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Fair Value Measurements (Tables)
 12 Months Ended
Dec. 31, 2019
Fair Value Disclosures [Abstract]  
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis
The following tables present information about PSEG’s, PSE&G’s and PSEG Power’s respective assets and (liabilities) measured at fair value on a recurring basis as of December 31, 2019 and December 31, 2018, 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 PSEG Power.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recurring Fair Value Measurements as of December 31, 2019
 
 
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)
 
$
50

 
$
—

 
$
50

 
$
—

 
$
—

 
 
Derivative Contracts:
 
 
 
 
 
 
 
 
 
 
 
 
Energy-Related Contracts (B)
 
$
137

 
$
(662
)
 
$
19

 
$
770

 
$
10

 
 
NDT Fund (C)
 
 
 
 
 
 
 
 
 
 
 
 
Equity Securities
 
$
1,151

 
$
—

 
$
1,150

 
$
1

 
$
—

 
 
Debt Securities—U.S. Treasury
 
$
225

 
$
—

 
$
—

 
$
225

 
$
—

 
 
Debt Securities—Govt Other
 
$
352

 
$
—

 
$
—

 
$
352

 
$
—

 
 
Debt Securities—Corporate
 
$
486

 
$
—

 
$
—

 
$
486

 
$
—

 
 
Rabbi Trust (C)
 
 
 
 
 
 
 
 
 
 
 
 
Equity Securities
 
$
28

 
$
—

 
$
28

 
$
—

 
$
—

 
 
Debt Securities—U.S. Treasury
 
$
57

 
$
—

 
$
—

 
$
57

 
$
—

 
 
Debt Securities—Govt Other
 
$
47

 
$
—

 
$
—

 
$
47

 
$
—

 
 
Debt Securities—Corporate
 
$
114

 
$
—

 
$
—

 
$
114

 
$
—

 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Contracts:
 
 
 
 
 
 
 
 
 
 
 
 
Energy-Related Contracts (B)
 
$
(32
)
 
$
660

 
$
(43
)
 
$
(646
)
 
$
(3
)
 
 
Interest Rate Swaps (D)
 
$
(5
)
 
$
—

 
$
—

 
$
(5
)
 
$
—

 
 
PSE&G
 
 
 
 
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
Rabbi Trust (C)
 
 
 
 
 
 
 
 
 
 
 
 
Equity Securities
 
$
5

 
$
—

 
$
5

 
$
—

 
$
—

 
 
Debt Securities—U.S. Treasury
 
$
11

 
$
—

 
$
—

 
$
11

 
$
—

 
 
Debt Securities—Govt Other
 
$
9

 
$
—

 
$
—

 
$
9

 
$
—

 
 
Debt Securities—Corporate
 
$
23

 
$
—

 
$
—

 
$
23

 
$
—

 
 
PSEG Power
 
 
 
 
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Contracts:
 
 
 
 
 
 
 
 
 
 
 
 
Energy-Related Contracts (B)
 
$
137

 
$
(662
)
 
$
19

 
$
770

 
$
10

 
 
NDT Fund (C)
 
 
 
 
 
 
 
 
 
 
 
 
Equity Securities
 
$
1,151

 
$
—

 
$
1,150

 
$
1

 
$
—

 
 
Debt Securities—U.S. Treasury
 
$
225

 
$
—

 
$
—

 
$
225

 
$
—

 
 
Debt Securities—Govt Other
 
$
352

 
$
—

 
$
—

 
$
352

 
$
—

 
 
Debt Securities—Corporate
 
$
486

 
$
—

 
$
—

 
$
486

 
$
—

 
 
Rabbi Trust (C)
 
 
 
 
 
 
 
 
 
 
 
 
Equity Securities
 
$
8

 
$
—

 
$
8

 
$
—

 
$
—

 
 
Debt Securities—U.S. Treasury
 
$
14

 
$
—

 
$
—

 
$
14

 
$
—

 
 
Debt Securities—Govt Other
 
$
12

 
$
—

 
$
—

 
$
12

 
$
—

 
 
Debt Securities—Corporate
 
$
28

 
$
—

 
$
—

 
$
28

 
$
—

 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Contracts:
 
 
 
 
 
 
 
 
 
 
 
 
Energy-Related Contracts (B)
 
$
(32
)
 
$
660

 
$
(43
)
 
$
(646
)
 
$
(3
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recurring Fair Value Measurements as of December 31, 2018
 
 
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)
 
$
100

 
$
—

 
$
100

 
$
—

 
$
—

 
 
Derivative Contracts:
 
 
 
 
 
 
 
 
 
 
 
 
Energy-Related Contracts (B)
 
$
12

 
$
(551
)
 
$
29

 
$
527

 
$
7

 
 
NDT Fund (C)
 
 
 
 
 
 
 
 
 
 
 
 
Equity Securities
 
$
900

 
$
—

 
$
898

 
$
2

 
$
—

 
 
Debt Securities—U.S. Treasury
 
$
171

 
$
—

 
$
—

 
$
171

 
$
—

 
 
Debt Securities—Govt Other
 
$
320

 
$
—

 
$
—

 
$
320

 
$
—

 
 
Debt Securities—Corporate
 
$
487

 
$
—

 
$
—

 
$
487

 
$
—

 
 
Rabbi Trust (C)
 
 
 
 
 
 
 
 
 
 
 
 
Equity Securities
 
$
23

 
$
—

 
$
23

 
$
—

 
$
—

 
 
Debt Securities—U.S. Treasury
 
$
69

 
$
—

 
$
—

 
$
69

 
$
—

 
 
Debt Securities—Govt Other
 
$
40

 
$
—

 
$
—

 
$
40

 
$
—

 
 
Debt Securities—Corporate
 
$
92

 
$
—

 
$
—

 
$
92

 
$
—

 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Contracts:
 
 
 
 
 
 
 
 
 
 
 
 
Energy-Related Contracts (B)
 
$
(15
)
 
$
704

 
$
(36
)
 
$
(677
)
 
$
(6
)
 
 
PSE&G
 
 
 
 
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
Rabbi Trust (C)
 
 
 
 
 
 
 
 
 
 
 
 
Equity Securities
 
$
5

 
$
—

 
$
5

 
$
—

 
$
—

 
 
Debt Securities—U.S. Treasury
 
$
14

 
$
—

 
$
—

 
$
14

 
$
—

 
 
Debt Securities—Govt Other
 
$
8

 
$
—

 
$
—

 
$
8

 
$
—

 
 
Debt Securities—Corporate
 
$
18

 
$
—

 
$
—

 
$
18

 
$
—

 
 
PSEG Power
 
 
 
 
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Contracts:
 
 
 
 
 
 
 
 
 
 
 
 
Energy-Related Contracts (B)
 
$
12

 
$
(551
)
 
$
29

 
$
527

 
$
7

 
 
NDT Fund (C)
 
 
 
 
 
 
 
 
 
 
 
 
Equity Securities
 
$
900

 
$
—

 
$
898

 
$
2

 
$
—

 
 
Debt Securities—U.S. Treasury
 
$
171

 
$
—

 
$
—

 
$
171

 
$
—

 
 
Debt Securities—Govt Other
 
$
320

 
$
—

 
$
—

 
$
320

 
$
—

 
 
Debt Securities—Corporate
 
$
487

 
$
—

 
$
—

 
$
487

 
$
—

 
 
Rabbi Trust (C)
 
 
 
 
 
 
 
 
 
 
 
 
Equity Securities
 
$
6

 
$
—

 
$
6

 
$
—

 
$
—

 
 
Debt Securities—U.S. Treasury
 
$
17

 
$
—

 
$
—

 
$
17

 
$
—

 
 
Debt Securities—Govt Other
 
$
10

 
$
—

 
$
—

 
$
10

 
$
—

 
 
Debt Securities—Corporate
 
$
23

 
$
—

 
$
—

 
$
23

 
$
—

 
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Contracts:
 
 
 
 
 
 
 
 
 
 
 
 
Energy-Related Contracts (B)
 
$
(15
)
 
$
704

 
$
(36
)
 
$
(677
)
 
$
(6
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 


(A)
Represents money market mutual funds.
(B)
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 similar assets and liabilities 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)
As of December 31, 2019, the fair value measurement table excludes foreign currency of $2 million in the NDT Fund. The NDT Fund maintains investments in various equity and fixed income securities. The Rabbi Trust maintains investments in a Russell 3000 index fund and various fixed income securities. 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 other equity securities in the NDT and Rabbi Trust Funds consist primarily of investments in money market funds which seek a high level of current income as is consistent with the preservation of capital and the maintenance of liquidity. To pursue its goals, the funds normally invest in diversified portfolios of high quality, short-term, dollar-denominated debt securities and government securities. The funds’ net asset value is priced and published daily. The Rabbi Trust’s Russell 3000 index fund is valued based on quoted prices in an active market and can be redeemed daily without restriction.
Level 2—NDT and Rabbi Trust fixed income securities include 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.
(D)
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.
(E)
Represents the netting of fair value balances with the same counterparty (where the right of offset exists) and the application of collateral. See Note 18. Financial Risk Management Activities for additional detail.
Schedule Of Quantitative Information About Level 3 Fair Value Measurements The following tables provide details surrounding significant Level 3 valuations as of December 31, 2019 and 2018.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quantitative Information About Level 3 Fair Value Measurements
 
 
 
 
Commodity
 
Level 3 Position
 
Fair Value as of December 31, 2019
 
Valuation
Technique(s)
 
Significant
Unobservable  Input
 
Range
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
(Liabilities)
 
 
 
 
 
 
 
 
 
 
 
 
Millions
 
 
 
 
 
 
 
 
PSEG Power
 
 
 
 
 
 
 
 
 
 
 
 
 
 
               Electricity
 
Electric Load Contracts
 
$
10

 
$
—

 
Discounted Cash flow
 
Historic Load Variability
 
0% to 10%
 
 
Gas
 
Gas Physical Contracts
 
—

 
(3
)
 
Discounted Cash flow
 
Average Historical Basis
 
-50% to 0%
 
 
Total PSEG and PSEG Power
 
$
10

 
$
(3
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quantitative Information About Level 3 Fair Value Measurements
 
 
 
 
Commodity
 
Level 3 Position
 
Fair Value as of December 31, 2018
 
Valuation
Technique(s)
 
Significant
Unobservable Input
 
Range
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
(Liabilities)
 
 
 
 
 
 
 
 
 
 
 
 
Millions
 
 
 
 
 
 
 
 
PSEG Power
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                 Electricity
 
Electric Load Contracts
 
$
2

 
$
(5
)
 
Discounted Cash flow
 
Historic Load Variability
 
0% to 15%
 
 
Gas
 
Gas Physical Contracts
 
5

 
(1
)
 
Discounted Cash flow
 
Average Historical Basis
 
-40% to 0%
 
 
Total PSEG and PSEG Power
 
$
7

 
$
(6
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 years ended December 31, 2019 and 2018, respectively, follows:
Changes in Level 3 Assets and (Liabilities) Measured at Fair Value on a Recurring Basis
for the Year Ended December 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Description
 
Balance as of December 31, 2018
 
Total Gains or (Losses)
Realized/Unrealized
Included in Income (A)
 
Purchases,
(Sales)
 
Issuances/
Settlements
(B)
 
Transfers
In/Out (C)
 
Balance as of December 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PSEG and PSEG Power
 
 
 
 
 
 
 
 
 
 
 
 
Net Derivative Assets (Liabilities)
 
$
1

 
$
14

 
$
—

 
$
(8
)
 
$
—

 
$
7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Changes in Level 3 Assets and (Liabilities) Measured at Fair Value on a Recurring Basis
for the Year Ended December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Description
 
Balance as of December 31, 2017
 
Total Gains or (Losses)
Realized/Unrealized
Included in Income (A)
 
Purchases, (Sales)
 
Issuances/ Settlements (B)
 
Transfers In/Out (C)
 
Balance as of December 31, 2018
 
 
 
 
Millions
 
 
PSEG and PSEG Power
 
 
 
 
 
 
 
 
 
 
 
 
Net Derivative Assets (Liabilities)
 
$
7

 
$
(6
)
 
$
—

 
$
—

 
$
—

 
$
1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Schedule of Change in Derivative Assets and Liabilities still Held Unrealized gains (losses) in the following table represent the change in derivative assets and liabilities still held as of December 31, 2019 and 2018.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Years Ended December 31,
 
 
 
 
2019
 
2018
 
 
 
 
Total Gains (Losses)
 
Unrealized Gains (Losses)
 
Total Gains (Losses)
 
Unrealized Gains (Losses)
 
 
 
 
Millions
 
 
PSEG and PSEG Power
 
 
 
 
 
 
 
 
 
 
Operating Revenues
 
$
23

 
$
12

 
$
(2
)
 
$
—

 
 
Energy Costs
 
(9
)
 
(6
)
 
(4
)
 
(6
)
 
 
Total
 
$
14

 
$
6

 
$
(6
)
 
$
(6
)