PECO Capital Investment Plan up 13% for 2007, Spurred by Center City Projects.

PHILADELPHIA -- PECO said it has allocated $254 million for capital investments in its electric transmission and distribution system for 2007, an increase of $29 million, or nearly 13 percent over last year. The large increase in spending is mostly attributed to five major projects in the City of Philadelphia intended to provide power for accommodating growth, to upgrade facilities and enhance reliability.

PECO's overall capital program for electric operations funds initiatives to improve system performance, expand electric capacity in certain areas, accommodate new residential and commercial business, and relocate utility facilities for public projects. The increased capital spending reflects $5 million more for system performance work and $21 million more for capacity expansion projects.

Denis O'Brien, PECO president, said the Philadelphia projects anticipate increasing electric needs for Center City and neighboring sections of the city with newer facilities. "The company is undertaking significant capital spending to ensure our system is well maintained, meets the growing needs of our region, and we meet our commitment to deliver reliable energy for our customers," he said.

PECO's new Waverly substation, now under construction, is one of the company's largest, most complex and unique projects ever. The $37 million substation is being built on the same site where one of the city's first electric substations operated for many years until 1999. When completed this spring, it will shift "electric load" from other nearby substations and boost power supply for Center City. It will feed 12 new underground distribution circuits, serving local residential and commercial customers. The project has been moving forward over the past two years with the cooperation of the local neighborhood association.

The Waverly project is unusual because PECO must fit all the new substation equipment into an existing building within one city block of a residential neighborhood and install new transmission supply lines and distribution circuits entirely underground --all while managing the construction impact on neighbors of the substation. The 80-year-old building faE*ade also has been cleaned and enhanced as part of the substation revival.

Waverly is the first in a series of major projects in the city. Work also is underway for a new $22 million substation supply South Philadelphia and be energized in 2008 and another new substation to serve University City, to be completed in 2009. Additionally, PECO plans upgrades for its Center City network, as well as its Schuylkill and Grays Ferry substations, to enhance reliability and provide additional capacity. At more than $40 million, these are the largest investments in the city's electric infrastructure in many years, O'Brien said.

The full capital plan includes about two dozen other major projects in the city and suburbs, as well as customer-targeted reliability enhancement work, increased automation for reduced outage duration, and preventive maintenance such as circuit patrols using thermography and right-of-way maintenance tree trimming.

PECO also has allotted $62 million in capital investments for upgrades and expansion of its suburban natural gas delivery network, an increase of $2 million over last year. Generally, the gas system upgrades get underway in the spring with projects slated for completion prior to the start of the next heating season.

Based in Philadelphia, PECO is an electric and natural gas utility subsidiary of Exelon Corporation (NYSE:EXC). PECO serves 1.6 million electric and 474,000 natural gas customers in southeastern Pennsylvania. In 2005, the company delivered 38.7 million megawatt-hours (Mwh) of electricity and 85.1 billion cubic feet of natural gas to residential, business and institutional customers. PECO's energy delivery services generated $4.91 billion in revenue for Exelon Founded in 1881, PECO is one of the Greater Philadelphia Region's most active corporate citizens, providing leadership, volunteer and financial support to numerous arts and culture, education, environmental, economic development and community programs and organizations.