Utility's Proposal Offers Meaningful Approach to Reducing Energy Use

MAYS LANDING, N.J. - Atlantic City Electric applauds the final version of New Jersey's Energy Master Plan (EMP) and pledges to continue working with stakeholders across the state, including Gov. Jon S. Corzine's Administration and the Board of Public Utilities (BPU), to help achieve the plan's ambitious goals.

"Atlantic City Electric has been a full participant in this process and we're committed to doing our part to help reduce energy use in New Jersey while also helping our customers better manage their energy use, save money and protect the environment," said Ken Parker, President, Atlantic City Electric Region. "We look forward to working with the BPU to design programs that ensure that the investments we make on behalf of our customers will deliver long-term savings."

The final version of the Energy Master Plan, which Gov. Corzine released Oct. 22, after two years of planning, discussion and evaluation, is consistent with Atlantic City Electric's Blueprint for the Future (Blueprint) in many respects. Currently under consideration by the BPU, the Blueprint is a multi-faceted proposal for investing in innovative technology and forward-thinking initiatives that will help customers more effectively manage their energy use, reduce their energy bills, reduce greenhouse gas emissions and improve service by enhancing the reliability of the electric power delivery system.

The Blueprint proposes the installation of advanced metering for homes and businesses which will provide customers with real-time price data for electricity. This would help customers make informed choices about the most cost-effective times of day to use energy and help them better manage their overall electricity bills. Atlantic City Electric is encouraged that the EMP supports evaluating this valuable technology. In a further effort to help customers save, the company has submitted a proposal for a Direct Load Control program which would help Atlantic City Electric manage energy usage and costs during peak times.

Atlantic City Electric supports the implementation of energy efficiency and conservation measures to help customers further reduce usage. To help achieve this, the company has recommended a rate structure that breaks the link between sales volume and revenue. This "decoupling" mechanism would bring more stability to customers' monthly bills, allow the company to cover its fixed costs, and help to maintain reliable service for all customers in the face of declining electric usage. This would position Atlantic City Electric financially to be a stakeholder in promoting energy efficiency.

Renewable energy, such as wind and solar power, will be part of the solution to meeting the state's future energy needs and we anticipate having a large role. Atlantic City Electric already has filed two proposals with the BPU to offer financial incentives for homes and businesses to invest in solar systems.

Another important component of an overall comprehensive energy plan is a robust and reliable transmission system. Atlantic City Electric is developing the Mid-Atlantic Power Pathway, a high- voltage transmission system that would pass through the Mid-Atlantic region. This 230-mile interstate power line will enhance reliability and improve transmission capacity in one of the most heavily congested regions of the country.

This system improvement will provide our region with greater access to low-cost power as well as provide a pathway for clean, renewable energy and will complement New Jersey's energy efficiency and demand-side management initiatives.

"Atlantic City Electric recognizes the important role it plays in helping our customers meet their energy needs," Parker said. "Given the array of proposals that we've developed, we're also looking forward to playing an important role in helping the state achieve its long-term energy goals."

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Atlantic City Electric, a public utility owned by Pepco Holdings, Inc. (NYSE: POM), provides safe, reliable and affordable regulated electric delivery services to more than 540, 000 customers in southern New Jersey.