Peco today said it will spend $254 million this year to upgrade its electric transmission and distribution system.

The figure is an increase of $29 million, or about 13 percent, over the Philadelphia utility's 2006 capital investment outlay.

Peco attributed the spending increase to five major projects in Philadelphia.

Denis O'Brien, Peco president, said those projects are in anticipation of increasing electric needs for Center City and neighboring sections of the city that are undergoing growth.

Peco said it 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.

Peco, a subsidiary of Exelon Corp., has 1.6 million electric and 474,000 natural gas customers in southeastern Pennsylvania.

Exelon shares were down 5 cents, to $63.31, at midday on the New York Stock Exchange.