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For Immediate Release


Pepco and Building Internet-Based Procurement Enterprise for Washington-Baltimore Region

Cross Industry, Regional Approach is Unique

For Immediate Release
May 10, 2000

Potomac Electric Power Company (NYSE: POM) and announced today they are building an Internet-based procurement enterprise for the Washington-Baltimore's $128 billion market. In a field where industry-specific procurement Web sites are the norm, the new venture is the first in the region to cross industry groups and be anchored by charter buyers in various industries.

This Internet-based marketplace, known as a "hub," will facilitate business-to-business (B2B) procurement of an extremely broad range of goods and services by businesses and non-profit institutions of all kinds and sizes in the region. The companies project that it will drive down purchase prices through the power of group procurement and improved marketplace information. In addition, it will reduce transaction and supply chain costs for participants through the efficiency of electronic procurement (e-commerce).

"With our extensive knowledge of the regional business community, we will be able to facilitate e-commerce in the region, helping local businesses lower their operating costs and making our region more competitive," said Dennis Wraase, Pepco President and Chief Financial Officer. "At the same time, the venture will be part of Pepco's family of competitive businesses and create substantial value for Pepco shareholders."

Wraase explained that the site will have the greatest positive impact for universities, hospitals, construction companies, school districts, real estate management firms and any type of entity that is compelled to drive down procurement and operating costs. The hub will offer many services, such as standard installation, training and customer care. One of the unique features will enable buyers to give preference to local and minority- and protected class-owned businesses that will be able to showcase their products and services without having to make a major investment in e-procurement on their own.

Sellers/vendors pay to participate and find it advantageous to offer their products through the hub because it will lower their marketing and sales costs, speed payment and provide access to new buyers. Revenues will come primarily from small service charges, site advertising and fees from preferred value-added service providers, such as shippers, banks and insurers.

"Now there are two strong business models for e-procurement: industry-specific marketplaces and regional hubs," said founder and Chief Executive Officer Steven A. Mitnick. "Industry-specific marketplaces will focus on a narrow range of products, while regional hubs will serve the broad needs of businesses and non-profits, including the efficient purchasing of services." ( is a Washington-based company that is building similar regional B2B hubs with utilities or their subsidiaries in other regional markets. Pepco ( is an investor-owned utility that provides electricity in Washington, D.C. and the Maryland suburbs, serving more than 700,000 customers. Through its family of subsidiaries, Pepco also operates in the competitive arenas of telecommunications and energy products and services in the Mid-Atlantic region.

Information contained in this press release may include forward-looking statements, which should be considered in light of the risks inherent in the company`s business, as discussed in the company`s public documents filed with the Securities and Exchange Commission.

For more direct help, please contact:
Pepco Media Relations: Nancy Moses or Bob Dobkin 202-872-2680
Pepco Investor Relations: Ernie Bourscheid 202-872-2797 Jim Pierobon at 202-466-7391, ext. 1119; or
Bob Conrad at 202-466-7391, ext. 1123

Point of Contact:
Nancy Moses

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