Asbury Park Press

Don't Swallow Exelon Carrot

Asbury Park Press — Thursday, August 3, 2006

With Exelon Corp. and Public Service Enterprise Group getting antsy for a decision by the state Board of Public Utilities on their $16 billion merger request, they decided to sweeten the pot a bit this week.

On Monday, Exelon CEO John W. Rowe said they would freeze customers' electric rates for an unspecified period and reduce a proposed natural gas rate hike "a modest amount"if the merger were approved.

On Tuesday, after skeptics pointed out it would be useful to be more specific about how long the electric rates would be frozen and to define what "modest amount" meant, PSEG said the freeze would stay in effect for four years. There was no elaboration of "modest amount."

Rowe described the initiative as a "big offer ... as far as we can go." Unfortunately, it doesn't go far enough. It doesn't alter the fact that the merger, which would create the nation's largest utility, would give the combined companies market power sure to hurt consumers.

A BPU consultant said the merger could cost New Jersey consumers as much as $2.3 billion a year in increased electric rates — an average $540 increase a year for all New Jersey ratepayers. This week's concessions would be chump change in comparison.

There are other reasons for concern. As we have stated before, we have not been impressed by the way Exelon has managed its Oyster Creek nuclear power plant in Lacey or its lack of responsiveness to the safety concerns posed by the public, environmental groups and the state. That attitude is not likely to change should a merger occur. We also worry about the impact of having PSEG, one of the state's most solid corporate citizens for decades, being taken under the wing of an Illinois-based company with a track record of putting profits ahead of people.

Exelon and PSEG have expressed their displeasure that the BPU has taken so long to make a decision on the merger. We agree it's time for a decision. The BPU, the last regulatory agency that has to sign off on the merger, has more than enough information to render a judgment. It should break off the settlement talks and make it clear it wants no part of a merger.

The BPU commissioners shouldn't be swayed by the sudden turn of generosity by Exelon. Nor should they be impressed by the public relations campaign by merger supporters that fails to address the issues involved. The BPU must base its decision on what's best for this state's utility customers. In our view, it's more competition in the energy industry, not less.

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