John Rowe - Chairman and CEO Frank Clark - ComEd CEO Ian McLean - President, Power Team John Young - EVP and CFO Michael Metzner - VP and Treasurer Betsy Moler - EVP, Government and Environmental Affairs Joyce Carson - IR

Daniele Seitz - Dahlman Rose Hugh Wynne - Sanford Bernstein Steve Fleishman - Merrill Lynch Vic Khaitan - Deutsche Bank Paul Patterson - Glenrock Associates Paul Fremont - Jefferies & Co. Ashar Khan - SAC Capital David Frank - Piqua Capital Management

At this time I would like to welcome everyone to the Exelon Corporation second quarter 2006 earnings and merger update conference call. (Operator Instructions) It is now my pleasure to turn the floor over to your host, Joyce Carson, VP of Investor Relations. Ma'am, you may begin your conference. Joyce Carson: Thank you, Nelson. Good morning and welcome to the Exelon second quarter earnings review and update conference call. Thank you all for joining us today. You should have received a copy of our earnings release. If you haven't received it, the release is available on the Exelon website at www.exeloncorp.com. Or you can call Mary Snider at 312-394-5222 and she will fax or e-mail the release to you. This call is being recorded and will be available through August 14 by dialing 877-519-4471. The international call-in number is 973-341-3080. The confirmation code is 7592439. In addition, the call will be archived on the Exelon website. Before we begin today's discussion, let me remind you that the earnings release and other matters we may discuss in today's call may contain forward-looking financial statements and estimates that are subject to various risks and uncertainties. Please refer to our SEC filings for discussions of the factors that may cause results to differ from management's projections, forecasts and expectations. In our press release and during this call we will discuss adjusted non-GAAP operating earnings that excludes the earnings impact of several items. For a list of these items, please refer to our earnings release. We believe these adjusted operating earnings are representative of the underlying operational results of the Company. In today's earnings release, we provide a reconciliation between reported GAAP earnings and adjusted non-GAAP operating earnings. With me today are John Rowe, Chairman, President and CEO; John Young, Executive Vice President, Finance and Markets and CFO; and other members of Exelon's senior management team who are available to answer your questions. Today's call will focus on second quarter 2006 results, full year expectations and updates on key issues facing the Company, including the ICC's rate order on ComEd's distribution, rate case and the status of the merger with Public Service Enterprise Group. We have scheduled an hour for this call. I will now turn the call over to John Young, who will begin with a discussion of Exelon's financial results.

Thank you, Joyce. Good morning. I plan to briefly discuss Exelon's second quarter financial results, our expectations for the balance of the year and review the main points contained in the Illinois Commerce Commission's rate order. Then I'll turn the call over to John Rowe who will describe more about our views on this order and provide an operational and merger update. Exelon Corporation announced second quarter adjusted non-GAAP operating earnings of $577 million, or $0.85 per diluted share, an increase of 13% on an EPS basis from the second quarter 2005 operating earnings of $506 million, or $0.75 per diluted share. On a GAAP basis, Exelon reported net income of $644 million or $0.95 per diluted share for the second quarter of 2006. This reported GAAP number includes the following after-tax items: income of $0.13 per diluted share resulting from decreases in estimated nuclear decommissioning obligations related to the AmerGen nuclear plants; a net charge of $0.08 per diluted share for an impairment related to the write-off of the intangible asset associated with our investments in synthetic fuel producing facilities net of the earnings from the investments; mark-to-market gains of $0.06 per diluted share from non-trading activities; a net charge of $0.01 per diluted share related to certain integration costs assisted with the proposed merger with PSEG and Exelon Generation's prior investment in Sithe Energies which is reflected as discontinued operations. These items are excluded from our operating earnings of $0.85 per diluted share as represented in the tables that accompany the earnings release. I will now review the major drivers of our 13% year-over-year growth in operating earnings per share for the second quarter. For your reference these drivers and additional details can be found on page 9 of the tables accompanying the earnings release. The major positive drivers include: higher realized wholesale margins at generation due to higher realized prices and strong operational performance across our nuclear fleet; increased weather normalized deliveries at ComEd and favorable changes in customer usage and mix; and, increased revenues at PECO associated with previously authorized rate increases. These positive factors were partially offset by: higher operating costs primarily related to the increased stock-based compensation and general inflation; increased depreciation and amortization expense including the scheduled increase in CTC amortization at PECO; and, lower sales volumes at our delivery companies due to unfavorable weather which represented $0.03 at ComEd and $0.01 at PECO. Turning now to the individual operating companies' performance. Generation's year-over-year second quarter earnings increased by 20% due to the repricing of forward hedges in prior periods at higher prices, combined with higher spot market prices and increased nuclear generation. Average realized wholesale margins on all sales at Generation during the second quarter of 2006 were up 15% over the same period for 2005. This increase in earnings was partially offset by the contractual decreases in prices associated with Generation's power sales agreement with ComEd and higher operating and maintenance costs, including costs associated with the recognition of stock compensation expenses and the effects of inflation on non-operating costs. The change in the power sales agreement with ComEd had no impact on Exelon's consolidated results. Let's spend a moment on ComEd. The increase in its earnings in the second quarter compared with the second quarter of 2005 was primarily due to the change in the power sales agreement, increased weather normalized deliveries and favorable changes in customer mix and usage. Weather normalized kilowatt hour growth at ComEd was 1.8%. This demonstrates continued growth in ComEd's service territory. The increase was partially offset by unfavorable weather, increased operating costs primarily due to the recognition of stock compensation expense and other miscellaneous items. According to our models, weather had a negative impact on the earnings at ComEd of $0.03 per Exelon share in the second quarter compared with the prior year and about $0.01 relative to weather. At PECO earnings for the second quarter compared to the same period in 2005 decreased primarily due to higher CTC amortization, unfavorable weather and increased bad debt expense which were partially offset by increased revenue from a previously authorized rate increase. The increase in CTC amortization was fully anticipated and included in our guidance. According to our models, weather had about $0.01 per share negative impact in the second quarter compared with the prior year and relative to normal weather. In our earnings release we have provided much more detail regarding our second quarter results and will be happy to respond to your questions later in the call. Let's turn for a minute to our full year expectations. As mentioned in the press release, we are reaffirming our initial standalone 2006 operating earnings guidance of $3.00 to $3.30 per share. Our operating earnings guidance is based on the assumption of normal weather for the remainder of the year. The fundamental story remains the same; improving generation margins, continued strong operational performance and core growth in our delivery companies, partially offset by milder weather and higher O&M costs are expected to be the key drivers of year-over-year earnings growth for both the balance of the year and the full year. This is both consistent with what we told you to expect back in January and also consistent with our experience for the first six months of the year. Due to the need to further analyze the impacts of the ICC rate order on ComEd's goodwill, Exelon is not updating its 2006 GAAP guidance of $3.00 to $3.30 per share. As we reported in our 2005 10-K, Exelon and ComEd impaired their $4.7 billion goodwill asset in the fourth quarter of last year by recording a $1.2 billion after-tax charge to earnings. As we have disclosed before, under GAAP, goodwill is tested for impairment at least annually, or more frequently, if events or circumstances indicate that it is more likely than not that goodwill might be impaired. We currently perform our annual test in the fourth quarter of each year. However, due to the significant negative impact of the ICC's rate order to cash flows and value of ComEd, we are required to complete an interim impairment test during the third quarter of this year. The size of any potential impairment will not be known until we complete our test in the third quarter but the impairment could be material. As we did in 2005, we will exclude any potential charge from operating earnings but since we have not completed our test, we cannot provide an update to our GAAP guidance at this time. Before I talk about the ICC rate order, I want to highlight Exelon's changing financial profile. As we have stated many times over the last couple of years, the composition of Exelon's earnings is shifting. Our business is moving from one that derived the majority of its earnings from our delivery companies to one that will see the majority of its earnings in the future come from our Generation company. In 2005, Generation represented about 50% of our operating earnings while ComEd and PECO each accounted for about 25%. We expect a similar split in 2006 with Generation accounting for about 55% of Exelon's operating earnings and ComEd and PECO contributing around 25% and 20% respectively. With the end of the below market PPA between Generation and ComEd in 2007, we expect to see Generation contributing roughly 70% of Exelon's operating earnings with ComEd and PECO contributing the balance. As Exelon shifts to a more commodity-based business we naturally expect to see increased variability in our earnings. By way of example we have included as part of our earnings release this morning a graph showing around-the-clock historical forward prices for calendar year 2007. We actually sent out a revised schedule because we had the labeling reversed on this chart, so please refer to the revised chart if you got it. If not, the prices that are represented by the original chart that say NIHUB on top, they are actually, that's the PJM West prices, so just reverse them. In both Northern Illinois and PJM West, prices increased by $10 to $12 from mid-February through mid-April, then decreased by the same amount from mid-April through the beginning of July and have recently started to trend upward again. Given the end of the transition period in Illinois and the related below market PPA between Generation and ComEd, such movements in forward price of wholesale power have a significant impact on the Company's earnings and cash flow projections for 2007 and beyond. Through Power Team, we will focus on getting the most out of the market by managing the risk associated with this type of business while also capturing any upside or optionality. As we have done in the past, we will continue to mitigate volatility through active hedging using various tools and methods. Before I turn the call over to John Rowe, I will summarize the major points of the Illinois Commerce Commission's order in ComEd's first general rate case since 1995. The materials accompanying the earnings release package include a fairly detailed summary that compares ComEd's original request to the ALJ's proposed order filed on June 8 and the ICC's rate order dated July 26th. ComEd originally sought to recover $1.9 billion in delivery rates, reflecting a revenue increase of $317 million. The rate order approves a revenue requirement of $1.6 billion or a delivery rate increase of only $8 million. The reductions to ComEd's original request fall into four major categories: These reductions, plus $5 million of miscellaneous adjustments from the ICC and $38 million of adjustments made by ComEd over the course of the proceedings to limit the issues in the case, bring the total revenue increase to $8 million. The rate order does allow ComEd to recover previously incurred severance costs, losses on extinguishments of long-term debt, manufactured gas plant costs and costs associated with the procurement case. ComEd expects that it will record regulatory assets and reverse the previously incurred expenses for these items in the third quarter of this year. As mentioned earlier, ComEd may incur impairment charges associated with its goodwill in the third quarter due to the impacts of the rate order. The size of any potential impairment will not be known until ComEd completes its test in the third quarter, but the impairment could be material and could exceed the regulatory assets expected to be recorded in the third quarter based on the ICC order. Importantly, the ICC's order confirms that ComEd will be allowed to recover its energy cost which will be incurred through the upcoming competitive power procurement auction in Illinois to be held in September. With that brief summary, I will turn the call over to John Rowe who will describe more about our views on the ICC rate order and provide an operational and merger update.

Thank you, John. Good morning everyone. I am of course extremely pleased with our second quarter financial results. As John reported, our operating earnings for the quarter increased 13% compared to last year and year-to-date operating earnings are up almost 5%. The second quarter has put us back on track for the year. As you know, we reported a relatively weak first quarter. As we become more and more dependent on wholesale markets, our earnings are more volatile. This financial performance is driven by our operating performance, both in generation and on the delivery side. Our nuclear fleet achieved a capacity factor of 95.5% for the second quarter of 2006, with a 99.1% capacity factor in June, the highest monthly seasonal level ever achieved for the fleet. There was not a single unplanned automatic scram in the second quarter, although I believe there was one on the first or second day of the third quarter. Our fossil and hydro fleet also had another strong quarter, with commercial availability factors of 93.7% and 95% respectively. Congratulations to Chris Crane, Mark Schiavoni and their excellent teams for giving Ian McLean and the power team the energy to work with. Our delivery companies have also done well, despite an array of record-breaking heat and storms. Two weeks ago, both ComEd and PECO set historic peaks; ComEd at 23,300 megawatts and PECO in excess of 8,600 megawatts; yet both systems performed well. We are getting a service return on the investments we've been making. PECO then experienced one of the five most damaging storms in the Company's history. PECO crews worked around the clock in 16-hour shifts to restore power to affected customers. These extraordinary efforts followed weeks of long hours responding to smaller storms. Both our PECO and our ComEd crews have done very well in this stormy summer and I thank them for their efforts. While I thank both, it has been particularly difficult around Philadelphia. I need to give a little extra attention there. I also want to thank the crews from the other utilities from across the country that came to assist in PECO. Our operating performance, when coupled with current wholesale prices, gives us renewed confidence in our operating earnings guidance that is, as you know, between $3.00 dollars and $3.30 per share for the year. When the third quarter is in, we will try to sharpen that guidance. I asked our controller, Matt Hilzinger, if he had any ideas on July and I was told he won't share them until after the call. Not a trusting person, Hilzinger. As many of you know, ComEd filed its first general rate case in nine years in August of 2005 to recover increased expenses and roughly $3 billion in transmission and delivery investments to upgrade the system and to keep up with the growing demand for electricity. As I said earlier that investment has resulted in a steady improvement in ComEd's delivery reliability. Thanks to Jack Skolds, John Costello, a whole of others, from 1998 to 2005 the number of outages declined by 46%, while the length of outages dropped 62%. After an exhaustive hearing two ALJs issued an initial order that would have allowed ComEd a revenue increase of approximately $164.5 million on the $317 million originally requested. While a little short in dollars, we believe that the ALJ's proposal set a principled and sound basis for future decisions. Last week, however, we were simply shocked -- and there is no other way to put it -- by an ICC order that drastically reduced the initial order to approximately $8 million. Frankly it is difficult to conceive that the commission would all but disallow a delivery rate increase after a nine-year rate freeze and over $3 billion of new investment. We will of course ask the ICC to reconsider its order and appeal. Our real challenge, however, is to convince the commission on rehearing -- and even more importantly, in future cases -- that ComEd must stand on its on bottom, both in order to continue its service improvements and to meet its other public service commitments. ComEd is committed to purchase renewable energy and promote energy efficiency. It is committed to a rate phase-in plan to protect its retail customers against excessively abrupt price increases. ComEd's ability to do these things depends on its continuing financial strength. While last week's decision was a serious blow, we all recognize that the Illinois Commission has shown its commitment to make the system work in its previous decisions, including the power procurement decision in January. This order does provide for recovery with respect to ComEd's investments in its system, and does provide and confirm that ComEd will be allowed to recover the energy costs it incurs through the upcoming competitive auction. My colleagues at ComEd and I remain committed to working with the ICC to achieve long-term positive results in Illinois. Turning to the merger front, our agreement with the DOJ was a major milestone in our efforts to close the merger with PSEG. It requires that we divest approximately 5,600 megawatts of fossil plant after the merger closes, the largest required in any energy company merger. The DOJ's antitrust expertise and comprehensive nature of their review should provide substantial assurance to the people of New Jersey that the merger will not adversely affect competition. We are of course pleased that the DOJ did not require any further divestiture of our nuclear fleet. The 20,000 megawatts of nuclear generation remains the platform of the combined company. Last week we met with various parties involved in the case in New Jersey and presented a comprehensive offer of settlement in connection with the proposed merger. PSE&G has proposed a package including an electric rate freeze, settling a pending gas rate case for a modest increase and a subsequent rate stay out. They have also offered $600 million to be made available through December 31, 2008 for targeted customer and state benefits as determined by the NJBPU and settling parties. This money can be used for rate reductions, economic development, conservation, environment and efficiency projects, assistance for low income customers or infrastructure development. Finally, PSE&G has also proposed to maintain its existing capital program and to increase its charitable contributions to 20% above 2005 levels. We have already demonstrated the benefits to New Jersey as well as to our shareholders of extending our nuclear know-how. 2005 net generation at Salem and Hope Creek increased by about 4 million megawatt hours when compared to 2004. Net generation this year has increased and additional 1.6 million megawatt hours. Combined with the concessions I have just outlined, there can be little doubt -- in my opinion, no doubt -- that our proposed merger offers a very great value to New Jersey customers. I am painfully aware that this offer is more than we expected to make and more than you expected us to make. Simply put, the analyses we have performed and the work done by our bankers continues to show that this merger can create positive value for our shareholders, both in the short and in the long run. We also believe, based on those analyses, that we can continue to make the merger accretive in the early years although the first one may be a close call. The time has come, however, to resolve the merger through negotiation one way or the other. The Board of Directors of Exelon has taken the position, with my full concurrence, that we must reach a preliminary agreement with the principal government parties in the next week or so if we are to continue this effort. That is why we have made a big offer and said it is as far as we can go. Once the final terms and conditions of the merger have been determined both the Exelon Board and the PSEG Board will review the complete packages. Speaking for Exelon, our Board will review the final terms, management's valuation analysis, management's accretion and dilution analysis. It will also receive the advice of JP Morgan Chase and Lehman Brothers, who were the bankers on the transaction. And, they will receive an independent review of Lazard in making this determination. Some of our investors suggested that the Board should have advice from a banker not receiving a fee on the deal, and we have done that. This has been a long transaction. It has been a painful negotiation in New Jersey and at the Justice Department. It has been a hard transaction to accomplish. I continue to believe that we will be able to complete the transaction and to make value out of it; but the final decisions made by our Board will be hard-boiled and value-driven as they have been all along. We are happy to take your questions now.

(Operator Instructions) Our first question comes from Daniele Seitz - Dahlman Rose. Daniele Seitz - Dahlman Rose: You seemed to intimate in your last news release that you may withdraw the 8%, 7% and 6% phase-in proposal. Did I not understand it correctly?

We are committed to doing a phase-in proposal. We are negotiating with the staff of the commission about what that might look like. We are of course concerned about the ability of ComEd to finance a phase-in proposal, but we're not running away from our commitment. Frank, what would you like to add to that? Frank Clark: This is Frank Clark. I'm the CEO of ComEd. That is exactly our position. Our senior members of the ComEd team have had meetings and will continue to have discussions with the Illinois Commerce Commission staff on going forward with a phase-in program. The numbers may be 8%, 7%, 6% or they may be different. It depends very much on our ability to finance such a phase-in. Daniele Seitz - Dahlman Rose: Okay. Would it come out during the hearings that you may change it?

Daniel, excuse me, this is what we're trying to say is it may come out in one of several ways. First Frank and his colleagues will be filing a motion for reconsideration and rehearing which will try to relate our request to what it takes to meet the commitments we put on record. Second, Anne Pramaggiore and her colleagues are trying to negotiate with the commission staff. So this is one of those things where there will be a result when there is a result and we can't tell you when. Daniele Seitz - Dahlman Rose: I understand. Thank you.

Our next question comes from Hugh Wynne - Sanford Bernstein. Hugh Wynne - Sanford Bernstein: Good morning. I just wanted to put to you a question regarding page 21 of the release where you provide a calculation of the average margin on your power sales. I noticed that the revenue per megawatt hour on the market and retail sales increased by almost $10 per megawatt hour this year. Yet below that, you provide around-the-clock market prices for PECO and ComEd where the increase is much less, maybe $2 to $5. I take it that the wholesale sales have benefited from the roll-off of contracts that were causing you to earn somewhat below market revenues. Is that the way I should interpret that?

If I understand your questions that is somewhat correct. We've had sales that were repricing outside of our obligations to both ComEd and PECO and then we have the PPA prices that are changing between Generation and ComEd. All of that is contributing to the margin increase at the Generation wholesale level. Hugh Wynne - Sanford Bernstein: I noticed that the ComEd revenues per megawatt hour declined by about $2. What was the reason for that?

It was the nature of the contract which had a different price in it when it was done for '05 and '06, I think, John, wasn't it?

It was up. I've got it up, Hugh. Are you reading your schedule right?

John, I think what it is I think John was correct. You will find that the transfer price in ComEd went from $38.47 down to $35.80. So when you throw it into the average, that what skews the average. Hugh Wynne - Sanford Bernstein: Okay, so the prices that you were selling to ComEd declined -- and I'm still a little bit unclear; maybe you can help me with why the market prices went up so much?

Yes, I'm not showing the market price up. I don't know what you are referring to. I'm showing actual prices up 2% and market prices year-on-year about flat. So I don't know what you are looking at. You must be looking at something that I don't have in front of me. Hugh Wynne - Sanford Bernstein: It is page 21 of the release. Exelon Generation Power Marketing Statistics, under Average Margin, Market and Retail Sales show a very substantial increase in revenues per megawatt hour. That is what I'm trying to understand.

Hugh, if I may, it's Michael Metzner. They did increase. Our average realized revenue on market sales were up in the first six months versus prior year; also the quarter versus prior year. As John mentioned in his prepared remarks, because of repricing forward hedges during prior periods, repricing forward hedges at higher prices and also higher spot prices. So that's just the roll-off of below market sales. Hugh Wynne - Sanford Bernstein: Great. Thank you very much.

Our next question comes from Steve Fleishman - Merrill Lynch. Steve Fleishman - Merrill Lynch: Hi, John. A couple of questions. First on the ComEd order, I'm wondering if you've had any commentary from the rating agencies on the potential impact of this? Associated, if ComEd rating were to go below investment grade, what impact does that have for either the auction itself or trying to do a phase-in plan?

Let me start and have John Young complete my response. We are very concerned and very watchful. We were downgraded by Moody's and it's my understanding that we are looking at a downgrade from Fitch. That will keep us above investment by just a notch. To the extent that we hold there, I expect that the auction will go forward and the participants in the auction will participate. I think that it could have some increase on the price that they would be willing to bid, principally because there's a greater risk. I think the commission is also aware of this and obviously this is an issue as we make our case in the rehearing process for adequate dollars to continue to fund our investments in the ComEd system, the need to get reasonable rate relief will alleviate some of this pressure. Steve Fleishman - Merrill Lynch: But the Moody's action occurred before this order came out. Has any of them commented to you subsequent to this order?

Moody's has not. We have talked to all three of the agencies, Steve, and they said thank you, we will get back to you. Fitch this morning has contacted us about a potential action today as a result of the order and that's the comment that Frank was referring to that they may lower the rating, but it would be the rating I believe equal to where we are with S&P today; which would be one notch above where Moody's has us, which is two notches above investment grade.

Steve, let me just add one thing. Obviously we are all concerned that ComEd keep its investment grade credit rating. That is one of the issues that Frank and his team will be addressing in their request for rehearing. But let me say that when you get a real disappointment with a regulatory agency, there is a natural temptation to say we will suspend our rate phase-in plans, we will cut our capital program, we won't do any environmental good work. Usually those natural temptations are just the worst thing you can do. What we intend to try to do with the Illinois Commission is to say, we want to keep our commitments, make it possible for ComEd to do so. Steve Fleishman - Merrill Lynch: Okay. I guess on the merger, could you just comment: were the New Jersey parties willing to at least try to negotiate within that timeframe that you've given as a deadline?

They appear to be, but I'm not authorized to speak for any one of them. But we've had several number now of very sober dialogues and monologues in which we have told people that we have to be wanted here, to be here. We know we can't badger our way in. We know we can't bluff our way in. On the other hand, we have now been at this proceeding somewhere between 19 and 20 months. It's not the fault of the State of New Jersey that the Justice Department took as long as it did. But there are so many parties involved in the New Jersey discussions that I personally -- and more importantly my Board -- had the sense that this discussion was reaching the point where the fruit starts to rot on the tree. What the Board instructed us to do was to stretch on the money and try to say, look we won't quibble, but we've got to get it done in a relevant timeframe. Now I've got at least two people here cautioning me that I've probably gone as far as I should go already. But we think you, as our investors, are entitled to know the frameworks in which we are dealing. I'm more jolly than I was a week ago when I carried the message to New Jersey. So if you want to measure this on a “Is Rowe jolly?” basis, that will give you about as much indication as I can give you. I mean I've been up and down so many times over these negotiations. I suspect some sort of thermometer -- I hope an oral one -- would give you a lot of different readings over the next week. But I think the principal parties in New Jersey realize that we are really stretching to make this work and that the natural processes have stretched us on time. So I'm very hopeful that this is going to be a very animated week. Steve Fleishman - Merrill Lynch: Thank you.

Our next question comes from Vic Khaitan – Deutsche Bank. Vic Khaitan - Deutsche Bank: Good morning to everybody. Just a two-part question, one regarding ComEd. You were preparing to do some more financial refinancing of ComEd so that that rating, if it were to be lower, will not impact the Exelon. So could you remind us where you are on the rate financing of ComEd's financial structure?

Yes, we are effectively complete with all the actions. The last stage of that would be the non-consolidation opinion and taking that to the rating agencies. That final step is underway as we speak right now. Vic Khaitan - Deutsche Bank: But does that mean that you are willing to do that, or do you want to just keep --?

No, we are doing it. We are getting the non-consolidation opinion, and then our plans would be as soon as we review that to take that to the three rating agencies. Vic Khaitan - Deutsche Bank: For John Rowe, you talked about where you stand with the merger and I understand the sensitivity of the discussions. But you are already offering what I consider to be a very generous offer to do this deal. But does this have some implication that the other jurisdiction like Pennsylvania, Illinois, might also come for the second bite in some way for the concession from you?

Well, obviously, we worry about that sort of thing. I think the Illinois Commission took at least five bites last week. So I think they have taken their piece, as we speak. We've had a very stable situation in Pennsylvania. There is more than one issue going on there. We have a real deal that has been confirmed by the commission. I'm optimistic that we will keep things stable there. We just have to try to keep each company standing on its own, Vic, and we are doing our best. Betsy wants to add something.

If you look at what we offered in Pennsylvania in both 2000 plus this latest transaction, and then gross that up for this relative size of PSE&G as compared to PECO, you're really putting them on a par with one another, which is what the ask has been in New Jersey. Vic Khaitan - Deutsche Bank: So does New Jersey then get the message that this is really very beneficial to the customers, because they appear to be saying that there is no benefit to customers?

We've certainly been singing that song. I think we will see in the next little while whether the parties are willing to do it at this price.

Vic, I think the real message we are trying to give you is we tried the usual process of tit-and-tat negotiations, and it wasn't getting this thing done. So we tried to take the principles that New Jersey parties, especially the government parties, were saying. We tried to apply those principles; we tried to meet their demands. We not only think this offer is generous, we think it is at the outer edge of what we can do and defend with all of you. We have made that point and we will be making it all week.

Thanks, Vic. Can we go on to the next question now, operator?

Yes, thank you. Our next question comes from Paul Patterson - Glenrock Associates. Paul Patterson - Glenrock Associates: Good morning. Is divestiture no longer an issue with the BPU in these discussions anymore? I mean we noticed that they put in another filing at PJM for another market monitor analysis, and I was just wondering, is that now off the table?

Nothing is ever off the table till everything is off the table; that is the nature of negotiations. We believe that PJM will be satisfied with what FERC and justice have required, plus perhaps some operational things in terms of bidding behavior and so forth. It's very frustrating to us that FERC had a clear set of rules, we complied with them. Justice clearly didn't have a set of rules to consider this, but it wanted more. PJM now seems to be playing with all the Justice Department screens, but coming up with its own set of conclusions. We think they will settle for some operating behavior things along with what we've done. At some point, enough has to be enough.

Our next question comes from Paul Fremont - Jefferies. Paul Fremont - Jefferies & Co.: Hi. I just wanted to clarify when you talked about the $600 million in concessions, were you saying that foregoing the gas rate increase was in addition to that, or is that part of the $600 million package that you are talking about?

We are proposing settling the gas rate case for part of the amount requested and the difference was, I think, Betsy, not explicitly part of the $600 million. The $600 million is straight cash concession separate from the size of the rate stay outs. Paul Fremont - Jefferies & Co.: One other quick question is on Commonwealth Edison. Can you give us a sense as to whether or not you have the ability to offset any of the absence of rate increase with cost cutting measures? Would you be substantially under earning the authorized return that the commission is giving you in the rate case?

Let me start and then I will turn it over to Frank. Our current guesstimates is that with this kind of rate order, ComEd would be under earnings it's authorized 10.04% by about 7%. Or in other words, ComEd's earnings would be down around 3%. More than that, nearly all of those 3% would be in the FERC regulated transmission components. So yes, ComEd would be drastically under earning and that is part of the case it proposes to make. I will let Frank talk to you about cost-saving efforts and so forth. But bear in mind that hardly anybody has done better than Exelon in the last five years in cutting costs. Frank Clark: Well, I think the straight answer to your question is that we are very aggressively looking at the ways to offset our O&M and capital spend, reflecting what we received in the order. We are also equally aggressively preparing our case for rehearing. The rehearing process we have, I believe 30 days from the date of the order to actually make a petition for rehearing, which we will obviously do. I believe the commission then has an additional 20 days to either grant or deny our request. So in a relatively short timeframe all of this year, we will know whether we have been able to reverse some of the damage that we see in the order from the ICC. In the meantime obviously, we are very actively looking at ways to reduce our costs. But consistent with what John Rowe said earlier, it does not mean that we are talking about doing things that put in jeopardy the reliability of our service. That would be a foolish thing to do. We are not abandoning commitments we made to phase-ins or to our environmental or any efficiency programs which is a very big thing in the State of Illinois. However, we must show and convince the commission in order to meet those commitments, we have to be adequately financed.

Our next question comes from Asher Khan - SAC Capital. Ashar Khan - SAC Capital: Good morning. John, could you to specify a little bit about future cash flow? How you would apply them going forward, next year onwards in terms of stock buyback? When can we get a signal as to the use of that cash flow from the Board and you?

Well, I'm laughing just a little because if I knew the answer to that you'd probably already have it. I mean, we're trying to balance the desire that some of you have for a share buyback with the desire that others of you have for increased dividends, with the fact that our earnings are volatile and we can reduce the tax impact of the divestitures if we can make some well-placed Generation investments. That is a lot of moving parts to keep track of at once. John Young just handed me a note saying that he thinks in mid-December we should be able to give you a real plan, although if these offers we've made aren't adequate to secure an agreement on the merger, we may have to give you such plan a bit earlier. Joyce Carson: We have time for one more question.

Our final question comes from David Frank - Piqua Capital Management. David Frank - Piqua Capital Management: Thank you. I was just wondering if you were to take a write-off at ComEd would you anticipate that that would flow through on an equal dollar basis to the consolidated company's balance sheet as well?

My controller, who would tell me he doesn't have any idea what the write-off will be is nodding his head vociferously that it will be an equal dollar write-off on the Exelon goodwill. The situation is that when we stop treating delivery as a group and started treating PECO and ComEd as separate items for purposes of the accounting statement, a goodwill write-off at ComEd is essentially one-for-one at Exelon. David Frank - Piqua Capital Management: I was going to make a quick note that in the future it would be really helpful if instead of margin per megawatt hour if you could find to provide some information on actual prices realized by region on wholesale and retail, because it kind of it gives us no real accurate base to work off of when you mix everything up and we just look at average margin.

Well, do take a look at that chart that John Young attached to his comments. I hope that gives you some clarity of signal in terms of what we are seeing in the market. Ian McLean will take your comment to heart. The issue is always how do we try to give you maximum transparency without impairing Ian's ability to do the best thing in the marketplace. Ian is inherently a secretive man. David Frank - Piqua Capital Management: Thank you.

Thank you, everybody.

Thank you. This does conclude today's Exelon Corporation second quarter 2006 earnings and merger update conference call. You can now disconnect your lines and have a wonderful day.