Setting its sights on improving natural gas and electric service reliability, field productivity and system performance, as well as investments to improve energy efficiency at several company facilities, Exelon Corp.’s Pennsylvania natural gas and electric utility, PECO, said it will fund its operations with roughly $400 million this year for infrastructure improvements and new facilities.

Overall, the capital investment program consists mainly of transmission and distribution system performance work, capacity upgrades, corrective maintenance programs, relocation of utility facilities for public roadway or other projects, and new facilities to accommodate new residential, business or institutional construction, the utility said. PECO serves 1.6 million electric and 490,000 natural gas customers in southeastern Pennsylvania. The utility delivered 83.7 Bcf of natural gas and 39.4 billion kWh of electricity in 2008.

PECO said many of its larger projects are planned and constructed over multiple years. About $142 million is allocated for the projects to modernize or replace older facilities and expand electric and gas capacity in certain communities due to increased energy consumption and local growth.

The utility noted that the total capital investment plan is about the same as last year, and spending still can be adjusted based on economic conditions, particularly impacts on new business activity and projected capacity expansion requirements and from stimulus programs.

“Whether it is a down economy or a growing one, PECO must fulfill its obligation to our customers and this region with investments in infrastructure improvements, new technology and projects to ensure safe, reliable service. Our work this year will provide benefits for the area this year and for years to come,” said Craig Adams, PECO senior vice president and COO. “To be prudent, we still are pursuing cost-saving opportunities across our operations to reflect our current economic realities.”

The largest project getting under way with construction this year is a new electric transmission substation in Worcester, PA, to improve regional grid reliability during peak summer demand periods. The $45 million project recently received Pennsylvania Public Utility Commission approval after an extensive two-year process for project planning, community outreach and siting.

Also in the suburbs, PECO will expand its distribution automation efforts, complete upgrades on circuits to improve electric reliability in targeted areas, and expand local substations in Warminster, Gladwyne, Goshen and other locations in southern Chester County and York County. PECO also is building or modernizing three substations in Philadelphia — one serving University City and West Philadelphia, another in the Grays Ferry section, and a facility on Schuylkill Avenue in South Philadelphia.

At its headquarters PECO is focusing on a major modernization project with the planned replacement of its transmission operations control center over the next two years. Additionally, PECO is upgrading lighting and heating, ventilation and air conditioning systems at its headquarters and several suburban sites to improve energy efficiency and reduce waste.

On the natural gas side PECO will be working throughout the year on nearly 100 projects to boost distribution pressure and/or replace underground mains and services with newer facilities that are easier to maintain, uphold strong reliability and improve customer satisfaction. The projects are located in all four suburban counties surrounding Philadelphia.

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