 Public Service Enterprise Group New York Investor Meetings New York, New York December 10, 2009 Exhibit 99 |
 Delivering Value: Today and Tomorrow 2 Forward-Looking Statement Readers are cautioned that statements contained in this presentation about our and our subsidiaries' future performance, including future revenues, earnings, strategies, prospects and all other statements that are not purely historical, are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Although we believe that our expectations are based on reasonable assumptions, we can give no assurance they will be achieved. The results or events predicted in these statements may differ materially from actual results or events. Factors which could cause results or events to differ from current expectations include, but are not limited to: Adverse changes in energy industry, law, policies and regulation, including market structures and rules, and reliability standards. Any inability of our energy transmission and distribution businesses to obtain adequate and timely rate relief and regulatory approvals from federal and state regulators. Changes in federal and/or state environmental requirements that could increase our costs or limit operations of our generating units. Changes in nuclear regulation and/or developments in the nuclear power industry generally, that could limit operations of our nuclear generating units. Actions or activities at one of our nuclear units that might adversely affect our ability to continue to operate that unit or other units at the same site. Any inability to balance our energy obligations, available supply and trading risks. Any deterioration in our credit quality. Availability of capital and credit at reasonable pricing terms and our ability to meet cash needs. Any inability to realize anticipated tax benefits or retain tax credits. Changes in the cost of or interruption in the supply of fuel and other commodities necessary to the operation of our generating units. Delays or cost escalations in our construction and development activities. Adverse investment performance of our decommissioning and defined benefit plan trust funds, and changes in discount rates and funding requirements. Changes in technology and increased customer conservation. For further information, please refer to our Annual Report on Form 10-K, including Item 1A. Risk Factors, and subsequent reports on Form 10-Q and Form 8-K filed with the Securities and Exchange Commission. These documents address in further detail our business, industry issues and other factors that could cause actual results to differ materially from those indicated in this presentation. In addition, any forward-looking statements included herein represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements from time to time, we specifically disclaim any obligation to do so, even if our internal estimates change, unless otherwise required by applicable securities laws. |
 Delivering Value: Today and Tomorrow 3 GAAP Disclaimer PSEG presents Operating Earnings in addition to its Net Income reported in accordance with accounting principles generally accepted in the United States (GAAP). Operating Earnings is a non-GAAP financial measure that differs from Net Income because it excludes the impact of the sale of certain non-core domestic and international assets and material impairments and lease-transaction-related charges. PSEG presents Operating Earnings because management believes that it is appropriate for investors to consider results excluding these items in addition to the results reported in accordance with GAAP. PSEG believes that the non- GAAP financial measure of Operating Earnings provides a consistent and comparable measure of performance of its businesses to help shareholders understand performance trends. This information is not intended to be viewed as an alternative to GAAP information. The last two slides in this presentation include a list of items excluded from Net Income to reconcile to Operating Earnings, with a reference to that slide included on each of the slides where the non-GAAP information appears. |
 PSEG Strategic Overview |
 Delivering Value: Today and Tomorrow 5 PSEG establishing a policy leadership position … Electric and Gas Delivery Leveraged Leases and Renewable Investments Regional Wholesale Energy … in promoting a sustainable energy future. PSE&G positioned to meet NJ’s energy policy and economic growth objectives with $1.7 billion investment program. PSEG Power’s low-cost baseload nuclear fleet well-positioned in carbon constrained environment. PSEG Energy Holdings positioned to pursue attractive renewable generation opportunities. Compressed Air Energy Storage (CAES) Solar Offshore wind |
 Delivering Value: Today and Tomorrow 6 • Maintaining 2009 earnings guidance range • Operational excellence – focused on enhancing asset performance and achieving cost efficiencies across the enterprise • Integrated generation and portfolio management to optimize asset-based revenues • Core business investments providing attractive returns • Sharpened business focus • Strengthened balance sheet • Attractive dividend yield Meeting Commitments and Delivering Value PSEG: Making decisions and achieving results… … building a record that sets us apart. |
 Delivering Value: Today and Tomorrow 7 A commitment to the future … • Established a new carbon reduction target – to reduce our 2005 carbon footprint by 25% by 2025. • Implementing and expanding our three-pronged strategy for addressing climate change: • Energy Efficiency • Renewables • Clean central station generation, including nuclear … building on a strong history of environmental leadership. |
 Delivering Value: Today and Tomorrow 8 We have been active participants in re-shaping the nation’s energy policy. • PSEG’s commitment is demonstrated by real actions: • Investing over $200 million to deliver energy efficiency • Investing over $600 million to develop solar energy, reduce carbon and create jobs • Investing over $400 million to improve nuclear facilities and develop clean power • Committing $100 million for an early site permit to build new nuclear • Developing a 350 MW wind farm off the coast of southern NJ Strong climate policies are essential to support investment. |
 Delivering Value: Today and Tomorrow 9 30% 35% 40% 45% 2007 2008 2009E 40% 45% 50% 55% 2007 2008 2009E PSEG Power Funds from Operations / Total Debt PSE&G Regulatory Equity Ratio Improvement in key credit measures … … provides support for planned investment program. |
 Delivering Value: Today and Tomorrow 10 On track to meet 2009 earnings guidance… … but, it will be difficult to meet upper-end of range. * See page 62 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. ** See page 63 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. 2007 Operating Earnings** 2008 Operating Earnings** 2009 Guidance $2.68 $3.00 - $3.25 $3.03 YTD September 2009 Operating Earnings*: $2.50 |
 Delivering Value: Today and Tomorrow 11 … continues 102-year history of paying common dividends. 70% 44% Payout Ratio 41% - 44% 43% 66% 63% $1.10 $1.12 $1.33 $1.17 $1.29 $1.14 2004 2005 2006 2007 2008 2009E *Indicated annual dividend rate * Dividends per Share Sixth consecutive annual increase in common dividend … |
 Delivering Value: Today and Tomorrow 12 Operational excellence, financial strength and disciplined investment… … position us well in today’s market. • Operational excellence efforts support: • Reliability • Cost control • Customer value • Investing in core business initiatives at attractive risk adjusted returns. • Actively managing hedging portfolio in challenging markets. • Maintaining strong balance sheet. |
 PSEG Review and Outlook |
 Delivering Value: Today and Tomorrow 14 Q3 Operating Earnings by Subsidiary $ 477 (5) 25 97 $ 360 2008 $ 464 20 18 87 $ 339 2009 Operating Earnings Earnings per Share (0.01) 0.04 Enterprise $ 0.94 $ 0.92 Operating Earnings* 0.05 0.04 PSEG Energy Holdings 0.19 0.17 PSE&G $ 0.71 $ 0.67 PSEG Power 2008 2009 $ millions (except EPS) Quarter ended September 30, * See page 62 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 Delivering Value: Today and Tomorrow 15 YTD Operating Earnings by Subsidiary $ 1,229 (14) 104 284 $ 855 2008 $ 1,264 17 58 253 $ 936 2009 Operating Earnings Earnings per Share (0.03) 0.03 Enterprise $ 2.41 $ 2.50 Operating Earnings* 0.20 0.12 PSEG Energy Holdings 0.56 0.50 PSE&G $ 1.68 $ 1.85 PSEG Power 2008 2009 $ millions (except EPS) Nine months ended September 30, * See page 62 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 Delivering Value: Today and Tomorrow 16 Low-cost portfolio Regional focus in competitive, liquid markets Assets favorably located near customers/load centers Many units east of PJM constraints Southern NEPOOL/ Connecticut Texas assets – low cost combined cycle Market knowledge and experience to maximize the value of our assets … with low cost plants, in good locations, within solid markets. Power’s assets support commitments in a dynamic environment… 15% 52% 8% 24% Fuel Diversity* Coal Gas Oil Nuclear Pumped Storage 1% Energy Produced* (Nine months ended September 30, 2009) 51% 15% 34% Pumped Storage & Oil <1% Nuclear Coal Gas Total GWh: 44,400 Total MW: 15,576 * Includes Texas |
 Delivering Value: Today and Tomorrow 17 PSEG Power – Gross Margin Performance $0 $25 $50 $75 2008 2009 Nine months ended September 30, $54 $64 • In 2009, PJM total gross margin was sustained by lower costs to serve, including strong performance of our nuclear fleet, which offset lower overall demand • Low gas pricing resulted in gas displacing coal-fired generation Regional Performance $47 $67 $2,234 Gross Margin ($M) YTD September 2009 Performance Region Low spark spreads, partially offset by increase in gas-fired generation. New York Performance of Bridgeport Harbor hurt by low energy prices and high cost of coal. New England Contribution to gross margin ($M) +11% versus year ago; strong nuclear production, higher contracted prices and decline in cost to serve offset 7.8% reduction in volumes and BGS customer migration. PJM PSEG Power Gross Margin ($/MWh) Note: Excludes Texas |
 Delivering Value: Today and Tomorrow 18 PSEG Power – Fuel Costs 159 338 Oil & Gas 80 130 Coal 20.00 32.40 $ / MWh 13,904 15,502 Total Generation (GWh) 278 502 Total Fuel Cost 39 34 Nuclear Total Fossil ($ millions) 239 468 2009 2008 Quarter ended September 30, PSEG Power – Fuel Costs 451 959 Oil & Gas 221 331 Coal 20.30 32.40 $ / MWh 38,576 42,771 Total Generation (GWh) 782 1,386 Total Fuel Cost 110 96 Nuclear Total Fossil ($ millions) 672 1,290 2009 2008 Nine months ended September 30, Note: Excludes Texas |
 Delivering Value: Today and Tomorrow 19 0% 25% 50% 75% 100% 2010 2011 2012 $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 0% 25% 50% 75% 100% 2010 2011 2012 $0 $50 $100 $150 Power’s hedging program provides near-term stability from market volatility… … while remaining open to long-term market forces. Estimated EPS impact of $10/MWh PJM West around the clock price change* (~$2/mmbtu gas change) Contracted Capacity Price (right scale) * As of October 2009: Assuming normal market commodity correlation and demand ** Excludes Texas – No capacity market Power has contracted for a considerable percentage of its future output over the next two years at attractive prices. The pricing for most of Power’s capacity has been fixed through May 2013, with the completion of auctions in PJM and NE. % sold (left scale) $0.40 - $0.70 $0.25 - $0.45 $0.10 - $0.20 Contracted Energy Price (right scale) % sold (left scale) ** |
 Delivering Value: Today and Tomorrow 20 Power’s hedging strategy secures pricing for near term output… • Sell expected nuclear and coal output forward over a two to three year horizon • Contract fuel to balance position • Buy gas as we sell output • Utilize liquid markets to manage risk • BGS annual recontracting opportunity; 3-year term mitigates volatility and monetizes basis • Source contractual needs from market on opportunistic basis • BGS at maximum tranches is approximately 40-50% of Power’s coal and nuclear output • Participation in the full requirements auctions supports margin opportunity commensurate with market risk • Extension of developed skill set supports participation in adjoining geographies within PJM … which mitigates the impact of market movements on earnings. |
 Delivering Value: Today and Tomorrow 21 Hedging our generation assets to increase our gross margin opportunities… PSEG Power's Generation Gross Margin (Illustrative) 0% 10% 20% 30% Gross Margin ($ M) Generation at Market Generation with Hedges … and reduce variability within market constraints. |
 Delivering Value: Today and Tomorrow 22 2003 2004 2005 2006 2007 2008 2009 Increase in Full Requirements Component Due to: Increased Congestion (East/West Basis) Increase in Capacity Markets/RPM Volatility in Market Increases Risk Premium The BGS auction process … Market Perspective – BGS Auction Results … cushions the impact of volatile markets on customers. Note: BGS prices reflect PSE&G Zone Full Requirements 3 Year Average Round the Clock PJM West Forward Energy Price $55.05 $65.41 ~ $18 ~ $21 $102.51 ~ $32 $98.88 ~ $41 ~ $43 $111.50 ~ $47 $103.72 $55.59 ~ $21 Capacity Load shape Transmission Congestion Ancillary services Risk premium Green $33 - $34 $36 - $37 $44 - $46 $67 - $70 $58-$60 $68 - $71 $56 - $58 * *2009 RTC price was ~ $50/MWh at time of auction |
 Delivering Value: Today and Tomorrow 23 Recent market environment prompts BGS customer migration … … while mid-term markets and rolling auctions should mitigate this impact. • Historic high prices in recent past • Recent spot market well below past years’ levels • Creates incentive for customers to migrate • Difference represents loss of a portion of margin per MWh • $0.04/sh impact to Power in Q3 2009 Short-Term Medium-Term • Current forward pricing points to recovery • Eliminates incentive to migrate • Smaller loss of margin per MWh • Reduces overall impact to Power Average BGS Rate Historical Market Price at Peak Current Forward Market Cost Illustrative Forward Market Cost vs. BGS Rate |
 Delivering Value: Today and Tomorrow 24 0 10 20 30 40 50 60 2009 2010 Major elements of BGS pricing have not varied greatly from last auction. Other elements of BGS could have a moderate effect. 36 month RTC PJM-W Energy 0 25 50 75 100 125 150 175 2009 2010 Capacity • Risk premium – Market and capital risk • Market – depressed environment • Congestion 2010 2009 $149 $159 3-year average $163 2012 / 2013 $110 $110 2011 / 2012 $174 $174 2010 / 2011 $191 2009 / 2010 BGS Auction PS Zone RPM Prices ($/MW-day) 2010 2009 $53 $57 3-year average $54 2012 / 2013 $53 $60 2011 / 2012 $51 $58 2010 / 2011 $52 2009 / 2010 BGS Auction RTC PJM West ($/MWh) |
 Delivering Value: Today and Tomorrow 25 2008 Operating Earnings* Energy Capacity Other Margin Cost 2009 Guidance … with visible sources of value to achieve this result. Power’s commitment in 2009 reflects continued earnings growth … $1,107M $1,170 - $1,245M $90 – 95M ($25 – 15M) $38– 88M O&M (pension) Depreciation Interest Other ($40 – 30M) Power’s 2008 Operating Earnings vs 2009 Guidance Operations Uprates BGS Recontracting Fuel Texas More capacity open to auction BGSS Other * See page 63 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 Delivering Value: Today and Tomorrow 26 PSE&G’s current investment plan including the recently approved NJ stimulus and EMP programs… 34% 53% 13% 0% 31% 4% 16% 49% 33% 15% 1% 51% … now provides for growth in rate base of 13%. PSE&G Rate Base 28% 22% 5% 45% Electric Transmission Electric Distribution Gas Distribution Energy Master Plan 2008 Rate Base $6.6B Equity Ratio ~ 50% 2009 Rate Base $7.3B Equity Ratio ~ 51%* 2010 Rate Base $8.6B Equity Ratio ~ 51%* 2011 Rate Base $9.7B Equity Ratio ~ 51%* *Includes Solar Loan II, which is pending regulatory approval |
 Delivering Value: Today and Tomorrow 27 0 400 800 1,200 1,600 2,000 2009 2010 2011 Base Capital Infrastructure Stimulus Energy Efficiency Stimulus Solar 4 All Solar II PSE&G Annual Projected Capital Investments ($Millions) PSE&G capital spending continues to grow through base Transmission projects… … and new initiatives developed to meet the State’s employment and environmental goals. |
 Delivering Value: Today and Tomorrow 28 PSE&G regulatory strategy… • Earn authorized returns • Minimize regulatory lag • Support state energy goals • Maintain/enhance local relationships … designed to support customer and shareholder requirements. |
 Delivering Value: Today and Tomorrow 29 New Jersey Electric & Gas Rate Case* Filed: May 29, 2009 6n6 Update: September 25, 2009 Test Year: 2009 51.2% Equity Ratio 11.5% Return on Equity *New Jersey BPU decision anticipated within 9-12 months. $2.4 billion $3.8 billion Rate Base $105.9 million $147.0 million Increase Gas Electric Request Includes tracking mechanisms for capital expenditures and pension costs. Request as of the 6n6 update |
 Delivering Value: Today and Tomorrow 30 2008 Operating Earnings* Weather Transmission Pension Depreciation, Interest and Other 2009 Guidance $360M $5 – 10M $315 – $335M $10 - 15M … increasing pension, depreciation and interest costs. ($45 - 40M) ($15 - 10M) In 2009, controlling O&M helps to mitigate the effects of… *See page 63 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings |
 Delivering Value: Today and Tomorrow 31 PSEG Global focused on… • Renewables: • Solar: • A 2 MW DC facility was installed during 2009 and have an additional 27 MW DC under contract for 2010 installation for a total amount of $100M • Ongoing development and opportunity evaluation is underway • Compressed Air Energy Storage (CAES) - Energy Storage & Power joint venture: • Technology to optimize renewable energy sources and power augmentation technology to improve the capacity of combined cycle plants • Offshore Wind – Garden State Offshore Wind joint venture: • 350 MW wind farm approximately 16 miles off the shore of southern New Jersey … identifying opportunities for renewable growth. |
 Delivering Value: Today and Tomorrow 32 Resources is focused on maximizing the value of its current investment portfolio… • Net Investment in lease portfolio of $0.3B as of September 30, 2009. • Book investment of $1.7B less deferred taxes of $1.4B. • As of September 30, 2009 the remaining tax exposure relating to LILO/SILO leases has been reduced to approximately $780 million including interest. • Cash on deposit with IRS of $320 million. • Recent court decision – positive development in on-going management of lease exposure. … while reducing the potential IRS exposure on LILO/SILO leases. |
 Delivering Value: Today and Tomorrow 33 -$0.2 $0.6 $1.4 $2.2 $3.0 Sources Uses PSEG Consolidated 2009E Sources and Uses Cash Ops* (Non-GAAP) Shareholder Dividend Investment (includes Nuclear Fuel) Net Asset Sales Internally generated cash in 2009 is expected to exceed investment needs. * Cash Ops (Non-GAAP) represents Cash Ops adjusted for securitization principal repayment, taxes associated with asset sales, and IRS deposits. IRS Deposit Net Debt Reduction |
 Delivering Value: Today and Tomorrow 34 Our balance sheet has been strengthened… … which provides us substantial financial flexibility. 35% 40% 45% 50% 9/30/09 12/31/08 (A) Long Term Debt (1+2+3+4) / Long Term Debt (1+2+3+4) + Equity (5) % Long Term Debt (A) September 30, 2009 December 31, 2008 Long-Term Debt Due (1) 449 $ 559 $ Project level, Non Recourse Debt Due (2) 5 286 Securitization Debt Due 194 188 Total Long-Term Debt Due Within One Year 648 1,033 Total Commercial Paper and Loans 243 19 Long-Term Debt (3) 6,326 6,621 Project level, Non Recourse Debt (4) 39 42 Securitization Debt 1,201 1,342 Total Long-Term Debt 7,566 8,005 Preferred Stock 80 80 Total Common Stockholders' Equity (5) 8,685 7,771 TOTAL CAPITALIZATION 17,222 $ 16,908 $ PSEG Consolidated ($Millions) |
 Delivering Value: Today and Tomorrow 35 Strong operations and risk controls… … position us to meet challenges of today’s market. Asset optimization yielding results 7 th successful BGS auction validates hedging strategy RPM capacity auction supports asset values in constrained areas Power’s dispatch profile provides operating flexibility PSE&G focused on reliability and meeting energy goals Organization focused on controlling costs Challenge to meet the upper end of our $3.00 - $3.25 per share operating earnings guidance. Investment focus on projects with attractive risk-adjusted returns Infrastructure Energy Efficiency Solar |
 Delivering Value: Today and Tomorrow 36 Positioned for the Future • Maintaining 2009 earnings guidance range • Operational excellence – focused on enhancing asset performance and achieving cost efficiencies in all businesses • Integrated generation and portfolio management optimizing asset-based revenues • Core business investments providing attractive returns • Sharpened business focus • Balance sheet strengthened • Attractive dividend yield • Balanced business mix • BGS: A demonstrated mechanism for meeting customer supply at market prices for multi-year period • Establishing a leadership position in energy policy – Federal and State policies provide opportunities for growth • T&D investments providing growth with minimal rate impact • Attractive carbon footprint • Strong financial position and cash flow provide flexibility in volatile markets – No need to issue equity Meeting Commitments and Delivering Value PSEG – Delivering Value: Today and Tomorrow |
 Appendix |
 PSEG Power |
 Delivering Value: Today and Tomorrow 39 … of serving full requirement load contracts, while maintaining optionality under a variety of conditions. Power’s assets along the dispatch curve reduce the risk… X X Ancillary Revenue X X X X Capacity Revenue X X Energy Revenue X X Dual Fuel Baseload units Load following units Peaking units Illustrative Salem Hope Creek Keystone Conemaugh Hudson 2 Linden 1,2 Burlington 8-9-11 Edison 1-2-3 Essex 10-11-12 Bergen 1 Sewaren 1-4 Hudson 1 Mercer1, 2 Bergen 2 Sewaren 6 Mercer 3 Kearny 10-11 Linden 5-8 / Essex 9 Burlington 12 / Kearny 12 Peach Bottom Bridgeport New Haven Nuclear Coal Combined Cycle Steam Peaking BEC Yards Creek National Park |
 Delivering Value: Today and Tomorrow 40 Operated by PSEG Nuclear PSEG Ownership: 100% Technology: Boiling Water Reactor Total Capacity: 1,211MW Owned Capacity: 1,211MW License Expiration: 2026 Filed for license extension, August 2009 Operated by PSEG Nuclear Ownership: PSEG - 57%, Exelon – 43% Technology: Pressurized Water Reactor Total Capacity: 2,345MW Owned Capacity: 1,346MW License Expiration: 2016 and 2020 Filed for license extension, August 2009 Operated by Exelon PSEG Ownership: 50% Technology: Boiling Water Reactor Total Capacity: 2,224MW Owned Capacity: 1,112MW License Expiration: 2033 and 2034 Hope Creek Salem Units 1 and 2 Peach Bottom Units 2 and 3 Our five unit nuclear fleet… … is a critical element of Power’s success. |
 Delivering Value: Today and Tomorrow 41 0 2,000 4,000 6,000 8,000 10,000 12,000 Power’s output is sold forward… … through full requirement contracts and other hedging transactions. 2010 2011 2012 2010 2011 2012 Nuclear Coal CC Steam / Pk Existing Hedges Existing Loads+ Hedges Existing Loads+ Hedges + Potential Future BGS Total Fleet On-Peak Average MW* Total Fleet Off-Peak Average MW* 0 2,000 4,000 6,000 8,000 10,000 12,000 * Includes Texas |
 Delivering Value: Today and Tomorrow 42 $0 $20 $40 $60 $80 $100 2004 2005 2006 2007 2008 2009 Fwd* 2010 Fwd 2011 Fwd Commodity prices have been volatile… *Average of 10 historical months and 2 forward months … but Power’s diverse asset portfolio and hedging strategy has mitigated the effect of volatility, providing strong results. Henry Hub NYMEX ($/MMBTU) Western Hub RTC ($/MWh) West Hub On Peak ($/MWh) Central Appalachian Coal ($/Ton) Note: Forward prices as of October 2009 $0 $20 $40 $60 $80 $100 $120 2004 2005 2006 2007 2008 2009 Fwd* 2010 Fwd 2011 Fwd $0 $2 $4 $6 $8 $10 2004 2005 2006 2007 2008 2009 Fwd* 2010 Fwd 2011 Fwd $0 $20 $40 $60 $80 $100 2004 2005 2006 2007 2008 2009 Fwd* 2010 Fwd 2011 Fwd |
 Delivering Value: Today and Tomorrow 43 $0 $20 $40 $60 $80 $100 2004 2005 2006 2007 2008 2009 Fwd 2010 Fwd 2011 Fwd The effect of our hedging/forward sales strategy… Power’s hedging strategy secures pricing over a 2 - 3 year future time horizon. The 3 year BGS Auction period has the effect of pulling forward prices back. … is to create a realized price that is a blend of prior and future pricing, moderating volatility. *PJM West Average of 10 historical months and 2 forward months PJM West PS Zone vs PJM West Basis 2009 realized price * |
 Delivering Value: Today and Tomorrow 44 -$10 $0 $10 $20 $30 $40 $50 2005 2006 2007 2008 2009 2010 2011 $0 $10 $20 $30 $40 $50 $60 $70 2005 2006 2007 2008 2009 2010 2011 Annual Average Historical Monthly Forecast Note: Forward prices as of October 2009 Spark spreads are in line with rising historical averages… PJM Western Hub Spark Spread (On-Peak – Henry Hub * 7.5 Heat Rate) PJM Western Hub Dark Spread (RTC – Central Appalachian Coal * 10 Heat Rate) … but near term dark spreads have declined in response to weak demand. |
 Delivering Value: Today and Tomorrow 45 2012 / 2013 RPM Auction Results • PSEG Power’s assets are in constrained zones, which cleared at higher prices. • Power’s offer for 178MW of new capacity was accepted by PJM. • Auction results reflect impact of new transmission capability. |
 Delivering Value: Today and Tomorrow 46 … Power expects to see continued strong margins from PJM’s Reliability Pricing Model. Through the new capacity construct, and pricing at auction prices… $185.00 PSEG North Zone $16.46 $110.00 $174.29 $102.04 $111.92 $40.80 Rest of Pool $133.37 $110.00 $174.29 191.32 MAAC $139.73 $110.00 $174.29 $191.32 $148.80 $197.67 Eastern MAAC 2012 / 2013 2011 / 2012 2010 / 2011 2009 / 2010 2008 / 2009 2007 / 2008 PJM Zones With nearly 1/3 of its capacity in PS North and nearly 2/3 of its capacity in MAAC and EMAAC, Power’s assets in congested locations received higher pricing in the 2012/2013 RPM Auction. PJM Capacity Available to Receive Auction Pricing 0 2,000 4,000 6,000 8,000 10,000 12,000 07/08 08/09 09/10 10/11 11/12 12/13 |
 Delivering Value: Today and Tomorrow 47 Power’s coal hedging strategy is matched up with generation… … with hedged coal pricing aligned with coal output sold. $0 $10 $20 $30 $40 $50 2010 2011 2012 Anticipated Coal Cost (Cost/MWh) Hedged Open Mid $20’s Mid $20’s Low $40’s Mid $40’s To High $30’s Mid $40’s Indicative Pricing ($/MWh) Prices lower, moderating Northern Appalachian Conemaugh Prices lower, moderating Northern Appalachian Keystone More limited segment of coal market Metallurgical Mercer Flexibility after BET in 2010 Adaro / Domestic Hudson Higher price, lower BTU, enviro coal Adaro Bridgeport Harbor Comments Coal Type Station |
 Delivering Value: Today and Tomorrow 48 $0 $5 $10 2010 2011 2012 Anticipated Nuclear Fuel Cost (Cost/MWh) Power has hedged its nuclear fuel needs through 2012… … with increased pricing over that time horizon. Hedged |
 Delivering Value: Today and Tomorrow 49 PSEG Texas projected EBITDA reflects … … higher maintenance costs and market uncertainty. Strong 2008 performance from favorable market in Spring 2008 For 2009: Gross margin impact from new wind additions Operations and maintenance costs approximately $15M higher in 2009 than 2007 as plants enter periods of major maintenance Longer-term: Continued uncertainty from wind Positive impact from transmission build-up. 45 – 55 40 – 45% 115 – 125 17% ~4.0 2009 PSEG Market 214 162 $186 Gross Margin ($M) 147 47.9% 14% 9.0 2008 104 48.7% 15% 6.9 2007 $130 54.4% 16% $6.7 2006 EBITDA* ($M) Capacity Factors Reserve Margin Nat. Gas Henry Hub Spot ($/mmBtu) *Excluding Mark-to-Market Accounting effects |
 Delivering Value: Today and Tomorrow 50 The implementation of carbon legislation will address the critical issue of global warming… ~$12.00 - ~$14.00 100% Total $0.00 $0.00 0% Nuclear $4.80 - $3.60 $8.00 60%- 45% Gas CC $1.20 - $0.60 $12.00 10% - 5% CTs $6.00 - $10.00 $20.00 30% - 50% Coal Impact $/MWh On margin (approximate) Dispatch curve implication @ $20/ton* By Fuel Type $12.0 $18.0 $30.0 @$30 $8.0 $12.0 $20.0 @$20 $4.0 $6.0 $10.0 @$10 Price ($/MWh) 0.4 0.6 1.0 Carbon tons/MWh CC CTs Coal … and activity continues in the direction of a national program. PSEG Power Generation Energy Produced (Nine months ended September 30, 2009) 51% 15% 34% Pumped Storage & Oil <1% Nuclear Coal Gas Total GWh: 44,400 ** *For illustration purposes – potential impact of CO 2 on power prices with current dispatch – not an indication of net effect on income. **Includes Texas |
 Delivering Value: Today and Tomorrow 51 The RGGI cap on CO 2 emission shows that headroom exists … … compared to historical emission levels. Affected Sources Fossil-fired electric generating units with a capacity of 25MW and larger Targets and Timing Three-year compliance periods with the first running from 2009- 2011 Stabilization of CO 2 emissions at recent levels through 2015 (~188 million tons per year) Achieve a 10% reduction of CO 2 emissions below recent levels by 2019 This translates into ~13% reduction below 1990 levels or ~35% reduction from Business as Usual (BAU) levels by 2020 CO2 Emissions vs. RGGI Cap (Actuals through 2007) 130 140 150 160 170 180 190 200 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 RGGI Cap Projected Actual & Forecast CO Actual |
 PSE&G |
 Delivering Value: Today and Tomorrow 53 Transmission Growth PJM approved the $750M Susquehanna to Roseland line in October 2007. Siting and permitting process underway Incentives approved by FERC: ROE: 12.93% (125 basis point adder) 100% CWIP in Rate Base FERC approval of Sub-Transmission to Transmission system reliability investments represents about $340M through 2011, post-2011 ~$60M per year. Other approved RTEP projects ~$250M also contribute meaningfully to improved reliability and earnings growth. PJM approved the Branchburg-Roseland-Hudson line in November 2008. PSE&G filed with FERC for incentive ROE adder of 150 bps in this $1.1B project; estimated in-service date of June 2013. These opportunities will require substantial deployment of capital with siting and permitting as the major challenges. Branchburg Roseland Jefferson New Freedom Smithburg Deans MAPP Hope Creek Salem Project I-765 Interstate Project PSE&G implemented fully-forecasted formula rates with an 11.68% base ROE, which provides attractive current return on investments. RTEP approved; subject to siting approval |
 Delivering Value: Today and Tomorrow 54 18.5 0 2 4 6 8 10 12 14 16 18 20 PSE&G Average 2011 Based on tariff rates in effect in March 2009. … produces superior value to our electric and gas customers. Electricity (500kWh/month bill) BGS Delivery Clauses 17.7 1.60 0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 PSE&G Average 2011 Gas (100 therm/month bill) BGSS Delivery Clauses 1.48 Source: Rates from PSE&G, NYPSC and PAPUC 1.53 BGSS Delivery * Clauses BGS*** Delivery * Clauses Potential Investments** 18.2 * Includes base rate increases ** Includes NJ stimulus filing (Capital and EEE), Solar 4 All and Solar II Potential Investments** *** Assumes BGS/BGSS pricing remains constant Combining operational excellence with prices comparable to regional competitors … |
 Delivering Value: Today and Tomorrow 55 Energy efficiency investment and savings Investment Timeline 2009 – 2011 (18 months) Category Residential Whole House Multi-Family Industrial & Commercial Small Business Muni/Local/State Government Hospital Efficiency Data Center Tech Demo Sub-Program Building Admin Sales, Training, Evaluation, IT TOTAL Expenditure Annual Lifetime Annual Lifetime Jobs ($ millions) $10 3,298 52,765 30,125 602,490 51 19 6,223 99,574 56,848 1,136,960 49 9,521 152,339 86,973 1,739,450 100 20 32,306 484,596 123,077 1,846,154 86 25 31,878 478,170 153,846 2,307,692 107 68 128,640 1,929,600 1,315,337 19,730,061 292 10 32,000 480,000 122,699 1,840,491 43 12 18,947 284,210 192,000 2,880,000 52 2 4,634 69,517 47,387 710,810 9 248,405 3,726,093 1,954,346 29,315,208 589 24 $190 257,926 3,878,432 2,041,319 31,054,658 689 Savings (MWh) Savings (Dtherms) |
 Delivering Value: Today and Tomorrow 56 PSE&G Solar 4 All Program Neighborhood Solar (40 megawatts) - $258.4M investment Solar panels on utility poles and street lights in neighborhoods throughout PSE&G’s service territory. Centralized Solar (40 megawatts) – $256.1M investment Solar systems on PSE&G land/buildings (25 megawatts). Solar systems on 3 rd Party sites (10 megawatts). Solar systems on sites in UEZs (5 megawatts). BPU approved a 10% ROE on its equity capital invested (47.4% common equity in its capital structure). Return and capital structure will change when a new WACC is established in a base rate case proceeding. Customer rate impact mitigated by benefits associated with ITC and the value of electricity and Solar Renewable Energy Certificates (SRECs) generated by the projects |
 PSEG |
 Delivering Value: Today and Tomorrow 58 PSEG Power had substantial and growing … … excess cash due to declining capital expenditures. 2008 2009 Excluding Non-Recurring Capex Excess Cash at Maintenance Capex Levels ~ $525M Excess Cash Flow • Cash Ops excluding changes in working capital • Less: Investing including Capex of $822M and Nuclear Fuel of $150M $800M - $900M • Improving Earnings & Cash Ops • Declining Capex Excess Cash Flow = Potential Dividends PSEG Power Cash Flow 2009 Capex = $693M vs. Sustainability Capex = $200M - $225M ~ $1.3B |
 Delivering Value: Today and Tomorrow 59 PSE&G’s asset base is growing. 2009 Guidance Retained Earnings Capex Financing Other Cash Ops 2009 $315M - $335M Capex ~$1,050 Dividends to the Parent are dependent on capital needs. PSE&G Cash Flow Cash Flow Drivers • Capital Spending • Earnings Cash Flow from adjustments to NI including Depreciation |
 Delivering Value: Today and Tomorrow 60 PSE&G’s investments in Energy Efficiency, Stimulus and Solar are conditioned upon receiving reasonable rate treatment. Future investments are weighted towards PSE&G and growth. $0 $500 $1,000 $1,500 $2,000 $2,500 2009 2010 2011 Power – Sustainability PSE&G - Distribution Infrastructure Power – BET Environmental PSE&G - Transmission PSE&G - Other Solar 4 All Energy Efficiency Solar II (Pending approval) Power – Growth 2009 - 2011 Capital Expenditures |
 Delivering Value: Today and Tomorrow 61 …with most of our credit facilities extending until 2012. We have substantial liquidity… 4.9% Union Bank of California 5.2% Citibank 5.9% BNP Paribas 6.2% BNY Mellon 6.4% Scotia Bank 6.6% Wachovia/Wells 6.6% Barclays 6.9% Royal Bank of Scotland 7.0% JPMorgan Chase 10.7% Bank of America Merrill % of Total Commitment Institution 0 500 1,000 1,500 2,000 2,500 3,000 3,500 Facility Expirations Dec11 = $122M Dec12 = $2.5B $100M Bilateral expiring March 2010 2009 2010 2011 2012 $350M Syndicated expiring in July 2011 Non-PSE&G Credit Capacity |
 Delivering Value: Today and Tomorrow 62 Items Excluded from Income from Continuing Operations to Reconcile to Operating Earnings Please see Page 3 for an explanation of PSEG’s use of Operating Earnings as a non-GAAP financial measure and how it differs from Net Income. Pro-forma Adjustments, net of tax 2009 2008 2009 2008 Earnings Impact ($ Millions) Gain (Loss) on Nuclear Decommissioning Trust (NDT) Fund Related Activity 7 $ (12) $ 1 $ (22) $ Gain (Loss) on Mark-to-Market (MTM) 17 11 (22) 30 Lease Reserves - - - (490) Premium on Bond Redemption - - - (1) Total Pro-forma adjustments 24 $ (1) $ (21) $ (483) $ Fully Diluted Average Shares Outstanding (in Millions) 507 508 507 509 Per Share Impact (Diluted) Gain (Loss) on Nuclear Decommissioning Trust (NDT) Fund Related Activity 0.01 $ (0.02) $ - $ (0.04) $ Gain (Loss) on Mark-to-Market (MTM) 0.03 0.02 (0.05) 0.06 Lease Reserves - - - (0.96) Premium on Bond Redemption - - - - Total Pro-forma adjustments 0.04 $ - $ (0.05) $ (0.94) $ For the Quarters Ended For the Nine Months Ended September 30, PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Reconciling Items Excluded from Continuing Operations to Compute Operating Earnings (Unaudited) September 30, |
 Delivering Value: Today and Tomorrow 63 Please see Page 3 for an explanation of PSEG’s use of Operating Earnings as a non-GAAP financial measure and how it differs from Net Income. Items Excluded from Income from Continuing Operations to Reconcile to Operating Earnings Pro-forma Adjustments, net of tax 2008 2007 Earnings Impact (in Millions) Asset Sales and Impairments: Impairment of PPN (9) $ (2) $ Impairment of Turboven (4) (7) Loss on Sale of Chilquinta and Luz del Sur - (23) Premium on Bond Redemption (1) (28) Total Asset Sales and Impairments (14) (60) Gain (Loss) on Nuclear Decommissioning Trust (NDT) Fund Related Activity (71) 12 Gain on Mark-to-Market (MTM) 16 10 Lease Reserves (490) - Total Pro-forma to Operating Earnings (559) $ (38) $ Fully Diluted Average Shares Outstanding (in Millions) 508 509 Per Share Impact (Diluted) Asset Sales and Impairments: Impairment of PPN (0.02) $ - $ Impairment of Turboven (0.01) (0.01) Loss on Sale of Chilquinta and Luz del Sur - (0.05) Premium on Bond Redemption - (0.06) Total Asset Sales and Impairments (0.03) (0.12) Gain (Loss) on Nuclear Decommissioning Trust (NDT) Fund Related Activity (0.14) 0.02 Gain on Mark-to-Market (MTM) 0.03 0.02 Lease Reserves (0.96) - Total Pro-forma to Operating Earnings (1.10) $ (0.08) $ For the Twelve Months Ended December 31, PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Reconciling Items Excluded from Continuing Operations to Compute Operating Earnings (Unaudited) |