Potomac Electric Power Co. is negotiating to sell all its business on the Virginia side of the Potomac to Virginia Power, officials of the two utilities said yesterday.
Pepco, which sells electricity in the District and its Maryland suburbs, serves only a small corner of Virginia that includes the Pentagon and Rosslyn.
Negotiations began more than a year ago when Virginia Power approached Pepco about acquiring its Virginia customers, said officials. Both companies refused to discuss possible terms of the agreement, and neither would predict how soon any decision would be made. Any agreement must be approved by state and federal utility regulators.
Pepco last year sold $28.9 million worth of power to the 3,100 commercial and 600 residential customers in its 10-square-mile territory.
"While this transaction will have no major business consequence for either company, the purchase of the Rosslyn service area makes good sense for us," said Virginia Power Chairman William W. Berry.
By selling off some of its customers, Pepco could reduce demand for power, helping the company's effort to delay construction of new power sources as long as possible, said Pepco spokesman William H. Jones. He called the possible sale an "isolated incident" in the company's policy.
"One of our major strategies has been to defer the building of new installations," Jones said. "Obviously, over a long period of time, it would contribute to deferment." He said that Pepco does not plan to sell its Potomac River Generating Station, a 480-megawatt coal-fired power plant located in Alexandria.
Revenue from the Virginia customers amounted to 2.4 percent of Pepco's sales of $1.2 billion last year. The company reported a profit of $168 million.
Last year, Virginia Power had revenue of $2.6 billion and a net income of $293 million, 95 percent of it from its electric operations. Virginia Power and its subsidiaries serve about 1.5 million customers.