Financing Receivables

6 Months Ended

Jun. 30, 2016

Schedule of Financial Receivables [Line Items]

Financing Receivables

Financing Receivables

PSE&G

PSE&G sponsors a solar loan program designed to help finance the installation of solar power systems throughout its electric service area. The loans are generally paid back with solar renewable energy certificates generated from the installed solar electric system. A substantial portion of these amounts are noncurrent and reported in Long-Term Investments on PSEG's and PSE&G's Condensed Consolidated Balance Sheets. The following table reflects the outstanding loans by class of customer, none of which are considered “non-performing.”

Outstanding Loans by Class of Customer
	As of		As of
Consumer Loans	June 30, 2016		December 31, 2015
	Millions
Commercial/Industrial	$	174	$	177
Residential	12		12
Total	$	186	$	189

Energy Holdings

Energy Holdings, through several of its indirect subsidiary companies, has investments in domestic energy and real estate assets subject primarily to leveraged lease accounting. A leveraged lease is typically comprised of an investment by an equity investor and debt provided by a third party debt investor. The debt is recourse only to the assets subject to lease and is not included on PSEG’s Condensed Consolidated Balance Sheets. As an equity investor, Energy Holdings’ investments in the leases are comprised of the total expected lease receivables on its investments over the lease terms plus the estimated residual values at the end of the lease terms, reduced for any income not yet earned on the leases. This amount is included in Long-Term Investments on PSEG’s Condensed Consolidated Balance Sheets. The more rapid depreciation of the leased property for tax purposes creates tax cash flow that will be repaid to the taxing authority in later periods. As such, the liability for such taxes due is recorded in Deferred Income Taxes on PSEG’s Condensed Consolidated Balance Sheets. 

The following table shows Energy Holdings’ gross and net lease investment as of June 30, 2016 and December 31, 2015, respectively.

	As of			As of
	June 30, 2016			December 31, 2015
	Millions
Lease Receivables (net of Non-Recourse Debt)	$	630		$	631
Estimated Residual Value of Leased Assets	519			519
Total Investment in Rental Receivables	1,149			1,150
Unearned and Deferred Income	(359		)	(366		)
Gross Investment in Leases	790			784
Deferred Tax Liabilities	(694		)	(724		)
Net Investment in Leases	$	96		$	60

The corresponding receivables associated with the lease portfolio are reflected in the following table, net of non-recourse debt. The ratings in the table represent the ratings of the entities providing payment assurance to Energy Holdings.

	Lease Receivables, Net of Non-Recourse Debt
Counterparties’ Credit Rating Standard & Poor's (S&P) as of June 30, 2016
	As of June 30, 2016
	Millions
AA	$	16
BBB+ — BBB-	316
BB-	134
CCC	164
Total	$	630

The “BB-” and the "CCC" ratings in the preceding table represent lease receivables related to coal-fired assets in Illinois and Pennsylvania, respectively. As of June 30, 2016, the gross investment in the leases of such assets, net of non-recourse debt, was $573 million ($(5) million, net of deferred taxes). A more detailed description of such assets under lease, as of June 30, 2016, is presented in the following table.

Asset	Location	Gross Investment		% Owned		Total MW	Fuel Type	Counterparties’ S&P Credit Ratings	Counterparty
		Millions
Powerton Station Units 5 and 6	IL	$	134	64	%	1,538	Coal	BB-	NRG Energy, Inc.
Joliet Station Units 7 and 8	IL	$	84	64	%	1,044	Coal (A)	BB-	NRG Energy, Inc.
Keystone Station Units 1 and 2	PA	$	121	17	%	1,711	Coal	CCC (C)	NRG REMA, LLC
Conemaugh Station Units 1 and 2	PA	$	121	17	%	1,711	Coal	CCC (C)	NRG REMA, LLC
Shawville Station Units 1, 2, 3 and 4	PA	$	113	100	%	603	Coal (B)	CCC (C)	NRG REMA, LLC

(A) The Joliet facility is currently in the process of converting to natural gas.

(B) NRG REMA, LLC (NRG REMA) notified PJM that it deactivated the coal-fired units at the Shawville generating facility in June 2015 and has disclosed that it expects to return the Shawville units to service in the fall of 2016 with the ability to use natural gas.

(C) On May 24, 2016, S&P lowered its corporate credit rating on GenOn Energy Inc. and affiliates (including NRG REMA) to "CCC" from "CCC+" due to a weaker forward power curve, milder weather patterns and weakening financial measures. PSEG continues to monitor any changes to GenOn's status and potential impacts on Energy Holdings' lease investments.

The credit exposure for lessors is partially mitigated through various credit enhancement mechanisms within the lease transactions. These credit enhancement features vary from lease to lease and may include letters of credit or affiliate guarantees. Upon the occurrence of certain defaults, indirect subsidiary companies of Energy Holdings would exercise their rights and attempt to seek recovery of their investment, potentially including stepping into the lease directly to protect their investments. While these actions could ultimately protect or mitigate the loss of value, they could require the use of significant capital investments and trigger certain material tax obligations which could be mitigated by tax indemnification claims with the counterparty. A bankruptcy of a lessee would likely delay and potentially limit any efforts on the part of the lessors to assert their rights upon default and could delay the monetization of claims. Failure to recover adequate value could ultimately lead to a foreclosure on the assets under lease by the lenders. If foreclosures were to occur, Energy Holdings could potentially record a pre-tax write-off up to its gross investment in these facilities and may also be required to pay significant cash tax liabilities to the Internal Revenue Service.

Although all lease payments are current, no assurances can be given that future payments in accordance with the lease contracts will continue. Factors which may impact future lease cash flows include, but are not limited to, new environmental legislation and regulation regarding air quality, water and other discharges in the process of generating electricity, market prices for fuel, electricity and capacity, overall financial condition of lease counterparties and the quality and condition of assets under lease.

PSE And G [Member]

Schedule of Financial Receivables [Line Items]

Financing Receivables

Financing Receivables

PSE&G

PSE&G sponsors a solar loan program designed to help finance the installation of solar power systems throughout its electric service area. The loans are generally paid back with solar renewable energy certificates generated from the installed solar electric system. A substantial portion of these amounts are noncurrent and reported in Long-Term Investments on PSEG's and PSE&G's Condensed Consolidated Balance Sheets. The following table reflects the outstanding loans by class of customer, none of which are considered “non-performing.”

Outstanding Loans by Class of Customer
	As of		As of
Consumer Loans	June 30, 2016		December 31, 2015
	Millions
Commercial/Industrial	$	174	$	177
Residential	12		12
Total	$	186	$	189

Energy Holdings

Energy Holdings, through several of its indirect subsidiary companies, has investments in domestic energy and real estate assets subject primarily to leveraged lease accounting. A leveraged lease is typically comprised of an investment by an equity investor and debt provided by a third party debt investor. The debt is recourse only to the assets subject to lease and is not included on PSEG’s Condensed Consolidated Balance Sheets. As an equity investor, Energy Holdings’ investments in the leases are comprised of the total expected lease receivables on its investments over the lease terms plus the estimated residual values at the end of the lease terms, reduced for any income not yet earned on the leases. This amount is included in Long-Term Investments on PSEG’s Condensed Consolidated Balance Sheets. The more rapid depreciation of the leased property for tax purposes creates tax cash flow that will be repaid to the taxing authority in later periods. As such, the liability for such taxes due is recorded in Deferred Income Taxes on PSEG’s Condensed Consolidated Balance Sheets. 

The following table shows Energy Holdings’ gross and net lease investment as of June 30, 2016 and December 31, 2015, respectively.

	As of			As of
	June 30, 2016			December 31, 2015
	Millions
Lease Receivables (net of Non-Recourse Debt)	$	630		$	631
Estimated Residual Value of Leased Assets	519			519
Total Investment in Rental Receivables	1,149			1,150
Unearned and Deferred Income	(359		)	(366		)
Gross Investment in Leases	790			784
Deferred Tax Liabilities	(694		)	(724		)
Net Investment in Leases	$	96		$	60

The corresponding receivables associated with the lease portfolio are reflected in the following table, net of non-recourse debt. The ratings in the table represent the ratings of the entities providing payment assurance to Energy Holdings.

	Lease Receivables, Net of Non-Recourse Debt
Counterparties’ Credit Rating Standard & Poor's (S&P) as of June 30, 2016
	As of June 30, 2016
	Millions
AA	$	16
BBB+ — BBB-	316
BB-	134
CCC	164
Total	$	630

The “BB-” and the "CCC" ratings in the preceding table represent lease receivables related to coal-fired assets in Illinois and Pennsylvania, respectively. As of June 30, 2016, the gross investment in the leases of such assets, net of non-recourse debt, was $573 million ($(5) million, net of deferred taxes). A more detailed description of such assets under lease, as of June 30, 2016, is presented in the following table.

Asset	Location	Gross Investment		% Owned		Total MW	Fuel Type	Counterparties’ S&P Credit Ratings	Counterparty
		Millions
Powerton Station Units 5 and 6	IL	$	134	64	%	1,538	Coal	BB-	NRG Energy, Inc.
Joliet Station Units 7 and 8	IL	$	84	64	%	1,044	Coal (A)	BB-	NRG Energy, Inc.
Keystone Station Units 1 and 2	PA	$	121	17	%	1,711	Coal	CCC (C)	NRG REMA, LLC
Conemaugh Station Units 1 and 2	PA	$	121	17	%	1,711	Coal	CCC (C)	NRG REMA, LLC
Shawville Station Units 1, 2, 3 and 4	PA	$	113	100	%	603	Coal (B)	CCC (C)	NRG REMA, LLC

(A) The Joliet facility is currently in the process of converting to natural gas.

(B) NRG REMA, LLC (NRG REMA) notified PJM that it deactivated the coal-fired units at the Shawville generating facility in June 2015 and has disclosed that it expects to return the Shawville units to service in the fall of 2016 with the ability to use natural gas.

(C) On May 24, 2016, S&P lowered its corporate credit rating on GenOn Energy Inc. and affiliates (including NRG REMA) to "CCC" from "CCC+" due to a weaker forward power curve, milder weather patterns and weakening financial measures. PSEG continues to monitor any changes to GenOn's status and potential impacts on Energy Holdings' lease investments.

The credit exposure for lessors is partially mitigated through various credit enhancement mechanisms within the lease transactions. These credit enhancement features vary from lease to lease and may include letters of credit or affiliate guarantees. Upon the occurrence of certain defaults, indirect subsidiary companies of Energy Holdings would exercise their rights and attempt to seek recovery of their investment, potentially including stepping into the lease directly to protect their investments. While these actions could ultimately protect or mitigate the loss of value, they could require the use of significant capital investments and trigger certain material tax obligations which could be mitigated by tax indemnification claims with the counterparty. A bankruptcy of a lessee would likely delay and potentially limit any efforts on the part of the lessors to assert their rights upon default and could delay the monetization of claims. Failure to recover adequate value could ultimately lead to a foreclosure on the assets under lease by the lenders. If foreclosures were to occur, Energy Holdings could potentially record a pre-tax write-off up to its gross investment in these facilities and may also be required to pay significant cash tax liabilities to the Internal Revenue Service.

Although all lease payments are current, no assurances can be given that future payments in accordance with the lease contracts will continue. Factors which may impact future lease cash flows include, but are not limited to, new environmental legislation and regulation regarding air quality, water and other discharges in the process of generating electricity, market prices for fuel, electricity and capacity, overall financial condition of lease counterparties and the quality and condition of assets under lease.