Public Service Enterprise Group Inc · 425 · Public Service Enterprise Group Inc · On 2/1/05

Filed On 2/1/05 6:03pm ET   ·   SEC File 1-09120   ·   Accession Number 950117-5-414

Business-Combination Transaction Communication   ·   Rule 425
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 425         Public Service Enterprise Group, Inc.                  4     24K 

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                           Filed by Public Service Enterprise Group Incorporated
                           Pursuant to Rule 425 under the Securities Act of 1933
                                  and Deemed Filed Pursuant to Rule 14a-12 under
                                             the Securities Exchange Act of 1934

                                                                Subject Company:
                                    Public Service Enterprise Group Incorporated
                                                 (Commission File No. 001-09120)

[PSEG LOGO] 

Merger Q&A                                                                      
A series of Q&As concerning the proposed merger                                 

February 1, 2005                                                                

PLEASE PRINT AND POST FOR EMPLOYEES WITHOUT ACCESS TO E-MAIL

Corporate communications and human resources continue to work together to gather
employees' questions concerning the planned merger between PSEG and Exelon. We  
will attempt to respond in a timely fashion. We recognize that information helps
ease uncertainties about change. However, please realize that some questions may
not have answers until later in the transition period.                          

Meanwhile, if you have a question, you can submit it by e-mail to               
mergerquestions@pseg.com.                                                       

Q. Why does Exelon's website position the merger as an "acquisition," and what  
are the differences between the two?                                            

A. Exelon refers to this deal as an "acquisition" for financial accounting      
purposes. However, this transaction truly is a collaborative undertaking between
Exelon and PSEG, reflecting qualities typical of a merger. When you examine this
deal, it has elements typical of a merger of equals and other elements usual for
an acquisition; Exelon is buying PSEG. For example, an exchange ratio, which    
reflects a premium, is typical of an acquisition. The exchange ratio in the     
current merger reflects a reasonable premium that allows the respective         
shareholders of each company to share in the synergies made possible by the     
combination of the two companies. When the merger becomes effective, former     
shareholders of PSEG will represent about 32 percent of the shareholders of the 
merged company, and former directors of PSEG will hold one third of the seats on
the merged company's board of directors.                                        

Q. What are the key milestones for next steps for the merger? When will the     
transition team be named?                                                       

A. The next steps in this merger include regulatory filings with the BPU and the
FERC. PSEG hopes to have completed both sets of filings within the next several 
weeks. More information will be made available as filings are completed. Another
milestone will be the naming of the rest of the transition team. It is expected 
that the team members will be announced within the next several weeks, as well. 

Q. Do you really expect that this transaction will take 12 months? How long did 
it take from the time they acquired PECO before employees were impacted?        

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A. It was initially announced that the transaction would take 12-15 months to   
complete. While the regulatory process is somewhat unpredictable, both companies
are working together to set up timelines and processes to ensure that we can    
meet this target. If past history serves as a guide, in September 1999,         
Commonwealth Edison's parent company, Unicom, announced its intent to merge with
PECO to form Exelon Corp. This merger was completed in October 2000 - 13 months 
later.                                                                          

Q. As an employee of PSEG and a stockholder, will there be a vote for the       
shareholders as far as the sale of PSEG?                                        

A. Remember, owning stock in a company represents an ownership interest in that 
company. So the answer is "Yes," the merger is contingent on the approval of the
respective stockholders of each of PSEG and Exelon, who will be required to vote
prior to its closure.                                                           

Q. What is the outlook for PSEG Energy Holdings after the merger? Will the      
company be managed as a standalone subsidiary or folded into Exelon's existing  
structure?                                                                      

Energy Holdings is continuing to implement its strategy, approved by the PSEG   
board in the summer of 2003, of reducing the company's international exposure.  
There currently is no timeline associated with this effort. In 2004, Energy     
Holdings earned $125 million and produced just under $1 billion in cash, of     
which $350 million was used to retire debt and $475 million was returned to     
Enterprise. The portfolio is earnings and cash positive, so we have the luxury  
of selling assets when the timing is right to maximize the value of our         
portfolio. It is too early to say how, or where in the company structure, the   
investments would be managed post-merger.                                       

Q. For FERC approval, is it true that the company will have to sell off         
thousands of megawatts of fossil assets? If so, are all of the gen stations in  
both companies up for potential sale or just those in the northeast? PJM only?  
Illinois? Any of the above? When will the proposal to FERC be made public? In   
the event that the need arises to sell off any of the company's fossil units due
to regulatory compliance issues, what is the protocol for the employees of those
locations? Do the employees accompany the asset with the sale or are they       
retained by the company for reassignment? Is there is a planned sale date?      

A. Exelon Chairman and CEO John Rowe indicated - both when the merger was       
announced and in subsequent comments - that there may be a need to respond to   
market power concerns by selling some fossil assets and/or auctioning a certain 
amount of output from nuclear assets (nuclear output, not the plants            
themselves). It is our understanding that the merger approval filing with the   
FERC, which should occur around the end of January, will contain a market power 
mitigation plan.                                                                

We are not sure at this time if the mitigation plan will actually identify      
specific plants that, once the merger is completed, Exelon plans to sell or,    
rather, simply identify the market (e.g., PJM), and the number of megawatts to  
be either divested or auctioned. When the FERC filing is made, it will become   
public information and we will make it available to employees at that time.     

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The divestiture process does not have to be completed prior to the merger       
closing. The new, combined generation company will be the entity that divests   
the MWs necessary to satisfy the FERC's market power concerns.                  

Regarding the future of employees at those plants effected, that decision would 
be made by whichever entities acquire the assets. As a point of reference, when 
PSEG Power acquired the Albany plant and its units in Connecticut, most workers 
at those facilities were offered employment with PSEG.                          

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of   
1995                                                                            

This filing contains forward-looking statements within the meaning of the       
Private Securities Litigation Reform Act of 1995. Such statements include, but  
are not limited to, statements about the benefits of the business combination   
transaction involving Public Service Enterprise Group Incorporated and Exelon   
Corporation, including future financial and operating results, the combined     
company's plans, objectives, expectations and intentions and other statements   
that are not historical or current facts. Such statements are based upon the    
current beliefs and expectations of Public Service Enterprise Group             
Incorporated's and Exelon Corporation's management, are subject to significant  
risks and uncertainties and may differ materially from actual future experience 
involving any one or more of such matters. Actual results may differ from those 
set forth in the forward-looking statements. The following factors, among       
others, could cause actual results to differ from those set forth in the        
forward-looking statements: the timing of the contemplated merger and the impact
of any conditions imposed by regulators in connection with their approval       
thereof; the failure of Public Service Enterprise Group Incorporated and Exelon 
Corporation stockholders to make the requisite approvals for the transaction;   
the risk that the businesses will not be integrated successfully; failure to    
quickly realize cost-savings from the transaction as a result of technical,     
logistical, competitive and other factors; the effects of weather; the          
performance of generating units and transmission systems; the availability and  
prices for oil, gas, coal, nuclear fuel, capacity and electricity; changes in   
the markets for electricity and other energy-related commodities; changes in the
number of participants and the risk profile of such participants in the energy  
marketing and trading business; the effectiveness of our risk management and    
internal controls systems; the effects of regulatory decisions and changes in   
law; changes in competition in the markets we serve; the ability to recover     
regulatory assets and other potential stranded costs; the outcomes of litigation
and regulatory proceedings or inquiries; the timing and success of efforts to   
develop domestic and international power projects; conditions of the capital    
markets and equity markets; advances in technology; changes in accounting       
standards; changes in interest rates and in financial and foreign currency      
markets generally; the economic and political climate and growth in the areas in
which we conduct our activities; and changes in corporate strategies. While we  
believe that our forecasts and assumptions are reasonable, we caution that      
actual results may differ materially. We intend the forward-looking statements  
to speak only as of the time first made and we do not undertake to update or    
revise them as more information becomes available. Additional factors that could
cause Public Service Enterprise Group Incorporated's and Exelon Corporation's   
results to differ materially from those described in the forward-looking        
statements can be found in the 2003 Annual Reports on Form 10-K, and Quarterly  
Reports on Form 10-Q for the quarterly period ended September 30, 2004, and     
Current Reports on Form 8-K on December 21 and December 20, 2004, of Public     
Service Enterprise Group Incorporated and Exelon Corporation, as such reports   
may have been amended, each filed with the Securities and Exchange Commission   
and available at the Securities and Exchange Commission's website, www.sec.gov. 

This communication is not a solicitation of a proxy from any security holder of 
Public Service Enterprise Group Incorporated or Exelon Corporation. Exelon      
Corporation intends to file with the Securities and Exchange Commission a       
registration statement that will include a joint proxy statement/prospectus and 
other relevant documents to be mailed by Public Service Enterprise Group        
Incorporated and Exelon Corporation to their respective security holders in     
connection with the proposed merger of Public Service Enterprise Group          
Incorporated and Exelon Corporation. WE URGE INVESTORS AND SECURITY HOLDERS TO  
READ THE JOINT                                                                  

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PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS WHEN THEY BECOME    
AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT PUBLIC SERVICE 
ENTERPRISE GROUP INCORPORATED, EXELON CORPORATION AND THE PROPOSED MERGER.      
Investors and security holders will be able to obtain these materials (when they
are available) and other documents filed with the Securities and Exchange       
Commission free of charge at the Securities and Exchange Commission's website,  
www.sec.gov. In addition, a copy of the joint proxy statement/prospectus (when  
it becomes available) may be obtained free of charge from Public Service        
Enterprise Group Incorporated, Investor Relations, 80 Park Plaza, P.O. Box 1171,
Newark, New Jersey 07101-1171, or from Exelon Corporation, Investor Relations,  
10 South Dearborn Street, P.O. Box 805398, Chicago, Illinois 60680-5398.        

Participants in Solicitation                                                    
Public Service Enterprise Group Incorporated, Exelon Corporation, their         
respective directors and executive officers and other persons may be deemed to  
be participants in the solicitation of proxies in respect of the proposed       
transaction. Information regarding Public Service Enterprise Group              
Incorporated's directors and executive officers is available in its proxy       
statement filed with the Securities and Exchange Commission by Public Service   
Enterprise Group Incorporated on March 10, 2004, and information regarding      
Exelon Corporation's directors and executive officers is available in its proxy 
statement filed with the Securities and Exchange Commission by Exelon           
Corporation on March 12, 2004. OTHER INFORMATION REGARDING THE PARTICIPANTS IN  
THE PROXY SOLICITATION AND A DESCRIPTION OF THEIR DIRECT AND INDIRECT INTERESTS,
BY SECURITY HOLDINGS OR OTHERWISE, WILL BE CONTAINED IN THE JOINT PROXY         
STATEMENT/PROSPECTUS AND OTHER RELEVANT MATERIALS TO BE FILED WITH THE          
SECURITIES AND EXCHANGE COMMISSION WHEN THEY BECOME AVAILABLE.                  

Dates Referenced Herein   and   Documents Incorporated By Reference

				Referenced-On Page
This 425 Filing		Date		First		Last			Other Filings
		3/10/04		4					DEF 14A
		3/12/04		4					4
		9/30/04		3					10-Q, 4
		12/20/04		3					425, 8-K
Filed On		2/1/05		1
Filed As Of		2/2/05
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