Gloucester County Times

Groups, Unions Join To Fight PSEG-Exelon Merger

Gloucester County Times — Monday, June 13, 2005

By Terrence Dopp

TRENTON — A coalition of consumer groups and unions is calling for both state and federal regulators to hold public hearings on the proposed merger of the Public Service Enterprise Group and Exelon.

The Federal Energy Regulatory Commission is scheduled to rule by July on a bid from the company to speed up the $12 billion deal by avoiding public hearings.

In exchange for the expedited OK, the two companies have agreed to fund $25 million in upgrades to the regional electrical grid and make other concessions, according to a joint statement.

Dena Mottola, director of the New Jersey Public Interest Research Group, opposes the merger.

"It would create the largest electricity utility in the nation," she said, with control of about 30 percent of the market.

Groups demanding more public hearings include New Jersey Citizen Action, Public Citizen and several unions that represent workers.

Calling the deal backroom and secretive, the activists plan to launch a media campaign today dubbed "Fight the Power Grab."

Exelon, a giant in the American energy market, has already taken over daily operations at PSEG Nuclear's three reactors in Lower Alloways Creek Township. The Hope Creek reactor is currently shut down after a leakage of radioactive water.

Nationwide, the Chicago-based Exelon has nearly 5.2 million customers and brings in $14 billion in revenue each year, according to company statements.

"We think this will lead to higher prices for consumers, and we think it creates a monopolistic environment," added Mottola, whose group was given "intervener" status by state regulators for this transaction.

Paul Rosengren, a spokesman for PSEG, denied that the merger would create a monopoly. The company's only current New Jersey holding is the Oyster Creek nuclear plant.

He said the company has met all federal filing requirements and has agreed to scale back operations in New Jersey. Federal regulations prohibit one company from gaining "market power" or the ability to affect prices.

Concessions include a company offer to sell off generation plants or to set aside for sale by other distributors an agreed amount of electricity generated at the company's nuclear facilities in New Jersey.

Those points were not in the original filing, the spokesman said.

"We think we've answered all the substantive issues that have been raised," Rosengren said, adding that a hearing would mean the company reverts to its original proposal.

"If they force us to go to a hearing, that's what we'll defend," he said.

Gloria Montealgre, spokeswoman for the New Jersey Board of Public Utilities, said Exelon's bid to circumvent public hearings cannot succeed at the state level.

According to Montealgre, the state board has already scheduled public hearings for October at the Office of Administrative Law.

A ratepayer advocate will represent the public at the hearings, said Montealgre.

PSEG's Salem plant, housing three reactors on 292 acres, is the nation's second-largest nuclear facility. On the site are Salem I, Salem II and Hope Creek, the 1,100-megawatt boiling water reactor that closed following a recent 10-gallon-per-minute leak.

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