NJPIRG's Allison Cairo

Ratepayers Win Major Victory, Setting A National Precedent

"New Jersey and other states have approved utility mergers that are not in the best interest of the public. The collapse of Exelon’s deal to take over PSE&G is a beacon for change."

In our last newsletter, I wrote about NJPIRG’s campaign to stop Exelon’s bid to buy out PSE&G, the largest utility merger in the country.

I’m thrilled to report that we won!

It was a hard-fought victory, so I think it is worth telling the story of how and why this victory came about and what it means for the future.

Nearly two years ago, Exelon filed its proposal to take over PSE&G.

We quickly became concerned that this deal would not be good for New Jersey.

We researched the issues and found that the deal would reduce reliability and quality of service, risk public safety and give Exelon the ability to control, manipulate and raise electricity rates.

We intervened in litigation before the New Jersey Board of Public Utilities (NJBPU) and got the agency to hold a series of public hearings and issue a standard of review protecting consumers by requiring the merger to provide positive benefits to the state.

We reached out to our members and e-mail activists and asked them to attend hearings and make comments. In total, more than 11,500 New Jerseyans sent letters and e-mails, and made phone calls to state decision-makers.

We filed expert testimony detailing the multitude of harms the merger would bring to the state, and worked to ensure that newly appointed New Jersey Public Advocate Ron Chen stated his opposition to the takeover.

We developed an unprecedented coalition of residential, commercial and industrial utility ratepayers to oppose the takeover and met with the state’s leading papers to editorialize on our side.

We worked with Asm. Joseph Cryan to sign on a majority of the state Assembly and 10 state senators to co-sponsor a resolution calling on the NJBPU to reject the deal.

We made sure we were in the room during settlement discussions between Exelon and state decision-makers and we wrangled with the NJBPU to ensure they did not give in to Exelon’s pressure to cut a deal that did not benefit New Jersey ratepayers.

On Sept. 14, late in the evening, Exelon announced their decision to walk away.

Our ability to stop Exelon’s takeover of PSE&G set an amazing precedent. Time after time, New Jersey and other states have approved utility mergers that are not in the best interest of the public.

The collapse of this deal is a beacon for change. First and foremost, it will help ensure that New Jersey and other states base their decisions on facts; conduct thorough, independent reviews; reject federal rubberstamps; and require positive public benefits for approval.

It will also shine the spotlight on the problems of utility deregulation, which puts some of our most basic public services—electric and gas services to power and heat our homes—in the hands of private companies.

Finally, it will slow down a fast-growing trend of utility consolidation across the country.

It has already started to happen—on Oct. 25, Florida Power and Light walked away from their bid to buy out Maryland-based Constellation Energy. That deal would have created the second-largest utility in the country.

The nation’s powerful utilities and energy companies are now thinking twice about pursuing mergers that are not in best interest of the public.

Sincerely,

Allison Cairo
Executive Director