Regulatory Matters (Notes)

3 Months Ended

Mar. 31, 2017

Schedule of Regulatory Assets and Liabilities [Text Block]

Regulatory Matters

DP&L originally filed its ESP 3 seeking an effective date of January 1, 2017. On October 11, 2016, DP&L amended the application requesting to collect $145.0 million per year for seven years named the Distribution Modernization Rider ("DMR"). This plan established the terms and conditions for DP&L’s SSO to customers that do not choose a competitive retail electric supplier, and recommended including renewable energy attributes as part of the product that is competitively bid. DP&L sought recovery of approximately $10.5 million of regulatory assets, and proposed a new Distribution Investment Rider to allow DP&L to recover costs associated with future distribution equipment and infrastructure needs. Additionally, the plan established new riders set initially at zero, related to energy reductions from DP&L’s energy efficiency programs, and certain environmental liabilities.

On January 30, 2017, DP&L, in conjunction with various intervening parties, filed a settlement in the ESP 3 case. On March 13, 2017, DP&L, in conjunction with various intervening parties and the staff of the PUCO, filed an Amended Stipulation in the ESP 3 case, which is subject to PUCO approval. The intervening parties agreed to a six-year settlement that provides a framework for energy rates and defines components which include, but are not limited to, the following:

• Bypassable standard offer energy rates for DP&L’s customers based on competitive bid auctions;

• The establishment of a three-year non-bypassable DMR designed to collect $105.0 million in revenue per year to pay debt obligations at DPL and DP&L and position DP&L to modernize and/or maintain its transmission and distribution infrastructure. With PUCO approval, DP&L may have the option of extending the duration of the DMR for an additional two years;

• The establishment of a non-bypassable Distribution Investment Rider, set initially at zero, to recover incremental distribution capital investments;

• The establishment of a Smart Grid Rider, set initially at zero, to recover costs of future grid modernization;

• A commitment by us to separate DP&L’s generation assets from its transmission and distribution assets (if approved by FERC) within 180 days after receipt of a PUCO order;

• A commitment to commence a sale process to sell our ownership interests in the Zimmer, Miami Fort and Conesville coal-fired generation plants; and

• Restrictions on DPL making dividend or tax sharing payments, and various other riders and competitive retail market enhancements.

A hearing was held in April 2017 and a final decision by the PUCO is expected at the end of the second quarter or early in the third quarter of 2017. There can be no assurance that the Amended ESP 3 stipulation will be approved as filed or on a timely basis, and if the Amended ESP 3 stipulation is not approved on a timely basis or if the final ESP provides for terms that are more adverse than those submitted in DP&L's Amended stipulation, our results of operations, financial condition and cash flows and DPL's ability to meet long-term obligations, in the periods beyond twelve months from the date of this report, could be materially impacted.

In connection with any sale or closure of our generation plants as contemplated by the ESP 3 settlement or otherwise, DPL and DP&L would expect to incur certain cash and non-cash charges, some or all of which could be material to the business and financial condition of DPL and DP&L.

DP&L’s ESP 2 had been approved by the PUCO for the years 2014 - 2016, and permitted DP&L to collect a non-bypassable service stability rider equal to $110.0 million per year for each of those years and required DP&L to conduct competitive bid auctions to procure generation supply for SSO service. The Ohio Supreme Court in a June 2016 opinion stated that the PUCO’s approval of the ESP was reversed. In view of that reversal, DP&L filed a motion to withdraw its ESP 2 and implement rates consistent with those in effect prior to 2014. The PUCO approved DP&L’s withdrawal of ESP 2 and implementation plans. Those rates will be in effect until rates consistent with DP&L’s pending ESP 3 filing are approved and effective. In February 2017, several parties appealed the PUCO orders that approved both the withdrawal and the implementation plans to the Ohio Supreme Court. Those appeals are pending and the outcome and potential financial impact of those appeals cannot be determined at this time.

Subsidiaries [Member]

Schedule of Regulatory Assets and Liabilities [Text Block]

Regulatory Matters

DP&L originally filed its ESP 3 seeking an effective date of January 1, 2017. On October 11, 2016, DP&L amended the application requesting to collect $145.0 million per year for seven years named the Distribution Modernization Rider ("DMR"). This plan established the terms and conditions for DP&L’s SSO to customers that do not choose a competitive retail electric supplier, and recommended including renewable energy attributes as part of the product that is competitively bid. DP&L sought recovery of approximately $10.5 million of regulatory assets, and proposed a new Distribution Investment Rider to allow DP&L to recover costs associated with future distribution equipment and infrastructure needs. Additionally, the plan established new riders set initially at zero, related to energy reductions from DP&L’s energy efficiency programs, and certain environmental liabilities.

On January 30, 2017, DP&L, in conjunction with various intervening parties, filed a settlement in the ESP 3 case. On March 13, 2017, DP&L, in conjunction with various intervening parties and the staff of the PUCO, filed an Amended Stipulation in the ESP 3 case, which is subject to PUCO approval. The intervening parties agreed to a six-year settlement that provides a framework for energy rates and defines components which include, but are not limited to, the following:

• Bypassable standard offer energy rates for DP&L’s customers based on competitive bid auctions;

• The establishment of a three-year non-bypassable DMR designed to collect $105.0 million in revenue per year to pay debt obligations at DPL and DP&L and position DP&L to modernize and/or maintain its transmission and distribution infrastructure. With PUCO approval, DP&L may have the option of extending the duration of the DMR for an additional two years;

• The establishment of a non-bypassable Distribution Investment Rider, set initially at zero, to recover incremental distribution capital investments;

• The establishment of a Smart Grid Rider, set initially at zero, to recover costs of future grid modernization;

• A commitment by us to separate DP&L’s generation assets from its transmission and distribution assets (if approved by FERC) within 180 days after receipt of a PUCO order;

• A commitment to commence a sale process to sell our ownership interests in the Zimmer, Miami Fort and Conesville coal-fired generation plants; and

• Restrictions on DPL making dividend or tax sharing payments, and various other riders and competitive retail market enhancements.

A hearing was held in April 2017 and a final decision by the PUCO is expected at the end of the second quarter or early in the third quarter of 2017. There can be no assurance that the Amended ESP 3 stipulation will be approved as filed or on a timely basis, and if the Amended ESP 3 stipulation is not approved on a timely basis or if the final ESP provides for terms that are more adverse than those submitted in DP&L's Amended stipulation, our results of operations, financial condition and cash flows and DPL's ability to meet long-term obligations, in the periods beyond twelve months from the date of this report, could be materially impacted.

In connection with any sale or closure of our generation plants as contemplated by the ESP 3 settlement or otherwise, DPL and DP&L would expect to incur certain cash and non-cash charges, some or all of which could be material to the business and financial condition of DPL and DP&L.

DP&L’s ESP 2 had been approved by the PUCO for the years 2014 - 2016, and permitted DP&L to collect a non-bypassable service stability rider equal to $110.0 million per year for each of those years and required DP&L to conduct competitive bid auctions to procure generation supply for SSO service. The Ohio Supreme Court in a June 2016 opinion stated that the PUCO’s approval of the ESP was reversed. In view of that reversal, DP&L filed a motion to withdraw its ESP 2 and implement rates consistent with those in effect prior to 2014. The PUCO approved DP&L’s withdrawal of ESP 2 and implementation plans. Those rates will be in effect until rates consistent with DP&L’s pending ESP 3 filing are approved and effective. In February 2017, several parties appealed the PUCO orders that approved both the withdrawal and the implementation plans to the Ohio Supreme Court. Those appeals are pending and the outcome and potential financial impact of those appeals cannot be determined at this time.