Good morning. I’d like to thank the Board for giving the Ratepayer Advocate the opportunity to comment on this matter here today. I will be making brief, preliminary comments on the status of the Ratepayer Advocate’s review of Atlantic Electric’s proposed sale of its ownership interest in three nuclear generating plants. Specifically, Atlantic has entered into agreements to sell its minority ownership interests in the Peach Bottom, Salem, and Hope Creek nuclear facilities to two of the co-owners of these plants -- PSE&G and PECO Energy.

At the outset, while we are pleased to be able to appear and comment today, we note our objection to the fact that the Board has apparently determined to not conduct any evidentiary hearings in this case, particularly since none of the issues pertaining to the sale of Atlantic’s nuclear plant ownership interests were addressed in the evidentiary hearings in the Atlantic stranded costs and rate unbundling cases. In fact, Atlantic did not announce any intent to divest either its nuclear or fossil fuel plants until after the evidentiary record was closed in those cases.

Nonetheless, there has been more than ample time since Atlantic’s divestiture announcement for the Board to conduct evidentiary hearings in this matter. Instead, the Board has chosen to pursue today’s "legislative-type" public hearing format. We believe that given the magnitude of the dollars involved in the sale of the Company’s nuclear facilities, as well as the long-term impact that the Board’s decisions here will have on the stranded costs that Atlantic’s customers will have to pay through rates, evidentiary hearings should be conducted. Only through the submission of comprehensive written testimony, exhibits, and cross-examination of other parties’ witnesses, can a comprehensive evidentiary record be developed in complex matters such as this. Moreover, because this proceeding will likely have a direct impact on customers’ stranded cost payments under the Electric Discount and Energy Competition Act, we believe evidentiary hearings are required by law.

I will now turn to some of the broad issues in this case. Again, I must emphasize that the Ratepayer Advocate has not completed its review of this matter. In fact, we received some of Atlantic’s responses to our discovery request just a few days ago, and some of the information we requested has not yet been provided. Therefore, these comments are necessarily preliminary in nature. The Ratepayer Advocate will file more detailed written comments by the March 3, 2000 deadline the Board has established.

Some of the issues the Ratepayer Advocate is reviewing in this care are:

• The extent to which the sales price reflects a true market value for the assets being sold;

• The proposed transfer of nuclear decommissioning trust balances to the Purchasers, and the necessity for an adjustment to Atlantic’s recovery of decommissioning costs through the SBC;

• Market power to be vested in PECO and PSE&G after they acquire the Conectiv nuclear ownership interests;

• The negotiated requirement that the units being sold must be eligible facilities and obtain EWG status;

• Atlantic’s request that the Board find that the Company may recover the Eligible Stranded Costs associated with the nuclear asset sale. Based on our preliminary review of the Company’s discovery responses, Atlantic has admitted that the sales price that it negotiated is far below the market value that Atlantic claimed existed for these same ownership interests during the stranded cost proceedings. This difference would produce a significant increase in stranded costs, which Atlantic requests be fully recovered from its customers. It is the Ratepayer Advocate’s position that Atlantic’s customers should not be burdened with increased stranded costs because Conectiv made a corporate decision to sell its nuclear assets at a substantial loss. Neither the Electric Discount and Energy Restructuring Act nor Board decisions required Atlantic to sell its nuclear assets. Moreover, the Act requires utilities to attempt to mitigate stranded costs through means such as divestiture, not to increase stranded costs. If, after receiving offers for its nuclear assets, the most economic decision for the Company’s customers was for Atlantic to retain the plant ownership interests at this time, that is what it should have done. If the Board approves the sale, it should adopt an appropriate ratemaking adjustment to ensure that Atlantic’s customers are not burdened with increased stranded costs from the sale of its interest in Peach Bottom, Salem, and Hope Creek.

In closing, I want to emphasize that the Board must ensure that New Jersey customers pay the lowest stranded costs possible, are not forced to pay higher stranded cost charges due to an incorrect or incomplete calculation of the net proceeds, or by Conectiv’s corporate decision to sell its nuclear assets at this time at a substantial loss.

Thank you.