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Mr. Boris Steffen and Dr. Jonathan Lesser testify in the merger proceedings of Exelon Corporation and Public Service Electric and Gas Company (PSEG)
WASHINGTON, D.C., March 17, 2006—Bates White Partners,
Mr. Boris Steffen and Dr. Jonathan Lesser, testified on January
12–13, 2006 in public hearings held by the New Jersey Board
of Public Utilities (“Board”) regarding Exelon Corporation’s
proposed acquisition of Public Service Electric and Gas Company
(“Petitioners”). Mr. Steffen and Dr. Lesser were
retained by the New Jersey Board of Public Utilities (“NJ
Commission”) to provide analyses and expert testimony regarding
the merger synergies and overall costs and benefits of the proposed
merger. The largest transaction in the utility sector to date,
as announced the merger will create a company having a generation
portfolio of approximately 52 thousand megawatts of domestic
capacity, total assets of approximately $79 billion, annual revenues
of approximately $27 billion, and annual net income of $3.2 billion.
Mr. Steffen’s analysis focused on the verification, quantification,
and classification of merger synergies presented in testimony
presented to the Board by Petitioners. His work included an analysis
of the sources of merger synergies, including that attributable
to direct and indirect cost savings, costs-to-achieve the savings,
and savings allocations between the regulatory and non-regulatory
businesses. Dr. Lesser’s analysis built upon the merger
synergy work conducted by Mr. Steffen and included a cost-benefit
study of the merger. In particular, Dr. Lesser’s study
set up an analytical structure to tally individual categories
of benefits and costs, including the costs associated with incomplete
or imperfect market power mitigation.
In response to testimonies
brought forth at the hearing, the New Jersey Office of Administrative
Law recently extended the
hearings period until April 2006, to allow for a full discussion
of required generating asset divestitures to address market
power and other antitrust concerns. An initial decision by the
judge
has not been set.
Public Service Enterprise Group (PSEG) is
a publicly traded, energy services company headquartered in
New Jersey. Its main
subsidiaries are PSEG Power LLC, Public Service Electric
and Gas Company, and PSEG Energy Holdings LLC.
Exelon Corporation
is a publicly traded electric utility company headquartered
in Chicago, Ill. Its operations include
energy
generation, power marketing, and energy delivery to customers
in Illinois and Pennsylvania.
About Bates White
Bates White is a national economic consulting firm of more than 150 professionals.
Established in 1999, Bates White offers consulting services in economics,
finance,
and business analytics. Bates White has offices in Washington, D.C., and San
Diego, Calif.
www.bateswhite.com
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