Exhibit 99
Public Service Enterprise Group
A Presentation to the Financial Community
The New York Palace Hotel, New York City
March 20, 2008
Forward-Looking Statement
Readers are cautioned that statements contained in this presentation about our and our subsidiaries' future performance, including future
revenues, earnings, strategies, prospects and all other statements that are not purely historical, are forward-looking statements for purposes of
the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Although we believe that our expectations are based on
reasonable assumptions, we can give no assurance they will be achieved. The results or events predicted in these statements may differ
materially from actual results or events. Factors which could cause results or events to differ from current expectations include, but are not
limited to:
Adverse Changes in energy industry, policies and regulation, including market rules that may adversely affect our operating results.
Any inability of our energy transmission and distribution businesses to obtain adequate and timely rate relief and/or regulatory approvals from
federal and/or state regulators.
Changes in federal and/or state environmental regulations that could increase our costs or limit operations of our generating units.
Changes in nuclear regulation and/or developments in the nuclear power industry generally, that could limit operations of our nuclear
generating units.
Actions or activities at one of our nuclear units that might adversely affect our ability to continue to operate that unit or other units at the same
site.
Any inability to balance our energy obligations, available supply and trading risks.
Any deterioration in our credit quality.
Any inability to realize anticipated tax benefits or retain tax credits.
Increases in the cost of or interruption in the supply of fuel and other commodities necessary to the operation of our generating units.
Delays or cost escalations in our construction and development activities.
Adverse capital market performance of our decommissioning and defined benefit plan trust funds.
Changes in technology and/or increased customer conservation.
For further information, please refer to our Annual Report on Form 10-K, including Item 1A. Risk Factors, and subsequent reports on Form 10-
Q and Form 8-K filed with the Securities and Exchange Commission. These documents address in further detail our business, industry issues
and other factors that could cause actual results to differ materially from those indicated in this presentation. In addition, any forward-looking
statements included herein represent our estimates only as of today and should not be relied upon as representing our estimates as of any
subsequent date. While we may elect to update forward-looking statements from time to time, we specifically disclaim any obligation to do so,
even if our estimates change, unless otherwise required by applicable securities laws.
2
GAAP Disclaimer
PSEG presents Operating Earnings in addition to its Net Income reported
in accordance with accounting principles generally accepted in the United
States (GAAP). Operating Earnings is a non-GAAP financial measure that
differs from Net Income because it excludes the impact of the sale of
certain non-core domestic and international assets and costs stemming
from the terminated merger agreement with Exelon Corporation. 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
slides are intended to be reviewed in conjunction with the oral
presentation to which they relate.
3
Today’s Agenda
Presenter
Presentation
Time
Ralph Izzo
Summary and Q&A
12:30
Tom O’Flynn
PSEG Financial Review and Outlook
12:00 – 12:30
Stephen Byrd
PSEG Energy Holdings – Review and Outlook
11:45 – 12:00
Ralph LaRossa
PSE&G – Review and Outlook
11:15 – 11:45
PSEG Power – Q&A
11:00 – 11:15
Dan Cregg
PSEG Power – Market Overview and
Financial Outlook
10:15 – 11:00
BREAK
Richard Lopriore
PSEG Fossil – Overview
9:30 – 10:00
Bill Levis
PSEG Power – Overview
PSEG Nuclear – Overview
9:00 – 9:30
Anne Hoskins
Climate Change: Public Policy Initiatives
8:30 – 9:00
Ralph Izzo
PSEG Strategic Overview
8:00 – 8:30
Kathleen Lally
Welcome / Introduction
8:00
4
PSEG
Strategic Overview
Ralph Izzo
Chairman, President and Chief Executive Officer, PSEG
Operational excellence is our foundation for success …
Financial
Strength
Operational
Excellence
Disciplined
Investment
… and this will yield financial strength that will be deployed
through disciplined investment.
6
Our platform …
… provides earnings stability and multiple sources of revenue for
growth.
Stable electric and gas
distribution and
transmission company
rated top quartile for
reliability providing
service in mature
service territory in New
Jersey.
Major electric generation
company with 13,300
MW of base-load,
intermediate and load
following capability
operating in attractive
markets in the Northeast
with operating control of
additional 2,000 MW of
capacity in Texas.
Redeployment of capital
through the sale of
international assets.
Focused on managing
lease portfolio and
potential investment in
renewables.
2007 Operating
Earnings:
$949M*
$115M*
$376M*
2008 Guidance:
$1,040M - $1,140M
$45M – $60M
$350M – $370M
* See page 134 for Items excluded from Net Income to reconcile to Operating Earnings
7
Major influences on business environment remain:
PSEG assets are well positioned to meet the needs of customers
and shareholders in a challenging environment.
Climate
Change
Infrastructure
Requirements
Capacity
Needs
PSEG Power’s base-load nuclear assets
well situated in carbon constrained
environment
PSE&G pursuing investments in energy
efficiency and renewables
Significant new transmission capital
program to improve reliability
Capital investment in coal fleet to meet
environmental requirements maintains
critical infrastructure and expands capability
New peaking capacity leverages existing
brownfield sites; potential for new nuclear
8
Our focus is to maximize benefits from existing assets …
Regulatory and
Market Environment
Growth with
Manageable Risk
… and build a substantial platform for ongoing growth.
Processes embedded
throughout the organization
on how to manage, operate
and invest with excellence
as the goal
Regulatory mechanisms in
place supporting best-in-
class reliability enhanced
by market dynamics
encouraging investment
Maintain strong balance
sheet providing opportunity
to deploy capital to meet
shareholder objectives for
growth with reasonable risk
Operational
Excellence
9
2007 was a year of major accomplishments.
Management team in place
Maintained reliability of utility operations
Resumed control of nuclear fleet
RPM introduced and four auctions successfully
completed
NJ concluded another successful BGS auction
Investing in coal fleet – installation of back-end
technology complete at Bridgeport
RTEP approval for transmission expansion
Selling international assets
Balance sheet targets met ahead of schedule
Exceeded earnings expectations
We met our commitments to shareholders, customers and
employees by solidifying operations and delivering on our
financial promises.
Operational
Excellence
Regulatory and
Market
Environment
Growth
with
Manageable
Risk
10
We are continuing to improve operational practices and participate
in market design discussions …
… to support long-term growth and reliability.
NJ enacted Regional Greenhouse Gas Initiative
(RGGI)
Awaiting NJ Energy Master Plan
PSEG Power exposed to heat rate expansion, gas
prices and carbon
Plan to add 300-400 MW peaking capacity
Pursuing RFPs in CT and NY
Awaiting RTEP decision on additional transmission
PSE&G pursuing pilot programs to test energy
efficiency and conservation
Hope Creek uprate and Salem steam generator adding
140MW
Operational
Excellence
Regulatory and
Market
Environment
Growth
with
Manageable
Risk
Fossil fleet adopted operating model based on
Nuclear’s success
Goal is to maintain (at a minimum) operating
capability of nuclear fleet at 90% capacity factor
PSE&G pursuing pilot programs in advanced metering
and back office technology
11
Spending for the next four years …
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
2007 Forecast*
2008 Forecast**
PSE&G
Other
PSEG Power
* As per 2006 10-K
** As per 2007 10-K; also includes plans for PSEG Energy Holdings
PSEG Energy
Holdings
$ 4.5B
$ 7.3B
… has increased 62% to support PSEG’s growth strategy.
(2008 – 2011)
(2008 – 2011)
Capital Expenditures
12
… supporting our growth initiatives, maintaining financial
flexibility.
$0.0
$5.0
$10.0
$15.0
Forecast*
Forecast
Shareholder
Dividend
Debt
Reduction
Discretionary Cash
PSEG Use of Cash
Investment
$1.5 – $2.0B
$3.0B
(2008 –2011)
(2008 –2011)
PSEG’s financing capability has improved with forecasted
discretionary cash expected to reach $3 billion …
* As presented at 2007 March Analyst Conference
13
Improved processes, markets and well-positioned assets …
$0.00
$1.00
$2.00
$3.00
$4.00
2006 Operating Earnings*
2007 Operating Earnings*
2008 Guidance
$2.71
$2.80 – $3.05
$1.73
2007
Guidance:
$2.58 - $2.73
… allowed us to meet our commitment to earnings growth as we
also reduced international risk.
* See page 134 for Items excluded from Net Income to reconcile to Operating Earnings
8% Growth
14
2006 Operating
Earnings*
2007 Operating
Earnings*
2010E
2011E
Improved processes, markets and well-positioned assets …
* See page 134 for Items excluded from Net Income to reconcile to Operating Earnings
… should continue to drive annual earnings guidance growth
of 8 - 9%.
$1.73
$2.71
$2.80 - $3.05
$3.05 - $3.35
2008
Guidance
2009
Guidance
+ 8 - 9%
+ 8 - 9%
15
$1.12
$1.14
+ 10%
$1.29
$1.17
$1.00
$1.25
$1.50
2005
2006
2007
2008
2009E
Our recent 10% dividend increase continues 100-year
history of paying common dividends.
Payout objective of 40 – 50% provides opportunity for growth with
earnings.
* Indicated annual dividend rate
*
44%
Payout
Ratio
40 – 50%
43%
66%
63%
?
16
Holdings
PSE&G
Power
Parent
$2.80
-
$3.05
2008
2009
2010
2011
1040
-
1140
45
-
60
350
-
370
(15)
–
(10)
8
–
9% Annual Growth
Subsidiary
Annual Growth
5
–
7%
Discretionary Cash
Annual Growth
6
–
8%
5
–
7%
~
~
3%
Redeploying our $3.0B of discretionary cash towards
additional growth and / or share repurchases…
…drives our Consolidated earnings growth rate resulting in a total
shareholder return between 10 – 13%.
+
Subsidiary Earnings
Annual Growth
5
–
7%
“
Discretionary Cash”
”
–
Annual Growth /
Share Repurchases
~
~
3%
Annual
Dividend Yield
~
~
3%
Total Shareholder
Return
10
-
13%
17
Fitting the pieces together - PSEG value proposition
PSEG well positioned in current business environment
Process improvement programs support efforts to:
- maintain reliability
- control costs
- provide value to the customer
Asset mix provides opportunities in attractive markets
Strengthened balance sheet supports capital investment
Return of cash to shareholders through dividends
provides discipline to investment process
Earnings growth and yield offer opportunity for double
digit shareholder returns of 10 – 13%
18
Creating shareholder value for the long-term ..
-50
0
50
100
150
200
250
300
350
400
450
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
PEG
S&P Electrics
Total Comparative Returns
(12/31/97 – 2/29/08)
… has been and will continue to be our focus.
19
Climate Change: State, Regional
and Federal Policy Developments
Anne Hoskins
Vice President - Federal Affairs and Policy, PSEG
Climate change is a classic example of the intersection
between public policy and business …
… at all levels of the government.
Climate Change
Public Policy
Business
21
New Jersey’s 2020 State Energy Goals …
20% Reduction
in projected BAU
Consumption
20%
Renewable
Energy
Reduction to
1990 GHG
Emissions
Levels
… are a challenge and an opportunity for PSEG.
BAU: Business as Usual
GHG: Greenhouse Gas
BAU: Business as Usual
GHG: Greenhouse Gas
22
New Jersey’s 2020 Energy Goals – Investment Opportunities
20% Reduction in BAU Consumption = 20,000 GWh of electricity in 2020
2004 NJ BPU study: 13,000 GWh of improved energy efficiency in
New Jersey is economically feasible, at an incremental cost of over $5
billion; demand grows, but at a lower rate.
20% Renewable Energy = 16,000 GWh of renewable generation in 2020
State Energy Master Plan modeling presumes by 2020: 1,500 MW of
solar capacity; 450 MW of biomass capacity and 300 MW of off-shore
wind capacity.
At today’s prices, this would cost over $10 billion, and would only
achieve roughly 1/3 of the 16,000 GWh goal.
1990 GHG Levels = 46 million tons of CO2 reduced in 2020
20% renewable energy = 10 million tons
20% consumption reduction = 12 million tons
24 million tons remain (one new 1,500 MW nuclear plant would save
roughly 12 million tons)
23
Regional Greenhouse Gas Initiative (RGGI) - Overview
Regional cap and trade program
Participating states: CT, MA,
MD, ME, NH, VT, NY, NJ, RI,
and DE
Goal: CO2 emissions from power
plants capped in 2009; that cap
is reduced by 10% between
2015 – 2019
24
NJ – RGGI enabling legislation enacted in January 2008 …
… contained several provisions of importance to PSEG.
Mitigate Leakage
Phase-out RGGI
Utility Investment in
Efficiency
Renewables
and
25
The next steps involve implementing the legislation …
… by defining the ground rules for carbon trading, leakage
control and utility investment opportunities.
Efficiency and Renewable
Rules
Leakage Mechanism
Carbon Auction
26
PSEG is in active dialogue around Federal carbon cap and trade
legislative proposals …
… advocating rewarding clean generation and supporting one
national trading system.
Strong Carbon Mandates
Allocation /
Auction
Role for
Utilities
One
Nationwide
System
27
Federal carbon cap and trade legislation is increasingly likely …
78 Congressional hearings
on climate change
8 major bills on climate
change introduced
Lieberman-Warner
approved by Senate
committee
2007 Activities
Senate floor debate after
Memorial Day recess?
Slower action in the House
Legislation unlikely in 2008
… although the timeframe for passage may extend to 2009.
2008 Prospects
28
With the passage of time increased evidence has heightened
concern over climate change.
PSEG will continue its efforts to support a national carbon trading
system.
14000
12000
10000
8000
4000
2000
6000
Comparison of Legislative Climate Change Targets
in the 110th Congress, 1990-2050
December 7, 2007
Bingaman-Specter
range with price cap
(projected only
through 2030)
potential reductions
from complementary
policies
Conditional target
Lieberman-McCain
Olver-Gilchrest
Lieberman-Warner
potential reductions
from complementary
policies
Kerry-Snowe
Sanders-Boxer,
Waxman
WORLD RESOURCES INSTITUTE
For a full discussion of underlying methodology, assumptions and references,
please see http://www.wri.orq/usclimatetargets. WRI does not endorse any
of these bills. This analysis is intended to fairly and accurately compare explicit
carbon caps in Congressional climate proposals. Data post-2030 may be
derived from extrapolation of EIA projections.
0
1990
2000
2010
2020
2030
2040
2050
29
PSEG and climate change …
… leading the way for a sustainable environment and robust
business opportunities.
Challenges and Opportunities
30
PSEG Power
Overview
Bill Levis
President and Chief Nuclear Officer, PSEG Power
PSEG Power - Positioned for growth in 2008 and beyond
Operational
Excellence
Regulatory
and Market
Environment
Growth with
Manageable
Risk
Implementation of Operational
Excellence Model (OEM)
Disciplined, standardized approach
Participation in well functioning markets
Multiple profitable products
Positioned to benefit from market
dynamics
Leveraging growth opportunities
32
Low-cost portfolio
Strong cash generator
Regional focus in competitive,
liquid markets
Assets favorably located
Many units east of PJM constraints
Southern NEPOOL/ Connecticut
Near customers/load centers
80% of Fossil capacity has dual
fuel capabilities
Integrated generation and portfolio
management optimizes asset-
based revenues
… we continue to like the assets we have and their location.
Right set of assets, right markets at the right time …
18%
47 %
8 %
26 %
Fuel Diversity – 2007
Coal
Gas
Oil
Nuclear
Pumped
Storage
1%
Energy Produced - 2007
54%
25%
19%
Oil 1%
Pumped
Storage
1%
Nuclear
Coal
Gas
Total GWh: 53,200
Total MW: 13,300
33
0
500
1,000
1,500
2,000
2,500
3,000
Power’s assets have a low carbon profile …
… which is well positioned for virtually any form of carbon
restrictions.
Source: Energy Information Administration (2006)
2006 CO2 Emissions Rate Ranking
(Companies in PJM States)
34
Baseload units
Load following units
Peaking units
Salem
Hope
Creek
Keystone
Conemaugh
Hudson 2
Linden 1,2
Burlington 8-9-11
Edison 1-2-3
Essex 10-11-12
Bergen 1
Sewaren 1-4
Hudson 1
Mercer1, 2
Bergen 2
… position the company to serve full requirement load contracts.
Sewaren 6
Mercer 3
Kearny 10-11
Linden 5-8 / Essex 9
Burlington 12 / Kearny 12
Peach
Bottom
Bridgeport
New
Haven
Nuclear
Coal
Combined Cycle
Steam
GT Peaking
Power’s assets along the dispatch curve …
BEC
Illustrative
Yards
Creek
National Park
X
X
Ancillary Revenue
X
X
X
X
Capacity Revenue
X
X
Energy Revenue
X
X
Dual Fuel
2% to 10%
Peaking CF
30% to 50%
Combined Cycle CF
50% to 70%
85% to 90%
Coal CF
90% to 92%
Nuclear CF
35
Total Power Output (GWh)
… we are expanding the output of our existing fleet.
Through our ongoing focus on operational excellence …
0
10,000
20,000
30,000
40,000
50,000
60,000
2004
2005
2006
2007
Year
Nuclear
Coal
CC
Peaking/Steam
Strong Performance
Continued growth in output
Improved fleet performance
3,500
Nuclear
4,300
Peaking / Steam
3,150
Combined Cycle
2,350
Coal
A Diverse 13,300 MW Fleet
36
… drove the increase in Power’s 2007 results.
$515M*
$949M*
$54M
$275M
$105M
Improvements across the portfolio …
RPM in PJM
FCM in New England
Recontracting
Reserve margins
Fuel prices
Heat rate expansion
BGSS
Other
* See page 134 for Items excluded from Net Income to reconcile to Operating Earnings
2006 Operating
Earnings
Energy
Capacity
Other
2007 Operating
Earnings
37
PSEG Nuclear
Overview
Stage 1
Identify Requirements
(Jan-Mar)
Determine organization required
Complete leadership staffing
Review Management Model Controls
Identify Critical Skill Gaps
Identify industry participation and
support
Stage 2
Create Plan
(Mar-Jun)
Develop plan to resume functions
from Exelon
Transition into station organization
Transition into Corporate Function
Transition into Operations Support
Organization
Outsource
Eliminate
Complete organization staffing
Stage 3
Execute Plan
(Jul-Dec)
Implement Plan
Check and adjust accordingly
Resume PSEG Corporate Support
Continue Day to Day Management Model Execution
… while sustaining strong nuclear performance.
We established independent operation in 2007…
39
The Nuclear Operational Excellence Model (OEM) is fully
implemented …
Nuclear Operating Service Agreement with Exelon ended in
December 2007
Core leadership team from Exelon retained
New Operations Support Organization established
More than 50 new positions added to the station
Corporate Functional Area Managers in place to provide
Governance and Oversight
Strong, broad-reaching connections to the industry established
to retain fleet benefit
… and positions Power well for future success.
40
24.8
27.4
28.5
28.8
29.2
2004
2005
2006
2007
2008 Target
We have delivered strong nuclear performance …
… while reducing cost of operations.
$589
$567
$564
$542
$554
2004
2005
2006
2007
2008 Target
Total Nuclear Output
(000 GWh)
O&M Total Incurred Cost
($ millions)
Note: Values represent Salem/Hope Creek/Peach Bottom, PSEG Share
41
Salem has improved versus its industry peers …
2007
2006
CM Backlogs
Fuel Reliability
Production Cost
2
1
Refueling Outage Duration
2
1
Forced Loss Rate
2
1
Capacity Factor
2
1
Chemistry Performance Index
2
1
Safety Injection
2
1
Auxiliary Feedwater
2
1
Emergency Diesel Generators
Safety System Reliability
2
1
Significant Events
2
1
Automatic Scram Rate
2
1
Collective Radiation Exposure
Industrial Safety (OSHA)
2
1
INPO Index
2005
2004
Unit
Note: 2007 year end performance is compared to the industry 2006 top quartile performance
… with a relentless drive for operational excellence.
4th Quartile
3rd Quartile
2nd Quartile
1st Quartile
Key
N/A
42
Hope Creek has also made great strides …
2007
2006
CM Backlogs
Fuel Reliability
Production Cost
Refueling Outage Duration
Forced Loss Rate
Capacity Factor
Chemistry Performance Index
High Pressure Coolant Injection
Residual Heat Removal
Emergency Diesel Generators
Safety System Reliability
Significant Events
Automatic Scram Rate
Collective Radiation Exposure
Industrial Safety (OSHA)
INPO Index
2005
2004
Note: 2007 year end performance is compared to the industry 2006 top quartile performance
… with a continuing focus on improvement.
4th Quartile
3rd Quartile
2nd Quartile
1st Quartile
Key
N/A
43
Capacity Factor (%)
77
89
96
91
90
2004
2005
2006
2007
2008 Target
Sustaining our performance improvement is critical to Power …
NJ Operations
… and Nuclear’s drive for excellence is core to its operations.
* Quartile values are 4th Qtr 2006
Top Quartile: 93.0
2nd Quartile: 90.7
Top Quartile: 97.4
2nd Quartile: 92.9
183
143
166
203
205
2004
2005
2006
2007
2008 Target
Capital Spend
22
33
25
35
2004
2005
2006
2007
2008 Target
Corrective Maintenance Backlog
78
80
97
94
93
2004
2005
2006
2007
2008 Target
INPO Index
($M, 100% share)
(Online CMs)
44
We have some major 2008 initiatives …
… that will drive value for years to come.
Hope Creek Uprate
Unit 2 outage commenced
March 11 (Unit 1 complete)
$148 million (PS share)
multi-year project
15 MW uprate (PS share)
expected for 2008 summer
run
Salem Steam Generator Outage
Corporate
Salem
Hope Creek
INPO Assessments
Work to support extended
power uprate largely
completed in 2007
Technical issue under review
at NRC
125 MW uprate expected for
2008 summer run
45
Our priorities are to drive continued operational
excellence …
… to maximize the value derived from our assets.
Capture value associated with
achieving top quartile performance
Safety
Environmental
Output maximization
Cost management
License Renewal
46
PSEG Fossil
Overview
Richard Lopriore
President, PSEG Fossil
0
5,000
10,000
15,000
20,000
25,000
30,000
2004
2005
2006
2007
`
Total Fossil Output
(GWh)
… through a low-cost portfolio in which the majority of the output is
from coal facilities.
Fossil operations contribute to earnings …
A Diverse 9,800 MW Fleet (MW)
4,300
Steam / Peaking
3,150
Combined Cycle
2,350
Coal
Right Assets – Right Location
Fuel diversity
Technical diversity
Near load centers
Operation of 2,000 MW Texas Portfolio
Shared best practices
Leverage scale
48
Implementation of an Operational Excellence Model …
Phase III
(Jul – Dec 08)
Finalize OEM &
Conduct Effectiveness
Reviews
Improve Behaviors
Finalize Plant
Assessment Program
Conduct Equipment
Health Audits
Continuous
Improvement
Phase II
(Jan – Jun 08)
OEM Development &
Implementation
Improve Behaviors
Implement Material
Condition Improvement
Plan
Implement Consistent
Conduct of Ops / Maint
Strengthen Oversight
Functions
Phase I
(Sept – Dec 07)
IMMEDIATE IMPACT
Establish Behaviors
Improve Ops Focus
Establish Functional
Area Accountability
Establish Performance
Indicators
Benchmark Externally
and Assess Gaps
… has standardized our approach to running our business and is
improving performance within Fossil Operations.
49
Fossil’s operations have improved, but still lag industry
benchmarks …
* Benchmark data by technology from NERC 2006 database. 2007 benchmark data is based on trend analysis.
1st Quartile
2nd Quartile
3rd Quartile
4th Quartile
UNITS by GROUP: Coal (Hudson 2, Mercer 1&2 and
BH3), CC (Bergen 1&2, BEC and Linden 1&2),
Load Following (Hudson 1, Sewaren1-4, New Haven),
Peaking (all CTs)
… and the Operational Excellence Model contains specific
initiatives to close the gaps.
2004
2005
2006
2007
Equivalent Availability
Forced Outage Rate (EFORd)
Equivalent Derate Hours
Forced Outage Occurrences
Planned Outage Hours
Maintenance Outage Hours
FOR
2004
2005
2006
2007
Equivalent Availability
Forced Outage Rate (EFORd)
Equivalent Derate Hours
Forced Outage Occurrences
Planned Outage Hours
Maintenance Outage Hours
FOR
2004
2005
2006
2007
Equivalent Availability
Forced Outage Rate (EFORd)
Equivalent Derate Hours
Forced Outage Occurrences
Planned Outage Hours
Maintenance Outage Hours
FOR
2004
2005
2006
2007
Equivalent Availability
Forced Outage Rate (EFORd)
Equivalent Derate Hours
Forced Outage Occurrences
Planned Outage Hours
Maintenance Outage Hours
FOR
50
0
2
4
2006
2007
2008 Target
OSHA Incident Rate
Environmental Opacity Incidents
Coal Forced Outage Rate*
Combined Cycle Forced Outage Rate
(Includes Texas)*
Fossil is driving to achieve targets through the OEM …
… with opportunity to increase value through improved
performance.
* Forced outage rate includes unit derates and is gross margin weighted.
0
2
4
2006
2007
2008 Target
0
20
40
60
2006
2007
2008 Target
Top Quartile: 4.1%
Top Quartile: 1.7%
0
5
10
15
2006
2007
2008 Target
Top Decile: 0.84%
51
Our environmental leadership …
Capex Planned
No Additional Capex Planned
… has enabled us to comply with existing rules, reduce
emissions and position the company for success.
Hudson (NJ)
Mercer (NJ)
Keystone (PA)
Bridgeport (CT)
Conemaugh (PA)
SCR
SCR
SCR
Low NOx
No additional
2010
Burners
Capex
Scrubber
Scrubber
Scrubber
Ultra-low
Scrubber
2010
2010
2009
Sulfur Coal
Baghouse
Baghouse
Scrubber
Baghouse
Scrubber
2010
2008
(PA compliant)
(PA compliant)
NO
x
SO
2
Mercury / Particulate
Forecasted Environmental
$700 - $750M
$490M
$160M
Capital Expenditures*
* Excludes IDC
52
Fossil’s capital spending on pollution control equipment
declines over time …
… and the coal fleet’s profile results in lower emissions and
higher output.
Coal Environmental Capital
Coal Emissions Output
Aggregate emissions will decline nearly 70%
after installation of the pollution control
equipment
The installation will allow for fuel flexibility in
future years
Fossil spending on BET reaches a peak of over
$500 million in 2008
Fossil’s coal fleet will be well positioned in
2010, with a dramatic reduction in capital
spending on pollution control equipment
0
20,000
40,000
60,000
80,000
2007
2008
2009
2010
2011
Coal - NOx
Coal – SO2
$0
$300
$600
2007
2008
2009
2010
2011
53
Hudson 2
Bridgeport Harbor 3
Mercer 1 & 2
Power’s eastern coal plants are in the right areas …
… and after capital investments, anticipate increased capacity factors.
System Interface
Power is also making considerable
investments beyond the pollution
control facilities for its coal assets.
Power’s New Jersey coal units are
mid-merit, with capacity factors
averaging 50% to 60%.
Capacity (MW)
Coal Units
1,578
Total
372
Bridgeport
648
Mercer 1&2
558
Hudson 2
54
… yield a culture focused on excellence.
Fossil’s priorities …
Capture value through OEM implementation
Safety
Environmental
Output maximization
Cost management
Hudson / Mercer back-end technology
implementation
Opacity controls
Outage planning and execution, seasonal
readiness
Integrate operations with growth opportunities
55
PSEG Power
Market Overview and Financial Outlook
Dan Cregg
Vice President – Finance, PSEG Power
Energy markets have seen rising prices
Fuel costs have risen
Reserve margins have tightened
Spark spreads are up
Capacity pricing mechanisms have been implemented in Power’s key
markets
Four RPM auctions implemented in PJM
First FCM auction implemented in NE
Power’s hedging strategy enables strong and stable cash flows
Increasingly visible and stable margin
BGS results in line with markets, including load serving value
Other recontracting to drive value
Gas asset optimization and other products round out a strong
portfolio
2007 delivered strong results
Last year we stated that markets were attractive …
… and results have been consistent with that message.
57
$0
$20
$40
$60
$80
2004
2005
2006
2007
2008E
$0
$2
$4
$6
$8
PJM Western Hub Off-Peak Prices
Coal Prices
$0
$20
$40
$60
$80
$100
2004
2005
2006
2007
2008E
$0
$5
$10
$15
$20
PJM Western Hub On-Peak Prices
Gas Prices
On-Peak Versus Gas
Off-Peak Versus Coal
$/MWh
$/MWh
Power market dynamics …
… have led to stronger electricity prices both on-peak and off-peak.
$/MB
$/MB
Note: Forward prices as of 2/29/08
58
$55
$60
$65
$70
$75
2009
2010
2011
8.5
9.0
9.5
10.0
10.5
2009
2010
2011
Rising coal and natural gas prices have driven LMPs ...
… and this trend may continue.
Central Appalachian Coal ($/Ton)
Natural Gas Henry Hub ($/MMbtu)
Electric PJM Western Hub RTC Price ($/MWh)
On Peak Heat Rate Expansion (MMbtu/MWh)
Note: Forward prices as of 2/29/08
$40
$50
$60
$70
$80
$90
2009
2010
2011
$6.5
$7.0
$7.5
$8.0
$8.5
$9.0
2009
2010
2011
59
The market dynamics reflect tightening reserve margins …
… which support Power’s well located assets.
Reserve margins remain tight and are
expected to get tighter in each of Power’s
three markets.
Development cycle time will likely drive
generation additions to be gas-fired, with
base-load additions not anticipated in the
near term.
60
15%
5%
0%
10%
-5%
-10%
-15%
2008
2009
2010
2011
2012
5%
4%
5%
3%
4%
2%
1%
1%
-2%
0%
0%
-5%
-2%
-1%
-7%
Data Source: EIA 411 - October 2007 (ISONE Includes External Capacity Imports)
Reserve Margin calculated using NERC Available Capacity Margin Methodology
PJM (RM Target = 15%, After 2009: 15.5%) – Data Shown is for RFC
NY ISO (RM Target = 15%)
ISONE (RM Target = 14.2, 14.6, 16.1, 16.2, 16.3% (‘08-‘12 implied))
Regional Generation Balance 2008 – 2012
(Percent above or below TARGET Reserve Margin)
The implementation of carbon legislation will address
the critical issue of global warming …
$14.40
100%
Total
$0.00
$0.0
0%
Nuclear
$3.20
$8.0
40%
Gas CC
$1.20
$12.0
10%
CTs
$10.00
$20.0
50%
Coal
Impact
($/MWh)
$/MWh
On margin
(Illustrative)
Dispatch curve implication @ $20/ton*
By Fuel Type
$12.0
$18.0
$30.0
@$30/ton
$8.0
$12.0
$20.0
@$20/ton
$4.0
$6.0
$10.0
@$10/ton
Price ($/MWh)
0.4
0.6
1.0
Carbon tons/MWh
CC
CTs
Coal
PSEG Power Generation by Fuel
54%
25%
19%
Oil 1%
Pumped
Storage
1%
Nuclear
Coal
Gas
2007 Total GWh: 53,200
… and will put additional upward pressure on energy prices.
* For illustration purposes – potential impact of CO2 on power prices with current dispatch – not an indication of net effect on income.
61
$0
$5
$10
$15
$20
$25
$30
$35
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
As policymakers are looking to reduce CO2 emissions …
… Power stands in good position based on its low carbon fleet.
($/Ton)
The diversity of the portfolio makes Power well positioned to capture value
in a wide range of potential regulatory outcomes, with about half of Power’s
revenue increase expected to remain in EBITDA after the cost of carbon
credits.
$0
$200
$400
$600
$800
Estimated Impact of Carbon Prices on Energy Prices
and on Power’s EBITDA
62
Power’s assets remain in the right places in PJM …
… deriving higher prices based on locational value.
Historical 5-year Average Energy Price
(Around the Clock)
$46
$48
$50
$52
$54
$56
Note: Reflects prices of original PJM load zones
63
The favorable location of Power’s assets …
$0
$50,000
$100,000
$150,000
$200,000
2002
2003
2004
2005
2006
2007
$0
$25,000
$50,000
$75,000
$100,000
2002
2003
2004
2005
2006
2007
Coal
Combined Cycle
Combustion Turbine
The PJM State of the Market Report reflected the
net revenue received from economic dispatch of
various technologies
The graphs above reflect the range of value
derived at various areas within PJM
The PSEG region consistently rates among the
highest value over the last six years, among
each of the various technologies
Net revenue has not met the Market Monitor’s
view of levelized requirement in most areas
… leads to incremental margin.
20-year levelized revenue
$0
$100,000
$200,000
$300,000
$400,000
2002
2003
2004
2005
2006
2007
Max
Min
PSEG
Max
Min
PSEG
Max
Min
PSEG
64
Through the new capacity constructs, and repricing at
market prices …
… Power expects to realize increasing margin improvement.
Power’s capacity is located in three Northeast markets.
Delivery Year ($MW/Day)
* Majority of Power’s assets
(a) – includes APS
Total Capacity 13,300MW
( ~ 1,000 - 1,500 MW under RMR)
The RPM Auction to date has provided strong price signals in PJM.
$174.29
$174.29
$174.29
2010 / 2011
$102.04
$191.32 (a)
$191.32
2009 / 2010
$111.92
---
$148.80
2008 / 2009
2007 / 2008
Zones
$40.80
Rest of Pool
---
MAAC
$197.67
Eastern MAAC*
NY
NE
PJM
65
2988
3228
1373
2463
46,272
73,893
Prior to FERC Approval
After FERC Approval
The market has responded to RPM …
… adding 10,000 MW to date, with proposals for additional
capacity in the queue.
Additional Resources Since
RPM Began (MW)
Proposed Generation in PJM Queue (MW)
Net exports have decreased by nearly 3,000 MW
Withdrawn deactivation requests and
postponed/cancelled retirements have accounted
for over 3,000 MW
Nearly 2,500 MW of new generation resources
have been bid
DSM Resources have increased in each auction
Power has increased its MW bid in each auction
RPM has prompted substantial generation
proposals, with over 27,000 MW added to the
queue in 2007, after FERC approved RPM
Power has requested PJM study adding 1,000
MW, with a near term objective of building 300 to
400 MW at our NJ sites.
Demand Resources
Increase in Generation
Retained Generation
Decrease in Net Exports
66
Capacity prices in PJM to date have cleared above Net
Cost of New Entry (“CONE”) …
… with a proposal from PJM to increase Net CONE for the
2011/2012 auction to better represent rising construction costs.
$100
$150
$200
$250
$300
'07/'08
'08/'09
'09/'10
'10/'11
'11/'12
Delivery Year
Net Cost of
New Entry
Proposed Net
Cost of New
Entry
Proposed
Gross Cost of
New Entry
Gross Cost of
New Entry
Note: Auction prices and CONE reflect Eastern MAAC prices for 07/08, 08/09, and 09/10, and MAAC for 10/11, and RTO for 11/12
Auction pricing
for most of
Power’s assets
Potential
increase in
CONE
67
2003
2004
2005
2006
2007
2008
Ancillary services
Capacity
Congestion
Load shape
RECs
Transmission
Risk premium
Full Requirements
Round the Clock
PJM West
Forward Energy
Price
$33 - $34
$36 - $37
$55.59
$55.05
$65.41
$44 - $46
~ $21
~ $18
~ $21
$102.51
$67 - $70
~ $32
$98.88
~ $41
$58-$60
$68 - $71
~ $43
$111.50
Increase in Full Requirements Component Due to:
Increased Congestion (East/West Basis)
Increase in Capacity Markets/RPM
Volatility in Market Increases Risk Premium
Power’s fleet diversity and location ...
Market Perspective – BGS Auction Results
… has enabled successful participation in each BGS auction and
cushioned customer impacts.
Note: BGS prices reflect PSE&G Zone
68
0%
25%
50%
75%
100%
2008
2009
2010
2011
$0
$50
$100
$150
$200
0%
25%
50%
75%
100%
2008
2009
2010
2011
$60
$70
$80
Power’s hedging program provides near-term stability from
market volatility …
… while remaining open to long-term market forces.
Estimated impact of
$10/MWh PJM West
around the clock
price change*
($/share)
Contracted Energy
Contracted Capacity
% sold
(left
scale)
Estimated impact of
$30/MW-day capacity
price change*
($/share)
Price
(right
scale)
Price
(right
scale)
* Assuming normal market commodity correlations
Power has
contracted for a
considerable
percent of its
output over the
next three years
at increasing
prices.
The pricing for
most of Power’s
capacity has been
fixed through May
of 2011, by virtue
of the completed
auctions in PJM
and NE.
% sold
(left
scale)
$0.30 - $0.70
$0.15 - $0.45
$0.04 - $0.10
$0.01 - $0.02
$0.05 - $0.15
$0.00 - $0.01
$0.00 - $0.01
$0.00 - $0.01
69
Historical and Contracted Nuclear Fuel Cost
While nuclear fuel was volatile during 2007 …
… Power’s hedging strategy has mitigated market price
increases, with 100% hedged through 2011.
Contracted
$0
$2
$4
$6
$8
$10
2004
2005
2006
2007
2008
2009
2010
2011
70
0
6,000
12,000
18,000
2008
2009
2010
2011
Hedged
Coal
Total Output
85-95%
75-85%
55-65%
Power has contracts for supply of its coal through 2010 …
… and after installation of pollution control equipment, Power
anticipates increasing flexibility in fuel choices.
Coal Output
Percent coal hedged as
of Feb. 15th, 2008
71
… are expected to drive continued increases in Power’s gross
margin.
Operational improvements and recontracting in
current markets …
Gross Margin ($/MWh)
Hedged Energy
Hedged Capacity
Unhedged Energy
Unhedged Capacity
$0
$20
$40
$60
2005
2006
2007
2008E
2009E
2010E
2011E
72
Power has potential sources of future value …
… which could enhance margin over the long-term.
Recontracting
Peaking
Combined Cycle
Coal
Nuclear
Contract for 500 MW RTC at $34/MWh expires at year end
Current market prices at approximately $70/MWh
Potential for incremental MW, lower forced outage rate
Capacity revenue opportunity
Load growth, heat rate expansion
Anticipate higher utilization of Power’s 3,150 MW
Fuel flexibility post BET
Balance of plant investment to enhance value
Hope Creek 125 MW uprate for summer 2008
Salem 15 MW (PS share) uprate for summer 2008
73
Gas Asset Optimization
Large wholesale provider to PSE&G and others
Storage capacity of 80 Bcf (in the Gulf and market regions)
Firm transportation of 1.1 Bcf/Day (on ten pipelines)
Off-system sales margins shared with residential customers
Commercial & Industrial customers (C&I) sales priced monthly at market
Storage spreads capture Summer/Winter price differential on C&I sales
Weather and price volatility drive results
Ancillary Services
Area regulation
Voltage regulation
Black start
Emissions
… to round out a robust portfolio providing a range of $100 to
$200 million in margin.
In addition to energy and capacity, Power has other
attractive sources of revenues …
74
Power’s open EBITDA is approximately $2.6 - $2.8 billion …
… which will vary depending upon market drivers.
~ $40M
$1/MWh
~ $69 - 73/MWh
(PJM-West)
Energy
Gas ~$8.50 to $9.00/MB
Coal ~ $2.85 to $3.15/MB
Fuel
~ $1.0 – 1.05B
O&M
Capacity
~ $120M
$10/KW-yr
~ $60 - $65/KW-yr
(~ $165 - $178/MW-day)
EBITDA
Impact
Sensitivity
Assumption
$1.0
$1.5
$2.0
$2.5
$3.0
2008 Forecasted EBITDA $2.05B - $2.25B
* Open EBITDA reflects unhedged results of Power at market prices shown above
75
PSEG Power
Summary
Right set of assets…
Large, diverse mix of low-cost base-load, load-following and peaking generating
assets
Near load centers
Right markets…
Generation assets operate in attractive and growing markets
Nuclear and coal base-load capacity operate in markets where the price for power is
set by gas
At the right time…
Mid-Atlantic and New England recognizing the value of capacity in constrained
areas
Power has opportunity for brownfield development at existing sites
A move to control carbon benefits our nuclear-based fleet
PSEG Power – Excellent position for today …
… ready for tomorrow.
77
… drive PSEG’s earnings expectations for 2008 and beyond.
Post-2008 Drivers:
Operational
Excellence Model
Recontracting
Incremental
additions to
nuclear capacity
New Peaking
Further improvements at Power …
$949M*
$1,040M -
$1,140M
* See page 134 for Items excluded from Net Income to reconcile to Operating Earnings
$40M - $60M
$0M - $30M
$50M - $100M
5-7%
Growth
2007
Operating
Earnings
Energy
Capacity
Other
2008 Guidance
2011E
78
While Power’s net income grows at 5 - 7% through 2011 …
… the EBITDA growth over the same period is 7 - 9%.
Net Income
5 - 7% Growth
EBITDA
7 - 9% Growth
2008
2009
2010
2011
79
Future opportunities to support growth for Power …
New Peakers
Expansion on existing sites in New Jersey
Pursuing RFP at New Haven location
Cross Hudson
Opportunity in adjacent market
Generation Acquisitions
Multiple market opportunities
New Nuclear
Advantaged location in New Jersey
Continued exploration of new nuclear
… will add to a strong existing portfolio.
80
PSEG Power - Positioned for growth in 2008 and beyond
Operational
Excellence
Regulatory
and Market
Environment
Growth with
Manageable
Risk
Resumed independent nuclear operations at year-
end
Continued focus on strong performance of fleet,
leveraging Operational Excellence Model at Fossil
Increased output from fleet to all time high
Active participation in deep, liquid, transparent
markets
NJ BGS model provides opportunity to contract
output over multi-year period
PJM’s capacity market supports reliability, first
capacity auction in New England
Positioned for market growth through heat rate
expansion, gas, carbon
Proposed construction of 300-400 MW of new gas
fired peaking capacity
Responding to RFPs in NY and CT
Positioned for additional growth through asset
acquisition, exploration of new nuclear
81
PSE&G
Review and Outlook
Ralph LaRossa
President and Chief Operating Officer, PSE&G
PSE&G - Positioned to provide growth
Operational
Excellence
Growth with
Manageable
Risk
Continued improvement in achieving
business objectives
Investments targeted to drive excellence
in performance at reasonable cost
O&M expenses growing less than
inflation
Attractive market and customer base
Competitive prices
Constructive policy supports Utility role
in meeting energy goals
Balanced regulatory environment at
both State and Federal levels
2007-2012 projected rate base growth of
7 - 8% with State energy policy providing
potential for longer-term growth through
carbon reduction investments
Regulatory and
Market
Environment
83
PSE&G operates in an attractive market …
NJ is ranked 3rd nationally in personal
income per capita
Mid-Atlantic ReliabilityOne Award winner
six years running
Solid regulatory relationships on traditional
utility matters
(0.2%)
1.6%
Historical Annual
Load Growth
2003-2007
3,502 M Therms
44,709 GWh
Electric Sales and Gas Sold
and Transported
0.4%
1.7 Million
Gas
1.0%
2.1 Million
Electric
Projected Annual
Load Growth
2008 - 2012
Customers
1.3%
Historical Annual Load Growth
2003-2007
10,378*
Billing Peak (MW)
1,429
Network Circuit
Miles
1.4%
Projected Annual Load Growth
2008 - 2012
Electric and Gas Distribution Statistics (12/31/07)
Transmission Statistics (12/31/07)
… and through a disciplined capital allocation process has become
a recognized leader in delivering safe and reliable service.
*Billing Peak includes adjustment for Voltage Reduction
84
PSE&G’s strategy is to be top decile nationwide in safety and top
quartile in reliability and cost results.
We measure our progress and report results through our Balanced
Scorecard.
Clearly Define Strategy
Design and Link
Metrics to Strategy
Measure and
Communicate Performance
Embed Benchmarking
and
Best Practice
Implementation
PSE&G Performance Measurement Process
85
The scorecard links measures directly to our strategy. The process
of measuring performance and benchmarking to best practices leads
to a very disciplined investment strategy.
Decisions are made not only through financial measures, but also on
achieving and maintaining best in class performance in people, operations
and customer measures.
People
OSHA Index
OSHA Severity Rate
Motor Vehicle Accidents
Availability – Illness
Overtime
Staffing/100k Customers
Operations
SAIFI (Excluding Major Storms)
MAIFI (Excluding Major Storms)
CEMI
Gas Leak Reports per Mile
Leak Response Rate
Damages per Locate 1,000 Requests
Percent of Actual Meters Read
General Service Inquiry Levels
Customers
Perception Survey (Res/Sm Business)
CAIDI (Excluding Major Storms)
Financial
CapEx – Electric (Total per MWh)
CapEx – Gas (Total per Dktm )
O&M – Electric (Total per MWh)
O&M – Gas (Total per Dktm )
Net Write-Off’s
Days Sales Outstanding
Return on Assets
Below Mean
Above Mean
Above Strategy
Not Available
AMI
2004
2005
2006
2007
iPower
iPower
86
As an example, using SAIFI and O&M metrics, it is clear that
PSE&G is the industry leader …
… in delivering value to our customers. Operational excellence is
the cornerstone for our strong regulatory relations on traditional
matters.
Reliability vs. O&M Expenditures
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
18.00
20.00
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
2.00
System Average Interruption Frequency Index
PSE&G
Better
87
Regulated electric transmission, electric and gas distribution system
Characteristics
FERC regulation for electric transmission (formula rates)
NJ BPU regulation for electric and gas distribution
Managing recovery lag on electric and gas distribution investments
PSE&G’s base investment plan …
Gas
Distribution
30%
Electric
Transmission
22%
Electric
Distribution
48%
Gas
Distribution
35%
Electric
Transmission
13%
Electric
Distribution
52%
2007 Actual
Rate Base = $6.4 B
2012 Base Plan
Rate Base = $10.2 B
Equity Ratio ~ 48%
… coupled with fair regulatory treatment provides a solid
foundation for future earnings growth from 2008 – 2012 of 7 - 8%.
PSE&G Rate Base
88
PSE&G is deploying earnings and cash to grow the
business.
PSE&G Base Capital Requirements*
(2006 – 2012)
*Excludes impact of NJ Energy Master Plan potential opportunities, but includes Solar Initiative
**Excludes Securitization
$572
$617
$840
$905
$1,100
$1,265
$1,215
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
2006
2007
2008
2009
2010
2011
2012
Transmission
Electric
Gas
Depreciation & Amortization**
2007-2011 Plan
Overall, PSE&G is planning to invest over $5.3 billion in its
infrastructure between 2008 and 2012, a 78% increase over last
year’s plan.
Spend
(2008 – 2012)
Transmission
$1.6 Billion
Electric
Distribution
$2.2 Billion
Gas
Distribution
$1.5 billion
89
We will apply our disciplined investment approach to
three areas of growth for PSE&G.
T&D Expansion
Opportunities
PJM backbone transmission
and RTEP projects
Sub-transmission to
Transmission reliability
upgrades
Distribution System
Reinforcements
PSE&G EMP Strategies
Renewables / Emissions
Strategies
Solar initiative
Demand-Side Strategies
Advanced Metering
Infrastructure
Carbon Abatement
PSE&G Facility and System
Efficiency
iPower, PSE&G’s new
Customer System
Leveraging State of the Art
Technology – SAP CCS
Enabling GPS technology to
improve dispatching
Creating new opportunities
through web-based
empowerment
Moving to a platform with full
AMI capability
Addressing customer
operational and financial
measures that are not
achieving strategy
Our investment profile extends growth opportunities beyond 2012.
Growth Capital Spending 2008 – 2012:
$1.5B*
$150M - $175M
$750M**
* Excludes traditional transmission projects
** Includes opportunities listed above except for Carbon Abatement opportunity
90
By 2018, NJ’s load is expected to grow by 4,000 MW …
Projects to NY
The Neptune HVDC project (685
MW) connecting Sayreville to
Long Island
The Linden VFT project (330
MW) connecting Linden to
Staten Island
The Bergen O66 project (670
MW) connecting Bergen to
ConEd's West 49th Street
substation
The Bergen Q75 project (1,200
MW) connecting Bergen to
ConEd's West 49th Street
substation
Linden S104 project (200 MW)
connecting Linden to Goethals
Projects to NJ
PSEG’s evaluation of
the proposed backbone
transmission projects:
Northern 500kV
route into Jefferson
and Roseland
Central 765kV route
into Deans
Southern 500kV
route into Salem
… yet the net import capability into NJ is only increasing by ~1,900 MW
indicating need for additional generation, DSM or transmission imports
requiring RTEP investment.
Total Import
Capability
~ 5,000 MW
Total Export
Capability
~ 3,100 MW
2008-2018 NJ Summer Peak
Annual Growth Rate = 1.8%
Sources: Imports: PSE&G Estimates; Exports: PJM 2008 Regional Transmission Expansion Plan; and Load Growth: PJM 2008 Load Forecast Report
91
Transmission opportunities will require substantial
deployment of capital.
Transmission Growth
PJM approval was received for the $600-$650
million Susquehanna to Roseland line in October
2007
Siting and permitting process underway
Incentive filing submitted to FERC for:
150 BPS adder to ROE
100% CWIP in Rate Base
FERC approval of the MAPP projects also mandates
an additional $100 million of capital at Salem/Hope
Creek (2014-2015)
Pending FERC approval of Sub Transmission to
Transmission system reliability investments
represents about $250 million through 2012, post-
2012 ~$60 million/year
Other approved RTEP projects ~$250 million also
contribute meaningfully to improved reliability and
earnings growth
Backbone projects are in preliminary stages but
present real opportunity to improve reliability
throughout the state, with the potential investment of
~ $1.5B through 2015
When coupled with formula rate design and additional incentives, it
will provide current return on forecasted capital expenditures
thereby improving profitability.
Branchburg
Roseland
Jefferson
New Freedom
Smithburg
Deans
MAPP
Hope Creek
Salem
Project
I-765
Interstate
Project
92
RGGI enabling legislation was signed into law in January
2008. It enables the utility to begin work with the BPU …
Section 13 of the RGGI Law permits utilities to invest and/or
offer programs in renewables, conservation and energy
efficiency
The BPU will be adopting rules and regulations to determine utility
participation and the mechanisms for recovery of costs, which must be
completed during May/June 2008
Active Filings
Carbon Abatement
$5 million pilot program intended to demonstrate PSE&G capabilities
AMI
$15 million pilot program for advanced two-way communications. Potential
$600 million in capital through 2013
Solar Initiative
$100 million pilot program to finance installation of PV Solar. Potential
PSE&G market up to $1.8 billion assuming 2% Solar RPS through 2020
… while we await the release of the Energy Master Plan. Our three
pilot programs will prove our capabilities at reducing carbon in an
economic manner.
93
In real terms, PSE&G customers pay less for electricity
than they did in 1990.
PSE&G Average Residential Electricity Rates
(1990 – 2008E)
4
6
8
10
12
14
16
18
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008E
17.4
16.2
9.7
10.4
Source: Rates from PSE&G, NJ CPI from Economy.com
The state’s BGS model has cushioned impacts of rising
commodity prices.
Nominal
(What Customers
Pay)
Real
(Adjusted for Inflation)
CPI Tracking
94
Combining operational excellence with prices
comparable to regional competitors …
16.1
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
18.00
PSE&G
Average
Note: Based on tariff rates in effect on December 31, 2007; does not include effects of BGS increase effective June 1, 2008 nor other unknown increases to other regional firms.
… produces superior value to our electric and gas customers.
Electricity
BGS
Delivery
Clauses
15.2
1.61
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
PSE&G
Average
Gas
BGSS
Delivery
Clauses
1.46
Source: Rates from PSE&G Rates Regional Comparison
95
Even with our planned investments, delivery prices to
customers ...
6.8
5.5
5.1
0.00
4.00
8.00
2007
2012
2007
Regional
Average
Note: 2007 Rates are based on tariff rates in effect on December 31, 2007; Regional Average may not include Electric Transmission for all firms.
… are expected to grow less than inflation.
Electricity
0.48
0.45
0.42
0.00
0.20
0.40
0.60
2007
2012
2007
Regional
Average
Gas
2007-2012 Growth = 0.7%
Inflation = 2.1%
2007-2012 Growth = 1.4%
Inflation = 2.1%
Distribution
Transmission
Source: Rates from PSE&G, NYPSC and PAPUC; Inflation from Moody’s Economy.com, February 2008
96
A moderate decline in earnings near-term …
$376M*
($3M - $13M)
$350M –
$370M
($3M - $14M)
… prior to significant increase in investment and resulting
expansion in earnings.
$262M*
Post-2008
Drivers
Managing O&M
growth below
rate of Inflation
Depreciation
Transmission
Formula Rates
Rate Case
execution and
minimizing
regulatory lag
associated with
Distribution rate
relief
6-8% consistent
with asset
growth
$3M - $11M
* See page 134 for Items excluded from Net Income to reconcile to Operating Earnings
($2M - $10M)
2006
Operating
Earnings
2007
Operating
Earnings
Sales Growth
Weather
O&M
Other
2008
Guidance
2011E
97
PSE&G - Positioned to provide growth
67% improvement from 2004 in achieving our business
objectives
Mid-Atlantic ReliabilityOne Award winner six years
running
AMI and iPower will improve areas with poor performing
metrics and reduce O&M costs
Balanced scorecard and peer panel benchmarks drive
our continuous improvement culture
Attractive market and constructive state policies will
enable us to provide economic solutions to the carbon
footprint challenge
Electricity and gas prices coupled with best in class
operations create superior value for customers
Transmission regulation provides favorable treatment to
large cap ex projects
Near Term Growth
Susquehanna/Roseland RTEP investment
Transmission and Distribution reliability enhancements
iPower and AMI
Long Term Growth
Additional backbone projects
Transmission and Distribution reliability enhancements
EMP
Manageable Risks
Regulatory recovery at FERC and BPU
Competing proposals in EMP
Proper regulatory incentives for EMP investments
Operational
Excellence
Growth with
Manageable
Risk
Regulatory and
Market
Environment
98
PSEG Energy Holdings
Review and Outlook
Stephen Byrd
Senior Vice President - Finance,
Business Development and Strategy
Two businesses focused on maximizing value of existing
investments at PSEG Energy Holdings
Operational
Excellence
Growth with
Manageable
Risk
Continued reliable Texas gas-fired asset
performance
Predictable performance of other US
generation from contracted base-load and
peaking assets
Solid performance in the remaining Latin
American distribution asset enhancing
market value
Texas market - declining reserve margins,
movement to a nodal market very similar to
PJM
Resources tax issues monitored closely
Capitalized on attractive values for
international assets
Strong cash flow generation for debt
retirement and growth
Attractive renewable generation opportunities
in PSEG core markets
Regulatory
and Market
Environment
100
Holdings’ portfolio has a diverse asset base . . .
Two businesses focused on maximizing value of existing investments
$45M - $60M projected 2008 operating earnings contribution
~ 55% of earnings from Resources
~ 45% of earnings from Global, targeting no international exposure by 2009
… with improved stability.
PSEG
Resources
49%
Chile & Peru
Distribution
Texas
Merchant
Generation
Other US
Generation
Two 1,000 MW CCGT‘s
1 in Central Texas (South Zone)
1 in West Texas
2007 Operating Earnings*
86% of the portfolio is
in energy-related
leveraged leases
2008 Guidance - Operating Earnings
12%
22%
17%
Texas
Merchant
Generation
25%
PSEG
Resources
56%
Other US
Generation
19%
~390MW owned in
CA, HI, NH
fully contracted
$ 115M
$ 45M - $60M
* See page 134 for Items excluded from Net Income to reconcile to Operating Earnings
Two companies sold
in 2007. SAESA in
Disc Ops.
101
By reducing capital invested in non-strategic assets …
$175
$129
$57
$13
$139
$41
$62
$104
$(13)
2004
2006
2007
2004
2006
$2.6B
$1.9B
$0.9B
$0.4B
$1.3B
$0.2B
$0.5B
$1.2B
35%
15%
50%
8%
64%
28%
$317M*
33%
74%
$202M*
$188M*
Contribution by Region to Global’s
Pre-Tax Income*
29%
51%
20%
4%
55%
41%
Global’s Invested Capital
$0.5B
$0.1B
2008
Projected
$0.6B
85%
2007
$1.1B
$0.5B
45%
45%
$0.1B
$0.5B
10%
15%
-7%
$65M - $85M*
… Global has an improved risk profile.
2008
Projected
US
Chile & Peru
Other
* Excludes interest on Energy Holdings debt and corporate allocated G&A. Includes interest on project level debt.
102
Texas assets are a driver of Global’s results.
Texas (ERCOT) Electric Market Zones
Two 1,000MW combined cycle facilities
- Two of the most efficient gas-fired plants in
Texas, constructed in 2001
- Forced outage rate less than 2%
Market Environment:
Bilateral forward market
Day ahead balancing and ancillary services
bid market
No capacity payments…margins derived
from energy and ancillary services
Nodal market transition begins in 2009
Natural gas units on the margin 90%
Reserve margins have been decreasing
Assets favorably located
15%
4,700
3,820
880
1.9%
4,100
West
Odessa
-8%
21%
Reserve
Margin
2007*
1.9%
1.9%
Annual
Growth
14,796
20,280
Total
Gas
Nuclear,
Coal, Wind**
Hydro
Load
Zone
12,161
2,635
16,000
Houston
12,680
7,600
16,750
South
Guadalupe
*Reserve Margins calculated on data provided by Global Energy.
** Wind is based on 8.7% of installed capacity (ERCOT Peak reliability %).
Odessa
Midland
Guadalupe
Austin
San Antonio
103
Global’s Texas assets are competitively positioned …
… with modern, highly efficient combined cycle gas turbines.
ERCOT Capacity - Variable Operating Cost Stack
Source: SNL & ERCOT (2007 System Load)
$0
$50
$100
$150
$200
$250
$300
$350
$400
Cumulative Capacity MWs
Renewables
Nuclear and Coal
Natural Gas
System
Minimum
Load
System
Winter Peak
System
Summer
Peak
* Based on $6 mm/Btu NG
Odessa Plant
Guadalupe Plant
104
Due to market uncertainty …
Key drivers behind decision to remain largely unhedged beyond 2008:
Oversold market: Many generators seeking a hedge, limited appetite among hedge providers
Market uncertainty:
Uncertainty relating to move to a nodal pricing market
Recent sudden loss of wind generation in western ERCOT resulting in grid instability
Transmission maintenance: Extensive maintenance of 345kV line near Global’s Odessa unit
0%
20%
40%
60%
80%
100%
2008
2009
2010
2011
Texas CCGT Generation Output
… Global’s Texas assets are largely unhedged beyond 2008.
2008 Hedged
Spark Spread
$20-22/MWh
+/- $ 27 M
+/- $ 22 M
+/- $22 M
+/- $15M
Heat Rate:
+/- 500 Btu/KWh*
+/- $16M
+/- $14M
+/- $11M
+/- $7M
Natural Gas:
+/- $1/MMBtu*
*Pretax income effect
105
Projected long-term (2011) EBITDA influenced by several key
assumptions:
Major maintenance: approximately $10M higher in 2011 than in
2008
Capacity factor: projected to moderately increase due to decreasing
reserve margins impacting South Zone
Spark spreads: projected to be in line with 2008 levels
While there are a number of uncertainties relating to
future Texas market dynamics …
85 - 105
48 - 52%
19 – 20
13 -14%
8.25
2011
PSEG
Market
19 – 20
19.04
19.42
16.52
$11.97
Spark
Spread
85 - 105
45 - 47%
13%
8.50
2008
104
48.7%
15%
6.76
2007
130
54.4%
16%
10.82
2006
93
54.6%
17%
6.34
2005
$48
50.4%
25%
$5.42
2004
EBITDA
($M)
Capacity
Factors
Reserve
Margin
Nat Gas
NYMEX
… EBITDA is projected to remain at 2008 levels.
106
Global continues to focus on monetizing non-core
international assets …
… while enhancing performance of existing domestic assets.
International:
Announced December ’07 intent to sell ownership interest in SAESA
Regulated utility with a book value of ~ $500M
Continuing to assess options for monetizing remaining international
investments with a total book value of approximately $120 million
Turboven (Venezuela); PPN (India); Bioenergie (Italy)
Domestic:
Evaluating opportunities arising from ERCOT transition from a zonal to a
nodal wholesale market
Assessing ability to further leverage Texas assets (existing debt of
$160/kW)
Focusing on continued operational excellence
PSEG Power has assumed operational oversight as of 2008
Top quartile availability at Texas assets
Continued strong performance from contracted U.S. generation assets
107
As renewable opportunities emerge …
… Global will focus on developing a renewable presence in core
markets.
Emerging aggressive RPS
targets in core PSEG markets
create an opportunity
PSEG is well positioned to
participate
Familiarity with infrastructure
development, asset
management, energy policy,
project financing and power
markets
Experience with domestic and
international renewable assets
PSEG Global is pursuing
potential development of wind,
biomass and solar projects,
primarily in core markets
Cumulative 2008-2011 planned
investment in renewables of
~$500 million
PSEG’s newly created entity, PSEG Renewable Generation, along with a private developer,
submitted a proposal in response to a New Jersey BPU Office of Clean Energy Solicitation,
to develop a 350 MW, 96 turbine wind farm approximately 16 miles off the southern New
Jersey shore
The proposal is subject to receipt of all required permits, financing and other conditions
National Renewable Portfolio Standards (RPS)
108
0
20
40
60
2007
2008E
2009E
2010E
2011E
Resources is focused on managing its current investment
portfolio …
… which has experienced an improvement in counterparties credit
ratings (A3/A-).
PSEG Resources - Earnings Profile
2007 Adoption of FIN 48/FSP 13-2
Changes accounting methodology to record reserves
Results in lower lease revenues and higher interest expense totaling
approximately $25M (after-tax) per year
Cash flows will decrease modestly as the portfolio matures and as leases
terminate
$58M*
$30M-
$35M
$20M-
$25M
* Includes $12M gain from airline recovery and CBO settlement.
$5M-
$10M
$5M-
$10M
(Net Income)
109
Resources continues to monitor its tax risks …
PSEG position:
IRS disallowed deductions in November 2006 (as part of 1997-2000 audit)
PSEG has been in dialogue with the IRS
Ultimate resolution expected to take several years
In December 2007, PSEG made $100 million deposit to mitigate
financial risk associated with disallowed deductions
Other cases / legislative activity:
Monitoring several cases under appeal or scheduled for decision in 2008
No draft legislation providing for retroactive treatment of leases; prior
attempts were unsuccessful
… and maintains a flexible plan to handle the uncertainty.
110
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
Sources
Uses
Cash From
Ops
Recourse
Bond
Redemptions
SAESA N.R.
Financing
PSEG Energy Holdings
Sources and Uses
2005 – Feb 2008
Asset
Sales
During the past three years, Energy Holdings has
substantially decapitalized its balance sheet …
… which allowed PSEG to both reduce its exposure to
international risk and redeploy capital to core businesses.
Dividends/ROC to
PSEG
IRS Deposit
$MM
$2.6 B
$2.6 B
111
PSEG Energy Holdings – 2008 Drivers
2007 Operating
Earnings
Latin America
Distribution
Taxes / FIN 48
Texas
Interest
Other/Airline/CBO
2008 Guidance
2011E
$115M*
($5M) – ($10M)
($20M) – ($30M)**
$20M - $30M
($45M) – ($50M)
($5M) - ($10M)
$45M - $60M
$30M - $50M
**75% of Texas reduction is Mark to Market (a positive MTM in 2007 vs. a negative MTM in 2008), 25% is reduced energy margins, maintenance and taxes
* See page 134 for Items excluded from Net Income to reconcile to Operating Earnings
($21) – ($31)
$20 – $30
$51
Total (after-tax)
($17) – ($21)
($6) – ($2)
$15
Mark-to-Market
($4) – ($10)
$26 – $32
$36
Operations
Variance
2008
2007
Texas Variance
($ millions)
112
Operational
Excellence
Growth with
Manageable
Risk
PSEG Power has assumed operational
oversight of Texas as of 2008
Going forward, Global’s operations will be
focused on existing contracted US generation
and on renewables developed in core US
markets
Regulatory and
Market
Environment
Two businesses focused on maximizing value of existing
investments at PSEG Energy Holdings
Texas gas-fired generation largely unhedged
beyond 2008; hedged levels likely to increase
over time as market dynamics change and
uncertainties are resolved
Resources tax issues monitored closely;
ultimate resolution is expected to take several
years
Strong cash flow generation for debt
retirement and growth
Attractive renewable generation opportunities
in PSEG core markets – PSEG is well-
positioned to participate in the rapidly-
growing renewable generation marketplace
113
PSEG
Financial Review and Outlook
Tom O’Flynn
Executive Vice President and Chief Financial Officer
2007 – A year of financial accomplishments …
Operational
Excellence
Producing
Financial Results
Regulatory and
Market
Environment
Growth with
Manageable
Risk
Earnings / Dividend:
2007 growth of 57% vs. Mar. ‘07 guidance of 37%
2008 dividend Increase of 10%
Credit:
Reduced $1.1B of Parent debt in 2007
Achieved target credit measures
Business Risk:
Continued operational improvements and
solidifying Nuclear performance increases
stability of cash flow
Capacity markets increase visibility of earnings
Proven BGS model supports multi-year hedging
Successfully monetized international assets in
favorable markets
Attractive asset platform in core markets to
pursue growth
Strong discretionary cash for additional growth
and/or share repurchases
… resulted in us exceeding our earnings and debt reduction
targets.
115
Our returns have improved…
… and earnings growth is expected to continue.
Note: Calculations exclude the effects of non-recurring items
PSEG
0
5
10
15
20
25
2006
2007
2008
2009
2010
2011
ROE
ROIC
116
262
376
515
949
161
115
(66)
(63)
350 - 370
1,040 - 1,140
45 - 60
(15) - (10)
2006
2007
2008
$2.80 - $3.05
Strong earnings growth in 2007 …
… is expected to be followed by 8% growth in 2008 led by Power.
$1.73*
$2.71*
Holdings
PSE&G
Power
Parent
Operating Earnings by Subsidiary
57%
8%
* See page 134 for Items excluded from Net Income to reconcile to Operating Earnings
117
… translated into substantial cash generated by our subsidiaries
and dividends to our parent.
In 2007, strong earnings combined with successful
asset sales …
$0.0
$0.6
$1.2
$1.8
Sources
Uses
Holdings
Dividend
Shareholder
Dividends
PSE&G
Dividend
Debt Reduction
2007 Parent Sources and Uses of Cash
Power
Dividend
$1.1B
118
PSE&G
Total Debt / Total Capitalization
1
2
3
4
5
2006
2007
44%
46%
48%
50%
52%
2006
2007
20%
24%
28%
32%
36%
40%
2006
2007
18%
20%
22%
24%
26%
28%
2006
2007
49%
50%
51%
52%
53%
2006
2007
… maximizing financial flexibility in today’s uncertain credit markets
while we position ourselves for additional growth opportunities.
We are meeting or exceeding PSEG’s key long-term credit
measures resulting in a strong credit profile …
PSEG
Total Debt / Total Capitalization
PSEG
FFO / Total Debt
PSEG Power
FFO / Total Debt
Holdings
FFO Coverage
Target
50%
~
~
Target
Mid-20’s
~
~
Target
Mid-30’s
~
~
Target
50%
~
~
Target
3.0X
~
~
v
v
v
v
v
119
At Power, strong cash generation and declining
capital expenditures …
… should result in substantial discretionary cash available to
PSEG for additional growth and/or share repurchases.
($2.0)
($1.0)
$0.0
$1.0
$2.0
2007
2008
2009
2010
2011
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
Sources
Uses
Cash from
Ops
Net
Financing
Dividends
to Parent
Investments
Power Sources and Uses
(2008 – 2011 Forecast)
Power Cash Flow
Cash
from Ops
Declining Investments
Net Cash
Flow
Asset
Sales
Incremental debt
capacity while
maintaining target
credit measures
120
($1.5)
($0.5)
$0.5
$1.5
2007
2008
2009
2010
2011
$0.0
$2.0
$4.0
$6.0
Sources
Uses
Cash from
Ops
Net
Financing
Dividends
to Parent
Investments
PSE&G Sources and Uses
(2008 – 2011 Forecast)
PSE&G Cash Flow
Cash from
Ops
Growing Investments
Net Cash
Flow
At PSE&G, cash flow will be primarily directed towards
attractive reinvestment opportunities.
Modest dividends to the Parent are expected to continue as
PSE&G grows its asset base.
121
$0.0
$2.0
$4.0
$6.0
Sources
Uses
Holdings cash
generated
(remaining asset
sales and cash
ops) less cash
earmarked for
potential
renewable
investments
Holdings
Dividend
Shareholder
Dividend
PSE&G
Dividend
Discretionary
Cash
Parent Sources and Uses
2008 - 2011
Power
Dividend
$3.0B
We forecast $3.0B of discretionary cash through 2011.
Cash flow from Power is the primary driver of discretionary cash.
122
Holdings
PSE&G
Power
Parent
$2.80
-
$3.05
2008
2009
2010
2011
1040
-
1140
45
-
60
350
-
370
(15)
–
(10)
8
–
9% Annual Growth
Subsidiary
Annual Growth
5
–
7%
Discretionary Cash
Total Shareholder
Return
10 – 13%
Annual
Dividend Yield
3%
~
~
“Discretionary Cash”
– Annual Growth /
Share Repurchases
3%
~
~
Subsidiary Earnings
Annual Growth
5 – 7%
Annual Growth
6
–
8%
5
–
7%
~
~
3%
Redeploying our $3.0B of discretionary cash towards
additional growth and / or share repurchases …
… drives our Consolidated earnings growth rate resulting in a total
shareholder return between 10 – 13%.
+
123
PSEG’s generating portfolio is well positioned …
… across multiple attractive markets.
Open Capacity
PSEG
2007 Total US Generation
15,700 MW
PSEG Power
2007 Total Capacity
13,300 MW
PSEG Global
2007 Total Owned Capacity
2,400 MW
NY
NE
PJM
Texas
CA
Other
PJM
Other
Texas
NE
NY
PSEG Power
2007 Energy Produced
53,200
GWh
Nuclear
54%
Coal
25%
Gas
19%
Oil 1%
Pumped
Storage
1%
Gas
92%
Oil 8%
PSEG Global
2007 Energy Produced
9,800
GWh
Nuclear
46%
Gas
30%
Coal
21%
PSEG
2007 Energy Produced
63,000
GWh
Oil 2%
Pumped
Storage
1%
+
+
=
=
124
PSEG’s generation portfolio provides attractive cash …
Combined fleet represents 15,700 MW of competitive generation
Assets are positioned in four attractive merchant markets
Growth opportunity available
Existing assets positioned for incremental growth
Site expansion capability
$1,993
TOTAL
$104
PSEG Global
(Texas)
$1,889
PSEG Power
PSEG Generation
2007 EBITDA ($M)
$2,700 - $2,900
TOTAL
~$100
PSEG Global
(Texas)
$2,600 - $2,800
PSEG Power
PSEG Generation
Open EBITDA* ($M)
… with opportunity for additional growth in a disciplined manner.
* Open EBITDA reflects unhedged results at PSEG Power and PSEG Global at market prices and current volume.
125
Our forecast of growth is based on highly visible drivers
which support our double digit returns …
What’s in our forecast…
New CONE pricing
Further improvements in
energy markets from heat
rate expansion, gas price
increases, and/or carbon
Potential for expansion of
investment in transmission
Revenue from additional new
generation
What’s not in our forecast…
Investment in new peakers
Current pricing in forward
energy markets
PSE&G’s spending on
known RTEP projects
New nuclear development
spending
PSEG Global’s capital
investment in renewables
… while additional growth is possible.
126
PSEG
Summary
Ralph Izzo
Chairman, President and Chief Executive Officer, PSEG
PSEG value proposition
PSEG well positioned in current business environment
Process improvement programs support efforts to:
- maintain reliability
- control costs
- provide value for the customer
Asset mix provides balance in expanding markets
Strengthened balance sheet supports capital investment
Return of cash to shareholders through dividends
provides discipline to investment process
Earnings growth and yield offer opportunity for double
digit shareholder returns
128
APPENDIX
Capacity value conversion table ($)
$140
$110
$100
$90
$80
Megawatt / Day
11.50
9.00
8.20
7.40
6.58
= Megawatt hour
50.40
39.60
36.00
32.40
28.80
= Kilowatt / Year
4.20
3.30
3.00
2.70
2.40
= Kilowatt / Month
Megawatt / Day Kilowatt / Month = (1 Megawatt / 1000) * 30 days
Kilowatt / Month Kilowatt / Year = (1 Kilowatt per month *12 months)
Kilowatt / Year Megawatt hour = (($ per Kilowatt / Year * 1000) / (# of hours in a year)) * load factor
Load factor for PEG = 50%
130
PSEG Energy Holdings - Global’s US Generation Assets
2011
Penelec
Hydro
4%
15
Conemaugh
2010
Constellation
Biomass
(wood chips)
40%
16
Bridgewater
(New Hampshire)
2,395
2,734
Total
Contracted:
2016
HECO
Oil
50%
208
Kalaeloa
(Hawaii)
2021
PG&E
Pet coke
50%
132
GWF & Hanford “QF”
(California)
2012
CDWR
Natural Gas-Fired
Peaker
60%
363
GWF Energy
(California)
Dec 31,
2010
Merchant
1,650MW
Contract:
350 MW
Natural Gas-Fired
7FA CCGT
100%
2,000
PSEG Texas – Odessa
(West) & Guadalupe
(South)
Term
Counter-
party
Fuel /
Technology
%
Owned
Total
MW
Merchant
131
PSEG Energy Holdings - Other International Generation
Modest investments: total of ~$120M (book value at 12/31/07)
2013
Manufacturas
de Papel C.A.
“Manpa”
Natural Gas
9%
40
TGM
Venezuela
’09 – ‘12
CIP 6 contracts
with Italian grid
Biomass
(Wood)
42.5%
60
Biomasse Italia
Crotone &
Strongoli, Italy
’09 – ’11
CIP 6 contracts
with Italian grid
Biomass
(Wood)
85%
20
Bioenergie
San Marco, Italy
2032
n/a
Term
173
570
Total
TNEB (State
Electricity
Board)
Naphtha /
Natural Gas
20%
330
PPN
Tamil Nadu, India
Merchant
Natural Gas
50%
120
Turboven
Maracay & Cagua,
Venezuela
Counter-party
Fuel /
Technology
%
Owned
Total
MW
132
PSEG Resources’ Portfolio – Leased Assets
BBB+/Baa1
56%
1,660
Total Top Ten
AA/Aa2
3%
104
Gas distribution network in Netherlands
EDON
A-/A3
100%
2,826
Total Leases
AAA/Aaa
4%
106
Gas distribution network in Netherlands
Nuon
A+/Aa3
4%
113
1,100 MW nuclear station in Mississippi
Grand Gulf
BBB+/
A3
4%
127
Reservoir in NJ
Merrill Creek –
(PECO, MetEd,
Delmarva Power &
Light)
AA+/Aa1
4%
130
540MW coal-fired generation facility in Netherlands
EZH
AA+/Aa1
5%
148
Electric distribution system in Austria
ESG
AA+/Aa1
6%
169
Gas distribution network in Netherlands
ENECO
BB-/B1
7%
212
Powerton & Joliet Generating Stations (IL)
2 coal-fired generating facilities (1,640 equity MW)
Edison Mission
Energy (EME)
B/B3
9%
255
Danskammer & Roseton Generating Station (NY) – 370
MW coal fired and 1,200 MW oil/gas fired
Dynegy Holdings
B/Ba2
10%
296
Keystone, Conemaugh & Shawville (PA)
3 coal fired plants (1,162 equity MW)
REMA (Reliant)
Credit
Rating*
% of
Portfolio
$ Invested
(millions)
Equipment
Lessee
*Reflects lessee or additional equity collateral support
133
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.
2007
2006
2007
2006
Merger related Costs:
PSE&G
-
$
(1)
$
-
$
Enterprise
-
(7)
(0.02)
Total Merger related Costs
-
$
(8)
$
-
$
(0.02)
$
Impact of Asset Sales:
Loss on Sale of RGE
-
(178)
-
$
(0.35)
$
Chilquinta & Luz Del Sur
(23)
-
(0.05)
-
Write down of Turboven
(7)
-
(0.01)
-
Premium on bond redemption
(28)
(7)
(0.06)
(0.02)
Total Impact of Asset Sales
(58)
$
(185)
$
(0.12)
$
(0.37)
$
Discontinued Operations:
Power - Lawrenceburg
(8)
$
(239)
$
(0.02)
$
(0.47)
$
Holdings:
SAESA
(33)
57
(0.06)
0.11
Electroandes
57
16
0.11
0.03
Elcho and Skawina
-
226
-
0.45
Total Holdings
24
$
299
$
0.05
$
0.59
$
Total Discontinued Operations
16
$
60
$
0.03
$
0.12
$
Years Ended Dec. 31,
Years Ended Dec. 31,
($ millions)
(EPS)
134