1. 1 PLANNING CONFERENCE ON MARYLAND’S ENERGY FUTURE WILLIAM GAUSMAN VICE PRESIDENT ASSET MANAGEMENT JULY 25 – 26, 2007

2. 2 Pepco and Delmarva Pepco and Delmarva develop independent forecasts of sales and peak demand These forecasts take into consideration historical growth, new customer connections and economic conditions in our service areas In our reliability planning, each transmission component is evaluated to ensure that it can withstand the highest forecasted loads and does not contribute to congestion

3. 3 Sales and Peak Demand Forecast Based on a broad range of inputs –History (weather corrected sales and peaks) –Overall economic growth (customers, employment, income) –Technology (new and/or more efficient products and processes) –Prices (electricity, alternate fuels, products that use electricity) –Local knowledge (PJM information, regional construction, coordination with PHI construction group) –Judgment and experience PHI has a detailed forecasting process which provides sales projections by customer class for each utility

4. 4 Peak Demand Forecast 1 Calculated using the ratio of PEPCO Maryland Jurisdictional Peak Demand to PEPCO Zone Peak Demand for 2006 2 Calculated using the ratio of Delmarva Maryland Jurisdictional Peak Demand to Delmarva Zone Peak Demand for 2006 PEPCO Zone – Includes Pepco and SMECO Delmarva Zone – Includes Delmarva and CO-OPS YearPEPCO Zone Pepco MD Customers 1 Delmarva Zone Delmarva MD Cutomers 2 20076,9724,4764,0761,049 20087,1264,5754,1661,073 20097,2384,6474,2561,096 20107,3414,7134,3441,118 20117,4394,7764,4321,141 20127,5154,8254,4901,156 20137,6414,9064,5771,178 20147,7484,9744,6581,199 20157,8535,0424,7421,221 20167,9375,0964,8441,247

5. 5 Pepco, Delmarva and PJM Pepco and Delmarva participate in the PJM Load Analysis Sub-committee Pepco and Delmarva monitor and evaluate the PJM load forecast and provide necessary comments concerning the PJM forecast PJM develops a model of the transmission system and applies these forecasted loads to determine necessary additions or enhancements Pepco and Delmarva model the transmission system to evaluate PJM’s recommendations and identify changes to facilities not monitored by PJM

6. 6 PEPCO & DELMARVA LOAD EVALUATION PEPCO / DELMARVA RESPONSIBILITIES: –FORECAST LOAD GROWTH ON ALL TRANSMISSION AND DISTRIBUTION FACILITIES –IDENTIFY NEED FOR NEW FACILITIES TO MEET CUSTOMER LOAD GROWTH AND PROVIDE PJM WITH TRANSMISSION OWNER RECOMMENDED ENHANCEMENTS –EVALUATE PJM’S RECOMMENDATIONS AND RECOMMEND CHANGES AS APPROPRIATE –PERFORM CONSTRUCTION OF PJM PROJECTS –MONITOR THE PERFORMANCE AND RELIABILITY OF TRANSMISSION EQUIPMENT PJM RESPONSIBILITIES: –ENSURE THE TRANSMISSION SYSTEM CAN DELIVER REQUIRED ENERGY TO MARYLAND –DIRECT CONSTRUCTION OF NEW FACILITIES –FORECAST LOAD GROWTH ON THE FACILITIES MONITORED BY PJM