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FERC May Act on Exelon-PSEG Deal at June 30 Meeting

FERC may take action on the pending mega-merger between Exelon Corp. and Public Service Enterprise Group (PSEG) at what will be FERC Chairman Patrick Wood's final open meeting at the Commission on June 30.

FERC has placed the docket for the Exelon-PSEG merger [EC05-43] on the open meeting agenda, which was released late Thursday. As with all items included on open meeting agendas issued by the Commission, the docket could wind up being struck from consideration at the meeting by FERC and taken up at a later point in time.

The Commission has received a wide range of opinions on how it should react to the pending transaction. In filings with FERC, a number of parties said that the agency should set the deal for hearing, while others urged FERC to issue an outright rejection of the merger.

Exelon last month said that if FERC approves the company's pending merger with PSEG without a hearing, the companies will divest additional capacity to address some of the concerns raised by outside parties.

Even with the strong opposition by some parties to a FERC decision on the merger of Exelon and PSEG without a hearing, analyst Christine Tezak of the Stanford Washington Research Group recently predicted there's a 75% chance that is exactly what will happen.

Meanwhile, in other news related to the deal, the New Jersey Board of Public Utilities (NJBPU) on Wednesday approved a broader "positive benefits" standard -- rather than a "no harm" standard -- to be used in evaluating the proposed merger.

With the NJBPU's decision, Exelon and PSEG will be required to show that the proposed acquisition is in the best interest of the public and that Public Service Electric & Gas (PSE&G) customers will benefit from it. PSE&G is New Jersey's largest regulated gas and electric delivery utility and a PSEG unit.

Because of the "magnitude and potential ramifications" of the acquisition of PSEG by Exelon, the NJBPU concluded that a close and careful scrutiny above and beyond the minimum standard is required and therefore a more comprehensive review standard should be used.

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