Exelon announced this week that it has abandoned plans to acquire Public Service Enterprise Group (PSEG), a deal worth nearly $17 billion that would have created the nation's largest utility company.
New Jersey regulators recently raised concerns that the combined company would have too much market power, and should provide greater rate relief in New Jersey, where a PSEG subsidiary is the state's largest utility.
Talks between Chicago-based Exelon, Newark-based PSEG and the New Jersey Board of Public Utilities did not produce agreement, said BPU executive director Victor Fortkiewicz. "A conclusion was reached that that gap could not be bridged," he stated after the companies announced the merger was off.
Consumer groups in New Jersey had opposed the deal as it was structured. "We did not believe the companies offered enough direct and real rate relief for New Jersey families and businesses," said New Jersey Public Advocate, Ronald K. Chen. "Perhaps most significantly, the companies also would not agree to measures that our experts, and the Board of Public Utilities staff, believed were necessary to ensure that the merged company could not manipulate regional energy markets and drive up statewide energy costs."
The plan, announced in December 2004, would have created Exelon Electric & Gas and provided electricity or gas to 18 million people in Illinois, New Jersey and Pennsylvania.
"The merger would have provided strategic benefits for PSEG and real benefits for New Jersey," said PSEG chairman and CEO E. James Ferland. "It is unfortunate that our intense effort to reach a comprehensive settlement with the state's Board of Public Utilities was not successful. We simply could not achieve agreement on issues ranging from market power mitigation to electric and gas rate concessions."
Read more in the article Exelon Scraps Plan to Acquire PSEG.
