For Immediate Release
April 30, 2003

Pepco, a unit of Pepco Holdings, Inc. (NYSE: POM), today hailed the Maryland Public Service Commission's approval of a settlement agreement that allows local utilities to continue to supply customers with electricity at market prices after existing rate caps expire.

Pepco President Bill Sim called the agreement the "most appropriate mechanism" for continuing to promote competition throughout the state while protecting small customers against possible price spikes and erratic supply.

"This is a well-balanced agreement that assures customers of back-up, or what's called standard offer service, if they do not choose an alternative energy supplier," Sim said. "At the same time, it allows Pepco to recover its cost to purchase power on the wholesale market."

The agreement, approved Tuesday, was negotiated last November by utility representatives, power suppliers, consumer advocates and regulators who were concerned that additional consumer safeguards were needed once rate caps began to expire and utilities were no longer permitted to serve as energy suppliers. Under Maryland's 1999 electric restructuring act, Pepco's rate cap is due to expire in 2004.

In announcing the commission's approval, Chairman Catherine I. Riley said that consumers choosing to remain with their utility supplier "will be paying a market price for their electric service. Also, the utilities will be able to recover their verifiable and prudently incurred costs to procure electric supply."

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Pepco Holdings, Inc. is a diversified energy company with headquarters in Washington, D.C. Its principal operations consist of Pepco and Conectiv Power Delivery, which deliver 50,000 gigawatt-hours of power to more than 1.8 million customers in Washington, Delaware, Maryland, New Jersey and Virginia. PHI engages in regulated utility operations by delivering electricity and natural gas, and provides competitive energy and energy products and services to residential and commercial customers.

Forward-Looking Statements: Except for historical statements and discussions, the statements in this news release constitute "forward-looking statements" within the meaning of federal securities law. These statements contain management`s beliefs based on information currently available to management and on various assumptions concerning future events. Forward-looking statements are not a guarantee of future performance or events. They are subject to a number of uncertainties and other factors, many of which are outside the company`s control. Factors that could cause actual results to differ materially from those in the forward-looking statements herein include general economic, business and financing conditions; availability and cost of capital; changes in laws, regulations or regulatory policies; weather conditions; competition; governmental actions; and other presently unknown or unforeseen factors. These uncertainties and factors could cause actual results to differ materially from such statements. PHI disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This information is presented solely to provide additional information to further understand the results and prospects of PHI.

Point of Contact:
Robert Dobkin