For Immediate Release
December 2, 1999

Pepco Energy Services, Inc., a subsidiary of Potomac Electric Power Company (NYSE: POM), the 103-year-old electric company serving Washington, D.C. and the Maryland suburbs, is now in the residential natural gas and appliance service business.

Moving to become a single-source supplier, Pepco Energy Services (PES) is offering competitively priced natural gas and a comprehensive home appliance warranty package under its new PowerChoice Home label. PES was formed in 1995 as an unregulated Pepco subsidiary to develop and sell products and services in the emerging deregulated energy marketplace.

PowerChoice Home protects homeowners against expensive repairs. Every major home system and appliance is covered for a monthly fee of $39.99, including parts and labor, and each service call is a flat $50 per visit. Customers can arrange for service by pre-qualified local technicians 24 hours a day, seven days a week.

This service covers a home`s central heating and air conditioning, plumbing and electrical systems, water heater, exhaust fans, washer and dryer, refrigerator/freezer combinations, oven-range-cooktop, dishwasher, built-in microwave, garbage disposal, trash compactor and garage door opener. If it becomes necessary to replace a faulty product, it will be replaced at no additional cost.

Discounts are offered to customers who sign up for additional services, such as electrical surge protection or natural gas, which PES is offering to Maryland and District of Columbia customers served by Washington Gas Co. Electricity is part of PowerChoice Home`s bundle of services in Pennsylvania, and will be sold in a broader Maryland area next year when customer choice begins.

"PowerChoice recognizes that time is a premium for our customers," said Joe Marsilii, president of the home and business energy services division of Pepco Energy Services. "We use our expertise to provide energy and services to homeowners and businesses that are hassle-free, dependable and economical."

PES acquired the assets and operations of a natural gas wholesaler last year to strengthen its product and service capabilities to meet all the energy needs of its electric customers. Pepco Gas Services is now a Columbia, Md.-based natural gas marketing and consulting gas services company that has more than doubled its volume of business in the past year and currently has retail customers from Pennsylvania to Florida.

Retail natural gas customers in Maryland last year were among the first in the nation to begin choosing their gas supplier. In a process called unbundling, customers can choose their gas supplier and its cost is separated from its delivery by the local utility, which will charge for its service to deliver the fuel, read the meter and respond to emergencies.