Related Party Transactions

12 Months Ended

Dec. 31, 2021

Service Company

The Service Company allocates the costs for services provided based on cost drivers designed to result in fair and equitable allocations. This includes ensuring that the regulated utilities served, including AES Ohio, are not subsidizing costs incurred for the benefit of other businesses.

Benefit Plans

DPL participates in an agreement with Health and Welfare Benefit Plans LLC, an affiliate of AES, to participate in a group benefits program, including but not limited to, health, dental, vision and life benefits. Health and Welfare Benefit Plans LLC administers the financial aspects of the group insurance program, receives all premium payments from the participating affiliates, and makes all vendor payments.

Long-term Compensation Plan

During 2021, 2020 and 2019, some of DPL’s non-union employees received benefits under the AES Long-term Compensation Plan, a deferred compensation program. This type of plan is a common employee retention tool used in our industry. Benefits under this plan are granted in the form of performance units payable in cash and AES restricted stock units. Restricted stock units vest ratably over a three-year period. The performance units payable in cash vest at the end of the three-year performance period and are subject to certain AES performance criteria. Total deferred compensation expense recorded during 2021, 2020 and 2019 was $0.0 million, $0.1 million and $0.0 million, respectively, and was included in “Operation and maintenance” on DPL’s Consolidated Statements of Operations. The value of these benefits is being recognized over the 36-month vesting period and a portion is recorded as miscellaneous deferred credits with the remainder recorded as “Other paid-in capital” on DPL’s Consolidated Balance Sheets in accordance with FASC 718 “Compensation - Stock Compensation.”

The following table provides a summary of our related party transactions:


	Years ended December 31,
$ in millions	2021		2020		2019
Transactions with the Service Company
Net charges for services provided	$	39.2	$	34.6	$	30.2
Transactions with other AES affiliates:
Payments for health, welfare and benefit plans	$	13.9	$	10.7	$	11.2
Consulting and other services	$	1.4	$	0.8	$	0.7

Balances with related parties:	At December 31, 2021		At December 31, 2020
Net payable to the Service Company	$	(24.7)	$	(14.8)
Net receivable from / (payable to) AES and other AES affiliates	$	0.7	$	(1.7)

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 amounted to $0.2 million and $0.2 million at December 31, 2021 and 2020, respectively, is included in Other non-current assets. DPL also has a note payable to the Trust amounting to $15.6 million and $15.6 million at December 31, 2021 and 2020, respectively, that was established upon the Trust’s deconsolidation in 2003. See Note 6 – Long-term 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.

THE DAYTON POWER AND LIGHT COMPANY [Member]

Entity Information [Line Items]

Related Party Transactions

Service Company

Benefit Plans

Long-term Compensation Plan

During 2021, 2020 and 2019, many of AES Ohio’s non-union employees received benefits under the AES Long-term Compensation Plan, a deferred compensation program. This type of plan is a common employee retention tool used in our industry. Benefits under this plan are granted in the form of performance units payable in cash and AES restricted stock units. Restricted stock units vest ratably over a three-year period. The performance units payable in cash vest at the end of the three-year performance period and are subject to certain AES performance criteria. Total deferred compensation expense recorded during 2021, 2020 and 2019 was $0.0 million, $0.1 million and $(0.3) million, respectively, and was included in “Operation and maintenance” on AES Ohio’s Statements of Operations. The value of these benefits is being recognized over the 36-month vesting period and a portion is recorded as miscellaneous deferred credits with the remainder recorded as “Other paid-in capital” on AES Ohio’s Balance Sheets in accordance with FASC 718 “Compensation - Stock Compensation.”

The following table provides a summary of our related party transactions:


	Years ended December 31,
$ in millions	2021		2020		2019


AES Ohio Operation & Maintenance Expenses:
Premiums charged for insurance services provided by MVIC (a)	$	3.3	$	3.4	$	3.1
Transactions with the Service Company:
Net charges for services provided	$	38.1	$	33.4	$	27.7
Transactions with other AES affiliates:
Charges for health, welfare and benefit plans	$	10.5	$	10.1	$	10.4
Charges to affiliates for non-power goods or services (b)	$	5.8	$	4.1	$	4.1
Consulting and other services	$	1.4	$	0.8	$	0.7

Balances with related parties:	At December 31, 2021		At December 31, 2020
Net payable to the Service Company	$	(24.7)	$	(14.8)

Net receivable from / (payable to) AES and other AES affiliates	$	0.5	$	(2.1)

(a) MVIC, a wholly-owned captive insurance subsidiary of DPL, provides insurance coverage to AES Ohio and other DPL subsidiaries for workers’ compensation, general liability, property damages and directors’ and officers’ liability. These amounts represent insurance premiums charged by MVIC to AES Ohio.

(b) In the normal course of business AES Ohio incurred and recorded expenses on behalf of DPL affiliates. Such expenses included but were not limited to employee-related expenses, accounting, information technology, payroll, legal and other administration expenses. AES Ohio subsequently charged these expenses to the affiliates at AES Ohio’s cost and credited the expense in which they were initially recorded.

Income Taxes

AES files federal and state income tax returns which consolidate DPL and its subsidiaries, including AES Ohio. Under a tax sharing agreement with DPL, AES Ohio is responsible for the income taxes associated with its own taxable income and records the provision for income taxes using a separate return method. Under this agreement, AES Ohio had a net receivable balance of $28.1 million and $32.5 million at December 31, 2021 and 2020, respectively, which is recorded in Taxes receivable on the accompanying Balance Sheets. During 2021, 2020 and 2019, AES Ohio made net payments of $0.0 million, $0.0 million and $22.5 million respectively, to DPL for its share of income taxes.