A US utilities group has announced that it is backing a scheme to make it easier for growing minority businesses in its areas operations to obtain letters of credit (L/Cs).

PECO Energy, Commonwealth Edison and their parent company, Exelon, have entered into an agreement for US$36 million of new business with minority and community banks in Philadelphia and other regions served by Exelon.

The agreement is intended to increase the company's business with smaller, more diverse firms and provide the "seed for growth."

Credit agreement

Exelon and its two utility subsidiaries, Philadelphia-based PECO and Chicago-based Commonwealth Edison, have established the US$36 million credit agreement with several community and minority banks arranged by United Bank of Philadelphia and Shore Bank of Chicago with support from Bank One. The company will use the agreement to issue L/Cs.

The other banks involved are Asian Bank (Philadelphia), Banco Popular (Philadelphia and Chicago), Highland Community Bank (Chicago), and Illinois Service Federal Savings and Loan (Chicago).

Corporate citizenship

Company representatives' say the scheme is about corporate citizenship but argue that there is a business case for the scheme too.

"We understand that we can help smaller business grow and be a good corporate citizen in the community," says PECO president, Denis O'Brien. "PECO recognises that our region has become increasingly more diverse, and we view this transaction as a milestone in our efforts to become more inclusive in all our business relationships," he adds.

The idea is the utility companies improve business relations with minority banks and businesses. "This transaction not only allows us to expand upon our business relationships, it also provides Exelon with an opportunity to facilitate a partnership between a major money centre bank like Bank One and community and minority banks in order to satisfy an important business requirement," says Exelon senior vice president, Barry Mitchell.

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