1 Pepco Benchmarking Study

2 Pepco Statistics Number of Customers:687,516 Customers Service Area:640 Square Miles 100% District of Columbia 61% Montgomery County 51% Prince George’s County Number of Linemen/Splicers:466 FTEs (including contractors) SAIDI: 93 Minutes (1998 data exc. Storms) SAIFI:1.35 (1998 Sustained exc. Storms) Sustained Outage is defined as any outage with a duration of greater than 1 minute.

3 Participating Companies Chelan PUD City of Alameda City of Glendale City of Redding City of Riverside CLECO Com/Electric Commonwealth Electric Consolidated Edison Duke Power Duquesne Power Edmonton Power Entergy Arkansas Entergy Gulf States (Louisiana) Entergy Gulf States (Texas) Entergy Louisiana Power & Light Entergy Mississippi Power & Light Entergy New Orleans PS Florida Power & Light Houston Lighting & Power Knoxville Utilities Board Los Angeles DWP Nashville Electric Service New York State E&G Niagara Mohawk Power Northern States Power Northern States Power (WI) Northern Virginia Electric Cooperative OG&E Services Omaha PPD Pacific Gas & Electric Pacificorp PECO Public Service Electric & Gas Roseville Electric Sacramento MUD Silicon Valley Power Southern California Edison St. Joseph Light & Power Tacoma Public Utility Texan Utilities Electric Toronto Hydro - Sear Office Truckee-Donner PUD Tucson Electric Power United Illuminating Western Resources Winnipeg Hydro

4 Costs

5 Source: PHB Hagler Bailly/TB&A 1997 T&D Survey (1997 Year-End Data); 1997 Pepco FERC Form 1 data Note: Pepco is represented as company 210; Pepco number of customers (684,954) reflects the number reported in the 1997 FERC Form 1. Mean: $ T&D Expenditures At $ per customer, Pepco is slightly higher than the average but within one standard deviation. Pepco (Positive)

6 Source: PHB Hagler Bailly/TB&A 1998 T&D Survey (1997 Year-End Data); 1997 Pepco FERC Form 1 data. Note: Pepco is represented as company 210; Underground Expenditures for Pepco: $34,913,575 Customers: 684,954. Mean: $36.23 Total T&D Underground Expenditures per Customer On a per customer basis, Pepco costs at $50.97 are above the mean but within one standard deviation. Pepco (Positive)

Company Dollars per Customer Source: PHB Hagler Bailly/TB&A 1998 T&D Survey (1997 Year-End Data); 1997 Pepco FERC Form 1 data. Note: Pepco is represented as company 210; Distribution Underground Expenditures for Pepco: $33,742,229; Customers: 684,954. Mean: $35.51 Distribution Underground Expenditures per Customer On a per customer basis, Pepco costs at $49.26 are above the mean but within one standard deviation. Pepco (Positive)

8 Mean: Distribution Maintenance Expense per Customer At $44.75 per customer, Pepco is above average but within one standard deviation Pepco (Positive) Source: PHB Hagler Bailly/TB&A 1997 T&D Survey (1997 Year-End Data); 1997 Pepco FERC Form 1 data Note: Pepco is represented as company 210; Pepco number of customers (684,954) reflects the number reported in the 1997 FERC Form 1.

Company Dollars per Customer Source: PHB Hagler Bailly/TB&A 1998 T&D Survey (1997 Year-End Data); 1997 Pepco FERC Form 1 data. Note: Pepco is represented as company 210; Underground Distribution Maintenance Expenditures for Pepco: $6,617,986; Customers: 684,954. Underground Distribution Maintenance Expense per Customer On a per customer basis, Pepco appears to have one of the higher levels of distribution maintenance spending at $9.66. Mean: $5.42 Pepco (Positive)

10 Reliability

11 Source: PHB Hagler Bailly/TB&A 1998 T&D Survey (1997 Year-End Data) Note: Pepco is indicated by circled plot ($ per customer, SAIDI minutes) SAIDI data is depicted with storm related outages T&D Expenditures per Customer vs. SAIDI Pepco is very close to the mean of T&D Expenditures per Customer and SAIDI. This slide demonstrates that an adequate amount of expenditures produces the same level of electrical system performance. Pepco (Neutral)

12 T&D Expenditures per Customer vs. SAIFI Pepco is pretty close to the mean for both T&D Expenditures and SAIFI. This slide demonstrates that an adequate amount of expenditures produces the same level of electrical system performance. Pepco (sustained) Source: PHB Hagler Bailly/TB&A 1998 T&D Survey (1997 Year-End Data); 1997 Pepco FERC Form 1 and Sustained SAIFI outage data. Note: Pepco is indicated by circled plot ($ per customer based on 1997 number of customers, 1.61 SAIFI outages) SAIFI data is depicted with storm related outages (Neutral)

13 Source: PHB Hagler Bailly/TB&A 1998 T&D Survey (1997 Year-End Data); 1997 Pepco FERC Form 1 and SAIDI data. Note: Pepco is indicated by circled plot ($ per customer (based on 1997 number of customers), 171 SAIDI minutes) SAIDI data is depicted with storm related outages Distribution Expenditures per Customer vs. SAIDI Pepco is very close to the mean of Distribution Expenditures per Customer and SAIDI. This slide demonstrates that an adequate amount of expenditures produces the same level of electrical system performance. Pepco (Neutral)

14 Distribution Expenditures per Customer vs. SAIFI Pepco is pretty close to the mean for both Distribution Expenditures and SAIFI. This slide demonstrates that an adequate amount of expenditures produces the same level of electrical system performance. Source: PHB Hagler Bailly/TB&A 1998 T&D Survey (1997 Year-End Data); 1997 Pepco FERC Form 1 and Sustained SAIFI outage data. Note: Pepco is indicated by circled plot ($ per customer based on 1997 number of customers, 1.61 SAIFI outages) SAIFI data is depicted with storm related outages Pepco (sustained) (Neutral)

15 Source: PHB Hagler Bailly/TB&A 1998 T&D Survey (1997 Year-End Data); 1997 Pepco FERC Form 1 and SAIDI data. Note: Pepco is indicated by circled plot ($44.75 per customer based on 1997 number of customers, 171 SAIDI minutes) SAIDI data is depicted with storm related outages Distribution Maintenance Expenditures per Customer vs. SAIDI Pepco is very close to the mean of Distribution Maintenance Expenditures per Customer and SAIDI. This slide demonstrates that an adequate amount of expenditures produces the same level of electrical system performance. Pepco (Neutral)

16 Distribution Maintenance Expenditures per Customer vs. SAIFI Pepco is pretty close to the mean for both T&D Expenditures and SAIFI. This slide demonstrates that an adequate amount of expenditures produces the same level of electrical system performance. Pepco (sustained) Source: PHB Hagler Bailly/TB&A 1998 T&D Survey (1997 Year-End Data); 1997 Pepco FERC Form 1 and SAIFI outage data. Note: Pepco is indicated by circled plot ($44.75 per customer based on 1997 number of customers, 1.61 SAIFI outages) SAIFI data is depicted with storm related outages (Neutral)

17 Overall Customer Outage Minutes Pepco is close to the mean of overall customer outage minutes per line mile. Pepco customers experience less outage minutes. Mean: 9,661 Source: PHB Hagler Bailly/TB&A 1997 T&D Survey (1996 Year-End Data) Note: Pepco is represented as company 210 Pepco (Positive)

18 System Average Interruption Duration Index (SAIDI) Pepco is slightly above the mean and within the first standard deviation. Pepco operates the electrical system at about the level of the industry average. Mean: Source: PHB Hagler Bailly/TB&A 1998 T&D Survey (1997 Year-End Data) Note: Pepco is represented as company Company Minutes Pepco (Neutral)

19 System Average Interruption Frequency Index (SAIFI) Pepco is slightly above the mean and within the first standard deviation. Pepco operates the electrical system at about the level of the industry average. Source: PHB Hagler Bailly/TB&A 1998 T&D Survey (1997 Year-End Data) Note: Pepco is represented as company 210; Pepco has 684,954 customers and 1.61 Sustained Outages SAIFI) Company Outages Mean: 1.5 Pepco (Neutral)

20 Sustained Outages SAIDI Three-year Trend Source: PHB Hagler Bailly/TB&A T&D Surveys Note: Pepco is represented as company 210 Industry Three-year Mean: 190 Pepco’s SAIDI performance is below the three-year industry average. Pepco’s 1997 performance is better than its 1996 and 1995 performance, indicating improvements in Pepco’s system. (Positive)

21 Sustained Outages SAIFI Three-year Trend Source: PHB Hagler Bailly/TB&A T&D Surveys Note: Pepco is represented as company 210 Pepco’s SAIFI performance for 1997 is below the three-year industry average. Pepco’s 1997 performance is better than its 1996 and 1995 performance, indicating improvements in Pepco’s system. (Positive) Industry Three-year Mean: 1.4

22 Tree Trimming Expenditures per OH Pole Mile Pepco’s tree trimming expenditures, which have a direct impact on reliability, demonstrate that Pepco’s level of spending is above the industry average. Mean: $3,777 Pepco Source: *PHB Hagler Bailly/TB&A 1997 T&D Survey (1996 Year-End Data) Note: Pepco is represented as company 210 and is based on 1997 Data. If the 1999 budgeted amount of $5,856,937 were used the ratio would be $5,198 per OH Line Mile which would bring Pepco above the mean. Pepco Tree Trimming costs have been doubled since their costs represent tree trimming every two years and the other companies trim their trees every four to five years. (Positive)

23 Average Customer Minutes of Interruption (inc. storms) Due to Trees Company 1997 Customer Outage Minutes Mean: Tree Related Outages Pepco has the highest amount of tree related outage minutes of any of the companies surveyed. Demonstrates the significant impact of trees on reliability. Source: PHB Hagler Bailly/TB&A 1998 T&D Survey (1997 Year-End Data) Note: Pepco is represented as company 210 Pepco

24 Customer Satisfaction

25 T&D Line/Splicer Crew Staffing Pepco is below the mean and the first standard deviation with 1,470 customers per T&D line/splicer crew personnel. Mean: 1,635 Source: PHB Hagler Bailly/TB&A 1998 T&D Survey (1997 Year-End Data) Note: Pepco is represented as company 210; Pepco has 684,954 customers and 466 Line/Splicer FTEs) Pepco (Positive)

26 On-Duty Troublemen Pepco is one of the many that have 24-Hour On-Duty/At Work Source: PHB Hagler Bailly/TB&A 1998 T&D Survey (1997 Year-End Data) Note: Pepco is represented as company 210 Pepco (Positive) Company Percent of Customers 24-Hour On-Duty/At Work2nd Shift Coverage3rd Shift CoverageOn-Call Coverage (On-Duty)On-Call Coverage (Volunteer)

27 Not Available Do Not Have Crews Have Crews On-Site, 24 Hour Response Crews Source: PHB Hagler Bailly/TB&A 1997 T&D Survey (1996 Year-End Data) 13% 43% 44% Pepco (Positive)

28 On-Site, 24 Hour Response Crews Source: *PHB Hagler Bailly/TB&A 1996 T&D Survey Note: Pepco is represented as company 210; This table contains alternate company I.D. codes Pepco (Positive)

29 Tree Trimming

30 Causes of Pepco Tree Caused Outages (Non-Storm) Pepco Tree Caused Outages Overhanging Limbs 36% Branches from Side 8% Branches from Below 10% Other 10% Tree Uprooting 28%

31 Overall Satisfaction with Pepco’s Tree Trimming Operations Pepco Customer Satisfaction with Tree Trimming Somewhat Satisfied 15% Dissatisfied 20% Complaints: More removals and aggressive trimming desired Too much debris left Better responsiveness Notification of trimming More careful trimming Completely/Mostly Satisfied 65%

32 Most Pepco customers are willing to have their trees trimmed aggressively. Customers Willing to have Trees Trimmed Aggressively Pepco Tree Trimming Practices Completely/Strongly Agree 71% Desire more aggressive trimming Somewhat Agree 17% Disagree 13% District of Columbia customers are less supportive of aggressive trimming than those customers in Montgomery County. Prince George’s customers are the least opposed to aggressive trimming.

33 Most Pepco customers are satisfied with Pepco’s private and public tree trimming. Completely/Mostly Satisfied 55% Somewhat Satisfied 17% Dissatisfied 28% Customer Satisfaction with How Private and Public Trees were Trimmed Near Their Property Pepco Customer Satisfaction with Trees Trimmed on or Near Property

34 Most Pepco customers feel that reliability has been enhanced due to tree trimming practices. Customer Perception of Reliability based on Tree Trimming Pepco Tree Trimming and Reliability Reliability Enhanced due to Tree Trimming 70% Reliability Somewhat Enhanced due to Tree Trimming 17% Reliability Not Affected by Tree Trimming 13%

35 Pepco is one of the few companies that do trim at customer service drop locations. –Most companies noted exceptions for the elderly or for limbs that are resting on the line itself Tree Trimming at Service Drop Locations Who is responsible for tree-trimming around service drops? Note: Pepco represented as company 210 Source: PHB Hagler Bailly/TB&A analysis Pepco (Positive)

36 Safety

37 Pepco’s distribution recordable incident rate is lower than the industry average which shows Pepco’s commitment to the safety of the public and its employees. Distribution Recordable Incident Rate Mean: 8.1 Pepco OSHA Mean: 3.3 Source: PHB Hagler Bailly/TB&A 1998 T&D Survey (1997 Year-End Data); United States Bureau of Labor Statistics (BLS) “Workplace Injuries and Illnesses in 1997” Note: Pepco is represented as company 210 and is based on the1998 Recordable Case Rate which is 7.6, OSHA Mean is the Total Lost Workday Cases Total for Injuries for Electric, Gas, and Sanitary Services (Positive)

38 Support Services

39 Distribution Service Levels/Fill-Rates Pepco is above the mean for distribution service levels. Source: *PHB Hagler Bailly/TB&A 1997 T&D Survey (1996 Year-End Data) Note: Pepco is represented as company 210 and is based on 1998 Data. Mean: 94% Pepco

40 Line/Splicer Crew Vehicles per Line/Splicer Crew FTEs Source: *PHB Hagler Bailly/TB&A 1997 T&D Survey (1996 Year-End Data) Note: Pepco is represented as company 210 and is based on 1998 Data. Mean: 0.95 Pepco (Neutral)