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Delmarva Power Proposes Small Decrease in Natural Gas Rates : Delmarva Power Files Cost Rate Adjustment and Base Rate Case

Thursday, August 31, 2006

WILMINGTON, Del – As a result of a series of filings made with the Delaware Public Service Commission today, Delmarva Power natural gas customers will see a moderate decrease in natural gas bills beginning November 1. The typical residential customer using 120 ccf (the unit used to measure residential usage) a month during the upcoming heating season should see an overall bill decrease of $11.73 or 6.2% a month, from $189.62 to $177.89. Delmarva Power provides natural gas service to approximately 120,000 customers in northern Delaware.

Delmarva Power’s filings ask the Delaware PSC for permission to adjust three different components of its overall rates: its gas cost rate (GCR), its delivery rates, and its environmental surcharge rider. The GCR filing, which is made every year at this time, adjusts rates to reflect the costs the company incurs to buy natural gas on behalf of its customers. The company passes through these costs without any profit. This year the filing calls for a decrease, reflecting lower wholesale prices for natural gas. In addition, the company also filed for an increase in natural gas delivery rates to recover the increasing costs to maintain and improve the system and to comply with more stringent federal regulations. A third filing proposes a minor change in the Environmental Surcharge, a small monthly charge used to fund cleanup of manufactured gas sites in operation decades ago.

On November 1, the company will place into effect a 7.2% reduction in its gas cost rate, a 0.1% increase in its environmental surcharge and a 1% increase in the proposed delivery base rate. These rate changes will be placed in effect on an interim basis while the commission reviews the proposed rates. A final decision on the company’s request is expected in the second quarter of 2007, after which time any additional base rate increase approved by the commission would go into effect. If all of the company’s proposals are approved at that time, the affect on the typical 120 ccf residential bill would be a total decrease of 1.6 percent, from $189.62 to $186.54, or $3.08 per month.

A detailed fact sheet on the filings is available on www.delmarva.com.

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Delmarva Power, a public utility owned by Pepco Holdings, Inc. (NYSE: POM), provides safe, reliable and affordable regulated electric and natural gas delivery services to more than 500,000 customers in Delaware, Maryland , and Virginia .