Debt (Tables)

12 Months Ended

Dec. 31, 2015

Components of Long-Term Debt

The components of long-term debt are shown in the table below:

		At December 31,
Interest Rate	Maturity	2015		2014
		(millions of dollars)
First Mortgage Bonds
Pepco:
3.05%	2022	$	200	$	200
6.20% (a)(b)	2022		110		110
3.60%	2024		400		400
5.75% (c)(d)	2034		100		100
5.40% (c)(d)	2035		175		175
6.50% (a)(c)	2037		500		500
7.90%	2038		250		250
4.15%	2043		450		250
4.95%	2043		150		150
ACE:
7.68% (e)	2015 - 2016		2		17
7.75%	2018		250		250
6.80% (d)(f)	2021		39		39
4.35%	2021		200		200
3.375%	2024		150		150
3.50%	2025		150		—
4.875% (a)(f)	2029		23		23
5.80% (d)(g)	2034		120		120
5.80% (d)(g)	2036		105		105
DPL:
5.22% (h)	2016		100		100
3.50%	2023		500		500
4.00%	2042		250		250
4.15%	2045		200		—
Total First Mortgage Bonds			4,424		3,889
Unsecured Tax-Exempt Bonds
DPL:
5.40%	2031		78		78
Total Unsecured Tax-Exempt Bonds			78		78

NOTE: Schedule is continued on next page.

		At December 31,
Interest Rate	Maturity	2015			2014
		(millions of dollars)
Medium-Term Notes (unsecured)
DPL:
7.56% - 7.58%	2017	$	14		$	14
6.81%	2018		4			4
7.61%	2019		12			12
7.72%	2027		10			10
Total Medium-Term Notes (unsecured)			40			40
Notes (secured)
Pepco Energy Services:
6.70% - 7.46%	2015-2018		3			4
Notes (unsecured)
PHI:
2.70%	2015		—			250
5.90%	2016		190			190
6.125%	2017		81			81
7.45%	2032		185			185
DPL:
5.00%	2015		—			100
Total Notes (unsecured)			456			806
Total Long-Term Debt			5,001			4,817
Net unamortized discount			(2	)		(10	)
Unamortized debt issuance costs			(49	)		(44	)
Current portion of long-term debt			(294	)		(366	)
Total Net Long-Term Debt		$	4,656		$	4,397

(a) Represents a series of Collateral First Mortgage Bonds which must be cancelled and released as security for the issuer’s obligations under the corresponding series of issuer notes or tax-exempt bonds, at such time as the issuer does not have any first mortgage bonds outstanding (other than its Collateral First Mortgage Bonds), except that the issuer may not permit such release of collateral unless the issuer substitutes comparable obligations for such collateral.

(b) Represents a series of Collateral First Mortgage Bonds securing a series of senior notes issued by Pepco, which in turn secures a series of tax-exempt bonds issued for the benefit of Pepco.

(c) Represents a series of Collateral First Mortgage Bonds (as defined herein) securing a series of senior notes issued by Pepco.

(d) Represents a series of Collateral First Mortgage Bonds which must be cancelled and released as security for the issuer’s obligations under the corresponding series of issuer notes (as defined herein) or tax-exempt bonds, at such time as the issuer does not have any first mortgage bonds outstanding (other than its Collateral First Mortgage Bonds).

(e) Represents a series of Collateral First Mortgage Bonds securing a series of medium-term notes issued by ACE.

(f) Represents a series of Collateral First Mortgage Bonds securing a series of tax-exempt bonds issued for the benefit of ACE.

(g) Represents a series of Collateral First Mortgage Bonds securing a series of senior notes issued by ACE.

(h) Represents a series of Collateral First Mortgage Bonds securing a series of debt securities issued by DPL.

The outstanding first mortgage bonds issued by each of Pepco, DPL and ACE are issued under a mortgage and deed of trust and are secured by a first lien on substantially all of the issuing company’s property, plant and equipment, except for certain property excluded from the lien of the respective mortgage.

PHI’s long-term debt is subject to certain covenants. As of December 31, 2015, PHI and its subsidiaries were in compliance with all such covenants.

The table above does not separately identify $885 million, $100 million and $227 million in aggregate principal amount of senior notes, medium term notes and other debt securities (issuer notes) issued by each of Pepco, DPL and ACE, respectively, and $110 million and $62 million in aggregate principal amount of tax-exempt bonds issued for the benefit of Pepco and ACE, respectively. These issuer notes are secured by a like amount of first mortgage bonds (Collateral First Mortgage Bonds) of each respective issuer. In addition, these tax-exempt bonds are secured by a like amount of Collateral First Mortgage Bonds issued by the utility subsidiary for whose benefit the tax-exempt bonds were issued. The principal terms of each such series of issuer notes, or the issuer’s obligations in respect of each such series of tax-exempt bonds, are identical to the same terms of the corresponding series of Collateral First Mortgage Bonds. Payments of principal and interest made on a series of such issuer notes, or the satisfaction of the issuer’s obligations in respect of a series of such tax-exempt bonds, satisfy the corresponding obligations on the related series of Collateral First Mortgage Bonds. For these reasons, each such series of Collateral First Mortgage Bonds and the corresponding issuer notes and/or tax-exempt bonds together effectively represent a single financial obligation and are not identified in the table above separately.

Bond Issuances

During 2015, Pepco issued $200 million of 4.15% first mortgage bonds due March 15, 2043, with a 3.9% yield to maturity. Net proceeds from the issuance of the bonds, which included a premium of $8 million, were used by Pepco to repay outstanding commercial paper and for general corporate purposes.

During 2015, DPL issued $200 million of 4.15% first mortgage bonds due May 15, 2045. Net proceeds from the issuance of the bonds were used by DPL to repay outstanding commercial paper and for general corporate purposes.

During 2015, ACE issued $150 million of 3.50% first mortgage bonds due December 1, 2025 in a private placement. The net proceeds from the issuance of the bonds were used by ACE to repay outstanding commercial paper and for general corporate purposes.

Note Retirements

During 2015, ACE retired, at maturity, $15 million of its secured medium-term notes series C. The medium-term notes were secured by a like principal amount of its 7.68% first mortgage bonds due August 24, 2015, which under the mortgage and deed of trust were deemed to be satisfied when the medium-term notes were repaid.

During 2015, DPL retired, at maturity, $100 million of its 5.00% unsecured notes due June 1, 2015.

During 2015, PHI retired, at maturity, $250 million of its 2.70% unsecured notes due October 1, 2015.

Transition Bonds Issued by ACE Funding

The components of transition bonds are shown in the table below:

		At December 31,
Interest Rate	Maturity	2015			2014
		(millions of dollars)
4.91%	2017	$	—		$	17
5.05%	2020		39			51
5.55%	2023		132			147
Total Transition Bonds			171			215
Unamortized debt issuance costs			(1	)		(1	)
Current portion of long-term debt			(46	)		(44	)
Total Net Long-Term Transition Bonds		$	124		$	170

Components of Short-Term Debt

The components of PHI’s short-term debt at December 31, 2015 and 2014 are as follows:

	2015		2014
	(millions of dollars)
Commercial paper	$	658	$	624
Variable rate demand bonds		105		105
Term loan		300		—
Total	$	1,063	$	729

Atlantic City Electric Co [Member]

Components of Long-Term Debt

The components of long-term debt are shown in the table below:

Type of Debt	Interest Rate			Maturity	2015			2014
					(millions of dollars)
First Mortgage Bonds
		7.68	% (a)	2015-2016	$	2		$	17
		7.75	%	2018		250			250
		6.80	% (b)(c)	2021		39			39
		4.35	%	2021		200			200
		3.375	%	2024		150			150
		3.50	%	2025		150			—
		4.875	%(c)(d)	2029		23			23
		5.80	% (b)(e)	2034		120			120
		5.80	% (b)(e)	2036		105			105
Total long-term debt						1,039			904
Net unamortized discount						(1	)		(1	)
Unamortized debt issuance costs						(6	)		(6	)
Current portion of long-term debt						(2	)		(15	)
Total net long-term debt					$	1,030		$	882

(a) Represents a series of Collateral First Mortgage Bonds (as defined herein) securing a series of medium-term notes issued by ACE.

(b) Represents a series of Collateral First Mortgage Bonds which must be cancelled and released as security for ACE’s obligations under the corresponding series of issuer notes (as defined herein) or tax-exempt bonds, at such time as ACE does not have any first mortgage bonds outstanding (other than its Collateral First Mortgage Bonds).

(c) Represents a series of Collateral First Mortgage Bonds securing a series of tax-exempt bonds issued for the benefit of ACE.

(d) Represents a series of Collateral First Mortgage Bonds which must be cancelled and released as security for ACE’s obligations under the corresponding series of issuer notes or tax-exempt bonds, at such time as ACE does not have any first mortgage bonds outstanding (other than its Collateral First Mortgage Bonds), except that ACE may not permit such release of collateral unless ACE substitutes comparable obligations for such collateral.

(e) Represents a series of Collateral First Mortgage Bonds securing a series of senior notes issued by ACE.

The outstanding first mortgage bonds issued by ACE are issued under a mortgage and deed of trust and are secured by a first lien on substantially all of ACE’s property, plant and equipment, except for certain property excluded from the lien of the mortgage.

Maturities of ACE’s long-term debt outstanding at December 31, 2015 are $2 million in 2016, zero in 2017, $250 million in 2018, zero in 2019 and 2020, and $787 million thereafter.

ACE’s long-term debt is subject to certain covenants. As of December 31, 2015, ACE was in compliance with all such covenants.

The table above does not separately identify $227 million in aggregate principal amount of senior notes and medium term notes (issuer notes) issued by ACE and $62 million in aggregate principal amount of tax-exempt bonds issued for the benefit of ACE. These issuer notes and tax-exempt bonds are secured by a like amount of first mortgage bonds (Collateral First Mortgage Bonds) of ACE. The principal terms of each such series of issuer notes, or ACE’s obligations in respect of each such series of tax-exempt bonds, are identical to the same terms of the corresponding series of Collateral First Mortgage Bonds. Payments of principal and interest made on a series of such issuer notes, or the satisfaction of ACE obligations in respect of a series of such tax-exempt bonds, satisfy the corresponding obligations on the related series of Collateral First Mortgage Bonds. For these reasons, each such series of Collateral First Mortgage Bonds and the corresponding issuer notes or tax-exempt bonds together effectively represent a single financial obligation and are not identified in the table above separately.

Bond Issuance

During 2015, ACE issued $150 million of 3.50% first mortgage bonds due December 1, 2025 in a private placement. The net proceeds from the issuance of the bonds were used by ACE to repay outstanding commercial paper and for general corporate purposes.

Bond Retirement

During 2015, ACE retired, at maturity, $15 million of its secured medium-term notes series C. The medium-term notes were secured by a like principal amount of its 7.68% first mortgage bonds due August 24, 2015, which under the mortgage and deed of trust were deemed to be satisfied when the medium-term notes were repaid.

Transition Bonds Issued by ACE Funding

The components of transition bonds are shown in the table below:

Type of Debt	Interest Rate			Maturity	2015			2014
					(millions of dollars)
Transition Bonds
		4.91	%	2017	$	—		$	17
		5.05	%	2020		39			51
		5.55	%	2023		132			147
						171			215
Unamortized debt issuance costs						(1	)		(1	)
Current portion of long-term debt						(46	)		(44	)
Total net long-term Transition Bonds					$	124		$	170

Components of Short-Term Debt

The components of ACE’s short-term debt at December 31, 2015 and 2014 are as follows:

	2015		2014
	(millions of dollars)
Commercial paper	$	5	$	127

Potomac Electric Power Co [Member]

Components of Long-Term Debt

The components of long-term debt are shown in the table below:

Type of Debt	Interest Rate			Maturity	2015			2014
					(millions of dollars)
First Mortgage Bonds
		3.05	%	2022	$	200		$	200
		6.20	%(a)(b)	2022		110			110
		3.60	%	2024		400			400
		5.75	%(c)(d)	2034		100			100
		5.40	%(c)(d)	2035		175			175
		6.50	%(a)(c)	2037		500			500
		7.90	%	2038		250			250
		4.15	%	2043		450			250
		4.95	%	2043		150			150
Total long-term debt						2,335			2,135
Net unamortized discount						(3	)		(11	)
Unamortized debt issuance costs						(31	)		(28	)
Total net long-term debt					$	2,301		$	2,096

(a) Represents a series of Collateral First Mortgage Bonds which must be cancelled and released as security for Pepco’s obligations under the corresponding series of senior notes or tax-exempt bonds, at such time as Pepco does not have any first mortgage bonds outstanding (other than its Collateral First Mortgage Bonds), except that Pepco may not permit such release of collateral unless Pepco substitutes comparable obligations for such collateral.

(b) Represents a series of Collateral First Mortgage Bonds securing a series of senior notes issued by Pepco, which in turn secures a series of tax-exempt bonds issued for the benefit of Pepco.

(c) Represents a series of Collateral First Mortgage Bonds (as defined herein) securing a series of senior notes issued by Pepco.

(d) Represents a series of Collateral First Mortgage Bonds which must be cancelled and released as security for Pepco’s obligations under the corresponding series of senior notes or tax-exempt bonds, at such time as Pepco does not have any first mortgage bonds outstanding (other than its Collateral First Mortgage Bonds).

Components of Short-Term Debt

Pepco’s short-term debt at December 31, 2015 and 2014 consisted of the following:

	2015		2014
	(millions of dollars)
Commercial paper	$	64	$	104

Delmarva Power & Light Co/De [Member]

Components of Long-Term Debt

Long-Term Debt

The components of long-term debt are shown in the table below:

Type of Debt	Interest Rate	Maturity	2015			2014
			(millions of dollars)
First Mortgage Bonds
	5.22%(a)	2016	$	100		$	100
	3.50%	2023		500			500
	4.00%	2042		250			250
	4.15%	2045		200			—
				1,050			850
Unsecured Tax-Exempt Bonds
	5.40%	2031		78			78
				78			78
Medium-Term Notes (unsecured)
	7.56%-7.58%	2017		14			14
	6.81%	2018		4			4
	7.61%	2019		12			12
	7.72%	2027		10			10
				40			40
Notes (unsecured)
	5.00%	2015		—			100
				—			100
Total long-term debt				1,168			1,068
Net unamortized premium				2			3
Unamortized debt issuance costs				(9	)		(8	)
Current portion of long-term debt				(100	)		(100	)
Total net long-term debt			$	1,061		$	963

(a) Represents a series of Collateral First Mortgage Bonds securing a series of debt securities issued by DPL.

Components of Short-Term Debt

The components of DPL’s short-term debt at December 31, 2015 and 2014 are as follows:

	2015		2014
	(millions of dollars)
Commercial paper	$	105	$	106
Variable rate demand bonds		105		105
Total	$	210	$	211