Pepco 8-K Regulation FD Disclosure

East Coast Utilities Seminar

WELLINGTON SHIELDS & CO.•BERENSON & CO.•BOSTON•AUGUST 9 - 11, 2010

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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, as amended, and are subject to the safe harbor created by the Private Securities Litigation
Reform Act of 1995. These statements include declarations regarding Pepco Holdings’ intents, beliefs and 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 PHI’s 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. The forward-looking statements contained herein are qualified in their entirety by reference to the
following important factors, which are difficult to predict, contain uncertainties, are beyond Pepco Holdings’ control and may cause
actual results to differ materially from those contained in forward-looking statements: prevailing governmental policies and
regulatory actions affecting the energy industry, including allowed rates of return, industry and rate structure, acquisition and
disposal of assets and facilities, operation and construction of transmission and distribution facilities, and the recovery of
purchased power expenses; changes in and compliance with environmental and safety laws and policies; weather conditions;
population growth rates and demographic patterns; general economic conditions, including potential negative impacts resulting
from an economic downturn; changes in tax rates or policies or in rates of inflation; 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; rules and regulations imposed by Federal and/or state regulatory commissions, PJM, the
North American Electric Reliability Corporation and other applicable electric reliability organizations; legal and administrative
proceedings (whether civil or criminal) and settlements that influence PHI’s business and profitability; pace of entry into new
markets; volatility in customer demand for electricity and natural gas; interest rate fluctuations and credit and capital market
conditions; and effects of geopolitical events, including the threat of domestic terrorism. Any forward-looking statements speak
only as to the date of this presentation and Pepco Holdings undertakes no obligation to update any forward-looking statements to
reflect events or circumstances after the date on which such statements are made or to reflect the occurrence of unanticipated
events. New factors emerge from time to time, and it is not possible for Pepco Holdings to predict all such factors, nor can Pepco
Holdings assess the impact of any such factor on Pepco Holdings’ business or the extent to which any factor, or combination of
factors, may cause results to differ materially from those contained in any forward-looking statement. The foregoing review of
factors should not be construed as exhaustive.Readers are referred to the most recent reports filed with the Securities and
Exchange Commission.

Safe Harbor Statement

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Forecast Business Mix Based on

2011-2014 Projected Operating Income

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

PHI’s Strategic Repositioning

•We have been repositioning
PHI over the last year

–Wind-down of retail energy
supply business at Pepco
Energy Services

–Completed sale of Conectiv
Energy’s wholesale power
generation business

–Liquidation of Conectiv
Energy’s remaining contracts
and assets

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•Invest in T&D infrastructure

•Implement Blueprint for the Future - AMI, energy efficiency,
demand response, decoupling

•Achieve constructive regulatory outcomes

•Increase operational excellence

Power Delivery

•Increase earnings contribution from energy services

Pepco Energy Services

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

PHI’s Strategic Focus

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Our plan positions us for significant long-term growth in both

transmission and distribution.

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

Power Delivery Business Outlook

•Over $5.4 billion in planned infrastructure investment over next 5 years

•Accelerated smart grid deployment backed by $168 million in stimulus
grants

•Revenue growth through continued modest, long-term growth in the
number of customers - comparatively strong, resilient economy

•Achieving constructive regulatory outcomes - ongoing rate cases,
decoupling, FERC formula and incentive rates

•Continued improvement in operating performance - safety, customer
satisfaction, reliability, cost

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Power Delivery - The Driver of Growth

Total Rate Base
Growth - 80%

Electric Distribution Rate
Base Growth - 49%

Transmission Rate
Base Growth - 185%

$4,765

$8,563

$5,357

$6,123

$3,425

$3,749

$4,087

$4,417

$4,725

$5,115

$218

$226

$237

$243

$249

$252

$1,122

$1,382

$1,799

$2,390

$2,884

$3,196

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

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MAPP - Project Update

Total Projected Construction cost: $1.2 billion

Current In-Service Date: June 2014

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

•Review of bids from HVDC vendors

•Construction activities on hold pending permits

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Projected Construction Costs: $334 million (1)

Other Expenditures:$241 million (2)

(1)Net of DOE Reimbursement

(2)Demand response and energy efficiency program costs are recorded as deferred regulatory assets

Combines smart grid technology with energy
efficiency programs to help customers control
their energy use and cost, while providing
earnings potential for the Company

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

Blueprint for the Future

•Advanced Metering Infrastructure

–Meter installation underway in DE (155,000 meters
installed through July 2010), regulatory asset approved

–Meter installation to begin in DC in 4Q2010, regulatory
asset approved

–Filing pending in MD

•Energy efficiency and demand response programs

–Demand response programs approved in MD and NJ,
recovery through a surcharge; proposal pending in DC

–Energy efficiency approved in MD and DC, recovery
through a surcharge

•Revenue decoupling

–Implemented in MD and DC; 66% of total distribution
revenue is decoupled

–To be implemented in DE following resolution of electric
distribution base rate case (3Q2010)

•Innovative rate structures

–Dynamic pricing proposals pending in DC and DE

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*Final briefed position

Distribution Rate Cases -
Most Recent Decisions

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(1)Date of company’s reply brief.

(2)On 6/23/10, the Commission issued an order granting in part Pepco’s application for reconsideration.
The impact of the decision is an additional $1.0 million of allowed rate base and an additional increase in
revenues of approximately $0.5 million annually effective 7/21/10.

Distribution Rate Cases -
Most Recent Decisions (continued)

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(1)As permitted by law, an interim rate increase of $2.5 million was put into effect on 11/17/09 and the remaining
amount of the requested rate increase was put into effect on 4/19/10, subject to refund.

(2)ROE with Modified Fixed Variable Rate Design (MFVRD) as addressed in Docket No. 09-277T, or 11.25% if the
Commission does not approve MFVRD.

(3)If the Commission does not approve MFVRD, the revenue requirement will increase by $0.5 million.

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

Distribution Rate Cases -
Current Filed Positions

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PES Overview

•PES provides retail energy services to large
customers

–Government

–Commercial and Industrial

–Institutional

•Energy Services

–PES develops, installs, operates, and maintains
energy efficiency, renewable energy, and
combined heat and power projects

•Energy Supply

–PES is in the process of winding down the
Retail Energy Supply business

–PES also owns two peaking power plants that
will be retired in 2012

PES has shifted its strategic focus from
Energy Supply to Energy Services

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Wind-down of Retail Electric and
Natural Gas Supply and Power Plants

•PES is on track in winding down this
business and the retail supply contracts
completely roll off by 2014

•Power Plants are scheduled for
retirement in May 2012

•Gross margin expectations for the
contract backlog:

–Electric:~$6.00/MWh

–Natural Gas:~$0.35/Dth

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

2010

2011

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Energy Services Overview

•Energy Efficiency

–PES is a leading developer of energy
efficiency projects

–Since 1995, completed $850 million of
energy efficiency projects

•Combined Heat and Power/ Thermal (CHP)

–PES develops, operates, and maintains
central heating and cooling plants

•70,000 tons of cooling

•950 MMBtu/hour of heating

•23 MW of CHP

•Renewable Energy

–PES owns and operates 12 MW of
renewable energy facilities

•Landfill gas to energy

•Solar energy

•Construction Companies

–Primarily underground high voltage
transmission construction for utilities

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Growing Energy Services

•PES is focused on government customers

–Federal, State, and Local governments

–Typical sales cycle averages 24 months, sometimes longer for the
Federal government

–Talent added now will create sustainable value over the longer term

Our sales team has doubled since 2008

2008 North American Market Share

Energy Performance Contracting

Source: Frost and Sullivan

•PES has an established track record and was
ranked #10 in a 2008 survey with a
3% market share of the energy performance
contracting market

–PES approximates its market share in the Mid-
Atlantic region in the range of 25% to 30%

–PES has an experienced, commercially-
oriented team

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Recently Signed Energy Efficiency Contract

•PES signs $35 million energy efficiency
contract with Prince George’s County Public
Schools

•Services

–New energy infrastructure (heating/cooling)

–Lighting/building improvements

–Energy controls/renewable energy systems

–103 county school system facilities

•Project

–Construction begins Mid-August; estimated
completion December 2011

–Fourth contract award to PES by the school
system

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

Conectiv Energy -
Asset Sale Completion

•Sale of wholesale power generation business completed on July 1, 2010

•Proceeds of $1.63 billion (after adjustments) used to pay down PHI debt

•Liquidation of Conectiv Energy’s contracts and remaining assets
underway; expected completion by year-end 2010

•Total after-tax proceeds from the sale of the wholesale power generation
business and the liquidation of the contracts and remaining assets
currently expected to be approximately $1.7 billion

•Total after-tax loss from the sale of the wholesale power generation
business and the liquidation of the contracts and remaining assets
currently expected to be approximately $75 million to $100 million

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•Applied proceeds from Conectiv Energy sale to debt reduction

–Paid off $450 million bridge financing put in place to fund

•$200 million of 4% Notes due May 2010

•$250 million of Floating Rate Notes due June 2010

–Tendered/called $944 million of long-term debt

•$750 million of Floating Rate Notes due 2012 ($835 million purchase price)

•$129 million of 6.125% Notes due 2017 ($145 million purchase price)

•$65 million of 7.45% Notes due 2032($78 million purchase price)

–Remaining proceeds used to pay down short-term debt

–Charges for debt extinguishment costs and rate lock losses totaling
approximately $79 million, after-tax, will be recorded in 3Q2010

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

Conectiv Energy -
Use of Asset Sale Proceeds

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Second Quarter 2010
Financial Performance - Drivers

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*Excludes Mirant settlement special item of $0.04 per share.Year-to-date 2009 earnings from
continuing operations are $0.37 per share.

Year-to-Date 2010
Financial Performance - Drivers

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Earnings Guidance and Outlook

Earnings Per Share Ranges

$1.10 - $1.30

$0.80 - $0.95

Guidance

Outlook

Reflects earnings per share from ongoing operations (GAAP results excluding
special, unusual or extraordinary items). See appendix for assumptions.

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

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We are positioned to provide an attractive total return
to our shareholders and growth for the future

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

POM Investment Case

•Robust T&D growth - over $5 billion planned investment, 42% in transmission

•Smart grid underway - aided by $168 million in stimulus funds

•Reasonable regulatory outlook - including FERC formula rates

•No equity issuance needs until at least 2012

•Commitment to the current dividend

•Clear value proposition - fundamentally a regulated T&D business

Appendix

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Sales and Customer Growth

While the economic downturn has slowed growth, we expect

continued growth over the long-term across our service territory.

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

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MAPP - Construction Costs*

(Millions of Dollars)

•In-service dates currently under review by PJM, which may affect timing of certain
expenditures.

•Construction costs based on proposed route through Dorchester County, announced on 5/5/10.

*2008 and 2009 actual costs; 2010 through 2015 planned costs

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

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Blueprint for the Future - Updated Costs

(2)DOE awarded PHI $168 million under the ARRA. $100 million will offset Blueprint construction costs and $30 million will
offset other capital expenditures. $36 million will offset expenses associated with direct load control programs.

(3)Demand response and energy efficiency program costs are recorded as deferred regulatory assets.

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

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$754

$1,100

$1,229

$1,232

$1,198

Construction Expenditures*

* Shown net of DOE Capital Reimbursement Awards, excludes Conectiv Energy

Total projected capital expenditures are $5.5 billion over 5 years

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

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Earnings Guidance Assumptions

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

Power Delivery

•Normal weather and operating conditions

•Constructive regulatory outcomes for pending rate cases (Delmarva Power - Electric DE
and Delmarva Power - Gas DE)

•Atlantic City Electric settlement reflected in rates June 1, 2010

•Additional rate cases reflect estimates based on projected rate base/cost-of-service growth
and timing of filings

•Average forecasted growth in number of customers of 1% annually

•Average forecasted sales growth of 1% annually

•Construction expenditures of $738 million in 2010 and $1,089 million in 2011

•O&M expense, net of reimbursable/recoverable, of $648 million in 2010 (excluding
February 2010 storm expense); forecasted increase of ~3% in 2011

•Incremental O&M expense of $15 million in 2010 due to February 2010 storm event

•Depreciation and amortization expense of $367 million in 2010 and $403 million in 2011

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

Earnings Guidance Assumptions -
Continued

Pepco Energy Services

•Growth in ESCO construction activity

•Retail Energy gross margins of $120 million in 2010 and $80 million in 2011

•Retail Energy O&M expense of $44 million in 2010 and $33 million in 2011

Conectiv Energy

•Conectiv Energy asset sale and liquidation are both included in discontinued operations
(and therefore excluded from 2010 guidance and 2011 outlook)

PHI

•Conectiv Energy sale proceeds primarily used to pay down debt by end of 3Q2010

•Debt extinguishment costs excluded from 2010 guidance range

•Other non-regulated (primarily cross-border leases) earnings at approximate 2009 level

•Composite consolidated effective tax rate of approximately 38%