Background: Utilities across the country are encouraging electric vehicle (EV) adoption by providing incentives for the deployment of charging infrastructure. Electric vehicle drivers are incentivized to charge their vehicles during off-peak periods when overall electricity system demand is low, instead of on-peak periods when both system demand and the associated emissions profiles of the generation sources needed to meet that demand are high.

Action: Pepco MD received approval from the Maryland Public Service Commission to implement a portfolio of electric vehicle program offerings across the residential, non-residential, and public market segments. Through our EVSmart program, Pepco provides the following offerings to customers:

Residential:

1. an unlimited whole house EV time of use (TOU) rate
2. rebates to defray the cost of 1,000 eligible Level II (L2) smart chargers
3. discounted EV chargers for residential applicants who use Pepco’s standard offer service.

Commercial:

1. a discounted L2 smart charger and one-time free installation per site for 250 multi-family applicants, with a voluntary green rider adder to their service agreement
2. a multifamily, fleet, and workplace demand charge credit on qualifying customer owned L2 or DC Fast Charger (DCFS) EV chargers

Public Charging:

1. 250 installations of utility owned, publicly available L2 smart chargers and DCFCs sited at county and municipal public locations across the service territory

Greenhouse Gas Impact: Pepco has a goal to install 100 public chargers throughout Montgomery County and Prince George’s County by the end of 2021. Replacing a gasoline vehicle with an electric model in Maryland will reduce annual CO₂ emissions by more than 5,000 pounds per year.

Background: Pepco has a goal to install 100 public chargers throughout Montgomery County and Prince George’s County by the end of 2021. Replacing a gasoline vehicle with an electric model in Maryland will reduce annual CO₂ emissions by more than 5,000 pounds per year.

• Cost Effective Programs and Customer Benefits
• Inclusion, Affordability, and Equity
• Innovation and Personalization

Action: Pepco MD will offer more than 20 programs through EmPOWER MD targeted at residential, business, and income-eligible customers. Program offerings include:

Residential:

• Efficient Products Program, including residential Lighting, Appliance Rebates, and Appliance Recycling
• Home Optimization and Home Retrofit, including Residential Heating, Ventilation and Cooling (HVAC) and School Programs with Take-Home Kits
• Residential New Construction, including additive measures for high-efficiency electric space and water heating equipment
• Home Energy Reports to yield verifiable energy savings by encouraging voluntary behavioral modifications

Non-residential:

• Small Business Program
• Energy Efficiency for Business
• Commercial Midstream incentivizes commercial customers
• Energy Efficient Communities
• Combined Heat and Power (CHP) to incentivize the long-term investment

Greenhouse Gas Impact: Pepco MD's energy efficiency programs are forecast to save more than 1 million MWhs of electricity between 2021 and 2023. This translates to a CO₂ reduction of more than 420,000 tons, based on the average PJM power grid energy mix. These savings are in excess of the nearly more than 2.7 million metric tons of CO₂ avoided and $4 billion saved since the launch of Pepco MD’s EmPOWER MD.

Background: Pepco has a large fleet of cars and trucks to support the work we do in providing clean, safe, reliable, and affordable energy to Maryland energy consumers. Pepco MD will convert 25% of Pepco’s passenger vehicles and compact SUVs to all electric and plug-in hybrid vehicles and medium and heavy-duty trucks to Plug-in Hybrid models by 2025, increasing conversions to 50% by 2030.

Action: As vehicles are replaced, Pepco will purchase all electric vehicles and plug-in hybrid vehicles for its passenger cars and small SUVs and plug-in hybrid models for its medium and heavy-duty vehicles (technology permitting). By 2025, Pepco MD will:

• Replace 76 passenger vehicles and small SUVs with all electric or plug-in hybrid
• Replace 51 medium duty and heavy-duty vehicles with vehicles with idle-mitigation and plug-in hybrid capabilities

Greenhouse Gas Impact: By switching from conventional gasoline vehicles to electric models, we estimate that we will avoid more than 200,000 pounds of CO₂ emissions by 2025.

Background:Measuring and evaluating the energy usage in our buildings through Building Energy Performance Standards (BEPS) and Energy Benchmarking reporting is the essential first step for making smart decisions when it comes to eliminating waste and implementing energy saving measures.

Action: Pepco will conduct energy efficiency audits at our service center locations beginning in 2022. The opportunities identified by the audits will be implemented in the 2022 to 2025 timeframe. Potential opportunities include:

• Reducing “over illumination” in some buildings
• Installing lighting controls such as motion sensors
• Replacing less efficient Heating, Ventilation and Cooling (HVAC) systems

Greenhouse Gas Impact: Once the audits are completed and opportunities identified, Pepco will prioritize upgrades that provide the greatest greenhouse gas reduction benefit at the least cost, pursuing those most effective opportunities in the 2022 to 2025 timeframe.

Background: Pepco MD is planning to install high efficiency light-emitting diode (LED) lighting at its Rockville and Forestville Service Centers, located in Montgomery County and Prince George’s County, respectively. Pepco MD is upgrading all lighting systems from incandescent to LED lighting to improve efficiency and generate cost savings. In addition, the Pepco MD service territory has 91 transmission & distribution substations with more than 10,000 indoor and outdoor light fixtures, offering additional opportunities for lighting upgrades.

Action: Pepco MD is working to install LED lighting at both its Maryland service centers. In addition, we are assessing all sites to identify all lighting upgrade opportunities during building refresh projects. Pepco MD also has a 5-year plan to upgrade 100% of substation lighting to high efficiency LED bulbs, to be completed by 2026.

Greenhouse Gas Impact: Replacing a conventional incandescent light with a high efficiency LED is estimated to reduce energy use by about 30%. Additionally, the substation upgrades, when complete, are expected to save approximately 800 MWh of electricity and eliminate more than 600,000 pounds of CO₂ emissions each year.

Background:Pepco MD, in partnership with the Arbor Day Foundation, provided over 700 free trees to residential customers through the Arbor Day Foundation's Energy-Saving Trees program in 2021. This climate-friendly and environmentally focused initiative helps customers conserve energy and reduce household energy use through strategic tree planting. As an added benefit, exposure to trees has a relaxing effect on humans, reducing stress and impacting a sense of well-being. Finally, trees help mitigate climate change and its impacts by sequestering CO₂ and reducing the urban heat island effect.

Action: Pepco customers can reserve one free tree per household. Customers will be able to choose one-gallon trees in various selections, including River Birch, Eastern Redbud, Cape Myrtle and Red Maple. All trees will be delivered to each customer's home between four- and six-weeks from when an online reservation is completed.

Greenhouse Gas Impact: The benefits from these trees are projected to provide more than $7.6 million in environmental benefits. Since 2012, Pepco has provided more than 9,000 trees for customers to plant in Maryland, providing the opportunity for saving approximately 10 million kWh of energy and sequestering an estimated 280,000 pounds of carbon.

Background: Vehicles in heavy use areas of the country and fleets offer some of the best opportunities for reducing greenhouse gas (GHG) and air pollution emissions by converting to electricity. Pepco MD is constructing and installing charging infrastructure for vehicles, including electric taxis, rideshare vehicles, buses, and others across the Pepco MD service territory. Many of these vehicles, for example, operate in service areas that have historically been impacted by poor air quality, contributing to public health and related issues.

Action: Pepco continues to consider the elements of designing programs and offerings best suited for the medium duty, heavy duty, and fleet market segments. To date, the Pepco team has been actively involved in planning discussions with both Prince George’s and Montgomery County Schools in support of the deployment of charging infrastructure for electric school bus fleets and associated vehicles.

In Pepco’s MD jurisdiction, the Company is working with Montgomery County Public Schools to deploy 335 electric school buses by 2025, beginning with an initial deployment of 25 electric school buses in July 2021. In addition to working with Montgomery County Public Schools, Pepco is also working with Prince George’s County Transit to deploy 4 electric buses at its transit facility. Both the transit buses and the charging equipment have been delivered to the County’s transit facility, with the buses planning to be operational by the end of 2021.

Greenhouse Gas Impact: Replacing a typical school bus with an electric model will reduce annual CO₂ emissions by more than 16,000 pounds per year, and replacing a transit bus with an electric model will reduce annual CO₂ emissions by more than 64,000 pounds per year. A study by the Union of Concerned Scientists estimates that transitioning to clean vehicles and clean fuels in the state of Maryland would produce net benefits of more than $39 billion, in part due to reductions in nitrogen oxide (NOx) and particulate matter (PM) emissions and the associated improvements in public health.

Background: Pepco is committed to converting its fleet to all electric and plug-in hybrid electric models. To enable this, we continue to install additional chargers at our facilities to support our growing fleet of electric vehicles (EVs) and to provide workplace charging for our employees.

Action: In 2020, six additional charging stations were installed at our Pepco MD facilities. We will continue to add chargers, as needed, to support fleet conversion and further support workplace charging needs to meet our 2025 and 2030 fleet conversion targets.

Greenhouse Gas Impact: Replacing a gasoline vehicle with an electric model in Maryland will reduce annual CO₂ emissions by more than 5,000 pounds per year.

Background: Maryland has leading renewable energy mandates, including targets for local solar, with a goal of achieving 50% renewable energy goals by 2030 with 14.5% of the Renewable Portfolio Standard to come from solar sources. To integrate increasing amounts of renewable energy and local solar, Pepco MD is investing in the infrastructure, communications, and system upgrades necessary to connect and optimize the clean energy resources.

Action: In January of 2020, Pepco deployed a new system called “Connect The Grid” to better support customers and contractors in tracking their solar interconnection projects. The company will enhance this tool and overall interconnection process and engage with Maryland stakeholders and the broader solar developer community to seek feedback on process improvements. Pepco will also update its current online “solar hosting capacity map,” including information on cross-border feeders, to help customers and solar project developers identify appropriate locations on the grid to site local solar projects. In addition, Pepco will provide customers with an online “Solar Toolkit” – a one-stop shop for solar applications and installation information.

Greenhouse Gas Impact: Local solar is a key element in Maryland’s goal of 50% renewable electricity by 2030. In total, the Pepco MD system currently supports 248 MW of solar energy capacity. This amount of solar capacity will avoid more than 130,000 metric tons of CO₂ each year.

Background: As is typical in the electric power industry, Pepco substations use SF₆ gas to “insulate” high voltage electrical equipment, such as switches and circuit breakers. However, SF₆, which is a powerful greenhouse gas (GHG), can leak from equipment, negatively impacting efforts to combat climate change.

Action: Pepco will continue to maintain its overall SF₆ leak rate at less than 1% at its Maryland facilities through leak inspections and replace aging equipment. Pepco will also evaluate the use of SF₆-free equipment on our system.

Greenhouse Gas Impact: By monitoring for leaks and upgrading equipment, we can significantly minimize SF₆-related GHG emissions. SF₆ emissions account for approximately 15-20% of Pepco’s greenhouse gas emissions associated with Pepco’s Maryland operations.

Background: The Maryland Public Service Commission adopted regulations for a community solar pilot program in Maryland. The pilot program encourages private investment in Maryland’s solar industry and diversifies the state’s energy resource mix to meet Renewable Portfolio Standard and Greenhouse Gas Emissions Reduction Act goals. Community solar customers are expected to see savings on their electric bills and all Marylanders will benefit from more clean energy options.

Action: Since the start of the pilot program in 2016, Pepco has helped enable solar developers to interconnect community solar projects to the grid, and these projects in turn provide customers with savings on their energy bill. To date, Pepco has enabled 12 MW of community solar in Maryland, with another 67 MW in the pipeline. Pepco continues to enhance the interconnection process and billing systems to make the program as effective and efficient as possible.

Greenhouse Gas Impact: Replacing Standard Offer Service (SOS) power with 1 MW of solar energy will avoid approximately 1 million pounds of CO₂ emissions per year.

Background: Improving access to information on energy efficient products can help customers make energy choices that save money and reduce greenhouse gas (GHG) emissions. To enable this, Pepco is providing an online marketplace offering convenience and personalization for our customers.

Action: Pepco launched an online “Energy Marketplace,” which helps customers identify, compare and purchase energy efficient equipment, lighting, appliances and other devices in one convenient location. The ENERGY STAR® certified LED light bulbs featured on the site, for example, can reduce energy use and associated emissions by 75%. Power strips can help to mitigate the energy wasted by home electronics, and smart thermostats can save a homeowner an estimated $180 per year, saving money and shrinking their carbon footprint.

Greenhouse Gas Impact: Through the Energy Marketplace, Pepco is seeking to encourage smarter energy choices that will save energy and reduce emissions by connecting customers to products and existing residential and commercial programs through rebates offered on the Marketplace.

Background: Rock Creek, the Anacostia and Potomac watersheds, and other protected and natural areas are a vital natural resource for the Greater Washington Region and all its residents, including Marylanders. The preservation and improvement of these and other natural areas are critical to species and habitat protection, community resilience, and providing recreational opportunities to millions of people each year. In addition to protecting the natural environment, additional action is required at the community level to address the impacts of climate change and build resilience for future generations.

Action: Pepco, with the Rock Creek Conservancy, offers Sustainable Community Grant awards to eligible organizations, including municipalities, recreational authorities, and nonprofits to develop and implement local solutions to strengthen our shared environment. This program provides $75,000 in funding to support environmental stewardship projects and $50,000 for community resilience projects across the Pepco region, including in Montgomery County and Prince George’s County. Pepco is committed to continuing this program at least through 2023.

Greenhouse Gas Impact: Taking action to enable solar and battery solutions can help build resilience and reduce greenhouse gas (GHG) emissions, while restoring wetlands and habitat, preserving and protecting open space and protected lands, mitigating the urban heat island effect, encouraging healthy activity, and create community connections.

Background: Pepco is a major employer in Maryland, and we recognize that the actions of our team members can impact the overall greenhouse gas (GHG) footprint of the region. To encourage innovation, action and engagement, Pepco and the broader Exelon family proudly support the Eco-Team Employee Resource Group (ERG), which is an employee-driven organization focused on identifying, elevating, and implementing eco-friendly ideas to reduce energy use, minimize waste, increase recycling, and promote environmentally friendly transportation options.

Action: Pepco and Eco-Team are encouraging the use of public transit as well as providing Eco-team members with tips and tools to measure and monitor their personal GHG footprint and save energy at home and at work. In 2019, the Eco-team launched an online Carbon Challenge with the EcoCRED App, which provided Pepco employees with resources to build eco-friendly habits.

Greenhouse Gas Impact: Pepco’s Carbon Challenge reduced a total of 642 pounds of CO₂ in just two days. That is equivalent to the CO₂ emissions of using 33 gallons of gasoline. The Eco-Team ERG will establish additional GHG reduction challenges as part of the company’s support for Exelon’s Path to Clean initiative.

Background: The state of Maryland has set a goal for 50% of electric power sold in the state to be renewable by 2030, with 14.5% sourced from solar.

Action: Pepco will accelerate the transition to renewable energy use and exceed the state’s goal by reaching the 50% target for our own buildings by the end of 2025. This will be achieved using a combination of strategies, including the purchase of additional MD Tier 1 and MD Solar Renewable Energy Credits (RECs), and participating in Montgomery County’s Community Choice Aggregation program, when available.

Greenhouse Gas Impact: By accelerating the renewable energy target for our building electricity use, including for our electric vehicle charging, we estimate saving more than 1,600 metric tons of CO₂ emissions by 2030.

Background: Severe weather is the leading cause of power outages in the United States (U.S.) and costs the U.S. economy billions of dollars per year. Outages caused by severe weather are expected to rise as climate change increases the frequency and intensity of storms, causing flooding and major wind events, heat waves and droughts, and changes in historic weather patterns. At the same time, Pepco customers are becoming more reliant on electric service to power their daily lives. To maintain safe, reliable service for all customers in the face of climate change, we are taking action to make the system smarter, stronger, and cleaner to build resilience and to enhance our preparedness for major weather events.

Action: Pepco has designed its system and processes to withstand extreme weather events, respond to outages and restore service quickly, and build redundancy and resilience into our facilities. For example, Pepco has an extensive vegetation management program to support strategic tree trimming. In addition, Pepco equipment installed below street level is designed to operate even if submerged for extended periods of time. Finally, we conduct extensive Summer and Winter Readiness analyses, including engaging with our customers and key stakeholders to remind them of steps they can take to prepare for extreme weather events and inform them of actions we are taking. Some of those actions include:

• System Hardening, Redundancy and Resilience: We are modernizing the grid through dedicated initiatives such as the Maryland Corrective Action Plan and the Automatic Sectionalization and Restoration Program to restore customers more quickly while potential repairs are made. These efforts will also result in the hardening and modernization of targeted substations, the build-out of a transmission backbone to create redundancy and connectivity across Maryland, including through our proposed 69kV build program, and the identification of decentralized alternatives to meeting future capacity needs. The pace and scale at which these investments can occur are determined by regulatory approvals.
• System Automation: Pepco has taken steps to make the grid smarter through increasing automation and use of advanced technologies. Efforts include, among others, the installation of reclosers and the activation of distribution automation schemes to help minimize the impact of outage events on our electric distribution system; the technology allows for the quick identification of outage events and locations and enables automated problem-solving. The pace and scale at which grid modernization and associated technologies can be deployed are determined by the regulatory approvals for these investments and funding requests.
• Storm Preparedness and Response: Pepco launched a Major Storm Response Improvement Project in 2020, which brought together subject matter experts from across the company to review the processes and procedures in place for storm preparedness and response. The project has identified and implemented improvements to the company’s Summer and Winter Readiness programs, ranging from operations and logistics, to customer engagement and communications to ensure the Company is prepared for the future.

Greenhouse Gas Impact: Pepco’s actions to enhance the overall resilience of the electric system, in addition to other actions included in its Climate Change Commitment as part of the company’s Path to Clean initiative will help the company to maintain safe, reliable, clean, and affordable service for all customers in the face of climate change.

Background: Large battery storage provides a range of potential benefits towards meeting state policy goals, resiliency goals, and customer benefits. These include goals associated with electric vehicle (EV) charging, greenhouse gas (GHG) reductions, and economic development. For example, battery storage can defer the need for upgrades to the underlying distribution system, provide redundancy and charging options for electric transit buses, and enhance overall system reliability and renewable energy integration. In November 2020, the Maryland Public Service Commission approved two Pepco-proposed battery storage pilot projects, one in Montgomery County and one in Prince George’s County.

Action: Pepco is developing a utility owned/third party operated battery storage project located in Oxon Hill, MD to defer the construction of a planned Pepco substation. The installed 1 MW/3 MWH battery will provide peak energy saving and emergency grid support and will participate in the PJM wholesale electricity market. The project is referred to as the National Harbor storage project.

Pepco is also supporting the development of the battery storage project at the Montgomery County Electric Bus Depot in Silver Spring, MD. This battery project has the potential to eliminate the construction of a new feeder, support grid reliability and enable charging for an electric transit bus fleet during normal grid and grid outage conditions. The project will be paired with a solar array to provide energy to charge the battery.

Greenhouse Gas Impact: The battery pilot is designed to inform Maryland policymakers and utilities about the optimal method of incorporating batteries into the Maryland electric distribution system. Batteries that are directly connected to photovoltaic (PV) arrays or that support additional renewable energy sources will reduce GHG.

Background: Access to energy usage data provides our customers with the information they need to track their energy use from day to day, including identifying energy waste and potential inefficiencies. Pepco is committed to empowering our customers with tools and tips that allow them to better manage their usage, save money, and reduce emissions through a web-based platform, such as MyAccount.

Action: Pepco plans to expand data availability to all customers to help them better manage their energy use. Pepco is also exploring online tools that would enable customers to share their energy usage with third-party providers.

Greenhouse Gas Impact: By providing detailed data and energy efficiency resources, customers can make smarter energy choices that will help them to effectively manage their energy use, thereby reducing emissions and saving money.

Background: Pepco encourages and ensures growth of the industry’s future workforce by focusing on educational opportunities at pivotal moments in a person’s lifetime, starting from middle school to adulthood. Pepco, in partnership with the Exelon Foundation, offers a science, technology, engineering and math (STEM) program that inspires teachers and students to explore the new energy future together. The program is expected to reach more than 39,000 students and 300 teachers at 150 schools, including participants in Montgomery County and Prince George's County. Pepco also serves as a sponsor of KID Museum in Bethesda, MD, which offers a unique, hands-on STEM learning experience to children and their families in the region.

Action: Through the Pepco and Exelon Foundation STEM program, schools receive year-round tools and resources through, including professional-development opportunities for teachers, hands-on classroom curriculum, energy audits of schools, turnkey materials to hold energy fairs at schools, field trips, and a small cash grant for additional supplies. Our partnership with The KID Museum focuses on diversity and inclusion through a state-of-the-art education center and cultural gathering place for the entire community.

Greenhouse Gas Impact: Our programs, which are focused on the industry’s future workforce, will also educate community members on climate change and enable participants and their networks to take action to reduce their global footprint.

Background: In 2014, Pepco began offering interest-free, on-bill financing for energy efficiency projects incentivized through the EmPOWER Maryland Small Business Program. The financing mechanism is known as the Small Business Energy Advance or “SBEA.” Eligible customers may apply for an SBEA in any amount, up to the total project cost after allowable incentives at the time of project application, with the choice of on-bill repayment over a 6-, 12-, or 24-month period. In December 2020, the Maryland Public Service Commission approved utility plans to continue offering EmPOWER Maryland energy efficiency programs from 2021 to 2023, including the Small Business Program and SBEA offering.

Action: The SBEA will continue to be offered to Pepco Small Business customers in 2021 to 2023 to help them overcome financial barriers to participation and encourage customers to reduce their overall energy consumption through energy efficient equipment upgrades.

Greenhouse Gas Impact: From 2018 to 2020, customer projects that took advantage of an SBEA accounted for over 11,000 MWh in energy savings; equivalent to a reduction of over 8,000 metric tons of CO₂ emissions.

Background: EcoCRED is an innovative app that provides personalized, recommended solutions to help individuals fight climate change by simplifying sustainability actions for residents of Prince George’s County, MD. To date, the EcoCRED community has reduced over 2.5 million pounds of carbon emissions across the country, by enabling people to take simple, daily actions in eliminating waste. Anyone who downloads the app can identify individual solutions to climate change and commit to easy eco-friendly habits that fit their lifestyle.

Action: Pepco has partnered with the Maryland National Parks and Planning Commission of Prince George’s County to allow use of this app with county residents to increase engagement and actions to reduce carbon emissions in the county.

Greenhouse Gas Impact: On average, customers who download this app will take about six energy saving actions daily. Those actions contribute to approximately 20 pounds of CO₂ reduction per person.

Background: In 2012, Pepco acquired the winning Department of Education (DOE) Solar Decathlon house created by the University of Maryland with the intention of using it as an educational platform for both customers and students in the Pepco service territory. Since acquiring the WaterShed, the Company’s Smart Grid Innovation team has provided numerous clean energy and energy efficiency demonstrations with emerging technologies that are being piloted or deployed at Pepco.

In 2019, Pepco saw an opportunity to gain additional support for the programming available to students. A partnership was formed with KID Museum to take over the educational and programming portion of WaterShed activities. By partnering with this non-profit, Pepco would be able to ensure continuity of public tours with targeted educational programming, as well as coordination of special events. The KID Museum would provide support to staff open hours for school groups, develop workshops on sustainable design that complement the WaterShed’s technology, and integrate a tour with hands-on activities that deepen the learning for students.

Action: Due to the on-going pandemic, the onsite planned activities with the KID Museum were temporarily suspended. Once restrictions are lifted, Pepco and KID Museum will evaluate opportunities to engage students and the public at the WaterShed.

Greenhouse Gas Impact: The WaterShed will educate students and community members on climate change and enable participants and their networks to take action to reduce their global footprint.

Background: Pepco has launched a review of the real estate that it owns within our Maryland service territory to evaluate potential uses of the land that could provide an environmental benefit beyond the land’s current use.

Action: Potential actions include increased use of integrated vegetation management techniques, including reduced mowing, installation of nest platforms for birds where appropriate, planting of pollinator friendly plants, and signing onto the US Fish and Wildlife Services Candidate Conservation Agreement for the Monarch Butterfly which would provide habitat for the butterfly on some of our rights of way.

Greenhouse Gas Impact: Greenhouse gas impacts will be determined as projects are implemented.