 Public Service Enterprise Group PSEG Earnings Conference Call 1st Quarter 2010 May 5, 2010 * * * * Exhibit 99.1 |
 1 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, law, policies and regulation, including market structures and rules, and reliability standards. • Any inability of our transmission and distribution businesses to obtain adequate and timely rate relief and regulatory approvals from federal and state regulators. • Changes in federal and state environmental regulations that could increase our costs or limit 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 located on a multi-unit site 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. • Availability of capital and credit at commercially reasonable terms and our ability to meet cash needs. • Any inability to realize anticipated tax benefits or retain tax credits. • Changes in the cost of or interruption in the supply of fuel and other commodities necessary to the operation of our generating units. • Delays or unforeseen cost escalations in our construction and development activities. • Increase in competition in energy markets in which we compete. • Adverse performance of our decommissioning and defined benefit plan trust fund investments, and changes in discount rates and funding requirements. • Changes in technology and 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 internal 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 gains or losses associated with Nuclear Decommissioning Trust (NDT) and Mark-to-Market (MTM) accounting, the impact of the sale of certain non-core domestic and international assets and material impairments and lease-transaction- related charges. 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 two slides in this presentation include a list of items excluded from Income from Continuing Operations to reconcile to Operating Earnings, with a reference to that slide included on each of the slides where the non-GAAP information appears. |
 PSEG 2010 Q1 Review Ralph Izzo Chairman, President and Chief Executive Officer * * * * * * * * |
 4 Q1 2010 Earnings Summary 482 425 Operating Earnings $ 444 $ 491 Income from Continuing Operations / Net Income (38) 66 Reconciling Items, Net of Tax $ 0.95 $ 0.84 EPS from Operating Earnings* 2009 2010 $ millions (except EPS) Quarter ended March 31 * See page 29 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 5 PSEG – Q1 2010 Results challenged by weather, economic conditions and low gas prices. Focused on operational excellence PSE&G experienced worst storm in its history in March 2010; including other storms, absorbed $16M in total storm costs. Power’s generation volumes increased 7% quarter-over-quarter. Foundation laid for future BPU releases its written order approving Susquehanna-Roseland transmission line. Completion of BET construction on schedule for year-end 2010. Awaiting decision on PSE&G request for electric and gas rate increase. Financing position Debt financings lower cost and extend maturities. Lease terminations reduce tax liability. $332M contributed to pension trust. Focused on building a financially strong, environmentally friendly energy business. |
 6 2008 Operating Earnings* 2009 Operating Earnings* 2010 Guidance $3.00 - $3.25 PSEG – Maintaining 2010 Guidance $3.03 * See page 30 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. $3.12 |
 PSEG 2010 Q1 Operating Company Review Caroline Dorsa Executive Vice President and Chief Financial Officer * * * * * * * * |
 8 Q1 Operating Earnings by Subsidiary $ 482 (4) 11 123 $ 352 2009 $ 425 3 7 117 $ 298 2010 Operating Earnings Earnings per Share -- 0.01 Enterprise $ 0.95 $ 0.84 Operating Earnings* 0.02 0.01 PSEG Energy Holdings 0.24 0.23 PSE&G $ 0.69 $ 0.59 PSEG Power 2009 2010 $ millions (except EPS) Quarter ended March 31 * See page 29 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 9 $0.84 0.01 (0.01) (0.01) (0.10) $0.95 0.00 0.25 0.50 0.75 1.00 PSEG EPS Reconciliation – Q1 2010 versus Q1 2009 Q1 2010 operating earnings* Q1 2009 operating earnings* Interest Higher volume offset by lower prices (0.05) BGSS and trading (0.04) O&M (0.02) Increase in effective tax rate related to new healthcare legislation (0.02) Depreciation, interest and other 0.03 PSEG Power Weather (0.02) O&M (0.02) Electric margin 0.01 Transmission margin 0.01 Other 0.01 PSE&G PSEG Energy Holdings Enterprise Lower project earnings and lower gains on lease sales * See page 29 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 PSEG Power 2010 Q1 Review * * * * * * * * |
 11 PSEG Power – Q1 2010 EPS Summary 71 (15) 56 Mark-to-Market, Net of Tax 33 (23) 10 NDT Funds Related Activity, Net of Tax ($ 161) $ 2,464 $ 2,303 Operating Revenues ($ 0.10) $ 0.69 $ 0.59 EPS from Operating Earnings* 50 314 364 Income from Continuing Operations / Net Income (54) 352 298 Operating Earnings Variance Q1 2009 Q1 2010 $ millions (except EPS) * See page 29 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 12 $0.59 0.03 (0.02) (0.02) (0.04) (0.05) $0.69 0.00 0.25 0.50 0.75 Higher volume offset by lower prices PSEG Power EPS Reconciliation – Q1 2010 versus Q1 2009 Q1 2010 operating earnings* Q1 2009 operating earnings* BGSS and trading * See page 29 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. O&M Increase in effective tax rate related to new healthcare legislation Depreciation, interest and other |
 13 PSEG Power – Generation Measures 7,781 7,817 2,921 2,679 3,530 2,621 1,596 1,536 0 8,750 17,500 2010 2009 Quarter ended March 31 Total Nuclear Total Coal* Oil & Natural Gas – excluding Texas * Includes figures for Pumped Storage PSEG Power – Generation (GWh) 14,713 15,768 Oil & Natural Gas - Texas PSEG Power – Capacity Factors (%) 37% 37% Texas 33% 49% PJM and NY Combined Cycle 42% 86% 44% 97.3% 2010 59% CT 86% PA 30% NJ Coal 97.8% Nuclear 2009 Quarter ended March 31 |
 14 PSEG Power – Fuel Costs 231 263 Oil & Gas* 95 114 Coal 24.60 26.50 $ / MWh 14,713 15,768 Total Generation (GWh) 362 418 Total Fuel Costs 36 41 Nuclear Total Fossil ($ millions) 326 377 2009 2010 Quarter ended March 31 PSEG Power – Fuel Costs * Includes Texas. |
 15 PSEG Power – Gross Margin Performance $0 $25 $50 $75 2010 2009 $63 $55 Quarter ended March 31 Power’s gross margin affected by lower pricing and customer migration which offset 7% increase in production. Combined cycle gas units maintained strong contribution to operations. No change versus year ago; higher prices offset decline in generation. $18 Texas Regional Performance $12 $27 $748 Q1 Gross Margin ($M) Q1 Performance Region Increase in generation supported margin. New York Contribution to margin hurt by lower prices. New England Q1 contribution to gross margin ($M) declined 5.0% versus year ago; decline in price and migration offset increase in production. PJM PSEG Power Gross Margin ($/MWh)* * Excludes Texas Increase in generation was predominantly from combined cycle and coal with continued strong nuclear. |
 16 … with the 2013/2014 auction results set for release on May 14. PJM’s capacity construct has acknowledged the value of Power’s fleet… $185.00 PSEG North Zone $16.46 $110.00 $174.29 $102.04 $111.92 $40.80 Rest of Pool $133.37 $110.00 $174.29 $191.32 MAAC $139.73 $110.00 $174.29 $191.32 $148.80 $197.67 Eastern MAAC 2012 / 2013 2011 / 2012 2010 / 2011 2009 / 2010 2008 / 2009 2007 / 2008 $/MW-day PJM Zones 0 2,000 4,000 6,000 8,000 10,000 12,000 07/08 08/09 09/10 10/11 11/12 12/13 PJM Capacity Available to Receive Auction Pricing |
 17 PSEG Power – Q1 Operating Highlights Q1 output + 7% Q1 nuclear capacity factor at 97.3% Combined cycle and coal units captured market opportunities Operations Regulatory and Market Environment Financial Lower pricing reduced Q1 earnings ($0.04 per share); customer migration also hurt Q1 earnings ($0.01 per share); mark-to-market related to lower volumes on contracts ($0.03 per share) RPM auction results due May 14 Power debt exchange to reduce financing cost and extend maturities |
 PSE&G 2010 Q1 Review * * * * * * * * |
 19 PSE&G – Q1 2010 Earnings Summary 274 2,447 2,173 Total Operating Expenses 2 44 42 Taxes Other than Income Taxes Operating Expenses 319 1,859 1,540 Energy Costs (19) 395 414 Operation & Maintenance (28) 149 177 Depreciation & Amortization ($ 0.01) $ 0.24 $ 0.23 EPS from Operating Earnings* (6) 123 117 Operating Earnings / Net Income ($ 291) $ 2,735 $ 2,444 Operating Revenues Variance Q1 2009 Q1 2010 $ millions (except EPS) * See page 29 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 20 $0.23 (0.01) 0.01 0.01 (0.02) $0.24 0.00 0.05 0.10 0.15 0.20 0.25 PSE&G EPS Reconciliation – Q1 2010 versus Q1 2009 Q1 2010 operating earnings* Q1 2009 operating earnings* Weather O&M and other * See page 29 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. Transmission margin Electric margin |
 21 PSE&G – Monthly Heating Degree Days 862 748 368 991 656 562 809 695 552 0 400 800 1200 January February March 2010 2009 Normal 2010 vs 2009 vs Normal PSE&G – Monthly Heating Degree Days |
 22 PSE&G – Q1 Operating Highlights NJ BPU written order approving construction of the $750 million Susquehanna- Roseland 500kV transmission line received in April Electric and gas rate filing updated to reflect actual results for 2009 test year Electric increase ($139.8 million); gas increase ($64.4 million) Leadership of NJ BPU changed with election of Chris Christie (R) as governor PSE&G redeemed preferred equity PSE&G’s operating earnings provided an earned return on equity of 7.6% Electric and Gas Distribution ROE of 7.6% and 6.5%, respectively; Transmission ROE of 11.3% Operations Regulatory and Market Environment Financial Economy showing signs of stability – but, not growing O&M affected by major storm related activity in Q1 Focused on maintaining reliability |
 PSEG Energy Holdings 2010 Q1 Review * * * * * * * * |
 24 PSEG Energy Holdings – Q1 2010 Earnings Summary ($0.01) $ 0.02 $ 0.01 EPS from Operating Earnings* ($ 4) $ 11 $ 7 Income from Continuing Operations / Net Income ($ 8) $ 44 $ 36 Operating Revenues Variance Q1 2009 Q1 2010 $ millions (except EPS) * See page 29 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 25 $0.01 (0.01) $0.02 0.00 0.01 0.02 0.03 PSEG Energy Holdings EPS Reconciliation – Q1 2010 versus Q1 2009 Q1 2010 operating earnings* Q1 2009 operating earnings* Lower project earnings and lower gains on lease sales * See page 29 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 26 PSEG Energy Holdings – Q1 Operating Highlights Financial Termination of one lease in Q1 brought the total number of leases terminated to 14, reducing potential tax liability at quarter-end to $600 million. Ownership of Texas gas-fired generating assets transferred to Power on October 1, 2009. Solar projects in Ohio and Florida are meeting/exceeding budget and construction schedule. NJ Solar project is operating as planned. |
 PSEG * * * * * * * * * * * |
 28 PSEG Liquidity as of April 30, 2010 Expiration Total Available Company Facility Date Facility Usage Liquidity 5-Year Credit Facility (Power) Dec-12 $1,600 1 $345 $1,255 5-year Credit Facility (PSEG) Dec-12 $1,000 2 $17 $983 2-Year Credit Facility (Power) Jul-11 $350 $0 $350 PSE&G 5-year Credit Facility Jun-12 $600 3 $0 $600 Total $3,550 $3,188 1 Power Facility reduces by $75 million in 12/2011 2 PSEG Facility reduces by $47 million in 12/2011 3 PSE&G Facility reduces by $28 million in 12/2011 PSEG / Power ($Millions) |
 29 Items Excluded from Income from Continuing Operations to Reconcile to Operating Earnings Please see Page 2 for an explanation of PSEG’s use of Operating Earnings as a non-GAAP financial measure and how it differs from Net Income. Pro-forma Adjustments, net of tax 2010 2009 Earnings Impact ($ Millions) Gain (Loss) on Nuclear Decommissioning Trust (NDT) Fund Related Activity 10 $ (23) $ Gain (Loss) on Mark-to-Market (MTM) 56 (15) Total Pro-forma adjustments 66 $ (38) $ Fully Diluted Average Shares Outstanding (in Millions) 507 507 Per Share Impact (Diluted) Gain (Loss) on NDT Fund Related Activity 0.02 $ (0.04) $ Gain (Loss) on MTM 0.11 (0.03) Total Pro-forma adjustments 0.13 $ (0.07) $ (a) Income from Continuing Operations for the three months ended March 31, 2010 and 2009 is equal to Net Income. For the Three Months Ended March 31, PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Reconciling Items Excluded from Continuing Operations (a) to Compute Operating Earnings (Unaudited) |
 30 Items Excluded from Income from Continuing Operations to Reconcile to Operating Earnings Please see Page 2 for an explanation of PSEG’s use of Operating Earnings as a non-GAAP financial measure and how it differs from Net Income. Pro-forma Adjustments, net of tax 2009 2008 Earnings Impact ($ Millions) Gain (Loss) on Nuclear Decommissioning Trust (NDT) Fund Related Activity 9 $ (71) $ Gain (Loss) on Mark-to-Market (MTM) (25) 16 Lease Transaction Reserves - (490) Net Reversal of Lease Transaction Reserves 29 - Asset Impairments - (13) Premium on Bond Redemption - (1) Total Pro-forma adjustments 13 $ (559) $ Fully Diluted Average Shares Outstanding (in Millions) 507 508 Per Share Impact (Diluted) Gain (Loss) on Nuclear Decommissioning Trust (NDT) Fund Related Activity 0.02 $ (0.14) $ Gain (Loss) on Mark-to-Market (MTM) (0.05) 0.03 Lease Transaction Reserves - (0.96) Net Reversal of Lease Transaction Reserves 0.05 - Asset Impairments - (0.03) Premium on Bond Redemption - - Total Pro-forma adjustments 0.02 $ (1.10) $ PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Reconciling Items Excluded from Continuing Operations to Compute Operating Earnings (Unaudited) For the Twelve Months Ended December 31, |