(Philadelphia, PA – April 15, 2005) –On Monday, April 11, 2005, PGW and the City of Philadelphia filed an Intervention and Protest with the Federal Energy Regulatory Commission (FERC). This followed a “Petition to Intervene,” filed two weeks ago with the Pennsylvania Public Utility Commission (PUC). In both cases, PGW opposed the proposed Merger of Exelon and PSEG unless conditions were imposed to provide protections for all customers. Exelon, which owns PECO Energy, is currently the primary electric utility company for Philadelphia and the four surrounding counties. PECO Energy also supplies gas to the Philadelphia suburbs. PSEG is the parent company of PSE&G, the primary electric and gas utility providers for New Jersey.

Other parties, including the state of Illinois, numerous utilities, and consumer groups have also opposed the proposed merger because of its expected impact on prices and the competitive markets from New Jersey to Illinois.

If approved, the merger of Exelon and PSEG would create the largest combined gas and electric utility in the country, providing service to customers from the Hudson River to Chicago. Experience in California and in Pennsylvania demonstrates that careful attention must be paid to consolidation of market power, particularly with regard to energy supply, because of the potential for harmful impact on residential and all other customers.

Specifically, PGW is concerned about potential impact on electric and natural gas prices. Gas and electric prices that rise above already high rates would have a major impact on the City budget, on low income customers, on PGW and on economic development within the City.

“It’s important to examine the consequences of such a merger. When a company controls the combined market power with respect to pipeline capacity, it could potentially begin to exercise monopoly power of Exelon (PECO) and PSE&G. This could drive costs upward, and should be formally discussed in advance of any decision being made”, said Thomas Knudsen, Chief Executive Officer, PGW.

For these reasons, among others, PGW has decided to intervene in the formal proceedings, at the FERC and the PUC, being conducted to review the proposed merger. PGW has not yet reached a final conclusion with regard to the proposed merger or the imposition of conditions that would make the merger acceptable by protecting customers, except that it is critical that the FERC and PUC proceed carefully and scrutinize the potential impact of the merger.

“We’re not yet at the point where we are saying that this shouldn’t be done,” Knudsen added. “All we’re saying is that it shouldn’t be done before all the potential ramifications are discussed thoroughly and that identified risks are appropriately mitigated.”

Founded in 1836, PGW is the nation’s largest municipally-owned natural gas utility, serving a half million residential, commercial, and industrial customers.