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.