 PSEG Public Service Enterprise Group 2012 EEI Financial Conference November 11-14, 2012 EXHIBIT 99 |
 2 Forward-Looking Statement Readers are cautioned that statements contained in this presentation about our 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 “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 the demand for or price of the capacity and energy that we sell into wholesale electricity markets, • adverse changes in energy industry law, policies and regulation, including market structures and a potential shift away from competitive markets toward subsidized market mechanisms, 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 our operations, • changes in nuclear regulation and/or general developments in the nuclear power industry, including various impacts from any accidents or incidents experienced at our facilities or by others in the industry, that could limit operations of our nuclear generating units, • actions or activities at one of our nuclear units located on a multi-unit site that might adversely affect our ability to continue to operate that unit or other units located at the same site, • any inability to balance our energy obligations, available supply and trading risks, • any deterioration in our credit quality, or the credit quality of our counterparties, including in our leveraged leases, • availability of capital and credit at commercially reasonable terms and conditions and our ability to meet cash needs, • changes in the cost of, or interruption in the supply of, fuel and other commodities necessary to the operation of our generating units, • delays in receipt of necessary permits and approvals for our construction and development activities, • delays or unforeseen cost escalations in our construction and development activities, • any inability to achieve or continue to sustain, our expected levels of operating performance, • increase in competition in energy supply markets as well as competition for certain rate-based transmission projects, • any inability to realize anticipated tax benefits or retain tax credits, • challenges associated with recruitment and/or retention of a qualified workforce, • adverse performance of our decommissioning and defined benefit plan trust fund investments and changes in 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 generally accepted accounting principles 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 page in this presentation (Page A) includes 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 – The Business of PSEG |
 5 Growing an operationally excellent, integrated generation, transmission and distribution business Renewable Investments PSE&G positioned to meet NJ’s energy policy and economic growth objectives with a $5.4 billion investment program through 2014 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 Assets $17.5B Operating Earnings $521M Assets $11.1B Operating Earnings $845M Assets $1.2B Operating Earnings $23M Assets and operating earnings are for the year ended 12/31/2011. Energy Holdings includes Parent. * See page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 6 What you’ll hear from us today… PSEG is an operationally excellent, integrated generation, transmission and distribution business PSE&G, our regulated electric and gas distribution company, is positioned to grow at double digit rates PSEG Power operates a portfolio of competitive generation assets with flexible fuel and dispatch mix Management team has a track record of execution - Hurricane Sandy restoration efforts Strong financial position with 105-year track record of paying an annual dividend |
 7 PSEG’s response to Hurricane Sandy continues with round the clock restoration efforts PSEG experienced the worst storm in its 107-year history when Hurricane Sandy brought storm surges, heavy rain, and damaging wind that resulted in 1.7 million customers losing power. One week later, PSE&G had restored power to 90% of its customers. |
 PSEG - Hurricane Sandy Update 8 In late October 2012, PSEG’s system was hit by Hurricane Sandy’s high winds, heavy rainfall and related storm surge -- which caused severe damage to the transmission and distribution system throughout our service territory as well as to some of our generation infrastructure in the northern part of New Jersey. At the peak of the outages, approximately 1.7 million of our customers were without power due to the storm, the most in PSE&G’s history -- surpassing both Tropical Storm Irene and the October 2011 snowstorm. With the assistance of mutual aid crews from other utilities, our associates worked to minimize the length of time our customers were without electric or gas service. PSEG Power has resumed operation at some generating stations affected by the storm, with restoration efforts continuing at others. PSE&G filed a petition with the BPU seeking authorization to defer on our books actually incurred, uninsured, incremental storm restoration costs associated with our gas and electric distribution systems. Transmission related storm costs to be reviewed as part of the existing Formula Rate process at the FERC. PSE&G and Power are unable to estimate the possible loss or range of loss related to Hurricane Sandy; however, such costs could be material. We maintain property insurance for both nuclear and non-nuclear property. We intend to seek recovery from our insurers for any property damage above our self-insured retentions; however, no assurances can be given relative to the timing or amount of such recovery. |
 9 We are executing well on our 2012 objectives • Major regulatory approvals received for transmission build out • Proposed up to $883 million solar energy investment • Improved to 2 nd place (from 10 ) on the 2012 J.D. Power Electric Utility Residential Customer Satisfaction Study-East Region • Improved availability of gas-fired CCGT fleet and strong nuclear performance • O&M under control • 400 MW of new peaking generation for summer 2012 • Continued de-risking of legacy portfolio • IRS settlement on LILO/SILO tax matters • IRS audit resolution • 25 MW Solar project in Arizona • 15 MW Solar project in Delaware th |
 Solid Financial Results $ millions (except EPS) 2012 2011 Operating Earnings $ 1,029 $ 1,152 Reconciling Items, Net of Tax 22 (105) Income from Continuing Operations $ 1,051 $ 1,047 Discontinued Operations - 96 Net Income $ 1,051 $ 1,143 EPS from Operating Earnings* $ 2.03 $ 2.27 Nine months ended September 30 * See Page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. 10 |
 11 PSEG – Maintaining 2012 Operating Earnings Guidance * See Page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 12 A relentless focus on growth investments to offset the earnings impact of a decline in energy prices Holdings Growth $0.1B 1% Maintenance $1.3B 20% Power Growth $0.7B 10% PSE&G Growth $4.4B 66% Environmental $0.2B 3% PSEG 2012-2014E Capital Spending* $6.7 Billion by Subsidiary PSEG 2012-2014E Capital Spending* $6.7 Billion Growth / Environmental / Maintenance E = Estimate; Capital excludes IDC and AFUDC. *This forecast does not reflect the impact of new proposals recently filed with the NJBPU. PSE&G $5.4B 80% Holdings $0.1B 1.5% Parent SC $0.1B 1.5% Power $1.1B 17% |
 13 PSE&G’s investment program provides opportunity for a minimum of 13% annualized growth in rate base from 2011* PSE&G Projected Rate Base *Starting from 2011 year-end Rate Base of $8.1 billion. This forecast does not reflect the impact of new proposals recently filed with the NJBPU. 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 2009A 2010A 2011A 2012 2013 2014 Gas Distribution Electric Distribution Transmission Solar/Energy Efficiency |
 Power’s asset diversity enables fleet optimization in response to changing market dynamics 18% 44% 8% Fuel Diversity Coal Gas Oil Nuclear Pumped Storage 1% Energy Produced* Total GWh: 53,980 56% 15% Pumped Storage & Oil <1% Nuclear Coal Gas Total MW: 13,060 28% 9% * 2011 • Well suited to serve load shaped products • Market knowledge and experience to maximize the value of our assets • Multiple emission controls installed Intermediate Energy Market Served Total MW: 13,060 28% 23% 34% 43% Baseload Peaking • Low-cost portfolio • Fuel flexibility • Regional focus in competitive, liquid markets • Assets favorably located near customers/load centers 14 |
 15 A focus on operational excellence and a capital program that provides the opportunity for double digit operating earnings growth at PSE&G* PSEG Focus ($ millions, except as noted) 2011 2014E • O&M Growth per year • PSE&G Rate Base Transmission E&G Distribution EMP • EFORd Rate - CCGT • Nuclear Generation • Holdings Solar Assets • LIPA • 2.8% (forecast) • $11,600 • $4,600 • $6,400 • $630 • 1.1% • 30.3TWh • $240 • $10-$15 *Refers to earnings growth opportunity from approved investment programs at PSE&G, excluding recently filed solar over 2011-2014. • 0.4% (actual) • $8,100 • $1,600 • $6,000 • $450 • 1.1% • 30.0TWh • $120 • $0 2008 • 2.4% (planned) • $6,800 • $866 • $5,900 • $0 • 1.6% • 29.3TWh • $0 • $0 |
 16 Hedging Update… Contracted Energy* * Hedge percentages and prices as of September 28, 2012. Revenues of full requirement load deals based on contract price, including renewable energy credits, ancillary, and transmission components but excluding capacity. Hedges include positions with MTM accounting treatment and options. Volume TWh 9 35 35 Base Load % Hedged 100% 90-95% 50-55% (Nuclear and Base Load Coal) Price $/MWh $54 $51 $49 Volume TWh 4 18 18 Intermediate Coal, Combined % Hedged 35-40% 0% 0% Cycle, Peaking Price $/MWh $54 $51 $49 Volume TWh 13 52-54 53-55 Total % Hedged 80-85% 60-65% 30-35% Price $/MWh $54 $51 $49 Oct -Dec 2012 2013 2014 |
 17 Hedging strategy designed to maximize value in dynamic market • Power is well positioned with base-load output substantially hedged in 2013, with intermediate and peaking capability open to the market • Hedge price data reflects expectations for an increase in customer migration away from the Basic Generation Service (BGS) contract. For 2013-2014, BGS is expected to ultimately represent ~10-12 TWh of annual hedges. BGS prices reflected in our hedges represent a full-requirements price, less capacity value • BGS continues to represent an attractive means of hedging output by allowing us to capture forward prices, monetize basis, and follow load effectively, given the location of Power’s assets in eastern PJM • Hedging activity continues to reflect consistent, forward sales of base load energy, with fine tuning of hedges focused on optimizing company profitability |
 PSEG’s strong balance sheet provides the opportunity to invest in solar, gas infrastructure, and energy efficiency with room to consider incremental investments 2012-2014E PSEG Sources & Uses Sources Uses Power Cash from Ops PSE&G Cash from Ops (1) Debt Redeemed PSE&G Capital Investment Power Capital Investment Shareholder Dividend Debt Issuances Holdings & Other Net Cash Flow Cash (1) PSE&G Cash from Operations adjusts for securitization principal repayments of ~$680 Million in 2012-2014. E=Estimate. 18 |
 30% 35% 40% 45% 50% 55% 2012E 2013E 2014E 30% 35% 40% 45% 50% 55% 2012E 2013E 2014E PSEG Power Funds from Operations / Total Debt PSEG Debt as Percent of Capital • Credit metrics remain above our floor levels, notwithstanding near-term power market expectations • PSEG maintains its capital structure throughout the forecast period A solid financial strategy – balance sheet strength to direct investments to the areas of greatest growth and value potential 19 |
 20 Modest and sustainable dividend growth consistent with stable regulated growth and cash generation outlook at Power PSEG Annual Dividend Rate $1.08 $1.08 $1.10 $1.12 $1.14 $1.17 $1.29 $1.33 $1.37 $1.37 $1.42 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Payout Ratio 111% 62% 70% 63% 66% 43% 44% 43% 44% 50% 60%* 5-year Rate of Growth 3.95% 10-year Rate of Growth 2.78% *Based on mid-point of 2012 operating earnings guidance. |
 21 PSEG Value Proposition Operating Excellence Regulatory/ Market Drivers Financial Strength Disciplined Investment PSEG is positioned to withstand the current weak power market by investing in PSE&G projects providing reasonable, risk adjusted returns; improving the operating capability of our generating fleet; and maintaining a strong balance sheet to internally finance growth and improve shareholder value |
 The Business of PSE&G |
 23 PSE&G is the largest electric and gas distribution and transmission utility company in New Jersey providing renewable and energy efficiency solutions * Weather normalized - estimated annual growth per year over forecast period. ** Specific projects approved for incentive rate treatment with additional ROE. *** Energy Efficiency Annualized Savings (includes conversion of gas savings). Transmission Electric Gas Approved Rate of Return 11.68% ROE** 10.3% ROE 10.3% ROE Renewables and Energy Efficiency 2009-2011 Total Program Plan Solar Loan 38 MW 81 MW Solar 4 All 59 MW 80 MW Energy Efficiency Initiative (annualized equivalent)*** 282 GWh 402 GWh Electric Gas Customers Growth (2007–2011) 2.2 Million 0.7% 1.8 Million 0.7% Electric Sales and Gas Sold and Transported 42,506 GWh 3,527 M Therms Projected Annual Load Growth (2012–2014) 0.8%* 0.1%* Historical Annual Peak Load Growth Transmission (2007–2011) 1.7% Projected Annual Load Growth Transmission (2012–2014) 1.4% Sales Mix Residential 33% 60% Commercial 57% 36% Industrial 10% 4% |
 24 Approved ROE Inclusion of CWIP in Rate Base 100% Recovery of Costs Due to Abandonment Total Estimated Project Costs ($ millions) Susquehanna-Roseland 12.93% $790 Northeast Grid Reliability 11.93% $895 North Central Reliability 11.68% $390 Burlington – Camden 230kV 11.68% $381 Mickleton – Gloucester 230kV 11.68% $435 Major Transmission Projects PSE&G’s investment in transmission is underway and is expected to grow to represent 40% of rate base |
 25 PSE&G is replacing aging distribution infrastructure to improve reliability at a reasonable return 0 250 500 750 1,000 2009 2010 2011 2012E 2013E 2014E Distribution Capital Infrastructure Programs Distribution New Business Distribution Base • Capital Infrastructure Program II was approved in 2011 with spending through 2012 • Recent incidents in the gas industry have led to enhanced focus on safety of natural gas pipeline systems • Utility storm response in NJ is under review by the Board of Public Utilities Capital Expenditures |
 26 Providing solutions to New Jersey’s energy and economic development goals 0 100 200 300 400 2009 2010 2011 2012E 2013E 2014E Energy Efficiency Renewables ($ Millions) Approval Date Forecast Amount Spending Thru 9/30/12 Remaining Spending Renewables Solar Loan I & II April 2008/ November 2009 $249 $192 $57 Solar 4 All July 2009 443 422 21 Energy Efficiency Carbon Abatement December 2008 45 44 1 Energy Efficiency Economic Stimulus July 2009 162 152 10 Demand Response July 2009 45 26 19 Energy Efficiency Economic Stimulus Extension July 2011 95 4 91 Total $1,039 $840 $199 Capital Expenditures* *This forecast does not reflect the impact of new proposals recently filed with the NJBPU. |
 27 PSEG is working with the state to advance energy policy, build infrastructure, and develop jobs … helping to make Governor Christie’s vision a reality Photo: PSEG Hackensack, NJ Solar Farm Groundbreaking – July 31, 2012 |
 PSE&G has filed proposals to increase its investment in solar energy which – if approved as filed – would result in a commitment of $1.5 billion ($ in Millions) Investment as of 9/30/12 Forecast Existing Programs New Proposals* Total Solar Loan I & II $192 $249 $193 $442 Solar 4 All $422 $443 $690 $1,133 Total $614 $692 $883 $1,575 + = *On July 31, 2012, PSE&G filed with the NJBPU to invest up to $883 million in additional solar energy projects over the next three to five years. 28 |
 Evaluating the potential of over $1 billion of increased investment in energy efficiency and gas infrastructure which would drive growth in PSE&G rate base to 14% CAGR* Potential Investment ($ millions) Per Year Potential Gas Infrastructure $250-$300 Energy Efficiency $90-$95 Total Potential Investment (Per Year) $340-$395 Million *compound annual growth rate over 2011-2014 29 |
   30 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 2010 2014E Typical Annual Bill Combined Electric and Gas Residential Customer Additional investments by PSE&G will stimulate the NJ economy by creating jobs, while improving reliability to customers Supply Supply Delivery and Clauses Delivery and Clauses Impact of Transmission investment Impact of Renewable and Distribution investment Lower commodity costs are expected to fully offset the impact to customer bills 1 2014 estimated supply cost is based on BGS rates effective 9/2012 and BGSS rates effective 10/2012. 2 Includes projected Solar Loan III and Solar 4 All Extension impacts in 2014 based on July 31, 2012 filing. E = Estimate. 1 2 |
 The Business of PSEG Power |
 32 $0 $1 $2 $3 $4 $5 $6 PPL RECO METED PECO JCPL PEPCO AECO DPL PSEG BGE $40 $42 $44 $46 $48 $50 WESTERN HUB PPL RECO METED PECO JCPL PEPCO AECO DPL PSEG BGE A well positioned fleet to respond to market conditions and opportunities Note: Reflects prices of original PJM load zones. • PSEG Power 2011 basis ~$5/MWh RTC • While 5 year average has declined, volatile periods help to maintain pricing • Premium pricing also seen in capacity markets 2011 RTC LMPs 2011 Basis to PJM West RTC Current plant locations ? New Haven Bridgeport Bethlehem Energy Center (Albany) Conemaugh Keystone Peach Bottom Bergen Kearny Essex Sewaren Edison Linden Mercer Burlington National Park Hudson Hope Creek Salem Yards Creek PSEG North PSEG Zone Eastern MAAC RPM Zones |
 33 PJM assets are well positioned along the dispatch curve and maintain fuel optionality while also reducing the risk of serving full requirements contracts Energy Revenue Capacity Revenue Ancillary Revenue Dual Fuel 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 Mercer 1, 2** Bergen 2 Sewaren 6 Mercer 3 Linden 5-8 / Essex 9 Burlington 12 / Kearny 12-13-14 Peach Bottom Yards Creek National Park Salem 3 Bergen 3 * Some units have been announced for future retirements. ** Hudson and Mercer units can also run on natural gas. |
 34 Conclusion of major environmental spend places Power in good position to meet MATS Current Regulations and Compliance Measures Description Hudson (NJ) Mercer (NJ) Keystone (PA) Bridgeport (CT) Conemaugh (PA) Status NO x SCR SCR SCR Low NO x Burners SCR 2014 Power is well positioned for MATS 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 Capital Spend Planned No Additional Capital Spend Planned *Use of trona (HCI) under evaluation. MATS = mercury and air toxics |
 35 An active gas management strategy providing economic value to customers and our fleet • Large portfolio of gas transportation & storage assets • Manage gas supply needs of PSE&G and PSEG Power • Responsible for over 400 bcf of gas supply in 2011 • 126 bcf consumed by Power’s gas fired assets in 2011; NJ units used 11% of total PJM gas • Well positioned to access Marcellus supplies; nearly 40% of pipeline capacity is adjacent to the region • Residential rates decreased eight times since January, 2009; total savings $614, or 35% |
 36 $0 $25 $50 $75 $100 2008 2009 2010 2011 Dark Spread Spark Spread PSEG Zone LMP's Maximizing the dispatch of our coal and gas fleet to maintain unit margins $/MWh • Market prices have declined since 2008 • Although dark spreads have declined, spark spreads have increased • Since 2008 there has been active coal/gas switching in our fleet • Coal generation and margin percentage have been replaced by our combined cycle output 50% 45% 47% 41% 50% 55% 53% 59% 0% 25% 50% 75% 100% 2008 2009 2010 2011 Coal Gas 72% 34% 36% 30% 28% 66% 64% 70% 0% 25% 50% 75% 100% 2008 2009 2010 2011 Coal Gas % PSEG’s PJM Coal/Gas Generation % PSEG’s PJM Coal/Gas Energy Margin |
 Actively managing our fleet in a volatile commodity market, with an asset profile that provides diverse opportunities for value creation 37 • Steep natural gas decline has had a major impact on US power prices and Dark Spreads • Coal prices have weakened somewhat both domestically and internationally in the last few months • Overall decline in Dark Spread has led to reduced coal-fired generation in the last 15 months • Power’s investments in dual-fuel capability at Hudson and Mercer coal units have made them more attractive than many other coal units in this environment, and we have switched, increasingly, to gas generation as economics dictate * As of November 8, 2012 2014 Forward Prices & Dark Spread* 2013 Forward Prices & Dark Spread* |
 38 • Low power prices are not a good environment for any merchant generator, although Power is more of a hybrid with long-term contracting through BGS sales as well as forward hedging • Forward markets signal continued strength in Spark Spreads and Heat Rates • Strong spark spreads in the Northeast have benefitted our gas-fired fleet • Power is well positioned with hedged nuclear output and efficient combined cycle margin contribution * As of November 8, 2012. Henry Hub Gas Forwards* 2013 and 2014 RTC Forward Prices & Spark Spread* Managing our fleet to capitalize on volatility |
 39 Note: PJM totals do not include ATSI and DEOK regions; announced retirement totals inclusive of retirements from 1/1/2010. The EPA is in the process of implementing Clean Air Act rules which will impact supply Region Total Capacity (GW) Total Coal Capacity (GW) Unscrubbed Capacity (GW) Announced Coal Retirements (GW) Announced Coal Retirements (as % of total) PJM 180 79 30 14 8% NY ISO 37 2.6 0.6 0.8 2% ISO-NE 32 2.8 2.1 0.4 1% U.S. Total 1,036 320 129 43 4% Mercury and Air Toxics Standards (MATS) • Final rule released December 2011 • Will require coal and oil-fired units to meet strict emissions limits, or retire • Effective early 2015; provides case-by-case extensions where needed to comply Cross State Air Pollution Rule (CSAPR) • Entire rule vacated by the DC Circuit Court of Appeals on August 21, 2012 • CAIR will continue to be enforced until a replacement rule is implemented • EPA requested an en banc rehearing on October 5, 2012 Source: MJB&A Tracking, Ventyx Velocity, EPA NEEDS v4.10, PJM, NYISO, ISO-NE. As of 4/27/2012. |
 40 $/MW-day 2011 / 2012 2012 / 2013 2013 / 2014 2014 / 2015 2015 / 2016 Power’s Average Prices $110 $153 $244 $162 $167 Rest of Pool Prices $110 $16 $28 $126 $136 PSEG Power Cleared Approximately 9,000 MW • No New PSEG Power Generation Cleared the Auction • Preserving Optionality of HEDD Sites 2015/2016 RPM Auction Influenced By: • Updated Demand Curve • Updated Transfer Capabilities • Environmental Retirements • New Build • Below MOPR Bids The Reliability Pricing Model has recognized the locational value of Power’s generating fleet with sites in the eastern part of PJM PJM Cleared Approximately 4,900 MW of New Generation |
 MOPR Reform – Comparison of Features 41 Design Feature Existing MOPR Proposed MOPR Resource Type All new generating resources (except nuclear, coal, IGCC, hydro, wind, solar, have zero minimum price threshold). All new gas-fired resources (CC, CT, IGCC) over 20 MW (except for landfill gas and eligible cogeneration) Locations Any LDA for which separate VRR curve is established Entire PJM market region Default MOPR Lower of 90% NET CONE for the asset type (70% where there is no applicable asset type CONE ) or unit specific minimum offer floor determined by the IMM and PJM 100% of NET CONE for asset type Exemption Unit specific alternative minimum offer established through detailed review of project cost/revenue Specific exemptions for the following categories subject to specific criteria: • Self supply (traditional business models building or contracting for the capacity needs of their customers and consistent with specific criteria) • Competitive entry Duration of Mitigation Until new resource clears in one RPM auction Non-exempt units must clear in RPM auctions for 3 separate delivery years, or must clear in 1 RPM auction in certain situations where reliability could be detrimentally affected Source: www.pjm.com ; Minimum Offer Price Rule Education Session Materials – October 4, 2012 |
 42 Full Requirements Component Capacity Markets/RPM Growing Renewable Energy Requirements Component for Market Risk Power’s participation in the BGS auctions provides opportunity to realize the locational value of assets Market Perspective – BGS Auction Results 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. 2005 2006 2007 2008 2009 2010 2011 2012 $44 - $46 $67 - $70 $58 - $60 $68 - $71 $56 - $58 $48 - $50 $65.41 ~ $21 $102.51 ~ $32 $98.88 ~ $41 $111.50 ~ $43 $103.72 ~ $47 $95.77 ~ $47 $45 - $47 ~ $48 $94.30 ~ $46 $37 - $38 $83.88 |
 43 Operated by PSEG Nuclear PSEG Ownership: 100% Technology: Boiling Water Reactor Total Capacity: 1,173 MW Owned Capacity: 1,173 MW License Expiration: 2046 License renewal approved July 2011 Next Refueling Fall 2013 Operated by PSEG Nuclear PSEG Ownership: 57%, Exelon – 43% Technology: Pressurized Water Reactor Total Capacity: 2,326 MW Owned Capacity: 1,336 MW License Expiration: 2036 and 2040 License renewal approved June 2011 Next Refueling Unit 1 -- Spring 2013 Unit 2 – Spring 2014 Operated by Exelon PSEG Ownership: 50% Technology: Boiling Water Reactor Total Capacity: 2,247 MW Owned Capacity: 1,123 MW License Expiration: 2033 and 2034 Next Refueling Unit 2 – Fall 2014 Unit 3 – Fall 2013 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 |
 The Business of PSEG Holdings |
 45 Holdings has significantly reduced its portfolio and will continue to monetize legacy assets Solar Investments Regulated Energy Leases & Other Merchant Energy Leases LILO/SILO Leases International Investments Holdings Investment Portfolio $4.9B $1.2B Merchant Energy Leases Regulated Energy Leases & Other Texas Texas Transfer & Sale ~$600M LILO/SILO Lease Terminations ~$1.2B International & Other Global Asset Sales ~$2.1B 2006 2011 Note: 2006 and 2011 data reflect book values of assets. Transactions reflect market values for asset dispositions or, in the case of Dynegy, book value reserve taken in 2011. B=Billion. |
 46 LIPA, a New York State agency, owns T&D and generation assets (formerly LILCO) – 1.1 million electric customers – Public / private business model: • T&D owned by LIPA • Privately operated – Sound T&D operations, but ongoing rate concerns, challenged storm restoration efforts, low customer satisfaction ratings December 2011 – PSEG and partner Lockheed Martin selected to manage T&D system – 10-year LIPA Management Services agreement fully approved – Transition period: 2012 – 2013 – Contract operating period: 2014 - 2023 – Economic terms: • Fixed fee escalating at regional CPI • Up to 15% incentive fee for certain performance metrics LIPA: Finding opportunities to extend and profit from our operational excellence |
 47 PSEG Resources Leveraged Lease Portfolio Lessee Equipment 9/30/12 Invested (millions) S&P Credit Rating* REMA (GenOn) Keystone, Conemaugh & Shawville (PA) 3 coal fired plants (1,162 equity MW) $337 B- Edison Mission Energy (EME) Powerton & Joliet Generating Stations (IL) 2 coal fired generating facilities (1,640 equity MW) 218 CCC Merrill Creek – (PECO, MetEd, Delmarva P&L) Reservoir in NJ 133 BBB, BBB-, BBB+ Grand Gulf Nuclear station in Mississippi (154 equity MW) 66 A+ Renaissance Ctr. Office towers located in Detroit, MI leased to GM 41 BB+ Wal-Mart Portfolio of 6 Wal-Mart stores 12 AA E-D Centers Portfolio of 8 shopping centers 22 NR Total Leases $829 *Indicative recent rating as of 10/15/2012 reflecting either Lessee, additional equity collateral support or parent company unsecured debt rating. |
 PSEG Financial Review |
 49 PSEG 2012 Operating Earnings Guidance - By Subsidiary $ millions (except EPS) 2012E 2011 PSEG Power $575 – $665 $845 PSE&G $530 – $560 $521 PSEG Energy Holdings/Parent $35 – $45 $23 Operating Earnings* $1,140 – $1,270 $1,389 Earnings per Share $2.25 – $2.50 $2.74 * See page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings. |
 50 Guidance $1.31 $1.13 PSEG’s 2012 earnings guidance of $2.25 to $2.50 reflects continued improvement at PSE&G and a decline in margins at Power $0.00 $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 2011 Operating Earnings* 2012E Earnings Guidance* PSE&G Earnings Per Share 2012 Assumptions PSE&G Growth in investments that provide contemporaneous returns Transmission Distribution economic stimulus programs Programs supporting NJ’s Energy Master Plan Power Impacted by lower energy prices Near term effects minimized by hedges in place ~400MW new Peaking capacity in-service mid 2012 Energy Holdings / Parent Operating earnings guidance of $0.07 to $0.09 $0.00 $0.50 $1.00 $1.50 $2.00 2011 Operating Earnings* 2012E Earnings Guidance* Power Earnings Per Share Guidance $1.10 $1.05 *See page A for Items excluded from Income from Continuing Operations to reconcile to Operating Earnings; 2011 reflects Texas in Discontinued Operations. E = Estimate |
 51 2013 2014 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 3% Change in Depreciation Rate 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 $0.01 $0.01 $0.01 $0.01 $0.01 $0.11 - $0.14 $0.04 $0.01 $0.01 $0.01 $0.01 - $0.03 $0.04 $0.01 $0.01 $0.01 Note: EPS impacts assume normal market commodity correlation and demand. Update as of September 28, 2012. PSEG’s long-term outlook is influenced by increased investment at PSE&G and Power’s hedge position |
 PSEG’s strong financial position supports our program to invest in growth Credit Ratings (Moody’s/S&P/Fitch) Debt as a % of Capitalization Enterprise/Parent* Baa2/BBB/BBB+ 41% PSEG Power Baa1/BBB/BBB+ 33% Public Service E&G** A1/ A- /A+ 48% PSEG Credit Metrics PSEG cash position at September 30 was in excess of $780 million Power and Parent available liquidity totaled approximately $4.1 billion Moody’s upgraded PSE&G’s secured debt rating to A1 with a Stable outlook and affirmed ratings of PSEG (Baa2) and Power (Baa1) with Stable outlooks Standard & Poor’s has a positive outlook on all of PSEG’s credit ratings Fitch upgraded PSE&G’s secured debt rating to A+ with a Stable outlook and affirmed ratings of PSEG (BBB+) and Power (BBB+) with Stable outlooks * Corporate credit rating for S&P. **Senior secured rating for PSE&G. All data is as of September 30, 2012. 52 |
 53 Power and Parent available liquidity totaled approximately $4.1 billion at September 30, 2012 Company Facility Date Facility Usage Liquidity ($Millions) PSE&G 5-year Credit Facility Apr-16 $600 $1 $599 5-Year Credit Facility (Power) Mar-17 $1,600 $119 $1,481 5-Year Credit Facility (Power) Apr-16 $1,000 $0 $1,000 5-Year Bilateral (Power) Sep-15 $100 $100 $0 5-year Credit Facility (PSEG) Mar-17 $500 $4 $496 5-year Credit Facility (PSEG) Apr-16 $500 $0 $500 Total $4,300 $224 $4,076 $662 PSE&G ST Investment $48 Total Liquidity Available $4,786 Total Parent / Power Liquidity $4,139 PSEG / Power PSEG Money Pool ST Investment |
 54 PSEG Consolidated Debt / Capitalization (1) Includes long-term debt due within one year and short-term debt; excludes Securitization Debt and Non-Recourse Debt. Debt 7,812 7,060 7,479 Common Shareholders Equity 9,633 10,270 10,806 Debt plus Equity 17,445 17,330 18,285 Debt Ratio 44.8% 40.7% 40.9% |
 Items Excluded from Income from Continuing Operations to Reconcile to Operating Earnings Please see Page 3 for an explanation of PSEG’s use of Operating Earnings as a non-GAAP financial measure and how it differs from Net Income. A (Unaudited) 2012 2011 2012 2011 Earnings Impact ($ Millions) Gain (Loss) on Nuclear Decommissioning Trust (NDT) Fund Related Activity (PSEG Power) 40 $ 7 $ 49 $ 49 $ 50 $ 46 $ Gain (Loss) on Mark-to-Market (MTM) (a) (PSEG Power) (76) 8 (34) 16 107 (1) Dynegy Related Activity (PSEG Energy Holdings) 1 (170) 7 (170) - - Market Transition Charge Refund (PSE&G) - - - - - (72) Gain on Sale of Qwest Building (Energy Holdings) - - - - 34 - Lease Transaction Loss (Energy Holdings) - - - - (173) - Total Pro-forma adjustments (35) $ (155) $ 22 $ (105) $ 18 $ (27) $ Fully Diluted Average Shares Outstanding (in Millions) 507 507 507 507 507 507 Per Share Impact (Diluted) Gain (Loss) on NDT Fund Related Activity (PSEG Power) 0.08 $ 0.01 $ 0.10 $ 0.10 $ 0.10 $ 0.09 $ Gain (Loss) on MTM (a) (PSEG Power) (0.15) 0.02 (0.07) 0.03 0.21 - Dynegy Related Activity (PSEG Energy Holdings) - (0.34) 0.01 (0.34) - - Market Transition Charge Refund (PSE&G) - - - - - (0.14) Gain on Sale of Qwest Building (Energy Holdings) - - - - 0.06 - Lease Transaction Loss (Energy Holdings) - - - - (0.34) - Total Pro-forma adjustments (0.07) $ (0.31) $ 0.04 $ (0.21) $ 0.03 $ (0.05) $ (a) Includes the financial impact from positions with forward delivery months. PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED For the Three Months Ended For the Nine Months Ended December 31, Pro-forma Adjustments, net of tax 2011 2010 September 30, For the Twelve Months Ended September 30, Reconciling Items Excluded from Continuing Operations to Compute Operating Earnings |