Derivative Instruments and Hedging Activities (Tables)

6 Months Ended

Jun. 30, 2013

Fair Value of Derivative Instruments by Balance Sheet Location

The tables below identify the balance sheet location and fair values of derivative instruments as of June 30, 2013 and December 31, 2012:

	As of June 30, 2013
Balance Sheet Caption	Derivatives Designated as Hedging Instruments		Other Derivative Instruments			Gross Derivative Instruments			Effects of Cash Collateral and Netting		Net Derivative Instruments
	(millions of dollars)
Derivative assets (non-current assets)	$	—	$	4		$	4		$	—	$	4
Total Derivative assets		—		4			4			—		4
Derivative liabilities (current liabilities)		—		(1	)		(1	)		1		—
Derivative liabilities (non-current liabilities)		—		(14	)		(14	)		—		(14	)
Total Derivative liabilities		—		(15	)		(15	)		1		(14	)
Net Derivative (liability) asset	$	—	$	(11	)	$	(11	)	$	1	$	(10	)

	As of December 31, 2012
Balance Sheet Caption	Derivatives Designated as Hedging Instruments		Other Derivative Instruments			Gross Derivative Instruments			Effects of Cash Collateral and Netting		Net Derivative Instruments
	(millions of dollars)
Derivative assets (non-current assets)	$	—	$	8		$	8		$	—	$	8
Total Derivative assets		—		8			8			—		8
Derivative liabilities (current liabilities)		—		(4	)		(4	)		—		(4	)
Derivative liabilities (non-current liabilities)		—		(11	)		(11	)		—		(11	)
Total Derivative liabilities		—		(15	)		(15	)		—		(15	)
Net Derivative (liability) asset	$	—	$	(7	)	$	(7	)	$	—	$	(7	)

Schedule of Cash Collateral Offset Against Derivative Positions

The amount of cash collateral that was offset against these derivative positions is as follows:

	June 30, 2013		December 31, 2012
	(millions of dollars)
Cash collateral pledged to counterparties with the right to reclaim (a)	$	1	$	—

(a) Includes cash deposits on commodity brokerage accounts.

Cash Flow Hedges Included in Accumulated Other Comprehensive Loss

The data in the following tables indicate the cumulative net loss after-tax related to effective cash flow hedges by contract type included in AOCL, the portion of AOCL expected to be reclassified to income during the next 12 months, and the maximum hedge or deferral term:

	As of June 30, 2013
Contracts	Accumulated Other Comprehensive  Loss After-tax		Portion Expected to be  Reclassified to Income during the Next 12 Months		Maximum Term
	(millions of dollars)
Interest rate	$	9	$	1	230 months
Total	$	9	$	1

	As of June 30, 2012
Contracts	Accumulated Other Comprehensive  Loss After-tax		Portion Expected to be Reclassified to Income during the Next  12 Months		Maximum Term
	(millions of dollars)
Interest rate	$	10	$	1		242 months
Total	$	10	$	1

Net Unrealized Derivative Gain (Loss) Deferred as Regulatory Asset or Liability

The following table indicates the net unrealized derivative gains and losses arising during the period that were deferred as Regulatory Liabilities and Regulatory Assets, respectively, and the net realized losses recognized in the consolidated statements of income (through Fuel and Purchased Energy expense) that were also deferred as Regulatory Assets for the three and six months ended June 30, 2013 and 2012 associated with these derivatives:

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(millions of dollars)
Net unrealized loss arising during the period	$	(9	)	$	(1	)	$	(7	)	$	(5	)
Net realized gain (loss) recognized during the period		1			(4	)		(3	)		(11	)

Net Outstanding Commodity Forward Contracts Quantities and Net Position that did not Qualify for Hedge Accounting

As of June 30, 2013 and December 31, 2012, the quantities and positions of DPL’s net outstanding natural gas commodity forward contracts and ACE’s capacity derivatives associated with the SOCAs that did not qualify for hedge accounting were:

	June 30, 2013			December 31, 2012
Commodity	Quantity		Net Position	Quantity		Net Position
DPL – Natural gas (one Million British Thermal Units (MMBtu))		3,272,500	Long		3,838,000	Long
ACE – Capacity (MWs)		180	Long		180	Long

Discontinued Operations [Member]

Fair Value of Derivative Instruments by Balance Sheet Location

The table below identifies the balance sheet location and fair values of the retail electric and natural gas supply businesses’ derivative instruments as of December 31, 2012:

	As of December 31, 2012
Balance Sheet Caption	Derivatives Designated as Hedging Instruments (a)			Other Derivative Instruments			Gross Derivative Instruments			Effects of Cash Collateral and Netting		Net Derivative Instruments
	(millions of dollars)
Assets held for disposition (current assets)	$	—		$	1		$	1		$	—	$	1
Total Derivative assets		—			1			1			—		1
Liabilities associated with assets held for disposition (current liabilities)		(10	)		(9	)		(19	)		16		(3	)
Liabilities associated with assets held for disposition (non-current liabilities)		(1	)		(1	)		(2	)		2		—
Total Derivative liabilities		(11	)		(10	)		(21	)		18		(3	)
Net Derivative (liability) asset	$	(11	)	$	(9	)	$	(20	)	$	18	$	(2	)

(a) Amounts included in Derivatives Designated as Hedging Instruments primarily consist of derivatives that were designated as cash flow hedges prior to Pepco Energy Services’ election to discontinue cash flow hedge accounting for these derivatives.

Schedule of Cash Collateral Offset Against Derivative Positions

The amount of cash collateral that was offset against these derivative positions is as follows:

	December 31, 2012
	(millions of dollars)
Cash collateral pledged to counterparties with the right to reclaim (a)	$	18

(a) Includes cash deposits on commodity brokerage accounts.

Cash Flow Hedges Included in Accumulated Other Comprehensive Loss

The data in the following tables indicate the cumulative net loss after-tax related to effective cash flow hedges by contract type included in AOCL, the portion of AOCL expected to be reclassified to income during the next 12 months, and the maximum hedge or deferral term:

	As of June 30, 2012
Contracts	Accumulated Other Comprehensive Loss After-tax		Portion Expected to be Reclassified to Income during the Next  12 Months		Maximum Term
	(millions of dollars)
Energy commodity (a)	$	15	$	13	23 months
Total	$	15	$	13

(a) The unrealized derivative losses recorded in AOCL relate to forecasted physical natural gas and electricity purchases which are used to supply retail electric and natural gas supply contracts that are in gain positions and subject to accrual accounting. Under accrual accounting, no asset is recorded on Pepco Energy Services’ balance sheet and the purchase cost is not recognized until the period of distribution.

Net Outstanding Commodity Forward Contracts Quantities and Net Position that did not Qualify for Hedge Accounting

As of December 31, 2012, the retail electric and natural gas supply businesses of Pepco Energy Services had the following net outstanding commodity forward contract quantities and net position on derivatives that did not qualify for hedge accounting:

	December 31, 2012
Commodity	Quantity		Net Position
Natural gas (MMBtu)		2,867,500	Long
Financial transmission rights (MWh)		181,008	Long
Electricity (MWh)		261,240	Long

Delmarva Power & Light Co/De [Member]

Fair Value of Derivative Instruments by Balance Sheet Location

The tables below identify the balance sheet location and fair values of derivative instruments as of June 30, 2013 and December 31, 2012:

	As of June 30, 2013
Balance Sheet Caption	Derivatives Designated as Hedging Instruments		Other Derivative Instruments			Gross Derivative Instruments			Effects of Cash Collateral and Netting		Net Derivative Instruments
	(millions of dollars)
Derivative liabilities (current liabilities)	$	—	$	(1	)	$	(1	)	$	1	$	—
Net Derivative liability	$	—	$	(1	)	$	(1	)	$	1	$	—

	As of December 31, 2012
Balance Sheet Caption	Derivatives Designated as Hedging Instruments		Other Derivative Instruments			Gross Derivative Instruments			Effects of Cash Collateral and Netting		Net Derivative Instruments
	(millions of dollars)
Derivative liabilities (current liabilities)	$	—	$	(4	)	$	(4	)	$	—	$	(4	)
Net Derivative liability	$	—	$	(4	)	$	(4	)	$	—	$	(4	)

Schedule of Cash Collateral Offset Against Derivative Positions

The amount of cash collateral that was offset against these derivative positions is as follows:

	June 30, 2013		December 31, 2012
	(millions of dollars)
Cash collateral pledged to counterparties with the right to reclaim (a)	$	1	$	—

(a) Includes cash deposits on commodity brokerage accounts.

Net Unrealized Derivative Gain (Loss) Deferred as Regulatory Asset or Liability

For the three and six months ended June 30, 2013 and 2012, the net unrealized derivative gains and losses arising during the period that were deferred as Regulatory Liabilities and Regulatory Assets and the net realized losses recognized in the statements of income (through Purchased Energy and Gas Purchased expense) that were also deferred as Regulatory Assets are provided in the table below:

	Three Months Ended June  30,						Six Months Ended June  30,
	2013			2012			2013			2012
	(millions of dollars)
Net unrealized losses arising during the period	$	(2	)	$	—		$	—		$	(4	)
Net realized gains (losses) recognized during the period		1			(4	)		(3	)		(11	)

Net Outstanding Commodity Forward Contracts Quantities and Net Position that did not Qualify for Hedge Accounting

As of June 30, 2013 and December 31, 2012, DPL had the following net outstanding natural gas commodity forward contracts that did not qualify for hedge accounting:

	June 30, 2013			December 31, 2012
Commodity	Quantity		Net Position	Quantity		Net Position
Natural gas (one Million British Thermal Units (MMBtu))		3,272,500	Long		3,838,000	Long