[Letterhead of Richards, Layton & Finger, P.A.]
March 13, 1998
PECO Energy Capital, L.P.
1013 Centre Road, Suite 350F
Wilmington, DE 19805
PECO Energy Capital Trust III
c/o First Union Trust Company, National Association
One Rodney Square
920 King Street, First Floor
Wilmington, DE 19801
Re: PECO Energy Capital, L.P.
and PECO Energy Capital Trust III
---------------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for PECO Energy Capital,
L.P., a Delaware limited partnership (the "Partnership"), and PECO Energy
Capital Trust III, a Delaware business trust (the "Trust"), in connection
with the matters set forth herein. At your request, this opinion is being
furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals
or copies of the following:
(a) The Certificate of Limited Partnership of the Partnership, dated as
of May 23, 1994 (the "Partnership Certificate"), as filed in the office of
the Secretary of State of the State of Delaware (the "Secretary of State")
on May 23, 1994;
(b) The Agreement of Limited Partnership of the Partnership, dated as
of May 23, 1994;
(c) The Amended and Restated Limited Partnership Agreement of the
Partnership, dated as of July 25, 1994, including the Action of PECO Energy
Capital Corp., a Delaware corporation and the general partner of the
Partnership (the "General Partner"), dated as of July 25, 1994, relating to
the 9% Cumulative Monthly Income Preferred Securities, Series A, of the
Partnership, the Action of the General Partner, dated as of December 19,
1995, relating to the 8.72% Cumulative Monthly Income Preferred Securities,
Series B, of the Partnership, and the Action of the General Partner, dated
as of June 6, 1997, relating to the 8% Cumulative Monthly Income Preferred
Securities, Series C, of the Partnership (the "Amended Agreement");
(d) Amendment No. 1 to the Amended Agreement, dated as of October 20,
1995 (the "First Partnership Amendment");
(e) Amendment No. 2 to the Amended Agreement, dated as of March 1, 1996
(the "Second Partnership Amendment");
(f) A form of Amendment No. 3 to the Amended Agreement (the "Third
Partnership Amendment") (the Amended Agreement as amended by the First
Partnership Amendment, the Second Partnership Amendment and the Third
Partnership Amendment being hereinafter referred to as the "Partnership
Agreement"), attached as an exhibit to the Registration Statement (as
defined below);
(g) A form of Action of the General Partner, relating to the Preferred
Partner Interests (as defined below) (the "Action"), attached as an exhibit
to the Registration Statement;
(h) The Certificate of Trust of the Trust, dated as of March 13, 1998
(the "Trust Certificate"), as filed in the office of the Secretary of State
on March 13, 1998;
(i) The Trust Agreement of the Trust, dated as of March 13, 1998,
among the Partnership, First Union Trust Company, National Association, as
trustee of the Trust (the "Trustee"), and, for limited purposes, the
General Partner;
(j) A form of Amended and Restated Trust Agreement of the Trust (the
"Trust Agreement"), to be entered into among the Partnership, the Trustee
and, for limited purposes, the General Partner, attached as an exhibit to
the Registration Statement;
(k) The Registration Statement (the "Registration Statement") on Form
S-3, including a related prospectus (the "Prospectus"), relating to the
___% Cumulative Preferred Securities, Series D, of the Partnership (each, a
"Preferred Partner Interest" and collectively, the "Preferred Partner
Interests") and to the Capital Trust Pass-through Securities of the Trust
(each, a "Capital Security" and collectively, the "Capital Securities"), as
proposed to be filed by PECO Energy Company, a Pennsylvania corporation,
the Partnership and the Trust with the Securities and Exchange Commission
on or about March 13, 1998;
(l) A Certificate of Good Standing for the Partnership, dated March 13,
1998, obtained from the Secretary of State; and
(m) A Certificate of Good Standing for the Trust, dated March 13, 1998,
obtained from the Secretary of State.
The Partnership Agreement as amended and supplemented by the Action is
hereinafter referred to as the "LP Agreement." Initially capitalized terms
used herein and not otherwise defined are used as defined in the LP
Agreement.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed in paragraphs (a) through (m) above. In
particular, we have not reviewed any document (other than the documents
listed in paragraphs (a) through (m) above) that is referred to in or
incorporated by reference into the documents reviewed by us. We have
assumed that there exists no provision in any document that we have not
reviewed that is inconsistent with the opinions stated herein. We have
conducted no independent factual investigation of our own, but rather have
relied solely upon the foregoing documents, the statements and information
set forth therein and the additional matters recited or assumed herein, all
of which we have assumed to be true, complete and accurate in all material
respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii)
the conformity with the originals of all documents submitted to us as
copies or forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the LP Agreement
constitutes the entire agreement among the parties thereto with respect to
the subject matter thereof, including with respect to the admission of
partners to, and the creation, operation and termination of, the
Partnership, and that the LP Agreement and the Partnership Certificate are
in full force and effect and have not been amended, (ii) that the Trust
Agreement constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the
creation, operation and termination of the Trust, and that the Trust
Agreement and the Trust Certificate are in full force and effect and have
not been amended, (iii) except to the extent provided in paragraphs 1 and 4
below, the due creation or the due organization or due formation, as the
case may be, and valid existence in good standing of each party to the
documents examined by us under the laws of the jurisdiction governing its
creation or organization or formation, (iv) the legal capacity of natural
persons who are signatories to the documents examined by us, (v) that each
of the parties to the documents examined by us has the power and authority
to execute and deliver, and to perform its obligations under, such
documents, (vi) the due authorization, execution and delivery by all
parties thereto of all documents examined by us, (vii) the receipt by each
Person to whom a Preferred Partner Interest is to be issued by the
Partnership (each, a "Preferred Partner" and collectively, the "Preferred
Partners") of a Certificate and the payment for the Preferred Partner
Interests acquired by it, in accordance with the LP Agreement and the
Registration Statement, (viii) the receipt by each Person to whom a Capital
Security is to be issued by the Trust (collectively, the "Holders") of a
certificate substantially in the form of the trust certificate attached to
the Trust Agreement as Exhibit A and the payment for the Capital Security
acquired by it, in accordance with the Trust Agreement and the Registration
Statement, (ix) that the books and records of the Partnership set forth all
information required by the LP Agreement and the Delaware Revised Uniform
Limited Partnership Act (6 Del. C. Section 17-101, et seq.) (the "Partnership
Act"), including all information with respect to all Persons to be admitted
as Partners and their contributions to the Partnership, (x) that the
Preferred Partner Interests are issued and sold to the Preferred Partners
in accordance with the Registration Statement and the LP Agreement, and
(xi) that the Capital Securities are issued and sold to the Holders in
accordance with the Registration Statement and the Trust Agreement. We
have not participated in the preparation of the Registration Statement and
assume no responsibility for its contents.
This opinion is limited to the laws of the State of Delaware (excluding
the securities laws of the State of Delaware), and we have not considered
and express no opinion on the laws of any other jurisdiction, including
federal laws and rules and regulations relating thereto. Our opinions are
rendered only with respect to Delaware laws and rules, regulations and
orders thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such questions of
law and statutes of the State of Delaware as we have considered necessary
or appropriate, and subject to the assumptions, qualifications, limitations
and exceptions set forth herein, we are of the opinion that:
1. The Partnership has been duly formed and is validly existing in good
standing as a limited partnership under the Partnership Act.
2. Assuming that the Preferred Partners, as limited partners of the
Partnership, do not participate in the control of the business of the
Partnership, upon issuance and payment as contemplated by the LP Agreement,
the Preferred Partner Interests will represent valid and, subject to the
qualifications set forth herein, will be fully paid and nonassessable
limited partner interests in the Partnership, as to which the Preferred
Partners, as limited partners of the Partnership, will have no liability in
excess of their obligations to make payments provided for in the LP
Agreement and their share of the Partnership's assets and undistributed
profits (subject to the obligation of a Preferred Partner to repay any
funds wrongfully distributed to it).
3. There are no provisions in the LP Agreement the inclusion of which,
subject to the terms and conditions therein, or, assuming that the
Preferred Partners, as limited partners of the Partnership, take no action
other than actions permitted by the LP Agreement, the exercise of which, in
accordance with the terms and conditions therein, would cause the Preferred
Partners, as limited partners of the Partnership, to be deemed to be
participating in the control of the business of the Partnership.
4. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act (12 Del.
C. Section 3801, et seq.).
5. The Capital Securities will represent valid and, subject to the
qualifications set forth in paragraph 6 below, fully paid and nonassessable
interests in the Trust.
6. The Holders, in their capacity as such, will be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the
State of Delaware. We note that the Holders may be obligated to make
payments as set forth in the Trust Agreement.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. We also
consent to Ballard Spahr Andrews & Ingersoll's relying as to matters of
Delaware law upon this opinion in connection with an opinion to be rendered
by it in connection with the Registration Statement. In addition, we
hereby consent to the use of our name under the heading "Legal Matters" in
the Prospectus. In giving the foregoing consents, we do not thereby admit
that we come within the category of Persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission thereunder. Except
as stated above, without our prior written consent, this opinion may not be
furnished or quoted to, or relied upon by, any other Person for any
purpose.
Very truly yours,
/s/ Richards, Layton & Finger, P.A.