Pepco 8-K 43rd EEI Financial Conference

43rd EEI Financial Conference

November 9 - 12,2008

B U I L D I N GV A L U E

1

Safe Harbor Statement	2
Company Overview	3
Financial Overview	4
Power Delivery	9
Conectiv Energy	16
Pepco Energy Services	21
Summary	24
Appendix	25

Topic

Beginning Page

Table of Contents

Some of the statements contained in today’s presentation are forward-looking statements within the meaning of Section 21E
of the Securities Exchange Act of 1934 and are subject to the safe harbor created by the Private Securities Litigation Reform
Act of 1995. These statements include all financial projections and any declarations regarding management’s intents, beliefs
or current expectations. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,”
“should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of such
terms or other comparable terminology. Any forward-looking statements are not guarantees of future performance, and
actual results could differ materially from those indicated by the forward-looking statements. Forward-looking statements
involve estimates, assumptions, known and unknown risks, uncertainties and other factors that may cause actual results,
levels of activity, performance or achievements to be materially different from any future results, levels of activity,
performance or achievements expressed or implied by such forward-looking statements. Each forward-looking statement
speaks only as of the date of the particular statement, and we undertake no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information, future events or otherwise. A number of factors could
cause actual results or outcomes to differ materially from those indicated by the forward-looking statements contained in this
presentation. These factors include, but are not limited to, prevailing governmental policies and regulatory actions affecting
the energy industry, including with respect to allowed rates of return, industry and rate structure, acquisition and disposal of
assets and facilities, operation and construction of plant facilities, recovery of purchased power expenses, and present or
prospective wholesale and retail competition; changes in and compliance with environmental and safety laws and policies;
weather conditions; population growth rates and demographic patterns; competition for retail and wholesale customers;
general economic conditions, including potential negative impacts resulting from an economic downturn; growth in demand,
sales and capacity to fulfill demand; changes in tax rates or policies or in rates of inflation; rules and changes in accounting
standards or practices; changes in project costs; unanticipated changes in operating expenses and capital expenditures; the
ability to obtain funding in the capital markets on favorable terms; restrictions imposed by Federal and/or state regulatory
commissions, PJM and other regional transmission organizations (NY ISO, ISO New England), the North American Electric
Reliability Council and other applicable electric reliability organizations; legal and administrative proceedings (whether civil or
criminal) and settlements that affect our business and profitability; pace of entry into new markets; volatility in market
demand and prices for energy, capacity and fuel; interest rate fluctuations and credit market concerns; and effects of
geopolitical events, including the threat of domestic terrorism.Readers are referred to the most recent reports filed with the
Securities and Exchange Commission.

2

Safe Harbor Statement

Transmission & Distribution

Competitive Energy / Other

Forecast

Business Mix*

60 - - 70%

30 - - 40%

Note:See Safe Harbor Statement at the beginning of today’s presentation.

—Stable earnings and cash flow

—Strong growth potential

—Secure dividend

… offers an

—Attractive total return

Company Overview

* Percentages based on operating income.

PHI Investments

3

3rd Quarter Financial Performance

GAAP Earnings Per Share
Three Months Ended September 30,
2008	2007
$0.38	$0.63
0.24	0.19
0.01	0.05
0.02	0.06
(0.06)	(0.06)
$0.59	$0.87

Power Delivery

Conectiv Energy

Pepco Energy Services

Other Non-Regulated

Corporate & Other

Total PHI

* The 2007 Earnings Per Share excluding Special Items for the Power Delivery operating segment excludes the following credits:Mirant
bankruptcy damage claims settlement of $0.10 per share and Maryland income tax settlement (net of fees) of $0.09 per share. See PHI’s
Form 10Q filed November 3, 2008 for additional information. Management believes the special items are not representative of the
Company’s ongoing business operations.

Operating Segments

4

Earnings Per Share excluding Special Items*
Three Months Ended September 30,
2008	2007
$0.38	$0.44
0.24	0.19
0.01	0.05
0.02	0.06
(0.06)	(0.06)
$0.59	$0.68

2007 Earnings Per Share*$0.68

2008 Earnings Per Share* $0.59

5

Earnings per Share for the three months ended September 30, 2008 compared to Earnings per Share for the three months ended
September 30, 2007, excluding special items.

*

3rd Quarter Earnings Drivers

Liquidity Position

6

Note:During periods of energy market price volatility, the collateral requirements (the posting of
letters of credit or cash) of PHI’s competitive energy businesses can fluctuate materially.

Commitment

% of

Total

Wachovia

$127.5

8.5%

Bank of Nova Scotia

115.0

7.7%

Bank of Tokyo Mitsubishi

115.0

7.7%

JPMorgan

115.0

7.7%

RBS

115.0

7.7%

Citibank

102.5

6.8%

Credit Suisse

100.0

6.7%

Merrill Lynch

100.0

6.7%

Key Bank

85.0

5.7%

Mizuho

85.0

5.7%

Morgan Stanley

85.0

5.7%

SunTrust

85.0

5.7%

Bank of New York

65.0

4.3%

M&T Bank

60.0

4.0%

Northern Trust

60.0

4.0%

PNC

60.0

4.0%

Bank of America

25.0

1.7%

Total Credit Facility

Credit Facility

7

At October 31, 2008

(Millions of dollars)

•Multi-year facility which
extends until May 2012

•$875 million of credit is
available to the parent
and $625 million is
available in aggregate to
the utilities

Recent Financing Activity -
Strengthened Financial Position

8

•PHI closed on a new $390 million credit facility

•PHI priced an offering of 14 million shares of common stock at a price
of $16.50 per share

† Net Proceeds:$222 million

† Expected Closing: 11/12/08

•Atlantic City Electric priced the issuance of $250 million of First
Mortgage Bonds

†Yield to Maturity:7.82%

† Maturity:2018

† Expected Closing:11/14/08

•Delmarva Power has regulatory authorization for the issuance of $250
million of First Mortgage Bonds

•Pepco has regulatory authorization from the Maryland PSC for the
issuance of $250 million of First Mortgage Bonds; approval from the
District of Columbia PSC is pending

•Standard & Poor’s upgraded the senior unsecured debt ratings of
each of our Utilities from BBB- to BBB

Commercial 47%

Diversified Customer Mix*

Residential 35%

Government 10%

Industrial 8%

* Based on 2007 MWh Sales; excludes Virginia operations sold on 1/2/08.

Note: See Safe Harbor Statement at the beginning of today’s presentation.

—Attractive Service Territory

–Diverse government and private sectors

–Regulatory diversity

—Constructive Regulatory Relationships

—Significant Investment Opportunities

Power Delivery - Business Overview

Combined Service Territory

9

10

•2008 weather adjusted sales are expected to be flat or slightly down
compared to 2007*

•A weakened economy and higher overall energy prices are reducing
customer usage

•Service territory economic growth impacted by national downturn

•Customer growth up 0.6% year over year through September*

Note:See Safe Harbor Statement at the beginning of today’s presentation.

Power Delivery Sales Trends

·230 mile, 500kV line originating in northern Virginia, crossing Maryland, traveling up
the Delmarva Peninsula and into southern New Jersey

·Preliminary cost estimate - $1.05 billion

·Direct Current technology for the Chesapeake Bay crossing currently being evaluated
by PJM; decision expected in the fourth quarter; incremental cost of approximately
$400 million

MAPP Incentive Filing Approved

Note:See Safe Harbor Statement at the beginning of today’s presentation.

Mid-Atlantic Power Pathway
(MAPP) Project

11

·FERC issued unanimous order
on October 31, 2008

·Full forward year CWIP in rate
base

·150 basis point ROE adder;
project will earn 12.8% ROE

·100% recovery of prudently
incurred costs in case of
project cancellation

Blueprint Estimated Capital Cost 2008-2012

Total Investment: $539 million

•Responsive to customer expectations:

–Managing energy costs

–Improving customer service

–Enhancing reliability

–Protecting the environment

•Includes significant investment:

–Advanced metering infrastructure (AMI)

–Demand side management applications

•Programs will provide the tools customers
need to move into the future:

–Energy Efficiency

–Demand Response

–Renewable Energy

•Cost recovery is key to timing of expenditures;

$83 Million of planned 2009 spending
anticipated to be deferred until later years

 $60 Million of planned 2010 spending
anticipated to be deferred until later years

12

Note:See Safe Harbor Statement at the beginning of today’s presentation.

$465

$64

$10

$0

$100

$200

$300

$400

$500

Advanced Metering

Infrastructure

Distribution Automation

Meter Data Management

System

Blueprint for the Future

Blueprint Status

Delaware - - Blueprint Order issued September 16

•Delmarva Power to move forward on the Advanced Metering Infrastructure (AMI) program

•Demand Side Management programs approved to move forward

•Regulatory asset will be created for AMI-related costs; costs will be reviewed in base rate cases

Delaware - - Decoupling Order issued September 16

•Approved electric and gas decoupling rate design concept; modified fixed variable rate design

•Implementation expected to begin with the next base rate case filing in Delaware

Maryland - - EmPower Maryland Program proposals filed September 2

•Pepco and Delmarva Power filed proposals for achieving demand reduction targets

•Letter order issued by Staff Counsel on September 12; procedural schedule proposed to review issues

•AMI proposals to be addressed in a separate proceeding

Maryland/New Jersey/District of Columbia - Pilot Programs

•“Smart Community” pilot underway in the District of Columbia to demonstrate customer benefits; pilots
planned for New Jersey and Maryland

•Plan to amend filings to pursue recovery of pilot costs via surcharge

Note:See Safe Harbor Statement at the beginning of today’s presentation.

13

Power Delivery Construction Summary

2008-2012 Construction Forecast

Note:See Safe Harbor Statement at the beginning of today’s presentation.

14

•Forecast for 2008 is approximately 10-15% lower than originally planned expenditures of $716 million

• An estimated 20-25% of 2009 spending can be reduced due to lower customer driven projects and project deferrals

(Dollars in Millions)

Atlantic City

Electric

Maryland

(1)

Columbia

(2)

Delaware

(3)

Maryland

(4)

Gas

(5)

New Jersey

(6)

Total

Operating Income (Adjusted)

(7)

$72

$72

$27

$16

$17

$61

$265

Rate Base (Adjusted)

(7)

$861

$983

$393

$268

$224

$761

$3,490

Earned Return on Rate Base

8.37%

7.31%

6.91%

6.12%

7.50%

8.09%

Authorized Return on Rate Base

7.99%

7.96%

7.17%

7.68%

7.73%

8.14%

Most Recent Authorized Return on Equity

10.00%

10.00%

10.00%

10.00%

10.25%

9.75%

Most Recent Test Period Ending

Sep-06

Sep-06

Mar-05

Sep-06

Mar-06

Dec-02

Anticipated Next Filing

2010

Early

2009

Mid

2009

Early

2009

2010

Mid

2009

(1)

As filed with MD PSC in Quarterly Earned Return Report for the twelve months ended 6/30/08, which is developed in accordance with PSC instructions and, therefore,

does not reflect the Company's rate case filing position in all respects.

(2)

As filed with DC PSC in Quarterly Earned Return Report for the twelve months ended 6/30/08, which is developed in accordance with PSC instructions and, therefore,

does not reflect the Company's rate case filing position in all respects.

(3)

As filed with DE PSC in Quarterly Earned Return Report for the twelve months ended 3/31/08, which is developed in accordance with PSC instructions and, therefore,

does not reflect the Company's rate case filing position in all respects.

(4)

As filed with MD PSC in Annual Earned Return Report for the twelve months ended 12/31/07, which is developed in accordance with PSC instructions and, therefore,

does not reflect the Company's rate case filing position in all respects.

(5)

As filed with DE PSC in Quarterly Earned Return Report for the twelve months ended 6/30/08, which is developed in accordance with PSC instructions and, therefore,

does not reflect the Company's rate case filing position in all respects.

(6)

Estimate as of December 2007; does not necessarily reflect the Company's rate case filing position in all respects.

(7)

Adjusted to annualize rates and to conform results to regulatory precedents.

Note: See Safe Harbor Statement at the beginning of today's presentation.

Delmarva Power

Pepco

15

Distribution Summary

2008 Capacity (4,267 MW)*

Competitive Mid-merit Generation
Portfolio

Financial

Property, Plant & Equipment-9/30/08$1,227M

Construction Work in Process-9/30/08$203M

2007 Earnings$73M

Year-to-date 9/30/08 - - Earnings$118M

Total Inter-Company Debt - 9/30/08$677M

Note:Excludes units under development.

16

«

Delta
COD: 2011

Cumberland
COD: 2009

«

«

Generating Facilities

* Includes plants under contract.

Units

Under

Contract,

12%

Coal, 8%

Oil-Fired

Steam,

13%

Gas

Combined

Cycle,

52%

Peaking

Units, 15%

Note:See Safe Harbor Statement at the beginning of today’s presentation.

Total Conectiv Energy Gross Margin - Forecast Range

(Including Merchant Generation and Load Service, and Energy Marketing)

$215

$206

$308

$265

$285

$335

$380

$435

$400

$460

$550

$259

$255

$319

* Based on 2007 actual and mid-point of 2010 range.

17

Gross Margin - Forecast Range

Cumberland Project

Note:See Safe Harbor Statement at the beginning of today’s presentation.

18

•100 MW dual fuel combustion turbine - flexible and
efficient GE LMS 100 technology

•Projected net income of $4 - $7 million per year

•Existing CT site (Cumberland, NJ)

–Land available for expansion (100 MW unit)

–Natural gas at site

–Minimal transmission system upgrades (PJM Queue
P06)

–Other infrastructure and resources on site

•Project Cost:$75 million (including owner’s costs)

•Project Status

–Major permits received

–Major equipment on site and construction advancing
on schedule

–Engineering substantially completed

–Construction started in April

–Commercial operation expected spring 2009

Delta Project

•545 MW dual fuel combined cycle plant located in Peach
Bottom Township, PA. (East MAAC LDA for RPM capacity
auctions)

•6 year tolling agreement (June 1, 2011 - May 31, 2017) with
Constellation Energy Commodities Group provides
stable/predictable earnings profile

•Projected net income of $24 - $28 million per year

•Project Cost:$470 million(including owner’s costs)

•Project Status

–Land options and major permits acquired

–Site preparation and foundation work has begun

–Minimal transmission system upgrades (PJM Queue P04)

–Major equipment ordered/delivery confirmed to meet
commercial operation date

–Commercial operation date - June 2011

•Permits and infrastructure allow for expansion (additional 545
MW block)

Note:See Safe Harbor Statement at the beginning of today’s presentation.

19

Note:See Safe Harbor Statement at the beginning of today’s presentation.

20

Marketing Expansion into
New England and New York

Expansion into new markets consistent with Conectiv Energy's strategy

–Opportunity for additional margins in power pools that operate similarly to PJM

–Leverage existing asset management and hedging capabilities

–Low capital requirements - focused on marketing and asset management opportunities

Activities to date

–Utility default supply contracts with various New England utilities:

YearPeak Load (MWs)Annual Energy (GWhs)

20081,2005,000

20095501,950

20104001,600

–Generation assets under management in NY ISO

–38MW municipal solid waste plant

–82MW natural gas combined cycle plant; 50% owned by CE (ESNE Project)

–Electric Transmission into NY

–25MW firm transmission agreement from PJM into NYC starting in 2010

–Renewable Energy Credits

–Investigating ways to generate and utilize Renewable Energy Credits in New England

Key Metrics2007YTD 9/08

Earnings ($ in millions)$38$28

Period-End Load Served (MW)4,2944,491

MWh Delivered (in millions)1915

Dth delivered (in millions)2125

21

•PES provides retail energy supply

and services to large energy users

• Primary business driver:

† Retail Electric Supply

† 80% of Business in Core PJM

Markets

• PES also provides:

† Retail Natural Gas Supply

† Energy Efficiency Services

• Performance Contracting

• Cogeneration, Thermal Energy

Supply

• While not part of its strategy, PES

also owns:

† 790 MW SWMAAC peaking

generation

† Retirement in 2012

36%

1%

Retail Electric Load

At September 30, 2008

Government

AOBA*

Large Commercial

and Industrial

Other

*D.C.-area Apartment and Office Building Association

Business Overview

•PES has grown its backlog by 8% to
34.3 million MWhs since the end of
2007

•Deliveries have grown at a 33%
compounded annual growth rate since
2004

•PES’s contract signings have grown at a
29% compounded annual growth rate
since 2004

•Gross margins for new business held
steady at approximately $3 per MWh

•Maintaining historical retention rates of
upward of 60%

22

Electric Contract Signings

millions of MWh

0

5

10

15

20

25

30

2004

2005

2006

2007

YTD 09/08

Contract Signings and Backlog

•September 2008 YTD gross margins
consistent with PES’s expected range
of $3 per MWh

•PES manages toward a flat book and
does not engage in speculative
trading

•PES’s fundamental strategy is to serve
large energy users

•By focusing only on large customers,
PES keeps its G&A costs low

–Small commercial customers require
a significantly higher G&A to serve

•PES has built a solid and scalable
platform for growth

23

Electric Realized Gross Margin

$ per MWh

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

2004

2005

2006

2007

YTD 09/08

Electric Business G&A

$ per MWh

$0.00

$0.50

$1.00

$1.50

$2.00

2005

2006

2007

YTD 09/08

Margins and G&A Expenses

Building Value

Note:Dividend yield source - Thomson Financial.See Safe Harbor Statement at the beginning of today’s presentation.

24

●Stable Earnings Base - - Derived primarily from regulated
utility business

●Earnings Growth Potential - - Driven by T&D utility
infrastructure investments, constructive regulatory
outcomes and competitive energy business growth

●Secure Dividend - - Power Delivery earnings growth
enables steady long-term dividend growth

 † Current dividend yield as of November 6, 2008 is 6.3%

APPENDIX

25

Year-to-date Financial Performance

GAAP Earnings Per Share
Nine Months Ended September 30,
2008	2007
$0.99	$1.05
0.59	0.30
0.14	0.12
(0.34)	0.19
(0.22)	(0.23)
$1.16	$1.43

Earnings Per Share excluding Special Items*
Nine Months Ended September 30,
2008	2007	Change
$0.99	$0.86	$0.13
0.59	0.30	0.29
0.14	0.12	0.02
0.12	0.19	(0.07)
(0.22)	(0.23)	0.01
$1.62	$1.24	$0.38

Power Delivery

Conectiv Energy

Pepco Energy Services

Other Non-Regulated

Corporate & Other

Total PHI

* The 2008 Earnings Per Share excluding Special Items for the Other Non-Regulated operating segment excludes the following charges for
the Cross-Border Energy leases:Equity value adjustment of $0.43 per share and interest accrued of $0.03 per share. The 2007 Earnings Per
Share excluding Special Items for the Power Delivery operating segment excludes the following credits:Mirant bankruptcy damage claims
settlement of $0.10 per share and Maryland income tax settlement, (net of fees) of $0.09 per share. See PHI’s Form 10Q filed November 3,
2008 for additional information. Management believes the special items are not representative of the Company’s ongoing business
operations.

Operating Segments

26

2007 Earnings Per Share*$1.24

2008 Earnings Per Share* $1.62

27

Earnings per Share excluding special items for the nine months ended September 30, 2008 compared to Earnings per Share
excluding special items for the nine months ended September 30, 2007.

*

Year-to-Date Earnings Drivers

Power Delivery

•Revenue - - Rate Order Impacts0.13

•Income Tax Adjustments0.08

•Network Transmission Revenue0.06

•Depreciation/Amortization - - Rate Order Impacts0.03

•Operation and Maintenance Expense(0.07)

•Weather (0.04)

•Dilution (0.04)

•Other, net(0.02)

Conectiv Energy

•Merchant Generation & Load Service 0.30

•Operating Costs, net(0.01)

Pepco Energy Services

•Retail Energy Supply0.02

Other Non-Regulated

•Financial Investment Portfolio(0.09)

•Other, net0.02

Corporate & Other, net0.01

Capital Structure Objectives

* Calculation excludes securitized debt and capital lease obligations; includes unamortized debt premium/discount.
See following slide calculation.

	9/30/08 Equity Ratio*	Target Percentage Range
PHI	44%	Mid to High 40s
Pepco	46%	High 40s
Delmarva Power	49%	High 40s
Atlantic City Electric	48%	High 40s

28

As of September 30, 2008, we are in line with our targeted equity ratios

29

At September 30, 2008

Calculation of Equity Ratio

Construction Expenditures*

Note:See Safe Harbor Statement at the beginning of today’s presentation.

$896

$1,187

$1,275

$1,210

$1,095

Consolidated Construction Expenditures

$623

* Projected construction expenditures as reported in 2007 Form 10-K

30

$153

$180

$133

$237

$270

$161

$0

$28

$179

$241

$273

$401

$447

$501

$485

$510

$621

$130

$136

$113

$99

$69

$180

$244

$176

$44

$26

$188

$61

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

2007 Actual

2008

2009

2010

2011

2012

Transmission

MAPP

Distribution

Blueprint

Competitive/Other

Long-term Debt Maturities

31

(Millions of dollars)

Maturity

Interest

4th Quarter

Date

Rate

2008

2009

Pepco - - FMB

10/15/08

5.88%

$50

Pepco Energy Services - VRDB

12/1/08

Variable

3

Potomac Capital Investment - MTN

12/5/08

7.40%

92

Pepco - - MTN

1/20/09

6.25%

$50

Pepco Energy Services - VRDB

12/1/09

Variable

3

Total Long-term DebtMaturities

-

-

-

-

-

Note:See Safe Harbor Statement at the beginning of today’s presentation.

32

Note:See Safe Harbor Statement at the beginning of today’s presentation.

Cross-Border Leases - Status

• Current Status - IRS Audit and Cross-Border Energy Leases reassessment

†The IRS is challenging tax benefits associated with certain sale-leaseback transactions with tax-
indifferent parties. Historical annual tax benefits derived from the lease portfolio have been approximately
$74 million per year.

†On June 9, 2006, the IRS issued its final Revenue Agent’s Report (RAR) for its audit of PHI’s 2001 and
2002 income tax returns which disallows the tax benefits claimed by PHI for these tax years.

†PHI filed a protest letter in August 2006 against the proposed adjustments.We anticipate the appeals
process to continue through 2008.Final resolution of the issue could still take several years to resolve.

†In the second quarter 2008, PHI recorded a non-cash after-tax charge to earnings of $93 million due to our
reassessment of the sustainability of our tax position on the cross-border energy lease investments.
Annual tax benefits derived from the lease portfolio going forward are approximately $56 million per year.

†Based on the facts relevant to these investments, we continue to believe that the tax treatment we applied
to the lease transactions was appropriate and we intend to defend this position.

• Current Status - Proposed Tax Legislation and IRS global settlement offer

†On June 18, 2008, the Farm, Nutrition and Bio Energy Act of 2007 became law.This legislation did not
contain any provisions that would apply passive loss limitations to leases with foreign tax indifferent
parties.At this time, there is no additional legislation pending in Congress.

†On August 7, 2008, PHI received a global settlement offer from the IRS.At this time, PHI is continuing its
discussion with the Appeals Office and has not responded to the settlement offer.

Note:See Safe Harbor Statement at the beginning of today’s presentation.

33

MAPP - - Maryland Regulatory Filings

•Regulatory approval for construction in Maryland will be accomplished
through filings with the Public Service Commission

•Notice filing made on September 18, 2008 for the section from
Maryland/Virginia border to Chalk Point; existing Certificate of Public
Convenience and Necessity (CPCN) in place

•Modified CPCNs will be filed for the Potomac River crossing and for the
Chalk Point to Calvert Cliffs section- fourth quarter of 2008

•Construction for the Southern Maryland portion of the line expected to
begin in the third quarter of 2009

•A new CPCN application will be filed in the second quarter of 2009 for
Calvert Cliffs across the Chesapeake Bay to the Maryland state line

Note:See Safe Harbor Statement at the beginning of today’s presentation.

34

Impact of Regional Greenhouse Gas Initiative

•Regional Greenhouse Gas Initiative (RGGI) is expected to have a
neutral to slightly positive impact on Conectiv Energy's margins.

–At current fuel prices, combined cycle units will not dispatch ahead of
coal until CO2 prices approach $55/ton.

–Since RGGI is regional, energy imports from non-RGGI states will tend
to keep price increases lower.

–Gas-fired combined cycles have the smallest CO2 footprint of all fossil
units; therefore, margins will increase during periods that coal and oil-
fired units (with their higher CO2 costs) are setting LMP.

–Coal margins will decrease during on-peak hours when gas units are
setting the LMP.

•Conectiv Energy is well positioned to manage the impact of RGGI
due to its largely gas fired generation portfolio, its renewable energy
contracts, and its Pennsylvania plants.

Expanding Renewable

Requirements & Portfolio

Conectiv Energy's Renewable Portfolio
	Expected Class I REC's (GWh)	% of CE Total Output	% of MAAC State Requirements
2008	730 -800	14.3% - 16.5%	14.3% - 15.7%
2009	870 - 960	16.6% - 19.2%	12.8% - 14.1%
2010	890 - 980	17.2% - 19.9%	9.9% - 11.0%

•Conectiv Energy has focused its
efforts on utilizing landfill methane
gas to generate qualifying energy
from renewable sources and on
acquiring qualified wind energy
output.

•Conectiv Energy's renewable
energy supply exceeds its internal
needs for utility load auction
participation in PJM.

Note:See Safe Harbor Statement at the beginning of today’s presentation.

35

•PJM

–NJ, DE, MD, PA, IL & DC have mandatory RPS with an average requirement of
17% of load served in 2020

•New England

–All states except VT have mandatory RPS with an average requirement of 23% by
2020

* Around-the-clock includes both on-peak (16 hrs/day, weekdays) and off-peak periods.

Capacity Hedges (MW basis)
PJM Planning Year (June 1 through May 31)	9/30/08
2008/2009	100%
2009/2010	100%
2010/2011	100%
2011/2012	100%
2012/2013	5%

Power Hedges (9/30/08, MWh basis)
Hedge Period	Target	Around-the-Clock *
Months 1-12(10/08 to 9/09)	50-100%	87%
Months 13-24(10/09 to 9/10)	25-75%	83%
Months 25-36(10/10 to 9/11)	0-50%	35%

Note:See Safe Harbor Statement at the beginning of today’s presentation.

36

Hedge Update

Combined Cycle Design

	Conectiv Energy Combined Cycle Design	Typical Combined Cycle Design
Time for CT's to Reach Full Load	20 Minutes	2 Hours
Ability to Run only CT's	Yes	No
Minimum Run Time (hours)	4	8-16
Allowable Starts per Day	2	1
Multi-fuel Capability (natural gas and No. 2 oil)	Yes	No
Multi-Pipeline Access	2 or 3	1

37

Conectiv Energy -
Combined Cycle Unit Operation