 PSEG Public Service Enterprise Group Barclays Capital 2011 CEO Energy/Power Conference September 8, 2011 EXHIBIT 99 |
 2 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, consequences 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. When used herein, the words “will”, “anticipate”, “intend”, “estimate”, “believe”, “expect”, “plan”, “should”, “hypothetical”, “potential”, “forecast”, “project”, variations of such words and similar expressions are intended to identify forward-looking statements. Although we believe that our expectations are based on reasonable assumptions, they are subject to risks and uncertainties and we can give no assurance they will be achieved. The results or developments projected or predicted in these statements may differ materially from what may actually occur. 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 a potential shift away from competitive markets toward subsidized market mechanisms, transmission planning and cost allocation rules, including rules regarding how transmission is planned and who is permitted to build transmission in the future, and reliability standards, • 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 general developments in the nuclear power industry, including various impacts from any accidents or incidents experienced at our facilities or by others in the industry that could limit operations of our nuclear generating units, • actions or activities at one of our nuclear units located on a multi-unit site that might adversely affect our ability to continue to operate that unit or other units located at the same site, • any inability to balance our energy obligations, available supply and trading risks, • any deterioration in our credit quality, or the credit quality of our counterparties, • availability of capital and credit at commercially reasonable terms and conditions and our ability to meet cash needs, • 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 in receipt of necessary permits and approvals for our construction and development activities, • delays or unforeseen cost escalations in our construction and development activities, • adverse changes in the demand for or price of the capacity and energy that we sell into wholesale electricity markets, • increase in competition in energy markets in which we compete, • challenges associated with recruitment and/or retention of a qualified workforce, • adverse performance of our decommissioning and defined benefit plan trust fund investments and changes in discount rates and funding requirements, and • changes in technology and customer usage patterns. 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. |
 3 GAAP Disclaimer PSEG presents Operating Earnings in addition to its Net Income reported in accordance with accounting principles generally accepted in the United States (GAAP). Operating Earnings is a non-GAAP financial measure that differs from Net Income because it excludes gains or losses associated with Nuclear Decommissioning Trust (NDT), Mark-to-Market (MTM) accounting, and other material one-time items. PSEG presents Operating Earnings because management believes that it is appropriate for investors to consider results excluding these items in addition to the results reported in accordance with GAAP. PSEG believes that the non-GAAP financial measure of Operating Earnings provides a consistent and comparable measure of performance of its businesses to help shareholders understand performance trends. This information is not intended to be viewed as an alternative to GAAP information. The last 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 – Defining the Future Ralph Izzo Chairman, President and Chief Executive Officer |
 ` 5 PSEG Advantage: Right platform to deliver value to customers and investors… PSE&G positioned to meet NJ’s energy policy and economic growth objectives with a $5.2 billion investment program through 2013 Electric & Gas Delivery and Transmission PSEG Power’s low-cost, base load and load following fleet is geographically well positioned and environmentally responsible Regional Wholesale Energy PSEG Energy Holdings positioned to pursue attractive renewable generation opportunities Renewable Investments …with a track record for safeguarding shareholder interests. $17.3B Market Cap* $28.8B Assets** *Market capitalization as of August 31, 2011; asset value at June 30, 2011 |
 6 PSEG Advantage: Asset mix, strong operations… Reliability One Award winner for Mid-Atlantic Region – 9 th year in a row Regulatory agreements and cost control provide opportunity for improved returns Investment program focused on growth and providing customers with clean, reliable energy PSEG Power PSE&G …with balance sheet to support growth. Strong platform open to improvement in the market Well-run, low-cost generating fleet combined with fuel flexibility supports margins Hedging strategy mitigates near-term risk Major environmental compliance capital program completed Reducing risk Building a platform for renewables and investing through PPA-supported projects International lease investments terminated Resources carefully monitoring remaining traditional leases and other investments PSEG Energy Holdings |
 7 Earnings growth achieved… … through increased investment, higher output and lower costs. * See page 62 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings; All periods reflect Texas in Discontinued Operations. $3.09 $3.12 2008 Operating Earnings* 2009 Operating Earnings* 2010 Operating Earnings* $2.91 |
 8 First Half Operating Earnings by Subsidiary Operating Earnings Earnings per Share $ millions (except EPS) 2011 2010 2011 2010 PSEG Power $ 452 $ 541 $ 0.89 $ 1.07 PSE&G 268 192 0.53 0.38 PSEG Energy Holdings 2 19 - 0.03 Enterprise 10 8 0.02 0.02 Operating Earnings* $ 732 $ 760 $ 1.44 $ 1.50 Six months ended June 30 * See page 61 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 9 $1.44 (0.03) 0.15 (0.18) $1.50 0.00 0.25 0.50 0.75 1.00 1.25 1.50 1.75 PSEG EPS Reconciliation – YTD June 2011 versus YTD June 2010 YTD 2011 operating earnings* YTD 2010 operating earnings* Lower Pricing (0.05) Lower Volume & Weather (0.02) Migration (0.02) O&M (0.04) D&A and Interest (0.05) PSEG Power Margins: Rate Relief 0.04 Transmission 0.02 Renewables & Cap Stimulus 0.03 O&M 0.07 Weather & Volume 0.02 D&A (0.02) Other (0.01) PSE&G PSEG Energy Holdings Absence of 2010 Tax Benefits for Solar & Other Projects (0.02) ES&P Investment Write-off (0.01) * See page 61 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 10 $1,000 $1,250 $1,500 $1,750 $2,000 $2,250 2010 2011E 2012E 2013E Pension O&M PSEG Consolidated O&M (1) C.A.G.R (’10-’13) = (0.0)% (1) Excludes O&M related to PSE&G clauses. E Estimate. Aggressive expense management… …should result in essentially no O&M growth. |
 11 PSEG’s 2011 earnings guidance reflects continued improvement at PSE&G… – Network transmission service revenue increase = ~ $0.05 per share – Full year of E&G Rate Relief = ~ $0.05 per share – Each 1% change in Load = ~ $0.02 per share – Each 1% change in O&M = ~ $0.01 per share – 2010 Utility ROE 9.9%; Each 10 bp = $0.01 per share Revenue/Margin – Decline in average Hedge Price/Volume = ~ ($0.25-$0.30) per share – Decline in Capacity revenues = ~ ($0.15-$0.20) per share – Improvement in WPT/BGSS = ~ $0.03-$0.05 per share Other Expense – Higher O&M = ~ ($0.03) per share – Increase in Depreciation rate = ~ ($0.05) per share – Absence of LILO/SILO termination gains = ~ ($0.06) per share – Loss of Income from Asset Sales = ~ ($0.04) per share 2011 Drivers …offset by a decline in margins at Power and Holdings. Earnings Per Share * See page 62 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. E Estimate. Guidance $2.75 $2.50 $3.12 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 2010 Operating Earnings* 2011E Earnings Guidance* |
 12 Outlook for 2011 Operating Earnings Maintained * See page 62 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. EPS contribution from PSE&G expected to represent 35 to 40% of 2011 forecast earnings versus 27% contribution to 2010 earnings. $3.12 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 2010 Operating Earnings* 2011E Earnings Guidance* $2.75E $2.50E |
 13 PSEG Consolidated Debt / Capitalization (1) Includes debt due within one year and short-term debt; excludes Securitization Debt and Non-Recourse Debt. $0 $2 $4 $6 $8 $10 $12 $14 $16 $18 2009 2010 6/30/2011 Equity Debt (1) Preferred Stock Debt 7,311 7,812 7,453 Preferred Stock 80 0 0 Common Shareholders Equity 8,788 9,633 10,109 Debt plus Equity 16,179 17,445 17,562 Debt Ratio 45.2% 44.8% 42.4% (in $Millions) |
 14 PSEG’s consolidated capital spending is focused on growth PSEG 2011-2013E Capital Spending $6.85 Billion* by Subsidiary PSEG 2011-2013E Capital Spending $6.85 Billion* Growth vs. Maintenance Spend *E: Estimate . Growth $4.72 B 69% Maintenance $2.13 B 31% Parent SC $0.07 B 1% Power $1.50 B 22% Holdings $0.04 B 1% PSE&G $5.24 B 76% |
 PSEG Annual Common Dividend Per Share 2001-2011E 15 PSEG Dividend – A 104-year commitment to returning cash to shareholders $1.08 $1.08 $1.08 $1.10 $1.12 $1.14 $1.17 $1.29 $1.33 $1.37 $1.37 $1.00 $1.25 $1.50 |
 PSEG Power – Review and Outlook |
 17 Low-cost portfolio Fuel flexibility Regional focus in competitive, liquid markets Assets favorably located near customers/load centers Many units east of PJM constraints Market knowledge and experience to maximize the value of our assets … with low cost plants in good locations, fuel diversity and solid markets. Power’s diverse assets drive value in a dynamic environment… 18% 45% 8% Fuel Diversity* Coal Gas Oil Nuclear Pumped Storage 1% Energy Produced* Total GWh: 56,727 52% 19% 28% Pumped Storage & Oil <1% Nuclear Coal Gas Total MW: 13,538 27% 9% * Twelve months ended December 31, 2010. |
 Power’s Northeast assets are located in attractive markets near load centers… ... and the fleet achieved record generation levels in 2010. 18 |
 19 … provide optionality under a variety of conditions. Power’s PJM assets along the dispatch curve reduce the risk of serving full requirement load contracts… Energy Revenue X X X Capacity Revenue X X X Ancillary Revenue X X Dual Fuel X X Peaking units Load following units Nuclear Coal Combined Cycle Steam Peaking Baseload units Illustrative 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 Sewaren 6 Mercer 3 Kearny 10-11 Linden 5-8 / Essex 9 Burlington 12 / Kearny 12 Peach Bottom Yards Creek National Park Salem 3 Bergen 3 |
 20 Power’s Coal/Gas fuel mix has changed from ~50/50… …to ~40/60 Coal/Gas due to gas commodity pricing vs coal. 52% 42% 42% 39% 48% 58% 58% 61% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2008 2009 2010 2011 July YTD Coal Gas CC |
 21 Our nuclear performance has improved… 11.1 3.1 0.6 2.1 1.0 0.9 3.0 0.7 0.7 0.6 0.7 0.6 0.6 0.6 0.7 0 2 4 6 8 10 12 2004 2005 2006 2007 2008 2009 2010 2011 E 24.7 27.3 29.1 28.4 29.3 30.3 29.6 30.0 0 5 10 15 20 25 30 35 2004 2005 2006 2007 2008 2009 2010 2011 E 79.0 85.0 97.097.0 94.0 91.7 99.0 93.9 90.3 96.0 96.0 96.0 97.0 98.0 98.5 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0 2004 2005 2006 2007 2008 2009 2010 2011 E** Salem Unit 2 set a new all time generation record Five year average generation was 29 GWh Salem 1 transformer forced outage in 2010 impacted forced loss rate by ~ 60% … as we maintain our drive for excellence. INPO Index ( ) NJ Units 1 Quartile NJ Units 1 Quartile * Total PS share nuclear generation **Index revised Jan 2011; average scores 4-7 points lower Nuclear Generation Output* (000’s GWh) Forced Loss Rate ( ) (%) st st |
 22 Power’s coal fleet has seen significant efficiency improvements… 14 15 15 13 13 9 11 10 0 2 4 6 8 10 12 14 16 18 2004 2005 2006 2007 2008 2009 2010 2011 E 10.3 11.1 11.3 7.9 8.4 4.8 4.2 3.8 0 2 4 6 8 10 12 2004 2005 2006 2007 2008 2009 2010 2011 E 1.11 1.12 1.01 0.91 0.96 0.83 0.4 0.34 0.34 0.29 0.20 0.21 0.19 0.17 0.13 0.17 0 0.2 0.4 0.6 0.8 1 1.2 2004 2005 2006 2007 2008 2009 2010 2011 E Market conditions were beneficial to increased output in 2010 Forced outage rate continues to improve Environmental footprint upgraded with BET BET enables coal flexibility … as Back-End Technology investment has prepared us for the future. Output (000’s GWh) Forced Outage Rate ( ) (% EFORD) SO 2 and NO x Rates ( ) (lb/mmbtu) SO 2 NO x |
 23 Power’s combined cycle fleet benefits from operating enhancements… 5 4 8 10 12 13 15 13 0 2 4 6 8 10 12 14 16 2004 2005 2006 2007 2008 2009 2010 2011 E 3.4 7 3.4 2.5 1.6 1.5 1.2 0.46 0 1 2 3 4 5 6 7 8 2004 2005 2006 2007 2008 2009 2010 2011 E 8079 7847 7928 7768 7810 7691 7533 7514 7200 7300 7400 7500 7600 7700 7800 7900 8000 8100 8200 2004 2005 2006 2007 2008 2009 2010 2011 E Output (000’s GWh) Forced Outage Rate ( ) (% EFORD) Period Heat Rate ( ) (mmbtu/KWh) Highest output ever in 2010 Continued improvement in forced outage rate Benefiting from heat rate improvement program …and continues to react to market dynamics. All data excludes Texas |
 24 Our peaking fleet rounds out a diverse generation portfolio… 13 17 23 19 13 14 15 12 0 5 10 15 20 25 2004 2005 2006 2007 2008 2009 2010 2011 E 85 86 76 77 91 92 95 98 0 10 20 30 40 50 60 70 80 90 100 2004 2005 2006 2007 2008 2009 2010 2011 E Peaking’s consistent record of start success provides opportunities in ancillary and real time markets Peaking adds flexibility in serving load and managing the needs of a diverse market environment Approximately 8,400 starts during 2010 HEDD is anticipated to reduce fleet size … and provides the ability to follow load during periods of high demand. % Start Success ( ) Forced Outage Rate ( ) (% EFORD) Equivalent Availability ( ) (%) 99.7 96.5 98.6 97.0 98.9 99.3 98.3 99.7 94 95 96 97 98 99 100 2004 2005 2006 2007 2008 2009 2010 2011 E |
 25 Source: MJ Bradley Power is well-positioned under numerous outcomes… 2010 2011 2012 2013 2014 2015 2016 2017 2018 Haz. Air Pollutants Criteria Pollutants Greenhouse Gases Coal Combustion 316(b) Compliance with Federal GHG Reporting Rule Compliance with Utility MACT Pre-Compliance Period Develop Utility MACT Develop Transport Rule Interim CAIR Phase-in of CCR Regulations Dev. Coal Comb. Residuals Rule Develop 316(b) Regulations Revised Ozone NAAQS may require further NO x reductions Phase-In of 316b Regulations by 2020 Compliance with GHG NSPS Develop GHG NSPS …to meet EPA environmental regulations. Today Compliance with Cross-State Air Pollution Rule Compliance with PSD/BACT and Title V Applies to GHG Emissions from New and Modified Sources |
 26 The potential impacts to Power vary… …with Power generally well positioned for the relative near term. Hazardous Air Pollutants (HAPs) •MACT standard for Hg & other HAPs establishes emission rate limits •Uncontrolled coal/oil units to install expensive capital or retire •Potential for increased variable O&M cost •Potential for higher electric prices •Mercer and Hudson have multiple emission controls •Bridgeport Harbor has Hg control •Keystone has scrubber, ESP and SCR •Conemaugh has scrubber, ESP and planned SCR Criteria Pollutants (CSAPR) •The generation fleet as a whole is well positioned for CSAPR Greenhouse Gases (GHG) •Nationally, for the time being, carbon cap-and-trade not expected •BACT may delay or impede permitting of new and modified plants •NSPS could potentially lead to emission trading •RGGI impact negligible, future uncertain •Power believes it has limited exposure to GHG BACT requirements at this time •Power would potentially benefit by NSPS with trading Coal Combustion Residuals •Facilities with wet ash ponds will need to spend capital to close or upgrade ponds (dam safety, liners, monitoring, etc) •Potential for increased variable O&M cost •Potential for higher electric prices •Already utilizes dry ash handling systems and disposal at Mercer, Hudson and BHS •No cost conversion at Key/Con •Coal ash scrubber waste tested as non-hazardous •Power has established option for beneficial use of all coal combustion residuals 316(b) Cooling Water •Power plants with once through cooling system are at risk. •Plants located on tidal rivers, estuaries or Great Lakes may face greater risk •Invest in capital, or potentially retire •Potential for higher electric prices •Lower plant output •Power shares general industry exposure •Prior permits judged that Salem has best technology available •Power has invested over $150M in estuary enhancements •Depending on EPA final rule, cost/benefit consideration may limit exposure Market Impact Power Impact • CSAPR will establish NO X and SO2 emission limits • Plant by plant, state and regional basis • Uncontrolled units to install expensive capital, retire or buy allowances under a more restrictive program • Potential for increased variable O&M cost • Potential for higher electric prices |
 27 Power’s investment program to mitigate air pollutants… Current Regulations and Compliance Measures Description Hudson (NJ) Mercer (NJ) Keystone (PA) Bridgeport (CT) Conemaugh (PA)* NO x SCR SCR SCR Low NO x Burners SCR 2014 SO 2 Scrubber Scrubber Scrubber Ultra-low Sulfur Coal Scrubber Mercury/ Particulate Baghouse & Activated Carbon Baghouse & Activated Carbon Scrubber & SCR, ESP Baghouse & Activated Carbon Scrubber & SCR, ESP …places it in good position to meet anticipated regulatory requirements. Capital Spend Planned No Additional Capital Spend Planned *Activated carbon under consideration. |
 28 Source: EPA (2009), EIA (2009), and PSEG Projections PSEG Projected NOx Emission Rate for 2011 versus 2009 400 U.S. Coal Plants Conemaugh Hudson Bridgeport Mercer Keystone NOx Keystone Bridgeport Conemaugh Hudson Mercer SO 2 PSEG Projected SO Emission Rate for 2011 versus 2009 400 U.S. Coal Plants Keystone Conemaugh Bridgeport Mercer Mercury PSEG Projected HG Emission Rate for 2011 versus 2009 400 U.S. Coal Plants Hudson PSEG Power’s environmental program has resulted in dramatically lower emissions… …leaving Power’s coal fleet among the cleanest in the country. 0 2 4 6 8 10 12 14 0 10 20 30 40 50 60 0 50 100 150 200 250 28 2 |
 29 …through a balanced portfolio hedging strategy. Power’s hedging strategy combined with strong operations have supported results 2011 forwards imply continued market challenges, but entities with the right assets in the right locations are best positioned Power will continue to utilize a hedging strategy that incorporates full requirement load contracts and contracting using other products to secure pricing over a 2-3 year forward horizon BGS continues to be an important part of our hedging strategy Three year nature of BGS provides reduced volatility for customers and providers PSEG Power, as part of P3, is an active participant in market discussions challenging subsidized pricing Power’s fleet is economically optimized… |
 30 Full Requirements Component Increase in Capacity Markets/RPM Growing Renewable Energy Requirements Component for Market Risk Through Power’s participation in each of the BGS auctions… Market Perspective – BGS Auction Results … we have developed an expertise in serving full-requirements contracts. 3 Year Average Round the Clock PJM West Forward Energy Price Capacity Load shape Transmission Congestion Ancillary services Risk premium Green Note: BGS prices reflect PSE&G Zone 2003 2004 2005 2006 2007 2008 2009 2010 $55.59 $33 - $34 $36 - $37 $44 -$46 $67 - $70 $58 - $60 $68 - $71 $56 - $58 $48 - $50 ~ $21 $55.05 ~ $18 $65.41 ~ $21 $102.51 ~ $32 $98.88 ~ $41 $111.50 ~ $43 $103.72 ~ $47 $95.77 ~ $47 2011 $45 - $47 ~ $48 $94.30 |
 31 Migration and headroom are a function of market and BGS price differentials… …with impact on Power’s margin in 2010-2011 limited by warm weather. • Migration has grown steadily from 2009 – 2011 – Market prices have been below BGS prices – Retail penetration has expanded beyond C&I to include residential customers – Approximate average migration of ~10% in 2009; ~24% in 2010; and forecasted to be ~34% in 2011, assuming 37% to 39% at year-end • Power margin is a direct function of headroom • Headroom has varied by year – 2009 headroom was high, as mild weather resulted in low market prices – 2010 headroom was low, as extreme weather resulted in high market prices – 2011 headroom affected by higher market pricing – Retail providers are more likely to promote switching if headroom is seen as sustainable |
  32 Hedging Update… … our strategy is to hedge our base load generation long term. Contracted Energy* 2011 2012 2013 Aug - Dec Volume TWh 14 36 36 Base Load % Hedged 100% 75%-80% 35%-40% (Nuclear and Base Load Coal) Price $/MWh $68 $64 $63 Volume TWh 9 20 21 Intermediate Coal, Combined % Hedged 30%-35% Cycle, Peaking Price $/MWh $68 Volume TWh 23 56 57 Total % Hedged 70%-75% 45%-50% 20%-25% Price $/MWh $68 $64 $63 *Hedge percentages and prices as of July 2011 for the August 2011 and forward time frame. Revenues of full requirement load deals based on contract price, including renewable energy credits, ancillary, and transmission components but excluding capacity. Hedges include positions with MTM accounting treatment and options. |
 33 … with sites in the eastern part of PJM. Reliability Pricing Model – locational value of Power’s generating fleet recognized… With nearly 1/3 of its capacity in PS North and nearly 2/3 of its capacity in EMAAC, Power’s assets in congested locations received higher pricing. • Locational value of Power’s fleet recognized. • Bid for 89 MW of new capacity accepted for 2013/2014 auction; in-service June 2012. • On schedule to complete 178 MW of previously cleared peaking capacity by June 2012. • Latest auction influenced by updated demand forecast and transfer capabilities. $/MW-day PJM Zones 2009 / 2010 2010 / 2011 2011 / 2012 2012 / 2013 2013/2014 2014/2015 Eastern MAAC $191.32 $174.29 $110.00 $139.73 $245.00 $136.50 MAAC $191.32 $174.29 $110.00 $133.37 $226.15 $136.50 PSEG $245.00 PSEG North Zone $185.00 $245.00 $225.00 Rest of Pool $102.04 $174.29 $110.00 $16.46 $27.73 $125.99 PJM Capacity Available to Receive Auction Pricing 0 2,000 4,000 6,000 8,000 10,000 12,000 09/10 10/11 11/12 12/13 13/14 14/15 |
 PSE&G – Review and Outlook |
 35 PSE&G is the largest utility in New Jersey providing electric, gas and transmission services… …and delivering renewable and energy efficiency solutions for customers. * Actual ** Weather normalized = estimated annual growth per year over forecast period *** Energy Efficiency Annualized Savings (75% Electric/25% Gas Equivalent) Electric Gas Customers Growth (2005 – 2010) 2.2 Million 4.0% 1.8 Million 4.0% Electric Sales and Gas Sold and Transported 43,645 GWh 3,465 M Therms Historical Annual Load Growth Distribution (2006 - 2010) (0.5%)* (1.0%)* Historical Annual Peak Load Growth Transmission (2006 – 2010) (0.1%) Projected Annual Load Growth (2011 – 2013) 1.3%** 0.8%** Projected Annual Load Growth Transmission (2011 – 2013) 1.4% Sales Mix Residential 33% 61% Commercial 57% 36% Industrial 10% 3% Transmission Electric Gas Approved Rate of Return 11.68% ROE 10.3% ROE 10.3% ROE Renewables and Energy Efficiency 2009-2010 Total Program Plan Solar Loan 19 MW 81 MW Solar 4 All 28 MW 80 MW Energy Efficiency Initiative (lifetime equivalent)*** 389 GWh 604 GWh |
 36 Susquehanna-Roseland Bergen O66 … while adapting to changes in resources. Transmission Capacity Growth Transmission Capacity Reductions Susquehanna-Roseland ~1,500 MW Northeast Grid (formerly BRH alternative) ~200 MW Bergen O66 - Bergen to ConEd's West 49th Street ~(670 MW*) Lakewood V3-206 - Lakewood to New York ~550 MW Werner X1-078 - Werner to New York ~525MW Other Impacts to NJ Long-term Capacity Agreement Pilot Program (LCAPP) ~2,000 MW Exelon has entered into an agreement with the state of New Jersey to close Oyster Creek in 2019 ~(700 MW) 2010-2020 Demand growth of ~1% based on 2011 PJM Load Forecast report ~1,125 MW * Project has firm contract for 320MW Sources: Imports: PSE&G Estimates; Exports: PJM 2009 RTEP; Load Growth: PJM 2011 Load Forecast Report Arrows are general indicators and not intended to represent actual route Net impact to New Jersey is ~130MW by 2020 New Jersey’s energy future requires continued investment… |
 37 Transmission investment recovery is supported by formula rate treatment… ($ Millions) Phase In-Service Spending Up To Susquehanna-Roseland Engineering / Licensing 2014 East 2015 West $750 North East Grid Preliminary Design 2015 $880 Burlington – Camden 230kV Conversion Engineering / Licensing 2014 $381 North Central Reliability Engineering / Licensing 2014 $336 Mickleton – Gloucester - Camden Preliminary Design 2015 $435 … and CWIP in rate base* for certain projects. * CWIP in Rate Base and 1.25% ROE incentive treatment approved for the Susquehanna-Roseland project. Transmission Projects Future Projects Future Transmission project spending will be influenced by PJM evaluation, potentially adding additional projects over 2011 – 2015 and revising required in-service dates. |
 38 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 2010 2011 2012 2013 Susquehanna-Roseland * RTEP 230 kV Conversions Other RTEP 69kV Transmission Other Transmission FERC’s Transmission formula rate order grants PSE&G an 11.68% ROE and a fully-forecasted cost of service Transmission represents approximately 56% of planned investment over the 2011-2013 plan and is expected to comprise ~33% of PSE&G rate base by 2013 Supportive regulatory treatment with contemporaneous recovery is key to align earnings growth with investment Execution of the Transmission plan is critical to achieving PSE&G’s future growth. Transmission Investment by Major Category * Susquehanna-Roseland approved for 12.93% ROE. |
 39 Our 2011 – 2013 capital plan calls for investing $5.2 billion… …with contemporaneous recovery mechanisms approved for ~$3.1 billion. PSE&G Capital Expenditures E - Estimated. $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 2010 2011E 2012E 2013E NJ Infrastructure Stimulus Solar Energy Efficiency Transmission Core Investment |
 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 2010 2011 2012 2013 Gas Distribution Electric Distribution Electric Transmission Energy Master Plan 40 PSE&G’s investment program provides opportunity for ~11%* annualized growth in rate base PSE&G Projected Rate Base *Starting from 2010 Rate Base of $7.8 billion. |
 41 Success in meeting State’s energy and economic development goals… …with reasonable contemporaneous returns. ($ Millions) Approval Date Total Amount Spending Thru 6/2011 Remaining Spending Thru 2013 Solar Loan I & II April 2008/ November 2009 $248 $93 $151 Carbon Abatement December 2008 46 30 16 NJ Capital Infrastructure Stimulus I April 2009 694 701 - Solar 4 All * July 2009 465 278 187 Energy Efficiency Economic Stimulus July 2009 166 118 48 Demand Response July 2009 65 10 35 Energy Efficiency Economic Stimulus Extension July 2011 95 - 95 NJ Capital Infrastructure Stimulus II July 2011 273 - 273 Total $2,052 $1,230 $805 * Filing amount based on installation of 80MW, total forecasted spend is lower due to a lower cost per watt to install. |
 PSEG Energy Holdings - Review & Outlook |
 43 PSEG Energy Holdings has made significant reductions in size and risks International Energy: Global has disposed of all but one international asset Domestic Generation: Only 176 MW of Global’s legacy domestic generation assets remain LILO/SILO: Resources terminated all 18 LILO/SILO leases Traditional Leases: Resources continues to carefully manage the remaining traditional leases and other investments. As of June 30, PSEG had a gross equity investment at risk of $264 million in two indirect subsidiaries of Dynegy and Dynegy Holdings Inc. |
 PSEG – Financial Review and Outlook |
 45 PSEG’s long-term outlook is influenced by Power’s hedge position… 2012 2013 Each $1/mcf Change in Natural Gas Each $2/Mwh Change in Spark Spread Each $2/Mwh Change in Dark Spread Each 1% Change in Nuclear Capacity Factor Each 1% Change in Depreciation Rate $0.06 - $0.08 $0.03 $0.02 $0.01 $0.01 $0.15 - $0.20 $0.03 $0.03 $0.01 $0.01 Segment EPS Drivers Each $100 Million of Incremental Investment Each 1% Change in Sales: Electric Gas Each 1% Change in O&M Each 10 bp Change in ROE $0.01 $0.01 $0.01 $0.01 $0.01 $0.02 $0.01 $0.01 $0.01 $0.01 …and increased investment at PSE&G. |
 46 PSE&G’s capital program is directed at improving reliability… …through investment in transmission and distribution. *E: Estimate. 2011-2013E Utility Capital Spending $5.2 Billion* Renewables/EMP $0.7 B 13% Gas Utility $0.6 B 11% Electric Distribution $1.0 B 20% Transmission $2.9 B 56% |
 47 PSEG’s internally generated cash flow between 2011 – 2013 … … supports capital investment and the shareholder dividend without the need for equity issuance. * Cash from Operations adjusts for securitization principal repayments ~$0.7B. ** 2011-2012 include bonus depreciation of ~$0.9B offset by ~$0.1B in 2013. Sources Uses Power Cash from Ops Debt Issued PSE&G Investment Debt Redeemed Shareholder Dividend PSEG Consolidated 2011 – 2013 Sources and Uses PSE&G Cash from Ops* Power Investment Asset Sale Proceeds Includes: Bonus Depreciation = ~$0.8B** Pension Contribution = ~($0.5B) Other Net Cash Flow |
 48 25% 30% 35% 40% 45% 50% 2008 2009 2010 2011-2013E Average PSEG Power Funds from Operations / Total Debt Power’s credit metrics remain strong during challenging markets ... Power’s free cash flow produces strong credit measures and provides sufficient cushion for potential gas price volatility Free Cash Flow (1) ~750 ~950 ~750 Average: ~725 Dividends to Parent 500 850 550 Average: ~475 (in $Millions) … providing opportunities for growth investments. (1) Free Cash Flow represents cash from operations less cash used for investing; E:estimate. |
 49 PSEG is responding to investors’ questions Investors’ Questions PSEG Position How is PSEG affected by environmental policy changes? Commercial operation of Back -End Technology puts us in good position on potential Clean Air rules What’s the impact of commodity volatility? Multi-year hedging Asset balance dampens relative fuel price volatility Capacity markets provide stability How are you responding to State incursion into markets? Recent decision by FERC has upheld competitive market mechanisms We are also challenging the constitutionality of NJ’s actions Do you need equity? Strong cash flow enables us to execute our strategy, with room for additional investment, without the need to issue equity How is management incented to deliver value to shareholders? Management’s long -term incentives are based on a combination of return on invested capital and total shareholder return relative to peers over a multi-year period of time |
 Appendix |
 51 PJM has adequate reserves to meet near term demand… …but over the longer term, many influences will dictate sources of market sufficiency. Unforecasted influences that could increase capacity: =>Government interventions – for example LCAPP =>Load / Demand rate of change =>Demand response / Economic recovery Unforecasted influences that could decrease capacity: =>Government regulations – for example coal retirements (20-45 GW’s), HEDD =>Load / Demand rate of change =>Demand response / Economic recovery PJM Forecasted Capacity Reserves - January 2011 PJM • Reserve margins to tighten going forward due to: – Load growth – Anticipated unit retirements driven by new EPA regulations (not reflected in PJM’s forecast) EMAAC • Most of Power’s assets located in EMAAC • Anticipated retirements driven by HEDD rule • Transmission projects expected to increase net imports into EMAAC, offsetting retirements • Local legislation (NJ LCAPP) could initially increase reserve margins but would discourage long-term merchant investment 0% 10% 20% 30% 40% 2011/2012 2012/2013 2013/2014 2014/2015 2015/2016 |
 52 Power’s coal hedging reflects 2011 supply matched with 2011 sales… … while maintaining flexibility on supply post BET installation. Contracted Coal Station Coal Type Pricing ($/MWh)* Comments Bridgeport Harbor Adaro High $40’s Higher price, lower BTU, enviro coal Hudson CAPP Mid $40’s Flexibility after BET in 2010 Mercer Metallurgical NAPP/CAPP Mid $40’s More limited segment of coal market Keystone NAPP Mid $20’s To High $20’s Prices moderating Conemaugh NAPP Mid $20’s To High $20’s Prices moderating % Hedged (left scale) *Commodity plus transportation. 0% 20% 40% 60% 80% 100% 2011 2012 2013 $0 $10 $20 $30 $40 $50 $/MWh (right scale) |
 53 $0 $5 $10 2011 2012 2013 Anticipated Nuclear Fuel Cost Power has fully hedged its nuclear fuel needs through 2013… … with increased costs over that time horizon. Hedged |
 54 54 Note: Forward prices as of July 2011. Forward spark spreads indicate moderation to 2009 levels and dark spreads continue to be challenged… PJM Western Hub Dark Spread (RTC – Central Appalachian Coal x 10 Heat Rate) … and both are expected to remain highly influenced by gas prices. PJM Western Hub Spark Spread (On-Peak – Henry Hub x 7.5 Heat Rate) |
 55 PSEG 2011 Operating Earnings Guidance - by Subsidiary $ millions (except EPS) 2011E 2010A PSEG Power $ 765 – $ 855 $ 1,091 PSE&G $ 495 – $ 520 $ 430 PSEG Energy Holdings $ 0 – $ 5 $ 49 Enterprise $ 5 – $ 15 $ 14 Operating Earnings* $ 1,265 – $ 1,395 $ 1,584 Earnings per Share $ 2.50 – $ 2.75 $ 3.12 * See Page 62 for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 56 PSEG Consolidated Debt / Capitalization (1) Long-Term Debt includes Debt due within one year; excludes Securitization Debt and Non-Recourse Debt. PSEG Consolidated ($Millions) December 31, 2009 December 31, 2010 June 30, 2011 PSE&G Short-Term Debt - $ - $ 298 $ PSEG Money Pool Short-Term Debt 530 64 - Total Short-term Debt 530 64 298 Long-Term Debt (1) : Power 3,121 3,455 2,851 PSE&G 3,571 4,283 4,284 Holdings 127 - - Parent / Services (38) 10 20 Total Long-Term Debt 6,781 7,748 7,155 Preferred Stock 80 - - Total Common Stockholders' Equity 8,788 9,633 10,109 TOTAL CAPITALIZATION 16,179 $ �� 17,445 $ 17,562 $ December 31, 2009 December 31, 2010 June 30, 2011 Debt 7,311 7,812 7,453 Preferred Stock 80 - - Total Common Stockholders' Equity 8,788 9,633 10,109 Debt Plus Equity 16,179 $ 17,445 $ 17,562 $ Debt Ratio 45.2% 44.8% 42.4% |
 57 Operated by PSEG Nuclear PSEG Ownership: 100% Technology: Boiling Water Reactor Total Capacity: 1,197MW Owned Capacity: 1,197MW License Expiration: 2046 License renewal approved July 2011 Next Refueling 2012 Operated by PSEG Nuclear Ownership: PSEG – 57% Exelon – 43% Technology: Pressurized Water Reactor Total Capacity: 2,337MW Owned Capacity: 1,342MW License Expiration: 2036 and 2040 License renewal approved June 2011 Next Refueling Unit 1 – Fall 2011 Unit 2 – Fall 2012 Operated by Exelon PSEG Ownership: 50% Technology: Boiling Water Reactor Total Capacity: 2,245MW Owned Capacity: 1,122MW License Expiration: 2033 and 2034 Next Refueling Unit 2 – 2012 Unit 3 – Fall 2011 Hope Creek Salem Units 1 and 2 Peach Bottom Units 2 and 3 Our five unit nuclear fleet… … is a critical element of Power’s success. |
 58 0% 25% 50% 75% 100% 2011 2012 2013 $0 $50 $100 $150 $200 $250 0% 25% 50% 75% 100% 2011 2012 2013 $0 $10 $20 $30 $40 $50 $60 $70 $80 Power’s hedging program provides near- term stability from market volatility… … while remaining open to long-term market forces. Estimated EPS impact of $5/MWh PJM West around the clock price change* (~$1/mmbtu gas change) Contracted Capacity Price (right scale) * As of July 2011, assuming normal market commodity correlation and demand. Power has contracted for a considerable percentage of its future output over the next two years. The pricing for most of Power’s capacity has been fixed through May 2014, with the completion of auctions in PJM and NE. % sold (left scale) Contracted Energy Price (right scale) % sold (left scale) * $0.02 - $0.08 $0.14 - $0.28 $0.20 - $0.40 |
 59 Gas competed favorably with coal in 2010, with operational flexibility favoring gas… … and Power’s diverse fleet is positioned to compete under various market conditions. PJM Fleet Flexibility Base Coal Base Coal Base Coal CC/Coal CC/Coal CC PK PK PK Int Coal Int Coal Int Coal CC CC - 5,000 10,000 15,000 20,000 25,000 2008 2009 2010 Note: Forward prices as of February 2011 |
 60 PSEG Resources Leveraged Lease Portfolio Lessee Equipment 6/30/11 Invested ($millions) S&P Credit Rating* REMA (GenOn) Keystone, Conemaugh & Shawville (PA) 3 coal fired plants (1,162 equity MW) 329 B Dynegy Holdings Danskammer & Roseton Generating Station (NY) 370 MW coal fired and 1,200 MW oil/gas fired 264 CC Edison Mission Energy (EME) Powerton & Joliet Generating Stations (IL) 2 coal-fired generating facilities (1,640 equity MW) 219 B- Merrill Creek – (PECO, MetEd, Delmarva P& L) Reservoir in NJ 128 BBB, BBB-, BBB+ Grand Gulf Nuclear station in Mississippi (154 equity MW) 99 A+ Qwest/Centurylink Qwest headquarters located in Denver, CO 115 BB Renaissance Ctr. GM headquarters located in Detroit, MI 40 BB- Wal-Mart Portfolio of 17 Wal-Mart stores 29 AA E-D Centers Portfolio of 8 shopping centers 30 NR Total Leases $1,253 *Indicative recent rating reflecting either Lessee, additional equity collateral support or parent company unsecured debt rating. |
 61 Items Excluded from Income from Continuing Operations to Reconcile to Operating Earnings Please see Page 3 for an explanation of PSEG’s use of Operating Earnings as a non-GAAP financial measure and how it differs from Net Income. Pro-forma Adjustments, net of tax 2011 2010 2011 2010 Earnings Impact ($ Millions) Gain (Loss) on Nuclear Decommissioning Trust (NDT) Fund Related Activity (PSEG Power) 15 $ 10 $ 42 $ 20 $ Gain (Loss) on Mark-to-Market (MTM) (PSEG Power) 4 (37) 8 12 Market Transition Charge Refund (PSE&G) - (72) - (72) Total Pro-forma adjustments 19 $ (99) $ 50 $ (40) $ Fully Diluted Average Shares Outstanding (in Millions) 507 507 507 507 Per Share Impact (Diluted) Gain (Loss) on NDT Fund Related Activity (PSEG Power) 0.03 $ 0.02 $ 0.08 $ 0.04 $ Gain (Loss) on MTM (PSEG Power) 0.01 (0.07) 0.02 0.02 Market Transition Charge Refund (PSE&G) - (0.14) - (0.14) Total Pro-forma adjustments 0.04 $ (0.19) $ 0.10 $ (0.08) $ For the Three Months Ended For the Six Months Ended June 30, June 30, PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Reconciling Items Excluded from Continuing Operations to Compute Operating Earnings (Unaudited) |
 62 Please see Page 3 for an explanation of PSEG’s use of Operating Earnings as a non-GAAP financial measure and how it differs from Net Income. Items Excluded from Income from Continuing Operations to Reconcile to Operating Earnings Pro-forma Adjustments, net of tax 2010 2009 2008 Earnings Impact ($ Millions) Gain (Loss) on Nuclear Decommissioning Trust (NDT) Fund Related Activity (PSEG Power) 46 $ 9 $ (71) $ Gain (Loss) on Mark-to-Market (MTM) (PSEG Power) (1) (11) 14 Market Transition Charge Refund (PSE&G) (72) - - Net Reversal of Lease Transaction Reserves (Energy Holdings) - 29 - Lease Transaction Reserves (Energy Holdings) - - (490) Asset Impairments - - (13) Premium on Bond Redemption - - (1) Total Pro-forma adjustments (27) $ 27 $ (561) $ Fully Diluted Average Shares Outstanding (in Millions) 507 507 508 Per Share Impact (Diluted) Gain (Loss) on Nuclear Decommissioning Trust (NDT) Fund Related Activity (PSEG Power) 0.09 $ 0.02 $ (0.14) $ Gain (Loss) on Mark-to-Market (MTM) (PSEG Power) - (0.02) 0.03 Market Transition Charge Refund (PSE&G) (0.14) - - Net Reversal of Lease Transaction Reserves (Energy Holdings) - 0.05 - Lease Transaction Reserves (Energy Holdings) - - (0.96) Asset Impairments - - (0.03) Premium on Bond Redemption - - - Total Pro-forma adjustments (0.05) $ 0.05 $ (1.10) $ December 31, PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Reconciling Items Excluded from Continuing Operations to Compute Operating Earnings (Unaudited) For the Twelve Months Ended |