After two years of public hearings, litigation, testimony and negotiations and more than 11,500 letters, phone calls and emails to state decision makers, New Jersey consumers avoided higher electricity rates when Exelon walked away from its takeover bid to buy-out Public Service Enterprise Group, PSEG, a publicly traded energy and energy services company headquartered in New Jersey.
Critics of the merger said it would have raised rates in New Jersey by as much as $2.3 billion a year, reduced reliability and quality of service, and risked public safety, according to critics of the merger.
A diverse coalition of residential, consumer and industrial utility ratepayers joined to oppose the companies' proposed marriage.
New Jersey Citizen Action, NJPIRG, Public Citizen, the New Jersey Large Energy Users Coalition, the Chemistry Council of New Jersey, the New Jersey Tenants Organization, the Service Employees International Union, New Jersey State Council, the Sierra Club of New Jersey and others worked to educate the public and decision makers about the damage to the state economy if such a monopoly were to be created.
"New Jersey ratepayers struggling with high energy costs have a huge weight lifted off their shoulders today," said Suzanne Leta, energy advocate for New Jersey Public Interest Research Group. "This deal would have created an energy giant large and powerful enough to dictate electric rates with the potential to cost every ratepayer in the state hundreds of dollars more a year."
In December 2004, Exelon filed its proposal to take over PSEG with the federal and state regulators. It was approved by federal agencies, but the states' Board of Public Utilities (BPU) issued a standard of review aimed at protecting consumers. The board required the company to show the merger would provide positive benefits to the state in terms of rates, competition, employees and service.
During the fall and winter of 2005, the agency conducted a series of public hearings and joined the New Jersey Public Advocate, NJPIRG, the New Jersey Large Energy Users Coalition and others in filing testimony before Judge McGill detailing the harms the merger would bring to the state. This spring, Public Advocate Ron Chen urged Judge McGill to reject the proposal.
In May, members of the coalition worked to build support for a state legislative resolution calling on the BPU to reject the deal. Assemblyman Joseph Cryan led the effort, and by the end of June, a bi-partisan majority of the state assembly and 10 state senators had signed on as co-sponsors.
"We in New Jersey should be very proud that unlike any other state regulator or the federal agencies in Washington, who proved to be more interested in protecting corporate interests instead of consumer interests, we took a firm stand against the exercise of market power and anti-competitive prices," said Ev Liebman, program director for New Jersey Citizen Action.
The discussions made clear that gaps separating the parties' positions are insurmountable, Exelon and PSEG said in a statement, and the executives of both companies said they were "disappointed" that agreement could not be reached. Major differences included issues relating to rate concessions and market power mitigation.
The merger is part of a trend towards utility consolidation across the country and within New Jersey. PSEG is the state's only remaining electric and gas utility that has not already been bought out by an out-of-state company.
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