Philadelphia Inquirer

Citizens' Groups, 2 Utilities Clash Over Merger Plan

Watchdogs said PSEG and Exelon, awaiting approval, had lobbied heavily. So did the critics, one firm said

The Philadelphia Inquirer — Thursday, June 8, 2006

TRENTON (Associated Press) — Groups critical of the Exelon Corp.'s pending acquisition of the Newark-based Public Service Enterprise Group are worried that the two utilities are spending millions on lobbying and hundreds of thousands on political donations to influence the deal's regulatory fate.

But PSEG said that it had done nothing wrong and that opponents, too, had spent millions lobbying the government.

A report released yesterday by New Jersey Citizen Action detailed spending by Chicago-based Exelon and PSEG, including their subsidiaries, between 2001 and the first quarter of 2006. During that time, the companies spent $23 million to lobby state and federal officials and donated almost $800,000 to New Jersey and federal politicians and political parties, said Ev Liebman of Citizen Action.

"There's a saying that money is power, and their money is going to determine where we get our power from," said Jeff Tittel, director of the New Jersey Sierra Club.

A spokesman for PSEG, Paul Rosengren, said any speculation that the companies were trying to buy legislators was "absolutely wrong."

"We don't need to buy political influence. We went through a very long case process," he said. "We think we put on an extremely strong case, and the people who put on this argument today did not."

Rosengren added that during the same period, three groups opposed to the merger spent about $5 million on lobbying the federal government. He asked why it was all right for such groups to lobby officials but not for the utilities to do the same.

Tittel called the comparison "ludicrous," saying that figure represented money the organizations spent on a wide range of issues, not just energy regulation. And the citizens' groups are still outspent, he added.

The $16 billion deal to create Exelon Electric & Gas has been approved by regulators in Pennsylvania and the Federal Energy Regulatory Commission but needs approval from the New Jersey Board of Public Utilities. A decision is expected in the summer.

The deal would create the largest U.S. electric company, to be based in Chicago, with about nine million electricity and natural-gas customers in Illinois, New Jersey and Pennsylvania. PSEG is the parent company of Public Service Electric & Gas of New Jersey, the state's largest electric utility.

The companies say the deal would mean lower prices because the new entity would be more efficient and because Exelon would be better at operating PSEG's nuclear power plants.

But critics say it would lead to higher prices because the company would control the market. They are calling on the New Jersey Board of Public Utilities to reject the deal.

Although donations did not go directly to regulators, Liebman said, regulators often are politically appointed and thus can be influenced.

The data in the report were gathered from the New Jersey Election Law Enforcement Committee, the Federal Election Commission, and the Center for Responsive Politics, a nonprofit group in Washington that monitors how and where money is spent in politics, Liebman said.

Citizen Action said the New Jersey Democratic State Committee was the biggest recipient of the utility companies' contributions, with $61,750, followed by U.S. Sen. Robert Menendez (D., N.J.), a member of the Senate Energy and Natural Resources Committee, who received $56,750.

The organizations conceded that money spent did not always equate to political payback. For example, a number of Democrats have sponsored an Assembly resolution urging the Board of Public Utilities to reject the Exelon-PSEG deal. Among them is Assemblyman Joseph Cryan (D., Union), who is chairman of the state Democratic Party.

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