For Immediate Release
For Immediate ReleaseMay 11, 2001
Pepco (NYSE: POM) and Conectiv (NYSE: CIV) customers will benefit from one of the most comprehensive programs of service and reliability guarantees in the industry - backed by payments to customers - pending regulatory approvals and completion of their proposed merger.
The guarantees are outlined in filings made today with regulatory agencies.
"These customer guarantees are designed with the resources and capabilities of the merged company in mind and will provide our customers direct assurances of performance," said John M. Derrick Jr., Pepco`s Chairman and Chief Executive Officer.
"The merger of Pepco and Conectiv will allow the companies to provide enhanced levels of service to our customers that neither could achieve separately," added Howard E. Cosgrove, Conectiv`s Chairman and Chief Executive Officer. "These service guarantees are one benefit of combining two strong regional allies and underscore our commitment to customer service and reliability."
Service guarantees are public commitments to customers to provide a specified level of service. The companies are proposing four service guarantees backed up by payments to customers.
Additionally, the companies are proposing several other service guarantees that would measure annual performance in key areas such as call center performance and number and length of outages. These guarantees would be backed up by reports to regulators.
The proximity of Pepco and Conectiv will greatly improve their ability to share internal resources during periods of system stress due to major storms or equipment failure. In addition, resource sharing and new technology development will enable the companies to better meet customer needs in critical customer contact roles such as the call centers.
"We are proposing to enhance our commitment to superior customer service and to build upon the significant investments in customer service and reliability that each company has already made," Derrick said.
If approved, the program will take time to implement after regulatory approvals and closing of the merger. Guarantees based on specific customer interactions will take effect 90 days after the merger closes. Annual commitments, such as outage frequency and outage duration measures, will take effect after the merger closing and one year after implementation of the companies` enhanced outage management systems. The guarantees generally would not apply during major storms or other events outside the utilities` control. Other limitations and exclusions also may apply.
In February, Pepco announced plans to acquire Conectiv for $2.2 billion in cash and stock, creating the largest electricity delivery company in the mid-Atlantic region. The companies, which would become subsidiaries of a yet-unnamed holding company, based in Washington, D.C., will serve more than 1.8 million customers in Delaware, the District of Columbia, Maryland, New Jersey and Virginia. Each distribution company will retain its own name and local identity.
About PepcoPepco is an investor-owned utility that delivers electricity in Washington, D.C., and the Maryland suburbs to more than 700,000 customers. Through its family of subsidiaries, Pepco also operates in the mid-Atlantic region in the competitive arenas of diversified energy products and services and telecommunications.
About ConectivConectiv, headquartered in Wilmington, Del., is focused on two core energy businesses. Conectiv Power Delivery provides energy to more than one million customers in N.J., Del., Md., and Va. Conectiv Energy manages a growing portfolio of "mid-merit" power plants that can respond quickly to changes in the demand for power within the PJM power pool.
Forward-Looking Statements Except for historical statements and discussions, the statements in this news release constitute "forward-looking statements" within the meaning of federal securities law. These statements contain management`s beliefs based on information currently available to management and on various assumptions concerning future events. Forward-looking statements are not a guarantee of future performance or events. They are subject to a number of uncertainties and other factors, many of which are outside the Companies` control. Factors that could cause actual results to differ materially from those in the forward-looking statements herein include general economic, business and financing conditions; weather conditions; competition; governmental actions; and other presently unknown or unforeseen factors. These uncertainties and factors could cause actual results to differ materially from such statements. Pepco and Conectiv disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Point of Contact:Nancy Moses