Gloucester County Times

Assembly Majority Opposes Merger Of PSEG And Exelon

Gloucester County Times — Tuesday, June 27, 2006

By Terrence Dopp

TRENTON — More than half of the state Assembly has signed on to co-sponsor a resolution urging the Board of Public Utilities to block the merger of Public Service Enterprise Group with Illinois-based Exelon Corp.

Critics contend that the merger, which recently cleared its final federal hurdle, would create a monopoly with the power to manipulate markets and rates for gas and electricity for all New Jersey customers, regardless of utility provider.

The new company would be the largest utility in the nation.

According to the resolution – a companion of which has 10 sponsors in the Senate – the new corporation would serve 18 percent of the entire population in the mid-Atlantic PJM power grid region and hold $79 billion in assets.

It would have an annual revenue of $27 billion and a net annual profit of $3.2 billion.

"The deal proposed, to me, would mean we would not have competition to keep prices down," said Assemblyman Joseph Cryan, a Union County Democrat who is also chairman of the Democratic State Committee.

"The bottom line is, are we going to have competition or are we not?"

Signing on to the resolution so far are: Assemblywoman Nilsa Cruz-Perez, D-5 of Camden; Assemblyman Paul Moriarty, D-4 of Washington Township; and Assemblyman David Mayer, D-4 of Gloucester Township.

But Fisher, D-Bridgeton, said he wants to make sure he has "all the facts" about the deal before agreeing to sign onto the deal.

"If it looks like it's going to impact jobs, it's going to impact ratepayers or it's going to take away from services, I would be on" the resolution, Fisher said.

Eric Hartsfield, a BPU spokesman, said his office had not seen the resolution. The matter is currently pending before an administrative law judge, who will make the initial ruling, he said.

A decision was expected this week.

"At that point, the board will make its decision," Hartsfield said. "The board can accept it, reject it or modify the decision by the Office of Administrative Law."

In a consent decree last week approving the $16 billion transaction, anti-monopoly regulators with the Department of Justice ordered the company to sell off 5,600 megawatts of generating capacity.

Exelon and the state BPU are currently negotiating a separate agreement.

Critics – which include a coalition of environmentalists and industry groups – contend that the federal Department of Justice was too lenient on the companies and want the state to be more strident in demands.

"It's really important for regulators and policy makers to know that the consumers are fed up with high rates and they are not willing to have their electricity supply and gas supply manipulated by a supermonopoly" said Ev Leibman, program director for New Jersey Citizen Action.

Paul Rosengren, a PSEG spokesman, said the company has agreed to sell off six "peaker plants" and is negotiating a state-level settlement with the BPU.

Those facilities kick on only at times of peak usage and affect market prices more than so-called "baseline plants" such as the Salem Generating Station in Lower Alloways Creek Township which are constantly producing power.

"We encourage legislators to hold off judgment until they see that settlement," Rosengren said. "The (plants) they are making us sell are the ones that set prices. And that should take the market manipulation issue off the table."

During hearings on the merger, one BPU staffer recently testified that the new corporation would have the ability to raise rates as much as $2.3 billion annually, or $540 for the average ratepayer.

Exelon has already assumed operations of the 292-acre Salem complex, which includes the Salem I, Salem II and Hope Creek reactors. It is the second-largest nuclear power facility in the nation.

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