LONG-TERM AND SHORT-TERM DEBT AND LIQUIDITY

Long-term Debt

In February 2019, DESC launched tender offers for certain of its first mortgage bonds pursuant to which it purchased first mortgage bonds having an aggregate purchase price equal to $1.2 billion. DESC incurred a loss on reacquired debt of $187 million in connection with these tender offers, which is recorded in other deferred debits on the Consolidated Balance Sheet.

Substantially all electric utility plant is pledged as collateral in connection with long-term debt.

Liquidity

In March 2019, DESC became a co-borrower under Dominion Energy's $6 billion joint revolving credit facility. DESC's short-term financing is supported through its access to this joint revolving credit facility, which can be used for working capital, as support for the combined commercial paper programs of DESC, Dominion Energy and certain other of its subsidiaries (co-borrowers), and for other general corporate purposes.

DESC's share of commercial paper and letters of credit outstanding under its joint credit facility with Dominion Energy, were as follows:



Millions of dollars	Facility Limit		Outstanding Commercial Paper		Outstanding Letters of Credit
At March 31, 2019	$	1,000	$	—	$	—

A maximum of $1.0 billion of the facility is available to DESC, less any amounts outstanding to co-borrowers. A sub-limit for DESC is set within the facility limit but can be changed at the option of the co-borrowers multiple times per year. At March 31, 2019, the sub-limit for DESC was $500 million. If DESC has liquidity needs in excess of its sub-limit, the sub-limit may be changed or such needs may be satisfied through short-term borrowings from DESC's parent or from Dominion Energy. This credit facility matures in March 2023 and can be used to support bank borrowings and the issuance of commercial paper, as well as to support up to $1.0 billion (or the sub-limit, whichever is less) of letters of credit.

Also in March 2019, DESC canceled its previous committed long-term facility which was a revolving line of credit under a credit agreement with a syndicate of banks. This previous credit agreement was used for general corporate purposes, including liquidity support for DESC's commercial paper program and working capital needs, and was set to expire in December 2020.



Millions of dollars	Facility Limit ⁽¹⁾		Outstanding Commercial Paper		Outstanding Letters of Credit
At December 31, 2018	$	1,200	$	73	$	—

⁽¹⁾ Included $500 million related to Fuel Company. In February 2019, Fuel Company's commercial paper program and its credit facility were terminated.

The weighted-average interest rate of the outstanding commercial paper supported by this credit facility was 3.82% at December 31, 2018.

In April 2019, DESC renewed its FERC authority to issue short-term indebtedness (pursuant to Section 204 of the Federal Power Act). DESC may issue unsecured promissory notes, commercial paper and direct loans in amounts not to exceed $2.2 billion outstanding with maturity dates of one year or less. In addition, in April 2019, GENCO renewed its FERC authority to issue short-term indebtedness not to exceed $200 million outstanding with maturity dates of one year or less. The authorities described herein will expire in April 2020, which reflects a one-year authorization period rather than the two-year period DESC and GENCO had requested. In granting the authorization for a shorter period, FERC cited certain regulatory and legislative proceedings at the state level, as well as certain legal proceedings, arising from the NND Project that could affect DESC's and GENCO's circumstances. Were adverse developments to occur with respect to these uncertainties, the ability of DESC or GENCO to secure renewal of this short-term borrowing authority may be adversely impacted.

DESC is obligated with respect to an aggregate of $68 million of industrial revenue bonds which are secured by letters of credit issued by TD Bank N.A. These letters of credit expire, subject to renewal, in the fourth quarter of 2019.

DESC participates in a utility money pool with SCANA and another regulated subsidiary of SCANA. Money pool borrowings and investments bear interest at short-term market rates. For the three months ended March 31, 2019, DESC recorded interest income from money pool transactions of $3 million, and for the same period DESC recorded interest expense from money pool transactions of $3 million. Interest income and interest expense for the corresponding period in 2018 were not significant. DESC had outstanding money pool borrowings due to an affiliate of $555 million and no investments due from an affiliate at March 31, 2019. At December 31, 2018 DESC had outstanding money pool borrowings due to an affiliate of $282 million and investments due from an affiliate of $353 million. For each period presented, money pool borrowings were made by Fuel Company and GENCO, and money pool investments were made by DESC. On its Consolidated Balance Sheet, DESC includes money pool borrowings within Affiliated payables and money pool investments within Affiliated companies receivables.