 PSEG Public Service Enterprise Group Goldman Sachs Power & Utility Conference New York, NY August 14, 2012 EXHIBIT 99 |
 2 Forward-Looking Statement • adverse changes in the demand for or price of the capacity and energy that we sell into wholesale electricity markets, • 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 our operations, • 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, including in our leveraged leases, • availability of capital and credit at commercially reasonable terms and conditions and our ability to meet cash needs, • 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, • any inability to achieve or continue to sustain, our expected levels of operating performance, • increase in competition in energy supply markets as well as competition for certain rate-based transmission projects, • any inability to realize anticipated tax benefits or retain tax credits, • 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. Readers are cautioned that statements contained in this presentation about our 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: 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. |
 3 GAAP Disclaimer PSEG presents Operating Earnings in addition to its Net Income reported in accordance with generally accepted accounting principles 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), 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 page in this presentation (Page A) includes 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 – The Business of PSEG Caroline Dorsa Executive Vice President and Chief Financial Officer |
 5 Growing an operationally excellent, integrated generation, transmission and distribution business PSE&G positioned to meet NJ’s energy policy and economic growth objectives with a $5.4 billion investment program through 2014 PSEG Power’s low-cost, base load and load following fleet is geographically well positioned and environmentally responsible PSEG Energy Holdings positioned to pursue attractive renewable generation opportunities Assets $17.5B Operating Earnings $521M Assets $11.1B Operating Earnings $845M Assets $1B Operating Earnings $5M Assets and operating earnings are for the year ended 12/31/2011. * See page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. Electric & Gas Delivery and Transmission Regional Wholesale Energy Renewable Investments |
 6 2012 – A year of significant accomplishment • NJBPU approved North Central Grid transmission line • Proposing up to $883 million solar energy investment through Solar 4 All and Solar Loan programs • Improved to 2 place (from 10 ) on the 2012 J.D. Power Electric Utility Residential Customer Satisfaction Study-East Region • Improved availability of gas-fired CCGT fleet and strong nuclear performance • O&M under control • 400 MW of new peaking generation for summer 2012 • Continued de-risking of legacy portfolio • Denver building sold • IRS settlement on LILO/SILO tax matters • IRS audit resolution • 25 MW Solar project in Arizona th nd |
 7 Focused program to improve operating efficiency and direct capital investment to PSE&G reduced the impact of lower energy prices on operating earnings • O&M Growth per year • Transmission Rate Base • Utility Cap Stimulus Spending • Utility Solar & EE Cap Exp • EFORd Rate CCGT Coal • Nuclear Generation • Holdings Solar Investment • 2.4% (planned) • $866 • $0 • $0 • 1.6% • 8.4% • 29.3TWh • $0 • 0.4% (actual) • $1,600 • $760 • $687 • 1.1% • 6.6% • 30.1TWh • $120 2008 PSEG Focus ($ millions, except as noted) 2011 $2.91 $2.74 Operating Earnings Per Share $69.85 $43.57 PJM West RTC ($/MWh) *See page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings; All periods reflect Texas in Discontinued Operations. |
 8 Our business mix has changed with PSE&G forecast to grow to 45% of 2012 operating earnings Operating Earnings by Subsidiary* *See page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings; All periods reflect Texas in Discontinued Operations. E = Estimate. $3.09 $3.12 $2.74 PSE&G Power Other Guidance $2.25-$2.50 $1.13 to $1.31 $1.05 to $1.10 $0.07 to $0.09 $0.04 $1.67 $1.03 $2.15 $0.12 $0.85 $0.11 $2.35 $0.63 |
 9 First-Half 2012 Operating Earnings by Subsidiary – In Line with Expectations Operating Earnings Earnings per Share $ millions (except EPS) 2011 2012 2011 2012 PSEG Power $ 452 $ 306 $ 0.89 $ 0.60 PSE&G 268 298 0.53 0.59 PSEG Energy Holdings/Enterprise 12 43 0.02 0.09 Operating Earnings* $ 732 $ 647 $ 1.44 $ 1.28 Six Months ended June 30 * See Page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 10 Guidance $1.31 $1.13 PSEG’s 2012 earnings guidance of $2.25 to $2.50 reflects continued improvement at PSE&G and a decline in margins at Power $0.00 $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 2011 Operating Earnings* 2012E Earnings Guidance* PSE&G Earnings Per Share 2012 Assumptions PSE&G Growth in investments that provide contemporaneous returns Transmission Distribution economic stimulus programs Programs supporting NJ’s Energy Master Plan Power Impacted by lower energy prices Near term effects minimized by hedges in place ~400MW new Peaking capacity in-service mid 2012 Energy Holdings / Parent Operating earnings guidance of $0.07 to $0.09 $0.00 $0.50 $1.00 $1.50 $2.00 2011 Operating Earnings* 2012E Earnings Guidance* Power Earnings Per Share Guidance $1.10 $1.05 *See page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings; 2011 reflects Texas in Discontinued Operations. E = Estimate |
 11 PSEG’s long-term outlook is influenced by Power’s hedge position and increased investment at PSE&G 2013 2014 Each $1/mcf Change in Natural Gas Each $2/Mwh Change in Spark Spread Each $2/Mwh Change in Dark Spread Each 1% Change in Nuclear Capacity Factor Each 3% Change in Depreciation Rate Segment EPS Drivers $0.01 $0.01 $0.01 $0.01 $0.01 $0.01 $0.01 $0.01 $0.01 $0.01 $0.12 - $0.15 $0.04 $0.01 $0.01 $0.01 $0.01 - $0.04 $0.04 $0.01 $0.01 $0.01 Note: EPS impacts assume normal market commodity correlation and demand. Each $100 Million of Incremental Investment Each 1% Change in Sales: Electric Gas Each 1% Change in O&M Each 10 bp Change in ROE |
 12 $1,000 $1,250 $1,500 $1,750 $2,000 $2,250 $2,500 2011 2012E 2013E 2014E O&M Pension PSEG Consolidated O&M (1) CAGR (’11-’14) = 2.9% (1) Excludes O&M related to PSE&G clauses. E = Estimate. Focus on business drivers supports overall cost control 2012 – 2014: Cyclical maintenance expenses at Power Growth in transmission & appliance service Headcount relatively flat Total fringe costs declining |
 13 Investments focused on growth to meet customer requirements PSEG 2012-2014E Capital Spending* $6.7 Billion by Subsidiary PSEG 2012-2014E Capital Spending* $6.7 Billion Growth / Environmental / Maintenance E = Estimate; Capital excludes IDC and AFUDC. *This forecast does not reflect the impact of new proposals recently filed with the NJBPU. |
 14 30% 35% 40% 45% 50% 55% 2012E 2013E 2014E 30% 35% 40% 45% 50% 55% 2012E 2013E 2014E PSEG Power Funds from Operations / Total Debt PSEG Debt as Percent of Capital • Credit metrics remain above our floor levels, notwithstanding near-term power market expectations • Investment Capacity exceeds $700 million in all years even with large capital expenditures at PSE&G • PSEG maintains its capital structure throughout the forecast period A solid financial strategy – balance sheet strength to direct investments to the areas of greatest growth and value potential |
 15 PSEG’s strong credit profile provides the financial flexibility for over $1B of additional capital investment in the regulated business 2012-2014E PSEG Sources & Uses Sources Uses Power Cash from Ops PSE&G Cash from Ops (1) Debt Redeemed PSE&G Capital Investment Power Capital Investment Shareholder Dividend Debt Issuances Holdings & Other Net Cash Flow Cash (1) PSE&G Cash from Operations adjusts for securitization principal repayments of ~$680 Million in 2012-2014. E=Estimate. B=Billion. |
 16 PSEG is working with the state to advance energy policy, build infrastructure, and develop jobs … helping to make Governor Christie’s vision a reality Photo: PSEG Hackensack, NJ Solar Farm Groundbreaking – July 31, 2012 |
 17 In addition to new reliability based transmission projects and future dividend growth, PSEG has the potential to increase its investment in PSE&G through several multi-year programs under review Potential Investment ($ millions) Per Year Potential Gas Infrastructure $250-$300 Energy Efficiency $35-$40 Total Potential Investment (Per Year) $285-$340 Million PSE&G filed proposals with the BPU to increase its investment in solar by up to $883 million through existing programs over a multi-year period of time … Program Investment ($ millions) Solar 4 All Extension (over 5 years) Up to $690 Solar Loan (over 3 years) Up to $193 Total Potential Investment Up to $883 Million and is evaluating the potential for increased investment in energy efficiency and gas infrastructure … |
 18 18 18 The business of PSEG: Returning cash to investors through common dividends and preserving flexibility to invest for future growth PSEG Annual Dividend Rate $1.08 $1.08 $1.10 $1.12 $1.14 $1.17 $1.29 $1.33 $1.37 $1.37 $1.42 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Payout Ratio 111% 62% 70% 63% 66% 43% 44% 43% 44% 50% 60%* 5-year Rate of Growth 3.95% 10-year Rate of Growth 2.78% *Based on mid-point of 2012 operating earnings guidance. |
 19 PSEG Value Proposition Operating Excellence Regulatory/ Market Drivers Financial Strength Disciplined Investment • • • – Environmental compliance costs and low natural gas prices to force retirements of 11 to 25 GW of existing generation in PJM – Infrastructure upgrades/reliability requirements driving regulated investment • • • • power and 13% CAGR in regulated rate base in position to benefit from higher market prices for PSEG Clean, low cost Nuclear, CCGT, and Coal generating fleet Large, reliable electric and gas distribution operations Energy markets in midst of transformational change finance growth opportunities Meaningful 2012 dividend increase and revised dividend policy Management long-term incentive leveraged to shareholder value creation Strong balance sheet provides flexibility and liquidity to |
 The Business of PSE&G Ralph LaRossa President and Chief Operating Officer |
 21 PSE&G is the largest electric and gas distribution and transmission utility company in New Jersey providing renewable and energy efficiency solutions * Weather normalized - estimated annual growth per year over forecast period. ** Specific projects approved for incentive rate treatment with additional ROE. *** Energy Efficiency Annualized Savings (includes conversion of gas savings). Electric Gas Customers Growth (2007 – 2011) 2.2 Million 0.7% 1.8 Million 0.7% Electric Sales and Gas Sold and Transported 42,506 GWh 3,527 M Therms Projected Annual Load Growth (2012 – 2014) 0.8%* 0.1%* Historical Annual Peak Load Growth Transmission (2007 – 2011) 1.7% Projected Annual Load Growth Transmission (2012 – 2014) 1.4% Sales Mix Residential 33% 60% Commercial 57% 36% Industrial 10% 4% Transmission Electric Gas Approved Rate of Return 11.68% ROE** 10.3% ROE 10.3% ROE Renewables and Energy Efficiency 2009-2011 Total Program Plan Solar Loan 38 MW 81 MW Solar 4 All 59 MW 80 MW Energy Efficiency Initiative (annualized equivalent)*** 282 GWh 402 GWh |
 22 Approved ROE Inclusion of CWIP in Rate Base 100% Recovery of Costs Due to Abandonment Total Estimated Project Costs Susquehanna-Roseland 12.93% $790 Northeast Grid Reliability 11.93% $895 North Central Reliability 11.68% $390 Burlington – Camden 230kV 11.68% $381 Mickleton – Gloucester 230kV 11.68% $435 Major Transmission Projects FERC and PJM support for transmission investment has created substantial opportunities for PSE&G to improve reliability while earning contemporaneous returns |
 23 PSE&G is replacing aging distribution infrastructure to improve reliability at a reasonable return 0 250 500 750 1,000 2009 2010 2011 2012E 2013E 2014E Dist. Capital Infrastructure Programs Distribution New Business Distribution Base • Capital Infrastructure Program II was approved in 2011 with spending through 2012 • Recent incidents in the gas industry have led to enhanced focus on safety of natural gas pipeline systems • Utility storm response in NJ is under review by the Board of Public Utilities Capital Expenditures |
 24 PSE&G is proactively and aggressively investing in infrastructure Potential Investment ($ millions) Per Year Potential Gas Infrastructure $250-$300 Energy Efficiency $35-$40 Total Potential Investment (Per Year) $285-$340 Million PSE&G filed proposals with the BPU to increase its investment in solar by up to $883 million through existing programs over a multi-year period of time … Program Investment ($ millions) Solar 4 All Extension (over 5 years) Up to $690 Solar Loan (over 3 years) Up to $193 Total Potential Investment Up to $883 Million and is evaluating the potential for increased investment in energy efficiency and gas infrastructure … |
 25 as filed – could grow to $1.5 billion over 5 years … ($ in Millions) Investment as of 6/30/12 Approved Investment Under Existing Programs New Proposals* Total Solar Loan I & II $177 $248 $193 $441 Solar 4 All $401 $456 $690 $1,146 Total $578 $704 $883 $1,587 + = *On July 31, 2012, PSE&G filed with the NJBPU to invest up to $883 million in additional solar energy projects over the next three to five years. PSE&G investment in solar energy – if approved |
 26 Providing solutions to New Jersey’s energy and economic development goals 0 100 200 300 400 2009 2010 2011 2012E 2013E 2014E Energy Efficiency Renewables ($ Millions) Approval Date Total Amount Spending Thru 2011 Remaining Spending Renewables Solar Loan I & II April 2008/ November 2009 $248 $127 $121 Solar 4 All July 2009 456 361 95 Energy Efficiency Carbon Abatement December 2008 46 40 6 Energy Efficiency Economic Stimulus July 2009 166 144 22 Demand Response July 2009 45 15 30 Energy Efficiency Economic Stimulus Extension July 2011 95 - 95 Total $1,056 $687 $369 Capital Expenditures* *This forecast does not reflect the impact of new proposals recently filed with the NJBPU. |
 27 PSE&G’s investment program provides opportunity for ~13% annualized growth in rate base from 2011* PSE&G Projected Rate Base *Starting from 2011 year-end Rate Base of $7.6 billion. This forecast does not reflect the impact of new proposals recently filed with the NJBPU. 0 2,000 4,000 6,000 8,000 10,000 12,000 2009 2010 2011 2012 2013 2014 Gas Distribution Electric Distribution Transmission Solar/Energy Efficiency |
 The Business of PSEG Power |
 29 Asset diversity enables fleet optimization in response to changing market dynamics 18% 44% 8% Fuel Diversity Coal Gas Oil Nuclear Pumped Storage 1% Energy Produced* Total GWh: 53,980 56% 15% Pumped Storage & Oil <1% Nuclear Coal Gas Total MW: 13,060 28% 9% * 2011 • Well suited to serve load shaped products • Market knowledge and experience to maximize the value of our assets • Multiple emission controls installed Intermediate Energy Market Served Total MW: 13,060 28% 23% 34% 43% Baseload Peaking • Low-cost portfolio • Fuel flexibility • Regional focus in competitive, liquid markets • Assets favorably located near customers/load centers |
 30 $0 $1 $2 $3 $4 $5 $6 PPL RECO METED PECO JCPL PEPCO AECO DPL PSEG BGE $40 $42 $44 $46 $48 $50 WESTERN HUB PPL RECO METED PECO JCPL PEPCO AECO DPL PSEG BGE A well positioned fleet Note: Reflects prices of original PJM load zones. • PSEG Power 2011 basis ~$5/MWhr RTC • While 5 year average has declined, volatile periods help to maintain pricing • Premium pricing also seen in capacity markets 2011 RTC LMPs 2011 Basis to PJM West RTC Current plant locations New Haven Bridgeport Bethlehem Energy Center (Albany) Conemaugh Keystone Peach Bottom Bergen Kearny Essex Sewaren Edison Linden Mercer Burlington National Park Hudson Hope Creek Salem Yards Creek PSEG North PSEG Zone Eastern MAAC RPM Zones |
 31 Conclusion of major environmental spend places Power in good position to meet CSAPR and MATS Current Regulations and Compliance Measures Description Hudson (NJ) Mercer (NJ) Keystone (PA) `Bridgeport (CT) Conemaugh (PA) Status NO x SCR SCR SCR Low No x Burners SCR 2014 Power is well positioned for CSAPR & MATS SO 2 Scrubber Scrubber Scrubber Ultra-low Sulfur Coal Scrubber Mercury/ Particulate Baghouse & Activated Carbon Baghouse & Activated Carbon Scrubber & SCR, ESP Baghouse & Activated Carbon Scrubber & SCR, ESP Capital Spend Planned No Additional Capital Spend Planned |
 32 An active gas management strategy providing economic value to customers and our fleet • Large portfolio of gas transportation & storage assets • Manage gas supply needs of PSE&G and PSEG Power • Responsible for over 400 bcf of gas supply in 2011 • 126 bcf consumed by Power’s gas fired assets in 2011; NJ units used 11% of total PJM gas • Well positioned to access Marcellus supplies; nearly 40% of pipeline capacity is adjacent to the region • Residential rates decreased eight times since January, 2009; total savings $614, or 35% |
 33 33 Actively managing our fleet in a volatile commodity market, with an asset profile that provides diverse opportunities for value creation • Steep natural gas decline has had a major impact on US power prices and Dark Spreads • Coal prices have been supported by long-term contracting and international demand • Decline in Dark Spread has led to reduced coal-fired generation in the last 15 months • Power’s investments in dual-fuel capability at Hudson and Mercer coal units have made them more attractive than many other coal units in this environment, and we have switched to gas generation as economics dictate 2014 Forward Prices & Dark Spread* 2013 Forward Prices & Dark Spread* * As of April 27, 2012. - 10 20 30 40 50 0 20 40 60 80 100 Aug-09 Feb-10 Aug-10 Feb-11 Aug-11 Feb-12 Western Hub RTC Forward 2013 Dark Spread - 10 20 30 40 50 0 20 40 60 80 100 Aug-09 Feb-10 Aug-10 Feb-11 Aug-11 Feb-12 Western Hub RTC Forward 2014 Dark Spread |
 34 34 • Low power prices are not a good environment for any merchant generator, although Power is more of a hybrid with long-term contracting through BGS sales as well as forward hedging • Forward markets signal continued strength in Spark Spreads and Heat Rates • Strong spark spreads in the Northeast have benefitted our gas-fired fleet • Power is well positioned with hedged nuclear output and efficient combined cycle margin contribution Henry Hub Gas Forwards* 2013 and 2014 RTC Forward Prices & Spark Spread* Managing our fleet to capitalize on volatility * As of April 27, 2012. 0 1 2 3 4 2013 2014 2015 - 10 20 30 40 0 20 40 60 80 Aug -09 Feb-10 Aug -10 Feb-11 Aug -11 Feb-12 Western Hub RTC Forward 2014 Western Hub RTC Forward 2013 2014 Spark Spread 2013 Spark Spread |
 35 PJM assets are well positioned along the dispatch curve and maintain fuel optionality while also reducing the risk of serving full requirements contracts Energy Revenue Capacity Revenue Ancillary Revenue Dual Fuel Peaking units* Load following units Nuclear Coal Combined Cycle Steam Peaking Baseload 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 Mercer 1, 2 Bergen 2 Sewaren 6 Mercer 3 Kearny 10-11 Linden 5-8 / Essex 9 Burlington 12 / Kearny 12 Peach Bottom Yards Creek National Park Salem 3 Bergen 3 * Some units have been announced for future retirements. |
 36 2008 2009 2010 2011 Dark Spread Spark Spread PSEG Zone LMP's Maximizing the dispatch of our coal and gas fleet to maintain unit margins $/MWh • Market prices have declined since 2008 • Although dark spreads have declined, spark spreads have increased • Since 2008 there has been active coal/gas switching in our fleet • Coal generation and margin percentage have been replaced by our combined cycle output 50% 45% 47% 41% 50% 55% 53% 59% 0% 25% 50% 75% 100% 2008 2009 2010 2011 Coal Gas 72% 34% 36% 30% 28% 66% 64% 70% 0% 25% 50% 75% 100% 2008 2009 2010 2011 Coal Gas % PSEG’s PJM Coal/Gas Generation % PSEG’s PJM Coal/Gas Energy Margin $0 $25 $50 $75 $100 |
 37 Managing our ancillary revenue stream, which contributes $100M in annual margin for Power, with potential to expand services as dependence on intermittent resources grows Reactive Regulation Sync/Non-sync Reserves Black Start Nuclear Coal Combined Cycle CT |
 38 Note: PJM totals do not include ATSI and DEOK regions; announced retirement totals inclusive of retirements from 1/1/2010. The EPA is in the process of implementing Clean Air Act rules which will impact supply Region Total Capacity (GW) Total Coal Capacity (GW) Unscrubbed Capacity (GW) Announced Coal Retirements (GW) Announced Coal Retirements (as % of total) PJM 180 79 30 14 8% NY ISO 37 2.6 0.6 0.8 2% ISO-NE 32 2.8 2.1 0.4 1% U.S. Total 1,036 320 129 43 4% Cross State Air Pollution Rule (CSAPR) • Final rule issued July 2011, having effective date January 2012 • Rule would institute new, more stringent trading program for NO x and SO 2 emissions • US DC Circuit Court ruled to stay implementation on 12/30/11 pending judicial review • Final decision expected in 2012 Mercury and Air Toxics Standards (MATS) • Final rule released December 2011 • Will require coal and oil-fired units to meet strict emissions limits, or retire • Effective early 2015; provides case-by-case extensions where needed to comply Source: MJB&A Tracking, Ventyx Velocity, EPA NEEDS v4.10, PJM, NYISO, ISO-NE. As of 4/27/2012. |
 39 PSEG Power’s Position Criteria Pollutants (CSAPR) • Well positioned on NO X and SO 2 , net of anticipated allowances Mercury & Air Toxics (MATS) • Generally well positioned on Hg, particulate matter, and HCl • Comprehensive coal controls (SCR planned at Conemaugh) High Electric Demand Days (HEDD) • Compliance strategy under review (retirements or investments) Coal Combustion Byproducts • Power uses dry ash systems • Coal ash and scrubber waste tested as non-hazardous 316(b) Cooling Water Regulations • Power shares general industry exposure on capital expenditure • Ongoing, positive industry dialogue with EPA • Power has over $150M in estuary enhancement program at Salem Market uplift expected as a result of environmental rules (due to retirements, derates, higher VO&M costs or higher emission allowances prices) Estimated energy impact of CSAPR and MATS: $2-$5/MWh, not fully reflected in current forward prices Retirements (MATS and HEDD) will provide strong support to capacity markets Power is generally well positioned to meet the anticipated requirements: Positioned to benefit from environmental leadership |
 40 $/MW-day 2011 / 2012 2012 / 2013 2013 / 2014 2014 / 2015 2015 / 2016 Power’s Average Prices $110 $153 $244 $162 $167 Rest of Pool Prices $110 $16 $28 $126 $136 PSEG Power Cleared Approximately 9,000 MW • No New PSEG Power Generation Cleared the Auction • Preserving Optionality of HEDD Sites 2015/2016 RPM Auction Influenced By: • Updated Demand Curve • Updated Transfer Capabilities • Environmental Retirements • New Build • Below MOPR Bids The Reliability Pricing Model has recognized the locational value of Power’s generating fleet with sites in the eastern part of PJM PJM Cleared Approximately 4,900 MW of New Generation |
 41 Full Requirements Component Capacity Markets/RPM Growing Renewable Energy Requirements Component for Market Risk Favorably hedging our generation at customer/load centers through Power’s participation in each of the BGS auctions Market Perspective – BGS Auction Results 3 Year Average Round the Clock PJM West Forward Energy Price Capacity Load shape Transmission Congestion Ancillary services Risk premium Green Note: BGS prices reflect PSE&G Zone. 2005 2006 2007 2008 2009 2010 2011 2012 $44 - $46 $67 - $70 $58 - $60 $68 - $71 $56 - $58 $48 - $50 $65.41 ~ $21 $102.51 ~ $32 $98.88 ~ $41 $111.50 ~ $43 $103.72 ~ $47 $95.77 ~ $47 $45 - $47 ~ $48 $94.30 ~ $46 $37 - $38 $83.88 |
 42 Contracting longer term hedges and other products provides medium term financial stability Contracted Energy* Volume TWh 17 35 35 Base Load % Hedged 100% 85-90% 45-50% (Nuclear and Base Load Coal) Price $/MWh $58 $54 $54 Volume TWh 10 18 19 Intermediate Coal, Combined % Hedged 30-35% 0% 0% Cycle, Peaking Price $/MWh $58 $54 $54 Volume TWh 28-30 52-54 53-55 Total % Hedged 70-75% 55-60% 25-30% Price $/MWh $58 $54 $54 Jul -Dec 2012 2014 2013 * Hedge percentages and prices as of June 30, 2012. 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. |
 The Business of PSEG Holdings |
 44 Holdings has significantly reduced its portfolio and will continue to monetize legacy assets Solar Investments Regulated Energy Leases & Other Merchant Energy Leases LILO/SILO Leases International Investments Holdings Investment Portfolio $4.9B $1.2B Merchant Energy Leases Regulated Energy Leases & Other Texas Texas Transfer & Sale ~$600M LILO/SILO Lease Terminations ~$1.2B International & Other Global Asset Sales ~$2.1B Dynegy Lease Reserve ~$0.2B 2006 2011 Transactions reflect market values for asset dispositions or, in the case of Dynegy, Note: 2006 and 2011 data reflect book values of assets. book value reserve taken in 2011. |
 45 LIPA, a New York State agency, owns T&D and generation assets (formerly LILCO) – 1.1 million electric customers – Public / private business model: • T&D owned by LIPA • Privately operated – Sound T&D operations, but ongoing rate concerns, challenged storm restoration efforts, low customer satisfaction ratings December 2011 – PSEG and partner Lockheed Martin selected to manage T&D system – 10-year LIPA Management Services agreement approved by New York State Office of the Comptroller, NYS Attorney General and IRS – Transition period: 2012 – 2013 – Contract operating period: 2014 - 2023 – Economic terms: • Fixed fee escalating at regional CPI • Up to 15% incentive fee for certain performance metrics The business of PSEG: Finding opportunities to extend and profit from our operational excellence |
 46 PSEG Resources Leveraged Lease Portfolio Lessee Equipment 6/30/12 Invested (millions) S&P Credit Rating* REMA (GenOn) Keystone, Conemaugh & Shawville (PA) 3 coal fired plants (1,162 equity MW) $ 335 B- Dynegy Holdings Danskammer & Roseton Generating Station (NY) 370 MW coal fired and 1,200 MW oil/gas fired - - Edison Mission Energy (EME) Powerton & Joliet Generating Stations (IL) 2 coal-fired generating facilities (1,640 equity MW) 218 CCC Merrill Creek – (PECO, MetEd, Delmarva P&L) Reservoir in NJ 131 BBB, BBB-, BBB+ Grand Gulf Nuclear station in Mississippi (154 equity MW) 66 A+ Renaissance Ctr. Office towers located in Detroit, MI leased to GM 41 BB+ Wal-Mart Portfolio of 6 Wal-Mart stores 12 AA E-D Centers Portfolio of 8 shopping centers 23 NR Total Leases $ 826 *Indicative recent rating as of 8/9/2012 reflecting either Lessee, additional equity collateral support or parent company unsecured debt rating. |
 Appendix |
 48 PSEG 2012 Operating Earnings Guidance - By Subsidiary $ millions (except EPS) 2012E 2011 PSEG Power $575 – $665 $ 845 PSE&G $530 – $560 $ 521 PSEG Energy Holdings/Parent $35 – $45 $ 23 Operating Earnings* $1,140 – $1,270 $ 1,389 Earnings per Share $ 2.25 – $ 2.50 $2.74 * See page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 49 PSEG Q2 2012 – Cash Update and Financing Activities Cash position at June 30 was in excess of $750 million PSEG’s debt as a percent of capital was 41% as of June 30 Power’s debt as a percent of capital was 34% as of June 30 Moody’s upgraded PSE&G’s secured debt rating to A1 with a Stable outlook and affirmed ratings of PSEG and Power (Baa1) with Stable outlooks Fitch upgraded PSE&G’s secured debt rating to A+ with a Stable outlook and affirmed ratings of PSEG and Power (BBB+) with Stable outlooks |
 50 Power and Parent available liquidity totaled approximately $4.2 billion at June 30, 2012 Company Facility Date Facility Usage Liquidity ($Millions) PSE&G 5-year Credit Facility Apr-16 $600 $16 $584 5-Year Credit Facility (Power) Mar-17 $1,600 $121 $1,479 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) Mar-17 $500 $12 $488 5-year Credit Facility (PSEG) Apr-16 $500 $0 $500 Total $4,300 $249 $4,051 $704 PSE&G ST Investment $0 Total Liquidity Available $4,755 Total Parent / Power Liquidity $4,171 PSEG / Power PSEG Money Pool ST Investment |
 51 PSEG Consolidated Debt / Capitalization (1) Long-Term Debt includes Debt due within one year; excludes Securitization Debt and Non-Recourse Debt. (2) Power includes Texas Non-recourse Debt December 31, 2010 December 31, 2011 June 30, 2012 PSE&G Short-term Debt PSEG Money Pool Short-term Debt Total Short-term Debt Long-term Debt (1) Power(2) PSE&G Holdings Parent/Services Total Long-term Debt Total Common Stockholders' Equity 9,633 10,270 10,644 TOTAL CAPITALIZATION $17,445 $17,330 $18,086 December 31, 2010 December 31, 2011 June 30, 2012 Debt $7,812 9,633 $7,060 10,270 $7,442 10,644 Total Common Stockholders' Equity Debt Plus Equity $17,445 $17,330 $18,086 Debt Ratio 44.8% 40.7% 41.1% PSEG Consolidated ($ Millions) 0 64 64 3,455 4,283 0 10 7,748 $0 0 0 16 0 16 2,751 4,270 0 39 7,060 2,686 4,696 0 44 7,426 $ $ |
 52 PSEG Consolidated Debt / Capitalization (1) Includes debt due within one year and short-term debt; excludes Securitization Debt and Non-Recourse Debt. Debt 7,812 7,060 7,442 Common Shareholders Equity 9,633 10,270 10,644 Debt plus Equity 17,445 17,330 18,086 Debt Ratio 44.8% 40.7% 41.1% (in $Millions) 6/30/2012 12/31/2010 12/31/2011 $0 $2 $4 $6 $8 $10 $12 $14 $16 $18 Debt (1) Equity |
 53 PSEG Power Funds from Operations / Total Debt Our focus on building a strong balance sheet places us in an advantageous position to capitalize on selected new opportunities Power’s free cash flow produces solid credit measures despite low natural gas prices Free Cash Flow (1) ~950 ~750 ~1,725 Average: ~415 Dividends to Parent 850 (2) 549 500 Average: ~525 (in $Millions) (1) Free Cash Flow represents cash from operations less cash used for Capital investment; E = Estimate. (2) Excludes dividend to Parent associated with transfer of Texas assets to PSEG Power. 80% 70% 60% 50% 40% 30% 20% 10% 0% 2009 2010 2011 2012-2014E Average |
 54 Tax Update Definitive agreement reached with the IRS that settles the tax treatment for challenged lease transactions (LILO/SILO) for all tax years Settlement reached with the IRS for all federal audit issues for tax years 1997-2006 Expected net refund of ~$170M |
 55 Operated by PSEG Nuclear PSEG Ownership: 100% Technology: Boiling Water Reactor Total Capacity: 1,173 MW Owned Capacity: 1,173 MW License Expiration: 2046 License renewal approved July 2011 Next Refueling Fall 2013 Operated by PSEG Nuclear PSEG Ownership: 57%, Exelon – 43% Technology: Pressurized Water Reactor Total Capacity: 2,326 MW Owned Capacity: 1,336 MW License Expiration: 2036 and 2040 License renewal approved June 2011 Next Refueling Unit 1 -- Spring 2013 Unit 2 -- Fall 2012 Operated by Exelon PSEG Ownership: 50% Technology: Boiling Water Reactor Total Capacity: 2,247 MW Owned Capacity: 1,123 MW License Expiration: 2033 and 2034 Next Refueling Unit 2 – Fall 2012 Unit 3 – Fall 2013 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 |
 56 $1.28 .07 .06 (.29) $1.44 0.00 0.25 0.50 0.75 1.00 1.25 1.50 1.75 YTD 2012 Operating Earnings* YTD 2011 Operating Earnings* PSEG Power PSE&G PSEG Energy Holdings/ Enterprise PSEG EPS Reconciliation – YTD 2012 versus YTD 2011 Lower Pricing (.16) Lower Volume (.03) Lower Capacity (.11) Financing Costs .03 O&M .02 Weather (.01) Other (.03) Transmission .05 Renewables and Other Investments .01 O&M (.04) Weather and Demand (.02) D&A (.02) Taxes .07 Other .01 Tax settlement * See Page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 57 Items Excluded from Income from Continuing Operations to Reconcile to Operating Earnings Please see Page 3 for an explanation of PSEG’s use of Operating Earnings as a non-GAAP financial measure and how it differs from Net Income. Public Service Enterprise Group Reconciling Items Excluded from Continuing Operations to Compute Operating Earnings (Unaudited) Pro-forma Adjustments, net of tax 2012 2011 2011 2010 2009 2008 Earnings Impact ($ Millions) Gain (Loss) on Nuclear Decommissioning Trust (NDT) Fund Related Activity (PSEG Power) 9 $ 42 $ 50 $ 46 $ 9 $ (71) $ Gain (Loss) on Mark-to-Market (MTM) (a) (PSEG Power) 42 8 107 (1) (11) 14 Lease Related Activity (PSEG Energy Holdings) 6 - (173) - 29 (490) Market Transition Charge Refund (PSE&G) - - - (72) - - Gain (Loss) on Asset Sales and Impairments (Energy Holdings) - - 34 - - (13) Total Pro-forma adjustments 57 $ 50 $ 18 $ (27) $ 27 $ (560) $ Fully Diluted Average Shares Outstanding (in Millions) 507 507 507 507 507 508 Per Share Impact (Diluted) Gain (Loss) on NDT Fund Related Activity (PSEG Power) 0.02 $ 0.08 $ 0.10 $ 0.09 $ 0.02 $ (0.14) $ Gain (Loss) on MTM (a) (PSEG Power) 0.08 0.02 0.21 - (0.02) 0.03 Lease Related Activity (PSEG Energy Holdings) 0.01 - (0.34) - 0.05 (0.96) Market Transition Charge Refund (PSE&G) - - - (0.14) - - Gain (Loss) on Asset Sales and Impairments (Energy Holdings) - - 0.06 - - (0.03) Total Pro-forma adjustments 0.11 $ 0.10 $ 0.03 $ (0.05) $ 0.05 $ (1.10) $ (a) Includes the financial impact from positions with forward delivery months. Years Ended December 31, Six Months Ended June 30, |