 Public Service Enterprise Group PSEG Earnings Conference Call 3rd Quarter 2014 October 30, 2014 EXHIBIT 99.1 |
 1 Forward-Looking Statement 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: • 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, capacity market design, transmission planning and cost allocation rules, including how transmission projects are 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 and enforcement 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 manage our energy obligations, available supply and risks, • adverse outcomes of any legal, regulatory or other proceeding, settlement, investigation or claim applicable to us and/or the energy industry, • any deterioration in our credit quality or the credit quality of our counterparties, • availability of capital and credit at commercially reasonable terms and conditions and our ability to meet cash needs, • 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, • 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 insurance coverage or recover proceeds of insurance with respect to such events, • acts of terrorism, cybersecurity attacks or intrusions that could adversely impact our businesses, • increases in competition in energy supply markets as well as competition for certain 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 funding requirements, • changes in technology, such as distributed generation and micro grids, and greater reliance on these technologies, and • changes in customer behaviors, including increases in energy efficiency, net-metering and demand response. 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. 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. |
 2 GAAP Disclaimer PSEG presents Operating Earnings in addition to its Net Income reported in accordance with accounting principles generally accepted in the United States (GAAP). Operating Earnings is a non-GAAP financial measure that differs from Net Income because it excludes gains or losses associated with Nuclear Decommissioning Trust (NDT), 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 slide in this presentation includes a list of items excluded from Net Income to reconcile to Operating Earnings, with a reference to that slide included on each of the slides where the non- GAAP information appears. These materials and other financial releases can be found on the pseg.com website under the investor tab, or at http://investor.pseg.com/ |
 PSEG 2014 Q3 Review Ralph Izzo Chairman, President and Chief Executive Officer |
 4 Q3 Earnings Summary Quarter ended September 30 $ millions (except EPS) 2014 2013 Operating Earnings $ 393 $ 385 Reconciling Items, Net of Tax 51 5 Net Income $ 444 $ 390 EPS from Operating Earnings* $ 0.77 $ 0.76 * See Slide A for Items excluded from Net Income to reconcile to Operating Earnings. |
 5 Year to Date Earnings Summary Nine months ended September 30 $ millions (except EPS) 2014 2013 Operating Earnings $ 1,153 $ 1,061 Reconciling Items, Net of Tax (111) (18) Net Income $ 1,042 $ 1,043 EPS from Operating Earnings* $ 2.27 $ 2.09 * See Slide A for Items excluded from Net Income to reconcile to Operating Earnings. |
 6 PSEG – Q3 2014 Highlights Operating Earnings of $0.77 vs. $0.76 per share in Q3 2013 Delivered solid results in the quarter as PSE&G’s continuing investment in transmission drove results Narrowed 2014 full–year, operating earnings guidance to $2.60-$2.75 per share, from $2.55-$2.75 per share prior Executing on operational goals Continued control of O&M supports full-year expectations Generation increase of 4% – with increased availability Executing on our on our capital program Transmission program of $6.8 billion continues on schedule and on budget Energy Strong investment underway – gas mains replacement prioritized Power announced a new $100-$120 million investment in the PennEast Pipeline project Market developments PJM proposed changes on Capacity Performance, Demand Curve Adjustment and pending Demand Response (DR) issues supportive of price formation PJM decision on FERC 1000 Artificial Island solution expected early 2015 Updated PSEG-Long Island “Utility 2.0” filing submitted to NY regulators |
 7 $2.60 - $2.75E PSEG – 2014 Another Year of Growth $2.44 $2.58 2014 operating earnings guidance narrowed; forecast full-year at upper end of range, assuming normal weather and unit operations for rest of year 2012 Operating Earnings* 2013 Operating Earnings* 2014 Operating Earnings Guidance * See Slide A for Items excluded from Net Income to reconcile to Operating Earnings. E = Estimate. |
 PSEG 2014 Q3 Operating Company Review Caroline Dorsa EVP and Chief Financial Officer |
 9 Q3 Operating Earnings by Subsidiary Operating Earnings Earnings per Share $ millions (except EPS) 2014 2013 2014 2013 PSE&G $ 200 $ 168 $ 0.39 $ 0.33 PSEG Power 171 221 0.34 0.43 PSEG Enterprise/Other 22 (4) 0.04 - Operating Earnings* $ 393 $ 385 $ 0.77 $ 0.76 Quarter ended September 30 * See Slide A for Items excluded from Net Income to reconcile to Operating Earnings. |
 10 PSEG EPS Reconciliation – Q3 2014 versus Q3 2013 Capacity (0.09) Re-Contracting & Market Pricing (0.04) Weather (0.03) O&M 0.06 Taxes & Other 0.01 Transmission 0.04 Electric Volume & Demand 0.01 Weather (0.02) Distribution O&M 0.02 Interest & Other 0.01 Q3 2014 Operating Earnings* Q3 2013 Operating Earnings* PSEG Power PSE&G Enterprise/ Other PSEG Long Island and Other $0.76 0.06 0.04 $0.77 (0.09) 0.00 0.25 0.50 0.75 1.00 * See Slide A for Items excluded from Net Income to reconcile to Operating Earnings. |
 11 Year to Date Operating Earnings by Subsidiary Operating Earnings Earnings per Share $ millions (except EPS) 2014 2013 2014 2013 PSE&G $ 565 $ 468 $ 1.11 $ 0.92 PSEG Power 551 595 1.09 1.17 PSEG Enterprise/Other 37 (2) 0.07 - Operating Earnings* $ 1,153 $ 1,061 $ 2.27 $ 2.09 Nine months ended September 30 • See Slide A for Items excluded from Net Income to reconcile to Operating Earnings. |
 12 PSEG EPS Reconciliation – YTD 2014 versus YTD 2013 YTD 2014 Operating Earnings* YTD 2013 Operating Earnings* Capacity 0.05 Re-Contracting & Market Pricing (0.07) Weather (0.03) Lower Volume (0.01) O&M (0.02) D&A, Taxes and Other 0.00 PSEG Power** Transmission 0.10 Gas Volume, Demand & Other Revenue 0.03 Electric Volume & Demand 0.01 Weather (0.02) Distribution O&M 0.04 Lower Interest Expense & Other 0.03 PSE&G ** Enterprise/ Other PSEG-Long Island And Other 0.00 0.50 1.00 1.50 2.00 2.50 $2.09 0.19 0.07 $2.27 (0.08) * See Slide A for Items excluded from Net Income to reconcile to Operating Earnings. ** Prior quarter results for reconciling items may not add to year-to-date (YTD) totals due to rounding. |
 PSE&G 2014 Q3 Review |
 14 PSE&G – Q3 Earnings Summary $ millions (except EPS) Q3 2014 Q3 2013 Variance Operating Revenues $ 1,655 $ 1,666 (11) Operating Expenses Energy Costs 668 661 7 Operation & Maintenance 366 408 (42) Depreciation & Amortization 238 236 2 Taxes Other than Income Taxes - 15 (15) Total Operating Expenses 1,272 1,320 (48) Operating Earnings / Net Income $ 200 $ 168 32 EPS from Operating Earnings $ 0.39 $ 0.33 $ 0.06 |
 15 PSE&G EPS Reconciliation – Q3 2014 versus Q3 2013 Q3 2014 Operating Earnings Q3 2013 Operating Earnings Transmission 0.04 Electric Volume & Demand 0.01 Distribution O&M 0.02 Interest & Other 0.01 Weather $0.33 0.05 0.03 $0.39 (0.02) 0.00 0.10 0.20 0.30 0.40 0.50 |
   4,587 3,397 2,101 6,977 3,691 1,687 5,213 4,607 1,906 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 July August September 16 PSE&G – Monthly Summer Weather Data 2014 vs. 2013 vs. Normal PSE&G Monthly Temperature Humidity Index (THI) -18.4% Q3 2014 vs. Q3 2013 -14% Q3 2014 vs. Normal 2014 2013 Normal |
 17 PSE&G – Q3 Operating Highlights Transmission projects on schedule and on budget Energy Strong investments underway: Gas mains replacement prioritized 2015 FERC Formula Rate filing submitted PSE&G lowered gas rates by 9% on 10/1; Additional BGSS rate credits to be implemented Nov 2014 to Jan 2015 – expected to further reduce winter heating bills Filed Energy Efficiency Ext II program with BPU for ~$100 million; early 2015 decision expected BPU approved settlement finding $366 million of 2010-2012 storm cost expenditures to be prudent: $126 million of capital costs and $240 million of O&M expenditures to be recoverable in a future rate case New NJBPU President Mroz (R) and Commissioner Chivukula (D) confirmed by NJ Senate PSE&G earned its authorized return Issued $250 million of secured MTNs (due 2019) and $250 million secured MTNs (due 2024); Retired $500 million of debt maturities in Q3 Weather in Q3 2014 was 18% cooler than Q3 2013 and 14% cooler than normal Transmission revenues added $0.04 per share over Q3 2013 O&M remains under control Financial Regulatory and Market Environment Operations |
 PSEG Power 2014 Q3 Review |
 19 PSEG Power – Q3 Earnings Summary $ millions (except EPS) Q3 2014 Q3 2013 Variance Operating Revenues $ 1,138 $ 1,174 $ (36) Operating Earnings 171 221 (50) Reconciling Items, Net of Tax** 51 5 46 Net Income 222 226 (4) EPS from Operating Earnings* $ 0.34 $ 0.43 $ (0.09) * See Slide A for Items excluded from Net Income to reconcile to Operating Earnings. **Includes the financial impact from positions with forward delivery months. |
 20 Capacity (0.09) Re-Contracting and Market Pricing (0.04) Weather (0.03) PSEG Power EPS Reconciliation – Q3 2014 versus Q3 2013 Q3 2014 Operating Earnings* Q3 2013 Operating Earnings* O&M Taxes and Other $0.43 0.06 0.01 $0.34 (0.16) 0.00 0.10 0.20 0.30 0.40 0.50 * See Slide A for Items excluded from Income from Net Income to reconcile to Operating Earnings. |
 21 PSEG Power – Generation Measures Quarter ended September 30 Total Nuclear Total Coal* Oil & Natural Gas * Includes figures for Pumped Storage. Includes Hudson and Mercer when run on gas. PSEG Power – Generation (GWh) 14,111 14,690 Quarter ended September 30 PSEG Power – Capacity Factors (%) 7,498 7,565 1,936 1,831 4,677 5,294 0 7,500 15,000 2013 2014 2013 2014 Combined Cycle PJM and NY 60.4% 67.5% Coal NJ (Coal/Gas) 16.3% 21.5% PA 83.1% 71.8% CT 11.6% 5.3% Nuclear 91.0% 92.0% |
 22 PSEG Power – Generation Measures Nine Months ended September 30 Total Nuclear Total Coal* Oil & Natural Gas PSEG Power – Generation (GWh) 40,986 41,306 Nine Months ended September 30 PSEG Power – Capacity Factors (%) 22,783 22,152 5,526 6,096 12,677 13,058 0 15,000 30,000 45,000 2013 2014 2013 2014 Combined Cycle PJM and NY 57.0% 54.7% Coal* NJ (Coal/Gas) 14.2% 18.6% PA 79.4% 78.1% CT 16.6% 27.1% Nuclear 93.2% 90.8% * Includes figures for Pumped Storage. Includes Hudson and Mercer when run on gas. |
 23 PSEG Power – Fuel Costs PSEG Power – Fuel Costs Quarter ended September 30 ($ millions) 2013 2014 Coal 45.1 42.2 Oil & Gas 146.1 139.5 Total Fossil 191.2 181.7 Nuclear 56.5 53.2 Total Fuel Cost 247.7 234.9 Total Generation (GWh) 14,111 14,690 $ / MWh 17.55 15.99 Nine months ended September 30 ($ millions) 2013 2014 Coal 141.3 169.7 Oil & Gas 483.8 623.4 Total Fossil 625.1 793.1 Nuclear 166.6 161.9 Total Fuel Cost 791.7 955.0 Total Generation (GWh) 40,986 41,306 $ / MWh 19.32 23.12 |
 24 PSEG Power – Gross Margin Performance Capacity pricing reset to $166/MW-day on June 1, to remain stable over multi-year period Mild summer weather weighed on spot market prices Lower spark spreads compared with Q3 2013 PSEG Power Gross Margin ($/MWh) $47 $51 $40 Quarter ended September 30 Nine months ended September 30 $45 $47 $44 $0 $35 $70 $0 $35 $70 Regional Performance Region Q3 2014 Gross Margin ($M) 2014 Performance PJM $537 Decline in capacity prices and hedged energy prices New England $20 Lower volume New York $24 Increased volume 2012 2013 2014 2012 2013 2014 |
 PSEG Power expanding supply of low-cost Marcellus gas PSEG plans to invest $100-$120 million in the to-be-constructed PennEast Pipeline, a 105.5 mile pipeline that would bring gas from eastern Pennsylvania to New Jersey PSEG ER&T would contract for approximately 125mmcf/day of PennEast’s 1 bcf/day capacity under a 15-year contract; other project sponsors have committed to offtake ~500mmcf/day PSEG and its customers would benefit from the displacement of higher-cost, Gulf Coast gas supply Targeted in-service date is November 2017 Proposed PennEast Pipeline Project 25 |
 Volume TWh 8 36 36 Base Load % Hedged 100% 100% 55-60% (Nuclear and Base Load Coal) Price $/MWh $49 $50 $49 Volume TWh 5 21 21 Intermediate Coal, Combined % Hedged 50-55% 5-10% 0% Cycle, Peaking Price $/MWh $49 $50 $49 26 Hedging Update… Contracted Energy* Oct-Dec 2014 2015 2016 * Hedge percentages and prices as of September 30, 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. Volume TWh 13 55-57 55-57 Total % Hedged 80-85% 65-70% 35-40% Price $/MWh $49 $50 $49 |
 Regulatory and Market Environment PJM active on ensuring future reliability: Capacity Performance proposal, review of DR participation in energy markets, and revision of demand (VRR) curve – all supportive of price formation Average hedge price for 2014 is $48/MWh vs. $50/MWh for 2013 27 PSEG Power – Q3 2014 Operating Highlights Q3 output up 4% from Q3 2013 YTD nuclear capacity factor was 91%; Q3 capacity factor was 92% Salem 1 refueling outage underway CCGT capacity factor improved 7% from Q3 2013 Operations New $600 million, 450 MW CCGT at Bridgeport Harbor under consideration Announced $100-$120 million PennEast Pipeline investment Power’s total debt as a percentage of capital at September 30 was 32% Power has been verbally notified by the FERC staff that they have initiated a preliminary, non-public staff investigation into the matters surrounding the errors discovered by Power in certain of its cost based bids Financial |
 PSEG |
 2014 operating earnings guidance narrowed to $2.60 - $2.75 per share Focused on maintaining operating efficiency and customer reliability PSE&G’s operating earnings on track to grow at double-digit rate in 2014 PSE&G transmission investment program continues on-track and on-budget Financial position remains strong Positive cash from Power and increasing cash flow from PSE&G supports dividend Debt as a percentage of capital was 42% at September 30 Long history of returning cash to the shareholder through the common dividend, with opportunity for future growth PSEG Financial Highlights 29 growth and funds capital spending program without the need to issue equity |
 $ millions (except EPS) 2014E 2013 2012 PSE&G $710 – $745 $612 $528 PSEG Power $575 – $610 $710 $663 PSEG Enterprise/Other $35 – $40 $(13) $45 Operating Earnings* $1,320 – $1,395 $1,309 $1,236 Earnings per Share $2.60 – $2.75 $2.58 $2.44 30 PSEG 2014 Operating Earnings Guidance - By Subsidiary * See Slide A for Items excluded from Net Income to reconcile to Operating Earnings. E = Estimate. |
 PSEG Liquidity as of September 30, 2014 31 Expiration Total Available Company Facility Date Facility Usage Liquidity ($Millions) PSE&G 5-year Credit Facility Mar-18 $600 1 $14 $586 5-Year Credit Facility (Power) Apr-19 $1,600 $76 $1,524 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) Apr-19 $500 $8 $492 5-year Credit Facility (PSEG) Mar-18 $500 3 $0 $500 Total $4,300 $198 $4,102 1 PSE&G Facility to be reduced by $29M on April 15, 2016 $374 2 Power Facility to be reduced by $48M on April 15, 2016 PSE&G ST Investment $293 3 PSEG Facility to be reduced by $23M on April 15, 2016 Total Liquidity Available $4,769 Total Parent / Power Liquidity $3,890 PSEG / Power PSEG Money Pool ST Investment |
 A Items Excluded from Net Income to Reconcile to Operating Earnings Please see Slide 2 for an explanation of PSEG’s use of Operating Earnings as a non-GAAP financial measure and how it differs from Net Income. 2014 2013 2014 2013 2013 2012 Earnings Impact ($ Millions) Operating Earnings 393 $ 385 $ 1,153 $ 1,061 $ 1,309 $ 1,236 $ Gain (Loss) on Nuclear Decommissioning Trust (NDT) Fund Related Activity (PSEG Power) 17 12 40 29 40 52 Gain (Loss) on Mark-to-Market (MTM) (a) (PSEG Power) 36 3 (138) (22) (74) (10) Lease Related Activity (PSEG Enterprise/Other) - - - - - 36 Storm O&M, net of insurance recoveries (PSEG Power) (2) (10) (13) (25) (32) (39) Net Income 444 $ 390 $ 1,042 $ 1,043 $ 1,243 $ 1,275 $ Fully Diluted Average Shares Outstanding (in Millions) 507 508 507 507 508 507 Per Share Impact (Diluted) Operating Earnings 0.77 $ 0.76 $ 2.27 $ 2.09 $ 2.58 $ 2.44 $ Gain (Loss) on NDT Fund Related Activity (PSEG Power) 0.04 0.02 0.08 0.06 0.08 0.10 Gain (Loss) on MTM (a) (PSEG Power) 0.07 0.01 (0.27) (0.04) (0.14) (0.02) Lease Related Activity (PSEG Enterprise/Other) - - - - - 0.07 Storm O&M, net of insurance recoveries (PSEG Power) (0.01) (0.02) (0.03) (0.05) (0.07) (0.08) Net Income 0.87 $ 0.77 $ 2.05 $ 2.06 $ 2.45 $ 2.51 $ (a) Includes the financial impact from positions with forward delivery months. September 30, September 30, December 31, (Unaudited) PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Reconciling Items, net of tax Three Months Ended Nine Months Ended Year Ended |