 Public Service Enterprise Group PSEG Earnings Conference Call 2 nd Quarter 2011 August 3, 2011 EXHIBIT 99.1 |
 1 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, consequences 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. When used herein, the words “anticipate”, “intend”, “estimate”, “believe”, “expect”, “plan”, “should”, “hypothetical”, “potential”, “forecast”, “project”, variations of such words and similar expressions are intended to identify forward-looking statements. Although we believe that our expectations are based on reasonable assumptions, they are subject to risks and uncertainties and we can give no assurance they will be achieved. The results or developments projected or predicted in these statements may differ materially from what may actually occur. 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 a potential shift away from competitive markets toward subsidized market mechanisms, transmission planning and cost allocation rules, including rules regarding how transmission is planned and who is permitted to build transmission in the future, and reliability standards, • any inability of our transmission and distribution businesses to obtain adequate and timely rate relief and regulatory approvals from federal and state regulators, • changes in federal and state environmental regulations that could increase our costs or limit operations of our generating units, • changes in nuclear regulation and/or general developments in the nuclear power industry, including various impacts from any accidents or incidents experienced at our facilities or by others in the industry that could limit operations of our nuclear generating units, • actions or activities at one of our nuclear units located on a multi-unit site that might adversely affect our ability to continue to operate that unit or other units located at the same site, • any inability to balance our energy obligations, available supply and trading risks, • any deterioration in our credit quality, or the credit quality of our counterparties, • availability of capital and credit at commercially reasonable terms and conditions 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 in receipt of necessary permits and approvals for our construction and development activities, • delays or unforeseen cost escalations in our construction and development activities, • adverse changes in the demand for or price of the capacity and energy that we sell into wholesale electricity markets, • increase in competition in energy markets in which we compete, • challenges associated with recruitment and/or retention of a qualified workforce, • adverse performance of our decommissioning and defined benefit plan trust fund investments and changes in discount rates and funding requirements, and • changes in technology and customer usage patterns. 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. |
 2 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 gains or losses associated with Nuclear Decommissioning Trust (NDT) and Mark-to-Market (MTM) accounting and other material one-time items. 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 Income from Continuing Operations to reconcile to Operating Earnings, with a reference to that slide included on each of the slides where the non-GAAP information appears. |
 PSEG 2011 Q2 Review Ralph Izzo Chairman, President and Chief Executive Officer |
 4 Q2 2011 Earnings Summary $ millions (except EPS) 2011 2010 Operating Earnings $ 301 $ 321 Reconciling Items, Net of Tax 19 (99) Income from Continuing Operations $ 320 $ 222 Discontinued Operations 3 2 Net Income $ 323 $ 224 EPS from Operating Earnings* $ 0.59 $ 0.63 Quarter ended June 30 * See page 34 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 5 First Half 2011 Earnings Summary $ millions (except EPS) 2011 2010 Operating Earnings $ 732 $ 760 Reconciling Items, Net of Tax 50 (40) Income from Continuing Operations $ 782 $ 720 Discontinued Operations 67 (5) Net Income $ 849 $ 715 EPS from Operating Earnings* $ 1.44 $ 1.50 Six months ended June 30 * See page 34 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 6 PSEG – Q2 2011 Focused on operational excellence PSE&G focused on meeting reliability Power’s generation volumes declined 6% in the quarter Power continues to optimize fuel flexibility Foundation laid for the future PSEG Nuclear received 20-year operating license extension for Hope Creek and Salem Generating Stations Completed sales of both Texas generating plants Investments for the future BPU approved $368 million of energy efficiency and capital infrastructure programs for PSE&G Received incentive rate treatment for 3 transmission projects at FERC EPA released CSAPR; Final HAPs/MACT rule expected in November Financing position Fitch affirmed the credit ratings of PSEG, Power and PSE&G – Rating Outlook is Stable Focused on building a financially strong, environmentally friendly energy business |
 7 PSEG Capital Expenditures 2011-2013 ($ Millions) FROM TO PSE&G $4,575 $5,245 PSEG Power $1,495 $1,495 PSEG Energy Holdings $570 $40 Other $70 $70 Total $6,710 $6,850 Updated capital spending program continues focus on growth investments in distribution and transmission *Estimate +2.1% PSEG Capital Expenditures 2011-2013* |
 8 2009 Operating Earnings* 2010 Operating Earnings* 2011 Guidance $2.50 - $2.75E PSEG – Maintaining 2011 Guidance $3.09 * See page 35 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. $3.12 |
 PSEG 2011 Q2 Operating Company Review Caroline Dorsa Executive Vice President and Chief Financial Officer |
 10 Q2 Operating Earnings by Subsidiary Operating Earnings Earnings per Share $ millions (except EPS) 2011 2010 2011 2010 PSEG Power $ 186 $ 229 $ 0.36 $ 0.45 PSE&G 105 75 0.21 0.15 PSEG Energy Holdings 5 12 0.01 0.02 Enterprise 5 5 0.01 0.01 Operating Earnings* $ 301 $ 321 $ 0.59 $ 0.63 Quarter ended June 30 * See page 34 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 11 $0.59 (0.01) 0.06 (0.09) $0.63 0.00 0.25 0.50 0.75 PSEG EPS Reconciliation – Q2 2011 versus Q2 2010 Q2 2011 operating earnings* Q2 2010 operating earnings* Lower Pricing (0.05) Lower Volume & Weather (0.02) Migration (0.01) Trading & Other 0.02 D&A (0.02) O&M (0.01) PSEG Power Margins: Rate Relief 0.01 Transmission 0.01 Renewables & Cap Stimulus 0.02 O&M 0.03 Weather & Volume 0.01 D&A (0.01) Other (0.01) PSE&G PSEG Energy Holdings Absence of 2010 Tax Benefits for Solar & Other Projects (0.02) Other 0.01 •See page 34 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 12 First Half Operating Earnings by Subsidiary Operating Earnings Earnings per Share $ millions (except EPS) 2011 2010 2011 2010 PSEG Power $ 452 $ 541 $ 0.89 $ 1.07 PSE&G 268 192 0.53 0.38 PSEG Energy Holdings 2 19 - 0.03 Enterprise 10 8 0.02 0.02 Operating Earnings* $ 732 $ 760 $ 1.44 $ 1.50 Six months ended June 30 •See page 34 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 13 $1.44 (0.03) 0.15 (0.18) $1.50 0.00 0.25 0.50 0.75 1.00 1.25 1.50 1.75 PSEG EPS Reconciliation – YTD 2011 versus YTD 2010 YTD 2011 operating earnings* YTD 2010 operating earnings* Lower Pricing (0.05) Lower Volume & Weather (0.02) Migration (0.02) O&M (0.04) D&A and Interest (0.05) PSEG Power Margins: Rate Relief 0.04 Transmission 0.02 Renewables & Cap Stimulus 0.03 O&M 0.07 Weather & Volume 0.02 D&A (0.02) Other (0.01) PSE&G PSEG Energy Holdings Absence of 2010 Tax Benefits for Solar & Other Projects (0.02) ES&P Investment Write-off (0.01) * See page 34 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 PSEG Power 2011 Q2 Review |
 15 PSEG Power – Q2 2011 EPS Summary $ millions (except EPS) Q2 2011 Q2 2010 Variance Operating Revenues $ 1,285 $ 1,264 $ 21 Operating Earnings 186 229 (43) NDT Funds/Mark to Market Related Activity, Net of Tax 19 (27) 46 Income from Continuing Operations 205 202 3 Discontinued Operations 3 2 1 Net Income 208 204 4 EPS from Operating Earnings* $ 0.36 $ 0.45 ($ 0.09) * See page 34 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 16 $0.45 (0.06) (0.02) (0.01) $0.36 0.00 0.25 0.50 Lower Pricing (0.05) Lower Volume & Weather (0.02) Migration (0.01) Trading & Other 0.02 PSEG Power EPS Reconciliation – Q2 2011 versus Q2 2010 Q2 2011 operating earnings* Q2 2010 operating earnings* * See page 34 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. O&M Higher Depreciation for BET Lower IDC Offset |
 17 PSEG Power – Generation Measures 7,487 7,307 2,595 2,191 4,090 3,824 0 8,750 17,500 2010 2011 Quarter ended June 30 Total Nuclear Total Coal* Oil & Natural Gas – excluding Texas * Includes figures for Pumped Storage PSEG Power – Generation (GWh) 14,172 13,322 PSEG Power – Capacity Factors (%) 2010 2011 Nuclear 95.0% 94.6% Coal NJ 42% 31% PA 83% 80% CT 35% 15% Combined Cycle PJM and NY 52% 53% Six months ended June 30 |
 18 PSEG Power – Fuel Costs Quarter ended June 30 ($ millions) 2010 2011 Coal 99 83 Oil & Gas* 168 155 Total Fossil 267 238 Nuclear 41 44 Total Fuel Costs 308 282 Total Generation (GWh) 14,172 13,322 $ / MWh 21.73 21.17 PSEG Power – Fuel Costs * Excludes Texas |
 19 PSEG Power – Gross Margin Performance $0 $25 $50 $75 2010 2011 $51 $49 Quarter ended June 30 Margins influenced by lower pricing and volumes Regional Performance Region Q2 Gross Margin ($M) Q2 Performance PJM $622 Q2 contribution to gross margin declined, reflecting lower volumes, capacity prices, and BGS/hedge pricing which occurred in the quarter. Migration volumes are less than forecast, and impact on margin has abated with recent market price improvement. New England $27 Fuel cost management offset flat year-over-year pricing and lower volumes. New York $9 Lower volumes and pricing. PSEG Power Gross Margin ($/MWh)* * Excludes Texas Decrease in generation output balanced with fuel switching at PJM oil and gas units and slight reduction at nuclear. |
 20 Hedging Update… … our strategy is to hedge our base load generation long term. Contracted Energy* * Hedge percentages and prices as of July 2011 for the August 2011 and forward time frame. Revenues of full requirement load deals based on contract price, including renewable energy credits, ancillary, and transmission components but excluding capacity. Hedges include positions with MTM accounting treatment and options. 2011 2012 2013 Aug - Dec Volume TWh 14 36 36 Base Load % Hedged 100% 75%-80% 35%-40% (Nuclear and Base Load Coal) Price $/MWh $68 $64 $63 Volume TWh 9 20 21 Intermediate Coal, Combined % Hedged 30%-35% Cycle, Peaking Price $/MWh $68 Volume TWh 23 56 57 Total % Hedged 70%-75% 45%-50% 20%-25% Price $/MWh $68 $64 $63 |
 21 PSEG Power – Q2 Operating Highlights Q2 output declined by 6% Q2 nuclear capacity factor at 90% Coal dispatch affected by higher cost structure Combined cycle units captured market opportunities Operations Regulatory and Market Environment Hope Creek and Salem received 20-year Operating License Extensions from the NRC Market prices for energy improved in Q2 May RPM auction results continue to support locational value of assets New Jersey BPU currently investigating the need for additional capacity subsidies |
 PSE&G 2011 Q2 Review |
 23 PSE&G – Q2 2011 Earnings Summary $ millions (except EPS) Q2 2011 Q2 2010 Variance Operating Revenues $ 1,571 $ 1,536 $ 35 Operating Expenses Energy Costs 815 917 (102) Operation & Maintenance 304 343 (39) Depreciation & Amortization 172 177 (5) Taxes Other than Income Taxes 28 28 - Total Operating Expenses 1,319 1,465 (146) Operating Earnings 105 75 30 EPS from Operating Earnings* $ 0.21 $ 0.15 $ 0.06 * See page 34 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 24 $0.15 0.04 0.03 0.01 (0.02) $0.21 0.00 0.05 0.10 0.15 0.20 0.25 ` PSE&G EPS Reconciliation – Q2 2011 versus Q2 2010 Q2 2011 operating earnings* Q2 2010 operating earnings* Weather & Volume * See page 34 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. O&M Margins: Rate Relief 0.01 Transmission 0.01 Renewables & Cap Stimulus 0.02 D&A (0.01) Other (0.01) |
 25 PSE&G – Monthly Weather Data 1,325 3,459 403 208 1,333 3,954 158 737 2,918 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 April May June 2011 2010 Normal 2011 vs. 2010 vs. Normal PSE&G Monthly Temperature Humidity Index (THI) -5.6% Q2 2011 vs. Q2 2010 + 36% Q2 2011 vs. Normal |
 26 PSE&G Capital Expenditures 2011-2013 ($ Millions) FROM TO Transmission $2,735 $2,920 Distribution $1,295 $1,685 Renewables/EMP $545 $640 Total $4,575 $5,245 Capital program provides growth in rate base of 11-12% from 2010 Transmission investment represents over 50% of planned capex over 2011-2013 Supportive regulatory treatment *Estimate +15% PSE&G Capital Expenditures 2011-2013* |
 27 PSE&G – Q2 Operating Highlights NJBPU approved $368 million of energy efficiency and capital infrastructure programs for PSE&G Received incentive rate treatment for 3 transmission projects at FERC Energy Master Plan Draft Released - Public hearings PSE&G has increased its capital budget by $670 million over 2011-2013 Rate base growth over the 2010-2013 period projected to be 11.5% CAGR Operations Regulatory and Market Environment Financial Economic indicators have stalled Focused on maintaining reliability |
 PSEG Energy Holdings 2011 Q2 Review |
 29 PSEG Energy Holdings – Q2 2011 Earnings Summary $ millions (except EPS) Q2 2011 Q2 2010 Variance Operating Revenues $ 21 $ 20 $ 1 Income from Continuing Operations / Net Income / Operating Earnings $ 5 $ 12 ($ 7) EPS from Operating Earnings* $ 0.01 $ 0.02 ($ 0.01) * See page 34 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 30 $0.01 0.01 (0.02) $0.02 0.00 0.01 0.02 0.03 0.04 PSEG Energy Holdings EPS Reconciliation – Q2 2011 versus Q2 2010 Q2 2011 operating earnings* Q2 2010 operating earnings* Other * See page 34 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. Absence of Q2 2010 Tax Benefits for Solar and Other Projects |
 PSEG |
 32 PSEG 2011 Operating Earnings Guidance - By Subsidiary $ millions (except EPS) 2011E 2010A PSEG Power $ 765 – $ 855 $ 1,091 PSE&G $ 495 – $ 520 $ 430 PSEG Energy Holdings $ 0 – $ 5 $ 49 Enterprise $ 5 – $ 15 $ 14 Operating Earnings* $ 1,265 – $ 1,395 $ 1,584 Earnings per Share $ 2.50 – $ 2.75 $ 3.12 * See page 35 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 33 PSEG Liquidity as of June 30, 2011 Expiration Total Available Company Facility Date Facility Usage Liquidity ($Millions) PSE&G 5-year Credit Facility Apr-16 $600 $298 $302 5-Year Credit Facility (Power) Dec-12 $1,600 1 $170 $1,430 5-Year Credit Facility (Power) Apr-16 $1,000 $0 $1,000 5-Year Bilateral - Credit Suisse (Power) Sep-15 $100 $100 $0 5-year Credit Facility (PSEG) Dec-12 $500 2 $14 $486 5-year Credit Facility (PSEG) Apr-16 $500 $0 $500 Total $4,300 $3,718 $92 PSE&G ST Investment $0 Total Liquidity Available $3,810 Total Parent / Power Liquidity $3,508 1 Power Facility reduced by $75 million in 12/2011 2 PSEG Facility reduced by $23 million in 12/2011 PSEG / Power PSEG Money Pool ST Investment |
 34 Items Excluded from Income from Continuing Operations to Reconcile to Operating Earnings Please see Page 2 for an explanation of PSEG’s use of Operating Earnings as a non-GAAP financial measure and how it differs from Net Income. Pro-forma Adjustments, net of tax 2011 2010 2011 2010 Earnings Impact ($ Millions) Gain (Loss) on Nuclear Decommissioning Trust (NDT) Fund Related Activity (PSEG Power) 15 $ 10 $ 42 $ 20 $ Gain (Loss) on Mark-to-Market (MTM) (PSEG Power) 4 (37) 8 12 Market Transition Charge Refund (PSE&G) - (72) - (72) Total Pro-forma adjustments 19 $ (99) $ 50 $ (40) $ Fully Diluted Average Shares Outstanding (in Millions) 507 507 507 507 Per Share Impact (Diluted) Gain (Loss) on NDT Fund Related Activity (PSEG Power) 0.03 $ 0.02 $ 0.08 $ 0.04 $ Gain (Loss) on MTM (PSEG Power) 0.01 (0.07) 0.02 0.02 Market Transition Charge Refund (PSE&G) - (0.14) - (0.14) Total Pro-forma adjustments 0.04 $ (0.19) $ 0.10 $ (0.08) $ PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Reconciling Items Excluded from Continuing Operations to Compute Operating Earnings (Unaudited) For the Three Months Ended For the Six Months Ended June 30, June 30, |
 35 Items Excluded from Income from Continuing Operations to Reconcile to Operating Earnings Please see Page 2 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 2010 2009 Earnings Impact ($ Millions) Gain (Loss) on Nuclear Decommissioning Trust (NDT) Fund Related Activity (PSEG Power) 46 $ 9 $ Gain (Loss) on Mark-to-Market (MTM) (PSEG Power) (1) (11) Net Reversal of Lease Transaction Reserves (Energy Holdings) - 29 Market Transition Charge Refund (PSE&G) (72) - Total Pro-forma adjustments (27) $ 27 $ Fully Diluted Average Shares Outstanding (in Millions) 507 507 Per Share Impact (Diluted) Gain (Loss) on NDT Fund Related Activity (PSEG Power) 0.09 $ 0.02 $ Gain (Loss) on MTM (PSEG Power) - (0.02) Net Reversal of Lease Transaction Reserves (Energy Holdings) - 0.05 Market Transition Charge Refund (PSE&G) (0.14) - Total Pro-forma adjustments (0.05) $ 0.05 $ December 31, PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Reconciling Items Excluded from Continuing Operations to Compute Operating Earnings (Unaudited) For the Twelve Months Ended |