UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended March 31, 2005

Commission File Number

Name of Registrant, State of Incorporation,
Address of Principal Executive Offices,
and Telephone Number

I.R.S. Employer
Identification
Number

001-31403

PEPCO HOLDINGS, INC.
  (Pepco Holdings or PHI), a Delaware corporation
701 Ninth Street, N.W.
Washington, D.C. 20068
Telephone: (202)872-2000

52-2297449

001-01072

POTOMAC ELECTRIC POWER COMPANY
  (Pepco), a District of Columbia and
    Virginia corporation
701 Ninth Street, N.W.
Washington, D.C. 20068
Telephone: (202)872-2000

53-0127880

001-01405

DELMARVA POWER & LIGHT COMPANY
  (DPL), a Delaware and Virginia corporation
800 King Street, P.O. Box 231
Wilmington, Delaware 19899
Telephone: (202)872-2000

51-0084283

001-03559

ATLANTIC CITY ELECTRIC COMPANY
  (ACE), a New Jersey corporation
800 King Street, P.O. Box 231
Wilmington, Delaware 19899
Telephone: (202)872-2000

21-0398280

Continued
________________________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Registrant

Title of Each Class

Name of Each Exchange on Which Registered  

Pepco Holdings

Common Stock, $.01 par value

   New York Stock
   Exchange

Securities registered pursuant to Section 12(g) of the Act:

Pepco

Serial Preferred Stock, $50 par value

     Indicate by check mark whether each of the registrants (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes X . No    .

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).

Pepco Holdings

Yes    X       No       

Pepco

Yes              No    X  

DPL

Yes              No    X  

ACE

Yes              No    X  

     DPL and ACE meet the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and are therefore filing this Form 10-Q with reduced disclosure format specified in General Instruction H(2) of Form 10-Q.

          Registrant

Number of Shares of Common Stock of the Registrant Outstanding at March 31, 2005

          Pepco Holdings

188,786,679 ($.01 par value)

          Pepco

100 ($.01 par value) (a)

          DPL

1,000 ($2.25 par value) (b)

          ACE

8,546,017 ($3 par value) (b)

(a)

All voting and non-voting common equity is owned by Pepco Holdings.

(b)

All voting and non-voting common equity is owned by Conectiv, a wholly owned subsidiary of Pepco Holdings.

     THIS COMBINED FORM 10-Q IS SEPARATELY FILED BY PEPCO HOLDINGS, PEPCO, DPL, AND ACE. INFORMATION CONTAINED HEREIN RELATING TO ANY INDIVIDUAL REGISTRANT IS FILED BY SUCH REGISTRANT ON ITS OWN BEHALF. EACH REGISTRANT MAKES NO REPRESENTATION AS TO INFORMATION RELATING TO THE OTHER REGISTRANTS.

________________________________________________________________________________

TABLE OF CONTENTS

Page

Glossary of Terms

i

PART I

FINANCIAL INFORMATION

  Item 1.

-

Financial Statements

1

  Item 2.

-

Management's Discussion and Analysis of
   Financial Condition and Results of Operations

91

  Item 3.

-

Quantitative and Qualitative Disclosures
   About Market Risk

155

  Item 4.

-

Controls and Procedures

158

PART II

OTHER INFORMATION

  Item 1.

-

Legal Proceedings

160

  Item 2.

-

Unregistered Sales of Equity Securities and Use of Proceeds

161

  Item 3.

-

Defaults Upon Senior Securities

161

  Item 4.

-

Submission of Matters to a Vote of Security Holders

162

  Item 5.

-

Other Information

162

  Item 6.

-

Exhibits

166

  Signatures

184

________________________________________________________________________________________

TABLE OF CONTENTS - EXHIBITS

Exh. No.

Registrant(s)

Description of Exhibit

Page

12.1

PHI

Statements Re: Computation of Ratios

168

12.2

Pepco

Statements Re: Computation of Ratios

169

12.3

DPL

Statements Re: Computation of Ratios

170

12.4

ACE

Statements Re: Computation of Ratios

171

31.1

PHI

Rule 13a-14(a)/15d-14(a) Certificate of Chief Executive Officer

172

31.2

PHI

Rule 13a-14(a)/15d-14(a) Certificate of Chief Financial Officer

173

31.3

Pepco

Rule 13a-14(a)/15d-14(a) Certificate of Chief Executive Officer

174

31.4

Pepco

Rule 13a-14(a)/15d-14(a) Certificate of Chief Financial Officer

175

31.5

DPL

Rule 13a-14(a)/15d-14(a) Certificate of Chief Executive Officer

176

31.6

DPL

Rule 13a-14(a)/15d-14(a) Certificate of Chief Financial Officer

177

31.7

ACE

Rule 13a-14(a)/15d-14(a) Certificate of Chief Executive Officer

178

31.8

ACE

Rule 13a-14(a)/15d-14(a) Certificate of Chief Financial Officer

179

32.1

PHI

Certificate of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350

180

32.2

Pepco

Certificate of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350

181

32.3

DPL

Certificate of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350

182

32.4

ACE

Certificate of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350

183

________________________________________________________________________________________

           GLOSSARY OF TERMS

Term

Definition

ABO

Accumulated benefit obligation

ACE

Atlantic City Electric Company

ACE Funding

Atlantic City Electric Transition Funding LLC

AOCI

Accumulated Other Comprehensive Income

APB

Accounting Principles Board Opinion

APB No. 25

Accounting Principles Board Opinion "Accounting for Stock Issued to Employees"

APBO

Accumulated Post-Retirement Benefit Obligation

Asset Purchase and
  Sale Agreement

Asset Purchase and Sale Agreement, dated as of June 7, 2000 and subsequently amended, between Pepco and Mirant (formerly Southern Energy, Inc.) relating to the sale of Pepco's generation assets

Bankruptcy Court

Bankruptcy Court for the Northern District of Texas

BGS

Basic Generation Service (the supply of electricity by ACE to retail customers in New Jersey who have not elected to purchase electricity from a competitive supplier)

BTP

Bondable Transition Property

Competitive Energy
  Business

Consists of the business operations of Conectiv Energy and Pepco Energy Services

Conectiv

A wholly owned subsidiary of PHI which is a PUHCA holding company and the parent of DPL and ACE

Conectiv Energy

Conectiv Energy Holding Company and its subsidiaries

DCPSC

District of Columbia Public Service Commission

Debentures

Junior Subordinated Debentures

Default Service

The supply of electricity by DPL to retail customers in Virginia who have not elected to purchase electricity from a competitive supplier

Default Electricity Supply

The supply of electricity within PHI's service territories at regulated rates to retail customers who do not elect to purchase electricity from a competitive supplier, and which, depending on the jurisdiction, is also known as Default Service, SOS, BGS, or POLR service

Default Supply Revenue

The generic term for revenue received from Default Electricity Supply

Delivery revenue

Revenue received for delivering energy to customers

District Court

U.S. District Court for the Northern District of Texas

DMEC

Delaware Municipal Electric Corporation

DPL

Delmarva Power & Light Company

DPSC

Delaware Public Service Commission

EITF

Emerging Issues Task Force

EPA

Environmental Protection Agency

ERISA

Employment Retirement Income Security Act of 1974

ESS

Electricity Supply Service

Exchange Act

Securities Exchange Act of 1934, as amended

FASB

Financial Accounting Standards Board

FERC

Federal Energy Regulatory Commission

FIN 45

FASB Interpretation No. 45, entitled "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others"

i
________________________________________________________________________________________

Term

Definition

FIN 46

FASB Interpretation No. 46, entitled "Consolidation of Variable Interest Entities"

FIN 46R

FASB Interpretation No. 46 (revised December 2003), entitled "Consolidation of Variable Interest Entities"

FIN 47

FASB Interpretation No. 47 entitled "Accounting for Conditional Asset Retirement Obligations"

FirstEnergy

FirstEnergy Corp., formerly Ohio Edison

FirstEnergy PPA

PPAs between Pepco and FirstEnergy Corp. and Allegheny Energy, Inc.

GAAP

Generally Accepted Accounting Principles in the United States of America

GPC

Generation Procurement Credit

Internal Control over
  Financial Reporting

A process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

LTIP

Long-Term Incentive Plan

Mirant

Mirant Corporation and certain of its subsidiaries

Mirant Pre-Petition
  Obligations

Unpaid obligations of Mirant to Pepco existing at the time of filing of Mirant's bankruptcy petition consisting primarily of payments due Pepco in respect of the PPA-Related Obligations

MPSC

Maryland Public Service Commission

MTC

Market transition charge

NJBPU

New Jersey Board of Public Utilities

NJDEP

New Jersey Department of Environmental Protection

NUG

Non-utility generator

OCI

Other Comprehensive Income

OPC

Office of the People's Counsel

Other energy
  commodity activities

The competitive energy segments' commodity risk management and other energy market activities

Panda

Panda-Brandywine, L.P.

Panda PPA

PPA between Pepco and Panda

PCI

Potomac Capital Investment Corporation and its subsidiaries

Pepco

Potomac Electric Power Company

Pepco Energy Services

Pepco Energy Services, Inc. and its subsidiaries

Pepco Holdings or PHI

Pepco Holdings, Inc.

Pepco TPA Claim

Pepco's $105 million allowed, pre-petition general unsecured claim against Mirant

ii
________________________________________________________________________________________

Term

Definition

Pepcom

Pepco Communications, Inc.

PJM

PJM Interconnection, LLC

POLR

Provider of Last Resort service (the supply of electricity by DPL before May 1, 2006 to retail customers in Delaware who have not elected to purchase electricity from a competitive supplier)

Power Delivery

PHI's Power Delivery Businesses

PPA

Power Purchase Agreement

PPA-Related
  Obligations

Mirant's obligations to purchase from Pepco the capacity and energy that Pepco is obligated to purchase under the FirstEnergy PPA and the Panda PPA

PUHCA

Public Utility Holding Company Act of 1935

RARC

Regulatory Asset Recovery Charge

Regulated electric
  revenues

Revenues for delivery (transmission and distribution) service and electricity supply service

SEC

Securities and Exchange Commission

Settlement Agreement

Amended Settlement Agreement and Release, dated as of October 24, 2003 between Pepco and the Mirant Parties

SFAS

Statement of Financial Accounting Standards

SFAS No. 13

Statement of Financial Accounting Standards No. 13, entitled "Accounting for Leases"

SFAS No. 123

Statement of Financial Accounting Standards No. 123, entitled "Accounting for Stock-Based Compensation"

SFAS No. 123R

Statement of Financial Accounting Standards No. 123R, entitled "Share-Based Payment"

SFAS No. 131

Statement of Financial Accounting Standards No. 131, entitled "Disclosures About Segments of an Enterprise and Related Information"

SFAS No. 133

Statement of Financial Accounting Standards No. 133, entitled "Accounting for Derivative Instruments and Hedging Activities"

SFAS No. 143

Statement of Financial Accounting Standards No. 143, entitled "Accounting for Asset Retirement Obligations"

SFAS No. 148

Statement of Financial Accounting Standards No. 148, entitled "Accounting For Stock-Based Compensation - Transition and Disclosure"

SFAS No. 150

Statement of Financial Accounting Standards No. 150, entitled "Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity"

SMECO

Southern Maryland Electric Cooperative, Inc.

SMECO Agreement

Capacity purchase agreement between Pepco and SMECO

SOS

Standard Offer Service (the supply of electricity by Pepco in the District of Columbia, by Pepco and DPL in Maryland and by DPL in Delaware on and after May 1, 2006, to retail customers who have not elected to purchase electricity from a competitive supplier)

Standard Offer Service
  revenue or SOS revenue

Revenue Pepco receives for the procurement of energy by Pepco for its SOS customers

Starpower

Starpower Communications, LLC

iii
________________________________________________________________________________________

Term

Definition

Stranded costs

Costs incurred by a utility in connection with providing service which would otherwise be unrecoverable in a competitive or restructured market. Such costs may include costs for generation assets, purchased power costs, and regulatory assets and liabilities, such as accumulated deferred income taxes.

TBC

Transition bond charge

T&D

Transmission and distribution

TPAs

Transition Power Agreements for Maryland and the District of Columbia between Pepco and Mirant

Transition Bonds

Transition bonds issued by ACE Funding

Treasury lock

A hedging transaction that allows a company to "lock-in" a specific interest rate corresponding to the rate of a designated Treasury bond for a determined period of time

VaR

Value at Risk

VSCC

Virginia State Corporation Commission

iv
________________________________________________________________________________________

________________________________________________________________________________________

PART I    FINANCIAL INFORMATION

Item 1.   FINANCIAL STATEMENTS

          Listed below is a table that sets forth, for each registrant, the page number where the information is contained herein.

                               Registrants                           

Item

Pepco
Holdings

Pepco

DPL

ACE

Consolidated Statements of Earnings

3

41

62

75

Consolidated Statements of Comprehensive Earnings

4

N/A

N/A

N/A

Consolidated Balance Sheets

5

42

63

76

Consolidated Statements of Cash Flows

7

44

65

78

Notes to Consolidated Financial Statements

8

45

66

79

1
________________________________________________________________________________________

THIS PAGE INTENTIONALLY LEFT BLANK.

2
________________________________________________________________________________________

3
________________________________________________________________________________________

4
________________________________________________________________________________________