Final Copy 9/8/95


ATLANTIC CITY ELECTRIC COMPANY
      
                SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN - II


Article 1.  Definitions

The following are defined terms wherever they appear in this
Supplemental Executive Retirement Plan - II ( SERP-II ).

  1.1    Board of Directors  means the Board  of Directors of
     Atlantic Energy, Inc.

  1.2    Change of Control  means that one of the following has
     occurred:

     (i)    when any  person  as defined in Section 3(a)(9) of
        the Securities Exchange Act of 1934, as amended (the
         Exchange Act ) and as used in Section 13(d) and 14(d)
        thereof, including a  group  as defined in Section
        13(d) of the Exchange Act but excluding the Company and
        any subsidiary and any employee benefit plan sponsored
        or maintained by the Company of any subsidiary
        (including any trustee of such plan acting as trustee),
        directly or indirectly, becomes the  beneficial owner 
        (as defined in Rule 13d-3 under the Exchange Act), of
        securities of the Company representing 20 percent or
        more of the combined voting power of the Company s then
        outstanding securities; or

     (ii)   when, during any period of 24 consecutive months
        during the existence of the Plan, the individuals who,
        at the beginning of such period, constitute the Board
        (the  Incumbent Directors ) cease for any reason other
        than death to constitute at least a majority thereof;
        provided, however, that a director  who is not a
        director at the beginning of such 24-month period shall
        be deemed to have satisfied such 24-month requirement
        (and be an Incumbent Director) if such director was
        elected by, or on the recommendation of or with the
        approval of, at least two-thirds of the directors who
        then qualified as Incumbent Directors either actually
        (because they were directors at the beginning of such
        24-month period) or by prior operation of this Section;
        or

     (iii)  upon the occurrence of a transaction requiring
        stockholder approval for the acquisition of the Company
        by an entity other than the Company or a subsidiary
        through purchase of assets, or by merger, or otherwise.
  
  1.3    Company  means Atlantic City Electric Company, any of
     its subsidiaries authorized by the Board of Directors to
     participate in this Plan with respect to its employees,
     its successors (whether direct or indirect by purchase,
     merger, consolidation or otherwise) to all or
     substantially all of the business or assets of Atlantic
     City Electric Company, and its assigns, except that for
     purposes of the definition of Change of Control it shall
     mean Atlantic Energy, Inc., and to the extent a
     participant is employed by Atlantic City Electric Company
     upon the occurrence of an event which constitutes a Change
     of Control, Atlantic City Electric Company.

  1.4    Compensation  means the Qualified Executive s base
     salary plus annual incentive payments.  Compensation 
     shall not include any amounts distributed or distributable
     to a Qualified Executive in stock or cash pursuant to the
     Long-Term Executive Incentive Plan.

  1.5    Designated Beneficiary  means a person or persons
     designated, in writing, by a Qualified Executive or, if no
     designation is made or if the person or persons so
     designated should predecease the Qualified Executive, the
     legal representative of the estate of a deceased Qualified
     Executive or the person or persons who shall acquire the
     benefits payable to the Qualified Executive by bequest or
     inheritance, or in the case of a Beneficiary s death after
     the Qualified Executive s death, the Beneficiary s estate.

  1.6    Early Retirement Date  means the first day of any
     month after the Qualified Executive has attained age
     fifty-five (55) and has completed five (5) years of
     Service with the Company, but before age sixty (60).

  1.7    Excess Benefit Plan  means the Atlantic City Electric
     Company Excess Benefit Retirement Income Program as may be
     supplemented or amended or any successor plan in effect at
     the time a Qualified Executive s employment with the
     Company terminates.

  1.8    Final Annual Compensation  means (i) the base salary
     of a Qualified Executive in the calendar year in which the
     Qualified Executive terminates Service, plus (ii) the
     average of the bonuses, if any, paid to a Qualified
     Executive during the year in which he terminates Service,
     and the bonuses, if any, paid to a Qualified Executive
     during the year immediately before he terminates Service. 
     Final Annual Compensation shall not include any amounts
     distributed or distributable to a Qualified Executive in
     stock or cash pursuant to the Long-Term Executive
     Incentive Plan.

  1.9    Final Average Compensation  means the average of the
     Qualified Executive s annual Compensation over the 36 full
     calendar months immediately preceding or coinciding with
     the Qualified Executive s last day of employment with the
     Company.

  1.10   Normal Retirement Date  means the first day of the
     month coincident with or next following the date on which
     the Qualified Executive attains (or would have attained)
     age sixty (60).

  1.11   Plan  means the Atlantic City Electric Company
     Supplemental Executive Retirement Plan - II approved by
     the Board of Directors of Atlantic City Electric Company,
     as embodied in this document and as may be supplemented or
     amended. 

  1.12   Qualified Executive  means an employee of the Company
     elected to the position of officer of the Company and who
     is designated by the Board of Directors to participate in
     this Plan.

  1.13   Retirement Plan  means the Atlantic City Electric
     Company Retirement Plan as may be supplemented or amended
     or any successor plan in effect at the time a Qualified
     Executive s employment with the Company terminates.

  1.14   SERP-II  Disability Benefits  means the benefits
     listed in paragraph 3.4.

  1.15   SERP-II Pre-Retirement Survivor Benefits  means the
     benefits listed in paragraph 3.2.

  1.16   SERP-II Post-Retirement Survivor Benefits  means the
     benefits listed in paragraph 3.3.
  
  1.17   SERP-II Retirement Benefits  means the benefits listed
in paragraph 3.1.
  
  1.18   Service  means all periods in which a Qualified
     Executive is an officer of the Company prior to attainment
     of age 66.  In addition to periods of employment, the
     following periods of absence count as Service:

     (1)    absence due to any illness or injury during which
        a Qualified Executive is receiving regular disability
        benefits under the Company s officer disability benefit
        program; and

     (2)    any period of absence granted by the Company s
        Board of Directors.

Article 2.  SERP-II Benefits - Vested Portion

  2.1   Upon termination of employment and the attainment of
     age 55 or greater as of such termination, a Qualified
     Executive shall be entitled to receive the Vested portion
     of his SERP- II Retirement Benefits, which shall be
     determined as follows:

     Service (as defined
     in paragraph 1.18)                   Vested Portion
      0-4 Years                                0%
        5 Years                              50%
        6 Years                              60%
        7 Years                              70%
        8 Years                              80%
        9 Years                              90%
     10 Years                                 100%

     Notwithstanding any other provision of the Plan, in the
     event of a Change of Control, any Qualified Executive not
     having 5 years of service shall be deemed to have 5 years
     of service and shall vest at that level.

  2.2   In the event of (i) the death of a Qualified Executive
     while he is in Service or (ii) the death of a Qualified
     Executive entitled to receive SERP-II Retirement Benefits
     or SERP-II Disability Benefits who has not received any of
     such benefits, the Designated Beneficiary of the Qualified
     Executive shall be entitled to receive the benefits listed
     in paragraph 3.2.

  2.3   In the event of the death of a Qualified Executive who
     has received SERP-II Retirement Benefits or SERP-II
     Disability Benefits for a period of less than 15 years,
     the Designated Beneficiary of such Qualified Executive
     shall be entitled to receive the benefits listed in
     paragraph 3.3.

  2.4   In the event that a Qualified Executive becomes
     disabled, such Qualified Executive shall be entitled to
     receive the benefits listed in paragraph 3.4.

Article 3.  Amount of Benefits

The amount of benefits payable, pursuant to this SERP-II are as
follows:

  3.1   SERP-II Retirement Benefits:  Subject to the limitation
     provided in paragraph 3.5 below and the vesting schedule
     provided in paragraph 2.1 above, SERP-II Retirement
     Benefits shall equal an annual benefit payable to the 
     Qualified Executive for life with guaranteed minimum
     payments of fifteen (15) years in an amount equal to A
     minus B:

     (A)    60% of the Qualified Executive s Final Average
        Compensation.
     (B)    The sum of (i) the annual primary social security
        retirement benefit payable (before reduction for the
        commencement of post-retirement earnings) to the
        Qualified Executive or which would be payable if
        applied for by the Qualified Executive, (ii) the annual
        amounts of benefits payable (whether or not actually
        paid) from the Retirement Plan (determined without
        regard to any optional method of benefit payment
        selected), and (iii) the annual amounts of benefits
        payable (whether or not actually paid) from the Excess
        Benefit Plan.

     Upon the Qualified Executive s retirement on or after his
     Early Retirement Date but prior to his Normal Retirement
     Date, the amount equal to the SERP-II Retirement Benefit
     shall be reduced by 4% for each year (to be calculated on
     a full calendar month basis) that the payment commencement
     date precedes the Qualified Executive s Normal Retirement
     Date.  

  3.2   SERP-II Pre-Retirement Survivor Benefits:

     (1)    A Qualified Executive shall be covered by a split
        dollar insurance policy providing benefits equal to
        three (3) times Final Annual Compensation.

     (2)    Notwithstanding subparagraph (1) above, if a
        Qualified Executive who would otherwise be entitled to
        the benefit described in subparagraph (1) is
        uninsurable, or if the Company determines that he is
        such a rated risk for insurance purposes that the cost
        of the split dollar insurance described in subparagraph
        (1) is excessive, the Company shall notify the
        Qualified Executive that he is not entitled to the
        benefit described in subparagraph (1) and that the
        benefit described below in subparagraph (3) shall be
        substituted therefore.

     (3)    Any Qualified Executive not eligible for the
        benefit described in subparagraph (1), as defined in
        subparagraph (2), shall be entitled to a benefit upon
        death equal to the sum of:

        (i) An amount equivalent to Final Average Compensation
            to be paid in a lump-sum within a reasonable time
            following the date of death; and
        (ii)   Subject to the limitation provided in paragraph
            3.5 and commencing with the first anniversary of the
            death of the Qualified Executive, an annual payment
            of fifty percent (50%) of the annual  Vested SERP-II
            Retirement Benefit to which the Qualified Executive
            would have been entitled to receive if he had
            terminated employment on his date of death, until
            the Qualified Executive would have attained the age
            of 60 years, or until fifteen (15) such annual
            payments have been made, whichever is the later to
            occur.



  3.3   SERP-II Post-Retirement Survivor Benefits:
     Commencing with the first anniversary of the death of the
     Qualified Executive, an annual payment of 100% of the
     annual SERP-II Retirement Benefit that the Qualified
     Executive was entitled to receive as of his date of death
     until benefits have been paid to both the Qualified
     Executive and the Designated Beneficiary for an aggregate
     of fifteen (15) years.
  3.4   SERP-II Disability Benefits
     Subject to the limitation provided in paragraph 3.5, in
     the event the Board of Directors shall determine, on the
     basis of such medical evidence as it may require, that the
     Qualified Executive has become disabled, mentally or
     physically, such that he is prevented from performing all
     the material aspects of his duties, the Qualified
     Executive shall be entitled to an annual payment equal to
     fifty percent (50%) of his Vested SERP-II Retirement
     Benefit.  SERP-II Disability Benefits shall commence on
     the date the Qualified Executive is determined to be
     disabled and shall be made for life with guaranteed
     minimum payments of fifteen (15) years.  In the event of
     death during such payment period, subsequent annual
     payments will be made to the Designated Beneficiary until
     such benefits have been paid to both the Qualified
     Executive and the Designated Beneficiary for an aggregate
     of fifteen (15) years.
  3.5   Limitation on SERP-II Benefits
     Notwithstanding the above, annual payments made pursuant
     to paragraph 3.1, 3.2(3)(ii) or 3.4 shall not exceed 25%
     of the Qualified Executive s Final Annual Compensation.
Article 4.  Commencement of SERP-II Retirement Benefits
  4.1   Unless this Plan specifically provides otherwise, SERP-
     II Retirement Benefits payable to a Qualified Executive
     shall commence when retirement benefits commence under the
     Retirement Plan.
     Notwithstanding  any other provision of the Plan, if any
     payment due under this Plan, when taken into account with
     all other payments of  applicable employee remuneration 
     (as defined in Section 162(m)(4) of the Internal Revenue
     Code)  made to the Qualified Executive in the taxable year
     his employment terminates, exceeds the limitation under
     Section 162(m)(l) of the Internal Revenue Code, then such
     payment will be deferred to the taxable year of the
     Qualified Executive next following the year of
     termination.


Article 5. Forfeiture of Benefits
  5.1   Forfeitures.  In the event of a Change of Control this
     paragraph 5.1 of the Plan shall be void and of no force
     and effect.  In the absence of a Change of Control,
     notwithstanding anything contained in this Plan to the
     contrary, a Qualified Executive shall forfeit all benefits
     not yet paid from this Plan in the event the Company
     terminates his employment for Cause or for his breach of
     the Non-Competition or Non-Disclosure provisions specified
     in paragraphs 5.2 and 5.3.  For purposes of this
     paragraph,  Cause  means:
     (i)  willful and continuous failure by a participant to
     perform his duties (other than resulting from incapacity
     due to physical or mental illness), (ii) a participant s
     conviction or plea of nolo contendere to a felony; (iii) a
     participant s willful engagement in misconduct in
     connection with employment which results in material
     damage to the Company s business or reputation; or (iv)
     material breach of Executive s duties under any applicable
     employment agreement which results in material damage to
     the Company s business or reputation, in each of (ii)
     through (iv) above, upon 30 days written notice to the
     Executive, the opportunity for the Executive to be heard
     by the Board and the good faith determination by at least
     two-thirds of the Company s non-emplyoee directors that
     Cause exists; provided, however, that after the occurrence
     of a Change of Control (as hereinafter defined),  Cause 
     shall be limited to (ii) through (iv) above.
  5.2   Non-Competition. 
     A Qualified Executive shall not, during his Service and
     for the period after termination of employment, compete
     directly or indirectly with the Company or be directly or
     indirectly interested in any business competing with the
     business being conducted by the Company; provided,
     however, that the Qualified Executive shall not be
     prohibited from owning up to one percent (1%) of the
     shares of common stock of any corporation whose shares are
     publicly traded on a national securities exchange or in
     the over-the-counter market, or from engaging in
     activities with the written permission of the Board of
     Directors.
  5.3   Non-Disclosure.
     A Qualified Executive shall regard and preserve as
     confidential and not use, communicate or disclose to any
     person, orally, in writing or by a publication, any secret
     or confidential information of the Company, regardless of
     where or when or how acquired by the Company, which the
     Company is obligated to maintain in confidence until such
     information becomes a matter of public knowledge through
     no act of the Qualified Executive.

Article 6.  General
  6.1   Form of Payment.   Benefits under this Plan shall be
     paid in cash.  In lieu of the fifteen (15) year certain
     form of payment provided in Article 3, a Qualified
     Executive may, with the approval of the Company, elect to
     receive an actuarially equivalent lump sum Benefit,
     provided that such election is made and becomes
     irrevocable before the Benefit is actually payable.  For
     purposes of this paragraph,  actuarial equivalent  shall
     have the same meaning as given such term in the Retirement
     Plan.
  6.2   Withholding.  The Company may withhold from any
     benefits payable all federal, state, city, or other taxes
     as shall be required pursuant to any law or governmental
     legislation or ruling.
  6.3   Amendment and Termination.  In the event of a Change of
     Control, the Plan may not be amended, curtailed, or
     terminated.  In the absence of a Change of Control, the
     Plan may be amended, curtailed, or terminated at any time
     by the Board of Directors; provided, however, that at the
     time such action is taken, to the extent that a Qualified
     Executive or his Designated Beneficiary is then entitled
     to receive benefits pursuant to paragraph 2.1, 2.2, or
     2.3, such benefits shall nonetheless be paid as if the
     Plan were still in existence and without reference to such
     change if the effect of such change would be to reduce the
     amount, frequency or duration of benefit payments; and
     further provided that no amendment or curtailment of the
     Plan pursuant hereto shall have the effect of reducing the
     accrued benefit under the Plan of any Qualified Executive.
  6.4   Assignability. Except for naming a Designated
     Beneficiary to receive benefits upon a Qualified
     Executive s death, no right to receive payments shall be
     transferable or assignable by a Qualified Executive.  Any
     other attempted assignment or alienation of payments shall
     be void and of no force or effect.
  6.5   Qualified Executive s Rights Unsecured.  The right of
     any Qualified Executive to receive future benefits under
     the provisions of the Plan shall be an unsecured claim
     against the general assets of the Company.  The benefits
     to be paid, pursuant to this Plan, are unfunded by the
     Company.  Nothing herein shall be construed to prevent
     establishment by the Company of a trust arrangement,
     commonly called a  rabbi trust,  to identify certain
     Company assets to be applied (subject to prior claims of
     creditors) to the discharge of the Company s obligations
     under the Plan.
  6.6   Agreement.  Each Qualified Executive shall execute a
     SERP-II agreement with the Company pursuant to which the
     Qualified Executive agrees, as a condition precedent to
     receipt of benefits, that the Company will purchase, own
     and be beneficiary of a policy or policies of insurance,
     insuring the life of each Qualified Executive.
  6.7   Not an Employment Contract.  The Plan does not confer
     any right of employment upon a Qualified Executive,
     provided the Qualified Executive shall not be discharge
     for the sole purpose of avoiding any obligation under the
     Plan.
  6.8   Applicable Law.  The Plan shall be construed and
     applied in accordance with the laws of the State of New
     Jersey, to the extent such laws have not been superseded
     by federal law (which shall otherwise prevail).
  6.9   Headings and Captions.  Headings and captions are for
     convenience of reference only; shall not be deemed
     provisions of the Plan; and shall not be applied to the
     construction of the Plan.
  6.10  Gender and Number. All terms used in the Plan shall be
     deemed both gender and quantity-neutral unless otherwise
     required by context.  Accordingly, the masculine shall
     include the feminine, the feminine shall include the
     masculine, the singular shall include the plural and the
     plural shall include the singular.
  6.11  Binding Effect.  The terms of the Plan shall be binding
     on each Qualified Executive and on the heirs,
     beneficiaries and personal representatives of each
     Qualified Executive.
  6.12  Construction of Provisions. In the event of any dispute
     as to the construction of any provision of the Plan, the
     need to supply an omission or reconcile an inconsistency
     in the provisions of the Plan, or the need to resolve any
     dispute as to benefits under the Plan, the Board of
     Directors shall appoint one or more individuals to serve
     as a committee with full authority to construe the Plan,
     to supply such omission, to reconcile any inconsistency in
     the provisions of the Plan, and to resolve any such
     disputes.  The determinations made by such appointee in
     good faith shall be binding upon the parties.