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

Accelerating Improvements in Resiliency and Reliability for Maryland Customers

There has been some confusion about the grid resiliency charge and why we included it in our Maryland rate case filing. I wanted to use our blog to explain why we think the grid resiliency charge is a good thing for both the company and our customers.

We began working more than two years ago on the biggest reliability effort in our 117-year history, and we are reducing the number and length of outages. We are committed to improving reliability and the customer experience, and that work will continue.

Our proposal for accelerating some of that work stems from a report issued by the Grid Resiliency Task Force. With an increase in frequency and intensity of storms, Governor O’Malley convened this task force in July 2012 to address resiliency and reliability of the Maryland electric distribution system. This task force held eight roundtable discussions featuring community leaders, policy experts and industry stakeholders from across the country. In September, it released a report that recommended accelerating reliability investment and raising reliability standards.

In response to that task force report, we put together a plan that would accelerate improvements in resiliency and reliability for customers. We propose to:

• Underground six distribution feeders (three in Montgomery County and three in Prince George’s County), reducing the frequency and duration of outages for customers
• Accelerate our four-year tree-trimming cycle (approximately 1,000 miles each year) to complete the cycle in three years, which would reduce power outages caused by tree branches falling onto power lines
• Upgrade 12 additional feeders per year for two years
• Raise the reliability performance beyond the level required by Maryland’s Service Quality and Reliability Standards

The Grid Resiliency Task Force also recommended that the Public Service Commission authorize timely recovery for the accelerated investments and expenses. We proposed to do that through a grid resiliency charge. If approved, customers would see a small increase in their bills. Starting in January 2014, a typical residential customer’s bill would increase about $0.96 per month. In 2015 the surcharge would increase from $0.96 to $1.70 per month, and in 2016 it would increase to $1.93 per month. We want to make significant improvements in resiliency and reliability while keeping the additional charge to customers under $2 per month.

Because reliability work would be accelerated, we think it’s fair to raise the reliability standards that we must meet. If we don’t meet the new accelerated reliability standards by 2015, we will refund customers up to $1 million. If we do meet the new reliability standards, we may receive up to a $1 million incentive.

As I noted earlier, the work we have been doing to improve reliability is paying off. From 2011 to 2012, outages on feeders that we worked on decreased by 39 percent and those outages that did occur were 42 percent shorter. We expect to meet the reliability standards that are currently in place without performing the proposed grid resiliency projects. However, by doing the work proposed as part of the grid resiliency charge, customers will experience a more resilient and reliable electric system in a much shorter time period. I welcome you to post questions in the comment section below.

Tom Graham
President, Pepco Region

Linemen Receive Prince George’s County Fire Chief’s Award

Pepco line mechanics, Donny Pfeifer, Sean Cecil, and Ryan Callahan, received Prince George’s County Fire and Emergency Medical Services Department Fire Chief’s Awards for their actions at the scene of an Upper Marlboro house fire last October.

Employees were presented Prince George’s County Fire and Emergency Medical Services Department Fire Chief’s Awards.

Pepco donates smoke alarms to Prince George’s County Fire and Emergency Medical Services.

Pfeifer, Cecil, and Callahan, were preparing electric service for a home being renovated in Upper Marlboro, Md. when they noticed flames and smoke coming from the house. Following their safety procedures and assuming their emergency roles, Callahan and Pfeifer grabbed fire extinguishers off their truck and went into the smoke-filled house to put out the fire that had started in the kitchen. Fire officials credited their quick actions for saving the life of a toddler sleeping in the home.

Pepco donated 700 smoke alarms and 30 smoke alarms for the hearing impaired to the Fire/EMS Department.

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.

Maryland customers: Save money this weekend by combining Maryland’s Tax-Free Weekend with Pepco Rebates to Save on New ENERGY STAR® Appliances

During Maryland’s Tax Free Weekend, February 16-18, residential customers in Maryland have a unique opportunity to save energy and money by purchasing ENERGY STAR appliances.

This weekend, customers will not have to pay Maryland’s 6 percent sales tax when they purchase select ENERGY STAR certified products such as standard size refrigerators, clothes washers, room air conditioners, dehumidifiers, heat pumps, and compact fluorescent light bulbs. To save even more, we encourage Maryland residential customers to combine these tax savings with Presidents Day sales and Pepco rebates on select energy efficient appliances.

Participating in Pepco’s Appliance Rebate Program is easy: simply purchase ENERGY STAR appliances at any retailer, and then print and submit one of the relevant rebate applications below for each qualified appliance.

Save $50–$100 on ENERGY STAR Certified Clothes Washers

Save $25 on ENERGY STAR Certified Dehumidifiers

Save $350 on ENERGY STAR Certified Electric Heat Pump Water Heaters

Save $25 on Energy-Efficient Electric Water Heaters

Save $75 on ENERGY STAR Certified Freezers

Save $100–$150 on ENERGY STAR Certified Refrigerators

Save $25 on ENERGY STAR Certified Room Air Conditioners

The Appliance Rebate Program is part of Pepco’s portfolio of energy efficiency programs that are designed to support Governor Martin O’Malley’s EmPOWER Maryland initiative to reduce energy consumption in the state by 15 percent by the year 2015.

Low Income Energy Summit Update

Pepco recently hosted more than 180 social service agency representatives from Delaware and Maryland for its annual Low Income Energy Summit in Dover, Delaware.

The Summit gave service providers valuable information to better assist low- to moderate-income utility customers, many of whom have difficulty paying their energy bills.

U.S. Senator Christopher Coons of Delaware provided opening remarks and welcomed the participants to Dover. Maryland Public Service Commission Chairman Douglas Nazarian, Delaware Public Service Commission Ombudsman Matthew Hartigan and District of Columbia Public Service Commission Member Linda Jordan participated in a very informative regulatory panel.

Closing the day in Dover was Kenneth Parker, Sr. Vice President, Government Affairs & Corporate Citizenship, who told his personal story of growing up in a household that relied heavily on community support and the outreach of social service providers. “I know what you do. I benefited from what you do. You invest in people like me, and I thank you from the bottom of my heart,” Ken said.

It is important for us to take the time out to assemble our community and agency partners under one roof to educate them on Pepco programs and services. Summit discussions included several exhibitors and plenary sessions on emergency preparedness, storm response, social media and diversity.

As Customer Advocate, my job is to communicate your concerns and ideas to the Company. If you would like your voice to be heard, please contact me at customeradvocate@pepco.com.

Felecia Greer
Customer Advocate

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

We’ve Been Working to Improve Reliability. Here is What We’ve Done!

It has officially been a year since Pepco began executing a plan to improve reliability.  Since September 2010, we have been carrying out aggressive and comprehensive work to upgrade our system and ensure that you have the reliable service you expect.  We have hundreds of crews working in your neighborhoods.  Their work includes

• Upgrading priority overhead lines that serve the largest number of customers.
• Accelerating tree-trimming efforts to remove limbs that threaten power lines.
• Preparing for system growth by proactively upgrading and installing power lines and equipment.
• Moving select power lines underground where overhead system improvements will not suffice.
• Improving additional power lines that have been negatively impacted by trees, vegetation, weather and animal-related issues.
• Installing advanced technologies to isolate power problems and automatically restore service to the most affected customers within minutes.

To keep this post short and to the point, I’m going to briefly focus on two areas of our work plan that already have delivered significant reliability benefits: tree trimming and installing advanced technology.

Since last September, we have trimmed trees along 302 miles of right-of-way in the District and 2,299 miles in Maryland.  Many storm-related outages are a direct result of trees falling on power lines, and this trimming helps minimize the threat of limbs and branches falling on our overhead electric wires. Additionally, we are working with counties, communities and homeowners to remove potentially hazardous trees that may come down outside of the company’s right-of-ways and damage equipment.

Also since last September, we installed advanced control systems on five power lines in the District and 26 power lines in Maryland.  The advanced control systems make it possible to pinpoint and isolate failed equipment, and automatically reroute power to restore most of the affected customers within minutes of the failure.  We have also installed 161,800 smart meters in the District and 21,347 in Maryland.  When activated, your smart meter will alert us that your home or business is without power helping to speed restoration. This capability is particularly helpful when you are away from home.

These two areas of our work plan are integral parts of Pepco’s five-year reliability plan that will ultimately reduce the frequency and duration of outages.  In the event that an outage does occur, this work will help ensure that service is restored quickly.

I will dive into the progress and benefits of the remaining parts of our work plan in future posts.