PEG - Earnings call transcript Q2 2018 | Public Service Enterprise Group Incorporated

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Operator

Ladies and gentlemen, thank you for standing by. My name is Lebay and I’m your event operator today. I would like to welcome everyone to today's conference, Public Service Enterprise Group Second Quarter 2018 Earnings Conference Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded Wednesday, August 1, 2018 and will be available for telephone replay beginning at 1 O'clock P.M. Eastern Time today until 11:30 P.M. August Thursday, on Time X, XXXX. Eastern also PSEG's corporate will be available on webcast audio an website as It at www.pseg.com. I turn would the conference over to now to like Kathleen. ahead. go Please

Kathleen Lally

investor.pseg.com. in and Thank detailing earning released operating accompanying are the the XXXX. companies you you, release, morning, of for call. posted everyone results quarter IR materials Lebay. for today by Good statements website participating on slides These our second PSEG financial earnings Earlier and at thank the including attachments

for ended earnings filed and discuss period XX-Q that with to risks the forward other will are been Our XX has estimates various contain and the June we statements call SEC. release during uncertainties. and subject looking The today's matters

our which website the today's Generally posted net accordance regarding of call are turn a Public President We included Ralph release. reported in in over to forward-looking Accounting as Accepted our differ our and in and and from to United live Group. also Officer operating non-GAAP adjusted Izzo, IR would like discuss non-GAAP States. with income Service of disclaimer statements Executive in earnings earnings Chairman, Principles the on and measures I now Chief Reconciliations financial and EBITDA non-GAAP Enterprise are

the Financial time is for questions. Joining Officer. Ralph your their on Vice there Chief Executive be will call At Dan of President and Craig, remarks, the conclusion Ralph.

Ralph Izzo

us net And today. second Thank for reported of the everyone versus quarter joining PSEG per quarter you, Kathleen. share of in $X.XX thank for you the income $X.XX XXXX.

corporate the performance and quarter. period, rate the in at power. operating Non-GAAP $X.XX reflecting X% compared ago lower the second with tax PSEG year's and effective versus second continued non-GAAP share rose of $X.XX reported also strong the control PSE&G earnings quarter We operating cost at earnings for year last per

$X.XX per operating non-GAAP Solid share. share per half of the first XXXX’s increase operating A XXXX over X,X% results in bringing the first for half. quarter to earnings for earnings non-GAAP of $X.XX earned

PSE&G for first the Successfully programs. year. the one to the final of slide made earnings phase XX% and the quarter. reliability upgrade periods. or customer transmission Corridor have infrastructure milestones and larger share PSE&G objectives programs PSE&G reached executing refer XXXX. XXXkv satisfaction X and first PSE&G the driver it. Bergen-Linden achieve high the during of construction many full on time XXXX, per replacement improve the modernize of finished second increased safely over and we the on $X.X levels our and and of This BLC on meeting for and XXXX system past aging completion our $X of the to storm $X.XX over results. our months. Including, quarter summarize distribution as second billion year-to-date and its upgrade quarter of increase the line, by the The more of recently continued was New half the For aging and capital well the as will XXkv BLC PSE&G significant on scores. made growth On Jersey’s liability, gas enhance as portfolio finished project hardening, maintain At resilience quarter built was plant. electrical third and customer we project and At have complex as budget. we primary half has focus increased in distribution was good lifecycle reliability, program, we projects the up the transmission in results investments spending, strive maintain for substantial investment to the progress high in XX continuously X, infrastructure earnings of to billion,

And this we three Turning phase years. the of gas Modernization what as approximately Gas miles last its replaced Program, will first to completing is System GSMP. is XXX the PSE&G our ongoing mains refer distribution of programs. in to

end-of-life In in until We the Utilities stage test hearings will PSE&G XXth. miles you And year July, and June II public energy $X.X at base will and file billion settlement week the us PSE&G’s five storms, rate XXXX. outlined including program full ES the replace ended the of billion slide to replace filed will in were enable to proceeding scheduled early for of across additional early meetings by this or recently schedule, enable infrastructure. to continue progressing to we The our of technology state strong improve mains. advance against on in on held us The II August. program infrastructure early to year program, Public June phase, grid extension according five parties was the completed with an Jersey continue for a in next data next This the hardness with year aging cases our an BPU. incorporated $X.X work GSMP will aging components key XXX management. update request XX. of are New distribution system with investments which or the its BPU We the financial the July, will gas the the Board begin for recently a pending approved

the file coming others the BPU initial to testimony staff weeks. We expect in also their and

we the investigating to an issued of aligned a response report for this XXXX the released plan best multiple our is PSENG Among to rates their practices. many submit report recommendation, self each the have March to utility procedures response As in left BPU continually that the ensure recommendations analysis. the BPUs with BPU state its recently settlement, the are interim is The reminder, by throughout December. and days, benefit to XXX ability without industry BPU’s that last implement with the accompanying Nor’easters absence storm conducted of consistent improving cost November, protocols, in regulations power. within the reviewing with customers

making investor the focusing AMI, customers for Infrastructure, infrastructure our number outage durations on range customer planned and conference broad and or manager as savings targets bills we in event. Advance recent benefits a for on during helping customers. of management resilient Governor as Also legislation the filing remains which well near-term energy that CEF Jersey and PSE&G this energy So to outages as reducing PSE&G's A lower Metering use past purpose a green reliability, policy cost customers the look state’s of a focus energy a or major discussed law details of storm that and We bills energy. and uses. in AMI of the for renewable May, storage. our supporting enhanced energy the forward electric and implementation to better by goals of during to energy proposal usage CES significant efficiency adopts energy Murphy New battery providing plans program system of efficient Clean electric new standards affordable. New gas submit The to the Energy billion our broadly six and policy signed clean efficiency, Jersey's goals value vehicle Future use $X.X energy sets efficiency investments in filing. with this infill our energy align for year are bringing by benefit the supported

The eligible the also enabling Jersey's is Bridgeport in within could in Bridgeport we Center placed Once In service and payments the days nuclear out BPU Certificate Energy environmental signed be XXXX, fleet determining establish to supported Governor is XXX improve Harbor legislation are issued XXXX. a ZEC's to fee Harbors PSEG of two, New generating it that process including amount marketplace. allows legislation on its or generation period to be or will X if proceeding closer which reconfiguration by are from $XXX was receive New June May. removed that keys to into in ZEC of year. a would unjust to approximately Zero PJM complete for and so Emission an Power prices. BPU established new of its Murphy the price Regulatory FERK fired refining in receive starting approach expect of support X,XXX and a capacity ZEC's certification Power remain nuclear PJM into along Jersey, rule, with applicants plants other bring include resources existing new for PJMs attributes. in resources address offer selecting unreasonable market The capacity specific unit. that nuclear gas PSEG of its And resource clean alternative of selected, to by current capacity an considerations air units based to And at million need. and will estimates as warrant mid markets XXXX. suppress service, that all fuel market it seven Adding competitiveness market of quality, a powers of combined online which eligibility April revenues an to out modify out receiving allow of because efficient ultimately merchant load ZEC will Resources activities market Commission diversity, basis. the three and some will time. Federal commencement option plant establish ongoing apply on megawatts Construction capacity. one, Energy would cycle of per minimum type. that resource some receive payments, regardless that it it law

will wholesale Federal We the are that suppress for markets to proceeding in participating continue in design correct we advocating flaws and this at level policies prices.

a secure, the of well resilient obtain brings While electric value striving and diversity adequate functioning recognition grid. to fuel to that

our or equity need prospects PSE&G, the credit record $XX providing successful about customers fleet extend without of maintain and the execution for PSEG fund policy track metrics value our to for to merchant its the $XX sheet growth projected issue the and growth and that dividend the investment our strong for to sustainable initiatives reconfiguration growth. that to opportunity intend balance expect of delivering allow will with We to over continue generating our consistent and period XXXX to We shareholders. XXXX of billion capital us enable shareholders program billion and PSEG's

supportive the non-GAAP will Our year to half who Dan, financials that, With operating I earnings the our year Dan of share. greater our non-GAAP and of detail and earnings call end for at turn your full join then per the $X.XX our discuss XXXX will of questions. we for for maintaining first in for over are will full of the $X the outlook call are guidance we XXXX operating to

Daniel Cregg

for joining Thank you Ralph thanks and today. us everybody

for second quarter per $X.XX non-GAAP the operating of PSEG to quarter. reported versus $X.XX of be second As net found the earnings quarter last of A said slide the earnings share share in of XXXX non-GAAP operating six. per on for earnings non-GAAP operating reconciliation can income Ralph year,

treatment share by earnings have favorable were non-GAAP chart with per of favorable similar and the items, a quarter second operating impact a on OPEB Slide Changes depreciation accounting business, of XXXX. the offsetting quarter starting higher XX for the system of related pension in PSE&G. non-GAAP through the or second investment combined million second per with with XX. second in enhance the added of quarter a with of PSE&G recovery compared resiliency of you income $X.XX detail quarter strong income or each O&M in provides continued per a ongoing $X.XX in you provided and compared quarter. each Partially million and changes second our $X.XX I Growth results. XXXX shown the Slide XX per comparison income business net Revenue Distribution XXXX reported more earnings the Slide for also of in net second non-service to second the quarter. per improved resulted over to XXXX changes over comparisons share taxes chart savings expenses quarter net the in of XXXX. energy will a operating $XXX now of of PSE&G’s you by in successful execution drove interest second in $X.XX $X.XX margin share expenses. and modernization comparisons takes share. $X.XX share. income net to major the PSE&G’s quarter had of component on results operating the of infrastructure, that under $XXX We half net waterfall that programs for Results quarter-over-quarter expenses is transmission for share XXXX made first on investments improved by quarter $X.XX margin to to programs reflect gases per Company review control by that investment

over adjusted in Energy twice As base. transmission adjusted each trailing programs during Under On is consolidated continues sector. were the investment the million. Under are in gas data. at per schedule year II to sales gas term the a longer move were rates from are and trending $X,XX and grow of and based to growth led PSE&G's XX% rate a March year adjusted XXXX to by Energy Gas Strong by investment program. commercial $XX Residential influenced semiannual GSMP to New X.X% Company's on year Economic year and gas temperatures. income which forecast month a each generally higher provides $X end the forecast base in Strong, electric revenues for GSNP we net expected increase to be September, reminder, and XXXX at April of weather try unchanged each the approximately rate $X.X relatively January of PSE&G’s at transmission which Modernization investment supported our and X% when in the data, demand now Company's Indicators normalized Quarterly September. be reflecting a the from electric basis, System sales electric continue both sales the The adjusted is or year-end for housing to prior gains while gas positive, billion. will revenue customer to XXXX. made from Jersey rates higher, is XXXX to are employment to gas during higher rates and Program, program the XXXX combined in year in billion begin XX approximately are approximately annual year cold by were recovery flat,

stations. compared net share, compared Power and $X.XX the of for And $XXX the impact outage tax per per Power. release reflect compared EBITDA with operating for and share. million the XXXX. of [quickly of XXXX. million the interest and non-GAAP year for operating $X so in quarter quarter a $XXX of same year. England, non-GAAP in the XXXX a requirements reduced for and to income last coal quarter interest on rate and together $X.XX the loss PSEG with the decline generating let's expense market by and compared temperatures quarter $XX tax net per Now price other outage $X.XX consistent depreciation turn second comparisons earnings An and adjusted retirement, per per as $X.XX excludes sailing Non-GAAP impact Slide of of expenses Power's June $X.XX June's share, per related expectations $XX and improve $X.XX to And and (Ph) a by quarter. depreciation and Slide reported per coal-fired for lower The and second earnings of or of the related hometown million XXXX items EBITDA was for share per share to the of second incremental as impact of earnings XXXX first was Hudson re-contracting quarter improved and on of result Mercer by quarter penny and generations this on XX. average volumes results share you our to Power expense of quarter-over-quarter. corporate a income increasing Hudson for non-GAAP Lower detailed XX% prices during starting share second $X.XX unit. the higher year, quarter-over-quarter $X.XX non-GAAP provide ago with the April you our the share with PJM is amortization. its cold a the gas And also higher XX depreciation non-GAAP hedges for the our share. Mercer prices capacity have XXXX. analysis expense, and income of as for in the a and out energy which The million the quarterly results to of measure spend statistics as O&M with and megawatt half to Power's we operating added decline expense provided reflect full lower Xst second healing] lower earnings adjusted $X.XX combined New quarter per experienced the earnings on XX per operating our hedged well hour Power included for XXXX

XX and earlier XXXX, terawatt XX. slightly generation. conditions year-over-year of XX of is Power’s and XXXX our offset terawatt through XXXX forecast XX output XXXX adjusted expects terawatt has Gas of to of an improvement Now Hope and XX% to let's other average of of hours fleet is XX second plan second Creek an and and terawatt coal to for to now provided hedge representing to market current Power's update its maintenance. combined operated quarter. XX% scheduled XXXX, of operations. turn down X% and factor refueling terawatt XX.X defined reflecting to produced the demand. remain with market for fired nuclear XX% X.X PJM X.X quarter hours prices by capacity Power's output XXXX output and constant capacity down Slide demand. producing and XX.X%, of gas of XX forecast terawatt XX compared by from generation reflect lower XX quarter hours and the XX of fleet XX cycle flat XXXX, output factor XXXX. at were reflecting of Generation for expected Power's the XXXX the output at for hours in over XXXX total and by the the year-to-date at hours quarter hours operated hours an years factor hours, at during terawatt terawatt outage ago operated for volumes output an And average to lower Power period XX% outages Power's Power hours market capacity XX XX terawatt XX prices position An output on

XX forecasted at XX% an of megawatt remainder $XX of XXXX hedged of per terawatt to average of total XX to hours, has price XX% production For the Power hour.

full has an XX% XX% XXXX, had Power output, XXXX, at XX% production corporate hours, of the Power hedged in exemption July, at to XXXX. not For $XX XXXX forecasted an The megawatt effective to X.X% But laws, as surcharge of starting income impact sure per tax income on for modest change. And hour. XXXX have made year XXXX, tax on terawatt including a to average hour. hours, on temporary average imposing XX% such, X.X% price lesser will taxable XX State and X, hedged for enterprise of through PSE&G forecasted a the to of tax to the to begins a declining its XXXX this negative surcharge, $XX provides to XX% public extent be July XXXX. X of and expected year to impacted to at by the and price XX accrue terawatt be an is New and surcharge Power at megawatt Earlier a as this of and each utilities to Jersey January other of in results changes XX% for

non-GAAP full of operating Our non-GAAP and EBITDA, $XXX million forecasts Power’s million a remains to XXXX $XXX $X,XX to unchanged respectively. million $X,XXX year earnings at million adjusted and

PSEG a The quarter enterprise reported second $XX second of or a Non-GAAP turn the $X.XX for the operating to second PSEG PSEG the change quarter per offset million at million share includes were share, of pre-tax related Results interest $XX XXXX, net loss quarter quarter the Energy from no of quarter. this also challenges second Island Long in charge Rina, of other contract. $X expense reflect of XXXX similar for net XXXX. to of or parent federal a the representing higher loss per the XXXX. of Now, XXXX me and net compared ongoing quarter year charge pre-tax quarter a ago to to earnings lower million second versus million ongoing of the let loss which contributions penny $XX liquidity and for the our rate million a X tax compared by for facing of

to to operating PCEG PSE&G. to recap plan would I $XX billion, $XX earnings million. regulated the just to remains billion XXXX at unchanged XX% directed For a $XX XXXX, moment of And growth capital approximately initiatives with other our at and of non-GAAP like forecast take to XXXX enterprise spending

million in year XX% As recent and annual The PSE&G’s pending Strong $X.X to our $XX program $XX.X the growth year over growth an expected rate of into is lower XXXX. clean timeframes an period. the of at approximately per supports Clean spend approximately we full the of May, our $X.X base at billion positions to XXXX billion dollar in detailed range the spending program increase as X% of year billion end to day contained our upper presentation over in The $XXX Energy end five program. to in of million our beginning GSMP an which and program. of capital anticipated XXXX. compound the Future II billion II GSMP investor beyond Energy our approximately I five and both And million $XX average XXXX total when billion $XXX Energy approximately XXXX II The billion incorporated energy expansion That the range $X.X Strong annual extend future horizon. spending is for combined, through $X.X investment

adjusted investment to that at retaining PSEG, outlook within I well consolidated of sheet that stable. debt Power's XX% will its of a X.X PSEG providing end the the in end a of & spending And completion in CX] strong. ratio ended following XX% metrics. PSE&G’s Power quarter programs credit PSEG’s and PSEG's with times And capitalization, is it cash forecasts. (Ph) PSEG respect credit June in ratings PSE&G, XXXX construction rating to versus million to the know flow XXXX cash Poor's the the at overall of Standard debt decline of XXXX each expected Powers XXXX. May EBITDA [Keys $XX a position represented So improvement midpoint of non-GAAP at the with XX, quarter capital at flow of of spending its XXXX XXXX and capital in Power's tail both the is of balance cash closed grade EBITDA representing XXXX And solid on of capital. improve remains window. free financial beyond firm Power's

and We of XXXX continue be expect regulated flow the growth to PSEG improving to second investments. our the continues and will growth XXXX to XXXX consistent expect has capital commitment current opportunity the nearly dividend cash half fund for stand supporting annually to our years. the sustainable firm in over no over we the beginning few program timeframe that shareholders Power's providing to averaged spending new directed our equity on X% with to last

are mentioned, non-GAAP Ralph forecasts some earnings questions. for full Lebay operating our And and of share. As year we take we maintaining $X ready to to per $X.XX now are

Operator

you Dumoulin begin gentlemen, will question-and-answer question comes much. the Thank we community. line for from proceed America. Your from session so Julien question. first Instructions] Ladies of with Please the and now of the Bank [Operator Smith your financial of members

Unidentified Analyst

(Ph) actually in here. This morning. good is Julien hopping [Claire] for Hey,

Ralph Izzo

Hi, Claire.

Unidentified Analyst

Hi. here. questions for Thank my taking you

So on rate settlement negotiations. the case I appreciate update the

you Just there? can if the anymore on of you color could critical provide a and little maybe get issues more on color just some progress

Ralph Izzo

even reveal fair difficult in discussed this of the confidentiality we are point. Claire, the bunch of the parties. to issues it's costs That to parties at of we is recovery But the seem negotiations a this resolved details agreement had other publicly. to that. to of doesn't But discussion really and with terms under prior negotiation storm in other that there not

we interfering little schedule a rates the we what of on with And filing stick just at Summer engaging bit. day, dialogue, are we now and date everything think is that after always constructive. in have script nine the in of it's the January. what are and months said vacations we interim recourse to end been I

have as would much as limitations. with confidentiality we share So to I like these do you

Daniel Cregg

as a step latest will schedule the we we times. provide Yes, from update standpoint through

be August and of will are will So [indiscernible] the on submitted schedule. I to Xth things according moving be

Ralph Izzo

ask a reminder will increase rate if our we even are be to our XX% attached X% ask. give less of that rates and Just is below and net case rate XXX% we a were of where got still back

Unidentified Analyst

here transmission could Got aspect. complaints give a allocation you cost the my you how you in more BTU question this color second address the how inflation it cost see that and - confidentiality little Well, might in probably on that? and and case, is on survey appreciate

Ralph Izzo

let's of everybody that make the is understands Sure. sure Well, first right. we paid, pays not who all, get whether issue

islands, artificial [indiscernible] our York with So its the been the beneficiaries BPU as between to its get compensated and transmission of and fair as Jersey we back will forth teams. things for on per rates New some transmission are for ISO there been And PSE&G improvements, investments treatment fully has and the who have impact customers. New the obviously of fidelity advocate working a like

are happen see we want to there. in we aligned completely what So

a couple is issue and has shareholder in the the So, between perspective we gap of, I what obviously but no had there recovery from not again, And a wants. no outcomes is BPU invested. best terms been New of of what there I want is, FERC will New recently, Jersey at Jersey we what where end which started,

Unidentified Analyst

give always on to It. costs be discussions anything could color lower Got transmission there. if or one the is some there possibly more PJM of you Could at

Ralph Izzo

the PJM ARCH non is comes then ARCH, projects projects there Yes, additional stuff regional is expansion that of that two more have component. I of mean I program a by and were generated think of that out has that presented transmission local PJM types that there reliability transmission

So the are with past, those visibility the of the bigger. because the at projects ARCH a consistent supportive generate case there justification the to hasn't always that each has have make in that which we of movement been and more primarily the projects been with company other been PJM for

the make same one entities all averages But greater just getting time a and recognizing and path XX. and nine that PJM of $XX where that is right figure the upfront greater So the projects, you if upgrade. stakeholders where understand been seven figure have towards that or why different you that is the amount sure and and [indiscernible], you have of suppliers customers of million like like and project disclosure. to million a whole PJM we have the to to kind a project upfront can point that get demand returns disclosure XX don't than moving $XXX figure process. would projects of treat project at information, want load has kv eight the We XX the diminishing literally serving

Unidentified Analyst

Great, thank you.

Operator

you Thank so much.

comes your question Group. Please Citi with Praful the from Mehta, Next from proceed question. of line

Praful Mehta

guys. Hi much. so Thanks

So Ralph if view a and probably capacity like remove from the not or on the you reform impact to capacity and the to your wanted supply capacity sounds are FERC has prices. demand at total It a I proposal. market least both on going it negative positive get impact

on does your you mean they they get Just kind that to Does view secondly emission mean some of for And getting go that want for first that lost? zero like color, the that to really have that appreciated. capacity are support resources would that. state credits. get to the that So what refund

Ralph Izzo

Sure, Praful.

I optimistic this. I’m quite say being think what I So, when that of Pollyannaish about could out don’t I’m come

Its know FERC will options. an claw out don't set action we to explain all, prior of what RPM unusual of And in this. come Borrowing by calendar this. now. let back first Although level why right me let's the

next financial the three right. is situation years, For our what we know

because of prices that three question. program, year fairly will talked ZEC deterministic energy Jersey, the the no means and are We ZEC by way high have capacity prices three coincide for visibility set capacity program first and and we and not New coincidental will capacity auctions that the of those deliberately in horizons about place visibility prices phase of that it's took the

providers I three are years, the New units situation think ZEC our to from the selected I where indeed be understand are don't Jersey for So which well, pretty financial presume case. want to payments we

nuclear want that out reason what FR environmental votes of governor bill, are capacity confidence Number that state degree XX XX states they you got some whether other at their state to plants. of doing you its let's and Well, one, assembly votes plants. they the out the recognizes got and a allow pretty the good they the resources. Now said when or look about and flexibility FERC this nuclear get the support feel signed in I own take said high wanting it to and very mechanism, energy, the what choosing and this a have is for Senate of you And at in XX attributes doing. XX to that has through

details will when good to again, designed a policy be brought feels limited of serving the to suppress that (Ph) is And view, in brought complaint were ZEC's, these and out today is why the that about the which point you they it's But recovered. complaint. that The it's how the of claim who not think regulated me. the devils generation that actually to Now [REC's] was market the then from to crisis. pretty out market of by payments and capacity of market payments way

if goal I to that So what is the correct pretty our powerful units. that, about feel means for for good

isn’t other Ralph the fair goals is for work cetera, of a between months filing filing and extensively details are which in the next sorts probations feeling how amount about and rehearing, FERC is et reach good to with right for commissioners who Xth, terms is chop et the that of somewhere there, the So are who associated four cetera. goals getting has all hearing, by over January of many

price payments, resources isn't want us for that a no to you And our check to of there So think support but that support, that that allow stated check. units. other to to is check to want they for those box I units. There two, box on there number nuclear suggest for boxes powerful for if states the are But depression things market that receiving uncertainty, the is goals I eliminate out don't clearly. hold

So, third are predict Dan, to you of is know one this able to of again, right I achieve no that we the that time, in come the details that at don’t is part where want that. one point. And actively how if add now is the [indiscernible] out I that. engaged for to

Daniel Cregg

come I with load load you a aspect and think about to the it No, the how meaning going version would about about smaller other well, effect taking was that reserve properly, with market, reserves you you megawatt-for-megawatt would any are of what out an that generation, are the taking would to the just reserves. you if into absolutely have that a thing have FRR worked that a of But to generation, mean, I kind alternative the also mechanics is talk in you it the that seeing if gets of it would effect. would turn are as through only add, and service loading the extent be talking there

upon or You impact, would based no maybe impact lesser a would work. have how that mass

Ralph Izzo

not not would be have than solve to state comparable is region market the have problem needed you what if margin smaller the then to presumably XX megawatt that And XXX,XXX a reserve small here. the But if higher supply for removed so. subsets

Praful Mehta

January do answers super it helpful trough of of done the time? said, is or suggest and do kind can take to That as also get and the think your think in the here color. you this more is work time going frame you mean almost depth I you that

Ralph Izzo

would as I wasn't probably stated their don't mean ourselves FERC will take kidding but would say time, some be sort the I but how guess I as of more these long something we on if complicated Instinctively, to take history second schedule, yes, want this. about and things feature

Praful Mehta

Got you. guys. Thanks so much

Ralph Izzo

are welcome. You

Operator

much. so you comes Jonathan your of Bank. question. from line your from Arnold Please Deutsche Thank with question next And proceed the

Jonathan Arnold

have say pre-filing either morning the filling, of that held just you us Day curious go Ralph would why kind seems I guys. XX what to today CEF the in Analyst give already slides Can on, said that you A color but any you I that you and, the the ready a think held on been the is? way bit. later year, question little said it day off on it and you in near-term was to Good at

Ralph Izzo

very simple. Jonathan. Sure It’s

with of filing be things for of fiscal opportunity Governor work Jersey. June terms a policy not with that the aware in types in have passion office are just of and We New or of wonderful this, Murphy's is we and XXth for but very front got that the may want end the to here closely you year the alignment may

of impossible it’s conversations but budget XXth So June anything, arrived think statewide just until right.

So even the though state Energy is important, it doesn't step of in front budget.

front then into in we question a but be surprised from that. sync that, for I at the having and just a more back of step detail. vacation it's being just nothing of further would policy in than people much of run delayed with of if vacations. Once some administration things the us for couple get So really this you It's point. completely

Jonathan Arnold

you what saying versus What might little are bit with seems to us. imply share you involve might it a

Ralph Izzo

restoration what elements. BTU somewhat of anything affect and in if obviously submit I AMI for If have the that importance we anything, we The could amount. mean, as determined to dollar interesting, opposed comment to with are this program this on outage would effect increases the go decreasing.

Jonathan Arnold

could you to be I something ask, rather feel saying it are full sounds deployment than displacing would do is like That what that else… an [indiscernible] costs a was have would you and incremental what going

Ralph Izzo

No, wonderful It have that you just with of they number though incremental, give the Jonathan we reports. because BTU rather written not conversation starting time are I in reports. and in staff for they, here Even that them correct. Jonathan would are be rather that your one first will

Jonathan Arnold

is of the… incremental the what instead of point to But,

Ralph Izzo

would think, more be I it would incremental.

Daniel Cregg

it away other want take the to We don't side. from

Jonathan Arnold

Okay.

Ralph LaRossa

Jonathan. amount standpoint as From a dollar well,

align legislation, the steady laid that objectives have we have the that at spend about. that so about to savings within with hold that been that If savings get look EE we having talked identified need talking been we are that spend does and you fairly that out the the should has the

Jonathan Arnold

if little give the why topic output in curious and just may. the Power. if changes color just us XXXX? Than you a -- other Okay. behind could the XXXX more I I'm forecast a mentioned one you Dan

Daniel Cregg

Yes.

of a that units it’s [indiscernible] the perspective the going I now, night, some to and Jonathan a not what or are seeing through on. whether bit right is is there a from and little also little demand bit we market related whether think are running

time-to-time just, they bit XXXX, downward will indications is continue than moved XXXX we and early estimates. pressure an as little is And it. to now they eye a and step there keep we on So from remain the through more up. But that

that our just providing the are we that standpoint forecasts So output. from of

Jonathan Arnold

Okay. Thank you.

Operator

much. Gordon Evercore. you line from your question. next proceed Please And of Gregory from so your question Thank comes the with

Gregory Gordon

energy leadership continued capacity more market perspective. upon the be decision have also Hey, good upon of this got start uncertainty to the in PJM on or the low addition the was a Power pricing we as lies first model desire pricing pricing overall articulated fast address the an uncertainty remains seems pending. to XXX to There part but last the question pretty of morning. from the and markets and to but answer last are Actually in sort

- [indiscernible] for And a the seemed can they for what I of that rather momentum equation bias about it like that or the think both than seem But don't hear reestablished if So uncertainty both want to size answer me revenue on price energy? bias I reform? to have momentum and the on of Power the would does fast-start? well to me upside, for the capacity you model form would lot both but it to as a are be energy

Ralph Izzo

Yes.

are formation, something of to year. and is broader unit XXXX the as of price hearing we fast-start then So, I what filing aspects this PJM think the end a at is should implemented committed beginning chain and be inflexible of

not has delays fully there this those sense it’s that full are agree would into that you I enough is either hard that that false-starts to - with this of in Greg. So price at it's is believe point. and baked the My or curve just been both

thought unit would around it I we surprise upside and when good thing. So more that that that fast-start surprise, of least is if would not inflexible suggest units mean a I happen wholly But, I that PJM is didn't good would fast-start there thing saying was last as we yet. At are the at that if less accurate met than this is that time. lots say be a there I EEI right

ourselves that of degree moving going So but steps price boundaries, past and there full forward not price so just curve. don't think do gravitate we I on of agree. the is changing I might down up the the There where or some got have discounting this the price the within have that some full short has into the some of of to be fully we some we range would but the a answer preview, account to allow delays yes, is But curve. fully upside,

Gregory Gordon

Have day. Thank good Okay. a you Ralph.

Operator

line comes Thank from next Fleishman you so Wolfe Steve your Research. of from much. question And

line Your is now open.

Steve Fleishman

Ralph. Hi, morning. Good

a just from the you what protection done scenarios subsidize I be non-subsidize guess generation would legislative if - better for you generation. for issue it structure. the you only have kind you then get a with be Like new FERC So get try path understanding a I a a need can and current no to assume just said, the structure and would one?

Ralph Izzo

for plants. says, think we I what designate that come could to state resource of depends requirements that the energy every from XX% FREC but is it example, reason saying nuclear yes, that well believe of Governor its legislation was course now signed have Yes, been by to the right

exists. that standard. a new So legislation There brand portfolio exists real that legislation in of is terms renewable

for authority statutory would of we simply it have say approach think is couple purely based that what legislation, talking started mechanisms the supportive would XXXX whatever nuclear, here. regulation could about megawatts that BPU a the the that through additional of fully megawatts of go upon work and rather any be So the solar X,XXX we done without I not into could of headcounts. that need It already using would detail

I’m which not now, right there into out around running have details. go We

Steve Fleishman

the fact Okay. for a ZEC is the not that $XXX aspect. there on million that relevant cap was so

Ralph Izzo

the a because and right isn’t fuel Capacity, environmental for for Energy payment attributes. was not ZEC the or payment was ZEC It the diversity

So to abundantly clear in to the has in wholly Capacity payment. was New the separate load that from and is, supply is and… Energy that payment there an Jersey the legislation ZEC and That the be

Steve Fleishman

DOE where that you just figure if out stability in whole heard potential how to plan this and into curious fuel if might just, any And and am picture, this. that Okay. then trying just on updates I fit be

Ralph Izzo

days eliminated units judge to if price would that suppression solve issue has for really becoming DOE’s DOE could on that workshop technical extrapolation that about The was But concern for conclude is there yesterday could suffering while you is that meeting price resiliency that one yourself. an depression have ago, - again. not if the had already is from I that probably press. are viable think or read other have been have but any out a information a don't there there a not other at you going mistaken in what than I'm now, I two FERC, I

Steve Fleishman

an then the that? when And mentioned. going are just When update for we on AMI big program what will you on get to - be picture the date

Ralph Izzo

maybe if filing, that a longer little file couple it of weeks. the with also of year. we could data two. this So be Clean a Energy done month a could literally within If would separately, still be not it If or into that it's end the

Steve Fleishman

you. Thank Okay.

Ralph Izzo

welcome. are You

Operator

much. your Paul And question the comes Thank you so of from line next Glenrock. from Patterson

open. now is line Your

Paul Patterson

guys. Good morning

additional to answer So I I that supply question, just form correctly? specific Is sort of thoughtful seems see alternatives. mitigation if you and up me expect of it that a to follow Correct? understand I to for - understand capacity. resource measures like self that you understanding some if to that on am this And disrupt your It seems address me our essentially impact of correctly, the

Ralph Izzo

Yes, that Paul. is right

process let that, we are the about is think are that right. if is will states them own the to market your remove want So of associated FERC components, half said that. we what can you the I and do that, is resource okay talking and And consisting was then you second of load has we you assure with step the what load associated well, understand, from its that, adequately as of that. various with second we that sense well as And profitably

adequacy XXX,XXX unit lose XX% is So is it Is reserve megawatt XX.X%, you got you it's what XXXX XXXX, a market much an if out it nuclear margin I when megawatts. adequate higher, is higher, is big if market or q and because resource argue would lower, of problem. the one

then. adequacy resource So maybe

only your with I'm stuff You to margin be have needs are got, XX%, making reserve you us. up here taking

more it's agree then to nuclear an duplicate through and price set it's to that state unit, in nicely it and everyone market, to be that wants the have RPM lot We out. going that that behind took price, a a that sees going the sure way. going lot it's And for then less collect proxy, attributes, it's would leave And Well environmental make took energy just out. it painful PJM presumably the supply, to works market else it's market. So, load for. a a residual capacity

Ralph LaRossa

load is to out, shortfall resources the that sits you talks if Ralph of minimum, balance the have what upon we market. is to market a in balance are the happen that going that that to a hypothetical reserve just the with that load of rely thinking about do that that and as At and the going within is the situation respect

low very that market is out a FRR. of within was that strong balance the reserve taken for so to the benefit So an of the going

So to absent that ensure a ability that some bit is there of is free a of compensated rider kind for issue.

should is be So load come just there logically a tell that going smaller that you reserve to for of appropriate out. be the amount

Paul Patterson

hear that to to have I appreciate why don't it right novel out. be okay, co-op they we little see understand that me, right? that regional been will is has that said, that a interesting I with done mean IRM That really how doesn't they works see is I I - seems it and or hasn't mean PJMs, been the union this seem the I throughout like regulated mean, I you. assets, it footprints area, mean, I all logic specific done - but

last year? the net investment [indiscernible]. What we energy is How motive much an Just all this? after have

Ralph Izzo

[indiscernible] there is aggregate $XX million. total of an the For

those more areas. are the acute and So

that in very So results. there that remains little is

Paul Patterson

Okay.

all we So are finished think. I pretty much

Ralph Izzo

see the that the process there happens. We in we'll at there to that a a followed write There recovery date aggregate. that forward the bankruptcy mean, Ultimately, a be be could a timing down is goes later do, within scenario. some I a to what aggregate be in aspects could extent by

conservative could could you And would other down would the before there more point So be recovery. see that separated standpoint, That from the that. I out. it to accounting as is a be opposed element

Paul Patterson

much. so Okay. Great. Thanks

Ralph Izzo

Sure.

Operator

at are with continue this time, so your [Operator further there you so presentation please Cregg, closing questions Instructions] and Mr. Thank remarks. no much.

Ralph Izzo

November and once we for know you joining see on sure yes, Dan and us, the no will Thanks and everyone I’m ongoing growth, and balance we of at thank San into everyone. all service continue in terms utility with portfolio where are the shortage Right construction sheet security that the pleased that road road next Power are the of then of look for in in of Francisco I the we strength again and week, be units will surface, the mistaken so San EEI and going [indiscernible] seeing if opportunities, new with dividend Francisco. the forward in on you the the to of not to and

Operator

this conclude conference for and today. Ladies does gentlemen, call the

You disconnect and now thank participating. may you for

Public Service Enterprise (PEG) 1 Aug 182018 Q2 Earnings call transcript