost | 109 | 100 | 107 |
Amendments | 3 | ||
Actuarial loss (gain) | 401 | -277 | |
Benefits paid | -154 | -135 | |
Benefit obligation at end of year | 2,638 | 2,238 | 2,494 |
Change in Plan Assets | |||
Fair value of plan assets at beginning of year | 2,116 | 2,039 | |
Actual return on plan assets | 268 | 86 | |
Company and participant contributions | 6 | 126 | |
Benefits paid | -154 | -135 | |
Fair value of plan assets at end of year | 2,236 | 2,116 | 2,039 |
Funded Status at end of year (plan assets less plan obligations) | -402 | -122 | |
Other Postretirement Benefits [Member] | |||
Change in Benefit Obligation | |||
Benefit obligation at beginning of year | 574 | 775 | |
Service cost | 7 | 8 | 7 |
Interest cost | 26 | 29 | 35 |
Amendments | -124 | ||
Actuarial loss (gain) | 59 | -71 | |
Benefits paid | -34 | -43 | |
Benefit obligation at end of year | 632 | 574 | 775 |
Change in Plan Assets | |||
Fair value of plan assets at beginning of year | 368 | 321 | |
Actual return on plan assets | 21 | 56 | |
Company and participant contributions | 12 | 34 | |
Benefits paid | -34 | -43 | |
Fair value of plan assets at end of year | 367 | 368 | 321 |
Funded Status at end of year (plan assets less plan obligations) | ($265) | ($206) |
Pension_and_Other_Postretireme3
Pension and Other Postretirement Benefits - Additional Information (Detail) (USD $) | 0 Months Ended | 12 Months Ended | ||
Jul. 01, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Amendments | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Accumulated benefit obligation | $2,400,000,000 | $2,100,000,000 | ||
Service periods for participating employee | 11 years | 11 years | ||
Percentage of plan asset target allocation | 68.00% | |||
Unfunded capital commitments | 11,000,000 | 12,000,000 | ||
Pension contribution | 120,000,000 | 200,000,000 | ||
Percentage of participants vested | 100.00% | |||
Defined contribution plan matching contributions | 13,000,000 | 12,000,000 | 12,000,000 | |
Other postretirement benefit obligations | 265,000,000 | 206,000,000 | ||
Pension Benefits [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Net loss to be amortized from AOCL or regulatory assets into net periodic benefit cost | 63,000,000 | |||
Prior service cost to be amortized from AOCL or regulatory assets into net periodic benefit cost | 2,000,000 | |||
Reduction of the projected benefit obligation | 3,000,000 | |||
Other Postretirement Benefits [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Net loss to be amortized from AOCL or regulatory assets into net periodic benefit cost | 11,000,000 | |||
Prior service cost to be amortized from AOCL or regulatory assets into net periodic benefit cost | 13,000,000 | |||
Reduction of the projected benefit obligation | -124,000,000 | |||
OPEB contributions | 1,000,000 | 6,000,000 | ||
Other postretirement benefit obligations | 265,000,000 | 206,000,000 | ||
Potomac Electric Power Co [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Pension contribution | 0 | 0 | 85,000,000 | |
Pension and other postretirement net periodic benefit cost | 22,000,000 | 34,000,000 | 39,000,000 | |
Prepaid pension expense | 316,000,000 | 332,000,000 | ||
Other postretirement benefit obligations | 57,000,000 | 61,000,000 | ||
Potomac Electric Power Co [Member] | Other Postretirement Benefits [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Number of amendments, PHI approved | 2 | |||
Reduction in net periodic benefit cost | 7,000,000 | |||
Percentage of postretirement benefit costs | 40.00% | |||
OPEB contributions | 1,000,000 | 6,000,000 | 5,000,000 | |
Delmarva Power & Light Co/De [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Pension contribution | 0 | 10,000,000 | 85,000,000 | |
Pension and other postretirement net periodic benefit cost | 7,000,000 | 18,000,000 | 23,000,000 | |
Prepaid pension expense | 220,000,000 | 228,000,000 | ||
Other postretirement benefit obligations | 21,000,000 | 23,000,000 | ||
Delmarva Power & Light Co/De [Member] | Other Postretirement Benefits [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Number of amendments, PHI approved | 2 | |||
Reduction in net periodic benefit cost | 4,000,000 | |||
OPEB contributions | 0 | 3,000,000 | 7,000,000 | |
Delmarva Power & Light Co/De [Member] | Retiree [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Pension contribution | 0 | 10,000,000 | ||
PHI Service Company [Member] | Other Postretirement Benefits [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Number of amendments, PHI approved | 2 | |||
Reduction in net periodic benefit cost | 193,000,000 | 69,000,000 | ||
Prior service credit included in projected benefit obligation | 124,000,000 | |||
Amortization period | 10 years | |||
Change in the discount rate | 4.95% | 4.10% | ||
Reduction of the projected benefit obligation | 19,000,000 | |||
Percentage of postretirement benefit costs | 36.00% | |||
PHI Service Company [Member] | Retiree [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Pension contribution | 0 | 80,000,000 | ||
Atlantic City Electric Co [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Pension contribution | 0 | 30,000,000 | 30,000,000 | |
Pension and other postretirement net periodic benefit cost | 13,000,000 | 17,000,000 | 24,000,000 | |
Prepaid pension expense | 96,000,000 | 106,000,000 | ||
Other postretirement benefit obligations | 36,000,000 | 35,000,000 | ||
Atlantic City Electric Co [Member] | Other Postretirement Benefits [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Number of amendments, PHI approved | 2 | |||
Reduction in net periodic benefit cost | 3,000,000 | |||
Percentage of postretirement benefit costs | 45.00% | |||
OPEB contributions | 3,000,000 | 6,000,000 | 7,000,000 | |
Atlantic City Electric Co [Member] | Retiree [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Pension contribution | 0 | 30,000,000 | ||
Subsidiaries [Member] | Other Postretirement Benefits [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
OPEB contributions | $0 | $7,000,000 |
Pension_and_Other_Postretireme4
Pension and Other Postretirement Benefits - Amounts Recognized in Consolidated Balance Sheets (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Regulatory asset | $2,409 | $2,087 | ||
Current liabilities | -2,065 | -2,313 | ||
Pension benefit obligation | -396 | -116 | ||
Other postretirement benefit obligations | -265 | -206 | ||
Deferred income taxes liabilities | 3,266 | 2,928 | ||
Accumulated other comprehensive loss net of tax | 46 | 34 | 48 | 63 |
Pension Benefits [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Regulatory asset | 871 | 664 | ||
Current liabilities | -6 | -6 | ||
Pension benefit obligation | -396 | -116 | ||
Deferred income taxes liabilities | -193 | -217 | ||
Accumulated other comprehensive loss net of tax | 37 | 25 | ||
Net amount recorded | 313 | 350 | ||
Other Postretirement Benefits [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Regulatory asset | 75 | 3 | ||
Other postretirement benefit obligations | -265 | -206 | ||
Deferred income taxes liabilities | 77 | 82 | ||
Net amount recorded | ($113) | ($121) |
Pension_and_Other_Postretireme5
Pension and Other Postretirement Benefits - Schedule of Amounts Included in AOCL and Regulatory Assets (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |||
Accumulated other comprehensive loss ($37 million and $25 million, net of tax, at December 31, 2014 and 2013, respectively) | ($20) | $13 | ($14) |
Regulatory assets | 2,409 | 2,087 | |
Pension Benefits [Member] | |||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |||
Unrecognized net actuarial loss | 925 | 694 | |
Unamortized prior service cost (credit) | 8 | 10 | |
Total | 933 | 704 | |
Accumulated other comprehensive loss ($37 million and $25 million, net of tax, at December 31, 2014 and 2013, respectively) | 62 | 40 | |
Regulatory assets | 871 | 664 | |
Total | 933 | 704 | |
Other Postretirement Benefits [Member] | |||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | |||
Unrecognized net actuarial loss | 176 | 117 | |
Unamortized prior service cost (credit) | -101 | -114 | |
Total | 75 | 3 | |
Regulatory assets | 75 | 3 | |
Total | $75 | $3 |
Pension_and_Other_Postretireme6
Pension and Other Postretirement Benefits - Schedule of Amounts Included in AOCL and Regulatory Assets (Parenthetical) (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | ||||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||||
Accumulated other comprehensive loss, net of tax | $46 | $34 | $48 | $63 |
Pension Benefits [Member] | ||||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||||
Accumulated other comprehensive loss, net of tax | $37 | $25 |
Pension_and_Other_Postretireme7
Pension and Other Postretirement Benefits - Changes in Plan Assets and Benefit Obligations Recognized in AOCL and Regulatory Assets (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Pension Benefits [Member] | |||
Amounts amortized during the year: | |||
Amortization of prior service (cost) credit | ($2) | ($2) | ($1) |
Amortization of net actuarial (loss) | -45 | -67 | -64 |
Amounts arising during the year: | |||
Current year prior service cost (credit) | 3 | ||
Current year actuarial loss (gain) | 276 | -218 | 220 |
Total recognized in AOCL and Regulatory assets for the year ended December 31 | 229 | -284 | 155 |
Other Postretirement Benefits [Member] | |||
Amounts amortized during the year: | |||
Amortization of prior service (cost) credit | 13 | 11 | 4 |
Amortization of net actuarial (loss) | -3 | -12 | -14 |
Amounts arising during the year: | |||
Current year prior service cost (credit) | -124 | ||
Current year actuarial loss (gain) | 62 | -109 | 4 |
Total recognized in AOCL and Regulatory assets for the year ended December 31 | $72 | ($234) | ($6) |
Pension_and_Other_Postretireme8
Pension and Other Postretirement Benefits - Components of Net Periodic Benefit Costs (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Defined Benefit Plan Disclosure [Line Items] | |||
Net periodic benefit cost | $58 | $95 | $110 |
Pension Benefits [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | 44 | 53 | 35 |
Interest cost | 109 | 100 | 107 |
Expected return on plan assets | -141 | -145 | -132 |
Amortization of prior service cost (credit) | 2 | 2 | 1 |
Amortization of net actuarial loss | 45 | 67 | 64 |
Net periodic benefit cost | 59 | 77 | 75 |
Other Postretirement Benefits [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | 7 | 8 | 7 |
Interest cost | 26 | 29 | 35 |
Expected return on plan assets | -24 | -20 | -18 |
Amortization of prior service cost (credit) | -13 | -11 | -4 |
Amortization of net actuarial loss | 3 | 12 | 14 |
Termination benefits | 1 | ||
Net periodic benefit cost | ($1) | $18 | $35 |
Pension_and_Other_Postretireme9
Pension and Other Postretirement Benefits - Split of Combined Pension and Other Postretirement Net Periodic Benefit Costs (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Net Periodic Benefit Cost | $58 | $95 | $110 |
Potomac Electric Power Co [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Net Periodic Benefit Cost | 22 | 34 | 39 |
Delmarva Power & Light Co/De [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Net Periodic Benefit Cost | 7 | 18 | 23 |
Atlantic City Electric Co [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Net Periodic Benefit Cost | 13 | 17 | 24 |
Subsidiaries [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Net Periodic Benefit Cost | $16 | $26 | $24 |
Recovered_Sheet1
Pension and Other Postretirement Benefits - Weighted Average Assumptions Used to Determine Benefit Obligations (Detail) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Pension Benefits [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Discount rate | 4.20% | 5.05% |
Rate of compensation increase | 5.00% | 5.00% |
Other Postretirement Benefits [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Discount rate | 4.15% | 5.00% |
Rate of compensation increase | 5.00% | 5.00% |
Rate to which the cost trend rate is assumed to decline for all eligible retirees (the ultimate trend rate) | 5.00% | 5.00% |
Year that the cost trend rate reaches the ultimate trend rate | 2020 | 2020 |
Other Postretirement Benefits [Member] | Pre 65 [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Health care cost trend rate assumed for current year | 6.67% | 7.00% |
Other Postretirement Benefits [Member] | Post 65 [Member] | ||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||
Health care cost trend rate assumed for current year | 5.50% | 5.60% |
Recovered_Sheet2
Pension and Other Postretirement Benefits - Summary of Effect of One Percent Change in Assumed Health Care Cost (Detail) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 |
Compensation and Retirement Disclosure [Abstract] | |
Effect of one percentage point increase in total service and interest cost | $1 |
Effect of one percentage point increase in postretirement benefit obligation | 18 |
Effect of one percentage point decrease in total service and interest cost | -1 |
Effect of one percentage point decrease in postretirement benefit obligation | ($20) |
Recovered_Sheet3
Pension and Other Postretirement Benefits - Weighted Average Assumptions Used to Determine Net Periodic Benefit Costs (Detail) | 0 Months Ended | 12 Months Ended | ||
Jul. 01, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Pension Benefits [Member] | ||||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||||
Discount rate | 5.05% | 4.15% | 5.00% | |
Expected long-term return on plan assets | 7.00% | 7.00% | 7.25% | |
Rate of compensation increase | 5.00% | 5.00% | 5.00% | |
Other Postretirement Benefits [Member] | ||||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||||
Discount rate | 4.95% | 5.00% | 4.10% | 4.90% |
Expected long-term return on plan assets | 7.25% | 7.00% | 7.25% | |
Rate of compensation increase | 5.00% | 5.00% | 5.00% | |
Health care cost trend rate | 7.00% | 7.50% | 8.00% |
Recovered_Sheet4
Pension and Other Postretirement Benefits - Weighted Average Assumptions Used to Determine Net Periodic Benefit Costs (Parenthetical) (Detail) (Other Postretirement Benefits [Member]) | 0 Months Ended | 12 Months Ended | ||
Jul. 01, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Other Postretirement Benefits [Member] | ||||
Pension Plans, Postretirement and Other Employee Benefits [Line Items] | ||||
Updated discount rate | 4.95% | 5.00% | 4.10% | 4.90% |
Recovered_Sheet5
Pension and Other Postretirement Benefits - Summary of Plan Asset Allocations (Detail) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Target Plan Asset Allocation, Other | 68.00% | |
Retirement Plan [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan Assets, Equity | 28.00% | 31.00% |
Plan Assets, Fixed Income | 65.00% | 62.00% |
Plan Assets, Other | 7.00% | 7.00% |
Plan Assets, Total | 100.00% | 100.00% |
Target Plan Asset Allocation, Equity | 27.00% | 28.00% |
Target Plan Asset Allocation, Fixed Income | 68.00% | 66.00% |
Target Plan Asset Allocation, Other | 5.00% | 6.00% |
Target Plan Asset Allocation, Total | 100.00% | 100.00% |
Other Postretirement Benefits [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan Assets, Equity | 64.00% | 63.00% |
Plan Assets, Fixed Income | 34.00% | 31.00% |
Plan Assets, Cash | 2.00% | 6.00% |
Plan Assets, Total | 100.00% | 100.00% |
Target Plan Asset Allocation, Equity | 60.00% | 60.00% |
Target Plan Asset Allocation, Fixed Income | 35.00% | 35.00% |
Target Plan Asset Allocation, Cash | 5.00% | 5.00% |
Target Plan Asset Allocation, Total | 100.00% | 100.00% |
Recovered_Sheet6
Pension and Other Postretirement Benefits - Schedule of Fair Value of Plan Assets (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | $2,603 | $2,484 | |
Pension Benefits [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 2,236 | 2,116 | 2,039 |
Pension Benefits [Member] | Equity Securities Domestic [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 376 | 389 | |
Pension Benefits [Member] | Equity Securities International [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 255 | 260 | |
Pension Benefits [Member] | Fixed Income [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 1,459 | 1,309 | |
Pension Benefits [Member] | Private Equity [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 47 | 53 | |
Pension Benefits [Member] | Real Estate [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 54 | 61 | |
Pension Benefits [Member] | Cash Equivalents [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 45 | 44 | |
Other Postretirement Benefits [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 367 | 368 | 321 |
Other Postretirement Benefits [Member] | Fixed Income [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 126 | 113 | |
Other Postretirement Benefits [Member] | Cash Equivalents [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 6 | 22 | |
Other Postretirement Benefits [Member] | Equity Securities [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 235 | 233 | |
Quoted Prices in Active Markets for Identical Instruments (Level 1) [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 767 | 783 | |
Quoted Prices in Active Markets for Identical Instruments (Level 1) [Member] | Pension Benefits [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 427 | 444 | |
Quoted Prices in Active Markets for Identical Instruments (Level 1) [Member] | Pension Benefits [Member] | Equity Securities Domestic [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 128 | 142 | |
Quoted Prices in Active Markets for Identical Instruments (Level 1) [Member] | Pension Benefits [Member] | Equity Securities International [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 254 | 258 | |
Quoted Prices in Active Markets for Identical Instruments (Level 1) [Member] | Pension Benefits [Member] | Cash Equivalents [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 45 | 44 | |
Quoted Prices in Active Markets for Identical Instruments (Level 1) [Member] | Other Postretirement Benefits [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 340 | 339 | |
Quoted Prices in Active Markets for Identical Instruments (Level 1) [Member] | Other Postretirement Benefits [Member] | Fixed Income [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 126 | 113 | |
Quoted Prices in Active Markets for Identical Instruments (Level 1) [Member] | Other Postretirement Benefits [Member] | Cash Equivalents [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 6 | 22 | |
Quoted Prices in Active Markets for Identical Instruments (Level 1) [Member] | Other Postretirement Benefits [Member] | Equity Securities [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 208 | 204 | |
Significant Other Observable Inputs (Level 2) [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 1,688 | 1,541 | |
Significant Other Observable Inputs (Level 2) [Member] | Pension Benefits [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 1,661 | 1,512 | |
Significant Other Observable Inputs (Level 2) [Member] | Pension Benefits [Member] | Equity Securities Domestic [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 213 | 213 | |
Significant Other Observable Inputs (Level 2) [Member] | Pension Benefits [Member] | Equity Securities International [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 1 | ||
Significant Other Observable Inputs (Level 2) [Member] | Pension Benefits [Member] | Fixed Income [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 1,448 | 1,298 | |
Significant Other Observable Inputs (Level 2) [Member] | Other Postretirement Benefits [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 27 | 29 | |
Significant Other Observable Inputs (Level 2) [Member] | Other Postretirement Benefits [Member] | Equity Securities [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 27 | 29 | |
Significant Unobservable Inputs (Level 3) [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 148 | 160 | 174 |
Significant Unobservable Inputs (Level 3) [Member] | Fixed Income [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 11 | 11 | 13 |
Significant Unobservable Inputs (Level 3) [Member] | Private Equity [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 47 | 53 | 56 |
Significant Unobservable Inputs (Level 3) [Member] | Real Estate [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 54 | 61 | 74 |
Significant Unobservable Inputs (Level 3) [Member] | Equity Securities [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 36 | 35 | 31 |
Significant Unobservable Inputs (Level 3) [Member] | Pension Benefits [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 148 | 160 | |
Significant Unobservable Inputs (Level 3) [Member] | Pension Benefits [Member] | Equity Securities Domestic [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 35 | 34 | |
Significant Unobservable Inputs (Level 3) [Member] | Pension Benefits [Member] | Equity Securities International [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 1 | 1 | |
Significant Unobservable Inputs (Level 3) [Member] | Pension Benefits [Member] | Fixed Income [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 11 | 11 | |
Significant Unobservable Inputs (Level 3) [Member] | Pension Benefits [Member] | Private Equity [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | 47 | 53 | |
Significant Unobservable Inputs (Level 3) [Member] | Pension Benefits [Member] | Real Estate [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Fair Value of Plan Assets | $54 | $61 |
Recovered_Sheet7
Pension and Other Postretirement Benefits - Schedule of Fair Value of Plan Assets (Parenthetical) (Detail) (Quoted Prices in Active Markets for Identical Instruments (Level 1) [Member], USD $) | Dec. 31, 2013 |
In Millions, unless otherwise specified | |
Quoted Prices in Active Markets for Identical Instruments (Level 1) [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Equity assets amount reclassified from domestic equity to international equity | $43 |
Recovered_Sheet8
Pension and Other Postretirement Benefits - Reconciliation of Fair Value Measurements Using Significant Unobservable Inputs (Detail) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets at end of year | $2,603 | $2,484 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets at beginning of year | 160 | 174 |
Transfer in (out) of Level 3 | -3 | |
Purchases | 4 | 4 |
Sales | -8 | -19 |
Settlements | -15 | -12 |
Unrealized gain (loss) | -8 | 7 |
Realized gain | 15 | 9 |
Fair value of plan assets at end of year | 148 | 160 |
Significant Unobservable Inputs (Level 3) [Member] | Equity Securities [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets at beginning of year | 35 | 31 |
Sales | -3 | -5 |
Unrealized gain (loss) | 2 | 7 |
Realized gain | 2 | 2 |
Fair value of plan assets at end of year | 36 | 35 |
Significant Unobservable Inputs (Level 3) [Member] | Fixed Income [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets at beginning of year | 13 | |
Transfer in (out) of Level 3 | -3 | |
Sales | -1 | |
Settlements | 2 | |
Fair value of plan assets at end of year | 11 | 11 |
Significant Unobservable Inputs (Level 3) [Member] | Private Equity [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets at beginning of year | 53 | 56 |
Purchases | 3 | 2 |
Settlements | -6 | -4 |
Unrealized gain (loss) | -12 | -7 |
Realized gain | 9 | 6 |
Fair value of plan assets at end of year | 47 | 53 |
Significant Unobservable Inputs (Level 3) [Member] | Real Estate [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets at beginning of year | 61 | 74 |
Purchases | 1 | 2 |
Sales | -5 | -13 |
Settlements | -9 | -10 |
Unrealized gain (loss) | 2 | 7 |
Realized gain | 4 | 1 |
Fair value of plan assets at end of year | $54 | $61 |
Recovered_Sheet9
Pension and Other Postretirement Benefits - Schedule of Estimated Benefit Payments (Detail) (USD $) | Dec. 31, 2014 |
In Millions, unless otherwise specified | |
Pension Benefits [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
2015 | $134 |
2016 | 140 |
2017 | 142 |
2018 | 148 |
2019 | 153 |
2020 through 2023 | 826 |
Other Postretirement Benefits [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
2015 | 38 |
2016 | 38 |
2017 | 39 |
2018 | 39 |
2019 | 39 |
2020 through 2023 | $193 |
Debt_Components_of_LongTerm_De
Debt - Components of Long-Term Debt (Detail) (USD $) | 12 Months Ended | ||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Apr. 15, 2014 | Jun. 30, 2014 | Mar. 31, 2014 |
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | $806 | $906 | |||
Debt instrument, carrying value | 806 | 906 | |||
Debt instrument, carrying value | 4,817 | 4,470 | |||
Net unamortized premium(discount) | -10 | -14 | |||
Current portion of long-term debt | -366 | -403 | |||
Total net long-term debt | 4,441 | 4,053 | |||
Total long-term debt | 4,817 | 4,470 | |||
First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | 3,889 | 3,321 | |||
Total long-term debt | 3,889 | 3,321 | |||
Medium-Term Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | 40 | 40 | |||
Debt instrument, carrying value | 40 | 40 | |||
Transition Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | 215 | 255 | |||
Current portion of long-term debt | -44 | -41 | |||
Total Net Long-Term Debt | 171 | 214 | |||
Total long-term debt | 215 | 255 | |||
4.65% Due 2014 [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest percentage | 4.65% | 4.65% | |||
Debt instrument maturity date | 2014 | ||||
Debt instrument, interest percentage | 4.65% | 4.65% | |||
Debt instrument maturity date | 2014 | ||||
Debt instrument, carrying value | 175 | ||||
Total long-term debt | 175 | ||||
3.05% Due 2022 [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest percentage | 3.05% | ||||
Debt instrument maturity date | 2022 | ||||
Debt instrument, interest percentage | 3.05% | ||||
Debt instrument maturity date | 2022 | ||||
Debt instrument, carrying value | 200 | 200 | |||
Total long-term debt | 200 | 200 | |||
6.20% Due 2022 [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest percentage | 6.20% | ||||
Debt instrument maturity date | 2022 | ||||
Debt instrument, interest percentage | 6.20% | ||||
Debt instrument maturity date | 2022 | ||||
Debt instrument, carrying value | 110 | 110 | |||
Total long-term debt | 110 | 110 | |||
3.60% Due 2024 [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest percentage | 3.60% | ||||
Debt instrument maturity date | 2024 | ||||
Debt instrument, interest percentage | 3.60% | ||||
Debt instrument maturity date | 2024 | ||||
Debt instrument, carrying value | 400 | ||||
Total long-term debt | 400 | ||||
5.75% Due 2034 [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest percentage | 5.75% | ||||
Debt instrument maturity date | 2034 | ||||
Debt instrument, interest percentage | 5.75% | ||||
Debt instrument maturity date | 2034 | ||||
Debt instrument, carrying value | 100 | 100 | |||
Total long-term debt | 100 | 100 | |||
5.40% Due 2035 [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest percentage | 5.40% | ||||
Debt instrument maturity date | 2035 | ||||
Debt instrument, interest percentage | 5.40% | ||||
Debt instrument maturity date | 2035 | ||||
Debt instrument, carrying value | 175 | 175 | |||
Total long-term debt | 175 | 175 | |||
6.50% Due 2037 [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest percentage | 6.50% | ||||
Debt instrument maturity date | 2037 | ||||
Debt instrument, interest percentage | 6.50% | ||||
Debt instrument maturity date | 2037 | ||||
Debt instrument, carrying value | 500 | 500 | |||
Total long-term debt | 500 | 500 | |||
7.90% Due 2038 [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest percentage | 7.90% | ||||
Debt instrument maturity date | 2038 | ||||
Debt instrument, interest percentage | 7.90% | ||||
Debt instrument maturity date | 2038 | ||||
Debt instrument, carrying value | 250 | 250 | |||
Total long-term debt | 250 | 250 | |||
4.15% Due 2043 [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest percentage | 4.15% | ||||
Debt instrument maturity date | 2043 | ||||
Debt instrument, interest percentage | 4.15% | ||||
Debt instrument maturity date | 2043 | ||||
Debt instrument, carrying value | 250 | 250 | |||
Total long-term debt | 250 | 250 | |||
4.95% Due 2043 [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest percentage | 4.95% | ||||
Debt instrument maturity date | 2043 | ||||
Debt instrument, interest percentage | 4.95% | ||||
Debt instrument maturity date | 2043 | ||||
Debt instrument, carrying value | 150 | 150 | |||
Total long-term debt | 150 | 150 | |||
3.50% Due 2023 [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest percentage | 3.50% | ||||
Debt instrument, interest percentage | 3.50% | ||||
2.70% Due 2015 [Member] | Unsecured Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | 250 | 250 | |||
Debt interest percentage | 2.70% | ||||
Debt instrument maturity date | 2015 | ||||
Debt instrument, interest percentage | 2.70% | ||||
Debt instrument, carrying value | 250 | 250 | |||
Debt instrument maturity date | 2015 | ||||
5.90% Due 2016 [Member] | Unsecured Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | 190 | 190 | |||
Debt interest percentage | 5.90% | ||||
Debt instrument maturity date | 2016 | ||||
Debt instrument, interest percentage | 5.90% | ||||
Debt instrument, carrying value | 190 | 190 | |||
Debt instrument maturity date | 2016 | ||||
6.125% Due 2017 [Member] | Unsecured Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | 81 | 81 | |||
Debt interest percentage | 6.13% | ||||
Debt instrument maturity date | 2017 | ||||
Debt instrument, interest percentage | 6.13% | ||||
Debt instrument, carrying value | 81 | 81 | |||
Debt instrument maturity date | 2017 | ||||
7.45% Due 2032 [Member] | Unsecured Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | 185 | 185 | |||
Debt interest percentage | 7.45% | ||||
Debt instrument maturity date | 2032 | ||||
Debt instrument, interest percentage | 7.45% | ||||
Debt instrument, carrying value | 185 | 185 | |||
Debt instrument maturity date | 2032 | ||||
4.46% Due 2016 [Member] | Transition Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | 8 | ||||
Total long-term debt | 8 | ||||
4.91% Due 2017 [Member] | Transition Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | 17 | 46 | |||
Total long-term debt | 17 | 46 | |||
5.05% Due 2020 [Member] | Transition Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | 51 | 54 | |||
Total long-term debt | 51 | 54 | |||
5.55% Due 2023 [Member] | Transition Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | 147 | 147 | |||
Total long-term debt | 147 | 147 | |||
Atlantic City Electric Co [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | 904 | 861 | |||
Net unamortized premium(discount) | -1 | -1 | |||
Current portion of long-term debt | -15 | -107 | |||
Total net long-term debt | 888 | 753 | |||
Total long-term debt | 904 | 861 | |||
Atlantic City Electric Co [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | 904 | 761 | |||
Total long-term debt | 904 | 761 | |||
Atlantic City Electric Co [Member] | Variable Rate Term Loan [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | 100 | ||||
Debt instrument maturity date | 2014 | ||||
Debt instrument, carrying value | 100 | ||||
Debt instrument maturity date | 2014 | ||||
Atlantic City Electric Co [Member] | Transition Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | 215 | 255 | |||
Current portion of long-term debt | -44 | -41 | |||
Total Net Long-Term Debt | 171 | 214 | |||
Total long-term debt | 215 | 255 | |||
Atlantic City Electric Co [Member] | 7.63% Due 2014 [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest percentage | 7.63% | ||||
Debt instrument maturity date | 2014 | ||||
Debt instrument, interest percentage | 7.63% | ||||
Debt instrument maturity date | 2014 | ||||
Debt instrument, carrying value | 7 | ||||
Total long-term debt | 7 | ||||
Atlantic City Electric Co [Member] | 7.68% Due 2015 - 2016 [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest percentage | 7.68% | ||||
Debt instrument, interest percentage | 7.68% | ||||
Debt instrument maturity date, start | 2015 | ||||
Debt instrument maturity date, end | 2016 | ||||
Debt instrument maturity date, start | 2015 | ||||
Debt instrument maturity date, end | 2016 | ||||
Debt instrument, carrying value | 17 | 17 | |||
Total long-term debt | 17 | 17 | |||
Atlantic City Electric Co [Member] | 7.75% Due 2018 [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest percentage | 7.75% | ||||
Debt instrument maturity date | 2018 | ||||
Debt instrument, interest percentage | 7.75% | ||||
Debt instrument maturity date | 2018 | ||||
Debt instrument, carrying value | 250 | 250 | |||
Total long-term debt | 250 | 250 | |||
Atlantic City Electric Co [Member] | 6.80% Due 2021 [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest percentage | 6.80% | ||||
Debt instrument maturity date | 2021 | ||||
Debt instrument, interest percentage | 6.80% | ||||
Debt instrument maturity date | 2021 | ||||
Debt instrument, carrying value | 39 | 39 | |||
Total long-term debt | 39 | 39 | |||
Atlantic City Electric Co [Member] | 4.35% Due 2021 [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest percentage | 4.35% | ||||
Debt instrument maturity date | 2021 | ||||
Debt instrument, interest percentage | 4.35% | ||||
Debt instrument maturity date | 2021 | ||||
Debt instrument, carrying value | 200 | 200 | |||
Total long-term debt | 200 | 200 | |||
Atlantic City Electric Co [Member] | 3.375% Due 2024 [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest percentage | 3.38% | ||||
Debt instrument maturity date | 2024 | ||||
Debt instrument, interest percentage | 3.38% | ||||
Debt instrument maturity date | 2024 | ||||
Debt instrument, carrying value | 150 | ||||
Total long-term debt | 150 | ||||
Atlantic City Electric Co [Member] | 4.875% Due 2029 [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest percentage | 4.88% | ||||
Debt instrument maturity date | 2029 | ||||
Debt instrument, interest percentage | 4.88% | ||||
Debt instrument maturity date | 2029 | ||||
Debt instrument, carrying value | 23 | 23 | |||
Total long-term debt | 23 | 23 | |||
Atlantic City Electric Co [Member] | 5.80% Due 2034 [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest percentage | 5.80% | ||||
Debt instrument maturity date | 2034 | ||||
Debt instrument, interest percentage | 5.80% | ||||
Debt instrument maturity date | 2034 | ||||
Debt instrument, carrying value | 120 | 120 | |||
Total long-term debt | 120 | 120 | |||
Atlantic City Electric Co [Member] | 5.80% Due 2036 [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest percentage | 5.80% | ||||
Debt instrument maturity date | 2036 | ||||
Debt instrument, interest percentage | 5.80% | ||||
Debt instrument maturity date | 2036 | ||||
Debt instrument, carrying value | 105 | 105 | |||
Total long-term debt | 105 | 105 | |||
Atlantic City Electric Co [Member] | 4.46% Due 2016 [Member] | Transition Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest percentage | 4.46% | ||||
Debt instrument maturity date | 2016 | ||||
Debt instrument, interest percentage | 4.46% | ||||
Debt instrument maturity date | 2016 | ||||
Debt instrument, carrying value | 8 | ||||
Total long-term debt | 8 | ||||
Atlantic City Electric Co [Member] | 4.91% Due 2017 [Member] | Transition Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest percentage | 4.91% | ||||
Debt instrument maturity date | 2017 | ||||
Debt instrument, interest percentage | 4.91% | ||||
Debt instrument maturity date | 2017 | ||||
Debt instrument, carrying value | 17 | 46 | |||
Total long-term debt | 17 | 46 | |||
Atlantic City Electric Co [Member] | 5.05% Due 2020 [Member] | Transition Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest percentage | 5.05% | ||||
Debt instrument maturity date | 2020 | ||||
Debt instrument, interest percentage | 5.05% | ||||
Debt instrument maturity date | 2020 | ||||
Debt instrument, carrying value | 51 | 54 | |||
Total long-term debt | 51 | 54 | |||
Atlantic City Electric Co [Member] | 5.55% Due 2023 [Member] | Transition Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest percentage | 5.55% | ||||
Debt instrument maturity date | 2023 | ||||
Debt instrument, interest percentage | 5.55% | ||||
Debt instrument maturity date | 2023 | ||||
Debt instrument, carrying value | 147 | 147 | |||
Total long-term debt | 147 | 147 | |||
Delmarva Power & Light Co/De [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | 1,068 | 968 | |||
Net unamortized premium(discount) | 3 | -1 | |||
Current portion of long-term debt | -100 | -100 | |||
Total net long-term debt | 971 | 867 | |||
Total long-term debt | 1,068 | 968 | |||
Delmarva Power & Light Co/De [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | 850 | 650 | |||
Debt instrument, carrying value | 850 | 650 | |||
Debt instrument, carrying value | 78 | 78 | |||
Total long-term debt | 78 | 78 | |||
Delmarva Power & Light Co/De [Member] | Unsecured Tax-Exempt Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | 78 | 78 | |||
Debt instrument, carrying value | 78 | 78 | |||
Delmarva Power & Light Co/De [Member] | Medium-Term Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | 40 | 40 | |||
Debt instrument, carrying value | 40 | 40 | |||
Delmarva Power & Light Co/De [Member] | Unsecured Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | 100 | 200 | |||
Debt instrument, carrying value | 100 | 200 | |||
Delmarva Power & Light Co/De [Member] | 5.22% Due 2016 [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | 100 | 100 | |||
Debt interest percentage | 5.22% | ||||
Debt instrument maturity date | 2016 | ||||
Debt instrument, interest percentage | 5.22% | ||||
Debt instrument, carrying value | 100 | 100 | |||
Debt instrument maturity date | 2016 | ||||
Debt instrument, carrying value | 100 | 100 | |||
Total long-term debt | 100 | 100 | |||
Delmarva Power & Light Co/De [Member] | 3.50% Due 2023 [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | 500 | 300 | |||
Debt interest percentage | 3.50% | 3.50% | |||
Debt instrument maturity date | 2023 | ||||
Debt instrument, interest percentage | 3.50% | 3.50% | |||
Debt instrument, carrying value | 500 | 300 | |||
Debt instrument maturity date | 2023 | ||||
Debt instrument, carrying value | 500 | 300 | |||
Total long-term debt | 500 | 300 | |||
Delmarva Power & Light Co/De [Member] | 4.00% Due 2042 [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | 250 | 250 | |||
Debt interest percentage | 4.00% | ||||
Debt instrument maturity date | 2042 | ||||
Debt instrument, interest percentage | 4.00% | ||||
Debt instrument, carrying value | 250 | 250 | |||
Debt instrument maturity date | 2042 | ||||
Debt instrument, carrying value | 250 | 250 | |||
Total long-term debt | 250 | 250 | |||
Delmarva Power & Light Co/De [Member] | 5.40% Due 2031 [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | 78 | 78 | |||
Total long-term debt | 78 | 78 | |||
Delmarva Power & Light Co/De [Member] | 5.40% Due 2031 [Member] | Unsecured Tax-Exempt Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | 78 | 78 | |||
Debt interest percentage | 5.40% | ||||
Debt instrument maturity date | 2031 | ||||
Debt instrument, interest percentage | 5.40% | ||||
Debt instrument, carrying value | 78 | 78 | |||
Debt instrument maturity date | 2031 | ||||
Delmarva Power & Light Co/De [Member] | 7.56% - 7.58% Due 2017 [Member] | Medium-Term Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | 14 | 14 | |||
Debt instrument maturity date | 2017 | ||||
Debt instrument, carrying value | 14 | 14 | |||
Debt instrument maturity date | 2017 | ||||
Debt instrument percentage, minimum | 7.56% | ||||
Debt instrument percentage, maximum | 7.58% | ||||
Debt instrument percentage, minimum | 7.56% | ||||
Debt instrument percentage, maximum | 7.58% | ||||
Delmarva Power & Light Co/De [Member] | 6.81% Due 2018 [Member] | Medium-Term Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | 4 | 4 | |||
Debt interest percentage | 6.81% | ||||
Debt instrument maturity date | 2018 | ||||
Debt instrument, interest percentage | 6.81% | ||||
Debt instrument, carrying value | 4 | 4 | |||
Debt instrument maturity date | 2018 | ||||
Delmarva Power & Light Co/De [Member] | 7.61% Due 2019 [Member] | Medium-Term Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | 12 | 12 | |||
Debt interest percentage | 7.61% | ||||
Debt instrument maturity date | 2019 | ||||
Debt instrument, interest percentage | 7.61% | ||||
Debt instrument, carrying value | 12 | 12 | |||
Debt instrument maturity date | 2019 | ||||
Delmarva Power & Light Co/De [Member] | 7.72% Due 2027 [Member] | Medium-Term Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | 10 | 10 | |||
Debt interest percentage | 7.72% | ||||
Debt instrument maturity date | 2027 | ||||
Debt instrument, interest percentage | 7.72% | ||||
Debt instrument, carrying value | 10 | 10 | |||
Debt instrument maturity date | 2027 | ||||
Delmarva Power & Light Co/De [Member] | 5.00% Due 2014 [Member] | Unsecured Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | 100 | ||||
Debt interest percentage | 5.00% | ||||
Debt instrument maturity date | 2014 | ||||
Debt instrument, interest percentage | 5.00% | ||||
Debt instrument, carrying value | 100 | ||||
Debt instrument maturity date | 2014 | ||||
Delmarva Power & Light Co/De [Member] | 5.00% Due 2015 [Member] | Unsecured Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | 100 | 100 | |||
Debt interest percentage | 5.00% | ||||
Debt instrument maturity date | 2015 | ||||
Debt instrument, interest percentage | 5.00% | ||||
Debt instrument, carrying value | 100 | 100 | |||
Debt instrument maturity date | 2015 | ||||
Potomac Capital Investment Corporation (PCI) [Member] | 6.59% - 6.69% Due 2014 [Member] | Recourse Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | 11 | ||||
Debt instrument maturity date | 2014 | ||||
Debt instrument, carrying value | 11 | ||||
Debt instrument maturity date | 2014 | ||||
Debt instrument percentage, minimum | 6.59% | ||||
Debt instrument percentage, maximum | 6.69% | ||||
Debt instrument percentage, minimum | 6.59% | ||||
Debt instrument percentage, maximum | 6.69% | ||||
Pepco Energy Services [Member] | 6.70% - 7.46% Due 2017-2018 [Member] | Secured Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | 4 | 14 | |||
Debt instrument, carrying value | 4 | 14 | |||
Debt instrument maturity date, start | 2015 | ||||
Debt instrument maturity date, end | 2018 | ||||
Debt instrument percentage, minimum | 6.70% | ||||
Debt instrument percentage, maximum | 7.46% | ||||
Debt instrument percentage, minimum | 6.70% | ||||
Debt instrument percentage, maximum | 7.46% | ||||
Debt instrument maturity date, start | 2015 | ||||
Debt instrument maturity date, end | 2018 | ||||
Potomac Electric Power Co [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, carrying value | 2,135 | 1,910 | |||
Net unamortized premium(discount) | -11 | -11 | |||
Current portion of long-term debt | -175 | ||||
Total net long-term debt | 2,124 | 1,724 | |||
Total long-term debt | 2,135 | 1,910 | |||
Potomac Electric Power Co [Member] | 4.65% Due 2014 [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest percentage | 4.65% | 4.65% | |||
Debt instrument maturity date | 2014 | ||||
Debt instrument, interest percentage | 4.65% | 4.65% | |||
Debt instrument maturity date | 2014 | ||||
Debt instrument, carrying value | 175 | ||||
Total long-term debt | 175 | ||||
Potomac Electric Power Co [Member] | 3.05% Due 2022 [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest percentage | 3.05% | ||||
Debt instrument maturity date | 2022 | ||||
Debt instrument, interest percentage | 3.05% | ||||
Debt instrument maturity date | 2022 | ||||
Debt instrument, carrying value | 200 | 200 | |||
Total long-term debt | 200 | 200 | |||
Potomac Electric Power Co [Member] | 6.20% Due 2022 [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest percentage | 6.20% | ||||
Debt instrument maturity date | 2022 | ||||
Debt instrument, interest percentage | 6.20% | ||||
Debt instrument maturity date | 2022 | ||||
Debt instrument, carrying value | 110 | 110 | |||
Total long-term debt | 110 | 110 | |||
Potomac Electric Power Co [Member] | 3.60% Due 2024 [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest percentage | 3.60% | ||||
Debt instrument maturity date | 2024 | ||||
Debt instrument, interest percentage | 3.60% | ||||
Debt instrument maturity date | 2024 | ||||
Debt instrument, carrying value | 400 | ||||
Total long-term debt | 400 | ||||
Potomac Electric Power Co [Member] | 5.75% Due 2034 [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest percentage | 5.75% | ||||
Debt instrument maturity date | 2034 | ||||
Debt instrument, interest percentage | 5.75% | ||||
Debt instrument maturity date | 2034 | ||||
Debt instrument, carrying value | 100 | 100 | |||
Total long-term debt | 100 | 100 | |||
Potomac Electric Power Co [Member] | 5.40% Due 2035 [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest percentage | 5.40% | ||||
Debt instrument maturity date | 2035 | ||||
Debt instrument, interest percentage | 5.40% | ||||
Debt instrument maturity date | 2035 | ||||
Debt instrument, carrying value | 175 | 175 | |||
Total long-term debt | 175 | 175 | |||
Potomac Electric Power Co [Member] | 6.50% Due 2037 [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest percentage | 6.50% | ||||
Debt instrument maturity date | 2037 | ||||
Debt instrument, interest percentage | 6.50% | ||||
Debt instrument maturity date | 2037 | ||||
Debt instrument, carrying value | 500 | 500 | |||
Total long-term debt | 500 | 500 | |||
Potomac Electric Power Co [Member] | 7.90% Due 2038 [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest percentage | 7.90% | ||||
Debt instrument maturity date | 2038 | ||||
Debt instrument, interest percentage | 7.90% | ||||
Debt instrument maturity date | 2038 | ||||
Debt instrument, carrying value | 250 | 250 | |||
Total long-term debt | 250 | 250 | |||
Potomac Electric Power Co [Member] | 4.15% Due 2043 [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest percentage | 4.15% | ||||
Debt instrument maturity date | 2043 | ||||
Debt instrument, interest percentage | 4.15% | ||||
Debt instrument maturity date | 2043 | ||||
Debt instrument, carrying value | 250 | 250 | |||
Total long-term debt | 250 | 250 | |||
Potomac Electric Power Co [Member] | 4.95% Due 2043 [Member] | First Mortgage Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt interest percentage | 4.95% | ||||
Debt instrument maturity date | 2043 | ||||
Debt instrument, interest percentage | 4.95% | ||||
Debt instrument maturity date | 2043 | ||||
Debt instrument, carrying value | 150 | 150 | |||
Total long-term debt | $150 | $150 |
Debt_Additional_Information_De
Debt - Additional Information (Detail) (USD $) | 12 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | |||||
Dec. 31, 2014 | Dec. 31, 2013 | Apr. 15, 2014 | 10-May-13 | Aug. 31, 2014 | Oct. 24, 2013 | Dec. 31, 2014 | Mar. 31, 2014 | Jun. 30, 2014 | |
Sublimit | |||||||||
Debt Instrument [Line Items] | |||||||||
Maturities of long term debt, 2015 | $410,000,000 | $410,000,000 | |||||||
Maturities of long term debt, 2016 | 340,000,000 | 340,000,000 | |||||||
Maturities of long term debt, 2017 | 131,000,000 | 131,000,000 | |||||||
Maturities of long term debt, 2018 | 285,000,000 | 285,000,000 | |||||||
Maturities of long term debt, 2019 | 30,000,000 | 30,000,000 | |||||||
Maturities of long term debt, thereafter | 3,836,000,000 | 3,836,000,000 | |||||||
Ongoing commercial paper | 875,000,000 | 875,000,000 | |||||||
Commercial paper outstanding | 729,000,000 | 565,000,000 | 729,000,000 | ||||||
Commercial paper weighted average maturity, in days | 6 days | 5 days | |||||||
Variable rate demand bonds maturing 2015 to 2017 | 26,000,000 | 26,000,000 | |||||||
Variable rate demand bonds maturing 2024 | 33,000,000 | 33,000,000 | |||||||
Variable rate demand bonds maturing 2028 to 2029 | 46,000,000 | 46,000,000 | |||||||
Variable rate demand bonds weighted average interest rate | 0.19% | 0.24% | |||||||
Credit facility, termination date | 1-Aug-18 | ||||||||
Line of credit facility maximum borrowing capacity | 1,500,000,000 | 1,500,000,000 | |||||||
Parent company credit facility letter of credit, maximum | 500,000,000 | ||||||||
Same day borrowings maximum percentage amount | 10.00% | ||||||||
Swingline loan repayment period | 14 days | ||||||||
Credit facility borrowing capacity | 750,000,000 | 750,000,000 | |||||||
Maximum amount of credit available to parent | 1,250,000,000 | ||||||||
Subsidiary borrowing limit under parent's credit facility | 500,000,000 | ||||||||
Maximum number of sublimit reallocations per year | 8 | ||||||||
Debt instrument variable interest rate in addition to one month LIBOR's effective rate | 1.00% | 1.00% | |||||||
Borrowing capacity under the credit facility | 875,000,000 | 1,063,000,000 | 875,000,000 | ||||||
Utility subsidiaries combined cash and borrowing capacity | 413,000,000 | 332,000,000 | 413,000,000 | ||||||
Amended description of Change in Control | The Consent amends the definition of "Change in Control" in the credit agreement to mean, following consummation of the Merger, an event or series of events by which Exelon no longer owns, directly or indirectly, 100% of the outstanding shares of voting stock of Pepco Holdings. | ||||||||
Ownership percentage of outstanding voting stock for Change in Control | 100.00% | 100.00% | |||||||
Purchase price | 12,000,000 | ||||||||
Contract payment period | 9 years | ||||||||
Commercial Paper [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Commercial paper outstanding | 624,000,000 | 442,000,000 | 624,000,000 | ||||||
Commercial paper weighted average interest rate | 0.57% | 0.70% | 0.57% | ||||||
Federal Funds Effective Rate [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument variable interest rate in addition to the federal funds effective rate | 0.50% | ||||||||
First Mortgage Bonds [Member] | 4.65% Due 2014 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, interest percentage | 4.65% | 4.65% | 4.65% | ||||||
Repayment of first mortgage bonds | 175,000,000 | 175,000,000 | |||||||
First Mortgage Bonds [Member] | 3.60% Due 2024 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, face amount | 400,000,000 | 400,000,000 | |||||||
Debt instrument, maturity date | 15-Mar-24 | ||||||||
Debt instrument, interest percentage | 3.60% | 3.60% | |||||||
First Mortgage Bonds [Member] | 3.50% Due 2023 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, face amount | 200,000,000 | 200,000,000 | |||||||
Debt instrument, maturity date | 15-Nov-23 | ||||||||
Debt instrument, interest percentage | 3.50% | 3.50% | |||||||
Debt instrument, premium | 4,000,000 | 4,000,000 | |||||||
First Mortgage Bonds [Member] | 3.375% Due 2024 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Net proceeds from issuance of bonds | 7,200,000 | ||||||||
First Mortgage Bonds [Member] | 7.63% Secured Medium Term Notes, Due 2014 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Repayment of medium term notes | 7,000,000 | ||||||||
First Mortgage Bonds [Member] | May.10, 2013 ACE Term Loan Repaid Aug. 21, 2014 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Prepayment of term loan | 100,000,000 | ||||||||
Maximum [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Ratio of indebtedness to total capitalization | 65.00% | ||||||||
Ratio of deferrable interest subordinated debt to total capitalization | 15.00% | 15.00% | |||||||
Delmarva Power & Light Co/De [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Repayment of first mortgage bonds | 100,000,000 | ||||||||
Maturities of long term debt, 2015 | 100,000,000 | 100,000,000 | |||||||
Maturities of long term debt, 2016 | 100,000,000 | 100,000,000 | |||||||
Maturities of long term debt, 2017 | 14,000,000 | 14,000,000 | |||||||
Maturities of long term debt, 2018 | 4,000,000 | 4,000,000 | |||||||
Maturities of long term debt, 2019 | 12,000,000 | 12,000,000 | |||||||
Maturities of long term debt, thereafter | 838,000,000 | 838,000,000 | |||||||
Ongoing commercial paper | 500,000,000 | 500,000,000 | |||||||
Commercial paper outstanding | 211,000,000 | 252,000,000 | 211,000,000 | ||||||
Commercial paper weighted average maturity, in days | 5 days | 3 days | |||||||
Variable rate demand bonds amount | 105,000,000 | ||||||||
Variable rate demand bonds maturing 2024 | 33,000,000 | 33,000,000 | |||||||
Variable rate demand bonds weighted average interest rate | 0.19% | 0.26% | |||||||
Credit facility, termination date | 1-Aug-18 | ||||||||
Line of credit facility maximum borrowing capacity | 1,500,000,000 | 1,500,000,000 | |||||||
Parent company credit facility letter of credit, maximum | 500,000,000 | ||||||||
Same day borrowings maximum percentage amount | 10.00% | ||||||||
Swingline loan repayment period | 14 days | ||||||||
Credit facility borrowing capacity | 250,000,000 | 250,000,000 | |||||||
Maximum amount of credit available to parent | 1,250,000,000 | ||||||||
Subsidiary borrowing limit under parent's credit facility | 500,000,000 | ||||||||
Maximum number of sublimit reallocations per year | 8 | ||||||||
Debt instrument variable interest rate in addition to one month LIBOR's effective rate | 1.00% | 1.00% | |||||||
Utility subsidiaries combined cash and borrowing capacity | 413,000,000 | 332,000,000 | 413,000,000 | ||||||
Amended description of Change in Control | The Consent amends the definition of "Change in Control" in the credit agreement to mean, following consummation of the Merger, an event or series of events by which Exelon no longer owns, directly or indirectly, 100% of the outstanding shares of voting stock of Pepco Holdings. | ||||||||
Ownership percentage of outstanding voting stock for Change in Control | 100.00% | 100.00% | |||||||
Variable rate demand bonds maturing 2017 | 26,000,000 | 26,000,000 | |||||||
Variable rate demand bonds maturing 2028 | 16,000,000 | 16,000,000 | |||||||
Variable rate demand bonds maturing 2029 | 30,000,000 | 30,000,000 | |||||||
Delmarva Power & Light Co/De [Member] | Commercial Paper [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Commercial paper outstanding | 106,000,000 | 147,000,000 | 106,000,000 | ||||||
Commercial paper weighted average interest rate | 0.26% | 0.29% | 0.26% | ||||||
Delmarva Power & Light Co/De [Member] | Federal Funds Effective Rate [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument variable interest rate in addition to the federal funds effective rate | 0.50% | ||||||||
Delmarva Power & Light Co/De [Member] | 5.00% Due 2014 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Repayment of unsecured notes | 100,000,000 | ||||||||
Delmarva Power & Light Co/De [Member] | Medium-Term Notes [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, face amount | 100,000,000 | 100,000,000 | |||||||
Delmarva Power & Light Co/De [Member] | First Mortgage Bonds [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Variable rate demand bonds amount | 72,000,000 | ||||||||
Delmarva Power & Light Co/De [Member] | First Mortgage Bonds [Member] | 3.50% Due 2023 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, face amount | 200,000,000 | ||||||||
Debt instrument, maturity date | 15-Nov-23 | ||||||||
Debt instrument, interest percentage | 3.50% | 3.50% | 3.50% | ||||||
Debt instrument, premium | 4,000,000 | ||||||||
Delmarva Power & Light Co/De [Member] | Unsecured Notes [Member] | 5.00% Due 2014 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, interest percentage | 5.00% | 5.00% | |||||||
Repayment of first mortgage bonds | 100,000,000 | ||||||||
Delmarva Power & Light Co/De [Member] | Maximum [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Ratio of indebtedness to total capitalization | 65.00% | ||||||||
Ratio of deferrable interest subordinated debt to total capitalization | 15.00% | 15.00% | |||||||
Atlantic City Electric Co [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Maturities of long term debt, 2015 | 15,000,000 | 15,000,000 | |||||||
Maturities of long term debt, 2016 | 2,000,000 | 2,000,000 | |||||||
Maturities of long term debt, 2017 | 0 | 0 | |||||||
Maturities of long term debt, 2018 | 250,000,000 | 250,000,000 | |||||||
Maturities of long term debt, 2019 | 0 | 0 | |||||||
Maturities of long term debt, thereafter | 637,000,000 | 637,000,000 | |||||||
Ongoing commercial paper | 350,000,000 | 350,000,000 | |||||||
Commercial paper outstanding | 127,000,000 | 138,000,000 | 127,000,000 | ||||||
Commercial paper weighted average maturity, in days | 5 days | 4 days | |||||||
Variable rate demand bonds amount | 18,000,000 | ||||||||
Variable rate demand bonds weighted average interest rate | 0.05% | 0.11% | |||||||
Credit facility, termination date | 1-Aug-18 | ||||||||
Line of credit facility maximum borrowing capacity | 1,500,000,000 | 1,500,000,000 | |||||||
Parent company credit facility letter of credit, maximum | 500,000,000 | ||||||||
Same day borrowings maximum percentage amount | 10.00% | ||||||||
Swingline loan repayment period | 14 days | ||||||||
Credit facility borrowing capacity | 250,000,000 | 250,000,000 | |||||||
Maximum amount of credit available to parent | 1,250,000,000 | ||||||||
Subsidiary borrowing limit under parent's credit facility | 500,000,000 | ||||||||
Maximum number of sublimit reallocations per year | 8 | ||||||||
Debt instrument variable interest rate in addition to one month LIBOR's effective rate | 1.00% | 1.00% | |||||||
Utility subsidiaries combined cash and borrowing capacity | 413,000,000 | 332,000,000 | 413,000,000 | ||||||
Amended description of Change in Control | The Consent amends the definition of "Change in Control" in the credit agreement to mean, following consummation of the Merger, an event or series of events by which Exelon no longer owns, directly or indirectly, 100% of the outstanding shares of voting stock of Pepco Holdings. | ||||||||
Ownership percentage of outstanding voting stock for Change in Control | 100.00% | 100.00% | |||||||
Atlantic City Electric Co [Member] | Commercial Paper [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Commercial paper outstanding | 127,000,000 | 120,000,000 | 127,000,000 | ||||||
Commercial paper weighted average interest rate | 0.27% | 0.31% | 0.27% | ||||||
Atlantic City Electric Co [Member] | Federal Funds Effective Rate [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument variable interest rate in addition to the federal funds effective rate | 0.50% | ||||||||
Atlantic City Electric Co [Member] | Term Loan Agreement [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, face amount | 100,000,000 | ||||||||
Debt instrument variable interest rate in addition to the federal funds effective rate | 0.75% | ||||||||
Atlantic City Electric Co [Member] | Medium-Term Notes [Member] | 7.63% Secured Medium Term Notes, Due 2014 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, interest percentage | 7.63% | 7.63% | |||||||
Repayment of medium term notes | 7,000,000 | ||||||||
Atlantic City Electric Co [Member] | Senior Medium Term Notes One [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, face amount | 242,000,000 | 242,000,000 | |||||||
Atlantic City Electric Co [Member] | Unsecured Tax-Exempt Bonds [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, face amount | 62,000,000 | 62,000,000 | |||||||
Atlantic City Electric Co [Member] | First Mortgage Bonds [Member] | 3.375% Due 2024 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, face amount | 150,000,000 | 150,000,000 | |||||||
Debt instrument, maturity date | 1-Sep-24 | ||||||||
Debt instrument, interest percentage | 3.38% | 3.38% | |||||||
Net proceeds from issuance of bonds | 7,200,000 | ||||||||
Atlantic City Electric Co [Member] | First Mortgage Bonds [Member] | 7.63% Secured Medium Term Notes, Due 2014 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, interest percentage | 7.63% | 7.63% | |||||||
Repayment of medium term notes | 7,000,000 | ||||||||
Atlantic City Electric Co [Member] | First Mortgage Bonds [Member] | May.10, 2013 ACE Term Loan Repaid Aug. 21, 2014 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Prepayment of term loan | 100,000,000 | ||||||||
Atlantic City Electric Co [Member] | Transition Bonds [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Maturities of long term debt, 2015 | 44,000,000 | 44,000,000 | |||||||
Maturities of long term debt, 2016 | 46,000,000 | 46,000,000 | |||||||
Maturities of long term debt, 2017 | 35,000,000 | 35,000,000 | |||||||
Maturities of long term debt, 2018 | 31,000,000 | 31,000,000 | |||||||
Maturities of long term debt, 2019 | 18,000,000 | 18,000,000 | |||||||
Maturities of long term debt, thereafter | 41,000,000 | 41,000,000 | |||||||
Atlantic City Electric Co [Member] | Maximum [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Ratio of indebtedness to total capitalization | 65.00% | ||||||||
Ratio of deferrable interest subordinated debt to total capitalization | 15.00% | 15.00% | |||||||
Potomac Capital Investment Corporation (PCI) [Member] | Bank Loan Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Repayment of first mortgage bonds | 11,000,000 | ||||||||
Pepco Energy Services [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Maturities of long term debt, 2015 | 2,000,000 | 2,000,000 | |||||||
Maturities of long term debt, 2016 | 1,000,000 | 1,000,000 | |||||||
Maturities of long term debt, 2017 | 1,000,000 | 1,000,000 | |||||||
Maturities of long term debt, 2018 | 1,000,000 | 1,000,000 | |||||||
Maturities of long term debt, 2019 | 2,000,000 | 2,000,000 | |||||||
Maturities of long term debt, thereafter | 3,000,000 | 3,000,000 | |||||||
Total long term project funding | 10,000,000 | 12,000,000 | 10,000,000 | ||||||
Purchase price | 7,000,000 | ||||||||
Contract payment period | 23 years | ||||||||
Potomac Electric Power Co [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Maturities of long term debt, 2015 | 0 | 0 | |||||||
Maturities of long term debt, 2016 | 0 | 0 | |||||||
Maturities of long term debt, 2017 | 0 | 0 | |||||||
Maturities of long term debt, 2018 | 0 | 0 | |||||||
Maturities of long term debt, 2019 | 0 | 0 | |||||||
Maturities of long term debt, thereafter | 2,135,000,000 | 2,135,000,000 | |||||||
Ongoing commercial paper | 500,000,000 | 500,000,000 | |||||||
Commercial paper outstanding | 104,000,000 | 151,000,000 | 104,000,000 | ||||||
Commercial paper weighted average maturity, in days | 6 days | 5 days | |||||||
Credit facility, termination date | 1-Aug-18 | ||||||||
Line of credit facility maximum borrowing capacity | 1,500,000,000 | 1,500,000,000 | |||||||
Parent company credit facility letter of credit, maximum | 500,000,000 | ||||||||
Same day borrowings maximum percentage amount | 10.00% | ||||||||
Swingline loan repayment period | 14 days | ||||||||
Credit facility borrowing capacity | 250,000,000 | 250,000,000 | |||||||
Maximum amount of credit available to parent | 1,250,000,000 | ||||||||
Subsidiary borrowing limit under parent's credit facility | 500,000,000 | ||||||||
Maximum number of sublimit reallocations per year | 8 | ||||||||
Debt instrument variable interest rate in addition to one month LIBOR's effective rate | 1.00% | 1.00% | |||||||
Utility subsidiaries combined cash and borrowing capacity | 413,000,000 | 332,000,000 | 413,000,000 | ||||||
Amended description of Change in Control | The Consent amends the definition of "Change in Control" in the credit agreement to mean, following consummation of the Merger, an event or series of events by which Exelon no longer owns, directly or indirectly, 100% of the outstanding shares of voting stock of Pepco Holdings. | ||||||||
Ownership percentage of outstanding voting stock for Change in Control | 100.00% | 100.00% | |||||||
Purchase price | 12,000,000 | ||||||||
Contract payment period | 9 years | ||||||||
Potomac Electric Power Co [Member] | Commercial Paper [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Commercial paper outstanding | 104,000,000 | 151,000,000 | 104,000,000 | ||||||
Commercial paper weighted average interest rate | 0.28% | 0.34% | 0.28% | ||||||
Potomac Electric Power Co [Member] | Federal Funds Effective Rate [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument variable interest rate in addition to the federal funds effective rate | 0.50% | ||||||||
Potomac Electric Power Co [Member] | Medium-Term Notes [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, face amount | 110,000,000 | 110,000,000 | |||||||
Potomac Electric Power Co [Member] | First Mortgage Bonds [Member] | 4.65% Due 2014 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, interest percentage | 4.65% | 4.65% | 4.65% | ||||||
Repayment of first mortgage bonds | 175,000,000 | ||||||||
Retirement of debt | 175,000,000 | ||||||||
Potomac Electric Power Co [Member] | First Mortgage Bonds [Member] | 3.60% Due 2024 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, face amount | 400,000,000 | 400,000,000 | |||||||
Debt instrument, maturity date | 15-Mar-24 | ||||||||
Debt instrument, interest percentage | 3.60% | 3.60% | |||||||
Potomac Electric Power Co [Member] | Senior Notes [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, face amount | 885,000,000 | 885,000,000 | |||||||
Potomac Electric Power Co [Member] | Maximum [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Ratio of indebtedness to total capitalization | 65.00% | ||||||||
Ratio of deferrable interest subordinated debt to total capitalization | 15.00% | 15.00% | |||||||
PHI [Member] | Commercial Paper [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Commercial paper outstanding | $287,000,000 | $24,000,000 | $287,000,000 |
Debt_Components_of_ShortTerm_D
Debt - Components of Short-Term Debt (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Short-term Debt [Line Items] | ||
Short-term debt | $729 | $565 |
Commercial Paper [Member] | ||
Short-term Debt [Line Items] | ||
Short-term debt | 624 | 442 |
Variable Rate Demand Bonds [Member] | ||
Short-term Debt [Line Items] | ||
Short-term debt | 105 | 123 |
Potomac Electric Power Co [Member] | ||
Short-term Debt [Line Items] | ||
Short-term debt | 104 | 151 |
Potomac Electric Power Co [Member] | Commercial Paper [Member] | ||
Short-term Debt [Line Items] | ||
Short-term debt | 104 | 151 |
Atlantic City Electric Co [Member] | ||
Short-term Debt [Line Items] | ||
Short-term debt | 127 | 138 |
Atlantic City Electric Co [Member] | Commercial Paper [Member] | ||
Short-term Debt [Line Items] | ||
Short-term debt | 127 | 120 |
Atlantic City Electric Co [Member] | Variable Rate Demand Bonds [Member] | ||
Short-term Debt [Line Items] | ||
Short-term debt | 18 | |
Delmarva Power & Light Co/De [Member] | ||
Short-term Debt [Line Items] | ||
Short-term debt | 211 | 252 |
Delmarva Power & Light Co/De [Member] | Commercial Paper [Member] | ||
Short-term Debt [Line Items] | ||
Short-term debt | 106 | 147 |
Delmarva Power & Light Co/De [Member] | Variable Rate Demand Bonds [Member] | ||
Short-term Debt [Line Items] | ||
Short-term debt | $105 | $105 |
Income_Taxes_Provision_for_Con
Income Taxes - Provision for Consolidated Income Taxes from Continuing Operations (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Current Tax (Benefit) Expense | |||||||||||
Federal | ($137) | ($128) | ($166) | ||||||||
State and local | -26 | -9 | -40 | ||||||||
Total Current Tax (Benefit) Expense | -163 | -137 | -206 | ||||||||
Deferred Tax Expense (Benefit) | |||||||||||
Federal | 261 | 393 | 254 | ||||||||
State and local | 41 | 65 | 58 | ||||||||
Investment tax credit amortization | -1 | -2 | -3 | ||||||||
Total Deferred Tax Expense | 301 | 456 | 309 | ||||||||
Consolidated Income Tax Expense Related to Continuing Operations | 13 | 34 | 45 | 46 | 39 | 65 | 30 | 185 | 138 | 319 | 103 |
Potomac Electric Power Co [Member] | |||||||||||
Current Tax (Benefit) Expense | |||||||||||
Federal | -79 | -39 | -84 | ||||||||
State and local | -3 | -1 | -27 | ||||||||
Total Current Tax (Benefit) Expense | -82 | -40 | -111 | ||||||||
Deferred Tax Expense (Benefit) | |||||||||||
Federal | 150 | 96 | 127 | ||||||||
State and local | 24 | 24 | 33 | ||||||||
Investment tax credit amortization | -1 | -1 | |||||||||
Total Deferred Tax Expense | 174 | 119 | 159 | ||||||||
Consolidated Income Tax Expense Related to Continuing Operations | 10 | 38 | 28 | 16 | 17 | 40 | 20 | 2 | 92 | 79 | 48 |
Delmarva Power & Light Co/De [Member] | |||||||||||
Current Tax (Benefit) Expense | |||||||||||
Federal | -45 | -8 | -9 | ||||||||
State and local | -1 | ||||||||||
Total Current Tax (Benefit) Expense | -45 | -8 | -10 | ||||||||
Deferred Tax Expense (Benefit) | |||||||||||
Federal | 99 | 53 | 44 | ||||||||
State and local | 12 | 12 | 11 | ||||||||
Investment tax credit amortization | -1 | -1 | -1 | ||||||||
Total Deferred Tax Expense | 110 | 64 | 54 | ||||||||
Consolidated Income Tax Expense Related to Continuing Operations | 14 | 13 | 13 | 25 | 17 | 14 | 9 | 16 | 65 | 56 | 44 |
Atlantic City Electric Co [Member] | |||||||||||
Current Tax (Benefit) Expense | |||||||||||
Federal | -7 | -23 | -31 | ||||||||
State and local | -2 | -10 | -12 | ||||||||
Total Current Tax (Benefit) Expense | -9 | -33 | -43 | ||||||||
Deferred Tax Expense (Benefit) | |||||||||||
Federal | 30 | 28 | 46 | ||||||||
State and local | 7 | 25 | 16 | ||||||||
Investment tax credit amortization | -1 | -1 | |||||||||
Total Deferred Tax Expense | 37 | 52 | 61 | ||||||||
Consolidated Income Tax Expense Related to Continuing Operations | $4 | $14 | $4 | $6 | $5 | $13 | $4 | ($3) | $28 | $19 | $18 |
Income_Taxes_Reconciliation_of
Income Taxes - Reconciliation of Consolidated Income Tax Expense from Continuing Operations (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Rate Reconciliation [Line Items] | |||||||||||
Income tax at Federal statutory rate | $133,000,000 | $150,000,000 | $112,000,000 | ||||||||
State income taxes, net of federal effect | 23,000,000 | 27,000,000 | 19,000,000 | ||||||||
Asset removal costs | -12,000,000 | -14,000,000 | -11,000,000 | ||||||||
Change in estimates and interest related to uncertain and effectively settled tax positions | 56,000,000 | -8,000,000 | |||||||||
Establishment of valuation allowances related to deferred tax assets | 101,000,000 | ||||||||||
Merger related costs | 7,000,000 | ||||||||||
Other, net | -13,000,000 | -1,000,000 | -9,000,000 | ||||||||
Consolidated Income Tax Expense Related to Continuing Operations | 13,000,000 | 34,000,000 | 45,000,000 | 46,000,000 | 39,000,000 | 65,000,000 | 30,000,000 | 185,000,000 | 138,000,000 | 319,000,000 | 103,000,000 |
Income tax at Federal statutory rate, percentage | 35.00% | 35.00% | 35.00% | ||||||||
State income taxes, net of federal effect, percentage | 6.10% | 6.30% | 6.00% | ||||||||
Asset removal costs, percentage | -3.20% | -3.30% | -3.40% | ||||||||
Change in estimates and interest related to uncertain and effectively settled tax positions, percentage | 13.10% | -2.60% | |||||||||
Establishment of valuation allowances related to deferred tax assets, percentage | 23.50% | ||||||||||
Merger related costs, percentage | 1.80% | ||||||||||
Other, net, percentage | -3.40% | -0.20% | -2.90% | ||||||||
Consolidated Income Tax Expense Related to Continuing Operations, percentage | 36.30% | 74.40% | 32.10% | ||||||||
Potomac Electric Power Co [Member] | |||||||||||
Income Tax Rate Reconciliation [Line Items] | |||||||||||
Income tax at Federal statutory rate | 92,000,000 | 80,000,000 | 61,000,000 | ||||||||
State income taxes, net of federal effect | 15,000,000 | 13,000,000 | 10,000,000 | ||||||||
Asset removal costs | -12,000,000 | -14,000,000 | -11,000,000 | ||||||||
Change in estimates and interest related to uncertain and effectively settled tax positions | -1,000,000 | -3,000,000 | -11,000,000 | ||||||||
Establishment of valuation allowances related to deferred tax assets | 0 | 0 | |||||||||
Other, net | -2,000,000 | 3,000,000 | -1,000,000 | ||||||||
Consolidated Income Tax Expense Related to Continuing Operations | 10,000,000 | 38,000,000 | 28,000,000 | 16,000,000 | 17,000,000 | 40,000,000 | 20,000,000 | 2,000,000 | 92,000,000 | 79,000,000 | 48,000,000 |
Income tax at Federal statutory rate, percentage | 35.00% | 35.00% | 35.00% | ||||||||
State income taxes, net of federal effect, percentage | 5.70% | 5.70% | 5.70% | ||||||||
Asset removal costs, percentage | -4.60% | -6.10% | -6.30% | ||||||||
Change in estimates and interest related to uncertain and effectively settled tax positions, percentage | -0.40% | -1.30% | -6.30% | ||||||||
Other, net, percentage | -0.70% | 1.20% | -0.50% | ||||||||
Consolidated Income Tax Expense Related to Continuing Operations, percentage | 35.00% | 34.50% | 27.60% | ||||||||
Delmarva Power & Light Co/De [Member] | |||||||||||
Income Tax Rate Reconciliation [Line Items] | |||||||||||
Income tax at Federal statutory rate | 59,000,000 | 51,000,000 | 41,000,000 | ||||||||
State income taxes, net of federal effect | 9,000,000 | 8,000,000 | 6,000,000 | ||||||||
Establishment of valuation allowances related to deferred tax assets | 0 | 0 | |||||||||
Other, net | -3,000,000 | -3,000,000 | -3,000,000 | ||||||||
Consolidated Income Tax Expense Related to Continuing Operations | 14,000,000 | 13,000,000 | 13,000,000 | 25,000,000 | 17,000,000 | 14,000,000 | 9,000,000 | 16,000,000 | 65,000,000 | 56,000,000 | 44,000,000 |
Income tax at Federal statutory rate, percentage | 35.00% | 35.00% | 35.00% | ||||||||
State income taxes, net of federal effect, percentage | 5.30% | 5.50% | 5.10% | ||||||||
Other, net, percentage | -1.80% | -1.90% | -2.50% | ||||||||
Consolidated Income Tax Expense Related to Continuing Operations, percentage | 38.50% | 38.60% | 37.60% | ||||||||
Atlantic City Electric Co [Member] | |||||||||||
Income Tax Rate Reconciliation [Line Items] | |||||||||||
Income tax at Federal statutory rate | 26,000,000 | 24,000,000 | 19,000,000 | ||||||||
State income taxes, net of federal effect | 4,000,000 | 5,000,000 | 3,000,000 | ||||||||
Change in estimates and interest related to uncertain and effectively settled tax positions | -1,000,000 | -9,000,000 | -1,000,000 | ||||||||
Establishment of valuation allowances related to deferred tax assets | 0 | 0 | |||||||||
Plant basis adjustments | -2,000,000 | -1,000,000 | |||||||||
Investment tax credit amortization | -1,000,000 | -1,000,000 | |||||||||
Other, net | -1,000,000 | 2,000,000 | -1,000,000 | ||||||||
Consolidated Income Tax Expense Related to Continuing Operations | $4,000,000 | $14,000,000 | $4,000,000 | $6,000,000 | $5,000,000 | $13,000,000 | $4,000,000 | ($3,000,000) | $28,000,000 | $19,000,000 | $18,000,000 |
Income tax at Federal statutory rate, percentage | 35.00% | 35.00% | 35.00% | ||||||||
State income taxes, net of federal effect, percentage | 5.50% | 7.20% | 5.70% | ||||||||
Change in estimates and interest related to uncertain and effectively settled tax positions, percentage | -1.40% | -13.00% | -1.90% | ||||||||
Plant basis adjustments, percentage | -2.90% | -1.90% | |||||||||
Investment tax credit amortization, percentage | -1.40% | -1.90% | |||||||||
Other, net, percentage | -0.70% | 2.60% | -1.00% | ||||||||
Consolidated Income Tax Expense Related to Continuing Operations, percentage | 38.40% | 27.50% | 34.00% |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Schedule of Income Tax [Line Items] | ||||
Tax benefit related to certain energy efficiency tax deductions | $5,000,000 | |||
Change in estimates and interest related to uncertain tax positions | 56,000,000 | |||
Establishment of valuation allowances on deferred tax assets | 101,000,000 | 101,000,000 | ||
PCI future deferred tax asset | 101,000,000 | 101,000,000 | ||
Income tax settlement with IRS | 8,000,000 | |||
Federal and state net operating losses, years | 20 years | |||
Federal and state net operating losses, expiration period | 2029 to 2034 | |||
Unrecognized tax benefits that would impact effective tax rate | 12,000,000 | |||
Uncertain tax position pre-tax interest income (expense) recognize | -125,000,000 | 23,000,000 | ||
Uncertain tax position after-tax interest income (expense) recognized | -75,000,000 | 14,000,000 | ||
Accrued interest receivable | 2,000,000 | 2,000,000 | 10,000,000 | |
Estimated possible decrease in unrecognized tax benefit lower range | 700,000,000 | |||
Estimated possible decrease in unrecognized tax benefit upper range | 800,000,000 | |||
Other taxes for continuing operations | 407,000,000 | 422,000,000 | 426,000,000 | |
After-tax effect of revised lease rerun | 377,000,000 | |||
Valuation allowance for deferred tax assets | 101,000,000 | |||
Less Than [Member] | ||||
Schedule of Income Tax [Line Items] | ||||
Uncertain tax position pre-tax interest income (expense) recognize | -1,000,000 | |||
Potomac Electric Power Co [Member] | ||||
Schedule of Income Tax [Line Items] | ||||
Income tax settlement with IRS | 10,000,000 | |||
Federal and state net operating losses, years | 20 years | |||
Federal and state net operating losses, expiration period | 2029 to 2034 | |||
Unrecognized tax benefits that would impact effective tax rate | 1,000,000 | |||
Uncertain tax position pre-tax interest income (expense) recognize | 2,000,000 | 5,000,000 | 18,000,000 | |
Uncertain tax position after-tax interest income (expense) recognized | 1,000,000 | 3,000,000 | 11,000,000 | |
Accrued interest receivable | 9,000,000 | 9,000,000 | 5,000,000 | |
Estimated possible decrease in unrecognized tax benefit lower range | 65,000,000 | |||
Estimated possible decrease in unrecognized tax benefit upper range | 85,000,000 | |||
After-tax effect of revised lease rerun | 377,000,000 | |||
After-tax non-cash charge | 54,000,000 | |||
Additional interest income | 5,000,000 | |||
Valuation allowance for deferred tax assets | 0 | 0 | ||
Amended state returns | 20,000,000 | |||
Refunds received | 4,000,000 | |||
Income tax remaining recoverable amount | 16,000,000 | |||
Delmarva Power & Light Co/De [Member] | ||||
Schedule of Income Tax [Line Items] | ||||
Federal and state net operating losses, years | 20 years | |||
Federal and state net operating losses, expiration period | 2029 to 2034 | |||
Unrecognized tax benefits that would impact effective tax rate | 1,000,000 | |||
Uncertain tax position pre-tax interest income (expense) recognize | 1,000,000 | 1,000,000 | 1,000,000 | |
Accrued interest receivable | 2,000,000 | 2,000,000 | 1,000,000 | |
Estimated possible decrease in unrecognized tax benefit lower range | 14,000,000 | |||
Estimated possible decrease in unrecognized tax benefit upper range | 18,000,000 | |||
After-tax effect of revised lease rerun | 377,000,000 | |||
After-tax non-cash charge | 54,000,000 | |||
Additional interest income | 1,000,000 | |||
Valuation allowance for deferred tax assets | 0 | 0 | ||
Atlantic City Electric Co [Member] | ||||
Schedule of Income Tax [Line Items] | ||||
Income tax settlement with IRS | 1,000,000 | |||
Federal and state net operating losses, years | 20 years | |||
Federal and state net operating losses, expiration period | 2029 to 2032 | |||
Unrecognized tax benefits that would impact effective tax rate | 0 | |||
Uncertain tax position pre-tax interest income (expense) recognize | 1,000,000 | 12,000,000 | 2,000,000 | |
Uncertain tax position after-tax interest income (expense) recognized | 1,000,000 | 7,000,000 | 1,000,000 | |
Accrued interest receivable | 14,000,000 | 14,000,000 | 7,000,000 | |
Estimated possible decrease in unrecognized tax benefit lower range | 6,000,000 | |||
Estimated possible decrease in unrecognized tax benefit upper range | 8,000,000 | |||
After-tax effect of revised lease rerun | 377,000,000 | |||
After-tax non-cash charge | 54,000,000 | |||
Additional interest income | 6,000,000 | |||
Valuation allowance for deferred tax assets | 0 | 0 | ||
Amended state returns | $1,000,000 |
Income_Taxes_Components_of_Con
Income Taxes - Components of Consolidated Deferred Tax Liabilities (Assets) (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Schedule Of Deferred Income Tax Assets And Liabilities [Line Items] | ||
Depreciation and other basis differences related to plant and equipment | $2,962 | $2,628 |
Deferred electric service and electric restructuring liabilities | 67 | 91 |
Cross-border energy lease investments | -6 | |
Federal and state net operating losses | -400 | -350 |
Valuation allowances on state net operating losses | 61 | 21 |
Pension and other postretirement benefits | 116 | 135 |
Deferred taxes on amounts to be collected through future rates | 94 | 75 |
Other | 325 | 285 |
Total Deferred Tax Liabilities, net | 3,225 | 2,879 |
Deferred tax assets included in Current Assets | 50 | 51 |
Deferred tax liabilities included in Other Current Liabilities | -9 | -2 |
Total Consolidated Deferred Tax Liabilities, net non-current | 3,266 | 2,928 |
Potomac Electric Power Co [Member] | ||
Schedule Of Deferred Income Tax Assets And Liabilities [Line Items] | ||
Depreciation and other basis differences related to plant and equipment | 1,423 | 1,240 |
Federal and state net operating losses | -186 | -169 |
Pension and other postretirement benefits | 103 | 105 |
Deferred taxes on amounts to be collected through future rates | 59 | 43 |
Other | 180 | 145 |
Total Deferred Tax Liabilities, net | 1,579 | 1,364 |
Deferred tax assets included in Current Assets | 14 | 48 |
Deferred tax liabilities included in Other Current Liabilities | -9 | |
Total Consolidated Deferred Tax Liabilities, net non-current | 1,584 | 1,412 |
Delmarva Power & Light Co/De [Member] | ||
Schedule Of Deferred Income Tax Assets And Liabilities [Line Items] | ||
Depreciation and other basis differences related to plant and equipment | 797 | 712 |
Deferred electric service and electric restructuring liabilities | -4 | -5 |
Federal and state net operating losses | -115 | -125 |
Pension and other postretirement benefits | 80 | 80 |
Deferred taxes on amounts to be collected through future rates | 19 | 16 |
Other | 101 | 80 |
Total Deferred Tax Liabilities, net | 878 | 758 |
Deferred tax assets included in Current Assets | 16 | 59 |
Deferred tax liabilities included in Other Current Liabilities | -1 | -1 |
Total Consolidated Deferred Tax Liabilities, net non-current | 893 | 816 |
Atlantic City Electric Co [Member] | ||
Schedule Of Deferred Income Tax Assets And Liabilities [Line Items] | ||
Depreciation and other basis differences related to plant and equipment | 691 | 627 |
Deferred electric service and electric restructuring liabilities | 71 | 96 |
Federal and state net operating losses | -26 | -49 |
Pension and other postretirement benefits | 25 | 29 |
Deferred taxes on amounts to be collected through future rates | 16 | 16 |
Payment for termination of purchased power contracts with NUGs | 38 | 43 |
Purchased energy | 1 | 2 |
Other | 39 | 55 |
Total Deferred Tax Liabilities, net | 855 | 819 |
Deferred tax assets included in Current Assets | 10 | 15 |
Deferred tax liabilities included in Other Current Liabilities | -1 | |
Total Consolidated Deferred Tax Liabilities, net non-current | $865 | $833 |
Income_Taxes_Components_of_Con1
Income Taxes - Components of Consolidated Deferred Tax Liabilities (Assets) (Parenthetical) (Detail) (USD $) | Dec. 31, 2013 | Mar. 31, 2013 |
In Millions, unless otherwise specified | ||
Income Tax Disclosure [Abstract] | ||
Establishment of valuation allowance on deferred tax assets | $101 | $101 |
Income_Taxes_Reconciliation_of1
Income Taxes - Reconciliation of Beginning and Ending Balances of Unrecognized Tax Benefits (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Unrecognized Tax Benefits [Line Items] | |||
Unrecognized Tax Benefits, Beginning balance | $831 | $200 | $357 |
Tax positions related to current year, Additions | 4 | 3 | 1 |
Tax positions related to current year, Reductions | -2 | ||
Tax positions related to prior years, Additions | 27 | 646 | 79 |
Tax positions related to prior years, Reductions | -10 | -12 | -235 |
Settlements | -6 | -2 | |
Unrecognized Tax Benefits, Ending balance | 850 | 831 | 200 |
Potomac Electric Power Co [Member] | |||
Unrecognized Tax Benefits [Line Items] | |||
Unrecognized Tax Benefits, Beginning balance | 101 | 91 | 173 |
Tax positions related to current year, Additions | 1 | 1 | |
Tax positions related to current year, Reductions | -2 | ||
Tax positions related to prior years, Additions | 1 | 12 | 60 |
Tax positions related to prior years, Reductions | -4 | -3 | -142 |
Unrecognized Tax Benefits, Ending balance | 97 | 101 | 91 |
Delmarva Power & Light Co/De [Member] | |||
Unrecognized Tax Benefits [Line Items] | |||
Unrecognized Tax Benefits, Beginning balance | 9 | 9 | 35 |
Tax positions related to current year, Additions | 1 | ||
Tax positions related to prior years, Additions | 13 | ||
Tax positions related to prior years, Reductions | -1 | -26 | |
Unrecognized Tax Benefits, Ending balance | 22 | 9 | 9 |
Atlantic City Electric Co [Member] | |||
Unrecognized Tax Benefits [Line Items] | |||
Unrecognized Tax Benefits, Beginning balance | 9 | 17 | 79 |
Tax positions related to current year, Additions | 1 | 2 | 1 |
Tax positions related to prior years, Additions | 5 | 1 | 8 |
Tax positions related to prior years, Reductions | -2 | -5 | -69 |
Settlements | -6 | -2 | |
Unrecognized Tax Benefits, Ending balance | $13 | $9 | $17 |
Income_Taxes_Other_Taxes_Detai
Income Taxes - Other Taxes (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Schedule of Income Tax [Line Items] | |||
Gross Receipts/Delivery | $123 | $133 | $135 |
Property | 84 | 77 | 75 |
County Fuel and Energy | 143 | 153 | 160 |
Environmental, Use and Other | 63 | 65 | 62 |
Total | 413 | 428 | 432 |
Potomac Electric Power Co [Member] | |||
Schedule of Income Tax [Line Items] | |||
Gross Receipts/Delivery | 107 | 108 | 106 |
Property | 51 | 45 | 46 |
County Fuel and Energy | 143 | 153 | 160 |
Environmental, Use and Other | 62 | 62 | 60 |
Total | 363 | 368 | 372 |
Delmarva Power & Light Co/De [Member] | |||
Schedule of Income Tax [Line Items] | |||
Gross Receipts/Delivery | 16 | 15 | 14 |
Property | 24 | 24 | 21 |
Environmental, Use and Other | 2 | 1 | 1 |
Total | 42 | 40 | 36 |
Atlantic City Electric Co [Member] | |||
Schedule of Income Tax [Line Items] | |||
Gross Receipts/Delivery | 10 | 14 | |
Property | 3 | 3 | 3 |
Environmental, Use and Other | -1 | 1 | 1 |
Total | $2 | $14 | $18 |
StockBased_Compensation_Divide2
Stock-Based Compensation, Dividend Restrictions, and Calculations of Earnings Per Share of Common Stock - Additional Information (Detail) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Feb. 27, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares of common stock authorized for issuance | 10,000,000 | |||
Stock-based compensation expense | $0 | $0 | $0 | |
Eligible percentage of common stock over the performance period target award minimum | 25.00% | |||
Eligible percentage of common stock over the performance period target award maximum | 200.00% | |||
Requisite service period (years) | 3 years | |||
Restricted stock units were granted to each non-employee director | 21,138 | 37,735 | ||
Vesting Period | 1 year | 1 year | ||
Unrecognized compensation expense | 12,000,000 | |||
Costs recognized, weighted average period (years) | 2 years | |||
Stock option expiration (years) | 10 years | |||
Stock options outstanding | 0 | |||
Recognized compensation expense | 1,000,000 | 0 | 0 | |
Deferred compensation balance | 2,000,000 | 2,000,000 | ||
Ratio of equity to total capitalization | 30.00% | |||
Retained earnings | 565,000,000 | 595,000,000 | ||
Restricted net assets for consolidated subsidiaries | 2,547,000,000 | |||
Shares of PHI common stock | 17,922,077 | |||
Public offering price | $19.25 | |||
Underwriting discount | $0.67 | |||
Initial pricing of equity forward instruments | $18.58 | |||
Forward sale price | 17.39 | |||
Proceeds from equity forward transaction | 312,000,000 | |||
Purchases of common stock minimum per calendar month | 25 | |||
Purchases of common stock maximum per calendar year | 300,000 | |||
Shares issued and sold under the DRP | 1,000,000 | 2,000,000 | 2,000,000 | |
2012 LTIP [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares of common stock authorized for issuance | 8,000,000 | |||
Performance Based Restricted Stock Award [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $18,000,000 | $12,000,000 | $11,000,000 |
StockBased_Compensation_Divide3
Stock-Based Compensation, Dividend Restrictions, and Calculations of Earnings Per Share of Common Stock - Schedule of Restricted Stock and Restricted Stock Units (Detail) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares outstanding, beginning balance | 1,653,384 |
Granted, number of shares | 924,219 |
Forfeited, number of shares | -340,936 |
Vested, number of shares | -815,287 |
Number of shares outstanding, ending balance | 1,421,380 |
Restricted Stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Granted, number of shares | 183,486 |
Vested, number of shares | -129,321 |
Number of shares outstanding, ending balance | 54,165 |
Granted, weighted average grant date fair value | 26.8 |
Vested, weighted average grant date fair value | 26.8 |
Weighted average grant date fair value, ending of period | 26.8 |
Performance-Based Restricted Stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Granted, number of shares | 70,276 |
Number of shares outstanding, ending balance | 70,276 |
Granted, weighted average grant date fair value | 27.01 |
Weighted average grant date fair value, ending of period | 27.01 |
Time-Based Restricted Stock Units [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares outstanding, beginning balance | 583,554 |
Granted, number of shares | 222,350 |
Vested, number of shares | -336,946 |
Number of shares outstanding, ending balance | 468,958 |
Weighted average grant date fair value, beginning of period | 19.34 |
Granted, weighted average grant date fair value | 19.77 |
Vested, weighted average grant date fair value | 19.25 |
Weighted average grant date fair value, ending of period | 19.61 |
Performance-Based Restricted Stock Units [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares outstanding, beginning balance | 1,069,830 |
Granted, number of shares | 448,107 |
Forfeited, number of shares | -340,936 |
Vested, number of shares | -349,020 |
Number of shares outstanding, ending balance | 827,981 |
Weighted average grant date fair value, beginning of period | 19.06 |
Granted, weighted average grant date fair value | 18.53 |
Vested, weighted average grant date fair value | 21.07 |
Forfeited, weighted average grant date fair value | 19.54 |
Weighted average grant date fair value, ending of period | 17.73 |
StockBased_Compensation_Divide4
Stock-Based Compensation, Dividend Restrictions, and Calculations of Earnings Per Share of Common Stock - Schedule of Restricted Stock and Restricted Stock Units (Parenthetical) (Detail) | Dec. 31, 2014 | Dec. 31, 2013 |
Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares vested but not yet settled | 36,110 | |
Performance-Based Restricted Stock Units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares vested but not yet settled | 59,797 | 31,403 |
Time-Based Restricted Stock Units Award [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares vested but not yet settled | 94,685 | 59,523 |
StockBased_Compensation_Divide5
Stock-Based Compensation, Dividend Restrictions, and Calculations of Earnings Per Share of Common Stock - Weighted Average Grant Date Fair Value Per Share (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant-date fair value per share of award granted during the year | $26.80 | ||
Performance-Based Restricted Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant-date fair value per share of award granted during the year | $27.01 | ||
Unrestricted Stock Award [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant-date fair value per share of award granted during the year | $18.85 | ||
Time-Based Restricted Stock Units Award [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant-date fair value per share of award granted during the year | $19.77 | $19.70 | $19.69 |
Performance Based Restricted Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant-date fair value per share of award granted during the year | $18.53 | $17.03 | $21.13 |
StockBased_Compensation_Divide6
Stock-Based Compensation, Dividend Restrictions, and Calculations of Earnings Per Share of Common Stock - Dividends Received from Subsidiaries (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||
Dividends received from subsidiaries | $212 | $136 | $70 |
Potomac Electric Power Co [Member] | |||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||
Dividends received from subsidiaries | 86 | 46 | 35 |
Delmarva Power & Light Co/De [Member] | |||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||
Dividends received from subsidiaries | 100 | 30 | |
Atlantic City Electric Co [Member] | |||
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |||
Dividends received from subsidiaries | $26 | $60 | $35 |
StockBased_Compensation_Divide7
Stock-Based Compensation, Dividend Restrictions, and Calculations of Earnings Per Share of Common Stock - Calculation of Earnings Per Share of Common Stock (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Statement [Abstract] | |||||||||||
Net Income from Continuing Operations | $58 | $110 | $53 | ($111) | $242 | $110 | $218 | ||||
Net (loss) income from discontinued operations | 8 | -11 | -319 | -322 | 67 | ||||||
Net Income (loss) | $35 | $79 | $53 | $75 | $58 | $118 | $42 | ($430) | $242 | ($212) | $285 |
Average shares outstanding | 251 | 246 | 229 | ||||||||
Adjustment to shares outstanding | 0 | 0 | 0 | ||||||||
Weighted Average Shares Outstanding for Computation of Basic Earnings Per Share of Common Stock | 251 | 246 | 229 | ||||||||
Net effect of potentially dilutive shares | 1 | 1 | |||||||||
Weighted Average Shares Outstanding for Computation of Diluted Earnings Per Share of Common Stock | 252 | 246 | 230 | ||||||||
Basic earnings per share of common stock from continuing operations | $0.96 | $0.45 | $0.95 | ||||||||
Basic (loss) earnings per share of common stock from discontinued operations | ($1.31) | $0.30 | |||||||||
Basic earnings (loss) per share | $0.96 | ($0.86) | $1.25 | ||||||||
Diluted earnings per share of common stock from continuing operations | $0.96 | $0.45 | $0.95 | ||||||||
Diluted (loss) earnings per share of common stock from discontinued operations | ($1.31) | $0.29 | |||||||||
Diluted earnings (loss) per share | $0.96 | ($0.86) | $1.24 |
StockBased_Compensation_Divide8
Stock-Based Compensation, Dividend Restrictions, and Calculations of Earnings Per Share of Common Stock - Calculation of Earnings Per Share of Common Stock (Parenthetical) (Detail) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Statement [Abstract] | |||
Antidilutive securities excluded from computation of earnings per share, amount | 0 | 0 | 0 |
StockBased_Compensation_Divide9
Stock-Based Compensation, Dividend Restrictions, and Calculations of Earnings Per Share of Common Stock - Common Stock Reserved and Unissued (Detail) | Dec. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares | 24,136,266 |
DRP [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares | 4,982,016 |
Pepco Holdings Long-Term Incentive Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares | 6,946,614 |
Pepco Holdings 2012 Long-Term Incentive Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares | 7,746,773 |
Pepco Holdings Non-Management Directors Compensation Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares | 457,211 |
Pepco Holdings Retirement Savings Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares | 4,003,652 |
Preferred_Stock_Additional_Inf
Preferred Stock - Additional Information (Detail) (USD $) | 12 Months Ended | 0 Months Ended | ||||
Dec. 31, 2014 | Oct. 27, 2014 | Jul. 29, 2014 | Apr. 30, 2014 | Jan. 26, 2015 | Apr. 29, 2014 | |
Class of Stock [Line Items] | ||||||
Amount Of Non Voting Series A Preferred Stock Purchase price | $126,000,000 | |||||
Non-voting Series A Preferred Stock, number of shares issued | 1,800 | 1,800 | ||||
Non-voting Series A Preferred Stock, maximum aggregate consideration | 180,000,000 | |||||
Redemption of Preferred Stock at original purchase price | $10,000 | |||||
Preferred Stock [Member] | ||||||
Class of Stock [Line Items] | ||||||
Estimated fair value of derivatives | 3,000,000 | |||||
Maximum [Member] | ||||||
Class of Stock [Line Items] | ||||||
Non-voting Series A Preferred Stock, number of shares issued | 18,000 | |||||
Non-Voting Series A Preferred Stock [Member] | ||||||
Class of Stock [Line Items] | ||||||
Issuance of non-voting Series A Preferred Stock, shares issued | 9,000 | |||||
Additional shares issued | 1,800 | 1,800 | ||||
Non-voting Series A Preferred Stock, shares purchased price | 90,000,000 | |||||
Amount Of Non Voting Series A Preferred Stock Purchase price | 18,000,000 | 18,000,000 | ||||
Non-voting Series A Preferred Stock, cumulative, non-participating cash dividend | 0.10% | |||||
Subsequent Event [Member] | ||||||
Class of Stock [Line Items] | ||||||
Non-voting Series A Preferred Stock, number of shares issued | 1,800 | |||||
Subsequent Event [Member] | Non-Voting Series A Preferred Stock [Member] | ||||||
Class of Stock [Line Items] | ||||||
Additional shares issued | 1,800 | |||||
Amount Of Non Voting Series A Preferred Stock Purchase price | $18,000,000 |
Derivative_Instruments_and_Hed2
Derivative Instruments and Hedging Activities - Fair Values of Derivative Instruments by Balance Sheet Location (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Gross Derivative Instruments [Member] | ||
Derivative [Line Items] | ||
Derivative assets (current assets) | $3,000,000 | $1,000,000 |
Derivative liabilities (current liabilities) | -4,000,000 | |
Net Derivative (liability) asset | -1,000,000 | |
Net Derivative Instruments [Member] | ||
Derivative [Line Items] | ||
Derivative assets (current assets) | 3,000,000 | |
Net Derivative (liability) asset | 3,000,000 | |
Other Derivative Instruments [Member] | ||
Derivative [Line Items] | ||
Derivative assets (current assets) | 3,000,000 | 1,000,000 |
Derivative liabilities (current liabilities) | -4,000,000 | |
Net Derivative (liability) asset | -1,000,000 | |
Delmarva Power & Light Co/De [Member] | Gross Derivative Instruments [Member] | ||
Derivative [Line Items] | ||
Derivative assets (current assets) | 1,000,000 | |
Derivative liabilities (current liabilities) | -4,000,000 | |
Delmarva Power & Light Co/De [Member] | Other Derivative Instruments [Member] | ||
Derivative [Line Items] | ||
Derivative assets (current assets) | 1,000,000 | |
Derivative liabilities (current liabilities) | -4,000,000 | |
Effects of Cash Collateral and Netting [Member] | ||
Derivative [Line Items] | ||
Derivative assets (current assets) | -1,000,000 | |
Derivative liabilities (current liabilities) | 4,000,000 | |
Net Derivative (liability) asset | 4,000,000 | |
Effects of Cash Collateral and Netting [Member] | Delmarva Power & Light Co/De [Member] | ||
Derivative [Line Items] | ||
Derivative assets (current assets) | -1,000,000 | |
Derivative liabilities (current liabilities) | $4,000,000 |
Derivative_Instruments_and_Hed3
Derivative Instruments and Hedging Activities - Schedule of Cash Collateral Offset Against Derivative Positions (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Derivative [Line Items] | ||
Cash collateral pledged to counterparities with the right reclaim | $4 | |
Cash collateral received from counterparties with the obligation to return | -1 | |
Delmarva Power & Light Co/De [Member] | ||
Derivative [Line Items] | ||
Cash collateral pledged to counterparities with the right reclaim | 4 | |
Cash collateral received from counterparties with the obligation to return | ($1) |
Derivative_Instruments_and_Hed4
Derivative Instruments and Hedging Activities - Cash Flow Hedges Included in Accumulated Other Comprehensive Loss (Detail) (Interest Rate [Member], USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Interest Rate [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Accumulated Other Comprehensive Loss After-tax | $9 | $9 |
Portion Expected to be Reclassified to Income during the Next 12 Months | $1 | $1 |
Maximum Term | 212 months | 224 months |
Derivative_Instruments_and_Hed5
Derivative Instruments and Hedging Activities - Net Unrealized and Realized Derivative Gains (Losses) Deferred as Regulatory Liabilities and Regulatory Assets (Detail) (Other Derivative Activity [Member], USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Net unrealized (loss) gain arising during the period | ($3) | $4 | ($6) |
Net realized gain (loss) recognized during the period | 2 | -4 | -16 |
Delmarva Power & Light Co/De [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Net unrealized (loss) gain arising during the period | -3 | 1 | -3 |
Net realized gain (loss) recognized during the period | $2 | ($4) | ($16) |
Derivative_Instruments_and_Hed6
Derivative Instruments and Hedging Activities - Net Outstanding Commodity Forward Contracts That Did Not Qualify For Hedge Accounting (Detail) (Natural Gas (One Million British Thermal Units (MMBtu)) [Member]) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
MMBTU | MMBTU | |
Derivative [Line Items] | ||
Quantity | 3,892,500 | 3,977,500 |
Net Position | Long | |
2013 [Member] | ||
Derivative [Line Items] | ||
Net Position | Long | |
Delmarva Power & Light Co/De [Member] | ||
Derivative [Line Items] | ||
Quantity | 3,892,500 | 3,977,500 |
Net Position | Long | |
Delmarva Power & Light Co/De [Member] | 2013 [Member] | ||
Derivative [Line Items] | ||
Net Position | Long |
Fair_Value_Disclosures_Fair_Va
Fair Value Disclosures - Fair Value of Financial Assets and Liabilities Measured on Recurring Basis (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Restricted cash equivalents | $25 | $13 |
Financial instruments, assets | 122 | 116 |
Financial instruments, liabilities | 34 | 30 |
Preferred Stock [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative instruments, assets | 3 | |
Natural Gas [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative instruments, assets | 1 | |
Derivative instruments, liabilities | 4 | |
Treasury Fund [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Restricted cash equivalents | 38 | 34 |
Money Market Funds and Short-term Investments [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Executive deferred compensation plan assets | 35 | 35 |
Life Insurance Contracts [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Executive deferred compensation plan assets | 46 | 46 |
Executive deferred compensation plan liabilities | 30 | 30 |
Quoted Prices in Active Markets for Identical Instruments (Level 1) [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial instruments, assets | 52 | 50 |
Financial instruments, liabilities | 4 | |
Quoted Prices in Active Markets for Identical Instruments (Level 1) [Member] | Natural Gas [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative instruments, assets | 1 | |
Derivative instruments, liabilities | 4 | |
Quoted Prices in Active Markets for Identical Instruments (Level 1) [Member] | Treasury Fund [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Restricted cash equivalents | 38 | 34 |
Quoted Prices in Active Markets for Identical Instruments (Level 1) [Member] | Money Market Funds and Short-term Investments [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Executive deferred compensation plan assets | 14 | 15 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial instruments, assets | 48 | 47 |
Financial instruments, liabilities | 30 | 30 |
Significant Other Observable Inputs (Level 2) [Member] | Money Market Funds and Short-term Investments [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Executive deferred compensation plan assets | 21 | 20 |
Significant Other Observable Inputs (Level 2) [Member] | Life Insurance Contracts [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Executive deferred compensation plan assets | 27 | 27 |
Executive deferred compensation plan liabilities | 30 | 30 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial instruments, assets | 22 | 19 |
Significant Unobservable Inputs (Level 3) [Member] | Preferred Stock [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative instruments, assets | 3 | |
Significant Unobservable Inputs (Level 3) [Member] | Life Insurance Contracts [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Executive deferred compensation plan assets | 19 | 19 |
Potomac Electric Power Co [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Restricted cash equivalents | 5 | 3 |
Financial instruments, assets | 80 | 77 |
Financial instruments, liabilities | 7 | 7 |
Potomac Electric Power Co [Member] | Treasury Fund [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Restricted cash equivalents | 5 | 3 |
Potomac Electric Power Co [Member] | Money Market Funds and Short-term Investments [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Executive deferred compensation plan assets | 34 | 33 |
Potomac Electric Power Co [Member] | Life Insurance Contracts [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Executive deferred compensation plan assets | 41 | 41 |
Executive deferred compensation plan liabilities | 7 | 7 |
Potomac Electric Power Co [Member] | Quoted Prices in Active Markets for Identical Instruments (Level 1) [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial instruments, assets | 18 | 16 |
Potomac Electric Power Co [Member] | Quoted Prices in Active Markets for Identical Instruments (Level 1) [Member] | Treasury Fund [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Restricted cash equivalents | 5 | 3 |
Potomac Electric Power Co [Member] | Quoted Prices in Active Markets for Identical Instruments (Level 1) [Member] | Money Market Funds and Short-term Investments [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Executive deferred compensation plan assets | 13 | 13 |
Potomac Electric Power Co [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial instruments, assets | 44 | 43 |
Financial instruments, liabilities | 7 | 7 |
Potomac Electric Power Co [Member] | Significant Other Observable Inputs (Level 2) [Member] | Money Market Funds and Short-term Investments [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Executive deferred compensation plan assets | 21 | 20 |
Potomac Electric Power Co [Member] | Significant Other Observable Inputs (Level 2) [Member] | Life Insurance Contracts [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Executive deferred compensation plan assets | 23 | 23 |
Executive deferred compensation plan liabilities | 7 | 7 |
Potomac Electric Power Co [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial instruments, assets | 18 | 18 |
Potomac Electric Power Co [Member] | Significant Unobservable Inputs (Level 3) [Member] | Life Insurance Contracts [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Executive deferred compensation plan assets | 18 | 18 |
Delmarva Power & Light Co/De [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Restricted cash equivalents | 5 | |
Financial instruments, assets | 7 | 3 |
Financial instruments, liabilities | 5 | 1 |
Delmarva Power & Light Co/De [Member] | Natural Gas [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative instruments, assets | 1 | |
Derivative instruments, liabilities | 4 | |
Delmarva Power & Light Co/De [Member] | Treasury Fund [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Restricted cash equivalents | 5 | |
Delmarva Power & Light Co/De [Member] | Money Market Funds [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Executive deferred compensation plan assets | 1 | 1 |
Delmarva Power & Light Co/De [Member] | Life Insurance Contracts [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Executive deferred compensation plan assets | 1 | 1 |
Executive deferred compensation plan liabilities | 1 | 1 |
Delmarva Power & Light Co/De [Member] | Quoted Prices in Active Markets for Identical Instruments (Level 1) [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial instruments, assets | 6 | 2 |
Financial instruments, liabilities | 4 | |
Delmarva Power & Light Co/De [Member] | Quoted Prices in Active Markets for Identical Instruments (Level 1) [Member] | Natural Gas [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative instruments, assets | 1 | |
Derivative instruments, liabilities | 4 | |
Delmarva Power & Light Co/De [Member] | Quoted Prices in Active Markets for Identical Instruments (Level 1) [Member] | Treasury Fund [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Restricted cash equivalents | 5 | |
Delmarva Power & Light Co/De [Member] | Quoted Prices in Active Markets for Identical Instruments (Level 1) [Member] | Money Market Funds [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Executive deferred compensation plan assets | 1 | 1 |
Delmarva Power & Light Co/De [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial instruments, liabilities | 1 | 1 |
Delmarva Power & Light Co/De [Member] | Significant Other Observable Inputs (Level 2) [Member] | Life Insurance Contracts [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Executive deferred compensation plan liabilities | 1 | 1 |
Delmarva Power & Light Co/De [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Financial instruments, assets | 1 | 1 |
Delmarva Power & Light Co/De [Member] | Significant Unobservable Inputs (Level 3) [Member] | Life Insurance Contracts [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Executive deferred compensation plan assets | 1 | 1 |
Atlantic City Electric Co [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Restricted cash equivalents | 10 | 10 |
Atlantic City Electric Co [Member] | Treasury Fund [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Restricted cash equivalents | 24 | 24 |
Atlantic City Electric Co [Member] | Quoted Prices in Active Markets for Identical Instruments (Level 1) [Member] | Treasury Fund [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Restricted cash equivalents | $24 | $24 |
Fair_Value_Disclosures_Reconci
Fair Value Disclosures - Reconciliations of Fair Value Measurements Using Significant Unobservable Inputs (Level 3) (Detail) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Preferred Stock [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Included in accumulated other comprehensive loss | $0 | |
Purchases | 0 | |
Issuances | 3 | |
Transfers in (out) of Level 3 | 0 | |
Ending balance | 3 | |
Life Insurance Contracts [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning balance | 19 | 18 |
Included in income | 3 | 4 |
Included in accumulated other comprehensive loss | 0 | 0 |
Purchases | 0 | 0 |
Issuances | -3 | -3 |
Transfers in (out) of Level 3 | 0 | 0 |
Ending balance | 19 | 19 |
Life Insurance Contracts [Member] | Potomac Electric Power Co [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning balance | 18 | 18 |
Included in income | 3 | 4 |
Included in accumulated other comprehensive loss | 0 | 0 |
Purchases | 0 | 0 |
Issuances | -3 | -3 |
Settlements | -1 | |
Transfers in (out) of Level 3 | 0 | 0 |
Ending balance | 18 | 18 |
Life Insurance Contracts [Member] | Delmarva Power & Light Co/De [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning balance | 1 | 1 |
Included in accumulated other comprehensive loss | 0 | 0 |
Purchases | 0 | 0 |
Transfers in (out) of Level 3 | 0 | 0 |
Ending balance | 1 | 1 |
Natural Gas [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning balance | -4 | |
Included in accumulated other comprehensive loss | 0 | |
Purchases | 0 | |
Settlements | 4 | |
Transfers in (out) of Level 3 | 0 | |
Natural Gas [Member] | Delmarva Power & Light Co/De [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning balance | -4 | |
Included in accumulated other comprehensive loss | 0 | |
Purchases | 0 | |
Settlements | 4 | |
Transfers in (out) of Level 3 | 0 | |
Capacity [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning balance | -3 | |
Included in accumulated other comprehensive loss | 0 | |
Included in regulatory liabilities and regulatory assets | 3 | |
Purchases | 0 | |
Transfers in (out) of Level 3 | 0 | |
Capacity [Member] | Atlantic City Electric Co [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning balance | -3 | |
Included in accumulated other comprehensive loss | 0 | 0 |
Included in regulatory liabilities and regulatory assets | 3 | |
Purchases | 0 | 0 |
Transfers in (out) of Level 3 | $0 | $0 |
Fair_Value_Disclosures_Gains_o
Fair Value Disclosures - Gains on Level 3 Instruments Included in Income (Detail) (Other Income [Member], USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total gains included in income for the period | $3 | $4 |
Change in unrealized gains relating to assets still held at reporting date | 3 | 4 |
Potomac Electric Power Co [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total gains included in income for the period | 3 | 4 |
Change in unrealized gains relating to assets still held at reporting date | $3 | $4 |
Fair_Value_Disclosures_Fair_Va1
Fair Value Disclosures - Fair Value of Financial Liabilities Measured on Recurring Basis (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, Fair Value | $5,583 | $4,850 |
Transition Bonds, Fair Value | 235 | 284 |
Long-term project funding, Fair Value | 28 | 12 |
Total Liabilities, Fair Value | 5,846 | 5,146 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, Fair Value | 5,136 | 4,289 |
Transition Bonds, Fair Value | 235 | 284 |
Total Liabilities, Fair Value | 5,371 | 4,573 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, Fair Value | 447 | 561 |
Long-term project funding, Fair Value | 28 | 12 |
Total Liabilities, Fair Value | 475 | 573 |
Potomac Electric Power Co [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, Fair Value | 2,624 | 2,127 |
Long-term project funding, Fair Value | 12 | |
Total Liabilities, Fair Value | 2,636 | |
Potomac Electric Power Co [Member] | Quoted Prices in Active Markets for Identical Instruments (Level 1) [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, Fair Value | ||
Potomac Electric Power Co [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, Fair Value | 2,624 | 2,127 |
Total Liabilities, Fair Value | 2,624 | |
Potomac Electric Power Co [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, Fair Value | ||
Long-term project funding, Fair Value | 12 | |
Total Liabilities, Fair Value | 12 | |
Delmarva Power & Light Co/De [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, Fair Value | 1,123 | 960 |
Delmarva Power & Light Co/De [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, Fair Value | 1,016 | 850 |
Delmarva Power & Light Co/De [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, Fair Value | 107 | 110 |
Atlantic City Electric Co [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, Fair Value | 1,035 | 959 |
Transition Bonds, Fair Value | 235 | 285 |
Total Liabilities, Fair Value | 1,270 | 1,244 |
Atlantic City Electric Co [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, Fair Value | 903 | 744 |
Transition Bonds, Fair Value | 235 | 285 |
Total Liabilities, Fair Value | 1,138 | 1,029 |
Atlantic City Electric Co [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, Fair Value | 132 | 215 |
Total Liabilities, Fair Value | $132 | $215 |
Fair_Value_Disclosures_Fair_Va2
Fair Value Disclosures - Fair Value of Financial Liabilities Measured on Recurring Basis (Parenthetical) (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, carrying amount | $4,807 | $4,456 |
Transition bonds, carrying amount | 215 | 255 |
Potomac Electric Power Co [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, carrying amount | 2,124 | 1,899 |
Delmarva Power & Light Co/De [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, carrying amount | 1,071 | 967 |
Atlantic City Electric Co [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, carrying amount | 903 | 860 |
Transition bonds, carrying amount | $215 | $255 |
Commitments_and_Contingencies_1
Commitments and Contingencies - Retained Environmental Exposures - Additional Information (Detail) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | |||
In Millions, unless otherwise specified | Nov. 05, 2014 | Jul. 31, 2010 | Jul. 31, 2014 | Dec. 31, 2012 | Dec. 31, 2014 | Oct. 22, 2014 |
Commitments and Contingencies [Line Items] | ||||||
Loss contingency liabilities | $33 | $21.70 | ||||
Self insured retention amount | 2 | |||||
Environmental remediation expense minimum | 7 | |||||
Environmental remediation expense maximum | 18 | |||||
Pepco Energy Services [Member] | ||||||
Commitments and Contingencies [Line Items] | ||||||
Certain allegedly unauthorized charges | 7 | |||||
Additional compounded interest | 9 | |||||
Litigation claim value, sought | 3 | |||||
Litigation claim value, interest disallowed | 4 | |||||
Conectiv Energy [Member] | ||||||
Commitments and Contingencies [Line Items] | ||||||
Third party maximum and seller floor for environmental remediation costs | 10 | |||||
Number of facility locations | 9 | |||||
PHI [Member] | ||||||
Commitments and Contingencies [Line Items] | ||||||
Third party maximum and seller floor for environmental remediation costs | 10 | |||||
Potomac Electric Power Co [Member] | ||||||
Commitments and Contingencies [Line Items] | ||||||
Loss contingency liabilities | 25 | 21.7 | ||||
Delmarva Power & Light Co/De [Member] | ||||||
Commitments and Contingencies [Line Items] | ||||||
Loss contingency liabilities | 2 | |||||
Atlantic City Electric Co [Member] | ||||||
Commitments and Contingencies [Line Items] | ||||||
Loss contingency liabilities | 6 | |||||
Self insured retention amount | $2 |
Commitments_and_Contingencies_2
Commitments and Contingencies - Schedule of Accrued Liabilities for Environmental Exposures (Detail) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 |
Commitments and Contingencies [Line Items] | |
Beginning balance | $30 |
Accruals | 0 |
Payments | 2 |
Ending balance | 28 |
Less amounts in Other Current Liabilities | 4 |
Amounts in Other Deferred Credits | 24 |
Potomac Electric Power Co [Member] | |
Commitments and Contingencies [Line Items] | |
Beginning balance | 21 |
Accruals | 0 |
Payments | 2 |
Ending balance | 19 |
Less amounts in Other Current Liabilities | 2 |
Amounts in Other Deferred Credits | 17 |
Delmarva Power & Light Co/De [Member] | |
Commitments and Contingencies [Line Items] | |
Beginning balance | 3 |
Accruals | 0 |
Ending balance | 3 |
Less amounts in Other Current Liabilities | 2 |
Amounts in Other Deferred Credits | 1 |
Transmission and Distribution [Member] | |
Commitments and Contingencies [Line Items] | |
Beginning balance | 19 |
Accruals | 0 |
Payments | 2 |
Ending balance | 17 |
Less amounts in Other Current Liabilities | 3 |
Amounts in Other Deferred Credits | 14 |
Transmission and Distribution [Member] | Potomac Electric Power Co [Member] | |
Commitments and Contingencies [Line Items] | |
Beginning balance | 18 |
Accruals | 0 |
Payments | 2 |
Ending balance | 16 |
Less amounts in Other Current Liabilities | 2 |
Amounts in Other Deferred Credits | 14 |
Transmission and Distribution [Member] | Delmarva Power & Light Co/De [Member] | |
Commitments and Contingencies [Line Items] | |
Beginning balance | 1 |
Accruals | 0 |
Ending balance | 1 |
Less amounts in Other Current Liabilities | 1 |
Legacy Generation Regulated [Member] | |
Commitments and Contingencies [Line Items] | |
Beginning balance | 6 |
Accruals | 0 |
Ending balance | 6 |
Less amounts in Other Current Liabilities | 1 |
Amounts in Other Deferred Credits | 5 |
Legacy Generation Regulated [Member] | Potomac Electric Power Co [Member] | |
Commitments and Contingencies [Line Items] | |
Beginning balance | 3 |
Accruals | 0 |
Ending balance | 3 |
Amounts in Other Deferred Credits | 3 |
Legacy Generation Regulated [Member] | Delmarva Power & Light Co/De [Member] | |
Commitments and Contingencies [Line Items] | |
Beginning balance | 2 |
Accruals | 0 |
Ending balance | 2 |
Less amounts in Other Current Liabilities | 1 |
Amounts in Other Deferred Credits | 1 |
Legacy Generation Regulated [Member] | Atlantic City Electric Co [Member] | |
Commitments and Contingencies [Line Items] | |
Beginning balance | 1 |
Accruals | 0 |
Ending balance | 1 |
Amounts in Other Deferred Credits | 1 |
Legacy Generation Non-Regulated [Member] | |
Commitments and Contingencies [Line Items] | |
Beginning balance | 5 |
Accruals | 0 |
Ending balance | 5 |
Amounts in Other Deferred Credits | $5 |
Commitments_and_Contingencies_3
Commitments and Contingencies - Environmental Matters - Additional Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended | 12 Months Ended |
Jan. 31, 2011 | Mar. 31, 2013 | Dec. 31, 2014 | |
gal | |||
Commitments and Contingencies [Line Items] | |||
EPA costs to date to clean up site | $6,000,000 | ||
Estimated costs remaining to remediate the site | 6,000,000 | ||
Quantity of mineral oil spill | 4,500 | ||
Cost of litigation | 875,000 | ||
Civil penalty payment | 250,000 | ||
Donation for training fund | 25,000 | ||
Fund provided for installation and operation of the trash collection SEP | 600,000 | ||
Tax payment made | 74,000,000 | 74,000,000 | |
Income tax penalties | 1,000,000 | 0 | |
Interest expense assessed relating to disallowed deductions | 28,000,000 | ||
Non-cash charge (after-tax) | 377,000,000 | ||
Maximum tax penalty percentage | 20.00% | ||
Percentage of disallowed tax benefits associated with leases | 100.00% | ||
Federal income tax benefits | 192,000,000 | ||
Potential interest on potential tax liability related to disallowed tax benefits | 50,000,000 | ||
Deposit of additional taxes and related interest | 242,000,000 | ||
PHI [Member] | Minimum [Member] | |||
Commitments and Contingencies [Line Items] | |||
Cost of implementation of a closure plan and cap | 3,000,000 | ||
PHI [Member] | Maximum [Member] | |||
Commitments and Contingencies [Line Items] | |||
Cost of implementation of a closure plan and cap | 6,000,000 | ||
Atlantic City Electric Co [Member] | |||
Commitments and Contingencies [Line Items] | |||
EPA costs to date to clean up site | 6,000,000 | ||
Estimated costs remaining to remediate the site | 6,000,000 | ||
Non-cash charge (after-tax) | 377,000,000 | ||
Potomac Electric Power Co [Member] | |||
Commitments and Contingencies [Line Items] | |||
Quantity of mineral oil spill | 4,500 | ||
Cost of litigation | 875,000 | ||
Civil penalty payment | 250,000 | ||
Donation for training fund | 25,000 | ||
Fund provided for installation and operation of the trash collection SEP | 600,000 | ||
Non-cash charge (after-tax) | 377,000,000 | ||
Potomac Electric Power Co [Member] | Minimum [Member] | |||
Commitments and Contingencies [Line Items] | |||
Cost of implementation of a closure plan and cap | 3,000,000 | ||
Potomac Electric Power Co [Member] | Maximum [Member] | |||
Commitments and Contingencies [Line Items] | |||
Cost of implementation of a closure plan and cap | $6,000,000 |
Commitments_and_Contingencies_4
Commitments and Contingencies - Schedule of Commitments and Obligations (Detail) (USD $) | Dec. 31, 2014 |
In Millions, unless otherwise specified | |
Commitments and Contingencies [Line Items] | |
Guarantees associated with disposal of Conectiv Energy assets | $13 |
Guaranteed lease residual values | 20 |
Total | 33 |
PHI [Member] | |
Commitments and Contingencies [Line Items] | |
Guarantees associated with disposal of Conectiv Energy assets | 13 |
Guaranteed lease residual values | 3 |
Total | 16 |
Potomac Electric Power Co [Member] | |
Commitments and Contingencies [Line Items] | |
Guaranteed lease residual values | 5 |
Total | 5 |
Delmarva Power & Light Co/De [Member] | |
Commitments and Contingencies [Line Items] | |
Guaranteed lease residual values | 7 |
Total | 7 |
Atlantic City Electric Co [Member] | |
Commitments and Contingencies [Line Items] | |
Guaranteed lease residual values | 5 |
Total | $5 |
Commitments_and_Contingencies_5
Commitments and Contingencies - Schedule of Commitments and Obligations (Parenthetical) (Detail) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Commitments and Contingencies [Line Items] | |
Derivative portfolio guarantee | $13,000,000 |
Obligations under guarantee | 52,000,000 |
PHI [Member] | |
Commitments and Contingencies [Line Items] | |
Obligations under guarantee | 10,000,000 |
Potomac Electric Power Co [Member] | |
Commitments and Contingencies [Line Items] | |
Obligations under guarantee | 13,000,000 |
Delmarva Power & Light Co/De [Member] | |
Commitments and Contingencies [Line Items] | |
Obligations under guarantee | 16,000,000 |
Atlantic City Electric Co [Member] | |
Commitments and Contingencies [Line Items] | |
Obligations under guarantee | 13,000,000 |
Leased Equipment and Fleet Vehicles [Member] | |
Commitments and Contingencies [Line Items] | |
Fair value of leased equipment and vehicles | $0 |
Minimum [Member] | |
Commitments and Contingencies [Line Items] | |
Lease term range | 1 to 4 years |
Maximum [Member] | |
Commitments and Contingencies [Line Items] | |
Lease term range | 3 to 8 years |
Commitments_and_Contingencies_6
Commitments and Contingencies - Tax Legislation, Guarantees, Indemnifications, and Performance Contracts - Additional Information (Detail) (USD $) | 12 Months Ended | 0 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 22, 2015 |
Commitment and Contingencies [Line Items] | ||||
Dividend declared date | 22-Jan-15 | |||
Dividend declared, payment date | 31-Mar-15 | |||
Dividends payable, date of record | 10-Mar-15 | |||
Contractual obligations due in 2015 | $276 | |||
Contractual obligations due in 2016 to 2017 | 509 | |||
Contractual obligations due in 2018 to 2019 | 478 | |||
Contractual obligations due, thereafter | 1,177 | |||
Rental expense for operating leases | 59 | 54 | 52 | |
Future minimum operating lease payments, 2015 | 45 | |||
Future minimum operating lease payments, 2016 | 43 | |||
Future minimum operating lease payments, 2017 | 40 | |||
Future minimum operating lease payments, 2018 | 40 | |||
Future minimum operating lease payments, 2019 | 28 | |||
Future minimum operating lease payments, thereafter | 329 | |||
Subsequent Event [Member] | ||||
Commitment and Contingencies [Line Items] | ||||
Dividend declared on common stock, per share | $0.27 | |||
Pepco Energy Services [Member] | Completed Performance Contracts Associated With Savings Guarantees [Member] | ||||
Commitment and Contingencies [Line Items] | ||||
Value of guarantees completed projects | 356 | |||
Contract life, maximum remaining term | 23 years | |||
Pepco Energy Services [Member] | Uncompleted Performance Contracts Associated With Savings Guarantees [Member] | ||||
Commitment and Contingencies [Line Items] | ||||
Value of guarantees on projects under construction | 61 | |||
Maximum term of project under construction | 13 years | |||
Pepco Energy Services [Member] | Energy Savings or Combined Heat and Power Performance [Member] | ||||
Commitment and Contingencies [Line Items] | ||||
Contract life, maximum remaining term | 20 years | |||
Value of guarantees under construction projects | 15 | |||
Accrued liability on contracts | 1 | |||
Potomac Electric Power Co [Member] | ||||
Commitment and Contingencies [Line Items] | ||||
Rental expense for operating leases | 8 | 7 | 6 | |
Future minimum operating lease payments, 2015 | 7 | |||
Future minimum operating lease payments, 2016 | 6 | |||
Future minimum operating lease payments, 2017 | 5 | |||
Future minimum operating lease payments, 2018 | 4 | |||
Future minimum operating lease payments, 2019 | 3 | |||
Future minimum operating lease payments, thereafter | 22 | |||
Delmarva Power & Light Co/De [Member] | ||||
Commitment and Contingencies [Line Items] | ||||
Contractual obligations due in 2015 | 64 | |||
Contractual obligations due in 2016 to 2017 | 129 | |||
Contractual obligations due in 2018 to 2019 | 128 | |||
Contractual obligations due, thereafter | 291 | |||
Rental expense for operating leases | 14 | 13 | 12 | |
Future minimum operating lease payments, 2015 | 13 | |||
Future minimum operating lease payments, 2016 | 12 | |||
Future minimum operating lease payments, 2017 | 11 | |||
Future minimum operating lease payments, 2018 | 14 | |||
Future minimum operating lease payments, 2019 | 5 | |||
Future minimum operating lease payments, thereafter | 114 | |||
Ownership interest | 11.90% | |||
Present value of future minimum lease payments | 79 | |||
Atlantic City Electric Co [Member] | ||||
Commitment and Contingencies [Line Items] | ||||
Contractual obligations due in 2015 | 210 | |||
Contractual obligations due in 2016 to 2017 | 381 | |||
Contractual obligations due in 2018 to 2019 | 349 | |||
Contractual obligations due, thereafter | 886 | |||
Rental expense for operating leases | 12 | 12 | 11 | |
Future minimum operating lease payments, 2015 | 6 | |||
Future minimum operating lease payments, 2016 | 6 | |||
Future minimum operating lease payments, 2017 | 5 | |||
Future minimum operating lease payments, 2018 | 4 | |||
Future minimum operating lease payments, 2019 | 4 | |||
Future minimum operating lease payments, thereafter | $30 |
Variable_Interest_Entities_Add
Variable Interest Entities - Additional Information (Detail) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 18, 2011 |
MW | ||||
Delmarva Power & Light Co/De [Member] | ||||
Variable Interest Entity [Line Items] | ||||
Power of fuel cell facility | 30 | 15 | 30 | |
Delmarva Power & Light Co/De [Member] | Fuel Cell Facility [Member] | ||||
Variable Interest Entity [Line Items] | ||||
Amount billed to distribution customers | $36 | $23 | $4 | |
Delmarva Power & Light Co/De [Member] | Fuel Cell Facility [Member] | October 18, 2011 [Member] | ||||
Variable Interest Entity [Line Items] | ||||
Term of agreement | Through 2033 | |||
Delmarva Power & Light Co/De [Member] | Land-Based Wind PPA [Member] | ||||
Variable Interest Entity [Line Items] | ||||
Megawatts received from power purchase agreements (PPAs) | 128 | |||
Number of purchase power agreements | 3 | |||
Delmarva Power & Light Co/De [Member] | Solar PPA [Member] | ||||
Variable Interest Entity [Line Items] | ||||
Megawatts received from power purchase agreements (PPAs) | 10 | |||
Number of purchase power agreements | 1 | |||
Energy purchase maximum to be purchased | 19 | |||
Term of agreement, years | 20 years | |||
Term of agreement | Through 2030 | |||
Obligated purchase amount of energy produced at the facility | 70.00% | |||
Solar energy purchases | 6 | 3 | 2 | |
Delmarva Power & Light Co/De [Member] | Wind PPA [Member] | ||||
Variable Interest Entity [Line Items] | ||||
Purchased energy | 31 | 30 | 27 | |
Delmarva Power & Light Co/De [Member] | Wind PPA [Member] | Wind Facility One [Member] | ||||
Variable Interest Entity [Line Items] | ||||
Energy purchase maximum to be purchased | 50 | |||
Delmarva Power & Light Co/De [Member] | Wind PPA [Member] | Wind Facility Two [Member] | ||||
Variable Interest Entity [Line Items] | ||||
Energy purchase maximum to be purchased | 40 | |||
Delmarva Power & Light Co/De [Member] | Wind PPA [Member] | Wind Facility Three [Member] | ||||
Variable Interest Entity [Line Items] | ||||
Energy purchase maximum to be purchased | 38 | |||
Atlantic City Electric Co [Member] | ||||
Variable Interest Entity [Line Items] | ||||
Net power purchases with non-utility generators | 233 | 221 | 206 | |
Equity ownership percentage | 100.00% | |||
Atlantic City Electric Co [Member] | Non-Utility Generators [Member] | ||||
Variable Interest Entity [Line Items] | ||||
Megawatts received from power purchase agreements (PPAs) | 459 | |||
Number of purchase power agreements | 3 | |||
Purchased energy | $208 | $206 | $201 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Loss - Schedule of Components of Other Comprehensive Loss (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance at beginning of period | ($34) | ($48) | ($63) |
Income tax (benefit) expense | -7 | 6 | -6 |
Balance at end of period | -46 | -34 | -48 |
Pension and Other Postretirement Benefits [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance at beginning of period | -25 | -32 | -24 |
Amount of amortization of net prior service cost and actuarial loss reclassified to Other operation and maintenance expense | 5 | 5 | 5 |
Amount of net prior service cost and actuarial (loss) gain arising during the year | -25 | 8 | -19 |
Income tax (benefit) expense | -8 | 6 | -6 |
Balance at end of period | -37 | -25 | -32 |
Treasury Lock [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance at beginning of period | -9 | -10 | -10 |
Income tax (benefit) expense | 1 | ||
Balance at end of period | -9 | -9 | -10 |
Treasury Lock [Member] | Interest Expense [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Amount of pre-tax loss reclassified to Interest expense | 1 | 1 | |
Commodity Derivatives [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance at beginning of period | -6 | -29 | |
Amount of net pre-tax loss reclassified to (Loss) income from discontinued operations before income tax | 10 | 39 | |
Income tax (benefit) expense | 4 | 16 | |
Balance at end of period | ($6) |
Quarterly_Financial_Informatio2
Quarterly Financial Information - Schedule of Quarterly Financial Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Quarterly Financial Information [Line Items] | |||||||||||
Total operating revenue | $1,118 | $1,313 | $1,117 | $1,330 | $1,091 | $1,344 | $1,051 | $1,180 | $4,878 | $4,666 | $4,625 |
Total operating expenses | 1,004 | 1,147 | 966 | 1,157 | 936 | 1,109 | 906 | 1,047 | 4,274 | 3,998 | 4,084 |
Operating Income (Loss) | 114 | 166 | 151 | 173 | 155 | 235 | 145 | 133 | 604 | 668 | 541 |
Other Expenses | -66 | -53 | -53 | -52 | -58 | -60 | -62 | -59 | -224 | -239 | -220 |
Income from Continuing Operations Before Income Tax Expense | 48 | 113 | 98 | 121 | 97 | 175 | 83 | 74 | 380 | 429 | 321 |
Income Tax Expense Related to Continuing Operations | 13 | 34 | 45 | 46 | 39 | 65 | 30 | 185 | 138 | 319 | 103 |
Net Income from Continuing Operations | 58 | 110 | 53 | -111 | 242 | 110 | 218 | ||||
(Loss) Income from Discontinued Operations, net of taxes | 8 | -11 | -319 | -322 | 67 | ||||||
Net Income (loss) | 35 | 79 | 53 | 75 | 58 | 118 | 42 | -430 | 242 | -212 | 285 |
Basic and Diluted Earnings Per Share of Common Stock: | |||||||||||
(Loss) Earnings Per Share of Common Stock from Continuing Operations | $0.23 | $0.44 | $0.21 | ($0.47) | $0.45 | ||||||
(Loss) Earnings Per Share of Common Stock from Discontinued Operations | $0.04 | ($0.04) | ($1.35) | ($1.31) | |||||||
(Loss) Earnings Per Share of Common Stock | $0.14 | $0.31 | $0.21 | $0.30 | $0.23 | $0.48 | $0.17 | ($1.82) | $0.96 | ($0.86) | |
Cash Dividends Per Share of Common Stock | $0.27 | $0.27 | $0.27 | $0.27 | $0.27 | $0.27 | $0.27 | $0.27 | $1.08 | $1.08 | $1.08 |
Potomac Electric Power Co [Member] | |||||||||||
Quarterly Financial Information [Line Items] | |||||||||||
Total Operating Revenue | 471 | 587 | 508 | 535 | 475 | 605 | 469 | 477 | 2,101 | 2,026 | 1,948 |
Total operating expenses | 408 | 462 | 414 | 469 | 410 | 476 | 389 | 430 | 1,753 | 1,705 | 1,691 |
Operating Income (Loss) | 63 | 125 | 94 | 66 | 65 | 129 | 80 | 47 | 348 | 321 | 257 |
Other Expenses | -27 | -20 | -20 | -18 | -24 | -23 | -23 | -22 | -85 | -92 | -83 |
Income from Continuing Operations Before Income Tax Expense | 36 | 105 | 74 | 48 | 41 | 106 | 57 | 25 | 263 | 229 | 174 |
Income Tax Expense Related to Continuing Operations | 10 | 38 | 28 | 16 | 17 | 40 | 20 | 2 | 92 | 79 | 48 |
Net Income (loss) | 26 | 67 | 46 | 32 | 24 | 66 | 37 | 23 | 171 | 150 | 126 |
Delmarva Power & Light Co/De [Member] | |||||||||||
Quarterly Financial Information [Line Items] | |||||||||||
Total Operating Revenue | 308 | 309 | 279 | 397 | 312 | 296 | 266 | 370 | 1,293 | 1,244 | 1,233 |
Total operating expenses | 257 | 264 | 239 | 326 | 258 | 249 | 235 | 317 | 1,086 | 1,059 | 1,079 |
Operating Income (Loss) | 51 | 45 | 40 | 71 | 54 | 47 | 31 | 53 | 207 | 185 | 154 |
Other Expenses | -12 | -9 | -8 | -9 | -9 | -10 | -10 | -11 | -38 | -40 | -37 |
Income from Continuing Operations Before Income Tax Expense | 39 | 36 | 32 | 62 | 45 | 37 | 21 | 42 | 169 | 145 | 117 |
Income Tax Expense Related to Continuing Operations | 14 | 13 | 13 | 25 | 17 | 14 | 9 | 16 | 65 | 56 | 44 |
Net Income (loss) | 25 | 23 | 19 | 37 | 28 | 23 | 12 | 26 | 104 | 89 | 73 |
Atlantic City Electric Co [Member] | |||||||||||
Quarterly Financial Information [Line Items] | |||||||||||
Total Operating Revenue | 273 | 347 | 253 | 340 | 258 | 396 | 271 | 277 | 1,213 | 1,202 | 1,198 |
Total operating expenses | 246 | 295 | 228 | 309 | 229 | 341 | 242 | 254 | 1,078 | 1,066 | 1,079 |
Operating Income (Loss) | 27 | 52 | 25 | 31 | 29 | 55 | 29 | 23 | 135 | 136 | 119 |
Other Expenses | -17 | -15 | -15 | -15 | -15 | -17 | -18 | -17 | -62 | -67 | -66 |
Income from Continuing Operations Before Income Tax Expense | 10 | 37 | 10 | 16 | 14 | 38 | 11 | 6 | 73 | 69 | 53 |
Income Tax Expense Related to Continuing Operations | 4 | 14 | 4 | 6 | 5 | 13 | 4 | -3 | 28 | 19 | 18 |
Net Income (loss) | $6 | $23 | $6 | $10 | $9 | $25 | $7 | $9 | $45 | $50 | $35 |
Quarterly_Financial_Informatio3
Quarterly Financial Information - Schedule of Quarterly Financial Information (Parenthetical) (Detail) (USD $) | 12 Months Ended | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | |
Quarterly Financial Information [Line Items] | ||||||
Establishment of valuation allowances related to deferred tax assets | $101,000,000 | |||||
Pepco Energy Services [Member] | ||||||
Quarterly Financial Information [Line Items] | ||||||
Reversed unbilled revenue, pre-tax | 3,000,000 | |||||
Reversed unbilled revenue, after-tax | 2,000,000 | |||||
Impairment losses, pre-tax | 28,000,000 | 53,000,000 | 4,000,000 | |||
Charge to correct prior period error before tax | 3,000,000 | |||||
Impairment losses, after-tax | 16,000,000 | 32,000,000 | 3,000,000 | |||
Change in estimates and interest related to uncertain and effectively settled tax positions | 56,000,000 | |||||
Establishment of valuation allowances related to deferred tax assets | 101,000,000 | |||||
Charge to correct prior period error after-tax | 2,000,000 | 4,000,000 | ||||
Potomac Electric Power Co [Member] | ||||||
Quarterly Financial Information [Line Items] | ||||||
Establishment of valuation allowances related to deferred tax assets | 0 | 0 | ||||
Charge to correct prior period error after-tax | 4,000,000 | |||||
Tax benefits related to uncertain tax position IRS | 5,000,000 | |||||
Atlantic City Electric Co [Member] | ||||||
Quarterly Financial Information [Line Items] | ||||||
Reversed unbilled revenue, pre-tax | 3,000,000 | |||||
Reversed unbilled revenue, after-tax | 2,000,000 | |||||
Charge to correct prior period error before tax | 3,000,000 | |||||
Establishment of valuation allowances related to deferred tax assets | 0 | 0 | ||||
Charge to correct prior period error after-tax | $2,000,000 |
Discontinued_Operations_Income
Discontinued Operations - Income (Loss) from Discontinued Operations, Net of Income Taxes (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||
In Millions, unless otherwise specified | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
(Loss) Income from Discontinued Operations, net of Income Taxes | $8 | ($11) | ($319) | ($322) | $67 |
Cross-Border Energy Lease Investments [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
(Loss) Income from Discontinued Operations, net of Income Taxes | -327 | 41 | |||
Pepco Energy Services' Retail Electric and Natural Gas Supply Businesses [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
(Loss) Income from Discontinued Operations, net of Income Taxes | $5 | $26 |
Discontinued_Operations_Additi
Discontinued Operations - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | 9 Months Ended | ||||
Mar. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2014 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2013 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
After-tax non-cash charges | $377,000,000 | ||||||
After-tax effect of revised lease rerun | 313,000,000 | ||||||
Pepco Energy Services [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Derivatives | 0 | 0 | |||||
Cash collateral posted | 2,000,000 | 3,000,000 | |||||
Letters of credit posted | 0 | ||||||
Pepco Energy Services [Member] | Less Than [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Letters of credit posted | 1,000,000 | ||||||
Discontinued Operations [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
After-tax non-cash charges | 323,000,000 | 6,000,000 | |||||
Non-cash pre-tax charge | 373,000,000 | ||||||
After-tax effect of revised lease rerun | 313,000,000 | ||||||
After-tax non-cash charge | 16,000,000 | ||||||
Penalties associated with re-assessment of tax positions | 0 | ||||||
Maximum percentage of penalty on the amount of additional taxes due | 20.00% | ||||||
Amount of net pre-tax loss arising during the period included in Accumulated Other Comprehensive Loss | -10,000,000 | ||||||
Amount of net tax loss arising during the period included in Accumulated Other Comprehensive Loss | -6,000,000 | ||||||
Pre-tax loss reclassified into Income from Discontinued operations, Before Taxes | -4,000,000 | -6,000,000 | |||||
Net of tax loss reclassified into Income from Discontinued operations, Net of Income Taxes | -2,000,000 | ||||||
Discontinued Operations [Member] | PHI [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Net pre-tax gain / loss | -3,000,000 | ||||||
Loss on early termination of finance leases held in trust, after-tax | -2,000,000 | ||||||
After-tax non-cash charge | 70,000,000 | ||||||
Discontinued Operations [Member] | PHI [Member] | Proceeds From Early Termination [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Aggregate of net cash proceeds (payments) of lease investments | 873,000,000 | ||||||
Discontinued Operations [Member] | PHI [Member] | Payment Paid From Early Termination [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Aggregate of net cash proceeds (payments) of lease investments | 2,000,000,000 | ||||||
Discontinued Operations [Member] | Power Delivery [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Interest benefit on uncertain tax positions | 12,000,000 | ||||||
Discontinued Operations [Member] | Other Non-Regulated [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Interest expense on uncertain tax positions | 16,000,000 | ||||||
Discontinued Operations [Member] | Corporate and Other [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Interest expense on uncertain tax positions | $66,000,000 |
Discontinued_Operations_Operat
Discontinued Operations - Operating Results for Cross-Border Energy Lease Investments (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||
In Millions, unless otherwise specified | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
(Loss) income from discontinued operations, net of income taxes | $8 | ($11) | ($319) | ($322) | $67 |
Cross-Border Energy Lease Investments [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Operating revenue from PHI's cross-border energy lease investments | 7 | 50 | |||
Non-cash charge to reduce carrying value of PHI's cross-border energy lease investments | -373 | ||||
Total operating revenue | -366 | 50 | |||
(Loss) income from operations of discontinued operations, net of income taxes | -325 | 32 | |||
Net (losses) gains associated with the early termination of the cross-border energy lease investments, net of income taxes | -2 | 9 | |||
(Loss) income from discontinued operations, net of income taxes | ($327) | $41 |
Discontinued_Operations_Operat1
Discontinued Operations - Operating Results for Cross-Border Energy Lease Investments (Parenthetical) (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Discontinued Operations and Disposal Groups [Abstract] | |||
Income tax expense (benefit), income from operations of discontinued operations | $0 | ($44) | $5 |
Income tax expense (benefit) from discontinued operations | $0 | ($1) | $30 |
Discontinued_Operations_Operat2
Discontinued Operations - Operating Results for Retail Electric and Natural Gas Supply Businesses (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||
In Millions, unless otherwise specified | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Income from discontinued operations, net of income taxes | $8 | ($11) | ($319) | ($322) | $67 |
Pepco Energy Services [Member] | Discontinued Operations [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Operating revenue | 84 | 415 | |||
Income from operations of discontinued operations, net of income taxes | 4 | 26 | |||
Net gains associated with accelerated disposition of retail electric and natural gas contracts, net of income taxes | 1 | ||||
Income from discontinued operations, net of income taxes | $5 | $26 |
Discontinued_Operations_Operat3
Discontinued Operations - Operating Results for Retail Electric and Natural Gas Supply Businesses (Parenthetical) (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Income tax expense (benefit) from discontinued operations | $0 | ($1) | $30 |
Discontinued Operations [Member] | Pepco Energy Services [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Income tax expense (benefit) from discontinued operations | $0 | $3 | $18 |
Discontinued_Operations_Deriva
Discontinued Operations - Derivative Gain (Loss) for Retail Electric and Natural Gas Supply Businesses (Detail) (Discontinued Operations [Member], USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Discontinued Operations [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Reclassification of mark-to-market to realized on settlement of contracts | $10 | $27 |
Unrealized mark-to-market loss | -3 | |
Total net gain | $10 | $24 |
Segment_Information_Additional
Segment Information - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2014 | |
Segment | |
Atlantic City Electric Co [Member] | |
Sales Information [Line Items] | |
Number of operating segments | 1 |
Delmarva Power & Light Co/De [Member] | |
Sales Information [Line Items] | |
Number of operating segments | 1 |
Potomac Electric Power Co [Member] | |
Sales Information [Line Items] | |
Number of operating segments | 1 |
Related_Party_Transactions_Add
Related Party Transactions - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Potomac Electric Power Co [Member] | PHI Service Company [Member] | |||
Related Party Transaction [Line Items] | |||
Costs directly charged or allocated | $220 | $209 | $211 |
Potomac Electric Power Co [Member] | Pepco Energy Services [Member] | |||
Related Party Transaction [Line Items] | |||
Maintenance services | 30 | 20 | 16 |
Delmarva Power & Light Co/De [Member] | PHI Service Company [Member] | |||
Related Party Transaction [Line Items] | |||
Costs directly charged or allocated | 163 | 154 | 153 |
Atlantic City Electric Co [Member] | PHI Service Company [Member] | |||
Related Party Transaction [Line Items] | |||
Costs directly charged or allocated | $124 | $115 | $117 |
Related_Party_Transactions_Sch
Related Party Transactions - Schedule of Related Party Transactions Included in Balance Sheet (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Potomac Electric Power Co [Member] | ||
Related Party Transaction [Line Items] | ||
Payable to Related Party, Total | ($30) | ($32) |
Potomac Electric Power Co [Member] | PHI Service Company [Member] | ||
Related Party Transaction [Line Items] | ||
Payable to Related Party, Total | -27 | -25 |
Potomac Electric Power Co [Member] | Pepco Energy Services [Member] | ||
Related Party Transaction [Line Items] | ||
Payable to Related Party, Total | -2 | -7 |
Potomac Electric Power Co [Member] | Other [Member] | ||
Related Party Transaction [Line Items] | ||
Payable to Related Party, Total | -1 | |
Delmarva Power & Light Co/De [Member] | ||
Related Party Transaction [Line Items] | ||
Payable to Related Party, Total | -17 | -22 |
Delmarva Power & Light Co/De [Member] | PHI Service Company [Member] | ||
Related Party Transaction [Line Items] | ||
Payable to Related Party, Total | -18 | -22 |
Delmarva Power & Light Co/De [Member] | Other [Member] | ||
Related Party Transaction [Line Items] | ||
Payable to Related Party, Total | 1 | |
Atlantic City Electric Co [Member] | ||
Related Party Transaction [Line Items] | ||
Payable to Related Party, Total | -15 | -15 |
Atlantic City Electric Co [Member] | PHI Service Company [Member] | ||
Related Party Transaction [Line Items] | ||
Payable to Related Party, Total | -14 | -15 |
Atlantic City Electric Co [Member] | Other [Member] | ||
Related Party Transaction [Line Items] | ||
Payable to Related Party, Total | ($1) |
Related_Party_Transactions_Sch1
Related Party Transactions - Schedule of Related Party Transactions Included in Income Statement (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Delmarva Power & Light Co/De [Member] | |||
Related Party Transaction [Line Items] | |||
Intercompany lease transactions | $5 | $4 | $4 |
Atlantic City Electric Co [Member] | |||
Related Party Transaction [Line Items] | |||
Meter reading services provided by Millennium Account Services LLC (an ACE affiliate) | -4 | -4 | -4 |
Intercompany use revenue | $2 | $3 | $3 |
Schedule_I_Condensed_Financial
Schedule I - Condensed Financial Information of Parent Company (Statements of Income (Loss)) (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Condensed Income Statements, Captions [Line Items] | |||||||||||
Operating Revenue | $1,118 | $1,313 | $1,117 | $1,330 | $1,091 | $1,344 | $1,051 | $1,180 | $4,878 | $4,666 | $4,625 |
Operating Expenses | |||||||||||
Other operation and maintenance | 924 | 851 | 898 | ||||||||
Total operating expenses | 1,004 | 1,147 | 966 | 1,157 | 936 | 1,109 | 906 | 1,047 | 4,274 | 3,998 | 4,084 |
Operating Income (Loss) | 114 | 166 | 151 | 173 | 155 | 235 | 145 | 133 | 604 | 668 | 541 |
Other Income (Expenses) | |||||||||||
Interest expense | -268 | -273 | -256 | ||||||||
Income from equity investments | 2 | 1 | |||||||||
Total Other Income (Expenses) | -66 | -53 | -53 | -52 | -58 | -60 | -62 | -59 | -224 | -239 | -220 |
Income Tax (Benefit) Expense Related to Continuing Operations | 13 | 34 | 45 | 46 | 39 | 65 | 30 | 185 | 138 | 319 | 103 |
Net Income from Continuing Operations | 58 | 110 | 53 | -111 | 242 | 110 | 218 | ||||
(Loss) Income from Discontinued Operations, net of Income Taxes | 8 | -11 | -319 | -322 | 67 | ||||||
Net Income (Loss) | 35 | 79 | 53 | 75 | 58 | 118 | 42 | -430 | 242 | -212 | 285 |
Comprehensive Income (Loss) | 230 | -198 | 300 | ||||||||
Earnings Per Share | |||||||||||
Basic earnings per share of common stock from continuing operations | $0.96 | $0.45 | $0.95 | ||||||||
Basic (loss) earnings per share of common stock from discontinued operations | ($1.31) | $0.30 | |||||||||
Basic earnings (loss) per share of common stock | $0.96 | ($0.86) | $1.25 | ||||||||
Diluted earnings per share of common stock from continuing operations | $0.96 | $0.45 | $0.95 | ||||||||
Diluted (loss) earnings per share of common stock from discontinued operations | ($1.31) | $0.29 | |||||||||
Diluted earnings (loss) per share of common stock | $0.96 | ($0.86) | $1.24 | ||||||||
Parent Company [Member] | |||||||||||
Condensed Income Statements, Captions [Line Items] | |||||||||||
Operating Revenue | 0 | 0 | 0 | ||||||||
Operating Expenses | |||||||||||
Other operation and maintenance | 31 | 1 | 1 | ||||||||
Total operating expenses | 31 | 1 | 1 | ||||||||
Operating Income (Loss) | -31 | -1 | -1 | ||||||||
Other Income (Expenses) | |||||||||||
Interest expense | -43 | -42 | -33 | ||||||||
Income from equity investments | 291 | 204 | 237 | ||||||||
Total Other Income (Expenses) | 248 | 162 | 204 | ||||||||
Income from Continuing Operations Before Income Tax | 217 | 161 | 203 | ||||||||
Income Tax (Benefit) Expense Related to Continuing Operations | -25 | 51 | -15 | ||||||||
Net Income from Continuing Operations | 242 | 110 | 218 | ||||||||
(Loss) Income from Discontinued Operations, net of Income Taxes | -322 | 67 | |||||||||
Net Income (Loss) | 242 | -212 | 285 | ||||||||
Comprehensive Income (Loss) | $230 | ($198) | $300 | ||||||||
Earnings Per Share | |||||||||||
Basic earnings per share of common stock from continuing operations | $0.96 | $0.45 | $0.95 | ||||||||
Basic (loss) earnings per share of common stock from discontinued operations | ($1.31) | $0.30 | |||||||||
Basic earnings (loss) per share of common stock | $0.96 | ($0.86) | $1.25 | ||||||||
Diluted earnings per share of common stock from continuing operations | $0.96 | $0.45 | $0.95 | ||||||||
Diluted (loss) earnings per share of common stock from discontinued operations | ($1.31) | $0.29 | |||||||||
Diluted earnings (loss) per share of common stock | $0.96 | ($0.86) | $1.24 |
Schedule_I_Condensed_Financial1
Schedule I - Condensed Financial Information of Parent Company (Balance Sheets) (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Millions, unless otherwise specified | ||||
CURRENT ASSETS | ||||
Cash and cash equivalents | $14 | $23 | $25 | $109 |
Total Current Assets | 1,084 | 1,398 | ||
INVESTMENTS AND OTHER ASSETS | ||||
Goodwill | 1,407 | 1,407 | ||
Other | 166 | 163 | ||
TOTAL ASSETS | 15,667 | 14,848 | 14,519 | |
CURRENT LIABILITIES | ||||
Short-term debt | 729 | 565 | ||
Current portion of long-term debt | 431 | 446 | ||
Total Current Liabilities | 2,065 | 2,313 | ||
DEFERRED CREDITS | ||||
Liabilities and accrued interest related to uncertain tax positions | 2 | 28 | ||
Long-term debt | 4,441 | 4,053 | ||
COMMITMENTS AND CONTINGENCIES (NOTE 4) | ||||
PREFERRED STOCK | ||||
Series A preferred stock, $.01 par value, 18,000 shares authorized, 12,600 and zero shares outstanding, respectively | 129 | |||
EQUITY | ||||
Common stock | 3 | 3 | ||
Premium on stock and other capital contributions | 3,800 | 3,751 | ||
Accumulated other comprehensive loss | -46 | -34 | -48 | -63 |
Retained earnings | 565 | 595 | ||
TOTAL LIABILITIES AND EQUITY | 15,667 | 14,848 | ||
Parent Company [Member] | ||||
CURRENT ASSETS | ||||
Cash and cash equivalents | 65 | 262 | 257 | |
Prepayments of income taxes | 152 | 151 | ||
Accounts receivable and other | 9 | 28 | ||
Total Current Assets | 226 | 179 | ||
INVESTMENTS AND OTHER ASSETS | ||||
Goodwill | 1,398 | 1,398 | ||
Investment in consolidated companies | 4,256 | 3,935 | ||
Other | 84 | 37 | ||
Total Investments and Other Assets | 5,738 | 5,370 | ||
TOTAL ASSETS | 5,964 | 5,549 | ||
CURRENT LIABILITIES | ||||
Short-term debt | 287 | 24 | ||
Current portion of long-term debt | 250 | |||
Interest and taxes accrued | 9 | 10 | ||
Accounts payable due to associated companies | 13 | 1 | ||
Total Current Liabilities | 559 | 35 | ||
DEFERRED CREDITS | ||||
Notes payable due to subsidiary companies | 494 | 491 | ||
Liabilities and accrued interest related to uncertain tax positions | 4 | 3 | ||
Total Deferred Credits | 498 | 494 | ||
Long-term debt | 456 | 705 | ||
COMMITMENTS AND CONTINGENCIES (NOTE 4) | ||||
PREFERRED STOCK | ||||
Series A preferred stock, $.01 par value, 18,000 shares authorized, 12,600 and zero shares outstanding, respectively | 129 | |||
EQUITY | ||||
Common stock | 3 | 3 | ||
Premium on stock and other capital contributions | 3,800 | 3,751 | ||
Accumulated other comprehensive loss | -46 | -34 | ||
Retained earnings | 565 | 595 | ||
Total Equity | 4,322 | 4,315 | ||
TOTAL LIABILITIES AND EQUITY | $5,964 | $5,549 |
Schedule_I_Condensed_Financial2
Schedule I - Condensed Financial Information of Parent Company (Balance Sheets) (Parenthetical) (Detail) (USD $) | Dec. 31, 2014 | Apr. 29, 2014 | Dec. 31, 2013 |
Condensed Balance Sheet Statements, Captions [Line Items] | |||
Series A preferred stock, par value | $0.01 | ||
Series A preferred stock, shares authorized | 18,000 | ||
Series A preferred stock, shares outstanding | 12,600 | 0 | |
Common stock, par value | $0.01 | $0.01 | $0.01 |
Common stock, shares authorized | 400,000,000 | 400,000,000 | |
Common stock, shares outstanding | 252,728,684 | 250,324,898 | |
Parent Company [Member] | |||
Condensed Balance Sheet Statements, Captions [Line Items] | |||
Series A preferred stock, par value | $0.01 | ||
Series A preferred stock, shares authorized | 18,000 | ||
Series A preferred stock, shares outstanding | 12,600 | 0 | |
Common stock, par value | $0.01 | $0.01 | |
Common stock, shares authorized | 400,000,000 | 400,000,000 | |
Common stock, shares outstanding | 252,728,684 | 250,324,898 |
Schedule_I_Condensed_Financial3
Schedule I - Condensed Financial Information of Parent Company (Statements of Cash Flows) (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
OPERATING ACTIVITIES | |||
Net Income (loss) | $242 | ($212) | $285 |
Loss (income) from discontinued operations, net of income taxes | 322 | -67 | |
Adjustments to reconcile net income to net cash from operating activities: | |||
Deferred income taxes | 302 | 458 | 312 |
Other | 3 | -13 | -15 |
Changes in: | |||
Other assets and liabilities | 10 | 9 | 16 |
FINANCING ACTIVITIES | |||
Dividends paid on common stock | -272 | -270 | -248 |
Common stock issued for the Direct Stock Purchase and Dividend Reinvestment Plan and employee-related compensation | 34 | 50 | 51 |
Issuances of common stock | 324 | ||
Issuances of Series A preferred stock | 126 | ||
Issuances (repayments) of short-term debt, net | 164 | -200 | 33 |
Issuance of term loan | 250 | 200 | |
Repayments of term loans | -100 | -450 | |
Costs of issuances | -10 | -23 | -9 |
Net Increase (Decrease) In Cash and Cash Equivalents | -9 | -2 | -84 |
Cash and Cash Equivalents at Beginning of Year | 23 | 25 | 109 |
CASH AND CASH EQUIVALENTS AT END OF YEAR | 14 | 23 | 25 |
Parent Company [Member] | |||
OPERATING ACTIVITIES | |||
Net Income (loss) | 242 | -212 | 285 |
Loss (income) from discontinued operations, net of income taxes | 322 | -67 | |
Adjustments to reconcile net income to net cash from operating activities: | |||
Distributions from related parties less than earnings | -149 | -127 | -52 |
Deferred income taxes | -5 | -7 | -31 |
Other | 18 | ||
Changes in: | |||
Prepaid and other | 13 | 2 | -23 |
Accounts payable | 1 | 6 | 6 |
Interest and taxes | -141 | 39 | |
Other assets and liabilities | 1 | 3 | 4 |
Net Cash From (Used By) Operating Activities | 121 | -154 | 161 |
FINANCING ACTIVITIES | |||
Dividends paid on common stock | -272 | -270 | -248 |
Common stock issued for the Direct Stock Purchase and Dividend Reinvestment Plan and employee-related compensation | 34 | 50 | 51 |
Issuances of common stock | 324 | ||
Issuances of Series A preferred stock | 126 | ||
Capital contributions to subsidiaries, net | -210 | -250 | -110 |
Decrease in notes receivable from associated companies | 154 | ||
Increase in notes payable due to associated companies | 3 | 491 | |
Issuances (repayments) of short-term debt, net | 263 | -240 | -201 |
Issuance of term loan | 250 | 200 | |
Repayments of term loans | -450 | ||
Costs of issuances | -13 | -2 | |
Net Cash Used By Financing Activities | -56 | -108 | -156 |
Net Increase (Decrease) In Cash and Cash Equivalents | 65 | -262 | 5 |
Cash and Cash Equivalents at Beginning of Year | 262 | 257 | |
CASH AND CASH EQUIVALENTS AT END OF YEAR | $65 | $262 |
Schedule_I_Condensed_Financial4
Schedule I - Condensed Financial Information of Parent Company - Additional Information (Detail) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Parent Company Only Financial Information [Line Items] | ||
Ownership percentage of significant subsidiaries | 100.00% | |
Ratio of equity to total capitalization | 30.00% | |
Retained earnings | $565 | $595 |
Restricted net assets for consolidated subsidiaries | 2,547 | |
Surety Bond [Member] | ||
Parent Company Only Financial Information [Line Items] | ||
Guarantee obligations amount | 53 | |
Pepco Energy Services [Member] | Performance Guarantee [Member] | ||
Parent Company Only Financial Information [Line Items] | ||
Guarantee obligations amount | 336 | |
Pepco Energy Services [Member] | Surety Bond [Member] | ||
Parent Company Only Financial Information [Line Items] | ||
Guarantee obligations amount | 185 | |
Potomac Capital Investment Corporation (PCI) [Member] | ||
Parent Company Only Financial Information [Line Items] | ||
Guarantee obligations amount | $725 |
Schedule_I_Condensed_Financial5
Schedule I - Condensed Financial Information of Parent Company - Investment in Consolidated Companies (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Parent Company Only Financial Information [Line Items] | ||
Investments in Consolidated Companies | $4,256 | $3,935 |
Conectiv, LLC [Member] | ||
Parent Company Only Financial Information [Line Items] | ||
Investments in Consolidated Companies | 1,984 | 1,730 |
Potomac Electric Power Co [Member] | ||
Parent Company Only Financial Information [Line Items] | ||
Investments in Consolidated Companies | 2,087 | 1,922 |
Potomac Capital Investment Corporation (PCI) [Member] | ||
Parent Company Only Financial Information [Line Items] | ||
Investments in Consolidated Companies | 30 | 29 |
Pepco Energy Services [Member] | ||
Parent Company Only Financial Information [Line Items] | ||
Investments in Consolidated Companies | 153 | 250 |
PHI Service Company [Member] | ||
Parent Company Only Financial Information [Line Items] | ||
Investments in Consolidated Companies | $2 | $4 |
Schedule_I_Condensed_Financial6
Schedule I - Condensed Financial Information of Parent Company - Related Party Transactions (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Parent Company Only Financial Information [Line Items] | ||
(Payable to) Receivable from Related Party, Total | ($13) | ($1) |
Money Pool Balance (included in cash and cash equivalents) | 65 | |
Conectiv Communication, Inc. [Member] | ||
Parent Company Only Financial Information [Line Items] | ||
(Payable to) Receivable from Related Party, Total | -4 | -4 |
PHI Service Company [Member] | ||
Parent Company Only Financial Information [Line Items] | ||
(Payable to) Receivable from Related Party, Total | -10 | 3 |
Other [Member] | ||
Parent Company Only Financial Information [Line Items] | ||
(Payable to) Receivable from Related Party, Total | 1 | |
Potomac Capital Investment Corporation (PCI) [Member] | ||
Parent Company Only Financial Information [Line Items] | ||
Potomac Capital Investment Corporation | ($494) | ($491) |
Schedule_II_Valuation_and_Qual
Schedule II - Valuation and Qualifying Accounts (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Period | $38 | $34 | $43 |
Charged to Costs and Expenses | 46 | 37 | 35 |
Charged to Other Accounts | 9 | 5 | 8 |
Deductions | -53 | -38 | -52 |
Balance at End of Period | 40 | 38 | 34 |
Potomac Electric Power Co [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Period | 16 | 13 | 18 |
Charged to Costs and Expenses | 17 | 15 | 13 |
Charged to Other Accounts | 2 | 1 | 2 |
Deductions | -19 | -13 | -20 |
Balance at End of Period | 16 | 16 | 13 |
Delmarva Power & Light Co/De [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Period | 12 | 9 | 12 |
Charged to Costs and Expenses | 13 | 11 | 11 |
Charged to Other Accounts | 4 | 1 | 3 |
Deductions | -18 | -9 | -17 |
Balance at End of Period | 11 | 12 | 9 |
Atlantic City Electric Co [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Period | 10 | 11 | 12 |
Charged to Costs and Expenses | 12 | 11 | 12 |
Charged to Other Accounts | 3 | 3 | 3 |
Deductions | -16 | -15 | -16 |
Balance at End of Period | $9 | $10 | $11 |