SecProbe.io

CORRESP
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  Daniel L. Thobe

  Corporate Controller

  1065 Woodman Drive

  Dayton, OH 45432

  dan.thobe@dplinc.com

  (937) 259-7905 (direct)

  (937) 259-7813 (fax)

March 3, 2005

Faxed to (202) 942-9648

Securities and Exchange Commission

Division of Corporation Finance

450 Fifth Street, N.W.

Judiciary Plaza

Washington, D.C.  20549

Attention:                                         James
Allegretto and Sarah Goldberg

Re:                               DPL
Inc.

The Dayton Power and Light Company

Form 10-Ks for the fiscal year ended December 31,
2003

Filed November 5, 2004

Form 10-Q for the quarters ended March 31,
2004, June 30, 2004 and September 30, 2004

File Nos.
1-9052

1-2385

Ladies and Gentlemen:

Please find our response to the comment letter to James V. Mahoney
dated February 17, 2005 from the staff of the Commission.

The numbered paragraphs below set forth the staff’s comments together
with our response.  Unless otherwise
indicated, capitalized terms used herein have the meanings assigned to them in
the Annual Reports.

Consolidated Statement of Cash Flows, page 43

1.              Please explain your
basis under GAAP for classifying investments with maturities between three
months and one year as cash on your statement of cash flows.  Specifically tell us how this treatment
complies with paragraphs 7-10 of SFAS 95.

Response:  On the Company’s 2003 Consolidated Statement
of Cash Flows and Consolidated Balance Sheet, the description of cash is “Cash
and Temporary Cash Investments.”  In Note
1 “Summary of Significant Accounting Policies and Overview”, cash is defined as
“cash, cash equivalents and short-term investments” and continues by defining “investments
with maturities of three months or less” as cash equivalents and “investments
with maturities of less than one year” as short-term.

Included in the December 31, 2003 cash
balance was $100.0 million identified in Note 3 “Supplemental Financial
Information” as short-term investments which was included in the total cash of
$337.6 million contained in the Consolidated Statement of Cash Flows and
Consolidated Balance Sheet.  There were
no amounts identified as short-term investments for 2002.

The Company has reviewed the nature of the
$100.0 million classified as short-term investments and concluded those amounts
were invested in short-term, highly liquid money market accounts, primarily
accumulated to pay down a significant debt payment scheduled in April 2004.  SFAS 95, paragraph 8 defines cash equivalents
as “short-term, highly liquid investments that are both a) readily convertible
to known amounts of cash, and b) so near their maturity that they present
insignificant risk of changes in value because of changes in interest
rates.  Generally, only investments with
original maturities of three months or less qualify under that definition.”  These short-term investments therefore
qualify as cash equivalents.  The Company
concluded that it is appropriate to include that amount as cash and cash
equivalents in the consolidated financial statements.

This
conclusion is based on the following:

•                              The
amounts identified as short-term investments as of December 31, 2003 were
invested in highly liquid money market accounts, and

•                              Those
short-term investments were readily convertible to cash and represented
insignificant risk of changes in value.

However, the Company has determined that in
future filings its definition of cash and cash equivalents should be changed
prospectively to add clarity to what the Company defines as cash and cash
equivalents, and the Company also will prospectively eliminate the supplemental
cash analysis included in the Form 10-K Note 3 for 2003 as it is no longer
necessary.

The prospective definition of cash to be
included prospectively in Note 1 “Summary of Significant Accounting Policies
and Overview” will read:

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Cash and Cash Equivalents

Cash and cash equivalents are stated at cost,
which approximates fair value. All highly liquid short-term investments with
original maturities of three months or less are considered cash equivalents.

Note 1. Summary of Significant Accounting
Policies and Overview

Financial Instruments, page 52

2.              We note that the
private equity funds in which you own a limited partnership interest and which
you account for under the equity method incurred a net loss of $359 million for
the twelve months ended September 30, 2003.  Based on your ownership interest, please
supplementally reconcile this loss to the investment loss of $6.6 million for
equity method investments you reported on page 52.  Further, we assume the private equity funds’
financial information as of December 31, 2003 was available to you when
you filed your Form 10-K in November 2004.
As such, please explain your rationale in using September 30, 2003
financial information as opposed to December 31, 2003 information.  We may have further comment.

Response:

1) Please see the following supplemental
reconciliation:

Equity Fund
Reconciliation ($ in millions):

  Total
  Private Equity Funds’ Net Loss - December 31, 2003 10 K:

  $

  (359

  )

  MVE’s
  proportional share calculated:

  (23.4

  )

  Timing
  differences related to one-quarter reporting lag (a):

  16.8

  Net loss as
  reported in the December 31, 2003 10-K :

  $

  (6.6

  )

(a) - The timing differences primarily relate
to impairment provisions recognized on DPL’s books in 2002 that were not
recognized on the General Partner’s books until 2003.

2) The financial information provided
quarterly by the General Partners is received by the Company in the following
quarter, resulting in the Company recording the private equity fund results on
a one quarter lag.  For example, the
General Partner’s financial results for June 30, 2003, were recorded in
the Company’s financial records at September 30, 2003.  Therefore, the Company’s

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policy has been to record the financial
results of the private equity funds on a one quarter lag due to this delay in
receiving the funds’ results.  Due to the
unforeseen delays in filing the Company’s 2003 Form 10-K, the Company
acknowledges it had available at the filing date the December 31, 2003
year-end private equity funds’ financial information from the General Partner’s.
However, the Company elected not to disclose or record these fourth quarter
results in the 2003 10-K, since that disclosure or related accounting entry
would produce inconsistent comparisons with future period disclosures, along
with inconsistent comparisons with past and future financial results.  For example, had the fourth quarter 2003
financial results of the private equity funds been recorded in the fourth
quarter of 2003, the financial results of 2003 would have reflected five
quarters’ activity, the financial results of 2002 would have reflected four
quarters’ activity, and the financial results of 2004 would reflect three
quarters’ activity.

Note 13. Business Segment Reporting, page 76

3.              In response to our
comment letter dated June 27, 2003, you stated that the activities of DPL
Energy, LLC, are not considered to be an operating segment as defined by SFAS
131.  However, we note that other utilities
within your jurisdiction separate their business into regulated and competitive
energy services segments.  As such, we
are unclear as to why the majority of your peers jurisdictionally and
nationally consider each business to be an operating segment as defined in
paragraph 10 of SFAS 131 and you do not.
Please address each of the sub-paragraphs of the above cite in
explaining the business reason(s) for the disparate treatment.  In doing so, please specifically explain how
management evaluates the profitability of DPL Energy, LLC.  Finally, please cite examples of other
utilities that include competitive energy services businesses and regulated
utility operations within one segment.

Response:  DPL Energy, LLC (DPLE) is a subsidiary of DPL
Inc. that engages in the operation of gas-fired electric generation facilities
known as peaking units (designed for servicing electric loads during periods of
high demand).  DPL Inc.’s (the Company’s)
principal utility subsidiary, The Dayton Power and Light Company (DP&L),
also engages in the operation of peaking units and marketing of wholesale
energy, in addition to providing coal-based generation and regulated electric
transmission and distribution services.

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SFAS 131, paragraph 10 defines an operating
segment as:  “An operating segment is a component of an enterprise:”

a.              “That
engages in business activities from which it may earn revenues and incur
expenses (including revenues and expenses relating to transactions with other
components of the same enterprise),”

The Company believes that DPLE and the
Company’s generation, regulated transmission and regulated distribution
businesses engage in business activities earning revenues and incurring
expenses and therefore meets the definition of an operating segment under this
sub-paragraph.

b.              “Whose
operating results are regularly reviewed by the enterprise’s chief operating
decision maker to make decisions about resources to be allocated to the segment
and assess its performance, and,”

The Company’s chief operating decision maker
(the CEO) receives a monthly internal management financial package consisting
of over 40 pages of financial data, including detailed variance analyses of
expenses by department.  Revenues are
analyzed by the following categories:
retail, wholesale and other.
Retail is further analyzed by type of retail customer (e.g.,
residential, commercial, industrial, etc.).
Wholesale is considered an integral element in the efficient operation
of an electric utility so that the Company’s capacity can be effectively
utilized.  Revenues are not analyzed at
the DPLE, generation, regulated transmission or regulated distribution
levels.  Income statement, cash flows and
balance sheet financial data are presented only on a consolidated basis.  Separate operating results are not presented
in the monthly internal financial package for DPLE, retail, wholesale,
generation, regulated transmission and regulated distribution activities. The
CEO makes decisions about resource allocation and assesses total performance on
an integrated basis; however, the CEO does assess individual departments’ cost
performance to budget and prior year for cost containment and control.

Since the Company’s CEO does not receive or
review operating results specifically for DPLE, generation, regulated
transmission or regulated distribution activities, the Company believes none of
those activities would be considered separate segments under this
sub-paragraph.

c.               “For
which discrete financial information is available.”

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As a utility operating in the state of Ohio,
all of DPL’s electric generation activities are considered “unregulated”, while
its electric transmission and distribution activities are considered “regulated”.  However, as discussed above, DPL’s management
generally views the business as an integrated utility, and does not routinely
monitor regulated earnings versus non-regulated earnings.  As such, generation activities are viewed as
a cost of providing energy to DPL’s customers. As indicated above, the Company
does not separate the operating results of DPLE, generation, regulated
transmission or regulated distribution activities in its monthly internal
financial package.  However, with a new
management team and an ever-evolving business, the Company may re-assess its
internal reporting and alter its reports at any time.  The Company will continue to monitor its
activities and, upon an appropriate change in reporting or structure, will
disclose any new operating segment at that time.  At this time, the Company does not believe
DPLE, generation, regulated transmission or regulated distribution would be
considered separate operating segments under this sub-paragraph.

Unlike the business models used by some other utilities, DPL’s electric
generation is used first and foremost to service the customers within its
service territory.  Only after its base
load is satisfied, does the Company sell remaining generation into the
wholesale energy market.  Unlike some
other companies in the industry, DPL does not devote large resources toward
purchasing and selling wholesale energy, but rather only sells excess
electricity produced from its coal-based and gas-fired generating facilities
when economically advantageous.  In 2003,
wholesale revenues accounted for $159.3 million or 13% of total revenues.  The Company integrates wholesale sales
information directly into internal reporting in the same manner as industrial,
commercial, and residential revenue classifications.

The Company acknowledges that:

•                  The
Company is responsible for the adequacy and accuracy of the disclosure in the
filing;

•                  Staff
comments or changes to disclosure in response to staff comments do not
foreclose the Commission from taking any action with respect to the filing; and

•                  The
Company may not assert staff comments as a defense in any proceeding initiated
by the Commission or any person under the federal securities laws of the United
States.

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I hope that the foregoing has been responsive to the staff’s comments. Any assistance you can provide in
obtaining an expeditious review of this response letter would be greatly
appreciated.

Should you have any questions relating to these responses, please call
Daniel Thobe at (937) 259-7905.

  Respectfully submitted,

  /s/ Daniel L. Thobe

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