Related Party Transactions

12 Months Ended

Dec. 31, 2013

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, 2013, 2012 and 2011 were approximately $209 million, $211 million and $185 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, 2013, 2012 and 2011 were approximately $20 million, $16 million and $20 million, respectively.

As of December 31, 2013 and 2012, Pepco had the following balances on its balance sheets due to related parties:

	2013			2012
	(millions of dollars)
(Payable to) Receivable From Related Party (current) (a)
PHI Service Company	$	(25	)	$	(22	)
Pepco Energy Services (b)		(7	)		(18	)
Other		—			(1	)
Total	$	(32	)	$	(41	)

(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.

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, 2013, 2012 and 2011 were $154 million, $153 million and $133 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,
	2013		2012		2011
	(millions of dollars)
Purchased power under Default Electricity Supply contracts with Conectiv Energy Supply, Inc. (a)	$	—	$	—	$	1
Intercompany lease transactions (b)		4		4		5

(a) Included in Purchased energy expense.

(b) Included in Electric revenue.

As of December 31, 2013 and 2012, DPL had the following balances on its balance sheets due to related parties:

	2013			2012
	(millions of dollars)
Payable to Related Party (current) (a)
PHI Service Company	$	(22	)	$	(19	)
Other		—			(1	)
Total	$	(22	)	$	(20	)

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

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, 2013, 2012 and 2011 were $115 million, $117 million and $102 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,
	2013			2012			2011
	(millions of dollars)
Meter reading services provided by Millennium Account Services LLC (an ACE affiliate)(a)	$	(4	)	$	(4	)	$	(4	)
Intercompany use revenue (b)		3			3			2

(a) Included in Other operation and maintenance expense.

(b) Included in Operating revenue.

As of December 31, 2013 and 2012, ACE had the following balances on its consolidated balance sheets due to related parties:

	2013			2012
	(millions of dollars)
Payable to Related Party (current) (a)
PHI Service Company	$	(15	)	$	(13	)
Other		—			(1	)
Total	$	(15	)	$	(14	)

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

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