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DELMARVA POWER MAKES PRELIMINARY OFFER TO BUY DOVER'S ELECTRICAL SYSTEM

 WILMINGTON, Del., May 26 /PRNewswire/ -- Delmarva Power & Light Company (NYSE: DEW) last night presented a proposal which could lead to the purchase of the City of Dover's electrical system.
 Potential benefits, as presented to the Utility Committee of the Dover City Council, include:
 -- lower electric rates to business and many residential customers,
 -- a continued source of steady income to the city without the risk of running a power plant, and
 -- the opportunity for Delmarva Power to locate a new operations center in the middle of its service territory.
 H. Ray Landon, Delmarva Power executive vice president, discussed the proposal and its advantages at an evening meeting of the Utility Committee.
 "Over time, the electric system has served the City of Dover and its residents well. But the electric utility business is changing dramatically, and competition is developing rapidly. The Dover system, which for years has generated a cash gain, faces the prospect of becoming a cash drain.
 "In these changing times, our proposal has several advantages. I look at this as a win, win, win situation," said Landon.
 Landon asked the councilmen and city administration to provide more detailed information about the city's system so a more specific purchase proposal can be made.
 He detailed several benefits to such a purchase:
 -- Rates. In total, customers of Dover would pay about $2 million to $3 million less annually in rates. Commercial and industrial rates will be substantially lower -- as much as 20 percent lower annually. For residential customers with electric heat or heat pumps, rates could be about 13 percent lower. For everyone else, rates will stay about the same. (Both Dover and Delmarva Power have proposed rate increases. If both were adopted totally, Delmarva Power's rates would be even less when compared to Dover's.)
 -- Cash to the City. By investing the net profits from the sale, the city could receive as much money annually as it currently receives from the electric system -- or about $3 million in 1993 -- and some extra funds to re-invest to keep up with inflation. In addition, Delmarva Power would become a taxpayer, contributing to the city's treasury.
 -- Environmental Protection. The electricity business is also becoming more complex in environmental areas. Delmarva Power has an excellent record of operating power plants in environmentally acceptable ways. Also, through its "Serving & Conserving Delmarva" environmental stewardship program, it works to improve the quality of life on the Delmarva Peninsula. The company donated 340 acres of environmentally sensitive wetlands at Port Mahon to the Nature Conservancy; raised and released more than 150,000 rockfish into the Delaware and Nanticoke rivers; and co-sponsored Delaware's annual Coastal Cleanup Day.
 -- Economic Development and Jobs. Lower rates in the commercial and industrial sector are attractive to new businesses and new jobs.
 -- Future Power Plants. Dover will need new sources of power as early as 1995. Delmarva Power has a flexible, multi-source plan for future growth called Challenge 2000. Dover's needs could be rolled into this plan.
 -- Extra Services. Delmarva Power has a wide variety of additional customer services, especially in the residential energy conservation area. For example, more than 53,500 customers currently participate in the energy-saving "Energy For Tomorrow" program which also provides rebates to participants.
 -- Economies of Scale. The electricity business is becoming increasingly competitive with new laws allowing utilities to use each others' lines. The ability to continually reduce costs, improve productivity, and contend with changing regulation will be key to survival in the decade ahead.
 -- Diversity of Fuel. The price of fuel makes up about one-third of the cost of electricity. Dover's fuel comes mainly from oil which is likely to be hit hard by the proposed federal BTU energy tax. Delmarva Power's power plants are 43 percent coal, 19 percent natural gas, 26 percent oil and 12 percent nuclear.
 Landon also said that if Delmarva Power purchased the city of Dover's system, Dover's electric department employees would be offered employment, a new division headquarters would be located in the city, and the company would participate in community activities as it does throughout the peninsula.
 Examples of new influences changing utility industry are the Clean Air Act, the National Energy Policy Act, the proposed BTU tax, deregulation, new regulation, and competition. "We believe we have made a proposal which can benefit Dover and Delmarva Power in these changing times," Landon said.
 /delval/
 -0- 5/26/93
 /CONTACT: Wallace C. Judd Jr., manager of media relations of Delmarva Power, 302-429-3595/
 (DEW)


CO: Delmarva Power and Light Company ST: Delaware IN: UTI SU:

MP-MK -- PH007 -- 2379 05/26/93 10:34 EDT
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Publication:PR Newswire
Date:May 26, 1993
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