Kansas City Star

Groups Oppose PSEG Merger With Exelon

The Kansas City Star — Monday, March 28, 2005

Associated Press

NEWARK, N.J. — The acquisition of Public Service Enterprise Group – parent company of New Jersey's largest utility – by Chicago-based Exelon would increase rates and diminish competition, two consumer groups claimed Monday.

New Jersey Public Interest Research Group and New Jersey Citizen Action filed motions with state regulators to oppose the deal. They also claimed the acquisition would end state oversight of PSEG.

Newark-based PSEG denied the claims.

No hearings on the $12 billion stock merger have been scheduled with federal and state regulators, but the deal is still expected to be completed by April 2006, said company spokesman Paul Rosengren.

The deal needs approval from the Federal Energy Regulatory Commission, the state Board of Public Utilities and shareholders. If it goes through, Exelon Electric & Gas would have customers in Illinois, New Jersey and Pennsylvania.

"Exelon's buy-out bid offers no evidence that this merger is in the public's interest," said Ev Liebman, New Jersey Citizen Action program director.

Suzanne Leta, New Jersey Public Interest Research Group energy associate, said her organization wants state regulators to hold public hearings on the acquisition.

"Most importantly, we're counting on the BPU (state Board of Public Utilities) to reject this buy-out request if no consumer benefits can be demonstrated," Leta said.

The public utilities board has not yet decided on a schedule for handling the merger, spokesman Eric Hartsfield said.

Exelon distributes electricity to 5.1 million customers in Illinois and Pennsylvania, and gas to 460,000 customers in the Philadelphia suburbs.

Exelon shares rose 51 cents, or 1.1 percent, in Monday trading on the New York Stock Exchange, to close at $45.27 - near the 52-week high of $47.18. PSEG stock closed Monday at $53.53, up 51 cents or nearly 1 percent on the NYSE, and near the 52-week high of $56.23.

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