Related Party Transactions

12 Months Ended

Dec. 31, 2015

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, 2015, 2014 and 2013 were approximately $240 million, $220 million and $209 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, 2015, 2014 and 2013 were approximately $26 million, $30 million and $20 million, respectively.

As of December 31, 2015 and 2014, Pepco had the following balances on its balance sheets due to related parties:

	2015			2014
	(millions of dollars)
Payable to Related Party (current) (a)
PHI Service Company	$	(25	)	$	(27	)
Pepco Energy Services (b)		(4	)		(2	)
Other		(1	)		(1	)
Total	$	(30	)	$	(30	)

(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.

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, 2015, 2014 and 2013 were $179 million, $163 million and $154 million, respectively.

Pepco Energy Services, Inc. and its subsidiaries (Pepco Energy Services) performs high voltage underground transmission cabling, including services that are treated as capital costs, for DPL. Amounts charged to DPL by Pepco Energy Services for the years ended December 31, 2015, 2014 and 2013 were approximately $3 million, zero and zero, 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,
	2015		2014		2013
	(millions of dollars)
Intercompany lease transactions (a)	$	4	$	5	$	4

(a) Included in Electric revenue.

As of December 31, 2015 and 2014, DPL had the following balances on its balance sheets due to related parties:

	2015			2014
	(millions of dollars)
Payable to Related Party (current) (a)
PHI Service Company	$	(19	)	$	(18	)
Other		(1	)		1
Total	$	(20	)	$	(17	)

(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, 2015, 2014 and 2013 were $143 million, $124 million and $115 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,
	2015			2014			2013
	(millions of dollars)
Meter reading services provided by Millennium Account Services LLC (an ACE affiliate) (a)	$	(4	)	$	(4	)	$	(4	)
Intercompany lease transactions (a)		(1	)		(1	)		(1	)
Intercompany use revenue (b)		1			2			3

(a) Included in Other operation and maintenance expense.

(b) Included in Operating revenue.

As of December 31, 2015 and 2014, ACE had the following balances on its consolidated balance sheets due to related parties:

	2015			2014
	(millions of dollars)
Payable to Related Party (current) (a)
PHI Service Company	$	(15	)	$	(14	)
Other		(1	)		(1	)
Total	$	(16	)	$	(15	)

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