Presentation on the Smart Grid to the Energy Bar Association Joe Rigby Chairman, President and CEO Dec. 3, 2009

Today’s Goals  Provide good understanding of the Smart Grid  Share perspectives on Pepco Holding’s Smart Grid progress  Reinforce the importance of customer participation in this transformation

The Smart Grid Defined  The convergence of electric system technology and information technology. Electricity meets Information

Smart Meters are the Building Blocks  Flow information two ways  Serve as a grid sensor  Are read “over the air”  Can transmit hourly data multiple times a day or on demand

The Smart Grid Transmission Substation Communications Infrastructure AMI (‘Smart Meters’) & Demand Side Management Transmission Automation Distribution Automation Substation Automation Feeder Automation Home Intelligence

Our Blueprint for the Future  Advanced metering infrastructure  Communications system  Distribution automation  AMI-enabled demand side management programs  Decoupled and dynamic rates

Smart Meter Deployment in Delaware is Under Way  300,000 electric smart meters and 130,000 natural gas modules  Complete Delaware installation by year-end 2010  Federal stimulus funds for AMI in the Pepco service area will bring total meter installations to more than 1.2 million

Customer Participation is Critical to Realize Benefits  Lower energy consumption  More control over energy costs  Reduced carbon output

Utility is Evolving into Energy Adviser  Historically, customer relationship has been transparent  Going forward, relationship will evolve  Utility will advise customers on managing energy use and costs

The Smart Grid Will Bring Opportunities  Customer-owned renewable generation  Electrified transportation infrastructure for plug-in vehicles  New jobs, products and services

The Time for the Smart Grid Has Arrived  Smart Grid is a cornerstone of the Obama Administration’s energy policy  State and local governments are setting aggressive energy reduction goals  Pepco Holdings is pleased to be part of this transformation