Rate Filings

9 Months Ended

Sep. 30, 2015

The following information discusses significant updates regarding orders and pending rate filings. This Note should be read in conjunction with Note 5. Regulatory Assets and Liabilities to the Consolidated Financial Statements in the Annual Report on Form 10-K for the year ended December 31, 2014.

In addition to items previously reported in the Annual Report on Form 10-K, significant 2015 regulatory orders received and currently pending rate filings with FERC and the BPU by PSE&G are as follows:

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Energy Strong Recovery Filing—In June 2015, PSE&G updated its Energy Strong electric and gas cost recovery petition filed in March 2015 seeking BPU approval to recover in base rates estimated annual increases in electric revenues of $6 million and gas revenues of $17 million. These increases represent a return on investment and recovery of Energy Strong capitalized investment costs placed in service from December 1, 2014 through May 31, 2015 for electric and from June 1, 2014 through May 31, 2015 for gas. In August 2015, the BPU provisionally approved PSE&G's request effective September 1, 2015.

In September 2015, PSE&G filed its Energy Strong electric cost recovery petition seeking BPU approval to recover the revenue requirements associated with Energy Strong capitalized investment costs placed in service from June 1, 2015 through November 30, 2015. The annualized requested increase in electric revenue requirements is $14 million. The petition requests rates to be effective March 1, 2016, consistent with the BPU Order of approval of the Energy Strong Program. This matter is pending.


•	Basic Gas Supply Service (BGSS)—In March 2015, PSE&G filed a letter with the BPU to extend the 28 cents per therm residential rate reduction via a bill credit for one additional month through April 30, 2015, which provided an additional approximate $31 million credit to customers.

In April 2015, the BPU issued an Order approving PSE&G’s provisional BGSS rate of 45 cents per therm which had been implemented on October 1, 2014.

In June 2015, PSE&G made its Annual BGSS Filing with the BPU requesting a reduction of $70 million in annual BGSS revenues. In September 2015, the BPU approved a Stipulation in this matter on a provisional basis and the BGSS rate was reduced from approximately 45 cents to 40 cents per therm effective October 1, 2015.


•	Weather Normalization Clause—On April 15, 2015, the BPU approved PSE&G's final filing with respect to excess revenues collected during the colder than normal 2013-2014 Winter Period (October 1, 2013 through May 31, 2014). Effective October 1, 2014, PSEG commenced returning $45 million in revenues to its customers during the 2014-2015 Winter Period (October 1, 2014 through May 31, 2015).

In September 2015, the BPU approved PSE&G's filing on a provisional basis with respect to excess revenues collected during the colder than normal 2014-2015 Winter Period. Effective October 1, 2015, PSE&G commenced returning $40 million in revenues to its customers during the 2015-2016 Winter Period (October 1, 2015 through May 31, 2016).


•	Solar and Energy Efficiency - Green Program Recovery Charges (GPRC) and Solar Pilot Recovery Charge

(SPRC)—In April 2015, the BPU approved PSE&G’s petition for an Energy Efficiency Economic Stimulus Extension II Program (EEE Ext II) to extend three EEE subprograms (multi-family, direct install and hospital efficiency). The Order allows PSE&G to extend the subprogram offerings under the same clause recovery process as its existing EEE Program and allows for $95 million of additional capital expenditures over the next three years and an allowance for $12 million of additional administrative expenses over the next 15 years. The EEE Ext II program was added as a ninth component of the GPRC rate effective May 1, 2015.

In July of each year, PSE&G files for annual recovery for its Green Program investments which include a return on its investment and recovery of expenses. In May 2015, the BPU approved PSE&G’s July 2014 filing requesting recovery of costs and investments in the first eight combined components of the electric and gas GPRC for the period October 1, 2014 through September 30, 2015. In July 2015, PSE&G filed its annual GPRC and SPRC cost recovery petitions with the BPU, requesting recovery of costs and investments for the first eight combined components of the electric and gas GPRC, as well as the electric SPRC. The filings proposed rates for the period October 1, 2015 through September 30, 2016 designed to recover approximately $66 million and $10 million in electric and gas revenues, respectively, on an annual basis associated with PSE&G's implementation of these BPU approved programs. In September 2015, the BPU approved the July 2015 filings on a provisional basis, with new rates effective October 1, 2015.

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Transmission Formula Rate Filings—In June 2015, PSE&G filed its 2014 true-up adjustment pertaining to its formula rates in effect for 2014, which resulted in an adjustment of $19 million less than the 2014 filed revenues. The adjustment was primarily due to the impact of bonus depreciation and lower interest rates which PSE&G had recognized in its Consolidated Statement of Operations for the year ended December 31, 2014.

The 2016 Annual Formula Rate Update was filed with FERC in October 2015 and provides for approximately $146 million in increased annual transmission revenues effective January 1, 2016.


•	Remediation Adjustment Charge (RAC)—In August 2015, the BPU approved PSE&G's filing with respect to its RAC 22 petition allowing recovery of $85 million effective September 1, 2015 related to net Manufactured Gas Plant expenditures from August 1, 2013 through July 31, 2014.


•	Universal Service Fund (USF)/Lifeline—In September 2015, the BPU approved rates set to recover costs incurred under the USF/Lifeline energy assistance programs effective October 1, 2015. PSE&G earns no margin on the collection of the USF and Lifeline programs resulting in no impact on Net Income.

PSE And G [Member]

Regulatory Assets [Line Items]

Rate Filings

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•	Basic Gas Supply Service (BGSS)—In March 2015, PSE&G filed a letter with the BPU to extend the 28 cents per therm residential rate reduction via a bill credit for one additional month through April 30, 2015, which provided an additional approximate $31 million credit to customers.

In April 2015, the BPU issued an Order approving PSE&G’s provisional BGSS rate of 45 cents per therm which had been implemented on October 1, 2014.


•	Weather Normalization Clause—On April 15, 2015, the BPU approved PSE&G's final filing with respect to excess revenues collected during the colder than normal 2013-2014 Winter Period (October 1, 2013 through May 31, 2014). Effective October 1, 2014, PSEG commenced returning $45 million in revenues to its customers during the 2014-2015 Winter Period (October 1, 2014 through May 31, 2015).


•	Solar and Energy Efficiency - Green Program Recovery Charges (GPRC) and Solar Pilot Recovery Charge

•

The 2016 Annual Formula Rate Update was filed with FERC in October 2015 and provides for approximately $146 million in increased annual transmission revenues effective January 1, 2016.


•	Remediation Adjustment Charge (RAC)—In August 2015, the BPU approved PSE&G's filing with respect to its RAC 22 petition allowing recovery of $85 million effective September 1, 2015 related to net Manufactured Gas Plant expenditures from August 1, 2013 through July 31, 2014.


•	Universal Service Fund (USF)/Lifeline—In September 2015, the BPU approved rates set to recover costs incurred under the USF/Lifeline energy assistance programs effective October 1, 2015. PSE&G earns no margin on the collection of the USF and Lifeline programs resulting in no impact on Net Income.