Utilities And Critics Trade Barbs Over Lobbying Activities

Newsday — Wednesday, June 7, 2006

Associated Press Writer

TRENTON LAUREL, N.J. — Groups critical of a pending merger of two major utility companies are worried that the companies are spending millions in lobbying and hundreds of thousands in political donations to influence the regulatory fate of the deal.

But one of the companies, Public Service Enterprise Group, said they have done nothing wrong and pointed out that the groups themselves spend millions lobbying the government.

A report released Wednesday by New Jersey Citizen Action detailed spending by the Chicago-based Exelon Corp. and Newark-based Public Service Enterprise Group, including their subsidiaries, between 2001 and the first quarter of 2006. Exelon is seeking regulatory approval to acquire PSEG.

During that time, the companies spent a total of $23 million to lobby state and federal officials and donated almost $800,000 to New Jersey state 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, executive director of the New Jersey Sierra Club.

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

"We don't need to buy political influence. We went thorough a very long case process," said Rosengren. "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 time period, the national organizations of three New Jersey groups opposed to the merger – the Sierra Club, Citizen Action and New Jersey Public Interest Research Group – had spent about $5 million on lobbying the federal government. He asked why it was OK for those groups to lobby officials, but not acceptable for the utility companies to do the same.

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

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

The deal would create the largest U.S. electric company, to be based in Chicago, with about 9 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 will lead to higher prices because the resulting company will be so big it will control the market. They're calling on the BPU to reject the deal.

Although donations were not given directly to regulators, Liebman said those positions are often filled through political appointments and thus can be influenced.

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

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-N.J., 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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