NorthJersey.com

Critics Of PSEG Sale File Petitions Ahead Of Monday Deadline

NorthJersey.com — Wednesday, November 16, 2005

By KEVIN G. DeMARRAIS
STAFF WRITER

Business and consumer groups filed 17 petitions opposing Public Service Enterprise Group's sale to a Chicago-based utility or calling for changes in the deal by Monday's deadline.

Now it's up to the New Jersey Board of Public Utilities to review the filings, conduct public hearings and set conditions for approval - or to oppose it outright. A decision is not expected until May.

Public Service, which has more than 2 million customers in New Jersey, announced last December that it had agreed to sell itself to Exelon Corp. for $12.8 billion to create the nation's largest utility.

The sale has received approvals from several federal and state agencies, but still faces its biggest hurdle, New Jersey's BPU.

The agency voted unanimously in June that to get approval, the companies would have to show that the sale provides "positive benefits" to the state, not merely that it do no harm.

The next step is for the BPU to conduct a series of five public hearings, starting Monday in Trenton and Hackensack, and ending Nov. 29 in Cherry Hill.

Even with control in the hands of an out-of-state parent, the BPU would retain regulatory oversight in New Jersey of the new company.

In past utility mergers, the agency made local accountability and physical presence criteria for approving the deal.

Public Service says the deal will improve reliability and that customers should notice few changes. But several consumer and business groups have challenged the sale, calling it harmful to consumers and workers.

The most recent opposition came from Philadelphia Gas Works, the nation's largest municipal gas company, with 500,000 residential customers.

In its filing Monday, PGW said the BPU should be "concerned" with the proposed sale's impact because it would give the utility the "ability and incentive to raise prices in gas markets in order to benefit in the electricity market."

The proposed sale "would put millions of people at serious risk for out-of-control electric and gas prices throughout the entire region," said Steven P. Hershey, PGW's vice president of community initiatives.

"Because of the way the entire [regional] energy grid works, the impact of this merger would extend far beyond New Jersey," Hershey said.

"Clearly, PGW customers and PGW itself are at risk as we face the serious danger that competitive markets designed to protect utility customers could be severely damaged."

In October, a coalition of some of the state's largest commercial energy users joined with labor unions and consumer organizations to challenge the deal.

Steven Goldenberg, attorney for the New Jersey Large Energy Users Coalition, expressed concern "about the potential market power of these companies and the ability to raise the cost of electricity to New Jersey consumers who already pay rates that are among the highest in the nation."

The coalition includes some of New Jersey's largest corporations, including Bristol-Myers Squibb Co., Hoffmann-LaYeRoche Inc. and the Pathmark and A&P supermarket chains.

"On each of the four elements - rates, effect on competition, reliability and employees - there is no question that the current petition does not supply those positive benefits," Goldenberg said.

Other opponents include the New Jersey Public Interest Research Group, Utility Workers Union Local 601, New Jersey Citizen Action, the Chemistry Council of New Jersey, the NAACP Voter Fund-New Jersey and the Service Employees International Union.

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WHAT'S NEXT

The public is invited to comment on Public Service Enterprise Group's proposed sale to Exelon Corp. The Board of Public Utilities will conduct five hearings, including one next week in Hackensack.

When: Monday, Nov. 21, 7 p.m.

Where: Room 540, Bergen County Administration Building, One Bergen Plaza

Other hearings: Nov. 21, Trenton, 10 a.m.; Nov. 22, New Brunswick, 7 p.m.; Nov. 28, Newark, 10 a.m.; Nov. 29, Cherry Hill, 7:30 p.m.

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