Pepco Issues RFP For Wholesale Energy

For Immediate Release
August 7, 2002

Pepco has issued a Request for Proposals (RFP) for wholesale energy to supply a portion of the company`s default service to its customers in the District of Columbia and Maryland.

Default services provided by Pepco are a part of the electric restructuring settlement and customer choice programs in D.C. and Maryland, and would make electricity available to customers who do not choose an alternate electricity supplier. Pepco is required to provide default services to D.C. customers through Feb. 7, 2005 and in Maryland through June 30, 2004 for the following:

Customers who have not chosen an alternate energy supplier;
Customers who have selected Pepco as their supplier;
Customers whose energy suppliers have failed to deliver to them; and,
Customers who have elected to return to Pepco after having switched to an alternate energy supplier.

The RFP, issued Aug. 2, 2002, solicits proposals that reflect a physical delivery at a fixed annual energy price which will be seasonally adjusted and a fixed percentage of the default service load in each jurisdiction during the term of the contract.

Beginning Aug. 7, 2002, parties who did not receive an RFP package and are interested in participating in the solicitation are encouraged to visit Pepco`s Web site at www.pepco.com/rfp and retrieve the information. They may also contact Joe DeNavas via e-mail at jdenavas@pepco.com. Bids are due by Sept. 13, 2002, and the expected award date is Sept. 20, 2002.

Pepco is a wholly owned subsidiary of Pepco Holdings Inc. (PHI) (NYSE: POM) that delivers electricity at regulated rates to more than 700,000 customers in Washington and major portions of Montgomery and Prince George`s counties in suburban Maryland.

Point of Contact:
Charles Taylor