2011 Wells Fargo MLP, E&P,
Services & Utility Symposium
NEW YORK, NY• DECEMBER 7, 2011
1
Safe Harbor Statement/Regulation G Information
Some of the statements contained in today’s presentation with respect to Pepco Holdings, Pepco, Delmarva Power and Atlantic City Electric, and each of their
respective subsidiaries, are forward-looking statements within the meaning of the U.S. federal securities laws and are subject to the safe harbor created
thereby and by the Private Securities Litigation Reform Act of 1995. These statements include declarations regarding each reporting company’s intents, beliefs
and current expectations. You can generally identify forward-looking statements by terminology such as “may,” “might,” “will,” “should,” “could,” “expects,”
“intends,” “assumes,” “seeks to,” “plans,” “anticipates,” “believes,” “projects,” “estimates,” “predicts,” “potential,” “future,” “goal,” “objective,” or “continue”, the
negative or other variations of such terms, or comparable terminology, or by discussions of strategy that involve risks and uncertainties. Forward-looking
statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that may cause one or more reporting company’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. Therefore, forward-looking statements are not guarantees or assurances of future performance, and
actual results could differ materially from those indicated by the forward-looking statements. These forward-looking statements are qualified in their entirety
by, and should be read together with, the risk factors included in the “Risk Factors” section of each reporting company’s annual and quarterly reports filed in
2011, and investors should refer to these risk factor sections. The forward-looking statements contained herein are also qualified in their entirety by reference
to, and should be read together with, the following important factors, which are difficult to predict, contain uncertainties, are beyond each reporting company’s
control and may cause actual results to differ materially from those contained in forward-looking statements: changes in 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; weather conditions affecting usage and
emergency restoration costs; population growth rates and changes in demographic patterns; changes in customer energy demand due to conservation
measures and the use of more energy-efficient products; general economic conditions, including the impact of an economic downturn or recession on energy
usage; changes in and compliance with environmental and safety laws and policies; 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, and decisions of, 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 each reporting company’s business and profitability; pace of entry into new markets; volatility in customer demand for
electricity and natural gas; interest rate fluctuations and the impact of credit and capital market conditions on the ability of a reporting company to obtain
funding on favorable terms; and effects of geopolitical events, including the threat of domestic terrorism or cyber attacks. Any forward-looking statements
speak only as to the date of this presentation and each reporting company 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 a reporting company to predict all such factors, nor can any reporting company assess the impact of any such factor on such
reporting company’s 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 factors should not be construed as exhaustive.
respective subsidiaries, are forward-looking statements within the meaning of the U.S. federal securities laws and are subject to the safe harbor created
thereby and by the Private Securities Litigation Reform Act of 1995. These statements include declarations regarding each reporting company’s intents, beliefs
and current expectations. You can generally identify forward-looking statements by terminology such as “may,” “might,” “will,” “should,” “could,” “expects,”
“intends,” “assumes,” “seeks to,” “plans,” “anticipates,” “believes,” “projects,” “estimates,” “predicts,” “potential,” “future,” “goal,” “objective,” or “continue”, the
negative or other variations of such terms, or comparable terminology, or by discussions of strategy that involve risks and uncertainties. Forward-looking
statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that may cause one or more reporting company’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. Therefore, forward-looking statements are not guarantees or assurances of future performance, and
actual results could differ materially from those indicated by the forward-looking statements. These forward-looking statements are qualified in their entirety
by, and should be read together with, the risk factors included in the “Risk Factors” section of each reporting company’s annual and quarterly reports filed in
2011, and investors should refer to these risk factor sections. The forward-looking statements contained herein are also qualified in their entirety by reference
to, and should be read together with, the following important factors, which are difficult to predict, contain uncertainties, are beyond each reporting company’s
control and may cause actual results to differ materially from those contained in forward-looking statements: changes in 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; weather conditions affecting usage and
emergency restoration costs; population growth rates and changes in demographic patterns; changes in customer energy demand due to conservation
measures and the use of more energy-efficient products; general economic conditions, including the impact of an economic downturn or recession on energy
usage; changes in and compliance with environmental and safety laws and policies; 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, and decisions of, 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 each reporting company’s business and profitability; pace of entry into new markets; volatility in customer demand for
electricity and natural gas; interest rate fluctuations and the impact of credit and capital market conditions on the ability of a reporting company to obtain
funding on favorable terms; and effects of geopolitical events, including the threat of domestic terrorism or cyber attacks. Any forward-looking statements
speak only as to the date of this presentation and each reporting company 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 a reporting company to predict all such factors, nor can any reporting company assess the impact of any such factor on such
reporting company’s 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 factors should not be construed as exhaustive.
PHI discloses net income from continuing operations and related per share data (both as historical information and earnings guidance) excluding special items
because management believes that these items are not representative of PHI’s ongoing business operations. Management uses this information, and believes
that such information is useful to investors, in evaluating PHI’s period-over-period performance. The inclusion of this disclosure is intended to complement, and
should not be considered as an alternative to, PHI’s reported net income from continuing operations and related per share data in accordance with accounting
principles generally accepted in the United States (GAAP).
because management believes that these items are not representative of PHI’s ongoing business operations. Management uses this information, and believes
that such information is useful to investors, in evaluating PHI’s period-over-period performance. The inclusion of this disclosure is intended to complement, and
should not be considered as an alternative to, PHI’s reported net income from continuing operations and related per share data in accordance with accounting
principles generally accepted in the United States (GAAP).
PHI’s Strategic Focus
• Focused on reliability and operational excellence
• Implement Blueprint for the Future - advanced
metering infrastructure (AMI), energy efficiency,
demand response, decoupling
metering infrastructure (AMI), energy efficiency,
demand response, decoupling
• Achieve reasonable regulatory outcomes
Power Delivery
Pepco Energy Services
• Build profitable market share in the energy
performance contracting business focused on
government customers
performance contracting business focused on
government customers
• Increase earnings contribution from energy services
Operating Income Business Mix
Forecasted 2011-2015
Note: See Safe Harbor Statement at the beginning of today’s presentation.
5 - 10 %
90 - 95%
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Reliability Enhancement Plan -
Improving System Reliability is a Top Priority
• Our focus in 2011 has been primarily in Pepco’s service territory
• Our progress since last fall*:
– Tree Trimming - Trimmed along more than 2,600 miles of power
lines to remove limbs that threatened our equipment; 73% of 2011
target complete
lines to remove limbs that threatened our equipment; 73% of 2011
target complete
– Cable Replacement - Replaced or upgraded more than 230 miles
of underground cable; 78% of 2011 target complete
of underground cable; 78% of 2011 target complete
– Selective Undergrounding - Identified overhead lines for
undergrounding
undergrounding
– Distribution Automation - Added more than 125 automated
switches that will reroute power more effectively during storms; 50%
of 2011 target complete
switches that will reroute power more effectively during storms; 50%
of 2011 target complete
– Customer Communications - Added call center staff and more
than doubled phone lines
than doubled phone lines
– Technology-Based Improvements - Implemented technology on
mobile devices to view online outage maps and enable customers to
report outages
mobile devices to view online outage maps and enable customers to
report outages
• System reliability has improved over the past year
– Improved outage frequency and duration statistics for Pepco
– Benefits of reliability initiatives demonstrated during Hurricane Irene
* Data as of 9/30/11 - Pepco service territory
4
Hurricane Irene - Storm Response
• Hurricane Irene hit our service territory in late August 2011
with high winds and driving rain
with high winds and driving rain
• Approximately 445,000 customers (~25% of total electric
customers) were without power at the height of the storm
customers) were without power at the height of the storm
• 98% of customers were restored within just over two days
after the storm ceased; received positive comments from
customers, elected officials and regulators on restoration
response
after the storm ceased; received positive comments from
customers, elected officials and regulators on restoration
response
• AMI outage detection proved useful during restoration
efforts in Delaware as data eliminated the need to dispatch
crews to several hundred outage locations
efforts in Delaware as data eliminated the need to dispatch
crews to several hundred outage locations
5
Hurricane Irene - Estimated Incremental Cost
Note: See Safe Harbor Statement at the beginning of today’s presentation.
* Since a large portion of the costs incurred related to services provided by third parties for which the invoices
have not yet been received, the costs have been estimated.
have not yet been received, the costs have been estimated.
Recovery of system restoration expenses that are in excess of the storm restoration expenses currently
embedded in base rates will be pursued during the current cycle of distribution rate cases.
embedded in base rates will be pursued during the current cycle of distribution rate cases.
6
Pepco - Maryland
Reliability Case 9240
Reliability Case 9240
• Related to power outages caused by severe weather in Pepco’s service
territory in 2010
territory in 2010
• Public Service Commission initiated the proceeding for Pepco in August
2010 to investigate the reliability of the electric distribution system and
the quality of service provided to customers
2010 to investigate the reliability of the electric distribution system and
the quality of service provided to customers
• Reliability Enhancement Plan submitted to the Commission in August
2010
2010
• Pepco’s position
– Committed to implementation of the Reliability Enhancement Plan
– No violation of Commission rules or regulations occurred
– Commission’s consultant agreed; storm restoration efforts were better than
industry norm
industry norm
• Awaiting Commission decision
7
Power Delivery - O&M
Note: See Safe Harbor Statement at the beginning of today’s presentation.
* Primarily offset in revenue (customer reimbursed or recoverable through rates in the same year)
• 2011 projected O&M will be included in the current cycle of distribution base rate cases
• We anticipate 2012 Base O&M spending levels in line with current projections for 2011
Increased reliability initiatives and
system restoration activities; higher
employee-related and Power Delivery
support costs
system restoration activities; higher
employee-related and Power Delivery
support costs
Hurricane Irene
8
Advanced Metering Infrastructure -
Status by Jurisdiction
Status by Jurisdiction
Note: See Safe Harbor Statement at the beginning of today’s presentation.
9
• PJM provided notice to PHI on August
18th that the MAPP project in-service
date will be delayed until 2019 - 2021
18th that the MAPP project in-service
date will be delayed until 2019 - 2021
• PHI suspended most permitting,
engineering, and environmental studies
engineering, and environmental studies
• Maryland PSC approved our request to
delay the procedural schedule for one
year or until PJM has issued its 2012
Regional Transmission Expansion Plan
delay the procedural schedule for one
year or until PJM has issued its 2012
Regional Transmission Expansion Plan
• PHI plans to spend approximately $5
million in each of 2011 and 2012 to
complete right-of-way acquisition in
Dorchester County and some
permitting and environmental activities
million in each of 2011 and 2012 to
complete right-of-way acquisition in
Dorchester County and some
permitting and environmental activities
Mid-Atlantic Power Pathway - Project Update
FERC Approved ROE: 12.8%
2020 in-service date currently planned
Note: See Safe Harbor Statement at the beginning of today’s presentation.
10
Capital Expenditures Forecast -
Updated November 2011
Updated November 2011
Note: See Safe Harbor Statement at the beginning of today’s presentation.
(1) Reflects the remaining anticipated reimbursement pursuant to awards from the U.S. DOE under the ARRA.
(2) Installation of AMI in New Jersey is contingent on regulatory approval ($9 million in 2015, $92 million in 2016).
(3) Assumes MAPP in-service date of 2020.
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Forecast Capital Expenditures Comparison
* Amounts are net of anticipated reimbursement pursuant to awards from the U.S. DOE under the ARRA.
Note: See Safe Harbor Statement at the beginning of today’s presentation.
12
Distribution Rate Cases - Pending
Pepco - District of Columbia
Pepco - District of Columbia
Note: See Safe Harbor Statement at the beginning of today’s presentation.
Drivers of requested increase:
• Rate base growth/reliability investment
• Under-earning at current authorized ROE
• Investment in Advanced Metering
Infrastructure
Infrastructure
Two regulatory lag mitigation measures
proposed in filing:
proposed in filing:
• Reliability Investment Recovery Mechanism -
provides full and timely recovery of future capital
investments related to distribution system reliability
provides full and timely recovery of future capital
investments related to distribution system reliability
• Fully forecasted test periods
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Note: See Safe Harbor Statement at the beginning of today’s presentation.
Distribution Rate Cases - Pending
Atlantic City Electric - New Jersey
Atlantic City Electric - New Jersey
Drivers of requested increase:
• Rate base growth/reliability investment
Regulatory lag mitigation measure proposed in a separate filing made October 18, 2011:
• Request the continuance and expansion of the recently completed Infrastructure Investment Program (IIP)
• Allows recovery of non-revenue generating infrastructure investment through a special rate outside of a
base rate filing
base rate filing
• Under the IIP, Atlantic City Electric proposes to recover reliability-related capital expenditures of $69
million, $94 million and $81 million, in 2012, 2013 and 2014, respectively
million, $94 million and $81 million, in 2012, 2013 and 2014, respectively
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Distribution Rate Cases - Pending
Delmarva Power - Delaware Electric
Delmarva Power - Delaware Electric
Note: See Safe Harbor Statement at the beginning of today’s presentation.
Drivers of requested increase:
• Rate base growth/reliability investment
• Increase in operating expenses
Two regulatory lag mitigation measures proposed
in filing:
in filing:
•Reliability Investment Recovery Mechanism - provides full
and timely recovery of future capital investments related to
distribution system reliability
and timely recovery of future capital investments related to
distribution system reliability
•Fully forecasted test periods
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• Filing Cycle Status
– Pepco DC Pending - Filed July 2011
– Atlantic City Electric NJ Pending - Filed August 2011
– Delmarva Power DE - Electric Pending - Filed December 2011
– Delmarva Power MD Filing targeted for December 2011
– Pepco MD Filing targeted for December 2011
– Delmarva Power DE - Gas Filing targeted for 1Q2013
• Requested distribution rate increases for residential customers with typical
usage are expected to range from 1% - 5% of the total bill
usage are expected to range from 1% - 5% of the total bill
• Targeted filing dates may be altered by financial projections and other
considerations
considerations
• Rate cases will be filed in 2012 if progress to reduce regulatory lag is less than
satisfactory in the current cycle of base rate cases
satisfactory in the current cycle of base rate cases
Distribution Rate Cases - The Current Cycle
Note: See Safe Harbor Statement at the beginning of today’s presentation.
Pepco Energy Services - Overview
• PES provides retail energy services to large
customers
customers
– Government
– Institutional
• Energy Efficiency
– PES is a leading developer of energy
efficiency projects
efficiency projects
– Since 1995, completed $1 billion of
energy efficiency projects
energy efficiency projects
• Combined Heat and Power (CHP)/Thermal
– PES develops, operates, and maintains
CHP and thermal energy plants
CHP and thermal energy plants
• Renewable Energy
– PES owns and operates 12 MW of
renewable energy facilities
renewable energy facilities
• W.A. Chester
– Primarily underground high voltage
transmission construction for utilities
transmission construction for utilities
• Energy Supply
– PES will substantially wind down the retail
energy supply business by 2012
energy supply business by 2012
– PES also owns two peaking power plants
that are scheduled to retire in 2012
that are scheduled to retire in 2012
Note: See Safe Harbor Statement at the beginning of today’s presentation.
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Pepco Energy Services -
Energy Services Earnings Components
Energy Services Earnings Components
• Military District of Washington
• Baltimore City Schools
• BWI Thurgood Marshall Airport
• Other universities, state agencies and
municipal governments
municipal governments
• Atlantic City District Energy
• Wilmington District Energy
• 23 MW NIH Combined Heat and Power,
Bethesda, MD
Bethesda, MD
• Washington Convention Center Thermal Facility**
$23 million
Contract Backlog
Contract Backlog
8-year remaining
contract life*
contract life*
$227 million
Contract Backlog
Contract Backlog
11-year remaining
contract life*
contract life*
* Weighted average, contract backlog at 9/30/2011 ** Excluded from backlog (partnership income)
• 2 MW Atlantic City Convention Center Solar
• 5 MW Bethlehem Landfill Gas (LFG), PA
• 2 MW Fauquier County LFG, VA
• 3 MW Eastern LFG, MD
Recurring Gross
Margin
Margin
$5-$7M per year
• Underground high voltage transmission
construction for utilities
construction for utilities
Recurring Gross
Margin
Margin
$6-$10M per year
$21 million
Contract Backlog
Contract Backlog
10-month weighted
average*
average*
Construction: Energy Services
and Combined Heat and Power
and Combined Heat and Power
Operations and maintenance
contracts related to energy
efficiency projects; 3-15 year
contracts
contracts related to energy
efficiency projects; 3-15 year
contracts
Long-term Combined Heat and
Power and thermal contracts
from facilities operated and
maintained by PES
Power and thermal contracts
from facilities operated and
maintained by PES
Renewable Energy Projects
W.A. Chester
• DE Technical Community College
• Maryland Port Authority
• Other universities, state agencies and
municipal governments
municipal governments
Note: See Safe Harbor Statement at the beginning of today’s presentation.
17
Pepco Energy Services -
Business Development and Marketing Update
Business Development and Marketing Update
• PES has signed $82 million of energy efficiency
contracts year-to-date
contracts year-to-date
• Project development pipeline has grown to $511
million, up 14% since January 1
million, up 14% since January 1
• PES continues to grow its business development
staff
staff
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Pepco Energy Services -
Typical Energy Efficiency Project
Typical Energy Efficiency Project
•Project (Phase 1)
– PES will implement 14 energy conservation measures including lighting
retrofit, water conservation, geothermal, roofs, boilers, HVAC
replacement, controls and electrical upgrades
retrofit, water conservation, geothermal, roofs, boilers, HVAC
replacement, controls and electrical upgrades
– The scope for Phase I involves over 22 armories and military facilities
(covering 1 million square feet)
(covering 1 million square feet)
– Expansion potential - Memorandum of Understanding signed for a total
of 60 facilities and 3.5 million square feet for future phases
of 60 facilities and 3.5 million square feet for future phases
– Project includes operations and maintenance for 15 years for additional
revenue of $12.2 million
revenue of $12.2 million
– Estimated guaranteed savings of $1 million per year
•Construction schedule
– Construction began in October 2011
– Estimated completion is January 2013
PES recently signed an $11.2 million energy performance
contract with the Commonwealth of Virginia for the Department
of Military Affairs (DMA)
contract with the Commonwealth of Virginia for the Department
of Military Affairs (DMA)
The project allows the DMA to save more than $15
million in utility costs over the 15 year project term
million in utility costs over the 15 year project term
Note: See Safe Harbor Statement at the beginning of today’s presentation.
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• PES is on track in winding down this
business; the retail energy supply
contracts completely roll off by 2014
business; the retail energy supply
contracts completely roll off by 2014
• Power Plants are scheduled for May
2012 retirement
2012 retirement
• Gross margin expectations for the
contract backlog:
contract backlog:
– Electric: ~$6.00/MWh
– Natural Gas: ~$0.35/Dth
2011
2012
Pepco Energy Services -
Update of Retail Supply Wind Down/Power Plant Retirement
Note: See Safe Harbor Statement at the beginning of today’s presentation.
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• Equity investment as of September 30, 2011 of $1.3 billion
• Annual tax benefits of $52 million
• Annual net earnings of $21 million
• Current Status:
– IRS audit settlement approved in November 2010 for the 2001/2002 periods; disallowed
net losses on the cross-border energy leases
net losses on the cross-border energy leases
– Paid $74 million of taxes, $1 million of penalties and $28 million of interest associated
with the 2001/2002 audit in 2011
with the 2001/2002 audit in 2011
• Path Forward:
– Filed a claim for refund of tax payment, interest and penalties with the IRS on July 7
– IRS has up to six months to act on the refund claim; expectation is claim will be denied
– Upon denial of claim, will immediately pursue litigation in the U.S. Court of Federal
Claims against the IRS to resolve the issue and recover the tax payment, interest and
penalties
Claims against the IRS to resolve the issue and recover the tax payment, interest and
penalties
– Absent a settlement, litigation will likely take several years to resolve
Cross-Border Energy Lease Status
Note: See Safe Harbor Statement at the beginning of today’s presentation.
22
2012 Financing Activity
• Utility long-term debt issuance of $350 - $450 million
• Equity issuance target of $250 - $350 million; may include the following:
– Forward sale
– Secondary offering
– Continuous equity program
• Dividend Reinvestment Plan (approximately $40 million)
Note: See Safe Harbor Statement at the beginning of today’s presentation.
23
2011 Earnings Guidance
Earnings Per Share
$1.24
Guidance
Reflects earnings per share from ongoing operations
(GAAP results excluding special, unusual or extraordinary items)
$1.15 - $1.25
The guidance range excludes:
• Discontinued operations
• The net mark-to-market effects of economic
hedging activities at Pepco Energy Services
hedging activities at Pepco Energy Services
• The impact of a tax law change to adopt a
unitary tax in DC
unitary tax in DC
The guidance range assumes/includes:
• Normal weather for the remainder of the
year
year
• Updated forecast for Power Delivery
operation and maintenance expenditures
operation and maintenance expenditures
Actual*
* Excludes special items. See Appendix for reconciliation of GAAP earnings to earnings excluding special items.
Note: See Safe Harbor Statement at the beginning of today’s presentation.
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• Stable Earnings Base - Derived primarily from regulated utility business
• Long-term Earnings Growth - Driven by T&D utility infrastructure
investments and constructive regulatory outcomes
investments and constructive regulatory outcomes
• Secure Dividend - Attractive dividend yield
• Solid Investment Grade Credit Ratings - Improved credit metrics and
stable outlook
stable outlook
• Experienced Team - Delivering on commitments
Delivering Value
PHI - Well Positioned to Deliver Value
Note: See Safe Harbor Statement at the beginning of today’s presentation.
Appendix
26
Potomac Capital Investment (PCI)
Cross-Border Energy Lease Portfolio
(Millions of Dollars)
* Decline in lease book value at September 30, 2011 reflects leases terminated in June 2011
27
Distribution Rate Cases - Recent Decision
Delmarva Power - Maryland
Delmarva Power - Maryland
Also approved:
• Cost of equity of 10% for purposes of calculating allowance for funds used during
construction and regulatory asset carrying costs
construction and regulatory asset carrying costs
• Full recovery of February 2010 winter storm costs ($1.45 million) straightlined over 5 years
28
Distribution Rate Cases - Recent Decision
Delmarva Power - Delaware Gas
Delmarva Power - Delaware Gas
• Interim rate increases implemented
– $2.5 million put into effect August 31, 2010
– Balance of requested increase put into effect February 2, 2011
– Amount collected in excess of approved rates has been refunded to customers
• Decoupling status
– Parties agreed to defer request to place revenue decoupling into effect until an implementation
plan is developed
plan is developed
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Reliability Standards
• Working group met weekly through October 2011
• Staff report with recommendations issued October 27, 2011; benchmarks proposed for:
– Service interruption
– Downed wire response
– Customer communications
– Vegetation management
– Equipment inspection
• Rulemaking sessions to be held December 8 - 9, 2011
• First measurement period begins as soon as the regulations are adopted, which will be no later than
July 1, 2012
July 1, 2012
Maryland (PSC - RM43) - Rulemaking proceeding applying to all electric utilities in the state
• New rules require improvement in reliability performance on an annual basis beginning in 2013 and
continuing through 2020
continuing through 2020
• Regulations in their current form are flawed because they propose an inconsistent method to calculate
reliability
reliability
• Standards may not be realistically achievable at an acceptable level of cost over the longer term
• Pepco filed an application for reconsideration of the regulations with the Commission on August 8,
2011, which is pending
2011, which is pending
District of Columbia - New reliability standards adopted in July 2011
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Reconciliation of GAAP Earnings to
Earnings Excluding Special Items
Earnings Excluding Special Items
Earnings per Share from Continuing Operations | Twelve Months Ended December 31, 2010 | |
Reported (GAAP) Earnings per Share from Continuing Operations | $ 0.62 | |
Special Items: | ||
· | Debt extinguishment costs | 0.51 |
· | Restructuring charge | 0.08 |
· | Effects of Pepco divestiture-related claims | 0.03 |
Earnings per Share from Continuing Operations, Excluding Special Items | $ 1.24 | |
Net Earnings from Continuing Operations - Millions of Dollars | Twelve Months Ended December 31, 2010 | |
Reported (GAAP) Net Earnings from Continuing Operations | $ 139 | |
Special Items: | ||
· | Debt extinguishment costs | 113 |
· | Restructuring charge | 18 |
· | Effects of Pepco divestiture-related claims | 6 |
Net Earnings from Continuing Operations, Excluding Special Items | $ 276 | |
Note: See Regulation G Information at the beginning of today’s presentation.
Pre-Tax Earnings Impact - Millions of Dollars | Twelve Months Ended December 31, 2010 | |
· | Debt extinguishment costs | $ 189 |
· | Restructuring charge | $ 30 |
· | Effects of Pepco divestiture-related claims | $ 11 |