2012 Corporate Social Responsibility Report Highlights

We’re dedicated to providing safe, reliable and affordable electricity to our customers, but our job goes well beyond providing power. We have a strong history of philanthropy and civic engagement in the District of Columbia and Maryland.  In the end, we are residents, too, and we benefit along with the larger community when we make the effort to make a positive difference in the lives of others.

Our annual Corporate Social Responsibility (CSR) Report gives us an opportunity to share with you the many activities and charitable giving campaigns that have taken place over the year. In 2012, we supported a wide variety of cultural, educational, environmental, health and business initiatives dedicated to improving the quality of life for all citizens. Our employees led the way by contributing more than 3,000 hours of volunteerism throughout our service territory, and we couldn’t be more proud of their efforts to engage with and advance the communities we serve. At the same time, nearly 350 local and regional organizations received corporate contributions from Pepco and our parent company, PHI, totaling more than $3 million.

If you have followed our reliability enhancement activities, you’ve often heard me say in commercials that our work continues. So, too, will our commitment to serving our customers through corporate social responsibility and philanthropy. I hope you enjoy reading our 2012 CSR Report and that you continue to partner with us to support the communities we serve.

Sincerely,

Thomas H. Graham
President
Pepco Region

Continuing to Improve Reliability

Our customers are continuing to see fewer and shorter outages, thanks to the reliability work we’re doing. From 2011 to 2012, outages on feeders that Pepco worked on as part of our Reliability Enhancement Plan decreased by 39 percent and those outages that did occur were 42 percent shorter.

Between September 2010 and January 2013, we:

• Trimmed more than 4,850 miles of trees along power lines in Maryland and about 850 miles in the District of Columbia. We plan to trim another 1,225 miles in Maryland and the District between now and the end of the year.
• Renewed or replaced more than 650 miles of neighborhood underground electric cable in Maryland and 58 miles in the District, with plans to do the same for another 200 miles between now and the end of the year.
• Improved the service of feeder lines that bring power into neighborhoods with the poorest reliability by upgrading more than 115 distribution feeders in Maryland, 66 feeders in the District of Columbia. We plan to complete work on about 100 more this year in the region.

Since we began our reliability work in September 2010, we also have:

• Doubled the number of Customer Care representatives who take calls and more than doubled the number of phone lines.
• Made arrangements to use outside customer service help during major outages.
• Retrained all Customer Care representatives and additional help.

We are upgrading our system to make sure we can provide safe and reliable service for our customers day to day and during storms, and our work continues.

Learn About Pepco’s Energy Wise Rewards Program

Pepco’s Energy Wise Rewards program is a new, voluntary program that helps decrease electricity consumption during peak energy use periods and saves you money. This program has been successful in Maryland and is now available to residents in the District of Columbia.

By allowing Pepco to remotely cycle off the compressor on your home’s central air conditioning and heat pump during specific peak-usage time periods, electricity consumption is reduced. In exchange, participating customers are rewarded financially with incentive payments off their Pepco bill. You save energy and money. It also reduces the strain on the electric grid during times of peak usage, such as heat waves.

Pepco contractors will be in your neighborhood visiting customers door-to-door providing more information on the program. Contractors wear Pepco Energy Wise Rewards insignias on their shirt and provide identification to customers so that they are easily recognizable to the public. In addition, our representatives will offer their business cards upon request.

We understand that there may be various vendors canvassing your community. However, Pepco Energy Wise Rewards Contractors will never ask you to provide them with a copy of your Pepco bill.

Your safety is very important to us!

If for any reason there is question or concern with anyone at your door, please ask them to show you their identification.

For more information, please visit pepco.com/rewards or call 1-866-353-5798.

Separating the facts from fiction about smart meters

Pepco is currently installing smart meters for all residential customers. Since 2009, we have completed over 98% of installations (263,000 meters) in the District of Columbia. In Maryland, where installations began in June 2011, we have completed 50% of installations (270,000 meters) and we will continue with the installation process through the end of 2012.

As a longtime supporter of building a smarter electric grid and one of the first Pepco customers to have received a new meter, I’m proud that Pepco is at the forefront of this advancement in power delivery. As we continue installing smart meters and begin rolling out new programs and benefits associated with the advanced technology, I would like to share with you a video from the Smart Grid Consumer Collaborative, which debunks some of the myths surrounding smart meters and highlights some of the benefits that you can look forward to in the future.

For more information about smart meters, you can visit http://www.pepco.com/energy/blueprint/. You can also sign up for My Account on our website to begin taking control of your energy use today.

Karen Lefkowitz
Vice President, Business Transformation

Thank you to our customers

On June 29, the violent, fast-moving derecho storm tore through states from the Midwest to the mid-Atlantic, leaving in its wake a 700-mile trail of death and destruction, including 34 fatalities, and significantly impacted more than four million customers. At its peak, the storm left more than 450,000 Pepco customers without power, and a state of emergency was declared in the District of Columbia, Maryland, Virginia, West Virginia and Ohio.

We understand the hardship and inconvenience of living without electricity, as caused by the storm, and I would like to take this opportunity to personally thank you for your patience and understanding as more than 3,000 personnel including Pepco forces, and mutual assistance crews worked to restore power. The storm caused significant damage to our critical infrastructure, which needed to be rebuilt prior to restoring power to customers. The restoration effort involved replacing almost 300 utility poles and almost 200 transformers – a significant amount more than what was replaced after Hurricane Irene in 2011. After rebuilding infrastructure, crews focused on restoring power to critical health and safety facilities, and then on restoring homes and businesses.

Yet, even with all of the destruction, Pepco restored power to 90% of customers by midnight on July 4, more than 48 hours before our original estimate. We reached 100% restoration just before dawn on Sunday, July 8. According to the Federal Emergency Management Association, more than 100,000 customers were still without power at that time in other parts of Maryland and nearby states.

In September 2010, Pepco committed $910 million over five years to improving our reliability. In the almost two years since we began that work, we’ve trimmed over 4,000 miles of trees, enhanced 144 power lines and replaced more than 500 miles of underground cable. Customers served by upgraded power lines experienced a 39% reduction in the average number of power outages of normal day-to-day service during 2011 as compared to 2010, and when outages did occur, they were shorter in duration, declining on average by 56% compared to 2010. Today, we are strong and more reliable – but no amount of strengthening to our system could have withstood a storm of this magnitude.

Again, we sincerely thank you for your patience. I would also like to thank customers who took time to show their gratitude – shaking crew members’ hands, and leaving them notes, water and Popsicles, and even sending emails or handwritten thank you notes to the company. We will continue to enhance our reliability, work hard to restore power when storms come again, and keep our customers informed of our progress every step of the way.

Tom Graham
President, Pepco Region

Receive up to $160 in bill credits this year by signing up for Pepco’s Energy Wise Rewards Program

When demand for electricity reaches its peak during the hot summer months, Pepco works with customers in the District of Columbia and Maryland to reduce strain on the electric grid through the Energy Wise Rewards program.  In addition to doing a good thing for the environment, customers who sign up for this program receive a one-time installation credit and bill credits during the peak summer months for each year they participate in the program.

Energy Wise Rewards works by turning off your central air conditioner or heat pump over short periods of time on selected summer days, known as Peak Savings Days. When Energy Wise Rewards conservation periods occur, the air conditioner fan continues to run, so most participants do not notice a conservation period occurring. You can expect, at most, five conservation events per year, each lasting three to six hours. Some homeowners may experience a 1- to 3-degree rise in temperature during a conservation period.

Energy Wise Rewards conservation periods are only activated during times of high electricity demand. During this time, typically between the months of June through October, you will receive monthly bill credits off of your electric bill. Participation is voluntary and there is no charge for taking part.

In addition to receiving the installation credit and bill credits during the summer months, you can choose between receiving a web-programmable thermostat or an outdoor switch, which is professionally installed at no cost to you. The thermostat will help you save energy and money all year round; the U.S. Department of Energy estimates that web-programmable thermostats can help customers save up to 10% off their electric bills every year.

Interested in signing up? You can enroll here.

To learn more, check out our Frequently Asked Questions, visit our website, or call 1-866-353-5798.

Virginia Burginger
Manager, Demand Side Management