Activists Decry Utility Merger

CourierPostOnline — Tuesday, August 15, 2006

Courier-Post Staff

Trolling for support from New Jersey's top political leaders, consumer advocates Monday asked U.S. senatorial candidates to oppose the pending merger between Exelon Corp. and Public Service Enterprise Group as it is currently proposed.

"As one of the biggest pocketbook issues facing state residents, the candidates for U.S. Senate cannot remain silent on the issues. They must insist that this buyout be rejected or crafted to ensure consumers are protected from sharply rising utility rates," said Dena Mottola, executive director of New Jersey Public Interest Group, at a press conference in front of the State House.

Calling it a "giant merger," U.S. Sen. Robert Menendez, D-N.J., urged the Board of Public Utilities "to take a very careful look at what the impacts would be on a timetable that makes sense for New Jersey consumers, not the companies."

Menendez was referring to the Aug. 21 deadline set by the companies for BPU approval. Exelon has said it would walk away from the deal if New Jersey does not approve the deal by then.

Menendez is running for his first full term against state Sen. Thomas H. Kean Jr., R-Westfield.

"We have not taken a position," said Kean spokeswoman Renee Trabert. "Our constituents have not asked us to. It's up to the BPU."

If approved, the merger would create the largest utility company in the nation with 7 million electric and 2 million gas customers. The new entity Exelon Electric and Gas would have $28 billion in assets and $11 billion in revenues.

U.S. Sen. Frank Lautenberg, D-N.J., did not return calls, nor did state Sen. Wayne Bryant, D-Lawnside, who is the state Senate's deputy majority leader.

Corzine spokesman Anthony Coley said the "governor is "in touch with all parties," but declined to elaborate.

Only Assembly Speaker Joe Roberts, D-Camden, showed his hand a bit.

He said it is "unlikely" that the transaction will be complete by Aug. 21 and called for more "face-to-face meetings."

Roberts urged the Board of Public Utilities to strike a balance between the companies' demands and allowing the new entity to unfairly dominate the energy market.

"Further divestiture might be necessary," he said. "Putting too much power over the supply of energy into the hands of too few is not a good thing."

Roberts praised Newark-based PSEG for its years of "affordable and dependable service."

"The company has done an excellent job marketing its reputation to bring new companies to the state. While New Jersey has been its singular focus, it has been a great corporate citizen. It's troubling to think of what could happen when New Jersey becomes a smaller part of the (Exelon) mission," said Roberts.

On the other hand, Speaker Roberts said Chicago-based Exelon has a "pretty good track record" in nuclear and alternative energy. Plus, the proposed merger would bring needed capital to the state.

Exelon estimates the merger will bring nearly $1.5 billion in set-asides, taxes and rate reductions to New Jersey in four years. The New Jersey Public Advocate and consumer groups dispute the number, saying a merger could cost ratepayers about $540 more a year.

Calling the merger "incredibly complex," Ingrid Reed, director of the New Jersey Project of the Eagleton Institute at Rutgers University, said this might be "one of those rare times to leave the decision making to the experts."

"While I am generally in favor of maximum transparency in government, it might be prudent here to let the experts who are burdened with this responsibility decide. It might even be detrimental to speak out. The issues were not as complex in the cable television versus Verizon dispute and ultimately the legislators had to vote. This time they don't. This is entirely in the BPU's court," she said.

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