EXHIBIT 99
Group
Enterprise
Service
Public
Lynch
Merrill
Conference
Leaders
Gas
&
Power
Global
2006
26,
September
1
Forward-Looking Statements
This presentation includes forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995, that are subject to risks and uncertainties. The factors that could
cause actual results of Public Service Enterprise Group Incorporated (PSEG), Public Service
Electric and Gas Company, PSEG Power LLC, and PSEG Energy Holdings L.L.C. (collectively,
the PSEG Companies) to differ materially from these forward-looking statements include those
discussed herein as well as those discussed in (1) the PSEG Companies' 2005 Annual Report on
Form 10-K, and 2006 Quarterly Reports on Form 10-Q in (a) Forward Looking Statements (b) Risk
Factors, and (c) Management's Discussion and Analysis of Financial Condition and Results of
Operations and (2) other factors discussed in filings with the SEC by the PSEG Companies.
Readers are cautioned not to place undue reliance on these forward-looking statements, which
apply only as of the date of this presentation. None of the PSEG Companies undertakes any
obligation to publicly release any revision to its forward-looking statements to reflect events or
circumstances after the date of this presentation.
,
2
Gas Customers: 1.7M
Nuclear Capacity: 3,494 MW
Total Capacity: 14,636 MW
Traditional T&D
Leveraged
Leases
2006E Operating Earnings(1)(2): $875M - $950M
2006 EPS Guidance(1)(2): $3.45 - $3.75
Assets (as of 12/31/05): $ 29.8B
Regional
Wholesale Energy
Domestic/Int’l
Energy
2005 Results: $347M(3)
$418M(3)
$196M(3)
2006 Range: $250M - $270M(2)
$500M - $550M(2)
$185M - $205M(2)
1) Includes the parent impact of $(60-70)M
(
2) Income from Continuing Operations, excluding merger-related costs and
gains/losses from asset sales and related costs
(
3) Income from Continuing Operations, excluding merger-related costs of $3M for
PSE&G and $12M for PSEG Power
(
PSEG Overview
Electric Customers: 2.1M
3
P
PSEG 2007 Earnings Outlook & Drivers
2006 Guidance
Power
PSE&G
Holdings
2008
$3.45 - $3.75
Excess
Growth
•
Forward
•
•
•
•
•
Weather
•
Texas
•
2006 RGE
Sale
•
New
Accounting
Standard
Hedging
Re-contracting
- PJM/NE
Capacity
Market Design
Gas Rate
Case
Electric
Proceeding
2007 Guidance
$4.60 - $5.00
of 10%
PSEG Power
5
PSEG Power Overview
Nuclear
•
Nuclear Operating Services Agreement provides stability
•
2005 – record output
V•
2006 – year to date output exceeds 2005 at each unit
Fossil
•
Increased output over 2005
•
Improved performance
Energy & Capacity Margin Growth
•
2006 – energy recontracting improvements
•
2007 and beyond – energy recontracting and capacity market improvements
•
Year over year growth
-
2006: $5-6/MWh improvement
-
2007: additional $7-9/MWh improvement
-
2008: further margin increase at a declining rate
6
Improvements in Nuclear Operations
0
500
1,000
1,500
,
2,000
2,500
,Peach Bottom
Salem 1 & 2
Hope Creek
2 & 3
MW
Exelon Share
PSEG
Share
• Strong operational performance
- Capacity factors: YTD ~96%
Summer ~100%
• Outage management
- Record for reactor head replacement
- Site records achieved
• Station culture improvements
- SCWE issue closed
- “Substantial, sustainable progress”
• Nuclear Operating Services
Agreement (NOSA) remains
effective
Total:
3,494MW
• PSEG Owned
• PSEG Operated
(NOSA)
• Jointly Owned
• PSEG Operated
(NOSA)
• Jointly Owned
• Exelon Operated
PSEG
MW
Owned
1,112MW
1,323MW
1,059MW*
* Uprate of 127MW scheduled for Fall 2007
7
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Low cost nuclear and coal generate more than 80% of Power’s total output
8
BGS Auction Results
•
Capacity
•
Load shape
•
Transmission
•
Congestion
•
Ancillary services
•
Risk premium
RTC Forward
Energy Cost
Full Requirements
$33 - $34
$36 - $37
$55.59
(34 Month NJ Avg.)
$55.05
(36 Month NJ Avg.)
$65.91
(36 Month NJ Avg.)
$44 - $46
~ $21
~ $18
~ $21
$102.21
(36 Month NJ Avg.)
$67 - $70
2
3
$
~
Increase in Full Requirements Component Due to:
Increased Congestion (East/West Basis)
Anticipated Increase in Capacity Markets/RPM
Higher Volatility in Market Increases Risk Premium
Recent Forward
Price Range
RTC = round the clock
2003 Auction
2004 Auction
2005 Auction
2006 Auction
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Generation output not under contract
2006 BGS
2005 BGS
2004 BGS
120%
100%
80%
60%
40%
20%
0%
2003 BGS
United Illuminating
Other term energy contracts
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Significant Forward Hedging of Nuclear and Coal
% of
Nuclear
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Coal
Generation
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12
Recognized as a Top Performing Utility
0
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l
m
Accomplishments
•
Top quartile performance
continues
•
Strong safety and reliability
results
•
Dedication to capital
investment program
Issues
•
Disappointing returns from
gas business
ROE: <4%
•
•
Re-establish constructive
regulatory relations regarding
traditional utility matters
3
1
PSE&G Regulatory Filings
P
Excess Depreciation Credit
•
$64M annual credit expired December 31, 2005
•
PSE&G filed 1Q 2006 actual results in June
•
Decision was put on hold, pending merger review
•
Expect discussions to resume with BPU shortly
Gas Base Rate Case
•
$133M revenue increase requested
•
Hearings held in July & August of this year
•
Currently conducting settlement discussions
•
Schedule calls for BPU decision late this year or early next year
PSEG Energy Holdings
5
1
P
PSEG Holdings: Providing Meaningful Earnings
PSEG
Resources
Latin American
Texas Merchant
Generation
(2,000 MW)
International
Generation
Other fully contracted
US Generation
Projected Earnings Contribution
•
Significant decapitalization:
2004-2006
•
Recourse debt reduction:
$ 917M
•
Return of capital & dividends:
$1,309M
$2,226M
•
Approximately 95% of Global’s Earnings
come from US Generation and Latin
American Distribution assets
•
Continue strategic asset monetization
Distribution
6
1
P
PSEG’s Business Outlook
•
Improved performance and reliability of Nuclear Operations
•
Enhanced electric marketplace
•
Business risk improvements
17
Public Service Enterprise Group