Related Party Transactions

12 Months Ended

Dec. 31, 2011

Potomac Electric Power 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 Pepco. The cost of these services is allocated in accordance with cost allocation methodologies set forth in the service agreement using a variety of factors, including the subsidiaries' share of employees, operating expenses, assets, and other cost causal methods. These intercompany transactions are eliminated by PHI in consolidation and no profit results from these transactions at PHI. PHI Service Company costs directly charged or allocated to Pepco for the years ended December 31, 2011, 2010 and 2009 were approximately $185 million, $186 million and $175 million, respectively.

Certain subsidiaries of Pepco Energy Services Inc. (collectively with its subsidiaries, Pepco Energy Services) perform utility maintenance services, including services that are treated as capital costs, for Pepco. Amounts charged to Pepco by these companies for the years ended December 31, 2011, 2010 and 2009 were approximately $20 million, $10 million and $9 million, respectively.

In addition to the transactions described above, Pepco's financial statements include the following related party transactions in its statements of income:

	For the Year Ended December 31,
	2011		2010		2009
Income (Expense)	(millions of dollars)
Purchased power under Default Electricity Supply contracts with Conectiv Energy Supply, Inc. (a)(b)	$	—	$	—	$	1

(a) Included in purchased energy expense.

(b) During 2010, PHI disposed of its Conectiv Energy segment and a third party assumed Conectiv Energy Supply, Inc.'s responsibilities under these contracts.

As of December 31, 2011 and 2010, Pepco had the following balances on its balance sheets due to related parties:

	2011			2010
(Liability) Asset	(millions of dollars)
Payable to Related Party (current) (a)
PHI Parent Company	$	15		$	—
PHI Service Company		(32	)		(27	)
Pepco Energy Services (b)		(40	)		(48	)
Total	$	(57	)	$	(75	)
Money Pool Balance with Pepco Holdings (included in cash and cash equivalents)	$	—		$	82

(a) Included in accounts payable due to associated companies.

(b) Pepco bills customers on behalf of Pepco Energy Services where customers have selected Pepco Energy Services as their alternative energy supplier or where Pepco Energy Services has performed work for certain government agencies under a General Services Administration area-wide agreement.

Delmarva Power & Light Co/De [Member]

Related Party Transactions

(16) RELATED PARTY TRANSACTIONS

PHI Service Company provides various administrative and professional services to PHI and its regulated and unregulated subsidiaries, including DPL. The cost of these services is allocated in accordance with cost allocation methodologies set forth in the service agreement using a variety of factors, including the subsidiaries' share of employees, operating expenses, assets, and other cost causal methods. These intercompany transactions are eliminated by PHI in consolidation and no profit results from these transactions at PHI. PHI Service Company costs directly charged or allocated to DPL for the years ended December 31, 2011, 2010 and 2009 were $133 million, $139 million and $130 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,
	2011		2010			2009
	(millions of dollars)
Income (Expense)
Purchased power under Default Electricity Supply contracts with Conectiv Energy Supply, Inc. (a)(b)	$	1	$	(103	)	$	(88	)
Intercompany lease transactions (c)		5		7			7
Transcompany pipeline gas purchases with Conectiv Energy Supply, Inc. (b)(d)		—		(1	)		(1	)

(a) Included in purchased energy expense.

(b) During 2010, PHI disposed of its Conectiv Energy segment and a third party assumed Conectiv Energy Supply, Inc.'s responsibilities under these contracts.

(c) Included in electric revenue.

(d) Included in gas purchased expense.

As of December 31, 2011 and 2010, DPL had the following balances on its balance sheets due (to) from related parties:

	2011			2010
	(millions of dollars)
(Liability) Asset
(Payable to) Receivable from Related Party (current) (a)
PHI Service Company	$	(20	)	$	(19	)
Conectiv Energy Supply, Inc.		(1	)		(13	)
Pepco Energy Services, Inc. and its subsidiaries (Pepco Energy Services) (b)		—			(2	)
Total	$	(21	)	$	(34	)
Money Pool Balance with Pepco Holdings (included in cash and cash equivalents)	$	—		$	63

(a) Included in accounts payable due to associated companies.

(b) DPL bills customers on behalf of Pepco Energy Services where customers have selected Pepco Energy Services as their alternative energy supplier.

Atlantic City Electric Co [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 ACE. The cost of these services is allocated in accordance with cost allocation methodologies set forth in the service agreement using a variety of factors, including the subsidiaries' share of employees, operating expenses, assets, and other cost causal methods. These intercompany transactions are eliminated by PHI in consolidation and no profit results from these transactions at PHI. PHI Service Company costs directly charged or allocated to ACE for the years ended December 31, 2011, 2010 and 2009 were $102 million, $100 million and $100 million, respectively.

In addition to the PHI Service Company charges described above, ACE's financial statements include the following related party transactions in its Consolidated Statements of Income:

	For the Year Ended December 31,
	2011			2010			2009
	(millions of dollars)
(Expense) Income
Purchased power under Default Electricity Supply contracts with Conectiv Energy Supply, Inc. (a)(b)	$	—		$	(174	)	$	(185	)
Meter reading services provided by Millennium Account Services LLC (c)		(4	)		(4	)		(4	)
Intercompany use revenue (d)		2			2			3

(a) Included in purchased energy expense.

(b) During 2010, PHI disposed of its Conectiv Energy segment and a third party assumed Conectiv Energy Supply, Inc.'s responsibilities under those contracts.

(c) Included in other operation and maintenance expense.

(d) Included in operating revenue.

As of December 31, 2011 and 2010, ACE had the following balances on its Consolidated Balance Sheets due to related parties:

	2011			2010
	(millions of dollars)
Liability
Payable to Related Party (current) (a)
PHI Service Company	$	(12	)	$	(13	)
Conectiv Energy Supply, Inc.		—			(14	)
Other		(2	)		(2	)
Total	$	(14	)	$	(29	)

(a) Included in accounts payable due to associated companies.

During 2011, PHI, through Conectiv, LLC, made a $60 million capital contribution to ACE.