The Potomac Electric Power Company (PEPCO) is an American

utility As a topic of economics, utility is used to model worth or value. Its usage has evolved significantly over time. The term was introduced initially as a measure of pleasure or happiness as part of the theory of utilitarianism by moral philosophe ...

company that supplies

electric power Electric power is the rate at which electrical energy is transferred by an electric circuit. The SI unit of power is the watt, one joule per second. Standard prefixes apply to watts as with other SI units: thousands, millions and billions ...

to the city of Washington, D.C. and to surrounding communities in

Maryland Maryland ( ) is a state in the Mid-Atlantic region of the United States. It shares borders with Virginia, West Virginia, and the District of Columbia to its south and west; Pennsylvania to its north; and Delaware and the Atlantic Ocean t ...

. It is owned by Exelon. The company's current trademarked slogan is "Your life. Plugged in." Its former slogan was "We're connected to you by more than power lines." Pepco's bulk transmission system consists of transmission lines operating at 115 kV, 138kV, 230 kV and 500 kV. Pepco has interconnections with Potomac Edison (230kV, 500kV), Baltimore Gas and Electric (500kV, 230kV, 115kV), and

Dominion Virginia Power Dominion Energy, Inc., commonly referred to as Dominion, is a North American power and energy company headquartered in Richmond, Virginia that supplies electricity in parts of Virginia, North Carolina, and South Carolina and supplies natural gas ...

(500kV, 230kV).

History

The company's predecessor, Potomac Electric Co., was organized in 1891 to provide street lighting and streetcar power in Georgetown and Northwest D.C. After suffering during the

Panic of 1893 The Panic of 1893 was an economic depression in the United States that began in 1893 and ended in 1897. It deeply affected every sector of the economy, and produced political upheaval that led to the political realignment of 1896 and the pres ...

, the company filed

bankruptcy Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debto ...

and, on November 6, 1895, was acquired by Oscar T. Crosby and Charles A. Lieb for $5,500. The company was incorporated as Potomac Electric Power Company on April 28, 1896 in Virginia. It became a subsidiary of the

North American Company The North American Company was a holding company incorporated in New Jersey on June 14, 1890, and controlled by Henry Villard, to succeed to the assets and property of the Oregon and Transcontinental Company. It owned public utilities and publi ...

, which owned the

Washington Traction and Electric Company The Washington Railway and Electric Company (WR&E) was the larger of the two major street railway companies in Washington, D.C., the capital of the United States, until 1933. At that time, it was merged with its main competitor, the Capital Tracti ...

, one of the private

streetcar A tram (called a streetcar or trolley in North America) is a rail vehicle that travels on tramway tracks on public urban streets; some include segments on segregated right-of-way. The tramlines or networks operated as public transport a ...

companies in Washington. On December 17, 1896, after a court battle, the company received a contract to light the city of Washington D.C. In January 1889, the company merged with its rival, United States Electric Lighting Company. In 1899, the company merged with Washington Traction and Electric Company. In June 1901, the company filed for

and was acquired by the Washington Railway and Electric Company. In 1905, revenues exceeded $1 million for the first time. In 1906, the company began construction of the first unit of the

Benning Road Power Plant The Benning Road Power Plant was a power plant owned by PEPCO and located in Washington, D.C. The 19-acre facility was built in 1906, and underwent several changes before being demolished in 2012. The facility was powered by coal until 1976, whe ...

, along the Anacostia River. When its last unit was completed in 1931, the power plant had a 185,000-kilowatt capacity. In 1928, the

, a holding company that owned many public utilities, gained control of Washington Railway and Electric. The

Public Utility Holding Company Act The Public Utility Holding Company Act of 1935 (PUHCA), also known as the Wheeler-Rayburn Act, was a US federal law giving the Securities and Exchange Commission authority to regulate, license, and break up electric utility holding companies. It ...

was enacted in 1935 to force the breakup of large utility holding companies. Under this law, the

Securities and Exchange Commission The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...

in 1942 ordered the North American Company and its subsidiaries to split up. A years-long legal battle ensued, culminating in a Supreme Court decision upholding the order. As a result, Pepco's stock was distributed to Washington Railway's shareholders in December 1947, making Pepco an independent, publicly traded company. In 1954, revenue exceeded $50 million for the first time. In 1969, the company suspended its

dividend A dividend is a distribution of profits by a corporation to its shareholders. When a corporation earns a profit or surplus, it is able to pay a portion of the profit as a dividend to shareholders. Any amount not distributed is taken to be re-i ...

due to rising costs. In 1980, the company cancelled plans to build a $930 million power plant in Montgomery County as a result of reduced demand. In September 1995, the company announced a merger with Baltimore Gas & Electric; however, the merger was cancelled in December 1997. In 2001, Pepco agreed to acquire Conectiv Power Delivery, the parent company of

Delmarva Power Delmarva Power is an energy company that provides electricity and natural gas to customers on portions of the Delmarva Peninsula in the states of Delaware and Maryland. The company is a subsidiary of Exelon. Electricity and natural gas Delmarv ...

and Atlantic City Electric, for $2.2 billion. The purchase was completed in 2002, with Pepco and Conectiv becoming subsidiaries of a newly formed holding company, Pepco Holdings. In 2003, Pepco's investment subsidiary, Potomac Capital Investment, was transferred to Pepco Holdings. In 2014, Pepco Holdings agreed to be acquired by Exelon for $6.8 billion. The deal faced opposition from Pepco customers and from officials in Washington and Maryland, but was ultimately approved. The acquisition was completed on March 23, 2016, making Pepco a subsidiary of Exelon.

Controversies

Most hated company in America

In 2011, ''Business Insider'' named the company first on its list of "The 19 Most Hated Companies In America" based on its

American Customer Satisfaction Index The American Customer Satisfaction Index (ACSI) is an economic indicator that measures the satisfaction of consumers across the U.S. economy. It is produced by the American Customer Satisfaction Index (ACSI LLC) based in Ann Arbor, Michigan. The AC ...

rating.

Poor reliability and outages

An investigation by ''

The Washington Post ''The Washington Post'' (also known as the ''Post'' and, informally, ''WaPo'') is an American daily newspaper published in Washington, D.C. It is the most widely circulated newspaper within the Washington metropolitan area and has a large n ...

'' in 2010 faulted Pepco for poor reliability. The report noted that the company's performance had slipped since 2005, comparing poorly to other major utilities in the frequency and duration of

power outage A power outage (also called a powercut, a power out, a power failure, a power blackout, a power loss, or a blackout) is the loss of the electrical power network supply to an end user. There are many causes of power failures in an electricity ...

s. Thousands of people lost power for as many as five days after only 5-8 inches of heavy wet snow. During the June 2012 North American derecho, more than half of the customers in Montgomery County, Maryland lost electric power. The company was criticized for being slow to restore power and for charging its customers for the power outage.

Environmental impact

The company's

produced air pollution that negatively affected neighboring communities. In 2017, the company agreed to pay regulators $1.6 million for violations of the

Clean Water Act The Clean Water Act (CWA) is the primary federal law in the United States governing water pollution. Its objective is to restore and maintain the chemical, physical, and biological integrity of the nation's waters; recognizing the responsibiliti ...

Alleged fraud

In March 2022, the D.C. Office of the Attorney General and the Office of the People’s Counsel alleged Pepco was committing a "pattern of systemic violations" in carrying out community solar panel installations. According to the complaint, Pepco has botched its handling of community solar projects in numerous ways. The utility is undercounting solar energy generation at community solar projects, according to the filing, and is “systematically failing” to provide accurate and timely solar credits to customers.

References

External links

* {{Authority control 1896 establishments in Washington, D.C. American companies established in 1896 Energy companies established in 1896 Electric power companies of the United States Exelon Privately held companies based in Washington, D.C.