For Immediate Release
Washington, D.C., and Wilmington, Del., February 27, 2002 -- Potomac Electric Power Company (Pepco) (NYSE: POM) and Conectiv (NYSE : CIV/CIVA) announced today that the parties to their merger approval proceeding before the District of Columbia Public Service Commission have reached a settlement which, if adopted by the Public Service Commission, would result in approval of the merger. The proposed settlement includes key provisions extending distribution rate caps and funding a "smart meter" pilot program in the District, once the merger is completed.
The agreement will be submitted as a unanimous proposed settlement to the D.C. Public Service Commission, which has the authority to accept or reject it.
The merger has already been approved by the Federal Energy Regulatory Commission, Pennsylvania Public Utility Commission and Virginia State Corporation Commission. The merger has cleared review by the Federal Trade Commission and U.S. Justice Department. Approvals also are required by regulators in Delaware, Maryland and New Jersey and by the U.S. Securities and Exchange Commission.
"This settlement agreement is a significant achievement. It offers extended rate cap protections for our customers in the District of Columbia and moves us a step closer to completing the merger process," said Dennis Wraase, Pepco President and Chief Operating Officer. "We hope that the Commission will approve the settlement as in the public interest."
Parties to the settlement include Pepco; the Office of the People's Counsel of the District of Columbia; the General Services Administration; Washington Metropolitan Area Transit Authority; Apartment and Office Building Association of Metropolitan Washington; the International Brotherhood of Electrical Workers, Local 1900, and AES New Energy, Inc. The settlement agreement includes the following key provisions:
Rate Caps to be extended in the District of Columbia until 2007 The settlement agreement caps the distribution portion of Pepco's rates for 30 months, until August 2007 and requires the company to file cost information with the D.C. Public Service Commission by July 2004 to determine if a rate decrease is warranted. The merged company to provide $2 million for a "smart meter" pilot The company will contribute $2 million to support the development and implementation of a "smart meter" pilot program for residential customers in the District of Columbia. Smart metering technology allows customers to more closely monitor their energy usage, enabling them to change usage patterns to their benefit.
Rate Caps to be extended in the District of Columbia until 2007
The settlement agreement caps the distribution portion of Pepco's rates for 30 months, until August 2007 and requires the company to file cost information with the D.C. Public Service Commission by July 2004 to determine if a rate decrease is warranted.
The merged company to provide $2 million for a "smart meter" pilot
The company will contribute $2 million to support the development and implementation of a "smart meter" pilot program for residential customers in the District of Columbia. Smart metering technology allows customers to more closely monitor their energy usage, enabling them to change usage patterns to their benefit.
Following the merger, Pepco and Conectiv will continue to operate as separate companies. Together they will serve more than 1.8 million customers in Delaware, the District of Columbia, Maryland, New Jersey and Virginia.
About PepcoPepco is an investor owned company that delivers electricity to more than 700,000 customers in Washington, D.C. and the Maryland suburbs. Through its family of subsidiaries, Pepco also operates in the competitive arena of telecommunications and energy products and services in the mid-Atlantic region. For more information visit the company`s web site at www.pepco.com .
About ConectivConectiv, a Fortune 500 company headquartered in Wilmington, Del., is focused on two core energy businesses. Conectiv Power Delivery provides energy to more than one million customers in New Jersey, Delaware, Maryland and Virginia. Conectiv Energy uses a sophisticated power-trading unit to optimize the value of a growing portfolio of mid-merit power plants that can start and stop quickly in response to changes in the demand for power within the PJM power pool. For more information, visit the company`s web site at www.conectiv.com.
Forward Looking Statements:Except for historical statements and discussions, the statements in this press release constitute "forward-looking statements" within the meaning of the federal securities laws. These statements contain managements' beliefs based on information currently available to them 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. In connection with the transaction, additional important factors that could cause actual results to differ materially from those in the forward-looking statements herein include risks and uncertainties relating to delays in obtaining or adverse conditions contained in, related regulatory approvals, changes in economic conditions, availability and cost of capital, changes in weather patterns, changes in laws, regulations or regulatory policies, developments in legal or public policy doctrines and other presently unknown or unforeseen factors. These uncertainties and factors could cause actual results to differ materially from such statements. The companies disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This information is presented solely to provide additional information to further understand the results and prospects of the companies.
Point of Contact:Makini Street