(Philadelphia, PA – January 26, 2006) – The Philadelphia Gas Works (PGW) and the City of Philadelphia are urging the United States Court of Appeals in Washington, D.C., to reverse the decision of the Federal Energy Regulatory Commission (FERC) to approve the merger of Exelon Corporation and PSEG without a hearing.

PSEG (Public Service Enterprise Group) based in Newark, N.J., has 2.1 million electric customers and 1.7 million natural gas customers. Exelon, which owns PECO Energy in Philadelphia, is based in Chicago and has some 5.2 million electric and 460,000 natural gas customers. With a merger, the Exelon-PSEG service territory would stretch from the banks of the Hudson River in northern New Jersey to the shores of Lake Michigan in Chicago and would be the largest combined gas and electric utility in the country.

PGW and the City filed the appeal because of concerns that the merger could result in higher gas and electric rates, which would have a major impact on low-income customers and economic development in Philadelphia. As a PECO customer, PGW spends an average of $2 million a year for electricity.

FERC on December 21 denied a formal request for reconsideration of its earlier approval. That request had been filed by PGW, the City, and by numerous other utilities and consumer groups, as well as the State of Illinois and the New Jersey Board of Public Utilities.

PGW had filed expert testimony stating that if the merger were approved the new Exelon would have the ability and the incentive to manipulate gas and electric prices in the broad region covering New Jersey, eastern Pennsylvania, Delaware and Maryland. Other parties supported that testimony, but it was not considered by the FERC which refused to even hold hearings on the issues. PPL Electric Utilities, based in Allentown, Pa., also filed an appeal.

In addition to FERC, the proposed merger must be approved by the Pennsylvania Public Utility Commission, the U.S. Justice Department, the New Jersey Board of Public Utilities, and the Securities Exchange Commission.

Founded in 1836, PGW is the nation's largest municipally owned natural gas utility, serving more than 500,000 residential, commercial, and industrial customers.