Managing the Financial Side of Commercial Fleets

Pepco Holdings: Blueprint for a Green Future

July 2008, by Staff

As one of the largest energy delivery companies in the Mid-Atlantic region, Pepco Holdings, Inc. (PHI) has energy consumption on the brain.

However, the company isn’t focused solely on customers’ energy consumption. In fact, it trains a keen eye on energy challenges in the community at large and that has meant making some changes to the company’s fleet.

PHI, headquartered in Washington, D.C., delivers electricity to about 1.9 million customers in Delaware, the District of Columbia, Maryland, and New Jersey. Through its subsidiaries Pepco, Delmarva Power, and Atlantic City Electric, PHI delivers regulated electricity. Delmarva Power also delivers natural gas.

PHI’s leadership recognized its ability to respond to the threat global warming poses. “The way we do business directly impacts our community and the environment, and the public concern about global warming can no longer be ignored,” said Dennis Wraase, chairman and CEO.

To transform to more environmentally friendly operations, PHI introduced a Blueprint for the Future in February 2007. “This initiative put PHI in a leadership role to address two of the pre-eminent energy challenges we face: the rising cost of energy and the impact of energy use on the environment,” said Frank Cottone, PHI vehicle resource manager.

The environmental initiative included replacing conventional vehicles with hybrids and alternative-fuel vehicles. Of its 2,000-unit fleet, 42 are hybrids and 116 operate on propane, compressed natural gas (CNG), E-85, or electricity. “In addition, we have switched to B-20 biodiesel at all of our company fuel sites, which helps our 792 diesel power units achieve a lower carbon footprint,” said Cottone.

Most of PHI’s alternative-fuel vehicles are light-duty units and material- handling forklifts. PHI chose Toyota Prius, Ford Escape Hybrid, and Dodge and Chevrolet alternative-fuel vehicles for employees who conduct business between the company’s three operating companies. “In addition, we have one hybrid bucket truck that we have evaluated as part of the Hybrid Truck Utility Forum (HTUF) and plan on purchasing eight more hybrid bucket trucks during 2008,” Cottone said.

The fleet additions’ most immediate benefit is better fuel economy. Compared to the vehicles they replace, the new vehicles are seeing significant gains in mpg: the Toyota Prius gets more than 43 mpg and the Ford Escape Hybrid averages more than 26 mpg.

“The benefits are pretty straightforward: better fuel economy and reduced CO2 emissions. With the escalating price of gasoline, we are reaping some economic benefits. And, according to the U.S. Environmental Protection Agency (EPA), biodiesel fuel reduces CO2 emissions by about 15 percent,” said Cottone.

In addition to environmentally conscious vehicle selection, PHI has evaluated the entire fleet operation to reduce its carbon footprint. Cottone said several “green opportunities” have been found, for example, in maintenance facility recycling of oil, rags, tires, and eliminating aerosol cans, etc.

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