<HTML>


<BODY>
<TABLE border=0 cellPadding=7 cellSpacing=0 width=638>
  <TR>
    <TD colSpan=2 vAlign=top><FONT face=Courier size=2>
      <P align=center><BR>RESTATED ARTICLES OF INCORPORATION<BR><BR>AND ARTICLES
      OF RESTATEMENT <BR><BR>OF<BR><BR>POTOMAC ELECTRIC POWER
COMPANY<BR><BR></P>
      <P>     These Restated Articles of Incorporation
      and Articles of Restatement were duly adopted on December 21, 1992 by the
      Board of Directors of Potomac Electric Power Company (hereinafter
      sometimes called the "Company"), a District of Columbia corporation and a
      domestic corporation of the Commonwealth of Virginia, in accordance with
      the provisions of Section 58a of the District of Columbia Business
      Corporation Act, D.C. Code Section 29-358.1, and Chapter 522 of the
      Virginia State Corporation Act, Va. Code Section 13.1-711 (1989
      Replacement Volume). The Company's Articles of Incorporation were
      originally filed in the District of Columbia on April 28, 1896, and
      Articles of Reincorporation of an Existing Domestic Corporation were filed
      in the District of Columbia on January 20,
      1957.<BR><BR>     The Restated Articles of
      Incorporation and Articles of Restatement only restate and integrate and
      do not further amend the provisions of the Company's articles of
      incorporation as previously amended or supplemented, and there is no
      discrepancy between those provisions and the provisions of these restated
      articles.<BR><BR>     The Restated Articles of
      Incorporation and Articles of Restatement of the Company are as
      follows:<BR><BR>I.     The name of the Company
      is<BR><BR>                        POTOMAC
      ELECTRIC POWER COMPANY.<BR><BR>II.    The duration of
      the Company shall be perpetual.<BR><BR>III.   The purposes
      for which the Company is organized
      are:<BR><BR>       (A)  To
      manufacture, produce, generate, buy, sell, lease, deal in, transmit and
      distribute (i) power, light, energy and heat in the form of electricity or
      otherwise, (ii) by-products thereof and (iii) appliances, facilities and
      equipment for use in connection
      therewith;<BR><BR>       (B)  To
      acquire (by construction, purchase, condemnation, lease or otherwise),
      use, maintain, operate, deal in and dispose of, power plants, dams,
      substations, office buildings, service buildings, transmission lines,
      distribution lines, and all other buildings, machinery, property (real,
      personal or mixed) and facilities (including water power and other sites),
      and all fixtures, equipments and appliances, necessary, appropriate,
      incidental or convenient for its corporate purposes;
      and<BR><BR>       (C)  To
      conduct business as a public service company, which business is briefly
      described as the purchase, manufacture, generation, transmission,
      distribution and sale, both at wholesale and at retail, of electricity or
      other power or energy for light, heat and power purposes in the District
      of Columbia, the Commonwealth of Virginia, the State of Maryland and
      elsewhere.</P>
      <P><BR>IV.    The aggregate number of shares which the
      Company shall have authority to issue is 215,042,227 divided into three
      classes: the first consisting of 6,242,227 shares of the par value of $50
      each; the second consisting of 8,800,000 shares of the par value of $25
      each; and the third consisting of 200,000,000 shares of the par value of
      $1 each.<BR><BR>V.     Said 6,242,227 shares of
      the par value of $50 each are designated as Serial Preferred Stock; said
      8,800,000 shares of the par value of $25 each are designated as Preference
      Stock; and said 200,000,000 shares of the par value of $1 each are
      designated as Common Stock. Such of said authorized shares of Serial
      Preferred Stock, Preference Stock and Common Stock as are unissued at any
      time may be issued, in whole or in part, at any time or from time to time
      by action of the Board of Directors of the Company, subject to the laws in
      force in the District of Columbia and the Commonwealth of Virginia and the
      terms and conditions set forth in the Articles of Incorporation, as
      amended, of the
      Company.<BR><BR>       The preferences,
      qualifications, limitations, and restrictions, the special or relative
      rights, and the voting power in respect of the shares of each said class
      are as
      follows:<BR><BR>                             (A)
      SERIAL PREFERRED
      STOCK<BR><BR>       (a)  Subject
      to the provisions hereafter in this subdivision (A) set forth, the Serial
      Preferred Stock may be divided into and issued, from time to time, in one
      or more series as the Board of Directors may determine, and the Board of
      Directors is hereby expressly authorized to adopt from time to time
      resolutions, in respect of any unissued shares of Serial Preferred Stock,
      to fix and
      determine:<BR><BR>            (1)  The
      division of such shares into series and the designation and authorized
      number of the shares of the particular
      series;<BR><BR>            (2)  The
      rate of dividend for the particular
      series;<BR><BR>            (3)  The
      price or prices at and the terms and conditions on which shares of the
      particular series may be
      redeemed;<BR><BR>            (4)  The
      amount payable upon shares of the particular series in the event of
      voluntary
      liquidation;<BR><BR>            (5)  Sinking
      fund provisions (if any) for the redemption or purchase of shares of the
      particular series;
      and<BR><BR>            (6)  The
      terms and conditions (if any) on which the shares of the particular series
      may be converted into other classes of stock of the Company;<BR><BR>All
      shares of Serial Preferred Stock shall be of equal rank with each other,
      regardless of series, and all shares thereof shall be identical except as
      to the above listed relative rights and preferences, in respect of any or
      all of which there may be variations between different series as fixed and
      determined by the Board of Directors in said resolutions. All shares of
      the Serial Preferred Stock of any one series shall be identical with each
      other in all
      respects.<BR><BR>       (b)  The
      following terms, as used in this subdivision (A), shall have the following
      meanings:<BR><BR>            (1)  The
      term senior stock shall mean any class of stock ranking in its claim to
      assets or dividends prior to the 1,600,000 shares of Serial Preferred
      Stock created
      hereby;<BR><BR>            (2)  The
      term parity stock shall mean any class of stock ranking in its claim to
      assets or dividends on a parity with the Serial Preferred Stock, but shall
      not include any of the 1,600,000 shares of Serial Preferred Stock created
      hereby, nor shall it include any increase in the authorized amount of the
      Serial Preferred Stock;
      and<BR><BR>            (3)  The
      term junior stock shall mean the Common Stock and any other class of stock
      ranking in its claim to assets or dividends junior to the Serial Preferred
      Stock.<BR><BR>       (c)  The
      holders of the Serial Preferred Stock shall be entitled to receive, but
      only when and as declared by the Board of Directors, cumulative cash
      dividends in the case of each series at the annual rate for such series
      theretofore fixed by the Board of Directors as hereinbefore provided,
      payable quarter-yearly on the first days of March, June, September and
      December in each year to stockholders of record on the respective dates
      fixed for the purpose by the Board of Directors as dividends are
      declared.<BR><BR>            No
      dividend shall be declared on any shares of the Serial Preferred Stock
      unless there shall likewise be declared on all shares of the Serial
      Preferred Stock at the time outstanding like dividends, ratably in
      proportion to the respective annual dividend rates fixed
      therefor.<BR><BR>            The
      dividends on shares of the Serial Preferred Stock shall be cumulative from
      the quarter-yearly dividend payment date next preceding the date of issue
      of such shares, unless such shares shall have been issued after the record
      date and before the payment date for a particular dividend, in which case
      the dividends shall be cumulative from the quarter-yearly dividend payment
      date next ensuing after the date of issue of such shares. Unless dividends
      on all outstanding shares of the Serial Preferred Stock, at the annual
      dividend rate or rates fixed therefor, shall have been paid for all past
      quarter-yearly dividend periods to which they are entitled, and the full
      dividend thereon at said rate or rates for the quarter-yearly dividend
      period current at the time shall have been paid or declared and set apart
      for payment, but without interest on accumulated dividends, and unless all
      sinking fund payments, if any, theretofore required to have been made
      shall have been made or provided for, no dividends shall be declared and
      no other distribution shall be made on any junior stock, and no junior
      stock shall be purchased, retired or otherwise acquired for value by the
      Company. No dividend shall be declared on any junior stock payable more
      than 120 days after the date of
      declaration.<BR><BR>            The
      holders of the Serial Preferred Stock shall not be entitled to receive any
      dividends thereon other than the dividends referred to in this subdivision
      (c).<BR><BR>       (d)  The
      Company, at the option of the Board of Directors or by the operation of
      the sinking fund, if any, provided for the Serial Preferred Stock of any
      series, may, from time to time, subject to such terms and conditions, if
      any, as may be fixed by the Board of Directors with respect to any series
      as hereinbefore provided, redeem the whole or any part of such series at
      any time outstanding, by paying in cash the applicable redemption price
      therefor theretofore fixed by the Board of Directors as hereinbefore
      provided.<BR><BR>            Notice
      of every such redemption shall be given by publication at least once in
      each of two calendar weeks in each of two daily newspapers printed in the
      English language, one published and of general circulation in the City of
      Washington, District of Columbia, and the other in the Borough of
      Manhattan, The City of New York, the first publication to be at least
      thirty days and not more than sixty days prior to the date fixed for such
      redemption. At least thirty days' and not more than sixty days' previous
      notice of every such redemption shall also be mailed to the holders of
      record of the shares so to be redeemed, at their respective addresses as
      the same shall appear on the books of the Company; but failure to mail
      such notice or any defect therein or in the mailing thereof shall not
      affect the validity of the proceedings for the redemption of any shares so
      to be
      redeemed.<BR><BR>            In
      case of the redemption of a part only of any series of the Serial
      Preferred Stock at the time outstanding, the Company or its duly
      authorized agent shall select by lot the shares so to be redeemed. The
      Board of Directors shall have full power and authority, subject to the
      limitations and provisions herein contained, to prescribe the manner in
      which the drawings by lot shall be conducted and the terms and conditions
      upon which the Serial Preferred Stock shall be redeemed from time to
      time.<BR><BR>            If
      such notice of redemption shall have been duly given by publication, and
      if on or before the redemption date specified therein the funds necessary
      for such redemption shall have been set aside by the Company, separate and
      apart from its other funds, in trust for the account of the holders of the
      shares so called for redemption, so as to be and continue to be available
      therefor, then, notwithstanding that any certificate for shares so called
      for redemption shall not have been surrendered for cancellation, the
      shares represented thereby shall no longer be deemed to be outstanding on
      and after such redemption date, and all rights with respect to such shares
      shall forthwith on such redemption date cease and terminate, except only
      the right of the holders thereof to receive the amount payable upon
      redemption thereof, without
      interest.<BR><BR>            Provided,
      however, in the alternative, that, after giving notice by publication of
      any such redemption as hereinbefore provided or after giving to the bank
      or trust company referred to below irrevocable authorization to give or
      complete such notice by publication, and prior to the redemption date
      specified in such notice, the Company may deposit in trust, for the
      account of the holders of the shares of Serial Preferred Stock so to be
      redeemed, the funds necessary for such redemption with a bank or trust
      company in good standing, organized and doing business under the laws of
      the United States or of any state or territory or of the District of
      Columbia and having its principal office in the City of Washington,
      District of Columbia, or in the Borough of Manhattan, The City of New
      York, having capital, surplus and undivided profits aggregating at least
      Ten Million Dollars, designated in such notice of redemption, and
      thereupon all shares of the Serial Preferred Stock with respect to which
      such deposit shall have been made shall no longer be deemed to be
      outstanding, and all rights with respect to such shares of Serial
      Preferred Stock shall forthwith upon such deposit in trust cease and
      terminate, except only the right of the holders thereof to receive from
      such bank or trust company at any time after the time of such deposit the
      funds so deposited, without interest and the right to exercise, on or
      before such redemption date privileges of conversion or exchange, if any,
      not theretofore
      expiring.<BR><BR>            Shares
      of Serial Preferred Stock purchased or redeemed pursuant to any obligation
      of the Company to purchase or redeem shares for a sinking fund, shares
      redeemed pursuant to the provisions hereof or purchased and for which
      credit shall have been taken against any sinking fund obligation, and
      shares surrendered pursuant to any conversion right, shall not be reissued
      or otherwise disposed of and shall be canceled. Any other shares of Serial
      Preferred Stock redeemed or otherwise acquired by the Company shall
      continue to be part of the authorized capital stock of the Company and may
      thereafter, in the discretion of the Board of Directors and to the extent
      permitted by law, be sold or reissued from time to time, as part of the
      same or another series, subject to the terms and conditions herein set
      forth.<BR><BR>            If
      and so long as the Company shall be in default in the payment of any
      quarter-yearly dividend on shares of any series of the Serial Preferred
      Stock, or shall be in default in the payment of funds into or the setting
      aside of funds for any sinking fund created for any series of the Serial
      Preferred Stock, the Company may not (other than by the use of unapplied
      funds, if any, paid into or set aside for a sinking fund or funds prior to
      such default) (i) redeem any shares of the Serial Preferred Stock unless
      all shares thereof are redeemed, or (ii) purchase or otherwise acquire for
      a consideration any shares of the Serial Preferred Stock, except pursuant
      to offers of sale made by holders of the Serial Preferred Stock in
      response to an invitation for tenders given simultaneously by the Company
      by mail to the holders of record of all shares of the Serial Preferred
      Stock then
      outstanding.<BR><BR>       (e)  In
      the event of any voluntary liquidation, dissolution or winding up of the
      Company, then, before any distribution or payment shall be made to the
      holders of any junior stock, the holder of each share of the Serial
      Preferred Stock shall be entitled to be paid in full in cash the amount
      fixed with respect to such share by the Board of Directors as hereinbefore
      provided, together with an amount computed at the annual dividend rate
      therefor from the date upon which dividends thereon became cumulative to
      the date fixed for the payment thereof, less the aggregate of the
      dividends theretofore paid thereon. If such payments shall have been made
      in full to the holders of the Serial Preferred Stock, the remaining assets
      and funds of the Company shall be distributed among the holders of the
      Common Stock and any other junior stock according to their respective
      rights, preferences, restrictions, qualifications and
      shares.<BR><BR>            In
      the event of any involuntary liquidation, dissolution or winding up of the
      Company, then, before any distribution or payment shall be made to the
      holders of any junior stock, the holder of each share of the Serial
      Preferred Stock shall be entitled to be paid in full the par value thereof
      in cash, together with an amount computed at the annual dividend rate
      therefor from the date upon which dividends thereon became cumulative to
      the date fixed for the payment thereof, less the aggregate of the
      dividends theretofore paid thereon. If such payments shall have been made
      in full to the holders of the Serial Preferred Stock, the remaining assets
      and funds of the Company shall be distributed among the holders of the
      Common Stock and any other junior stock according to their respective
      rights, preferences, restrictions, qualifications and
      shares.<BR><BR>            With
      respect to the payments to be made in the event of voluntary or
      involuntary liquidation, dissolution or winding up of the Company, all
      series of the Serial Preferred Stock shall rank ratably according to their
      respective interests without preference of any series thereof over any
      other
      series.<BR><BR>       (f)  Subject
      to the limitations hereinafter specified, whenever the full dividends on
      the Serial Preferred Stock at the time outstanding for all past
      quarter-yearly dividend periods shall have been paid and the full dividend
      thereon for the quarter-yearly dividend period then current shall have
      been paid or declared and a sum sufficient for the payment thereof set
      apart, then such dividends (payable in cash, stock or otherwise) as may be
      determined by the Board of Directors may be declared on the Common Stock
      and any other junior stock, and the Serial Preferred Stock shall not be
      entitled to participate in any such
      dividends.<BR><BR>       (g)  So
      long as any shares of the Serial Preferred Stock are outstanding, no
      amendment to the Articles of Incorporation of the Company which would (i)
      create, change any junior stock into, or increase the rights and
      preferences of, any senior or parity stock, (ii) increase the authorized
      amount of the Serial Preferred Stock in excess of the 1,600,000 shares
      created hereby or the authorized amount of any senior or parity stock, or
      (iii) change the express terms of the outstanding shares of Serial
      Preferred Stock in any manner substantially prejudicial to the holders
      thereof, shall be made without the affirmative consent (given in writing
      without a meeting or by a vote at a meeting duly called for the purpose)
      of the holders of more than two thirds of the aggregate number of shares
      of the Serial Preferred Stock then outstanding; but any such amendment may
      be made with such affirmative consent, together with such additional vote
      or consent of stockholders as from time to time may be required by law;
      provided, however, that if any such amendment would change the express
      terms of the outstanding shares of Serial Preferred Stock of any
      particular series in any manner substantially prejudicial to the holders
      thereof without correspondingly affecting the holders of the outstanding
      shares of Serial Preferred Stock of all series, then, in lieu of such
      consent of the holders of Serial Preferred Stock (or, if such consent of
      the holders of the outstanding shares of Serial Preferred Stock is
      required by law, in addition thereto), a like affirmative consent of the
      holders of more than two thirds of the Serial Preferred Stock of the
      affected series at the time outstanding shall be necessary for making such
      amendment.<BR><BR>       (h)  So
      long as any shares of the Serial Preferred Stock are outstanding, the
      Company shall not, without the affirmative consent (given in writing
      without a meeting or by a vote at a meeting duly called for the
      <BR><BR>purpose) of the holders of at least a majority of the aggregate
      number of shares of the Serial Preferred Stock then
      outstanding:<BR><BR>            (1)  issue
      any shares of the Serial Preferred Stock in excess of 300,000 shares
      thereof at any one time outstanding,or issue any shares of senior or
      parity stock (either directly or by reclassification),unless for a period
      of twelve consecutive calendar months within the fifteen calendar months
      next preceding the date on which such shares are to be issued net earnings
      (after depreciation and taxes but before deducting interest) have been at
      least one and one-half times the annual interest charges and dividend
      requirements on all indebtedness of the Company and on all shares of
      Serial Preferred Stock and senior and parity stock which shall then be
      outstanding; for the purpose of such computation, the shares and any
      indebtedness proposed to be issued in connection with such issue shall be
      included, but any indebtedness or shares proposed to be retired in
      connection with such issue shall be excluded, and in determining such net
      earnings, the Board of Directors of the Company shall make such
      adjustments, by way of increase or decrease in such net earnings, as shall
      in their opinion be necessary to give effect for the entire twelve months
      for which such net earnings are determined to any acquisition or
      disposition of property the earnings of which can be separately
      ascertained, and to any issue, sale, assumption or retirement of
      securities, which shall have occurred after the commencement of such
      twelve months' period and prior to or in connection with the issue of the
      shares of the Serial Preferred Stock or senior or parity stock;
      or<BR><BR>            (2)  issue
      any shares of the Serial Preferred Stock, in excess of 300,000 shares
      thereof at any one time outstanding, or issue any shares of senior or
      parity stock (either directly or by reclassification), unless immediately
      after such proposed issue the aggregate of (i) the capital of the Company
      applicable to its stock ranking junior as to assets and dividends and (ii)
      the surplus of the Company shall be not less than the aggregate amount
      payable upon involuntary liquidation to the holders of the Serial
      Preferred Stock and of senior and parity stock then to be outstanding,
      excluding from such computation all stock to be retired through such
      proposed issue;
      or<BR><BR>            (3)  issue
      any unsecured notes, debentures or other securities representing unsecured
      indebtedness, or assume or guarantee any such unsecured securities, other
      than for the extension, renewal or refunding of outstanding debt
      securities theretofore issued or assumed, or for the redemption or
      retirement of shares of the Serial Preferred Stock or of any senior or
      parity stock, if immediately after such issue or assumption the total
      principal amount of such unsecured securities then outstanding would
      exceed twenty-five per cent of the aggregate of (i) the total principal
      amount of all bonds or other securities representing secured indebtedness
      issued, assumed or guaranteed by the Company and then to be outstanding
      and (ii) the capital and surplus of the Company as then stated on its
      books less any known excess of book value of the Company's physical
      property which is devoted to public use over (I) the actual cost thereof
      to the Company and (II) as to such property as was not acquired as the
      result of arm's length negotiations, the actual cost thereof to the one
      first devoting the same to public use;
      or<BR><BR>            (4)  merge
      or consolidate with or into any other corporation or corporations or sell
      or lease all or substantially all of its assets, unless such merger,
      consolidation, sale or lease, or the issue and assumption of all
      securities to be issued or assumed in connection with any such merger,
      consolidation, sale or lease shall have been ordered, approved or
      permitted by the regulatory authority or authorities having jurisdiction
      in the premises; provided that the provisions of this clause (4) shall not
      apply to a purchase, lease or other acquisition by the Company of the
      franchises or assets of another corporation, or otherwise apply in any
      manner which does not involve a merger or consolidation or sale or lease
      by the Company of all or substantially all of its
      assets.<BR><BR>       (i)  So
      long as any shares of the Serial Preferred Stock are outstanding, the
      Company shall not pay any dividends on its Common Stock (other than
      dividends payable in Common Stock) or make any distribution on, or
      purchase or otherwise acquire for value, any of its Common Stock (each
      such payment distribution purchase and/or acquisition being herein
      referred to as a "Common Stock dividend") except to the extent permitted
      by the following
      provisions:<BR><BR>            (1)  No
      Common Stock dividend shall be declared or paid in an amount which,
      together with all other Common Stock dividends declared in the year ending
      on (and including) the date of the declaration of such Common Stock
      dividend, would in the aggregate exceed 50% of the net earnings of the
      Company for the period consisting of the twelve consecutive calendar
      months ending on the last day of the calendar month next preceding the
      declaration of such Common Stock dividend after deducting from such net
      earnings dividends accruing on any stock other than Common Stock of the
      Company during such period, if at the end of such period, the ratio
      (herein referred to as the "capitalization ratio") of the sum of (i) the
      capital represented by the Common Stock (including premiums on Common
      Stock) and (ii) the surplus accounts of the Company, to the sum of (I) the
      total capital and (II) the surplus accounts of the Company (after
      adjustment in each case of the surplus accounts to reflect payment of such
      Common Stock dividend) would be less than
      20%.<BR><BR>            (2)  If
      such capitalization ratio, determined as aforesaid, shall be 20% or more,
      but less than 25%, no Common Stock dividend shall be declared or paid in
      an amount which, together with all other Common Stock dividends declared
      in the year ending on (and including) the date of the declaration of such
      Common Stock dividend, would in the aggregate exceed 75% of the net
      earnings of the Company for the period consisting of the twelve
      consecutive calendar months ending on the last day of the calendar month
      next preceding the declaration of such Common Stock dividend after
      deducting from such net earnings dividends accruing on any stock other
      than the Common Stock of the Company during such period;
      and<BR><BR>            (3)  If
      such capitalization ratio, determined as aforesaid, shall be in excess of
      25%, no Common Stock dividend shall be declared or paid which would reduce
      such capitalization ratio to less than 25% except to the extent permitted
      by the next preceding subparagraphs (1) and
      (2).<BR><BR>       For the purposes of
      this subdivision (i) the total capital of the Company shall be deemed to
      consist of the aggregate of (x) the principal amount of all outstanding
      indebtedness of the Company represented by bonds, notes or other evidences
      of indebtedness maturing by their terms one year or more after the date of
      the issue thereof and (y) the par or stated value of all outstanding
      capital stock (including premiums on capital stock) of all classes of the
      Company. All indebtedness and shares of stock of the Company acquired by
      the Company and held in its treasury shall be excluded in determining
      total capital.<BR><BR>       Purchases
      or other acquisitions of Common Stock shall be deemed, for the purposes of
      the foregoing provisions of this subdivision (i), to have been declared as
      dividends as of the date on which such purchases or acquisitions are
      consummated.<BR><BR>       (j)  No
      holder of Serial Preferred Stock shall be entitled as such as a matter of
      right to subscribe for or purchase any part of any new or additional issue
      of stock, or securities convertible into, or carrying or evidencing any
      right to purchase, stock, of any class whatever, whether now or hereafter
      authorized, and whether issued for cash, property, services or
      otherwise.<BR><BR>       (k)  Except
      as otherwise in subdivisions (g) and (h) of this subdivision (A) or by
      statute specifically provided, the Serial Preferred Stock shall have no
      voting power unless and until dividends payable thereon are in default in
      an amount equivalent to four full quarter-yearly dividends on the Serial
      Preferred Stock at the time outstanding. In such event and until such
      default shall have been remedied as hereinafter provided, the holders of
      Serial Preferred Stock, voting separately, shall become entitled to elect
      twenty-five percent of the Board of Directors, or the smallest number of
      directors that exceeds twenty-five percent of the Board, but in no event
      less than two directors, and the other stockholders then entitled to vote
      for the election of directors, voting separately by classes if so required
      by the provisions applicable to such classes, shall be entitled to elect
      the remaining directors of the Company. Upon the accrual of such special
      right to the holders of Serial Preferred Stock a meeting of the
      stockholders then entitled to vote for the election of directors shall be
      held upon notice promptly given, as provided in the By-Laws for a special
      meeting, by the President or the Chairman of the Board of the Company. If
      within fifteen days after the accrual of such special right to the holders
      of Serial Preferred Stock, the President and the Chairman of the Board of
      the Company shall fail to call such meeting, then such meeting shall be
      held upon notice, as provided in the By-Laws for a special meeting, given
      by the holders of not less than five hundred shares of Serial Preferred
      Stock after filing with the Company notice of their intention so to do.
      The terms of office of all persons who may be directors of the Company at
      the time shall terminate upon the election of directors by the holders of
      Serial Preferred Stock, whether or not at the time of such termination the
      remaining directors of the Company shall have been elected; and thereafter
      and during the continuance of such special right of the holders of Serial
      Preferred Stock, the Board of Directors shall be divided into two or more
      classes, one class consisting of the directors to be elected by the
      holders of Serial Preferred Stock and the other class or classes
      consisting of the directors to be elected by the other stockholders
      entitled to vote for the election of directors, and the directors of each
      such class elected at such meeting, or at any adjournment thereof, and the
      directors of each such class elected at any subsequent annual meeting for
      the election of directors, held during the continuance of such special
      right, shall hold office until the next succeeding annual election and
      until their respective successors by classes are elected and
      qualified.<BR><BR>       However, if
      and when all dividends then in default on the Serial Preferred Stock shall
      be paid (and such dividends shall be declared and paid as soon as
      reasonably practicable out of surplus or net profits, but without
      diminishing the amount of capital of the Company), the holders of Serial
      Preferred Stock shall be divested of such special right, but subject
      always to the same provisions for the revesting of such special right in
      the holders of Serial Preferred Stock in the case of any similar future
      default or defaults. Whenever the holders of Serial Preferred Stock shall
      be so divested of such special right, the method of election of the Board
      of Directors by the vote of the other stockholders entitled to vote for
      the election of directors exclusively shall be restored, and the election
      of directors shall take place at the next succeeding annual meeting for
      the election of directors, or at any adjournment
      thereof.<BR><BR>       (l)  Except
      as hereinafter provided, during the continuance of the special right of
      the holders of Serial Preferred Stock to elect directors as provided in
      subdivision (k) of this subdivision (A), at all meetings for the election
      of directors the presence in person or by proxy of the holders of record
      of a majority of the outstanding shares of Serial Preferred Stock shall be
      necessary to constitute a quorum for the election of directors whom the
      holders of Serial Preferred Stock are entitled to elect, and the presence
      in person or by proxy of the holders of record of a majority of the
      outstanding shares of each other class of stock then entitled to vote for
      the election of directors shall be necessary to constitute a quorum for
      the election of the directors whom the holders of such class of stock are
      entitled to elect. In the absence of such a quorum of the holders of stock
      of any particular class then entitled to vote for the election of
      directors, the holders of a majority of the shares of the stock of such
      class so present in person or represented by proxy may adjourn from time
      to time the meeting for the election of directors to be elected by such
      stock, without notice other than announcement at the meeting, until the
      requisite quorum of holders of such stock shall be obtained. However, at
      the first meeting for the election of directors after any accrual of the
      special right of the holders of Serial Preferred Stock, and at any
      subsequent annual meeting for the election of directors held during the
      continuance of such special right, if there shall not be such a quorum of
      the holders of Serial Preferred Stock the meeting shall be adjourned from
      time to time as above provided until such quorum shall have been obtained;
      provided that, if such quorum shall not have been obtained within ninety
      days from the date of such meeting as originally called (or, in the case
      of any annual meeting held during the continuance of such special right,
      from the date fixed for such annual meeting), the presence in person or by
      proxy of the holders of record of one third of the outstanding shares of
      Serial Preferred Stock shall then be sufficient to constitute a quorum for
      the election of the directors whom the holders of Serial Preferred Stock
      are then entitled to elect. The absence of a quorum of the holders of any
      class of stock then entitled to vote for the election of directors shall
      not, except as hereinafter provided, prevent or invalidate the election by
      the other class or classes of stockholders of the directors which they are
      entitled to elect, if the necessary quorum of stockholders of such other
      class or classes is present in person or represented by proxy at any such
      meeting or any adjournment thereof. However, at the first meeting for the
      election of directors after any accrual of the special right of the
      holders of Serial Preferred Stock to elect directors as provided in
      subdivision (k) of this subdivision (A), the absence of a quorum of the
      holders of Serial Preferred Stock shall prevent the election of directors
      by the holders of Common Stock until the election of directors by the
      holders of Serial Preferred Stock after a quorum of the holders of Serial
      Preferred Stock shall have been
      obtained.<BR><BR>                            (B)
      PREFERENCE
      STOCK<BR><BR>       (a)  Subject
      to the provisions hereafter in this subdivision (B) set forth, the
      Preference Stock may be divided into and issued, from time to time, in one
      or more series as the Board of Directors may determine, and the Board of
      Directors is hereby expressly authorized to adopt from time to time
      resolutions, in respect of any unissued shares of Preference Stock, to fix
      and
      determine:<BR><BR>            (1)  The
      division of such shares into series and the designation and authorized
      number of shares of the particular
      series;<BR><BR>            (2)  The
      rate of dividend and the time of payment for the particular series and the
      dates from which dividends on all shares of such series issued prior to
      the record date for the first dividend on shares of such series shall be
      cumulative;<BR><BR>            (3)  The
      price or prices at and the terms and conditions on which shares of the
      particular series may be
      redeemed;<BR><BR>            (4)  The
      amount payable upon shares of the particular series in the event of
      voluntary
      liquidation;<BR><BR>            (5)  Sinking
      fund provisions (if any) for the redemption or purchase of shares of the
      particular series;
      and<BR><BR>            (6)  The
      terms and conditions (if any) on which the shares of the particular series
      may be converted into other classes of stock of the Company.<BR><BR>All
      shares of Preference Stock shall be of equal rank with each other,
      regardless of series, and all shares thereof shall be identical except as
      to the above listed relative rights and preferences, in respect of any or
      all of which there may be variations between different series as fixed and
      determined by the Board of Directors in said resolutions. All shares of
      the Preference Stock of any one series shall be identical with each other
      in all respects. All shares of the Preference Stock shall be subject to
      the prior rights and preferences of the Serial Preferred Stock as defined
      in subdivision (A) above and any other senior stock as defined in
      subdivision (b) (1) below hereafter
      authorized.<BR><BR>       (b)  The
      following terms, as used in this subdivision (B), shall have the following
      meanings:<BR><BR>            (1)  The
      term senior stock as used in this subdivision (B) shall mean the Serial
      Preferred Stock and any other class of stock ranking in its claim to
      assets or dividends prior to the 5,000,000 shares of Preference Stock
      created
      hereby;<BR><BR>            (2)  The
      term parity stock as used in this subdivision (B) shall mean any class of
      stock ranking in its claim to assets or dividends on a parity with the
      Preference Stock, but shall not include any of the 8,800,000 shares of
      Preference Stock provided for hereby, nor shall it include any increase in
      the authorized amount of the Preference Stock;
      and<BR><BR>            (3)  The
      term junior stock as used in this subdivision (B) shall mean the Common
      Stock and any other class of stock ranking in its claim to assets or
      dividends junior to the Preference
      Stock.<BR><BR>       (c)  The
      holders of the Preference Stock shall be entitled, subject to the prior
      rights and preferences of senior stock, to receive, but only when and as
      declared by the Board of Directors, cumulative cash dividends in the case
      of each series at the annual rate for such series theretofore fixed by the
      Board of Directors as hereinbefore provided, payable quarter-yearly on the
      first days of March, June, September and December (or such other
      quarter-yearly dates for a particular series as the Board of Directors may
      determine prior to the issue thereof as hereinbefore provided) in each
      year to stockholders of record on the respective dates fixed for the
      purpose by the Board of Directors as dividends are
      declared.<BR><BR>            No
      dividend shall be declared on any shares of Preference Stock of any series
      for any particular dividend period unless dividends in full have been paid
      or declared and set apart for payment or are contemporaneously declared
      and set apart for payment on the Preference Stock of all series then
      outstanding for all dividend periods terminating at or before the end of
      the particular dividend period. When dividends at the respective annual
      dividend rates are not paid in full on any shares of Preference Stock, the
      shares of all series of Preference Stock shall share ratably in the
      payment of dividends including accumulations, if any, in accordance with
      the sums which would be payable on such shares if all dividends were
      declared and paid in
      full.<BR><BR>            The
      dividends on shares of Preference Stock shall be cumulative in the case of
      all shares of each particular series (a) if issued prior to the record
      date for the first dividend on shares of such series, then from the date
      theretofore fixed for the purpose by the Board of Directors as
      hereinbefore provided, or, if no such date is so fixed, then from the date
      on which the shares of such series shall have been originally issued, (b)
      if issued after the record date for a dividend on shares of such series
      and before the payment date for such dividend then from such dividend
      payment date; and (c) otherwise from the quarterly dividend payment date
      next preceding the date of issue of such shares. Unless dividends on all
      outstanding shares of the Preference Stock, at the annual dividend rate or
      rates fixed therefor, shall have been paid for all past quarter-yearly
      dividend periods to which they are entitled, and the full dividend thereon
      at said rate or rates for the quarter-yearly dividend periods current at
      the time shall have been paid or declared and set apart for payment, but
      without interest on accumulated dividends, and unless all sinking fund
      payments, if any, theretofore required to have been made shall have been
      made or provided for, no dividends shall be declared and no other
      distribution shall be made on any junior stock, and no junior stock shall
      be purchased, retired or otherwise acquired for value by the Company. No
      dividend shall be declared on any junior stock payable more than 120 days
      after the date of
      declaration.<BR><BR>            The
      holders of the Preference Stock shall not be entitled to receive any
      dividends thereon other than the dividends referred to in this subdivision
      (c).<BR><BR>       (d)  The
      Company, at the option of the Board of Directors or by the operation of
      the sinking fund, if any, provided for the Preference Stock of any series,
      may, from time to time, subject to such terms and conditions, if any, as
      may be fixed by the Board of Directors with respect to any series as
      hereinbefore provided, and subject to the prior rights and preferences of
      senior stock, redeem the whole or any part of such series at any time
      outstanding, by paying in cash the applicable redemption price theretofore
      fixed by the Board of Directors as hereinbefore
      provided.<BR><BR>            Notice
      of every such redemption shall be given by publication at least once in
      each of two calendar weeks in each of two daily newspapers printed in the
      English language, one published and of general circulation in the City of
      Washington, District of Columbia, and the other in the Borough of
      Manhattan, The City of New York, the first publication to be at least
      thirty days and not more than sixty days prior to the date fixed for such
      redemption. At least thirty days' and not more than sixty days' previous
      notice of every such redemption shall also be mailed to the holders of
      record of the shares so to be redeemed, at their respective addresses as
      the same shall appear on the books of the Company; but failure to mail
      such notice or any defect therein or in the mailing thereof shall not
      affect the validity of the proceedings for the redemption of any shares so
      to be
      redeemed.<BR><BR>            In
      case of the redemption of a part only of any series of the Preference
      Stock at the time outstanding, the Company or its duly authorized agent
      shall select by lot the shares so to be redeemed. The Board of Directors
      shall have full power and authority, subject to the limitations and
      provisions herein contained, to prescribe the manner in which the drawings
      by lot shall be conducted and the terms and conditions upon which the
      Preference Stock shall be redeemed from time to
      time.<BR><BR>            If
      such notice of redemption shall have been duly given by publication, and
      if on or before the redemption date specified therein the funds necessary
      for such redemption shall have been set aside by the Company, separate and
      apart from its other funds, in trust for the account of the holders of the
      shares so called for redemption so as to be and continue to be available
      therefor, then, notwithstanding that any certificate for shares so called
      for redemption shall not have been surrendered for cancellation, the
      shares represented thereby shall no longer be deemed to be outstanding on
      and after such redemption date, and all rights with respect to such shares
      shall forthwith on such redemption date cease and terminate, except only
      the right of the holders thereof to receive the amount payable upon
      redemption thereof, without
      interest.<BR><BR>            Provided,
      however, in the alternative, that after giving notice by publication of
      any such redemption as hereinbefore provided or after giving to the bank
      or trust company referred to below irrevocable authorization to give or
      complete such notice by publication, and prior to the redemption date
      specified in such notice, the Company may deposit in trust, for the
      account of the holders of the shares of Preference Stock so to be
      redeemed, the funds necessary for such redemption with a bank or trust
      company in good standing, organized and doing business under the laws of
      the United States or of any state or territory or of the District of
      Columbia and having its principal office in the City of Washington,
      District of Columbia, or in the Borough of Manhattan, The City of New
      York, having capital, surplus and undivided profits aggregating at least
      Ten Million Dollars, designated in such notice of redemption, and
      thereupon all shares of the Preference Stock with respect to which such
      deposit shall have been made shall no longer be deemed to be outstanding,
      and all rights with respect to such shares of Preference Stock shall
      forthwith upon such deposit in trust cease and terminate, except only the
      right of the holders thereof to receive from such bank or trust company at
      any time after the time of such deposit the funds so deposited, without
      interest and the right to exercise, on or before such redemption date
      privileges of conversion or exchange, if any, not theretofore
      expiring.<BR><BR>            Shares
      of Preference Stock purchased or redeemed pursuant to any obligation of
      the Company to purchase or redeem shares for a sinking fund, shares
      redeemed pursuant to the provisions hereof or purchased and for which
      credit shall have been taken against any sinking fund obligation, and
      shares surrendered pursuant to any conversion right, shall not be reissued
      or otherwise disposed of and shall be cancelled. Any other shares of
      Preference Stock redeemed or otherwise acquired by the Company shall
      continue to be part of the authorized capital stock of the Company and may
      thereafter, in the discretion of the Board of Directors and to the extent
      permitted by law, be sold or reissued from time to time, as part of the
      same or another series, subject to the terms and conditions herein set
      forth.<BR><BR>            If
      and so long as the Company shall be in default in the payment of any
      quarter-yearly dividend on shares of any series of the Preference Stock,
      or shall be in default in the payment of funds into or the setting aside
      of funds for any sinking fund created for any series of the Preference
      Stock, the Company may not (other than by the use of unapplied funds, if
      any, paid into or set aside for a sinking fund or funds prior to such
      default) (i) redeem any shares of the Preference Stock unless all shares
      thereof are redeemed, or (ii) purchase or otherwise acquire for a
      consideration any shares of the Preference Stock, except pursuant to
      offers of sale made by holders of the Preference Stock in response to an
      invitation for tenders given simultaneously by the Company by mail to the
      holders of record of all shares of the Preference Stock then
      outstanding.<BR><BR>       (e)  In
      the event of any voluntary liquidation, dissolution or winding up of the
      Company, then, before any distribution or payment shall be made to the
      holders of any junior stock, the holder of each share of the Preference
      Stock shall be entitled, subject to the prior rights and preferences of
      senior stock, to be paid in full in cash the amount fixed with respect to
      such share by the Board of Directors as hereinbefore provided, together
      with an amount computed at the annual dividend rate therefor from the date
      upon which dividends thereon became cumulative to the date fixed for the
      payment thereof, less the aggregate of the dividends theretofore paid
      thereon. If such payments shall have been made in full to the holders of
      the Preference Stock, the remaining assets and funds of the Company shall
      be distributed among the holders of the Common Stock and any other junior
      stock according to their respective rights, preferences, restrictions,
      qualifications and
      shares.<BR><BR>            In
      the event of any involuntary liquidation, dissolution or winding up of the
      Company, then, before any distribution or payment shall be made to the
      holders of any junior stock, the holder of each share of the Preference
      Stock shall be entitled, subject to the prior rights and preferences of
      senior stock, to be paid in full the par value thereof in cash, together
      with an amount computed at the annual dividend rate therefor from the date
      upon which dividends thereon became cumulative to the date fixed for the
      payment thereof, less the aggregate of the dividends theretofore paid
      thereon. If such payments shall have been made in full to the holders of
      the Preference Stock, the remaining assets and funds of the Company shall
      be distributed among the holders of the Common Stock and any other junior
      stock according to their respective rights, preferences, restrictions,
      qualifications and
      shares.<BR><BR>            With
      respect to the payments to be made in the event of voluntary or
      involuntary liquidation, dissolution or winding up of the Company, all
      series of the Preference Stock shall rank ratably according to their
      respective interests without preference of any series thereof over any
      other
      series.<BR><BR>       (f)  Whenever
      the full dividends on the Preference Stock at the time outstanding for all
      past quarter-yearly dividend periods shall have been paid and the full
      dividend thereon for the quarter-yearly dividend period then current shall
      have been paid or declared and a sum sufficient for the payment thereof
      set apart, then such dividends (payable in cash, stock or otherwise) as
      may be determined by the Board of Directors may be declared on the Common
      Stock and any other junior stock, and the Preference Stock shall not be
      entitled to participate in any such
      dividends.<BR><BR>       (g)  So
      long as any shares of the Preference Stock are outstanding, no amendment
      to the Articles of Incorporation of the Company which would (i) create,
      change any junior stock into, or increase the rights and preferences of,
      any senior or parity stock, (ii) increase the authorized amount of the
      Preference Stock in excess of the 5,000,000 shares created hereby or the
      authorized amount of any senior or parity stock, or (iii) change the
      express terms of the outstanding shares of Preference Stock in any manner
      substantially prejudicial to the holders thereof, shall be made without
      the affirmative consent (given in writing without a meeting or by a vote
      at a meeting duly called for the purpose) of the holders of more than two
      thirds of the aggregate number of shares of the Preference Stock then
      outstanding; but any such amendment may be made with such affirmative
      consent, together with such additional vote or consent of stockholders as
      from time to time may be required by law; provided, however, that if any
      such amendment would change the express terms of the outstanding shares of
      Preference Stock of any particular series in any manner substantially
      prejudicial to the holders thereof without correspondingly affecting the
      holders of the outstanding shares of Preference Stock of all series, then,
      in lieu of such consent of the holders of Preference Stock (or, if such
      consent of the holders of the outstanding shares of Preference Stock is
      required by law, in addition thereto), a like affirmative consent of the
      holders of more than two thirds of the Preference Stock of the affected
      series at the time outstanding shall be necessary for making such
      amendment.<BR><BR>       (h)  So
      long as any shares of the Preference Stock are outstanding, the Company
      shall not, without the affirmative consent (given in writing without a
      meeting or by a vote at a meeting duly called for the purpose) of the
      holders of at least a majority of the aggregate number of shares of the
      Preference Stock then outstanding, merge or consolidate with or into any
      other corporation or corporations or sell or lease all or substantially
      all of its assets, unless such merger, consolidation, sale or lease, or
      the issue and assumption of all securities to be issued or assumed in
      connection with any such merger, consolidation, sale or lease shall have
      been ordered, approved or permitted by the regulatory authority or
      authorities having jurisdiction in the premises; provided that the
      provisions of this subdivision (h) shall not apply to a purchase, lease or
      other acquisition by the Company of the franchises or assets of another
      corporation, or otherwise apply in any manner which does not involve a
      merger or consolidation or sale or lease by the Company of all or
      substantially all of its
      assets.<BR><BR>       (i)  No
      holder of Preference Stock shall be entitled as such as a matter of right
      to subscribe for or purchase any part of any new or additional issue of
      stock, or securities convertible into, or carrying or evidencing any right
      to purchase, stock, of any class whatever, whether now or hereafter
      authorized, and whether issued for cash, property, services or
      otherwise.<BR><BR>       (j)  Except
      as otherwise in subdivisions (g) and (h) of this subdivision (B) or by
      statute specifically provided, the Preference Stock shall have no voting
      power unless and until dividends payable thereon are in default in an
      amount equivalent to six full quarter-yearly dividends on the Preference
      Stock at the time outstanding. In such event and until such default shall
      have been remedied as hereinafter provided, the holders of Preference
      Stock, voting separately, shall become entitled to elect two directors of
      the Company at the next meeting of stockholders for the election of
      directors (unless all dividends then in default on the Preference Stock
      shall have been paid), and the other stockholders then entitled to vote
      for the election of directors, voting separately by classes if so required
      by the provisions applicable to such classes, shall be entitled to elect
      the remaining directors of the Company. During the continuance of such
      special right of the holders of Preference Stock, the Board of Directors
      shall be divided into two or more classes, one consisting of the directors
      to be elected by the holders of Preference Stock and the other class or
      classes consisting of the directors to be elected by the other
      stockholders entitled to vote for the election of directors, and the
      directors of each such class elected at any meeting for the election of
      directors, held during the continuance of such special right, shall hold
      office, subject to the rights of any senior stock, until the next
      succeeding annual election and until their respective successors by
      classes are elected and
      qualified.<BR><BR>            However,
      if and when all dividends then in default on the Preference Stock shall be
      paid (and such dividends shall be declared and paid as soon as reasonably
      practicable out of surplus or net profits, but without diminishing the
      amount of capital of the Company), the holders of Preference Stock shall
      be divested of such special right, but subject always to the same
      provisions for the revesting of such special right in the holders of
      Preference Stock in the case of any similar future default or defaults.
      Whenever the holders of Preference Stock shall be so divested of such
      special right, the method of election of the Board of Directors by the
      vote of the other stockholders entitled to vote for the election of
      directors exclusively shall be restored and the election of directors
      shall take place at the next succeeding annual meeting for the election of
      directors, or at any adjournment
      thereof.<BR><BR>       (k)  Except
      as hereinafter provided, during the continuance of the special right of
      the holders of Preference Stock to elect directors as provided in
      subdivision (j) of this subdivision (B), at all meetings for the election
      of directors the presence in person or by proxy of the holders of record
      of a majority of the outstanding shares of Preference Stock shall be
      necessary to constitute a quorum for the election of directors whom the
      holders of Preference Stock are entitled to elect, and the presence in
      person or by proxy of the holders of record of a majority of the
      outstanding shares of each other class of stock then entitled to vote for
      the election of directors shall, except as otherwise provided in
      subdivision (1) of subdivision (A), be necessary to constitute a quorum
      for the election of the directors whom the holders of such class of stock
      are entitled to elect. In the absence of such a quorum of the holders of
      stock of any particular class then entitled to vote for the election of
      directors, the holders of a majority of the shares of the stock of such
      class so present in person or represented by proxy may adjourn from time
      to time the meeting for the election of directors to be elected by such
      stock, without notice other than announcement at the meeting, until the
      requisite quorum of holders of such stock shall be obtained. The absence
      of a quorum of the holders of any class of stock then entitled to vote for
      the election of directors shall not, except as hereinbefore provided,
      prevent or invalidate the election by the other class or classes of
      stockholders of the directors which they are entitled to elect, if the
      necessary quorum of stockholders of such other class or classes is present
      in person or represented by proxy at any such meeting or any adjournment
      thereof.<BR><BR>                            (C)
      COMMON
      STOCK<BR><BR>       (a)  No
      holder of Common Stock shall be entitled as such as a matter of right to
      subscribe for or purchase any part of any new or additional issue of
      stock, or securities convertible into, or carrying or evidencing any right
      to purchase, stock, of any class whatever, whether now or hereafter
      authorized, and whether issued for cash, property, services or
      otherwise.<BR><BR>       (b)  Except
      as otherwise provided by statute or by this Article V, voting rights for
      all purposes shall be vested exclusively in the holders of the Common
      Stock, who shall have one vote for each share held by
      them.<BR><BR>VI.    The following provisions are set
      forth herein for the regulation of the internal affairs of the
      Company:<BR><BR>       At the date
      hereof, the Company has issued and outstanding $120,000,000 aggregate
      principal amount of First Mortgage Bonds issued under and secured by the
      lien of the Company's Mortgage and Deed of Trust dated July 1, 1936, as
      amended and supplemented, heretofore made by the Company to The Riggs
      National Bank of Washington, D.C., as Trustee, which Mortgage and Deed of
      Trust, as amended and supplemented, constitutes a lien on substantially
      all the properties and franchises of the Company, other than cash,
      accounts receivable and other liquid assets, securities, leases by the
      Company as lessor, equipment and materials not installed as part of the
      fixed property, and electric energy and other materials, merchandise or
      supplies produced or purchased by the Company for sale, distribution or
      use. The Board of Directors of the Company may from time to time cause to
      be issued additional First Mortgage Bonds to be secured by said Mortgage
      and Deed of Trust, as heretofore or hereafter amended and supplemented,
      without limitation as to principal amount and without action by or
      approval of the Company's shareholders, and in connection therewith may
      cause to be executed and delivered by the Company such supplemental
      indentures, containing such additional covenants, as the Board may
      approve.<BR><BR>       Without the
      assent of the shareholders of any class the stated capital of the Company
      may, from time to time, be reduced in respect of shares of its Serial
      Preferred Stock reacquired in conversion and
      cancelled.<BR><BR>VII.   The address of the Company's
      registered office in the District of Columbia is 1900 Pennsylvania Avenue,
      N. W.; and the name of its registered agent at such address is Jack E.
      Strausman.<BR><BR>       The address of
      the Company's registered office in Virginia is 8280 Greensboro Drive,
      #900, P.O. Box 9346, Tyson's Corner, McLean, Virginia 22102; and the name
      of its registered agent at such address is John S. Stump, who is a
      resident of Virginia and a member of the Virginia State
      Bar.<BR><BR>VIII.  Unless otherwise provided in the By-Laws, the
      number of directors of the Company shall be twelve
      (12).<BR><BR>IX.    The business and affairs of the
      Company shall be managed by or under the direction of the Board of
      Directors. The number of directors shall be determined in accordance with
      the provisions of Article VIII. The directors shall be divided into three
      classes, designated Class I, Class II and Class III. Each class shall
      consist, as nearly as may be possible, of one-third of the total number of
      directors constituting the entire Board of Directors. At the 1987 annual
      meeting of shareholders, Class I directors shall be elected for a one-year
      term, Class II directors for a two-year term, and Class III directors for
      a three-year term. At each succeeding annual meeting of shareholders
      beginning in 1988, successors to the class of directors whose term expires
      at that annual meeting shall be elected for a three-year term. If the
      number of directors is changed in accordance with the provisions of
      Article VIII, any increase or decrease shall be apportioned among the
      classes so as to maintain the number of directors in each class as nearly
      equal as possible, and any additional director of any class elected to
      fill a vacancy resulting from an increase in such class shall hold office
      for a term that shall coincide with the remaining term of that class, but
      in no case will a decrease in the number of directors shorten the term of
      any incumbent director. A director shall hold office until the annual
      meeting for the year in which his term expires and until his successor
      shall be elected and shall qualify, subject, however, to prior death,
      resignation, retirement, age and service limitations as may be set forth
      in the By-Laws, disqualification or removal from office. Any vacancy on
      the Board of Directors that results from other than an increase in the
      number of directors may be filled by a majority of the Board of Directors
      then in office even if less than a quorum, or by a sole remaining
      director. The term of any director elected by the Board of Directors to
      fill a vacancy not resulting from an increase in the number of directors
      shall expire at the next shareholders' meeting at which directors are
      elected, and the remainder of such term, if any, shall be filled by a
      director elected at such
      meeting.<BR><BR>       Notwithstanding
      the foregoing, whenever the holders of any class of stock issued by the
      Company shall have the right, voting separately by class or series, to
      elect directors at an annual or special meeting of shareholders, the
      election, term of office, filling of vacancies and other features of such
      directorships shall be governed by the terms of the Articles of
      Incorporation applicable thereto, and such directors so elected shall not
      be divided into classes pursuant to this Article IX unless expressly
      provided by such
      terms.<BR><BR>       Subject to the
      provisions of the preceding paragraphs, directors elected pursuant to this
      Article IX may be removed only for
      cause.<BR><BR>X.     In addition to any other
      vote that may be required by law or these Articles of Incorporation or the
      By-Laws of the Company, the affirmative vote of the holders of four-fifths
      of all the capital stock entitled to vote shall be required to amend,
      alter, or repeal Articles IX and X of these Articles of Incorporation, and
      Article I, Section 1, the second through the fourth paragraphs, Article I,
      Section 2, and Article II, Section 1 of the By-Laws of the Company;
      provided, however, that the power of the Board of Directors to amend,
      alter, or repeal the By-Laws shall not be affected by this Article
      X.<BR><BR>XI.    (A)  In addition to any
      affirmative vote required by law or these Articles of Incorporation or the
      By-Laws of the Company, and except as otherwise expressly provided in
      Paragraph (B) of this Article XI, a Business Combination (as hereinafter
      defined) shall require the affirmative vote of not less than sixty-six and
      two-thirds percent (66-2/3%) of the votes entitled to be cast by the
      holders of all the then outstanding shares of Voting Stock (as hereinafter
      defined), voting together as a single class, excluding Voting Stock
      beneficially owned by any Interested Shareholder (as hereinafter defined).
      Such affirmative vote shall be required notwithstanding the fact that no
      vote may be required, or that a lesser percentage or separate class vote
      may be specified, by law or in any agreement with any national securities
      exchange or
      otherwise.<BR><BR>       (B)  The
      provisions of the preceding Paragraph (A) shall not be applicable to any
      particular Business Combination, and such Business Combination shall
      require only such affirmative vote, if any, as is required by law or by
      any other provision of these Articles of Incorporation or the By-Laws of
      the Company, or any agreement with any national securities exchange, if
      all of the conditions specified in either of the following Paragraphs (1)
      or (2) are met or, in the case of a Business Combination not involving the
      payment of consideration to the holders of the Company's outstanding
      Capital Stock (as hereinafter defined), if the condition specified in the
      following Paragraph (1) is
      met:<BR><BR>            (1)  The
      Business Combination shall have been approved by a majority (whether such
      approval is made prior to or subsequent to the acquisition of beneficial
      ownership of the Voting Stock that caused the Interested Shareholder to
      become an Interested Shareholder) of the Continuing Directors (as
      hereinafter
      defined).<BR><BR>            (2)  All
      of the following conditions shall have been met with respect to every
      class or series of outstanding Capital Stock, whether or not the
      Interested Shareholder has previously acquired beneficial ownership of any
      shares of a particular class or series of Capital
      Stock:<BR><BR>                 (a)  The
      aggregate amount of cash and the Fair Market Value (as hereinafter
      defined), as of the date of the consummation of the Business Combination,
      of consideration other than cash to be received per share by holders of
      Common Stock in such Business Combination shall be at least equal to the
      highest amount determined under clauses (i), (ii), (iii), and (iv)
      below:<BR><BR>                      (i)    (if
      applicable) the highest per share price (including any brokerage
      commissions, transfer taxes and soliciting dealers' fees) paid by or on
      behalf of the Interested Shareholder for any share of Common Stock in
      connection with the acquisition by the Interested Shareholder of
      beneficial ownership of shares of Common Stock (x) within the two-year
      period immediately prior to the first public announcement of the proposed
      Business Combination (the "Announcement Date") or (y) in the transaction
      in which it became an Interested Shareholder, whichever is higher, in
      either case as adjusted for any subsequent stock split, stock dividend,
      subdivision or reclassification with respect to Common
      Stock;<BR><BR>                      (ii)   the
      Fair Market Value per share of Common Stock on the Announcement Date or on
      the date on which the Interested Shareholder became an Interested
      Shareholder (the "Determination Date"), whichever is higher, as adjusted
      for any subsequent stock split, stock dividend, subdivision or
      reclassification with respect to Common
      Stock;<BR><BR>                      (iii)  (if
      applicable) the price per share equal to the Fair Market Value per share
      of Common Stock determined pursuant to the immediately preceding clause
      (ii), multiplied by the ratio of (x) the highest per share price
      (including any brokerage commissions, transfer taxes and soliciting
      dealers' fees) paid by or on behalf of the Interested Shareholder for any
      share of Common Stock in connection with the acquisition by the Interested
      Shareholder of beneficial ownership of shares of Common Stock within the
      two-year period immediately prior to the Announcement Date, as adjusted
      for any subsequent stock split, stock dividend, subdivision or
      reclassification with respect to Common Stock to (y) the Fair Market Value
      per share of Common Stock on the first day in such two-year period on
      which the Interested Shareholder acquired beneficial ownership of any
      share of Common Stock, as adjusted for any subsequent stock split, stock
      dividend, subdivision or reclassification with respect to Common Stock;
      and<BR><BR>                      (iv)   the
      Company's net income per share of Common Stock for the four full
      consecutive fiscal quarters immediately preceding the Announcement Date,
      multiplied by the higher of the then price/earnings multiple (if any) of
      such Interested Shareholder or the highest price/earnings multiple of the
      Company within the two-year period immediately preceding the Announcement
      Date (such price/earnings multiples being determined by dividing the
      highest price per share during a day as reported in the Wall Street
      Journal from the Composite Tape for the New York Stock Exchange by the
      immediately preceding publicly reported twelve-months earnings per
      share).<BR><BR>                 (b)  The
      aggregate amount of cash and the Fair Market Value, as of the date of the
      consummation of the Business Combination, of consideration other than cash
      to be received per share by holders of shares of any class or series of
      outstanding Capital Stock, other than Common Stock, shall be at least
      equal to the highest amount determined under clauses (i), (ii), (iii), and
      (iv)
      below:<BR><BR>                      (i)    (if
      applicable) the highest per share price (including any brokerage
      commissions, transfer taxes and soliciting dealers' fees) paid by or on
      behalf of the Interested Shareholder for any share of such class or series
      of Capital Stock in connection with the acquisition by the Interested
      Shareholder of beneficial ownership of shares of such class or series of
      Capital Stock (x) within the two-year period immediately prior to the
      Announcement Date or (y) in the transaction in which it became an
      Interested Shareholder, whichever is higher, in either case as adjusted
      for any subsequent stock split, stock dividend, subdivision or
      reclassification with respect to such class or series of Capital
      Stock;<BR><BR>                      (ii)   the
      Fair Market Value per share of such class or series of Capital Stock on
      the Announcement Date or on the Determination Date, whichever is higher,
      as adjusted for any subsequent stock split, stock dividend, subdivision or
      reclassification with respect to such class or series of Capital
      Stock;<BR><BR>                      (iii)  (if
      applicable) the price per share equal to the Fair Market Value per share
      of such class or series of Capital Stock determined pursuant to the
      immediately preceding clause (ii), multiplied by the ratio of (x) the
      highest per share price (including any brokerage commissions, transfer
      taxes and soliciting dealers' fees) paid by or on behalf of the Interested
      Shareholder for any share of such class or series of Capital Stock in
      connection with the acquisition by the Interested Shareholder of
      beneficial ownership of shares of such class or series of Capital Stock
      within the two-year period immediately prior to the Announcement Date, as
      adjusted for any subsequent stock split, stock dividend, subdivision or
      reclassification with respect to such class or series of Capital Stock to
      (y) the Fair Market Value per share of such class or series of Capital
      Stock on the first day in such two-year period on which the Interested
      Shareholder acquired beneficial ownership of any share of such class or
      series of Capital Stock, as adjusted for any subsequent stock split, stock
      dividend, subdivision or reclassification with respect to such class or
      series of Capital Stock;
      and<BR><BR>                      (iv)   (if
      applicable) the highest preferential amount per share to which the holders
      of shares of such class or series of Capital Stock would be entitled in
      the event of any voluntary or involuntary liquidation, dissolution or
      winding up of the affairs of the Company regardless of whether the
      Business Combination to be consummated constitutes such an
      event.<BR><BR>                 (c)  The
      consideration to be received by holders of a particular class or series of
      outstanding Capital Stock shall be in cash or in the same form as
      previously has been paid by or on behalf of the Interested Shareholder in
      connection with its direct or indirect acquisition of beneficial ownership
      of shares of such class or series of Capital Stock. If the consideration
      previously paid by the Interested Shareholder to acquire shares of any
      class or series of Capital Stock varied among the recipients thereof as to
      form, the form of consideration to be paid for such class or series of
      Capital Stock in connection with the Business Combination shall be either
      cash or the form used to acquire beneficial ownership of the largest
      number of shares of such class or series of Capital Stock previously
      acquired by the Interested
      Shareholder.<BR><BR>                 (d)  After
      the Determination Date and prior to the consummation of such Business
      Combination: (i) except as approved by a majority of the Continuing
      Directors, there shall have been no failure to declare and pay at the
      regular date therefor any full quarterly dividends (whether or not
      cumulative) payable in accordance with the terms of any outstanding
      Capital Stock; (ii) there shall have been no reduction in the annual rate
      of dividends paid on the Common Stock (except as necessary to reflect any
      stock split, stock dividend or subdivision of the Common Stock), except as
      approved by a majority of the Continuing Directors; (iii) there shall have
      been an increase in the annual rate of dividends paid on the Common Stock
      as necessary to reflect any reclassification (including any reverse stock
      split), recapitalization, reorganization or any similar transaction that
      has the effect of reducing the number of outstanding shares of Common
      Stock, unless the failure so to increase such annual rate is approved by a
      majority of the Continuing Directors; and (iv) such Interested Shareholder
      shall not have become the beneficial owner of any additional shares of
      Capital Stock except as part of the transaction that results in such
      Interested Shareholder becoming an Interested Shareholder and except in a
      transaction that, after giving effect thereto, would not result in any
      increase in the Interested Shareholder's percentage of beneficial
      ownership of any class or series of Capital
      Stock.<BR><BR>                 (e)  After
      the Determination Date, such Interested Shareholder shall not have
      received the benefit, directly or indirectly (except proportionately as a
      shareholder of the Company), of any loans, advances, guarantees, pledges
      or other financial assistance or any tax credits or other tax advantages
      provided by the Company, whether in anticipation of or in connection with
      such Business Combination or
      otherwise.<BR><BR>                 (f)  A
      proxy or information statement describing the proposed Business
      Combination and complying with the requirements of the Securities Exchange
      Act of 1934, as amended, and the rules and regulations thereunder (the
      "Act") (or any subsequent provisions replacing such Act, rules or
      regulations) shall be mailed to all shareholders of the Company at least
      30 days prior to the consummation of such Business Combination (whether or
      not such proxy or information statement is required to be mailed pursuant
      to such Act or subsequent provisions). The proxy or information statement
      shall contain on the first page thereof, in a prominent place, any
      statement as to the advisability (or inadvisability) of the Business
      Combination that the Continuing Directors, or any of them, may choose to
      make and, if deemed advisable by a majority of the Continuing Directors,
      the opinion of an investment banking firm selected by a majority of the
      Continuing Directors as to the fairness (or not) of the terms of the
      Business Combination from a financial point of view to the holders of the
      outstanding shares of Capital Stock other than the Interested Shareholder
      and its Affiliates or Associates (as hereinafter defined), such investment
      banking firm to be paid a reasonable fee for its services by the
      Company.<BR><BR>                 (g)  Such
      Interested Shareholder shall not have made any major change in the
      Company's business or equity capital structure without the approval of a
      majority of the Continuing
      Directors.<BR><BR>       (C)  The
      following definitions shall apply with respect to this Article
      XI:<BR><BR>            (1)  The
      term "Business Combination" shall
      mean:<BR><BR>                 (a)  any
      merger or consolidation of the Company or any Subsidiary (as hereinafter
      defined) with (i) any Interested Shareholder or (ii) any other company
      (whether or not itself an Interested Shareholder) which is or after such
      merger or consolidation would be an Affiliate or Associate of an
      Interested Shareholder;
      or<BR><BR>                 (b)  any
      sale, lease, exchange, mortgage, pledge, transfer or other disposition or
      security arrangement, investment, loan, advance, guarantee, agreement to
      purchase, agreement to pay, extension of credit, joint venture
      participation or other arrangement (in one transaction or a series of
      transactions) with or for the benefit of any Interested Shareholder or any
      Affiliate or Associate of any Interested Shareholder involving any assets,
      securities or commitments of the Company or any Subsidiary having an
      aggregate Fair Market Value and/or involving aggregate commitments of
      $10,000,000 or more or constituting more than 5 percent of the book value
      of the total assets (in the case of transactions involving assets or
      commitments other than Capital Stock) or 5 percent of the shareholders'
      equity (in the case of transactions in Capital Stock) of the entity in
      question (the "Substantial Part"), as reflected in the most recent fiscal
      year-end consolidated balance sheet of such entity existing at the time
      the shareholders of the Company would be required, pursuant to Paragraph A
      of this Article XI, to approve or <BR>authorize the Business Combination
      involving the assets, securities and/or commitments constituting any
      Substantial Part;
      or<BR><BR>                 (c)  the
      adoption of any plan or proposal for the liquidation or dissolution of the
      Company which is voted for or consented to by any Interested Shareholder
      or any Affiliate or Associate thereof;
      or<BR><BR>                 (d)  any
      reclassification of securities (including any reverse stock split), or
      recapitalization of the Company, or any merger or consolidation of the
      Company with any of its Subsidiaries or any other transaction (whether or
      not with or otherwise involving an Interested Shareholder) that has the
      effect, directly or indirectly, of increasing the proportionate share of
      any class or series of Capital Stock, or any securities convertible into
      Capital Stock or into equity securities of any Subsidiary, that is
      beneficially owned by any Interested Shareholder or any Affiliate or
      Associate of any Interested Shareholder;
      or<BR><BR>                 (e)  any
      agreement, contract or other arrangement providing for any one or more of
      the actions specified in the foregoing clauses (a) to
      (d).<BR><BR>            (2)  The
      term "Capital Stock" shall mean all capital stock of the Company
      authorized to be issued from time to time under Article IV of these
      Articles of Incorporation, and the term "Voting Stock" shall mean all
      Capital Stock that by its terms may be voted on all matters submitted to
      shareholders of the Company
      generally.<BR><BR>            (3)  The
      term "person" shall mean any individual, firm, company or other entity and
      shall include any group comprised of any person and any other person with
      whom such person or any Affiliate or Associate of such person has any
      agreement, arrangement or understanding, directly or indirectly, for the
      purpose of acquiring, holding, voting or disposing of Capital
      Stock.<BR><BR>            (4)  The
      term "Interested Shareholder" shall mean any person (other than the
      Company or any Subsidiary and other than any profit-sharing, employee
      stock ownership or other employee benefit plan of the Company or any
      Subsidiary or any trustee of or fiduciary with respect to any such plan
      when acting in such capacity) who (a) is the beneficial owner of Voting
      Stock representing ten percent (10%) or more of the votes entitled to be
      cast by the holders of all then outstanding shares of Voting Stock; or (b)
      is an Affiliate or Associate of the Company and at any time within the
      two-year period immediately prior to the Announcement Date was the
      beneficial owner of Voting Stock representing ten percent (10%) or more of
      the votes entitled to be cast by the holders of all then outstanding
      shares of Voting
      Stock.<BR><BR>            (5)  A
      person shall be a "beneficial owner" of any Capital Stock (a) which such
      person or any of its Affiliates or Associates beneficially owns, directly
      or indirectly; (b) which such person or any of its Affiliates or
      Associates has, directly or indirectly, (i) the right to acquire (whether
      such right is exercisable immediately or subject only to the passage of
      time), pursuant to any agreement, arrangement or understanding or upon the
      exercise of conversion rights, exchange rights, warrants or options, or
      otherwise, or (ii) the right to vote pursuant to any agreement,
      arrangement or understanding; or (c) which is beneficially owned, directly
      or indirectly, by any other person with which such person or any of its
      Affiliates or Associates has any agreement, arrangement or understanding
      for the purpose of acquiring, holding, voting or disposing of any shares
      of Capital Stock. For purposes of determining whether a person is an
      Interested Shareholder pursuant to Paragraph (4) of this Section (C), the
      number of shares of Capital Stock deemed to be outstanding shall include
      shares deemed beneficially owned by such person through application of
      this Paragraph (5) of Section (C), but shall not include any other shares
      of Capital Stock that may be issuable pursuant to any agreement,
      arrangement or understanding, or upon exercise of conversion rights,
      warrants or options, or
      otherwise.<BR><BR>            (6)  The
      terms "Affiliate" and "Associate" shall have the respective meanings
      ascribed to such terms in Rule 12b-2 under the Act as in effect on the
      date that Article XI is approved by the Board (the term "registrant" in
      said Rule 12b-2 meaning in this case the
      Company).<BR><BR>            (7)  The
      term "Subsidiary" means any company of which a majority of any class of
      equity security is beneficially owned by the Company; provided, however,
      that for the purposes of the definition of Interested Shareholder set
      forth in Paragraph (4) of this Section (C), the term "Subsidiary" shall
      mean only a company of which a majority of each class of equity security
      is beneficially owned by the
      Company.<BR><BR>            (8)  The
      term "Continuing Director" means any member of the Board of Directors of
      the Company (the "Board of Directors"), while such person is a member of
      the Board of Directors, who is not an Affiliate or Associate or
      representative of the Interested Shareholder and was a member of the Board
      of Directors prior to the time that the Interested Shareholder became an
      Interested Shareholder, and any successor of a Continuing Director while
      such successor is a member of the Board of Directors, who is not an
      Affiliate or Associate or representative of the Interested Shareholder and
      is recommended or elected to succeed the Continuing Director by a majority
      of Continuing
      Directors.<BR><BR>            (9)  The
      term "Fair Market Value" means (a) in the case of cash, the amount of such
      cash; (b) in the case of stock, the highest closing sale price during the
      30-day period immediately preceding the date in question of a share of
      such stock on the Composite Tape for New York Stock Exchange-Listed
      Stocks, or, if such stock is not quoted on the Composite Tape, on the New
      York Stock Exchange, or, if such stock is not listed on such Exchange, on
      the principal United States securities exchange registered under the Act
      on which such stock is listed, or, if such stock is not listed on any such
      exchange, the highest closing bid quotation with respect to a share of
      such stock during the 30-day period preceding the date in question on the
      National Association of Securities Dealers, Inc. Automated Quotations
      System or any similar system then in use, or if no such quotations are
      available, the fair market value on the date in question of a share of
      such stock as determined by a majority of the Continuing Directors in good
      faith; and (c) in the case of property other than cash or stock, the fair
      market value of such property on the date in question as determined in
      good faith by a majority of the Continuing
      Directors.<BR><BR>           (10)  In
      the event of any Business Combination in which the Company survives, the
      phrase "consideration other than cash to be received" as used in
      Paragraphs (2)(a) and (2)(b) of Section (B) of this Article XI shall
      include the shares of Common Stock and/or the shares of any other class or
      series of Capital Stock retained by the holders of such shares.
      <BR><BR>       (D)  A
      majority of the Continuing Directors shall have the power and duty to
      determine for the purposes of this Article XI, on the basis of information
      known to them after reasonable inquiry, (a) whether a person is an
      Interested Shareholder, (b) the number of shares of Capital Stock or other
      securities beneficially owned by any person, (c) whether a person is an
      Affiliate or Associate of another, (d) whether the assets that are the
      subject of any Business Combination have, or the consideration to be
      received for the issuance or transfer of securities by the Company or any
      Subsidiary in any Business Combination has, an aggregate Fair Market Value
      of $10,000,000 or more, and (e) whether the assets or securities that are
      the subject of any Business Combination constitute a Substantial Part. Any
      such determination made in good faith shall be binding and conclusive on
      all
      parties.<BR><BR>       (E)  Nothing
      contained in this Article XI shall be construed to relieve any Interested
      Shareholder from any fiduciary obligation imposed by
      law.<BR><BR>       (F)  The
      fact that any Business Combination complies with the provisions of Section
      (B) of this Article XI shall not be construed to impose any fiduciary
      duty, obligation or responsibility on the Board of Directors, or any
      member thereof, to approve such Business Combination or recommend its
      adoption or approval to the shareholders of the Company, nor shall such
      compliance limit, prohibit or otherwise restrict in any manner the Board
      of Directors, or any member thereof, with respect to evaluations of or
      actions and responses taken with respect to such Business
      Combination.<BR><BR>       (G)  Notwithstanding
      any other provisions of these Articles of Incorporation or the By-Laws of
      the Company (and notwithstanding the fact that a lesser percentage or
      separate class vote may be specified by law, these Articles of
      Incorporation or the By-Laws of the Company), the affirmative vote of the
      holders of not less than four-fifths of the votes entitled to be cast by
      the holders of all the then outstanding shares of Voting Stock, voting
      together as a single class, shall be required to amend or repeal, or adopt
      any provisions inconsistent with, this Article XI; provided, however, that
      this Section (G) shall not apply to, and such four-fifths vote shall not
      be required for, any amendment, repeal or adoption unanimously recommended
      by the Board of Directors if all of such directors are persons who would
      be eligible to serve as Continuing Directors within the meaning of Section
      (C), Paragraph (8) of this Article
      XI.<BR><BR>       IN WITNESS WHEREOF,
      Potomac Electric Power Company has duly caused these Restated Articles of
      Incorporation to be duly executed (in duplicate) in its name by Dennis R.
      Wraase, one of its Senior Vice Presidents, and by Betty K. Cauley,
      its Secretary, and its corporate seal to be hereunto affixed and duly
      attested by Betty K. Cauley, its Secretary, all as of the 22<SUP>nd</SUP>
      day of December, 1992.<BR></FONT></P></TD></TR>
  <TR>
    <TD vAlign=top width="50%"><FONT face=Courier size=2>
      <P>[Corporate Seal]<BR><BR>Attest:<BR><BR><U>   BETTY K.
      CAULEY   <BR></U>   Betty K.
      Cauley<BR>      Secretary<BR><BR><BR><BR><BR></FONT></P></TD>
    <TD vAlign=top width="50%"><FONT face=Courier size=2>
      <P>POTOMAC ELECTRIC POWER
      COMPANY<BR><BR>By  <U>      D. R.
      WRAASE      <BR></U>         Dennis
      R. Wraase<BR>      Senior Vice
      President<BR><BR>By  <U>     BETTY K.
      CAULEY    <BR></U>         Betty
      K.
      Cauley<BR>           Secretary</FONT></P></TD></TR>
  <TR>
    <TD colSpan=2 vAlign=top><FONT face=Courier size=2>
      <P>DISTRICT OF COLUMBIA,
      ss.:<BR><BR>       I, Indiana C. Shepp,
      a notary public, do hereby certify that on this 22<SUP>nd</SUP> day of
      December, 1992, personally appeared before me Dennis R. Wraase, who, being
      by me first duly sworn, declared that he is a Senior Vice President of
      Potomac Electric Power Company, that he signed the foregoing document as
      Senior Vice President of the corporation, and that the statements therein
      contained are true.<BR></FONT></P></TD></TR>
  <TR>
    <TD vAlign=top width="50%"><FONT face=Courier size=2>
      <P><BR>[NOTARIAL SEAL]<BR><BR><BR><BR><BR><BR></FONT></P></TD>
    <TD vAlign=top width="50%"><U><FONT face=Courier size=2>
      <P>           INDIANA
      C.
      SHEPP          </U><BR>         Notary
      Public, D. C.<BR>My commission expires:  June 14,
    1992</FONT></P></TD></TR>
  <TR>
    <TD colSpan=2 vAlign=top><FONT face=Courier size=2>
      <P align=center><BR>CERTIFICATE OF<BR>POTOMAC ELECTRIC POWER COMPANY</P>
      <P><BR>       Pursuant to Virginia Code
      Section 13.1-711 D., Potomac Electric Power<BR><BR>Company, through Betty
      K. Cauley, its Secretary and Associate General Counsel,<BR><BR>hereby
      certifies that the accompanying Restated Articles of Incorporation
      and<BR><BR>Articles of Restatement do not contain an amendment to the
      Articles of<BR><BR>Incorporation requiring shareholder approval and were
      duly adopted by the<BR><BR>Board of Directors of the Company on December
      21, 1992.<BR><BR>       WHEREFORE, this
      Certificate has been duly executed this 22<SUP>nd</SUP> day
      of<BR><BR>December,
      1992.<BR><BR>                                       
POTOMAC
      ELECTRIC POWER
      COMPANY<BR><BR>                                       
By:  <U>     BETTY
      K.
      CAULEY     </U><BR>                                  
               Betty
      K.
      Cauley<BR>                                        
          Secretary
      and<BR>                                        
    Associate
      General
      Counsel<BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR></FONT></P></TD></TR>
  <TR>
    <TD colSpan=2 vAlign=top><FONT face=Courier size=2>
      <P align=center><BR><BR><BR><BR><BR>ARTICLES OF AMENDMENT<BR><BR>TO
      THE<BR><BR>ARTICLES OF INCORPORATION<BR><BR>OF<BR><BR>POTOMAC ELECTRIC
      POWER COMPANY<BR></P>
      <P><BR>     Pursuant to the provisions of Section
      29-356 of Title 29 of the District of Columbia Code (Section 56 of the
      District of Columbia Business Corporation Act, as amended) and Section
      13.1-710 of the Code of Virginia (chapter 522 of the Virginia Stock
      Corporation Act), the undersigned corporation adopts these Articles of
      Amendment to its Articles of
      Incorporation.<BR><BR>FIRST:<BR><BR>       The
      name of the Company is Potomac Electric Power
      Company.<BR><BR>SECOND:<BR><BR>       The
      following amendment to the Articles of Incorporation was adopted by the
      shareholders of the corporation in the manner prescribed by the District
      of Columbia Business Corporation Act and the Virginia State Corporation
      Act:<BR><BR>       Article IV of the
      Articles of Incorporation is hereby amended to read as
      follows:<BR><BR>       IV.  The
      aggregate number of shares which the Company shall have authority to issue
      is 220,042,227 divided into three classes: the first consisting of
      11,242,227 shares of the par value of $50 each; the second consisting of
      8,800,000 shares of the par value of $25 each; and the third consisting of
      200,000,000 shares of the par value of $1
      each.<BR><BR>       The first paragraph
      of Article V of the Articles of Incorporation is hereby amended to read as
      follows:<BR><BR>       V.   
      Said 11,242,227 shares of the par value of $50 each are designated as
      Serial Preferred Stock; said 8,800,000 shares of the par value of $25 each
      are designated as Preference Stock; and said 200,000,000 shares of the par
      value of $1 each are designated as Common Stock. Such of said authorized
      shares of Serial Preferred Stock, Preference Stock and Common Stock as are
      unissued at any time may be issued, in whole or in part, at such time, or
      from time to time, by action of the Board of Directors of the Company,
      subject to the laws in force in the District of Columbia and the
      Commonwealth of Virginia and the terms and conditions set forth in the
      Articles of Incorporation, as amended of the
      Company.<BR><BR>       The number of
      shares of Serial Preferred Stock appearing in Article V, Section (A),
      subparagraphs (b)(1) and (2) and (g) is hereby amended to read
      11,242,227.<BR><BR>THIRD:<BR><BR>       The
      amendment to increase by 5,000,000 shares the authorized number of shares
      of Serial Preferred Stock was proposed and recommended by the Board of
      Directors of the corporation and submitted to and approved by its
      shareholders in accordance with the corporation's Articles of
      Incorporation and applicable
      law.<BR><BR>FOURTH:<BR><BR>       The
      amendment was adopted by the shareholders on May 20, 1993. The number of
      shares of the corporation outstanding at the time of such adoption was
      120,430,936. The number of shares entitled to vote at such time on the
      amendment was 119,962,841, the designation and number of which shares of
      each class were as
      follows:<BR><BR>      <U>          Class          </U>           
          <U>Number
      of Shares<BR></U><BR>      Common
      Stock                                    114,471,011<BR><BR> 
     Serial
      Preferred
      Stock                            5,491,830<BR><BR>       The
      number of shares of each class entitled to vote on the amendment that were
      voted for and against the amendment
      were:<BR><BR>                                       
   <U>    Number
      of Shares
      Voted    <BR></U>      <U>        Class        </U>           
    <U>    For   </U>        <U>  Against  <BR><BR></U>      Common
      Stock                        78,854,276         7,415,274<BR><BR>   
   Serial
      Preferred
      Stock               4,263,996           234,178<BR><BR>FIFTH:<BR><BR>       The
      amendment does not provide for an exchange, reclassification, or
      cancellation of issued
      shares.<BR><BR>SIXTH:<BR><BR>       The
      amendment does not effect a change in the amount of stated capital, or
      paid-in surplus, or both, of the
      corporation.<BR><BR><BR><BR><BR><BR>       IN
      WITNESS WHEREOF, the Potomac Electric Power Company has caused these
      Articles of Amendment to be duly executed (in duplicate) in its name by
      William T. Torgerson, one of its Vice Presidents, and by Mary T. Howard,
      one of its Assistant Secretaries, and its corporate seal to be hereunto
      affixed and duly attested by Mary T. Howard, one of its Assistant
      Secretaries, all as of the 20<SUP>th</SUP> day of May,
    1993.<BR></FONT></P></TD></TR>
  <TR>
    <TD vAlign=top width="50%"><FONT face=Courier size=2>
      <P>[Corporate
      Seal]<BR><BR>Attest:<BR><BR><BR><U>      M.
      T.
      HOWARD      <BR></U>  Assistant Secretary</FONT></P></TD>
    <TD vAlign=top width="50%"><FONT face=Courier size=2>
      <P>POTOMAC ELECTRIC POWER
      COMPANY<BR><BR><BR>By: <U>     WILLIAM T.
      TORGERSON     <BR></U>         Dennis
      R.
      Wraase<BR>           Vice
      President<BR><BR>By: <U>         M.
      T.
      HOWARD         </U><BR>Assistant
      Secretary<BR><BR><BR></FONT></P></TD></TR>
  <TR>
    <TD colSpan=2 vAlign=top><FONT face=Courier size=2>
      <P>DISTRICT OF COLUMBIA,
      ss.:<BR><BR>       I, Indiana C. Shepp,
      a notary public, do hereby certify that on this 20<SUP>th </SUP>day of
      May, 1993, personally appeared before me William T. Torgerson, who, being
      by me first duly sworn, declared that he is a Vice President of Potomac
      Electric Power Company, that he signed the foregoing document as Vice
      President of the corporation, and that the statements therein contained
      are true.<BR></FONT></P></TD></TR>
  <TR>
    <TD vAlign=top width="50%"><FONT face=Courier size=2>
      <P><BR>[NOTARIAL SEAL]</FONT></P></TD>
    <TD vAlign=top width="50%"><U><FONT face=Courier size=2>
      <P>           INDIANA
      C.
      SHEPP          </U><BR>         Notary
      Public, D. C.<BR>My commission expires:  June 14,
    1995</FONT></P></TD></TR>
  <TR>
    <TD colSpan=2 vAlign=top><FONT face=Courier size=2>
      <P
      align=center><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR>DISTRICT
      OF COLUMBIA<BR>STATEMENT OF<BR>CANCELLATION OF REDEEMABLE
      SHARES<BR>OF<BR>POTOMAC ELECTRIC POWER COMPANY<BR></P>
      <P><BR><BR>            Under
      the provisions of Section 29-359 of Chapter 3 of Title 29 of the District
      of Columbia Code, 1981 Edition (Section 59 of the District of Columbia
      Business Corporation Act, as amended), the undersigned corporation submits
      this statement of cancellation, pursuant to the provisions of its articles
      of incorporation, of redeemable shares of the corporation reacquired by it
      subsequent to the close of business on December 17, 1992, and prior to the
      close of business on December 16, 1993, through their conversion, in
      accordance with their terms, into shares of its common stock, and through
      redemption subsequent to the close of business on December 17, 1992, and
      prior to the close of business on December 16, 1993 of 30,000 shares of
      Serial Preferred Stock, $3.37 Series of
      1987:<BR><BR>FIRST:   The name of the corporation is
      Potomac Electric Power Company.<BR><BR>SECOND:  The aggregate
      number of shares which the corporation had authority to issue is
      220,042,227<SUP>*</SUP>, itemized as
      follows:<BR><BR><U>    CLASS      </U>        <U>      SERIES         </U> 
               <U>NUMBER
      OF SHARES<BR><BR></U>Common
      Stock                    -                    
           200,000,000<BR><BR>Preference
      Stock       Undesignated as to
      series                  8,800,000<BR><BR>Serial
      Preferred<BR>  Stock                $2.44
      Series of
      1957                         300,000<BR>              
         $2.46
      Series of
      1958                         300,000<BR>              
         $2.28
      Series of
      1965                         400,000<BR>              
         $2.44
      Convertible<BR>                         Series
      of
      1966                              10,027<BR>         
              $3.82
      Series of
      1969                         500,000<BR>              
         $3.37
      Series of
      1987                         982,200<BR>              
         Auction
      Series
      A                           1,000,000<BR>            
           $3.89
      Series of
      1991                       1,000,000<BR>               
        $3.40
      Series of
      1992                       1,000,000<BR>               
        Undesignated
      as to
      series                  5,750,000<BR><BR>_______________<BR><SUP>*</SUP>Includes
      additional shares authorized in Articles of Amendment to the Articles of
      Incorporation dated May 20, 1993.<BR><BR>THIRD:   The
      number of shares of the corporation so cancelled is 31,183 itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>          SERIES       
  </U>            <U>NUMBER
      OF SHARES<BR></U><BR>Serial
      Preferred<BR>  Stock                $2.44
      Convertible Series of
      1966               1,183<BR>                       $3.37
      Series of
      1987                          30,000<BR><BR>FOURTH:  The
      number of shares which the corporation has authority to issue after giving
      effect to such cancellation is 220,011,044, itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Common
      Stock                         -               
           200,000,000<BR><BR>Preference
      Stock       Undesignated as to
      series                  8,800,000<BR><BR>Serial
      Preferred<BR>  Stock                $2.44
      Series of
      1957                         300,000<BR>              
         $2.46
      Series of
      1958                         300,000<BR>              
         $2.28
      Series of
      1965                         400,000<BR>              
         $2.44
      Convertible<BR>                         Series
      of
      1966                               8,844<BR>        
               $3.82
      Series of
      1969                         500,000<BR>              
         $3.37
      Series of
      1987                         952,200<BR>              
         Auction
      Series
      A                           1,000,000<BR>            
           $3.89
      Series of
      1991                       1,000,000<BR>               
        $3.40
      Series of
      1992                       1,000,000<BR>               
        Undesignated
      as to
      series                  5,750,000<BR><BR>FIFTH:   The
      aggregate number of issued shares of the corporation after giving effect
      to such cancellation is 122,926,152 itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Common
      Stock                       -                 
           117,465,108<BR><BR>Preference
      Stock       Undesignated as to
      series                       NONE<BR><BR>Serial
      Preferred<BR>  Stock                $2.44
      Series of
      1957                         300,000<BR>              
         $2.46
      Series of
      1958                         300,000<BR>              
         $2.28
      Series of
      1965                         400,000<BR>              
         $2.44
      Convertible<BR>                         Series
      of
      1966                               8,844<BR>        
               $3.82
      Series of
      1969                         500,000<BR>              
         $3.37
      Series of
      1987                         952,200<BR>              
         Auction
      Series
      A                           1,000,000<BR>            
           $3.89
      Series of
      1991                       1,000,000<BR>               
        $3.40
      Series of
      1992                       1,000,000<BR>               
        Undesignated
      as to
      series                  5,750,000<BR><BR>SIXTH:    After
      giving effect to such cancellation, the amounts of the stated capital and
      paid-in surplus of the corporation, computed in accordance with the
      provisions of the District of Columbia Business Corporation Act, as
      amended, are $390,517,308 and $989,419,430.89,
      respectively.<BR><BR>DATED:  December 21,
      1993<BR>                                        
 POTOMAC
      ELECTRIC POWER
      COMPANY<BR><BR><BR>                                      
   By  <U>         H.
      L.
      DAVIS      <BR></U>                                 
                   H.
      Lowell
      Davis<BR>                                        
           Vice
      Chairman
      and<BR>                                        
       Chief
      Financial Officer<BR><BR><BR>[Corporate
      Seal]<BR><BR>Attest:<BR><BR><U>    M. T.
      HOWARD    <BR></U>    M. T.
      Howard<BR>  Assistant Secretary<BR><BR><BR>DISTRICT OF COLUMBIA,
      ss.:<BR><BR>      I, Lisa A. Poole, a Notary
      Public, do hereby certify that on this 21<SUP>st</SUP> day of December,
      1993, personally appeared before me H. Lowell Davis, who, being by me
      first duly sworn, declared that he is Vice Chairman and Chief Financial
      Officer of Potomac Electric Power Company, that he signed the foregoing
      document as Vice Chairman and Chief Financial Officer of the corporation,
      and that the statements therein contained are
      true.<BR><BR><BR>                                      
          <U>    LISA
      A.
      POOLE   </U><BR>                                    
            Notary
      Public, D. C.<BR><BR>[Notarial
      Seal]<BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR></P>
      <P align=center><BR>ARTICLES OF AMENDMENT<BR><BR>OF<BR><BR>POTOMAC
      ELECTRIC POWER COMPANY</P>
      <P align=center></P>
      <P><BR><BR><BR>     Under the provisions of
      Section 13.1-652 of the Code of Virginia, as amended, the undersigned
      corporation submits these Articles of
      Amendment.<BR><BR>FIRST:    The name of the corporation is
      Potomac Electric Power Company.<BR><BR>SECOND:   The reduction
      in the number of authorized shares of the corporation is 31,183, itemized
      as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Serial
      Preferred<BR>  Stock                $2.44
      Convertible
      Series<BR>                         of
      1966                                      1,183<BR> 
                      $3.37
      Series of
      1987                          30,000<BR><BR>THIRD:   
      The total number of authorized shares of the corporation remaining after
      giving effect to such reduction is 220,011,044, itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Common
      Stock                       -                 
           200,000,000<BR><BR>Preference
      Stock       Undesignated as to
      series                  8,800,000<BR><BR>Serial
      Preferred<BR>  Stock                $2.44
      Series of
      1957                         300,000<BR>              
         $2.46
      Series of
      1958                         300,000<BR>              
         $2.28
      Series of
      1965                         400,000<BR>              
         $2.44
      Convertible
      Series<BR>                         of
      1966                                      8,844<BR> 
                      $3.82
      Series of
      1969                         500,000<BR>              
         $3.37
      Series of
      1987                         952,200<BR>              
         Auction
      Series
      A                           1,000,000<BR>            
           $3.89
      Series of
      1991                       1,000,000<BR>               
        $3.40
      Series of
      1992                       1,000,000<BR>               
        Undesignated
      as to
      series                  5,750,000<BR><BR>     The
      Articles of Incorporation prohibit the reissuance of acquired
      shares.<BR><BR>FOURTH:    The reduction in the number
      of authorized shares was duly authorized by the Board of Directors on
      December 20, 1993.<BR><BR>DATED:  December 21,
      1993<BR><BR>                                       
  POTOMAC
      ELECTRIC POWER
      COMPANY<BR><BR><BR>                                      
   By  <U>        H.
      L.
      DAVIS       <BR></U>                                
                   H.
      Lowell
      Davis<BR>                                        
          Vice
      Chairman
      and<BR>                                        
       Chief
      Financial Officer<BR>[Corporate
      Seal]<BR><BR>Attest:<BR><BR><U>    M. T.
      HOWARD    <BR></U>    M. T.
      Howard<BR>Assistant Secretary<BR></P>
      <P
      align=center><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR>DISTRICT
      OF COLUMBIA<BR>STATEMENT OF<BR>CANCELLATION OF REDEEMABLE
      SHARES<BR>OF<BR>POTOMAC ELECTRIC POWER COMPANY</P>
      <P><BR><BR>     Under the provisions of Section
      29-359 of Chapter 3 of Title 29 of the District of Columbia Code, 1981
      Edition (Section 59 of the District of Columbia Business Corporation Act,
      as amended), the undersigned corporation submits this statement of
      cancellation, pursuant to the provisions of its articles of incorporation,
      of redeemable shares of the corporation reacquired by it subsequent to the
      close of business on December 16, 1993, and prior to the close of business
      on December 12, 1994, through their conversion, in accordance with their
      terms, into shares of its common stock, and through redemption subsequent
      to the close of business on December 16, 1993, and prior to the close of
      business on December 12, 1994 of 50,949 shares of Serial Preferred Stock,
      $3.37 Series of 1987:<BR><BR>FIRST:     The name
      of the corporation is Potomac Electric Power
      Company.<BR><BR>SECOND:    The aggregate number of
      shares which the corporation had authority to issue is 220,011,044,
      itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Common
      Stock                      -                  
           200,000,000<BR><BR>Preference
      Stock       Undesignated as to
      series                  8,800,000<BR><BR>Serial
      Preferred<BR>  Stock                $2.44
      Series of
      1957                         300,000<BR>              
         $2.46
      Series of
      1958                         300,000<BR>              
         $2.28
      Series of
      1965                         400,000<BR>              
         $2.44
      Convertible
      Series<BR>                         of
      1966                                      8,844<BR> 
                      $3.82
      Series of
      1969                         500,000<BR>              
         $3.37
      Series of
      1987                         952,200<BR>              
         Auction
      Series
      A                           1,000,000<BR>            
           $3.89
      Series of
      1991                       1,000,000<BR>               
        $3.40
      Series of
      1992                       1,000,000<BR>               
        Undesignated
      as to
      series                  5,750,000<BR><BR>THIRD:     The
      number of shares of the corporation so cancelled is 51,610 itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Serial
      Preferred<BR>  Stock                $2.44
      Convertible Series of
      1966                 661<BR>                      
 $3.37
      Series of
      1987                          50,949<BR><BR>FOURTH:    The
      number of shares which the corporation has authority to issue after giving
      effect to such cancellation is 219,959,434, itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Common
      Stock                      -                  
           200,000,000<BR><BR>Preference
      Stock       Undesignated as to
      series                  8,800,000<BR><BR>Serial
      Preferred<BR>  Stock                $2.44
      Series of
      1957                         300,000<BR>              
         $2.46
      Series of
      1958                         300,000<BR>              
         $2.28
      Series of
      1965                         400,000<BR>              
         $2.44
      Convertible Series of
      1966               8,183<BR>                       $3.82
      Series of
      1969                         500,000<BR>              
         $3.37
      Series of
      1987                         901,251<BR>              
         Auction
      Series
      A                           1,000,000<BR>            
           $3.89
      Series of
      1991                       1,000,000<BR>               
        $3.40
      Series of
      1992                       1,000,000<BR>               
        Undesignated
      as to
      series                  5,750,000<BR><BR>FIFTH:     The
      aggregate number of issued shares of the corporation after giving effect
      to such cancellation is 123,557,532 itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Common
      Stock                      -                  
           118,148,098<BR><BR>Preference
      Stock                  -                      
              NONE<BR><BR>Serial
      Preferred<BR>  Stock                $2.44
      Series of
      1957                         300,000<BR>              
         $2.46
      Series of
      1958                         300,000<BR>              
         $2.28
      Series of
      1965                         400,000<BR>              
         $2.44
      Convertible Series of
      1966               8,183<BR>                       $3.82
      Series of
      1969                         500,000<BR>              
         $3.37
      Series of
      1987                         901,251<BR>              
         Auction
      Series
      A                           1,000,000<BR>            
           $3.89
      Series of
      1991                       1,000,000<BR>               
        $3.40
      Series of
      1992                       1,000,000<BR><BR>SIXTH:     After
      giving effect to such cancellation, the amounts of the stated capital and
      paid-in surplus of the corporation, computed in accordance with the
      provisions of the District of Columbia Business Corporation Act, as
      amended, are $388,619,798 and $1,004,683,941.72,
      respectively.<BR><BR>DATED:  December 16,
      1994<BR><BR>                                       
  POTOMAC
      ELECTRIC POWER
      COMPANY<BR><BR><BR>                                      
   By  <U>       H.
      L.
      DAVIS       <BR></U>                                
                  H.
      Lowell
      Davis<BR>                                        
         Vice
      Chairman
      and<BR>                                        
      Chief
      Financial Officer<BR><BR>[Corporate
      Seal]<BR><BR>Attest:<BR><BR><BR><U>    M. T.
      HOWARD    <BR></U>    M. T.
      Howard<BR>Assistant Secretary<BR><BR><BR><BR>DISTRICT OF COLUMBIA,
      ss.:<BR><BR><BR>     I, Indiana C. Shepp, a
      Notary Public, do hereby certify that on this 16<SUP>th</SUP> day of
      December, 1994, personally appeared before me H. Lowell Davis, who, being
      by me first duly sworn, declared that he is Vice Chairman and Chief
      Financial Officer of Potomac Electric Power Company, that he signed the
      foregoing document as Vice Chairman and Chief Financial Officer of the
      corporation, and that the statements therein contained are
      true.<BR><BR><BR><BR>                                      
        <U>
      INDIANA C. SHEPP
      <BR></U>                                        
        Notary
      Public, D. C.<BR><BR>[Notarial
      Seal]                  My
      commission expires: June 14, 1995<BR><BR><BR><BR><BR><BR><BR><BR><BR></P>
      <P align=center><BR><BR><BR><BR><BR><BR>ARTICLES OF
      AMENDMENT<BR><BR>OF<BR><BR>POTOMAC ELECTRIC POWER COMPANY</P>
      <P><BR><BR>     Under the provisions of Section
      13.1-652 of the Code of Virginia, as amended, the undersigned corporation
      submits these Articles of
      Amendment.<BR><BR>FIRST:     The name of the
      corporation is Potomac Electric Power
      Company.<BR><BR>SECOND:    The reduction in the number
      of authorized shares of the corporation is 51,610, itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Serial
      Preferred<BR>  Stock                $2.44
      Convertible
      Series<BR>                         of
      1966                                        661<BR>
                       $3.37
      Series of
      1987                          50,949<BR><BR>THIRD:     The
      total number of authorized shares of the corporation remaining after
      giving effect to such reduction is 219,959,434, itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Common
      Stock                      -                  
           200,000,000<BR><BR>Preference
      Stock       Undesignated as to
      series                  8,800,000<BR><BR>Serial
      Preferred<BR>  Stock                $2.44
      Series of
      1957                         300,000<BR>              
         $2.46
      Series of
      1958                         300,000<BR>              
         $2.28
      Series of
      1965                         400,000<BR>              
         $2.44
      Convertible
      Series<BR>                         of
      1966                                      8,183<BR> 
                      $3.82
      Series of
      1969                         500,000<BR>              
         $3.37
      Series of
      1987                         901,251<BR>              
         Auction
      Series
      A                           1,000,000<BR>            
           $3.89
      Series of
      1991                       1,000,000<BR>               
        $3.40
      Series of
      1992                       1,000,000<BR>               
        Undesignated
      as to
      series                  5,750,000<BR><BR>     The
      Articles of Incorporation prohibit the reissuance of acquired
      shares.<BR><BR>FOURTH:    The reduction in the number
      of authorized shares was duly authorized by the Board of Directors on
      December 15, 1994.<BR><BR>DATED:  December 16,
      1994<BR><BR>                                       
  POTOMAC
      ELECTRIC POWER
      COMPANY<BR><BR><BR>                                      
   By  <U>       H.
      L.
      DAVIS       <BR></U>                                
                  H.
      Lowell
      Davis<BR>                                        
         Vice
      Chairman
      and<BR>                                        
     Chief
      Financial Officer<BR><BR>[Corporate
      Seal]<BR><BR>Attest:<BR><BR><BR><U>    M. T.
      HOWARD    </U><BR>    M. T.
      Howard<BR>Assistant Secretary</P>
      <P
      align=center><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><B>DISTRICT
      OF COLUMBIA<BR>STATEMENT OF<BR>CANCELLATION OF REDEEMABLE
      SHARES<BR>OF<BR>POTOMAC ELECTRIC POWER COMPANY</P></B>
      <P><BR><BR>     Under the provisions of Section
      29-359 of Chapter 3 of Title 29 of the District of Columbia Code, 1981
      Edition (Section 59 of the District of Columbia Business Corporation Act,
      as amended), the undersigned corporation submits this statement of
      cancellation, pursuant to the provisions of its articles of incorporation,
      of redeemable shares of the corporation reacquired by it subsequent to the
      close of business on December 12, 1994, and prior to the close of business
      on December 14, 1995, through their conversion, in accordance with their
      terms, into shares of its common stock, and through redemption subsequent
      to the close of business on December 12, 1994, and prior to the close of
      business on December 14, 1995 of 31,555 shares of Serial Preferred Stock,
      $3.37 Series of
      1987:<BR><BR><B>FIRST</B>:     The name of the
      corporation is Potomac Electric Power
      Company.<BR><BR><B>SECOND:    </B>The aggregate number
      of shares which the corporation had authority to issue is 219,959,434
      itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Common
      Stock                       -                 
           200,000,000<BR><BR>Preference             Undesignated
      as to
      series                  8,800,000<BR><BR>Serial
      Preferred<BR>  Stock                $2.44
      Series of
      1957                         300,000<BR>              
         $2.46
      Series of
      1958                         300,000<BR>              
         $2.28
      Series of
      1965                         400,000<BR>              
         $2.44
      Convertible
      Series<BR>                         of
      1966                                      8,183<BR> 
                      $3.82
      Series of
      1969                         500,000<BR>              
         $3.37
      Series of
      1987                         901,251<BR>              
         Auction
      Series
      A                           1,000,000<BR>            
           $3.89
      Series of
      1991                       1,000,000<BR>               
        $3.40
      Series of
      1992                       1,000,000<BR>               
        Undesignated
      as to
      series                  5,750,000<BR><BR><B>THIRD</B>:     The
      number of shares of the corporation so cancelled is 33,212 itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Serial
      Preferred<BR>  Stock                $2.44
      Convertible
      Series<BR>                         of
      1966                                      1,657<BR> 
                      $3.37
      Series of
      1987                          31,555<BR><BR><B>FOURTH</B>:    The
      number of shares which the corporation has authority to issue after giving
      effect to such cancellation is 219,926,222, itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Common
      Stock                      -                  
           200,000,000<BR><BR>Preference
      Stock       Undesignated as to
      series                  8,800,000<BR><BR>Serial
      Preferred<BR>  Stock                $2.44
      Series of
      1957                         300,000<BR>              
         $2.46
      Series of
      1958                         300,000<BR>              
         $2.28
      Series of
      1965                         400,000<BR>              
         $2.44
      Convertible
      Series<BR>                         of
      1966                                      6,526<BR> 
                      $3.82
      Series of
      1969                         500,000<BR>              
         $3.37
      Series of
      1987                         869,696<BR>              
         Auction
      Series
      A                           1,000,000<BR>            
           $3.89
      Series of
      1991                       1,000,000<BR>               
        $3.40
      Series of
      1992                       1,000,000<BR>               
        Undesignated
      as to
      series                  5,750,000<BR><BR><B>FIFTH:     </B>The
      aggregate number of issued shares of the corporation after giving effect
      of such cancellation is 123,870,682 itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Common
      Stock                       -                 
           118,494,460<BR><BR>Preference
      Stock                   -                     
              NONE<BR><BR>Serial
      Preferred<BR>  Stock                $2.44
      Series of
      1957                         300,000<BR>              
         $2.46
      Series of
      1958                         300,000<BR>              
         $2.28
      Series of
      1965                         400,000<BR>              
         $2.44
      Convertible Series of
      1966               6,526<BR>                       $3.82
      Series of
      1969                         500,000<BR>              
         $3.37
      Series of
      1987                         869,696<BR>              
         Auction
      Series
      A                           1,000,000<BR>            
           $3.89
      Series of
      1991                       1,000,000<BR>               
        $3.40
      Series of
      1992                       1,000,000<BR><BR><B>SIXTH</B>:     After
      giving effect to such cancellation, the amounts of the stated capital and
      paid-in surplus of the corporation, computed in accordance with the
      provisions of the District of Columbia Business Corporation Act, as
      amended, are $387,305,560 and $1,010,531,171.08,
      respectively.<BR><BR><BR><B>DATED:  </B>December 20,
      1995<BR><BR>                                       
  <B>POTOMAC
      ELECTRIC POWER
      COMPANY<BR><BR></B>                                      
   By  <U>     H.
      LOWELL
      DAVIS     <BR></U>                                  
                H.
      Lowell
      Davis<BR>                                        
         Vice
      Chairman
      and<BR>                                        
      Chief
      Financial Officer<BR><BR>[Corporate
      Seal]<BR><BR>Attest:<BR><BR><BR><U>   ELLEN SHERIFF
      ROGERS   <BR></U>   Ellen Sheriff
      Rogers<BR>   Assistant Secretary<BR><BR><BR><B>DISTRICT OF
      COLUMBIA, ss.:<BR><BR></B>     I<B>, </B>Michelle
      T. Brown, a Notary Public, do hereby certify that on this 20<SUP>th</SUP>
      day of December, 1995, personally appeared before me H. Lowell Davis, who,
      being by first duly sworn, declared that he is Vice Chairman and Chief
      Financial Officer of Potomac Electric Power Company, that he signed the
      foregoing document as Vice Chairman and Chief Financial Officer of the
      corporation, and that the statements therein contained are
      true.<BR><BR><BR>                                      
   <U>       MICHELLE
      T.
      BROWN       <BR></U>                                
                Notary
      Public, D. C.<BR><BR>[Notarial
      Seal]                          My
      commission expires:  <U>11-14-97<BR></P></U>
      <P
      align=center><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><B>ARTICLES
      OF AMENDMENT<BR><BR>OF<BR><BR>POTOMAC ELECTRIC POWER COMPANY</P></B>
      <P><BR><BR><BR>     Under the provisions of
      Section 13.1-652 of the Code of Virginia, as amended, the undersigned
      corporation submits these Articles of
      Amendment.<BR><BR><B>FIRST</B>:     The name of
      the corporation is Potomac Electric Power
      Company.<BR><BR><B>SECOND:    </B>The reduction in the
      number of authorized shares of the corporation is 33,212, itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Serial
      Preferred<BR>  Stock                $2.44
      Convertible Series of
      1966               1,657<BR>                       $3.37
      Series of
      1987                          31,555<BR><BR><B>THIRD</B>:
      The total number of authorized shares of the corporation remaining after
      giving effect to such reduction is 219,926,222, itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Common
      Stock                       -                 
           200,000,000<BR><BR>Preference
      Stock       Undesignated as to
      series                  8,800,000<BR><BR>Serial
      Preferred<BR>  Stock                $2.44
      Series of
      1957                         300,000<BR>              
         $2.46
      Series of
      1958                         300,000<BR>              
         $2.28
      Series of
      1965                         400,000<BR>              
         $2.44
      Convertible Series of
      1966               6,526<BR>                       $3.82
      Series of
      1969                         500,000<BR>              
         $3.37
      Series of
      1987                         869,696<BR>              
         Auction
      Series
      A                           1,000,000<BR>            
           $3.89
      Series of
      1991                       1,000,000<BR>               
        $3.40
      Series of
      1992                       1,000,000<BR>               
        Undesignated
      as to
      series                  5,750,000<BR><BR>     The
      Articles of Incorporation prohibit the reissuance of acquired
      shares.<BR><BR>FOURTH:     The reduction in the
      number of authorized shares was duly authorized by the Board of Directors
      on December 18, 1995.<BR><BR><B>DATED:</B>  December 20,
      1995<BR><BR>                                       
  <B>POTOMAC
      ELECTRIC POWER
      COMPANY<BR><BR></B>                                      
   By  <U>       H.
      L.
      DAVIS        <BR></U>                               
                  H.
      Lowell
      Davis<BR>                                        
        Vice
      Chairman
      and<BR>                                        
     Chief
      Financial Officer<BR><BR><BR>[Corporate
      Seal]<BR><BR>Attest:<BR><BR><U>   ELLEN SHERIFF
      ROGERS   <BR></U>   Ellen Sheriff
      Rogers<BR>   Assistant Secretary</P>
      <P
      align=center><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR>DISTRICT
      OF COLUMBIA<BR>STATEMENT OF<BR>CANCELLATION OF REDEEMABLE
      SHARES<BR>OF<BR>POTOMAC ELECTRIC POWER COMPANY<BR><BR><BR></P>
      <P>     Under the provisions of Section 29-359 of
      Chapter 3 of Title 29 of the District of Columbia Code, 1981 Edition
      (Section 59 of the District of Columbia Business Corporation Act, as
      amended), the undersigned corporation submits this statement of
      cancellation, pursuant to the provisions of its articles of incorporation,
      of redeemable shares of the corporation reacquired by it subsequent to the
      close of business on December 14, 1995, and prior to the close of business
      on December 12, 1996, through their conversion, in accordance with their
      terms, into shares of its common
      stock:<BR><BR>FIRST:     The name of the
      corporation is Potomac Electric Power
      Company.<BR><BR>SECOND:    The aggregate number of
      shares which the corporation had authority to issue is 219,926,222
      itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Common
      Stock                      -                  
           200,000,000<BR><BR>Preference             Undesignated
      as to
      series                  8,800,000<BR><BR>Serial
      Preferred<BR>  Stock                $2.44
      Series of
      1957                         300,000<BR>              
         $2.46
      Series of
      1958                         300,000<BR>              
         $2.28
      Series of
      1965                         400,000<BR>              
         $2.44
      Convertible Series of
      1966               6,526<BR>                       $3.82
      Series of
      1969                         500,000<BR>              
         $3.37
      Series of
      1987                         869,696<BR>              
         Auction
      Series
      A                           1,000,000<BR>            
           $3.89
      Series of
      1991                       1,000,000<BR>               
        $3.40
      Series of
      1992                       1,000,000<BR>               
        Undesignated
      as to
      series                  5,750,000<BR><BR>THIRD:     The
      number of shares of the corporation so cancelled is 573 itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>             <U>NUMBER
      OF SHARES<BR><BR></U>Serial
      Preferred<BR>  Stock                $2.44
      Convertible Series of
      1966                 573<BR><BR>FOURTH:    The
      number of shares which the corporation has authority to issue after giving
      effect to such cancellation is 219,925,649, itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Common
      Stock                     -                   
           200,000,000<BR><BR>Preference
      Stock       Undesignated as to
      series                  8,800,000<BR><BR>Serial
      Preferred<BR>  Stock                $2.44
      Series of
      1957                         300,000<BR>              
         $2.46
      Series of
      1958                         300,000<BR>              
         $2.28
      Series of
      1965                         400,000<BR>              
         $2.44
      Convertible Series of
      1966               5,953<BR>                       $3.82
      Series of
      1969                         500,000<BR>              
         $3.37
      Series of
      1987                         869,696<BR>              
         Auction
      Series
      A                           1,000,000<BR>            
           $3.89
      Series of
      1991                       1,000,000<BR>               
        $3.40
      Series of
      1992                       1,000,000<BR>               
        Undesignated
      as to
      series                  5,750,000<BR><BR>FIFTH:     The
      aggregate number of issued shares of the corporation after giving effect
      of such cancellation is 123,875,670 itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Common
      Stock                      -                  
           118,500,021<BR><BR>Preference
      Stock                  -                      
              NONE<BR><BR>Serial
      Preferred<BR>  Stock                $2.44
      Series of
      1957                         300,000<BR>              
         $2.46
      Series of
      1958                         300,000<BR>              
         $2.28
      Series of
      1965                         400,000<BR>              
         $2.44
      Convertible Series of
      1966               5,953<BR>                       $3.82
      Series of
      1969                         500,000<BR>              
         $3.37
      Series of
      1987                         869,696<BR>              
         Auction
      Series
      A                           1,000,000<BR>            
           $3.89
      Series of
      1991                       1,000,000<BR>               
        $3.40
      Series of
      1992                       1,000,000<BR><BR>SIXTH:
      After giving effect to such cancellation, the amounts of the stated
      capital and paid-in surplus of the corporation, computed in accordance
      with the provisions of the District of Columbia Business Corporation Act,
      as amended, are $387,282,471 and $1,010,424,927.80,
      respectively.<BR><BR>DATED: December 17,
      1996<BR><BR>                                       
  POTOMAC
      ELECTRIC POWER
      COMPANY<BR><BR><BR><BR>                                     
    By  <U>       D.
      R.
      WRAASE       <BR></U>                                
                 Dennis
      R.
      Wraase<BR>                                        
     Senior
      Vice President
      and<BR>                                        
      Chief
      Financial Officer<BR><BR>[Corporate
      Seal]<BR><BR>Attest:<BR><BR><U>   ELLEN SHERIFF
      ROGERS   <BR></U>   Ellen Sheriff
      Rogers<BR>        Secretary<BR><BR><BR><BR>DISTRICT
      OF COLUMBIA, ss.:<BR><BR>I, Lisa A. Poole, a Notary Public, do hereby
      certify that on this 17th day of December, 1996, personally appeared
      before me Dennis R. Wraase, who, being by me first duly sworn, declared
      that he is Senior Vice President and Chief Financial Officer of Potomac
      Electric Power Company, that he signed the foregoing document as Senior
      Vice President and Chief Financial Officer of the corporation, and that
      the statements therein contained are
      true.<BR><BR><BR>                                      
      <U>       LISA
      A.
      POOLE       <BR></U>                                
               Notary
      Public, D. C.<BR><BR>[Notarial
      Seal]                         My
      commission expires: 7-31-97</P>
      <P
      align=center><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><B>ARTICLES
      OF AMENDMENT<BR><BR>OF<BR><BR>POTOMAC ELECTRIC POWER COMPANY</P></B>
      <P><BR>     Under the provisions of Section
      13.1-652 of the Code of Virginia, as amended, the undersigned corporation
      submits these Articles of
      Amendment.<BR><BR><B>FIRST</B>:     The name of
      the corporation is Potomac Electric Power Company.<BR><BR><B>SECOND:
      </B>The reduction in the number of authorized shares of the corporation is
      573, itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Serial
      Preferred<BR>  Stock                $2.44
      Convertible Series of
      1966                 573<BR><BR><B>THIRD</B>:     The
      total number of authorized shares of the corporation remaining after
      giving effect to such reduction is 219,925,649, itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Common
      Stock                      -                  
           200,000,000<BR><BR>Preference
      Stock       Undesignated as to
      series                  8,800,000<BR><BR>Serial
      Preferred<BR>  Stock                $2.44
      Series of
      1957                         300,000<BR>              
         $2.46
      Series of
      1958                         300,000<BR>              
         $2.28
      Series of
      1965                         400,000<BR>              
         $2.44
      Convertible Series of
      1966               5,953<BR>                       $3.82
      Series of
      1969                         500,000<BR>              
         $3.37
      Series of
      1987                         869,696<BR>              
         Auction
      Series
      A                           1,000,000<BR>            
           $3.89
      Series of
      1991                       1,000,000<BR>               
        $3.40
      Series of
      1992                       1,000,000<BR>               
        Undesignated
      as to
      series                  5,750,000<BR><BR>     The
      Articles of Incorporation prohibit the reissuance of acquired
      shares.<BR><BR>FOURTH:     The reduction in the
      number of authorized shares was duly authorized by the Board of Directors
      on December 16, 1996.<BR><BR><B>DATED:</B> December 17,
      1996<BR><BR>                                       
  <B>POTOMAC
      ELECTRIC POWER
      COMPANY<BR><BR><BR></B>                                     
    By  <U>       D.
      R.
      WRAASE       <BR></U>                                
                  Dennis
      R.
      Wraase<BR>                                        
     Senior
      Vice President
      and<BR>                                        
      Chief
      Financial Officer<BR><BR>[Corporate
      Seal]<BR><BR>Attest:<BR><BR><BR><U>   ELLEN SHERIFF
      ROGERS   <BR></U>   Ellen Sheriff
      Rogers<BR>        Secretary</P>
      <P
      align=center><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><B>DISTRICT
      OF COLUMBIA<BR><BR>STATEMENT OF<BR><BR>CANCELLATION OF REDEEMABLE
      SHARES<BR><BR>OF<BR><BR>POTOMAC ELECTRIC POWER COMPANY</P></B>
      <P><BR>     Under the provisions of Section
      29-359 of Chapter 3 of Title 29 of the District of Columbia Code, 1981
      Edition (Section 59 of the District of Columbia Business Corporation Act,
      as amended), the undersigned corporation submits this statement of
      cancellation, pursuant to the provisions of its articles of incorporation,
      of redeemable shares of the corporation reacquired by it subsequent to the
      close of business on December 12, 1996, and prior to the close of business
      on December 11, 1997, through their conversion, in accordance with their
      terms, into shares of its common stock, and through redemption subsequent
      to the close of business on December 12, 1996, and prior to the close
      of business on December 11, 1997 of 30,000 shares of Serial Preferred
      Stock, $3.37 Series of
      1987.<BR><BR><B>FIRST</B>:     The name of the
      corporation is Potomac Electric Power
      Company.<BR><BR><B>SECOND:    </B>The aggregate number
      of shares which the corporation had authority to issue is 219,925,649
      itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>              <U>NUMBER
      OF SHARES<BR><BR></U>Common
      Stock                        -                
           200,000,000<BR><BR>Preference             Undesignated
      as to
      series                  8,800,000<BR><BR>Serial
      Preferred<BR>  Stock                $2.44
      Series of
      1957                         300,000<BR>              
         $2.46
      Series of
      1958                         300,000<BR>              
         $2.28
      Series of
      1965                         400,000<BR>              
         $2.44
      Convertible Series of
      1966               5,953<BR>                       $3.82
      Series of
      1969                         500,000<BR>              
         $3.37
      Series of
      1987                         869,696<BR>              
         Auction
      Series
      A                           1,000,000<BR>            
           $3.89
      Series of
      1991                       1,000,000<BR>               
        $3.40
      Series of
      1992                       1,000,000<BR>               
        Undesignated
      as to
      series                  5,750,000<BR><BR><B>THIRD</B>:     The
      number of shares of the corporation so cancelled is 30,148 itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Serial
      Preferred<BR>  Stock                $2.44
      Convertible Series of
      1966                 148<BR>                      
 $3.37
      Series of
      1987                          30,000<BR><BR><B>FOURTH</B>:
      The number of shares which the corporation has authority to issue after
      giving effect to such cancellation is 219,895,501, itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Common
      Stock                      -                  
           200,000,000<BR><BR>Preference
      Stock       Undesignated as to
      series                  8,800,000<BR><BR>Serial
      Preferred<BR>  Stock                $2.44
      Series of
      1957                         300,000<BR>              
         $2.46
      Series of
      1958                         300,000<BR>              
         $2.28
      Series of
      1965                         400,000<BR>              
         $2.44
      Convertible Series of
      1966               5,805<BR>                       $3.82
      Series of
      1969                         500,000<BR>              
         $3.37
      Series of
      1987                         839,696<BR>              
         Auction
      Series
      A                           1,000,000<BR>            
           $3.89
      Series of
      1991                       1,000,000<BR>               
        $3.40
      Series of
      1992                       1,000,000<BR>               
        Undesignated
      as to
      series                  5,750,000<BR><BR><B>FIFTH:     </B>The
      aggregate number of issued shares of the corporation after giving effect
      of such cancellation is 123,846,381 itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Common
      Stock                      -                  
           118,500,880<BR><BR>Preference
      Stock                  -                      
              NONE<BR><BR>Serial
      Preferred<BR>  Stock                $2.44
      Series of
      1957                         300,000<BR>              
         $2.46
      Series of
      1958                         300,000<BR>              
         $2.28
      Series of
      1965                         400,000<BR>              
         $2.44
      Convertible Series of
      1966               5,805<BR>                       $3.82
      Series of
      1969                         500,000<BR>              
         $3.37
      Series of
      1987                         839,696<BR>              
         Auction
      Series
      A                           1,000,000<BR>            
           $3.89
      Series of
      1991                       1,000,000<BR>               
        $3.40
      Series of
      1992                       1,000,000<BR><BR><B>SIXTH</B>:     After
      giving effect to such cancellation, the amounts of the stated capital and
      paid-in surplus of the corporation, computed in accordance with the
      provisions of the District of Columbia Business Corporation Act, as
      amended, are $385,775,930 and $1,010,219,386.21,
      respectively.<BR><BR><B>DATED:</B> December 17,
      1997<BR><BR>                                       
  <B>POTOMAC
      ELECTRIC POWER
      COMPANY<BR><BR></B>                                      
   By  <U>       D.
      R.
      WRAASE       <BR></U>                                
                  Dennis
      R.
      Wraase<BR>                                        
     Senior
      Vice President
      and<BR>                                        
      Chief
      Financial Officer<BR><BR><BR>[Corporate
      Seal]<BR><BR>Attest:<BR><BR><U>   ELLEN SHERIFF
      ROGERS   <BR></U>   Ellen Sheriff
      Rogers<BR>        Secretary<BR><BR><BR><BR><B>DISTRICT
      OF COLUMBIA, ss.:<BR><BR>     </B>I, <U>Loretta
      S. Thompson</U>, a Notary Public, do hereby certify that on this
      17<SUP>th</SUP> day of December, 1997, personally appeared before me
      Dennis R. Wraase, who, being by me first duly sworn, declared that he is
      Senior Vice President and Chief Financial Officer of Potomac Electric
      Power Company, that he signed the foregoing document as Senior Vice
      President and Chief Financial Officer of the corporation, and that the
      statements therein contained are
      true.<BR><BR><BR>                                      
      <U>     LORETTA
      S.
      THOMPSON     <BR></U>                                  
               Notary
      Public, D. C.<BR><BR>[Notarial
      Seal]                        My
      commission expires:  <U>12/31/2002</P></U>
      <P
      align=center><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><B>ARTICLES
      OF AMENDMENT<BR><BR>OF<BR><BR>POTOMAC ELECTRIC POWER COMPANY</P></B>
      <P><BR><BR><BR><BR>     Under the provisions of
      Section 13.1-652 of the Code of Virginia, as amended, the undersigned
      corporation submits these Articles of
      Amendment.<BR><BR><B>FIRST</B>:     The name of
      the corporation is Potomac Electric Power
      Company.<BR><BR><B>SECOND:    </B>The reduction in the
      number of authorized shares of the corporation is 30,148, itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Serial
      Preferred<BR>  Stock                $2.44
      Convertible Series of
      1966                 148<BR>                      
 $3.37
      Series of
      1987                          30,000<BR><BR><B>THIRD</B>:     The
      total number of authorized shares of the corporation remaining after
      giving effect to such reduction is 219,895,501, itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Common
      Stock                       -                 
           200,000,000<BR><BR>Preference
      Stock       Undesignated as to
      series                  8,800,000<BR><BR>Serial
      Preferred<BR>  Stock                $2.44
      Series of
      1957                         300,000<BR>              
         $2.46
      Series of
      1958                         300,000<BR>              
         $2.28
      Series of
      1965                         400,000<BR>              
         $2.44
      Convertible Series of
      1966               5,805<BR>                       $3.82
      Series of
      1969                         500,000<BR>              
         $3.37
      Series of
      1987                         839,696<BR>              
         Auction
      Series
      A                           1,000,000<BR>            
           $3.89
      Series of
      1991                       1,000,000<BR>               
        $3.40
      Series of
      1992                       1,000,000<BR>               
        Undesignated
      as to
      series                  5,750,000<BR><BR>     The
      Articles of Incorporation prohibit the reissuance of acquired
      shares.<BR><BR><B>FOURTH</B>:    The reduction in the
      number of authorized shares was duly authorized by the Board of Directors
      on December 15, 1997.<BR><BR><B>DATED:</B> December 17,
      1997<BR><BR>[Corporate
      Seal]                         <B>POTOMAC
      ELECTRIC POWER
      COMPANY<BR><BR></B>Attest:<BR><BR><U>   ELLEN SHERIFF
      ROGERS   </U>               By  <U>       D.
      R.
      WRAASE       <BR></U>   Ellen
      Sheriff
      Rogers                           Dennis
      R.
      Wraase<BR>       Secretary                             Senior
      Vice President
      and<BR>                                        
      Chief
      Financial Officer</P>
      <P align=center><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><B>DISTRICT OF
      COLUMBIA<BR><BR>STATEMENT OF<BR><BR>CANCELLATION OF REDEEMABLE
      SHARES<BR><BR>OF<BR><BR>POTOMAC ELECTRIC POWER COMPANY</P></B>
      <P><BR><BR>     Under the provisions of Section
      29-359 of Chapter 3 of Title 29 of the District of Columbia Code, 1981
      Edition (Section 59 of the District of Columbia Business Corporation Act,
      as amended), the undersigned corporation submits this statement of
      cancellation, pursuant to the provisions of its articles of incorporation,
      of redeemable shares of the corporation reacquired by it subsequent to the
      close of business on December 12, 1997, and prior to the close of business
      on December 11, 1998, through their conversion, in accordance with their
      terms, into shares of its common stock, and through redemption subsequent
      to the close of business on December 12, 1997, and prior to the close
      of business on December 11, 1998 of 1,278 shares of Serial Preferred
      Stock, $2.44 Convertible Series of 1966, 500,000 shares of Serial
      Preferred Stock, $3.82 Series of 1969, 839,696 shares of Serial Preferred
      Stock, $3.37 Series of 1987 and 1,000,000 shares of Serial Preferred
      Stock, $3.89 Series of
      1991.<BR><BR><B>FIRST</B>:     The name of the
      corporation is Potomac Electric Power
      Company.<BR><BR><B>SECOND:    </B>The aggregate number
      of shares which the corporation had authority to issue is 219,895,501
      itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Common
      Stock                      -                  
           200,000,000<BR><BR>Preference             Undesignated
      as to
      series                  8,800,000<BR><BR>Serial
      Preferred<BR>  Stock                $2.44
      Series of
      1957                         300,000<BR>              
         $2.46
      Series of
      1958                         300,000<BR>              
         $2.28
      Series of
      1965                         400,000<BR>              
         $2.44
      Convertible Series of
      1966               5,805<BR>                       $3.82
      Series of
      1969                         500,000<BR>              
         $3.37
      Series of
      1987                         839,696<BR>              
         Auction
      Series
      A                           1,000,000<BR>            
           $3.89
      Series of
      1991                       1,000,000<BR>               
        $3.40
      Series of
      1992                       1,000,000<BR>               
        Undesignated
      as to
      series                  5,750,000<BR><BR><B>THIRD</B>:     The
      number of shares of the corporation so cancelled is 2,345,501 itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Serial
      Preferred<BR>  Stock                $2.44
      Convertible Series of
      1966               5,805<BR>                       $3.82
      Series of
      1969                         500,000<BR>              
         $3.37
      Series of
      1987                         839,696<BR>              
         $3.89
      Series of
      1991                       1,000,000<BR><BR><B>FOURTH</B>:    The
      number of shares which the corporation has authority to issue after giving
      effect to such cancellation is 217,550,000, itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Common
      Stock                      -                  
           200,000,000<BR><BR>Preference
      Stock       Undesignated as to
      series                  8,800,000<BR><BR>Serial
      Preferred<BR>  Stock                $2.44
      Series of
      1957                         300,000<BR>              
         $2.46
      Series of
      1958                         300,000<BR>              
         $2.28
      Series of
      1965                         400,000<BR>              
         Auction
      Series
      A                           1,000,000<BR>            
           $3.40
      Series of
      1992                       1,000,000<BR>               
        Undesignated
      as to
      series                  5,750,000<BR><BR>FIFTH:
      The aggregate number of issued shares of the corporation after giving
      effect of such cancellation is 121,527,287 itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Common
      Stock                      -                  
           118,527,287<BR><BR>Preference
      Stock                  -                      
              NONE<BR><BR>Serial
      Preferred<BR>  Stock                $2.44
      Series of
      1957                         300,000<BR>              
         $2.46
      Series of
      1958                         300,000<BR>              
         $2.28
      Series of
      1965                         400,000<BR>              
         Auction
      Series
      A                           1,000,000<BR>            
           $3.40
      Series of
      1992                       1,000,000<BR><BR><B>SIXTH</B>:     After
      giving effect to such cancellation, the amounts of the stated capital and
      paid-in surplus of the corporation, computed in accordance with the
      provisions of the District of Columbia Business Corporation Act, as
      amended, are $268,527,287 and $1,011,568,625.09,
      respectively.<BR><BR><BR><B>DATED:</B> December 16, 1998<BR><BR>(Corporate
      Seal)                         <B>POTOMAC
      ELECTRIC POWER
      COMPANY<BR><BR><BR></B>Attest:<BR><BR><U>   ELLEN SHERIFF
      ROGERS   </U>               By  <U>       D.
      R.
      WRAASE       <BR></U>   Ellen
      Sheriff
      Rogers                           Dennis
      R.
      Wraase<BR>       Secretary                              Senior
      Vice President
      and<BR>                                        
       Chief
      Financial Officer<BR><BR><BR><B>DISTRICT OF COLUMBIA,
      ss.:<BR><BR>     </B>I, <U>Lisa A. Poole</U>, a
      Notary Public, do hereby certify that on this 16<SUP>th</SUP> day of
      December, 1998 personally appeared before me Dennis R. Wraase, who, being
      by me first duly sworn, declared that he is Senior Vice President and
      Chief Financial Officer of Potomac Electric Power Company, that he signed
      the foregoing document as Senior Vice President and Chief Financial
      Officer of the corporation, and that the statements therein contained are
      true.<BR><BR><BR>                                      
      <U>       LISA
      A.
      POOLE       <BR></U>                                
               Notary
      Public, D. C.<BR><BR>[Notarial
      Seal]                         My
      commission expires:  <U>7-31-02</P>
      <P
      align=center><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR></U><B>ARTICLES
      OF AMENDMENT</P>
      <P align=center>OF<BR>POTOMAC ELECTRIC POWER COMPANY</P></B>
      <P><BR>     Under the provisions of Section
      13.1-652 of the Code of Virginia, as amended, the undersigned corporation
      submits these Articles of
      Amendment.<BR><BR><B>FIRST</B>:     The name of
      the corporation is Potomac Electric Power
      Company.<BR><BR><B>SECOND:    </B>The reduction in the
      number of authorized shares of the corporation is 2,345,501, itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Serial
      Preferred<BR>  Stock                $2.44
      Convertible Series of
      1966              5,805<BR>                       $3.82
      Series of
      1969                        500,000<BR>               
        $3.37
      Series of
      1987                        839,696<BR>               
        $3.89
      Series of
      1991                      1,000,000<BR><BR><B>THIRD</B>:     The
      total number of authorized shares of the corporation remaining after
      giving effect to such reduction is 217,550,000, itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Common
      Stock                      -                  
           200,000,000<BR><BR>Preference
      Stock       Undesignated as to
      series                  8,800,000<BR><BR>Serial
      Preferred<BR>  Stock                $2.44
      Series of
      1957                         300,000<BR>              
         $2.46
      Series of
      1958                         300,000<BR>              
         $2.28
      Series of
      1965                         400,000<BR>              
         Auction
      Series
      A                           1,000,000<BR>            
           $3.40
      Series of
      1992                       1,000,000<BR>               
        Undesignated
      as to
      series                  5,750,000<BR><BR>     The
      Articles of Incorporation prohibit the reissuance of acquired
      shares.<BR><BR><B>FOURTH</B>:    The reduction in the
      number of authorized shares was duly authorized by the Board of Directors
      on December 14, 1998.<BR><BR><B>DATED:</B> December 16,
      1998<BR><BR>[Corporate
      Seal]                         <B>POTOMAC
      ELECTRIC POWER COMPANY<BR></B>Attest:<BR><BR><U>   ELLEN
      SHERIFF
      ROGERS   </U>               By  <U>       D.
      R.
      WRAASE       <BR></U>   Ellen
      Sheriff
      Rogers                           Dennis
      R.
      Wraase<BR>        Secretary                            Senior
      Vice President
      and<BR>                                        
      Chief
      Financial Officer</P>
      <P><BR></P>
      <P align=center><BR><BR><BR><B>DISTRICT OF COLUMBIA<BR>STATEMENT
      OF<BR>CANCELLATION OF REDEEMABLE SHARES<BR>OF<BR>POTOMAC ELECTRIC POWER
      COMPANY</P></B>
      <P><BR><BR>     Under the provisions of Section
      29-359 of Chapter 3 of Title 29 of the District of Columbia Code, 1981
      Edition (Section 59 of the District of Columbia Business Corporation Act,
      as amended), the undersigned corporation submits this statement of
      cancellation, pursuant to the provisions of its articles of incorporation,
      of redeemable shares of the corporation reacquired by it through
      redemption subsequent to the close of business on December 11, 1998, and
      prior to the close of business on December 9, 1999, 1,000,000 shares of
      Serial Preferred Stock, Auction Series
      A.<BR><BR><B>FIRST</B>:     The name of the
      corporation is Potomac Electric Power
      Company.<BR><BR><B>SECOND:    </B>The aggregate number
      of shares which the corporation had authority to issue is 217,550,000
      itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Common
      Stock                      -                  
           200,000,000<BR><BR>Preference             Undesignated
      as to
      series                  8,800,000<BR><BR>Serial
      Preferred<BR>  Stock                $2.44
      Series of
      1957                         300,000<BR>              
         $2.46
      Series of
      1958                         300,000<BR>              
         $2.28
      Series of
      1965                         400,000<BR>              
         Auction
      Series
      A                           1,000,000<BR>            
           $3.40
      Series of
      1992                       1,000,000<BR>               
        Undesignated
      as to
      series                  5,750,000<BR><BR><B>THIRD</B>:     The
      number of shares of the corporation so cancelled is 1,000,000 itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Serial
      Preferred<BR>  Stock                Auction
      Series
      A                           1,000,000<BR><BR><B>FOURTH</B>:    The
      number of shares which the corporation has authority to issue after giving
      effect to such cancellation is 216,550,000, itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Common
      Stock                      -                  
           200,000,000<BR><BR>Preference
      Stock       Undesignated as to
      series                  8,800,000<BR><BR>Serial
      Preferred<BR>  Stock                $2.44
      Series of
      1957                         300,000<BR>              
         $2.46
      Series of
      1958                         300,000<BR>              
         $2.28
      Series of
      1965                         400,000<BR>              
         $3.40
      Series of
      1992                       1,000,000<BR>               
        Undesignated
      as to
      series                  5,750,000<BR><BR><B>FIFTH:     </B>The
      aggregate number of issued shares of the corporation after giving effect
      of such cancellation is 120,530,802 itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Common
      Stock                      -                  
           118,530,802<BR><BR>Preference
      Stock                  -                      
              NONE<BR><BR>Serial
      Preferred<BR>  Stock                $2.44
      Series of
      1957                         300,000<BR>              
         $2.46
      Series of
      1958                         300,000<BR>              
         $2.28
      Series of
      1965                         400,000<BR>              
         $3.40
      Series of
      1992                       1,000,000<BR><BR><B>SIXTH</B>:     After
      giving effect to such cancellation, the amounts of the stated capital and
      paid-in surplus of the corporation, computed in accordance with the
      provisions of the District of Columbia Business Corporation Act, as
      amended, are $218,530,802 and $1,012,481,924.19,
      respectively.<BR><BR><BR><B>DATED:</B> December 14, 1999<BR><BR>(Corporate
      Seal)                         <B>POTOMAC
      ELECTRIC POWER COMPANY<BR></B>Attest:<BR><BR><U>   ELLEN
      SHERIFF
      ROGERS   </U>               <U>          D.
      R.
      WRAASE         <BR></U>   Ellen
      Sheriff
      Rogers                          Dennis
      R.
      Wraase<BR>        Secretary                          Executive
      Vice President
      and<BR>                                        
     Chief
      Financial Officer<BR><BR><BR><BR><BR><BR><BR><B>DISTRICT OF COLUMBIA,
      ss.:<BR><BR>     </B>I<B>, </B>Lisa A. Poole, a
      Notary Public, do hereby certify that on this 14<SUP>th</SUP> day of
      December, 1999 personally appeared before me Dennis R. Wraase, who, being
      by me first duly sworn, declared that he is Executive Vice President and
      Chief Financial Officer of Potomac Electric Power Company, that he signed
      the foregoing document as Executive Vice President and Chief Financial
      Officer of the corporation, and that the statements therein contained are
      true.<BR><BR><BR>                                      
       <U>        LISA
      A.
      POOLE          <BR></U>                             
                     Notary
      Public, D. C.<BR><BR>[Notarial
      Seal]                              My
      commission expires: <U>7-31-02</P>
      <P
      align=center><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR></U><B>ARTICLES
      OF AMENDMENT<BR>OF<BR>POTOMAC ELECTRIC POWER COMPANY</P></B>
      <P><BR><BR><BR>     Under the provisions of
      Section 13.1-652 of the Code of Virginia, as amended, the undersigned
      corporation submits these Articles of
      Amendment.<BR><BR><B>FIRST</B>:     The name of
      the corporation is Potomac Electric Power
      Company.<BR><BR><B>SECOND:    </B>The reduction in the
      number of authorized shares of the corporation is 1,000,000, itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Serial
      Preferred<BR>  Stock                Auction
      Series
      A                           1,000,000<BR><BR><B>THIRD</B>:     The
      total number of authorized shares of the corporation remaining after
      giving effect to such reduction is 216,550,000, itemized as
      follows:<BR><BR><U>     CLASS      </U>       <U>         SERIES        
  </U>           <U>NUMBER
      OF SHARES<BR><BR></U>Common
      Stock                      -                  
           200,000,000<BR><BR>Preference
      Stock       Undesignated as to
      series                  8,800,000<BR><BR>Serial
      Preferred<BR>  Stock                $2.44
      Series of
      1957                         300,000<BR>              
         $2.46
      Series of
      1958                         300,000<BR>              
         $2.28
      Series of
      1965                         400,000<BR>              
         $3.40
      Series of
      1992                       1,000,000<BR>               
        Undesignated
      as to
      series                  5,750,000<BR><BR>     The
      Articles of Incorporation prohibit the reissuance of acquired
      shares.</P><B>
      <P><BR>FOURTH</B>:    The reduction in the number of
      authorized shares was duly authorized by the Board of Directors on
      December 13, 1999.<BR><BR><B>DATED:</B> December 14,
      1999<BR><BR>[Corporate
      Seal]                         <B>POTOMAC
      ELECTRIC POWER COMPANY<BR></B>Attest:<BR><BR><U>   ELLEN
      SHERIFF
      ROGERS   </U>               By:  <U>         D.
      R.
      WRAASE       <BR></U>   Ellen
      Sheriff
      Rogers                             Dennis
      R.
      Wraase<BR>        Secretary                            Executive
      Vice President
      and<BR>                                        
        Chief
      Financial Officer</FONT></P></TD></TR></TABLE><FONT
face=INT2OF5X1></FONT></BODY></HTML>