Exelon and PSEG moved one step closer toward creating the nation’s finest electric and gas utility with the formation of 10 merger integration teams. The teams are designed to develop and implement plans to successfully combine the two organizations, following the

approval of each company’s shareholders and various regulatory agencies.

     Leading the integration effort and overseeing the work of the teams are Exelon Executive Vice President Randall E. Mehrberg and PSE&G President and Chief Operating Officer Ralph Izzo. In addition to an executive sponsor, each team has co-leads with one representative from Exelon and the other from PSEG.

     “Now that the team leaders have been named, the next step is to identify people with the right experience to handle various integration issues and activities that need to get done,” Izzo said. “We expect each team to and better define their deliverables and complete their staffing by the end of February.”

     Mehrberg added that real analyses by the teams would begin in March. “We will com-

     The following answers address questions raised about Exelon and PSEG’s recent regulatory filings as well as other employee concerns

How much generation is owned by Exelon and its subsidiaries?

     Exelon owns or controls 33,000 Megawatts of generation. Of that, 26,000 MW are in PJM.

How much generation is owned by PSEG and its subsidiaries?

     PSEG owns or controls 18,000 MW of North American generation,14,000 MW of which are in PJM.

What is market power, and why is it an issue in this merger?

     Market power generally reflects the amount and location of electric generating capacity owned or controlled by a participant in wholesale electric markets like PJM. Regulatory agencies want to make sure that any one owner of electric generating capacity doesn’t have the ability to artificially raise prices by physically or economically withholding energy and capacity from the market.

     The Exelon and PSEG merger will create an electric generating company with more than 40,000 megawatts of electric generating capacity located in PJM markets. The Federal Regulatory Energy Commission will consider whether the size and location of the new company’s portfolio presents the potential for market concentration. Both companies recognize this concern and the FERC application filed includes a plan to address the issue.

How is it determined if there is a market power issue?

     FERC has a series of tests or “screens” that it asks companies to apply under a variety of to contribute conditions to determine under what circumstances market power issues may exist. FERC examines multiple time periods and load conditions when applying these screens. The companies have done a detailed analysis using FERC’s market power screens and have determined that a potential for market power does exist, primarily in PJM East. PJM East is part of the “traditional” PJM market, which includes eastern Pennsylvania and central and northern New Jersey.

How are the companies proposing to mitigate the market power issue?

     The companies have proposed a comprehensive market power mitigation plan designed to address in full, FERC’s requirements for competitive markets. As part of the plan, the companies have proposed to divest — that is sell the power plant to someone else — a number of coal, mid-merit and peaking generating plants and transfer control of the output of a portion of their baseload nuclear generating capacity. All of the plants that would be divested are in PJM East.

     The plan calls for the new company to divest at least 550 MW of coal-fired capacity, 1,350 MW of mid-merit and 1,000 MW of peaking capacity in the PJM East region. This is a total of 2,900 MW of generation.

     The plan also calls for “virtual divestiture” of more than 2,600 MW of baseload nuclear capacity. This will be accomplished by long-term sales (for at least 15 years or the life of a unit) or annual auctions of 25-MW blocks of nuclear capacity for three-year terms. The amount of nuclear capacity not sold via long-term contracts will be available for the annual capacity auctions.

     The virtual divestiture is designed to transfer control of the capacity without losing the benefit to the marketplace of Exelon’s demonstrated nuclear operating expertise. In addition, the annual nuclear capacity auctions will be timed to coincide with New Jersey’s Basic Generation Service wholesale power auction in which the state’s distribution utilities obtain the energy and capacity they need to serve customers. The expectation is that making the nuclear capacity available to other wholesale suppliers will contribute to the competitiveness of the BGS auction.

How long will it take to receive approval from New Jersey, Pennsylvania and FERC?

     The New Jersey Board of Public Utilities and the Pennsylvania Public Utility Commission will establish schedules to hear the case. We

Additional Information This communication is not a solicitation of a proxy from any security holder of Exelon Corporation or Public Service Enterprise Group Incorporated. Exelon has filed a Registration Statement on Form S-4 with the SEC (Registration No. 333-122704) containing a preliminary joint proxy statement/prospectus regarding the proposed transaction involving Exelon Corporation and Public Service Enterprise Group Incorporated. We urge investors and security holders to read the definitive joint proxy statement/prospectus regarding the proposed transaction and any other relevant documents when they become available, because they will contain important information about Exelon, PSEG 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 SEC free of charge at the SEC’s website (<http://www.sec.gov>).In addition, a copy of the definitive joint proxy statement/prospectus (when it becomes available) may be obtained free of charge from Exelon, Shareholder

Services, 10 South Dearborn Street, P.O. Box 805398, Chicago, Illinois 60680-5398, or from PSEG, Investor Relations, 80 Park Plaza, P.O. Box 1171, Newark, New Jersey 07101-1171.

     Information regarding Exelon’s and PSEG’s directors and executive officers and other participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, is available in the preliminary joint proxy statement/prospectus contained in the above-referenced Registration Statement on Form S-4.

     This document includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, for example, statements regarding benefits of the proposed merger, integration plans, and expected synergies, anticipated future financial and operating performance and results, including estimates for growth. There are a number of risks and uncertainties that could cause actual results to

differ materially from the forward-looking statements made herein. A discussion of some of these risks and uncertainties is contained or referred to in the Current Report on Form 8-K filed with the SEC on December 20, 2004 by Exelon. These risks, as well as other risks associated with the merger, will be more fully discussed in the joint proxy statement/ prospectus that will be included in the Registration Statement on Form S-4 that Exelon will file with the SEC in connection with the proposed merger. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this document. Neither Exelon nor PSEG undertakes any obligation to publicly release any revision to its forward-looking statements to reflect events or circumstances after the date of this document in connection with the proposed merger. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this document.