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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: times new roman">UNITED
STATES</font></div>
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AND EXCHANGE COMMISSION</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: times new roman">Washington,
D.C. 20549</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: times new roman">FORM
8-K</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: times new roman">CURRENT
REPORT</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: times new roman">Pursuant
to Section 13 or 15(d) of</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: times new roman">The
Securities Exchange Act of 1934</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="FONT-SIZE: 12pt">Date of Report (Date of earliest event
reported):&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt">Ma</font><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt">y 1</font><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt">,
2008</font></font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font><font style="DISPLAY: inline; FONT-SIZE: 12pt; TEXT-DECORATION: underline">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; TEXT-DECORATION: underline">&#160;&#160;&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; TEXT-DECORATION: underline">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; TEXT-DECORATION: underline">POTOMAC
ELECTRIC POWER COMPANY</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; TEXT-DECORATION: underline">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font></font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: center" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman">(Exact
name of registrant as specified in its charter)</font></div>
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    <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
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      of Columbia</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; TEXT-DECORATION: underline">&#160;and
      Virginia</font></font></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman">(State
      or other jurisdiction</font></div>
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      incorporation)</font></div>
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      Number)</font></div>
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      Employer</font></div>
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      No.)</font></div>
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    <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font><font style="DISPLAY: inline; FONT-SIZE: 12pt">&#160;&#160;&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 12pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; TEXT-DECORATION: underline">701
      Ninth Street, N.W., Washington, DC</font><font style="DISPLAY: inline; FONT-SIZE: 12pt">&#160;&#160;&#160;&#160;</font></font></font></div>
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      of principal executive offices)</font></div>
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      Code)</font></div>
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    <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="FONT-SIZE: 12pt">Registrant's telephone number, including area code
&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; TEXT-DECORATION: underline">(202)</font><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; TEXT-DECORATION: underline">
872-3526</font></font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font><font style="DISPLAY: inline; FONT-SIZE: 12pt; TEXT-DECORATION: underline">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; TEXT-DECORATION: underline">Not
Applicable&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font></font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: center" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman">(Former
name or former address, if changed since last report.)</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman">Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
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          <tr>
            <td valign="top" width="6%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: wingdings">&#168;</font></div>
            </td>
            <td align="left" valign="top" width="73%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman">Written
      communications pursuant to Rule 425 under the Securities Act (17 CFR
      230.425)</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="6%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: wingdings">&#168;</font></div>
            </td>
            <td align="left" valign="top" width="73%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman">Soliciting
      material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12)</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="6%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: wingdings">&#168;</font></div>
            </td>
            <td align="left" valign="top" width="73%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman">Pre-commencement
      communications pursuant to Rule 14d-2(b) under the Exchange Act
      (17&#160;CFR&#160;240.14d-2(b))</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="6%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: wingdings">&#168;</font></div>
            </td>
            <td align="left" valign="top" width="73%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman">Pre-commencement
      communications pursuant to Rule 13e-4(c) under the Exchange Act
      (17&#160;CFR&#160;240.13e-4(c))</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div><br>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div style="WIDTH: 100%" align="left">
          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
          <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
        </div>
        <div id="GLFTR" style="WIDTH: 100%" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; COLOR: #000000; FONT-FAMILY: times new roman">&#160;
</font></div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman">&#160;
</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2"> </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; COLOR: #000000; FONT-FAMILY: times new roman">&#160;
</font></div>
      </div>
    </div><br>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: times new roman">Potomac
Electric Power Company</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: right" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: times new roman">Form
8-K</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
          <tr valign="top">
            <td style="WIDTH: 108pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: times new roman">Item
      1.01.</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: times new roman">Entry
      into a Material Definitive
Agreement.</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="FONT-SIZE: 12pt">See Item
2.03 below.</font></font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">
          <tr valign="top">
            <td style="WIDTH: 108pt">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: times new roman">Item
      2.03.</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: times new roman">Creation
      of a Direct Financial Obligation or an Obligation under an Off-Balance
      Sheet Arrangement of a Registrant.</font></div>
            </td>
          </tr>
      </table>
    </div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="FONT-SIZE: 12pt">On May 1,
2008, Potomac Electric Power Company (&#8220;Pepco&#8221;) entered into a Loan Agreement
with Wachovia Bank, National Association (&#8220;Wachovia&#8221;) under which it has
borrowed $25 million for a 364-day term (the &#8220;Wachovia Loan
Agreement&#8221;).&#160;&#160;The interest rate payable is based on the prevailing
Eurodollar rate for the applicable interest period, plus 0.60% per
annum.&#160;&#160;Pepco is entitled to elect interest periods of one, two, three
or six months.&#160;&#160;Alternatively, Pepco may elect to convert the interest
rate to a daily rate equal to the greater of (i) Wachovia&#8217;s prime rate and (ii)
the federal funds rate plus 0.5%.&#160;&#160;The principal amount of the loan is
payable on April 30, 2009.&#160;&#160;The loan may be prepaid by Pepco in whole
or in part without premium or penalty on three business days&#8217;
notice.&#160;&#160;Amounts prepaid may not be re-borrowed.&#160;&#160;The
indebtedness under the Wachovia Loan Agreement is unsecured.</font></font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="FONT-SIZE: 12pt">On May 2,
2008, Pepco entered into a Loan Agreement with Mizuho Corporate Bank (USA)
(&#8220;Mizuho&#8221;, and together with Wachovia, the &#8220;Lenders&#8221;) under which it has
borrowed $25 million (the &#8220;Mizuho Loan Agreement&#8221;, and together with the
Wachovia Loan Agreement, the &#8220;Loan Agreements&#8221;).&#160;&#160;The interest rate
payable is based on the prevailing Eurodollar rate for the applicable interest
period, plus 0.60% per annum.&#160;&#160;Pepco is entitled to elect interest
periods of one, two, three or six months.&#160;&#160;Alternatively, Pepco may
elect to convert the interest rate to a daily rate equal to the greater of (i)
the Mizuho&#8217;s prime rate and (ii) the federal funds rate plus
0.6%.&#160;&#160;The principal amount of the loan is payable on September 30,
2008.&#160;&#160;The loan may be prepaid by Pepco in whole or in part without
premium or penalty on three business days&#8217; notice.&#160;&#160;Amounts prepaid
may not be re-borrowed.&#160;&#160;The indebtedness under the Mizuho Loan
Agreement is unsecured.</font></font></div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="FONT-SIZE: 12pt">Each of
the Loan Agreements contains customary financial and other covenants that, if
not satisfied, could result in the acceleration of repayment of each loan. Among
these covenants are (i)&#160;the requirement that Pepco maintain a ratio of
total indebtedness to total capitalization of 65% or less, computed in
accordance with the terms of the Loan Agreements, (ii) a restriction on sales or
other dispositions of assets, other than sales and dispositions permitted by the
Loan Agreements and (iii) a restriction on the incurrence of liens on the assets
of Pepco or any of its significant subsidiaries, other than liens permitted by
the Loan Agreements.&#160;&#160;Each of the Loan Agreements also contains a
number of customary events of default that could result in the acceleration of
repayment of the loan, including (i) the failure of Pepco or any of its
significant subsidiaries to pay when due, or the acceleration of, certain
indebtedness under other borrowing arrangements, (ii)&#160;certain bankruptcy
events, judgments or decrees against Pepco or its significant subsidiaries and
(iii) a change in control (as defined in the Loan Agreements) of Pepco Holdings,
Inc. (&#8220;PHI&#8221;) or the failure of PHI to own all of the voting stock of
Pepco.&#160;&#160;Neither Loan Agreement includes any ratings
triggers.</font></font></div><br>
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2&#160;-</font></div>
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Electric Power Company</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt; TEXT-ALIGN: right" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: times new roman">Form
8-K</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
    <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
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Lenders or their affiliates have provided investment or commercial banking
services to Pepco and its affiliates, including as an underwriter of their
securities, in the past and are likely to do so in the future. They receive
customary fees and commissions for these services.</font></font></div>
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    <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
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      9.01.</font></div>
            </td>
            <td>
              <div align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: times new roman">Financial
      Statements and Exhibits.</font></div>
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            </td>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman">Loan
      Agreement, dated as of May 1, 2008, between Potomac Electric Power Company
      and Wachovia Bank, National Association.</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="11%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman">10.2</font></div>
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            <td align="left" valign="top" width="60%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman">Loan
      Agreement, dated as of May 2, 2008, between Potomac Electric Power Company
      and Mizuho Corporate Bank (USA).</font></div>
            </td>
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    <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: times new roman">SIGNATURES</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="FONT-SIZE: 12pt">Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.</font></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">
          <tr>
            <td valign="top" width="45%"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman">&#160;
      </font></td>
            <td align="left" valign="top" width="55%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; TEXT-DECORATION: underline">POTOMAC
      ELECTRIC POWER COMPANY</font></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: times new roman">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;(Registrant)</font></div>
            </td>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
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      6</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; TEXT-DECORATION: underline">,</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; TEXT-DECORATION: underline">&#160;200</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; TEXT-DECORATION: underline">8</font></font></font></font></div>
            </td>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman"><font><font style="DISPLAY: inline; FONT-SIZE: 12pt; TEXT-DECORATION: underline">/s/
      P. H.
      Barry&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; TEXT-DECORATION: underline">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</font></font></font></div>
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      Financial Officer</font></div>
            </td>
          </tr>
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    </div>
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    <div style="DISPLAY: block; TEXT-INDENT: 0pt">&#160;</div>
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may6-pepco8k.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
The
Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported):
Ma
y 1
,
2008
POTOMAC
ELECTRIC POWER COMPANY
(Exact
name of registrant as specified in its charter)
D
istrict
      of Columbia
and
      Virginia
(State
      or other jurisdiction
of
      incorporation)
001-01072
(Commission
File
      Number)
53-0127880
(IRS
      Employer
Identification
      No.)
701
      Ninth Street, N.W., Washington, DC
(Address
      of principal executive offices)
20068
(Zip
      Code)
Registrant's telephone number, including area code
(202)
872-3526
Not
Applicable
(Former
name or former address, if changed since last report.)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
¨
Written
      communications pursuant to Rule 425 under the Securities Act (17 CFR
      230.425)
¨
Soliciting
      material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12)
¨
Pre-commencement
      communications pursuant to Rule 14d-2(b) under the Exchange Act
      (17 CFR 240.14d-2(b))
¨
Pre-commencement
      communications pursuant to Rule 13e-4(c) under the Exchange Act
      (17 CFR 240.13e-4(c))
Potomac
Electric Power Company
Form
8-K
Item
      1.01.
Entry
      into a Material Definitive
Agreement.
See Item
2.03 below.
Item
      2.03.
Creation
      of a Direct Financial Obligation or an Obligation under an Off-Balance
      Sheet Arrangement of a Registrant.
On May 1,
2008, Potomac Electric Power Company ("Pepco") entered into a Loan Agreement
with Wachovia Bank, National Association ("Wachovia") under which it has
borrowed $25 million for a 364-day term (the "Wachovia Loan
Agreement").  The interest rate payable is based on the prevailing
Eurodollar rate for the applicable interest period, plus 0.60% per
annum.  Pepco is entitled to elect interest periods of one, two, three
or six months.  Alternatively, Pepco may elect to convert the interest
rate to a daily rate equal to the greater of (i) Wachovia's prime rate and (ii)
the federal funds rate plus 0.5%.  The principal amount of the loan is
payable on April 30, 2009.  The loan may be prepaid by Pepco in whole
or in part without premium or penalty on three business days'
notice.  Amounts prepaid may not be re-borrowed.  The
indebtedness under the Wachovia Loan Agreement is unsecured.
On May 2,
2008, Pepco entered into a Loan Agreement with Mizuho Corporate Bank (USA)
("Mizuho", and together with Wachovia, the "Lenders") under which it has
borrowed $25 million (the "Mizuho Loan Agreement", and together with the
Wachovia Loan Agreement, the "Loan Agreements").  The interest rate
payable is based on the prevailing Eurodollar rate for the applicable interest
period, plus 0.60% per annum.  Pepco is entitled to elect interest
periods of one, two, three or six months.  Alternatively, Pepco may
elect to convert the interest rate to a daily rate equal to the greater of (i)
the Mizuho's prime rate and (ii) the federal funds rate plus
0.6%.  The principal amount of the loan is payable on September 30,
2008.  The loan may be prepaid by Pepco in whole or in part without
premium or penalty on three business days' notice.  Amounts prepaid
may not be re-borrowed.  The indebtedness under the Mizuho Loan
Agreement is unsecured.
Each of
the Loan Agreements contains customary financial and other covenants that, if
not satisfied, could result in the acceleration of repayment of each loan. Among
these covenants are (i) the requirement that Pepco maintain a ratio of
total indebtedness to total capitalization of 65% or less, computed in
accordance with the terms of the Loan Agreements, (ii) a restriction on sales or
other dispositions of assets, other than sales and dispositions permitted by the
Loan Agreements and (iii) a restriction on the incurrence of liens on the assets
of Pepco or any of its significant subsidiaries, other than liens permitted by
the Loan Agreements.  Each of the Loan Agreements also contains a
number of customary events of default that could result in the acceleration of
repayment of the loan, including (i) the failure of Pepco or any of its
significant subsidiaries to pay when due, or the acceleration of, certain
indebtedness under other borrowing arrangements, (ii) certain bankruptcy
events, judgments or decrees against Pepco or its significant subsidiaries and
(iii) a change in control (as defined in the Loan Agreements) of Pepco Holdings,
Inc. ("PHI") or the failure of PHI to own all of the voting stock of
Pepco.  Neither Loan Agreement includes any ratings
triggers.
-
2 -
Potomac
Electric Power Company
Form
8-K
The
Lenders or their affiliates have provided investment or commercial banking
services to Pepco and its affiliates, including as an underwriter of their
securities, in the past and are likely to do so in the future. They receive
customary fees and commissions for these services.
Item
      9.01.
Financial
      Statements and Exhibits.
10.1
Loan
      Agreement, dated as of May 1, 2008, between Potomac Electric Power Company
      and Wachovia Bank, National Association.
10.2
Loan
      Agreement, dated as of May 2, 2008, between Potomac Electric Power Company
      and Mizuho Corporate Bank (USA).
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
POTOMAC
      ELECTRIC POWER COMPANY
(Registrant)
Date
Ma
y
      6
,
200
8
/s/
      P. H.
      Barry
Name:  Paul
      H. Barry
Title:    Senior
      Vice President and
Chief
      Financial Officer
- 3
-