Affiliated and Related Party Transactions

3 Months Ended

Mar. 31, 2020

Affiliated and Related Party Transactions

12. AFFILIATED AND RELATED PARTY TRANSACTIONS

DESC owns 40% of Canadys Refined Coal, LLC, which is involved in the manufacturing and sale of refined coal to reduce emissions at certain of DESC's generating facilities. DESC accounts for this investment using the equity method. Purchases and sales of the related coal are recorded as other income (expense), net in the Consolidated Statements of Comprehensive Income (Loss).

DESC purchases natural gas and related pipeline capacity from SEMI to serve its retail gas customers and to satisfy certain electric generation requirements. These purchases are included within gas purchased for resale or fuel used in electric generation, as applicable in the Consolidated Statements of Comprehensive Income (Loss).

DESS, on behalf of itself and its parent company, provides the following services to DESC, which are rendered at direct or allocated cost: information systems, telecommunications, customer support, marketing and sales, human resources, corporate compliance, purchasing, financial, risk management, public affairs, legal, investor relations, gas supply and capacity management, strategic planning, general administrative and retirement benefits. In addition, DESS processes and pays invoices for DESC and is reimbursed. Costs for these services include amounts capitalized. Amounts expensed are primarily recorded in other operations and maintenance - affiliated suppliers and other income (expense), net in the Consolidated Statements of Comprehensive Income (Loss).

	Three Months Ended March 31,
(millions)	2020		2019
Purchases of coal from affiliate	$	—	$	28
Sales of coal to affiliate		—		28
Purchases of fuel used in electric generation from affiliate		—		33
Direct and allocated costs from services company affiliate⁽¹⁾		67		58
Operating Revenues - Electric from sales to affiliate		—		1
Operating Expenses - Other taxes from affiliate		3		2
Purchases of electricity from solar affiliates		2		1
Demand and transportation charges from DECG - Fuel used in electric generation		4		11
Demand and transportation charges from DECG - Gas purchased for resale		11		4

(1)	^{Includes capitalized expenditures of $12 million and $9 million for the three months ended March 31, 2020 and 2019, respectively.}

(millions)	March 31, 2020		December 31, 2019
Receivable from Canadys Refined Coal, LLC	$	—	$	2
Payable to Canadys Refined Coal, LLC		—		2
Payable to DESS		58		76
Payable to Public Service Company of North Carolina, Incorporated		6		8
Payable to solar affiliates		1		—
Receivable from DECG		—		1
Payable to DECG		5		5

Borrowings from an affiliate are described in Note 5.