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Delmarva Power Unveils Proposals to Lower Costs, Improve Reliability, and Enhance Energy Independence for Maryland Customers

Wednesday, March 21, 2007

Salisbury, Md.  – Delmarva Power today proposed an ambitious program for its Maryland customers that will combine traditional energy efficiency programs with innovative technologies to help customers manage their energy use and reduce the total cost of energy.

“Energy efficiency is the lowest cost and the cleanest way to address future energy needs,” said Dennis Wraase, Chairman of the Board, President and Chief Executive Officer, Pepco Holdings, Inc., the parent company of Delmarva Power.

“If we can provide tools for PHI’s nearly two million customers to reduce their electricity usage, we can make a measurable contribution to meeting the nation’s environmental challenges and at the same time help customers keep their electric bills affordable,” Wraase added.

New technology will lead the way toward energy independence in Delmarva Power’s comprehensive plan. The proposal includes Demand Side Management efforts, such as rebates or other incentives for residential customers to update inefficient appliances with Energy Star replacements. Customers could also receive credits on their bills for allowing Delmarva Power to control, or intermittently turn off, their central air conditioning or heat pumps when wholesale electricity prices are high.

Business customers would receive financial incentives for using energy efficient equipment such as improved lighting and HVAC systems, and would be rewarded for reducing use during periods of peak demand.

Last year Delmarva Power invested in web based, energy auditing software. That investment is already paying off for Delmarva customers who may monitor their own energy use and learn what changes might lower their costs. Today’s filing with the Maryland Public Service Commission outlining Delmarva Power’s comprehensive complement of energy efficiency and demand side management programs is the next step and represents the future in energy efficiency.

These environmental initiatives build on actions the company is taking at the corporate-wide level. PHI currently is using biodiesel and ethanol blends to fuel a portion of its 2,000 vehicle fleet and is testing electric hybrid technology in Maryland, the District of Columbia and New Jersey. PHI plans to continue to evaluate these and other technologies to increase the number of alternative fueled vehicles in its fleet. PHI also is joining the National Action Plan on Energy Efficiency Coalition, a broad based group of utilities, environmental advocacy groups, State Utility Commissions and others working together on environmental issues.

Delmarva Power also proposed to install “smart meters” in the first phase of an effort designed to improve reliability and, ultimately, give customers options for lowering usage and cost. The smart meters, which the company proposes to install in the homes of all Maryland customers over the next three to four years, would give Delmarva the ability to remotely identify the location of outages without customers calling in. When combined with additional investments in technologies planned by the company, smart meters can give customers the information and options they need to manage their demand when electricity prices are high.

A recent study sponsored by PJM and mid-Atlantic public utility commissions--including the Maryland Public Service Commission--estimates that programs such as those advanced in Delmarva Power’s blueprint for the future could save Delmarva customers $10.6 million per year, depending on how the programs are structured and how many customers participate.

As part of the filing, Delmarva Power recommended ways to fund the proposed programs and offered to work with the Maryland Public Service Commission to determine the most appropriate mechanisms to permit full and timely recovery of the company’s investments.

Delmarva Power Regional President Gary Stockbridge said, “Helping our customers deal with higher energy prices is very important to us. This plan can help our customers save money, make us more energy independent and keep the environment cleaner.”

The Maryland Public Service Commission will review Delmarva Power’s proposals and will decide whether these plans will be implemented.

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Editors Note: refer to Delmarva Power's website (www.delmarva.com) for information on electrical safety, energy saving tips, bill payment options and power outage updates.

Delmarva Power, a public utility owned by Pepco Holdings, Inc. (NYSE: POM), provides safe and reliable energy to more than 500,000 electric delivery customers in Delaware, Maryland and Virginia and over 118,000 natural gas delivery customers in northern Delaware .