Pepco
| File:Pepco new logo.png | |
| File:PEPCO Building - Washington, D.C.jpg PEPCO headquarters in Washington, D.C., in 2020 | |
| Pepco | |
| Company type | Subsidiary |
| Industry | Utilities |
| Founded | April 28, 1896 (as Potomac Electric Power Company) |
| Founder | Oscar T. Crosby |
Area served | Washington metropolitan area |
| Products | Electric power |
Number of employees | 1,429 |
| Parent | Exelon |
| Website | pepco |
The Potomac Electric Power Company (commonly known as PEPCO) is a U.S.-based utility provider delivering electrical services to the Washington, D.C. region and adjacent areas in Maryland. It functions as a subsidiary under the ownership of Exelon.
Pepco promotes its services with the registered tagline "Your life. Plugged in." Its high-voltage transmission network comprises lines at 115 kV, 138 kV, 230 kV, and 500 kV, maintaining interconnections with Potomac Edison, Baltimore Gas and Electric, and Dominion Virginia Power.
History
Originally established in 1891 as Potomac Electric Co. to supply power for street lighting and streetcars in Washington, D.C., the company encountered financial failure during the Panic of 1893. In 1895, Oscar T. Crosby and Charles A. Lieb acquired it for $5,500. The firm was formally incorporated as Potomac Electric Power Company in 1896 and became part of the North American Company conglomerate, which held control over several utilities including Washington Traction and Electric Company.
After overcoming legal disputes, Pepco secured a contract in December 1896 to provide lighting services for Washington, D.C. It merged with the United States Electric Lighting Company in 1889 and later with Washington Traction and Electric Company in 1899. Following a bankruptcy filing in 1901, ownership transferred to Washington Railway and Electric Company.
By 1905, the company’s revenue exceeded $1 million. Construction commenced on the Benning Road Power Plant in 1906, which eventually reached an output capacity of 185,000 kilowatts by 1931.
In 1928, control of Washington Railway and Electric was acquired by North American Company. The enactment of the Public Utility Holding Company Act of 1935 resulted in a Supreme Court ruling that compelled North American to divest its utility holdings. Consequently, Pepco emerged as an independent publicly traded entity in 1947.
By 1954, annual revenues had surpassed $50 million; however, escalating operational expenses led to a suspension of dividend payments in 1969. Plans for a $930 million power generation facility were abandoned in 1980 due to declining electricity demand.
In September 1995, Pepco announced intentions to merge with Baltimore Gas & Electric; this proposal was ultimately withdrawn in December 1997.
Pepco expanded its operations through acquisition by agreeing to purchase Conectiv Power Delivery—the parent company of Delmarva Power and Atlantic City Electric—for $2.2 billion in 2001. This merger was finalized in 2002 under the newly established holding company Pepco Holdings. In 2003, Pepco consolidated its investment subsidiary into Pepco Holdings.
In 2014, Exelon reached an agreement to acquire Pepco Holdings for $6.8 billion amid regulatory review and opposition from customers. The transaction was completed on March 23, 2016, making Pepco a subsidiary of Exelon and strengthening Exelon's position within the Mid-Atlantic utility market.
Reliability Issues and Service Interruptions
A 2010 report by The Washington Post highlighted a decline in Pepco's service dependability starting in 2005, noting frequent and extended power outages in comparison to other utility providers. Thousands of customers experienced outages lasting as long as five days after receiving only 5 to 8 inches of snowfall. In 2011, Business Insider identified Pepco as the least favored company in the United States, based on its notably poor customer satisfaction ratings.
During the June 2012 North American derecho event, more than half of Montgomery County, Maryland's customers were left without electricity. Pepco faced backlash for the slow pace of power restoration and for continuing to bill customers during the outage period.
Potomac River Mineral Oil Spill – January 25, 2011
On January 24, 2011, a Pepco transformer at a substation in Alexandria, Virginia, leaked approximately 5,000 gallons of mineral oil, with around 500 gallons entering the Potomac River. The Coast Guard and local authorities responded swiftly by engaging environmental contractors to contain and clean up the spill. Oil containment booms were deployed to prevent further spread in the waterway, while investigations into the spill’s origins and ecological consequences were carried out with assistance from NOAA.
Additional Air and Water Contamination
The Benning Road Power Plant, operated by Pepco, was a source of air pollution affecting adjacent neighborhoods. In 2017, the company paid $1.6 million in fines for violations of the Clean Water Act. More recently, in October 2023, Pepco agreed to a $57 million settlement covering expenses and penalties related to decades-long discharges of hazardous chemicals into the Anacostia River and nearby environments.
Allegations of Fraud
In March 2022, the D.C. Attorney General alongside the Office of the People’s Counsel charged Pepco with engaging in a "pattern of systemic violations" concerning its management of community solar panel programs. The lawsuit claims that Pepco has consistently underestimated solar energy production and failed to provide customers with accurate and timely solar credit allocations.