Fair Value Disclosures (Tables)

9 Months Ended

Sep. 30, 2012

Fair Value Of Financial Assets And Liabilities Measured On Recurring Basis


	Fair Value Measurements at September 30, 2012
Description	Total		Quoted Prices in Active Markets for Identical Instruments (Level 1) (a)		Significant Other Observable Inputs (Level 2) (a)		Significant Unobservable Inputs (Level 3)
	*(millions of dollars)*
ASSETS
Derivative instruments (b)
Electricity (c)	$	2	$	—	$	2	$	—
Natural gas (d)		1		1		—		—
Capacity (e)		8		—		—		8
Cash equivalents
Treasury fund		128		128		—		—
Executive deferred compensation plan assets
Money market funds		19		19		—		—
Life insurance contracts		58		—		41		17

	$	216	$	148	$	43	$	25

LIABILITIES

Derivative instruments (b)
Electricity (c)	$	15	$	—	$	15	$	—
Natural gas (d)		26		18		—		8
Capacity (e)		9		—		—		9
Executive deferred compensation plan liabilities
Life insurance contracts		28		—		28		—

	$	78	$	18	$	43	$	17

(a)	There were no transfers of instruments between level 1 and level 2 valuation categories during the nine months ended September 30, 2012.

(b)	The fair value of derivative assets and liabilities reflect netting by counterparty before the impact of collateral.

(c)	Represents wholesale electricity futures and swaps that are used mainly as part of Pepco Energy Services’ retail energy supply business.

(d)

Level 1 instruments represent wholesale gas futures and swaps that are used mainly as part of Pepco Energy Services’ retail energy supply business and level 3 instruments represent natural gas options purchased by DPL as part of a natural gas hedging program approved by the DPSC, as well as Pepco Energy Services physical basis contracts.

(e)	Represents derivatives associated with ACE SOCAs.


	Fair Value Measurements at December 31, 2011
Description	Total		Quoted Prices in Active Markets for Identical Instruments (Level 1) (a)		Significant Other Observable Inputs (Level 2) (a)		Significant Unobservable Inputs (Level 3)
	*(millions of dollars)*
ASSETS
Cash equivalents
Treasury fund	$	114	$	114	$	—	$	—
Executive deferred compensation plan assets
Money market funds		18		18		—		—
Life insurance contracts		60		—		43		17

	$	192	$	132	$	43	$	17

LIABILITIES

Derivative instruments (b)
Electricity (c)	$	32	$	—	$	32	$	—
Natural gas (d)		67		50		—		17
Capacity		1		—		1		—
Executive deferred compensation plan liabilities
Life insurance contracts		28		—		28		—

	$	128	$	50	$	61	$	17

(a)	There were no transfers of instruments between level 1 and level 2 valuation categories during the year ended December 31, 2011.

(b)	The fair values of derivative liabilities reflect netting by counterparty before the impact of collateral.

(c)	Represents wholesale electricity futures and swaps that are used mainly as part of Pepco Energy Services’ retail energy supply business.

(d)	Level 1 instruments represent wholesale gas futures and swaps that are used mainly as part of Pepco Energy Services’ retail energy supply business and level 3 instruments represent natural gas options purchased by DPL as part of a natural gas hedging program approved by the DPSC.

Summary Of Primary Unobservable Inputs Used To Determine Fair Value Of Level 3 Instruments And Range Of Values That For Those Inputs


Type of Instrument	Fair Value at September 30, 2012			Valuation Technique	Unobservable Input	Range
	*(millions of dollars)*

Natural gas options	$	(7	)	Option model	Volatility factor	0.82 - 2.76
Capacity contracts, net		(1	)	Discounted cash flow	Discount rate	5% - 9%
Natural gas physical basis contracts		(1	)	Market comparable	Congestion adder	$(0.04) - $0.72

Reconciliations Of Fair Value Measurements Using Significant Unobservable Inputs (Level 3)


	Nine Months Ended September 30, 2012
	Natural Gas			Life Insurance Contracts			Capacity
	*(millions of dollars)*
Beginning balance as of January 1	$	(17	)	$	17		$	—
Total gains (losses) (realized and unrealized):
Included in income		—			3			—
Included in accumulated other comprehensive loss		—			—			—
Included in regulatory assets		(2	)		—			(1	)
Purchases		—			—			—
Issuances		—			(3	)		—
Settlements		11			—			—
Transfers in (out) of level 3		—			—			—

Ending balance as of September 30	$	(8	)	$	17		$	(1	)


	Nine Months Ended September 30, 2011
	Natural Gas			Life Insurance Contracts
	*(millions of dollars)*
Beginning balance as of January 1	$	(23	)	$	19
Total gains (losses) (realized and unrealized):
Included in income		—			5
Included in accumulated other comprehensive loss		—			—
Included in regulatory assets		(6	)		—
Purchases		—			—
Issuances		—			(3	)
Settlements		11			(4	)
Transfers in (out) of level 3		1			—

Ending balance as of September 30	$	(17	)	$	17

Gains Or (Losses) On Level 3 Instruments Included In Income


	Nine Months Ended September 30,
	2012		2011
	*(millions of dollars)*
Total net gains included in income for the period	$	3	$	5


Change in unrealized gains relating to assets still held at reporting date	$	3	$	2

Fair Value Of Financial Liabilities Measured On Recurring Basis


	Fair Value Measurements at September 30, 2012
Description	Total		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	*(millions of dollars)*
LIABILITIES

Debt instruments
Long-term debt (a)	$	5,068	$	990	$	3,584	$	494
Transition Bonds issued by ACE Funding (b)		355		—		355		—
Long-term project funding		14		—		—		14

	$	5,437	$	990	$	3,939	$	508

(a)	The carrying amount for Long-term debt is $4,177 million as of September 30, 2012.

(b)	The carrying amount for Transition Bonds issued by ACE Funding, including amounts due within one year, is $306 million as of September 30, 2012.

Estimated Fair Values Of Debt And Equity Instruments


	December 31, 2011
	Carrying Amount		Fair Value
	*(millions of dollars)*

Long-term debt	$	3,867	$	4,577
Transition Bonds issued by ACE Funding		332		380
Long-term project funding		15		15

Delmarva Power & Light Co/De [Member]

Fair Value Of Financial Assets And Liabilities Measured On Recurring Basis


	Fair Value Measurements at September 30, 2012
Description	Total		Quoted Prices in Active Markets for Identical Instruments (Level 1) (a)		Significant Other Observable Inputs (Level 2) (a)		Significant Unobservable Inputs (Level 3)
	*(millions of dollars)*
ASSETS

Derivative instruments (b)
Natural gas (c)	$	1	$	1	$	—	$	—
Cash equivalents
Treasury fund		40		40		—		—
Executive deferred compensation plan assets
Money market funds		2		2		—		—
Life insurance contracts		1		—		—		1

	$	44	$	43	$	—	$	1

LIABILITIES

Derivative instruments (b)
Natural gas (c)	$	7	$	—	$	—	$	7

	$	7	$	—	$	—	$	7

(a)	There were no transfers of instruments between level 1 and level 2 valuation categories during the nine months ended September 30, 2012.

(b)	The fair values of derivative assets and liabilities reflect netting by counterparty before the impact of collateral.

(c)	Represents natural gas options purchased by DPL as part of a natural gas hedging program approved by the DPSC.


	Fair Value Measurements at December 31, 2011
Description	Total		Quoted Prices in Active Markets for Identical Instruments (Level 1) (a)		Significant Other Observable Inputs (Level 2) (a)		Significant Unobservable Inputs (Level 3)
	*(millions of dollars)*
ASSETS

Executive deferred compensation plan assets
Money market funds	$	2	$	2	$	—	$	—
Life insurance contracts		1		—		—		1

	$	3	$	2	$	—	$	1

LIABILITIES

Derivative instruments (b)
Natural gas (c)	$	17	$	2	$	—	$	15

	$	17	$	2	$	—	$	15

(a)	There were no transfers of instruments between level 1 and level 2 valuation categories during the year ended December 31, 2011.

(b)	The fair value of derivative liabilities reflect netting by counterparty before the impact of collateral.

(c)	Represents natural gas options purchased by DPL as part of a natural gas hedging program approved by the DPSC.

Summary Of Primary Unobservable Inputs Used To Determine Fair Value Of Level 3 Instruments And Range Of Values That For Those Inputs


Type of Instrument	Fair Value at September 30, 2012			Valuation Technique	Unobservable Input	Range
	*(millions of dollars)*

Natural gas options	$	(7	)	Option model	Volatility factor	0.82 – 2.76

Reconciliations Of Fair Value Measurements Using Significant Unobservable Inputs (Level 3)


	Nine Months Ended September 30, 2012
	Natural Gas			Life Insurance Contracts
	*(millions of dollars)*
Beginning balance as of January 1	$	(15	)	$	1
Total gains (losses) (realized and unrealized):
Included in income		—			—
Included in accumulated other comprehensive loss		—			—
Included in regulatory assets		(2	)		—
Purchases		—			—
Issuances		—			—
Settlements		10			—
Transfers in (out) of level 3		—			—

Ending balance as of September 30	$	(7	)	$	1


	Nine Months Ended September 30, 2011
	Natural Gas			Life Insurance Contracts
	*(millions of dollars)*
Beginning balance as of January 1	$	(23	)	$	1
Total gains (losses) (realized and unrealized):
Included in income		—			—
Included in accumulated other comprehensive loss		—			—
Included in regulatory assets		(6	)		—
Purchases		—			—
Issuances		—			—
Settlements		11			—
Transfers in (out) of level 3		—			—

Ending balance as of September 30	$	(18	)	$	1

Fair Value Of Financial Liabilities Measured On Recurring Basis


	Fair Value Measurements at September 30, 2012
Description	Total		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	*(millions of dollars)*
LIABILITIES

Debt instruments
Long-term debt (a)	$	996	$	278	$	603	$	115

	$	996	$	278	$	603	$	115

(a)	The carrying amount for Long-term debt is $917 million as of September 30, 2012.

Estimated Fair Values Of Debt And Equity Instruments


	December 31, 2011
	Carrying Amount		Fair Value
	(*millions of dollars*)

Long-term debt	$	765	$	834

Atlantic City Electric Co [Member]

Fair Value Of Financial Assets And Liabilities Measured On Recurring Basis


	Fair Value Measurements at September 30, 2012
Description	Total		Quoted Prices in Active Markets for Identical Instruments (Level 1) (a)		Significant Other Observable Inputs (Level 2) (a)		Significant Unobservable Inputs (Level 3)
	*(millions of dollars)*
ASSETS

Derivative instruments (b)
Capacity (c)	$	8	$	—	$	—	$	8
Cash equivalents
Treasury fund		28		28		—		—

	$	36	$	28	$	—	$	8

LIABILITIES

Derivative instruments (b)
Capacity (c)	$	9	$	—	$	—	$	9
Executive deferred compensation plan liabilities
Life insurance contracts		1		—		1		—

	$	10	$	—	$	1	$	9

(a)	There were no transfers of instruments between level 1 and level 2 valuation categories during the nine months ended September 30, 2012.

(b)	The fair value of derivative assets and liabilities reflect netting by counterparty before the impact of collateral.

(c)	Represents derivatives associated with ACE SOCAs.


	Fair Value Measurements at December 31, 2011
Description	Total		Quoted Prices in Active Markets for Identical Instruments (Level 1) (a)		Significant Other Observable Inputs (Level 2) (a)		Significant Unobservable Inputs (Level 3)
	*(millions of dollars)*
ASSETS

Cash equivalents
Treasury fund	$	114	$	114	$	—	$	—

	$	114	$	114	$	—	$	—

LIABILITIES

Executive deferred compensation plan liabilities
Life insurance contracts	$	1	$	—	$	1	$	—

	$	1	$	—	$	1	$	—

(a)	There were no transfers of instruments between level 1 and level 2 valuation categories during the year ended December 31, 2011.

Summary Of Primary Unobservable Inputs Used To Determine Fair Value Of Level 3 Instruments And Range Of Values That For Those Inputs


Type of Instrument	Fair Value at September 30, 2012			Valuation Technique	Unobservable Input	Range
	*(millions of dollars)*

Capacity contracts, net	$	(1	)	Discounted cash flow	Discount rate	5% - 9%

Reconciliations Of Fair Value Measurements Using Significant Unobservable Inputs (Level 3)


	Capacity
	Nine Months Ended September 30, 2012
	*(millions of dollars)*
Beginning balance as of January 1	$	—
Total gains (losses) (realized and unrealized):
Included in income		—
Included in accumulated other comprehensive loss		—
Included in regulatory assets		(1	)
Purchases		—
Issuances		—
Settlements		—
Transfers in (out) of level 3		—

Ending balance as of September 30	$	(1	)

Fair Value Of Financial Liabilities Measured On Recurring Basis


	Fair Value Measurements at September 30, 2012
Description	Total		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	*(millions of dollars)*
LIABILITIES
Debt instruments
Long-term debt (a)	$	1,029	$	—	$	894	$	135
Transition Bonds issued by ACE Funding (b)		355		—		355		—

	$	1,384	$	—	$	1,249	$	135

(a)	The carrying amount for Long-term debt is $829 million as of September 30, 2012.

(b)	The carrying amount for Transition Bonds issued by ACE Funding, including amounts due within one year, is $306 million as of September 30, 2012.

Estimated Fair Values Of Debt And Equity Instruments


	December 31, 2011
	Carrying Amount		Fair Value
	*(millions of dollars)*
Long-term debt	$	832	$	1,003
Transition Bonds issued by ACE Funding		332		380

Potomac Electric Power Co [Member]

Fair Value Of Financial Assets And Liabilities Measured On Recurring Basis


	Fair Value Measurements at September 30, 2012
Description	Total		Quoted Prices in Active Markets for Identical Instruments (Level 1) (a)		Significant Other Observable Inputs (Level 2) (a)		Significant Unobservable Inputs (Level 3)
	*(millions of dollars)*
ASSETS

Executive deferred compensation plan assets
Money market funds	$	17	$	17	$	—	$	—
Life insurance contracts		53		—		36		17

	$	70	$	17	$	36	$	17

LIABILITIES

Executive deferred compensation plan liabilities
Life insurance contracts	$	9	$	—	$	9	$	—

	$	9	$	—	$	9	$	—

(a)	There were no transfers of instruments between level 1 and level 2 valuation categories during the nine months ended September 30, 2012.


	Fair Value Measurements at December 31, 2011
Description	Total		Quoted Prices in Active Markets for Identical Instruments (Level 1) (a)		Significant Other Observable Inputs (Level 2) (a)		Significant Unobservable Inputs (Level 3)
	*(millions of dollars)*
ASSETS

Executive deferred compensation plan assets
Money market funds	$	12	$	12	$	—	$	—
Life insurance contracts		57		—		40		17

	$	69	$	12	$	40	$	17

LIABILITIES

Executive deferred compensation plan liabilities
Life insurance contracts	$	10	$	—	$	10	$	—

	$	10	$	—	$	10	$	—

(a)	There were no transfers of instruments between level 1 and level 2 valuation categories during the year ended December 31, 2011.

Reconciliations Of Fair Value Measurements Using Significant Unobservable Inputs (Level 3)


	Life Insurance Contracts
	Nine Months Ended September 30,
	2012			2011
	*(millions of dollars)*
Beginning balance as of January 1	$	17		$	18
Total gains (losses) (realized and unrealized):
Included in income		3			5
Included in accumulated other comprehensive loss		—			—
Purchases		—			—
Issuances		(3	)		(3	)
Settlements		—			(4	)
Transfers in (out) of level 3		—			—

Ending balance as of September 30	$	17		$	16

Gains Or (Losses) On Level 3 Instruments Included In Income


	Nine Months Ended September 30,
	2012		2011
	*(millions of dollars)*

Total gains included in income for the period	$	3	$	5


Change in unrealized gains relating to assets still held at reporting date	$	3	$	2

Fair Value Of Financial Liabilities Measured On Recurring Basis


	Fair Value Measurements at September 30, 2012
Description	Total		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	*(millions of dollars)*
LIABILITIES

Debt instruments
Long-term debt (a)	$	2,195	$	712	$	1,483	$	—

	$	2,195	$	712	$	1,483	$	—

(a)	The carrying amount for Long-term debt is $1,701 million as of September 30, 2012.

Estimated Fair Values Of Debt And Equity Instruments


	December 31, 2011
	Carrying Amount		Fair Value
	(*millions of dollars*)

Long-term debt	$	1,540	$	1,943

- Definition

Tabular disclosure of the amount of gains or losses for the period included in earnings or resulted in a change to net assets, have arisen from the use of significant unobservable inputs (level 3) to measure the fair value of assets, liabilities, and financial instruments classified in shareholders' equity.

+ References+ Details

- Definition

Tabular disclosure of liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, by class that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). Where the quoted price in an active market for the identical liability is not available, the Level 1 input is the quoted price of an identical liability when traded as an asset.

+ References+ Details

- Definition

Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

+ References+ Details

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

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-Publisher SEC

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+ Details