Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2017

Fair Value Disclosures [Abstract]

PSEG's, Power's And PSE&G's Respective Assets And (Liabilities) Measured At Fair Value On A Recurring Basis

The following tables present information about PSEG’s, PSE&G’s and Power’s respective assets and (liabilities) measured at fair value on a recurring basis as of September 30, 2017 and December 31, 2016, including the fair value measurements and the levels of inputs used in determining those fair values. Amounts shown for PSEG include the amounts shown for PSE&G and Power.

	Recurring Fair Value Measurements as of September 30, 2017
Description	Total			Netting  (E)			Quoted Market Prices for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	Millions
PSEG
Assets:
Cash Equivalents (A)	$	220		$	—		$	220		$	—		$	—
Derivative Contracts:
Energy-Related Contracts (B)	$	146		$	(384	)	$	11		$	513		$	6
NDT Fund (D)
Equity Securities	$	1,032		$	—		$	1,030		$	2		$	—
Debt Securities—U.S. Treasury	$	249		$	—		$	—		$	249		$	—
Debt Securities—Govt Other	$	318		$	—		$	—		$	318		$	—
Debt Securities—Corporate	$	358		$	—		$	—		$	358		$	—
Other Securities	$	55		$	—		$	55		$	—		$	—
Rabbi Trust (D)
Equity Securities—Mutual Funds	$	23		$	—		$	23		$	—		$	—
Debt Securities—U.S. Treasury	$	51		$	—		$	—		$	51		$	—
Debt Securities—Govt Other	$	33		$	—		$	—		$	33		$	—
Debt Securities—Corporate	$	120		$	—		$	—		$	120		$	—
Other Securities	$	2		$	—		$	2		$	—		$	—
Liabilities:
Derivative Contracts:
Energy-Related Contracts (B)	$	(8	)	$	370		$	(6	)	$	(372	)	$	—
PSE&G
Assets:
Cash Equivalents (A)	$	220		$	—		$	220		$	—		$	—
Rabbi Trust (D)
Equity Securities—Mutual Funds	$	5		$	—		$	5		$	—		$	—
Debt Securities—U.S. Treasury	$	10		$	—		$	—		$	10		$	—
Debt Securities—Govt Other	$	7		$	—		$	—		$	7		$	—
Debt Securities—Corporate	$	24		$	—		$	—		$	24		$	—
Other Securities	$	—		$	—		$	—		$	—		$	—
Power
Assets:
Derivative Contracts:
Energy-Related Contracts (B)	$	146		$	(384	)	$	11		$	513		$	6
NDT Fund (D)
Equity Securities	$	1,032		$	—		$	1,030		$	2		$	—
Debt Securities—U.S. Treasury	$	249		$	—		$	—		$	249		$	—
Debt Securities—Govt Other	$	318		$	—		$	—		$	318		$	—
Debt Securities—Corporate	$	358		$	—		$	—		$	358		$	—
Other Securities	$	55		$	—		$	55		$	—		$	—
Rabbi Trust (D)
Equity Securities—Mutual Funds	$	6		$	—		$	6		$	—		$	—
Debt Securities—U.S. Treasury	$	13		$	—		$	—		$	13		$	—
Debt Securities—Govt Other	$	8		$	—		$	—		$	8		$	—
Debt Securities—Corporate	$	30		$	—		$	—		$	30		$	—
Other Securities	$	—		$	—		$	—		$	—		$	—
Liabilities:
Derivative Contracts:
Energy-Related Contracts (B)	$	(8	)	$	370		$	(6	)	$	(372	)	$	—

	Recurring Fair Value Measurements as of December 31, 2016
Description	Total			Netting  (E)			Quoted Market Prices for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
	Millions
PSEG
Assets:
Cash Equivalents (A)	$	365		$	—		$	365		$	—		$	—
Derivative Contracts:
Energy-Related Contracts (B)	$	186		$	(371	)	$	17		$	533		$	7
Interest Rate Swaps (C)	$	1		$	—		$	—		$	1		$	—
NDT Fund (D)
Equity Securities	$	957		$	—		$	954		$	3		$	—
Debt Securities—U.S. Treasury	$	227		$	—		$	—		$	227		$	—
Debt Securities—Govt Other	$	293		$	—		$	—		$	293		$	—
Debt Securities—Corporate	$	337		$	—		$	—		$	337		$	—
Other Securities	$	44		$	—		$	44		$	—		$	—
Rabbi Trust (D)
Equity Securities—Mutual Funds	$	22		$	—		$	22		$	—		$	—
Debt Securities—U.S. Treasury	$	37		$	—		$	—		$	37		$	—
Debt Securities—Govt Other	$	66		$	—		$	—		$	66		$	—
Debt Securities—Corporate	$	91		$	—		$	—		$	91		$	—
Other Securities	$	1		$	—		$	1		$	—		$	—
Liabilities:
Derivative Contracts:
Energy-Related Contracts (B)	$	(16	)	$	372		$	(18	)	$	(364	)	$	(6	)
PSE&G
Assets:
Cash Equivalents (A)	$	365		$	—		$	365		$	—		$	—
Derivative Contracts:
Energy Related Contracts (B)	$	—		$	—		$	—		$	—		$	—
Rabbi Trust (D)
Equity Securities—Mutual Funds	$	5		$	—		$	5		$	—		$	—
Debt Securities—U.S. Treasury	$	7		$	—		$	—		$	7		$	—
Debt Securities—Govt Other	$	13		$	—		$	—		$	13		$	—
Debt Securities—Corporate	$	18		$	—		$	—		$	18		$	—
Other Securities	$	—		$	—		$	—		$	—		$	—
Liabilities:
Derivative Contracts:
Energy-Related Contracts (B)	$	(5	)	$	—		$	—		$	—		$	(5	)
Power
Assets:
Derivative Contracts:
Energy-Related Contracts (B)	$	186		$	(371	)	$	17		$	533		$	7
NDT Fund (D)
Equity Securities	$	957		$	—		$	954		$	3		$	—
Debt Securities—U.S. Treasury	$	227		$	—		$	—		$	227		$	—
Debt Securities—Govt Other	$	293		$	—		$	—		$	293		$	—
Debt Securities—Corporate	$	337		$	—		$	—		$	337		$	—
Other Securities	$	44		$	—		$	44		$	—		$	—
Rabbi Trust (D)
Equity Securities—Mutual Funds	$	5		$	—		$	5		$	—		$	—
Debt Securities—U.S. Treasury	$	9		$	—		$	—		$	9		$	—
Debt Securities—Govt Other	$	16		$	—		$	—		$	16		$	—
Debt Securities—Corporate	$	23		$	—		$	—		$	23		$	—
Other Securities	$	—		$	—		$	—		$	—		$	—
Liabilities:
Derivative Contracts:
Energy-Related Contracts (B)	$	(11	)	$	372		$	(18	)	$	(364	)	$	(1	)

(A) Represents money market mutual funds.

(B) Level 1— During 2016 a net fair value of $1 million relating to energy-related contracts was transferred from Level 2 into Level 1. These contracts represent natural gas futures contracts executed on NYMEX, and are being valued solely on settled pricing inputs which come directly from the exchange.

Level 2—Fair values for energy-related contracts are obtained primarily using a market-based approach. Most derivative contracts (forward purchase or sale contracts and swaps) are valued using settled prices from an exchange, such as NYMEX, ICE and Nodal Exchange, or auction prices. Prices used in the valuation process are also corroborated independently by management to determine that values are based on actual transaction data or, in the absence of transactions, bid and offers for the day. Examples may include certain exchange and non-exchange traded capacity and electricity contracts and natural gas physical or swap contracts based on market prices, basis adjustments and other premiums where adjustments and premiums are not considered significant to the overall inputs.

Level 3—Unobservable inputs are used for the valuation of certain contracts. See “Additional Information Regarding Level 3 Measurements” below for more information on the utilization of unobservable inputs.

(C) Interest rate swaps are valued using quoted prices on commonly quoted intervals, which are interpolated for periods different than the quoted intervals, as inputs to a market valuation model. Market inputs can generally be verified and model selection does not involve significant management judgment.

(D) The fair value measurement tables exclude an immaterial amount of cash as of September 30, 2017 and $1 million as of December 31, 2016, which is part of the NDT Fund. The NDT Fund maintains investments in various equity and fixed income securities classified as “available for sale.” The Rabbi Trust maintains investments in a Russell 3000 index fund and various fixed income securities classified as “available for sale” as of September 30, 2017. The Rabbi Trust maintained investments in a S&P 500 index fund and various securities classified as “available for sale” as of December 31, 2016. These securities are generally valued with prices that are either exchange provided (equity securities) or market transactions for comparable securities and/or broker quotes (fixed income securities).

Level 1—Investments in marketable equity securities within the NDT Fund are primarily investments in common stocks across a broad range of industries and sectors. Most equity securities are priced utilizing the principal market close price or, in some cases, midpoint, bid or ask price. Certain open-ended mutual funds with mainly short-term investments are valued based on unadjusted quoted prices in active markets. The Rabbi Trust equity index fund is valued based on quoted prices in an active market.

Level 2—NDT and Rabbi Trust fixed income securities include primarily investment grade corporate bonds, collateralized mortgage obligations, asset backed securities and certain government and U.S. Treasury obligations or Federal Agency asset-backed securities and municipal bonds with a wide range of maturities. Since many fixed income securities do not trade on a daily basis, they are priced using an evaluated pricing methodology that varies by asset class and reflects observable market information such as the most recent exchange price or quoted bid for similar securities. Market-based standard inputs typically include benchmark yields, reported trades, broker/dealer quotes and issuer spreads. The preferred stocks are not actively traded on a daily basis and therefore, are also priced using an evaluated pricing methodology. Certain short-term investments are valued using observable market prices or market parameters such as time-to-maturity, coupon rate, quality rating and current yield.

(E) Represents the netting of fair value balances with the same counterparty (where the right of offset exists) and the application of collateral. All cash collateral received or posted that has been allocated to derivative positions, where the right of offset exists, has been offset in the Condensed Consolidated Balance Sheets. As of September 30, 2017, net cash collateral (received) paid of $(14) million was netted against the corresponding net derivative contract positions. The $(14) million of cash collateral as of September 30, 2017 was netted against assets. As of December 31, 2016, net cash collateral (received) paid of $1 million was netted against the corresponding net derivative contract positions. Of the $1 million of cash collateral as of December 31, 2016, $(3) million was netted against assets, and $4 million was netted against liabilities.

Schedule of Quantitative Information About Level 3 Fair Value Measurements

The following tables provide details surrounding significant Level 3 valuations as of September 30, 2017 and December 31, 2016.

	Quantitative Information About Level 3 Fair Value Measurements
							Significant
		Fair Value as of				Valuation	Unobservable
Commodity	Level 3 Position	September 30, 2017				Technique(s)	Input	Range
		Assets		(Liabilities)
		Millions
Power
Electricity	Electric Load Contracts	$	5	$	—	Discounted Cash flow	Historic Load Variability	0% to +10%
Gas	Other	1		—
Total Power		$	6	$	—
Total PSEG		$	6	$	—

	Quantitative Information About Level 3 Fair Value Measurements
								Significant
		Fair Value as of					Valuation	Unobservable
Commodity	Level 3 Position	December 31, 2016					Technique(s)	Input	Range
		Assets		(Liabilities)
		Millions
PSE&G
Gas	Natural Gas Supply Contract	$	—	$	(5	)	Discounted Cash Flow	Transportation Costs	$0.60 to $0.80/Dth
Total PSE&G		$	—	$	(5	)
Power
Electricity	Electric Load Contracts	$	7	$	(1	)	Discounted Cash Flow	Historic Load Variability	0% to +10%
Gas (A)	Other	—		—
Total Power		$	7	$	(1	)
Total PSEG		$	7	$	(6	)

(A) Includes gas positions which were immaterial.

Significant unobservable inputs listed above would have a direct impact on the fair values of the above Level 3 instruments if they were adjusted. For energy-related contracts in cases where Power is a seller, an increase in the load variability would decrease the fair value.

Changes In Level 3 Assets And (Liabilities) Measured At Fair Value On A Recurring Basis

A reconciliation of the beginning and ending balances of Level 3 derivative contracts and securities for the three months ended September 30, 2017 and September 30, 2016, respectively, follows:

Changes in Level 3 Assets and (Liabilities) Measured at Fair Value on a Recurring Basis for the Three Months and Nine Months Ended September 30, 2017

	Three Months Ended September 30, 2017
				Total Gains or (Losses) Realized/Unrealized
Description	Balance as of July 1, 2017			Included in Income (A)		Included in Regulatory Assets/ Liabilities (B)		Purchases (Sales)		Issuances/ Settlements (C)			Transfers In/Out (D)			Balance as of September 30, 2017
	Millions
PSEG
Net Derivative Assets (Liabilities)	$	6		$	3	$	—	$	—	$	(3	)	$	—		$	6
PSE&G
Net Derivative Assets (Liabilities)	$	—		$	—	$	—	$	—	$	—		$	—		$	—
Power
Net Derivative Assets (Liabilities)	$	6		$	3	$	—	$	—	$	(3	)	$	—		$	6
	Nine Months Ended September 30, 2017
				Total Gains or (Losses) Realized/Unrealized
Description	Balance as of January 1, 2017			Included in Income (A)		Included in Regulatory Assets/ Liabilities (B)		Purchases (Sales)		Issuances/ Settlements (C)			Transfers In/Out (D)			Balance as of September 30, 2017
	Millions
PSEG
Net Derivative Assets (Liabilities)	$	1		$	29	$	5	$	—	$	(28	)	$	(1	)	$	6
PSE&G
Net Derivative Assets (Liabilities)	$	(5	)	$	—	$	5	$	—	$	—		$	—		$	—
Power
Net Derivative Assets (Liabilities)	$	6		$	29	$	—	$	—	$	(28	)	$	(1	)	$	6

Changes in Level 3 Assets and (Liabilities) Measured at Fair Value on a Recurring Basis

for the Three MonthsandNine Months EndedSeptember 30, 2016

	Three Months Ended September 30, 2016
				Total Gains or (Losses) Realized/Unrealized
Description	Balance as of July 1, 2016			Included in Income (E)		Included in Regulatory Assets/ Liabilities (B)			Purchases (Sales)		Issuances/ Settlements (C)			Transfers In/Out (D)		Balance as of September 30, 2016
	Millions
PSEG
Net Derivative Assets (Liabilities)	$	5		$	8	$	(2	)	$	4	$	(4	)	$	—	$	11
PSE&G
Net Derivative Assets (Liabilities)	$	(2	)	$	—	$	(2	)	$	—	$	—		$	—	$	(4	)
Power
Net Derivative Assets (Liabilities)	$	7		$	8	$	—		$	4	$	(4	)	$	—	$	15
	Nine Months Ended September 30, 2016
				Total Gains or (Losses) Realized/Unrealized
Description	Balance as of January 1, 2016			Included in Income (E)		Included in Regulatory Assets/ Liabilities (B)			Purchases (Sales)		Issuances/ Settlements (C)			Transfers In/Out (D)		Balance as of September 30, 2016
PSEG
Net Derivative Assets (Liabilities)	$	13		$	24	$	(6	)	$	4	$	(24	)	$	—	$	11
PSE&G
Net Derivative Assets (Liabilities)	$	2		$	—	$	(6	)	$	—	$	—		$	—	$	(4	)
Power
Net Derivative Assets (Liabilities)	$	11		$	24	$	—		$	4	$	(24	)	$	—	$	15

(A) PSEG’s and Power’s gains and losses attributable to changes in net derivative assets and liabilities include $3 million and $29 million in Operating Income for the three months and nine months ended September 30, 2017, respectively. The $3 million in Operating Income is realized. Of the $29 million in Operating Income, $1 million is unrealized.

(B) Mainly includes gains/losses on PSE&G’s derivative contracts that are not included in either earnings or Accumulated Other Comprehensive Income, as they are deferred as a Regulatory Asset/Liability and are expected to be recovered from/returned to PSE&G’s customers.

(C) Represents $(3) million and $(28) million in settlements for the three months and nine months ended September 30, 2017, respectively. Represents $(4) million and $(24) million in settlements for the three months and nine months ended September 30, 2016, respectively.

(D) During the three months ended September 30, 2017 there were no transfers in to or out of Level 3. During the nine months ended September 30, 2017, $(1) million of net derivatives assets/liabilities were transferred from Level 2 to Level 3. There were no transfers in to or out of Level 3 during three months and nine months ended September 30, 2016.

(E) PSEG’s and Power’s gains and losses attributable to changes in net derivative assets and liabilities include $8 million and $24 million in Operating Income for the three months and nine months ended September 30, 2016, respectively. Of the $8 million in Operating Income, $4 million is unrealized. The $24 million in Operating Income is realized.

Schedule of Fair Value of Debt

The estimated fair values were determined using the market quotations or values of instruments with similar terms, credit ratings, remaining maturities and redemptions as of September 30, 2017 and December 31, 2016.

	As of				As of
	September 30, 2017				December 31, 2016
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	Millions
Long-Term Debt:
PSEG (Parent) (A) (B)	$	1,896	$	1,891	$	1,195	$	1,185
PSE&G (B)	8,243		8,857		7,818		8,240
Power - Recourse Debt (B)	2,385		2,657		2,382		2,578
Total Long-Term Debt	$	12,524	$	13,405	$	11,395	$	12,003

(A) As of September 30, 2017, fair value includes a $700 million floating rate term loan in addition to the $500 million floating rate term loan and net offsets as of December 31, 2016. The fair values of the term loan debt (Level 2 measurement) approximate the carrying values because the interest payments are based on LIBOR rates that are reset monthly and the debt is redeemable at face value by PSEG at any time.

(B) Given that these bonds do not trade actively, the fair value amounts of taxable debt securities (primarily Level 2 measurements) are generally determined by a valuation model that is based on a conventional discounted cash flow methodology and utilizes assumptions of current market pricing curves. In order to incorporate the credit risk into the discount rates, pricing is obtained (i.e. U.S. Treasury rate plus credit spread) based on expected new issue pricing across each of the companies’ respective debt maturity spectrum. The credit spreads of various tenors obtained from this information are added to the appropriate benchmark U.S. Treasury rates in order to determine the current market yields for the various tenors. The yields are then converted into discount rates of various tenors that are used for discounting the respective cash flows of the same tenor for each bond or note.