PEPCO Plans to Reduce or Terminate
Conservation Programs in Maryland

Potomac Electric Power Company has received approval from the Maryland Public Service Commission to reduce or end several of the company`s customer conservation programs in Maryland. The utility company, which serves 467,000 Maryland residential and commercial customers, said that most of its conservation programs are no longer cost effective, primarily because the same products and services are available in the open, competitive market. PEPCO already has suspended some conservation programs in the District of Columbia.

Effective today, PEPCO will stop accepting new applications to participate in the Custom Rebate and New Building Design Programs. Through these programs, thousands of commercial and governmental customers have received rebates for replacing existing electrical equipment with high-efficiency equipment or building new buildings to higher levels of energy efficiency. The costs associated with many of the high-efficiency measures installed under the programs have declined to the point where customers are purchasing and installing them as a normal course of business.

As of April 30, 1998, PEPCO will stop accepting new applications for two residential programs -- the Energy Saver Home and Home Fitness programs. Both of these programs received far fewer participants than its other popular residential rebate programs and thus are no longer cost effective.

The High-Efficiency Air Conditioning and Heat Pump Rebate Program -- through which PEPCO has paid more than 69,000 rebates to residential customers to date -- will continue but at reduced rebate levels. The company`s other programs that help shape energy use -- Time-of-Use rates, Kilowatchers Club and Curtailable Load -- will remain at this time.

"Over the last decade, PEPCO spent $360 million on conservation programs for our customers with very successful results," said Mark Kumm, PEPCOs manager of market planning and policy. "Due to these efforts, the company has achieved reductions in energy use during peak times of more than 700 megawatts. This is the equivalent of two medium-sized power plants that we have not had to build to meet customer demand. However, while helping our customers use electricity wisely, conservation programs add costs to everyone`s electric bill."

By reducing or eliminating conservation programs that are no longer cost effective, PEPCO can limit company spending and continue to encourage customers to use energy efficiently without significantly increasing electricity prices.

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