The Star-Ledger

Jersey Groups Object To PSEG Deal

The Star-Ledger — Tuesday, March 29, 2005

Associated Press

The acquisition of Public Service Enterprise Group, parent company of the state's largest utility, by Chicago-based Exelon would increase rates and diminish competition, two consumer groups claimed yesterday.

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 assertions. 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, company spokesman Paul Rosengren said.

"We basically feel that this is a merger that will flow benefits to all stakeholders involved," he said.

If approved by the Federal Energy Regulatory Commission, the state Board of Public Utilities and shareholders, Exelon Electric & Gas would be the nation's largest power generation company, with customers in Illinois, New Jersey and Pennsylvania.

"Exelon's buyout bid offers no evidence that this merger is in the public's interest," Ev Liebman, NJCA program director, said. "Synergies for CEOs do not translate into positive benefits for the millions of ratepayers who could end up footing the bill."

Suzanne Leta, NJPIRG energy associate, said her organization wants state regulators to hold public hearings on the acquisition.

"Most importantly, we're counting on the BPU to reject this buyout request if no consumer benefits can be demonstrated," Leta said.

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

Rosengren said rates could eventually be reduced, since utilities in three states will be able to share information on how to operate efficiently and because Exelon's operation of PSEG's nuclear plants should increase their power production.

He said that after the merger, the BPU will continue to have oversight over a portion of PSEG's business, Public Service Electric & Gas, the state's largest utility, with 2 million electricity and 1.6 million gas customers.

He also said that to avoid unfair market concentration, Exelon has proposed selling some of its power production capacity.

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

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