PSEG–Exelon Merger Benefits Politicians

CourierPostOnline — Thursday, June 8, 2006


While consumers struggle to pay their energy bills, politicians are raking in campaign contributions from two corporate energy giants hoping to buy approval for a merger, according to a report released Wednesday by New Jersey Citizen Action.

The 27-page report, titled "Political Power Lines: Running at Full Capacity," reveals that Exelon and PSEG spent $23.2 million in the past five years on lobbying activities at state and federal levels, plus an additional $795,000 on election campaigns for New Jersey politicians.

New Jersey Citizen Action, the state's largest watchdog organization representing about 60,000 consumers, opposes the pending merger between Public Service Enterprise Group, New Jersey's largest utility, and Chicago-based Exelon Corp.

An administrative law judge could rule on the merger – which would create the nation's largest utility company – as early as the end of the month. The New Jersey Board of Public Utilities must give final approval. PSEG is hoping for closure before the end of the third quarter.

If approved, the new utility – to be renamed Exelon Electric & Gas – would have combined annual sales of $27 billion from 7 million electric customers and 2 million gas customers in three states. Opponents fear a "super utility monopoly" with unbridled control over energy production, transmission and rates.

Compared to other large companies, PSEG is a "modest contributor," said company spokesman Paul Rosengren, adding that he had not received a copy of the report.

Of the $23.2 million, PSEG spent $9.6 million and Exelon spent $13.6 million. Since plans for the merger were announced two years ago, both companies have increased their campaign contributions substantially in New Jersey, according to the report.

"We're not going to apologize for taking a role in the public arena where we support some very important issues, such as the creation of national environmental standards for power plants, the reduction of dividend taxes on behalf of our shareholders and the need for increased funding for low-income customers. We feel it is vitally important for us to get involved in these public discussions," Rosengren said.

At the same time, Rosengren questioned Citizen Action's methodology.

"They aggregated five years with multiple jurisdictions, and we believe they may have used inflated figures. Then they make this huge leap that we're buying approvals. We have spent 18 months making a very strong case on why this merger is good for New Jersey, so we don't have to buy approvals," said Rosengren.

Speaking for Citizen Action at Wednesday's news conference in Trenton, Ev Liebman said she stands behind the assertion that corporate money is being spent to buy power.

"We're here today to call on our state and federal policy-makers to resist the influence of campaign cash and special interest lobbyists and do what's right for ratepayers," she said.

"The enormous amounts of money these corporations are spending on lobbying and political donations are one good indication of just how lucrative this deal is for Exelon, PSEG, their shareholders and executives. The deal is not good for consumers who right now are struggling just to keep the lights on," she said.

In terms of political contributions, Citizen Action said the New Jersey Democratic State Committee was the biggest recipient of the utility companies' contributions, with $61,750, followed by Sen. Robert Menendez, D-Hoboken, who is a member of the Senate Energy and Natural Resources Committee. He received $56,750.

The organizations conceded that money spent didn't always equate to political payback. For example, a number of Democrats have sponsored an Assembly resolution urging the BPU to reject the Exelon-PSEG deal. Among them is Assemblyman Joseph Cryan, D-Union, who is also chairman of the state Democratic Party.

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