|UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
Form 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000     Commission file number 1-1072Potomac Electric Power Company 
  (Exact name of registrant as specified in its charter)District of Columbia and Virginia             53-0127880 
   (State or other jurisdiction of                      (I.R.S. Employer
       incorporation or organization)                     Identification No.)
       1900 Pennsylvania Avenue, N.W.Washington, D.C.              20068
  (Address of principal executive offices)                     (Zip Code)
Registrant's telephone number, including area code        (202) 872-2000
Securities registered pursuant to Section 12(b) of the Act:
                                          
        Name of each exchange on
           Title of each class                  which
registered
Common Stock, $1 par value               )      New York Stock Exchange, Inc.
Guarantee by Potomac Electric Power      )
  Company of the 7-3/8% Trust Originated )
  Preferred Securities issued by         )
  Potomac Electric Power Company Trust I )
Securities registered pursuant to Section 12(g) of the Act:
     None.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Indicate by check mark whether the registrant (1) has filed all 
reports required to be filed by Section 13 or 15(d) of the Securities 
Exchange Act of 1934 during the preceding 12 months and (2) has been subject 
to such filing requirements for the past 90 days.  Yes X.  No .
          Indicate by check mark if disclosure of delinquent filers pursuant 
to Item 405 of Regulation S-K is not contained herein, and will not be 
contained, to the best of registrant's knowledge, in definitive proxy or 
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K.  .
          As of March 19, 2001, Potomac Electric Power Company had 
109,892,976 shares of its $1 par value Common Stock outstanding, and the 
aggregate market value of these common shares (based upon the closing price 
of these shares on the New York Stock Exchange on that date) held by 
nonaffiliates was approximately $2.4 billion.                                                                                                                                                                                                                                                                                                                                         



|POTOMAC ELECTRIC POWER COMPANY
Form 10-K - 2000
TABLE OF CONTENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|PART I
  Item 1.  - Business
               General. . . . . . . . . . . . . . . . . . . . . . . . .
               Sales. . . . . . . . . . . . . . . . . . . . . . . . . .  
               Fuel . . . . . . . . . . . . . . . . . . . . . . . . . .
  Item 2.  - Properties . . . . . . . . . . . . . . . . . . . . . . . .
  Item 3.  - Legal Proceedings  . . . . . . . . . . . . . . . . . . . .
  Item 4.  - Submission of Matters to a Vote of Security Holders  . . .
PART II
  Item 5.  - Market for Registrant's Common Equity and Related
               Stockholder Matters  . . . . . . . . . . . . . . . . . .
  Item 6.  - Selected Financial Data  . . . . . . . . . . . . . . . . .
  Item 7.  - Management's Discussion and Analysis of Financial
               Condition and Results of Operations  . . . . . . . . . .
  Item 7A. - Quantitative and Qualitative Disclosures About Market
               Risk . . . . . . . . . . . . . . . . . . . . . . . . . .
  Item 8.  - Financial Statements and Supplementary Data  . . . . . . .
  Item 9.  - Changes in and Disagreements with Accountants on
               Accounting and Financial Disclosure  . . . . . . . . . .
  
PART III
  Item 10. - Directors and Executive Officers of the Registrant . . . .
  Item 11. - Executive Compensation . . . . . . . . . . . . . . . . . .
  Item 12. - Security Ownership of Certain Beneficial Owners and
               Management . . . . . . . . . . . . . . . . . . . . . . .
  Item 13. - Certain Relationships and Related Transactions . . . . . .
PART IV
  Item 14. - Exhibits, Financial Statement Schedules, and Reports on
               Form 8-K . . . . . . . . . . . . . . . . . . . . . . . .
    Schedule II - Valuation and Qualifying Accounts . . . . . . . . . .
    Exhibit 11 - Statements Re. Computation of Earnings Per Common
                   Share  . . . . . . . . . . . . . . . . . . . . . . .
    Exhibit 12 - Statements Re. Computation of Ratios . . . . . . . . .
    Exhibit 21 - Subsidiaries of the Registrant . . . . . . . . . . . .
    Exhibit 23 - Consent of Independent Accountants . . . . . . . . . .
    Report of Independent Accountants on Consolidated Financial
      Statement Schedule  . . . . . . . . . . . . . . . . . . . . . . .
  Signatures  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PAGE LEFT BLANK
                            INTENTIONALLY

Part I
     Except for historical statements and discussions, statements in this 
Form 10-K constitute "forward-looking statements" within the meaning of the 
federal securities laws.  These statements contain management's beliefs based 
on information currently available to management and on various assumptions 
concerning future events.  Forward-looking statements are not a guarantee of 
future performance or events.  They are subject to a number of uncertainties 
and other factors, many of which are outside the Company's control.  In 
connection with the transaction, additional important factors that could 
cause actual results to differ materially from those in the forward-looking 
statements herein include risks and uncertainties relating to delays in 
obtaining or adverse conditions contained in, related regulatory approvals, 
changes in economic conditions, availability and cost of capital, changes in 
weather patterns, changes in laws, regulations or regulatory policies, 
developments in legal or public policy doctrines, population growth rates and 
demographic patterns, growth in demand and capacity to fill demand, 
unanticipated changes in operating expenses and capital expenditures, capital 
market conditions, and other presently unknown or unforeseen factors.  These 
uncertainties and factors could cause actual results to differ materially 
from such statements.  The Company disclaims any intention or obligation to 
update or revise any forward-looking statements, whether as a result of new 
information, future events or otherwise.  This information is presented 
solely to provide additional information to further understand the Company's 
results and prospects.Item 1.    BUSINESSGENERAL
     Additional information required by this Item, other than the information 
disclosed below, is included in the "Management's Discussion and Analysis of 
Consolidated Results of Operations and Financial Condition" section and the 
"Notes to Consolidated Financial Statements," which are included in Exhibit 13.
     Potomac Electric Power Company (Pepco or the Company) is engaged in 
three principal lines of business.  These business lines consist of 
(1) the provision of regulated electric utility transmission and distribution 
services, (2) the supply of telecommunications services including local and 
long distance telephone, high speed Internet and cable television, and 
(3) the supply of energy products and services in competitive retail markets.  
The Company's regulated electric utility activities are referred to herein as 
the "Utility" or "Utility Operations," and its telecommunications services 
and competitive energy activities are referred to herein as "Competitive 
Operations."  Competitive Operations are derived from Pepco Holdings, Inc. 
(PHI), a wholly owned subsidiary of the Company, and PHI's wholly owned 
subsidiaries, Potomac Capital Investment Corporation (PCI), Pepco Energy 
Services, Inc. (Pepco Energy Services), and PepMarket.com, LLC (PepMarket).  
Additionally, the Company has a wholly owned Delaware statutory business 
trust, Potomac Electric Power Company Trust I (Trust) and a wholly owned 
Delaware Investment Holding Company, Edison Capital Reserves Corporation 
(Edison).
     The Utility successfully executed its business plan to exit the 
electricity generating business by completing the divestiture of 
substantially all of its generating assets on December 19, 2000 to Mirant 
Corp., formerly Southern Energy Inc. (Southern Energy).  The divestiture 
resulted in the Company's recognition of a pre-tax gain of approximately 
$423.8 million ($182 million net of income tax or $1.58 per share).  Also in 
December 2000, the Company recognized a pre-tax impairment loss of $40.3 
million ($24.1 million net of income tax or 20 cents per share) on its 
Benning Road and Buzzard Point generating stations, which were transferred to 
a subsidiary of Pepco Energy Services in December 2000.  The Company 
determined that these stations were impaired when it performed an impairment 
assessment in 2000.  This impairment was warranted due to circumstances that 
existed at the time, such as the divestiture of its generation assets as well 
as the volatility of energy prices and the availability of current financial 
information derived from the completion of the 2001 budgeting cycle.  The 
closing on the Company's sale of its 9.72% interest in the Conemaugh 
Generating Station (Conemaugh) to PPL Global, Inc. and Allegheny Energy 
Supply Company, LLC for $156 million took place on January 8, 2001, which 
resulted in a pre-tax gain of approximately $39 million, which will be 
recorded in the first quarter of 2001.
     On February 12, 2001, the Company and Conectiv announced that their 
boards of directors approved an agreement for a strategic transaction whereby 
the Company will effectively acquire Conectiv for a combination of cash and 
stock valued at approximately $2.2 billion.  See Item 7., Management's 
Discussion and Analysis of Financial Condition and Results of Operations, for 
additional information.SALES
     The Utility's total kilowatt-hours delivered and electric revenue by 
class of service for the periods 1998 through 2000 are presented below.

|                                                                                 | 2000                         | 1999   | 1998  
|-------------------------------------------------------------------------------- | ---------------------------- | ------ | ------
|Electric Energy Sales                                                            | (Millions of Kilowatt-hours)
|                                                                                 |                              |        |       
|Kilowatt-hours Delivered - Total                                                 | 27,442                       | 26,970 | 26,298
|By Class of Service -                                                            |                              |        |       
|Residential service                                                              | 6,991                        | 7,014  | 6,757 
|General service                                                                  | 16,227                       | 15,890 | 15,591
|Large power service (a)                                                          | 712                          | 701    | 686   
|Street lighting                                                                  | 173                          | 167    | 164   
|Rapid transit                                                                    | 458                          | 438    | 422   
|Wholesale (Primarily SMECO)                                                      | 2,881                        | 2,760  | 2,678 
|                                                                                 |                              |        |       
|                                                                                 |                              |        |       
|(a) Large power service customers are served at a voltage of 66KV or
    higher.



|                                                                                                                                                                                               | 2000                  | 1999     | 1998    
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------- | -------- | --------
|Electric Revenue                                                                                                                                                                               | (Millions of Dollars)
|                                                                                                                                                                                               |                       |          |         
|Sales of Electricity - Total (a)                                                                                                                                                               | $1,909.9              | $1,916.7 | $1,872.7
|By Class of Service -                                                                                                                                                                          |                       |          |         
|Residential service                                                                                                                                                                            | $  563.9              | $  586.3 | $  567.7
|General service                                                                                                                                                                                | 1,135.3               | 1,121.3  | 1,102.9 
|Large power service (b)                                                                                                                                                                        | 32.3                  | 36.2     | 35.0    
|Street lighting                                                                                                                                                                                | 14.5                  | 13.6     | 13.2    
|Rapid transit                                                                                                                                                                                  | 31.5                  | 30.6     | 29.7    
|Wholesale (Primarily SMECO)                                                                                                                                                                    | 132.4                 | 128.7    | 124.2   
|                                                                                                                                                                                               |                       |          |         
|                                                                                                                                                                                               |                       |          |         
|Exclusive of Other Electric Revenue of $327.6 million in 2000, 
$302.6 million in 1999, and, $196.2 million in 1998.
Large power service customers are served at a voltage of 66KV 
or higher.

The Utility's sales of electric energy are seasonal, and, accordingly, 
rates have been designed to closely reflect the daily and seasonal variations 
in the cost of producing or acquiring energy, in part by raising summer rates 
and lowering winter rates.  Mild weather during the summer billing months of 
June through October, when base rates are higher to encourage customer 
conservation and peak load shifting, has an adverse effect on revenue and net 
income and, conversely, hot weather during these months has a favorable 
effect.FUEL
     The Maryland fuel clause was terminated effective July 1, 2000 (the date 
of commencement of customer choice) and the D.C. fuel clause was terminated 
on February 9, 2001 (one month after the completion of the sale of the 
Company's interest in Conemaugh).  Now that generation services have been 
deregulated in both Maryland and D.C., and the Utility has exited the 
generation business, the Utility will no longer incur fuel costs.  Standard 
Offer Services (SOS) will be provided through energy purchased from Southern 
Energy.  For additional information about SOS as well as the Transition Power 
Agreement with Southern Energy, refer to the "Management's Discussion and 
Analysis of Consolidated Results of Operations and Financial Condition" 
section, which is included in Exhibit 13.

|Part I                                                                                                                                                                                                                                                                                                                                                                                      |                                                                       |                                                  |                 |                       |     |                                                                    
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------- | ------------------------------------------------ | --------------- | --------------------- | --- | -------------------------------------------------------------------
|Item 2.     Properties                                                                                                                                                                                                                                                                                                                                                                      |                                                                       |                                                  |                 |                       |     |                                                                    
|The Company divested substantially all of its generation assets to Southern Energy on December 19, 2000.  The Company divested its 9.72% interest in Conemaugh on January 8, 2001.  For a discussion of the impact
of the divestiture agreement with Southern Energy on items (5) and (6) below, refer to the Company's 2000 financial statements, which are included in Exhibit 13 herein.
|                                                                                                                                                                                                                                                                                                                                                                                            |                                                                       |                                                  |                 |                       |     |                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                            |                                                                       | Megawatts of Net 
Capabilityat December 18, 2000 |                 |                      
|Generating Station                                                                                                                                                                                                                                                                                                                                                                          | Location                                                              | Steam
GenerationPrimary Fuel                     | SteamGeneration | CombustionTurbine (1) |     | Net Megawatt - Hours
Generated through
December 18, 2000(thousands)
|                                                                                                                                                                                                                                                                                                                                                                                            |                                                                       |                                                  |                 |                       |     |                                                                    
|Benning Road (2)                                                                                                                                                                                                                                                                                                                                                                            | Benning Road and Anacostia River, N.E.
   Washington, D.C.            | No. 4 Oil                                        | 550             | -                     |     | 86                                                                 
|Buzzard Point (2)                                                                                                                                                                                                                                                                                                                                                                           | 1st and V Streets, S.W.
   Washington, D.C.                           | -                                                | -               | 256                   |     | 11                                                                 
|Potomac River                                                                                                                                                                                                                                                                                                                                                                               | Bashford Lane and Potomac River
   Alexandria, Virginia               | Coal                                             | 482             | -                     |     | 2,018                                                              
|Dickerson                                                                                                                                                                                                                                                                                                                                                                                   | Potomac River, South of Little Monocacy
   River, Dickerson, Maryland | Coal                                             | 546             | 291                   |     | 2,762                                                              
|Chalk Point                                                                                                                                                                                                                                                                                                                                                                                 | Patuxent River at Swanson Creek
   Aquasco, Maryland                  | Coal/
Residual Oil/
Natural Gas                  | 1,907           | 516                   | (3) | 5,199                                                              
|Morgantown                                                                                                                                                                                                                                                                                                                                                                                  | Potomac River, South of Route 301
   Newburg, Maryland                | Coal/
Residual Oil                               | 1,164           | 248                   |     | 7,568                                                              
|Total - Wholly Owned Units                                                                                                                                                                                                                                                                                                                                                                  |                                                                       |                                                  | 4,649           | 1,311                 |     | 17,644                                                             
|Conemaugh (4)                                                                                                                                                                                                                                                                                                                                                                               | Indiana County, Pennsylvania                                          | Coal                                             | 165             | 1                     |     | 1,189                                                              
|Total - All Stations Operated                                                                                                                                                                                                                                                                                                                                                               |                                                                       |                                                  | 4,814           | 1,312                 |     | 18,833                                                             
|Cogeneration                                                                                                                                                                                                                                                                                                                                                                                |                                                                       |                                                  | -               | -                     |     | 311                                                                
|Purchased Capacity                                                                                                                                                                                                                                                                                                                                                                          |                                                                       |                                                  |                 |                       |     |                                                                    
|First Energy (5)                                                                                                                                                                                                                                                                                                                                                                            |                                                                       |                                                  | 450             | -                     |     | 3,539                                                              
|Panda-Brandywine (6)                                                                                                                                                                                                                                                                                                                                                                        |                                                                       |                                                  | 230             | -                     |     | 715                                                                
|                                                                                                                                                                                                                                                                                                                                                                                            |                                                                       |                                                  | 680             | -                     |     | 4,254                                                              
|Total System - excluding Short- 
   Term Capacity Transactions                                                                                                                                                                                                                                                                                                                              |                                                                       |                                                  | 5,494           | 1,312                 |     |                                                                    
|Short-Term Capacity Transactions, net                                                                                                                                                                                                                                                                                                                                                       |                                                                       |                                                  | (288)           | -                     |     |                                                                    
|Total System                                                                                                                                                                                                                                                                                                                                                                                |                                                                       |                                                  | 5,206           | 1,312                 |     |                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                            |                                                                       |                                                  |                 |                       |     |                                                                    
|(1)   Combustion turbines burned No. 2 fuel oil and certain units also burned natural gas.                                                                                                                                                                                                                                                                                                 
|(2)   These generating stations were transferred to Pepco Energy Services in December 2000.                                                                                                                                                                                                                                                                                                
|(3)   Includes 84 megawatts supplied by a combustion turbine owned by SMECO and operated by the Company.                                                                                                                                                                                                                                                                                   
|(4)   As stated, the Company sold its 9.72% undivided interest in this station on January 8, 2001.                                                                                                                                                                                                                                                                                         
|(5)   Generating capacity under long-term agreements with FirstEnergy and Allegheny Energy, Inc.                                                                                                                                                                                                                                                                                           
|(6)   Generating capacity under long-term agreement with Panda-Brandywine L.P.                                                                                                                                                                                                                                                                                                             



Item 3.    LEGAL PROCEEDINGS
     The information required by this Item is included in Note 13 to the 
"Notes to Consolidated Financial Statements," which is included in Exhibit 13.Item 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    None.Part IIItem 5.    MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER           MATTERS
     The following table presents the dividends per share of Common Stock and 
the high and low of the daily Common Stock transaction prices as reported in 
The Wall Street Journal during each period.  The New York Stock Exchange is 
the principal market on which the Company's Common Stock is traded.

|Period                  | Dividends
 Per Share | Price RangeHigh   Low
|----------------------- | -------------------- | ---------------------
|2000:                   |                      |                      
|First Quarter . . . . . | $.415                | $27.69               
|Second Quarter  . . . . | .415                 | 27.88                
|Third Quarter . . . . . | .415                 | 27.44                
|Fourth Quarter  . . . . | .415                 | 25.56                
|                        | $1.66                |                      
|1999:                   |                      |                      
|First Quarter . . . . . | $.415                | $26.50               
|Second Quarter  . . . . | .415                 | 31.75                
|Third Quarter . . . . . | .415                 | 31.31                
|Fourth Quarter  . . . . | .415                 | 28.06                
|                        | $1.66                |                      

The number of holders of Common Stock was 60,159 at March 19, 2001, and 
61,151 at December 31, 2000.
     There were 109,892,976 shares of the Company's $1 par value Common Stock 
outstanding at March 19, 2001, and 110,751,829 outstanding at December 31, 
2000.  A total of 200 million shares is authorized.
     In January 2001, a dividend of 41.5 cents per share was declared payable 
March 30, 2001, to shareholders of record of the Company's common stock on 
March 12, 2001.  The Company's dividend rate on common stock is determined by 
the Board of Directors and takes into consideration, among other factors, 
current and possible future developments which may affect the Company's 
income and cash flows.  On February 12, 2001, the Company announced 
that it will reduce its annual dividend to $1.00 per share from $1.66 per 
share, effective with the June 2001 dividend.  The Company also announced its 
plans to repurchase up to $450 million of its common stock in the open market 
or in privately negotiated transactions over the next 12 months.  See 
Item 7., Management's Discussion and Analysis of Financial Condition and 
Results of Operations, for additional information.Item 6.    SELECTED FINANCIAL DATA
     The information required by this Item is included in the "Selected 
Consolidated Financial Data" section, which is included in Exhibit 13.Item 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS
     Additional information required by this Item, other than the information 
disclosed below, is included in the "Management's Discussion and Analysis of 
Consolidated Results of Operations and Financial Condition" section, which is  included in Exhibit 13.
     On February 12, 2001, Pepco, a corporation organized under the laws of 
the District of Columbia and the Commonwealth of Virginia, and Conectiv, a 
Delaware corporation, announced that they have entered into an Agreement and 
Plan of Merger, dated as of February 9, 2001 (the Merger Agreement), 
providing for a strategic transaction in which Pepco will effectively acquire 
Conectiv for a combination of cash and stock (the Transaction).  The Merger 
Agreement provides that a new, as yet unnamed, holding company (HoldCo) will 
be formed and that two wholly owned newly formed subsidiaries of HoldCo will 
merge with and into Pepco and Conectiv such that Pepco and Conectiv will 
become wholly owned subsidiaries of HoldCo.  The common stockholders of Pepco 
and Conectiv will together own all of the outstanding shares of common stock 
of HoldCo, and each share of each other class of capital stock of Pepco and 
Conectiv will be unaffected and remain outstanding.  HoldCo will register 
with the Securities and Exchange Commission under the Public Utility Holding 
Company Act of 1935, as amended.  In addition, Pepco announced that it will 
reduce its annual dividend to $1.00 per share from $1.66 per share, effective 
with the June 2001 dividend.  The March 2001 dividend will remain at its 
current level.  Pepco has also authorized a share repurchase program of up to 
$450 million and will repurchase its common stock in the open market or in 
privately negotiated transactions from time to time over the next 12 months.  
The actual amount of stock repurchased will be determined by management 
depending on market conditions.
     Under the Merger Agreement, Pepco stockholders will receive one share of 
common stock of HoldCo for each share of Pepco common stock that they hold.  
Each share of Pepco preferred stock will remain outstanding as Pepco 
preferred stock after the Transaction.  For each share of Conectiv common 
stock, Conectiv stockholders will receive either $25.00 in cash ($21.69 for 
the Class A common stock) or HoldCo common stock with a market value of 
$25.00  ($21.69 for the Class A common stock) as long as the average market 
value of Pepco's common stock for 20 selected trading days in the 30 trading 
day period immediately prior to the closing of the Transaction is between 
$19.50 and $24.50.  However, if the market value of Pepco's common stock at 
that time is below $19.50, the number of shares of HoldCo common stock 
received for each share of Conectiv common stock will be fixed at 1.28205 
(1.11227 for the Class A common stock) and if the market value of Pepco's 
common stock is above $24.50, the number of shares of HoldCo common stock 
received for each share of Conectiv common stock will be fixed at 1.02041 
(.88528 for the Class A common stock).  Additionally, 50 percent of the 
consideration payable to Conectiv stockholders will be paid in cash and 50 
percent in HoldCo common stock, giving Conectiv stockholders a right to elect 
their consideration with an allocation and proration formula in the event 
either cash or stock is oversubscribed.  Fractional shares will still be 
cashed out.  Based on the number of common shares of Pepco and Conectiv 
currently outstanding on a fully diluted basis, Pepco stockholders will own 
approximately 67 percent of the common equity of HoldCo, and Conectiv 
stockholders will own approximately 33 percent.  The transaction is expected 
to be tax-free to the extent that stockholders receive stock for their 
shares.
     The Merger Agreement provides that the board of directors of HoldCo will 
have 12 directors, at least two of whom will come from the current Conectiv 
board.  After the Transaction is completed, it is expected that John M. 
Derrick, Jr., chairman and chief executive officer of Pepco, will be chairman 
and chief executive officer of HoldCo, and Howard E. Cosgrove, chairman and 
chief executive officer of Conectiv, will retire.  In addition, HoldCo will 
have its headquarters in Washington, D.C. while Conectiv will maintain its 
headquarters in Wilmington, Delaware and will continue to have significant 
operations in New Jersey and the Delmarva Peninsula.  The Transaction is not 
expected to result in significant workforce reductions and all union 
contracts will be honored.
     The Transaction is subject to customary closing conditions, including, 
without limitation, the receipt of required stockholder approvals of Pepco 
and Conectiv, the receipt of all necessary governmental approvals and the 
making of all necessary governmental filings.  The Transaction is also 
subject to the receipt of opinions of counsel that the Transaction will 
qualify for treatment under Section 351 of the Internal Revenue Code of 1986.  
In addition, the Transaction is conditioned upon the effectiveness of a joint 
registration statement and proxy statement to be filed by Pepco, Conectiv and 
HoldCo with the Securities and Exchange Commission with respect to shares of 
HoldCo common stock to be issued in the Transaction and the stockholder 
meetings, and upon the approval of HoldCo common stock for listing on the New 
York Stock Exchange.  The meetings of the stockholders of Pepco and Conectiv 
to vote on the Transaction will be convened as soon as is practicable.  The 
companies anticipate that the transaction will be completed in approximately 
12 months.
     The Merger Agreement may be terminated under certain circumstances, 
including (1) by mutual consent of Pepco and Conectiv; (2) by either Pepco or 
Conectiv if the Transaction is not consummated before the 18 month 
anniversary of the date of the Merger Agreement (provided, however, that such 
termination date shall be extended for an additional 6 months if any 
statutory approvals that have not been obtained are being pursued diligently 
and in good faith); (3) by either Pepco or Conectiv if either Pepco's or 
Conectiv's stockholders vote against the Transaction or if any state or 
federal law or court order prohibits the Transaction; (4) by either Pepco or 
Conectiv if the Board of Directors of the other shall withdraw or adversely 
modify its recommendation of the Transaction; (5) by a non-breaching party if 
there exists a breach of any material representation, warranty or covenant 
contained in the Merger Agreement which is not cured within 30 business days 
after notice from the other party; or (6) by Conectiv, under certain 
circumstances, as a result of a third-party tender offer or business 
combination proposal which the Board of Directors of Conectiv in good faith 
and pursuant to the exercise of its fiduciary duties determines to accept, 
after Pepco has first been given an opportunity to make adjustments in the 
terms of the Merger Agreement so as to enable the Transaction to proceed.  In 
addition, in the event that the market value of Pepco's common stock during 
the pricing period discussed above is below $16.50, Conectiv may terminate 
the Merger Agreement, provided that before such termination is effective, 
Pepco will have the option to increase consideration to be paid to Conectiv 
stockholders so that they will receive an amount equal to the amount they 
would receive if the market value of Pepco's common stock is $16.50.  If 
Pepco exercises this option, the Merger Agreement will not be terminated and 
the Transaction will proceed.
     The Merger Agreement requires payment of a termination fee of $60 
million in cash, by Conectiv to Pepco if (i) the Merger Agreement is 
terminated as a result of the acceptance by Conectiv of a third-party tender 
offer or business combination proposal, or (ii) following a failure of the 
stockholders of Conectiv to approve the Transaction if at the time prior to 
the meeting of Conectiv's stockholders there shall have been a third-party 
tender offer or business combination proposal made public and a definitive 
agreement is entered into with respect thereto (and is subsequently 
consummated) or such proposal is consummated within 12 months after the 
termination.  Pepco is required to pay to Conectiv a termination fee of $60 
million if Pepco's stockholders fail to approve the Transaction and at the 
time prior to the meeting of Pepco's stockholders there shall have been made 
public a third-party tender offer or business combination proposal and a 
definitive agreement is entered into with respect thereto (and is 
subsequently consummated) or such proposal is consummated within 12 months 
after the termination.  In addition, if either Pepco or Conectiv terminates 
the Merger Agreement after the Board of Directors of the other party 
withdraws or adversely modifies its recommendation of the Transaction, a 
termination fee of $60 million is payable to the party that terminates the 
Merger Agreement.Item 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
     The information required by this Item is included in the "Management's 
Discussion and Analysis of Consolidated Results of Operations and Financial 
Condition" section, which is included in Exhibit 13.Item 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
     The consolidated financial statements, together with the report thereon 
of PricewaterhouseCoopers LLP dated January 19, 2001, and supplementary data, 
are included in Exhibit 13.Item 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
            FINANCIAL DISCLOSURE
     None.

|Part III                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |               
|---------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------
|Item 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                                                          
|Information with regard to the directors and executive officers of the 
registrant as of March 23, 2001 is as follows:
|Directors                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |               
|Name and Age                                                                                                           | Principal Occupation and Business Experience for Past Five Years                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Director Since
|Roger R. Blunt, Sr.
Age 70 (a)(b)(e)                                                                                   | Chairman of the Board, President and Chief 
Executive Officer of Blunt Enterprises, LLC 
(general contracting and construction 
management), a Washington-based holding company, 
that includes Essex Construction, LLC, of which 
he is Chairman of the Board, President and Chief 
Executive Officer, and Tyroc Construction, LLC, 
of which he is Chairman of the Board, President 
and Chief Executive Officer.  Mr. Blunt has 
reached the mandatory age for retirement for 
directors and will retire in April 2001. | 1984          
|Edmund B. Cronin, Jr.
Age 63 (a)(c)(d)(f)                                                                              | Chairman of the Board, President and Chief 
Executive Officer of Washington Real Estate 
Investment Trust, based in Rockville, Maryland, 
which owns income-producing real estate in the 
mid-Atlantic Region.                                                                                                                                                                                                                                                                                                             | 1998          
|John M. Derrick, Jr.
Age 61 (b)                                                                                        | See Executive Officers Below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 1994          
|Terence C. Golden
Age 56 (a)(c)(e)(f)                                                                                  | Chairman of Bailey Capital Corporation in 
Washington, D.C.  Bailey Capital Corporation is a 
private investment company.  From 1995 until 
2000, Mr. Golden was President, Chief Executive 
Officer and a director of Host Marriott 
Corporation.  He continues to serve as a director 
of Host Marriott Corporation.  He is also a 
director of Cousins Properties, Inc., American 
Classic Voyages, Inc. and the Morris & Gwendolyn 
Cafritz Foundation.                                                                | 1998          
|David O. Maxwell
Age 70 (c)(d)(e)                                                                                      | Retired Chairman of the Board and Chief Executive 
Officer of Fannie Mae, a position he held from 
1981-1991.  He is a director of Financial 
Security Assurance Holdings Ltd.  Mr. Maxwell has 
reached the mandatory age for retirement for 
directors and will retire in April 2001.                                                                                                                                                                                                                                    | 1993          
|Judith A. McHale
Age 54 (a)(d)(e)(f)                                                                                   | President and Chief Operating Officer of 
Discovery Communications, Inc. (DCI), parent 
company of cable television's Discovery Channel, 
which is based in Bethesda, Maryland.  She is a 
director of John Hancock Financial Services, Inc. 
and Polo Ralph Lauren Corporation.                                                                                                                                                                                                                                           | 1998          
|Floretta D. McKenzie
Age 65 (a)(b)(d)(f)                                                                               | Chairwoman and Chief Executive Officer of The 
McKenzie Group, Inc., a District of Columbia 
based educational consulting firm.  Dr. McKenzie 
is a director of Marriott International, Inc.                                                                                                                                                                                                                                                                                                                               | 1988          
|Edward F. Mitchell
Age 69 (b)(c)(e)                                                                                    | Retired Chairman of the Board of the Company, a 
position he held from 1992-1999.  He was Chief 
Executive Officer from 1989-1997.                                                                                                                                                                                                                                                                                                                                                                                         | 1980          
|Lawrence C. Nussdorf
Age 54                                                                                            | Since 1998 has been President and Chief Operating 
Officer of Clark Enterprises, Inc., a holding 
company based in Bethesda, Maryland, which 
includes The Clark Construction Group, a general 
contracting company, of which Mr. Nussdorf has 
been Vice President and Treasurer since 1977.                                                                                                                                                                                                                              | Nominee       
|Peter F. O'Malley
Age 62 (c)(d)(e)                                                                                     | Of Counsel to O'Malley, Miles, Nylen & Gilmore, 
P.A., a law firm headquartered in Calverton, 
Maryland.  Mr. O'Malley currently serves as the 
President of Aberdeen Creek Corp., a privately 
held company engaged in investment, business 
consulting and development activities.  
Mr. O'Malley is a director of Legg Mason, Inc. 
and FTI Consulting.                                                                                                                                                                 | 1982          
|Pauline A. Schneider
Age 57                                                                                            | Joined the Washington office of the law firm of 
Hunton & Williams in 1985 and has been a partner 
there since 1987.  In October 2000, Ms. Schneider 
was elected as Chair of the Board of MedStar 
Health, Inc., a community-based healthcare 
organization that includes seven major hospitals 
in the Washington, D.C./Baltimore area.  Also, 
since 1998, she has chaired the Board of The 
Access Group, Inc., a not for profit student loan 
provider headquartered in Wilmington, Delaware.                         | Nominee       
|Dennis R. Wraase
Age 57 (b)                                                                                            | See Executive Officers Below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 1998          
|A. Thomas Young
Age 62 (a)(c)(d)(f)                                                                                    | Retired Executive Vice President of Lockheed 
Martin Corporation.  From 1990 until 1995, he was 
President and Chief Operating Officer of Martin 
Marietta Corporation.  He is a director of the 
B.F. Goodrich Company and Science Applications 
International Corporation.                                                                                                                                                                                                                                               | 1995          



|(a) | Mr. Blunt is Chairman of the Audit Committee.  Messrs. Cronin, Golden 
and Young, Ms. McHale and Dr. McKenzie are members of the Committee.                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | Mr. Mitchell is Chairman of the Executive Committee.  Messrs. Blunt, 
Derrick and Wraase and Dr. McKenzie are members of the Committee.                        
|(c) | Messrs. Cronin, Golden, Maxwell, Mitchell, O'Malley and Young are 
members of the Finance Committee.                                                           
|(d) | Mr. O'Malley is Chairman of the Corporate Governance Committee.  
Messrs. Cronin, Maxwell and Young, Ms. McHale and Dr. McKenzie are 
members of the Committee.
|(e) | Mr. Maxwell is Chairman of the Human Resources Committee.  Messrs. 
Blunt, Golden, Mitchell and O'Malley and Ms. McHale are members of the 
Committee.         
|(f) | Dr. McKenzie is Chairman of the Nominating Committee.  Messrs. Cronin, 
Golden and Young and Ms. McHale are members of the Committee.                          

|Executive Officers   |                                                                   |     |                              
|-------------------- | ----------------------------------------------------------------- | --- | -----------------------------
|Name                 | Position                                                          | Age | Served in such position since
|John M. Derrick, Jr. | Chairman of the Board and Chief 
Executive Officer                | 61  | 1999 (1)                     
|Dennis R. Wraase     | President and Chief Operating 
Officer and Director               | 57  | 2001 (2)                     
|William T. Torgerson | Executive Vice President - 
External Affairs and General 
Counsel | 56  | 2001 (3)                     
|Andrew W. Williams   | Senior Vice President and Chief 
Financial Officer                | 51  | 2001 (4)                     
|William J. Sim       | Senior Vice President - Power 
Delivery                           | 56  | 2001 (5)                     
|Robert C. Grantley   | Group Vice President - Customer 
Care                             | 52  | 1997 (6)                     
|Earl K. Chism        | Vice President and Comptroller                                    | 65  | 1994                         
|Kenneth P. Cohn      | Vice President and Chief 
Information Officer                     | 53  | 1999 (7)                     
|Kirk J. Emge         | Vice President - Legal Services                                   | 51  | 1994                         
|William R. Gee, Jr.  | Vice President - System Planning                                  | 60  | 1991                         
|Anthony J. Kamerick  | Vice President, Finance and 
Treasurer                            | 53  | 1994                         
|Beverly L. Perry     | Vice President - Government and 
Corporate Affairs                | 53  | 1999 (8)                     
|James S. Potts       | Vice President - Environment                                      | 55  | 1993                         

|None of the above persons has a "family relationship" with any other officer 
listed or with any director.                                                                   
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|The term of office for each of the above persons is from May 9, 2000, until 
the next succeeding Annual Meeting, and until their successors have been 
elected and qualified.
|(1)                                                                                                                                                                          
|(2)                                                                                                                                                                          
|(3)                                                                                                                                                                          
|(4)                                                                                                                                                                          
|(5)                                                                                                                                                                          
|(6)                                                                                                                                                                          
|(7)                                                                                                                                                                          
|()                                                                                                                                                                           



|Section 16(a) Beneficial Ownership Reporting Compliance
     The rules of the Securities and Exchange Commission require that the 
Company disclose any late filing of the reports of stock ownership (and 
changes in stock ownership), and any known failure to file these reports, by 
its directors and executive officers.  Mary Sharpe-Hayes, former Vice 
President, Strategic Planning, who became the indirect owner of 500 shares of 
Common Stock of the Company when her spouse purchased these shares in 
February 2000 inadvertently failed to file a Form 4 by the March 10, 2000 
deadline.  She filed the form on March 16, 2000.  To the best of the 
Company's knowledge, all other filings required to be made by the Company's 
directors and executive officers were made on a timely basis in 2000.Item 11.  EXECUTIVE COMPENSATIONDirector Compensation
     Each of the Company's non-employee directors is paid an annual retainer 
of $26,000, plus a fee of $1,250 for each Board and Committee meeting 
attended.  Each director who is a Chairman of a Committee is paid an 
additional retainer of $3,500.
     The Stock Compensation Plan for Directors requires each director who is 
not an employee of the Company to receive half of his or her $26,000 annual 
retainer either (i) in shares of Common Stock or (ii) as a Common Stock 
equivalent deferral under the Company's Deferred Compensation Plan, the value 
of which corresponds to the market price of the Company's Common Stock.  A 
director may elect to receive up to 100% of his or her retainer and meeting 
fees in shares of Common Stock or Common Stock equivalents.  Common Stock 
equivalents are credited with additional amounts equal to the dividend payout 
on the corresponding number of shares of Common Stock, which amounts are 
deemed reinvested in additional Common Stock equivalents.  Common Stock 
equivalents have no voting rights.  A director alternatively may elect to be 
paid in cash or to defer under the Deferred Compensation Plan the portion of 
his or her annual retainer and meeting fee payments not required to be 
invested in Common Stock or Common Stock equivalents.  Such deferrals are 
credited, at the election of the director, with a return equal to the prime 
rate, a return on a specified group of funds or a combination of both.  
Balances under the Deferred Compensation Plan, including Common Stock 
equivalent balances, are paid out in cash, in either a lump sum or 
installments, commencing at a time selected by the director.
    On May 1 of each year, each non-employee director is granted an option to 
purchase 1,000 shares of Common Stock.  Each option has an exercise price 
equal to the market price of the Common Stock on the date of grant.  Options 
granted prior to 2000 become exercisable at the earlier of (i) four years 
after date of grant or (ii) fifty percent upon attainment of a target price 
and the remaining fifty percent upon the attainment of a higher target price.  
Options granted in 2000 become exercisable at the rate of twenty-five percent 
on each of the first four anniversaries of the date of grant.  Upon a "change 
in control," all options become immediately exercisable.  Options expire ten 
years after the date of grant or at such earlier date as specified by the 
Plan in the event of retirement, death, disability or after termination of 
service of the director.
     The Company also provides directors with travel accident insurance for 
Company-related travel and directors' and officers' liability insurance 
coverage.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Executive Compensation

|SUMMARY COMPENSATION TABLE                                               
|-------------------------------------------------------------------------
|Annual Compensation                                                      
|Name and Principal Position                                              
|John M. Derrick, Jr.
Chairman of the Board and 
  Chief Executive Officer
|Dennis R. Wraase
  President and
  Chief Operating Officer               
|William T. Torgerson
  Executive Vice President 
  and General Counsel   
|Andrew W. Williams
  Senior Vice President  and
  Chief Financial Officer
|William J. Sim
  Senior Vice President                                   

|(1) Other Annual Compensation
    Amounts in this column for each year represent above-market earnings on 
deferred compensation funded by Company-owned life insurance policies held 
in trust, assuming the expected retirement at age 65.  The amounts are 
reduced if the executive terminates employment  prior to age 62 for any 
reason other than death, total or permanent disability or a change in 
control of the Company.  In the event of a change in control and termination 
of the participant's employment, a lump sum payment will be made equal to 
the net present value of the expected payments at age 65 discounted using 
the Pension Benefit Guaranty Corporation immediate payment interest rate 
plus one-half of one percent.  The Company has purchased such policies on 
participating individuals under a program designed so that if assumptions as 
to mortality experience, policy return and other factors are realized, the 
compensation deferred and the death benefits payable to the Company under 
such insurance policies will cover all premium payments and benefit payments 
projected under this program, plus a factor for the use of Company funds.
(2) Restricted Stock
    Amounts in this column for each year represent the aggregate market 
price on the grant date of restricted shares of Common Stock.  These shares 
vest over a four-year period: 20% vested on the first anniversary of the 
grant date, 20% vested on the second anniversary of the grant date, 20% vest 
on the third anniversary of the grant date, and the remaining 40% vest on 
the fourth anniversary of the grant date.  The market price does not reflect 
that the shares are restricted.  Dividends are paid on the restricted 
shares.  Dollar amounts shown are for executives who received restricted 
shares of Common Stock in the year indicated.  The number and aggregate 
market value of the non-vested restricted shares of Common Stock at 
December 31, 2000 for the five named executives are:  3,000 shares, $74,130 
for Mr. Derrick; 1,560 shares, $38,547 for Mr. Wraase; 1,440 shares, $35,582 
for Mr. Torgerson; and 960 shares, $23,722 each for Messrs. Williams and 
Sim.

(3) Options
    Amounts in this column represent the number of stock options granted for 
each year.  The shareholders approved the Long-Term Incentive Plan in April 
1998 and options were granted for the first time in May 1998.  Additional 
options were granted in January 2000.  Fifty percent of the options granted 
in 1998 became exercisable on October 9, 1998 and the remaining 50% became 
exercisable on June 11, 1999.  Twenty-five percent of the options granted in 
2000 became exercisable on January 1, 2001.  The remaining options will 
become exercisable at the rate of twenty-five percent on January 1 of each 
year until January 1, 2004.
(4) Incentive Plan Payouts
    All amounts in this column represent the value of vested Common Stock 
under the Company's Performance Restricted Stock Program. The amount shown 
for 2000 consists of 33-1/3% of the Common Stock award from the one-year 
performance cycle ended December 31, 1999, 33-1/3% of the Common Stock award 
from the eight-month performance cycle ended December 31, 1999, and 50% of 
the Common Stock award from the performance cycle ended December 31, 1998 
(the "1998 Cycle"), that vested on January 1, 2001. The amounts shown for 
1999 consist of 33-1/3% of the Common Stock award from the eight-month 
performance cycle ended December 31, 1999, 50% of the Common Stock award 
for the 1998 Cycle, and 50% of the Common Stock award from the performance 
cycle ended December 31, 1997 (the "1997 Cycle"), that vested on January 1, 
2000. For 1999, amounts also include cash awards for the Performance Share 
Plan, which was applicable to the years 1997 through 1999 (the "1999 
Cycle"). The cash amounts awarded for the 1999 Cycle for Messrs. Derrick, 
Wraase, Torgerson, Williams and Sim were $119,722, $57,221, $53,482, $38,355 
and $37,940, respectively. The amount shown for 1998 consists of 50% of the 
Common Stock award for the 1997 Cycle and 50% of the Common Stock award for 
the performance cycle ended December 31, 1996 (the "1996 Cycle"), that 
vested on January 1, 1999. The value of the vested Common Stock was 
calculated based on the market price of the Common Stock on the day 
preceding the vesting date. Dollar amounts shown are for executives who were 
eligible to participate in the Performance Restricted Stock Program in the 
years indicated.
(5) All Other Compensation
    Amounts in this column for 2000 consist of (i) Company contributions to 
the Savings Plan for Exempt Employees of $7,900, $7,804, $7,900, $4,232 and 
$7,900 for Messrs. Derrick, Wraase, Torgerson, Williams and Sim, 
respectively, (ii) Company contributions to the Executive Deferred 
Compensation Plan due to Internal Revenue Service limitations on maximum 
contributions to the Savings Plan for Exempt Employees of $13,069, $7,860, 
$5,790, $5,732 and $1,766 for Messrs. Derrick, Wraase, Torgerson, Williams 
and Sim, respectively, (iii) the term life insurance portion of life 
insurance written on a split-dollar basis of $4,111, $2,398, $1,953, $1,040 
and $1,517 for Messrs. Derrick, Wraase, Torgerson, Williams and Sim, 
respectively, and (iv) the interest on employer paid premiums for split-
dollar life insurance of $32,448, $18,328, $14,371, $12,594 and $10,674 for 
Messrs. Derrick, Wraase, Torgerson, Williams and Sim, respectively.  The 
split-dollar life insurance contract provides death benefits to the 
executive's beneficiaries of approximately three times the executive's 
annual salary.  The split-dollar program is designed so that, if the 
assumptions made as to mortality experience, policy return and other factors 
are realized, the Company will recover all plan costs, including a factor 
for the use of Company funds.  The split-dollar policy provides a cash 
surrender value to each participant in excess of any premiums paid.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|OPTION GRANTS IN LAST FISCAL YEAR
|---------------------------------
|                                 
|Name                             
|John M. Derrick, Jr.             
|Dennis R. Wraase                 
|William T. Torgerson             
|Andrew W. Williams               
|William J. Sim                   

|(1)Individual Grants
     The exercise price of options is the market price of the Common Stock on 
the grant date (January 1, 2000).  Twenty-five percent of the options became 
exercisable on January 1, 2001.  The remaining options will become 
exercisable at the rate of twenty-five percent on January 1 of each year 
until January 1, 2004.
(2) Grant Date Present Value
     The values in this column were determined based on the Black-Scholes 
option pricing model and are calculated at the time of grant.  The following 
assumptions were used in the calculation:  (a) expected price volatility - 
twenty percent (20%), (b) options will be exercised in the tenth year, (c) an 
interest rate based upon the corresponding yield of a U.S. Treasury note 
maturing ten years from the date of grant, (d) dividends at the rate in 
effect on the date of grant, and (e) no adjustments for transferability.  The 
fact that the Company used the Black-Scholes model does not necessarily mean 
that the Company believes or acknowledges that the model can accurately 
determine the value of options.  The ultimate value of the option, if any, 
will depend on the future market price of the Company's Common Stock and the 
optionee's individual investment decisions, neither of which can be predicted 
with any degree of certainty.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
|-----------------------------------------------
|Name                                           
|John M. Derrick, Jr.                           
|Dennis R. Wraase                               
|William T. Torgerson                           
|Andrew W. Williams                             
|William J. Sim                                 

|(3)Value of Unexercised In-the-Money Options at End of Fiscal Year
     The value of unexercised in-the-money options at December 29, 2000 is 
calculated by multiplying the number of shares by the amount by which the 
fair market value of the Common Stock on the last trading day of 2000, as 
reported by the New York Stock Exchange, exceeds the option exercise price.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|LONG-TERM INCENTIVE PLAN--
AWARDS IN LAST FISCAL YEAR
|-----------------------------------------------------
|Name                                                 
|John M. Derrick, Jr.                                 
|Dennis R. Wraase                                     
|William T. Torgerson                                 
|Andrew W. Williams                                   
|William J. Sim                                       

|The preceding table reflects the share awards available under the 
Company's Performance Restricted Stock Program established under the 
Company's Long-Term Incentive Plan. Under the Program, performance cycles 
will be measured over three-year periods commencing January 1 of each year.  
The Program provides for the earning of Common Stock based on the Company's 
total shareholder return compared to other companies in a peer group 
comprised of 20 gas and electric distribution companies.  If, during the 
course of a performance period, a significant event occurs, as determined in 
the sole discretion of the Board of Directors, which the Board of Directors 
expects to have a substantial effect on total shareholder performance during 
the period, the Board of Directors may revise such measures.
     Under the Program, a target performance is established.  Each award 
provides that, following completion of the performance period, the 
participant will be eligible to earn a number of shares of Common Stock 
ranging from 0% to 200% of the target performance award to the extent that 
performance objectives are achieved.  The shares of Common Stock earned 
by a participant will vest immediately on the date that the performance award 
is earned.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|PENSION PLAN TABLE                                     
|-------------------------------------------------------
|Average Annual Salary
in Final Three Yearsof Employment
|15                                                     
|$250,000                                               
|$350,000                                               
|$450,000                                               
|$550,000                                               
|$650,000                                               
|$750,000                                               
|$850,000                                               
|$950,000                                               

|The Company's General Retirement Plan provides participants benefits 
after five years of service based on the average salary (the term salary 
being equal to the amounts contained in the Salary column of the Summary 
Compensation Table) for the final three years of employment and years of 
credited service under the Plan at time of retirement.  Normal retirement 
under the Plan is at age 65.  Plan benefits are subject to an offset for any 
Social Security benefits.  Benefits under the Plan may be reduced under 
certain provisions of the Internal Revenue Code, as amended, and by salary 
deferrals under the Company's deferred compensation plans (other than CODA 
contributions made under the Savings Plan).  Where any such limitations 
occur, the Company will pay a supplemental retirement benefit to eligible 
executives designed to maintain total retirement benefits at the formula 
level of the Plan.  In addition, for executives who retire under the terms of 
the General Retirement Plan and are at least 59 years of age, their 
retirement benefit will be calculated on the basis of average salary, plus 
the average of the highest three annual incentive awards in the last five 
consecutive years.  The annual incentive amounts are equal to the amounts 
shown in the Bonus column of the Summary Compensation Table.  The current 
age, years of credited service and compensation used to determine retirement 
benefits (including supplemental benefits) for the above-named officers are 
as follows:  Mr. Derrick, 61 and 39 years of credit, $709,685; Mr. Wraase, 57 
and 31 years of credit, $458,240; Mr. Torgerson, 56 and 31 years of credit, 
$386,031; Mr. Williams, 51 and 26 years of credit, $292,776; and Mr. Sim, 56 
and 31 years of credit, $275,864.  Annual benefits at age 65 (including the 
effect of the Social Security offset and the supplemental retirement benefit) 
are illustrated in the table above.
Employment Agreements and Severance Agreements
     Messrs. Derrick, Wraase and Torgerson each have entered into employment 
agreements with the Company that provide for his employment through 
December 10, 2004, and that automatically extend for successive periods of 
five years thereafter unless the Company or the executive has given notice 
that it shall not be so extended.  Each of the employment agreements provides 
that the executive (i) will receive an annual base salary in an amount not 
less than his salary in effect as of December 10, 1999, and incentive 
compensation as determined by the Board of Directors and (ii) will be 
entitled to participate in retirement and other benefit plans, and receive 
fringe benefits on the same basis as other senior executives of the Company.
     Under each of the employment agreements, the executive is entitled to 
certain benefits if his employment is terminated prior to the expiration of 
the initial term of the agreement (or as extended) either (i) by the Company 
other than for cause, death or disability or (ii) by the executive if his 
salary is reduced, he is not in good faith considered for incentive awards, 
the Company fails to provide him with retirement benefits and other benefits 
provided to similarly situated executives, he is required to relocate by more 
than 50 miles from Washington, D.C., or he is demoted from a senior 
management position.  These benefits include: (i) a lump sum payment in cash 
equal to three times (x) the sum of the executive's highest base salary rate 
in effect during the three-year period preceding termination and (y) the 
higher of (1) the annual target bonus for the year in which the termination 
of employment occurs or (2) the highest annual bonus received by the 
executive in any of the three preceding calendar years and (ii) the 
executive's annual cash incentive award for the year preceding termination of 
employment, if not yet paid, and a pro rata portion of the executive's annual 
incentive award for the year in which the executive's employment terminates.  
In addition, any outstanding shares of restricted stock will become 
immediately vested, and the executive will be entitled to receive unpaid 
salary through the date of termination, certain supplemental retirement 
benefits under existing plans of the Company, and a continuation of premium 
payments under the Company's split-dollar life insurance policy.  The 
agreements also provide that each executive is entitled to receive a gross-up 
payment equal to the amount of any federal excise taxes imposed upon 
compensation payable upon termination and the additional taxes that result 
from such payment.
     Messrs. Williams and Sim have entered into severance agreements with the 
Company.  Each severance agreement provides for the payment of severance 
benefits to the executive if, within two years following a change in control, 
which in the case of Mr. Sim includes a sale of all or substantially all of 
the generation assets, of the Company, any of the following events occur: 
(i) termination of the employment of the executive by the Company (or a 
successor company), other than for cause, death, disability or voluntary 
normal retirement; (ii) termination of employment by the executive for "good 
reason," defined as the assignment of duties materially inconsistent with the 
executive's duties prior to the change in control or a material reduction or 
alteration of his duties, a reduction in the executive's salary or relocation 
of the executive by more than 50 miles; (iii) the failure or refusal by a 
successor company to assume the Company's obligations under the agreement; or 
(iv) a material breach of the agreement by the Company (or a successor 
company).  The executive also is entitled to severance benefits upon (i) the 
termination of the executive's employment without cause in contemplation of, 
but prior to, a change in control or (ii) the occurrence of an event, in 
contemplation of, but prior to a change in control, constituting "good 
reason" followed by the executive's voluntary termination of employment 
within two years after a change in control.  The severance benefits consist 
of:  (i) an amount equal to two times the executive's annual base salary (in 
effect at the time of termination) and annual bonus (average of annual target 
bonuses during the three years prior to termination) paid in 24 equal monthly 
installments and (ii) certain welfare benefits for a three-year period after 
the date of termination. The agreements also provide that each executive is 
entitled to receive a gross-up payment equal to the amount of any federal 
excise taxes imposed upon compensation payable upon termination and the 
additional taxes that result from such payment.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
     The following table sets forth, as of March 7, 2001, for each director, 
the five executive officers named in the Summary Compensation Table on 
page 18 and all directors and officers as a group (i) the number of shares of 
Common Stock beneficially owned, (ii) the number of shares acquirable within 
60 days pursuant to exercise of stock options, (iii) credited Common Stock 
equivalents and (iv) the total stock-based holdings.  None of such persons 
beneficially owns shares of any other class of equity securities of the 
Company.  Each of the individuals, as well as all directors and executive 
officers as a group, beneficially owned less than 1% of the Company's 
outstanding Common Stock.  The following table also sets forth, as of 
March 7, 2001, the number and percentage of shares of Common Stock owned 
by all persons known by the Company to own beneficially 5% or more of the 
Common Stock.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Name of Beneficial Owner                                                    | Shares ofCommon Stock Owned (1)  | Common Stock 
AcquirableWithin 60 Days (2) | Deferred
Common StockEquivalents (3) | Total
Stock-BasedHoldings (4)
|--------------------------------------------------------------------------- | -------------------------------- | ------------------------------------------ | ------------------------------------ | -----------------------------
|Roger R. Blunt, Sr.                                                         | 378                              | 1,000                                      | 1,252                                | 2,630                        
|Edmund B. Cronin, Jr.                                                       | 1,123                            | 1,000                                      | 5,450                                | 7,573                        
|John M. Derrick, Jr.                                                        | 44,467                           | 138,360                                    | -                                    | 182,827                      
|Terence C. Golden                                                           | 1,942                            | -                                          | 4,577                                | 6,519                        
|David O. Maxwell                                                            | 500                              | 1,000                                      | 1,549                                | 3,049                        
|Judith A. McHale                                                            | 4,683                            | -                                          | -                                    | 4,683                        
|Floretta D. McKenzie                                                        | 2,696                            | 1,000                                      | -                                    | 3,696                        
|Edward F. Mitchell                                                          | 70,356                           | 1,000                                      | 1,549                                | 72,905                       
|Lawrence C. Nussdorf                                                        | 1,000                            | -                                          | -                                    | 1,000                        
|Peter F. O'Malley                                                           | 1,828                            | 1,000                                      | 1,549                                | 4,377                        
|Pauline A. Schneider                                                        | 600                              | -                                          | -                                    | 600                          
|William J. Sim                                                              | 15,423                           | 16,509                                     | -                                    | 31,932                       
|William T. Torgerson                                                        | 20,871                           | 29,343                                     | -                                    | 50,214                       
|Andrew W. Williams                                                          | 24,863                           | 16,509                                     | -                                    | 41,372                       
|Dennis R. Wraase                                                            | 29,633                           | 33,843                                     | -                                    | 63,476                       
|A. Thomas Young                                                             | 1,000                            | 1,000                                      | 6,328                                | 8,328                        
|All Directors and
  Executive Officers
  as a Group (24 Individuals)        | 313,693                          | 266,998                                    | 22,254                               | 602,945                      
|Name and Addressof Beneficial Owner                                         | Shares of Common Stock Owned (5) | Percent of
Common StockOutstanding         |                                      |                              
|Franklin Resources, Inc.
777 Mariners Island Boulevard
San Mateo, CA  94404 | 11,006,264                       | 9.9%                                       |                                      |                              

|(1)Includes shares held under the Company's Dividend Reinvestment Plan and 
the Employee Savings Plan.  Also includes shares awarded under the Company's 
Long-Term Incentive Plan which will vest over time.
(2) Consists of Common Stock issuable upon the exercise of stock options.
(3) Consists of Common Stock equivalents acquired under the Directors' 
Deferred Compensation Plan.
(4) Consists of the sum of the three preceding columns.
(5) According to a Schedule 13G, dated February 2, 2001, filed with the 
Securities and Exchange Commission jointly by Franklin Resources, Inc., 
Templeton Global Advisors Limited, a subsidiary of Franklin Resources, Inc., 
and Charles B. Johnson and Rupert H. Johnson, Jr., each a principal 
shareholder of Franklin Resources, Inc., the Common Stock is beneficially 
owned by one or more open or closed-end investment companies or other managed 
accounts that are advised by direct and indirect advisory subsidiaries of 
Franklin Resources, Inc.  Sole power to vote or to direct the voting of the 
Common Stock is reported as follows: Templeton Global Advisors Limited:  
8,457,369; Franklin Advisers, Inc.:  2,080,000; Franklin Templeton Investment 
Management Limited:  413,853; and Templeton Investment Counsel, LLC:  42,362.  
Sole power to dispose or to direct the disposition of the Common Stock is 
reported as follows: Templeton Global Advisors Limited:  8,470,049; Franklin 
Advisers, Inc.:  2,080,000; Franklin Templeton Investment Management Limited:  
413,853; and Templeton Investment Counsel, LLC:  42,362.Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS     The Clark Construction Group, Inc., of which Mr. Nussdorf, a nominee for 
director, is Vice President and Treasurer, serves as the general contractor 
with a joint venture partner for the base building and interior construction 
of the Company's new headquarters in Washington, D.C.
     Pauline Schneider, a nominee for director, is a partner in the law firm 
of Hunton & Williams.  Hunton & Williams rendered legal services to the 
Company and its subsidiaries in 2000 and is expected to render services to 
the Company and its subsidiaries in 2001.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Part IVItem 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)  Documents List
1.   Financial Statements
     The following documents are included within this document as Exhibit 13 
on the pages identified below:



|                                                                                                                                       | Page Reference       
|-------------------------------------------------------------------------------------------------------------------------------------- | ---------------------
|                                                                                                                                       | Form 10-K(Exhibit 13)
|Consolidated Balance Sheets - 
  December 31, 2000 and 1999                                                                            | 35                   
|Consolidated Statements of Earnings -
  for the years ended December 31, 2000,
  1999 and 1998                                         | 34                   
|Consolidated Statements of Shareholders' 
  Equity and Comprehensive Income - for
  the years ended December 31, 2000,
  1999 and 1998 | 37                   
|Consolidated Statements of Cash Flows - 
  for the years ended December 31, 2000,
  1999 and 1998                                      | 38                   
|Notes to Consolidated Financial Statements                                                                                             | 39                   
|Report of Independent Accountants                                                                                                      | 33                   

2.   Financial Statement Schedules
     Unaudited supplementary data entitled "Quarterly Financial Summary 
(Unaudited)" is included herein in Exhibit 13 (included in "Notes to 
Consolidated Financial Statements" as Note 16).
     Schedule II (Valuation and Qualifying Accounts) and the Report of 
Independent Accountants on Consolidated Financial Statement Schedule are 
submitted pursuant to Item 14(d).
     All other schedules are omitted because they are not applicable, or the 
required information is presented in the financial statements.
3.   Exhibits required by Securities and Exchange Commission Regulation S-K 
     (summarized below).

|ExhibitNo. | Description of Exhibit                                                                                                                                                                                                           | Reference*                                                                                                                  
|---------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------
|3.1        | Charter of the Company. . . . . . . .                                                                                                                                                                                            | Exh. 3.1 to Form 10-K, 
3/27/00.                                                                                            
|3.2        | By-Laws of the Company. . . . . . . .                                                                                                                                                                                            | Filed herewith.                                                                                                             
|4          | Mortgage and Deed of Trust dated
July 1, 1936, of the Company to
The Bank of New York as Successor
Trustee, securing First Mortgage
Bonds of the Company, and
Supplemental Indenture dated
July 1, 1936. . . . . . . . . . . . . | Exh. B-4 to First Amendment,
6/19/36, to Registration
Statement No. 2-2232.                                                 
|           | Supplemental Indentures, to the
aforesaid Mortgage and Deed of
Trust, dated -
December 1, 1939 and December 10,
1939. . . . . . . . . . . . . . . . .                                                                            | Exhs. A & B to Form 8-K,
1/3/40.                                                                                            
|           | August 1, 1940. . . . . . . . . . . .                                                                                                                                                                                            | Exh. A to Form 8-K, 9/25/40.                                                                                                
|           | July 15, 1942 and August 10,
1942. . . . . . . . . . . . . . . . .                                                                                                                                                               | Exh. B-1 to Amendment No. 2,
8/24/42, and B-3 to Post-
Effective Amendment, 
8/31/42, to Registration 
Statement No. 2-5032.
|           | August 1, 1942. . . . . . . . . . . .                                                                                                                                                                                            | Exh. B-4 to Form 8-A, 
10/8/42.                                                                                             
|           | October 15, 1942. . . . . . . . . . .                                                                                                                                                                                            | Exh. A to Form 8-K, 12/7/42.                                                                                                
|           | October 15, 1947. . . . . . . . . . .                                                                                                                                                                                            | Exh. A to Form 8-K, 12/8/47.                                                                                                
|ExhibitNo. | Description of Exhibit                                                                                                                                                                                                           | Reference*                                                                                                                  
|4 (cont.)  | January 1, 1948 . . . . . . . . . . .                                                                                                                                                                                            | Exh. 7-B to Post-Effective 
Amendment No. 2, 1/28/48, to 
Registration Statement
No. 2-7349.                                
|           | December 31, 1948 . . . . . . . . . .                                                                                                                                                                                            | Exh. A-2 to Form 10-K, 
4/13/49.                                                                                            
|           | May 1, 1949 . . . . . . . . . . . . .                                                                                                                                                                                            | Exh. 7-B to Post-Effective 
Amendment No. 1, 5/10/49, to 
Registration Statement 
No. 2-7948.                               
|           | December 31, 1949 . . . . . . . . . .                                                                                                                                                                                            | Exh. (a)-1 to Form 8-K, 
2/8/50.                                                                                            
|           | May 1, 1950 . . . . . . . . . . . . .                                                                                                                                                                                            | Exh. 7-B to Amendment No. 2, 
5/8/50, to Registration 
Statement No. 2-8430.                                                
|           | February 15, 1951 . . . . . . . . . .                                                                                                                                                                                            | Exh. (a) to Form 8-K,
3/9/51.                                                                                               
|           | March 1, 1952 . . . . . . . . . . . .                                                                                                                                                                                            | Exh. 4-C to Post-Effective 
Amendment No. 1, 3/12/52, to 
Registration Statement No. 
2-9435.                               
|           | February 16, 1953 . . . . . . . . . .                                                                                                                                                                                            | Exh. (a)-1 to Form 8-K, 
3/5/53.                                                                                            
|           | May 15, 1953. . . . . . . . . . . . .                                                                                                                                                                                            | Exh. 4-C to Post-Effective 
Amendment No. 1, 5/26/53, to 
Registration Statement
No. 2-10246.                               
|           | March 15, 1954 and March 15,
1955. . . . . . . . . . . . . . . . .                                                                                                                                                               | Exh. 4-B to Registration 
Statement No. 2-11627, 
5/2/55.                                                                   
|           | May 16, 1955. . . . . . . . . . . . .                                                                                                                                                                                            | Exh. A to Form 8-K, 7/6/55.                                                                                                 
|           | March 15, 1956. . . . . . . . . . . .                                                                                                                                                                                            | Exh. C to Form 10-K, 4/4/56.                                                                                                
|           | June 1, 1956. . . . . . . . . . . . .                                                                                                                                                                                            | Exh. A to Form 8-K, 7/2/56.                                                                                                 
|           | April 1, 1957 . . . . . . . . . . . .                                                                                                                                                                                            | Exh. 4-B to Registration 
Statement No. 2-13884, 
2/5/58.                                                                   
|           | May 1, 1958 . . . . . . . . . . . . .                                                                                                                                                                                            | Exh. 2-B to Registration 
Statement No. 2-14518, 
11/10/58.                                                                 
|           | December 1, 1958. . . . . . . . . . .                                                                                                                                                                                            | Exh. A to Form 8-K, 1/2/59.                                                                                                 
|           | May 1, 1959 . . . . . . . . . . . . .                                                                                                                                                                                            | Exh. 4-B to Amendment No. 1, 
5/13/59, to Registration 
Statement No. 2-15027.                                              
|           | November 16, 1959 . . . . . . . . . .                                                                                                                                                                                            | Exh. A to Form 8-K, 1/4/60.                                                                                                 
|           | May 2, 1960 . . . . . . . . . . . . .                                                                                                                                                                                            | Exh. 2-B to Registration 
Statement No. 2-17286, 
11/9/60.                                                                  
|           | December 1, 1960 and April 3,
1961. . . . . . . . . . . . . . . . .                                                                                                                                                              | Exh. A-1 to Form 10-K, 
4/24/61.                                                                                            
|           | May 1, 1962 . . . . . . . . . . . . .                                                                                                                                                                                            | Exh. 2-B to Registration 
Statement No. 2-21037, 
1/25/63.                                                                  
|ExhibitNo. | Description of Exhibit                                                                                                                                                                                                           | Reference*                                                                                                                  
|4 (cont.)  | February 15, 1963 . . . . . . . . . .                                                                                                                                                                                            | Exh. A to Form 8-K, 3/4/63.                                                                                                 
|           | May 1, 1963 . . . . . . . . . . . . .                                                                                                                                                                                            | Exh. 4-B to Registration 
Statement No. 2-21961, 
12/19/63.                                                                 
|           | April 23, 1964. . . . . . . . . . . .                                                                                                                                                                                            | Exh. 2-B to Registration 
Statement No. 2-22344, 
4/24/64.                                                                  
|           | May 15, 1964. . . . . . . . . . . . .                                                                                                                                                                                            | Exh. A to Form 8-K, 6/2/64.                                                                                                 
|           | May 3, 1965 . . . . . . . . . . . . .                                                                                                                                                                                            | Exh. 2-B to Registration 
Statement No. 2-24655, 
3/16/66.                                                                  
|           | April 1, 1966 . . . . . . . . . . . .                                                                                                                                                                                            | Exh. A to Form 10-K, 
4/21/66.                                                                                              
|           | June 1, 1966. . . . . . . . . . . . .                                                                                                                                                                                            | Exh. 1 to Form 10-K, 
4/11/67.                                                                                              
|           | April 28, 1967. . . . . . . . . . . .                                                                                                                                                                                            | Exh. 2-B to Post-Effective 
Amendment No. 1 to 
Registration Statement No. 
2-26356, 5/3/67.                                
|           | May 1, 1967 . . . . . . . . . . . . .                                                                                                                                                                                            | Exh. A to Form 8-K, 6/1/67.                                                                                                 
|           | July 3, 1967. . . . . . . . . . . . .                                                                                                                                                                                            | Exh. 2-B to Registration 
Statement No. 2-28080, 
1/25/68.                                                                  
|           | February 15, 1968 . . . . . . . . . .                                                                                                                                                                                            | Exh. II-I to Form 8-K, 
3/7/68.                                                                                             
|           | May 1, 1968 . . . . . . . . . . . . .                                                                                                                                                                                            | Exh. 2-B to Registration 
Statement No. 2-31896, 
2/28/69.                                                                  
|           | March 15, 1969. . . . . . . . . . . .                                                                                                                                                                                            | Exh. A-2 to Form 8-K, 
4/8/69.                                                                                              
|           | June 16, 1969 . . . . . . . . . . . .                                                                                                                                                                                            | Exh. 2-B to Registration 
Statement No. 2-36094, 
1/27/70.                                                                  
|           | February 15, 1970 . . . . . . . . . .                                                                                                                                                                                            | Exh. A-2 to Form 8-K, 
3/9/70.                                                                                              
|           | May 15, 1970. . . . . . . . . . . . .                                                                                                                                                                                            | Exh. 2-B to Registration 
Statement No. 2-38038, 
7/27/70.                                                                  
|           | August 15, 1970 . . . . . . . . . . .                                                                                                                                                                                            | Exh. 2-D to Registration 
Statement No. 2-38038, 
7/27/70.                                                                  
|           | September 1, 1971 . . . . . . . . . .                                                                                                                                                                                            | Exh. 2-C to Registration 
Statement No. 2-45591, 
9/1/72.                                                                   
|           | September 15, 1972. . . . . . . . . .                                                                                                                                                                                            | Exh. 2-E to Registration 
Statement No. 2-45591, 
9/1/72.                                                                   
|           | April 1, 1973 . . . . . . . . . . . .                                                                                                                                                                                            | Exh. A to Form 8-K, 5/9/73.                                                                                                 
|           | January 2, 1974 . . . . . . . . . . .                                                                                                                                                                                            | Exh. 2-D to Registration 
Statement No. 2-49803, 
12/5/73.                                                                  
|ExhibitNo. | Description of Exhibit                                                                                                                                                                                                           | Reference*                                                                                                                  
|4. (cont.) | August 15, 1974 . . . . . . . . . . .                                                                                                                                                                                            | Exhs. 2-G and 2-H to 
Amendment No. 1 to 
Registration Statement No. 
2-51698, 8/14/74.                                     
|           | June 15, 1977 . . . . . . . . . . . .                                                                                                                                                                                            | Exh. 4-A to Form 10-K, 
3/19/81.                                                                                            
|           | July 1, 1979. . . . . . . . . . . . .                                                                                                                                                                                            | Exh. 4-B to Form 10-K, 
3/19/81.                                                                                            
|           | June 16, 1981 . . . . . . . . . . . .                                                                                                                                                                                            | Exh. 4-A to Form 10-K, 
3/19/82.                                                                                            
|           | June 17, 1981 . . . . . . . . . . . .                                                                                                                                                                                            | Exh. 2 to Amendment No. 1, 
6/18/81, to Form 8-A.                                                                           
|           | December 1, 1981. . . . . . . . . . .                                                                                                                                                                                            | Exh. 4-C to Form 10-K, 
3/19/82.                                                                                            
|           | August 1, 1982. . . . . . . . . . . .                                                                                                                                                                                            | Exh. 4-C to Amendment No. 1 
to Registration Statement
No. 2-78731, 8/17/82.                                                
|           | October 1, 1982 . . . . . . . . . . .                                                                                                                                                                                            | Exh. 4 to Form 8-K, 11/8/82.                                                                                                
|           | April 15, 1983. . . . . . . . . . . .                                                                                                                                                                                            | Exh. 4 to Form 10-K, 
3/23/84.                                                                                              
|           | November 1, 1985. . . . . . . . . . .                                                                                                                                                                                            | Exh. 2-B to Form 8-A, 
11/1/85.                                                                                             
|           | March 1, 1986 . . . . . . . . . . . .                                                                                                                                                                                            | Exh. 4 to Form 10-K, 
3/28/86.                                                                                              
|           | November 1, 1986. . . . . . . . . . .                                                                                                                                                                                            | Exh. 2-B to Form 8-A, 
11/5/86.                                                                                             
|           | March 1, 1987 . . . . . . . . . . . .                                                                                                                                                                                            | Exh. 2-B to Form 8-A, 
3/2/87.                                                                                              
|           | September 16, 1987. . . . . . . . . .                                                                                                                                                                                            | Exh. 4-B to Registration 
Statement No. 33-18229,
10/30/87.                                                                 
|           | May 1, 1989 . . . . . . . . . . . . .                                                                                                                                                                                            | Exh. 4-C to Registration 
Statement No. 33-29382, 
6/16/89.                                                                 
|           | August 1, 1989. . . . . . . . . . . .                                                                                                                                                                                            | Exh. 4 to Form 10-K, 
3/23/90.                                                                                              
|           | April 5, 1990 . . . . . . . . . . . .                                                                                                                                                                                            | Exh. 4 to Form 10-K, 
3/29/91.                                                                                              
|           | May 21, 1991. . . . . . . . . . . . .                                                                                                                                                                                            | Exh. 4 to Form 10-K, 
3/27/92.                                                                                              
|           | May 7, 1992 . . . . . . . . . . . . .                                                                                                                                                                                            | Exh. 4 to Form 10-K, 
3/26/93.                                                                                              
|           | September 1, 1992 . . . . . . . . . .                                                                                                                                                                                            | Exh. 4 to Form 10-K, 
3/26/93.                                                                                              
|           | November 1, 1992. . . . . . . . . . .                                                                                                                                                                                            | Exh. 4 to Form 10-K,
3/26/93.                                                                                               
|           | March 1, 1993 . . . . . . . . . . . .                                                                                                                                                                                            | Exh. 4 to Form 10-K, 
3/26/93.                                                                                              
|           | March 2, 1993 . . . . . . . . . . . .                                                                                                                                                                                            | Exh. 4 to Form 10-K, 
3/26/93.                                                                                              
|           | July 1, 1993. . . . . . . . . . . . .                                                                                                                                                                                            | Exh. 4.4 to Registration 
Statement No. 33-49973, 
8/11/93.                                                                 
|ExhibitNo. | Description of Exhibit                                                                                                                                                                                                           | Reference*                                                                                                                  
|4 (cont.)  | August 20, 1993 . . . . . . . . . . .                                                                                                                                                                                            | Exh. 4.4 to Registration 
Statement No. 33-50377, 
9/23/93.                                                                 
|           | September 29, 1993. . . . . . . . . .                                                                                                                                                                                            | Exh. 4 to Form 10-K, 
3/25/94.                                                                                              
|           | September 30, 1993. . . . . . . . . .                                                                                                                                                                                            | Exh. 4 to Form 10-K, 
3/25/94.                                                                                              
|           | October 1, 1993 . . . . . . . . . . .                                                                                                                                                                                            | Exh. 4 to Form 10-K, 
3/25/94.                                                                                              
|           | February 10, 1994 . . . . . . . . . .                                                                                                                                                                                            | Exh. 4 to Form 10-K, 
3/25/94.                                                                                              
|           | February 11, 1994 . . . . . . . . . .                                                                                                                                                                                            | Exh. 4 to Form 10-K, 
3/25/94.                                                                                              
|           | March 10, 1995. . . . . . . . . . . .                                                                                                                                                                                            | Exh. 4.3 to Registration 
Statement No. 61379, 
7/28/95.                                                                    
|           | September 6, 1995 . . . . . . . . . .                                                                                                                                                                                            | Exh. 4 to Form 10-K, 4/1/96.                                                                                                
|           | September 7, 1995 . . . . . . . . . .                                                                                                                                                                                            | Exh. 4 to Form 10-K, 4/1/96.                                                                                                
|           | October 2, 1997 . . . . . . . . . . .                                                                                                                                                                                            | Exh. 4 to Form 10-K, 
3/26/98.                                                                                              
|           | March 17, 1999. . . . . . . . . . . .                                                                                                                                                                                            | Exh. 4 to Form 10-K, 
3/27/00.                                                                                              
|4-A        | Indenture, dated as of July 28, 1989, between the Company and The Bank of New York, Trustee, with respect to
the Company's Medium-Term Note
Program . . . . . . . . . . . . . . .                                                | Exh. 4 to Form 8-K, 6/21/90.                                                                                                
|10         | Agreement, effective December 8, 1998, between the Company and the International Brotherhood of Electrical Workers (Local Union 
No. 1900). . . . . . . .                                                                        | Exh. 10 to Form 10-K, 
3/26/99.                                                                                             
|10.1       | Employment Agreement of
  John M. Derrick, Jr.**. . . . . . .                                                                                                                                                                    | Exh. 10.1 to Form 10-K, 
3/27/00.                                                                                           
|10.2       | Employment Agreement of
  Dennis R. Wraase**. . . . . . . . .                                                                                                                                                                    | Exh. 10.2 to Form 10-K, 
3/27/00.                                                                                           
|10.3       | Employment Agreement of
  William T. Torgerson**. . . . . . .                                                                                                                                                                    | Exh. 10.3 to Form 10-K, 
3/27/00.                                                                                           
|10.4       | Severance Agreement of
  Robert C. Grantley**. . . . . . . .                                                                                                                                                                     | Exh. 10.4 to Form 10-K, 
3/27/00.                                                                                           
|10.5       | Severance Agreement of
  William J. Sim** . . . . . . . . .                                                                                                                                                                      | Exh. 10.5 to Form 10-K, 
3/27/00.                                                                                           
|10.6       | Severance Agreement of
  Andrew W. Williams** . . . . . . .                                                                                                                                                                      | Exh. 10.6 to Form 10-K, 
3/27/00.                                                                                           
|10.7       | Severance Agreement of
  Earl K. Chism** . . . . . . . . .                                                                                                                                                                       | Exh. 10.7 to Form 10-K, 
3/27/00.                                                                                           
|ExhibitNo. | Description of Exhibit                                                                                                                                                                                                           | Reference*                                                                                                                  
|10.8       | Severance Agreement of
  Kenneth P. Cohn** . . . . . . . .                                                                                                                                                                       | Exh. 10.8 to Form 10-K, 
3/27/00.                                                                                           
|10.9       | Severance Agreement of
  Kirk J. Emge** . . . . . . . . .                                                                                                                                                                        | Exh. 10.9 to Form 10-K, 
3/27/00.                                                                                           
|10.11      | Severance Agreement of
  William R. Gee** . . . . . . . .                                                                                                                                                                        | Exh. 10.11 to Form 10-K, 
3/27/00.                                                                                          
|10.12      | Severance Agreement of
  Anthony J. Kamerick** . . . . . . . .                                                                                                                                                                   | Exh. 10.12 to Form 10-K, 
3/27/00.                                                                                          
|10.13      | Severance Agreement of
  Beverly L. Perry** . . . . . . . .                                                                                                                                                                      | Exh. 10.13 to Form 10-K, 
3/27/00.                                                                                          
|10.14      | Severance Agreement of
  James S. Potts** . . . . . . . .                                                                                                                                                                        | Exh. 10.14 to Form 10-K, 
3/27/00.                                                                                          
|10.16      | 1999 General Memorandum of Understanding, dated December 8,
1998 between the Company and the International Brotherhood of Electrical Workers (Local Union
No. 1900) . . . . . . . . . . . . . .                                  | Exh. 10.2 to Form 10-K, 
3/26/99.                                                                                           
|10.17      | Potomac Electric Power Company Long-Term Incentive Plan** . . . . . . . .                                                                                                                                                        | Exh. 4 to Form S-8, 6/12/98                                                                                                 
|11         | Statements Re. Computation of
  Earnings Per Common Share . . . . .                                                                                                                                                              | Filed herewith.                                                                                                             
|12         | Statements Re. Computation of
  Ratios. . . . . . . . . . . . . . .                                                                                                                                                              | Filed herewith.                                                                                                             
|13         | Financial Information Section of
  Annual Report . . . . . . . . . . .                                                                                                                                                           | Filed herewith.                                                                                                             
|21         | Subsidiaries of the Registrant. . . .                                                                                                                                                                                            | Filed herewith.                                                                                                             
|23         | Consent of Independent Accountants. .                                                                                                                                                                                            | Filed herewith.                                                                                                             

*The exhibits referred to in this column by specific designations and date
  have heretofore been filed with the Securities and Exchange Commission
  under such designations and are hereby incorporated herein by reference.
  The Forms 8-A, 8-K and 10-K referred to were filed by the Company under the
  Commission's File No. 1-1072 and the Registration Statements referred to
  are registration statements of the Company.
**These exhibits are submitted pursuant to Item 14(c).

(b)  Reports on Form 8-K
     A Current Report on Form 8-K was filed by the Company on December 19, 
2000, providing details on the completion of the divestiture of substantially 
all of the Company's generation assets to Mirant Corp., formerly Southern 
Energy Inc.  The items reported on such Form 8-K were Item 2 (Acquisition or 
Disposition of Assets) and Item 7 (Financial Statements and Exhibits).

|Schedule II                                                                          | Valuation and Qualifying Accounts
|------------------------------------------------------------------------------------ | ---------------------------------
|                                                                                     |                                  
|                                                                                     |                                  
|Col. A                                                                               | Col. B                           
|                                                                                     |                                  
|                                                                                     |                                  
|Description                                                                          | Balance at
Beginning ofPeriod    
|                                                                                     | (Millions of Dollars)            
|                                                                                     |                                  
|Year Ended December 31, 2000                                                         |                                  
|Allowance for uncollectible accounts - 
      customer and other accounts receivable | $8.0                             
|                                                                                     |                                  
|Year Ended December 31, 1999                                                         |                                  
|Allowance for uncollectible accounts - 
      customer and other accounts receivable | $7.7                             
|                                                                                     |                                  
|Year Ended December 31, 1998                                                         |                                  
|Allowance for uncollectible accounts - 
      customer and other accounts receivable | $8.4                             
|                                                                                     |                                  
|(a) Collection of accounts previously written off.                                  
|(b) Uncollectible accounts written off.                                             

(c)  Exhibit 11   Statements Re. Computation of Earnings Per Common Share
     The information required by this Exhibit is included in Note 11 of the 
"Notes to Consolidated Financial Statements," which is included in Exhibit 13.

|Exhibit 12    Statements Re: Computation of Ratios                                                                                                                                                                                         
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                           
|The computations of the coverage of fixed charges before income taxes, and the coverage of combined fixed charges and preferred dividends for each of the years 2000 through 1996, on the basis of Utility operations only,
are as follows:
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|Net income                                                                                                                                                                                                                                 
|Taxes based on income                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                           
|Income before taxes                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                           
|Fixed charges:                                                                                                                                                                                                                             
|Interest charges                                                                                                                                                                                                                           
|Interest factor in rentals                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                           
|Total fixed charges                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                           
|Income before income taxes and fixed charges                                                                                                                                                                                               
|                                                                                                                                                                                                                                           
|Coverage of fixed charges                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                           
|Preferred dividend requirements, including 
  redemption premium                                                                                                                                                                           
|                                                                                                                                                                                                                                           
|Ratio of pre-tax income to net income                                                                                                                                                                                                      
|                                                                                                                                                                                                                                           
|Preferred dividend factor                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                           
|Total fixed charges and preferred dividends                                                                                                                                                                                                
|                                                                                                                                                                                                                                           
|Coverage of combined fixed charges and 
  preferred dividends                                                                                                                                                                              



|Exhibit 12    Statements Re: Computation of Ratios                                                                                                                                                                          |                                 |  |        |  |        |  |        |  |       
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------- |  | ------ |  | ------ |  | ------ |  | ------
|                                                                                                                                                                                                                            |                                 |  |        |  |        |  |        |  |       
|The computations of the coverage of fixed charges before income taxes, and the coverage of combined fixed charges and preferred dividends for each of the years 2000 through 1996, on a consolidated basis, are as follows:
|                                                                                                                                                                                                                            |                                 |  |        |  |        |  |        |  |       
|                                                                                                                                                                                                                            | For the Year Ended December 31,
|                                                                                                                                                                                                                            | 2000                            |  | 1999   |  | 1998   |  | 1997   |  | 1996  
|                                                                                                                                                                                                                            | (Dollar Amounts in Millions)   
|                                                                                                                                                                                                                            |                                 |  |        |  |        |  |        |  |       
|Net income                                                                                                                                                                                                                  | $352.0                          |  | $247.1 |  | $226.3 |  | $181.8 |  | $237.0
|Taxes based on income                                                                                                                                                                                                       | 341.2                           |  | 114.5  |  | 122.3  |  | 65.6   |  | 80.4  
|                                                                                                                                                                                                                            |                                 |  |        |  |        |  |        |  |       
|Income before taxes                                                                                                                                                                                                         | 693.2                           |  | 361.6  |  | 348.6  |  | 247.4  |  | 317.4 
|                                                                                                                                                                                                                            |                                 |  |        |  |        |  |        |  |       
|Fixed charges:                                                                                                                                                                                                              |                                 |  |        |  |        |  |        |  |       
|Interest charges                                                                                                                                                                                                            | 230.7                           |  | 208.7  |  | 208.6  |  | 216.1  |  | 231.1 
|Interest factor in rentals                                                                                                                                                                                                  | 23.6                            |  | 23.8   |  | 24.0   |  | 23.7   |  | 23.9  
|                                                                                                                                                                                                                            |                                 |  |        |  |        |  |        |  |       
|Total fixed charges                                                                                                                                                                                                         | 254.3                           |  | 232.5  |  | 232.6  |  | 239.8  |  | 255.0 
|                                                                                                                                                                                                                            |                                 |  |        |  |        |  |        |  |       
|Competitive operations capitalized interest                                                                                                                                                                                 | (3.9)                           |  | (1.8)  |  | (0.6)  |  | (0.5)  |  | (0.7) 
|                                                                                                                                                                                                                            |                                 |  |        |  |        |  |        |  |       
|Income before income taxes and fixed charges                                                                                                                                                                                | $943.6                          |  | $592.3 |  | $580.6 |  | $486.7 |  | $571.7
|                                                                                                                                                                                                                            |                                 |  |        |  |        |  |        |  |       
|Coverage of fixed charges                                                                                                                                                                                                   | 3.71                            |  | 2.55   |  | 2.50   |  | 2.03   |  | 2.24  
|                                                                                                                                                                                                                            |                                 |  |        |  |        |  |        |  |       
|Preferred dividend requirements, including
  redemption premium                                                                                                                                                             | $5.5                            |  | $8.9   |  | $18.0  |  | $16.5  |  | $16.6 
|                                                                                                                                                                                                                            |                                 |  |        |  |        |  |        |  |       
|Ratio of pre-tax income to net income                                                                                                                                                                                       | 1.97                            |  | 1.46   |  | 1.54   |  | 1.36   |  | 1.34  
|                                                                                                                                                                                                                            |                                 |  |        |  |        |  |        |  |       
|Preferred dividend factor                                                                                                                                                                                                   | $10.9                           |  | $12.9  |  | $27.7  |  | $22.4  |  | $22.2 
|                                                                                                                                                                                                                            |                                 |  |        |  |        |  |        |  |       
|Total fixed charges and preferred dividends                                                                                                                                                                                 | $265.2                          |  | $245.4 |  | $260.3 |  | $262.2 |  | $277.2
|                                                                                                                                                                                                                            |                                 |  |        |  |        |  |        |  |       
|Coverage of combined fixed charges and 
  preferred dividends                                                                                                                                                               | 3.56                            |  | 2.41   |  | 2.23   |  | 1.86   |  | 2.06  

|Exhibit 21    Subsidiaries of the Registrant                 Name | Jurisdiction of Incorporation
|----------------------------------------------------------------- | -----------------------------
|Aircraft International Management Company                         | Delaware                     
|American Energy Corporation                                       | Delaware                     
|AMP Funding, LLC                                                  | Delaware                     
|BCR/BT Ventures                                                   | Delaware                     
|Edison Place, LLC                                                 | Delaware                     
|Edison Capital Reserves Corporation                               | Delaware                     
|Electro Ecology, Inc.                                             | New York                     
|Energy and Telecommunication Services, LLC                        | Delaware                     
|59 M Street Associates, LLC                                       | District of Columbia         
|Friendly Skies, Inc.                                              | U.S. Virgin Islands          
|Harmons Building Associates                                       | Maryland                     
|Linpro Harmons Land Limited Partnership                           | Maryland                     
|Met Electrical Testing Company, Inc.                              | Delaware                     
|NLI/PLC-Maco III Associates                                       | Delaware                     
|PCI Air Management Corporation                                    | Nevada                       
|PCI Air Management Partners, LLC                                  | Delaware                     
|PCI/BT Ventures                                                   | Delaware                     
|PCI Energy Corporation                                            | Delaware                     
|PCI Engine Trading, Ltd.                                          | Bermuda                      
|PCI Ever, Inc.                                                    | Delaware                     
|PCI/Foxhall Investment LP                                         | District of Columbia         
|PCI Holdings, Inc.                                                | Delaware                     
|PCI Netherlands Corporation                                       | Nevada                       
|PCI Nevada Investments                                            | Delaware                     
|PCI Queensland Corporation                                        | Nevada                       
|PCI-BT Investing, LLC                                             | Delaware                     
|Pepco Building Services, Inc.                                     | Delaware                     
|Pepco Communications, LLC                                         | Delaware                     
|Pepco Communications, Inc.                                        | Delaware                     
|Pepco Energy Company                                              | Delaware                     
|Pepco Energy Services, Inc.                                       | Delaware                     
|Pepco Enterprises, Inc.                                           | Delaware                     
|Pepco Holdings, Inc.                                              | Delaware                     
|Pepco Technologies, LLC                                           | Delaware                     
|PepMarket.com LLC                                                 | Delaware                     
|PES Home Warranty Services of Virginia                            | Virginia                     
|Potomac Aircraft Leasing Corporation                              | Nevada                       
|Potomac Capital Investment Corporation                            | Delaware                     
|Potomac Capital Joint Leasing Corporation                         | Delaware                     
|Potomac Capital Markets Corporation                               | Delaware                     
|Potomac Delaware Leasing Corporation                              | Delaware                     
|Potomac Electric Power Company Trust I                            | Delaware                     
|Potomac Equipment Leasing Corporation                             | Nevada                       
|Potomac/Foxhall, LLC                                              | District of Columbia         
|Potomac Harmans Corporation                                       | Maryland                     
|Potomac Land Corporation                                          | Delaware                     
|Potomac Leasing Associates, L.P.                                  | Nevada                       
|Potomac Nevada Corporation                                        | Nevada                       
|Potomac Nevada Investment, Inc.                                   | Nevada                       
|Potomac Nevada Leasing Corporation                                | Nevada                       
|Potomac Power Resources, Inc.                                     | Delaware                     
|Ramp Investments, LLC                                             | Delaware                     
|21    Subsidiaries of the Registrant (Cont.)                 Name |                              
|Redland Tech Center, LLC                                          | Delaware                     
|Severn Cable, LLC                                                 | Delaware                     
|Severn Construction, LLC                                          | Delaware                     
|Square 673 Associates, LLC                                        | District of Columbia         
|Starpower Communications LLC                                      | Delaware                     
|Substation Test Company, Inc.                                     | Delaware                     
|30/60 M Street Limited Partnership                                | Delaware                     
|Viron/Pepco Services Partnership                                  | Delaware                     
|W.A. Chester, LLC                                                 | Delaware                     
|W. A. Chester Corporation                                         | Delaware                     

Report of Independent Accountants on Consolidated Financial Statement 
Schedule
To the Board of Directors of
Potomac Electric Power Company
Our audits of the consolidated financial statements referred to in our report 
dated January 19, 2001 appearing in the 2000 Annual Report to shareholders of 
Potomac Electric Power Company (which report and consolidated financial 
statements are included on pages 34 to 77 of Exhibit 13 in this Annual Report 
on Form 10-K) also included an audit of the consolidated financial statement 
schedule listed in Item 14(a)2. of this Form 10-K.  In our opinion, this 
consolidated financial statement schedule presents fairly, in all material 
respects, the information set forth therein when read in conjunction with the 
related consolidated financial statements.

PRICEWATERHOUSECOOPERS LLP
Washington, D.C.
January 19, 2001

SIGNATURES
     Pursuant to the requirements of Section 13 or 15(d) of the Securities 
Exchange Act of 1934, the registrant has duly caused this report to be signed 
on its behalf by the undersigned, thereunto duly authorized, in the City of 
Washington, District of Columbia, on the 23rd day of March, 2001.POTOMAC
ELECTRIC POWER COMPANY
                                          
    (Registrant)
                                   By    John M. Derrick
                                          
 (John M. Derrick, Jr.,
                                         Chairman
of the Board and
                                          
Chief Executive Officer)


Pursuant to the requirements of the Securities Exchange Act of 1934, 
this report has been signed below by the following persons on behalf of the 
registrant and in the capacities and on the dates indicated:

|      | Signature                                                             | Title                                                 | Date          
|----- | --------------------------------------------------------------------- | ----------------------------------------------------- | --------------
|(i)   | Principal Executive OfficersJohn M. Derrick
   (John M. Derrick, Jr.) | Chairman of the Board
  and Chief Executive   Officer |               
|      | D. R. Wraase
    (Dennis R. Wraase)                                   | President, Chief
  Operating Officer
  and Director   |               
|(ii), | Principal Financial Officer                                           |                                                       |               
|(iii) | Principal Accounting OfficerA. W. Williams
   (Andrew W. Williams)    | Senior Vice President
  and Chief Financial
  Officer |               
|(iv)  | Directors:Roger R. Blunt   (Roger R. Blunt, Sr.)                      | Director                                              |               
|      | Edmund B. Cronin, Jr.   (Edmund B. Cronin, Jr.)                       | Director                                              |               
|      |                                                                       |                                                       | March 23, 2001
|      | Signature                                                             | Title                                                 | Date          
|(iv)  | Directors (cont.):T. C. Golden
   (Terence C. Golden)                 | Director                                              |               
|      | David O. Maxwell
    (David O. Maxwell)                               | Director                                              |               
|      | Judith A. McHale
    (Judith A. McHale)                               | Director                                              |               
|      | Floretta D. McKenzie   (Floretta D. McKenzie)                         | Director                                              |               
|      | ___________________________
   (Edward F. Mitchell)                   | Director                                              |               
|      | Peter F. O'Malley   (Peter F. O'Malley)                               | Director                                              |               
|      | A. T. Young   (A. Thomas Young)                                       | Director                                              |               
|      |                                                                       |                                                       |               
|      |                                                                       |                                                       |               
|      |                                                                       |                                                       | March 23, 2001