Fair Value Disclosures (Tables)

9 Months Ended

Sep. 30, 2015

Fair Value of Financial Assets and Liabilities Measured on Recurring Basis

The following tables set forth, by level within the fair value hierarchy, PHI’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2015 and December 31, 2014. As required by the guidance, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. PHI’s assessment of the significance of a particular input to the fair value measurement requires the exercise of judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.

	Fair Value Measurements at September 30, 2015
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
Preferred stock	$	18	$	—	$	—	$	18
Cash equivalents and restricted cash equivalents
Treasury funds		285		285		—		—
Executive deferred compensation plan assets
Money market funds and short-term investments		27		13		14		—
Life insurance contracts		45		—		26		19
Total	$	375	$	298	$	40	$	37
LIABILITIES
Derivative instruments (b)
Natural gas (c)	$	1	$	1	$	—	$	—
Executive deferred compensation plan liabilities
Life insurance contracts		28		—		28		—
Total	$	29	$	1	$	28	$	—

(a) There were no transfers of instruments between level 1 and level 2 valuation categories during the nine months ended September 30, 2015.

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

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

	Fair Value Measurements at December 31, 2014
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
Preferred stock	$	3	$	—	$	—	$	3
Restricted cash equivalents
Treasury funds		38		38		—		—
Executive deferred compensation plan assets
Money market funds and short-term investments		35		14		21		—
Life insurance contracts		46		—		27		19
Total	$	122	$	52	$	48	$	22
LIABILITIES
Derivative instruments (b)
Natural gas (c)	$	4	$	4	$	—	$	—
Executive deferred compensation plan liabilities
Life insurance contracts		30		—		30		—
Total	$	34	$	4	$	30	$	—

(a) There were no transfers of instruments between level 1 and level 2 valuation categories during the year ended December 31, 2014.

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

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

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

Reconciliations of the beginning and ending balances of PHI’s fair value measurements using significant unobservable inputs (Level 3) for the nine months ended September 30, 2015 and 2014 are shown below:

	Nine Months Ended September 30, 2015
	Preferred Stock		Life Insurance Contracts
	(millions of dollars)
Beginning balance as of January 1	$	3	$	19
Total gains (losses) (realized and unrealized):
Included in income		15		4
Included in accumulated other comprehensive loss		—		—
Included in regulatory liabilities		—		—
Purchases		—		—
Issuances		—		(3	)
Settlements		—		(1	)
Transfers in (out) of level 3		—		—
Ending balance as of September 30	$	18	$	19

	Nine Months Ended September 30, 2014
	Preferred Stock		Life Insurance Contracts
	(millions of dollars)
Beginning balance as of January 1	$	—	$	19
Total gains (losses) (realized and unrealized):
Included in income		—		3
Included in accumulated other comprehensive loss		—		—
Included in regulatory liabilities		—		—
Purchases		—		—
Issuances		3		(3	)
Settlements		—		—
Transfers in (out) of level 3		—		—
Ending balance as of September 30	$	3	$	19

Gains on Level 3 Instruments Included in Income

The breakdown of realized and unrealized gains on level 3 instruments included in income as a component of Other income or Other operation and maintenance expense for the periods below were as follows:

	Nine Months Ended September 30,
	2015		2014
	(millions of dollars)
Total net gains included in income for the period	$	19	$	3
Change in unrealized gains relating to assets still held at reporting date	$	17	$	3

Fair Value of Financial Liabilities Measured on Recurring Basis

	Fair Value Measurements at September 30, 2015
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)	$	5,658	$	—	$	5,217	$	441
Transition Bonds (b)		201		—		201		—
Long-term project funding		4		—		—		4
Total	$	5,863	$	—	$	5,418	$	445

(a) The carrying amount for Long-term debt was $5,099 million as of September 30, 2015.

(b) The carrying amount for Transition Bonds, including amounts due within one year, was $184 million as of September 30, 2015.

	Fair Value Measurements at December 31, 2014
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)	$	5,583	$	—	$	5,136	$	447
Transition Bonds (b)		235		—		235		—
Long-term project funding		28		—		—		28
Total	$	5,846	$	—	$	5,371	$	475

(a) The carrying amount for Long-term debt was $4,807 million as of December 31, 2014.

(b) The carrying amount for Transition Bonds, including amounts due within one year, was $215 million as of December 31, 2014.

Potomac Electric Power Co [Member]

Fair Value of Financial Assets and Liabilities Measured on Recurring Basis

The following tables set forth, by level within the fair value hierarchy, Pepco’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2015 and December 31, 2014. As required by the guidance, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Pepco’s assessment of the significance of a particular input to the fair value measurement requires the exercise of judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.

	Fair Value Measurements at September 30, 2015
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 and restricted cash equivalents
Treasury funds	$	3	$	3	$	—	$	—
Executive deferred compensation plan assets
Money market funds and short-term investments		26		12		14		—
Life insurance contracts		40		—		22		18
Total	$	69	$	15	$	36	$	18
LIABILITIES
Executive deferred compensation plan liabilities
Life insurance contracts	$	6	$	—	$	6	$	—
Total	$	6	$	—	$	6	$	—

(a) There were no transfers of instruments between level 1 and level 2 valuation categories during the nine months ended September 30, 2015.

	Fair Value Measurements at December 31, 2014
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
Restricted cash equivalents
Treasury fund	$	5	$	5	$	—	$	—
Executive deferred compensation plan assets
Money market funds and short-term investments		34		13		21		—
Life insurance contracts		41		—		23		18
Total	$	80	$	18	$	44	$	18
LIABILITIES
Executive deferred compensation plan liabilities
Life insurance contracts	$	7	$	—	$	7	$	—
Total	$	7	$	—	$	7	$	—

(a) There were no transfers of instruments between level 1 and level 2 valuation categories during the year ended December 31, 2014.

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

Reconciliations of the beginning and ending balances of Pepco’s fair value measurements using significant unobservable inputs (level 3) for the nine months ended September 30, 2015 and 2014 are shown below:

	Life Insurance Contracts
	Nine Months Ended September 30,
	2015			2014
	(millions of dollars)
Beginning balance as of January 1	$	18		$	18
Total gains (losses) (realized and unrealized):
Included in income		4			3
Included in accumulated other comprehensive loss		—			—
Purchases		—			—
Issuances		(4	)		(3	)
Settlements		—			—
Transfers in (out) of level 3		—			—
Ending balance as of September 30	$	18		$	18

Gains on Level 3 Instruments Included in Income

The breakdown of realized and unrealized gains on level 3 instruments included in income as a component of Other income or Other operation and maintenance expense for the periods below were as follows:

	Nine Months Ended September 30,
	2015		2014
	(millions of dollars)
Total gains included in income for the period	$	4	$	3
Change in unrealized gains relating to assets still held at reporting date	$	2	$	3

Fair Value of Financial Liabilities Measured on Recurring Basis

	Fair Value Measurements at September 30, 2015
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)	$	2,686	$	—	$	2,686	$	—

(a) The carrying amount for Long-term debt was $2,332 million as of September 30, 2015.

	Fair Value Measurements at December 31, 2014
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)	$	2,624	$	—	$	2,624	$	—
Project funding		12		—		—		12
Total	$	2,636	$	—	$	2,624	$	12

(a) The carrying amount for Long-term debt was $2,124 million as of December 31, 2014.

Delmarva Power & Light Co/De [Member]

Fair Value of Financial Assets and Liabilities Measured on Recurring Basis

The following tables set forth, by level within the fair value hierarchy, DPL’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2015 and December 31, 2014. As required by the guidance, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. DPL’s assessment of the significance of a particular input to the fair value measurement requires the exercise of judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.

	Fair Value Measurements at September 30, 2015
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)
LIABILITIES
Derivative instruments (b)
Natural gas (c)	$	1	$	1	$	—	$	—
Executive deferred compensation plan liabilities
Life insurance contracts		1		—		1		—
Total	$	2	$	1	$	1	$	—

(a) There were no transfers of instruments between level 1 and level 2 valuation categories during the nine months ended September 30, 2015.

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

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

	Fair Value Measurements at December 31, 2014
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
Restricted cash equivalents
Treasury funds	$	5	$	5	$	—	$	—
Executive deferred compensation plan assets
Money market funds		1		1		—		—
Life insurance contracts		1		—		—		1
Total	$	7	$	6	$	—	$	1
LIABILITIES
Derivative instruments (b)
Natural gas (c)	$	4	$	4	$	—	$	—
Executive deferred compensation plan liabilities
Life insurance contracts		1		—		1		—
Total	$	5	$	4	$	1	$	—

(a) There were no transfers of instruments between level 1 and level 2 valuation categories during the year ended December 31, 2014.

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

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

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

Reconciliations of the beginning and ending balances of DPL’s fair value measurements using significant unobservable inputs (level 3) for the nine months ended September 30, 2015 and 2014 are shown below:

	Life Insurance Contracts
	Nine Months Ended September 30,
	2015			2014
	(millions of dollars)
Balance as of January 1	$	1		$	1
Total gains (losses) (realized and unrealized):
Included in income		—			—
Included in accumulated other comprehensive loss		—			—
Included in regulatory liabilities		—			—
Purchases		—			—
Issuances		—			—
Settlements		(1	)		—
Transfers in (out) of Level 3		—			—
Balance as of September 30	$	—		$	1

Fair Value of Financial Liabilities Measured on Recurring Basis

	Fair Value Measurements at September 30, 2015
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)	$	1,190	$	—	$	1,086	$	104

(a) The carrying amount for Long-term debt was $1,171 million as of September 30, 2015.

	Fair Value Measurements at December 31, 2014
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)	$	1,123	$	—	$	1,016	$	107

(a) The carrying amount for Long-term debt was $1,071 million as of December 31, 2014.

Atlantic City Electric Co [Member]

Fair Value of Financial Assets and Liabilities Measured on Recurring Basis

The following tables set forth, by level within the fair value hierarchy, ACE’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2015 and December 31, 2014. As required by the guidance, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. ACE’s assessment of the significance of a particular input to the fair value measurement requires the exercise of judgment, and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.

	Fair Value Measurements at September 30, 2015
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 and restricted cash equivalents
Treasury funds	$	30	$	30	$	—	$	—

(a) There were no transfers of instruments between level 1 and level 2 valuation categories during the nine months ended September 30, 2015.

	Fair Value Measurements at December 31, 2014
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 and restricted cash equivalents
Treasury funds	$	24	$	24	$	—	$	—

(a) There were no transfers of instruments between level 1 and level 2 valuation categories during the year ended December 31, 2014.

Fair Value of Financial Liabilities Measured on Recurring Basis

	Fair Value Measurements at September 30, 2015
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)	$	998	$	—	$	862	$	136
Transition Bonds (b)		201		—		201		—
Total	$	1,199	$	—	$	1,063	$	136

(a) The carrying amount for Long-term debt was $888 million as of September 30, 2015.

(b) The carrying amount for Transition Bonds, including amounts due within one year, was $184 million as of September 30, 2015.

	Fair Value Measurements at December 31, 2014
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)	$	1,035	$	—	$	903	$	132
Transition Bonds (b)		235		—		235		—
Total	$	1,270	$	—	$	1,138	$	132

(a) The carrying amount for Long-term debt was $903 million as of December 31, 2014.

(b) The carrying amount for Transition Bonds, including amounts due within one year, was $215 million as of December 31, 2014.