<PAGE>

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C.  20549

                                   FORM 10-Q


[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

For the quarterly period ended        September 30, 2001
                              -------------------------------

                                      OR

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

                         Commission file number 1-1405

                        Delmarva Power & Light Company
                     -----------------------------------
            (Exact name of registrant as specified in its charter)

        Delaware and Virginia                                 51-0084283
     --------------------------                             ------------
      (States of incorporation)                           (I.R.S. Employer
                                                          Identification No.)

      800 King Street, P.O. Box 231, Wilmington, Delaware       19899
      ---------------------------------------------------      -------
          (Address of principal executive offices)            (Zip Code)

      Registrant's telephone number, including area code     302-429-3018
                                                             ------------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports),  and (2) has been subject to such filing
requirements for the past 90 days.

                       Yes     X       No___
                             -----

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

All 1,000 issued and outstanding shares of Delmarva Power & Light Company common
stock, $2.25 per share par value, are owned by Conectiv.


<PAGE>

                        DELMARVA POWER & LIGHT COMPANY
                        ------------------------------

                               Table of Contents
                               -----------------

<TABLE>
<CAPTION>
                                                                                                   Page No.
                                                                                                   --------
<S>                                                                                                <C>
Part I.   Financial Information

    Item 1.  Financial Statements

             Consolidated Statements of Income for the three and nine months ended
             September 30, 2001 and September 30, 2000............................                     1

             Consolidated Balance Sheets as of September 30, 2001 and
             and December 31, 2000................................................                   2-3

             Consolidated Statements of Cash Flows for the nine months
             ended September 30, 2001, and September 30, 2000.....................                     4

             Notes to Consolidated Financial Statements...........................                  5-10

    Item 2.  Management's Discussion and Analysis of Financial
             Condition and Results of Operations..................................                 11-17

    Item 3.  Quantitative and Qualitative Disclosures About Market Risk...........                    17

Part II.     Other Information

    Item 6.  Exhibits and Reports on Form 8-K.....................................                    18

Signature.........................................................................                    18

</TABLE>
<PAGE>

                         Part 1. FINANCIAL INFORMATION

                         Item 1. Financial Statements


                        DELMARVA POWER & LIGHT COMPANY
                        ------------------------------
                       CONSOLIDATED STATEMENTS OF INCOME
                            (Dollars in Thousands)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                  Three Months Ended                      Nine Months Ended
                                                                     September 30,                           September 30,
                                                            -------------------------------       ----------------------------------
                                                                2001              2000                2001                2000
                                                            --------------    -------------       --------------    ----------------
<S>                                                         <C>               <C>                 <C>               <C>
OPERATING REVENUES
     Electric                                                   $ 315,569        $ 333,504            $ 830,860         $ 1,153,904
     Gain on sale of electric plants                                    -                -              221,224                   -
     Gas                                                           28,393           47,544              186,503             552,680
     Other services                                                 6,161            5,505               17,392              22,032
                                                            --------------    -------------       --------------    ----------------
                                                                  350,123          386,553            1,255,979           1,728,616
                                                            --------------    -------------       --------------    ----------------
OPERATING EXPENSES
     Electric fuel and purchased energy and capacity              228,024          179,211              503,815             653,525
     Gas purchased                                                 22,660           41,459              148,952             519,985
     Other services' cost of sales                                  6,026            4,390               16,255              18,385
     Operation and maintenance                                     46,429           52,868              121,247             192,537
     Depreciation and amortization                                 20,897           26,778               74,188              85,447
     Taxes other than income taxes                                  8,925           10,705               26,450              32,608
                                                            --------------    -------------       --------------    ----------------
                                                                  332,961          315,411              890,907           1,502,487
                                                            --------------    -------------       --------------    ----------------
OPERATING INCOME                                                   17,162           71,142              365,072             226,129
                                                            --------------    -------------       --------------    ----------------

OTHER INCOME                                                        6,555            1,793               15,382               4,624
                                                            --------------    -------------       --------------    ----------------

INTEREST EXPENSE
     Interest charges                                              13,953           20,315               50,545              59,006
     Allowance for borrowed funds used during
        construction and capitalized interest                        (206)            (157)                (520)               (773)
                                                            --------------    -------------       --------------    ----------------
                                                                   13,747           20,158               50,025              58,233
                                                            --------------    -------------       --------------    ----------------

PREFERRED DIVIDEND REQUIREMENT ON
     PREFERRED SECURITIES OF A SUBSIDIARY TRUST                     1,421            1,422                4,265               4,266
                                                            --------------    -------------       --------------    ----------------

INCOME BEFORE INCOME TAXES AND
     EXTRAORDINARY ITEM                                             8,549           51,355              326,164             168,254

INCOME TAXES, EXCLUDING INCOME TAXES
     APPLICABLE TO EXTRAORDINARY ITEM                               3,972           21,172              135,320              65,566
                                                            --------------    -------------       --------------    ----------------

INCOME BEFORE EXTRAORDINARY ITEM                                    4,577           30,183              190,844             102,688

EXTRAORDINARY ITEM (Net of Income Taxes of $1,885)                 (2,790)               -               (2,790)                  -
                                                            --------------    -------------       --------------    ----------------

NET INCOME                                                          1,787           30,183              188,054             102,688

DIVIDENDS ON PREFERRED STOCK                                          852            1,251                3,335               3,690
                                                            --------------    -------------       --------------    ----------------

EARNINGS APPLICABLE TO COMMON STOCK                             $     935        $  28,932            $ 184,719         $    98,998
                                                            ==============    =============       ==============    ================
</TABLE>

See accompanying Notes to Consolidated Financial Statements.

                                      -1-
<PAGE>

                        DELMARVA POWER & LIGHT COMPANY
                        ------------------------------
                          CONSOLIDATED BALANCE SHEETS
                            (Dollars in Thousands)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                               September 30,          December 31,
                                                                   2001                  2000
                                                            ------------------    ------------------
<S>                                                         <C>                   <C>
ASSETS

Current Assets
   Cash and cash equivalents                                   $   273,065           $    94,604
   Accounts receivable, net of allowances
      of $18,898 and $ 16,285, respectively                        198,708               283,426
   Accounts receivable from affiliated companies                         -                21,915
   Inventories, at average cost                                     34,224                43,789
   Prepayments                                                      33,295                22,209
   Deferred energy supply costs                                     27,080                22,094
                                                               -----------           -----------
                                                                   566,372               488,037
                                                               -----------           -----------

Investments                                                          5,558                 6,275
                                                               -----------           -----------

Property, Plant and Equipment
   Electric generation                                                   -               617,077
   Electric transmission and distribution                        1,491,755             1,451,644
   Gas transmission and distribution                               288,196               277,650
   Other electric and gas facilities                               168,403               184,529
   Other property, plant and equipment                               5,231                 5,463
                                                               -----------           -----------
                                                                 1,953,585             2,536,363
   Less: Accumulated depreciation                                  756,434             1,090,557
                                                               -----------           -----------
   Net plant in service                                          1,197,151             1,445,806
   Construction work-in-progress                                    87,988                80,103
   Goodwill, net                                                    66,407                67,945
                                                               -----------           -----------
                                                                 1,351,546             1,593,854
                                                               -----------           -----------
Deferred Charges and Other Assets
   Recoverable stranded costs                                       18,187                29,271
   Deferred recoverable income taxes                                60,941                70,753
   Prepaid employee benefits costs                                 183,851               174,335
   Unamortized debt expense                                         11,365                10,624
   Deferred debt refinancing costs                                  18,558                 8,247
   Other                                                             1,723                24,723
                                                               -----------           -----------
                                                                   294,625               317,953
                                                               -----------           -----------
Total Assets                                                   $ 2,218,101           $ 2,406,119
                                                               ===========           ===========
</TABLE>

See accompanying Notes to Consolidated Financial Statements.

                                      -2-
<PAGE>

                        DELMARVA POWER & LIGHT COMPANY
                        ------------------------------
                          CONSOLIDATED BALANCE SHEETS
                            (Dollars in Thousands)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                               September 30,          December 31,
                                                                                    2001                  2000
                                                                             ------------------    ------------------
<S>                                                                          <C>                   <C>
CAPITALIZATION AND LIABILITIES

Current Liabilities
     Long-term debt due within one year                                         $    17,511           $     2,253
     Variable rate demand bonds                                                     104,830               104,830
     Accounts payable                                                                74,995               174,470
     Accounts payable to affiliated companies                                        40,151                     -
     Taxes accrued                                                                  189,535                25,016
     Interest accrued                                                                14,369                19,406
     Dividends payable                                                               15,139                 6,463
     Current capital lease obligation                                                   125                   111
     Above-market purchased energy contracts and
        other electric restructuring liabilities                                      5,597                16,305
     Deferred income taxes, net                                                         835                 2,594
     Other                                                                           39,327                34,426
                                                                          ------------------    ------------------
                                                                                    502,414               385,874
                                                                          ------------------    ------------------

Deferred Credits and Other Liabilities
     Deferred income taxes, net                                                     289,441               340,048
     Deferred investment tax credits                                                 14,936                20,505
     Long-term capital lease obligation                                                 776                   872
     Obligation to affiliated company                                                32,422                     -
     Above-market purchased energy contracts and
        other electric restructuring liabilities                                     41,449                86,831
     Other                                                                           13,152                28,782
                                                                          ------------------    ------------------
                                                                                    392,176               477,038
                                                                          ------------------    ------------------

Capitalization
     Common stock, $2.25 par value;
       1,000,000 shares authorized; 1,000 shares outstanding                              2                     2
     Additional paid-in-capital                                                     213,405               212,612
     Retained earnings                                                              367,087               257,866
                                                                          ------------------    ------------------
         Total common stockholder's equity                                          580,494               470,480
     Preferred stock not subject to mandatory redemption                             29,833                89,703
     Preferred securities of subsidiary trust subject to
         mandatory redemption                                                        70,000                70,000
     Long-term debt                                                                 643,184               913,024
                                                                          ------------------    ------------------
                                                                                  1,323,511             1,543,207
                                                                          ------------------    ------------------

Commitments and Contingencies (Note 10)

Total Capitalization and Liabilities                                            $ 2,218,101           $ 2,406,119
                                                                          ==================    ==================
</TABLE>

See accompanying Notes to Consolidated Financial Statements.

                                      -3-
<PAGE>

                        DELMARVA POWER & LIGHT COMPANY
                        ------------------------------
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (Dollars in Thousands)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                   Nine Months Ended
                                                                                     September 30,
                                                                           --------------------------------
                                                                                2001              2000
                                                                           --------------    --------------
<S>                                                                          <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net income                                                                $ 188,054          $102,688
   Adjustments to reconcile net income to
     net cash provided by operating activities:
      Gain on sales of electric generating plants                             (221,224)                -
      Depreciation and amortization                                             74,244            93,790
      Deferred income taxes, net                                               (42,554)           23,126
      Investment tax credit adjustments, net                                    (5,569)           (1,836)
      Pension expense credit                                                   (14,048)          (32,880)
      Net change in:
          Accounts receivable                                                  106,052           (15,074)
          Inventories                                                          (15,584)             (857)
          Accounts payable                                                     (79,634)          (13,692)
          Accrued taxes                                                        164,519            24,401
          Other current assets and liabilities (1)                             (36,127)            7,366
   Other, net                                                                   (1,685)           (4,527)
                                                                         --------------    --------------
   Net cash provided by operating activities                                   116,444           182,505
                                                                         --------------    --------------

CASH FLOWS FROM INVESTING ACTIVITIES
   Proceeds from sale of electric generating plants                            528,215                 -
   Proceeds from other assets sold                                               8,543             8,664
   Capital expenditures                                                        (75,001)          (80,115)
   Increase in bond proceeds held in trust funds                                     -            (9,029)
   Other, net                                                                    1,689            (4,630)
                                                                         --------------    --------------
   Net cash provided / (used) by investing activities                          463,446           (85,110)
                                                                         --------------    --------------

CASH FLOWS FROM FINANCING ACTIVITIES
   Dividends paid on common stock                                              (66,294)          (19,071)
   Dividends paid on preferred stock                                            (3,070)           (3,833)
   Long-term debt issued                                                        59,000            70,140
   Long-term debt redeemed                                                    (314,403)          (64,715)
   Preferred stock redeemed                                                    (59,871)                -
   Principal portion of capital lease payments                                     (54)           (8,343)
   Costs of issuances and redemptions                                          (16,737)           (1,224)
                                                                         --------------    --------------
   Net cash used by financing activities                                      (401,429)          (27,046)
                                                                         --------------    --------------
   Net change in cash and cash equivalents                                     178,461            70,349
   Cash and cash equivalents at beginning of period                             94,604            14,121
                                                                         --------------    --------------
   Cash and cash equivalents at end of period                                $ 273,065          $ 84,470
                                                                         ==============    ==============
</TABLE>

(1)  Other than debt and deferred income taxes classified as current.

See accompanying Notes to Consolidated Financial Statements.

                                      -4-
<PAGE>

                        DELMARVA POWER & LIGHT COMPANY
                        ------------------------------
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  ------------------------------------------
                                  (Unaudited)


Note 1.  Financial Statement Presentation
-------  --------------------------------

The consolidated condensed interim financial statements contained herein include
the accounts of Delmarva Power & Light Company (DPL) and its wholly owned
subsidiaries and reflect all adjustments, consisting of only normal recurring
adjustments, necessary in the opinion of management for a fair presentation of
interim results.  In accordance with regulations of the Securities and Exchange
Commission (SEC), disclosures that would substantially duplicate the disclosures
in DPL's 2000 Annual Report on Form 10-K have been omitted.  Accordingly, DPL's
consolidated condensed interim financial statements contained herein should be
read in conjunction with DPL's 2000 Annual Report on Form 10-K.

On July 20, 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 141, "Business
Combinations," and SFAS No. 142, "Goodwill and Other Intangible Assets."  SFAS
No. 141 requires that business combinations initiated after June 30, 2001 be
accounted for under the purchase method of accounting and does not permit the
use of the pooling of interests method of accounting for business combinations.
Under SFAS No. 142, goodwill that has not been included in the rates of a
regulated utility subject to SFAS No. 71, "Accounting for the Effects of Certain
Types of Regulation," will no longer be amortized.  Intangible assets other than
goodwill which have finite useful lives will continue to be amortized under SFAS
No. 142.  Goodwill and other intangible assets will be tested periodically for
impairment.  If an impairment occurs, then a charge to earnings would result.
An impairment of goodwill that results from adoption of SFAS No. 142 will be
recognized as the cumulative effect of a change in accounting principle.  Under
SFAS No. 142, historical operating results will not be restated; instead pro
forma earnings, adjusted to exclude goodwill amortization, will be disclosed.
SFAS No. 142 will be effective January 1, 2002 for companies with a calendar
fiscal year, including DPL.

On August 9, 2001, the FASB issued SFAS No. 143, "Accounting For Asset
Retirement Obligations," which establishes the accounting requirements for asset
retirement obligations (ARO) associated with tangible long-lived assets.  If a
legal obligation for an ARO exists, then SFAS No. 143 requires recognition of a
liability, capitalization of the cost associated with the ARO, and allocation of
the capitalized cost to expense.  The initial measurement of an ARO is based on
the fair value of the obligation, which may result in a gain or loss upon the
settlement of the ARO.  If the requirements of SFAS No. 71 are met, a regulated
entity shall also recognize a regulatory asset or liability for timing
differences between financial reporting and rate-making in the recognition of
the period costs associated with an ARO.  SFAS No. 143 will be effective January
1, 2003 for companies with a calendar fiscal year, including DPL.  Upon adoption
of SFAS No. 143, the difference between the net amount recognized in the balance
sheet under SFAS No. 143 and the net amount previously recognized in the balance
sheet will be recognized as the cumulative effect of a change in accounting
principle.

                                      -5-
<PAGE>

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets" which requires that one accounting model be used
for long-lived assets to be disposed of by sale and broadens discontinued
operations to include more disposal transactions.  Under SFAS No. 144, operating
losses of discontinued operations are recognized in the period in which they
occur, instead of accruing future operating losses before they occur. SFAS No.
144 will become effective on January 1, 2002.

DPL is currently evaluating SFAS No. 141, 142, 143, and 144 and cannot predict
the impact that these standards may have on its financial position or results of
operations; however, any such impact could be material.


Note 2.  Related Party Purchases and Sales
-------  ---------------------------------

DPL's operating expenses and revenues include amounts for transactions with
other Conectiv subsidiaries.  DPL purchased electric energy and capacity from
Conectiv subsidiaries in the amounts of $30.4 million and $51.6 million for the
three-months and nine-months ended September 30, 2001, respectively.  During the
three-months and nine-months ended September 30, 2000, DPL purchased $70.5
million and $94.9 million, respectively, of electric energy and natural gas from
Conectiv subsidiaries.  DPL also sold natural gas and electricity and leased
certain assets to other Conectiv subsidiaries.  Amounts included in operating
revenues for these transactions were $5.3 million and $15.1 million for the
three-months and nine-months ended September 30, 2001, respectively, and $4.7
million and $27.0 million for the three-months and nine-months ended September
30, 2000, respectively.

DPL had a contract with Conectiv Energy Supply, Inc. (CESI), a Conectiv
subsidiary, which provided a fixed price for substantially all of DPL's electric
energy and capacity needs for the period April 1, 2001 through August 31, 2001.
The difference between DPL's cost of procuring such energy and capacity and the
price provided for by the contract with CESI is reflected as an adjustment to
"Electric fuel and purchased energy and capacity" in the Consolidated Statements
of Income.

Effective September 1, 2001, DPL entered into an agreement with CESI, under
which DPL purchases from CESI the electricity required for DPL to fulfill its
obligation to supply default service and certain other customers.  In connection
with the agreement, CESI assumed the rights and obligations that DPL had under
certain agreements to purchase electricity on a long-term basis.  Within the
next several months and after receiving regulatory approval, the rights and
obligations associated with DPL's 500 megawatt-hour (MWh) purchased power
agreement with NRG Power, which is discussed in Note 5 to the Consolidated
Financial Statements, are also expected to be transferred to CESI. DPL's
contract with CESI extends until January 31, 2002, with an automatic extension
until June 30, 2004 upon the receipt of necessary regulatory approvals. The
costs of purchased power associated with this contract are included in "Electric
fuel and purchased energy and capacity" in the Consolidated Statement of Income.


Note 3.  Supplemental Cash Flow Information
-------  ----------------------------------

<TABLE>
<CAPTION>
                                                   Nine Months Ended
                                                     September 30,
                                                   -----------------
                                                     2001     2000
                                                   -------  --------
                                                (Dollars in thousands)
<S>                                                <C>      <C>
Cash paid for:
 Interest, net of amounts capitalized               $53,229  $52,207
 Income taxes, net of refunds                       $25,574  $28,838
</TABLE>

                                      -6-
<PAGE>

Note 4.  Income Taxes
-------  ------------

The amount computed by multiplying "Income before income taxes" by the federal
statutory rate is reconciled in the table below to income tax expense, excluding
income taxes applicable to the extraordinary item.

<TABLE>
<CAPTION>
                                   Three Months Ended September 30,      Nine Months Ended September 30,
                                -------------------------------------  ------------------------------------
                                       2001               2000               2001                2000
                                -----------------  ------------------  ------------------  ----------------
                                 Amount     Rate    Amount      Rate    Amount      Rate    Amount    Rate
                                ---------  ------  --------    ------  --------    ------  --------  ------
                                                        (Dollars in Thousands)
<S>                             <C>        <C>     <C>         <C>     <C>         <C>     <C>       <C>
Statutory federal income
 tax expense                    $   2,992    35%   $ 17,974      35%   $ 114,157     35%   $ 58,889    35%
State income taxes, net
 of federal benefit                   518     6       2,768       5       18,216      6       9,696     6
Depreciation                          770     9         851       2        2,309      1       2,552     1
Regulatory asset basis
 difference                             -     -           -       -        4,876      1           -     -
Investment tax credit
 amortization                        (238)   (3)       (556)     (1)      (5,569)    (2)     (1,836)   (1)
Other, net                            (70)   (1)        135       -        1,331      -      (3,735)   (2)
                                ---------  ----    --------    ----    ---------   ----    --------  ----
                                $   3,972    46%   $ 21,172      41%   $ 135,320     41%   $ 65,566    39%
                                =========  ====    ========    ====    =========   ====    ========  ====
</TABLE>

Note 5.  Divestiture of Electric Generating Plants
-------  -----------------------------------------

The following disclosure updates the information concerning the divestiture of
the electric generating plants of DPL, as discussed in Note 11 to the
Consolidated Financial Statements in Item 8 of Part II of DPL's 2000 Annual
Report on Form 10-K.

On June 22, 2001, all of DPL's ownership interests in various electric
generating plants, which had a net book value of approximately $247 million and
electric generating capacity of 954 megawatts (MW), were sold to NRG Energy,
Inc. (NRG) for approximately $528.2 million.  The sales proceeds are subject to
final adjustments for inventory and other items.  As a result of these sales,
DPL's results of operations for the nine months ended September 30, 2001 include
a gain of $221.2 million before taxes ($129.4 million after taxes).  The $221.2
million before-tax gain is included in operating revenues in the Consolidated
Statement of Income.

The agreement between DPL and NRG Power for DPL to purchase 500 MWh of firm
electricity per hour, became effective June 22, 2001 and continues through
December 31, 2005. DPL also entered into a short-term arrangement on June 22,
2001, under which NRG Power supplied part of DPL's electric energy and capacity
requirements through the summer months ended August 30, 2001 and September 30,
2001, respectively. Within the next several months and after receiving
regulatory approval, the rights and obligations associated with DPL's 500 MWh
purchased power agreement with NRG Power are expected to be transferred to CESI
in connection with DPL's purchased power agreement with CESI that became
effective September 1, 2001, as discussed in Note 2 to the Consolidated
Financial Statements.

                                      -7-
<PAGE>

Note 6.  Proceeds from Termination of Membership in Mutual Insurance Company
-------  -------------------------------------------------------------------

DPL sold its interests in nuclear electric generating plants on December 29,
2000, as discussed in Note 11 to the Consolidated Financial Statements included
in Item 8 of Part II of DPL's 2000 Annual Report on Form 10-K.  Prior to
February 19, 2001, DPL was a member of an industry mutual insurance company
(NEIL), which provides replacement power cost coverage to members in the event
of a major accidental outage at a nuclear power plant.  NEIL members that sold
their interests in nuclear electric generating plants on or before December 31,
2000 could elect prior to February 28, 2001 to be paid their member account
balances by NEIL for terminating their NEIL insurance coverages.  On February
19, 2001, DPL elected to terminate its NEIL membership and received $16.3
million for its member account balance.  As a result of DPL's NEIL membership
termination, DPL's operation and maintenance expenses for the nine months ended
September 30, 2001 include a $16.3 million pre-tax credit ($9.8 million after
taxes).


Note 7.  Retained Earnings
-------  -----------------

<TABLE>
<CAPTION>
Changes in retained earnings are shown in the table below.
(Dollars in Thousands)
<S>                                                           <C>
Balance as of December 31, 2000.............................  $257,866
Net income..................................................   188,054
Cash dividends declared
 Common stock...............................................   (74,705)
 Preferred stock............................................    (3,335)
Preferred stock redemption expenses.........................      (793)
                                                              --------
Balance as of September 30, 2001............................  $367,087
                                                              ========
</TABLE>

Note 8.  Preferred Stock
-------  ---------------

On September 6, 2001, DPL paid $45.0 million to purchase all 450,000 outstanding
shares of its Auction Rate Preferred Stock for par value of $100 per share.

During the third quarter of 2001, DPL paid $14.66 million to repurchase 148,700
shares of its Adjustable Rate Preferred Stock which had a par value of $14.87
million ($100 par value per share).


Note 9.  Debt
-------  ----

On February 12, 2001, DPL reduced the commitments under its revolving credit
facility, which expires January 31, 2003, from $150 million to $105 million;
this credit facility provides liquidity for DPL's $104.8 million of Variable
Rate Demand Bonds and also may be used for general corporate purposes.

On behalf of DPL, the Delaware Economic Development Authority issued $59.0
million of long-term bonds on May 11, 2001, and loaned the proceeds to DPL.  The
bonds issued included $24.5 million of variable rate (set by auction procedures)
Exempt Facilities Refunding Revenue Bonds, due May 1, 2031, and $34.5 million of
4.9% Pollution Control Refunding Revenue Bonds, subject to mandatory tender on
May 1, 2011 and due May 1, 2026.  All of the bonds which were issued are not
secured by a mortgage or security interest in property of DPL.  On July 2, 2001,
the proceeds from the bonds issued and additional cash were used to refund $59.0
million of long-term bonds, with a 7.2% average interest rate and maturity dates
in 2018 and 2021, at 102% of their principal amounts.

                                      -8-
<PAGE>

On June 1, 2001, DPL redeemed $1.7 million of 6.95% Amortizing First Mortgage
Bonds.

Excluding the $59.0 million of bonds that DPL refunded on July 2, 2001, DPL
repaid $253.7 million of long-term debt during the third quarter of 2001.  The
$253.7 million of long-term debt repurchased included $192.2 million of Medium
Term Notes, with maturity dates from 2005 to 2027 and an 8.0% average interest
rate, and $61.5 million of First Mortgage Bonds, with maturity dates from 2003
to 2022 and an 8.1% average interest rate.  The estimated portion of debt
extinguishment costs which may not be recoverable through utility rates were
expensed as a $2.8 million extraordinary item, after-taxes of $1.9 million ($4.7
million before taxes).

Subsequent to September 30, 2001, DPL redeemed $15 million of 8.96% Medium Term
Notes which were scheduled to mature in 2021.


Note 10.  Contingencies
--------  -------------

DPL is subject to regulation with respect to the environmental effect of its
operations, including air and water quality control, solid and hazardous waste
disposal, and limitation on land use by various federal, regional, state, and
local authorities.  Federal and state statutes authorize governmental agencies
to compel responsible parties to clean up certain abandoned or uncontrolled
hazardous waste sites.  Costs may be incurred to clean up facilities found to be
contaminated due to past disposal practices.  DPL's liability for clean-up costs
is affected by the activities of these governmental agencies and private land-
owners, the nature of past disposal practices, the activities of others
(including whether they are able to contribute to clean-up costs), and the
scientific and other complexities involved in resolving clean up-related issues
(including whether DPL or a corporate predecessor is responsible for conditions
on a particular parcel).

DPL is currently a potentially responsible party at three federal superfund
sites.  At one of these sites, DPL has resolved its liability for clean up costs
through a de minimis settlement with the government.  At this site, DPL may be
liable for a claim by the state or federal government for natural resource
damages.  DPL also is alleged to be a third-party contributor at three other
federal superfund sites.  In addition, DPL has two former coal gasification
sites in Delaware and one former coal gasification site in Maryland, each of
which is a state superfund site.  Also, the Delaware Department of Natural
Resources and Environmental Control (DNREC) notified DPL in 1998 that it is a
potentially responsible party liable for clean-up of the Wilmington Public Works
Yard as a former owner of the property.  DPL's current liabilities include $15.1
million as of September 30, 2001 ($8.8 million as of December 31, 2000) for
clean-up and other potential costs related to these sites, including $13.1
million for remediation and other costs associated with environmental
contamination that resulted from an oil leak at the Indian River power plant and
reflects the terms of a related consent agreement reached with the DNREC.   DPL
does not expect such future costs to have a material effect on DPL's financial
position or results of operations.

                                      -9-
<PAGE>

Note 11.  Business Segments
--------  -----------------

Conectiv's organizational structure and management reporting information is
aligned with Conectiv's business segments, irrespective of the subsidiary, or
subsidiaries, through which a business is conducted.  Businesses are managed
based on lines of business, not legal entity.  Business segment information is
not produced, or reported, on a subsidiary by subsidiary basis.  Thus, as a
Conectiv subsidiary, no business segment information (as defined by SFAS No.
131, "Disclosures about Segments of an Enterprise and Related Information") is
available for DPL on a stand-alone basis.

Changes in business activities subsequent to the restructuring of DPL's electric
utility business in 1999 have resulted in electricity transmission and
distribution representing a greater proportion of DPL's business.  Effective
July 1, 2000, DPL transferred certain electric generating plants and energy
trading activities to Conectiv.  On December 29, 2000, DPL sold its ownership
interests in various nuclear electric generating plants.  On June 22, 2001, DPL
sold its other electric generating plants to NRG and completed the divestiture
of its electric generating plants.  After June 22, 2001, DPL supplies the load
requirements of its default electric service customers entirely with purchased
power.

                                      -10-
<PAGE>

                 ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS
               OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Forward-Looking Statements
--------------------------

The Private Securities Litigation Reform Act of 1995 (Litigation Reform Act)
provides a "safe harbor" for forward-looking statements to encourage such
disclosures without the threat of litigation, provided those statements are
identified as forward-looking and are accompanied by meaningful, cautionary
statements identifying important factors that could cause the actual results to
differ materially from those projected in the statement.  Forward-looking
statements have been made in this report.  Such statements are based on
management's beliefs as well as assumptions made by and information currently
available to management.  When used herein, the words "intend," "will,"
"anticipate," "estimate," "expect," "believe," and similar expressions are
intended to identify forward-looking statements.  In addition to any assumptions
and other factors referred to specifically in connection with such forward-
looking statements, factors that could cause actual results to differ materially
from those contemplated in any forward-looking statements include, among others,
the following: the effects of deregulation of energy supply and the unbundling
of delivery services; the ability to enter into purchased power agreements on
acceptable terms; market demand and prices for energy, capacity, and fuel;
weather variations affecting energy usage; an increasingly competitive
marketplace; sales retention and growth; federal and state regulatory actions;
future litigation results; costs of construction; operating restrictions;
increased costs and construction delays attributable to environmental
regulations; and credit market concerns.  DPL undertakes no obligation to
publicly update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.  The foregoing list of factors
pursuant to the Litigation Reform Act should not be construed as exhaustive or
as any admission regarding the adequacy of disclosures made prior to the
effective date of the Litigation Reform Act.

Earnings Results Summary
------------------------

On June 22, 2001, all of DPL's ownership interests in various electric
generating plants, which had a net book value of approximately $247 million and
electric generating capacity of 954 MW, were sold to NRG for approximately
$528.2 million.  The sales proceeds are subject to final adjustments for
inventory and other items.  As a result of these sales, DPL's results of
operations for the nine months ended September 30, 2001 include a gain of $221.2
million before taxes ($129.4 million after taxes).  The $221.2 million before-
tax gain is included in operating revenues in the Consolidated Statements of
Income.  The sale of DPL's electric generating plants to NRG completes DPL's
divestiture of electric generating plants.  DPL now supplies the load
requirements of its default electric service customers entirely with purchased
power, and DPL's principal business is the transmission and distribution of
electricity.

Earnings applicable to common stock decreased by $28.0 million to $0.9 million
for the third quarter of 2001, from $28.9 million for the third quarter of 2000.
Excluding the $129.4 million after-tax gain on the sale of electric generating
plants, earnings applicable to common stock decreased $43.7 million to $55.3
million for the nine months ended September 30, 2001, from $99.0 million for the
nine months ended September 30, 2000.  The earnings decreases for the third
quarter of 2001 and the nine months ended September 30, 2001 primarily resulted
from the divestiture of DPL's electric generating plants, which occurred during
the period from July 1, 2000 to June 22, 2001.  Due to completion of the
divestiture of the electric generating plants, DPL purchases all of its
electricity requirements and the cost per kilowatt-hour for the electricity
supplied to DPL's default service customers has increased.  DPL's exit from
competitive energy activities, effective July 1, 2000, also contributed to the
earnings decreases.  These unfavorable factors were partly offset by lower
operating and maintenance costs, lower interest expense, and certain other
positive variances.

                                      -11-
<PAGE>

Extraordinary Item
------------------

During the third quarter of 2001, DPL repaid $253.7 million of long-term debt
and refinanced $59.0 million of long-term bonds.  The estimated portion of debt
extinguishment costs which may not be recoverable through utility rates was
expensed as a $2.8 million extraordinary item, after-taxes of $1.9 million ($4.7
million before taxes).

Electricity Supply for DPL Default Service Customers
----------------------------------------------------

Effective September 1, 2001, DPL entered into an agreement with CESI, under
which DPL purchases from CESI the electricity required for DPL to fulfill its
obligation to supply default service and certain other customers.  In connection
with the agreement, CESI assumed the rights and obligations that DPL had under
certain agreements to purchase electricity on a long-term basis.  Within the
next several months and after receiving regulatory approval, the rights and
obligations associated with DPL's 500 MWh purchased power agreement with NRG
Power, which is discussed in Note 5 to the Consolidated Financial Statements,
are also expected to be transferred to CESI.  DPL's contract with CESI extends
until January 31, 2002, with an automatic extension until June 30, 2004 upon the
receipt of necessary regulatory approvals.  The costs of purchased power
associated with this contract are included in "Electric fuel and purchased
energy and capacity" in the Consolidated Statement of Income.

Electric Revenues
-----------------

<TABLE>
<CAPTION>
                                   Three Months Ended   Nine Months Ended
                                      September 30,        September 30,
                                   ------------------   -------------------
                                    2001        2000     2001         2000
                                   ------      ------   ------       ------
                                             (Dollars in millions)
<S>                                <C>         <C>      <C>        <C>
Regulated electric revenues        $314.8      $288.0   $827.5     $  827.2
Non-regulated electric revenues       0.8        45.5      3.4        326.7
                                   ------      ------   ------     --------
Total electric revenues            $315.6      $333.5   $830.9     $1,153.9
                                   ======      ======   ======     ========
</TABLE>

The table above shows the amounts of electric revenues earned that are subject
to price regulation (regulated) and that are not subject to price regulation
(non-regulated).  "Regulated electric revenues" include revenues for delivery
(transmission and distribution) service and electricity supply service within
the service area of DPL.

"Regulated electric revenues" increased by $26.8 million for the three months
ended September 30, 2001, compared to the same period last year, primarily due
to increased revenues from electricity supplied to customers that switched back
to DPL from other electricity suppliers.  "Regulated electric revenues" were
$827.5 million for the nine months ended September 30, 2001 compared to $827.2
million for the same period last year.  The revenue variance between the nine-
month periods was minimal because increased revenues from electricity supplied
to customers that switched back to DPL from other electricity suppliers were
offset by lower interchange sales.

Due to the transfer of competitive energy activities and electric generating
plants to Conectiv effective July 1, 2000, "non-regulated electric revenues"
decreased to $0.8 million and $3.4 million for the three months and nine months
ended September 30, 2001, respectively.  During the three months and nine months
ended September 30, 2000, "non-regulated electric revenues" were $45.5 million
and $326.7 million, respectively.

                                      -12-
<PAGE>

The gross margin earned (revenue less fuel and purchased energy and capacity)
from total electric revenues decreased by $66.7 million and $173.3 million for
the three and nine months ended September 30, 2001, primarily due to an increase
in the cost per kilowatt-hour of the electricity supplied to DPL's default
service customers due to the divestiture of DPL's electric generating plants.


Gas Revenues
------------

<TABLE>
<CAPTION>
                              Three Months Ended  Nine Months Ended
                                 September 30,      September 30,
                              ------------------  -----------------
                               2001        2000    2001       2000
                              ------      ------  ------     ------
                                    (Dollars in millions)
<S>                           <C>         <C>     <C>        <C>
Regulated gas revenues        $ 16.3      $ 12.9  $119.6     $ 79.9
Non-regulated gas revenues      12.1        34.6    66.9      472.8
                              ------      ------  ------     ------
Total gas revenues            $ 28.4      $ 47.5  $186.5     $552.7
                              ======      ======  ======     ======
</TABLE>

The table above shows the amounts of gas revenues earned from sources which were
subject to price regulation (regulated) and which were not subject to price
regulation (non-regulated). DPL's on-system sales and transportation of natural
gas are generally subject to price regulation. Effective July 1, 2000, DPL ended
its non-regulated gas trading activities. "Non-regulated gas revenues" for the
three months and nine months ended September 30, 2001 primarily resulted from
off-system sales to large retail customers.

"Regulated gas revenues" increased by $3.4 million and $39.7 million for the
three months and nine months ended September 30, 2001, respectively, primarily
due to higher rates charged under the gas rate clause to recover higher costs of
purchased natural gas. DPL's gross margin (gas revenues less gas purchased) from
supplying regulated gas customers is insignificant, so earnings were not
affected by the additional revenues from the rate increase under the gas rate
clause. "Regulated gas revenues" also include increases for gas supplied to
large customers that switched back to DPL from other suppliers. Also, "regulated
gas revenues" for the nine months ended September 30, 2001 reflect an increase
from colder winter weather, which caused gas space-heating customers to use more
gas.

Primarily due to the transfer to Conectiv of gas trading and most other
competitive gas activities effective July 1, 2000, "non-regulated gas revenues"
decreased by $22.5 million and $405.9 million for the three months and nine
months ended September 30, 2001, respectively. These revenue decreases had
little effect on earnings since the gross margin earned from these non-regulated
gas activities was not significant for the three months and nine months ended
September 30, 2000.

Other Services Revenues
-----------------------

Other services revenues decreased by $4.6 million for the nine months ended
September 30, 2001 primarily due to revenues earned during the same period last
year for the sale of oil inventory in conjunction with termination of a lease of
a storage tank.

                                      -13-
<PAGE>

Operating Expenses
------------------

Electric Fuel and Purchased Energy and Capacity

"Electric fuel and purchased energy and capacity" increased by $48.8 million in
the third quarter of 2001, mainly due higher costs related to serving DPL's
regulated business, partly offset by a decrease due to the phase-out of DPL's
non-regulated electric activities. During the third quarter of 2001, the cost
per kilowatt-hour for the electricity supplied to DPL's default service
customers increased because DPL purchased all of its electricity requirements
due to the divestiture of its electric generating plants.

"Electric fuel and purchased energy and capacity" decreased by $149.7 million
for the nine months ended September 30, 2001, primarily due to the transfer of
non-regulated electricity trading and marketing activities to Conectiv, partly
offset by an increase due to purchasing a greater portion of the electricity
required to supply default service customers.

Gas Purchased

Gas purchased decreased by $18.8 million and $371.0 million for the three months
and nine months ended September 30, 2001. These decreases were mainly due to the
transfer to Conectiv of non-regulated gas trading and most other competitive gas
activities, partly offset by an increase in gas costs due to higher prices paid
for natural gas supplied to customers of DPL's regulated gas business.

Operation and Maintenance Expenses

Operation and maintenance expenses decreased $6.4 million in the third quarter
of 2001 mainly due to decreases related to the sales of DPL's electric
generating plants, partly offset by increased pension expense.

Operation and maintenance expenses decreased by $71.3 million for the nine
months ended September 30, 2001, mainly due to the credit for termination of
DPL's membership in NEIL ($16.3 million) and the divestiture of DPL's electric
generating plants, partly offset by increased pension expense.

Depreciation and Amortization

Depreciation and amortization expenses decreased $5.9 million and $11.3 million
for the three months and nine months ended September 30, 2001, respectively,
primarily due to the divestiture of DPL's electric generating plants.

Taxes Other Than Income Taxes

Taxes other than income taxes decreased by $1.8 million and $6.2 million for the
three months and nine months ended September 30, 2001, respectively, mainly due
to the divestiture of DPL's electric generating plants.

Interest Expense

Interest expense, net of amounts capitalized, decreased by $6.4 million and $8.2
million for the three months and nine months ended September 30, 2001,
respectively, primarily due to redemptions and refinancings of debt and lower
interest expense for variable rate debt of DPL.

                                      -14-
<PAGE>

Income Taxes
------------

Income taxes decreased $17.2 million for the three months ended September 30,
2001 and increased $69.8 million for the nine months ended September 30, 2001,
mainly due to variances in "income before income taxes and extraordinary item."

Liquidity and Capital Resources
--------------------------------

Due to $116.4 million of cash provided by operating activities, $463.5 million
of cash provided by investing activities, and $401.4 million of cash used by
financing activities, cash and cash equivalents increased by $178.5 million
during the nine months ended September 30, 2001.

The net cash provided by operating activities decreased by $66.1 million to
$116.4 million for the nine months ended September 30, 2001, from $182.5 million
for the nine months ended September 30, 2000.  The decrease in operating cash
flow resulted from the divestiture of DPL's electric generating plants and the
related purchase of all electricity requirements for default service customers.

Cash Flows From Investing Activities for the nine months ended September 30,
2001 provided $463.5 million of net cash primarily due to $528.2 million of cash
provided by proceeds from the sale of DPL's fossil fuel-fired electric
generating plants on June 22, 2001, and $75.0 million of cash used for capital
expenditures, primarily for the electric transmission and distribution system.

Cash Flows From Financing Activities for the nine months ended September 30,
2001 used $401.4 million of net cash mainly due to redemptions of long-term debt
and preferred stock and the payment of common dividends.

DPL issued $59.0 million of refunding bonds ($24.5 million variable rate and
$34.5 million 4.9% fixed rate) in May 2001 and used the proceeds on July 2, 2001
to refund $59.0 million of bonds (7.2% average interest rate).  DPL also repaid
$253.7 million of long-term debt during the third quarter of 2001, including
$192.2 million of Medium Term Notes, with maturity dates from 2005 to 2027 and
an 8.0% average interest rate, and $61.5 million of First Mortgage Bonds, with
maturity dates from 2003 to 2022 and an 8.1% average interest rate.  Debt
redemptions during the nine months ended September 30, 2001, also included $1.7
million of 6.95% Amortizing First Mortgage Bonds.

During the nine months ended September 30, 2001, financing activities also used
cash for the payment of $66.3 million of dividends on common stock held by
Conectiv, the redemption of $59.87 million of preferred stock, including $45.0
million of DPL's Auction Rate Preferred Stock and $14.87 million of DPL's
Adjustable Rate Preferred Stock, and $16.7 million of costs mainly associated
with debt redemption.

                                      -15-
<PAGE>

DPL's capital structure including current maturities of long-term debt,
expressed as a percentage of total capitalization, is shown below as of
September 30, 2001, and December 31, 2000.  The increase in common stockholders
equity as a percent of total capitalization, as shown below, was primarily due
to the redemption of $253.7 million of long-term debt in the third quarter of
2001 and the gain from the sale of fossil fuel-fired electric generating plants
on June 22, 2001.

<TABLE>
<CAPTION>
                                                  September 30,   December 31,
                                                      2001           2000
                                                      ----           ----
<S>                                               <C>             <C>
Common stockholder's equity                           40.1%          28.5%
Preferred stock and preferred trust securities         6.9%           9.7%
Long-term debt, including current maturities
   and variable rate demand bonds                     53.0%          61.8%
</TABLE>

On February 12, 2001, DPL reduced the commitments under its revolving credit
facility, which expires January 31, 2003, from $150 million to $105 million;
this credit facility provides liquidity for DPL's $104.8 million of Variable
Rate Demand Bonds and also may be used for general corporate purposes.

DPL's ratio of earnings to fixed charges and ratio of earnings to fixed charges
and preferred dividends under the SEC Methods are shown below.  See Exhibit 12-
A, Ratio of Earnings to Fixed Charges, and Exhibit 12-B, Ratio of Earnings to
Fixed Charges and Preferred Dividends, for additional information.

<TABLE>
<CAPTION>

                                              9 Months
                                                Ended         Year Ended December 31,
                                            September 30,  ----------------------------
                                                 2001      2000  1999  1998  1997  1996
                                                 ----      ----  ----  ----  ----  ----
<S>                                         <C>            <C>   <C>   <C>   <C>   <C>
Ratio of Earnings to
   Fixed Charges (SEC Method)                    6.65      3.47  3.65  2.92  2.83  3.33
Ratio of Earnings to Fixed Charges and
  Preferred Stock Dividends (SEC Method)         6.06      3.20  3.37  2.72  2.63  2.83
</TABLE>

New Accounting Standards
------------------------

On July 20, 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 141, "Business
Combinations," and SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS
No. 141 requires that business combinations initiated after June 30, 2001 be
accounted for under the purchase method of accounting and does not permit the
use of the pooling of interests method of accounting for business combinations.
Under SFAS No. 142, goodwill that has not been included in the rates of a
regulated utility subject to SFAS No. 71, "Accounting for the Effects of Certain
Types of Regulation," will no longer be amortized. Intangible assets other than
goodwill which have finite useful lives will continue to be amortized under SFAS
No. 142. Goodwill and other intangible assets will be tested periodically for
impairment. If an impairment occurs, then a charge to earnings would result. An
impairment of goodwill that results from adoption of SFAS No. 142 will be
recognized as the cumulative effect of a change in accounting principle. Under
SFAS No. 142, historical operating results will not be restated; instead pro
forma earnings, adjusted to exclude goodwill amortization, will be disclosed.
SFAS No. 142 will be effective January 1, 2002 for companies with a calendar
fiscal year, including DPL.

                                      -16-
<PAGE>

On August 9, 2001, the FASB issued SFAS No. 143, "Accounting For Asset
Retirement Obligations," which establishes the accounting requirements for asset
retirement obligations (ARO) associated with tangible long-lived assets.  If a
legal obligation for an ARO exists, then SFAS No. 143 requires recognition of a
liability, capitalization of the cost associated with the ARO, and allocation of
the capitalized cost to expense.  The initial measurement of an ARO is based on
the fair value of the obligation, which may result in a gain or loss upon the
settlement of the ARO.  If the requirements of SFAS No. 71 are met, a regulated
entity shall also recognize a regulatory asset or liability for timing
differences between financial reporting and rate-making in the recognition of
the period costs associated with an ARO.  SFAS No. 143 will be effective January
1, 2003 for companies with a calendar fiscal year, including DPL.  Upon adoption
of SFAS No. 143, the difference between the net amount recognized in the balance
sheet under SFAS No. 143 and the net amount previously recognized in the balance
sheet will be recognized as the cumulative effect of a change in accounting
principle.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets" which requires that one accounting model be used
for long-lived assets to be disposed of by sale and broadens discontinued
operations to include more disposal transactions.  Under SFAS No. 144, operating
losses of discontinued operations are recognized in the period in which they
occur, instead of accruing future operating losses before they occur. SFAS No.
144 will become effective on January 1, 2002.

DPL is currently evaluating SFAS No. 141, 142, 143, and 144 and cannot predict
the impact that these standards may have on its financial position or results of
operations; however, any such impact could be material.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk
-------  ----------------------------------------------------------

As previously disclosed under "Quantitative and Qualitative Disclosures About
Market Risk" on page II-14 to DPL's 2000 Annual Report on Form 10-K, DPL is
subject to market risks, including interest rate risk and commodity price risk.
There were no material changes in DPL's level of market risk associated with
interest rates and derivative commodity instruments as of September 30, 2001
compared to December 31, 2000.  During the nine months ended September 30, 2001,
DPL held derivative instruments solely for the purposes of limiting regulated
gas customers' exposure to commodity price uncertainty.  Due to the operation of
the regulated gas cost recovery clause, DPL had no value at risk as of September
30, 2001 or December 31, 2000.

Although DPL's level of market risk associated with derivative commodity
instruments is unchanged as of September 30, 2001 compared to December 31, 2000,
during the nine months ended September 30, 2001, DPL purchased increased amounts
of electricity under short-term arrangements due to the divestiture of its
electric generating plants. As a result, DPL experienced more exposure to
fluctuations in the market price of electricity.

                                      -17-
<PAGE>

                          PART II. OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K
-------  --------------------------------

(a) Exhibits
------------

Exhibit 10, Purchase and Sale Agreement for Unforced Capacity, Energy and
Ancillary Services between Conectiv Energy Supply, Inc. and Delmarva Power &
Light Company

Exhibit 12-A, Ratio of Earnings to Fixed Charges

Exhibit 12-B, Ratio of Earnings to Fixed Charges and Preferred Dividends


(b) Reports on Form 8-K
------------------------

No Current Reports on Form 8-K were filed during the third quarter of 2001.



                                   SIGNATURE


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                   Delmarva Power & Light Company
                                   ------------------------------
                                            (Registrant)



Date:  November 9, 2001            /s/ John C. van Roden
       ----------------            ----------------------------------------
                                   John C. van Roden, Senior Vice President
                                   and Chief Financial Officer

                                      -18-
<PAGE>

                                 Exhibit Index
                                 -------------

Exhibit 10, Purchase and Sale Agreement for Unforced Capacity, Energy and
Ancillary Services between Conectiv Energy Supply, Inc. and Delmarva Power &
Light Company

Exhibit 12-A, Ratio of Earnings to Fixed Charges

Exhibit 12-B, Ratio of Earnings to Fixed Charges and Preferred Dividends