PECO Cuts Rates To Gain Merger OK
PHILADELPHIA (AP) _ PECO Energy Co. has agreed to cut rates by $200 million over four years, keep almost all of the jobs at its Philadelphia headquarters, and keep up its charitable contributions for the next three years, all in an attempt to gain approval of its planned merger with Chicago-based Unicom Corp.
The agreement was reached Thursday with consumer and environmental groups, city officials and other businesses that had been questioning how the merger would benefit utility customers.
After the $7.8 billion merger was announced last September, consumer groups demanded that it provide benefits to PECO’s 1.5 million electricity customers. Thursday’s agreement was the result of a month of negotiations between PECO and about 20 other parties representing the public.
``We think it’s a very balanced settlement in the end,″ PECO Energy president Ken Lawrence said. Irwin Popowsky, Pennsylvania’s consumer advocate on utility issues, praised the settlement.
``PECO actually put together a packet of proposals that addressed the concerns expressed by a wide range of parties,″ he said.
A $200 million rate cut over four years beginning in 2002 would shave about 2.7 percent from residential customers’ bills in each of the first two years. PECO said consumers should see their bills drop 1.8 percent in 2004 and in 2005.
PECO agreed to retain at least 1,250 jobs at its Philadelphia headquarters through 2003. The building would serve as the offices for the company’s distribution business.
Chicago would be the headquarters for the new company, which would be called Exelon Corp.
PECO would continue to donate to area charities at the same dollar amounts through 2003. The company has been one of the region’s biggest contributors to city charities and civic causes, including a jazz festival and the primate house at the Philadelphia Zoo.
The PECO-Unicom merger would create the largest electricity company in the nation, with 5 million customers and annual revenues of more than $12 billion.
Public hearings on the merger are scheduled next week in various locations in the region. The deal also must be approved by the Nuclear Regulatory Commission, the Federal Energy Regulatory Commission and the Securities and Exchange Commission.