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DALLAS, TX., July 13, 2001 - Alliance Data Systems Corp. has completed the migration and conversion of Pepco Energy Services' (PES) customer account data to its database, allowing Alliance Data to begin the rollout of billing and payment processing services.

Under the five-year agreement signed this spring, Alliance Data is providing PES a complete suite of advanced services designed to facilitate acquisition, billing, electronic data interchange, billing-information management, and customer retention.

Pepco Energy Services, Inc. is an unregulated subsidiary of a large, investor-owned utility based in Washington, D.C., and has customer accounts throughout Maryland, Pennsylvania, District of Columbia, New Jersey and Virginia. Alliance Data will provide platform hosting and transaction processing services for more than 40,000 PES retail customer accounts throughout these mid-Atlantic states.

Utilizing a customized billing and customer care platform developed for the deregulated energy industry, Alliance Data will improve accuracy and increase efficiencies in customer billing by its ability to support multiple complex tariff structures that differ by state. Additional services provided will include the deployment of "smart statement" technology, which allows PES to conduct one-to-one customer communication via its billing statements.

"As deregulation continues to penetrate the utility marketplace, we recognize the significant value that Alliance Data can provide PES," said Ed Mayberry, president and chief executive officer, Pepco Energy Services. "We're very optimistic about the rollout of these services which will further support our dedication to customer satisfaction while also providing optimum opportunities for increasing our competitive edge for retail client acquisitions."

"We are excited about being a part of Pepco Energy Services' long-term strategy for building customer relationships and expanding transaction processing capabilities," said Mike Beltz, Alliance Data Systems president, Transaction Services. "We are confident that our business solution tailored to the deregulated marketplace will enable Pepco Energy Services to increase its customer base and grow its business."

Pepco Energy Services
Pepco Energy Services, Inc., a wholly owned, separately-managed subsidiary of Potomac Electric Power Company, provides residential, commercial, institutional and government customers a complete suite of integrated energy management solutions including electricity and natural gas; energy surveys; energy information systems; fuel management services; heating, ventilation and air conditioning systems; lighting; project financing; and energy operations and maintenance services.

Over the past 24 months, Pepco Energy Services was awarded nearly $800 million in energy and energy-related services contracts, and has provided energy or energy-related services to customers from Connecticut to Florida. Visit www.pepcoenergy.com for more information.

Alliance Data Systems
Based in Dallas, Alliance Data Systems is a provider of transaction services, credit services and marketing services, including one of the largest loyalty programs in North America. The company manages 72 million consumer accounts and processes 2.5 billion transactions annually. Alliance Data Systems employs approximately 6,000 associates at more than 20 locations in the United States, Canada and New Zealand. For more information about the company, visit its Web site, www.alliancedatasystems.com.

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