<HTML><HEAD><TITLE>POTOMAC ELECTRIC POWER COMPANY</TITLE>
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      <P align=center><BR><BR><BR><BR><BR><BR><BR>POTOMAC ELECTRIC POWER
      COMPANY<BR><BR>1900 Pennsylvania Avenue, N.W., Washington,
      D.C.<BR><BR>TO<BR><BR>THE BANK OF NEW YORK<BR><BR>101 Barclay Street, New
      York, NY<BR><BR>AS TRUSTEE<BR><BR>________________<BR><BR>Supplemental
      Indenture<BR><BR>Dated as of March 17,
      1999<BR><BR>________________<BR><BR><BR>Supplemental to Mortgage and Deed
      of Trust<BR><BR>Dated July 1,
      1936<BR><BR>_________________<BR><BR><BR><BR>First Mortgage Bonds, 6%
      Series due 2004<BR><BR><BR><BR><BR><BR><BR></P>
      <P align=justify></B></FONT></P></TD></TR></TABLE><B><FONT
face="Letter Gothic">
<P align=justify> </P></B></FONT>
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      <P align=center><BR>POTOMAC ELECTRIC POWER COMPANY<BR><BR>Supplemental
      Indenture Dated As of March 17, 1999<BR><BR>TABLE OF
      CONTENTS*<BR>____________________</P>
      <P align=center><BR><BR></B></FONT></P></TD></TR>
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    <TD colSpan=2 vAlign=top width="74%"> </TD>
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      <P align=right>PAGE</B></FONT></P></TD></TR>
  <TR>
    <TD vAlign=top width="19%"><B><FONT face="Letter Gothic">
      <P>PARTIES</B></FONT></P></TD>
    <TD colSpan=2 vAlign=top width="74%"><B><FONT face="Letter Gothic">
      <P>. . . . . . . . . . . . . . . . . . . . . . . . . .
 ..</B></FONT></P></TD>
    <TD vAlign=top width="8%"><B><FONT face="Letter Gothic">
      <P align=right>1</B></FONT></P></TD></TR>
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    <TD vAlign=top width="19%"><B><FONT face="Letter Gothic">
      <P>RECITALS</B></FONT></P></TD>
    <TD colSpan=2 vAlign=top width="74%"><B><FONT face="Letter Gothic">
      <P>. . . . . . . . . . . . . . . . . . . . . . . . . . .
    .</B></FONT></P></TD>
    <TD vAlign=top width="8%"><B><FONT face="Letter Gothic">
      <P align=right>1</B></FONT></P></TD></TR>
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    <TD colSpan=2 vAlign=top width="74%"><B><FONT face="Letter Gothic">
      <P align=center><BR>PART I<BR>DESCRIPTION OF BONDS<BR></B></FONT></P></TD>
    <TD vAlign=top width="8%"> </TD></TR>
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    <TD vAlign=top width="19%"><B><FONT face="Letter Gothic">
      <P>SECTION 1.</B></FONT></P></TD>
    <TD colSpan=2 vAlign=top width="74%"><B><FONT face="Letter Gothic">
      <P>General description of Bonds of 2004 Series . . . . .
    .</B></FONT></P></TD>
    <TD vAlign=top width="8%"><B><FONT face="Letter Gothic">
      <P align=right>5</B></FONT></P></TD></TR>
  <TR>
    <TD vAlign=top width="19%"><B><FONT face="Letter Gothic">
      <P align=justify>SECTION 2.</B></FONT></P></TD>
    <TD colSpan=2 vAlign=top width="74%"><B><FONT face="Letter Gothic">
      <P align=justify>Form of face of Bond of 2004 Series . . . . . . . . .
      .</B></FONT></P></TD>
    <TD vAlign=top width="8%"><B><FONT face="Letter Gothic">
      <P align=right>7</B></FONT></P></TD></TR>
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    <TD vAlign=top width="19%"> </TD>
    <TD colSpan=2 vAlign=top width="74%"><B><FONT face="Letter Gothic">
      <P align=justify>Form of Trustee's certificate . . . . . . . . . . . .
      .</B></FONT></P></TD>
    <TD vAlign=top width="8%"><B><FONT face="Letter Gothic">
      <P align=right>8</B></FONT></P></TD></TR>
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    <TD vAlign=top width="19%"> </TD>
    <TD colSpan=2 vAlign=top width="74%"><B><FONT face="Letter Gothic">
      <P align=justify>Text appearing on reverse side of Bond of 2004 Series
      .</B></FONT></P></TD>
    <TD vAlign=top width="8%"><B><FONT face="Letter Gothic">
      <P align=right>9</B></FONT></P></TD></TR>
  <TR>
    <TD vAlign=top width="19%"><B><FONT face="Letter Gothic">
      <P align=justify>SECTION 3.</B></FONT></P></TD>
    <TD colSpan=2 vAlign=top width="74%"><B><FONT face="Letter Gothic">
      <P align=justify>Denominations of Bonds of 2004 Series . . . . . . . .
      .</B></FONT></P></TD>
    <TD vAlign=top width="8%"><B><FONT face="Letter Gothic">
      <P align=right>11</B></FONT></P></TD></TR>
  <TR>
    <TD vAlign=top width="19%"><B><FONT face="Letter Gothic">
      <P align=justify>SECTION 4.</B></FONT></P></TD>
    <TD colSpan=2 vAlign=top width="74%"><B><FONT face="Letter Gothic">
      <P align=justify>Execution and form of temporary Bonds of 2004 Series
      .</B></FONT></P></TD>
    <TD vAlign=top width="8%"><B><FONT face="Letter Gothic">
      <P align=right>11</B></FONT></P></TD></TR>
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    <TD vAlign=top width="19%"> </TD>
    <TD colSpan=2 vAlign=top width="74%"><B><FONT face="Letter Gothic">
      <P align=center><BR>PART II<BR>ISSUE OF BONDS<BR></B></FONT></P></TD>
    <TD vAlign=top width="8%"> </TD></TR>
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    <TD vAlign=top width="19%"><B><FONT face="Letter Gothic">
      <P align=justify>SECTION 1.</B></FONT></P></TD>
    <TD colSpan=2 vAlign=top width="74%"><B><FONT face="Letter Gothic">
      <P align=justify>Limitation as to principal amount . . . . . . . . . .
      .</B></FONT></P></TD>
    <TD vAlign=top width="8%"><B><FONT face="Letter Gothic">
      <P align=right>11</B></FONT></P></TD></TR>
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    <TD vAlign=top width="19%"><B><FONT face="Letter Gothic">
      <P align=justify>SECTION 2.</B></FONT></P></TD>
    <TD colSpan=2 vAlign=top width="74%"><B><FONT face="Letter Gothic">
      <P align=justify>Issue of Bonds of 2004 Series . . . . . . . . . . . .
      .</B></FONT></P></TD>
    <TD vAlign=top width="8%"><B><FONT face="Letter Gothic">
      <P align=right>12</B></FONT></P></TD></TR>
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    <TD colSpan=2 vAlign=top width="74%"><B><FONT face="Letter Gothic">
      <P align=center><BR>PART III<BR>REDEMPTION<BR></B></FONT></P></TD>
    <TD vAlign=top width="8%"> </TD></TR>
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    <TD vAlign=top width="19%"><B><FONT face="Letter Gothic">
      <P align=justify>SECTION 1.</B></FONT></P></TD>
    <TD colSpan=2 vAlign=top width="74%"><B><FONT face="Letter Gothic">
      <P>Bonds of 2004 Series redeemable . . . . . . . . . . .
    .</B></FONT></P></TD>
    <TD vAlign=top width="8%"><B><FONT face="Letter Gothic">
      <P align=right>12</B></FONT></P></TD></TR>
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    <TD vAlign=top width="19%"><B><FONT face="Letter Gothic">
      <P align=justify>SECTION 2.</B></FONT></P></TD>
    <TD colSpan=2 vAlign=top width="74%"><B><FONT face="Letter Gothic">
      <P>Notice of Redemption, etc. . . . . . . . . . . . . . .
    </B></FONT></P></TD>
    <TD vAlign=top width="8%"><B><FONT face="Letter Gothic">
      <P align=right>13</B></FONT></P></TD></TR>
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    <TD colSpan=2 vAlign=top width="74%"><B><FONT face="Letter Gothic">
      <P align=center><BR>PART IV<BR>ADDITIONAL PARTICULAR COVENANTS OF THE
      COMPANY<BR></B></FONT></P></TD>
    <TD vAlign=top width="8%"> </TD></TR>
  <TR>
    <TD vAlign=top width="19%"><B><FONT face="Letter Gothic">
      <P align=justify>SECTION 1.</B></FONT></P></TD>
    <TD colSpan=2 vAlign=top width="74%"><B><FONT face="Letter Gothic">
      <P>Company not to withdraw moneys pursuant to Section 2 of Article VIII in
      excess of an amount equal to principal amount of issued refundable bonds .
      . . . . . . . . . .</B></FONT></P></TD>
    <TD vAlign=top width="8%"><B><FONT face="Letter Gothic">
      <P align=right><BR><BR>13</B></FONT></P></TD></TR>
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    <TD vAlign=top width="19%"><B><FONT face="Letter Gothic">
      <P align=justify>SECTION 2.</B></FONT></P></TD>
    <TD colSpan=2 vAlign=top width="74%"><B><FONT face="Letter Gothic">
      <P>No property additions made on or prior to December 31, 1946 to be
      used for any purpose under the Indenture . .</B></FONT></P></TD>
    <TD vAlign=top width="8%"><B><FONT face="Letter Gothic">
      <P align=right><BR>13<BR></B></FONT></P></TD></TR>
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    <TD colSpan=2 vAlign=top width="74%"><B><FONT face="Letter Gothic">
      <P align=center>PART V<BR></B></FONT></P></TD>
    <TD vAlign=top width="8%"> </TD></TR>
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    <TD colSpan=3 vAlign=top width="92%"><B><FONT face="Letter Gothic">
      <P>Amendment of Indenture to Permit Qualification Under Trust Indenture
      Act of 1939 . . . . </B></FONT></P></TD>
    <TD vAlign=top width="8%"><B><FONT face="Letter Gothic">
      <P align=right>14</B></FONT></P></TD></TR>
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    <TD vAlign=top width="72%"><B><FONT face="Letter Gothic">
      <P align=center><BR>PART VI<BR></B></FONT></P></TD>
    <TD vAlign=top width="8%"> </TD></TR>
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    <TD colSpan=3 vAlign=top width="92%"><B><FONT face="Letter Gothic">
      <P>Amendment of Original Indenture . . . . . . . . . . . . . . . . . .
      .</B></FONT></P></TD>
    <TD vAlign=top width="8%"><B><FONT face="Letter Gothic">
      <P align=right>14</B></FONT></P></TD></TR>
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    <TD colSpan=2 vAlign=top width="21%"> </TD>
    <TD vAlign=top width="72%"><B><FONT face="Letter Gothic">
      <P align=center><BR>PART VII<BR>THE TRUSTEE<BR></B></FONT></P></TD>
    <TD vAlign=top width="8%"> </TD></TR>
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      <P>Acceptance of trusts by the Trustee . . . . . . . . . . . . . . . .
      .</B></FONT></P></TD>
    <TD vAlign=top width="8%"><B><FONT face="Letter Gothic">
      <P align=right>14</B></FONT></P></TD></TR>
  <TR>
    <TD colSpan=3 vAlign=top width="92%"><B><FONT face="Letter Gothic">
      <P>Trustee not responsible for validity of the Supplemental Indenture
      .</B></FONT></P></TD>
    <TD vAlign=top width="8%"><B><FONT face="Letter Gothic">
      <P align=right>15</B></FONT></P></TD></TR>
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    <TD colSpan=2 vAlign=top width="21%"> </TD>
    <TD vAlign=top width="72%"><B><FONT face="Letter Gothic">
      <P align=center><BR>PART VIII<BR>MISCELLANEOUS
      PROVISIONS<BR></B></FONT></P></TD>
    <TD vAlign=top width="8%"> </TD></TR>
  <TR>
    <TD colSpan=3 vAlign=top width="92%"><B><FONT face="Letter Gothic">
      <P>Execution of Supplemental Indenture in counterparts . . . . . . . .
      .</B></FONT></P></TD>
    <TD vAlign=top width="8%"><B><FONT face="Letter Gothic">
      <P align=right>15</B></FONT></P></TD></TR>
  <TR>
    <TD colSpan=3 vAlign=top width="92%"><B><FONT face="Letter Gothic">
      <P>Appointment of attorneys-in-fact by parties</B></FONT></P></TD>
    <TD vAlign=top width="8%"><B><FONT face="Letter Gothic">
      <P align=right>15</B></FONT></P></TD></TR>
  <TR>
    <TD colSpan=2 vAlign=top width="21%"> </TD>
    <TD vAlign=top width="72%"> </TD>
    <TD vAlign=top width="8%"> </TD></TR>
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    <TD colSpan=3 vAlign=top width="92%"><B><FONT face="Letter Gothic">
      <P>TESTIMONIUM</B></FONT></P></TD>
    <TD vAlign=top width="8%"><B><FONT face="Letter Gothic">
      <P align=right>15</B></FONT></P></TD></TR>
  <TR>
    <TD colSpan=3 vAlign=top width="92%"><B><FONT face="Letter Gothic">
      <P>EXECUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
      .</B></FONT></P></TD>
    <TD vAlign=top width="8%"><B><FONT face="Letter Gothic">
      <P align=right>16</B></FONT></P></TD></TR>
  <TR>
    <TD colSpan=3 vAlign=top width="92%"><B><FONT face="Letter Gothic">
      <P>COMPANY'S ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . . .
      .</B></FONT></P></TD>
    <TD vAlign=top width="8%"><B><FONT face="Letter Gothic">
      <P align=right>16</B></FONT></P></TD></TR>
  <TR>
    <TD colSpan=3 vAlign=top width="92%"><B><FONT face="Letter Gothic">
      <P>TRUSTEE'S ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . . . .
      </B></FONT></P></TD>
    <TD vAlign=top width="8%"><B><FONT face="Letter Gothic">
      <P align=right>16</B></FONT></P></TD></TR></TABLE><B><FONT
face="Letter Gothic">
<P><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR>______________<BR>  *
The Table of Contents is not part of the Supplemental Indenture and should not
be considered<BR>as such. It is included herein only for purposes of convenient
reference.<BR></P></B></FONT>
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    <TD vAlign=top><B><FONT face="Letter Gothic">
      <P><BR>     SUPPLEMENTAL INDENTURE, dated as of
      the 17<SUP>th</SUP> day of March, Nineteen hundred ninety-nine (1999),
      made by and between Potomac Electric Power Company, a corporation
      organized and existing under the laws of the District of Columbia and a
      domestic corporation of the Commonwealth of Virginia (hereinafter
      sometimes called the "Company"), party of the first part, and The Bank of
      New York, a New York banking corporation organized and existing under the
      laws of the State of New York (hereinafter sometimes called the
      "Trustee"), as Trustee under the Mortgage and Deed of Trust dated July 1,
      1936, hereinafter mentioned, party of the second
      part;<BR><BR>     WHEREAS, the Company has
      heretofore executed and delivered its Mortgage and Deed of Trust, dated
      July 1, 1936 (hereinafter sometimes referred to as the "Original
      Indenture"), to The Riggs National Bank of Washington, D.C., as trustee,
      to secure an issue of First Mortgage Bonds of the Company, issuable in
      series; and<BR><BR>     WHEREAS, the Trustee has
      succeeded The Riggs National Bank of Washington, D.C. as trustee under the
      Original Indenture pursuant to Article XIII, Section 3 thereof;
      and<BR><BR>     WHEREAS, pursuant to the terms
      and provisions of the Original Indenture, indentures supplemental thereto
      dated as of July 1, 1936, December 1, 1939, August 1, 1940, August 1,
      1942, January 1, 1948, May 1, 1949, May 1, 1950, March 1, 1952, May
      15, 1953, May 16, 1955, June 1, 1956, December 1, 1958, November 16, 1959,
      December 1, 1960, February 15, 1963, May 15, 1964, April 1, 1966, May 1,
      1967, February 15, 1968, March 15, 1969, February 15, 1970,
      August 15, 1970, September 15, 1972, April 1, 1973, January 2,
      1974, August 15, 1974, August 15, 1974, June 15, 1977, July 1, 1979, June
      16, 1981, June 17, 1981, December 1, 1981, August 1, 1982, October 1,
      1982, April 15, 1983, November 1, 1985, March 1, 1986,
      November 1, 1986, March 1, 1987, September 16, 1987, May 1, 1989,
      August 1, 1989, April 5, 1990, May 21, 1991, May 7, 1992, September
      1, 1992, November 1, 1992, March 1, 1993, March 2, 1993, July 1,
      1993, August 20, 1993, September 29, 1993, September 30, 1993,
      October 1, 1993, February 10, 1994, February 11, 1994, March 10,
      1995, September 6, 1995, September 7, 1995 and October 2, 1997 have
      been heretofore entered into between the Company and the Trustee to
      provide, respectively, for the creation of the first through the
      sixty-second series of Bonds thereunder and, in the case of the
      supplemental indentures dated January 1, 1948, March 1, 1952, May 15,
      1953, May 16, 1955, June 1, 1956, September 15, 1972, July 1, 1979,
      June 17, 1981, November 1, 1985, September 16, 1987, May 1, 1989, May 21,
      1991, May 7, 1992, July 1, 1993, October 2, 1997 and one of the
      supplemental indentures dated August 15, 1975, to convey additional
      property; and<BR><BR>     WHEREAS, $20,000,000
      principal amount of Bonds of the 3-1/4% Series due 1966 (the first
      series), $5,000,000 principal amount of Bonds of the 3-1/4% Series due
      1974 (the second series), $10,000,000 principal amount of Bonds of the
      3-1/4% Series due 1975 (the third series), $5,000,000 principal amount of
      Bonds of the 3-1/4% Series due 1977 (the fourth series), $15,000,000
      principal amount of Bonds of the 3% Series due 1983 (the fifth series),
      $10,000,000 principal amount of Bonds of the 2-7/8% Series due 1984 (the
      sixth series), $30,000,000 principal amount of Bonds of the 2-3/4% Series
      due 1985 (the seventh series), $15,000,000 principal amount of Bonds of
      the 3-1/4% Series due 1987 (the eighth series), $10,000,000 principal
      amount of Bonds of the 3-7/8% Series due 1988 (the ninth series),
      $10,000,000 principal amount of Bonds of the 3-3/8% Series due 1990 (the
      tenth series), $10,000,000 principal amount of Bonds of the 3-5/8% Series
      due 1991 (the eleventh series), $25,000,000 principal amount of Bonds of
      the 4-5/8% Series due 1993 (the twelfth series), $15,000,000 principal
      amount of Bonds of the 5-1/4% Series due 1994 (the thirteenth series),
      $40,000,000 principal amount of Bonds of the 5% Series due 1995 (the
      fourteenth series), $50,000,000 principal amount of Bonds of the 4-3/8%
      Series due 1998 (the fifteenth series), $45,000,000 principal amount of
      Bonds of the 7-3/4% Series due 2004 (the twentieth series), $35,000,000
      principal amount of Bonds of the 8.85% Series due 2005 (the twenty-first
      Series), $70,000,000 principal amount of Bonds of the 9-1/2% Series due
      August 15, 2005 (the twenty-second series), $50,000,000 principal
      amount of Bonds of the 7-3/4% Series due 2007 (the twenty-third series),
      $25,000,000 principal amount of Bonds of the 5-5/8% Series due 1997 (the
      twenty-fourth series), $100,000,000 principal amount of Bonds of the
      8-3/8% Series due 2009 (the twenty-fifth series), $50,000,000 principal
      amount of Bonds of the 10-1/4% Series due 1981 (the twenty-sixth series),
      $50,000,000 principal amount of Bonds of the 10-3/4% Series due 2004 (the
      twenty-seventh series), $38,300,000 principal amount of Bonds of the
      6-1/8% Series due 2007 (the twenty-eighth series), $15,000,000 principal
      amount of Bonds of the 6-1/2% Series due 2004 (the twenty-ninth series),
      $20,000,000 principal amount of Bonds of the 6-1/2% Series due 2007 (the
      thirtieth series), $7,500,000 principal amount of Bonds of the 6-5/8%
      Series due 2009 (the thirty-first series), $30,000,000 principal amount of
      Bonds of the Floating Rate Series due 2010 (the thirty-second series),
      $50,000,000 principal amount of Bonds of the 14-1/2% Series due 1991 (the
      thirty-third series), $60,000,000 principal amount of Bonds of the 14-1/4%
      Series due 1992 (the thirty-fifth series), $50,000,000 principal amount of
      Bonds of the 11-7/8% Series due 1989 (the thirty-sixth series),
      $37,000,000 principal amount of Bonds of the 8-3/4% Series due 2010 (the
      thirty-seventh series), $75,000,000 principal amount of Bonds of the
      11-1/4% Series due 2015 (the thirty-eighth series), $75,000,000 principal
      amount of Bonds of the 9-1/4% Series due 2016 (the thirty-ninth series),
      $75,000,000 principal amount of Bonds of the 8-3/4% Series due 2016 (the
      fortieth series), $75,000,000 principal amount of Bonds of the 8-1/4%
      Series due 2017 (the forty-first series), $75,000,000 principal amount of
      Bonds of the 9% Series due 1990 (the forty-second series), $75,000,000
      principal amount of Bonds of the 9-3/4% Series due 2019 (the forty-third
      series) and $75,000,000 principal amount of Bonds of the 8-5/8% Series due
      2019 (the forty-fourth series), have been heretofore redeemed and retired
      and there are now issued and outstanding under the Original Indenture and
      under the supplemental indentures referred to above: $45,000,000 principal
      amount of Bonds of the 4-1/2% Series due 1999 (the sixteenth series);
      $15,000,000 principal amount of Bonds of the 5-1/8% Series due 2001 (the
      seventeenth series); $35,000,000 principal amount of Bonds of the 5-7/8%
      Series due 2002 (the eighteenth series); $40,000,000 principal amount of
      Bonds of the 6-5/8% Series due 2003 (the nineteenth series); $50,000,000
      principal amount of Bonds of the Adjustable Rate Series due 2001 (the
      thirty-fourth series); $100,000,000 principal amount of Bonds of the 9%
      Series due 2000 (the forty-fifth series); $100,000,000 principal amount of
      Bonds of the 9% Series due 2021 (the forty-sixth series); $75,000,000
      principal amount of Bonds of the 8-1/2% Series due 2027 (the forty-seventh
      series); $30,000,000 principal amount of Bonds of the 6% Series due 2022
      (the forty-eighth series); $37,000,000 principal amount of Bonds of the
      6-3/8% Series due 2023 (the forty-ninth series); $78,000,000 principal
      amount of Bonds of the 6-1/2% Series due 2008 (the fiftieth series);
      $40,000,000 principal amount of Bonds of the 7-1/2% Series due 2028 (the
      fifty-first series); $100,000,000 principal amount of Bonds of the 7-1/4%
      Series due 2023 (the fifty-second series); $100,000,000 principal amount
      of Bonds of the 6-7/8% Series due 2023 (the fifty-third series);
      $50,000,000 principal amount of Bonds of the 5-5/8% Series due 2003 (the
      fifty-fourth series); $50,000,000 principal amount of Bonds of the 5-7/8%
      Series due 2008 (the fifty-fifth series); $75,000,000 principal amount of
      Bonds of the 6-7/8% Series due 2024 (the fifty-sixth series); $42,500,000
      principal amount of Bonds of the 5-3/8% Series due 2024 (the fifty-seventh
      series); $38,300,000 principal amount of Bonds of the 5-3/8% Series due
      2024 (the fifty-eighth series); $16,000,000 principal amount of Bonds of
      the 5-3/4% Series due 2010 (the fifty-ninth series); $100,000,000
      principal amount of Bonds of the 6-1/2% series due 2005 (the sixtieth
      series); $75,000,000 principal amount of Bonds of the 7-3/8% Series due
      2025 (the sixty-first series); and $175,000,000 principal amount of Bonds
      of the 6-1/4% Series due 2007 (the sixty-second series);
      and<BR><BR>     WHEREAS, for the purpose of
      conforming the Original Indenture to the standards prescribed by the Trust
      Indenture Act of 1939 or otherwise modifying certain of the provisions of
      the Original Indenture, indentures supplemental thereto dated
      December 10, 1939, August 10, 1942, October 15, 1942, April 1, 1966,
      June 16, 1981, June 17, 1981, December 1, 1981, August 1, 1982,
      October 1, 1982, April 15, 1983, November 1, 1985, March 1, 1986,
      November 1, 1986, March 1, 1987, September 16, 1987, May 1, 1989,
      August 1, 1989, April 5, 1990, May 21, 1991, May 7, 1992, September
      1, 1992, November 1, 1992, March 1, 1993, March 2, 1993, July 1,
      1993, August 20, 1993, September 29, 1993, September 30, 1993, October 1,
      1993, February 10, 1994, February 11, 1994, March 10, 1995,
      September 6, 1995, September 7, 1995 and October 2, 1997 have
      been heretofore entered into between the Company and the Trustee, and for
      the purpose of conveying additional property, indentures supplemental
      thereto dated July 15, 1942, October 15, 1947, December 31, 1948,
      December 31, 1949, February 15, 1951, February 16, 1953,
      March 15, 1954, March 15, 1955, March 15, 1956, April 1, 1957, May 1,
      1958, May 1, 1959, May 2, 1960, April 3, 1961, May 1, 1962, May
      1, 1963, April 23, 1964, May 3, 1965, June 1, 1966, April 28,
      1967, July 3, 1967, May 1, 1968, June 16, 1969, May 15, 1970,
      September 1, 1971, June 17, 1981, November 1, 1985, September 16,
      1987, May 1, 1989, May 21, 1991, May 7, 1992, July 1, 1993
      and October 2, 1997 have been heretofore entered into between the
      Company and the Trustee, and for the purpose of better securing and
      protecting the Bonds then or thereafter issued and confirming the lien of
      the Original Indenture, an indenture dated October 15, 1942 supplemental
      thereto has been heretofore entered into between the Company and the
      Trustee; the Original Indenture as heretofore amended and supplemented
      being hereinafter referred to as the "Original Indenture as amended";
      and<BR><BR>     WHEREAS, the Company is entitled
      to have authenticated and delivered additional Bonds on the basis of the
      net bondable value of property additions, upon compliance with the
      provisions of Section 4 of Article III of the Original Indenture as
      amended; and<BR><BR>     WHEREAS, the Company has
      determined to issue a sixty-third series of Bonds under the Original
      Indenture as amended in the principal amount of $270,000,000, to be known
      as First Mortgage Bonds, 6% Series due 2004 (hereinafter called "Bonds of
      2004 Series"); and<BR><BR>     WHEREAS, the
      Original Indenture as amended provides that certain terms and provisions,
      as determined by the Board of Directors of the Company, of the Bonds of
      any particular series may be expressed in and provided by the execution of
      an appropriate supplemental indenture;
      and<BR><BR>     WHEREAS, the Original Indenture
      as amended provides that the Company and the Trustee may enter into
      indentures supplemental thereto to add to the covenants and agreements of
      the Company contained therein other covenants and agreements thereafter to
      be observed; and to surrender any right or power reserved to or conferred
      upon the Company in the Original Indenture as amended;
      and<BR><BR>     WHEREAS, the Company, in the
      exercise of the powers and authority conferred upon and reserved to it
      under the provisions of the Original Indenture as amended and pursuant to
      appropriate resolutions of its Board of Directors, has duly resolved and
      determined to make, execute and deliver to the Trustee a Supplemental
      Indenture in the form hereof for the purposes herein provided;
      and<BR><BR>     WHEREAS, all conditions and
      requirements necessary to make this Supplemental Indenture a valid,
      binding and legal instrument have been done, performed and fulfilled, and
      the execution and delivery hereof have been in all respects duly
      authorized;<BR><BR>     NOW, THEREFORE, THIS
      INDENTURE WITNESSETH:<BR><BR>     THAT POTOMAC
      ELECTRIC POWER COMPANY, in consideration of the premises and of One Dollar
      to it duly paid by the Trustee at or before the ensealing and delivery of
      these presents, and for other valuable considerations, the receipt whereof
      is hereby acknowledged, hereby covenants, declares and agrees with the
      Trustee and its successors in the trust under the Original Indenture as
      amended, for the benefit of those who hold the Bonds and coupons, or any
      of them, issued or to be issued hereunder or under the Original Indenture
      as amended, as follows:</P>
      <P align=center><BR>PART I.<BR><BR>DESCRIPTION OF BONDS.</P>
      <P><BR>     SECTION 1. The Bonds of 2004 Series
      shall, subject to the provisions of Section 1 of Article II of the
      Original Indenture as amended, be designated as "First Mortgage Bonds, 6%
      Series due 2004" of the Company. The Bonds of 2004 Series shall be
      executed, authenticated and delivered in accordance with the provisions
      of, and shall in all respects be subject to, all of the terms, conditions
      and covenants of the Original Indenture as amended, except in so far as
      the terms and provisions of the Original Indenture as amended are amended
      or modified by this Supplemental
      Indenture.<BR><BR>     The Bonds of 2004 Series
      shall mature April 1, 2004, and shall bear interest at the rate of
      six percent (6%) per annum, payable monthly, commencing May 1, 1999,
      on the first day of each month until maturity (each such date being
      hereinafter called an "interest payment date"). Interest on the Bonds of
      2004 Series shall be computed on the basis of a 360-day year of twelve
      30-day months. Interest payable for any period shorter than a full month
      shall be computed on the basis of the actual number of days elapsed. The
      Bonds of 2004 Series shall be payable as to principal and interest in
      lawful money of the United States of America, and shall be payable (as
      well the interest as the principal thereof) at the agency of the Company
      in the Borough of Manhattan, The City of New
      York.<BR><BR>     The interest so payable on any
      interest payment date shall be paid to the persons in whose names the
      Bonds of 2004 Series are registered at the close of business on the last
      business day (hereinafter called the "record date") which is more than ten
      days prior to such interest payment date, a "business day" being any day
      that is not a day on which banks in the City of New York are authorized by
      law to close; except that if the Company shall default in the payment of
      any interest due on such interest payment date, such defaulted interest
      shall be paid to the persons in whose names the Bonds of 2004 Series are
      registered on the date of payment of such defaulted interest, or in
      accordance with the regulations of any securities exchange on which the
      Bonds of 2004 Series are
      listed.<BR><BR>     Except as provided
      hereinafter, every Bond of 2004 Series shall be dated as of the date of
      its authentication and delivery, or if that is an interest payment date,
      the next day, and shall bear interest from the interest payment date next
      preceding its date or the date of delivery of the initial Bonds of 2004
      Series, whichever is later. Notwithstanding Section 6 of Article II of the
      Original Indenture, any Bond of 2004 Series authenticated and delivered by
      the Trustee after the close of business on the record date with respect to
      any interest payment date and prior to such interest payment date shall be
      dated as of the date next following such interest payment date and shall
      bear interest from such interest payment date; except that if the Company
      shall default in the payment of any interest due on such interest payment
      date, such Bond shall bear interest from the next preceding interest
      payment date or the date of delivery of the initial Bonds of 2004 Series,
      whichever is later.<BR><BR>     SECTION 2. The
      Bonds of 2004 Series, and the Trustee's certificate to be endorsed on the
      Bonds of 2004 Series, shall be substantially in the following forms,
      respectively:<BR><BR></P>
      <P align=center>[FORM OF FACE OF BOND OF 2004 SERIES]<BR><BR>POTOMAC
      ELECTRIC POWER COMPANY<BR>(A District of Columbia and Virginia
      corporation)<BR><BR>First Mortgage Bond, 6% Series Due 2004<BR><BR></P>
      <P>No.              
                    
                    
                     
                   $<BR>               
                     
                     
                    
                     
      Cusip No.<BR><BR>     POTOMAC ELECTRIC POWER
      COMPANY, a corporation organized and existing under the laws of the
      District of Columbia and a domestic corporation of the Commonwealth of
      Virginia (hereinafter called the "Company", which term shall include any
      successor corporation as defined in the Amended Indenture hereinafter
      referred to), for value received, hereby promises to pay to
                                   
      or registered assigns, the sum of
                             
      dollars, on the first of April, 2004, in lawful money of the United States
      of America, and to pay interest thereon in like money from the later of
      the date of delivery of the initial Bonds of 2004 Series or the interest
      payment date next preceding the date of this Bond, or if the Company shall
      default in the payment of interest due on such interest payment date, then
      from the next preceding interest payment date or the date of delivery of
      the initial Bonds of 2004 Series, whichever is later, at the rate of six
      percent (6%) per annum, payable monthly, commencing May 1, 1999,
      on the first day of each month in each year until maturity (each such date
      being hereinafter called an "interest payment date"), or, if the Company
      shall default in the payment of the principal hereof, until the Company's
      obligation with respect to the payment of such principal shall be
      discharged as provided in the Amended Indenture. Interest on the Bonds of
      2004 Series shall be computed on the basis of a 360-day year of twelve
      30-day months. Interest payable for any period shorter than a full month
      shall be computed on the basis of the actual number of days elapsed. The
      interest so payable on any interest payment date will, subject to certain
      exceptions provided in the indenture dated as of March 17, 1999
      supplemental to the Amended Indenture, be paid to the person in whose name
      this Bond is registered at the close of business on the last business day
      which is more than ten days prior to such interest payment date. Both
      principal of, and interest on, this Bond are payable at the agency of the
      Company in the Borough of Manhattan, The City of New
      York.<BR><BR>     Reference is made to the
      further provisions of this Bond set forth on the reverse hereof, and such
      further provisions shall for all purposes have the same effect as though
      fully set forth at this place.<BR><BR>     This
      Bond shall not be entitled to any benefit under the Amended Indenture or
      any indenture supplemental thereto, or become valid or obligatory for any
      purpose, until The Bank of New York, the Trustee under the Amended
      Indenture, or a successor trustee thereto under the Amended Indenture,
      shall have signed the form of certificate endorsed
      hereon.<BR><BR>     IN WITNESS WHEREOF, Potomac
      Electric Power Company has caused this Bond to be signed in its name by
      the signature (or a facsimile thereof) of its President or a Vice
      President, and its corporate seal (or a facsimile thereof) to be hereto
      affixed and attested by the facsimile signature of its Secretary or an
      Assistant
      Secretary.<BR><BR>Dated,              
                   POTOMAC
      ELECTRIC POWER
      COMPANY<BR><BR><BR>               
                     
           By                       <BR>            
   
                     
                 Vice
      President<BR>Attest:<BR><BR>                  <BR>     Secretary<BR></P>
      <P align=center>[FORM OF TRUSTEE'S CERTIFICATE]</P>
      <P>     This Bond is one of the Bonds, of the
      series designated therein, described in the within-mentioned Amended
      Indenture and the Supplemental Indenture dated as of March 17,
      1999.<BR><BR>               
                     
          THE BANK OF NEW YORK,
      Trustee<BR><BR><BR>               
                     
          By                       <BR>             
  
                     
               Authorized
      Signatory<BR><BR></P>
      <P align=center>[TEXT APPEARING ON REVERSE SIDE OF BOND OF 2004
SERIES]</P>
      <P>     This Bond is one of a duly authorized
      issue of Bonds of the Company (hereinafter called the "Bonds") in
      unlimited aggregate principal amount, of the series hereinafter specified,
      all issued and to be issued under and equally secured (except in so far as
      any purchase or sinking fund or analogous provisions for any particular
      series of Bonds, established by any indenture supplemental to the Amended
      Indenture hereinafter mentioned, may afford additional security for such
      Bonds) by a mortgage and deed of trust, dated July 1, 1936, executed
      by the Company to The Bank of New York (herein called the "Trustee") as
      successor to The Riggs National Bank of Washington, D.C., as trustee, as
      amended by indentures supplemental thereto dated December 10, 1939,
      August 10, 1942, October 15, 1942, April 1, 1966, June 16, 1981,
      June 17, 1981, December 1, 1981, August 1, 1982, October 1, 1982, April
      15, 1983, November 1, 1985, March 1, 1986, November 1, 1986, March 1,
      1987, September 16, 1987, May 1, 1989, August 1, 1989, April 5,
      1990, May 21, 1991, May 7, 1992, September 1, 1992, November 1, 1992,
      March 1, 1993, March 2, 1993, July 1, 1993, August 20, 1993,
      September 29, 1993, September 30, 1993, October 1, 1993, February 10,
      1994, February 11, 1994, March 10, 1995, September 6, 1995,
      September 7, 1995 and October 2, 1997 (said mortgage and deed of
      trust, as so amended, being herein called the "Amended Indenture") and all
      indentures supplemental thereto, to which Amended Indenture and
      supplemental indentures reference is hereby made for a description of the
      properties mortgaged and pledged, the nature and extent of the security,
      the rights of the owners of the Bonds and of the Trustee in respect
      thereto, and the terms and conditions upon which the Bonds are, and are to
      be, secured. To the extent permitted by, and as provided in, the Amended
      Indenture, modifications or alterations of the Amended Indenture, or of
      any indenture supplemental thereto, and of the rights and obligations of
      the Company and of the holders of the Bonds may be made with the consent
      of the Company by an affirmative vote of not less than 80% in amount of
      the Bonds entitled to vote then outstanding, at a meeting of Bondholders
      called and held as provided in the Amended Indenture, and by an
      affirmative vote of not less than 80% in amount of the Bonds of any series
      entitled to vote then outstanding and affected by such modification or
      alteration, in case one or more but less than all of the series of Bonds
      then outstanding under the Amended Indenture are so affected; provided,
      however, that no such modification or alteration shall be made which will
      affect the terms of payment of the principal of, or interest on, this
      Bond, which are unconditional, or which reduces the percentage of Bonds
      the affirmative vote of which is required for the making of such
      modifications or alterations. The Company is proposing an amendment to the
      Amended Indenture which would replace "80%" with "60%" in the preceding
      sentence, which amendment will become effective upon the consent or
      agreement thereto of the holders of all the outstanding Bonds. The holder
      of this Bond will be deemed to have approved such amendment. The Bonds may
      be issued in series, for various principal sums, may mature at different
      times, may bear interest at different rates and may otherwise vary as in
      the Amended Indenture provided.<BR><BR>     This
      Bond is one of a series designated as the "First Mortgage Bonds, 6% Series
      due 2004" (herein called the "Bonds of 2004 Series") of the Company,
      issued under and secured by the Amended Indenture and all indentures
      supplemental thereto and described in the indenture (herein called the
      "New Supplemental Indenture"), dated as of March 17, 1999, between
      the Company and the Trustee, supplemental to the Amended
      Indenture.<BR><BR>     The Bonds of 2004 Series
      are subject to redemption, at any time or from time to time after
      June 30, 2000 and prior to maturity, at the option of the Company,
      either as a whole or in part by lot, upon payment of a redemption price
      equal to 100% of the principal amount of the Bonds so redeemed, together,
      in each case, with accrued interest to the redemption date, all subject to
      the conditions and as more fully set forth in the Amended Indenture and
      the New Supplemental
      Indenture.<BR><BR>     Notice of any redemption
      shall be sent by the Company through the mails, postage prepaid, at least
      thirty days and not more than sixty days prior to the redemption date, to
      the registered owners of any of the Bonds to be redeemed, at their
      addresses as the same shall appear on the transfer register of the
      Company, all subject to the conditions and as more fully set forth in the
      Amended Indenture and New Supplemental Indenture. Any notice so mailed
      shall be conclusively presumed to have been duly given, whether or not the
      owner receives it.<BR><BR>     In case an event
      of default, as defined in the Amended Indenture, shall occur, the
      principal of all the Bonds at any such time outstanding under the Amended
      Indenture may be declared or may become due and payable, upon the
      conditions and in the manner and with the effect provided in the Amended
      Indenture. The Amended Indenture provides that such declaration may in
      certain events be waived by the holders of a majority in principal amount
      of the Bonds entitled to vote then
      outstanding.<BR><BR>     This Bond is
      transferable by the registered owner hereof, in person or by duly
      authorized attorney, on the books of the Company to be kept for that
      purpose at the agency of the Company in the Borough of Manhattan, The City
      of New York, upon surrender and cancellation of this Bond and on
      presentation of a duly executed written instrument of transfer, and
      thereupon a new Bond or Bonds of the same series, of the same aggregate
      principal amount and in authorized denominations will be issued to the
      transferee or transferees in exchange therefor; and this Bond, with or
      without others of the same series, may in like manner be exchanged for one
      or more new Bonds of the same series of other authorized denominations but
      of the same aggregate principal amount; all subject to the terms and
      conditions set forth in the Amended
      Indenture.<BR><BR>     No recourse shall be had
      for the payment of the principal of, or the interest on, this Bond, or for
      any claim based hereon or otherwise in respect hereof or of the Amended
      Indenture or any indenture supplemental thereto, against any incorporator,
      or against any stockholder, director or officer, past, present or future,
      of the Company or of any predecessor or successor corporation, either
      directly or through the Company or any such predecessor or successor
      corporation, whether for amounts unpaid on stock subscriptions or by
      virtue of any constitution, statute or rule of law, or by the enforcement
      of any assessment or penalty or otherwise, all such liability, whether at
      common law, in equity, by any constitution, statute or otherwise, of
      incorporators, stockholders, directors or officers being released by every
      owner hereof by the acceptance of this Bond and as part of the
      consideration for the issue hereof, and being likewise released by the
      terms of the Amended
      Indenture.<BR><BR>     SECTION 3. The Bonds of
      2004 Series shall be registered Bonds without coupons in denominations of
      any multiple of $1,000, numbered consecutively upwards from
      R1.<BR><BR>SECTION 4. Until Bonds of 2004 Series in definitive form are
      ready for delivery, the Company may execute, and upon its request in
      writing the Trustee shall authenticate and deliver, in lieu thereof, Bonds
      for such series in temporary form, as provided in Section 9 of Article II
      of the Original Indenture as amended.<BR></P>
      <P align=center>PART II.<BR><BR>ISSUE OF BONDS.<BR></P>
      <P>     SECTION 1. Except for Bonds of 2004
      Series issued pursuant to Section 13 of Article II of the Original
      Indenture as amended, the principal amount of Bonds of 2004 Series which
      may be authenticated and delivered hereunder is limited to $270,000,000
      aggregate principal amount.<BR><BR>     SECTION
      2. Bonds of 2004 Series in the aggregate principal amount permitted in
      Section 1 of this Part II, may at any time subsequent to the execution
      hereof be executed by the Company and delivered to the Trustee and shall
      be authenticated by the Trustee and delivered (either before or after the
      recording hereof) to or upon the order of the Company evidenced by a
      writing or writings, signed by its President or one of its Vice Presidents
      and its Treasurer or one of its Assistant Treasurers, at such time or
      times as may be requested by the Company subsequent to the receipt by the
      Trustee of <BR><BR>    (1) the certified resolution
      and the officers' certificate required by Section 3(<I>a</I>) and Section
      3<I>(b</I>) of Article III of the Original Indenture as
      amended;<BR><BR>     (2) the opinion of counsel
      required by Section 3<I>(c</I>) of Article III of the Original Indenture
      as amended; <BR><BR>     (3) cash, if any, in the
      amount required to be deposited by Section 3(<I>d</I>) of Article III of
      the Original Indenture as amended, which shall be held and applied by the
      Trustee as provided in said Section
      3<I>(d</I>);<BR><BR>     (4) the certificates,
      instruments, opinions of counsel, prior lien bonds and cash, if any,
      required by Section 4 of Article III of the Original Indenture as amended,
      except that, as required by Part IV of this Supplemental Indenture,
      property additions purchased, constructed or otherwise acquired on or
      before December 31, 1946 shall not be made the basis for the
      authentication and delivery of Bonds of 2004 Series;
      and<BR><BR>     (5) the certificates and opinions
      required by Article XVIII of the Original Indenture as amended.<BR></P>
      <P align=center>PART III.<BR><BR>REDEMPTION.<BR></P>
      <P>     SECTION 1. The Bonds of 2004 Series are
      not redeemable up to and including June 30, 2000. The Bonds of 2004
      Series shall, in accordance with the provisions of Article V of the
      Original Indenture as amended, be redeemable, at any time or from time to
      time after June 30, 2000 and prior to maturity, at the option of the
      Company, either as a whole or in part by lot, upon payment of a redemption
      price equal to 100% of the principal amount of the Bonds so redeemed,
      together, in each case, with accrued interest to the redemption
      date.<BR><BR>     SECTION 2. In accordance with
      the provisions of Article V of the Original Indenture as amended, notice
      of any redemption shall be sent by the Company through the mails, postage
      prepaid, at least thirty days and not more than sixty days prior to the
      date of redemption, to the registered owners of any of the Bonds to be
      redeemed at their addresses as the same shall appear on the transfer
      register of the Company. Any notice so mailed shall be conclusively
      presumed to have been duly given, whether or not the owner receives
      it.<BR><BR>     All Bonds delivered to be
      redeemed by the Trustee pursuant to the provisions of this Part III shall
      forthwith be canceled.<BR><BR></P>
      <P align=center>PART IV.<BR><BR>ADDITIONAL PARTICULAR COVENANTS OF THE
      COMPANY.</P>
      <P>     The Company hereby covenants, warrants
      and agrees that so long as any Bonds of 2004 Series are
      outstanding:<BR><BR>     SECTION 1. The Company
      will not withdraw, pursuant to the provisions of Section 2 of Article VIII
      of the Original Indenture as amended, any moneys held by the Trustee as
      part of the trust estate in excess of an amount equal to the aggregate
      principal amount of such of the refundable Bonds as were theretofore
      issued by the Company; and that upon any such withdrawal by the Company
      refundable Bonds equal in aggregate principal amount to the amount so
      withdrawn shall be deemed to have been made the basis of such
      withdrawal.<BR><BR>     SECTION 2. Property
      additions purchased, constructed or otherwise acquired on or before
      December 31, 1946 shall not be made the basis for the authentication and
      delivery of Bonds, or the withdrawal of cash, or the reduction of the
      amount of cash required to be paid to the Trustee under any provision of
      the Indenture.</P>
      <P align=center><BR>PART V.<BR><BR>AMENDMENT OF INDENTURE TO PERMIT
      QUALIFICATION<BR>UNDER TRUST INDENTURE ACT OF 1939.<BR></P>
      <P>     The Company and the Trustee, from time to
      time and at any time, without any vote or consent of the holders of the
      Bonds of 2004 Series, may enter into such indentures supplemental to the
      Original Indenture as may or shall by them be deemed necessary or
      desirable to add to or modify or amend any of the provisions of the
      Original Indenture so as to permit the qualification of the Original
      Indenture under the Trust Indenture Act of
      1939.<BR><BR>     Except to the extent
      specifically provided herein, no provision of this Supplemental Indenture
      is intended to modify, and the parties hereto do hereby adopt and confirm,
      the provisions of Section 318(c) of the Trust Indenture Act of 1939 which
      amend and supersede provisions of the Original Indenture, as supplemented,
      in effect prior to November 15, 1990.<BR><BR></P>
      <P align=center>PART VI.<BR><BR>AMENDMENT OF ORIGINAL INDENTURE.<BR></P>
      <P>     Notwithstanding any other provisions of
      the Original Indenture as amended, the holders of the Bonds of 2004
      Series, by their holding of such Bonds, are deemed to have approved the
      following amendment to the Original Indenture as amended and to have
      authorized the Trustee to take any action necessary to evidence or
      effectuate such
      approval:<BR><BR>          Sections
      5 and 6 of Article XV of the Original Indenture
      as<BR>     amended are hereby amended by changing
      the words and figures "eighty <BR>     percent.
      (80%)" to the words and figures "sixty percent. (60%)"
      <BR>     wherever in such Sections such words and
      figures occur.<BR><BR><BR></P>
      <P align=center>PART VII.<BR><BR>THE TRUSTEE.<BR></P>
      <P>     The Trustee hereby accepts the trusts
      hereby declared and provided and agrees to perform the same upon the terms
      and conditions in the Original Indenture as amended set forth and upon the
      following terms and conditions:<BR><BR>     The
      Trustee shall not be responsible in any manner whatsoever for or in
      respect of the validity or sufficiency of this Supplemental Indenture or
      the due execution hereof by the Company or for or in respect of the
      recitals contained herein, all of which recitals are made by the Company
      solely. In general, each and every term and condition contained in Article
      XIII of the Original Indenture as amended shall apply to this Supplemental
      Indenture with the same force and effect as if the same were herein set
      forth in full, with such omissions, variations and modifications thereof
      as may be appropriate to make the same conform to this Supplemental
      Indenture.<BR></P>
      <P align=center>PART VIII.<BR><BR>MISCELLANEOUS PROVISIONS.<BR></P>
      <P>     This Supplemental Indenture may be
      simultaneously executed in any number of counterparts, each of which when
      so executed shall be deemed to be an original; but such counterparts shall
      together constitute but one and the same
      instrument.<BR><BR>     Potomac Electric Power
      Company hereby constitutes and appoints Anthony J. Kamerick, one of
      its Vice Presidents, to be its true and lawful attorney-in-fact, for it
      and in its name to appear before any officer authorized by law to take and
      certify acknowledgments of deeds to be recorded in the District of
      Columbia, in the State of Maryland, in the Commonwealth of Virginia, and
      in the Commonwealth of Pennsylvania and to acknowledge and deliver these
      presents as the act and deed of said Potomac Electric Power
      Company.<BR><BR>     The Bank of New York, hereby
      constitutes and appoints Mary Beth Lewicki, one of its Assistant Vice
      Presidents, to be its true and lawful attorney-in-fact, for it and in its
      name to appear before any officer authorized by law to take and certify
      acknowledgments of deeds to be recorded in the District of Columbia, in
      the State of Maryland, in the Commonwealth of Virginia, and in the
      Commonwealth of Pennsylvania and to acknowledge and deliver these presents
      as the act and deed of said The Bank of New
      York.<BR><BR>     IN WITNESS WHEREOF, said
      Potomac Electric Power Company has caused this Supplemental Indenture to
      be executed on its behalf by its President or one of its Vice Presidents
      and its corporate seal to be hereto affixed and said seal and this
      Supplemental Indenture to be attested by its Secretary or one of its
      Assistant Secretaries; and said The Bank of New York, in evidence of its
      acceptance of the trust hereby created, has caused this Supplemental
      Indenture to be executed on its behalf by one of its Assistant Vice
      Presidents, and its corporate seal to be hereto affixed and said seal and
      this Supplemental Indenture to be attested by one of its Assistant
      Treasurers, all as of the 17<SUP>th</SUP> day of March, Nineteen hundred
      ninety-nine.<BR><BR>              
                    
                  
                  
      POTOMAC ELECTRIC POWER
      COMPANY<BR><BR><BR>               
                     
                
                 
       By      A. J. KAMERICK<BR>(CORPORATE
      SEAL)        
                   
            ANTHONY J.
      KAMERICK,<BR>Attested:          
                  
                  
                   
      Vice President<BR><BR><BR>     ELLEN SHERIFF
      ROGERS     <BR>     ELLEN
      SHERIFF
      ROGERS<BR>         Secretary<BR> Signed,
      sealed and delivered by<BR>Potomac Electric Power Company
      in<BR>       the presence
      of:<BR><BR>       JANET L.
      PARKER       <BR><BR>       LINDA
      J.
      EPPERLY      <BR>                As
      Witnesses<BR>               
                     
                     
                     
          THE BANK OF NEW YORK<BR>(Corporate
      Seal)<BR><BR>Attested:             
                    
                              By    MARYBETH
      LEWICKI  <BR>               
                     
                 
                  
                  
            MARY BETH
      LEWICKI<BR>               
                     
              
                  
                  
            Assistant Vice
      President<BR>       MICHELE L.
      RUSSO      <BR>       MICHELE
      L. RUSSO<BR>      Assistant
      Treasurer<BR>Signed, sealed and delivered by The <BR>Bank of New York in
      the presence of:<BR><BR>      ROBERT A.
      MANIMILLO    <BR>      PATRICK
      O'LEARY       <BR>                As
      Witnesses<BR><BR><BR>CITY OF WASHINGTON,<BR>DISTRICT OF COLUMBIA,
      SS.:<BR><BR>     I, Lisa A. Poole, a Notary
      Public in and for the District of Columbia, United States of America,
      whose commission as such will expire July 31, 2002. do hereby certify
      that ANTHONY J. KAMERICK and ELLEN SHERIFF ROGERS, whose names as Vice
      President and Secretary, respectively, of POTOMAC ELECTRIC POWER COMPANY,
      a corporation, are signed to the foregoing and hereto attached deed,
      bearing date as of the 17<SUP>th</SUP> day of March, 1999, personally
      appeared this day before me in my District aforesaid and acknowledged
      themselves to be, respectively, a Vice President and the Secretary of
      Potomac Electric Power Company, and that they as such, being authorized so
      to do, executed the said deed by signing the name of Potomac Electric
      Power Company by Anthony J. Kamerick, as Vice President, and attested by
      Ellen Sheriff Rogers, as Secretary, and acknowledged the same before me in
      my District aforesaid and acknowledged the foregoing instrument to be the
      act and deed of Potomac Electric Power
      Company.<BR><BR>     Given under my hand and
      official seal this 17<SUP>th</SUP> day of March,
      1999.<BR><BR>               
                     
                     
                 
                  
                  (NOTARIAL
      SEAL)<BR><BR><BR><BR>               
                     
                    
                  
                  
            LISA A.
      POOLE<BR>               
                     
                    
                  
                  
            Notary
      Public<BR>               
                     
                 
                  
                  
            District of
      Columbia<BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR>CITY
      OF WASHINGTON,<BR>DISTRICT OF COLUMBIA,
      SS.:<BR><BR><BR>     I, Lisa A. Poole, a Notary
      Public in and for the District of Columbia, United States of America, do
      hereby certify that Anthony J. Kamerick, a Vice President of POTOMAC
      ELECTRIC POWER COMPANY, a corporation, one of the parties to the foregoing
      instrument bearing date as of the 17<SUP>th</SUP> day of March, 1999, and
      hereto annexed, this day personally appeared before me in the City of
      Washington, the said Anthony J. Kamerick being personally well known to me
      as the person who executed the said instrument as a Vice President of and
      on behalf of said Potomac Electric Power Company and known to me to be the
      attorney-in-fact duly appointed therein to acknowledge and deliver said
      instrument on behalf of said corporation, and, as such attorney-in-fact,
      he acknowledged said instrument to be the act and deed of said Potomac
      Electric Power Company, and delivered the same as such. I further certify
      that the said Anthony J. Kamerick, being by me duly sworn, did depose and
      say that he knows the seal of said corporation; that the seal affixed to
      said instrument is such corporate seal and was so affixed by order of the
      Board of Directors of said corporation; and that he signed his name
      thereto by like order. My commission expires July 31,
      2002.<BR><BR>     Given under my hand and
      official seal this 17<SUP>th</SUP> day of March,
      1999.<BR><BR>               
                     
                     
                
                  
                  (NOTARIAL
      SEAL)<BR><BR><BR>               
                     
                   
                  
                  
            LISA A.
      POOLE<BR>               
                     
                   
                  
                  
            Notary
      Public<BR>               
                     
                 
                  
                  
            District of
      Columbia<BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR>STATE
      OF NEW YORK, SS.:<BR><BR>     I, William J.
      Cassels, a Notary Public in and for the State of New York, United States
      of America, do hereby certify that Mary Beth Lewicki and Michele L.
      Russo whose names as Assistant Vice President and Assistant Treasurer, of
      THE BANK OF NEW YORK, a corporation, are signed to the foregoing and
      hereto attached instrument, bearing date as of the 17<SUP>th</SUP> day of
      March, 1999, personally appeared before me this day in my State aforesaid
      and acknowledged themselves to be, respectively, an Assistant Vice
      President and an Assistant Treasurer of The Bank of New York, and that
      they as such, being authorized so to do, executed the said instrument by
      signing the name of The Bank of New York, by Mary Beth Lewicki as
      Assistant Vice President, and attested by Michele L. Russo as
      Assistant Treasurer, and acknowledged the same before me in my State
      aforesaid and acknowledged the foregoing instrument to be the act and deed
      of The Bank of New York, as therein set
      forth.<BR><BR>     Given under my hand and
      notarial seal this <U>18</U> day of March,
      1999.<BR><BR>               
                     
                     
                  
                  
                  (NOTARIAL
      SEAL)<BR><BR><BR>               
                     
                 
                  
                  
            WILLIAM J.
      CASSELS     <BR>               
                     
                  
                  
                  
            Notary
      Public<BR>               
                     
                
                  
                  
            State of New
      York<BR><BR>               
                     
                     
                  
            My Commission Expires May 16,
      2000.<BR><BR>               
                     
               
                  
                  
            William J.
      Cassels<BR>               
                     
               
                  
                  Notary
      Public, State of New
      York<BR>               
                     
                     
                   
                  No.
      01CA5027729<BR>               
                     
                     
               
                  
      Qualified in Bronx
      County<BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR>STATE OF NEW
      YORK, SS.:<BR><BR><BR>     Mary Beth Lewicki, of
      full age, being sworn according to law, on her oath deposes and says that
      she is an Assistant Vice President of THE BANK OF NEW YORK, the Trustee
      named in the foregoing Supplemental Indenture, dated as of the
      17<SUP>th</SUP> day of March, 1999, that she is the agent of said Trustee
      for the purpose of perfecting such Supplemental Indenture and that the
      consideration in the Original Indenture referred to therein and in all
      indentures supplemental to said Original Indenture, including the
      foregoing Supplemental Indenture, is true and <I>bona fide</I> as therein
      set
      forth.<BR><BR><BR><BR>               
                  
                     
                  
                  
            MARYBETH
      LEWICKI      <BR>               
                     
                  
                  
                  
            MARY BETH
      LEWICKI<BR>               
                     
                     
                  
                  
      Assistant Vice
      President<BR><BR><BR><BR>               
                     
              
                  
                  
      Subscribed and sworn to before
      me<BR>               
                     
                
                  
                  this
      <U>18</U> day of March,
      1999.<BR><BR><BR>               
                     
                   
                  
                  WILLIAM
      J.
      CASSELS<BR>               
                     
               
                  
                  
            Notary
      Public<BR>               
                     
             
                  
                  
            State of New
      York<BR><BR>               
                     
              
                  
            
            My Commission Expires May 16,
      2000.<BR><BR>               
                     
                     
                           
                  (NOTARIAL
      SEAL)<BR><BR>               
                     
                     
                     
                William J.
      Cassels<BR>               
                     
                 
                  
                  Notary
      Public, State of New
      York<BR>               
                     
                 
                  
                  
            No.
      01CA5027729<BR>               
                     
               
                  
                  
            Qualified in Bronx
      County<BR><BR><BR><BR><BR><BR><BR><BR><BR><BR>STATE OF NEW YORK,
      SS.:<BR><BR>     I, William J. Cassels, a Notary
      Public in and for the State of New York, United States of America, do
      hereby certify that Mary Beth Lewicki, an Assistant Vice President of THE
      BANK OF NEW YORK, a corporation, one of the parties to the foregoing
      instrument bearing date as of the 17<SUP>th</SUP> day of March, 1999, and
      hereto annexed, this day personally appeared before me in the State of New
      York, the said Mary Beth Lewicki, being personally well known to me as the
      person who executed the said instrument as an Assistant Vice President of
      and on behalf of said The Bank of New York, and known to me to be the
      attorney-in-fact duly appointed therein to acknowledge and deliver said
      instrument on behalf of said corporation, and, as such attorney-in-fact,
      she acknowledged said instrument to be the act and deed of said The Bank
      of New York, and delivered the same as such. I further certify that the
      said Mary Beth Lewicki, being by me duly sworn, did depose and say that
      she knows the seal of said corporation; that the seal affixed to said
      instrument is such corporate seal and was so affixed by order of the Board
      of Directors of said corporation; and that she signed her name thereto by
      like order.<BR><BR>     Given under my hand and
      official seal this <U>18</U> day of March,
      1999.<BR><BR>               
                     
                     
                                  
               (NOTARIAL
      SEAL)<BR><BR>               
                     
                     
                     
                WILLIAM J.
      CASSELS<BR>               
                     
                     
               
                  
            Notary
      Public<BR>               
                     
                     
             
                  
            State of New
      York<BR><BR>               
                     
                     
             
                  
      My Commission Expires May 16,
      2000.<BR><BR>               
                     
                     
                   
                  William
      J.
      Cassels<BR>               
                     
                     
                     
          Notary Public, State of New
      York<BR>               
                     
                     
                     
                 
         No.
      01CA5027729<BR>               
                     
             
                  
            
                  
      Qualified in Bronx County</P>
      <P
      align=center><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR>CERTIFICATE
      OF RESIDENCE</P>
      <P><BR>     The Bank of New York, Mortgagee and
      Trustee within named, hereby certifies that its precise residence is 101
      Barclay Street, New York, NY
      10286.<BR><BR>               
                     
                     
                     
         THE BANK OF NEW
      YORK<BR><BR>               
                     
                     
                     
         By     MARYBETH
      LEWICKI   <BR>               
                     
                     
                     
               MARY BETH
      LEWICKI<BR>               
                     
                     
                     
            Assistant Vice
    President</B></FONT></P></TD></TR></TABLE><FONT
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