Federal judge denies Mirant’s request to terminate Pepco contracts

WASHINGTON

On December 23, 2003, The Honorable John McBryde, Judge of the United States District Court for the Northern District of Texas, Fort Worth Division, issued a Memorandum Opinion and Order denying bankrupt Mirant Corp.’s request to reject two power purchase agreements under which Mirant had committed to reimburse Pepco for the cost of electricity supplied to Pepco under power purchase agreements with third party generators. Pepco is a subsidiary of Pepco Holdings, Inc. (NYSE: POM – News).

Pepco and the Federal Energy Regulatory Commission (FERC) opposed Mirant’s attempt to use the bankruptcy laws to terminate the agreements on the grounds that Mirant could not terminate its obligations without prior FERC approval. Judge McBryde agreed and declined to issue injunctive relief requested by Mirant. He further ordered Mirant to show cause by January 5, 2004 why all injunctive relief previously granted by the bankruptcy court should not be dissolved.

Pepco believes the Court’s opinion is just, proper and in accordance with the law, and assumes that Mirant will continue to perform its obligations under these agreements, as it has since the commencement of its bankruptcy proceeding.

About PHI: Pepco Holdings, Inc. is a diversified energy company with headquarters in Washington, D.C. Its principal operations consist of Pepco and Conectiv Power Delivery, which deliver 50,000 gigawatt-hours of power to more than 1.8 million customers in Washington, Delaware, Maryland, New Jersey and Virginia. PHI engages in regulated utility operations by delivering electricity and natural gas, and provides competitive energy and energy products and services to residential and commercial customers.

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