Fair Value Disclosures (Tables)

3 Months Ended

Mar. 31, 2013

Fair Value Of Financial Assets And Liabilities Measured On Recurring Basis


	Fair Value Measurements at March 31, 2013
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 (d)	$	1	$	1	$	—	$	—
Capacity (e)		8		—		—		8
Cash equivalents
Treasury fund		112		112		—		—
Executive deferred compensation plan assets
Money market funds		17		17		—		—
Life insurance contracts		62		—		43		19

	$	200	$	130	$	43	$	27

LIABILITIES
Derivative instruments (b)
Electricity (c)	$	4	$	—	$	4	$	—
Capacity (e)		11		—		—		11
Executive deferred compensation plan liabilities
Life insurance contracts		29		—		29		—

	$	44	$	—	$	33	$	11

(a)	There were no transfers of instruments between level 1 and level 2 valuation categories during the three months ended March 31, 2013.

(b)	The fair values 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 electric supply business.

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

(e)	Represents derivatives associated with ACE SOCAs.


	Fair Value Measurements at December 31, 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)	$	1	$	—	$	1	$	—
Capacity (e)		8		—		—		8
Cash equivalents
Treasury fund		27		27		—		—
Executive deferred compensation plan assets
Money market funds		17		17		—		—
Life insurance contracts		60		—		42		18

	$	113	$	44	$	43	$	26

LIABILITIES
Derivative instruments (b)
Electricity (c)	$	10	$	—	$	10	$	—
Natural gas (d)		4		—		—		4
Capacity (e)		11		—		—		11
Executive deferred compensation plan liabilities
Life insurance contracts		28		—		28		—

	$	53	$	—	$	38	$	15

(a)	There were no transfers of instruments between level 1 and level 2 valuation categories during the year ended December 31, 2012.

(b)	The fair values 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 electric supply business.

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

(e)	Represents derivatives associated with ACE SOCAs.

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

Type of Instrument

Fair Value at
March 31, 2013

Valuation Technique

Unobservable Input

Range

(millions of dollars)

Capacity contracts, net

)

Discounted cash flow

Discount rate

6% - 8%


Type of Instrument	Fair Value at December 31, 2012			Valuation Technique	Unobservable Input	Range
	*(millions of dollars)*
Natural gas options	$	(4	)	Option model	Volatility factor	1.57 - 2.00
Capacity contracts, net		(3	)	Discounted cash flow	Discount rate	5% - 9%

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


	Three Months Ended March 31, 2013
	Natural Gas			Life Insurance Contracts		Capacity
	*(millions of dollars)*
Beginning balance as of January 1	$	(4	)	$	18	$	(3	)
Total gains (losses) (realized and unrealized):
Included in income		—			1		—
Included in accumulated other comprehensive loss		—			—		—
Included in regulatory liabilities		—			—		—
Purchases		—			—		—
Issuances		—			—		—
Settlements		4			—		—
Transfers in (out) of level 3		—			—		—

Ending balance as of March 31	$	—		$	19	$	(3	)


	Three Months Ended March 31, 2012
	Natural Gas			Life Insurance Contracts
	*(millions of dollars)*
Beginning balance as of January 1	$	(15	)	$	17
Total gains (losses) (realized and unrealized):
Included in income		—			1
Included in accumulated other comprehensive loss		—			—
Included in regulatory liabilities		(3	)		—
Purchases		—			—
Issuances		—			—
Settlements		6			—
Transfers in (out) of level 3		—			—

Ending balance as of March 31	$	(12	)	$	18

Gains On Level 3 Instruments Included In Income


	Three Months Ended March 31,
	2013		2012
	*(millions of dollars)*
Total net gains included in income for the period	$	1	$	1

Change in unrealized gains relating to assets still held at reporting date	$	1	$	1

Fair Value Of Financial Liabilities Measured On Recurring Basis


	Fair Value Measurements at March 31, 2013
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)	$	5,194	$	386	$	4,326	$	482
Transition Bonds issued by ACE Funding (b)		327		—		327		—
Long-term project funding		13		—		—		13

	$	5,534	$	386	$	4,653	$	495

(a)	The carrying amount for Long-term debt is $4,426 million as of March 31, 2013.

(b)	The carrying amount for Transition Bonds issued by ACE Funding, including amounts due within one year, is $285 million as of March 31, 2013.


	Fair Value Measurements at December 31, 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)	$	5,004	$	204	$	4,313	$	487
Transition Bonds issued by ACE Funding (b)		341		—		341		—
Long-term project funding		13		—		—		13

	$	5,358	$	204	$	4,654	$	500

(a)	The carrying amount for Long-term debt is $4,177 million as of December 31, 2012.

(b)	The carrying amount for Transition Bonds issued by ACE Funding, including amounts due within one year, is $295 million as of December 31, 2012.

Delmarva Power & Light Co/De [Member]

Fair Value Of Financial Assets And Liabilities Measured On Recurring Basis


	Fair Value Measurements at March 31, 2013
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	$	—	$	—
Executive deferred compensation plan assets
Money market funds		2		2		—		—
Life insurance contracts		1		—		—		1

	$	4	$	3	$	—	$	1

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 three months ended March 31, 2013.

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

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


	Fair Value Measurements at December 31, 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	$	2	$	2	$	—	$	—
Life insurance contracts		1		—		—		1

	$	3	$	2	$	—	$	1

LIABILITIES
Derivative instruments (b)
Natural gas (c)	$	4	$	—	$	—	$	4

	$	4	$	—	$	—	$	4

(a)	There were no transfers of instruments between level 1 and level 2 valuation categories during the year ended December 31, 2012.

(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 Could Be Used For Those Inputs

Type of Instrument

Fair Value at
December 31, 2012

Valuation Technique

Unobservable Input

Range

(millions of dollars)

Natural gas options

)

Option model

Volatility factor

1.57 – 2.00

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


	Three Months Ended March 31, 2013
	Natural Gas			Life Insurance Contracts
	*(millions of dollars)*
Beginning balance as of January 1	$	(4	)	$	1
Total gains (losses) (realized and unrealized):
Included in income		—			—
Included in accumulated other comprehensive loss		—			—
Included in regulatory liabilities		—			—
Purchases		—			—
Issuances		—			—
Settlements		4			—
Transfers in (out) of level 3		—			—

Ending balance as of March 31	$	—		$	1


	Three Months Ended March 31, 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 liabilities		(3	)		—
Purchases		—			—
Issuances		—			—
Settlements		6			—
Transfers in (out) of level 3		—			—

Ending balance as of March 31	$	(12	)	$	1

Fair Value Of Financial Liabilities Measured On Recurring Basis


	Fair Value Measurements at March 31, 2013
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)	$	968	$	15	$	841	$	112

	$	968	$	15	$	841	$	112

(a)	The carrying amount for Long-term debt is $917 million as of March 31, 2013.


	Fair Value Measurements at December 31, 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)	$	990	$	—	$	877	$	113

	$	990	$	—	$	877	$	113

(a)	The carrying amount for Long-term debt is $917 million as of December 31, 2012.

Atlantic City Electric Co [Member]

Fair Value Of Financial Assets And Liabilities Measured On Recurring Basis


	Fair Value Measurements at March 31, 2013
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		26		26		—		—

	$	34	$	26	$	—	$	8

LIABILITIES
Derivative instruments (b)
Capacity (c)	$	11	$	—	$	—	$	11
Executive deferred compensation plan liabilities
Life insurance contracts		1		—		1		—

	$	12	$	—	$	1	$	11

(a)	There were no transfers of instruments between level 1 and level 2 valuation categories during the three months ended March 31, 2013.

(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, 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		27		27		—		—

	$	35	$	27	$	—	$	8

LIABILITIES
Derivative instruments (b)
Capacity (c)	$	11	$	—	$	—	$	11
Executive deferred compensation plan liabilities
Life insurance contracts		1		—		1		—

	$	12	$	—	$	1	$	11

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

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

Type of Instrument

Fair Value at
March 31, 2013

Valuation
Technique

Unobservable
Input

Range

(millions of dollars)

Capacity contracts, net

)

Discounted cash flow

Discount rate

6% - 8%

Type of Instrument

Fair Value at
December 31, 2012

Valuation
Technique

Unobservable
Input

Range

(millions of dollars)

Capacity contracts, net

)

Discounted cash flow

Discount rate

5% - 9%

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


	Capacity
	Three Months Ended March 31, 2013
	*(millions of dollars)*
Beginning balance as of January 1	$	(3	)
Total gains (losses) (realized and unrealized):
Included in income		—
Included in accumulated other comprehensive loss		—
Included in regulatory liabilities and regulatory assets		—
Purchases		—
Issuances		—
Settlements		—
Transfers in (out) of level 3		—

Ending balance as of March 31	$	(3	)

Fair Value Of Financial Liabilities Measured On Recurring Basis


	Fair Value Measurements at March 31, 2013
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)	$	1,007	$	—	$	877	$	130
Transition Bonds issued by ACE Funding (b)		327		—		327		—

	$	1,334	$	—	$	1,204	$	130

(a)	The carrying amount for Long-term debt is $829 million as of March 31, 2013.

(b)	The carrying amount for Transition Bonds issued by ACE Funding, including amounts due within one year, is $285 million as of March 31, 2013.


	Fair Value Measurements at December 31, 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)	$	1,016	$	—	$	884	$	132
Transition Bonds issued by ACE Funding (b)		341		—		341		—

	$	1,357	$	—	$	1,225	$	132

(a)	The carrying amount for Long-term debt is $829 million as of December 31, 2012.

(b)	The carrying amount for Transition Bonds issued by ACE Funding, including amounts due within one year, is $295 million as of December 31, 2012.

Potomac Electric Power Co [Member]

Fair Value Of Financial Assets And Liabilities Measured On Recurring Basis


	Fair Value Measurements at March 31, 2013
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	$	85	$	85	$	—	$	—
Executive deferred compensation plan assets
Money market funds		14		14		—		—
Life insurance contracts		57		—		39		18

	$	156	$	99	$	39	$	18

LIABILITIES
Executive deferred compensation plan liabilities
Life insurance contracts	$	8	$	—	$	8	$	—

	$	8	$	—	$	8	$	—

(a)	There were no transfers of instruments between level 1 and level 2 valuation categories during the three months ended March 31, 2013.


	Fair Value Measurements at December 31, 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	$	15	$	15	$	—	$	—
Life insurance contracts		56		—		38		18

	$	71	$	15	$	38	$	18

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 year ended December 31, 2012.

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


	Life Insurance Contracts
	Three Months Ended March 31,
	2013			2012
	*(millions of dollars)*
Beginning balance as of January 1	$	18		$	17
Total gains (losses) (realized and unrealized):
Included in income		1			1
Included in accumulated other comprehensive loss		—			—
Purchases		—			—
Issuances		(1	)		—
Settlements		—			—
Transfers in (out) of level 3		—			—

Ending balance as of March 31	$	18		$	18

Gains On Level 3 Instruments Included In Income


	Three Months Ended March 31,
	2013		2012
	*(millions of dollars)*
Total gains included in income for the period	$	1	$	1

Change in unrealized gains relating to assets still held at reporting date	$	1	$	1

Fair Value Of Financial Liabilities Measured On Recurring Basis


	Fair Value Measurements at March 31, 2013
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)	$	2,387	$	371	$	2,016	$	—

	$	2,387	$	371	$	2,016	$	—

(a)	The carrying amount for Long-term debt is $1,951 million as of March 31, 2013.


	Fair Value Measurements at December 31, 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)	$	2,160	$	204	$	1,956	$	—

	$	2,160	$	204	$	1,956	$	—

(a)	The carrying amount for Long-term debt is $1,701 million as of December 31, 2012.

- 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