Potomac Electric Power Co. has reported significantly increased earnings for the seven-month and one-year periods ended July 31.

Pepco said net income totaled $49.9 million (98 cents a share) for the first seven months of 1980, compared with $36.7 million (73 cents) for the corresponding period of 1979.

For the 12 months ending on July 31, net income was $97.5 million ($1.98 per share), compared with $78.7 million ($1.65) for the 12 months ending the prior July 31.

Pepco also announced that the board of directors elected Edward F. Mitchell, Pepco's executive vice president-operations, to the board to succeed Ellis T. Cox, who retires as executive vice president and a director of Pepco on Sept. 1.

In another local earnings report, Biospherics Inc. reported that net earnings for the first six months of 1980 fell to $33,637 (2 cents a share), compared with $117,031 (8 cents) for the same period of 1980. Revenues were up 30 percent to $2.9 million from $2.3 million.

Officials of the Rockville-based company said the earnings decline was expected since Biospherics is carrying out plans to invest in new production facilities and to expand its marketing capability. The 13-year-old firm, which is involved in environmental studies and technology development, recently opened a branch office in Lanham to house its environmental instrumentation division.