Commission File Number | Registrant, State of Incorporation, Address and Telephone Number | I.R.S. Employer Identification No. | ||
1-9052 | DPL INC. | 31-1163136 | ||
(An Ohio Corporation) | ||||
1065 Woodman Drive Dayton, Ohio 45432 | ||||
937-259-7215 | ||||
1-2385 | THE DAYTON POWER AND LIGHT COMPANY | 31-0258470 | ||
(An Ohio Corporation) | ||||
1065 Woodman Drive Dayton, Ohio 45432 | ||||
937-259-7215 |
DPL Inc. | Yes o | No x |
The Dayton Power and Light Company | Yes o | No x |
DPL Inc. | Yes x | No o |
The Dayton Power and Light Company | Yes x | No o |
Large accelerated filer | Accelerated filer | Non- accelerated filer (Do not check if a smaller reporting company) | Smaller reporting company | Emerging growth company | |
DPL Inc. | o | o | x | o | o |
The Dayton Power and Light Company | o | o | x | o | o |
DPL Inc. | o |
The Dayton Power and Light Company | o |
DPL Inc. | Yes o | No x |
The Dayton Power and Light Company | Yes o | No x |
Registrant | Description | Shares Outstanding | ||
DPL Inc. | Common Stock, no par value | 1 | ||
The Dayton Power and Light Company | Common Stock, $0.01 par value | 41,172,173 |
Page No. | ||
Glossary of Terms | ||
Forward-Looking Statements | ||
Part I Financial Information | ||
Item 1 | Financial Statements – DPL Inc. and The Dayton Power and Light Company (Unaudited) | |
DPL Inc. | ||
The Dayton Power and Light Company | ||
Item 2 | ||
Item 3 | ||
Item 4 | ||
Page No. | ||
Part II Other Information | ||
Item 1 | ||
Item 1A | ||
Item 2 | ||
Item 3 | ||
Item 4 | ||
Item 5 | ||
Item 6 | ||
Other | ||
Term | Definition |
AES | The AES Corporation, a global power company and the ultimate parent company of DPL |
AES Ohio Generation | AES Ohio Generation, LLC, a wholly-owned subsidiary of DPL that owns and operates peaking generation facilities from which it makes wholesale sales |
AOCI | Accumulated Other Comprehensive Income |
ARO | Asset Retirement Obligation |
ASU | Accounting Standards Update |
CAA | U.S. Clean Air Act |
Capacity Market | The purpose of the capacity market is to enable PJM to obtain sufficient resources to reliably meet the needs of electric customers within the PJM footprint. PJM procures capacity, through a multi-auction structure, on behalf of the load serving entities to satisfy the load obligations. There are four auctions held for each Delivery Year (running from June 1 through May 31). The Base Residual Auction is held three years in advance of the Delivery Year and there is one Incremental Auction held in each of the subsequent three years. DP&L’s capacity is located in the “rest of” RTO area of PJM. |
CP | In 2015, PJM adopted changes to the capacity market known as “Capacity Performance”. The CP program offers the potential for higher capacity revenues, combined with substantially increased penalties for non-performance or under-performance during certain periods identified as “capacity performance hours.” The DP&L units operate under the CP construct effective June 1, 2016. |
D.C. Circuit Court | United States Court of Appeals for the District of Columbia Circuit |
DPL | DPL Inc. |
DPLER | DPL Energy Resources, Inc., formerly a wholly-owned subsidiary of DPL which sold competitive electric energy and other energy services. DPLER was sold by DPL on January 1, 2016. The DPLER sale agreement was signed on December 28, 2015. |
DP&L | The Dayton Power and Light Company, the principal subsidiary of DPL and a public utility that delivers electricity to residential, commercial, industrial and governmental customers in a 6,000 square mile area of West Central Ohio |
Dths | Decatherms, unit of heat energy equal to 10 therms. One therm is equal to 100,000 British Thermal Units |
EBITDA | Earnings before interest, taxes, depreciation and amortization. EBITDA also excludes the Fixed-asset impairment |
EGU | Electric Generating Unit |
ERISA | The Employee Retirement Income Security Act of 1974 |
ESP | The Electric Security Plan is a plan that a utility must file with the PUCO to establish SSO rates pursuant to Ohio law |
ESP 1 | ESP approved by PUCO order dated June 24, 2009 |
ESP 2 | ESP approved by PUCO order dated September 4, 2013. The Ohio Supreme Court ruled that it was invalid. DP&L withdrew its ESP 2 on July 27, 2016 and filed to reinstate previously authorized rates from ESP 1 |
ESP 3 | ESP filed with the PUCO by DP&L on February 22, 2016 and an amended application filed on October 11, 2016 |
FASC | Financial Accounting Standards Board (FASB) Accounting Standards Codification |
FERC | Federal Energy Regulatory Commission |
Form 10-K | DPL’s and DP&L’s combined Annual Report on Form 10-K for the fiscal year ended December 31, 2016, which was filed on February 28, 2017 |
First and Refunding Mortgage | DP&L’s First and Refunding Mortgage, dated October 1, 1935, as amended, with the Bank of New York Mellon as Trustee |
FTR | Financial Transmission Right |
GAAP | Generally Accepted Accounting Principles in the United States of America |
GLOSSARY OF TERMS (cont.) | |
Term | Definition |
GHG | Greenhouse Gas |
kV | Kilovolt, 1,000 volts |
kWh | Kilowatt-hours |
LIBOR | London Inter-Bank Offering Rate |
Master Trust | DP&L established a Master Trust to hold assets that could be used for the benefit of employees participating in employee benefit plans |
Merger | The merger of DPL and Dolphin Sub, Inc., a wholly-owned subsidiary of AES. On November 28, 2011, DPL became a wholly-owned subsidiary of AES. |
MRO | Market Rate Option, a market-based plan that a utility may file with PUCO to establish SSO rates pursuant to Ohio law |
MTM | Mark to Market |
MVIC | Miami Valley Insurance Company, a wholly-owned insurance subsidiary of DPL that provides insurance services to DPL and its subsidiaries and, in some cases, insurance services to partner companies related to jointly owned facilities operated by DP&L |
MW | Megawatt |
MWh | Megawatt-hour |
NERC | North American Electric Reliability Corporation |
NOx | Nitrogen Oxide |
NYMEX | New York Mercantile Exchange |
Ohio EPA | Ohio Environmental Protection Agency |
OTC | Over-The-Counter |
OVEC | Ohio Valley Electric Corporation, an electric generating company in which DP&L holds a 4.9% equity interest |
PJM | PJM Interconnection, LLC, an RTO |
PUCO | Public Utilities Commission of Ohio |
RPM | Reliability Pricing Model. The Reliability Pricing Model was PJM’s capacity construct prior to the implementation of the CP program. |
RTO | Regional Transmission Organization |
SEC | Securities and Exchange Commission |
SERP | Supplemental Executive Retirement Plan |
Service Company | AES US Services, LLC, the shared services affiliate providing accounting, finance, and other support services to AES’ U.S. SBU businesses |
SO2 | Sulfur Dioxide |
SSO | Standard Service Offer represents the regulated rates, authorized by the PUCO, charged to DP&L retail customers that take retail generation service from DP&L within DP&L’s service territory |
TCRR-N | Transmission Cost Recovery Rider - Nonbypassable |
USEPA | U.S. Environmental Protection Agency |
USF | The Universal Service Fund is a statewide program which provides qualified low-income customers in Ohio with income-based bills and energy efficiency education programs |
U.S. SBU | U. S. Strategic Business Unit, AES’ reporting unit covering the businesses in the United States, including DPL |
• | abnormal or severe weather and catastrophic weather-related damage; |
• | unusual maintenance or repair requirements; |
• | changes in fuel costs and purchased power, coal, environmental emission allowances, natural gas and other commodity prices; |
• | volatility and changes in markets for electricity and other energy-related commodities; |
• | performance of our suppliers; |
• | increased competition and deregulation in the electric utility industry; |
• | increased competition in the retail generation market; |
• | availability and price of capacity; |
• | state, federal and foreign legislative and regulatory initiatives that affect cost and investment recovery, emission levels, rate structures or tax laws; |
• | changes in environmental laws and regulations to which DPL and its subsidiaries are subject; |
• | the development and operation of RTOs, including PJM to which DP&L has given control of its transmission functions; |
• | changes in our purchasing processes, pricing, delays, contractor and supplier performance and availability; |
• | significant delays associated with large construction projects; |
• | growth in our service territory and changes in demand and demographic patterns; |
• | changes in accounting rules and the effect of accounting pronouncements issued periodically by accounting standard-setting bodies; |
• | financial market conditions, changes in interest rates and changes in our credit ratings and availability and cost of capital; |
• | changes in tax laws and the effects of our strategies to reduce tax payments; |
• | the outcomes of litigation and regulatory investigations, proceedings or inquiries; |
• | general economic conditions; and |
• | the risks and other factors discussed in this report and other DPL and DP&L filings with the SEC. |
Part I – Financial Information |
Item 1 – Financial Statements |
DPL INC. | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
Three months ended March 31, | ||||||||
$ in millions | 2017 | 2016 | ||||||
Revenues | $ | 323.9 | $ | 364.0 | ||||
Cost of revenues: | ||||||||
Fuel | 54.1 | 66.9 | ||||||
Purchased power | 102.0 | 121.9 | ||||||
Total cost of revenues | 156.1 | 188.8 | ||||||
Gross margin | 167.8 | 175.2 | ||||||
Operating expenses: | ||||||||
Operation and maintenance | 86.3 | 88.5 | ||||||
Depreciation and amortization | 28.0 | 33.4 | ||||||
General taxes | 24.2 | 21.0 | ||||||
Fixed-asset impairment | 66.4 | — | ||||||
Loss on asset disposal | 19.4 | 0.1 | ||||||
Other | (1.2 | ) | — | |||||
Total operating expenses | 223.1 | 143.0 | ||||||
Operating income / (loss) | (55.3 | ) | 32.2 | |||||
Other income / (expense), net | ||||||||
Investment loss | — | (0.1 | ) | |||||
Interest expense | (26.9 | ) | (26.3 | ) | ||||
Charge for early retirement of debt | — | (2.6 | ) | |||||
Other deductions | (1.0 | ) | (0.4 | ) | ||||
Total other expense, net | (27.9 | ) | (29.4 | ) | ||||
Income / (loss) from continuing operations before income tax | (83.2 | ) | 2.8 | |||||
Income tax expense / (benefit) from continuing operations | (31.5 | ) | 0.6 | |||||
Net income / (loss) from continuing operations | (51.7 | ) | 2.2 | |||||
Discontinued operations (Note 13) | ||||||||
Loss from discontinued operations | — | (0.7 | ) | |||||
Gain from disposal of discontinued operations | — | 49.2 | ||||||
Income tax expense for discontinued operations | — | 18.9 | ||||||
Net income from discontinued operations | — | 29.6 | ||||||
Net income / (loss) | $ | (51.7 | ) | $ | 31.8 |
DPL INC. | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME / (LOSS) | ||||||||
Three months ended March 31, | ||||||||
$ in millions | 2017 | 2016 | ||||||
Net income / (loss) | $ | (51.7 | ) | $ | 31.8 | |||
Available-for-sale securities activity: | ||||||||
Change in fair value of available-for-sale securities, net of income tax expense of $0.0 and $(0.1) for each respective period | 0.2 | 0.2 | ||||||
Reclassification to earnings, net of income tax expense of $0.0 and $0.0 for each respective period | (0.1 | ) | (0.1 | ) | ||||
Total change in fair value of available-for-sale securities | 0.1 | 0.1 | ||||||
Derivative activity: | ||||||||
Change in derivative fair value, net of income tax (expense) / benefit of $2.8 and $(11.6) for each respective period | 5.2 | 21.5 | ||||||
Reclassification to earnings, net of income tax (expense) / benefit of $(0.5) and $4.8 for each respective period | 1.0 | (8.2 | ) | |||||
Total change in fair value of derivatives | 6.2 | 13.3 | ||||||
Pension and postretirement activity: | ||||||||
Prior service cost for the period, net of income tax benefit of $0.2 and $0.0 for each respective period | (0.3 | ) | — | |||||
Net loss for period, net of income tax benefit of $0.7 and $0.0 for each respective period | (1.2 | ) | — | |||||
Reclassification to earnings, net of income tax expense of $(0.5) and $(0.1) for each respective period | 0.8 | — | ||||||
Total change in unfunded pension obligation | (0.7 | ) | — | |||||
Other comprehensive income | 5.6 | 13.4 | ||||||
Net comprehensive income / (loss) | $ | (46.1 | ) | $ | 45.2 |
DPL INC. | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
March 31, | December 31, | |||||||
$ in millions | 2017 | 2016 | ||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 54.3 | $ | 54.6 | ||||
Restricted cash | 8.4 | 29.0 | ||||||
Accounts receivable, net (Note 2) | 101.4 | 135.1 | ||||||
Inventories (Note 2) | 60.9 | 77.2 | ||||||
Taxes applicable to subsequent years | 60.7 | 81.0 | ||||||
Regulatory assets, current | 0.9 | 0.1 | ||||||
Other prepayments and current assets | 33.7 | 31.8 | ||||||
Total current assets | 320.3 | 408.8 | ||||||
Property, plant & equipment: | ||||||||
Property, plant & equipment | 1,953.6 | 1,985.6 | ||||||
Less: Accumulated depreciation and amortization | (355.5 | ) | (334.8 | ) | ||||
1,598.1 | 1,650.8 | |||||||
Construction work in process | 102.5 | 116.4 | ||||||
Total net property, plant & equipment | 1,700.6 | 1,767.2 | ||||||
Other non-current assets: | ||||||||
Regulatory assets, non-current | 206.0 | 203.9 | ||||||
Intangible assets, net of amortization | 23.0 | 22.7 | ||||||
Other deferred assets | 14.3 | 16.6 | ||||||
Total other non-current assets | 243.3 | 243.2 | ||||||
Total assets | $ | 2,264.2 | $ | 2,419.2 | ||||
LIABILITIES AND SHAREHOLDER'S DEFICIT | ||||||||
Current liabilities: | ||||||||
Current portion of long-term debt (Note 7) | $ | 29.7 | $ | 29.7 | ||||
Accounts payable | 78.8 | 113.9 | ||||||
Accrued taxes | 159.5 | 185.1 | ||||||
Accrued interest | 33.7 | 17.7 | ||||||
Security deposits | 32.8 | 15.2 | ||||||
Regulatory liabilities, current | 13.7 | 33.7 | ||||||
Insurance and claims costs | 6.6 | 5.4 | ||||||
Other current liabilities | 40.9 | 50.2 | ||||||
Total current liabilities | 395.7 | 450.9 | ||||||
Non-current liabilities: | ||||||||
Long-term debt (Note 7) | 1,822.3 | 1,828.7 | ||||||
Deferred taxes | 252.4 | 252.4 | ||||||
Taxes payable | 44.3 | 84.6 | ||||||
Regulatory liabilities, non-current | 131.6 | 130.4 | ||||||
Pension, retiree and other benefits | 100.6 | 101.6 | ||||||
Asset retirement obligations | 135.6 | 138.8 | ||||||
Other deferred credits | 15.4 | 19.4 | ||||||
Total non-current liabilities | 2,502.2 | 2,555.9 | ||||||
Commitments and contingencies (Note 10) | ||||||||
Common shareholder's deficit | ||||||||
Common stock: | ||||||||
1,500 shares authorized; 1 share issued and outstanding at March 31, 2017 and December 31, 2016 | — | — | ||||||
Other paid-in capital | 2,233.0 | 2,233.0 | ||||||
Accumulated other comprehensive income | 5.9 | 0.3 | ||||||
Accumulated deficit | (2,872.6 | ) | (2,820.9 | ) | ||||
Total common shareholder's deficit | (633.7 | ) | (587.6 | ) | ||||
Total liabilities and shareholder's deficit | $ | 2,264.2 | $ | 2,419.2 |
DPL INC. | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
Three months ended March 31, | ||||||||
$ in millions | 2017 | 2016 | ||||||
Cash flows from operating activities: | ||||||||
Net income / (loss) | $ | (51.7 | ) | $ | 31.8 | |||
Adjustments to reconcile net income / (loss) to net cash from operating activities: | ||||||||
Depreciation and amortization | 28.0 | 33.4 | ||||||
Deferred income taxes | (4.7 | ) | (9.2 | ) | ||||
Fixed-asset impairment | 66.4 | — | ||||||
Gain on sale of business | — | (49.2 | ) | |||||
Loss on asset disposal | 19.4 | 0.1 | ||||||
Changes in certain assets and liabilities: | ||||||||
Accounts receivable | 38.1 | 35.8 | ||||||
Inventories | 0.1 | 19.0 | ||||||
Prepaid taxes | — | 0.2 | ||||||
Taxes applicable to subsequent years | 20.2 | 21.6 | ||||||
Deferred regulatory costs, net | (23.8 | ) | 4.8 | |||||
Accounts payable | (30.9 | ) | (7.6 | ) | ||||
Accrued taxes payable | (66.0 | ) | (13.5 | ) | ||||
Accrued interest payable | 15.9 | 7.3 | ||||||
Security deposits | 17.6 | 4.4 | ||||||
Unamortized investment tax credit | (0.1 | ) | (0.1 | ) | ||||
Insurance claims costs | 1.2 | (0.4 | ) | |||||
Pension, retiree and other benefits | 1.3 | (4.5 | ) | |||||
Other | (4.5 | ) | 9.1 | |||||
Net cash provided by operating activities | 26.5 | 83.0 | ||||||
Cash flows from investing activities: | ||||||||
Capital expenditures | (41.4 | ) | (37.7 | ) | ||||
Proceeds from sale of business | — | 75.5 | ||||||
Insurance proceeds | 1.2 | — | ||||||
Purchase of renewable energy credits | (0.1 | ) | (0.1 | ) | ||||
Decrease in restricted cash | 20.6 | 1.3 | ||||||
Other investing activities, net | 0.3 | 0.6 | ||||||
Net cash provided by / (used in) investing activities | (19.4 | ) | 39.6 | |||||
Cash flows from financing activities: | ||||||||
Retirement of long-term debt | (7.4 | ) | (75.4 | ) | ||||
Net cash used in financing activities | (7.4 | ) | (75.4 | ) | ||||
Cash and cash equivalents: | ||||||||
Net change | (0.3 | ) | 47.2 | |||||
Balance at beginning of period | 54.6 | 32.4 | ||||||
Cash and cash equivalents at end of period | $ | 54.3 | $ | 79.6 | ||||
Supplemental cash flow information: | ||||||||
Interest paid, net of amounts capitalized | $ | 10.4 | $ | 19.2 | ||||
Non-cash financing and investing activities: | ||||||||
Accruals for capital expenditures | $ | 10.7 | $ | 12.5 |
Accounting Standard | Description | Date of Adoption | Effect on the financial statements upon adoption |
New Accounting Standards Adopted | |||
2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting | The standard simplifies the following aspects of accounting for share-based payments awards: accounting for income taxes, classification of excess tax benefits on the statement of cash flows, forfeitures, statutory tax withholding requirements, classification of awards as either equity or liabilities and classification of employee taxes paid on statement of cash flows when an employer withholds shares for tax-withholding purposes. Transition method: The recognition of excess tax benefits and tax deficiencies arising from vesting or settlement were applied retrospectively. The elimination of the requirement that excess tax benefits be realized before they are recognized was adopted on a modified retrospective basis with a cumulative adjustment to the opening balance sheet. | January 1, 2017 | The primary effect of adoption was the recognition of excess tax benefits in our provision for income taxes in the period when the awards vest or are settled, rather than in paid-in-capital in the period when the excess tax benefits are realized. We will continue to estimate the number of awards that are expected to vest in our determination of the related periodic compensation cost. The adoption of this standard did not have a material impact on the consolidated financial statements. |
Accounting Standard | Description | Date of Adoption | Effect on the financial statements upon adoption |
New Accounting Standards Issued But Not Yet Effective | |||
2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities | This standard shortens the period of amortization of the premium on certain callable debt securities to the earliest call date. Transition method: modified retrospective. | January 1, 2019. Early adoption is permitted. | We are currently evaluating the impact of adopting the standard on our consolidated financial statements. |
2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost | The standard provides guidance on the presentation of net benefit cost in an employer’s income statement and on the components eligible for capitalization. It requires that an employer report the service cost component in the same line item(s) as other employee compensation costs arising from services rendered during the period, and report the other components of net benefit cost separately from the service cost component and outside a subtotal of operating income. Only the service cost component will be eligible for capitalization. Transition method: various. | January 1, 2018. Early adoption is permitted. | We are currently evaluating the impact of adopting the standard on our consolidated financial statements. |
2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business | This standard provides guidance to assist the entities with evaluating when a set of transferred assets and activities is a business. Transition method: prospective. | January 1, 2018. Early adoption is permitted | We are currently evaluating the impact of adopting the standard on our consolidated financial statements. |
2016-18, Statement of Cash Flows (Topic 320): Restricted Cash (a consensus of the FASB Emerging Issues Task Force) | This standard requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. Transition method: retrospective. | January 1, 2018. Early adoption is permitted | We are currently evaluating the impact of adopting the standard on our consolidated financial statements. |
2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory | This standard requires that an entity recognizes the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Transition method: modified retrospective method. | January 1, 2018. Early adoption is permitted. | We are currently evaluating the impact of adopting the standard on our consolidated financial statements. |
2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Receipts and Cash Payments (a consensus of the Emerging Issues Task Force) | This standard provides specific guidance on how certain cash transactions are presented and classified in the statement of cash flows. Transition method: retrospective method | January 1, 2018. Early adoption is permitted. | We are currently evaluating the impact of adopting the standard on our consolidated financial statements but do not anticipate a material impact. |
2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments | This standard updates the impairment model for financial assets measured at amortized cost to an expected loss model rather than an incurred loss model. It also allows for the presentation of credit losses on available-for-sale debt securities as an allowance rather than a write down. Transition method: various. | January 1, 2020. Early adoption is permitted only as of January 1, 2019. | We are currently evaluating the impact of adopting the standard on our consolidated financial statements. |
2016-02, Leases (Topic 842) | The standard creates Topic 842, Leases which supersedes Topic 840, Leases, and introduces a lessee model that brings substantially all leases onto the balance sheet while retaining most of the principles of the existing lessor model in U.S. GAAP and aligning many of those principles with ASC 606, Revenue from Contracts with Customers. Transition method: modified retrospective approach with certain practical expedients. | January 1, 2019. Early adoption is permitted. | We are currently evaluating the impact of adopting the standard on our consolidated financial statements. |
Accounting Standard | Description | Date of Adoption | Effect on the financial statements upon adoption |
2014-09, 2015-14, 2016-08, 2016-10, 2016-12, 2016-20, 2017-05 Revenue from Contracts with Customers (Topic 606) | See discussion of the ASUs below. | January 1, 2018. Earlier application is permitted only as of January 1, 2017. | We will adopt the standard on January 1, 2018; see below for the evaluation of the impact of its adoption on the consolidated financial statements. |
March 31, | December 31, | |||||||
$ in millions | 2017 | 2016 | ||||||
Accounts receivable, net: | ||||||||
Unbilled revenue | $ | 14.7 | $ | 43.0 | ||||
Customer receivables | 68.4 | 73.9 | ||||||
Amounts due from partners in jointly owned plants | 6.6 | 12.7 | ||||||
Other | 12.7 | 6.7 | ||||||
Provision for uncollectible accounts | (1.0 | ) | (1.2 | ) | ||||
Total accounts receivable, net | $ | 101.4 | $ | 135.1 | ||||
Inventories, at average cost: | ||||||||
Fuel and limestone | $ | 38.8 | $ | 38.9 | ||||
Plant materials and supplies | 20.6 | 36.6 | ||||||
Other | 1.5 | 1.7 | ||||||
Total inventories, at average cost | $ | 60.9 | $ | 77.2 |
Details about Accumulated Other Comprehensive Income / (Loss) components | Affected line item in the Condensed Consolidated Statements of Operations | Three months ended | ||||||||
March 31, | ||||||||||
$ in millions | 2017 | 2016 | ||||||||
Gains and losses on Available-for-sale securities activity (Note 5): | ||||||||||
Other income | $ | (0.1 | ) | $ | (0.1 | ) | ||||
Gains and losses on cash flow hedges (Note 6): | ||||||||||
Interest expense | (0.3 | ) | (0.2 | ) | ||||||
Revenue | (1.5 | ) | (17.2 | ) | ||||||
Purchased power | 3.3 | 4.4 | ||||||||
Total before income taxes | 1.5 | (13.0 | ) | |||||||
Tax expense / (benefit) | (0.5 | ) | 4.8 | |||||||
Net of income taxes | 1.0 | (8.2 | ) | |||||||
Amortization of defined benefit pension items (Note 9): | ||||||||||
Operation and maintenance | 1.3 | 0.1 | ||||||||
Tax benefit | (0.5 | ) | (0.1 | ) | ||||||
Net of income taxes | 0.8 | — | ||||||||
Total reclassifications for the period, net of income taxes | $ | 1.7 | $ | (8.3 | ) |
$ in millions | Gains / (losses) on available-for-sale securities | Gains / (losses) on cash flow hedges | Change in unfunded pension obligation | Total | ||||||||||||
Balance January 1, 2017 | $ | 0.6 | $ | 13.1 | $ | (13.4 | ) | $ | 0.3 | |||||||
Other comprehensive income / (loss) before reclassifications | 0.2 | 5.2 | (1.5 | ) | 3.9 | |||||||||||
Amounts reclassified from accumulated other comprehensive income / (loss) | (0.1 | ) | 1.0 | 0.8 | 1.7 | |||||||||||
Net current period other comprehensive income / (loss) | 0.1 | 6.2 | (0.7 | ) | 5.6 | |||||||||||
Balance March 31, 2017 | $ | 0.7 | $ | 19.3 | $ | (14.1 | ) | $ | 5.9 |
• | Bypassable standard offer energy rates for DP&L’s customers based on competitive bid auctions; |
• | The establishment of a three-year non-bypassable DMR designed to collect $105.0 million in revenue per year to pay debt obligations at DPL and DP&L and position DP&L to modernize and/or maintain its transmission and distribution infrastructure. With PUCO approval, DP&L may have the option of extending the duration of the DMR for an additional two years; |
• | The establishment of a non-bypassable Distribution Investment Rider, set initially at zero, to recover incremental distribution capital investments; |
• | The establishment of a Smart Grid Rider, set initially at zero, to recover costs of future grid modernization; |
• | A commitment by us to separate DP&L’s generation assets from its transmission and distribution assets (if approved by FERC) within 180 days after receipt of a PUCO order; |
• | A commitment to commence a sale process to sell our ownership interests in the Zimmer, Miami Fort and Conesville coal-fired generation plants; and |
• | Restrictions on DPL making dividend or tax sharing payments, and various other riders and competitive retail market enhancements. |
DP&L Share | DPL Carrying Value | ||||||||||||||||
Ownership (%) | Summer Production Capacity (MW) | Gross Plant In Service ($ in millions) | Accumulated Depreciation ($ in millions) | Construction Work in Process ($ in millions) | |||||||||||||
Jointly-owned production units | |||||||||||||||||
Conesville - Unit 4 | 16.5 | 129 | $ | — | $ | — | $ | — | |||||||||
Killen - Unit 2 | 67.0 | 402 | 7.0 | 1.0 | 1.0 | ||||||||||||
Miami Fort - Units 7 and 8 | 36.0 | 368 | 28.0 | 1.0 | 5.0 | ||||||||||||
Stuart - Units 1 through 4 | 35.0 | 808 | 1.0 | 1.0 | — | ||||||||||||
Zimmer - Unit 1 | 28.1 | 371 | 12.0 | 1.0 | 5.0 | ||||||||||||
Transmission (at varying percentages) | 43.0 | 11.0 | — | ||||||||||||||
Total | 2,078 | $ | 91.0 | $ | 15.0 | $ | 11.0 |
$ in millions | |||
Balance January 1, 2017 | $ | 138.8 | |
Revisions to cash flow and timing estimates | (4.4 | ) | |
Accretion expense | 1.1 | ||
Settlements | 0.1 | ||
Balance March 31, 2017 | $ | 135.6 |
March 31, 2017 | December 31, 2016 | |||||||||||||||
$ in millions | Cost | Fair Value | Cost | Fair Value | ||||||||||||
Assets | ||||||||||||||||
Money market funds | $ | 0.3 | $ | 0.3 | $ | 0.4 | $ | 0.4 | ||||||||
Equity securities | 2.6 | 3.9 | 2.4 | 3.4 | ||||||||||||
Debt securities | 4.3 | 4.3 | 4.4 | 4.4 | ||||||||||||
Hedge funds | 0.1 | 0.1 | — | 0.1 | ||||||||||||
Real estate | — | — | 0.3 | 0.3 | ||||||||||||
Tangible assets | 0.1 | 0.1 | 0.1 | 0.1 | ||||||||||||
Total Assets | $ | 7.4 | $ | 8.7 | $ | 7.6 | $ | 8.7 | ||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||
Liabilities | ||||||||||||||||
Debt (a) | $ | 1,851.6 | $ | 1,940.7 | $ | 1,858.0 | $ | 1,907.7 |
(a) | Amounts exclude immaterial capital lease obligations |
• | Level 1 (quoted prices in active markets for identical assets or liabilities); |
• | Level 2 (observable inputs such as quoted prices for similar assets or liabilities or quoted prices in markets that are not active); or |
• | Level 3 (unobservable inputs). |
Assets and Liabilities at Fair Value | ||||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||
$ in millions | Fair value at March 31, 2017 | Based on Quoted Prices in Active Markets | Other Observable Inputs | Unobservable Inputs | ||||||||||||
Assets | ||||||||||||||||
Master Trust assets | ||||||||||||||||
Money market funds | $ | 0.3 | $ | 0.3 | $ | — | $ | — | ||||||||
Equity securities | 3.9 | — | 3.9 | — | ||||||||||||
Debt securities | 4.3 | — | 4.3 | — | ||||||||||||
Hedge funds | 0.1 | — | 0.1 | — | ||||||||||||
Tangible assets | 0.1 | — | 0.1 | — | ||||||||||||
Total Master Trust assets | 8.7 | 0.3 | 8.4 | — | ||||||||||||
Derivative Assets | ||||||||||||||||
Forward power contracts | 18.9 | — | 18.9 | — | ||||||||||||
Interest rate hedges | 1.4 | — | 1.4 | — | ||||||||||||
Natural gas | 0.3 | 0.3 | — | — | ||||||||||||
Total Derivative assets | 20.6 | 0.3 | 20.3 | — | ||||||||||||
Total Assets | $ | 29.3 | $ | 0.6 | $ | 28.7 | $ | — | ||||||||
Liabilities | ||||||||||||||||
Derivative Liabilities | ||||||||||||||||
Interest rate hedges | $ | 0.3 | $ | — | $ | 0.3 | $ | — | ||||||||
Natural gas futures | 0.5 | 0.5 | — | — | ||||||||||||
Forward power contracts | 18.1 | — | 17.0 | 1.1 | ||||||||||||
Total Derivative liabilities | 18.9 | 0.5 | 17.3 | 1.1 | ||||||||||||
Debt | 1,940.6 | — | 1,922.7 | 17.9 | ||||||||||||
Total Liabilities | $ | 1,959.5 | $ | 0.5 | $ | 1,940.0 | $ | 19.0 |
Assets and Liabilities at Fair Value | ||||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||
$ in millions | Fair value at December 31, 2016 | Based on Quoted Prices in Active Markets | Other Observable Inputs | Unobservable Inputs | ||||||||||||
Assets | ||||||||||||||||
Master Trust assets | ||||||||||||||||
Money market funds | $ | 0.4 | $ | 0.4 | $ | — | $ | — | ||||||||
Equity securities | 3.4 | — | 3.4 | — | ||||||||||||
Debt securities | 4.4 | — | 4.4 | — | ||||||||||||
Hedge funds | 0.1 | — | 0.1 | — | ||||||||||||
Real estate | 0.3 | — | 0.3 | — | ||||||||||||
Tangible assets | 0.1 | — | 0.1 | — | ||||||||||||
Total Master Trust assets | 8.7 | 0.4 | 8.3 | — | ||||||||||||
Derivative assets | ||||||||||||||||
Forward power contracts | 19.5 | — | 19.5 | — | ||||||||||||
Interest rate hedges | 1.2 | — | 1.2 | — | ||||||||||||
FTRs | 0.1 | — | — | 0.1 | ||||||||||||
Total Derivative assets | 20.8 | — | 20.7 | 0.1 | ||||||||||||
Total Assets | $ | 29.5 | $ | 0.4 | $ | 29.0 | $ | 0.1 | ||||||||
Liabilities | ||||||||||||||||
Derivative liabilities | ||||||||||||||||
Interest rate hedges | $ | 0.7 | $ | — | $ | 0.7 | $ | — | ||||||||
Forward power contracts | 28.5 | — | 26.0 | 2.5 | ||||||||||||
Total Derivative liabilities | 29.2 | — | 26.7 | 2.5 | ||||||||||||
Debt | 1,907.7 | — | 1,889.7 | 18.0 | ||||||||||||
Total Liabilities | $ | 1,936.9 | $ | — | $ | 1,916.4 | $ | 20.5 |
• | Level 1 inputs are used for derivative contracts such as natural gas futures and for money market accounts that are considered cash equivalents. The fair value is determined by reference to quoted market prices and other relevant information generated by market transactions. |
• | Level 2 inputs are used to value derivatives such as forward power contracts (which are traded on the OTC market but which are valued using prices on the NYMEX for similar contracts on the OTC market). Other Level 2 assets include open-ended mutual funds that are in the Master Trust, which are valued using observable prices based on the end of day net asset value per unit. |
• | Level 3 inputs such as FTRs are considered a Level 3 input because the monthly auctions are considered inactive. Other Level 3 inputs include the credit valuation adjustment on some of the forward power contracts and forward power contracts in less active markets. Our Level 3 inputs are immaterial to our derivative balances as a whole and as such no further disclosures are presented. |
$ in millions | Three months ended March 31, 2017 | |||||||||||||||||||
Carrying | Fair Value | Gross | ||||||||||||||||||
Amount (b) | Level 1 | Level 2 | Level 3 | Loss | ||||||||||||||||
Assets | ||||||||||||||||||||
Long-lived assets (a) | ||||||||||||||||||||
Stuart | $ | 42.4 | $ | — | $ | — | $ | 3.3 | $ | 39.1 | ||||||||||
Killen | $ | 35.2 | $ | — | $ | — | $ | 7.9 | $ | 27.3 |
$ in millions | Fair value | Valuation technique | Unobservable input | Weighted average | ||||||
Long-lived assets held and used: | ||||||||||
Stuart | $ | 3.3 | Discounted cash flow | Pre-tax operating margin (through remaining life) | 10% | |||||
Weighted-average cost of capital | 7% | |||||||||
Killen | $ | 7.9 | Discounted cash flow | Pre-tax operating margin (through remaining life) | 22% | |||||
Weighted-average cost of capital | 7% |
Commodity | Accounting Treatment (a) | Unit | Purchases (in thousands) | Sales (in thousands) | Net Purchases/ (Sales) (in thousands) | |||||||||||
FTRs | Not designated | MWh | 0.9 | — | 0.9 | |||||||||||
Natural gas futures | Not designated | Dths | 17,127.5 | — | 17,127.5 | |||||||||||
Forward power contracts | Designated | MWh | 1,276.6 | (6,250.9 | ) | (4,974.3 | ) | |||||||||
Forward power contracts | Not designated | MWh | 1,727.3 | (2,052.6 | ) | (325.3 | ) | |||||||||
Interest rate swaps | Designated | USD | $ | 200,000.0 | $ | — | $ | 200,000.0 |
Commodity | Accounting Treatment (a) | Unit | Purchases (in thousands) | Sales (in thousands) | Net Purchases/ (Sales) (in thousands) | |||||||||||
FTRs | Not designated | MWh | 2.3 | — | 2.3 | |||||||||||
Natural gas futures | Not designated | Dths | 1,590.0 | — | 1,590.0 | |||||||||||
Forward power contracts | Designated | MWh | 342.9 | (9,974.5 | ) | (9,631.6 | ) | |||||||||
Forward power contracts | Not designated | MWh | 2,568.3 | (2,020.9 | ) | 547.4 | ||||||||||
Interest rate swaps | Designated | USD | $ | 200,000.0 | $ | — | $ | 200,000.0 |
Three months ended | Three months ended | |||||||||||||||
March 31, 2017 | March 31, 2016 | |||||||||||||||
Interest | Interest | |||||||||||||||
$ in millions (net of tax) | Power | Rate Hedge | Power | Rate Hedge | ||||||||||||
Beginning accumulated derivative gains / (losses) in AOCI | $ | (4.3 | ) | $ | 17.4 | $ | 9.2 | $ | 17.5 | |||||||
Net gains associated with current period hedging transactions | 4.9 | 0.3 | 21.5 | — | ||||||||||||
Net gains / (losses) reclassified to earnings | ||||||||||||||||
Interest expense | — | (0.2 | ) | — | — | |||||||||||
Revenues | (0.9 | ) | — | (11.0 | ) | — | ||||||||||
Purchased power | 2.1 | — | 2.8 | — | ||||||||||||
Ending accumulated derivative gains in AOCI | $ | 1.8 | $ | 17.5 | $ | 22.5 | $ | 17.5 | ||||||||
Portion expected to be reclassified to earnings in the next twelve months (a) | $ | 2.0 | $ | (0.2 | ) | |||||||||||
Maximum length of time that we are hedging our exposure to variability in future cash flows related to forecasted transactions (in months) | 17 | 41 |
For the three months ended March 31, 2017 | ||||||||||||||||
$ in millions | FTRs | Power | Natural Gas | Total | ||||||||||||
Change in unrealized loss | $ | — | $ | (0.1 | ) | $ | (0.1 | ) | $ | (0.2 | ) | |||||
Realized gain / (loss) | 0.2 | (2.6 | ) | (0.2 | ) | (2.6 | ) | |||||||||
Total | $ | 0.2 | $ | (2.7 | ) | $ | (0.3 | ) | $ | (2.8 | ) | |||||
Recorded in Income Statement: gain / (loss) | ||||||||||||||||
Revenues | $ | — | $ | (6.7 | ) | $ | — | $ | (6.7 | ) | ||||||
Purchased power | 0.2 | 4.0 | (0.3 | ) | 3.9 | |||||||||||
Total | $ | 0.2 | $ | (2.7 | ) | $ | (0.3 | ) | $ | (2.8 | ) |
For the three months ended March 31, 2016 | ||||||||||||||||
$ in millions | FTRs | Power | Natural Gas | Total | ||||||||||||
Change in unrealized gain / (loss) | $ | 0.1 | $ | (1.5 | ) | $ | (0.2 | ) | $ | (1.6 | ) | |||||
Realized gain / (loss) | 0.2 | (0.4 | ) | (0.2 | ) | (0.4 | ) | |||||||||
Total | $ | 0.3 | $ | (1.9 | ) | $ | (0.4 | ) | $ | (2.0 | ) | |||||
Recorded in Income Statement: gain / (loss) | ||||||||||||||||
Revenue | $ | — | $ | (1.1 | ) | $ | — | $ | (1.1 | ) | ||||||
Purchased power | 0.3 | (0.8 | ) | (0.4 | ) | (0.9 | ) | |||||||||
Total | $ | 0.3 | $ | (1.9 | ) | $ | (0.4 | ) | $ | (2.0 | ) |
Fair Values of Derivative Instruments | ||||||||||||||||||
at March 31, 2017 | ||||||||||||||||||
Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets | ||||||||||||||||||
$ in millions | Hedging Designation | Gross Fair Value as presented in the Condensed Consolidated Balance Sheets | Financial Instruments with Same Counterparty in Offsetting Position | Cash Collateral | Net Balance Fair Value | |||||||||||||
Assets | ||||||||||||||||||
Short-term derivative positions (presented in Other prepayments and current assets) | ||||||||||||||||||
Forward power contracts | Designated | $ | 12.7 | $ | (8.6 | ) | $ | — | $ | 4.1 | ||||||||
Forward power contracts | Not designated | 6.1 | (5.5 | ) | — | 0.6 | ||||||||||||
Natural gas futures | Not designated | 0.3 | (0.2 | ) | — | 0.1 | ||||||||||||
Long-term derivative positions (presented in Other deferred assets) | ||||||||||||||||||
Interest rate swap | Designated | 1.4 | — | — | 1.4 | |||||||||||||
Forward power contracts | Not designated | 0.1 | (0.1 | ) | — | — | ||||||||||||
Total assets | $ | 20.6 | $ | (14.4 | ) | $ | — | $ | 6.2 | |||||||||
Liabilities | ||||||||||||||||||
Short-term derivative positions (presented in Other current liabilities) | ||||||||||||||||||
Forward power contracts | Designated | $ | 9.7 | $ | (8.6 | ) | $ | — | $ | 1.1 | ||||||||
Interest rate swap | Designated | 0.3 | — | — | 0.3 | |||||||||||||
Forward power contracts | Not designated | 8.1 | (5.5 | ) | (0.1 | ) | 2.5 | |||||||||||
Natural gas futures | Not designated | 0.2 | (0.2 | ) | — | — | ||||||||||||
Long-term derivative positions (presented in Other deferred credits) | ||||||||||||||||||
Forward power contracts | Designated | 0.1 | — | (0.1 | ) | — | ||||||||||||
Natural gas futures | Not designated | 0.3 | — | (0.3 | ) | — | ||||||||||||
Forward power contracts | Not designated | 0.2 | (0.1 | ) | — | 0.1 | ||||||||||||
Total liabilities | $ | 18.9 | $ | (14.4 | ) | $ | (0.5 | ) | $ | 4.0 |
Fair Values of Derivative Instruments | ||||||||||||||||||
at December 31, 2016 | ||||||||||||||||||
Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets | ||||||||||||||||||
$ in millions | Hedging Designation | Gross Fair Value as presented in the Condensed Consolidated Balance Sheets | Financial Instruments with Same Counterparty in Offsetting Position | Cash Collateral | Net Balance Fair Value | |||||||||||||
Assets | ||||||||||||||||||
Short-term derivative positions (presented in Other prepayments and current assets) | ||||||||||||||||||
Forward power contracts | Designated | $ | 11.0 | $ | (10.5 | ) | $ | — | $ | 0.5 | ||||||||
Forward power contracts | Not designated | 6.0 | (4.7 | ) | — | 1.3 | ||||||||||||
FTRs | Not designated | 0.1 | — | — | 0.1 | |||||||||||||
Long-term derivative positions (presented in Other deferred assets) | ||||||||||||||||||
Interest rate swaps | Designated | 1.2 | — | — | 1.2 | |||||||||||||
Forward power contracts | Designated | 0.6 | (0.6 | ) | — | — | ||||||||||||
Forward power contracts | Not designated | 1.9 | (1.0 | ) | — | 0.9 | ||||||||||||
Total assets | $ | 20.8 | $ | (16.8 | ) | $ | — | $ | 4.0 | |||||||||
Liabilities | ||||||||||||||||||
Short-term derivative positions (presented in Other current liabilities) | ||||||||||||||||||
Interest rate swaps | Designated | $ | 0.7 | $ | — | $ | — | $ | 0.7 | |||||||||
Forward power contracts | Designated | 16.4 | (10.5 | ) | (5.5 | ) | 0.4 | |||||||||||
Forward power contracts | Not designated | 7.7 | (4.7 | ) | — | 3.0 | ||||||||||||
Long-term derivative positions (presented in Other deferred credits) | ||||||||||||||||||
Forward power contracts | Designated | 2.4 | (0.6 | ) | (0.8 | ) | 1.0 | |||||||||||
Forward power contracts | Not designated | 2.0 | (1.0 | ) | — | 1.0 | ||||||||||||
Total liabilities | $ | 29.2 | $ | (16.8 | ) | $ | (6.3 | ) | $ | 6.1 |
Interest | March 31, | December 31, | ||||||||||
$ in millions | Rate | Maturity | 2017 | 2016 | ||||||||
Term loan - rates from 4.01% - 4.04% (a) and 4.00% - 4.01% (b) | 2022 | $ | 443.9 | $ | 445.0 | |||||||
Tax-exempt First Mortgage Bonds | 4.8% | 2036 | 100.0 | 100.0 | ||||||||
Tax-exempt First Mortgage Bonds - rates from 1.52% - 1.53% (a) and 1.29% - 1.42% (b) | 2020 | 200.0 | 200.0 | |||||||||
U.S. Government note | 4.2% | 2061 | 17.9 | 18.0 | ||||||||
Capital leases | 0.4 | 0.4 | ||||||||||
Unamortized deferred financing costs | (10.1 | ) | (10.7 | ) | ||||||||
Unamortized debt discount and premiums, net | (5.3 | ) | (5.5 | ) | ||||||||
Total long-term debt at consolidated subsidiary | 746.8 | 747.2 | ||||||||||
Bank term loan - rates from 3.02% - 3.73% (a) and 2.67% - 3.02% (b) | 2020 | 118.8 | 125.0 | |||||||||
Senior unsecured notes | 6.75% | 2019 | 200.0 | 200.0 | ||||||||
Senior unsecured notes | 7.25% | 2021 | 780.0 | 780.0 | ||||||||
Note to DPL Capital Trust II (c) | 8.125% | 2031 | 15.6 | 15.6 | ||||||||
Unamortized deferred financing costs | (8.4 | ) | (8.8 | ) | ||||||||
Unamortized debt discounts and premiums, net | (0.8 | ) | (0.6 | ) | ||||||||
Total long-term debt | 1,852.0 | 1,858.4 | ||||||||||
Less: current portion | (29.7 | ) | (29.7 | ) | ||||||||
Long-term debt, net of current portion | $ | 1,822.3 | $ | 1,828.7 |
(a) | Range of interest rates for the three months ended March 31, 2017. |
(b) | Range of interest rates for the year ended December 31, 2016. |
(c) | Note payable to related party. See Note 11 – Related Party Transactions for additional information. |
Three months ended | ||||
March 31, | ||||
2017 | 2016 | |||
DPL | 37.9% | 21.4% |
Net Periodic Benefit Cost | Pension | |||||||
Three months ended | ||||||||
March 31, | ||||||||
$ in millions | 2017 | 2016 | ||||||
Service cost | $ | 1.4 | $ | 1.4 | ||||
Interest cost | 3.6 | 3.7 | ||||||
Expected return on plan assets | (5.7 | ) | (5.7 | ) | ||||
Plan curtailment (a) | 4.1 | — | ||||||
Amortization of unrecognized: | ||||||||
Prior service cost | 0.4 | 0.5 | ||||||
Actuarial loss | 1.3 | 1.0 | ||||||
Net periodic benefit cost | $ | 5.1 | $ | 0.9 |
(a) | As a result of the decision to retire certain of DP&L's coal-fired plants, we recognized a plan curtailment of $4.1 million in the first quarter of 2017. See Note 14 – Fixed-asset Impairment for more information. |
$ in millions | ||||
Estimated to be paid during the twelve months ending March 31, | Pension | |||
2018 | $ | 18.8 | ||
2019 | 25.5 | |||
2020 | 26.0 | |||
2021 | 26.4 | |||
2022 | 26.7 | |||
2023 - 2027 | 139.6 |
• | The federal CAA and state laws and regulations (including State Implementation Plans) which require compliance, obtaining permits and reporting as to air emissions; |
• | Litigation with federal and certain state governments and certain special interest groups regarding whether modifications to or maintenance of certain coal-fired generating stations require additional permitting or pollution control technology, or whether emissions from coal-fired generating stations cause or contribute to climate change; |
• | Rules and future rules issued by the USEPA and the Ohio EPA that require or will require substantial reductions in SO2, particulates, mercury, acid gases, NOx, and other air emissions. DP&L has installed emission control technology and is taking other measures to comply with required and anticipated reductions; |
• | Rules and future rules issued by the USEPA, the Ohio EPA or other authorities that require or will require reporting and reductions of GHGs; |
• | Rules and future rules issued by the USEPA associated with the federal Clean Water Act, which prohibits the discharge of pollutants into waters of the United States except pursuant to appropriate permits; and |
• | Solid and hazardous waste laws and regulations, which govern the management and disposal of certain waste. The majority of solid waste created from the combustion of coal and fossil fuels consists of fly ash and other coal combustion by-products. |
Three months ended | ||||||||
March 31, | ||||||||
$ in millions | 2017 | 2016 | ||||||
Transactions with the Service Company | ||||||||
Charges for services provided | $ | 13.9 | $ | 11.6 | ||||
Charges to the Service Company | $ | 1.0 | $ | 1.2 | ||||
Transactions with other AES affiliates: | ||||||||
Charges for health, welfare and benefit plans | $ | 4.2 | $ | 4.1 | ||||
Balances with the Service Company: | At March 31, 2017 | At December 31, 2016 | ||||||
Net payable to the Service Company | $ | — | $ | (2.0 | ) | |||
Net payable to other AES affiliates | $ | (3.1 | ) | $ | (2.5 | ) |
$ in millions | T&D | Generation | Other | Adjustments and Eliminations | DPL Consolidated | |||||||||||||||
Three months ended March 31, 2017 | ||||||||||||||||||||
Revenues from external customers | $ | 189.8 | $ | 131.8 | $ | 2.3 | $ | — | $ | 323.9 | ||||||||||
Intersegment revenues | 0.3 | — | 1.4 | (1.7 | ) | — | ||||||||||||||
Total revenues | $ | 190.1 | $ | 131.8 | $ | 3.7 | $ | (1.7 | ) | $ | 323.9 | |||||||||
Depreciation and amortization | $ | 18.1 | $ | 7.0 | $ | 2.9 | $ | — | $ | 28.0 | ||||||||||
Fixed-asset impairment (Note 14) | $ | — | $ | 66.3 | $ | 0.1 | $ | — | $ | 66.4 | ||||||||||
Interest expense | $ | 7.4 | $ | — | $ | 19.6 | $ | (0.1 | ) | $ | 26.9 | |||||||||
Income / (loss) from continuing operations before income tax | $ | 25.0 | $ | (86.8 | ) | $ | (21.4 | ) | $ | — | $ | (83.2 | ) | |||||||
Cash capital expenditures | $ | 26.3 | $ | 14.1 | $ | 1.0 | $ | — | $ | 41.4 | ||||||||||
At March 31, 2017 | ||||||||||||||||||||
Total assets | $ | 1,680.9 | $ | 366.1 | $ | 633.6 | $ | (416.4 | ) | $ | 2,264.2 |
$ in millions | T&D | Generation | Other | Adjustments and Eliminations | DPL Consolidated | |||||||||||||||
Three months ended March 31, 2016 | ||||||||||||||||||||
Revenues from external customers | $ | 204.2 | $ | 158.2 | $ | 1.6 | $ | — | $ | 364.0 | ||||||||||
Intersegment revenues | 0.3 | — | 1.3 | (1.6 | ) | — | ||||||||||||||
Total revenues | $ | 204.5 | $ | 158.2 | $ | 2.9 | $ | (1.6 | ) | $ | 364.0 | |||||||||
Depreciation and amortization | $ | 17.2 | $ | 18.6 | $ | (2.4 | ) | $ | — | $ | 33.4 | |||||||||
Interest expense | $ | 5.4 | $ | 0.1 | $ | 20.9 | $ | (0.1 | ) | $ | 26.3 | |||||||||
Income / (loss) from continuing operations before income tax | $ | 34.2 | $ | (12.3 | ) | $ | (19.1 | ) | $ | — | $ | 2.8 | ||||||||
Cash capital expenditures | $ | 24.1 | $ | 13.0 | $ | 0.6 | $ | — | $ | 37.7 | ||||||||||
At December 31, 2016 | ||||||||||||||||||||
Total assets | $ | 1,710.5 | $ | 472.3 | $ | 673.6 | $ | (437.2 | ) | $ | 2,419.2 |
Three months ended March 31, | ||||||
$ in millions | 2016 | |||||
Revenues | $ | — | ||||
Cost of revenues | — | |||||
Operating expenses | (0.7 | ) | ||||
Loss from discontinued operations before income taxes | (0.7 | ) | ||||
Gain from disposal of discontinued operations | 49.2 | |||||
Income tax expense | 18.9 | |||||
Income on discontinued operations | $ | 29.6 |
THE DAYTON POWER AND LIGHT COMPANY | ||||||||
CONDENSED STATEMENTS OF OPERATIONS | ||||||||
Three months ended March 31, | ||||||||
$ in millions | 2017 | 2016 | ||||||
Revenues | $ | 311.1 | $ | 349.2 | ||||
Cost of revenues: | ||||||||
Fuel | 50.1 | 62.9 | ||||||
Purchased power | 100.8 | 121.3 | ||||||
Total cost of revenues | 150.9 | 184.2 | ||||||
Gross margin | 160.2 | 165.0 | ||||||
Operating expenses: | ||||||||
Operation and maintenance | 82.6 | 86.1 | ||||||
Depreciation and amortization | 23.5 | 34.3 | ||||||
General taxes | 23.6 | 20.5 | ||||||
Gain on termination of contract | — | (27.7 | ) | |||||
Fixed-asset impairment | 66.3 | — | ||||||
Loss on asset disposal | 19.4 | 0.1 | ||||||
Total operating expenses | 215.4 | 113.3 | ||||||
Operating income / (loss) | (55.2 | ) | 51.7 | |||||
Other income / (expense), net: | ||||||||
Investment loss | — | (0.1 | ) | |||||
Interest expense | (7.6 | ) | (5.3 | ) | ||||
Other expense, net | (0.9 | ) | (0.2 | ) | ||||
Total other expense, net | (8.5 | ) | (5.6 | ) | ||||
Income / (loss) from operations before income tax | (63.7 | ) | 46.1 | |||||
Income tax expense / (benefit) | (21.9 | ) | 12.4 | |||||
Net income / (loss) | (41.8 | ) | 33.7 | |||||
Dividends on preferred stock | — | 0.2 | ||||||
Income / (loss) attributable to common stock | $ | (41.8 | ) | $ | 33.5 |
THE DAYTON POWER AND LIGHT COMPANY | ||||||||
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME / (LOSS) | ||||||||
Three months ended March 31, | ||||||||
$ in millions | 2017 | 2016 | ||||||
Net income / (loss) | $ | (41.8 | ) | $ | 33.7 | |||
Available-for-sale securities activity: | ||||||||
Change in fair value of available-for-sale securities, net of income tax expense of $0.0 and $(0.1) for each respective period | 0.2 | 0.2 | ||||||
Reclassification to earnings, net of income tax expense of $0.0 and $0.0 for each respective period | (0.1 | ) | (0.1 | ) | ||||
Total change in fair value of available-for-sale securities | 0.1 | 0.1 | ||||||
Derivative activity: | ||||||||
Change in derivative fair value, net of income tax expense of $(2.8) and $(11.6) for each respective period | 5.2 | 21.5 | ||||||
Reclassification to earnings, net of income tax (expense) / benefit of $(0.5) and $4.6 for each respective period | 1.0 | (8.4 | ) | |||||
Total change in fair value of derivatives | 6.2 | 13.1 | ||||||
Pension and postretirement activity: | ||||||||
Prior Service Costs for the period, net of income tax benefit of $0.6 and $0.0 for each respective period | (1.1 | ) | — | |||||
Net loss for period, net of income tax benefit of $0.3 and $0.0 for each respective period | (0.5 | ) | — | |||||
Reclassification to earnings, net of income tax expense of $(1.3) and $(0.8) for each respective period | 2.5 | 0.3 | ||||||
Total change in unfunded pension obligation | 0.9 | 0.3 | ||||||
Other comprehensive income | 7.2 | 13.5 | ||||||
Net comprehensive income / (loss) | $ | (34.6 | ) | $ | 47.2 |
THE DAYTON POWER AND LIGHT COMPANY | ||||||||
CONDENSED BALANCE SHEETS | ||||||||
March 31, | December 31, | |||||||
$ in millions | 2017 | 2016 | ||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 4.9 | $ | 1.6 | ||||
Restricted cash | 8.4 | 29.0 | ||||||
Accounts receivable, net (Note 2) | 110.6 | 134.6 | ||||||
Inventories (Note 2) | 59.5 | 75.8 | ||||||
Taxes applicable to subsequent years | 59.4 | 79.2 | ||||||
Regulatory assets, current | 0.9 | 0.1 | ||||||
Other prepayments and current assets | 33.4 | 32.4 | ||||||
Total current assets | 277.1 | 352.7 | ||||||
Property, plant & equipment: | ||||||||
Property, plant & equipment | 2,348.1 | 2,398.6 | ||||||
Less: Accumulated depreciation and amortization | (1,057.7 | ) | (1,047.9 | ) | ||||
1,290.4 | 1,350.7 | |||||||
Construction work in process | 80.4 | 89.9 | ||||||
Total net property, plant & equipment | 1,370.8 | 1,440.6 | ||||||
Other non-current assets: | ||||||||
Regulatory assets, non-current | 206.0 | 203.9 | ||||||
Intangible assets, net of amortization | 23.2 | 23.0 | ||||||
Other deferred assets | 12.8 | 14.9 | ||||||
Total other non-current assets | 242.0 | 241.8 | ||||||
Total assets | $ | 1,889.9 | $ | 2,035.1 | ||||
LIABILITIES AND SHAREHOLDER'S EQUITY | ||||||||
Current liabilities: | ||||||||
Current portion of long-term debt (Note 7) | $ | 4.7 | $ | 4.7 | ||||
Short-term debt (Note 12) | — | 5.0 | ||||||
Accounts payable | 81.0 | 110.5 | ||||||
Accrued taxes | 62.5 | 75.7 | ||||||
Accrued interest | 0.9 | 2.1 | ||||||
Security deposits | 32.8 | 15.2 | ||||||
Regulatory liabilities, current | 13.7 | 33.7 | ||||||
Other current liabilities | 39.5 | 48.3 | ||||||
Total current liabilities | 235.1 | 295.2 | ||||||
Non-current liabilities: | ||||||||
Long-term debt (Note 7) | 744.0 | 744.7 | ||||||
Deferred taxes | 152.3 | 146.3 | ||||||
Taxes payable | 44.5 | 84.1 | ||||||
Regulatory liabilities, non-current | 131.6 | 130.4 | ||||||
Pension, retiree and other benefits | 100.6 | 101.6 | ||||||
Unamortized investment tax credit | 17.2 | 17.7 | ||||||
Asset retirement obligations | 132.3 | 135.2 | ||||||
Other deferred credits | 13.5 | 17.6 | ||||||
Total non-current liabilities | 1,336.0 | 1,377.6 | ||||||
Commitments and contingencies (Note 11) | ||||||||
Common shareholder's equity: | ||||||||
Common stock, at par value of $0.01 per share | 0.4 | 0.4 | ||||||
Other paid-in capital | 801.8 | 810.7 | ||||||
Accumulated other comprehensive loss | (35.3 | ) | (42.5 | ) | ||||
Accumulated deficit | (448.1 | ) | (406.3 | ) | ||||
Total common shareholder's equity | 318.8 | 362.3 | ||||||
Total liabilities and shareholder's equity | $ | 1,889.9 | $ | 2,035.1 |
THE DAYTON POWER AND LIGHT COMPANY | ||||||||
CONDENSED STATEMENTS OF CASH FLOWS | ||||||||
Three months ended March 31, | ||||||||
$ in millions | 2017 | 2016 | ||||||
Cash flows from operating activities: | ||||||||
Net income / (loss) | $ | (41.8 | ) | $ | 33.7 | |||
Adjustments to reconcile net income / (loss) to net cash from operating activities: | ||||||||
Depreciation and amortization | 23.5 | 34.3 | ||||||
Deferred income taxes | 0.4 | (1.8 | ) | |||||
Fixed-asset impairment | 66.3 | — | ||||||
Loss on asset disposal | 19.4 | 0.1 | ||||||
Changes in certain assets and liabilities: | ||||||||
Accounts receivable | 28.4 | 2.1 | ||||||
Inventories | 0.1 | 19.1 | ||||||
Prepaid taxes | — | 2.7 | ||||||
Taxes applicable to subsequent years | 19.8 | 21.1 | ||||||
Deferred regulatory costs, net | (23.8 | ) | 4.8 | |||||
Accounts payable | (24.6 | ) | (9.8 | ) | ||||
Accrued taxes payable | (52.7 | ) | (28.2 | ) | ||||
Accrued interest payable | (1.3 | ) | (3.1 | ) | ||||
Security deposits | 17.6 | 4.4 | ||||||
Unamortized investment tax credit | (0.5 | ) | — | |||||
Pension, retiree and other benefits | 1.3 | (4.5 | ) | |||||
Other | (9.3 | ) | 8.5 | |||||
Net cash provided by operating activities | 22.8 | 83.4 | ||||||
Cash flows from investing activities: | ||||||||
Capital expenditures | (34.1 | ) | (35.8 | ) | ||||
Purchase of renewable energy credits | (0.1 | ) | (0.1 | ) | ||||
Decrease in restricted cash | 20.6 | 1.4 | ||||||
Insurance proceeds | — | 0.2 | ||||||
Other investing activities, net | 0.2 | 0.5 | ||||||
Net cash used in investing activities | (13.4 | ) | (33.8 | ) | ||||
Cash flows from financing activities: | ||||||||
Dividends paid on preferred stock | — | (0.2 | ) | |||||
Retirement of long-term debt | (1.1 | ) | — | |||||
Issuance of short-term debt - related party | 30.0 | 5.0 | ||||||
Repayment of short-term debt - related party | (35.0 | ) | (35.0 | ) | ||||
Net cash used in financing activities | (6.1 | ) | (30.2 | ) | ||||
Cash and cash equivalents: | ||||||||
Net change | 3.3 | 19.4 | ||||||
Balance at beginning of period | 1.6 | 5.4 | ||||||
Cash and cash equivalents at end of period | $ | 4.9 | $ | 24.8 | ||||
Supplemental cash flow information: | ||||||||
Interest paid, net of amounts capitalized | $ | 7.9 | $ | 7.1 | ||||
Non-cash financing and investing activities: | ||||||||
Accruals for capital expenditures | $ | 8.7 | $ | 12.5 |
Accounting Standard | Description | Date of Adoption | Effect on the financial statements upon adoption |
New Accounting Standards Adopted | |||
2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting | The standard simplifies the following aspects of accounting for share-based payments awards: accounting for income taxes, classification of excess tax benefits on the statement of cash flows, forfeitures, statutory tax withholding requirements, classification of awards as either equity or liabilities and classification of employee taxes paid on statement of cash flows when an employer withholds shares for tax-withholding purposes. Transition method: The recognition of excess tax benefits and tax deficiencies arising from vesting or settlement were applied retrospectively. The elimination of the requirement that excess tax benefits be realized before they are recognized was adopted on a modified retrospective basis with a cumulative adjustment to the opening balance sheet. | January 1, 2017 | The primary effect of adoption was the recognition of excess tax benefits in our provision for income taxes in the period when the awards vest or are settled, rather than in paid-in-capital in the period when the excess tax benefits are realized. We will continue to estimate the number of awards that are expected to vest in our determination of the related periodic compensation cost. The adoption of this standard did not have a material impact on the financial statements. |
New Accounting Standards Issued But Not Yet Effective | |||
2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities | This standard shortens the period of amortization of the premium on certain callable debt securities to the earliest call date. Transition method: modified retrospective. | January 1, 2019. Early adoption is permitted. | We are currently evaluating the impact of adopting the standard on our financial statements. |
2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost | The standard provides guidance on the presentation of net benefit cost in an employer’s income statement and on the components eligible for capitalization. It requires that an employer report the service cost component in the same line item(s) as other employee compensation costs arising from services rendered during the period, and report the other components of net benefit cost separately from the service cost component and outside a subtotal of operating income. Only the service cost component will be eligible for capitalization. Transition method: various. | January 1, 2018. Early adoption is permitted. | We are currently evaluating the impact of adopting the standard on our financial statements. |
2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business | This standard provides guidance to assist the entities with evaluating when a set of transferred assets and activities is a business. Transition method: prospective. | January 1, 2018. Early adoption is permitted | We are currently evaluating the impact of adopting the standard on our financial statements. |
Accounting Standard | Description | Date of Adoption | Effect on the financial statements upon adoption |
2016-18, Statement of Cash Flows (Topic 320): Restricted Cash (a consensus of the FASB Emerging Issues Task Force) | This standard requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. Transition method: retrospective. | January 1, 2018. Early adoption is permitted | We are currently evaluating the impact of adopting the standard on our financial statements. |
2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory | This standard requires that an entity recognizes the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Transition method: modified retrospective method. | January 1, 2018. Early adoption is permitted. | We are currently evaluating the impact of adopting the standard on our financial statements. |
2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Receipts and Cash Payments (a consensus of the Emerging Issues Task Force) | This standard provides specific guidance on how certain cash transactions are presented and classified in the statement of cash flows. Transition method: retrospective method | January 1, 2018. Early adoption is permitted. | We are currently evaluating the impact of adopting the standard on our financial statements but do not anticipate a material impact. |
2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments | This standard updates the impairment model for financial assets measured at amortized cost to an expected loss model rather than an incurred loss model. It also allows for the presentation of credit losses on available-for-sale debt securities as an allowance rather than a write down. Transition method: various. | January 1, 2020. Early adoption is permitted only as of January 1, 2019. | We are currently evaluating the impact of adopting the standard on our financial statements. |
2016-02, Leases (Topic 842) | The standard creates Topic 842, Leases which supersedes Topic 840, Leases, and introduces a lessee model that brings substantially all leases onto the balance sheet while retaining most of the principles of the existing lessor model in U.S. GAAP and aligning many of those principles with ASC 606, Revenue from Contracts with Customers. Transition method: modified retrospective approach with certain practical expedients. | January 1, 2019. Early adoption is permitted. | We are currently evaluating the impact of adopting the standard on our financial statements. |
2014-09, 2015-14, 2016-08, 2016-10, 2016-12, 2016-20, 2017-05 Revenue from Contracts with Customers (Topic 606) | See discussion of the ASUs below. | January 1, 2018. Earlier application is permitted only as of January 1, 2017. | We will adopt the standard on January 1, 2018; see below for the evaluation of the impact of its adoption on the financial statements. |
March 31, | December 31, | |||||||
$ in millions | 2017 | 2016 | ||||||
Accounts receivable, net: | ||||||||
Unbilled revenue | $ | 14.7 | $ | 43.0 | ||||
Customer receivables | 65.2 | 71.2 | ||||||
Amounts due from partners in jointly owned plants | 6.6 | 12.7 | ||||||
Amounts due from affiliates | 14.8 | 2.9 | ||||||
Other | 10.3 | 6.0 | ||||||
Provision for uncollectible accounts | (1.0 | ) | (1.2 | ) | ||||
Total accounts receivable, net | $ | 110.6 | $ | 134.6 | ||||
Inventories, at average cost: | ||||||||
Fuel and limestone | $ | 38.8 | $ | 38.8 | ||||
Plant materials and supplies | 19.2 | 35.3 | ||||||
Other | 1.5 | 1.7 | ||||||
Total inventories, at average cost | $ | 59.5 | $ | 75.8 |
Details about Accumulated Other Comprehensive Income / (Loss) components | Affected line item in the Condensed Statements of Operations | Three months ended | ||||||||
March 31, | ||||||||||
$ in millions | 2017 | 2016 | ||||||||
Gains and losses on Available-for-sale securities activity (Note 5): | ||||||||||
Other income | $ | (0.1 | ) | $ | (0.1 | ) | ||||
Gains and losses on cash flow hedges (Note 6): | ||||||||||
Interest expense | (0.3 | ) | (0.3 | ) | ||||||
Revenue | (1.5 | ) | (17.1 | ) | ||||||
Purchased power | 3.3 | 4.4 | ||||||||
Total before income taxes | 1.5 | (13.0 | ) | |||||||
Tax expense / (benefit) | (0.5 | ) | 4.6 | |||||||
Net of income taxes | 1.0 | (8.4 | ) | |||||||
Amortization of defined benefit pension items (Note 9): | ||||||||||
Operation and maintenance | 3.8 | 1.1 | ||||||||
Tax benefit | (1.3 | ) | (0.8 | ) | ||||||
Net of income taxes | 2.5 | 0.3 | ||||||||
Total reclassifications for the period, net of income taxes | $ | 3.4 | $ | (8.2 | ) |
$ in millions | Gains / (losses) on available-for-sale securities | Gains / (losses) on cash flow hedges | Change in unfunded pension obligation | Total | ||||||||||||
Balance January 1, 2017 | $ | 0.7 | $ | (2.7 | ) | $ | (40.5 | ) | $ | (42.5 | ) | |||||
Other comprehensive income / (loss) before reclassifications | 0.2 | 5.2 | (1.6 | ) | 3.8 | |||||||||||
Amounts reclassified from accumulated other comprehensive income / (loss) | (0.1 | ) | 1.0 | 2.5 | 3.4 | |||||||||||
Net current period other comprehensive income | 0.1 | 6.2 | 0.9 | 7.2 | ||||||||||||
Balance March 31, 2017 | $ | 0.8 | $ | 3.5 | $ | (39.6 | ) | $ | (35.3 | ) |
• | Bypassable standard offer energy rates for DP&L’s customers based on competitive bid auctions; |
• | The establishment of a three-year non-bypassable DMR designed to collect $105.0 million in revenue per year to pay debt obligations at DPL and DP&L and position DP&L to modernize and/or maintain its transmission and distribution infrastructure. With PUCO approval, DP&L may have the option of extending the duration of the DMR for an additional two years; |
• | The establishment of a non-bypassable Distribution Investment Rider, set initially at zero, to recover incremental distribution capital investments; |
• | The establishment of a Smart Grid Rider, set initially at zero, to recover costs of future grid modernization; |
• | A commitment by us to separate DP&L’s generation assets from its transmission and distribution assets (if approved by FERC) within 180 days after receipt of a PUCO order; |
• | A commitment to commence a sale process to sell our ownership interests in the Zimmer, Miami Fort and Conesville coal-fired generation plants; and |
• | Restrictions on DPL making dividend or tax sharing payments, and various other riders and competitive retail market enhancements. |
DP&L Share | DP&L Carrying Value | ||||||||||||||||
Ownership % | Summer Production Capacity (MW) | Gross Plant In Service ($ in millions) | Accumulated Depreciation ($ in millions) | Construction Work in Process ($ in millions) | |||||||||||||
Jointly-owned production units | |||||||||||||||||
Conesville - Unit 4 | 16.5 | 129 | $ | — | $ | — | $ | — | |||||||||
Killen - Unit 2 | 67.0 | 402 | 7.0 | 1.0 | 1.0 | ||||||||||||
Miami Fort - Units 7 and 8 | 36.0 | 368 | 28.0 | 1.0 | 5.0 | ||||||||||||
Stuart - Units 1 through 4 | 35.0 | 808 | 1.0 | 1.0 | — | ||||||||||||
Zimmer - Unit 1 | 28.1 | 371 | 12.0 | 1.0 | 5.0 | ||||||||||||
Transmission (at varying percentages) | 99.0 | 67.0 | — | ||||||||||||||
Total | 2,078 | $ | 147.0 | $ | 71.0 | $ | 11.0 |
$ in millions | |||
Balance January 1, 2017 | $ | 135.2 | |
Revisions to cash flow and timing estimates | (4.4 | ) | |
Accretion expense | 1.4 | ||
Settlements | 0.1 | ||
Balance March 31, 2017 | $ | 132.3 |
March 31, 2017 | December 31, 2016 | |||||||||||||||
$ in millions | Cost | Fair Value | Cost | Fair Value | ||||||||||||
Assets | ||||||||||||||||
Money market funds | $ | 0.3 | $ | 0.3 | $ | 0.4 | $ | 0.4 | ||||||||
Equity securities | 2.6 | 3.9 | 2.4 | 3.4 | ||||||||||||
Debt securities | 4.3 | 4.3 | 4.4 | 4.4 | ||||||||||||
Hedge funds | 0.1 | 0.1 | — | 0.1 | ||||||||||||
Real estate | — | — | 0.3 | 0.3 | ||||||||||||
Tangible assets | 0.1 | 0.1 | 0.1 | 0.1 | ||||||||||||
Total assets | $ | 7.4 | $ | 8.7 | $ | 7.6 | $ | 8.7 | ||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||
Liabilities | ||||||||||||||||
Debt (a) | $ | 748.3 | $ | 762.3 | $ | 749.0 | $ | 763.5 |
(a) | Amounts exclude immaterial capital lease obligations |
• | Level 1 (quoted prices in active markets for identical assets or liabilities); |
• | Level 2 (observable inputs such as quoted prices for similar assets or liabilities or quoted prices in markets that are not active); or |
• | Level 3 (unobservable inputs). |
Assets and Liabilities at Fair Value | ||||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||
$ in millions | Fair value at March 31, 2017 | Based on Quoted Prices in Active Markets | Other Observable Inputs | Unobservable Inputs | ||||||||||||
Assets | ||||||||||||||||
Master Trust assets | ||||||||||||||||
Money market funds | $ | 0.3 | $ | 0.3 | $ | — | $ | — | ||||||||
Equity securities | 3.9 | — | 3.9 | — | ||||||||||||
Debt securities | 4.3 | — | 4.3 | — | ||||||||||||
Hedge funds | 0.1 | — | 0.1 | — | ||||||||||||
Tangible assets | 0.1 | — | 0.1 | — | ||||||||||||
Total Master Trust assets | 8.7 | 0.3 | 8.4 | — | ||||||||||||
Derivative assets | ||||||||||||||||
Natural gas futures | 0.3 | 0.3 | — | — | ||||||||||||
Interest rate hedges | 1.4 | — | 1.4 | — | ||||||||||||
Forward power contracts | 19.0 | — | 19.0 | — | ||||||||||||
Total derivative assets | 20.7 | 0.3 | 20.4 | — | ||||||||||||
Total assets | $ | 29.4 | $ | 0.6 | $ | 28.8 | $ | — | ||||||||
Liabilities | ||||||||||||||||
Derivative liabilities | ||||||||||||||||
Interest rate hedges | $ | 0.3 | $ | — | $ | 0.3 | $ | — | ||||||||
Natural gas futures | 0.5 | 0.5 | — | — | ||||||||||||
Forward power contracts | 18.1 | — | 17.0 | 1.1 | ||||||||||||
Total derivative liabilities | 18.9 | 0.5 | 17.3 | 1.1 | ||||||||||||
Debt | 762.3 | — | 744.4 | 17.9 | ||||||||||||
Total liabilities | $ | 781.2 | $ | 0.5 | $ | 761.7 | $ | 19.0 |
Assets and Liabilities at Fair Value | ||||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||
$ in millions | Fair value at December 31, 2016 | Based on Quoted Prices in Active Markets | Other Observable Inputs | Unobservable Inputs | ||||||||||||
Assets | ||||||||||||||||
Master Trust assets | ||||||||||||||||
Money market funds | $ | 0.4 | $ | 0.4 | $ | — | $ | — | ||||||||
Equity securities | 3.4 | — | 3.4 | — | ||||||||||||
Debt securities | 4.4 | — | 4.4 | — | ||||||||||||
Hedge funds | 0.1 | — | 0.1 | — | ||||||||||||
Real estate | 0.3 | — | 0.3 | — | ||||||||||||
Tangible assets | 0.1 | 0.1 | — | |||||||||||||
Total Master Trust assets | 8.7 | 0.4 | 8.3 | — | ||||||||||||
Derivative assets | ||||||||||||||||
FTRs | 0.1 | — | — | 0.1 | ||||||||||||
Interest rate hedges | 1.2 | — | 1.2 | — | ||||||||||||
Forward power contracts | 19.5 | — | 19.5 | — | ||||||||||||
Total Derivative assets | 20.8 | — | 20.7 | 0.1 | ||||||||||||
Total assets | $ | 29.5 | $ | 0.4 | $ | 29.0 | $ | 0.1 | ||||||||
Liabilities | ||||||||||||||||
Derivative liabilities | ||||||||||||||||
Interest rate hedges | $ | 0.7 | $ | — | $ | 0.7 | $ | — | ||||||||
Forward power contracts | 28.5 | — | 26.0 | 2.5 | ||||||||||||
Total Derivative liabilities | 29.2 | — | 26.7 | 2.5 | ||||||||||||
Debt | 763.5 | — | 745.5 | 18.0 | ||||||||||||
Total liabilities | $ | 792.7 | $ | — | $ | 772.2 | $ | 20.5 |
• | Level 1 inputs are used for derivative contracts such as natural gas futures and for money market accounts that are considered cash equivalents. The fair value is determined by reference to quoted market prices and other relevant information generated by market transactions. |
• | Level 2 inputs are used to value derivatives such as forward power contracts (which are traded on the OTC market but which are valued using prices on the NYMEX for similar contracts on the OTC market). Other Level 2 assets include open-ended mutual funds that are in the Master Trust, which are valued using observable prices based on the end of day net asset value per unit. |
• | Level 3 inputs such as FTRs are considered a Level 3 input because the monthly auctions are considered inactive. Other Level 3 inputs include the credit valuation adjustment on some of the forward power contracts and forward power contracts in less active markets. Our Level 3 inputs are immaterial to our derivative balances as a whole and as such no further disclosures are presented. |
$ in millions | Three months ended March 31, 2017 | |||||||||||||||||||
Carrying | Fair Value | Gross | ||||||||||||||||||
Amount (b) | Level 1 | Level 2 | Level 3 | Loss | ||||||||||||||||
Assets | ||||||||||||||||||||
Long-lived assets (a) | ||||||||||||||||||||
Stuart | $ | 42.3 | $ | — | $ | — | $ | 3.3 | $ | 39.0 | ||||||||||
Killen | $ | 35.2 | $ | — | $ | — | $ | 7.9 | $ | 27.3 |
$ in millions | Fair value | Valuation technique | Unobservable input | Weighted average | |||||||
Long-lived assets held and used: | |||||||||||
Stuart | $ | 3.3 | Discounted cash flow | Pre-tax operating margin (through remaining life) | 10 | % | |||||
Weighted-average cost of capital | 7% | ||||||||||
Killen | $ | 7.9 | Discounted cash flow | Pre-tax operating margin (through remaining life) | 22 | % | |||||
Weighted-average cost of capital | 7% |
Commodity | Accounting Treatment (a) | Unit | Purchases (in thousands) | Sales (in thousands) | Net Purchases/ (Sales) (in thousands) | |||||||||||
FTRs | Not designated | MWh | 0.9 | — | 0.9 | |||||||||||
Natural gas futures | Not designated | Dths | 17,127.5 | — | 17,127.5 | |||||||||||
Forward power contracts | Designated | MWh | 1,276.6 | (6,250.9 | ) | (4,974.3 | ) | |||||||||
Forward power contracts | Not designated | MWh | 1,727.3 | (2,057.9 | ) | (330.6 | ) | |||||||||
Interest rate swaps | Designated | USD | $ | 200,000.0 | $ | — | $ | 200,000.0 |
Commodity | Accounting Treatment (a) | Unit | Purchases (in thousands) | Sales (in thousands) | Net Purchases/ (Sales) (in thousands) | |||||||||||
FTRs | Not designated | MWh | 2.3 | — | 2.3 | |||||||||||
Natural gas futures | Not designated | Dths | 1,590.0 | — | 1,590.0 | |||||||||||
Forward power contracts | Designated | MWh | 342.9 | (9,974.5 | ) | (9,631.6 | ) | |||||||||
Forward power contracts | Not designated | MWh | 2,568.3 | (2,037.5 | ) | 530.8 | ||||||||||
Interest rate swaps | Designated | USD | $ | 200,000.0 | $ | — | $ | 200,000.0 |
Three months ended | Three months ended | |||||||||||||||
March 31, 2017 | March 31, 2016 | |||||||||||||||
Interest | Interest | |||||||||||||||
$ in millions (net of tax) | Power | Rate Hedge | Power | Rate Hedge | ||||||||||||
Beginning accumulated derivative gains / (losses) in AOCI | $ | (4.3 | ) | $ | 1.6 | $ | 9.2 | $ | 2.0 | |||||||
Net gains associated with current period hedging transactions | 4.9 | 0.3 | 21.5 | — | ||||||||||||
Net gains / (losses) reclassified to earnings | ||||||||||||||||
Interest expense | — | (0.2 | ) | — | (0.2 | ) | ||||||||||
Revenues | (0.9 | ) | — | (11.0 | ) | — | ||||||||||
Purchased power | 2.1 | — | 2.8 | — | ||||||||||||
Ending accumulated derivative gains in AOCI | $ | 1.8 | $ | 1.7 | $ | 22.5 | $ | 1.8 | ||||||||
Portion expected to be reclassified to earnings in the next twelve months (a) | $ | 2.0 | $ | (0.2 | ) | |||||||||||
Maximum length of time that we are hedging our exposure to variability in future cash flows related to forecasted transactions (in months) | 17 | 41 |
(a) | The actual amounts that we reclassify from AOCI to earnings related to power can differ from the estimate above due to market price changes. |
For the three months ended March 31, 2017 | ||||||||||||||||
$ in millions | FTRs | Power | Natural Gas | Total | ||||||||||||
Change in unrealized loss | $ | — | $ | (0.1 | ) | $ | (0.1 | ) | $ | (0.2 | ) | |||||
Realized gain / (loss) | 0.2 | (2.6 | ) | (0.2 | ) | (2.6 | ) | |||||||||
Total | $ | 0.2 | $ | (2.7 | ) | $ | (0.3 | ) | $ | (2.8 | ) | |||||
Recorded in Income Statement: gain / (loss) | ||||||||||||||||
Revenues | $ | — | $ | (6.7 | ) | $ | — | $ | (6.7 | ) | ||||||
Purchased power | 0.2 | 4.0 | (0.3 | ) | 3.9 | |||||||||||
Total | $ | 0.2 | $ | (2.7 | ) | $ | (0.3 | ) | $ | (2.8 | ) |
For the three months ended March 31, 2016 | ||||||||||||||||
$ in millions | FTRs | Power | Natural Gas | Total | ||||||||||||
Change in unrealized gain / (loss) | $ | 0.1 | $ | (1.9 | ) | (0.2 | ) | $ | (2.0 | ) | ||||||
Realized gain / (loss) | 0.2 | (0.3 | ) | (0.2 | ) | (0.3 | ) | |||||||||
Total | $ | 0.3 | $ | (2.2 | ) | $ | (0.4 | ) | $ | (2.3 | ) | |||||
Recorded in Income Statement: gain / (loss) | ||||||||||||||||
Revenues | — | (1.4 | ) | — | (1.4 | ) | ||||||||||
Purchased power | 0.3 | (0.8 | ) | (0.4 | ) | (0.9 | ) | |||||||||
Total | $ | 0.3 | $ | (2.2 | ) | $ | (0.4 | ) | $ | (2.3 | ) |
Fair Values of Derivative Instruments | ||||||||||||||||||
at March 31, 2017 | ||||||||||||||||||
Gross Amounts Not Offset in the Condensed Balance Sheets | ||||||||||||||||||
$ in millions | Hedging Designation | Gross Fair Value as presented in the Condensed Balance Sheets | Financial Instruments with Same Counterparty in Offsetting Position | Cash Collateral | Net Balance Fair Value | |||||||||||||
Assets | ||||||||||||||||||
Short-term derivative positions (presented in Other prepayments and current assets) | ||||||||||||||||||
Forward power contracts | Designated | $ | 12.7 | $ | (8.6 | ) | $ | — | $ | 4.1 | ||||||||
Forward power contracts | Not designated | 6.2 | (5.5 | ) | — | 0.7 | ||||||||||||
Natural gas futures | Not designated | 0.3 | (0.2 | ) | — | 0.1 | ||||||||||||
Long-term derivative positions (presented in Other deferred assets) | ||||||||||||||||||
Interest rate swaps | Designated | 1.4 | — | — | 1.4 | |||||||||||||
Forward power contracts | Not designated | 0.1 | (0.1 | ) | — | — | ||||||||||||
Total assets | $ | 20.7 | $ | (14.4 | ) | $ | — | $ | 6.3 | |||||||||
Liabilities | ||||||||||||||||||
Short-term derivative positions (presented in Other current liabilities) | ||||||||||||||||||
Forward power contracts | Designated | $ | 9.7 | $ | (8.6 | ) | $ | — | $ | 1.1 | ||||||||
Interest rate swaps | Designated | 0.3 | — | — | 0.3 | |||||||||||||
Forward power contracts | Not designated | 8.1 | (5.5 | ) | (0.1 | ) | 2.5 | |||||||||||
Natural gas futures | Not designated | 0.2 | (0.2 | ) | — | — | ||||||||||||
Long-term derivative positions (presented in Other deferred credits) | ||||||||||||||||||
Forward power contracts | Designated | 0.1 | — | (0.1 | ) | — | ||||||||||||
Natural gas futures | Not designated | 0.3 | — | (0.3 | ) | — | ||||||||||||
Forward power contracts | Not designated | 0.2 | (0.1 | ) | — | 0.1 | ||||||||||||
Total liabilities | $ | 18.9 | $ | (14.4 | ) | $ | (0.5 | ) | $ | 4.0 |
Fair Values of Derivative Instruments | ||||||||||||||||||
at December 31, 2016 | ||||||||||||||||||
Gross Amounts Not Offset in the Condensed Balance Sheets | ||||||||||||||||||
$ in millions | Hedging Designation | Gross Fair Value as presented in the Condensed Balance Sheets | Financial Instruments with Same Counterparty in Offsetting Position | Cash Collateral | Net Balance Fair Value | |||||||||||||
Assets | ||||||||||||||||||
Short-term derivative positions (presented in Other prepayments and current assets) | ||||||||||||||||||
Forward power contracts | Designated | $ | 11.0 | $ | (10.5 | ) | $ | — | $ | 0.5 | ||||||||
Forward power contracts | Not designated | 6.0 | (4.7 | ) | — | 1.3 | ||||||||||||
FTRs | Not designated | 0.1 | — | — | 0.1 | |||||||||||||
Long-term derivative positions (presented in Other deferred assets) | ||||||||||||||||||
Interest rate swaps | Designated | 1.2 | — | — | 1.2 | |||||||||||||
Forward power contracts | Designated | 0.6 | (0.6 | ) | — | — | ||||||||||||
Forward power contracts | Not designated | 1.9 | (1.0 | ) | — | 0.9 | ||||||||||||
Total assets | $ | 20.8 | $ | (16.8 | ) | $ | — | $ | 4.0 | |||||||||
Liabilities | ||||||||||||||||||
Short-term derivative positions (presented in Other current liabilities) | ||||||||||||||||||
Forward power contracts | Designated | $ | 16.4 | $ | (10.5 | ) | $ | (5.5 | ) | $ | 0.4 | |||||||
Interest rate swaps | Designated | 0.7 | — | — | 0.7 | |||||||||||||
Forward power contracts | Not designated | 7.7 | (4.7 | ) | — | 3.0 | ||||||||||||
Long-term derivative positions (presented in Other deferred credits) | ||||||||||||||||||
Forward power contracts | Designated | 2.4 | (0.6 | ) | (0.8 | ) | 1.0 | |||||||||||
Forward power contracts | Not designated | 2.0 | (1.0 | ) | — | 1.0 | ||||||||||||
Total liabilities | $ | 29.2 | $ | (16.8 | ) | $ | (6.3 | ) | $ | 6.1 |
Interest | March 31, | December 31, | ||||||||||
$ in millions | Rate | Maturity | 2017 | 2016 | ||||||||
Term loan - rates from 4.01% - 4.04% (a) and 4.00% - 4.01% (b) | 2022 | $ | 443.9 | $ | 445.0 | |||||||
Tax-exempt First Mortgage Bonds | 4.8% | 2036 | 100.0 | 100.0 | ||||||||
Tax-exempt First Mortgage Bonds - rates from 1.52% - 1.53% (a) and 1.29% - 1.42% (b) | 2020 | 200.0 | 200.0 | |||||||||
U.S. Government note | 4.2% | 2061 | 17.9 | 18.0 | ||||||||
Capital leases | 0.4 | 0.4 | ||||||||||
Unamortized deferred financing costs | (11.5 | ) | (11.8 | ) | ||||||||
Unamortized debt discount | (2.0 | ) | (2.2 | ) | ||||||||
Total long-term debt | 748.7 | 749.4 | ||||||||||
Less: current portion | (4.7 | ) | (4.7 | ) | ||||||||
Long-term debt, net of current portion | $ | 744.0 | $ | 744.7 |
Three months ended | ||||
March 31, | ||||
2017 | 2016 | |||
DP&L | 34.4% | 26.9% |
Net Periodic Benefit Cost | Pension | |||||||
Three months ended | ||||||||
March 31, | ||||||||
$ in millions | 2017 | 2016 | ||||||
Service cost | $ | 1.4 | $ | 1.4 | ||||
Interest cost | 3.6 | 3.7 | ||||||
Expected return on plan assets | (5.7 | ) | (5.7 | ) | ||||
Plan curtailment (a) | 5.6 | — | ||||||
Amortization of unrecognized: | ||||||||
Prior service cost | 0.5 | 0.8 | ||||||
Actuarial loss | 2.2 | 1.8 | ||||||
Net periodic benefit cost | $ | 7.6 | $ | 2.0 |
(a) | As a result of the decision to retire certain of DP&L's coal-fired plants, we recognized a plan curtailment of $5.6 million in the first quarter of 2017. See Note 14 – Fixed-asset Impairment for more information. |
$ in millions | ||||
Estimated to be paid during the twelve months ending March 31, | Pension | |||
2018 | $ | 18.8 | ||
2019 | 25.5 | |||
2020 | 26.0 | |||
2021 | 26.4 | |||
2022 | 26.7 | |||
2023 - 2027 | 139.6 |
• | The federal CAA and state laws and regulations (including State Implementation Plans) which require compliance, obtaining permits and reporting as to air emissions; |
• | Litigation with federal and certain state governments and certain special interest groups regarding whether modifications to or maintenance of certain coal-fired generating stations require additional permitting or pollution control technology, or whether emissions from coal-fired generating stations cause or contribute to climate change; |
• | Rules and future rules issued by the USEPA and the Ohio EPA that require or will require substantial reductions in SO2, particulates, mercury, acid gases, NOx, and other air emissions. DP&L has installed emission control technology and is taking other measures to comply with required and anticipated reductions; |
• | Rules and future rules issued by the USEPA, the Ohio EPA or other authorities that require or will require reporting and reductions of GHGs; |
• | Rules and future rules issued by the USEPA associated with the federal Clean Water Act, which prohibits the discharge of pollutants into waters of the United States except pursuant to appropriate permits; and |
• | Solid and hazardous waste laws and regulations, which govern the management and disposal of certain waste. The majority of solid waste created from the combustion of coal and fossil fuels consists of fly ash and other coal combustion by-products. |
Three months ended | ||||||||
March 31, | ||||||||
$ in millions | 2017 | 2016 | ||||||
DP&L Operation & Maintenance Expenses: | ||||||||
Premiums paid for insurance services provided by MVIC (a) | $ | (0.8 | ) | $ | (0.9 | ) | ||
Transactions with the Service Company: | ||||||||
Charges for services provided | $ | 13.0 | $ | 8.9 | ||||
Charges to the Service Company | $ | 1.0 | $ | 1.2 | ||||
Transactions with other AES affiliates: | ||||||||
Charges for health, welfare and benefit plans | $ | 4.1 | $ | 4.1 | ||||
Balances with related parties: | At March 31, 2017 | At December 31, 2016 | ||||||
Net payable to the Service Company | $ | — | $ | (2.0 | ) | |||
Short-term loan with DPL (b) | $ | — | $ | 5.0 | ||||
Net prepayment with / (payable to) other AES affiliates | $ | 5.0 | $ | (2.5 | ) |
(a) | MVIC, a wholly-owned captive insurance subsidiary of DPL, provides insurance coverage to DP&L and other DPL subsidiaries for workers’ compensation, general liability, property damages and directors’ and officers’ liability. These amounts represent insurance premiums paid by DP&L to MVIC. DP&L received insurance proceeds from MVIC of $0.0 million and $0.2 million for the three months ended March 31, 2017 and 2016, respectively. |
(b) | On December 31, 2016, DPL loaned $5.0 million to DP&L through an intercompany short-term loan at 3.02%. |
$ in millions | T&D | Generation | Adjustments and Eliminations | DP&L Total | ||||||||||||
Three months ended March 31, 2017 | ||||||||||||||||
Revenues from external customers | $ | 190.1 | $ | 121.0 | $ | — | $ | 311.1 | ||||||||
Intersegment revenues | — | — | — | — | ||||||||||||
Total revenues | $ | 190.1 | $ | 121.0 | $ | — | $ | 311.1 | ||||||||
Depreciation and amortization | $ | 18.1 | $ | 5.4 | $ | — | $ | 23.5 | ||||||||
Fixed-asset impairment (Note 14) | $ | — | $ | 66.3 | $ | — | $ | 66.3 | ||||||||
Interest expense | $ | 7.4 | $ | 0.2 | $ | — | $ | 7.6 | ||||||||
Income / (loss) from operations before income tax | $ | 25.0 | $ | (88.7 | ) | $ | — | $ | (63.7 | ) | ||||||
Cash capital expenditures | $ | 26.3 | $ | 7.8 | $ | — | $ | 34.1 | ||||||||
At March 31, 2017 | ||||||||||||||||
Total assets | $ | 1,680.9 | $ | 209.0 | $ | — | $ | 1,889.9 |
$ in millions | T&D | Generation | Adjustments and Eliminations | DP&L Total | ||||||||||||
Three months ended March 31, 2016 | ||||||||||||||||
Revenues from external customers | $ | 204.5 | $ | 144.7 | $ | — | $ | 349.2 | ||||||||
Intersegment revenues | — | — | — | — | ||||||||||||
Total revenues | $ | 204.5 | $ | 144.7 | $ | — | $ | 349.2 | ||||||||
Depreciation and amortization | $ | 17.2 | $ | 17.1 | $ | — | $ | 34.3 | ||||||||
Interest expense | $ | 5.2 | $ | 0.1 | $ | — | $ | 5.3 | ||||||||
Income from operations before income tax | $ | 34.4 | $ | 11.7 | $ | — | $ | 46.1 | ||||||||
Cash capital expenditures | $ | 24.1 | $ | 11.7 | $ | — | $ | 35.8 | ||||||||
At December 31, 2016 | ||||||||||||||||
Total assets | $ | 1,710.5 | $ | 324.6 | $ | — | $ | 2,035.1 |
• | Review of Results of Operations |
◦ | DPL |
▪ | DPL - T&D Segment |
▪ | DPL - Generation Segment |
◦ | DP&L |
▪ | DP&L - T&D Segment |
▪ | DP&L - Generation Segment |
• | Key Trends and Uncertainties |
• | Capital Resources and Liquidity |
• | Critical Accounting Estimates |
• | water intake regulations finalized by the USEPA on May 19, 2014; |
• | the appeal of the NPDES permit governing the discharge of water from the Stuart station; and |
• | revised technology-based regulations governing water discharges from steam electric generating facilities, finalized by the USEPA on November 3, 2015. |
Three months ended March 31, | ||||||||
$ in millions | 2017 | 2016 | ||||||
Revenues: | ||||||||
Retail | $ | 171.9 | $ | 187.2 | ||||
Wholesale | 103.1 | 122.4 | ||||||
RTO revenues | 14.0 | 15.6 | ||||||
RTO capacity revenues | 32.1 | 36.5 | ||||||
Other revenues | 2.8 | 2.3 | ||||||
Total revenues | 323.9 | 364.0 | ||||||
Cost of revenues: | ||||||||
Fuel costs | 54.4 | 68.6 | ||||||
Gains from the sale of coal | (0.3 | ) | (1.7 | ) | ||||
Total fuel | 54.1 | 66.9 | ||||||
Purchased power | 77.4 | 91.2 | ||||||
RTO charges | 21.1 | 20.8 | ||||||
RTO capacity charges | 3.2 | 8.4 | ||||||
Mark-to-market losses | 0.3 | 1.5 | ||||||
Total purchased power | 102.0 | 121.9 | ||||||
Total cost of revenues | 156.1 | 188.8 | ||||||
Gross margin | 167.8 | 175.2 | ||||||
Operating expenses: | ||||||||
Operation and maintenance | 86.3 | 88.5 | ||||||
Depreciation and amortization | 28.0 | 33.4 | ||||||
General taxes | 24.2 | 21.0 | ||||||
Fixed asset impairment | 66.4 | — | ||||||
Loss on asset disposal | 19.4 | 0.1 | ||||||
Other | (1.2 | ) | — | |||||
Total operating expenses | 223.1 | 143.0 | ||||||
Operating income / (loss) | (55.3 | ) | 32.2 | |||||
Other income / (expense), net: | ||||||||
Investment income / (loss) | — | (0.1 | ) | |||||
Interest expense | (26.9 | ) | (26.3 | ) | ||||
Charge for early retirement of debt | — | (2.6 | ) | |||||
Other deductions | (1.0 | ) | (0.4 | ) | ||||
Total other expense, net | (27.9 | ) | (29.4 | ) | ||||
Income / (loss) from continuing operations before income tax (a) | $ | (83.2 | ) | $ | 2.8 |
(a) | For purposes of discussing operating results, we present and discuss Income / (loss) from continuing operations before income tax. This format is useful to investors because it allows analysis and comparability of operating trends and includes the same information that is used by management to make decisions regarding our financial performance. |
Three months ended March 31, | ||||||
2017 | 2016 | |||||
Heating degree days (a) | 2,292 | 2,576 | ||||
Cooling degree days (a) | 2 | — |
(a) | Heating and cooling degree days are a measure of the relative heating or cooling required for a home or business. The heating degrees in a day are calculated as the difference of the average actual daily temperature below 65 degrees Fahrenheit. For example, if the average temperature on March 20th was 40 degrees Fahrenheit, the heating degrees for that day would be the 25 degree difference between 65 degrees and 40 degrees. In a similar manner, cooling degrees in a day are the difference of the average actual daily temperature in excess of 65 degrees Fahrenheit. |
Three months ended | ||||
March 31, | ||||
$ in millions | 2017 v 2016 | |||
Retail | ||||
Rate | $ | (4.7 | ) | |
Volume | (14.0 | ) | ||
Other miscellaneous | 3.4 | |||
Total retail change | (15.3 | ) | ||
Wholesale | ||||
Rate | (11.3 | ) | ||
Volume | (8.0 | ) | ||
Total wholesale change | (19.3 | ) | ||
RTO revenues and RTO capacity revenues | ||||
RTO revenues and RTO capacity revenues | (6.0 | ) | ||
Other | ||||
Other revenues | 0.5 | |||
Total revenues change | $ | (40.1 | ) |
• | Retail revenues decreased $15.3 million primarily due to lower DP&L retail volumes and lower average DP&L retail rates. The decrease in retail volume was primarily driven by warmer weather in 2017 as heating degree days decreased by 284 degree days. The decrease in average retail rates was primarily |
• | Wholesale revenues decreased $19.3 million primarily as a result of an unfavorable $11.3 million wholesale price variance and an unfavorable $8.0 million wholesale volume variance. Despite year over year increases in PJM market prices, our average wholesale rates decreased due to higher rates on contracted sales to serve the load of other parties in 2016 as well as hedged transactions in both years. The decrease in wholesale volumes of $8.0 million was primarily driven by a decrease in the load served of other parties through their competitive bid process and a 2% decrease in internal generation at DPL's plants in 2017. |
• | RTO capacity and other revenues, consisting primarily of compensation for use of DP&L’s transmission assets, regulation services, reactive supply and operating reserves, and capacity payments under the RPM construct, decreased $6.0 million compared to same period in the prior year. This decrease was the result of a $4.4 million decrease in revenue realized from the PJM capacity auction in 2017 primarily due to lower prices in both the CP and RPM auctions. The capacity price that became effective in June of 2016 was $134/MW-day, compared to $136/MW-day in June of 2015. There was also a $1.6 million decrease in RTO transmission and congestion revenue, as 2017 congestion revenue charges were lower due to milder winter weather in 2017 than 2016. |
• | Net fuel costs, which include coal, gas, oil and emission allowance costs, decreased $12.8 million compared to the same period in the prior year primarily due to a 19% decrease in average fuel cost per MWh and a 2% decrease in internal generation. In addition, there were fuel costs deferred in 2015, which were expensed in 2016 because they were collected in 2016. There were no fuel costs deferred or collected in the first quarter of 2017. |
• | Net purchased power decreased $19.9 million compared to the same period in the prior year. This decrease was driven by the following factors: |
◦ | Purchased power decreased $13.8 million primarily due to a $13.9 million volume decrease primarily driven by a lower load served through the competitive bid process of other parties compared to 2016, as well as the decrease in DP&L retail demand in 2017. |
◦ | RTO charges increased $0.3 million compared to the same period in the prior year. RTO charges are incurred by DP&L as a member of PJM and primarily include transmission charges within our network, which are incurred and charged to customers in the TCRR-N rider, transmission and congestion losses incurred on DP&L's wholesale revenues, and costs associated with load obligations for retail customers. |
◦ | RTO capacity charges decreased $5.2 million compared to the same period in the prior year primarily due to a lower retail load served in 2017 as well as a $1.7 million PJM penalty incurred in March 2016 associated with low plant availability. Retail load served relates to the load of other parties through their competitive bid process. As noted in the revenue section above, RTO capacity prices are set by an annual auction. |
◦ | Mark-to-market losses decreased $1.2 million due to less significant changes in power prices in 2017. |
Three months ended | ||||
March 31, | ||||
$ in millions | 2017 v 2016 | |||
Decrease in uncollectible expenses for the low-income payment program, which is funded by the USF revenue rate rider (a) | $ | (7.1 | ) | |
Increase in retirement benefits costs, primarily due to pension curtailment charges associated with announced plant closures | 4.7 | |||
Other, net | 0.2 | |||
Net change in operation and maintenance expense | $ | (2.2 | ) |
(a) | There is a corresponding offset in Revenues associated with these programs. |
Three months ended March 31, | ||||||||
$ in millions | 2017 | 2016 | ||||||
T&D | $ | 25.0 | $ | 34.2 | ||||
Generation | (86.8 | ) | (12.3 | ) | ||||
Other | (21.4 | ) | (19.1 | ) | ||||
Income / (loss) from continuing operations before income tax | $ | (83.2 | ) | $ | 2.8 |
Three months ended March 31, | ||||||||
$ in millions | 2017 | 2016 | ||||||
Revenues: | ||||||||
Retail | $ | 172.2 | $ | 187.5 | ||||
Wholesale | 5.1 | 3.6 | ||||||
RTO revenues | 11.5 | 11.3 | ||||||
RTO capacity revenues | 1.3 | 2.1 | ||||||
Total revenues | 190.1 | 204.5 | ||||||
Cost of revenues: | ||||||||
Net fuel cost | — | 5.3 | ||||||
Purchased power: | ||||||||
Purchased power | 66.7 | 65.9 | ||||||
RTO charges | 14.4 | 15.0 | ||||||
RTO capacity charges | — | (0.7 | ) | |||||
Total purchased power | 81.1 | 80.2 | ||||||
Total cost of revenues | 81.1 | 85.5 | ||||||
Gross margin | 109.0 | 119.0 | ||||||
Operating expenses: | ||||||||
Operation and maintenance | 38.8 | 46.3 | ||||||
Depreciation and amortization | 18.1 | 17.2 | ||||||
General taxes | 18.9 | 15.6 | ||||||
Loss on asset disposal | — | 0.1 | ||||||
Total operating expenses | 75.8 | 79.2 | ||||||
Operating income | 33.2 | 39.8 | ||||||
Other expense, net | ||||||||
Interest expense | (7.4 | ) | (5.4 | ) | ||||
Other expense | (0.8 | ) | (0.2 | ) | ||||
Total other expense, net | (8.2 | ) | (5.6 | ) | ||||
Income from continuing operations before income tax (a) | $ | 25.0 | $ | 34.2 |
(a) | For purposes of discussing operating results, we present and discuss Income / (loss) from continuing operations before income tax. This format is useful to investors because it allows analysis and comparability of operating trends and includes the same information that is used by management to make decisions regarding our financial performance. |
• | Retail revenues decreased $15.3 million primarily due to lower DP&L retail volumes and lower average DP&L retail rates. The decrease in retail volume was primarily driven by warmer weather in 2017 as heating degree days decreased by 284 degree days. The decrease in average retail rates was primarily driven by the reversion back to ESP 1 rates in September of 2016, collections on the remaining 2015 |
• | Wholesale revenues increased $1.5 million. These revenues, included in the T&D segment, consist of our 4.9% share of the generation output of OVEC, which is sold into PJM at market prices. As such, the increase in wholesale revenue is due to increased OVEC revenue. |
• | RTO capacity and other revenues decreased $0.6 million compared to the same period in the prior year. |
• | Net fuel costs, which include expense recognition or deferral coinciding with the collection of fuel costs through the regulatory fuel deferral, decreased $5.3 million compared to the prior year primarily due to fuel costs deferred in 2015, being collected in 2016. There were no fuel costs deferred or collected in the first quarter of 2017. |
• | Net purchased power increased $0.9 million compared to the prior year. This was driven by the following factors: |
◦ | Purchased power increased $0.8 million compared to the same period in the prior year primarily due to an unfavorable price variance, partially offset by lower volumes due to the decrease in DP&L retail demand in 2017. |
◦ | RTO capacity and other charges increased $0.1 million compared to the same period in the prior year. |
Three months ended March 31, | ||||
$ in millions | 2017 v 2016 | |||
Decrease in uncollectible expenses for the low-income payment program, which is funded by the USF revenue rate rider (a) | $ | (7.5 | ) | |
Increase in General taxes | 3.3 | |||
Increase in retirement benefits costs | 1.4 | |||
Increase in Depreciation and amortization | 0.9 | |||
Other, net | (1.5 | ) | ||
Net change in operating expenses | $ | (3.4 | ) |
(a) | There is corresponding revenue associated with this program resulting in no impact to Net income. |
Three months ended March 31, | ||||||||
$ in millions | 2017 | 2016 | ||||||
Revenues: | ||||||||
Wholesale | $ | 98.5 | $ | 119.4 | ||||
RTO revenues | 2.5 | 4.3 | ||||||
RTO capacity revenues | 30.8 | 34.4 | ||||||
Other mark-to-market gains | — | 0.1 | ||||||
Total revenues | 131.8 | 158.2 | ||||||
Cost of revenues: | ||||||||
Cost of fuel: | ||||||||
Fuel costs | 54.4 | 63.0 | ||||||
Gains from the sale of coal | (0.3 | ) | (1.4 | ) | ||||
Net fuel costs | 54.1 | 61.6 | ||||||
Purchased power: | ||||||||
Purchased power | 10.7 | 25.9 | ||||||
RTO charges | 6.7 | 5.8 | ||||||
RTO capacity charges | 3.2 | 9.1 | ||||||
Mark-to-market losses | 0.3 | 1.6 | ||||||
Net purchased power | 20.9 | 42.4 | ||||||
Total cost of revenues | 75.0 | 104.0 | ||||||
Gross margin | 56.8 | 54.2 | ||||||
Operating expenses: | ||||||||
Operation and maintenance | 46.9 | 42.4 | ||||||
Depreciation and amortization | 7.0 | 18.6 | ||||||
General taxes | 5.2 | 5.4 | ||||||
Fixed asset impairment | 66.3 | — | ||||||
Loss on asset disposal | 19.4 | — | ||||||
Other | (1.2 | ) | — | |||||
Total operating expenses | 143.6 | 66.4 | ||||||
Operating loss | (86.8 | ) | (12.2 | ) | ||||
Other expense, net | ||||||||
Interest expense | — | (0.1 | ) | |||||
Total other expense, net | — | (0.1 | ) | |||||
Loss from continuing operations before income tax (a) | $ | (86.8 | ) | $ | (12.3 | ) |
(a) | For purposes of discussing operating results, we present and discuss Loss from continuing operations before income tax. This format is useful to investors because it allows analysis and comparability of operating trends and includes the same information that is used by management to make decisions regarding our financial performance. |
• | Wholesale revenues decreased $20.9 million primarily as a result of an unfavorable wholesale volume variance of $12.4 million and an unfavorable wholesale price variance of $8.5 million. The decrease in wholesale volumes was primarily driven by a decrease in the load served of other parties through their competitive bid process and by a 2% decrease in internal generation at DPL's plants in 2017 compared to the prior year. The decrease in wholesale rates, despite year over year increases in PJM market prices, was due to higher rates on contracted sales to serve the load of other parties in 2016 as well as hedged transactions in both years. |
• | RTO capacity and other revenues, consisting primarily of PJM capacity revenues, regulation services, reactive supply and operating reserves, decreased $5.4 million compared to the same period in the prior year. Revenues realized from the PJM capacity auction in 2017 decreased $3.6 million primarily due to lower prices in both the CP and RPM auctions. The capacity price that became effective in June of 2016 was $134/MW-day, compared to $136/MW-day in June of 2015. There was also a $1.8 million decrease in other RTO revenues. |
• | Net fuel costs, which include coal, gas, oil and emission allowance costs, decreased $7.5 million compared to the same period in the prior year primarily due to a 19% decrease in average fuel cost per MWh and a 2% decrease in internal generation. |
• | Net purchased power decreased $21.5 million compared to the prior year. This decrease was driven by the following factors: |
◦ | Purchased power decreased $15.2 million primarily due to a favorable volume variance of $16.6 million, partially offset by an unfavorable price variance of $1.4 million. The decrease in volume was driven by a lower load served of other parties through their competitive bid process in 2016. The generation segment purchases power to source retail load in other service territories and to meet contracted Wholesale requirements when generating facilities are not available due to planned and unplanned outages or when market prices are below the marginal costs associated with our generating facilities. |
◦ | RTO charges increased $0.9 million compared to the same period in the prior year. |
◦ | RTO capacity charges decreased $5.9 million compared to the same period in the prior year primarily due to a lower retail load served in 2017 as well as a $1.7 million PJM penalty incurred in March 2016 associated with low plant availability. Retail load served relates to the load of other parties through their competitive bid process. As noted in the revenue section above, RTO capacity prices are set by an annual auction. |
◦ | Mark-to-market losses decreased $1.3 million due to less significant changes in power prices in 2017 causing less significant losses on derivative forward power purchase contracts. |
Three months ended March 31, | ||||
$ in millions | 2017 v 2016 | |||
Fixed-asset impairment in 2017 (a) | $ | 66.3 | ||
Loss on asset disposal due to the write-off of plant materials and supplies inventory at the Stuart and Killen plants and the net loss recorded on the disposal of assets related to the high pressure feedwater heater shell failure on Unit 1 at Stuart station | 19.4 | |||
Increase in retirement benefits costs, primarily due to pension curtailment charges associated with announced plant closures | 5.8 | |||
Decrease in Depreciation and amortization expense as a result of the fixed asset impairments in the second and fourth quarters of 2016 and the first quarter of 2017, which reduced depreciation expense due to the lower asset values | (11.6 | ) | ||
Insurance proceeds related to plant outage | (1.2 | ) | ||
Other, net | (1.5 | ) | ||
Net change in operating expenses | $ | 77.2 |
(a) | During the three months ended March 31, 2017, the Generation segment recorded an impairment of fixed assets of $66.3 million. The Generation segment recognized asset impairment expense of $39.0 million and $27.3 million for Stuart Station and Killen Station, respectively. For more information, see Note 14 – Fixed-asset Impairment of Notes to DPL's Condensed Consolidated Financial Statements. |
Three months ended March 31, | ||||||||
$ in millions | 2017 | 2016 | ||||||
Revenues: | ||||||||
Retail | $ | 172.2 | $ | 187.5 | ||||
Wholesale | 98.5 | 117.4 | ||||||
RTO revenues | 13.3 | 14.5 | ||||||
RTO capacity revenues | 27.1 | 29.7 | ||||||
Other mark-to-market gains | — | 0.1 | ||||||
Total revenues | 311.1 | 349.2 | ||||||
Cost of revenues: | ||||||||
Fuel costs | 50.4 | 64.6 | ||||||
Gains from the sale of coal | (0.3 | ) | (1.7 | ) | ||||
Total fuel | 50.1 | 62.9 | ||||||
Purchased power | 77.0 | 91.4 | ||||||
RTO charges | 20.6 | 20.3 | ||||||
RTO capacity charges | 2.9 | 8.1 | ||||||
Mark-to-market losses | 0.3 | 1.5 | ||||||
Total purchased power | 100.8 | 121.3 | ||||||
Total cost of revenues | 150.9 | 184.2 | ||||||
Gross margin | 160.2 | 165.0 | ||||||
Operating expenses: | ||||||||
Operation and maintenance | 82.6 | 86.1 | ||||||
Depreciation and amortization | 23.5 | 34.3 | ||||||
General taxes | 23.6 | 20.5 | ||||||
Gain on termination of contract | — | (27.7 | ) | |||||
Fixed-asset impairment | 66.3 | — | ||||||
Loss on asset disposal | 19.4 | 0.1 | ||||||
Total operating expenses | 215.4 | 113.3 | ||||||
Operating income | (55.2 | ) | 51.7 | |||||
Other expense, net | ||||||||
Investment loss | — | (0.1 | ) | |||||
Interest expense | (7.6 | ) | (5.3 | ) | ||||
Other expense | (0.9 | ) | (0.2 | ) | ||||
Total other expense, net | (8.5 | ) | (5.6 | ) | ||||
Income / (loss) from operations before income tax (a) | $ | (63.7 | ) | $ | 46.1 |
(a) | For purposes of discussing operating results, we present and discuss income / (loss) from operations before income tax. This format is useful to investors because it allows analysis and comparability of operating trends and includes the same information used by management to make decisions regarding our financial performance. |
Three months ended | ||||
March 31, | ||||
$ in millions | 2017 v 2016 | |||
Retail | ||||
Rate | $ | (4.7 | ) | |
Volume | (14.0 | ) | ||
Other miscellaneous | 3.4 | |||
Total retail change | (15.3 | ) | ||
Wholesale | ||||
Rate | (12.6 | ) | ||
Volume | (6.3 | ) | ||
Total wholesale change | (18.9 | ) | ||
RTO revenues and RTO capacity revenues | ||||
RTO revenues and RTO capacity revenues | (3.8 | ) | ||
Other | ||||
Unrealized MTM | (0.1 | ) | ||
Total revenues change | $ | (38.1 | ) |
• | Retail revenues decreased $15.3 million primarily due to lower DP&L retail volumes and lower average DP&L retail rates. The decrease in retail volume was primarily driven by warmer weather in 2017 as heating degree days decreased by 284 degree days. The decrease in average retail rates was primarily driven by the reversion back to ESP 1 rates in September of 2016, collections on the remaining 2015 deferred fuel balance in the first quarter of 2016, and a decrease in the USF revenue rate rider, partially offset by increased revenue associated with energy efficiency programs recorded in 2017. The aforementioned impacts resulted in an unfavorable $14.0 million retail volume variance and an unfavorable $4.7 million retail price variance. In addition, there was a favorable other miscellaneous variance of $3.4 million. |
• | Wholesale revenues decreased $18.9 million primarily as a result of an unfavorable $12.6 million wholesale price variance and an unfavorable $6.3 million wholesale volume variance. The decrease in wholesale rates of $12.6 million was primarily driven by lower contracted rates in 2017 and higher rates on sales to serve the load of other parties through their competitive bid process in 2016. The decrease in wholesale |
• | RTO capacity and other revenues, consisting primarily of compensation for use of DP&L’s transmission assets, regulation services, reactive supply and operating reserves, and capacity payments under the RPM construct, decreased $3.8 million. This decrease was the result of a $1.2 million decrease in RTO transmission and congestion revenue, as 2016 congestion revenue charges were higher due to milder winter weather in 2017 than 2016. There was also a $2.6 million decrease in revenue realized from the PJM capacity auction in 2017 primarily due to lower prices in both the CP and RPM auctions. The capacity price that became effective in June of 2016 was $134/MW-day, compared to $136/MW-day in June of 2015. |
• | Net fuel costs, which include coal, gas, oil and emission allowance costs, decreased $12.8 million, compared to the same period in the prior year primarily due to a 21% decrease in average fuel cost per MWh and due to fuel costs deferred in 2015, being collected in 2016. There were no fuel costs deferred or collected in the first quarter of 2017. |
• | Net purchased power decreased $20.5 million compared to the prior year. This decrease was driven by the following factors: |
◦ | Purchased power decreased $14.4 million primarily due to a $13.9 million volume decrease driven by the decrease in DP&L retail demand in 2017 and a lower load served of other parties through their competitive bid process in 2016. In addition, there was a favorable price variance of $0.5 million due to lower prices in the competitive bid process. |
◦ | RTO charges increased $0.3 million compared to the same period in the prior year. RTO charges are incurred by DP&L as a member of PJM and primarily include transmission charges within our network, which are incurred and charged to customers in the TCRR-N rider, transmission and congestion losses incurred on DP&L's wholesale revenues, and costs associated with load obligations for retail customers. |
◦ | RTO capacity charges decreased $5.2 million compared to the same period in the prior year primarily due to a lower retail load served in 2017 as well as a $1.7 million PJM penalty incurred in March 2016 associated with low plant availability. Retail load served relates to the load of other parties through their competitive bid process. As noted in the revenue section above, RTO capacity prices are set by an annual auction. |
◦ | Mark-to-market losses decreased $1.2 million compared to the same period in the prior year due to less significant changes in power prices in 2017. |
Three months ended | ||||
March 31, | ||||
$ in millions | 2017 v 2016 | |||
Decrease in uncollectible expenses for the low-income payment program, which is funded by the USF revenue rate rider (a) | $ | (7.1 | ) | |
Increase in retirement benefits costs, primarily due to pension curtailment charges associated with announced plant closures | 6.3 | |||
Other, net | (2.7 | ) | ||
Net change in operation and maintenance expense | $ | (3.5 | ) |
(a) | There is a corresponding offset in Revenues associated with these programs. |
Three months ended March 31, | ||||||||
$ in millions | 2017 | 2016 | ||||||
T&D | $ | 25.0 | $ | 34.4 | ||||
Generation | (88.7 | ) | 11.7 | |||||
Income / (loss) from operations before income tax | $ | (63.7 | ) | $ | 46.1 |
Three months ended March 31, | ||||||||
$ in millions | 2017 | 2016 | ||||||
Revenues: | ||||||||
Wholesale | 93.4 | 113.8 | ||||||
RTO revenues | 1.8 | 3.2 | ||||||
RTO capacity revenues | 25.8 | 27.6 | ||||||
Other mark-to-market gains | — | 0.1 | ||||||
Total revenues | 121.0 | 144.7 | ||||||
Cost of revenues: | ||||||||
Cost of fuel: | ||||||||
Fuel costs | 50.4 | 59.0 | ||||||
Gains from the sale of coal | (0.3 | ) | (1.4 | ) | ||||
Net fuel costs | 50.1 | 57.6 | ||||||
Purchased power: | ||||||||
Purchased power | 10.3 | 25.5 | ||||||
RTO charges | 6.2 | 5.3 | ||||||
RTO capacity charges | 2.9 | 8.8 | ||||||
Mark-to-market losses | 0.3 | 1.5 | ||||||
Net purchased power | 19.7 | 41.1 | ||||||
Total cost of revenues | 69.8 | 98.7 | ||||||
Gross margin | 51.2 | 46.0 | ||||||
Operating expenses: | ||||||||
Operation and maintenance | 43.8 | 39.8 | ||||||
Depreciation and amortization | 5.4 | 17.1 | ||||||
General taxes | 4.7 | 4.9 | ||||||
Gain on termination of contract | — | (27.7 | ) | |||||
Fixed asset impairment | 66.3 | — | ||||||
Loss on asset disposal | 19.4 | — | ||||||
Total operating expenses | 139.6 | 34.1 | ||||||
Operating income | (88.4 | ) | 11.9 | |||||
Other expense, net | ||||||||
Investment loss | — | (0.1 | ) | |||||
Interest expense | (0.2 | ) | (0.1 | ) | ||||
Other expense | (0.1 | ) | — | |||||
Total other expense, net | (0.3 | ) | (0.2 | ) | ||||
income / (loss) from continuing operations before income tax (a) | $ | (88.7 | ) | $ | 11.7 |
(a) | For purposes of discussing operating results, we present and discuss Income / (loss) operations before income tax. This format is useful to investors because it allows analysis and comparability of operating trends and includes the same information that is used by management to make decisions regarding our financial performance. |
• | Wholesale revenues decreased $20.4 million primarily as a result of an unfavorable wholesale volume variance of $10.7 million and an unfavorable wholesale price variance of $9.7 million. The decrease in wholesale volumes was primarily driven by a decrease in the load served of other parties through their competitive bid process in 2017 compared to the prior year. The decrease in wholesale rates, despite year over year increases in PJM market prices, was due to higher rates on contracted sales to serve the load of other parties in 2016 as well as hedged transactions in both years. |
• | RTO capacity and other revenues decreased $3.2 million compared to same period in the prior year. This decrease was the result of a $1.8 million decrease in revenue realized from the PJM capacity auction in 2017 due to lower prices in both the CP and RPM auctions. The capacity price that became effective in June of 2016 was $134/MW-day, compared to $136/MW-day in June of 2015. There was also a $1.4 million decrease in other RTO revenues. |
• | Net fuel costs, which include coal, gas, oil and emission allowance costs, decreased $7.5 million compared to the same period in the prior year primarily due to a 21% decrease in average fuel cost per MWh. |
• | Net purchased power decreased $21.4 million compared to the prior year. This decrease was driven by the following factors: |
◦ | Purchased power decreased $15.2 million primarily due to a favorable volume variance of $16.9 million, partially offset by an unfavorable price variance of $1.7 million. The decrease in volume was driven by a lower load served of other parties through their competitive bid process in 2016. The generation segment purchases power to source retail load in other service territories and to meet contracted Wholesale requirements when generating facilities are not available due to planned and unplanned outages or when market prices are below the marginal costs associated with our generating facilities. |
◦ | RTO charges increased $0.9 million compared to the same period in the prior year. |
◦ | RTO capacity charges decreased $5.9 million compared to the same period in the prior year primarily due to a lower retail load served in 2017 as well as a $1.7 million PJM penalty incurred in March 2016 associated with low plant availability. Retail load served relates to the load of other parties through their competitive bid process. As noted in the revenue section above, RTO capacity prices are set by an annual auction. |
◦ | Mark-to-market losses decreased $1.2 million due to less significant changes in power prices in 2017 causing less significant losses on derivative forward power purchase contracts. |
Three months ended March 31, | ||||
$ in millions | 2017 v 2016 | |||
Fixed-asset impairment in 2017 (a) | $ | 66.3 | ||
Gain on termination of contract in 2016 | 27.7 | |||
Loss on asset disposal due to the write-off of plant materials and supplies inventory at the Stuart and Killen plants and the net loss recorded on the disposal of assets related to the high pressure feedwater heater shell failure on Unit 1 at Stuart station | 19.4 | |||
Increase in retirement benefits costs, primarily due to pension curtailment charges associated with announced plant closures | 5.9 | |||
Decrease in Depreciation and amortization expense as a result of the fixed asset impairments in the second and fourth quarters of 2016 and the first quarter of 2017, which reduced depreciation expense due to the lower asset values | (11.7 | ) | ||
Other, net | (2.1 | ) | ||
Net change in operating expenses | $ | 105.5 |
(a) | During the three months ended March 31, 2017, the Generation segment recorded an impairment of fixed assets of $66.3 million. The Generation segment recognized an asset impairment expense of $39.0 million and $27.3 million for Stuart Station and Killen Station, respectively. For more information, see Note 14 – Fixed-asset Impairment of Notes to DP&L's Condensed Financial Statements. |
• | PJM capacity prices; |
• | Outcome of DP&L's pending ESP 3 case, including the amount of non-bypassable revenue; |
• | Outcome of DP&L's pending distribution rate case; |
• | Operational performance of generation facilities; |
• | Recovery in the power market, particularly as it relates to an expansion in dark spreads; |
• | Sale or transfer of DP&L generation assets; and |
• | DPL's ability to reduce its cost structure. |
• | Bypassable standard offer energy rates for DP&L’s customers based on competitive bid auctions; |
• | The establishment of a three-year non-bypassable DMR designed to collect $105.0 million in revenue per year to pay debt obligations at DPL and DP&L and position DP&L to modernize and/or maintain its transmission and distribution infrastructure. With PUCO approval, DP&L may have the option of extending the duration of the DMR for an additional two years; |
• | The establishment of a non-bypassable Distribution Investment Rider, set initially at zero, to recover incremental distribution capital investments; |
• | The establishment of a Smart Grid Rider, set initially at zero, to recover costs of future grid modernization; |
• | A commitment by us to separate DP&L’s generation assets from its transmission and distribution assets (if approved by FERC) within 180 days after receipt of a PUCO order; |
• | A commitment to commence a sale process to sell our ownership interests in the Zimmer, Miami Fort and Conesville coal-fired generation plants; and |
• | Restrictions on DPL making dividend or tax sharing payments, and various other riders and competitive retail market enhancements. |
DPL | Three months ended March 31, | |||||||
$ in millions | 2017 | 2016 | ||||||
Net cash provided by operating activities | $ | 26.5 | $ | 83.0 | ||||
Net cash provided by / (used in) investing activities | (19.4 | ) | 39.6 | |||||
Net cash used in financing activities | (7.4 | ) | (75.4 | ) | ||||
Net change | (0.3 | ) | 47.2 | |||||
Balance at beginning of period | 54.6 | 32.4 | ||||||
Cash and cash equivalents at end of period | $ | 54.3 | $ | 79.6 |
Three months ended March 31, | $ change | |||||||||||
$ in millions | 2017 | 2016 | 2017 v 2016 | |||||||||
Net income / (loss) | (51.7 | ) | 31.8 | $ | (83.5 | ) | ||||||
Depreciation and amortization | 28.0 | 33.4 | (5.4 | ) | ||||||||
Impairment expenses | 66.4 | — | 66.4 | |||||||||
Gain on sale of business | — | (49.2 | ) | 49.2 | ||||||||
Other adjustments to Net income / (loss) | 14.7 | (9.1 | ) | 23.8 | ||||||||
Net income / (loss), adjusted for non-cash items | 57.4 | 6.9 | 50.5 | |||||||||
Net change in operating assets and liabilities | (30.9 | ) | 76.1 | (107.0 | ) | |||||||
Net cash provided by operating activities | $ | 26.5 | $ | 83.0 | $ | (56.5 | ) |
$ in millions | $ Change | |||
Decrease from inventory primarily due to lower coal purchases in 2016 | $ | (18.9 | ) | |
Decrease from accrued taxes payable primarily due to an income tax benefit from the current year loss | (52.5 | ) | ||
Decrease from accounts payable due to timing of spending | (23.3 | ) | ||
Other | (12.3 | ) | ||
Total decrease in cash from changes in operating assets and liabilities | $ | (107.0 | ) |
DP&L | Three months ended March 31, | |||||||
$ in millions | 2017 | 2016 | ||||||
Net cash provided by operating activities | $ | 22.8 | $ | 83.4 | ||||
Net cash used in investing activities | (13.4 | ) | (33.8 | ) | ||||
Net cash used in financing activities | (6.1 | ) | (30.2 | ) | ||||
Net change | 3.3 | 19.4 | ||||||
Balance at beginning of period | 1.6 | 5.4 | ||||||
Cash and cash equivalents at end of period | $ | 4.9 | $ | 24.8 |
Three months ended March 31, | $ change | |||||||||||
$ in millions | 2017 | 2016 | 2017 v 2016 | |||||||||
Net income / (loss) | (41.8 | ) | 33.7 | $ | (75.5 | ) | ||||||
Depreciation and amortization | 23.5 | 34.3 | (10.8 | ) | ||||||||
Impairment expenses | 66.3 | — | 66.3 | |||||||||
Other adjustments to Net income / (loss) | 19.8 | (1.7 | ) | 21.5 | ||||||||
Net income / (loss), adjusted for non-cash items | 67.8 | 66.3 | 1.5 | |||||||||
Net change in operating assets and liabilities | (45.0 | ) | 17.1 | (62.1 | ) | |||||||
Net cash provided by operating activities | $ | 22.8 | $ | 83.4 | $ | (60.6 | ) |
$ in millions | $ Change | |||
Decrease from inventory primarily due to lower coal purchases in 2016 | $ | (19.0 | ) | |
Decrease from accrued taxes payable, due to income tax benefit incurred on current year loss | (24.5 | ) | ||
Decrease from accounts payable due to timing of spending | (14.8 | ) | ||
Other | (3.8 | ) | ||
Total decrease in cash from changes in operating assets and liabilities | $ | (62.1 | ) |
$ in millions | Type | Maturity | Commitment | Amounts available as of March 31, 2017 | ||||||||
DP&L | Revolving | July 2020 | $ | 175.0 | $ | 173.6 | ||||||
DPL | Revolving | July 2020 | 205.0 | 202.0 | ||||||||
$ | 380.0 | $ | 375.6 |
DPL | DP&L | Outlook | Effective or Affirmed | |||||
Fitch Ratings | BB(a) / BB-(b) | BBB (c) | Negative | July 2016 | ||||
Moody's Investors Service, Inc. | Ba3 (b) | Baa2 (c) | Negative | August 2016 | ||||
Standard & Poor's Financial Services LLC | B+ (b) | BBB- (c) | Negative | March 2017 |
(a) | Rating relates to DPL’s Senior secured debt. |
(b) | Rating relates to DPL's Senior unsecured debt. |
(c) | Rating relates to DP&L’s Senior secured debt. |
DPL | DP&L | Outlook | Effective or Affirmed | |||||
Fitch Ratings | B+ | BB+ | Negative | July 2016 | ||||
Moody's Investors Service, Inc. | Ba3 | Baa3 | Negative | August 2016 | ||||
Standard & Poor's Financial Services LLC | BB- | BB- | Negative | March 2017 |
DPL | Three months ended | |||||
March 31, | ||||||
2017 | 2016 | |||||
Percent of electric revenues from wholesale market | 32 | % | 34 | % | ||
DP&L | Three months ended | |||||
March 31, | ||||||
2017 | 2016 | |||||
Percent of electric revenues from wholesale market | 32 | % | 34 | % |
$ in millions | DPL | DP&L | ||||||
Effect of 10% change in price per MWh | $ | 29.8 | $ | 28.3 |
PJM Delivery Year | ||||||||||||||||||||
($/MW-day) | 2015/16 | 2016/17 | 2017/18 | 2018/19 | 2019/20 | |||||||||||||||
Capacity clearing price | $ | 136 | $ | 134 | $ | 152 | $ | 165 | $ | 100 |
Calendar Year | ||||||||||||||||||||
($/MW-day) | 2015 | 2016 | 2017 | 2018 | 2019 | |||||||||||||||
Computed average capacity price | $ | 132 | $ | 135 | $ | 145 | $ | 159 | $ | 127 |
$ in millions | DPL | DP&L | ||||||
Effect of $10/MW-day change in capacity auction pricing | $ | 5.5 | $ | 4.7 |
$ in millions | DPL | DP&L | ||||||
Effect of 10% change in fuel and purchased power | $ | 37.1 | $ | 35.6 |
DPL | ||||||||||||||||||||||||||||||||
Principal payments due | At March 31, 2017 | |||||||||||||||||||||||||||||||
during the twelve months ending | ||||||||||||||||||||||||||||||||
March 31, | Principal | Fair | ||||||||||||||||||||||||||||||
$ in millions | 2018 | 2019 | 2020 | 2021 | 2022 | Thereafter | Amount | Value | ||||||||||||||||||||||||
Long-term debt (a) | ||||||||||||||||||||||||||||||||
Variable-rate debt | $ | 29.5 | $ | 29.5 | $ | 29.5 | $ | 48.2 | $ | 4.5 | $ | 421.5 | $ | 562.7 | $ | 562.7 | ||||||||||||||||
Average interest rate (b) | 3.8% | 3.8% | 3.8% | 3.8% | 4.0% | 4.0% | ||||||||||||||||||||||||||
Fixed-rate debt (c) | $ | 0.1 | $ | 0.2 | $ | 200.2 | $ | 200.2 | $ | 780.2 | $ | 132.6 | 1,313.5 | 1,378.0 | ||||||||||||||||||
Average interest rate | 4.2% | 4.2% | 6.7% | 2.0% | 7.2% | 5.1% | ||||||||||||||||||||||||||
Total | $ | 1,876.2 | $ | 1,940.7 |
(a) | Amounts exclude immaterial capital lease obligations |
(b) | Based on rates in effect at March 31, 2017 |
(c) | Fixed-rate debt includes $200.0 million DP&L Tax-exempt First Mortgage Bonds, which are variable rate, that have been hedged, per discussion above. See Note 6 – Derivative Instruments and Hedging Activities of Notes to DPL's Condensed Consolidated Financial Statements |
DP&L | ||||||||||||||||||||||||||||||||
Principal payments due | At March 31, 2017 | |||||||||||||||||||||||||||||||
during the twelve months ending | ||||||||||||||||||||||||||||||||
March 31, | Principal | Fair | ||||||||||||||||||||||||||||||
$ in millions | 2018 | 2019 | 2020 | 2021 | 2022 | Thereafter | Amount | Value | ||||||||||||||||||||||||
Long-term debt (a) | ||||||||||||||||||||||||||||||||
Variable-rate debt | $ | 4.5 | $ | 4.5 | $ | 4.5 | $ | 4.5 | $ | 4.5 | $ | 421.4 | $ | 443.9 | $ | 443.9 | ||||||||||||||||
Average interest rate (b) | 4.0% | 4.0% | 4.0% | 4.0% | 4.0% | 4.0% | ||||||||||||||||||||||||||
Fixed-rate debt (c) | $ | 0.1 | $ | 0.2 | $ | 0.2 | $ | 200.2 | $ | 0.2 | $ | 117.0 | 317.9 | 318.4 | ||||||||||||||||||
Average interest rate | 4.2% | 4.2% | 4.2% | 2.0% | 4.2% | 4.7% | ||||||||||||||||||||||||||
Total | $ | 761.8 | $ | 762.3 |
(a) | Amounts exclude immaterial capital lease obligations |
(b) | Based on rates in effect at March 31, 2017 |
(c) | Fixed-rate debt includes $200.0 million DP&L Tax-exempt First Mortgage Bonds, which are variable rate, that have been hedged, per discussion above. See Note 6 – Derivative Instruments and Hedging Activities of Notes to DP&L's Condensed Financial Statements |
DPL | At March 31, 2017 | One percent | ||||||||||
Principal | Fair | interest rate | ||||||||||
$ in millions | Amount | Value | risk | |||||||||
Long-term debt (a) | ||||||||||||
Variable-rate debt | $ | 562.7 | $ | 562.7 | $ | 5.6 | ||||||
Fixed-rate debt (b) | 1,313.5 | $ | 1,378.0 | 13.8 | ||||||||
Total | $ | 1,876.2 | $ | 1,940.7 | $ | 19.4 |
(a) | Amounts exclude immaterial capital lease obligations |
(b) | Fixed-rate debt includes $200.0 million DP&L Tax-exempt First Mortgage Bonds, which are variable rate, that have been hedged, per discussion above. See Note 6 – Derivative Instruments and Hedging Activities of Notes to DPL's Condensed Consolidated Financial Statements |
DP&L | At March 31, 2017 | One percent | ||||||||||
Principal | Fair | interest rate | ||||||||||
$ in millions | Amount | Value | risk | |||||||||
Long-term debt (a) | ||||||||||||
Variable-rate debt | $ | 443.9 | $ | 443.9 | $ | 4.4 | ||||||
Fixed-rate debt (b) | 317.9 | 318.4 | 3.2 | |||||||||
Total | $ | 761.8 | $ | 762.3 | $ | 7.6 |
(a) | Amounts exclude immaterial capital lease obligations |
(b) | Fixed-rate debt includes $200.0 million DP&L Tax-exempt First Mortgage Bonds, which are variable rate, that have been hedged, per discussion above. See Note 6 – Derivative Instruments and Hedging Activities of Notes to DP&L's Condensed Financial Statements |
ELECTRIC SALES AND CUSTOMERS (a) | |||||||||
DPL | DP&L | ||||||||
Three months ended | Three months ended | ||||||||
March 31, | March 31, | ||||||||
2017 | 2016 | 2017 | 2016 | ||||||
Electric Sales (millions of kWh) | 3,825 | 4,092 | 3,731 | 3,953 | |||||
Billed electric customers (end of period) | 520,265 | 517,558 | 520,265 | 517,558 |
(a) | This table contains wholesale sales in the PJM market and to other utilities. |
DPL Inc. | DP&L | Exhibit Number | Exhibit | Location |
X | X | 2.1 | Asset Purchase Agreement dated April 21, 2017, by and among Dynegy Zimmer, LLC, Dynegy Miami Fort, LLC, AES Ohio Generation, LLC and The Dayton Power and Light Company | |
X | X | 10.1 | Amended Stipulation and Recommendation dated March 13, 2017 | |
X | 31(a) | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | Filed herewith as Exhibit 31(a) | |
X | 31(b) | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | Filed herewith as Exhibit 31(b) | |
X | 31(c) | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | Filed herewith as Exhibit 31(c) | |
X | 31(d) | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | Filed herewith as Exhibit 31(d) | |
X | 32(a) | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | Filed herewith as Exhibit 32(a) | |
X | 32(b) | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | Filed herewith as Exhibit 32(b) | |
X | 32(c) | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | Filed herewith as Exhibit 32(c) | |
X | 32(d) | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | Filed herewith as Exhibit 32(d) | |
X | X | 101.INS | XBRL Instance | Filed herewith as Exhibit 101.INS |
X | X | 101.SCH | XBRL Taxonomy Extension Schema | Filed herewith as Exhibit 101.SCH |
X | X | 101.CAL | XBRL Taxonomy Extension Calculation Linkbase | Filed herewith as Exhibit 101.CAL |
X | X | 101.DEF | XBRL Taxonomy Extension Definition Linkbase | Filed herewith as Exhibit 101.DEF |
X | X | 101.LAB | XBRL Taxonomy Extension Label Linkbase | Filed herewith as Exhibit 101.LAB |
X | X | 101.PRE | XBRL Taxonomy Extension Presentation Linkbase | Filed herewith as Exhibit 101.PRE |
DPL Inc. | ||
(Registrant) | ||
Date: | May 5, 2017 | /s/ Kenneth J. Zagzebski |
Kenneth J. Zagzebski | ||
President and Chief Executive Officer | ||
(principal executive officer) | ||
May 5, 2017 | /s/ Craig L. Jackson | |
Craig L. Jackson | ||
Chief Financial Officer | ||
(principal financial officer) | ||
May 5, 2017 | /s/ Kurt A. Tornquist | |
Kurt A. Tornquist | ||
Controller | ||
(principal accounting officer) |
The Dayton Power and Light Company | ||
(Registrant) | ||
Date: | May 5, 2017 | /s/ Thomas A. Raga |
Thomas A. Raga | ||
President and Chief Executive Officer | ||
(principal executive officer) | ||
May 5, 2017 | /s/ Craig L. Jackson | |
Craig L. Jackson | ||
Chief Financial Officer | ||
(principal financial officer) | ||
May 5, 2017 | /s/ Kurt A. Tornquist | |
Kurt A. Tornquist | ||
Controller | ||
(principal accounting officer) |
1. | I have reviewed this quarterly report on Form 10-Q of DPL Inc. ; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Kenneth J. Zagzebski |
Kenneth J. Zagzebski |
President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of DPL Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Craig L. Jackson |
Craig L. Jackson |
Chief Financial Officer |
1. | I have reviewed this quarterly report on Form 10-Q of The Dayton Power and Light Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Thomas A. Raga |
Thomas A. Raga |
President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of The Dayton Power and Light Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Craig L. Jackson |
Craig L. Jackson |
Chief Financial Officer |
/s/ Kenneth J. Zagzebski |
Kenneth J. Zagzebski |
President and Chief Executive Officer |
/s/ Craig L. Jackson |
Craig L. Jackson |
Chief Financial Officer |
/s/ Thomas A. Raga |
Thomas A. Raga |
President and Chief Executive Officer |
/s/ Craig L. Jackson |
Craig L. Jackson |
Chief Financial Officer |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
May 05, 2017 |
|
Entity Registrant Name | DPL INC | |
Entity Central Index Key | 0000787250 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 1 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q1 | |
Entity Voluntary Filers | Yes | |
Entity Well-known Seasoned Issuer | No | |
THE DAYTON POWER AND LIGHT COMPANY [Member] | ||
Entity Registrant Name | DAYTON POWER & LIGHT CO | |
Entity Central Index Key | 0000027430 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 41,172,173 | |
Entity Voluntary Filers | Yes | |
Entity Well-known Seasoned Issuer | No |
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Common stock, shares authorized | 1,500 | 1,500 |
Common stock, shares issued | 1 | 1 |
Common stock, shares outstanding | 1 | 1 |
THE DAYTON POWER AND LIGHT COMPANY [Member] | ||
Common stock, shares authorized | 250,000,000 | |
Common stock, shares outstanding | 41,172,173 | |
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Overview and Summary of Significant Accounting Policies |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Overview and Summary of Significant Accounting Policies | Overview and Summary of Significant Accounting Policies Description of Business DPL is a diversified regional energy company organized in 1985 under the laws of Ohio. DPL has two reportable segments: the Transmission and Distribution (T&D) segment and the Generation segment. See Note 12 – Business Segments for more information relating to these reportable segments. The terms “we,” “us,” “our” and “ours” are used to refer to DPL and its subsidiaries. DPL is an indirectly wholly-owned subsidiary of AES. DP&L is a public utility incorporated in 1911 under the laws of Ohio. Beginning in 2001, Ohio law gave Ohio consumers the right to choose the electric generation supplier from whom they purchase retail generation service; however, distribution and transmission retail services are still regulated. DP&L has the exclusive right to provide such distribution and transmission services to approximately 520,000 customers located in West Central Ohio. Additionally, DP&L offers retail SSO electric service to residential, commercial, industrial and governmental customers in a 6,000 square mile area of West Central Ohio. DP&L owns multiple coal-fired and peaking electric generating facilities as well as numerous transmission facilities, all of which are included in the financial statements at amortized cost. DP&L sources 100% of the generation for its SSO customers through a competitive bid process. Principal industries located in DP&L’s service territory include automotive, food processing, paper, plastic, manufacturing and defense. DP&L's distribution sales reflect the general economic conditions, seasonal weather patterns, retail competition in our service territory and the market price of electricity. DP&L sells all of its energy and capacity into the wholesale market. DPL’s other significant subsidiaries include AES Ohio Generation, which owns and operates peaking generating facilities from which it sells all of its energy and capacity into the wholesale market, and MVIC, our captive insurance company that provides insurance services to DPL and our subsidiaries. DPL owns all of the common stock of its subsidiaries. DPL also has a wholly-owned business trust, DPL Capital Trust II, formed for the purpose of issuing trust capital securities to investors. DP&L’s electric transmission and distribution businesses are subject to rate regulation by federal and state regulators while its generation business is deemed competitive under Ohio law. Accordingly, DP&L applies the accounting standards for regulated operations to its electric transmission and distribution businesses and records regulatory assets when incurred costs are expected to be recovered in future customer rates, and regulatory liabilities when current cost recoveries in customer rates relate to expected future costs. DPL and its subsidiaries employed 1,153 people as of March 31, 2017, of which 1,145 were employed by DP&L. Approximately 62% of all DPL employees are under a collective bargaining agreement that expires on October 31, 2017. Financial Statement Presentation DPL’s Condensed Consolidated Financial Statements include the accounts of DPL and its wholly-owned subsidiaries except for DPL Capital Trust II, which is not consolidated, consistent with the provisions of GAAP. DP&L has undivided ownership interests in five coal-fired generating facilities, various peaking generating facilities and numerous transmission facilities, all of which are included in the financial statements at amortized cost, which was adjusted to fair value at the date of the Merger for DPL. Operating revenues and expenses of these facilities are included on a pro rata basis in the corresponding lines in the Condensed Consolidated Statements of Operations. Certain immaterial amounts from prior periods have been reclassified to conform to the current period presentation. All material intercompany accounts and transactions are eliminated in consolidation. These financial statements have been prepared in accordance with GAAP for interim financial statements, the instructions of Form 10-Q and Regulation S-X. Accordingly, certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with GAAP have been omitted from this interim report. Therefore, our interim financial statements in this report should be read along with the annual financial statements included in our Form 10-K for the fiscal year ended December 31, 2016. In the opinion of our management, the Condensed Consolidated Financial Statements presented in this report contain all adjustments necessary to fairly state our financial position as of March 31, 2017; our results of operations for the three months ended March 31, 2017 and 2016 and our cash flows for the three months ended March 31, 2017 and 2016. Unless otherwise noted, all adjustments are normal and recurring in nature. Due to various factors, including, but not limited to, seasonal weather variations, the timing of outages of EGUs, changes in economic conditions involving commodity prices and competition, and other factors, interim results for the three months ended March 31, 2017 may not be indicative of our results that will be realized for the full year ending December 31, 2017. The preparation of financial statements in conformity with GAAP requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the revenues and expenses of the periods reported. Actual results could differ from these estimates. Significant items subject to such estimates and judgments include: the carrying value of property, plant and equipment; unbilled revenues; the valuation of derivative instruments; the valuation of insurance and claims liabilities; the valuation of allowances for receivables and deferred income taxes; regulatory assets and liabilities; liabilities recorded for income tax exposures; litigation; contingencies; the valuation of AROs; and assets and liabilities related to employee benefits. Accounting for Taxes Collected from Customers and Remitted to Governmental Authorities DP&L collects certain excise taxes levied by state or local governments from its customers. These taxes are accounted for on a net basis and not included in revenue. The amounts of such taxes collected for the three months ended March 31, 2017 and 2016 were $12.5 million and $12.9 million, respectively. New Accounting Pronouncements The following table provides a brief description of recent accounting pronouncements that could have a material impact on our consolidated financial statements:
ASU 2014-09 and its subsequent corresponding updates provide the principles an entity must apply to measure and recognize revenue. The core principle is that an entity shall recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Amendments to the standard were issued that provide further clarification of the principle and to provide certain transition expedients. The standard will replace most existing revenue recognition guidance in GAAP, including the guidance on recognizing other income upon the sale or transfer of nonfinancial assets (including in-substance real estate). The standard requires retrospective application and allows either a full retrospective adoption in which all of the periods are presented under the new standard or a modified retrospective approach in which the cumulative effect of initially applying the guidance is recognized at the date of initial application. We are currently working towards adopting the standard using the full retrospective method. However, we will continue to assess this conclusion which is dependent on the final impact to the financial statements. In 2016, we established a cross-functional implementation team and are in the process of evaluating changes to our business processes, systems and controls to support recognition and disclosure under the new standard. Given the complexity and diversity of our non-regulated arrangements, we are assessing the standard on a contract by contract basis and have completed more than half of the total expected effort. Through this assessment, we have identified certain key issues that we are continuing to evaluate in order to complete our assessment of the full population of contracts and be able to assess the overall impact to the financial statements. These issues include: the application of the practical expedient for measuring progress toward satisfaction of a performance obligation, when variable quantities would be considered variable consideration versus an option to acquire additional goods and services, and how to measure progress toward completion for a performance obligation that is a bundle. We are continuing to work with various non-authoritative industry groups, and monitoring the FASB and Transition Resource Group activity, as we finalize our accounting policy on these and other industry specific interpretative issues which is expected in 2017. We are currently evaluating certain contracts along with our tariff revenue, capacity agreements with PJM and wholesale agreements with PJM. We expect additional contracts to be executed during 2017 that will require assessment under the new standard. |
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THE DAYTON POWER AND LIGHT COMPANY [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Overview and Summary of Significant Accounting Policies | Overview and Summary of Significant Accounting Policies Description of Business DP&L is a public utility incorporated in 1911 under the laws of Ohio. Beginning in 2001, Ohio law gave Ohio consumers the right to choose the electric generation supplier from whom they purchase retail generation service; however, distribution and transmission retail services are still regulated. DP&L has the exclusive right to provide such distribution and transmission services to approximately 520,000 customers located in West Central Ohio. Additionally, DP&L offers retail SSO electric service to residential, commercial, industrial and governmental customers in a 6,000 square mile area of West Central Ohio. DP&L owns multiple coal-fired and peaking electric generating facilities as well as numerous transmission facilities, all of which are included in the financial statements at amortized cost. DP&L sources 100% of the generation for its SSO customers through a competitive bid process. Principal industries located in DP&L’s service territory include automotive, food processing, paper, plastic, manufacturing and defense. DP&L's distribution sales reflect the general economic conditions, seasonal weather patterns, retail competition in our service territory and the market price of electricity. DP&L sells all of its energy and capacity into the wholesale market. DP&L is a subsidiary of DPL. DP&L has two reportable segments: the Transmission and Distribution (T&D) segment and the Generation segment. See Note 13 – Business Segments for more information relating to these reportable segments. DP&L’s electric transmission and distribution businesses are subject to rate regulation by federal and state regulators while its generation business is deemed competitive under Ohio law. Accordingly, DP&L applies the accounting standards for regulated operations to its electric transmission and distribution businesses and records regulatory assets when incurred costs are expected to be recovered in future customer rates, and regulatory liabilities when current cost recoveries in customer rates relate to expected future costs. DP&L employed 1,145 people as of March 31, 2017. Approximately 62% of all employees are under a collective bargaining agreement which expires on October 31, 2017. Financial Statement Presentation DP&L does not have any subsidiaries. DP&L has undivided ownership interests in five coal-fired generating facilities, peaking electric generating facilities and numerous transmission facilities, all of which are included in the financial statements at amortized cost. Operating revenues and expenses of these facilities are included on a pro rata basis in the corresponding lines in the Condensed Statements of Operations. Certain immaterial amounts from prior periods have been reclassified to conform to the current period presentation. These financial statements have been prepared in accordance with GAAP for interim financial statements, the instructions of Form 10-Q and Regulation S-X. Accordingly, certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with GAAP have been omitted from this interim report. Therefore, our interim financial statements in this report should be read along with the annual financial statements included in our Form 10-K for the fiscal year ended December 31, 2016. In the opinion of our management, the Condensed Financial Statements presented in this report contain all adjustments necessary to fairly state our financial position as of March 31, 2017; our results of operations for the three months ended March 31, 2017 and 2016 and our cash flows for the three months ended March 31, 2017 and 2016. Unless otherwise noted, all adjustments are normal and recurring in nature. Due to various factors, including, but not limited to, seasonal weather variations, the timing of outages of EGUs, changes in economic conditions involving commodity prices and competition, and other factors, interim results for the three months ended March 31, 2017 may not be indicative of our results that will be realized for the full year ending December 31, 2017. The preparation of financial statements in conformity with GAAP requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the revenues and expenses of the periods reported. Actual results could differ from these estimates. Significant items subject to such estimates and judgments include: the carrying value of property, plant and equipment; unbilled revenues; the valuation of derivative instruments; the valuation of insurance and claims liabilities; the valuation of allowances for receivables and deferred income taxes; regulatory assets and liabilities; liabilities recorded for income tax exposures; litigation; contingencies; the valuation of AROs; and assets and liabilities related to employee benefits. Accounting for Taxes Collected from Customers and Remitted to Governmental Authorities DP&L collects certain excise taxes levied by state or local governments from its customers. These taxes are accounted for on a net basis and not included in revenue. The amounts of such taxes collected for the three months ended March 31, 2017 and 2016 were $12.5 million and $12.9 million, respectively. New Accounting Pronouncements The following table provides a brief description of recent accounting pronouncements that could have a material impact on our financial statements:
ASU 2014-09 and its subsequent corresponding updates provide the principles an entity must apply to measure and recognize revenue. The core principle is that an entity shall recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Amendments to the standard were issued that provide further clarification of the principle and to provide certain transition expedients. The standard will replace most existing revenue recognition guidance in GAAP, including the guidance on recognizing other income upon the sale or transfer of nonfinancial assets (including in-substance real estate). The standard requires retrospective application and allows either a full retrospective adoption in which all of the periods are presented under the new standard or a modified retrospective approach in which the cumulative effect of initially applying the guidance is recognized at the date of initial application. We are currently working towards adopting the standard using the full retrospective method. However, we will continue to assess this conclusion which is dependent on the final impact to the financial statements. In 2016, we established a cross-functional implementation team and are in the process of evaluating changes to our business processes, systems and controls to support recognition and disclosure under the new standard. Given the complexity and diversity of our non-regulated arrangements, we are assessing the standard on a contract by contract basis and have completed more than half of the total expected effort. Through this assessment, we have identified certain key issues that we are continuing to evaluate in order to complete our assessment of the full population of contracts and be able to assess the overall impact to the financial statements. These issues include: the application of the practical expedient for measuring progress toward satisfaction of a performance obligation, when variable quantities would be considered variable consideration versus an option to acquire additional goods and services, and how to measure progress toward completion for a performance obligation that is a bundle. We are continuing to work with various non-authoritative industry groups, and monitoring the FASB and Transition Resource Group activity, as we finalize our accounting policy on these and other industry specific interpretative issues which is expected in 2017. We are currently evaluating certain contracts along with our tariff revenue, capacity agreements with PJM and wholesale agreements with PJM. We expect additional contracts to be executed during 2017 that will require assessment under the new standard. |
Supplemental Financial Information |
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Supplemental Financial Information | Supplemental Financial Information Accounts receivable and Inventories are as follows at March 31, 2017 and December 31, 2016:
Accumulated Other Comprehensive Income / (Loss) The amounts reclassified out of Accumulated Other Comprehensive Income / (Loss) by component during the three months ended March 31, 2017 and 2016 are as follows:
The changes in the components of Accumulated Other Comprehensive Income / (Loss) during the three months ended March 31, 2017 are as follows:
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Supplemental Financial Information | Supplemental Financial Information Accounts receivable and Inventories are as follows at March 31, 2017 and December 31, 2016:
Accumulated Other Comprehensive Income / (Loss) The amounts reclassified out of Accumulated Other Comprehensive Income / (Loss) by component during the three months ended March 31, 2017 and 2016 are as follows:
The changes in the components of Accumulated Other Comprehensive Income / (Loss) during the three months ended March 31, 2017 are as follows:
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Regulatory Matters (Notes) |
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Schedule of Regulatory Assets and Liabilities [Text Block] | Regulatory Matters DP&L originally filed its ESP 3 seeking an effective date of January 1, 2017. On October 11, 2016, DP&L amended the application requesting to collect $145.0 million per year for seven years named the Distribution Modernization Rider ("DMR"). This plan established the terms and conditions for DP&L’s SSO to customers that do not choose a competitive retail electric supplier, and recommended including renewable energy attributes as part of the product that is competitively bid. DP&L sought recovery of approximately $10.5 million of regulatory assets, and proposed a new Distribution Investment Rider to allow DP&L to recover costs associated with future distribution equipment and infrastructure needs. Additionally, the plan established new riders set initially at zero, related to energy reductions from DP&L’s energy efficiency programs, and certain environmental liabilities. On January 30, 2017, DP&L, in conjunction with various intervening parties, filed a settlement in the ESP 3 case. On March 13, 2017, DP&L, in conjunction with various intervening parties and the staff of the PUCO, filed an Amended Stipulation in the ESP 3 case, which is subject to PUCO approval. The intervening parties agreed to a six-year settlement that provides a framework for energy rates and defines components which include, but are not limited to, the following:
A hearing was held in April 2017 and a final decision by the PUCO is expected at the end of the second quarter or early in the third quarter of 2017. There can be no assurance that the Amended ESP 3 stipulation will be approved as filed or on a timely basis, and if the Amended ESP 3 stipulation is not approved on a timely basis or if the final ESP provides for terms that are more adverse than those submitted in DP&L's Amended stipulation, our results of operations, financial condition and cash flows and DPL's ability to meet long-term obligations, in the periods beyond twelve months from the date of this report, could be materially impacted. In connection with any sale or closure of our generation plants as contemplated by the ESP 3 settlement or otherwise, DPL and DP&L would expect to incur certain cash and non-cash charges, some or all of which could be material to the business and financial condition of DPL and DP&L. DP&L’s ESP 2 had been approved by the PUCO for the years 2014 - 2016, and permitted DP&L to collect a non-bypassable service stability rider equal to $110.0 million per year for each of those years and required DP&L to conduct competitive bid auctions to procure generation supply for SSO service. The Ohio Supreme Court in a June 2016 opinion stated that the PUCO’s approval of the ESP was reversed. In view of that reversal, DP&L filed a motion to withdraw its ESP 2 and implement rates consistent with those in effect prior to 2014. The PUCO approved DP&L’s withdrawal of ESP 2 and implementation plans. Those rates will be in effect until rates consistent with DP&L’s pending ESP 3 filing are approved and effective. In February 2017, several parties appealed the PUCO orders that approved both the withdrawal and the implementation plans to the Ohio Supreme Court. Those appeals are pending and the outcome and potential financial impact of those appeals cannot be determined at this time. |
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Subsidiaries [Member] | |||||||||||||||||||||||||||||
Schedule of Regulatory Assets and Liabilities [Text Block] | Regulatory Matters DP&L originally filed its ESP 3 seeking an effective date of January 1, 2017. On October 11, 2016, DP&L amended the application requesting to collect $145.0 million per year for seven years named the Distribution Modernization Rider ("DMR"). This plan established the terms and conditions for DP&L’s SSO to customers that do not choose a competitive retail electric supplier, and recommended including renewable energy attributes as part of the product that is competitively bid. DP&L sought recovery of approximately $10.5 million of regulatory assets, and proposed a new Distribution Investment Rider to allow DP&L to recover costs associated with future distribution equipment and infrastructure needs. Additionally, the plan established new riders set initially at zero, related to energy reductions from DP&L’s energy efficiency programs, and certain environmental liabilities. On January 30, 2017, DP&L, in conjunction with various intervening parties, filed a settlement in the ESP 3 case. On March 13, 2017, DP&L, in conjunction with various intervening parties and the staff of the PUCO, filed an Amended Stipulation in the ESP 3 case, which is subject to PUCO approval. The intervening parties agreed to a six-year settlement that provides a framework for energy rates and defines components which include, but are not limited to, the following:
A hearing was held in April 2017 and a final decision by the PUCO is expected at the end of the second quarter or early in the third quarter of 2017. There can be no assurance that the Amended ESP 3 stipulation will be approved as filed or on a timely basis, and if the Amended ESP 3 stipulation is not approved on a timely basis or if the final ESP provides for terms that are more adverse than those submitted in DP&L's Amended stipulation, our results of operations, financial condition and cash flows and DPL's ability to meet long-term obligations, in the periods beyond twelve months from the date of this report, could be materially impacted. In connection with any sale or closure of our generation plants as contemplated by the ESP 3 settlement or otherwise, DPL and DP&L would expect to incur certain cash and non-cash charges, some or all of which could be material to the business and financial condition of DPL and DP&L. DP&L’s ESP 2 had been approved by the PUCO for the years 2014 - 2016, and permitted DP&L to collect a non-bypassable service stability rider equal to $110.0 million per year for each of those years and required DP&L to conduct competitive bid auctions to procure generation supply for SSO service. The Ohio Supreme Court in a June 2016 opinion stated that the PUCO’s approval of the ESP was reversed. In view of that reversal, DP&L filed a motion to withdraw its ESP 2 and implement rates consistent with those in effect prior to 2014. The PUCO approved DP&L’s withdrawal of ESP 2 and implementation plans. Those rates will be in effect until rates consistent with DP&L’s pending ESP 3 filing are approved and effective. In February 2017, several parties appealed the PUCO orders that approved both the withdrawal and the implementation plans to the Ohio Supreme Court. Those appeals are pending and the outcome and potential financial impact of those appeals cannot be determined at this time. |
Property, Plant and Equipment (Notes) |
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Property, Plant and Equipment Disclosure [Text Block] | Property, Plant and Equipment DP&L and certain other Ohio utilities have undivided ownership interests in five coal-fired electric generating facilities and numerous transmission facilities. Certain expenses, primarily fuel costs for the generating units, are allocated to the owners based on their energy usage. The remaining expenses, investments in fuel inventory, plant materials and operating supplies, and capital additions are allocated to the owners in accordance with their respective ownership interests. At March 31, 2017, DP&L had $11.0 million of construction work in process at such facilities. DP&L’s share of the operations of such facilities is included within the corresponding line in the Condensed Consolidated Statements of Operations, and DP&L’s share of the investment in the facilities is included within Total net property, plant and equipment in the Condensed Consolidated Balance Sheets. Each joint owner provides their own financing for their share of the operations and capital expenditures of the jointly-owned station. Coal-fired facilities DP&L’s undivided ownership interest in such facilities at March 31, 2017, is as follows:
Each of the above generating units has SCR and FGD equipment installed. On January 10, 2017, a high pressure feedwater heater shell failed on Unit 1 at the J.M. Stuart station. As a result, $6.4 million of net book value was written off, resulting in a $3.2 million loss on disposal, net of insurance recoveries. As the damage assessment process is currently ongoing, we cannot determine the impact to operations or capacity at this time. On March 17, 2017, the Board of Directors of DP&L approved the retirement of the DP&L operated and co-owned Stuart Station coal-fired and diesel-fired generating units and the Killen Station coal-fired generating unit and combustion turbine on or before June 1, 2018, and DP&L agreed with the co-owners of these facilities to proceed with this plan of retirement. On April 21, 2017, DP&L and AES Ohio Generation entered into an agreement for the sale of DP&L’s undivided interests in Zimmer and Miami Fort, for $50.0 million in cash and the assumption of certain liabilities, including environmental. The purchase price is subject to adjustment at closing based on the amount of certain inventories, pre-paid amounts, employment benefits, insurance premiums, property taxes and other costs. The sale is subject to approval by the FERC and is expected to close in the third quarter of 2017. AROs We recognize AROs in accordance with GAAP which requires legal obligations associated with the retirement of long-lived assets to be recognized at their fair value at the time those obligations are incurred. Upon initial recognition of a legal liability, costs are capitalized as part of the related long-lived asset and depreciated over the useful life of the related asset. Our legal obligations are associated with the retirement of our long-lived assets, consisting primarily of river intake and discharge structures, coal unloading facilities, loading docks, ice breakers and ash disposal facilities. Estimating the amount and timing of future expenditures of this type requires significant judgment. Management routinely updates these estimates as additional information becomes available. Changes in the Liability for Generation AROs
See Note 5 – Fair Value for further discussion on ARO additions. |
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Property, Plant and Equipment Disclosure [Text Block] | Property, Plant and Equipment DP&L and certain other Ohio utilities have undivided ownership interests in five coal-fired electric generating facilities and numerous transmission facilities. Certain expenses, primarily fuel costs for the generating units, are allocated to the owners based on their energy usage. The remaining expenses, investments in fuel inventory, plant materials and operating supplies, and capital additions are allocated to the owners in accordance with their respective ownership interests. At March 31, 2017, DP&L had $11.0 million of construction work in process at such facilities. DP&L’s share of the operations of such facilities is included within the corresponding line in the Condensed Statements of Operations, and DP&L’s share of the investment in the facilities is included within Total net property, plant and equipment in the Condensed Balance Sheets. Each joint owner provides their own financing for their share of the operations and capital expenditures of the jointly-owned station. Coal-fired facilities DP&L’s undivided ownership interest in such facilities at March 31, 2017, is as follows:
Each of the above generating units has SCR and FGD equipment installed. On January 10, 2017, a high pressure feedwater heater shell failed on Unit 1 at the J.M. Stuart station. As a result, $6.4 million of net book value was written off, resulting in a $3.2 million loss on disposal, net of insurance recoveries. As the damage assessment process is currently ongoing, we cannot determine the impact to operations or capacity at this time. On March 17, 2017, the Board of Directors of DP&L approved the retirement of the DP&L operated and co-owned Stuart Station coal-fired and diesel-fired generating units and the Killen Station coal-fired generating unit and combustion turbine on or before June 1, 2018, and DP&L agreed with the co-owners of these facilities to proceed with this plan of retirement. On April 21, 2017, DP&L and AES Ohio Generation entered into an agreement for the sale of DP&L’s undivided interests in Zimmer and Miami Fort, for $50.0 million in cash and the assumption of certain liabilities, including environmental. The purchase price is subject to adjustment at closing based on the amount of certain inventories, pre-paid amounts, employment benefits, insurance premiums, property taxes and other costs. The sale is subject to approval by the FERC and is expected to close in the third quarter of 2017. AROs We recognize AROs in accordance with GAAP which requires legal obligations associated with the retirement of long-lived assets to be recognized at their fair value at the time those obligations are incurred. Upon initial recognition of a legal liability, costs are capitalized as part of the related long-lived asset and depreciated over the useful life of the related asset. Our legal obligations are associated with the retirement of our long-lived assets, consisting primarily of river intake and discharge structures, coal unloading facilities, loading docks, ice breakers and ash disposal facilities. Estimating the amount and timing of future expenditures of this type requires significant judgment. Management routinely updates these estimates as additional information becomes available. Changes in the Liability for Generation AROs
See Note 5 – Fair Value for further discussion on current year ARO additions. |
Fair Value |
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | Fair Value The fair values of our financial instruments are based on published sources for pricing when possible. We rely on valuation models only when no other methods exist. The value of our financial instruments represents our best estimates of the fair value, which may not be the value realized in the future. The following table presents the fair value, carrying value and cost of our non-derivative instruments at March 31, 2017 and December 31, 2016. Information about the fair value of our derivative instruments can be found in Note 6 – Derivative Instruments and Hedging Activities.
These financial instruments are not subject to master netting agreements or collateral requirements and as such are presented in the Condensed Consolidated Balance Sheet at their gross fair value, except for Debt, which is presented at amortized carrying value. Debt Unrealized gains or losses are not recognized in the financial statements as debt is presented at cost, net of unamortized premium or discount and deferred financing costs in the financial statements. The debt amounts include the current portion payable in the next twelve months and have maturities that range from 2019 to 2061. Master Trust Assets DP&L established Master Trusts to hold assets that could be used for the benefit of employees participating in employee benefit plans and these assets are not used for general operating purposes. These assets are primarily comprised of open-ended mutual funds, which are valued using the net asset value per unit. These investments are recorded at fair value within Other deferred assets on the balance sheets and classified as available-for-sale. Any unrealized gains or losses are recorded in AOCI until the securities are sold. DPL had $1.2 million ($0.8 million after tax) of unrealized gains and immaterial unrealized losses on the Master Trust assets in AOCI at March 31, 2017 and $1.0 million ($0.6 million after tax) of unrealized gains and immaterial unrealized losses on the Master Trust assets in AOCI at December 31, 2016. During the three months ended March 31, 2017, $0.7 million ($0.5 million after tax) of various investments were sold to facilitate the distribution of benefits and the unrealized gains were reversed into earnings. An immaterial amount of unrealized gains are expected to be reversed to earnings as investments are sold over the next twelve months to facilitate the distribution of benefits. Fair Value Hierarchy Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. These inputs are then categorized as:
Valuations of assets and liabilities reflect the value of the instrument including the values associated with counterparty risk. We include our own credit risk and our counterparty’s credit risk in our calculation of fair value using global average default rates based on an annual study conducted by a large rating agency. We did not have any transfers of the fair values of our financial instruments between Level 1, Level 2 or Level 3 of the fair value hierarchy during the three months ended March 31, 2017 or 2016. The fair value of assets and liabilities at March 31, 2017 and December 31, 2016 and the respective category within the fair value hierarchy for DPL was determined as follows:
Our financial instruments are valued using the market approach in the following categories:
Approximately 93.6% of the inputs to the fair value of our derivative instruments are from quoted market prices. Our debt is fair valued for disclosure purposes only and most of the fair values are determined using quoted market prices in inactive markets. These fair value inputs are considered Level 2 in the fair value hierarchy. As the Wright-Patterson Air Force Base loan is not publicly traded, fair value is assumed to equal carrying value. These fair value inputs are considered Level 3 in the fair value hierarchy as there are no observable inputs. Additional Level 3 disclosures are not presented since debt is not recorded at fair value. Non-recurring Fair Value Measurements We use the cost approach to determine the fair value of our AROs, which is estimated by discounting expected cash outflows to their present value at the initial recording of the liability. Cash outflows are based on the approximate future disposal cost as determined by market information, historical information or other management estimates. These inputs to the fair value of the AROs would be considered Level 3 inputs under the fair value hierarchy. As a result of changes in our estimates of costs to be incurred for our AROs, we decreased our AROs by $4.4 million in the first quarter of 2017. AROs for ash ponds, asbestos, river structures and underground storage tanks decreased by a net amount of $(3.1) million and decreased by a net amount of $(0.6) million during the three months ended March 31, 2017 and 2016, respectively. On March 17, 2017, the Board of Directors of DP&L approved the retirement of the DP&L operated and co-owned Stuart Station coal-fired and diesel-fired generating units and the Killen Station coal-fired generating unit and combustion turbine (collectively, the “Facilities”) on or before June 1, 2018, and DP&L agreed with the co-owners of the Facilities to proceed with this plan of retirement. As such, we performed a long-lived asset impairment analysis and determined that the carrying amounts of the Facilities were not recoverable. See Note 14 – Fixed-asset Impairment. When evaluating impairment of long-lived assets, we measure fair value using the applicable fair value measurement guidance. Impairment expense is measured by comparing the fair value at the evaluation date to the carrying amount. The following table summarizes Long-lived assets measured at fair value on a non-recurring basis during the period and their level within the fair value hierarchy (there were no impairments during the three months ended March 31, 2016):
(a)See Note 14 – Fixed-asset Impairment for further information (b)Carrying amount at date of valuation The following summarizes the significant unobservable inputs used in the Level 3 measurement on a non-recurring basis during the three months ended March 31, 2017:
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THE DAYTON POWER AND LIGHT COMPANY [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | Fair Value The fair values of our financial instruments are based on published sources for pricing when possible. We rely on valuation models only when no other methods exist. The value of our financial instruments represents our best estimates of the fair value, which may not be the value realized in the future. The following table presents the fair value, carrying value and cost of our non-derivative instruments at March 31, 2017 and December 31, 2016. Information about the fair value of our derivative instruments can be found in Note 6 – Derivative Instruments and Hedging Activities.
These financial instruments are not subject to master netting agreements or collateral requirements and as such are presented in the Condensed Balance Sheet at their gross fair value, except for Debt, which is presented at amortized carrying value. Debt Unrealized gains or losses are not recognized in the financial statements as debt is presented at cost, net of unamortized premium or discount and deferred financing costs in the financial statements. The debt amounts include the current portion payable in the next twelve months and have maturities that range from 2020 to 2061. Master Trust Assets DP&L established Master Trusts to hold assets that could be used for the benefit of employees participating in employee benefit plans and these assets are not used for general operating purposes. These assets are primarily comprised of open-ended mutual funds, which are valued using the net asset value per unit. These investments are recorded at fair value within Other deferred assets on the balance sheets and classified as available-for-sale. Any unrealized gains or losses are recorded in AOCI until the securities are sold. DP&L had $1.3 million ($0.9 million after tax) of unrealized gains and immaterial unrealized losses on the Master Trust assets in AOCI at March 31, 2017 and $1.1 million ($0.7 million after tax) in unrealized gains and immaterial unrealized losses on the Master Trust assets in AOCI at December 31, 2016. During the three months ended March 31, 2017, $0.7 million ($0.5 million after tax) of various investments were sold to facilitate the distribution of benefits and the unrealized gains were reversed into earnings. An immaterial amount of unrealized gains are expected to be reversed to earnings as investments are sold over the next twelve months to facilitate the distribution of benefits. Fair Value Hierarchy Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. These inputs are then categorized as:
Valuations of assets and liabilities reflect the value of the instrument including the values associated with counterparty risk. We include our own credit risk and our counterparty’s credit risk in our calculation of fair value using global average default rates based on an annual study conducted by a large rating agency. We did not have any transfers of the fair values of our financial instruments between Level 1, Level 2 or Level 3 of the fair value hierarchy during the three months ended March 31, 2017 or 2016. The fair value of assets and liabilities at March 31, 2017 and December 31, 2016 and the respective category within the fair value hierarchy for DP&L was determined as follows:
Our financial instruments are valued using the market approach in the following categories:
Our debt is fair valued for disclosure purposes only and most of the fair values are determined using quoted market prices in inactive markets. These fair value inputs are considered Level 2 in the fair value hierarchy. As the Wright-Patterson Air Force Base loan is not publicly traded, fair value is assumed to equal carrying value. These fair value inputs are considered Level 3 in the fair value hierarchy as there are no observable inputs. Additional Level 3 disclosures are not presented since debt is not recorded at fair value. Approximately 93.6% of the inputs to the fair value of our derivative instruments are from quoted market prices. Non-recurring Fair Value Measurements We use the cost approach to determine the fair value of our AROs, which is estimated by discounting expected cash outflows to their present value at the initial recording of the liability. Cash outflows are based on the approximate future disposal cost as determined by market information, historical information or other management estimates. These inputs to the fair value of the AROs would be considered Level 3 inputs under the fair value hierarchy. As a result of changes in our estimates of costs to be incurred for our AROs, we decreased our AROs by $4.4 million in the first quarter of 2017. AROs for ash ponds, asbestos, river structures and underground storage tanks decreased by a net amount of $(2.9) million and decreased by a net amount of $(0.6) million during the three months ended March 31, 2017 and 2016, respectively. On March 17, 2017, the Board of Directors of DP&L approved the retirement of the DP&L operated and co-owned Stuart Station coal-fired and diesel-fired generating units and the Killen Station coal-fired generating unit and combustion turbine (collectively, the “Facilities”) on or before June 1, 2018, and DP&L agreed with the co-owners of the Facilities to proceed with this plan of retirement. As such, we performed a long-lived asset impairment analysis and determined that the carrying amounts of the Facilities were not recoverable. See Note 14 – Fixed-asset Impairment. When evaluating impairment of long-lived assets, we measure fair value using the applicable fair value measurement guidance. Impairment expense is measured by comparing the fair value at the evaluation date to the carrying amount. The following table summarizes Long-lived assets measured at fair value on a non-recurring basis during the period and their level within the fair value hierarchy (there were no impairments during the three months ended March 31, 2016):
(a)See Note 14 – Fixed-asset Impairment for further information (b)Carrying amount at date of valuation The following summarizes the significant unobservable inputs used in the Level 3 measurement on a non-recurring basis during the three months ended March 31, 2017:
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Derivative Instruments and Hedging Activities |
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Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities In the normal course of business, DPL enters into various financial arrangements, including derivative financial instruments. We use derivatives principally to manage the risk of changes in market prices for commodities. The derivatives that we use to economically hedge these risks are governed by our risk management policies for forward and futures contracts. Our net positions are continually assessed within our structured hedging programs to determine whether new or offsetting transactions are required. The objective of the hedging program is to mitigate financial risks while ensuring that we have adequate resources to meet our requirements. We monitor and value derivative positions monthly as part of our risk management processes. We use published sources for pricing, when possible, to mark positions to market. All of our derivative instruments are used for risk management purposes and are designated as normal purchase/normal sale, cash flow hedges or marked to market each reporting period. At March 31, 2017, DPL had the following outstanding derivative instruments:
(a) Refers to whether the derivative instruments have been designated as a cash flow hedge. At December 31, 2016, DPL had the following outstanding derivative instruments:
(a) Refers to whether the derivative instruments have been designated as a cash flow hedge. Cash Flow Hedges As part of our risk management processes, we identify the relationships between hedging instruments and hedged items, as well as the risk management objective and strategy for undertaking various hedge transactions. The fair value of cash flow hedges is determined by observable market prices available as of the balance sheet dates and will continue to fluctuate with changes in market prices up to contract expiration. The effective portion of the hedging transaction is recognized in AOCI and transferred to earnings using specific identification of each contract when the forecasted hedged transaction takes place or when the forecasted hedged transaction is probable of not occurring. The ineffective portion of the cash flow hedge is recognized in earnings in the current period. All risk components were taken into account to determine the hedge effectiveness of the cash flow hedges. We enter into forward power contracts to manage commodity price risk exposure related to our generation of electricity. We do not hedge all commodity price risk. We reclassify gains and losses on forward power contracts from AOCI into earnings in those periods in which the contracts settle. In November 2016, we entered into two interest rate swaps to hedge the variable interest on our $200.0 million variable interest rate tax-exempt First Mortgage Bonds. The interest rate swaps have a combined notional amount of $200.0 million and will settle monthly based on a one month LIBOR. We use the income approach to value the swaps, which consists of forecasting future cash flows based on contractual notional amounts and applicable and available market data as of the valuation date. The most common market data inputs used in the income approach include volatilities, spot and forward benchmark interest rates (LIBOR). Forward rates with the same tenor as the derivative instrument being valued are generally obtained from published sources, with these forward rates being assessed quarterly at a portfolio-level for reasonableness versus comparable published rates. We reclassify gains and losses on the swaps out of AOCI and into earnings in those periods in which hedged interest payments occur. We had previously entered into interest rate derivative contracts to manage interest rate exposure related to anticipated borrowings of fixed-rate debt. These interest rate derivative contracts were settled in the third quarter of 2013 and we continue to amortize amounts out of AOCI into interest expense. The following table provides information for DPL concerning gains or losses recognized in AOCI for the cash flow hedges for the three months ended March 31, 2017 and 2016:
(a)The actual amounts that we reclassify from AOCI to earnings related to power can differ from the estimate above due to market price changes. Derivatives not designated as hedges Certain derivative contracts are entered into on a regular basis as part of our risk management program but do not qualify for hedge accounting or the normal purchase and sales scope exceptions under FASC 815. Accordingly, such contracts are recorded at fair value with changes in the fair value charged or credited to the Condensed Consolidated Statements of Operations in the period in which the change occurred. This is commonly referred to as “MTM accounting.” Contracts we enter into as part of our risk management program may be settled financially, by physical delivery, or net settled with the counterparty. FTRs, natural gas futures, and certain forward power contracts are currently marked to market. Certain qualifying derivative instruments have been designated as normal purchases or normal sales contracts, as provided under GAAP. Derivative contracts that have been designated as normal purchases or normal sales under GAAP are not subject to MTM accounting and are recognized in the Condensed Consolidated Statements of Operations on an accrual basis. Financial Statement Effect The following tables present the amount and classification within the Condensed Consolidated Statements of Operations of the gains and losses on DPL’s derivatives not designated as hedging instruments for the three months ended March 31, 2017 and 2016:
DPL has elected not to offset derivative assets and liabilities and not to offset net derivative positions against the right to reclaim cash collateral pledged (an asset) or the obligation to return cash collateral received (a liability) under derivative agreements. The following tables summarize the derivative positions presented in the balance sheet where a right of offset exists under these arrangements and related cash collateral received or pledged. The following table presents the fair value and balance sheet classification of DPL’s derivative instruments at March 31, 2017:
The following table presents the fair value and balance sheet classification of DPL’s derivative instruments at December 31, 2016:
Credit risk-related contingent features Certain of our OTC commodity derivative contracts are under master netting agreements that contain provisions that require us to post collateral if our credit ratings drop below certain thresholds. We have crossed that threshold with one counterparty to the derivative instruments and they could request that we post collateral of $0.9 million at this time. The aggregate fair value of DPL’s commodity derivative instruments that were in a MTM loss position at March 31, 2017 was $18.9 million. $0.5 million of collateral was posted directly with third parties and in a broker margin account which offsets our loss positions on the forward contracts. This liability position is further offset by the asset position of counterparties with master netting agreements of $14.4 million. Since our debt is below investment grade, we could have to post collateral for the remaining $4.0 million. |
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THE DAYTON POWER AND LIGHT COMPANY [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities In the normal course of business, DP&L enters into various financial arrangements, including derivative financial instruments. We use derivatives principally to manage the risk of changes in market prices for commodities. The derivatives that we use to economically hedge these risks are governed by our risk management policies for forward and futures contracts. Our net positions are continually assessed within our structured hedging programs to determine whether new or offsetting transactions are required. The objective of the hedging program is to mitigate financial risks while ensuring that we have adequate resources to meet our requirements. We monitor and value derivative positions monthly as part of our risk management processes. We use published sources for pricing, when possible, to mark positions to market. All of our derivative instruments are used for risk management purposes and are designated as normal purchase/normal sale, cash flow hedges or marked to market each reporting period. At March 31, 2017, DP&L had the following outstanding derivative instruments:
(a) Refers to whether the derivative instruments have been designated as a cash flow hedge. At December 31, 2016, DP&L had the following outstanding derivative instruments:
(a) Refers to whether the derivative instruments have been designated as a cash flow hedge. Cash Flow Hedges As part of our risk management processes, we identify the relationships between hedging instruments and hedged items, as well as the risk management objective and strategy for undertaking various hedge transactions. The fair value of cash flow hedges is determined by observable market prices available as of the balance sheet dates and will continue to fluctuate with changes in market prices up to contract expiration. The effective portion of the hedging transaction is recognized in AOCI and transferred to earnings using specific identification of each contract when the forecasted hedged transaction takes place or when the forecasted hedged transaction is probable of not occurring. The ineffective portion of the cash flow hedge is recognized in earnings in the current period. All risk components were taken into account to determine the hedge effectiveness of the cash flow hedges. We enter into forward power contracts to manage commodity price risk exposure related to our generation of electricity. We do not hedge all commodity price risk. We reclassify gains and losses on forward power contracts from AOCI into earnings in those periods in which the contracts settle. In November 2016, we entered into two interest rate swaps to hedge the variable interest on our $200.0 million variable interest rate tax-exempt First Mortgage Bonds. The interest rate swaps have a combined notional amount of $200.0 million and will settle monthly based on a one month LIBOR. We use the income approach to value the swaps, which consists of forecasting future cash flows based on contractual notional amounts and applicable and available market data as of the valuation date. The most common market data inputs used in the income approach include volatilities, spot and forward benchmark interest rates (LIBOR). Forward rates with the same tenor as the derivative instrument being valued are generally obtained from published sources, with these forward rates being assessed quarterly at a portfolio-level for reasonableness versus comparable published rates. We reclassify gains and losses on the swaps out of AOCI and into earnings in those periods in which hedged interest payments occur. The following table provides information for DP&L concerning gains or losses recognized in AOCI for the cash flow hedges for the three months ended March 31, 2017 and 2016:
Derivatives not designated as hedges Certain derivative contracts are entered into on a regular basis as part of our risk management program but do not qualify for hedge accounting or the normal purchase and sales scope exceptions under FASC 815. Accordingly, such contracts are recorded at fair value with changes in the fair value charged or credited to the Condensed Statements of Operations in the period in which the change occurred. This is commonly referred to as “MTM accounting.” Contracts we enter into as part of our risk management program may be settled financially, by physical delivery, or net settled with the counterparty. FTRs, natural gas futures, and certain forward power contracts are currently marked to market. Certain qualifying derivative instruments have been designated as normal purchases or normal sales contracts, as provided under GAAP. Derivative contracts that have been designated as normal purchases or normal sales under GAAP are not subject to MTM accounting and are recognized in the Condensed Statements of Operations on an accrual basis. Financial Statement Effect The following tables present the amount and classification within the Condensed Statements of Operations of the gains and losses on DP&L's derivatives not designated as hedging instruments for the three months ended March 31, 2017 and 2016:
DP&L has elected not to offset derivative assets and liabilities and not to offset net derivative positions against the right to reclaim cash collateral pledged (an asset) or the obligation to return cash collateral received (a liability) under derivative agreements. The following tables summarize the derivative positions presented in the balance sheet where a right of offset exists under these arrangements and related cash collateral received or pledged. The following table presents the fair value and balance sheet classification of DP&L’s derivative instruments at March 31, 2017:
The following table presents the fair value and balance sheet classification of DP&L’s derivative instruments at December 31, 2016:
Credit risk-related contingent features Certain of our OTC commodity derivative contracts are under master netting agreements that contain provisions that require us to post collateral if our credit ratings drop below certain thresholds. We have crossed that threshold with one counterparty to the derivative instruments and they could request that we post collateral of $0.9 million at this time. The aggregate fair value of DP&L’s commodity derivative instruments that were in a MTM loss position at March 31, 2017 was $18.9 million. $0.5 million of collateral was posted directly with third parties and in a broker margin account which offsets our loss positions on the forward contracts. This liability position is further offset by the asset position of counterparties with master netting agreements of $14.4 million. Since our debt is below investment grade, we could have to post collateral for the remaining $4.0 million. |
Debt Obligations |
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Debt Obligations | Debt The following table provides a summary of DPL's outstanding debt.
Premiums or discounts are amortized over the remaining life of the debt using the effective interest method. Debt covenants and restrictions DP&L’s unsecured revolving credit agreement and Bond Purchase and Covenants Agreement have two financial covenants. The first measures Total Debt to Total Capitalization and is calculated at the end of each fiscal quarter by dividing total debt at the end of the quarter by total capitalization at the end of the quarter. The second financial covenant ratio compares EBITDA to Interest Expense and is calculated at the end of each fiscal quarter by dividing EBITDA for the four prior fiscal quarters by the consolidated interest charges for the same period. On February 21, 2017, DP&L and its lenders amended DP&L’s revolving credit agreement and Bond Purchase and Covenant Agreement. These amendments modified the definition of Consolidated Net Worth (which is used for measuring the Total Debt to Total Capitalization ratio under each of the agreements), to exclude, through March 31, 2018, non-cash charges related directly to impairments of coal generation assets in DP&L's fiscal quarter ending December 31, 2016 and thereafter. With this amendment, DP&L’s Total Debt to Total Capitalization ratio for the period ending March 31, 2017 is 0.53 to 1.00. The amendment also changed, for each amendment, the dates after generation separation during which compliance with the Total Capitalization ratio detailed above shall be suspended if long-term indebtedness, as determined by the PUCO, is less than or equal to $750.0 million. As noted above this time period previously was January 1, 2017 to December 31, 2017, and is now the twelve months immediately subsequent to the separation of the generation assets from DP&L. The cost of borrowing under DP&L's unsecured revolving credit agreement and Bond Purchase and Covenants Agreement adjust under certain credit rating scenarios. DPL’s revolving credit agreement and term loan have two financial covenants. The first financial covenant, a Total Debt to EBITDA ratio, is calculated at the end of each fiscal quarter by dividing total debt at the end of the current quarter by consolidated EBITDA for the four prior fiscal quarters. The second financial covenant, an EBITDA to Interest Expense ratio, is calculated, at the end of each fiscal quarter, by dividing EBITDA for the four prior fiscal quarters by the consolidated interest charges for the same period. The cost of borrowing under DPL's revolving credit agreement and term loan adjust under certain credit rating scenarios. DPL’s revolving credit agreement, term loan, and senior unsecured notes due 2019 restrict dividend payments from DPL to AES. As of March 31, 2017, DP&L and DPL were in compliance with all debt covenants, including the financial covenants described above. Substantially all property, plant & equipment of DP&L is subject to the lien of the mortgage securing DP&L’s First and Refunding Mortgage. |
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Debt Obligations | Debt The following table provides a summary of DP&L's outstanding debt.
(a)Range of interest rates for the three months ended March 31, 2017. (b)Range of interest rates for the year ended December 31, 2016. Premiums or discounts are amortized over the remaining life of the debt using the effective interest method. Debt covenants and restrictions DP&L’s unsecured revolving credit agreement and Bond Purchase and Covenants Agreement have two financial covenants. The first measures Total Debt to Total Capitalization and is calculated, at the end of each fiscal quarter, by dividing total debt at the end of the quarter by total capitalization at the end of the quarter. The second financial covenant measures EBITDA to Interest Expense and is calculated at the end of each fiscal quarter by dividing EBITDA for the four prior fiscal quarters by the consolidated interest charges for the same period. On February 21, 2017, DP&L and its lenders amended DP&L’s revolving credit agreement and Bond Purchase and Covenant Agreement. These amendments modified the definition of Consolidated Net Worth (which is used for measuring the Total Debt to Total Capitalization ratio under each of the agreements), to exclude, through March 31, 2018, non-cash charges related directly to impairments of coal generation assets in DP&L's fiscal quarter ending December 31, 2016 and thereafter. With this amendment, DP&L’s Total Debt to Total Capitalization ratio for the period ending March 31, 2017 is 0.53 to 1.00. The amendment also changed, for each amendment, the dates after generation separation during which compliance with the Total Capitalization ratio detailed above shall be suspended if long-term indebtedness, as determined by the PUCO, is less than or equal to $750.0 million. As noted above this time period previously was January 1, 2017 to December 31, 2017, and is now the twelve months immediately subsequent to the separation of the generation assets from DP&L. As of March 31, 2017, DP&L was in compliance with all debt covenants, including the financial covenants described above. The cost of borrowing under DP&L's unsecured revolving credit agreement and Bond Purchase and Covenants Agreement adjusts under certain credit rating scenarios. Substantially all property, plant & equipment of DP&L is subject to the lien of the mortgage securing DP&L’s First and Refunding Mortgage. |
Income Taxes |
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Income Taxes | Income Taxes The following table details the effective tax rates for the three months ended March 31, 2017 and 2016.
Income tax expense for the three months ended March 31, 2017 and 2016 was calculated using the estimated annual effective income tax rates for 2017 and 2016 of 37.6% and 20.6%, respectively. For the three months ended March 31, 2017 and 2016, management estimated the annual effective tax rate based on its forecast of annual pre-tax income. To the extent that actual pre-tax results for the year differ from the forecasts applied to the most recent interim period, the rates estimated could be materially different from the actual effective tax rates. The increase in the annual effective rate compared to the same period in 2016 is primarily due to an increase of forecasted tax expense relating to flow-through depreciation and a reduction in the projected manufacturer's production deduction. |
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Income Taxes | Income Taxes The following table details the effective tax rates for the three months ended March 31, 2017 and 2016.
Income tax expense for the three months ended March 31, 2017 and 2016 was calculated using the estimated annual effective income tax rates for 2017 and 2016 of 33.8% and 27.0%, respectively. For the three months ended March 31, 2017 and 2016 management estimated the annual effective tax rate based on its forecast of annual pre-tax income. To the extent that actual pre-tax results for the year differ from the forecasts applied to the most recent interim period, the rates estimated could be materially different from the actual effective tax rates. The increase in the annual effective rate compared to the same period in 2016 is primarily due to an increase of forecasted tax expense relating to flow-through depreciation and a reduction in the projected manufacturer's production deduction. |
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Pension and Postretirement Benefits | Benefit Plans DP&L sponsors a defined benefit pension plan for the vast majority of its employees. We generally fund pension plan benefits as accrued in accordance with the minimum funding requirements of ERISA and, in addition, make voluntary contributions from time to time. There were $5.0 million in employer contributions during each of the three months ended March 31, 2017 and 2016. The amounts presented in the following tables for pension include the collective bargaining plan formula, the traditional management plan formula, the cash balance plan formula and the SERP, in the aggregate. The pension costs below have not been adjusted for amounts billed to the Service Company for former DP&L employees who are now employed by the Service Company but are still participants in the DP&L plan. See Note 11 – Related Party Transactions. The net periodic benefit cost of the pension benefit plans for the three months ended March 31, 2017 and 2016 was:
In addition, DP&L provides postretirement health care and life insurance benefits to certain retired employees, their spouses and eligible dependents. We have funded a portion of the union-eligible benefits using a Voluntary Employee Beneficiary Association Trust. These postretirement health care benefits and the related unfunded obligation of $15.8 million at both March 31, 2017 and December 31, 2016 were not material to the Financial Statements in the periods covered by this report. Benefit payments, which reflect future service, are estimated to be paid as follows:
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Pension and Postretirement Benefits | Benefit Plans DP&L sponsors a defined benefit pension plan for the vast majority of its employees. We generally fund pension plan benefits as accrued in accordance with the minimum funding requirements of ERISA and, in addition, make voluntary contributions from time to time. There were $5.0 million in employer contributions during each of the three months ended March 31, 2017 and 2016. The amounts presented in the following tables for pension include the collective bargaining plan formula, the traditional management plan formula, the cash balance plan formula and the SERP, in the aggregate. The pension costs below have not been adjusted for amounts billed to the Service Company for former DP&L employees who are now employed by the Service Company but are still participants in the DP&L plan. See Note 12 – Related Party Transactions. The net periodic benefit cost of the pension benefit plans for the three months ended March 31, 2017 and 2016 was:
In addition, DP&L provides postretirement health care and life insurance benefits to certain retired employees, their spouses and eligible dependents. We have funded a portion of the union-eligible benefits using a Voluntary Employee Beneficiary Association Trust. These postretirement health care benefits and the related unfunded obligation of $15.8 million at both March 31, 2017 and December 31, 2016 were not material to the Financial Statements in the periods covered by this report. Benefit payments, which reflect future service, are estimated to be paid as follows:
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Shareholder's Equity |
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THE DAYTON POWER AND LIGHT COMPANY [Member] | |
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Shareholder's Equity | Shareholder’s Equity DP&L has 250,000,000 authorized $0.01 par value common shares, of which 41,172,173 are outstanding at March 31, 2017. All common shares are held by DP&L’s parent, DPL. As part of the PUCO’s approval of the Merger, DP&L agreed to maintain a capital structure that includes an equity ratio, calculated as total equity divided by total capitalization, of at least 50 percent and not to have a negative retained earnings balance. After the fixed-asset impairments recorded in 2017 and 2016 and as of March 31, 2017, DP&L's equity ratio was 30% and retained earnings balance was negative. It is unknown what impact, if any, this will have on DP&L. In the generation separation order dated September 17, 2014, the PUCO permitted DP&L to temporarily maintain long-term debt of $750.0 million or 75% of its rate base, whichever is greater, until January 1, 2018. |
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Contractual Obligations, Commercial Commitments and Contingencies | Contractual Obligations, Commercial Commitments and Contingencies Guarantees In the normal course of business, DPL enters into various agreements with its wholly-owned subsidiary, AES Ohio Generation, providing financial or performance assurance to third parties. These agreements are entered into primarily to support or enhance the creditworthiness otherwise attributed to this subsidiary on a stand-alone basis, thereby facilitating the extension of sufficient credit to accomplish these subsidiary's intended commercial purposes. At March 31, 2017, DPL had $24.6 million of guarantees on behalf of AES Ohio Generation to third parties for future financial or performance assurance under such agreements. The guarantee arrangements entered into by DPL with these third parties cover select present and future obligations of AES Ohio Generation to such beneficiaries and are terminable by DPL upon written notice to the beneficiaries within a certain time. The carrying amount of obligations for commercial transactions covered by these guarantees recorded in our Condensed Consolidated Balance Sheets was $2.4 million and $2.3 million at March 31, 2017 and December 31, 2016, respectively. To date, DPL has not incurred any losses related to the guarantees of AES Ohio Generation’s obligations and we believe it is remote that DPL would be required to perform or incur any losses in the future associated with any of the above guarantees. Equity Ownership Interest DP&L owns a 4.9% equity ownership interest in OVEC, which is recorded using the cost method of accounting under GAAP. As of March 31, 2017, DP&L could be responsible for the repayment of 4.9%, or $72.5 million, of a $1,479.6 million debt obligation that has maturities from 2018 to 2040. This would happen if OVEC defaulted on debt payments. OVEC could also seek additional contributions from us to avoid a default in the event that other OVEC members defaulted on their OVEC repayment obligations. As of March 31, 2017, we have no knowledge of such a default. Commercial Commitments and Contractual Obligations There have been no material changes, outside the ordinary course of business, to our commercial commitments and to the information disclosed in the contractual obligations table in our Form 10-K for the fiscal year ended December 31, 2016. Contingencies In the normal course of business, we are subject to various lawsuits, actions, proceedings, claims and other matters asserted under various laws and regulations. We believe the amounts provided in our Condensed Consolidated Financial Statements, as prescribed by GAAP, are adequate in light of the probable and estimable contingencies. However, there can be no assurances that the actual amounts required to satisfy alleged liabilities from various legal proceedings, claims, tax examinations and other matters discussed below, and to comply with applicable laws and regulations, will not exceed the amounts reflected in our Condensed Consolidated Financial Statements. As such, costs, if any, that may be incurred in excess of those amounts provided as of March 31, 2017, cannot be reasonably determined. Environmental Matters DPL’s and DP&L’s facilities and operations are subject to a wide range of federal, state and local environmental regulations and laws. The environmental issues that may affect us include:
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Contractual Obligations, Commercial Commitments and Contingencies | Contractual Obligations, Commercial Commitments and Contingencies Equity Ownership Interest DP&L owns a 4.9% equity ownership interest in OVEC, which is recorded using the cost method of accounting under GAAP. As of March 31, 2017, DP&L could be responsible for the repayment of 4.9%, or $72.5 million, of a $1,479.6 million debt obligation that has maturities from 2018 to 2040. This would happen if OVEC defaulted on debt payments. OVEC could also seek additional contributions from us to avoid a default in the event that other OVEC members defaulted on their OVEC repayment obligations. As of March 31, 2017, we have no knowledge of such a default. Commercial Commitments and Contractual Obligations There have been no material changes, outside the ordinary course of business, to our commercial commitments and to the information disclosed in the contractual obligations table in our Form 10-K for the fiscal year ended December 31, 2016. Contingencies In the normal course of business, we are subject to various lawsuits, actions, proceedings, claims and other matters asserted under various laws and regulations. We believe the amounts provided in our Condensed Financial Statements, as prescribed by GAAP, are adequate in light of the probable and estimable contingencies. However, there can be no assurances that the actual amounts required to satisfy alleged liabilities from various legal proceedings, claims, tax examinations and other matters discussed below, and to comply with applicable laws and regulations, will not exceed the amounts reflected in our Condensed Financial Statements. As such, costs, if any, that may be incurred in excess of those amounts provided as of March 31, 2017, cannot be reasonably determined. Environmental Matters DP&L’s facilities and operations are subject to a wide range of federal, state and local environmental regulations and laws. The environmental issues that may affect us include:
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Related Party Transactions | Related Party Transactions Service Company The Service Company provides services including operations, accounting, legal, human resources, information technology and other corporate services on behalf of companies that are part of the U.S. SBU, including, among other companies, DPL and DP&L. The Service Company allocates the costs for these services based on cost drivers designed to result in fair and equitable allocations. This includes ensuring that the regulated utilities served, including DP&L, are not subsidizing costs incurred for the benefit of other businesses. Benefit plans DPL has an agreement with AES or one of its affiliates to participate in a group benefits program, including but not limited to, health, dental, vision and life benefits. AES or its affiliate administers the financial aspects of the group insurance program, receives all premium payments from the participating affiliates, and makes all vendor payments. The following table provides a summary of these transactions:
DPL Capital Trust II DPL has a wholly-owned business trust, DPL Capital Trust II (the "Trust"), formed for the purpose of issuing trust capital securities to third-party investors. Effective in 2003, DPL deconsolidated the Trust upon adoption of the accounting standards related to variable interest entities and currently treats the Trust as a nonconsolidated subsidiary. The Trust holds mandatorily redeemable trust capital securities. The investment in the Trust, which amounts to $0.3 million and $0.3 million at March 31, 2017 and December 31, 2016, respectively, is included in Other deferred assets within Other non-current assets. DPL also has a note payable to the Trust amounting to $15.6 million and $15.6 million at March 31, 2017 and December 31, 2016, respectively, that was established upon the Trust’s deconsolidation in 2003. See Note 7 – Debt for additional information. In addition to the obligations under the note payable mentioned above, DPL also agreed to a security obligation which represents a full and unconditional guarantee of payments to the capital security holders of the Trust. Income taxes AES files federal and state income tax returns which consolidate DPL and its subsidiaries. Under a tax sharing agreement with AES, DPL is responsible for the income taxes associated with its own taxable income and records the provision for income taxes using a separate return method. DPL had net payable balances of $70.6 million and $97.2 million at March 31, 2017 and December 31, 2016, respectively, which are recorded in Accrued taxes on the accompanying Balance Sheets on a gross basis. |
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Related Party Transactions | Related Party Transactions Service Company The Service Company provides services including operations, accounting, legal, human resources, information technology and other corporate services on behalf of companies that are part of the U.S. SBU, including, among other companies, DPL and DP&L. The Service Company allocates the costs for these services based on cost drivers designed to result in fair and equitable allocations. This includes ensuring that the regulated utilities served, including DP&L, are not subsidizing costs incurred for the benefit of other businesses. Benefit plans DPL has an agreement with AES or one of its affiliates to participate in a group benefits program, including but not limited to, health, dental, vision and life benefits. AES or its affiliate administers the financial aspects of the group insurance program, receives all premium payments from the participating affiliates, and makes all vendor payments. The following table provides a summary of these transactions:
Income taxes AES files federal and state income tax returns which consolidate DPL and its subsidiaries, including DP&L. Under a tax sharing agreement with DPL, DP&L is responsible for the income taxes associated with its own taxable income and records the provision for income taxes using a separate return method. DP&L had net receivable balances of $23.7 million and $9.5 million at March 31, 2017 and December 31, 2016, respectively, which are recorded in Accounts receivable, net on the accompanying Balance Sheets on a gross basis. Gain on termination of contract On January 1, 2016, DPL closed on the sale of DPLER. Also on January 1, 2016, DP&L terminated the contract it had with DPLER for the supply of electricity. The agreement terminating the contract was signed on December 28, 2015 and DP&L received $27.7 million of restricted cash on December 31, 2015 for the early termination of the contract. For the three months ended March 31, 2016, this amount was recorded in Gain on termination of contract in the Condensed Statements of Operations and the cash received was included in Cash flows from operating activities in the Condensed Statements of Cash Flows. |
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Segment Reporting Information [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segments | Business Segments During the fourth quarter of 2016, DPL's management reassessed the reportable business segments in connection with recent changes in the regulatory environment, including the pending ESP case, and in preparation for the anticipated transfer of DP&L’s generation assets to AES Ohio Generation. DPL currently manages the business through two reportable operating segments, the T&D segment and the Generation segment. The primary segment performance measure is income / (loss) from continuing operations before income tax as management has concluded that income / (loss) from continuing operations before income tax best reflects the underlying business performance of DPL and is the most relevant measure considered in DPL’s internal evaluation of the financial performance of its segments. The segments are discussed further below: Transmission and Distribution Segment The T&D segment is comprised primarily of DP&L’s electric transmission and distribution businesses, which distribute electricity to residential, commercial, industrial and governmental customers. DP&L distributes electricity to more than 520,000 retail customers who are located in a 6,000 square mile area of West Central Ohio. DP&L’s electric transmission and distribution businesses are subject to rate regulation by federal and state regulators. Accordingly, DP&L applies the accounting standards for regulated operations to its electric transmission and distribution businesses and records regulatory assets when incurred costs are expected to be recovered in future customer rates, and regulatory liabilities when current cost recoveries in customer rates relate to expected future costs. The T&D segment includes revenues and costs associated with our investment in OVEC and the historical results of DP&L’s Beckjord, Hutchings Coal, and East Bend generating facilities, which were either closed or sold in prior periods. As these assets will not be transferring to AES Ohio Generation when DP&L’s planned generation separation occurs, they are grouped with the T&D assets for segment reporting purposes. In addition, regulatory deferrals and collections, which include fuel deferrals in historical periods, are included in the T&D segment. Generation Segment The Generation segment is comprised of AES Ohio Generation and DP&L’s electric generation business. Beginning in 2001, Ohio law gave consumers the right to choose the electric generation supplier from whom they purchase retail generation services. AES Ohio Generation owns and operates peaking generating facilities, and DP&L owns multiple coal-fired and peaking electric generating facilities. Both AES Ohio Generation and DP&L primarily sell their generated energy and capacity into the PJM wholesale market as DP&L sources all of the generation for its SSO customers through a competitive bid process. Included within the “Other” column are other businesses that do not meet the GAAP requirements for disclosure as reportable segments as well as certain corporate costs, which include interest expense on DPL’s debt and adjustments related to purchase accounting from the Merger. The accounting policies of the reportable segments are the same as those described in Note 1 – Overview and Summary of Significant Accounting Policies. Intersegment sales and profits are eliminated in consolidation. Certain shared and corporate costs are allocated among reporting segments. The following tables present financial information for each of DPL’s reportable business segments:
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Subsidiaries [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segments | Business Segments During the fourth quarter of 2016, DP&L’s management reassessed the separate reportable business segments in connection with recent changes in the regulatory environment, including the pending ESP case, and in preparation for the anticipated transfer of DP&L’s generation assets to AES Ohio Generation. DP&L currently manages the business through two reportable operating segments, the T&D segment and the Generation segment. The primary segment performance measure is income / (loss) from operations before income tax as management has concluded that income / (loss) from operations before income tax best reflects the underlying business performance of DP&L and is the most relevant measure considered in DP&L’s internal evaluation of the financial performance of its segments. The segments are discussed further below: Transmission and Distribution Segment The T&D segment is comprised primarily of DP&L’s electric transmission and distribution businesses, which distribute electricity to residential, commercial, industrial and governmental customers. DP&L distributes electricity to more than 520,000 retail customers who are located in a 6,000 square mile area of West Central Ohio. DP&L’s electric transmission and distribution businesses are subject to rate regulation by federal and state regulators. Accordingly, DP&L applies the accounting standards for regulated operations to its electric transmission and distribution businesses and records regulatory assets when incurred costs are expected to be recovered in future customer rates, and regulatory liabilities when current cost recoveries in customer rates relate to expected future costs. The T&D segment includes revenues and costs associated with our investment in OVEC and the historical results of DP&L’s Beckjord, Hutchings Coal, and East Bend generating facilities, which were either closed or sold in prior periods. As these assets will not be transferring to AES Ohio Generation when DP&L’s planned generation separation occurs, they are grouped with the T&D assets for segment reporting purposes. In addition, regulatory deferrals and collections, which include fuel deferrals in historical periods, are included in the T&D segment. Generation Segment The Generation segment is comprised of DP&L’s electric generation business. Beginning in 2001, Ohio law gave consumers the right to choose the electric generation supplier from whom they purchase retail generation services. DP&L's generation segment owns multiple coal-fired and peaking electric generating facilities. DP&L's generation segment sells its generated energy and capacity into the wholesale market as DP&L sources all of the generation for its SSO customers through a competitive bid process. The accounting policies of the reportable segments are the same as those described in Note 1 – Overview and Summary of Significant Accounting Policies. Intersegment sales and profits are eliminated in consolidation. Certain shared and corporate costs are allocated among reporting segments. The following tables present financial information for each of DP&L’s reportable business segments:
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Discontinued Operations |
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Mar. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations | Discontinued Operations On January 1, 2016, DPL closed on the sale of DPLER, its competitive retail business. The sale agreement was signed on December 28, 2015 and DPL received $75.5 million of restricted cash on December 31, 2015 for the sale. DPL recorded a gain on this transaction of $49.2 million in the first quarter of 2016. The gain includes the impact of DPLER’s liability to DP&L that transferred with the sale on January 1, 2016 but was eliminated in consolidation as of December 31, 2015. Operating activities related to DPLER have been reclassified to "Discontinued operations" in the Condensed Consolidated Statements of Operations for the three months ended March 31, 2016. The following table summarizes the revenues, cost of revenues, operating expenses and income tax of discontinued operations for the periods indicated:
Cash flows related to discontinued operations are included in our Condensed Consolidated Statements of Cash Flows. Cash flows from operating activities for discontinued operations were $(0.7) million for the three months ended March 31, 2016. Cash flows from investing activities for discontinued operations were $75.5 million for the three months ended March 31, 2016. All cash generated from discontinued operations was paid to DPL through dividends for all periods presented. |
Fixed-asset Impairment (Notes) |
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Mar. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |
Asset Impairment Charges [Text Block] | Fixed-asset Impairment On March 17, 2017, the Board of Directors of DP&L approved the retirement of the DP&L operated and co-owned Stuart Station coal-fired and diesel-fired generating units and the Killen Station coal-fired generating unit and combustion turbine (collectively, the “Facilities”) on or before June 1, 2018. DP&L also reached agreement with the co-owners of the Facilities to proceed with this plan of retirement. We performed a long-lived asset impairment analysis and determined that the carrying amounts of the Facilities were not recoverable. The asset groups of Stuart Station and Killen Station were determined to have fair values of $3.3 million and $7.9 million, respectively, using the discounted cash flows under the income approach. As a result, we recognized an asset impairment expense of $39.1 million and $27.3 million for Stuart Station and Killen Station, respectively. Additionally, as a result of the decision to retire the Facilities by June 1, 2018, we concluded that inventory at these Facilities is considered obsolete. As a result, we recognized a loss on disposal of $9.8 million and $6.4 million for Stuart Station and Killen Station inventories, respectively, during the first quarter of 2017, which is recorded in Loss on asset disposal in the Condensed Consolidated Statements of Operations. |
THE DAYTON POWER AND LIGHT COMPANY [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Asset Impairment Charges [Text Block] | Fixed-asset Impairment On March 17, 2017, the Board of Directors of DP&L approved the retirement of the DP&L operated and co-owned Stuart Station coal-fired and diesel-fired generating units and the Killen Station coal-fired generating unit and combustion turbine (collectively, the “Facilities”) on or before June 1, 2018. DP&L also reached agreement with the co-owners of the Facilities to proceed with this plan of retirement. We performed a long-lived asset impairment analysis and determined that the carrying amounts of the Facilities were not recoverable. The asset groups of Stuart Station and Killen Station were determined to have fair values of $3.3 million and $7.9 million, respectively, using the discounted cash flows under the income approach. As a result, we recognized an asset impairment expense of $39.0 million and $27.3 million for Stuart Station and Killen Station, respectively. Additionally, as a result of the decision to retire the Facilities by June 1, 2018, we concluded that inventory at these Facilities is considered obsolete. As a result, we recognized a loss on disposal of $9.8 million and $6.4 million for Stuart Station and Killen Station inventories, respectively, during the first quarter of 2017, which is recorded in Loss on asset disposal in the Condensed Statements of Operations. |
Summary of Significant Accounting Policies (Policy) |
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Significant Accounting Policies [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description of Business | Description of Business DPL is a diversified regional energy company organized in 1985 under the laws of Ohio. DPL has two reportable segments: the Transmission and Distribution (T&D) segment and the Generation segment. See Note 12 – Business Segments for more information relating to these reportable segments. The terms “we,” “us,” “our” and “ours” are used to refer to DPL and its subsidiaries. DPL is an indirectly wholly-owned subsidiary of AES. DP&L is a public utility incorporated in 1911 under the laws of Ohio. Beginning in 2001, Ohio law gave Ohio consumers the right to choose the electric generation supplier from whom they purchase retail generation service; however, distribution and transmission retail services are still regulated. DP&L has the exclusive right to provide such distribution and transmission services to approximately 520,000 customers located in West Central Ohio. Additionally, DP&L offers retail SSO electric service to residential, commercial, industrial and governmental customers in a 6,000 square mile area of West Central Ohio. DP&L owns multiple coal-fired and peaking electric generating facilities as well as numerous transmission facilities, all of which are included in the financial statements at amortized cost. DP&L sources 100% of the generation for its SSO customers through a competitive bid process. Principal industries located in DP&L’s service territory include automotive, food processing, paper, plastic, manufacturing and defense. DP&L's distribution sales reflect the general economic conditions, seasonal weather patterns, retail competition in our service territory and the market price of electricity. DP&L sells all of its energy and capacity into the wholesale market. DPL’s other significant subsidiaries include AES Ohio Generation, which owns and operates peaking generating facilities from which it sells all of its energy and capacity into the wholesale market, and MVIC, our captive insurance company that provides insurance services to DPL and our subsidiaries. DPL owns all of the common stock of its subsidiaries. DPL also has a wholly-owned business trust, DPL Capital Trust II, formed for the purpose of issuing trust capital securities to investors. DP&L’s electric transmission and distribution businesses are subject to rate regulation by federal and state regulators while its generation business is deemed competitive under Ohio law. Accordingly, DP&L applies the accounting standards for regulated operations to its electric transmission and distribution businesses and records regulatory assets when incurred costs are expected to be recovered in future customer rates, and regulatory liabilities when current cost recoveries in customer rates relate to expected future costs. DPL and its subsidiaries employed 1,153 people as of March 31, 2017, of which 1,145 were employed by DP&L. Approximately 62% of all DPL employees are under a collective bargaining agreement that expires on October 31, 2017. |
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Financial Statement Presentation | Financial Statement Presentation DPL’s Condensed Consolidated Financial Statements include the accounts of DPL and its wholly-owned subsidiaries except for DPL Capital Trust II, which is not consolidated, consistent with the provisions of GAAP. DP&L has undivided ownership interests in five coal-fired generating facilities, various peaking generating facilities and numerous transmission facilities, all of which are included in the financial statements at amortized cost, which was adjusted to fair value at the date of the Merger for DPL. Operating revenues and expenses of these facilities are included on a pro rata basis in the corresponding lines in the Condensed Consolidated Statements of Operations. Certain immaterial amounts from prior periods have been reclassified to conform to the current period presentation. All material intercompany accounts and transactions are eliminated in consolidation. These financial statements have been prepared in accordance with GAAP for interim financial statements, the instructions of Form 10-Q and Regulation S-X. Accordingly, certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with GAAP have been omitted from this interim report. Therefore, our interim financial statements in this report should be read along with the annual financial statements included in our Form 10-K for the fiscal year ended December 31, 2016. In the opinion of our management, the Condensed Consolidated Financial Statements presented in this report contain all adjustments necessary to fairly state our financial position as of March 31, 2017; our results of operations for the three months ended March 31, 2017 and 2016 and our cash flows for the three months ended March 31, 2017 and 2016. Unless otherwise noted, all adjustments are normal and recurring in nature. Due to various factors, including, but not limited to, seasonal weather variations, the timing of outages of EGUs, changes in economic conditions involving commodity prices and competition, and other factors, interim results for the three months ended March 31, 2017 may not be indicative of our results that will be realized for the full year ending December 31, 2017. The preparation of financial statements in conformity with GAAP requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the revenues and expenses of the periods reported. Actual results could differ from these estimates. Significant items subject to such estimates and judgments include: the carrying value of property, plant and equipment; unbilled revenues; the valuation of derivative instruments; the valuation of insurance and claims liabilities; the valuation of allowances for receivables and deferred income taxes; regulatory assets and liabilities; liabilities recorded for income tax exposures; litigation; contingencies; the valuation of AROs; and assets and liabilities related to employee benefits. |
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Accounting for Taxes Collected from Customers and Remitted to Governmental Authorities | Accounting for Taxes Collected from Customers and Remitted to Governmental Authorities DP&L collects certain excise taxes levied by state or local governments from its customers. These taxes are accounted for on a net basis and not included in revenue. The amounts of such taxes collected for the three months ended March 31, 2017 and 2016 were $12.5 million and $12.9 million, respectively. |
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Recently Issued Accounting Standards | New Accounting Pronouncements The following table provides a brief description of recent accounting pronouncements that could have a material impact on our consolidated financial statements:
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THE DAYTON POWER AND LIGHT COMPANY [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description of Business | Description of Business DP&L is a public utility incorporated in 1911 under the laws of Ohio. Beginning in 2001, Ohio law gave Ohio consumers the right to choose the electric generation supplier from whom they purchase retail generation service; however, distribution and transmission retail services are still regulated. DP&L has the exclusive right to provide such distribution and transmission services to approximately 520,000 customers located in West Central Ohio. Additionally, DP&L offers retail SSO electric service to residential, commercial, industrial and governmental customers in a 6,000 square mile area of West Central Ohio. DP&L owns multiple coal-fired and peaking electric generating facilities as well as numerous transmission facilities, all of which are included in the financial statements at amortized cost. DP&L sources 100% of the generation for its SSO customers through a competitive bid process. Principal industries located in DP&L’s service territory include automotive, food processing, paper, plastic, manufacturing and defense. DP&L's distribution sales reflect the general economic conditions, seasonal weather patterns, retail competition in our service territory and the market price of electricity. DP&L sells all of its energy and capacity into the wholesale market. DP&L is a subsidiary of DPL. DP&L has two reportable segments: the Transmission and Distribution (T&D) segment and the Generation segment. See Note 13 – Business Segments for more information relating to these reportable segments. DP&L’s electric transmission and distribution businesses are subject to rate regulation by federal and state regulators while its generation business is deemed competitive under Ohio law. Accordingly, DP&L applies the accounting standards for regulated operations to its electric transmission and distribution businesses and records regulatory assets when incurred costs are expected to be recovered in future customer rates, and regulatory liabilities when current cost recoveries in customer rates relate to expected future costs. DP&L employed 1,145 people as of March 31, 2017. Approximately 62% of all employees are under a collective bargaining agreement which expires on October 31, 2017. |
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Financial Statement Presentation | Financial Statement Presentation DP&L does not have any subsidiaries. DP&L has undivided ownership interests in five coal-fired generating facilities, peaking electric generating facilities and numerous transmission facilities, all of which are included in the financial statements at amortized cost. Operating revenues and expenses of these facilities are included on a pro rata basis in the corresponding lines in the Condensed Statements of Operations. Certain immaterial amounts from prior periods have been reclassified to conform to the current period presentation. These financial statements have been prepared in accordance with GAAP for interim financial statements, the instructions of Form 10-Q and Regulation S-X. Accordingly, certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with GAAP have been omitted from this interim report. Therefore, our interim financial statements in this report should be read along with the annual financial statements included in our Form 10-K for the fiscal year ended December 31, 2016. In the opinion of our management, the Condensed Financial Statements presented in this report contain all adjustments necessary to fairly state our financial position as of March 31, 2017; our results of operations for the three months ended March 31, 2017 and 2016 and our cash flows for the three months ended March 31, 2017 and 2016. Unless otherwise noted, all adjustments are normal and recurring in nature. Due to various factors, including, but not limited to, seasonal weather variations, the timing of outages of EGUs, changes in economic conditions involving commodity prices and competition, and other factors, interim results for the three months ended March 31, 2017 may not be indicative of our results that will be realized for the full year ending December 31, 2017. The preparation of financial statements in conformity with GAAP requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the revenues and expenses of the periods reported. Actual results could differ from these estimates. Significant items subject to such estimates and judgments include: the carrying value of property, plant and equipment; unbilled revenues; the valuation of derivative instruments; the valuation of insurance and claims liabilities; the valuation of allowances for receivables and deferred income taxes; regulatory assets and liabilities; liabilities recorded for income tax exposures; litigation; contingencies; the valuation of AROs; and assets and liabilities related to employee benefits. |
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Accounting for Taxes Collected from Customers and Remitted to Governmental Authorities | Accounting for Taxes Collected from Customers and Remitted to Governmental Authorities DP&L collects certain excise taxes levied by state or local governments from its customers. These taxes are accounted for on a net basis and not included in revenue. The amounts of such taxes collected for the three months ended March 31, 2017 and 2016 were $12.5 million and $12.9 million, respectively. |
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Recently Issued Accounting Standards | New Accounting Pronouncements The following table provides a brief description of recent accounting pronouncements that could have a material impact on our financial statements:
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Summary of Significant Accounting Policies (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of New Accounting Pronouncements | The following table provides a brief description of recent accounting pronouncements that could have a material impact on our consolidated financial statements:
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THE DAYTON POWER AND LIGHT COMPANY [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of New Accounting Pronouncements | The following table provides a brief description of recent accounting pronouncements that could have a material impact on our financial statements:
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Supplemental Financial Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Financial Information [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Supplemental Financial Information | Accounts receivable and Inventories are as follows at March 31, 2017 and December 31, 2016:
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Reclassification out of Accumulated Other Comprehensive Income | The amounts reclassified out of Accumulated Other Comprehensive Income / (Loss) by component during the three months ended March 31, 2017 and 2016 are as follows:
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Schedule of Accumulated Other Comprehensive Income (Loss) | The changes in the components of Accumulated Other Comprehensive Income / (Loss) during the three months ended March 31, 2017 are as follows:
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THE DAYTON POWER AND LIGHT COMPANY [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Financial Information [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Supplemental Financial Information | Accounts receivable and Inventories are as follows at March 31, 2017 and December 31, 2016:
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Reclassification out of Accumulated Other Comprehensive Income | The amounts reclassified out of Accumulated Other Comprehensive Income / (Loss) by component during the three months ended March 31, 2017 and 2016 are as follows:
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Schedule of Accumulated Other Comprehensive Income (Loss) | The changes in the components of Accumulated Other Comprehensive Income / (Loss) during the three months ended March 31, 2017 are as follows:
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Property, Plant and Equipment (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Property, Plant and Equipment [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Jointly Owned Utility Plants [Table Text Block] | DP&L’s undivided ownership interest in such facilities at March 31, 2017, is as follows:
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Schedule of Change in Asset Retirement Obligation [Table Text Block] | Changes in the Liability for Generation AROs
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Subsidiaries [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Jointly Owned Utility Plants [Table Text Block] | DP&L’s undivided ownership interest in such facilities at March 31, 2017, is as follows:
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Schedule of Change in Asset Retirement Obligation [Table Text Block] | Changes in the Liability for Generation AROs
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Fair Value (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value and Cost Of Non-Derivative Instruments | The following table presents the fair value, carrying value and cost of our non-derivative instruments at March 31, 2017 and December 31, 2016. Information about the fair value of our derivative instruments can be found in Note 6 – Derivative Instruments and Hedging Activities.
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Fair Value of Assets and Liabilities Measured on Recurring Basis | The fair value of assets and liabilities at March 31, 2017 and December 31, 2016 and the respective category within the fair value hierarchy for DPL was determined as follows:
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Fair Value Measurements, Nonrecurring [Table Text Block] | When evaluating impairment of long-lived assets, we measure fair value using the applicable fair value measurement guidance. Impairment expense is measured by comparing the fair value at the evaluation date to the carrying amount. The following table summarizes Long-lived assets measured at fair value on a non-recurring basis during the period and their level within the fair value hierarchy (there were no impairments during the three months ended March 31, 2016):
(a)See Note 14 – Fixed-asset Impairment for further information (b)Carrying amount at date of valuation |
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Fair Value Inputs, Assets, Quantitative Information [Table Text Block] | The following summarizes the significant unobservable inputs used in the Level 3 measurement on a non-recurring basis during the three months ended March 31, 2017:
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value and Cost Of Non-Derivative Instruments | The following table presents the fair value, carrying value and cost of our non-derivative instruments at March 31, 2017 and December 31, 2016. Information about the fair value of our derivative instruments can be found in Note 6 – Derivative Instruments and Hedging Activities.
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Fair Value of Assets and Liabilities Measured on Recurring Basis | The fair value of assets and liabilities at March 31, 2017 and December 31, 2016 and the respective category within the fair value hierarchy for DP&L was determined as follows:
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Fair Value Measurements, Nonrecurring [Table Text Block] | When evaluating impairment of long-lived assets, we measure fair value using the applicable fair value measurement guidance. Impairment expense is measured by comparing the fair value at the evaluation date to the carrying amount. The following table summarizes Long-lived assets measured at fair value on a non-recurring basis during the period and their level within the fair value hierarchy (there were no impairments during the three months ended March 31, 2016):
(a)See Note 14 – Fixed-asset Impairment for further information (b)Carrying amount at date of valuation |
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Fair Value Inputs, Assets, Quantitative Information [Table Text Block] | The following summarizes the significant unobservable inputs used in the Level 3 measurement on a non-recurring basis during the three months ended March 31, 2017:
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Derivative Instruments and Hedging Activities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Schedule of Notional Amounts of Outstanding Derivative Positions | At March 31, 2017, DPL had the following outstanding derivative instruments:
(a) Refers to whether the derivative instruments have been designated as a cash flow hedge. At December 31, 2016, DPL had the following outstanding derivative instruments:
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Gains or Losses Recognized in AOCI for the Cash Flow Hedges | The following table provides information for DPL concerning gains or losses recognized in AOCI for the cash flow hedges for the three months ended March 31, 2017 and 2016:
(a)The actual amounts that we reclassify from AOCI to earnings related to power can differ from the estimate above due to market price changes. |
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Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location | The following tables present the amount and classification within the Condensed Consolidated Statements of Operations of the gains and losses on DPL’s derivatives not designated as hedging instruments for the three months ended March 31, 2017 and 2016:
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Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following tables summarize the derivative positions presented in the balance sheet where a right of offset exists under these arrangements and related cash collateral received or pledged. The following table presents the fair value and balance sheet classification of DPL’s derivative instruments at March 31, 2017:
The following table presents the fair value and balance sheet classification of DPL’s derivative instruments at December 31, 2016:
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THE DAYTON POWER AND LIGHT COMPANY [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Notional Amounts of Outstanding Derivative Positions | At March 31, 2017, DP&L had the following outstanding derivative instruments:
(a) Refers to whether the derivative instruments have been designated as a cash flow hedge. At December 31, 2016, DP&L had the following outstanding derivative instruments:
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Gains or Losses Recognized in AOCI for the Cash Flow Hedges | The following table provides information for DP&L concerning gains or losses recognized in AOCI for the cash flow hedges for the three months ended March 31, 2017 and 2016:
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Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location | The following tables present the amount and classification within the Condensed Statements of Operations of the gains and losses on DP&L's derivatives not designated as hedging instruments for the three months ended March 31, 2017 and 2016:
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Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | DP&L’s derivative instruments at March 31, 2017:
The following table presents the fair value and balance sheet classification of DP&L’s derivative instruments at December 31, 2016:
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Debt (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt |
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THE DAYTON POWER AND LIGHT COMPANY [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt |
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Income Taxes (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||
Entity Information [Line Items] | |||||||||||||||||||||||||||||||
Schedule of Effective Income Tax Rates | The following table details the effective tax rates for the three months ended March 31, 2017 and 2016.
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THE DAYTON POWER AND LIGHT COMPANY [Member] | |||||||||||||||||||||||||||||||
Entity Information [Line Items] | |||||||||||||||||||||||||||||||
Schedule of Effective Income Tax Rates | The following table details the effective tax rates for the three months ended March 31, 2017 and 2016.
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Benefit Plans (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Entity Information [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Periodic Benefit Cost / (Income) | The net periodic benefit cost of the pension benefit plans for the three months ended March 31, 2017 and 2016 was:
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Estimated Future Benefit Payments and Medicare Part D Reimbursements | Benefit payments, which reflect future service, are estimated to be paid as follows:
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THE DAYTON POWER AND LIGHT COMPANY [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Entity Information [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Periodic Benefit Cost / (Income) | The net periodic benefit cost of the pension benefit plans for the three months ended March 31, 2017 and 2016 was:
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Estimated Future Benefit Payments and Medicare Part D Reimbursements | Benefit payments, which reflect future service, are estimated to be paid as follows:
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Related Party Transactions (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions | The following table provides a summary of these transactions:
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THE DAYTON POWER AND LIGHT COMPANY [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions | The following table provides a summary of these transactions:
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Business Segments (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Reporting for Reportable Business Segments | The following tables present financial information for each of DPL’s reportable business segments:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subsidiaries [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Reporting for Reportable Business Segments | The following tables present financial information for each of DP&L’s reportable business segments:
|
Discontinued Operations (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Balance Sheet and Profit and Loss Information for Discontinued Operations | The following table summarizes the revenues, cost of revenues, operating expenses and income tax of discontinued operations for the periods indicated:
|
Regulatory Matters (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Mar. 13, 2017 |
Oct. 11, 2016 |
Dec. 31, 2016 |
|
Distribution Modernization Rider | $ 145,000,000 | ||
Distribution Modernization Rider Period | 7 years | ||
Regulatory Assets, Renewable Energy Recovery | $ 10,500,000 | ||
Energy Reduction Riders | 0 | ||
Non-bypassable DMR | $ 105,000,000 | ||
Service stability rider per year | $ 110,000,000 | ||
Subsidiaries [Member] | |||
Distribution Modernization Rider | $ 145,000,000 | ||
Distribution Modernization Rider Period | 7 years | ||
Regulatory Assets, Renewable Energy Recovery | $ 10,500,000 | ||
Energy Reduction Riders | $ 0 | ||
Non-bypassable DMR | $ 105,000,000 | ||
Service stability rider per year | $ 110,000,000 |
Income Taxes (Narrative) (Details) |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Entity Information [Line Items] | ||
Effective income tax rates | 37.90% | 21.40% |
Estimated annual effective income tax rate | 37.60% | 20.60% |
THE DAYTON POWER AND LIGHT COMPANY [Member] | ||
Entity Information [Line Items] | ||
Effective income tax rates | 34.40% | 26.90% |
Estimated annual effective income tax rate | 33.80% | 27.00% |
Benefit Plans (Estimated Future Benefit Payments and Medicare Part D Reimbursements) (Details) - Pension [Member] $ in Millions |
Mar. 31, 2017
USD ($)
|
---|---|
2016 | $ 18.8 |
2017 | 25.5 |
2018 | 26.0 |
2019 | 26.4 |
2020 | 26.7 |
2021 - 2025 | 139.6 |
THE DAYTON POWER AND LIGHT COMPANY [Member] | |
2016 | 18.8 |
2017 | 25.5 |
2018 | 26.0 |
2019 | 26.4 |
2020 | 26.7 |
2021 - 2025 | $ 139.6 |
Shareholder's Equity (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Dec. 31, 2016 |
|
Class of Stock [Line Items] | ||
Accounts Payable, Related Parties, Current | $ 0 | $ 2,000,000 |
Common stock, shares authorized | 1,500 | 1,500 |
Common stock, shares outstanding | 1 | 1 |
THE DAYTON POWER AND LIGHT COMPANY [Member] | ||
Class of Stock [Line Items] | ||
Accounts Payable, Related Parties, Current | $ 0 | $ 2,000,000 |
Common stock, shares authorized | 250,000,000 | |
Par value common shares (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares outstanding | 41,172,173 | |
PUCO merger equity ratio approval (at least) | 50.00% | |
PUCO Equity Ratio | 30.00% | |
PUCO merger, maximum long-term debt allowed | $ 750,000,000.0 | |
PUCO merger, maximum long-term debt as percent of rate base (percent) | 75.00% |
Shareholder's Equity Equity Settlement of Related Party Payable (Details) - USD ($) $ in Millions |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Accounts Payable, Related Parties, Current | $ 0.0 | $ 2.0 |
Subsidiaries [Member] | ||
Accounts Payable, Related Parties, Current | $ 0.0 | $ 2.0 |
Contractual Obligations, Commercial Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Dec. 31, 2016 |
|
Public Utility, Property, Plant and Equipment [Line Items] | ||
Due to third parties, current | $ 2.4 | $ 2.3 |
THE DAYTON POWER AND LIGHT COMPANY [Member] | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Debt maturity, earliest | 2018 | |
Debt maturity, latest | 2040 | |
DPLE [Member] | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Third party guarantees | $ 24.6 | |
Debt Obligation on 4.9% Equity Ownership [Member] | THE DAYTON POWER AND LIGHT COMPANY [Member] | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Equity ownership interest | 4.90% | |
Equity ownership interest aggregate cost | $ 72.5 | |
Electric Generation Company [Member] | THE DAYTON POWER AND LIGHT COMPANY [Member] | ||
Public Utility, Property, Plant and Equipment [Line Items] | ||
Debt obligation | $ 1,479.6 |
Business Segments (Narrative) (Details) - THE DAYTON POWER AND LIGHT COMPANY [Member] |
3 Months Ended |
---|---|
Mar. 31, 2017
mi²
segment
customer
| |
Segment Reporting Information [Line Items] | |
Number of Operating Segments | segment | 2 |
Approximate number of retail customers | customer | 520,000 |
Service area, square miles | mi² | 6,000 |
Discontinued Operations (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Dec. 31, 2015 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Revenues | $ 0.0 | ||
Cost of revenues | 0.0 | ||
Operating expenses | (0.7) | ||
(Loss) / income from discontinued operations before income taxes | $ 0.0 | (0.7) | |
Gain from disposal of discontinued operations | 0.0 | 49.2 | |
Income tax expense / (benefit) for discontinued operations | 0.0 | 18.9 | |
Discontinued operations | $ 0.0 | 29.6 | |
Cash flows from operating activities for discontinued operations | (0.7) | ||
Cash flows from investing activities for discontinued operations | $ 75.5 | ||
Dpler [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Deposit received on sale of DPLER | $ 75.5 |
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