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Delmarva Power Begins Removal of Gas Communications Devices

Thursday, December 16, 2010

Process to Continue Pending Recertification of Equipment

WILMINGTON, Del – Delmarva Power has begun removing communications devices installed on some customers’ natural gas meters, and will continue to do so until the vendor completes a recertification of its product, enabling the equipment to meet the specifications of the vendor’s contract with the utility.

The utility halted installation and began removing the devices after learning from the vendor, Silver Spring Networks, that the equipment did not meet a specification stipulated in the terms of the purchase agreement with Delmarva Power.

When first delivered, Silver Spring Networks certified that the devices were compliant with the utility’s terms. The vendor later informed Delmarva Power that, as a result of a change in the manufacturing process, a recertification was necessary. Recertification testing is now under way.

The removal of these units is a contract compliance and quality control issue. The vendor has provided independent analysis that the units are safe. Delmarva Power is confident that the analysis is accurate. Silver Spring Networks said the equipment is operating correctly and that there have been no safety incidents or product failures stemming from the compliance issue.

Nevertheless, Delmarva Power maintains stringent standards in purchasing equipment and requires vendors to meet those standards. If the devices ultimately achieve the necessary recertification, the utility will resume installing them.

Delmarva Power customers will not bear the cost of removing this equipment, or the replacement, if necessary. The utility is notifying affected customers.

These communications devices have been installed on natural gas meters for about 21,000 of Delmarva Power’s 123,000 natural gas customers, all of whom are in New Castle County, Delaware.

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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 and Maryland and over 123,000 natural gas delivery customers in northern Delaware.