For Immediate Release

June 23, 1999

Potomac Electric Power Company's (NYSE: POM) Year 2000 preparations are complete for all critical systems needed to produce and deliver electricity to its customers in the District of Columbia and suburban Maryland communities when computers roll over their clocks to Jan. 1.

Pepco reported to the North American Electric Reliability Council today that 100 percent of its "mission-critical" systems are Y2K ready following a lengthy process to identify, update and test components and systems that could be vulnerable to a computer glitch.

"This has been a top priority for us," said Kenneth Cohn, vice president and Chief Information Officer. "We completed our mission-critical readiness ahead of schedule with the understanding that electricity is the underpinning of our economy, and that a lot of folks depend on us."

Pepco worked toward a goal of June 30 to complete its Y2K readiness program for 50 separate categories defined by NERC as critical to the generation and delivery of power. These included electric generating units, the energy management system, the supervisory control center and data acquisition system, telecommunications, substation controls, electric system protection devices, distribution components that route electricity to customers, and various business systems.

Within the generating systems alone, more than 3,000 components were found to contain tiny microprocessors referred to as embedded chips. Although 2,532 were considered critical, fewer than 4 percent required upgrading.

Fourteen of Pepco's 16 major generating units underwent control system upgrades and extensive testing. The remaining two are run with analog controls and required no upgrades.

Pepco's computerized energy management system, which monitors and controls the flow of electricity on Pepco's grid, began operating with Y2K-ready software installed June 3. The system and its back-up were tested by setting the date forward to make certain that the system processed correctly the rollover from Dec. 31 to Jan. 1, 2000.

Cohn said the company's Y2K readiness program also included a review of all suppliers of critical services or materials, including the major fuel and transportation companies on which Pepco is dependent to keep its power plants operating. All have advised they are either Y2K ready or will be within an acceptable time frame prior to Dec. 31.

"We haven't found anything that could cause a major problem,"he said. "We are encouraged by our findings and are confident that we will provide our customers with the same high standard of reliable service they are accustomed to receiving."

Recognizing, however, that no company can make absolute guarantees about something as complex as Y2K, Cohn noted Pepco has in place contingency plans to address potential problems caused by Y2K. These plans will continue to be tested through the remainder of the year. In addition, Pepco is coordinating Y2K drills with regional emergency management agencies , the Pennsylvania-New Jersey-Maryland power pool and NERC.

NERC is an independent group that works with utilities nationwide to insure electric reliability and was requested by the U.S. Department of Energy to monitor utilities' Y2K readiness.

Pepco's Year 2000 Task Force will remain in place well into the year 2000 to further manage and monitor the company's critical systems. "We will continue to assess potential challenges and focus on providing reliable electric service in the new millennium,"Cohn said.