Related Party Transactions

12 Months Ended

Dec. 31, 2011

Related Party Transactions [Line Items]

Related party transactions

19.       RELATED PARTY TRANSACTIONS

There were no material related party transactions in which we or any of our subsidiaries were or will be a participant and in which any of our directors, executive officers or any of their immediate family members had a direct or indirect material interest. Transactions between affiliated companies are further discussed below.

As a part of normal business, we enter into various agreements providing financial or performance assurances to third parties. These agreements are entered into primarily to support or enhance the creditworthiness otherwise attributed to a subsidiary on a stand-alone basis, thereby facilitating the extension of sufficient credit to accomplish the subsidiaries' intended commercial purposes. Our guarantees may include performance obligations under power supply agreements, transmission agreements, gas agreements, fuel procurement agreements, trading operations and cash management. Our guarantees also include standby letters of credit and surety bonds. At December 31, 2011, the Parent had issued $453 million of guarantees for future financial or performance assurance on behalf of its subsidiaries. This includes $300 million of guarantees of certain payments of two wholly owned indirect subsidiaries (See Note 23). We do not believe conditions are likely for significant performance under the guarantees of performance issued by or on behalf of affiliates. To the extent liabilities are incurred as a result of the activities covered by the guarantees, such liabilities are included on the Consolidated Balance Sheets.

Our subsidiaries provide and receive services, at cost, to and from the Parent and its subsidiaries, in accordance with agreements approved by the SEC pursuant to Section 13(b) of the Public Utility Holding Company Act of 1935. The repeal of the Public Utility Holding Company Act of 1935 effective February 8, 2006, and subsequent regulation by the FERC did not change our current intercompany services. Services include purchasing, human resources, accounting, legal, transmission and delivery support, engineering materials, contract support, loaned employees payroll costs, construction management and other centralized administrative, management and support services. The costs of the services are billed on a direct-charge basis, whenever possible, and on allocation factors for general costs that cannot be directly attributed. Billings from affiliates are capitalized or expensed depending on the nature of the services rendered. Amounts receivable from and/or payable to affiliated companies for these services are included in receivables from affiliated companies and payables to affiliated companies on the Balance Sheets.

PESC provides the majority of the affiliated goods and services under the approved agreements. Goods and services provided by PESC during 2011, 2010 and 2009 to PEC amounted to $203 million, $176 million and $170 million, respectively, and services provided to PEF were $160 million, $156 million and $147 million, respectively. During 2010, PESC transferred a $24 million combustion turbine to PECat cost.

PEC and PEF also provide and receive goods and services at cost. Goods and services provided by PEC to PEF during 2011, 2010 and 2009 amounted to $57 million, $43 million and $36 million, respectively. Goods and services provided by PEF to PEC during 2011, 2010 and 2009 amounted to $12 million, $18 million and $12 million, respectively.

PEC and PEF participate in an internal money pool, administered by PESC, to more effectively utilize cash resources and to reduce outside short-term borrowings. The money pool is also used to settle intercompany balances. The weighted-average interest rate for the money pool was 0.32%,0.30% and 0.74% for the years endedDecember 31, 2011, 2010 and 2009, respectively. Amounts payable to the money pool are included in notes payable to affiliated companies on the Balance Sheets. PEC and PEF recorded minimal interest expense related to the money pool for all the years presented.

PEC and each of its wholly owned subsidiaries and PEF have entered into the Tax Agreement with the Parent (See Note 15).

PEC

Related Party Transactions [Line Items]

Related party transactions

19.       RELATED PARTY TRANSACTIONS

There were no material related party transactions in which we or any of our subsidiaries were or will be a participant and in which any of our directors, executive officers or any of their immediate family members had a direct or indirect material interest. Transactions between affiliated companies are further discussed below.

As a part of normal business, we enter into various agreements providing financial or performance assurances to third parties. These agreements are entered into primarily to support or enhance the creditworthiness otherwise attributed to a subsidiary on a stand-alone basis, thereby facilitating the extension of sufficient credit to accomplish the subsidiaries' intended commercial purposes. Our guarantees may include performance obligations under power supply agreements, transmission agreements, gas agreements, fuel procurement agreements, trading operations and cash management. Our guarantees also include standby letters of credit and surety bonds. At December 31, 2011, the Parent had issued $453 million of guarantees for future financial or performance assurance on behalf of its subsidiaries. This includes $300 million of guarantees of certain payments of two wholly owned indirect subsidiaries (See Note 23). We do not believe conditions are likely for significant performance under the guarantees of performance issued by or on behalf of affiliates. To the extent liabilities are incurred as a result of the activities covered by the guarantees, such liabilities are included on the Consolidated Balance Sheets.

Our subsidiaries provide and receive services, at cost, to and from the Parent and its subsidiaries, in accordance with agreements approved by the SEC pursuant to Section 13(b) of the Public Utility Holding Company Act of 1935. The repeal of the Public Utility Holding Company Act of 1935 effective February 8, 2006, and subsequent regulation by the FERC did not change our current intercompany services. Services include purchasing, human resources, accounting, legal, transmission and delivery support, engineering materials, contract support, loaned employees payroll costs, construction management and other centralized administrative, management and support services. The costs of the services are billed on a direct-charge basis, whenever possible, and on allocation factors for general costs that cannot be directly attributed. Billings from affiliates are capitalized or expensed depending on the nature of the services rendered. Amounts receivable from and/or payable to affiliated companies for these services are included in receivables from affiliated companies and payables to affiliated companies on the Balance Sheets.

PESC provides the majority of the affiliated goods and services under the approved agreements. Goods and services provided by PESC during 2011, 2010 and 2009 to PEC amounted to $203 million, $176 million and $170 million, respectively, and services provided to PEF were $160 million, $156 million and $147 million, respectively. During 2010, PESC transferred a $24 million combustion turbine to PECat cost.

PEC and PEF also provide and receive goods and services at cost. Goods and services provided by PEC to PEF during 2011, 2010 and 2009 amounted to $57 million, $43 million and $36 million, respectively. Goods and services provided by PEF to PEC during 2011, 2010 and 2009 amounted to $12 million, $18 million and $12 million, respectively.

PEC and PEF participate in an internal money pool, administered by PESC, to more effectively utilize cash resources and to reduce outside short-term borrowings. The money pool is also used to settle intercompany balances. The weighted-average interest rate for the money pool was 0.32%,0.30% and 0.74% for the years endedDecember 31, 2011, 2010 and 2009, respectively. Amounts payable to the money pool are included in notes payable to affiliated companies on the Balance Sheets. PEC and PEF recorded minimal interest expense related to the money pool for all the years presented.

PEC and each of its wholly owned subsidiaries and PEF have entered into the Tax Agreement with the Parent (See Note 15).

PEF

Related Party Transactions [Line Items]

Related party transactions

19.       RELATED PARTY TRANSACTIONS

There were no material related party transactions in which we or any of our subsidiaries were or will be a participant and in which any of our directors, executive officers or any of their immediate family members had a direct or indirect material interest. Transactions between affiliated companies are further discussed below.

As a part of normal business, we enter into various agreements providing financial or performance assurances to third parties. These agreements are entered into primarily to support or enhance the creditworthiness otherwise attributed to a subsidiary on a stand-alone basis, thereby facilitating the extension of sufficient credit to accomplish the subsidiaries' intended commercial purposes. Our guarantees may include performance obligations under power supply agreements, transmission agreements, gas agreements, fuel procurement agreements, trading operations and cash management. Our guarantees also include standby letters of credit and surety bonds. At December 31, 2011, the Parent had issued $453 million of guarantees for future financial or performance assurance on behalf of its subsidiaries. This includes $300 million of guarantees of certain payments of two wholly owned indirect subsidiaries (See Note 23). We do not believe conditions are likely for significant performance under the guarantees of performance issued by or on behalf of affiliates. To the extent liabilities are incurred as a result of the activities covered by the guarantees, such liabilities are included on the Consolidated Balance Sheets.

Our subsidiaries provide and receive services, at cost, to and from the Parent and its subsidiaries, in accordance with agreements approved by the SEC pursuant to Section 13(b) of the Public Utility Holding Company Act of 1935. The repeal of the Public Utility Holding Company Act of 1935 effective February 8, 2006, and subsequent regulation by the FERC did not change our current intercompany services. Services include purchasing, human resources, accounting, legal, transmission and delivery support, engineering materials, contract support, loaned employees payroll costs, construction management and other centralized administrative, management and support services. The costs of the services are billed on a direct-charge basis, whenever possible, and on allocation factors for general costs that cannot be directly attributed. Billings from affiliates are capitalized or expensed depending on the nature of the services rendered. Amounts receivable from and/or payable to affiliated companies for these services are included in receivables from affiliated companies and payables to affiliated companies on the Balance Sheets.

PESC provides the majority of the affiliated goods and services under the approved agreements. Goods and services provided by PESC during 2011, 2010 and 2009 to PEC amounted to $203 million, $176 million and $170 million, respectively, and services provided to PEF were $160 million, $156 million and $147 million, respectively. During 2010, PESC transferred a $24 million combustion turbine to PECat cost.

PEC and PEF also provide and receive goods and services at cost. Goods and services provided by PEC to PEF during 2011, 2010 and 2009 amounted to $57 million, $43 million and $36 million, respectively. Goods and services provided by PEF to PEC during 2011, 2010 and 2009 amounted to $12 million, $18 million and $12 million, respectively.

PEC and PEF participate in an internal money pool, administered by PESC, to more effectively utilize cash resources and to reduce outside short-term borrowings. The money pool is also used to settle intercompany balances. The weighted-average interest rate for the money pool was 0.32%,0.30% and 0.74% for the years endedDecember 31, 2011, 2010 and 2009, respectively. Amounts payable to the money pool are included in notes payable to affiliated companies on the Balance Sheets. PEC and PEF recorded minimal interest expense related to the money pool for all the years presented.

PEC and each of its wholly owned subsidiaries and PEF have entered into the Tax Agreement with the Parent (See Note 15).