PSE&G 2004 Annual Report Download - page 4

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We also entered into a nuclear operating services contract
with Exelon as a key but separate part of our collaboration.
Under the contract, which went into effect on January 17, 2005,
Exelon began providing management services for plant
operations at our Salem and Hope Creek generating stations.
Exelon is a leader in nuclear energy operations. We expect
that the application of Exelon’s proven management model
to the Salem and Hope Creek stations will produce quality
results at these facilities.
Our company is fortunate to have a large base of low-cost nuclear
generating capacity, especially in the current environment of
high natural gas prices. As the Salem and Hope Creek plants
improve toward Exelon’s standard of excellence, with resulting
higher capacity factors, they will make a meaningfully greater
contribution to earnings. This will also help ensure that the
people of New Jersey and neighboring regions will continue to
benefit by the abundant source of safe, clean, low-cost energy
provided by nuclear power.
Just as the nuclear operating services contract will help us
achieve critical operational goals, the merger agreement with
Exelon will advance our broad strategic interests. It will enhance
our ability to deliver on our longstanding commitments to
customers, communities, investors and employees. We will be
combining with a company that shares the same commitments
to the highest standards of corporate responsibility, integrity
and performance.
The merger offers a range of compelling advantages. Exelon
Electric & Gas—the combined company resulting from the
merger—should have a large, balanced portfolio in the nation’s
DEAR SHAREHOLDER /THE MOST MOMENTOUS EVENT
OF 2004 FOR PSEG WAS THE MERGER AGREEMENT WITH
EXELON CORPORATION. THIS STRATEGIC STEP SPECIFICALLY
ADDRESSES KEY CHALLENGES FACING OUR COMPANY, AND
PROVIDES A SOLID BASE ON WHICH TO BUILD THE NATION’S
PREMIER UTILITY AND POWER GENERATION BUSINESS.