Related Party Transactions

9 Months Ended

Sep. 30, 2012

Related party transactions [Line Items]

Related party transactions

15.       RELATED PARTY TRANSACTIONS

The Progress Energy Registrants engage in related party transactions, which are generally performed at cost and in accordance with the applicable state and federal commission regulations. Refer to the Balance Sheets for balances due to or due from related parties. Amounts related to transactions with related parties included in the Statements of Operations and Comprehensive Income are presented in the following table:

		Three months ended September 30				Nine months ended September 30
(in millions)		2012		2011		2012		2011
PROGRESS ENERGY
Corporate governance and shared services provided by Duke Energy(a)		$	31	$	0	$	31	$	0
Corporate governance and shared services provided to Duke Energy(b)			30		0		30		0
JDA revenues(c)			37		0		37		0
JDA expenses(d)			8		0		8		0
Indemnification coverage expenses(e)			7		0		7		0
PEC
Corporate governance and shared service expenses(a)		$	72	$	48	$	183	$	155
JDA revenues(c)			37		0		37		0
JDA expenses(d)			8		0		8		0
Indemnification coverage expenses(e)			3		0		3		0
PEF
Corporate governance and shared service expenses(a)		$	52	$	41	$	136	$	122
Indemnification coverage expenses(e)			4		0		4		0
(a)	Progress Energy Registrants are charged their proportionate share of corporate governance and other costs by PESC (only applicable to PEC and PEF) and an unconsolidated affiliate that is a consolidated affiliate of Duke Energy. Corporate governance and other shared costs are primarily related to human resources, employee benefits, legal and accounting fees, as well as other third-party costs. These expenses are recorded in O&M in the Statements of Operations and Comprehensive Income.
(b)	PESC charges a proportionate share of corporate governance and other costs to unconsolidated affiliates that are consolidated affiliates of Duke Energy. Corporate governance and other shared costs are primarily related to human resources, employee benefits, legal and accounting fees, as well as other third-party costs. These charges are recorded as an offset to O&M in the Statements of Operations and Comprehensive Income.
(c)	Effective with the consummation of the merger, PEC and Duke Energy Carolinas began to participate in a JDA, which allows the collective dispatch of power plants between the service territories to reduce customers' rates (See Note 4). The revenues from the sale of power to Duke Energy Carolinas are recorded in regulated electric revenues in the Consolidated Statements of Operations and Comprehensive Income.
(d)	Effective with the consummation of the merger, PEC and Duke Energy Carolinas began to participate in a JDA, which allows the collective dispatch of power plants between the service territories to reduce customers' rates (See Note 4). The expenses from the purchase of power from Duke Energy Carolinas are recorded in fuel used in electric generation and purchased power in the Consolidated Statements of Operations and Comprehensive Income.
(e)	Effective with the consummation of the merger, Progress Energy Registrants incur expenses related to certain indemnification coverages through Bison, Duke Energy's wholly owned captive insurance subsidiary. These expenses are recorded in O&M in the Statements of Operations and Comprehensive Income.

Prior to the merger, PEC and PEF participated in an internal money pool, administered by PESC, to more effectively utilize cash resources and to reduce outside short-term borrowings. The money pool was also used to settle intercompany balances. Effective with the consummation of the merger, the Progress Energy Registrants began to participate in a money pool arrangement with Duke Energy (See Note 6). Interest income and expense associated with money pool activity were immaterial for the three and nine months ended September 30, 2012 and 2011.

In addition, the Parent has issued $300 million in guarantees for certain payments of two wholly owned indirect subsidiaries (See Note 17).