UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549
                                    FORM 10-Q

           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 2000

                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                         Commission file number: 1-1401

                               PECO Energy Company
             (Exact name of registrant as specified in its charter)

            Pennsylvania                                   23-0970240
  (State or other jurisdiction of                      (I.R.S. Employer
   incorporation or organization)                      Identification No.)

              2301 Market Street, Philadelphia, PA           19103
            (Address of principal executive offices)       (Zip Code)

                                 (215) 841-4000
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                          Yes    X            No
                               -----             -----

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock as of the latest practicable date:

The Company had 169,570,844 shares of common stock outstanding on May 5, 2000.

<PAGE>
PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                  PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)
                      (In Millions, except per share data)

<TABLE>
<CAPTION>
                                                                        Three Months Ended
                                                                             March 31,
                                                                     -----------------------
                                                                        2000            1999
                                                                     -------         -------
<S>                                                                  <C>             <C>
OPERATING REVENUES
     Electric                                                        $ 1,041         $ 1,035
     Gas                                                                 202             217
     Infrastructure Services                                             100              --
                                                                     -------         -------
         Total Operating Revenues                                      1,343           1,252
                                                                     -------         -------
OPERATING EXPENSES
     Fuel and Energy Interchange                                         457             453
     Operating and Maintenance                                           390             292
     Depreciation and Amortization                                        80              56
     Taxes Other Than Income Taxes                                        67              75
                                                                     -------         -------
         Total Operating Expenses                                        994             876
                                                                     -------         -------
OPERATING INCOME                                                         349             376
                                                                     -------         -------
OTHER INCOME AND DEDUCTIONS
     Interest Expense                                                   (104)            (74)
     Company Obligated Mandatorily Redeemable
       Preferred Securities of a Partnership                              (2)             (7)
     Allowance for Funds Used During Construction                          1              --
     Equity in Earnings (Losses) of Unconsolidated Affiliates              4             (12)
     Other, Net                                                           14             (24)
                                                                     -------         -------
         Total Other Income and Deductions                               (87)           (117)
                                                                     -------         -------
INCOME BEFORE INCOME TAXES                                               262             259

INCOME TAXES                                                              97             103
                                                                     -------         -------
NET INCOME                                                               165             156

PREFERRED STOCK DIVIDENDS                                                  3               3
                                                                     -------         -------
EARNINGS APPLICABLE TO COMMON STOCK                                  $   162         $   153
                                                                     =======         =======

AVERAGE SHARES OF COMMON STOCK OUTSTANDING                               181             223
                                                                     =======         =======

BASIC EARNINGS PER AVERAGE COMMON SHARE                              $  0.89         $  0.69
                                                                     =======         =======

DILUTIVE EARNINGS PER AVERAGE COMMON SHARE                           $  0.89         $  0.68
                                                                     =======         =======

DIVIDENDS PER AVERAGE COMMON SHARE                                   $  0.25         $  0.25
                                                                     =======         =======
</TABLE>

            See Notes to Condensed Consolidated Financial Statements

                                       2
<PAGE>
                  PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (In Millions)


<TABLE>
<CAPTION>
                                                               March 31,     December 31,
                                                                 2000            1999
                                                               -------       ------------
                                                             (Unaudited)
<S>                                                            <C>            <C>
ASSETS

CURRENT ASSETS
     Cash and Cash Equivalents                                 $   110        $   228
     Accounts Receivable, Net                                      594            692
     Inventories, at average cost                                  176            206
     Other                                                         204             87
                                                               -------        -------

         Total Current Assets                                    1,084          1,213
                                                               -------        -------


PROPERTY, PLANT AND EQUIPMENT, NET                               5,080          5,045

DEFERRED DEBITS AND OTHER ASSETS
     Competitive Transition Charge                               5,260          5,275
     Recoverable Deferred Income Taxes                             638            638
     Deferred Non-Pension Postretirement Benefits Costs             83             84
     Investments                                                   568            538
     Loss on Reacquired Debt                                        69             71
     Goodwill, Net                                                 117            121
     Other                                                         132            135
                                                               -------        -------

         Total Deferred Debits and Other Assets                  6,867          6,862
                                                               -------        -------

TOTAL ASSETS                                                   $13,031        $13,120
                                                               =======        =======
</TABLE>

            See Notes to Condensed Consolidated Financial Statements
                            (continued on next page)

                                       3
<PAGE>
                  PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (In Millions)
                                   (continued)


<TABLE>
<CAPTION>
                                                             March 31,       December 31,
                                                               2000              1999
                                                             --------         --------
                                                           (Unaudited)
<S>                                                          <C>              <C>
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
     Notes Payable, Bank                                     $    135         $    163
     Long-Term Debt Due Within One Year                           151              128
     Accounts Payable                                             251              429
     Accrued Taxes                                                316              203
     Accrued Interest                                              62              119
     Deferred Income Taxes                                         14               15
     Other                                                        247              247
                                                             --------         --------

         Total Current Liabilities                              1,176            1,304
                                                             --------         --------

LONG-TERM DEBT                                                  5,895            5,969

DEFERRED CREDITS AND OTHER LIABILITIES
     Deferred Income Taxes                                      2,417            2,411
     Unamortized Investment Tax Credits                           282              286
     Pension Obligation                                           212              212
     Non-Pension Postretirement Benefits Obligation               448              443
     Other                                                        385              401
                                                             --------         --------

         Total Deferred Credits and Other Liabilities           3,744            3,753
                                                             --------         --------

COMPANY OBLIGATED MANDATORILY REDEEMABLE
     PREFERRED SECURITIES OF A PARTNERSHIP                        128              128
MANDATORILY REDEEMABLE PREFERRED STOCK                             56               56

COMMITMENTS AND CONTINGENCIES (NOTE 6)

SHAREHOLDERS' EQUITY
     Common Stock (No Par)                                      3,576            3,576
     Preferred Stock                                              137              137
     Other Paid-In Capital                                          3                1
     Retained Earnings (Accumulated Deficit)                       14             (103)
     Treasury Stock, at cost                                   (1,701)          (1,705)
     Accumulated Other Comprehensive Income                         3                4
                                                             --------         --------
         Total Shareholders' Equity                             2,032            1,910
                                                             --------         --------


TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                   $ 13,031         $ 13,120
                                                             ========         ========
</TABLE>

            See Notes to Condensed Consolidated Financial Statements

                                       4
<PAGE>
                  PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                  (In Millions)

<TABLE>
<CAPTION>
                                                                  Three Months Ended March 31,
                                                                  ----------------------------
                                                                      2000            1999
                                                                  -----------       ----------
<S>                                                                  <C>             <C>

CASH FLOWS FROM OPERATING ACTIVITIES

     Net Income                                                      $   165         $   156
     Adjustments to Reconcile Net Income to Net Cash
         Provided by Operating Activities:
     Depreciation and Amortization                                       107              74
     Deferred Income Taxes                                                 9             (23)
     Amortization of Investment Tax Credits                               (4)             (4)
     Deferred Energy Costs                                                12              29
     Equity in Earnings (Losses) of Unconsolidated Affiliates             (4)             12
     Other Items Affecting Operations                                      6              75
     Changes in Working Capital:
         Accounts Receivable                                              98            (135)
         Inventories                                                      30               7
         Accounts Payable                                               (178)            (39)
         Accrued Taxes                                                   113             171
         Accrued Interest                                                (57)              6
         Other Current Assets and Liabilities                           (124)           (147)
                                                                     -------         -------


CASH FLOWS PROVIDED BY OPERATING ACTIVITIES                              173             182
                                                                     -------         -------


CASH FLOWS FROM INVESTING ACTIVITIES
     Investment in Plant                                                (121)            (77)
     Increase in Other Investments                                       (43)             (5)
                                                                     -------         -------


NET CASH FLOWS USED IN INVESTING ACTIVITIES                             (164)            (82)
                                                                     -------         -------


CASH FLOWS FROM FINANCING ACTIVITIES
     Change in Short-Term Debt                                           (28)           (457)
     Issuance of Long-Term Debt                                           14           4,010
     Retirement of Long-Term Debt                                        (65)           (263)
     Common Stock Repurchase                                              --            (696)
     Loss on Reacquired Debt                                              --               2
     Dividends on Preferred and Common Stock                             (48)            (60)
     Other Items Affecting Financing                                      --              19
                                                                     -------         -------


NET CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES               (127)          2,555
                                                                     -------         -------


INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                        (118)          2,655
                                                                     -------         -------


CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                         228              48
                                                                     -------         -------


CASH AND CASH EQUIVALENTS AT END OF PERIOD                           $   110         $ 2,703
                                                                     =======         =======
</TABLE>

            See Notes to Condensed Consolidated Financial Statements

                                       5
<PAGE>
                  PECO ENERGY COMPANY AND SUBSIDIARY COMPANIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.   BASIS OF PRESENTATION
         The  accompanying  condensed  consolidated  financial  statements as of
March 31, 2000 and for the three  months then ended are  unaudited,  but include
all adjustments  that PECO Energy Company  (Company)  considers  necessary for a
fair presentation of such financial statements. All adjustments are of a normal,
recurring nature.  The year-end condensed  consolidated  balance sheet data were
derived from audited  financial  statements  but do not include all  disclosures
required by generally accepted accounting principles. Certain prior-year amounts
have been reclassified for comparative  purposes.  These notes should be read in
conjunction with the Notes to Consolidated Financial Statements in Item 8 of the
Company's  Annual  Report on Form 10-K for the year ended  December 31, 1999, as
amended by Form 10-K/A filed on April 28, 2000.


2.   MERGER WITH UNICOM CORPORATION
         On September  22,  1999,  the Company and Unicom  Corporation  (Unicom)
entered into an Agreement and Plan of Exchange and Merger providing for a merger
of equals. On January 7, 2000, the Agreement and Plan of Exchange and Merger was
amended and restated (Merger Agreement).  The Merger Agreement has been approved
by both companies' Boards of Directors. The transaction will be accounted for as
a purchase with the Company as acquiror.

         On March 24, 2000, the Company  submitted for approval a joint petition
for settlement  reached with various parties to the Company's  proceeding before
the Pennsylvania  Public Utility  Commission  involving the proposed merger with
Unicom.  The Company  reached  agreement with advocates for  residential,  small
business and large  industrial  customers,  and  representatives  of  marketers,
environmentalists, municipalities and elected officials. Under the comprehensive
settlement agreement,  the Company has agreed to $200 million in rate reductions
for all customers over the period January 1, 2002 through 2005 and extended rate
caps on the Company's retail electric  distribution charges through December 31,
2006.  The  comprehensive   settlement  agreement  also  provides  for  electric
reliability and customer service  standards,  mechanisms to enhance  competition
and customer  choice,  expanded  assistance to low-income  customers,  extensive
funding  for wind and solar  energy  and  community  education,  nuclear  safety
research   funds,   customer   protection   against  nuclear  costs  outside  of
Pennsylvania,   and  maintenance  of  charitable  and  civic  contributions  and
employment for the Company's headquarters in Philadelphia.


3.   SEGMENT INFORMATION
         The Company's segment  information as of and for the three months ended
March  31,  2000 as  compared  to the  same  period  in 1999 is as  follows  (in
millions):

                                       6
<PAGE>
Quarter Ended March 31, 2000 as compared to the Quarter Ended March 31, 1999
----------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                          Intersegment
                      Distribution        Generation        Ventures        Corporate       Revenues         Consolidated
                      ------------        ----------        --------        ---------       --------         ------------
<S>                      <C>                <C>             <C>               <C>            <C>                <C>
Revenues:
    2000                 $   843            $  561          $  107(b)         $   -          $(168)             $ 1,343
    1999                 $   908            $  541          $    1            $   -          $(198)             $ 1,252
EBIT (a):
    2000                 $   341            $   35          $  (12)           $   3                             $   367
    1999                 $   355            $   59          $  (31)           $ (43)                            $   340
Total Assets:
    March 31, 2000       $10,222            $1,767          $  639            $ 403                             $13,031
    December 31, 1999    $10,293            $1,779          $  640            $ 408                             $13,120
<FN>

(a) EBIT - Earnings Before Interest and Income Taxes.
(b) Increase as compared  to the prior year  period is  attributable  to Exelon
Infrastructure Services acquisitions in the fourth quarter of 1999.
</FN>
</TABLE>


4.   EARNINGS PER SHARE
         Diluted  earnings per average  common share is  calculated  by dividing
earnings  applicable  to common stock by the average  number of shares of common
stock  outstanding  after  giving  effect to stock  options  issuable  under the
Company's  stock option plans which are  considered to be dilutive  common stock
equivalents.  The following table shows the effect of the stock options issuable
under the Company's  stock option plans on the average  number of shares used in
calculating diluted earnings per average common share (in millions of shares):

                                                Three Months Ended
                                                     March 31,
                                                ---------------------
                                                2000             1999
                                                ----             ----


Average Common Shares Outstanding                181              223

Assumed Exercise of Stock Options                  2                2
                                              ------           ------

Potential Average Dilutive
  Common Shares Outstanding                       183             225
                                              =======         =======


5.   SALES OF ACCOUNTS RECEIVABLE
         The Company is party to an agreement with a financial institution under
which it can sell or  finance  with  limited  recourse  an  undivided  interest,
adjusted daily, in up to $275 million of designated  accounts  receivable  until
November 2000. At March 31, 2000,  the Company had sold a $275 million  interest
in  accounts  receivable,  consisting  of a $222  million  interest  in accounts
receivable which the Company accounts for as a sale under Statement of Financial
Accounting  Standards (SFAS) No. 125, "Accounting for Transfers and Servicing of
Financial Assets and

                                       7

<PAGE>

Extinguishment  of Liabilities," and a $53 million interest in special agreement
accounts  receivable  which are accounted for as a long-term  note payable.  The
Company  retains  the  servicing  responsibility  for  these  receivables.   The
agreement requires the Company to maintain the $275 million interest,  which, if
not  met,  requires  the  Company  to  deposit  cash in order  to  satisfy  such
requirements. At March 31, 2000, the Company met such requirements.

         On May 8, 2000,  the Company  used a portion of the  proceeds  from the
Transition  Bonds (See Note 8 - Subsequent  Events) to repurchase $50 million of
the interest in accounts  receivable  including $10 million of special agreement
accounts  receivable.  This repurchase reduced the amount of accounts receivable
the Company could sell or finance with limited recourse under the agreement.


6.   COMMITMENTS AND CONTINGENCIES
         For information  regarding the Company's capital  commitments,  nuclear
insurance,  nuclear  decommissioning and spent fuel storage, energy commitments,
environmental  issues  and  litigation,  see  Note 6 of  Notes  to  Consolidated
Financial Statements for the year ended December 31, 1999.

         The Company has identified 28 sites where former manufactured gas plant
(MGP) activities have or may have resulted in actual site  contamination.  As of
March  31,  2000,  the  Company  had  accrued  $57  million  for   environmental
investigation and remediation costs, including $32 million for MGP investigation
and remediation that currently can be reasonably  estimated.  The Company cannot
predict  whether it will incur  other  significant  liabilities  for  additional
investigation  and remediation  costs at these or additional sites identified by
the Company, environmental agencies or others, or whether all such costs will be
recoverable from third parties.

         At December  31,  1998,  the Company  incurred a charge of $125 million
($74  million,  net of income  taxes) for its Early  Retirement  and  Separation
Program relating to 1,157 employees.  The estimated cost of separation  benefits
was approximately  $47 million,  of which $31 million was paid through March 31,
2000. The remaining $16 million is expected to be paid by June 2000.  Retirement
benefits of approximately  $78 million are being paid to the retirees over their
lives. All cash payments  related to the early retirement and severance  program
are expected to be funded  through the assets of the Company's  Service  Annuity
Plan. Of the 1,157 employees,  at March 31, 2000, 497 were eligible for and have
taken the retirement  incentive  program and 464 employees were terminated.  The
remaining employees are scheduled for termination through the end of June 2000.

                                       8

<PAGE>

         At March 31, 2000, the Company had long-term  commitments,  in megawatt
hours (MWhs) and dollars,  relating to the purchase and sale of energy, capacity
and transmission  rights from unaffiliated  utilities and others as expressed in
the tables below (in millions):

<TABLE>
<CAPTION>
                                                Power Only
                 ---------------------------------------------------------------------
                           Purchases                                 Sales
                 ---------------------------           --------------------------------
                   MWhs             Dollars                MWhs               Dollars
                 ----------      -----------           ----------          -----------
<S>                     <C>      <C>                  <C>                 <C>
2000                     6        $     150                    17             $    599
2001                     8              149                    13                  524
2002                     7              132                    10                  463
2003                     7              139                     6                  234
2004                     5              118                     4                  108
Thereafter               3               83                     6                  168
                                  ---------                                   --------
Total                             $     771                                   $  2,096
                                  =========                                   ========

                                Capacity              Capacity             Transmission
                                Purchases               Sales                 Rights
                               in Dollars             in Dollars            in Dollars
                               ----------             ----------            ----------
2000                              $      31           $        24             $     79
2001                                     84                    31                   57
2002                                    150                    19                   57
2003                                    178                    14                   18
2004                                    170                     2                   17
Thereafter                            1,834                     7                   55
                                  ---------           -----------             --------
Total                             $   2,447           $        97             $    283
                                  =========           ===========             ========
</TABLE>

         In the first  quarter of 2000,  the  Company  restructured  an existing
power sales  contract from a variable price with fixed capacity sales to a fixed
price power only contract which decreased the Company's commitments for capacity
sales and increased the Company's commitments for power only sales.


7.   NEW ACCOUNTING PRONOUNCEMENTS
         In June 1998, the Financial  Accounting  Standards  Board (FASB) issued
SFAS No. 133,  "Accounting for Derivative  Instruments and Hedging  Activities,"
(SFAS No. 133) to establish  accounting and reporting standards for derivatives.
The new  standard  requires  recognizing  all  derivatives  as either  assets or
liabilities  on the  balance  sheet  at  their  fair  value  and  specifies  the
accounting  for changes in fair value  depending  upon the  intended  use of the
derivative.  In June  1999,  the  FASB  issued  SFAS  No.  137  "Accounting  for
Derivative  Instruments and Hedging  Activities - Deferral of the Effective Date
of FASB  Statement No. 133," (SFAS No. 137) which delayed the effective date for
SFAS No. 133 until  fiscal  years  beginning  after June 15,  2000.  The Company
expects to adopt SFAS No. 133 in the first  quarter of 2001.  The  Company is in
the  process  of  evaluating  the  impact  of  SFAS  No.  133 on  its  financial
statements.

                                       9

<PAGE>
8.   SUBSEQUENT EVENTS
         On May 2, 2000,  PECO Energy  Transition  Trust (PETT),  an independent
statutory business trust organized under the laws of Delaware and a wholly owned
subsidiary of the Company,  issued an additional $1 billion aggregate  principal
amount of  Transition  Bonds  (Transition  Bonds) to securitize a portion of the
Company's  authorized  stranded cost recovery.  As a result of this transaction,
the  Company  has  securitized  a total of $5  billion  of its $5.26  billion of
stranded costs. The Transition Bonds are solely  obligations of PETT, secured by
intangible transition property sold by the Company to PETT concurrently with the
issuance of the Transition Bonds and certain other related collateral.

The terms of the Transition Bonds are as follows:

<TABLE>
<CAPTION>
                                                                   Expected
                            Approximate                             Final
        Series 2000         Face Amount          Interest          Payment                 Termination
           Class             (millions)          Rate                Date                     Date
           -----             ----------          ----                ----                     ----
<S>                             <C>             <C>            <C>                        <C>
           A-1                   $110            7.18%         September 1, 2001          September 1, 2003
           A-2                   $140            7.30%         September 1, 2002          September 1, 2004
           A-3                   $399            7.63%         March 1, 2009              March 1, 2010
           A-4                   $351            7.65%         September 1, 2009          September 1, 2010
</TABLE>

         The Company is using the proceeds from the securitization to reduce the
Company's   stranded  costs  and  related   capitalization.   On  May  3,  2000,
approximately  $500 million of the proceeds from the Transition  Bonds were used
to  repurchase  approximately  12 million  shares of common  stock  through  the
settlement  of a forward  purchase  agreement  that was entered  into in January
2000. The remaining  proceeds are expected to be used to purchase  and/or redeem
First and Refunding Mortgage Bonds and to reduce other debt.

         In February 2000, the Company  entered into forward  starting  interest
rate swaps for a notional  amount of $1 billion in  anticipation of the issuance
of the  Transition  Bonds in the  second  quarter of 2000.  On May 2, 2000,  the
Company  settled  these  forward  starting  interest  rate  swaps  and  paid the
counterparties  approximately  $12  million  which  was  deferred  and is  being
amortized  over the life of the  Transition  Bonds as an  increase  in  interest
expense consistent with the Company's hedge accounting policy.

                                       10
<PAGE>
ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

GENERAL

         On September  22,  1999,  the Company and Unicom  Corporation  (Unicom)
entered into an Agreement and Plan of Exchange and Merger providing for a merger
of equals. On January 7, 2000, the Agreement and Plan of Exchange and Merger was
amended and restated (Merger Agreement).  The Merger Agreement has been approved
by both companies' Boards of Directors. The transaction will be accounted for as
a purchase with the Company as acquiror.  For additional  information  see "PART
II, ITEM 7. - MANAGEMENTS'  DISCUSSION  AND ANALYSIS OF FINANCIAL  CONDITION AND
RESULTS OF  OPERATIONS - General," in the  Company's  1999 Annual Report on Form
10-K as amended by Form 10-K/A filed on April 28, 2000.

         On March 24, 2000, the Company  submitted for approval a joint petition
for settlement  reached with various parties to the Company's  proceeding before
the Pennsylvania  Public Utility  Commission (PUC) involving the proposed merger
with Unicom. The Company reached agreement with advocates for residential, small
business and large  industrial  customers,  and  representatives  of  marketers,
environmentalists, municipalities and elected officials. Under the comprehensive
settlement agreement,  the Company has agreed to $200 million in rate reductions
for all customers over the period January 1, 2002 through 2005 and extended rate
caps on the Company's retail electric  distribution charges through December 31,
2006.  The  comprehensive   settlement  agreement  also  provides  for  electric
reliability and customer service  standards,  mechanisms to enhance  competition
and customer  choice,  expanded  assistance to low-income  customers,  extensive
funding  for wind and solar  energy  and  community  education,  nuclear  safety
research   funds,   customer   protection   against  nuclear  costs  outside  of
Pennsylvania,   and  maintenance  of  charitable  and  civic  contributions  and
employment for the Company's headquarters in Philadelphia.

         Retail   competition   for  electric   generation   services  began  in
Pennsylvania on January 1, 1999. Effective January 1, 2000, all of the Company's
retail electric customers in its traditional service territory have the right to
choose their generation suppliers.  At March 31, 2000,  approximately 17% of the
Company's residential load, 45% of its commercial load and 63% of its industrial
load were purchasing  generation service from an alternative electric generation
supplier.  As of that date,  Exelon  Energy,  the Company's  alternative  energy
supplier,  was providing electric  generation  service to approximately  123,800
business and residential customers located throughout Pennsylvania.

                                       11

<PAGE>

RESULTS OF OPERATIONS


Revenue and Expense Items as a
Percentage of Total Operating
Revenues                                               Percentage Dollar Changes
                                                              2000 vs. 1999
                                                              -------------

       March 31,
       ---------
     2000     1999
     ----     ----

       78%     83%          Electric                                   1%
       15%     17%          Gas                                       (7%)
        7%      --          Infrastructure Services                  100%
     -----   -----

     100%     100%          Total Operating Revenues                   7%
     -----   -----

       34%     36%          Fuel and Energy Interchange                1%
       29%     23%          Operating and Maintenance                 34%
        6%      5%          Depreciation and Amortization             42%
        5%      6%          Taxes Other Than Income                  (11%)
     -----   -----
       74%     70%          Total Operating Expenses                  13%
     -----   -----

       26%     30%          Operating Income                          (7%)
     -----   -----

      (8%)    (6%)          Interest Charges                          30%
                            Equity in Earnings (Losses) of
        --    (1%)            Unconsolidated Affiliates              135%
        1%    (2%)          Other Income and Deductions              159%
     -----   -----

       19%     21%          Income Before Income Taxes                 1%
        7%      8%          Income Taxes                              (6%)
     -----   -----

       12%     13%          Net Income                                 6%
     =====   =====


First Quarter 2000 Compared To First Quarter 1999
Operating Revenues
         Electric  revenues  increased $6 million,  or 1%, to $1,041 million for
the quarter ended March 31, 2000 compared to the same 1999 period.  The increase
was  attributable  to higher  revenues from the generation  business unit of $55
million  partially offset by lower revenues from the distribution  business unit
of $49 million.

         The  increase   from  the   generation   business  unit  was  primarily
attributable to $33 million from increased volume in Pennsylvania resulting from
the sale of competitive  electric  generation  services by Exelon Energy and $22
million from  increased  wholesale  revenues as a result of higher  volume.  The
decrease from the distribution  business unit was primarily  attributable to $31
million as a result of lower volume  principally  associated with the effects of
competition  and $18 million  related to the  across-the-board  rate  reductions
mandated by the PUC Opinion and Order (Final  Restructuring  Order)  approving a
joint petition and settlement of the Company's restructuring case.

                                       12

<PAGE>

         Gas  revenues  decreased  $15  million,  or 7%, to $202 million for the
quarter ended March 31, 2000 compared to the same 1999 period.  The decrease was
primarily  attributable  to $10 million  resulting  from the  elimination of the
gross receipts tax in connection with gas  restructuring  in Pennsylvania and $9
million as a result of lower prices. These decreases were partially offset by $1
million  from  increased  volume  in  Pennsylvania  resulting  from  the sale of
competitive  gas supply  services by Exelon  Energy and $1 million of  increased
transportation revenues.

         Infrastructure  services revenues increased $100 million as a result of
the Exelon  Infrastructure  Services (EIS) acquisitions in the fourth quarter of
1999.

Fuel and Energy Interchange Expense
         Fuel and energy  interchange  expense  increased $4 million,  or 1%, to
$457  million  for the quarter  ended  March 31, 2000  compared to the same 1999
period.  The increase  was  attributable  to higher fuel and energy  interchange
expenses  associated with the generation  business unit of $23 million partially
offset  by a $19  million  decrease  in fuel  and  energy  interchange  expenses
associated with the distribution business unit. As a percentage of revenue, fuel
and  interchange  expenses were 34% as compared to 36% in the  comparable  prior
year period.

         The  increase   from  the   generation   business  unit  was  primarily
attributable  to $42 million  related to  increased  volume  from Exelon  Energy
sales,  partially  offset by $19  million of lower  fuel and energy  interchange
expense  principally  associated  with lower internal  generation as a result of
unplanned  outages  at two  fossil  generating  plants.  The  decrease  from the
distribution business unit was primarily attributable to $30 million as a result
of  lower  volume  partially  offset  by  an  increase  of  $8  million  in  PJM
Interconnection, LLC ancillary charges.

Operating and Maintenance Expense
         Operating and maintenance  expense (O&M) increased $98 million, or 34%,
to $390 million for the quarter  ended March 31, 2000  compared to the same 1999
period. As a percentage of revenue,  operating and maintenance expenses were 29%
as compared to 23% in the same 1999  period.  The ventures  business  unit's O&M
expenses increased $97 million related to the  infrastructure  services business
as a  result  of the  EIS  acquisitions  in the  fourth  quarter  of  1999.  The
generation  business  unit's O&M expenses  increased  $4 million  primarily as a
result of higher  compensation  expense of $14 million and additional  marketing
expenses of $1 million.  These  increases  were  partially  offset by $7 million
related to the abandonment of an information  system  implementation in 1999 and
additional  joint-owner  expense  of $4  million  as  compared  to the same 1999
period.  In  addition,  the Company  experienced  $12  million of lower  pension
expense  as a result of the  performance  of the  investments  in the  Company's
pension plan and $11 million of lower Year 2000 (Y2K) remediation  expenditures.
These  decreases  were  partially  offset by $11 million of  incremental  merger
expenses and $6 million in compensation expense.

                                       13

<PAGE>

Depreciation and Amortization Expense
         Depreciation and amortization expense increased $24 million, or 42%, to
$80  million for the  quarter  ended  March 31,  2000  compared to the same 1999
period. As a percentage of revenue, depreciation and amortization expense was 6%
as  compared  to 5% in the  comparable  prior  year  period.  The  increase  was
primarily  attributable to $15 million  associated with the  commencement of the
amortization  of $5.26  billion  of  Competitive  Transition  Charges in 2000 in
accordance with the terms of the Final  Restructuring  Order.  The increase also
included $5 million related to EIS depreciation  expense,  $3 million related to
plant in service and $1 million of goodwill amortization.

Taxes Other Than Income
         Taxes other than income  decreased  $8 million,  or 11%, to $67 million
for the  quarter  ended March 31, 2000  compared to the same 1999  period.  As a
percentage  of  revenue,  taxes other than income were 5%, as compared to 6%, in
the comparable  prior year period.  The decrease was primarily  attributable  to
lower  real  estate  taxes of $5  million  relating  to a change in tax laws for
utility  property in Pennsylvania  and $3 million as a result of the elimination
of the gross  receipts  tax on gas sales  partially  offset by a net increase in
gross receipts tax on electric sales.

Interest Charges
         Interest charges consist of interest expense,  distributions on Company
Obligated  Mandatorily  Redeemable  Preferred  Securities of a  Partnership  and
Allowance for Funds Used During  Construction.  Interest  charges  increased $24
million to $105  million,  or 30%, for the quarter ended March 31, 2000 compared
to the same 1999 period. As a percentage of revenue, interest charges were 8% as
compared to 6% in the comparable  prior year period.  The increase was primarily
attributable  to  interest  on  the  transition  bonds  issued  by  PECO  Energy
Transition Trust of $57 million,  partially offset by the Company's reduction of
long-term  debt with the proceeds of transition  bonds,  which reduced  interest
charges by $33 million.

Equity in Earnings (Losses) of Unconsolidated Affiliates

         Equity in earnings (losses) of unconsolidated  affiliates increased $16
million, or 135%, to earnings of $4 million for the quarter ended March 31, 2000
as compared to losses of $12 million in the same 1999  period.  The  increase in
equity  in  earnings  (losses)  of   unconsolidated   affiliates  was  primarily
attributable  to $12  million  related to the  Company's  equity  investment  in
AmerGen Energy Company,  LLC (AmerGen) as a result of the  acquisitions of Three
Mile Island Unit No. 1 Nuclear Generating Facility and the Clinton Nuclear Power
Station  which were acquired in December  1999 and improved  performance  of the
Company's  telecommunications  equity  investments  of $4 million as a result of
customer base growth.

                                       14

<PAGE>

Other Income and Deductions
         Other income and deductions  excluding  interest  charges and equity in
earnings (losses) of unconsolidated  affiliates  increased $38 million, or 159%,
to $14 million for the quarter ended March 31, 2000 as compared to a loss of $24
million in the same 1999 period. The increase in other income and deductions was
primarily attributable to a $15 million write-off, in 1999, of the investment in
Grays Ferry  Cogeneration  Partnership  in  connection  with the  settlement  of
litigation  and other income in the first quarter of 2000 of $6 million from the
favorable  settlement of litigation,  an increase of $5 million from non-utility
operations and $4 million of additional interest income.

Income Taxes
         The  effective  tax  rate  was  36.9%  which  was  consistent  with the
comparable prior year period.

Preferred Stock Dividends
         Preferred  stock  dividends  for  the  quarter  ended  March  31,  2000
decreased  $0.6  million,  or 18%,  to $3 million as  compared  to the same 1999
period.  The  decrease  was  attributable  to the  retirement  of $37 million of
Mandatorily  Redeemable  Preferred  Stock in August  1999 with a portion  of the
proceeds from the issuance of transition bonds.

Earnings
         Earnings  applicable  to common stock  increased $9 million,  or 6%, to
$162 million in the first  quarter of 2000.  Earnings  per average  common share
increased  $0.20 per share or 29%,  to $0.89 per share in the first  quarter  of
2000,  reflecting  the  increase  in net income and a decrease  in the  weighted
average  shares of common stock  outstanding  as a result of the use of proceeds
from the Company's April 1999  securitization of a portion of its stranded costs
recovery.  The proceeds  were used to retire  higher cost debt and to repurchase
approximately 44 million shares of common stock.


DISCUSSION OF LIQUIDITY AND CAPITAL RESOURCES

         Cash flows  provided by  operating  activities  decreased $9 million to
$173  million  for the three  months  ended  March 31,  2000 as compared to $182
million in the same 1999 period. The decrease was primarily attributable to less
cash generated by operations of $28 million,  partially offset by an increase in
changes in working  capital of $19 million.  The increase in working capital was
principally related to improvement in cash collections of Exelon Energy accounts
receivable, partially offset by higher cash payments for accounts payable.

         Cash flows used by investing activities were $164 million for the three
months  ended March 31, 2000 as compared to $82 million in the same 1999 period.
The increase was attributable to capital expenditures and ventures business unit
investments.

         Cash flows used in financing activities were $127 million for the three
months  ended  March  31,  2000,  as  compared  to cash  provided  by  financing
activities of $2,555 million in the same 1999 period. The decrease was primarily
attributable  to the  securitization  of stranded  cost  recovery and the use of
related proceeds in March 1999.

                                       15

<PAGE>

         At March 31, 2000,  the Company had  outstanding  $135 million of notes
payable which included $114 million of commercial paper and $21 million of lines
of credit.  At March 31,  2000,  the Company had  available  formal and informal
lines of bank credit  aggregating  $100 million and available  revolving  credit
facilities  aggregating $900 million which support its commercial paper program.
At March 31, 2000, the Company had no short-term investments.

         On March 16, 2000,  the PUC issued an order  approving a Joint Petition
for Full  Settlement  of PECO Energy  Company's  Application  for  Issuance of a
Qualified  Rate Order  (QRO)  authorizing  the  Company to  securitize  up to an
additional $1 billion of its authorized stranded cost recovery.  Under the terms
of the Joint Petition for Full Settlement, the Company, through its distribution
business unit,  will provide its retail  customers  with rate  reductions in the
total amount of $60 million  beginning on January 1, 2001.  This rate  reduction
will be effective for calendar year 2001 only.

         On May 2, 2000,  PECO Energy  Transition  Trust (PETT),  an independent
statutory business trust organized under the laws of Delaware and a wholly owned
subsidiary of the Company,  issued an additional $1 billion aggregate  principal
amount of  Transition  Bonds  (Transition  Bonds) to securitize a portion of the
Company's  authorized  stranded cost recovery.  As a result of this transaction,
the  Company  has  secruitized  a total of $5  billion  of its $5.26  billion of
stranded costs. The Transition Bonds are solely  obligations of PETT, secured by
intangible transition property sold by the Company to PETT concurrently with the
issuance of the  Transition  Bonds and certain  other  related  collateral.  The
Company is using the proceeds  from the  securitization  to reduce the Company's
stranded costs and related  capitalization.  On May 3, 2000,  approximately $500
million  of the  proceeds  from the  Transition  Bonds  were used to  repurchase
approximately  12 million  shares of common stock  through the  settlement  of a
forward purchase  agreement that was entered into in January 2000. The remaining
proceeds are expected to be used to purchase  and/or  redeem First and Refunding
Mortgage  Bonds and to reduce other debt. The Company  currently  estimates that
the issuance of the Transition  Bonds,  the  application of the proceeds and the
2001 rate reduction will increase  earnings per share by approximately  $0.01 to
$0.02 in 2000 and reduce earnings per share by approximately $0.05 in 2001.



YEAR 2000 READINESS DISCLOSURE

         During 1999, the Company successfully addressed,  through its Year 2000
Project (Y2K  Project),  the issue  resulting  from computer  programs using two
digits  rather  than four to define the  applicable  year and other  programming
techniques  that  constrain  date  calculations  or assign  special  meanings to
certain dates.

         The current estimated total cost of the Y2K Project is $61 million, the
majority  of which is  attributable  to  testing.  This  estimate  includes  the
Company's  share of Y2K costs for jointly  owned  facilities.  The total  amount
expended on the Y2K Project through March 31, 2000 was $57 million.  The Company
is funding the Y2K Project from operating cash flows.

                                       16

<PAGE>

         The Company's  systems  experienced no Y2K difficulties on December 31,
1999 or since  that date.  The  Company's  operations  have not,  to date,  been
adversely  affected by any Y2K difficulties that suppliers or customers may have
experienced.  The Company will continue to monitor its systems for potential Y2K
difficulties through the remainder of 2000.

         For additional  information  regarding the Y2K Readiness Disclosure see
"PART II, ITEM 7. - MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - Outlook" in the Company's Annual Report on Form 10-K
for the year 1999, as amended by Form 10-K/A dated April 28, 2000.



FORWARD-LOOKING STATEMENTS
         Except for the historical  information contained herein, certain of the
matters discussed in this Report are forward-looking  statements,  including the
estimated  impact on earnings  per share for 2000 and 2001 from the  issuance of
Transition  Bonds,  the  application  of the proceeds  thereof and the 2001 rate
reduction, and accordingly, are subject to risks and uncertainties.  The factors
that could cause actual  results to differ  materially  include those  discussed
herein  as well as those  listed  in  notes  6, 7 and 8 of  Notes  to  Condensed
Consolidated  Financial  Statements and other factors discussed in the Company's
filings with the Securities and Exchange  Commission.  Readers are cautioned not
to place undue reliance on these forward-looking statements, which speak only as
of the date of this Report.  The Company  undertakes  no  obligation to publicly
release any revision to these  forward-looking  statements to reflect  events or
circumstances after the date of this Report.


                                       17
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK


         The Company uses a combination  of fixed rate and variable rate debt to
reduce  interest rate exposure.  Interest rate swaps are used to adjust exposure
when deemed appropriate,  based upon market conditions. These strategies attempt
to provide and maintain the lowest cost of capital.

         In February 2000, the Company  entered into forward  starting  interest
rate swaps for a notional  amount of $1 billion in  anticipation of the issuance
of the  Transition  Bonds in the  second  quarter of 2000.  On May 2, 2000,  the
Company  settled  these  forward  starting  interest  rate  swaps  and  paid the
counterparties  approximately  $12  million  which  was  deferred  and is  being
amortized  over the life of the  Transition  Bonds as an  increase  in  interest
expense consistent with the Company's hedge accounting policy.

         At March 31, 2000,  the Company's  interest  rate swaps,  including the
interest rate swaps  relating to the Transition  Bonds referred to above,  had a
fair market value of $88 million which was based on the present value difference
between the contracted rate and the market rates at March 31, 2000.

         The  aggregate  fair value of the  interest  rate swaps that would have
resulted from a hypothetical  50 basis point decrease in the spot yield at March
31, 2000 is  estimated to be $25  million.  If the interest  rate swaps had been
terminated at March 31, 2000, this estimated fair value represents the amount to
be paid by the counterparties to the Company.

         The  aggregate  fair value of the  interest  rate swaps that would have
resulted from a hypothetical  50 basis point increase in the spot yield at March
31, 2000 is estimated to be $147  million.  If the interest  rate swaps had been
terminated at March 31, 2000, this estimated fair value represents the amount to
be paid by the counterparties to the Company.

         There were no material  changes in the quarter  ended March 31, 2000 in
the  Company's  quantitative  and  qualitative  disclosures  about  market  risk
associated with commodity risk and equity price risk from December 31, 2000.

         For information on Commodity Risk,  Interest Rate Risk and Equity Price
Risk, see "PART II, ITEM 7A. - QUANTITATIVE  AND QUALITATIVE  DISCLOSURES  ABOUT
MARKET  RISK," in the  Company's  1999 Annual  Report on Form 10-K as amended by
Form 10-K/A filed on April 28, 2000.


                                       18
<PAGE>

PART II - OTHER INFORMATION

ITEM 5. OTHER INFORMATION

         As  previously  reported in the Form 8-K dated June 24,  1999,  AmerGen
executed an agreement with Niagara Mohawk Power Corporation  (NIMO) and New York
State Electric & Gas Corporation (NYSEG) to purchase their respective  interests
in Nine Mile Point Unit 1 Nuclear Generating Facility and Nine Mile Point Unit 2
Nuclear Generating Facility. On May 11, 2000, AmerGen, NIMO and NYSEG terminated
the  agreements  executed as of June 23, 1999 in  connection  with the  proposed
acquisition of NIMO's and NYSEG's interests in Nine Mile Point Unit 1 and Unit 2
Nuclear Generating Facilities.





                                       19
<PAGE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits:

         27 - Financial Data Schedule.

(b)      During the quarter  ended March 31,  2000,  the Company  filed the
              following Current Reports on Form 8-K:

         Date of earliest event reported:
                  January 7, 2000  reporting  information  under  "ITEM 5. OTHER
                  EVENTS"  regarding  the  approval by the Board of Directors of
                  the  Company  and  Unicom   Corporation   to  accelerate   the
                  repurchase  of $1.5  billion in stock and  adjust  shareholder
                  consideration.

         Date of earliest event reported:
                  January 13, 1999  reporting  information  under "ITEM 5. OTHER
                  EVENTS"   regarding  the  provision  of  the  Amended   Merger
                  Agreement  and  additional  information,  including  pro forma
                  financial information,  about the transactions contemplated by
                  the Amended  Merger  Agreement  before the  Company  commences
                  repurchases of shares of its common stock.

         Date of earliest event reported:
                  March 21,  2000  reporting  information  under  "ITEM 5. OTHER
                  EVENTS" regarding the issuance of an order by the Pennsylvania
                  Public Utility Commission  approving a Joint Petition for Full
                  Settlement of PECO Energy  Company's  Application for Issuance
                  of  a  Qualified  Rate  Order   authorizing   the  Company  to
                  securitize up to an additional  $1.0 billion of its authorized
                  recoverable stranded costs.

         Date of earliest event reported:
                  March 24,  2000  reporting  information  under  "ITEM 5. OTHER
                  EVENTS"  regarding the filing with the PUC of a joint petition
                  for settlement  reached with various  parties to the Company's
                  proceeding  before the PUC involving the proposed  merger with
                  Unicom.

         Subsequent  to March 31,  2000 the  Company  filed  the  following
              Current Reports on Form 8-K:

         Date of earliest event reported:
                  May 2, 2000 reporting information under "ITEM 5. OTHER EVENTS"
                  regarding  the  completion  of the  sale of an  additional  $1
                  billion  in  transition  bonds  securitizing  a portion of the
                  Company's stranded cost recovery.


                                       20

<PAGE>

                                   Signatures

         Pursuant to  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.




                                               PECO ENERGY COMPANY

                                               /s/ Michael J. Egan
                                               ----------------------------
                                               MICHAEL J. EGAN
                                               Vice President and
                                               Senior Vice President and
                                               Chief Financial Officer
                                               (Chief Accounting Officer)

Date:  May 15, 2000


                                       21