For Immediate Release
December 19, 2000

The Board of Directors of Potomac Electric Power Company (NYSE: POM) yesterday approved several executive changes. Dennis R. Wraase, 56, was elected Chief Operating Officer of the Company. He will continue to serve as President. John M. Derrick, Jr., 60, continues to serve as Chairman of the Board and Chief Executive Officer. Other changes include the election of Andrew W. Williams, 51, as Senior Vice President and Chief Financial Officer; William T. Torgerson, 56, as Executive Vice President, External Affairs and General Counsel; and William J. Sim, 56, as Senior Vice President, Power Delivery.

"The Board has made these changes in light of the sale of the company`s generating assets to Southern Energy, Inc., and to pursue our new direction," said Chairman and CEO John M. Derrick, Jr. "Following the divestiture, Pepco will be a multifaceted enterprise that delivers electricity, and, through its subsidiaries, sells a range of energy and telecommunications products and services." He added that the changes will further strengthen Pepco's delivery business by creating an organizational structure that combines the functions of electricity transmission and distribution.

Wraase joined Pepco in 1974, and was elected Vice President and Comptroller in 1985. He was named Senior Vice President and Chief Financial Officer in April 1996, Executive Vice President and CFO in 1999, and President in May earlier this year. He has been a member of the Board since 1998. Wraase will continue as Chairman and CEO of Pepco`s wholly owned subsidiary, Pepco Holdings, Inc. (PHI). PHI owns a number of businesses offering telecommunications and energy products and services.

Wraase graduated from the University of Maryland with a bachelor`s degree in accounting. He also holds a master`s degree in finance from The George Washington University and is a Certified Public Accountant. He is an executive board member of the National Capital Area Council of Boy Scouts of America.

Andrew W. Williams joined Pepco in 1980 as Director, Rate and Economic Analysis. He became Manager, Financial Planning and Analysis in 1985 and was elected Vice President, Energy Policy and Development in 1989. In 1994 he was elected Vice President, Energy and Market Policy and Development, and became Group Vice President, Transmission and Marketing in 1997.

Williams received a bachelor s degree in nuclear engineering from North Carolina State University and a Master s of Business Administration from Loyola College of Baltimore. Williams is Chairman of Edison Electric Institute s Economics, Public Policy and Strategic Planning Executive Advisory Committee, and is a member of EEI`s Transmission Subject Area Committee. He is also Pepco`s representative on the PJM Interconnections` Members Committee.

William T. Torgerson has been with Pepco in various legal and non-legal positions since 1982, prior to which he was engaged in the private practice of law in Washington, D.C. Torgerson is a graduate of Princeton University with an A.B. in Politics and a graduate of the University of Maryland School of Law.

Torgerson is responsible for Pepco`s legal, government relations and corporate communications activities, and is Chairman of Pepco s Corporate Contributions and Memberships Committee. He is a member and former Chairman of the Electricity Committee of the American Bar Association`s Section on Public Utility, Communications and Transportation Law; a member of the Conference Board`s Council of Chief Legal Officers; and a member of the Legal Committee of the Edison Electric Institute.

William J. Sim joined Pepco in 1977 as Manager, Generating Construction. He served as President and COO of the American Energy Division of Pepco`s subsidiary Potomac Capital Investment Corporation from 1987 to1991. Sim was elected Vice President, Operations and Construction at Pepco in 1991 and was elected Group Vice President, Power Supply and Delivery in 1994. He became Group Vice President, Generation in 1997.

Sim is a 1968 graduate of the University of Glasgow, Glasgow, Scotland. He has a Master`s in Business Administration from Loyola College of Baltimore. Sim serves on the Power Generating Committee of the Association of Edison Illuminating Companies and is a member of the Board of Visitors, A. James Clark School of Engineering, University of Maryland; the Electric Power Research Institute Group Council; the EEI Generation Committee; and the Utility Relocation Task Force.

The executive changes become effective January 1, 2001.

Pepco (www.pepco.com) is an investor-owned utility that delivers electricity in Washington, D.C. and the Maryland suburbs to 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.