By three separate orders approved at its November 15, 2007 meeting, FERC granted Southern California Edison ("SCE"), Baltimore Gas and Electric Co. ("BG&E") and Pepco Holdings, Inc. ("Pepco") special return on equity ("ROE") and transmission rate incentives for their new investments in transmission infrastructure projects. Pursuant to the incentive standards for new transmission infrastructure established under Order No. 679 and fostered under the Energy Policy Act of 2005, FERC granted SCE a 125-basis point ROE incentive for its Devers-Palo Verde II and Tehachapi transmission line projects and a 75-basis point ROE incentive for the Ranco Vista substation project. BG&E received approval for a 100-basis point ROE incentive for transmission reliability projects, and FERC granted Pepco a transmission rate incentive of 50-basis points for its membership in PJM Interconnection, L.L.C. Transmission investments should continue to increase with this type of support from FERC.

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