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Pepco Files for Rate Adjustment to Support Reliability and Technology Investments

Washington, D.C. (April 19, 2016) - Pepco today filed a rate request with the Maryland Public Service Commission to recover the cost of reliability investments that have reduced the number and length of power outages and a five-year smart grid initiative that is generating more than $3.50 in customer benefits for every $1 invested. 

The request for a regulatory rate adjustment comes as Pepco marks historic reliability performance and improved customer service for its more than 560,000 customers in Montgomery County and Prince George's County. 

Under the proposed rate adjustment, the typical Pepco Maryland residential customer bill would increase by 10 percent, or about $15.80 per month; an average monthly bill is currently $152. 

Even if the new rates are approved, Pepco customers' monthly bills are down 9 percent from where they were five years ago because of dropping energy prices. And many customers continue to take advantage of Pepco's smart energy management programs to save on their bills. 

"Pepco customers benefit from the strong progress we've made on our commitment to accelerate investments in our system, improve reliability and modernize the power grid," said Donna Cooper, Pepco region President. "Our customers are realizing the results by experiencing fewer and shorter outages as a result of an upgraded electric distribution system that is more efficient." 

During the past two years, Pepco invested $327 million into improving reliability of the electric distribution system - and fully $890 million in reliability and other programs since 2012. In addition, during the last two years, Pepco implemented a successful $24 million grid resiliency program, which reinforced 24 major distribution lines in Maryland. The rate request would extend the grid-resiliency program, which has had dramatic results in improving service. 

As a result of those investments, Pepco exceeded the reliability standards for 2015 established by the state of Maryland. Compared with 2011, customers experienced 43 percent fewer power outages, and the length of power outages was cut by nearly half. Between 2011 and 2015, Pepco residential customer satisfaction also increased by double digits. 

Pepco also has invested in technology to benefit customers by adding more than 560,000 smart meters that have improved service and enabled new programs to help customers save money on their bills by managing energy usage and avoiding in person meter readings. Pepco's filing shows that for every dollar invested in smart grid, customers gain more than $3.50 in benefits. 

Smart meters allow customers to better track and manage their household energy use and save money during times of peak demand, such as on a hot summer day. Smart meters also mean fewer estimated bills, and they can alert Pepco when a customer's power goes out. The meters also increase Pepco's operational efficiency, including remote meter reading, remote start and stop of service, more-efficient truck dispatches, and enhanced planning and management of the power grid. 

Pepco customers in Maryland can take advantage of a variety of energy-saving and low-income assistance programs to help offset the impact of any increases to their bills. Those programs include Low-Income Energy Assistance, Budget Billing, Extended Payments, Third-Party Notifications and a variety of Payment Arrangements. In 2015, our Pepco Maryland customers saved $10.6 million by taking advantage of Pepco's Energy Wise Rewards program and $8.3 million through our Peak Energy Savings Credit program. 

"We recognize that rate increases can be difficult for our customers, and that's why we provide ways to help customers save on their energy bills, whether that's through smart meter technology, energy efficiency programs or direct financial assistance to help those most in need," said Dave Velazquez, President and CEO of Pepco Holdings. "With some simple changes in how they use energy in their homes, customers can significantly lower their bills and save money." 

Pepco's delivery rates in Maryland have not changed since 2014. The request for an increase is unrelated to Pepco Holdings' recent merger with Exelon and will be used to recover costs from the reliability and technology investments the company made prior to the merger. The request would have been made regardless of the merger and only applies to Pepco's Maryland customers, not customers in the District of Columbia. 

Distribution, or delivery, rates cover the cost of the poles, wires and other equipment that carry electricity to customers' homes and businesses, the cost of staff for customer service and for preparing and processing customers' bills. Distribution rates are separate from electricity supply rates, which cover the cost of the electricity commodity carried over the power lines. 
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