EXHIBIT 99 We have the energy to make things better … for you, for our investors and for our stakeholders. |
2 Forward-Looking Statement The forward-looking statements contained in this report are intended to qualify for the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All of the forward-looking statements made in this report are qualified by these cautionary statements and we cannot assure you that the results or developments anticipated by management will be realized or even if realized, will have the expected consequences to, or effects on, us or our business prospects, financial condition or results of operations. Readers are cautioned not to place undue reliance on these forward-looking statements in making any investment decision. Forward-looking statements made in this report apply only as of the date of this report. While we may elect to update forward-looking statements from time to time, we specifically disclaim any obligation to do so, even if internal estimates change, unless otherwise required by applicable securities laws. adverse changes in the demand for or the 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, 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 risks, any deterioration in our credit quality or the credit quality of our counterparties, any inability to achieve, or continue to sustain, our expected levels of operating performance, any equipment failures, accidents, severe weather events or other incidents that impact our ability to provide safe and reliable service to our customers, and any inability to obtain sufficient coverage or recover proceeds of insurance with respect to such events, increases in competition in energy supply markets as well as competition for certain transmission projects, 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 and enforcement that could increase our costs or limit our operations, 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, acts of terrorism, cybersecurity attacks or intrusions that could adversely impact our businesses, 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 funding requirements, and changes in technology, such as distributed generation and micro grids, and greater reliance on these technologies and changes in customer behaviors, including energy efficiency,net-metering and demand response. Certain of the matters discussed in this report about our and our subsidiaries' future performance, including, without limitation, future revenues, earnings, strategies, prospects, consequences and all other statements that are not purely historical constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those anticipated. Such statements are based on management's beliefs as well as assumptions made by and information currently available to management. 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. Factors that may cause actual results to differ are often presented with the forward- looking statements themselves. Other factors that could cause actual results to differ materially from those contemplated in any forward-looking statements made by us herein are discussed in filings we make with the United States Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K and subsequent reports on Form 10-Q and Form 8-K and available on our website: http://www.pseg.com. These factors include, but are not limited to: |
GAAP Disclaimer PSEG presents Operating Earnings in addition to its Income from Continuing Operations/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 Income from Continuing Operations/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. Slides A and B at the end of this presentation include a list of items excluded from Income from Continuing Operations/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. These materials and other financial releases can be found on the pseg.com website under the investor tab, or at http://investor.pseg.com/ 3 |
PSEG OVERVIEW Caroline Dorsa VICE PRESIDENT – INVESTOR RELATIONS EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER Kathleen Lally |
5 PSEG’s Strategy – delivering results Our businesses’ focus on cost- effective, reliable operations yields strong cash flow We are funding growth-oriented investments aligned with customer needs and state energy policies We are enhancing the competitiveness of our environmentally well-positioned generation business The results of our financial strategy support a credit profile capable of meeting our corporate objectives and providing sustained dividend growth for our shareholders DISCIPLINED INVESTMENT OPERATIONAL EXCELLENCE FINANCIAL STRENGTH ENGAGED WORKFORCE |
6 Two complementary businesses Strong asset platform, performing well and positioned for the future ASSETS AND OPERATING EARNINGS ARE FOR THE YEAR ENDED 12/31/2013. PSE&G AND POWER DO NOT ADD TO TOTAL DUE TO PARENT, PSEG LONG ISLAND AND ENERGY HOLDINGS ACTIVITY. SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING OPERATIONS/NET INCOME TO RECONCILE TO OPERATING EARNINGS. Assets $12B Operating Earnings $710M Regional Competitive Generation Assets $20B Operating Earnings $612M Electric & Gas Delivery and Transmission 2013 2013 Strategy: Strategy: Positioned to meet customers’ needs as we respond to state and federal energy policy and economic growth objectives Value Proposition: A $11.3 billion infrastructure program - focused on transmission – that produces double-digit rate base growth through 2016 Fuel diverse fleet is geographically and environmentally well positioned, with investments to enhance competitiveness Value Proposition: Provides substantial free cash flow in current environment and poised for price recovery |
7 Delivering on commitments and pursuing opportunities for growth Operational Excellence • Power: Record 2013 output at Linden CCGT and Salem 2; nuclear capacity factor greater than 90% for 9 th straight year • PSE&G: Mid-Atlantic Reliability Award (12 th consecutive year) • PSEG Long Island: Went “live” on January 1, 2014 • PSEG: Cost-control benefits continue Financial Strength • Strong cash flows supported credit rating increases • Pension more than fully funded • Dividend increased Disciplined Investment • PSE&G Transmission capital program execution and growth Energy Strong settlement Solar 4 All Extension and Solar Loan III programs • Power: Investments to enhance the fleet’s competitiveness – 130 MW Nuclear uprate, 150 MW CCGT uprate and efficiency improvement |
8 Maintaining PSEG 2014 Operating Earnings Guidance SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING OPERATIONS/NET INCOME TO RECONCILE TO OPERATING EARNINGS. $2.44 $2.58 $2.55 - $2.75E Reflects increased level of utility investment, pension savings and assumes normal weather and unit operations for the rest of year 2012 2013 2014 Guidance E = ESTIMATE. |
Operating Earnings Mix Long term investment program has driven increased earnings contribution from stable, regulated business *SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING OPERATIONS/ NET INCOME TO RECONCILE TO OPERATING EARNINGS; DISCONTINUED OPERATIONS REFLECT TEXAS. E=ESTIMATE ** 2014 PERCENTS USE MIDPOINT OF EARNINGS GUIDANCE. Power’s diverse fuel mix and dispatch flexibility continues to generate earnings and free cash flow PSE&G’s investment in transmission has diversified its asset base and, coupled with other investments and cost controls, supported compound annual earnings growth of ~18% over 2009 – 2013 Operating Earnings* Contribution by Subsidiary (%) PSE&G Power Other $2.44 $2.58 $2.55 - $2.75E $3.12 $2.74 $3.09 2009 2010 2011 2012 2013 2014E** 9 20% 27% 38% 43% 47% 54% 76% 69% 62% 54% 54% 43% |
Maintaining a robust capital program focused on growth PSEG 2014 - 2018E Capital Spending $13.1 Billion PSEG 2009 - 2013 Capital Spending $11.3 Billion NOTE: POWER 2009–2013 ACTUALS ARE RESTATED TO INCLUDE SOLAR CAPITAL SPEND. POWER CAPITAL SPENDING EXCLUDES NUCLEAR FUEL. E=ESTIMATE . Power $1.6B PSE&G $11.3B Power $2.8B PSE&G $8.4B 10 $3.3 $1.0 $4.1 $0.8 $1.2 $0.8 $0.1 $2.9 $1.2 $0.3 $6.8 $1.0 $0.4 $0.2 $0.2 |
11 PSEG’s business profile has been transformed through significant growth in utility capital spending 3 YR AVG 3 YR AVG ENDED 3 YEAR AVERAGE PSE&G CAPITAL SPENDING GREW AT A RATE OF 23% PER YEAR FROM 2008 - 2013 AVERAGE PSE&G CAPITAL SPENDING FOR THE 3-YEAR PERIOD ENDING IN BASE YEAR. PSE&G TOTAL CAPITAL SPENDING IN BASE YEAR. 3 YR AVG 3 YR AVG 3 YR AVG 3 YR AVG 3 YR AVG 3 YR AVG $761 $855 $1,257 $1,302 $1,770 $2,175 $0 $500 $1,000 $1,500 $2,000 $2,500 2008 2009 2010 2011 2012 2013 $620 $729 $958 $1,138 $1,443 $1,749 |
12 • Energy Strong Agreement reached with all parties Agreement recognizes the benefits of system investments that prevent or shorten outages Supports $1.22 billion capital program over several years on reasonable terms: $1 billion recovered through accelerated, rate recovery mechanism - $820 million Electric - $400 million Gas Allows PSE&G to earn a 9.75% ROE on the $1 billion recovered through mechanism Requires PSE&G to file a base rate case by November 2017 Final NJBPU approval anticipated • Over 100 New Jersey municipalities supported Energy Strong • Energy Strong agreement clears path for PSE&G to pursue the initial phase of this robust capital program Energy Strong Agreement recognizes benefits of system investments |
13 PSEG Power – Value-advantaged through asset diversity, fuel flexibility, location and installed environmental controls 2013 PERIOD *INCLUDES NEW JERSEY COAL UNITS THAT FUEL SWITCH TO GAS. 43% 23% 34% 1% 44% 27% 9% 1% 18% <1 % 30% 55% 2% <1% 13% Load Following Peaking Base load Fuel Diversity Total MW: 13,450 Energy Produced Total GWh: 54,264 Energy Market Served Total MW: 13,450 Gas Pumped Storage Nuclear Oil Coal* Solar |
14 PSEG Power – Our diverse fleet and flexible portfolio allow us to capture opportunities arising from market volatility *AT THE BEGINNING OF EACH YEAR. **EXCLUDES BGSS. $40 $45 $50 $55 2011 2012 2013 PSEG Power Gross Margin** Hedges + Forwards* Actual |
15 Balance Sheet Strength 2009 – 2013: Reduced risk profile and transformed business mix • PSE&G’s $11.3 billion approved investment program through 2018 • Consistent and sustainable dividend growth • Additional investment capacity to deploy in opportunities beyond those in the current capital plan • No need to issue equity 2014 – Forward: Strong cash flows and increasingly regulated business mix fully support: • Invested $8.4 billion in PSE&G • Improved credit ratings • Monetized and de-risked Holdings’ portfolio |
16 Opportunity for consistent, sustainable growth Operating Earnings Per Share Where we’re going … actions taken to focus on more predictable growth • O&M Growth per year • PSE&G Rate Base • Transmission • E&G Distribution • EE and Solar • Nuclear Generation • CC Equivalent Availability • PSEG LI Earnings •(0.7%) (forecast ) •$14,600 •$6,500 •$7,500 •$600 4 •31.4TWh •91% •$0.07 5 2016E ($ Millions except as noted) • 1.5% (actual ) • $10,400 • $3,800 • $6,000 • $600 • 29.5TWh • 89% • $0 2013 • 2.4% (planned ) • $6,800 • $866 • $5,900 • $0 • 29.3TWh • 90% • $0 2008 (1) Planned compound annual growth rate 2008-2013. (4) Includes approved solar programs. (2) Actual compound annual growth rate 2008-2013. (5) Includes management fee for T&D operations under expanded OSA and fuel (3) Planned compound annual growth rate 2013-2016. and energy procurement contract. (6) Forward market as of 5/7/2014. SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING OPERATIONS/ NET INCOME TO RECONCILE TO OPERATING EARNINGS. E = ESTIMATE . $1.29 $1.44 Common Dividend Per Share $70 $38 $44 6 PJM West RTC ($/MWh) $2.58 $2.91 PSEG Focus 1 2 3 |
17 PSEG Annual Dividend – A long history of growth and returning cash to shareholders with a financial position that provides opportunity for consistent and sustained growth Payout Ratio 70% 63% 66% 43% 44% 43% 44% 50% 58% 56% 56%** PSEG Annual Dividend Rate *INDICATED ANNUAL RATE. **2014 PAYOUT RATIO REFLECTS THE MIDPOINT OF OPERATING EARNINGS GUIDANCE. E=ESTIMATE 10-YEAR COMPOUND ANNUAL RATE OF GROWTH 3.0% $1.10 $1.12 $1.14 $1.17 $1.29 $1.33 $1.37 $1.37 $1.42 $1.44 $1.48* 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E |
18 PSEG Q1 2014 Financial Highlights Strong Q1 Earnings Operating earnings of $1.01 vs. $0.85 per share in Q1 2013 Power benefited from higher market pricing, market volatility and increased output Increased contribution to earnings from PSE&G’s investment in transmission Maintaining 2014 operating earnings guidance of $2.55 - $2.75 per share Focused on maintaining operating efficiency and customer reliability PSE&G expected to grow at double-digit rate in 2014 and provide over 50% of operating earnings Executing existing 5-year, $6.8 billion transmission capital spending program on budget and on schedule Agreement on PSE&G’s Energy Strong infrastructure program to invest $1.22 billion over 2014 – 2018, awaiting final NJBPU approval Power recognized a liability in the quarter related to its discovery that it incorrectly calculated certain components of its cost-based bids for certain generating units in the PJM energy market, with resulting over-collection of revenues related to its fossil fleet. Power has notified FERC, PJM and the PJM Independent Market Monitor of this issue, which is still under review; we are unable to estimate the ultimate impact or predict any resulting penalties or other costs associated with the matter at this time Financial position remains strong Positive cash from Power and increasing cash flow from PSE&G supports dividend growth and funds capital spending program without the need to issue equity Increased common dividend to indicative annual rate of $1.48 per share in Q1 2014 Debt as a percentage of capital was 41% at March 31, 2014 |
19 Value Proposition PSEG is positioned to expand its investment in PSE&G projects that provide reasonable, risk-adjusted returns, in ways that meet customer needs and state goals, given strong cash flow of Power and growing cash contribution from PSE&G. PSEG will maintain a strong financial profile that provides the opportunity to achieve our growth objectives and maintains our track record of returning cash to shareholders. |
PSE&G |
21 PSE&G strategy Building a sustainable platform that balances reliability, customer rates and public policy to ensure growth at reasonable returns DISCIPLINED INVESTMENT OPERATIONAL EXCELLENCE FINANCIAL STRENGTH ENGAGED WORKFORCE |
22 PSE&G is the largest electric and gas distribution and transmission utility company in New Jersey * WEATHER NORMALIZED - ESTIMATED ANNUAL GROWTH PER YEAR OVER FORECAST PERIOD. ** SPECIFIC PROJECTS APPROVED FOR INCENTIVE RATE TREATMENT WITH ADDITIONAL ROE. Electric Gas Customers Growth (2009 – 2013) 2.2 Million 0.6% 1.8 Million 0.6% Electric Sales and Gas Sold and Transported 41,286 GWh 3,813M Therms Projected Annual Load Growth (2014 – 2016) 0.6%* 0.5%* Projected Annual Load Growth Transmission (2014 – 2016) 1.1% 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 Approved Programs 2009-2013 Total Program Plan Solar Loan Capacity 79 MW 178.5 MW Solar 4 All Capacity 79 MW 125 MW Energy Efficiency Annual Electric savings 182 GWh 204 GWh Energy Efficiency Annual Gas savings 5M Therms 6M Therms |
23 12 time Mid-Atlantic ReliabilityOne award winner and Outstanding Response to a Major Event |
24 PSE&G’s operating earnings grew ~18% over the 5-year period with increased investment, cost control and supportive rate mechanisms *SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING OPERATIONS/NET INCOME TO RECONCILE TO OPERATING EARNINGS. PSE&G Operating Earnings* Per Share $0.63 $0.85 $1.03 $1.04 $1.21 2009 2010 2011 2012 2013 |
25 Focus on controlling O&M and lower pension costs support decline in expenses PSE&G O&M* 2009–2014 CAGR: (1.0%) * EXCLUDES REGULATORY CLAUSES ** INCLUDES $40M IMPACT FROM SUPERSTORM SANDY. E = ESTIMATE 0 200 600 800 1,000 1,200 2009 2010 2011 2012 ** 2013 2014E 400 |
26 Growth in rate base is driven by investments with constructive recovery mechanisms 6% $10.4B PSE&G Rate Base $7.3B PSE&G’s rate base has grown ~9% annualized with investment focused on meeting customers’ requirements 1% 84% 58% 15% 36% 2009 2013 Solar & Energy Efficiency Transmission Distribution |
27 Successfully worked with regulators to develop multiple solutions for New Jersey’s energy and economic development goals RENEWABLES – creative solutions to install solar generation: $0.7B ENERGY EFFICIENCY – assisting customers with controlling energy usage: $0.3B DISTRIBUTION – improving the electric and gas delivery infrastructure: $1.0B Invested ~$2.0B through 2013; plan to invest additional ~$1.6B through 2018 in approved programs NOTE: SPENDING THROUGH 2013 UNLESS INDICATED OTHERWISE • Carbon Abatement – 2008 • Energy Efficiency – 2009 • Demand Response – 2009 • Energy Efficiency Ext – 2011 • NJ Capital Infrastructure Program 1 (CIP 1) • NJ Capital Infrastructure Program 2 (CIP 2) • Energy Strong • Solar Loan I – 2008 • Solar Loan II – 2009 • Solar 4 All – 2009 • Solar Loan III – 2013 • Solar 4 All Ext – 2013 – 2009 – 2011 – 2014 |
28 A 60% increase to $11.3 billion, in our 5-year investment program, including Energy Strong PSE&G’s Capital Expenditures 2013-2017E $7.0 Billion 2014-2018E $11.3 Billion E = ESTIMATE 26% 11% 3% 60% Distribution Energy Strong Solar/Energy Efficiency Transmission 33% 2% 65% |
29 PSE&G’s capital program has expanded with the addition of Energy Strong PSE&G’s Capital Expenditures E = ESTIMATE 0 500 1,500 2,000 2,500 3,000 2009 2010 2011 2012 2013 2014E 2015E 2016E 2017E 2018E Distribution Transmission Solar/Energy Efficiency 1,000 Previous Forecast for 2013-2017 Approved Programs |
30 Energy Strong Agreement supports customers’ needs in the aftermath of Superstorm Sandy • Settled with NJBPU Staff and all other parties in May 2014 for $1.22 billion • Program addresses system resiliency and hardening by: $620 million to raise, relocate or protect 29 switching and substations that were damaged by water in recent storms $350 million to replace and modernize 250 miles of low-pressure, cast iron gas mains in or near flood areas $100 million to create redundancy in the electric system, reducing outages when damage occurs $100 million to deploy smart grid technologies to better monitor system operations to increase our ability to more swiftly deploy repair teams $50 million to protect five natural gas metering stations and a liquefied natural gas station affected by Sandy or located in flood zones |
31 Over 70% of PSE&G’s $11.3 billion investment program will be recovered through contemporaneous mechanisms Clause Recovery Mechanisms Energy Strong / Solar / Energy Efficiency FERC Formula Rates Transmission Traditional Recovery Mechanisms Distribution Base Rates E = ESTIMATE 2014-2018E PSE&G Capital Spending by Recovery Method $11.3 Billion 12% 60% 28% |
PSE&G TRANSMISSION |
33 Transmission represented ~36% of rate base at YE 2013 up from ~15% at YE 2009 Transmission has delivered, and has grown to represent ~36% of rate base PSE&G’s Transmission Capital Expenditures |
PSE&G’s existing major transmission investment program remains on schedule and on budget Major Transmission Projects Approved ROE Inclusion of CWIP in Rate Base 100% Recovery of Costs Due to Abandonment Project Estimate Up To ($ Millions) Expected In-service Date Susquehanna-Roseland 12.93% $790 June 2014 / June 2015 Northeast Grid Reliability 11.93% $907 June 2015 North Central Reliability 11.68% $390 June 2014 Burlington–Camden 230kV 11.68% $399 Mickleton–Gloucester–Camden 230kV 11.68% $435 June 2015 Completed 34 |
35 Susquehanna-Roseland consists of constructing 150 miles of 500kV circuit (46 miles in NJ) with two new 500kV GIS switching stations at Roseland and Hopatcong Project Estimate Up To* Through Year-end 2013 Expected In-service Date $790M $661M June 2014 / June 2015 • PJM RTEP project b0489 • ROE of 12.93% (including 1.25% incentive) • 100% CWIP in rate base during development • 100% recovery of prudently incurred costs due to abandonment Customer Benefit: Improves reliability and reduces congestion *PROJECT IS SHARED WITH PPL. PROJECT ESTIMATE REPRESENTS PSE & G’S CONSTRUCTION RESPONSIBILITY FOR THE NJ PORTION. Project Status: Major permitting & siting complete, outside plant construction in progress, inside plant construction is complete and commissioning is in progress |
36 Northeast Grid Reliability consists of upgrading approximately 50 overhead circuit miles of 138kV transmission line to 230kV, constructing ~18 miles of new underground 230kV lines, and converting/upgrading 12 existing stations to 230kV operation Project Estimate Up To Through Year-end 2013 Expected In-service Date $907M $228M June 2015 • PJM RTEP project b1304 • ROE of 11.93% (including 0.25% incentive) • 100% CWIP in rate base during development • 100% recovery of prudently incurred costs due to abandonment • Project estimate has increased ~$12M associated with hardening related scope changes as a result of Superstorm Sandy Customer Benefit: Improves reliability and increases transfer capability Project Status: Nearing completion of engineering/design and licensing/permitting phase. Outside and inside plant construction are in progress |
37 North Central Reliability consists of upgrading 55 circuit miles of 138kV transmission line to 230kV, and converting six existing stations to 230kV operation Project Estimate Up To Through Year-end 2013 Expected In-service Date $390M $349M June 2014 • PJM RTEP project b1154 • ROE of 11.68% • 100% CWIP in rate base during development • 100% recovery of prudently incurred costs due to abandonment Customer Benefit: Improves power quality and increases transfer capability Project Status: Major permitting & siting complete, outside and inside plant construction is essentially complete, commissioning is in progress |
38 Burlington-Camden 230kV consists of upgrading 37 circuit miles (30 miles of overhead and 7 miles of underground) of 138kV transmission line to 230kV, converting the existing stations to 230kV operation Project Estimate Up To Through Year-end 2013 Expected In-service Date $399M $301M Completed • PJM RTEP project b1156 • ROE of 11.68% • 100% CWIP in rate base during development • 100% recovery of prudently incurred costs due to abandonment Customer Benefit: Addresses voltage reliability and increases transfer capability Project Status: In-service April 2014 |
39 Mickleton-Gloucester-Camden 230kV consists of upgrading 10 circuit miles of overhead transmission, installing ~16 circuit miles of new 230kV underground, 10 circuit miles of new 230kV overhead, and modifications/upgrades at five existing stations Project Estimate Up To Through Year-end 2013 Expected In-service Date $435M $122M June 2015 • PJM RTEP project b1398 • ROE of 11.68% • 100% CWIP in rate base during development • 100% recovery of prudently incurred costs due to abandonment Customer Benefit: Addresses thermal reliability and increases transfer capability Project Status: Major permitting & siting complete, outside and inside plant construction in progress |
40 Bergen-Linden Corridor is a recently approved project which will provide a double-circuit 345kV line to maintain reliability Project Estimate Up To Through Year-end 2013 Expected Completion Date $1,200M - June 2018 • PJM RTEP project b2436 • 30 miles of underground cable • New ~ 23 miles • Reconductor (Upgrade of 138 to 345) ~7 miles • 13 miles of double circuit overhead conductor (replacing double circuit 138 with double circuit 345) • 11 station upgrades to 345kV Customer Benefit: Addresses thermal and short-circuit reliability Project Status: Engineering |
41 Planned transmission spend of $6.8 billion is driven by PJM reliability projects, 69kV conversions and life-cycle replacement projects PSE&G’s Transmission Capital Expenditures Previous Forecast for 2013-2017 E= ESTIMATE |
42 PSE&G’s processes and culture are the foundation for project execution success Diverse, well-rounded team Culture with a focus for on-time, on-scope and on-budget execution Successful recruitment, development and retention strategies Strong unions and supplier relationships Cradle to grave project execution organization Processes designed to be scalable, repeatable and improvable Emphasis on best practices and lessons learned sharing Improvements driven by performance metric management Collaborative relationship with regulatory agencies Innovative design and construction practices to minimize environmental impacts Robust environmental compliance system |
PSE&G’s demonstrated ability to successfully execute large projects leaves us well positioned to pursue new opportunities Future RTEP as identified by PJM Near-term participation in RTO competitive open planning windows PJM MISO NYISO Anticipate participating in future competitive solicitations under FERC 1000 43 |
44 PSE&G’s 2014 operating earnings to benefit from increased investment in transmission and on-going cost control E=ESTIMATE *SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING OPERATIONS/NET INCOME TO RECONCILE TO OPERATING EARNINGS. PSE&G Operating Earnings* ($ Millions) |
PSEG LONG ISLAND |
46 PSEG was selected to operate Long Island Power Authority’s (LIPA) electric transmission and distribution system for 12 years starting in 2014 Pursuant to the Operating Services Agreement (OSA), all expenses and capital costs to operate the system are pre-funded by LIPA and passed through to their customers Compensation consists of a fixed fee and an incentive fee — Fixed compensation fee for 2014 with scheduled increases in 2015 and 2016 — Starting in 2015 PSEG Energy Resources and Trading (ER&T) begins managing fuel/energy contracts — PSEG Long Island expected to contribute $0.03 to operating earnings in 2014 increasing to $0.07 per share in 2016 including contribution at ER&T Potential for an 8-year extension of the OSA |
47 PSEG Long Island commenced operations on January 1, 2014 Key elements of Operating Services Agreement Increased PSEG scope and control Performance metrics NY Department of Public Service oversight Potential for “Utility 2.0” investment Use of PSEG brand as PSEG Long Island 3-Year rate freeze (2013-2015) Early performance Successful transition to PSEG Long Island Stakeholder communication Winter storm response |
PSEG POWER |
49 PSEG Power strategy Excellence in operating our units safely, reliably, cost- competitively and in an environmentally, responsible manner DISCIPLINED INVESTMENT ENGAGED WORKFORCE OPERATIONAL EXCELLENCE FINANCIAL STRENGTH |
50 Agenda • Delivering Value • Fleet Advantage, Location, Flexibility and Fuel Diversity • Nuclear Operation • Fossil Operation • Financial Performance • Expansion Opportunities • Regulatory • Engaged Workforce |
51 PSEG Power creating value by responding to changing markets and regulations Safety/Environmental Focus Fleet Diversity/Efficiency Focus Financial/Economic Focus Regulatory Focus • Nuclear units continue to achieve strong operational results, operating at over 90% capacity factors for the 9 consecutive year • Fleet diversity across the dispatch curve and fuel types provide flexibility to meet changing conditions • Linden CCGT and Salem 2 nuclear unit achieved record output in 2013 • “Getting the most out of existing fleet” • Locational advantage • O&M control programs have delivered a CAGR of 1.6% between 2009 and 2014 • Sites offer competitive advantage for expansion • Strong regulatory performance • Industry leadership in the changing business environment th |
52 Financial Strength Disciplined Investment Operational Excellence • Maximize value of existing generating plants through implementation of the Operational Excellence Model (OEM) • Workforce engagement and development • Deliver on Business Plan Commitments • Maintain competitive markets and improve constituent communication on issues important to Power • Successfully complete the Advanced Gas Path (AGP) uprates • Seek new opportunities in target markets (PJM, ISO-NE, NYISO) • Develop our renewables business (solar) • Maintain new nuclear option by successfully managing the Early Site Permit (ESP) process PSEG Power Delivering on priorities • OEM implemented and achieving measures • Resource sharing program initiated • Exceeded earnings guidance in 2013 • Ongoing effort in key markets showing success • Successful court outcome against subsidized generation • Accelerated schedule for AGP to maximize opportunity • LIPA contract for fuel and generation dispatch • Completed 19 MW solar project, 4 MW project under construction, established robust pipeline • Nuclear ESP is expected in 2015 |
53 PSEG Power met 2013 challenges Storm and weather challenges • SuperStorm Sandy impacted our generating sites • Cold and hot weather extremes created challenging operating environment, but also presented opportunities Market challenges • Unit outages and planned transmission outages resulted in pressure on basis • Lower gas cost impacted dark spread pressuring coal unit dispatch • Load impacted by economy Value delivered • Optimized unit dispatch across fleet during storm recovery • Expedited return from storm outages, restored margin opportunities • High availability when needed • Achieved fuel cost savings • Captured value through coal/gas switching, unit flexibility • Coal & oil sales optimized inventory • Flexibility of portfolio captured real- time basis opportunities |
54 PSEG Power exceeded 2013’s earnings guidance $630-$685M $710M $535-$600M Winter/ Summer Volatility Lower Gas Cost Basis Volatility Spark/ Dark Spread Fuel Flexibility SOLAR/ KALAELOA $15M* GUIDANCE RANGE Over $100M of additional value gained from fleet flexibility, locational advantage and market volatility Initial Guidance Actual Revised Guidance OPERATING EARNINGS FOR PSEG POWER IN 2013; SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING OPERATIONS/NET INCOME TO RECONCILE TO OPERATING EARNINGS. *ASSETS TRANSFERRED TO POWER AT YEAR-END 2013. |
55 PSEG Power has generating assets in three competitive markets • Assets near loads • Low cost portfolio • Fuel flexibility with gas cost advantage • Poised to benefit from volatility in real-time markets • Fleet will maintain diversity and efficiency after HEDD • Most sites suitable for expansion ISO New England New York ISO PJM |
56 PSEG Power will maintain diversity and efficiency after a realignment of the fleet due to HEDD • Maintain fuel diversity • Maintain load-serving capability • Maintain low cost structure • Environmental improvement • Peach Bottom (PB) uprate • Advanced Gas Path (AGP) • Kalaeloa and Solar transfer adds ~200MW of capacity Objective 2013 2017 13,450 MW 11,900 MW Fuel Diversity 55 - 56 TWh 54 TWh Energy Produced |
57 Power’s PJM assets along the dispatch curve reduce the risk of serving full requirement load contracts and can take advantage of volatile market conditions Energy Revenue X X X Capacity Revenue X X X Ancillary Revenue X X Dual Fuel X X Illustrative Salem Hope Creek Keystone Conemaugh Hudson 2 Linden 1,2 Bergen 1 Mercer 1, 2 Bergen 2 Peach Bottom Burlington 8-9-11 Edison 1-2-3 Essex 10-11-12 Sewaren 6 Linden 5-8 / Essex 9 National Park Salem 3 Bergen 3 Mercer 3 Sewaren 1-4 Burlington 12 Yards Creek Base Load Units Peaking Units Load Following Units Kearny 9-12-13-14 Nuclear Coal Coal/Gas Combined Cycle Steam Combustion Turbine / Pumped Storage • Base Load ensures cash flow certainty • Load Following provides ability to serve load shape • Peaking takes advantage of real-time prices and reduces operational risk • Dual fuel flexibility for >60% of fleet |
58 PSEG Power Nuclear is a critical element of our success Hope Creek • Operated by PSEG Nuclear • PSEG Ownership: 100% • Technology: Boiling Water Reactor • Total Capacity: 1,178 MW • Owned Capacity: 1,178 MW • License Expiration: 2046 • Next Refueling • Spring 2015 Salem Units 1 and 2 • Operated by PSEG Nuclear • PSEG Ownership: 57% • Technology: Pressurized Water Reactor • Total Capacity: 2,365 MW • Owned Capacity: 1,358 MW • License Expiration: 2036 and 2040 • Next Refueling • Unit 1 -- Fall 2014 • Unit 2 – Spring 2014 Peach Bottom Units 2 and 3 • Operated by Exelon • PSEG Ownership: 50% • Technology: Boiling Water Reactor • Total Capacity: 2,251 MW • Owned Capacity: 1,125 MW • License Expiration: 2033 and 2034 • Next Refueling • Unit 2 – Fall 2014 • Unit 3 – Fall 2015 • Uprate: 130 MW in 2015/2016 |
59 PSEG Power Nuclear is core to the fleet and has competitive advantages *STRATEGY KNOWN AS THE “DIVERSE AND FLEXIBLE MITIGATION CAPABILITY” OR FLEX, ADDRESSES RECOMMENDATIONS OF THE NUCLEAR REGULATORY COMMISSION’S FUKUSHIMA TASK FORCE. Continued strong nuclear operations: nine consecutive years of >90% capacity factor Significant earnings contributor Top quartile of cost performance/MWh One third new staff, recruitment of the best new and experienced talent, and attractive training program Fukushima action plan in response to NRC staff review FLEX* plan submitted with implementation starting with Fall outage Peach Bottom extended power uprate, 130 MW Power’s share, scheduled in service 2015/2016 Active and influential participation at INPO, NEI, EPRI, USA Alliance |
60 Power’s nuclear fleet is well positioned with significantly lower-than-average US cost structure *SOURCE: ELECTRIC UTILITY COST GROUP ** SOURCE: PSEG NUCLEAR Total Fuel, Capital and O&M Costs* 3 YEAR AVERAGE 2010 - 2012 |
61 PSEG Power’s Fossil Fleet Performance has shown improvement *LM6000 AND 7EA UNITS • Fossil Capacity Factor rebounded with market • Peaking Units maintain high start success • Coal EFORp improving • CC EFORp less than 1% in 2013 • Consistent recipient of EFORp payments 0% 25% 50% 75% 2008 2009 2010 2011 2012 2013 Coal Combined Cycle Peaking 0% 5% 10% 15% 2008 2009 2010 2011 2012 2013 0% 1% 2% 3% 4% 5% 2008 2009 2010 2011 2012 2013 80% 85% 90% 95% 100% 2008 2009 2010 2011 2012 2013 Capacity Factor NJ Coal EFORp Peaking Start Success* NJ Combined Cycle EFORp |
62 7,300 7,400 7,500 7,600 7,700 7,800 2008 2009 2010 2011 2012 2013 PSEG Power improvements achieved in combined cycle fleet efficiency Actions Taken to Create Value • Operational Excellence Model • Training programs • Unit testing initiative • Outage work to restore efficiency • Second gas line at BEC • Heat rate improvement 2008-2013 translates to meaningful fuel savings at current market prices • Advanced Gas Path (AGP) investments 2014 through 2018 to provide additional fuel savings Combined Cycle Operating Heat Rate AGP projected efficiency improvement 2014-2018 2018 |
63 Investing to expand CCGT capacity and improve efficiency o Expand Power’s CCGT fleet, one of the largest gas-fired portfolios in PJM, with incremental base and peaking MWs o Retrofit Bergen, Linden and BEC with Advanced Gas Path (AGP) components at cost of ~$120M over 2014 - 2018 AGP Project Benefits PSEG Power - CCGT Uprate Project CCGT capacity uprates of ~150 MW: - Linden (63 MW – Completed) - Bergen (31 MW – 2015) - BEC (58 MW – 2017-2018) Increases Efficiency - Combined Cycle (CC) heat rate improvement ~ 1.2% Upgrades technology and extends maintenance outage cycles |
64 PSEG Power’s fleet is among the lowest emitting in the industry 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 10,000 20,000 30,000 40,000 50,000 60,000 70,000 2006 2007 2008 2009 2010 2011 2012 2013 Generation SO2 NOx • Mercury reduced 80% across the timeframe above • More efficient testing and improved operational flexibility through utilization of Continuous Emission Monitoring System testing • Cost control through testing coordination program |
65 PSEG Power’s capital expenditures for environmental requirements are essentially complete* *BASED ON CURRENTLY KNOWN AND QUANTIFIABLE ENVIRONMENTAL REQUIREMENTS. E=ESTIMATE COMPLETION OF CONEMAUGH SCR/FGD MODS IN 2015 |
Cost control actions taken: • Fossil plant assessment • CCGT material condition assessment • Contract renegotiations • Nuclear maintenance productivity study • Nuclear outage efficiency initiative • Materials management 2009 to 2014 CAGR = 1.6% Power O&M Expense* *EXCLUDES IMPACTS FROM STORM RECOVERY COSTS E=ESTIMATE PSEG Power’s focus on costs has resulted in moderate increase in O&M for six years $0 $500 $1,000 $1,500 2009 2010 2011 2012 2013 2014E 66 |
PSEG Power is well-positioned for growth when market conditions warrant Available locations • Bergen • Burlington • Essex • Edison • Kearny • Hudson • Linden • Sewaren • Bridgeport Harbor • Electric Transmission Interconnections • Access to Gas Pipelines • Space • Emissions Our sites possess infrastructure advantages 67 |
PSEG Solar Source owns 92 MW of operating solar facilities 68 Shasta California (4 MW) COD March 2014 Polycrystalline - single axis tracker Investment $13 million est. 20 year PPA with PG&E Hackettstown (Mars) New Jersey (2 MW) COD September 2009 Thin film panels – fixed tilt Investment $13 million 15 year PPA with Mars, Inc. Wyandot Ohio (12 MW) COD May 2010 Thin film panels – fixed tilt Investment $45 million 20 year PPA with AEP JEA Florida (15 MW) COD September 2010 Thin film panels – fixed tilt Investment $59 million 30 year PPA with JEA Queen Creek Arizona (25 MW) COD October 2012 Polycrystalline - single axis tracker Investment $79 million 20 year PPA with SRP Milford Delaware (15 MW) COD December 2012 Polycrystalline - fixed tilt Investment $49 million 20 year PPA with DEMEC Badger I Arizona (19 MW) COD November 2013 Polycrystalline - single axis tracker Investment $50 million 30 year PPA with APS • Continue to seek high quality projects with creditworthy off-takers. • Solar portfolio delivers strong EBITDA post- construction period. |
PSEG Power is an established leader within the industry 69 INPO • Board of Directors • National Nuclear Accrediting Board NEI • Chair Communications Advisory Committee • Board of Directors • Board of Directors Executive Committee • Chair Emergency Preparedness Working Group • Security Working Group • Fukushima Response Steering Committee • Nuclear Strategic Issues Advisory Committee Steering Group EPRI • Chairman Nuclear Power Council • Executive Committee Nuclear Power Council BWR Owners Group • Vice Chair of the Executive Oversight Committee USA Alliance • Chair EPSA • Executive committee member UWAG • Chair of the Cooling Systems Committee PJM/NY/ISO-NE • Chair of NEPOOL Participants Committee • Member of various Committees at PJM • Vice-Chair of the Supplier Sector of the NEPOOL • Chair of the NEPOOL Budget & Finance Subcommittee from 2008 through 2013 • Seat on the ISO-NE Board of Directors Joint Nominating Committee • Founding member of NEPGA (New England Power Generators Association) – trade association, position on Board of Directors |
70 Developing People to drive operational excellence and to optimize the workforce • Succession planning and development planning • Training & development of employees • Outreach programs • Employee engagement • Shared resources between Fossil and Nuclear (outage support) |
PSEG POWER ER&T |
Portfolio Management Strategy Optimize value of assets Manage risk vs. reward Directly engage with regulatory agencies DISCIPLINED INVESTMENT OPERATIONAL EXCELLENCE FINANCIAL STRENGTH ENGAGED WORKFORCE 72 |
PSEG Power: Enjoys real and sustainable advantages in the merchant generation space Market Review • • PSEG’s Competitive Advantage • • • • PSEG’s Sustainable Advantage • • • Gas, Power, Spark Spreads Regulatory construct Fuel flexibility Heat Rate diversity Access to Marcellus Shale gas Asset flexibility Positive cash-flow hedging into the long-term Robust capacity market pricing in most concentrated load pocket in US Long-term access to discounted Marcellus gas 73 |
74 Market Review: Prices have stabilized • Energy and gas prices appear to have stabilized • Environmental restrictions may tighten market • Insufficient gas infrastructure continues to place upward pressure on fuel prices during seasonal peaks F=FORWARDS AS OF 12/31/2013 $6 $5 $4 $3 $2 $1 $- $50 $45 $40 $35 $30 $25 $20 2011 2012 2013 2014F 2015F 2016F 2017F 2018F 2011 2012 2013 2014 F 2015 F 2016 F 2017 F 2018 F $23 $21 $19 $17 $15 $13 $11 $9 $7 $5 Historical Forward NYMEX Natural Gas Price PJM West RTC PJM West Spark Spreads |
75 Market Review: New generation in PJM not keeping pace with coal retirements Forecast Reserve Margin (PJM January 2014) • PJM forecasts a declining Reserve Margin through 2018, which may improve forward prices • Brattle estimates energy prices could rise at least $3-4/MWh from today’s prices *PJM AS OF FEBRUARY 20, 2014 SOURCE OF CHART DATA: PJM Cumulative Generation Retirements* 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 6/1/2014 6/1/2015 6/1/2016 6/1/2017 6/1/2018 Demand Response Energy Efficiency Solar + Wind Reserve Requirement Existing + Expected New Generation 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 |
76 Market Review: Regulatory framework showing signs of improvement ISSUE / POLICY REGULATORY GAINS PJM SUBSIDIZED GENERATION (NJ and MD) • Comprehensively defeated in federal court (appeals currently pending) DEMAND RESPONSE RULES • PJM and ISO-NE enacted stricter rules of eligibility and deployment ENERGY PRICE FORMATION • Concerted drive to improve price formation for generation and ancillary services • Waiver of price caps during extreme market conditions NYISO TRANSMISSION • Significant progress made to relieve bottling of upstate generation ISO-NE CAPACITY • Improvement in price formation to better reflect tight supply conditions • Implementation of sloping demand curve in Forward Capacity Auction (FCA) 9 ENERGY • Demand response required to participate in Day Ahead markets FEDERAL GAS to ELECTRIC • Better coordination between pipelines and ISO’s will promote efficiency ENVIRONMENTAL REGULATIONS • HEDD, HAPS/MACT may lead to tightening of supply in 2015+ timeframe |
77 Competitive Advantage: Heat Rate Diversity & Flexible Dispatch Illustrative Salem Hope Creek Keystone Conemaugh Hudson 2 Linden 1,2 Bergen 1 Mercer 1, 2 Bergen 2 Peach Bottom Burlington 8-9-11 Edison 1-2-3 Essex 10-11-12 Sewaren 6 Linden 5-8 / Essex 9 National Park Bergen 3 Mercer 3 Sewaren 1-4 Burlington 12 Yards Creek Base Load Units Peaking Units Load Following Units Kearny 9-12-13-14 Nuclear Coal Coal/Gas Combined Cycle (gas/oil) Steam (gas/oil) Combustion Turbine / Pumped Storage (gas/oil) Salem 3 PJM Dispatch Curve |
78 Competitive Advantage: PSEG’s extensive gas asset portfolio gives unparalleled access to Marcellus Shale gas Gulf Coast Supply 0.7 BCF/D Shale Supply 0.6 BCF/D Storage 0.9 BCF/D |
79 Competitive Advantage: ~25% of Power’s gas for generation comes from Marcellus • Our combined cycle and peaking assets have been able to take advantage of locational gas price volatility driven by production and logistical constraints • Lower cost shale supply provides additional savings during periods of lower residential gas demand Market Prices for Natural Gas Access to Lower Cost Shale Gas in Marcellus and Utica Spot Natural Gas Prices: June 2013 – April 2014 |
80 Competitive Advantage: Locational advantage from short term basis volatility $45 - $47 $37 - $38 $56 - $58 $39 - $40 • Annual basis benefits baseload units • Intermediate units flexible to seasonal opportunities • Combined Cycle and Peaking units positioned to optimize daily and hourly volatility PS Zone Annual Basis to PJM-W PS Zone Day Ahead On Peak Monthly Basis to PJM-W PS Zone Real Time On Peak Hourly Basis to PJM-W ANNUAL FORWARD BASIS TO PJM-WEST AS OF 12/31/2013. ($200) ($150) ($100) ($50) $0 $50 $100 $150 $- $2 $4 $6 $8 $10 $12 $14 $16 $18 $20 2011 2012 2013 2014 F 2015 F 2016 F 2017 F 2018 F $- $2 $4 $6 $8 $10 $12 $14 $16 $18 $20 |
81 Competitive Advantage: Trading & Asset Flexibility High gas market at $58/MMbtu setting power prices in PS zone on 1/7/14 PSEG Zone LMP’s on January 7, 2014 Higher basis to generation Base load and load following generation sufficient to cover load and hedge obligations Hourly Generation and Load on January 7, 2014 Additional steam and peaking generation available above day ahead commitment to gain value from real time market Fuel flexibility with coal/gas/oil optionality among available units $- $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hour Day Ahead Real Time $(80.0) $(60.0) $(40.0) $(20.0) $- $20.0 $40.0 $60.0 $80.0 $100.0 Salem/HC PB Key/Con Mer Hud Ber Linden - 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hour Nuclear Coal Combined Cycle Other Real Time Balancing Generation LOAD/HEDGES On Peak Basis to PJM-W on January 7, 2014 |
82 Competitive Advantage: Trading & Asset Flexibility High demand in constrained northern NJ Base load and load following generation sufficient to cover load and hedge obligations Additional generation available above obligations to gain value from real time market spikes Gas advantage in procuring low cost shale supply to capture savings PSEG Zone LMP’s on July 18, 2013 On Peak Basis to PJM-W on July 18, 2013 Hourly Generation and Load on July 18, 2013 $- $100 $200 $300 $400 $500 $600 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hour Day Ahead Real Time $(10.0) $(5.0) $- $5.0 $10.0 $15.0 $20.0 Salem/HC Key/Con Hud Linden - 2,000 4,000 6,000 8,000 10,000 12,000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hour Nuclear Coal Combined Cycle Other Real Time Balancing Generation LOAD/HEDGES |
83 Sustainable Advantage: BGS Auction provides excellent opportunity to forward hedge our generation Capacity Load shape Transmission Congestion Ancillary services Risk premium Green ~ $53 $37 - $38 $39 - $40 $38 - $39 BGS sales account for about a quarter of our forward portfolio of hedges 3 Year Average Round the Clock PJM West Forward Energy Price $/MWH; BGS PRICES REFLECT PSE&G ZONE; RESULTS FOR 2012-2014 WILL BE THE NEW BLENDED PRICES BEGINNING JUNE 1, 2014. $95.77 $94.30 $83.88 ~ $46 $92.18 ~ $47 ~ $48 ~ $43 ~ $53 ~ $59 $97.39 $48 - $50 $45 - $47 $68 - $71 |
84 Sustainable Advantage: Hedging strategy designed to protect gross margin while leveraging the portfolio Forecast output: Increased to reflect improvement in economic dispatch Apr-Dec 2014 2015 2016 Volume TWh 26 35 36 Base Load % Hedged 100% 75 - 80% 35 - 40% (Nuclear and Base Load Coal) Price $/MWh $49 $51 $51 Volume TWh 18 21 19 Intermediate Coal, Combined % Hedged 30 - 35% 0% 0% Cycle, Peaking Price $/MWh $49 $51 $51 Volume TWh 42 - 44 54 - 56 54 - 56 Total % Hedged 70 - 75% 50 - 55% 25 - 30% Price $/MWh $49 $51 $51 HEDGE PERCENTAGES AND PRICES AS OF MARCH 31, 2014. REVENUES OF FULL REQUIREMENT LOAD DEALS BASED ON CONTRACT PRICE, INCLUDING RENEWABLE ENERGY CREDITS, ANCILLARY, AND TRANSMISSION COMPONENTS BUT EXCLUDING CAPACITY. HEDGES INCLUDE POSITIONS WITH MTM ACCOUNTING TREATMENT AND OPTIONS. EXCLUDES SOLAR AND KALAELOA. |
85 2017/2018 RPM Auction Influenced By: • Updated Demand Curve • Updated Transfer Capabilities • Environmental Retirements • New Build/Cost of New Entry • Minimum Offer Price Rule • Demand Response *PSEG POWER’S AVERAGE PRICES AND CLEARED CAPACITY (MW) REFLECT BASE AND INCREMENTAL RPM AUCTION RESULTS. DELIVERY YEAR RUNS FROM JUNE 1 TO MAY 31 OF THE NEXT CALENDAR YEAR. RPM Auction Results* ($/MW-day) 2012 / 2013 2013 / 2014 2014 / 2015 2015 / 2016 2016 / 2017 Power’s Average Prices $153 $242 $166 $166 $166 Rest of Pool Prices $16 $28 $126 $136 $59 Power’s Cleared Capacity (MW) 10,400 10,890 10,710 9,210 8,610 Sustainable Advantage: PJM’s capacity market is expected to continue to recognize locational value |
86 Forward curve shows that Marcellus shale supply averages over $1.50/MMbtu discount year-round through 2018 2013 AVERAGE 6/1/13-12/31/13; F= FORWARDS AS OF 12/31/13. LEIDY BASIS FROM ICE/BROKER QUOTES (2.50) (2.25) (2.00) (1.75) (1.50) (1.25) (1.00) (0.75) (0.50) (0.25) - 0.25 0.50 0.75 1.00 2013 2014F 2015F 2016F 2017F 2018F Leidy Basis to HH TRANS6 Basis to HH TETM3 Basis to HH Basis to Henry Hub Sustainable Advantage: Fuel advantage continues throughout the curve |
87 PSEG Power’s Value Proposition • Well-positioned fleet of merchant generating assets concentrated in PJM market • Advantaged by low cost structure, fuel diversity and dispatch flexibility • Low environmental capital requirements • Capacity uprates to enhance value of nuclear and combined cycle stations • Consistent hedging strategy recognizes asset flexibility • Continue to meet commitments and to provide free cash flow |
PSEG FINANCIAL REVIEW & OUTLOOK |
89 Strong financial position to support our business initiatives 2013 Financial Position Exceeded upwardly revised 2013 earnings guidance Pension fully funded Strong balance sheet and upgraded credit ratings 2014 and Beyond Continued positive earnings trend in 2014 Controlled O&M growth Balance Sheet and Cash Flow support investments without equity issuance Growth in PSE&G investments with contemporaneous returns Diversified Power assets with a balanced hedge profile Growth in PSE&G Cash from Operations, with continued significant Cash from Operations/FFO at Power Increased Dividend by $0.04 to indicative annual rate of $1.48 for 2014 Opportunity for consistent and sustainable dividend growth |
90 Exceeded upwardly revised guidance in both businesses PSEG Operating Earnings $ Millions (except EPS) 2012 2013 PSE&G $528 $612 PSEG Power $663 $710 Other $45 ($13) Operating Earnings $1,236 $1,309 Operating EPS* $2.44 $2.58 Upwardly Revised Earnings Guidance (Nov 2013) $2.40 - $2.55 Earnings Guidance (Feb 2013) $2.25 - $2.50 *SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING OPERATIONS/NET INCOME TO RECONCILE TO OPERATING EARNINGS. NOTE: 2012 OPERATING EARNINGS RE-STATED FOR TRANSFER OF ASSETS FROM PSEG HOLDINGS TO PSEG POWER. |
91 Power Cash from Ops ~$1.3B Power Capital Investment ~0.6B Dividend to Parent ~$0.7B Net Debt ~$0.2B Power 2013 Cash Flows Free Cash Flow ~$0.7B Cash ~$0.2B In 2013, Power had significant free cash flow ~$0.9B Available for PSEG $0.0 $0.5 $1.0 $1.5 |
92 PSE&G Cash from Ops (1) ~$1.4B PSE&G Capital Investment ~$2.2B In 2013, PSE&G invested over $2B, using $1.4B of internally generated cash flow and debt, while maintaining its capital structure (1) PSE&G CASH FROM OPERATIONS ADJUSTS FOR SECURITIZATION PRINCIPAL REPAYMENTS OF ~$220 MILLION. Cash ~$0.1B $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 PSE&G Net Debt ~$0.6B PSE&G 2013 Cash Flows Parent Capital Contribution ~$0.1B |
93 In 2013, Power’s Free Cash Flow supported PSE&G’s capital program and shareholder dividend Power Cash from Ops ~$1.3B PSE&G Cash from Ops (1) ~$1.4B PSE&G Capital Investment ~$2.2B Power Capital Investment ~$0.6B Shareholder Dividend ~$0.7B Net Debt Issuances ~$0.7B PSEG Consolidated 2013 Sources and Uses (1) PSE&G CASH FROM OPERATIONS ADJUSTS FOR SECURITIZATION PRINCIPAL REPAYMENTS OF ~$220 MILLION. (2) OTHER CASH FLOW INCLUDES HOLDINGS NET CASH FLOW AND PARENT CASH. $0.0 $1.0 $2.0 $3.0 $4.0 Sources Uses Other Cash Flow (2) ~$0.1B |
94 PSEG growth spend, including Energy Strong, of ~$6.4B represents ~76% of total investment Power & Other Maintenance PSE&G Distribution Maintenance Power Growth PSE&G Transmission Growth PSE&G Solar and New Business PSE&G Energy Strong Approved Growth Investment ~$6.4B E = ESTIMATE; CAPITAL INCLUDES AFUDC AND IDC. PSEG Planned Spend Maintenance ~$2B ~$0.9B ~$0.3B ~$1.1B ~$0.8B ~$4.3B ~$1.0B ~$8.4B PSEG 2014 – 2016E Capital Investment |
95 PSE&G’s Capital Program drives double-digit growth in rate base and earnings over the 2013 to 2016 period E = ESTIMATE 2013 Rate Base 2016E Rate Base ~$10.4B ~$14.6B ~$6.6B ~$3.8B ~$2.7B ~$6.5B ~$0.5B ~$1.0B ~$8.1B Transmission Growth Energy Strong Solar and New Business 2013 – 2016E Rate Base CAGR Growth of ~12% Distribution Transmission 95 |
96 PSE&G’s Cash from Operations and Power’s Free Cash Flow support growth investments without the need for new equity 2014 – 2016E PSE&G Cash from Ops (1) PSE&G Capital Investment PSE&G Net Debt 2014 – 2016E (1) PSE&G CASH FROM OPERATIONS ADJUSTS FOR SECURITIZATION PRINCIPAL REPAYMENTS OF ~$500M FROM 2014 - 2016 (2) OTHER CASH FLOW INCLUDES PSEG LI, HOLDINGS NET CASH FLOW, CASH, AND SHORT TERM DEBT E = ESTIMATE PSE&G Cash from Ops (1) PSE&G Capital Investment PSE&G Net Debt Approved Programs With Energy Strong Shareholder Dividend Power Cash from Ops Other Cash Flow (2) Shareholder Dividend Power Cash from Ops Power Net Debt Power Capital Investment Power Capital Investment Other Cash Flow (2) Power Net Debt PSEG Sources and Uses 96 Sources Uses Sources Uses |
97 Power’s key credit metric supports incremental investment opportunities E = ESTIMATE PSEG Power Funds From Operations / Debt 2014-2016E Average Increased contribution to earnings from the more stable regulated business allows us to reset Power’s FFO/Debt threshold from 35% to 30%, providing additional financial flexibility Power’s annual Cash From Operations and Funds From Operations each average ~$1.1B over the 2014 to 2016 period supported by: - Capacity Revenues - Hedged Generation - O&M Control Financial strength can be used to pursue future growth in both businesses beyond current plans 0% 10% 20% 30% 40% 50% 60% 70% 80% 2012 2013 97 |
98 Pension: Our Long Term Asset allocation strategy resulted in a ~17% increase in pension assets during 2013 Trust Assets 12/31/2012 Cash Contributions Investment Return Gross Benefits Paid Trust Assets 12/31/2013 83% 106% $4.36B $5.12B ~$0.15B ~$0.86B ~($0.25B) $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 98 Fully Funded Pension PBO Funded Ratio |
99 Our Pension Management is expected to result in pension income in 2014 and over the planning horizon Pension (Expense)/Income 2013 to 2014 Drivers (1) OTHER REFLECTS UPDATES TO THE POPULATION OF OUR EMPLOYEES AND RETIREES E=ESTIMATE 2013 2014 2015E 2016E Expense ($110) M Discount Rate ~$40M Investment Return ~$70M Other (1) ~$15M ($125) ($75) ($25) $25 Income ~$15M per annum 99 |
100 (1) POWER EXCLUDES IMPACTS FROM STORM RECOVERY COSTS AND POTENTIAL RELATED INSURANCE PROCEEDS NM = NOT MATERIAL E = ESTIMATE. 2013 - 2016E CAGR: ~(0.7)% PSEG O&M Expense (1) Ongoing cost control efforts, including pension, expected to reduce O&M over the forecast period $0 $500 $1,000 $1,500 $2,000 $2,500 2013 2014E 2015E 2016E 2013 – 2016E CAGR Transmission ~(0.8)% Distribution ~(1.2)% Power ~(0.7)% Other: N.M. 100 |
101 Improving Operating Earnings and increased contribution from PSE&G PSEG Operating Earnings $ Millions (except EPS) 2012 2013 2014E PSE&G $528 $612 $705 - $745 PSEG Power $663 $710 $550 - $610 Other $45 ($13) $35 - $40 Operating Earnings* $1,236 $1,309 $1,290 - $1,395 Operating EPS* $2.44 $2.58 $2.55 - $2.75 Regulated % of Earnings 43% 47% 53% - 55% * SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING OPERATIONS/NET INCOME TO RECONCILE TO OPERATING EARNINGS. NOTE: 2012 OPERATING EARNINGS RE-STATED FOR TRANSFER OF ASSETS FROM PSEG HOLDINGS TO PSEG POWER. E=ESTIMATE. 101 |
PSE&G EPS $1.47 $1.39 Annual Dividend Per Share (10 YEAR HISTORICAL CAGR ~3%) (1) THE 2014 PAYOUT RATIO IS BASED ON THE MIDPOINT OF PSEG'S 2014 OPERATING EARNINGS GUIDANCE OF $2.55 - $2.75E PER SHARE. SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING OPERATIONS/NET INCOME TO RECONCILE TO OPERATING EARNINGS. Opportunity for consistent and sustainable dividend growth supported by strong cash flow from both businesses 2.8% increase Payout Ratio 43% 44% 50% 58% 56% 56% ( 1) E = ESTIMATE $1.60 $1.33 $1.37 $1.37 $1.42 $1.44 $1.48 $0.60 $0.80 $1.00 $1.20 $1.40 2009 2010 2011 2012 2013 2014E 102 |
PSEG’s longer-term outlook is influenced by Power’s hedge position and increased investment at PSE&G 2015E 2016E Each $0.75/mcf Change in Natural Gas Each $2/MWh Change in Spark Spread Each $5/MWh Change in Dark Spread Each 1% Change in Nuclear Capacity Factor Segment EPS Drivers 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 $0.01 $0.01 $0.01 $0.01 $0.01 $0.12 - $0.15 $0.04 $0.04 $0.01 $0.04 - $0.07 $0.04 $0.04 $0.01 $0.01 $0.01 $0.01 $0.01 $0.01 Sensitivities derived from typical annual market variability* * Estimated annual variability approximating one standard deviation based on 2011 – 2013 historical data and forward curve estimates applied to PSEG Power open positions E = ESTIMATE |
104 PSEG Summary • Our 2013 earnings of $2.58 exceeded our upwardly revised operating earnings guidance of $2.40 - $2.55 per share • Double digit earnings growth at PSE&G on one and three year basis from 2013 to 2016, driven by transmission investments and approved programs • Power’s continued focus on operational excellence, market expertise and financial strength delivers value in current price environment • Strong Balance Sheet and Cash Flow support full capital program and new potential opportunities without the need for equity • Long history of returning cash to the shareholder through the common dividend, with opportunity for consistent and sustainable growth 104 |
105 PSE&G APPENDIX |
106 PSE&G provides high reliability at below average cost which creates superior value to customers SAIDI = SYSTEM AVERAGE INTERRUPTION DURATION INDEX, A MEASURE OF AVERAGE OUTAGE DURATION FOR ALL CUSTOMERS SERVED. |
107 PSE&G prioritizes public safety while maintaining value to customers LEAK RESPONSE RATE = PERCENTAGE OF UTILITY RESPONSES TO REPORTED LEAKS WITHIN ONE HOUR. |
108 PSEG POWER AND ER&T APPENDIX |
109 Nuclear fuel needs have been hedged through 2016 Hedged $0 $5 $10 2014 2015 2016 Anticipated Nuclear Fuel Cost 109 |
110 Power’s coal hedging reflects 2014 supply matched with 2014 sales Station Coal Type Pricing ($/MWh)* Comments Bridgeport Harbor Adaro Low $40’s Higher price, lower BTU, enviro coal Hudson CAPP Mid $40’s Flexibility after BET in 2010 Mercer Metallurgical CAPP/NAPP Low $40’s More limited segment of coal market Keystone NAPP Mid $20’s Prices steady Conemaugh NAPP Mid $20’s Prices steady % Hedged (left scale) $/MWh (right scale) $0 $10 $20 $30 $40 $50 0% 20% 40% 60% 80% 100% 2014 2015 2016 *COMMODITY PLUS TRANSPORTATION. Contracted Coal |
The full requirements BGS rate recognizes the forward PJM capacity market price 111 2014-2015 $172 Three Year Average ($/MW-day) $172 2015-2016 $166 MW per Tranche (varies by EDC) 109 2016-2017 $178 Days per Year 365 Three Year Average ($/MW-day) $172 MWh per Tranche Energy MW per Tranche (varies by EDC) 109 Hours per Year 8,768 Load Factor (varies by EDC) ~37% MWh per Tranche, approx. 350,090 Capacity Cost per MWh $20 Capacity Price per RPM Auction for PSEG Zone Capacity Price per BGS Tranche Capacity Cost per Tranche $ 6,841,016 |
PSEG FINANCIAL APPENDIX 112 |
Q1 Operating Earnings by Subsidiary Operating Earnings Earnings per Share $ millions (except EPS) 2014 2013 2014 2013 PSEG Power $ 293 $ 254 $ 0.58 $ 0.50 PSE&G 214 179 0.42 0.35 PSEG Enterprise/Other 8 - 0.01 - Operating Earnings* $ 515 $ 433 $ 1.01 $ 0.85 Quarter ended March 31 * SEE SLIDE B FOR ITEMS EXCLUDED FROM NET INCOME TO RECONCILE TO OPERATING EARNINGS. 113 |
114 PSEG EPS Reconciliation – Q1 2014 versus Q1 2013 Q1 2014 Operating Earnings* Q1 2013 Operating Earnings* PSEG Power PSE&G PSEG Enterprise/ Other Capacity 0.11 Market Prices and Volume 0.02 Re-contracting (0.05) Gas Send-Out 0.05 Lower Pension Expense 0.01 O&M (0.05) Taxes and Other (0.01) Transmission Net Earnings 0.03 Gas Volume & Demand 0.02 Weather 0.01 Lower Pension Expense 0.02 Distribution O&M (0.02) Taxes and Other 0.01 Interest and PSEG Long Island 0.01 $0.85 0.07 0.08 $1.01 0.00 0.20 0.40 0.60 0.80 1.00 * SEE SLIDE B FOR ITEMS EXCLUDED FROM NET INCOME TO RECONCILE TO OPERATING EARNINGS. |
115 March 31, 2014 PSEG PSE&G Power Cash Investments $0.6 $0.1 N/A (2) Short Term Debt $0.0 $0.0 N/A (2) Long Term Debt (3) 8.1 5.5 2.5 Common Equity 11.8 6.3 5.7 Total Capitalization $19.9 $11.8 $8.2 Total Debt / Capitalization 41% 47% 31% PSE&G Regulated Equity Ratio (1) 53% Our balance sheet remains strong (1) REGULATED EQUITY RATIO INCLUDES CUSTOMER DEPOSITS OF ~$95 MILLION AND EXCLUDES SHORT-TERM DEBT (2) N/A BECAUSE POWER INVESTS AND BORROWS SHORT-TERM THROUGH INTERCOMPANY ARRANGEMENT WITH PSEG PARENT (3) DOES NOT INCLUDE SECURITIZATION DEBT OF $442 MILLION. $ Billions |
116 PSEG Liquidity as of March 31, 2014 In April 2014, Power and PSEG amended their respective 5-Year credit agreements ending in 2017, extending the expiration dates from March 2017 to April 2019. Expiration Total Available Company Facility Date Facility Usage Liquidity ($Millions) PSE&G 5-year Credit Facility Mar-18 $600 1 $13 $587 5-Year Credit Facility (Power) Mar-17 $1,600 $67 $1,533 5-Year Credit Facility (Power) Mar-18 $1,000 2 $0 $1,000 5-Year Bilateral (Power) Sep-15 $100 $100 $0 5-year Credit Facility (PSEG) Mar-17 $500 $8 $492 5-year Credit Facility (PSEG) Mar-18 $500 3 $0 $500 Total $4,300 $4,112 1 PSE&G Facility to be reduced by $29M on April 15, 2016 $434 2 Power Facility to be reduced by $48M on April 15, 2016 PSE&G ST Investment $132 3 PSEG Facility to be reduced by $23M on April 15, 2016 Total Liquidity Available $4,678 Total Parent / Power Liquidity $3,959 PSEG / Power PSEG Money Pool ST Investment 116 |
117 PSEG Energy Holdings Investment Portfolio Equipment Investment Balance * at 3/31/14 ($millions) Merchant Energy Leases NRG REMA Keystone, Conemaugh & Shawville (PA) 3 coal-fired plants (1,162 equity MW) $344 Edison Mission Energy (EME)** Powerton & Joliet Generating Stations (IL) 2 coal-fired generating facilities (1,640 equity MW) $218 Regulated Energy Leases Merrill Creek Reservoir in NJ (PECO, MetEd, Delmarva Power & Light) $193 Grand Gulf Nuclear station in Mississippi (175 equity MW) Real Estate Leveraged Leases GM Renaissance Center; Wal-Marts; E-D (shopping) Centers $73 Real Estate Operating Leases Office Towers, Shopping Centers - 30 properties $69 Generation Legacy Assets GWF (in wind down stage), Bridgewater, GSOE $4 Other Land & Receivables $7 Total Holdings Investments $908 * BOOK BALANCE EXCLUDING DEFERRED TAX ACCOUNTS. ** EME AND ITS SUBSIDIARIES FILED CHAPTER 11 BANKRUPTCY ON 12/17/2012. ON APRIL 1,2014, EME WAS ACQUIRED BY NRG; ALL MONETARY DEFAULTS WERE CURED AT CLOSING WITH NO CHANGE TO HOLDINGS’ STATED EQUITY VALUE. |
118 Strong, full year 2013 operating earnings delivered * SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING OPERATIONS/NET INCOME TO RECONCILE TO OPERATING EARNINGS. Operating Earnings Earnings per Share $ millions (except EPS) 2013 2012 2013 2012 PSEG Power $ 710 $ 663 $ 1.40 $ 1.31 PSE&G 612 528 1.21 1.04 PSEG Enterprise/Other (13) 45 (0.03) 0.09 Operating Earnings* $ 1,309 $ 1,236 $ 2.58 $ 2.44 Twelve Months ended December 31 118 |
Items Excluded from Income from Continuing Operations/Net Income 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. (a) Includes the financial impact from positions with forward delivery months. A 2013 2012 2011 2010 2009 2008 Earnings Impact ($ Millions) Operating Earnings 1,309 $ 1,236 $ 1,389 $ 1,584 $ 1,567 $ 1,478 $ Gain (Loss) on Nuclear Decommissioning Trust (NDT) Fund Related Activity (PSEG Power) 40 52 50 46 9 (71) Gain (Loss) on Mark-to-Market (MTM) (a) (PSEG Power) (74) (10) 107 (1) (11) 14 Lease Transaction Activity (PSEG Enterprise/Other) - 36 (173) - 29 (490) Storm O&M (PSEG Power) (32) (39) - - - - Market Transition Charge Refund (PSE&G) - - - (72) - - Gain (Loss) on Asset Sales and Impairments (PSEG Enterprise/Other) - - 34 - - (13) Income from Continuing Operations 1,243 $ 1,275 $ 1,407 $ 1,557 $ 1,594 $ 918 $ Discontinued Operations - - 96 7 (2) 270 Net Income 1,243 $ 1,275 $ 1,503 $ 1,564 $ 1,592 $ 1,188 $ Fully Diluted Average Shares Outstanding (in Millions) 508 507 507 507 507 508 Per Share Impact (Diluted) Operating Earnings 2.58 $ 2.44 $ 2.74 $ 3.12 $ 3.09 $ 2.91 $ Gain (Loss) on NDT Fund Related Activity (PSEG Power) 0.08 0.10 0.10 0.09 0.02 (0.14) Gain (Loss) on MTM (a) (PSEG Power) (0.14) (0.02) 0.21 - (0.02) 0.03 Lease Transaction Activity (PSEG Enterprise/Other) - 0.07 (0.34) - 0.05 (0.96) Storm O&M (PSEG Power) (0.07) (0.08) - - - - Market Transition Charge Refund (PSE&G) - - - (0.14) - - Gain (Loss) on Asset Sales and Impairments (PSEG Enterprise/Other) - - 0.06 - - (0.03) Income from Continuing Operations 2.45 $ 2.51 $ 2.77 $ 3.07 $ 3.14 $ 1.81 $ Discontinued Operations - - 0.19 0.01 - 0.53 Net Income 2.45 $ 2.51 $ 2.96 $ 3.08 $ 3.14 $ 2.34 $ For the Year Ended December 31, (Unaudited) PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Reconciling Items, net of tax |
Items Excluded from Net Income to Reconcile to Operating Earnings B 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. Attachment 10 2014 2013 2013 2012 Earnings Impact ($ Millions) Operating Earnings 515 $ 433 $ 1,309 $ 1,236 $ Gain (Loss) on Nuclear Decommissioning Trust (NDT) Fund Related Activity (PSEG Power) 9 9 40 52 Gain (Loss) on Mark-to-Market (MTM) (a) (PSEG Power) (132) (105) (74) (10) Lease Related Activity (PSEG Enterprise/Other) - - - 36 Storm O&M, net of insurance recoveries (PSEG Power) (6) (17) (32) (39) Net Income 386 $ 320 $ 1,243 $ 1,275 $ Fully Diluted Average Shares Outstanding (in Millions) 508 507 508 507 Per Share Impact (Diluted) Operating Earnings 1.01 $ 0.85 $ 2.58 $ 2.44 $ Gain (Loss) on NDT Fund Related Activity (PSEG Power) 0.02 0.02 0.08 0.10 Gain (Loss) on MTM (a) (PSEG Power) (0.26) (0.21) (0.14) (0.02) Lease Related Activity (PSEG Enterprise/Other) - - - 0.07 Storm O&M, net of insurance recoveries (PSEG Power) (0.01) (0.03) (0.07) (0.08) Net Income 0.76 $ 0.63 $ 2.45 $ 2.51 $ (a) Includes the financial impact from positions with forward delivery months. PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Reconciling Items, net of tax Three Months Ended Year Ended March 31, December 31, (Unaudited) |