Pepco Energy Services awarded state government’s largest electricity accounts

WASHINGTON, Jan. 23, 2002 — Pepco Energy Services, a subsidiary of Potomac Electric Power Company, has been competitively selected by the Maryland Department of General Services to supply electricity to state agencies and departments.

This 24-month contract, which begins July 2002, represents nearly $65 million and 1.6 billion kilowatt hours of conventional and green electricity.

Under this agreement, Pepco Energy Services will provide electricity to more than 16 state agencies and departments located primarily in the Annapolis and Baltimore areas, including the Departments of Transportation, Corrections, Health and Mental Hygiene, as well as Morgan State University, Towson State University, the Anne Arundel County Public School System’s nine largest facilities and the Camden Yards Sports Complex, home to the Baltimore’s professional baseball and football teams.

All of the customers covered by the contract are located in Baltimore Gas & Electric Company’s (BGE’s) retail service area, and all are served under BGE’s “Schedule P,” which is the tariff applying to BGE’s largest commercial and industrial customers. “Schedule P” customers face the decision of either remaining with BGE and paying fluctuating market-based rates for electricity, or choosing a new competitive electric supplier by July 2002. It is estimated there are more than 400 accounts served under the “Schedule P” tariff.

Six percent of the electricity that Pepco Energy Services will supply to the state agencies and departments — which is enough to meet the annual electricity needs of about 4,000 Maryland households — will be “green electricity,” which consists of electricity produced with renewable resources. Electricity produced with renewable resources has significantly lower environmental impacts than electricity produced with conventional resources. On March 13, 2001 Governor Glendening issued an Executive Order which established a goal for the procurement of green electricity for use within state facilities, the highest goal of any state. This contract represents the first purchase of green electricity by Maryland state government.

“This contract offers the state of Maryland a way to manage the risk of volatile electricity prices with the added benefit of improving the environment,” said Ed Mayberry, president and chief executive officer of Pepco Energy Services. “We expect that many other BGE ‘Schedule P’ customers will understand the value of energy solutions that mitigate the risks of market- based pricing.”

About Pepco Energy Services

Pepco Energy Services, Inc., a wholly owned, separately-managed subsidiary of Potomac Electric Power Company, provides residential, commercial, institutional and government customers a complete suite of integrated energy management solutions including electricity and natural gas; energy surveys; energy information systems; fuel management services; heating, ventilation and air conditioning systems; lighting; project financing; and energy operations and maintenance services. Visit http://www.pepcoenergy.com for more information about a variety of energy products and services.

Pepco Energy Services, Inc., is not the same company as Potomac Electric Power Company and prices and services of Pepco Energy Services, Inc., are not set by the Public Service Commission.


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