For Immediate Release

June 3, 1999

Clinton Announces Largest Energy-Saving Performance Contract Will Be Awarded To Subsidiaries of Pepco, York International

WASHINGTON, DC - President Clinton announced today that the Department of Defense intends to award the federal government's largest energy-saving performance contract ever to Pepco Energy Services and Viron Energy Services. Pepco Energy Services is a subsidiary of Potomac Electric Power Co. (NYSE: POM), Washington, DC, and Viron Energy Services is a subsidiary of York International Corp. (NYSE: YRK), York, PA.

In a special ceremony at the White House, the President announced the $200 million contract, designed to implement energy-savings measures for the Military District of Washington (MDW). The MDW is a major Army command encompassing five Army posts: Fort George G. Meade in Maryland; Fort Myer, Fort Belvoir and Fort A.P. Hill in Virginia; and Fort Lesley J. McNair in Washington, DC. More than 2,100 buildings were examined for energy improvements.

Energy-saving performance contracts (ESPCs) are innovative financing mechanisms that leverage private-sector investment and expertise to accomplish energy- and cost-saving projects in federal facilities at no net cost to taxpayers. Under ESPC authority, federal agencies contract with private energy-service companies to audit facilities, propose energy-saving retrofits, and privately finance, install and maintain retrofits. There are no up-front payments by the government, and Pepco Energy Services and Viron will be paid from a share of the MDW savings.

The 18-year MDW contract will result in approximately $220 million in overall cost savings. It will be administered by the Defense Logistics Agency's Defense Energy Support Center contracting office at Fort Belvoir.

"Energy-saving performance contracts illustrate how the federal and private sectors can create innovative solutions that will achieve significant savings for taxpayers and federal agencies," said Ed Mayberry, President and Chief Executive Officer of Pepco Energy Services. "We are excited that area military bases will soon be benefiting from our proven experience in helping customers, both governmental and commercial, make the right energy decisions."

"We are extremely pleased with this significant government contract, and so is our partner, Pepco Energy Services," added John Mahoney, President of Viron Energy Services. "We are committed to ensuring that the U.S. government and Military District of Washington receive the best value for their investment over the life of the contract."

Pepco Energy Services and Viron will provide energy engineering, equipment installation, construction supervision, maintenance, operations and monitoring over the contract's term to produce energy savings that will pay for these improvements.

The energy-saving measures will cover a wide range of technologies, including lighting, building envelope, building automation systems, chillers, controls, HVAC, boilers and water conservation. Some of the more prominent energy-saving measures will include:

• Lighting: Some 142,600 light fixtures will be replaced or retrofitted in 714 buildings, reducing energy consumption by 29.8 million kWh, saving $1.4 million annually and reducing greenhouse gas emissions by 4,800 MTCE.
• Cooling system retrofits: A total of 888 cooling units will be replaced or retrofitted, cutting energy use in 343 buildings and reducing associated energy costs by over $1 million annually.
• Air handling units: Replacement and retrofitting of air handling units in 126 buildings will reduce energy consumption by 14 million kWh. This will mean annual savings of $742,000 and 3,500 MTCE of greenhouse gas emissions avoided each year.
• Central heating plant upgrade: Two central steam plants will be replaced with new gas-fired boilers, avoiding fuel use of 138,000 MMBTU and saving $655,000 annually.
• Central cooling plant upgrade: A new absorption chiller and chilled-water distribution line will be installed at one site, saving approximately 270,000 kWh and $21,000 annually.
• Water conservation: Water consumption and wastewater will be reduced in 213 buildings through replacement of existing plumbing equipment with ultra-low-flow units, saving approximately 50.5 million gallons of water annually, or $195,000.

Pepco Energy Services Inc., a non-regulated subsidiary of Potomac Electric Power Company (Pepco), supplies energy and energy-efficiency solutions for commercial, industrial, institutional, government and residential customers throughout the mid-Atlantic area. Pepco Energy Services offers cost savings through design, installation and financing of energy-efficiency products; competitively priced electric and natural gas; operations and maintenance services; and energy information services. For more information about Pepco Energy Services, visit the company's web site at www.pepco-services.com.

Based in Kansas City, MO, Viron Energy Services is an engineering-based energy services company specializing in energy performance contracting and turnkey energy retrofit projects. Viron is also a 46 State Super ESPC awardee. Viron is an independently operated, wholly owned subsidiary of York International, the largest independent supplier of HVAC&R equipment in the U.S. and a leading competitor internationally. For more information about YORK, visit the company's web site at www.york.com.