-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TJO+PAU5aUfMrBVxHTSJvmm1sFZApB2jAyF9KNkVWdboPQ3w2JhDzZBD/L4sOhTS HclP5+8pm/T6FfaEHCaGFA== 0000950117-04-003643.txt : 20041022 0000950117-04-003643.hdr.sgml : 20041022 20041022164150 ACCESSION NUMBER: 0000950117-04-003643 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20041018 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041022 DATE AS OF CHANGE: 20041022 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PUBLIC SERVICE ELECTRIC & GAS CO CENTRAL INDEX KEY: 0000081033 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 221212800 STATE OF INCORPORATION: NJ FISCAL YEAR END: 0717 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-00973 FILM NUMBER: 041092245 BUSINESS ADDRESS: STREET 1: CORPORATE ACCOUNTING SERVICES STREET 2: 80 PARK PLAZA, 9TH FLOOR CITY: NEWARK STATE: NJ ZIP: 07102-4194 BUSINESS PHONE: 973-430-7000 MAIL ADDRESS: STREET 1: CORPORATE ACCOUTNING SERVICES STREET 2: 80 PARK PLAZA, 9TH FLOOR CITY: NEWARK STATE: NJ ZIP: 07102-4194 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PUBLIC SERVICE ENTERPRISE GROUP INC CENTRAL INDEX KEY: 0000788784 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 222625848 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09120 FILM NUMBER: 041092242 BUSINESS ADDRESS: STREET 1: CORPORATE ACCOUNTING SERVICES STREET 2: 80 PARK PLAZA, 9TH FLOOR CITY: NEWARK STATE: NJ ZIP: 07102-4194 BUSINESS PHONE: 973-430-7000 MAIL ADDRESS: STREET 1: CORPORATE ACCOUNTING SERVICES STREET 2: 80 PARK PLAZA, 9TH FLOOR CITY: NEWARK STATE: NJ ZIP: 07102-4194 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PSEG ENERGY HOLDINGS LLC CENTRAL INDEX KEY: 0001089206 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 222983750 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-32503 FILM NUMBER: 041092244 BUSINESS ADDRESS: STREET 1: 80 PARK PLAZA STREET 2: 22ND FLOOR CITY: NEWARK STATE: NJ ZIP: 07102-4194 BUSINESS PHONE: 973-456-3581 MAIL ADDRESS: STREET 1: 80 PARK PLAZA STREET 2: 22ND FLOOR CITY: NEWARK STATE: NJ ZIP: 07102-4194 FORMER COMPANY: FORMER CONFORMED NAME: PSEG ENERGY HOLDINGS INC DATE OF NAME CHANGE: 19990621 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PSEG POWER LLC CENTRAL INDEX KEY: 0001158659 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 223663480 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-49614 FILM NUMBER: 041092243 BUSINESS ADDRESS: STREET 1: 80 PARK PLAZA T-6 STREET 2: ` CITY: NEWARK STATE: NJ ZIP: 07111 BUSINESS PHONE: 9734307000 MAIL ADDRESS: STREET 1: 80 PARK PLAZA T-6 CITY: NEWARK STATE: NJ ZIP: 07111 8-K 1 a38571.txt PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) October 18, 2004 PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED (Exact name of registrant as specified in its charter) New Jersey 001-09120 22-2625848 ---------- --------- ---------- (State or other (Commission File Number) (I.R.S. Employer jurisdiction of incorporation) Identification No.) 80 Park Plaza, P.O. Box 1171 Newark, New Jersey 07101-1171 ----------------------------- (Address of principal executive offices) (Zip Code) 973-430-7000 (Registrant's telephone number, including area code) http://www.pseg.com ------------------- PSEG POWER LLC (Exact name of registrant as specified in its charter) Delaware 000-49614 22-3663480 -------- --------- ---------- (State or other (Commission File Number) (I.R.S. Employer jurisdiction of incorporation) Identification No.) 80 Park Plaza, T-25 Newark, New Jersey 07102-4194 ----------------------------- (Address of principal executive offices) (Zip Code) 973-430-7000 (Registrant's telephone number, including area code) http://www.pseg.com ------------------- PUBLIC SERVICE ELECTRIC AND GAS COMPANY (Exact name of registrant as specified in its charter) New Jersey 001-00973 22-1212800 ---------- --------- ---------- (State or other (Commission File Number) (I.R.S. Employer jurisdiction of incorporation) Identification No.) 80 Park Plaza, P.O. Box 570 Newark, New Jersey 07101-0570 ----------------------------- (Address of principal executive offices) (Zip Code) 973-430-7000 ------------ (Registrant's telephone number, including area code) http://www.pseg.com ------------------- PSEG ENERGY HOLDINGS LLC (Exact name of registrant as specified in its charter) New Jersey 000-32503 42-1544079 ---------- --------- ---------- (State or other (Commission File Number) (I.R.S. Employer jurisdiction of incorporation) Identification No.) 80 Park Plaza, T-20 Newark, New Jersey 07102-4194 ----------------------------- (Address of principal executive offices) (Zip Code) 973-456-3581 ------------ (Registrant's telephone number, including area code) http://www.pseg.com ------------------- Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) The information contained in Item 2.02. Results of Operations and Financial Condition in this Form 8-K is furnished solely for PSEG. The information contained in Item 8.01 Other Events in this combined Form 8-K is separately filed, as noted, by Public Service Enterprise Group Incorporated (PSEG), Public Service Electric and Gas Company (PSE&G), PSEG Power LLC (Power) and PSEG Energy Holdings LLC (Energy Holdings). Information contained herein relating to any individual company is provided by such company on its own behalf and in connection with its respective Form 8-K. PSE&G, Power and Energy Holdings each makes representations only as to itself and makes no other representations whatsoever as to any other company. Item 2.02 Results of Operations and Financial Condition On October 22, 2004, PSEG announced unaudited financial results for the quarter and nine months ended September 30, 2004. A copy of the earnings release dated October 22, 2004 is furnished as Exhibit 99 to this Form 8-K. The information contained in this report is being furnished pursuant to Item 2.02 as directed by the U.S. Securities and Exchange Commission. Item 8.01 Other Events PSEG, PSE&G, Power and Energy Holdings 3rd Quarter 2004 Results On October 22, 2004, the following unaudited results were announced for PSEG, PSE&G, Power and Energy Holdings. Income from Continuing Operations for the quarter ended September 30, 2004 was $248 million, $93 million, $131 million and $36 million for PSEG, PSE&G, Power and Energy Holdings, respectively. As required by generally accepted accounting principles, Income from Continuing Operations for PSE&G and Energy Holdings does not include preferred securities dividends/distributions of $1 million and $3 million, respectively. Net Income for PSEG, or Earnings Available to PSEG with respect to PSE&G, Power and Energy Holdings, for the quarter ended September 30, 2004 was $248 million, $92 million, $131 million and $33 million, respectively. Income from Continuing Operations for the nine months ended September 30, 2004 was $638 million, $281 million, $292 million and $105 million for PSEG, PSE&G, Power and Energy Holdings, respectively. As required by generally accepted accounting principles, Income from Continuing Operations for PSE&G and Energy Holdings does not include preferred securities dividends/distributions of $3 million and $13 million, respectively. Net Income for PSEG, or Earnings Available to PSEG with respect to PSE&G, Power and Energy Holdings, for the nine months ended September 30, 2004 was $643 million, $278 million, $292 million and $97 million, respectively. PSEG and Power Hope Creek Outage On October 18, 2004 PSEG issued a press release relating to the outage at its Hope Creek nuclear facility and its 2004 earnings guidance, a copy of which is attached as Exhibit 99.1 to this Form 8-K. Item 9.01 Financial Statements and Exhibits Exhibit 99 Earnings Release announcing 3rd quarter 2004 results dated October 22, 2004 Exhibit 99.1 Press Release dated October 18, 2004 relating to outage at Hope Creek Nuclear Generating Station 2 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof. PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED -------------------------------------------- (Registrant) By: /s/ Patricia A. Rado -------------------------------------------------- Patricia A. Rado Vice President and Controller (Principal Accounting Officer) Date: October 22, 2004 3 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof. PUBLIC SERVICE ELECTRIC AND GAS COMPANY --------------------------------------- (Registrant) By: /s/ Patricia A. Rado -------------------------------------------------- Patricia A. Rado Vice President and Controller (Principal Accounting Officer) Date: October 22, 2004 4 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof. PSEG POWER LLC -------------- (Registrant) By: /s/ Patricia A. Rado -------------------------------------------------- Patricia A. Rado Vice President and Controller (Principal Accounting Officer) Date: October 22, 2004 5 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof. PSEG ENERGY HOLDINGS LLC ------------------------ (Registrant) By: /s/ Patricia A. Rado -------------------------------------------------- Patricia A. Rado Vice President and Controller (Principal Accounting Officer) Date: October 22, 2004 6 EX-99 2 ex99.txt EXHIBIT 99 EXHIBIT 99 [PSEG INVESTOR NEWS LETTERHEAD] October 22, 2004 PSEG ANNOUNCES THIRD-QUARTER 2004 EARNINGS: $1.04 PER SHARE OF COMMON STOCK Earnings Are 19% Higher Than Same Period in 2003, Reflecting Improved Margins at PSEG Power and PSE&G Public Service Enterprise Group (PSEG) announced today (October 22) that earnings from continuing operations for the third quarter of 2004 were $248 million or $1.04 per share of common stock, based on 238 million average shares outstanding. Comparatively, PSEG's earnings for the third quarter of 2003 were $207 million or 91 cents per share of common stock, based on 228 million average shares outstanding. For the nine months ended September 30, 2004, PSEG produced earnings from continuing operations of $638 million or $2.68 per share, based on 238 million average shares outstanding. These results exclude a gain of $5 million or 2 cents per share from discontinued operations at PSEG Global. Including this item, PSEG's reported earnings for the first nine months of the year were $643 million or $2.70 per share. For the comparable nine-month period in 2003, earnings from continuing operations were $688 million or $3.04 per share, based on 226 million average shares outstanding. These results exclude a net benefit of $333 million or $1.47 per share related to the adoption of a new accounting standard for fossil and nuclear decommissioning, the effect of an extraordinary charge due to the finalization of Public Service Electric and Gas Company's (PSE&G) electric base rate case, and discontinued operations at PSEG Energy Technologies. Including this net benefit, PSEG's reported earnings for the first nine months of 2003 were $1.02 billion or $4.51 per share. Attachments to this release provide a summary of quarterly and year-to-date results for 2004 and 2003 and other related information. Additional details will be included in PSEG's third-quarter 10-Q, which is expected to be filed with the Securities and Exchange Commission (SEC) on or before November 1. E. James Ferland, chairman of the board, said the earnings from continuing operations for the third quarter were about 19% higher than results for the comparable period a year ago. "The better performance stemmed largely from improved operating margins at PSEG Power, our wholesale energy business, and PSE&G, our regulated electric and gas delivery business," he said. Ferland said Power's quarterly contribution, which improved by about $21 million or 7 cents per share, was due largely to higher margins from various wholesale energy contracts and also by lower energy replacement power costs. He explained that the level of replacement power was higher in the third quarter of 2003 primarily because of Hurricane Isabel's impact on Power's three nuclear units in South Jersey. The storm caused heavy salt spray from the Delaware Bay to coat electrical equipment outside the units, forcing them out of service for about a week. He said the benefit this year of lower replacement power costs was due to the absence of a similar storm-related problem. In addition to these factors, Ferland said, Power's quarterly results were affected by the absence of the market transition charge (MTC) revenues collected over a four-year period ended July 31, 2003 and by higher O&M and depreciation costs principally associated with the commercial operation this year of generating facilities in the Midwest. PSE&G's quarterly contribution improved on a relative basis by $24 million or 9 cents per share. Ferland said the increase was primarily due to a $159.5 million electric distribution rate case that became effective in August 2003. Ferland said the stronger quarterly performance by PSEG Power and PSE&G was offset by a relatively lower contribution from PSEG Energy Holdings and by the dilutive effect of an additional 10 million average shares of common stock resulting from an issuance of about 9 million shares in October 2003 and additional shares through the ongoing Dividend Reinvestment Plan. The contribution by Holdings, which is the parent of PSEG Global, an international and domestic generation and distribution business, and PSEG Resources, which manages energy-related financial investments, declined by $5 million or 3 cents per share, due primarily to lower project income and lower lease income at Global and Resources, respectively, because of the monetization of selected assets. In looking ahead, Ferland said PSEG will focus on achieving operational excellence throughout its businesses. "In particular, we are taking significant steps to improve the performance of our nuclear and fossil generating units to assure long-term reliability," Ferland said. He noted that longer-than-expected refurbishment outages and related replacement power and O&M costs this year -- along with increased competitive pressures within the energy industry - caused PSEG to revise its 2004 earnings guidance, which is now in the range of $3.15 to $3.35 per share. Ferland said increased pressure was placed on earnings guidance earlier this week when PSEG Power announced that its Hope Creek nuclear station will transition to a planned refueling outage following the unit's shutdown on October 10 due to a steam pipe failure. Refueling was to have begun on October 28 and conclude in mid-December. However, an earlier start of the refueling may provide an opportunity for an earlier return to service, he said. He said the extension of the refueling outage is expected to increase replacement power costs and O&M by about $12 million (after taxes) or 5 cents per share of PSEG common stock in the fourth quarter. "These incremental costs will pressure the low end of our guidance of $3.15 to $3.35 per share," Ferland said. "The competitive pressures cut across many fronts," Ferland said. "For example, fuel prices have skyrocketed more than 40% and this has driven up electric energy prices within our PJM region by more than 25%. This run-up in prices has impacted the potential benefit of PSEG Power's generation supply contracts we entered into before prices spiked." Ferland said this recent development and other competitive factors will continue to pressure the company's performance at least through next year. "As a result, we recently announced that guidance for 2005 will be in the range of 2004 guidance -- $3.15 to $3.35 per share," he said. He said the earnings outlook should begin to improve beyond 2005. "In 2006, our efforts to upgrade the performance and reliability of our low-cost nuclear units will be completed and a significant portion of our contracted generation will be freed up for repricing," he said. "This should help us achieve our long-term earnings growth rate target of 4%-6% and further support our continuing objective of modest and sustainable dividend increases on an annual basis." ================================================================================ FORWARD-LOOKING STATEMENT Readers are cautioned that statements contained in this press release about our and our subsidiaries' future performance, including future revenues, earnings, strategies, prospects and all other statements that are not purely historical, are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Although we believe that our expectations are based on reasonable assumptions, we can give no assurance they will be achieved. The results or events predicted in these statements may differ materially from actual results or events. Factors which could cause results or events to differ from current expectations include, among other things: the effects of weather; the performance of generating units and transmission systems; the availability and prices for oil, gas, coal, nuclear fuel, capacity and electricity; changes in the markets for electricity and other energy-related commodities; changes in the number of participants and the risk profile of such participants in the energy marketing and trading business; the effectiveness of our risk management and internal controls systems; the effects of regulatory decisions and changes in law; changes in competition in the markets we serve; the ability to recover regulatory assets and other potential stranded costs; the outcomes of litigation and regulatory proceedings or inquiries; the timing and success of efforts to develop domestic and international power projects; conditions of the capital markets and equity markets; advances in technology; changes in accounting standards; changes in interest rates and in financial and foreign currency markets generally; the economic and political climate and growth in the areas in which we conduct our activities; and changes in corporate strategies. For further information, please refer to our Annual Report on Form 10-K and subsequent reports on Form 10-Q and Form 8-K filed with the Securities and Exchange Commission. These documents address in further detail our business, industry issues and other factors that could cause actual results to differ materially from those indicated in this release. In addition, any forward-looking statements included herein represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements from time to time, we specifically disclaim any obligation to do so, even if our estimates change, unless otherwise required by applicable securities laws. ================================================================================ Attachment 1 PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED (Unaudited)
- ----------------------------------------------------------------------------------------------------------- For the Quarters Ended For the Nine Months Ended September 30, September 30, ------------------------------------------------ As Restated As Restated (Note 3) (Note 3) 2004 2003 2004 2003 ------------------------------------------------ Earnings Results (in Millions) Income from Continuing Operations (Note 1) PSE&G $ 92 $ 68 $ 278 $ 189 PSEG Power 131 110 292 396 PSEG Energy Holdings PSEG Global 17 24 67 81 PSEG Resources 18 15 31 49 PSEG Energy Holdings (2) (1) (6) (3) -------------------------------------------- Total PSEG Energy Holdings 33 38 92 127 -------------------------------------------- PSEG (8) (8) (24) (24) - ------------------------------------------------------------------------------------------------------ Income from Continuing Operations $ 248 $ 208 $ 638 $ 688 - ------------------------------------------------------------------------------------------------------ Income (Loss) from Discontinued Operations, including Gain (Loss) on Disposal - (1) 5 (19) Extraordinary Item - - - (18) Cumulative Effect of a Change in Accounting Principle - - - 370 - ------------------------------------------------------------------------------------------------------ PSEG Net Income $ 248 $ 207 $ 643 $ 1,021 - ------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------ Fully Diluted Average Shares Outstanding (in Millions) 238 228 238 226 - ------------------------------------------------------------------------------------------------------ Per Share Results (Diluted) Income from Continuing Operations PSE&G $ 0.39 $ 0.30 $ 1.17 $ 0.84 PSEG Power 0.55 0.48 1.23 1.75 PSEG Energy Holdings PSEG Global 0.07 0.10 0.29 0.36 PSEG Resources 0.08 0.07 0.13 0.21 PSEG Energy Holdings (0.01) - (0.03) (0.01) -------------------------------------------- Total PSEG Energy Holdings 0.14 0.17 0.39 0.56 -------------------------------------------- PSEG (0.04) (0.04) (0.11) (0.11) - ------------------------------------------------------------------------------------------------------ Income from Continuing Operations $ 1.04 $ 0.91 $ 2.68 $ 3.04 - ------------------------------------------------------------------------------------------------------ Income (Loss) from Discontinued Operations, including Gain (Loss) on Disposal - - 0.02 (0.09) Extraordinary Item - - - (0.08) Cumulative Effect of a Change in Accounting Principle - - - 1.64 - ------------------------------------------------------------------------------------------------------ PSEG Net Income (Note 2) $ 1.04 $ 0.91 $ 2.70 $ 4.51 - ------------------------------------------------------------------------------------------------------
Note 1: Income from Continuing Operations includes preferred stock dividends / preference units distributions relating to PSE&G of $1 million and $1 million, PSEG Global of $3 million and $4 million and PSEG Resources of $0 and $2 million for the quarters ended September 30, 2004 and 2003, respectively. Income from Continuing Operations includes preferred stock dividends / preference units distributions relating to PSE&G of $3 million and $3 million, PSEG Global of $11 million and $13 million and PSEG Resources of $2 million and $4 million for the nine months ended September 30, 2004 and 2003, respectively. Note 2: Basic Earnings per Share from Net Income was $1.05 and $0.92 per share for the quarters ended September 30, 2004 and 2003, respectively. Basic Earnings per Share from Net Income was $2.72 and $4.52 per share for the nine months ended September 30, 2004 and 2003, respectively. Note 3: 2003 results reflect the restatement to correct foreign currency translation impacts of PSEG Energy Holdings' equity method investment in RGE, a distribution company in Brazil, and other minor items. The total impact of the restatement for the quarter and nine months ended September 30, 2003 resulted in a change in PSEG's and PSEG Energy Holdings' Net Income of approximately $(0.01) and $0.02 per share, respectively. Attachment 2 PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED CONSOLIDATING STATEMENT OF OPERATIONS For the Quarter Ended September 30, 2004 (Unaudited, $ Millions)
PSEG PSEG ENERGY PSEG OTHER PSE&G POWER HOLDINGS ------- --------- ------- ------- ----------- (Note 3) OPERATING REVENUES $ 2,747 $ (329) $ 1,636 $ 1,129 $ 311 OPERATING EXPENSES Energy Costs 1,418 (326) 960 636 148 Operation and Maintenance 531 (9) 261 215 64 Depreciation and Amortization 192 5 140 32 15 Taxes Other Than Income Taxes 30 - 30 - - ------- ------- ------- ------- ------- Total Operating Expenses 2,171 (330) 1,391 883 227 ------- ------- ------- ------- ------- Income from Equity Method Investments 31 - - - 31 ------- ------- ------- ------- ------- OPERATING INCOME 607 1 245 246 115 Other Income 54 11 4 38 1 Other Deductions (19) 1 - (14) (6) Interest Expense (221) (30) (86) (39) (66) Preferred Securities Dividends (1) 3 (1) - (3) ------- ------- ------- ------- ------- INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (Note 1) 420 (14) 162 231 41 Income Tax Expense (172) 6 (70) (100) (8) ------- ------- ------- ------- ------- NET INCOME $ 248 $ (8) $ 92 $ 131 $ 33 ======= ======= ======= ======= =======
For the Quarter Ended September 30, 2003 (Unaudited, $ Millions)
PSEG PSEG ENERGY PSEG OTHER PSE&G POWER HOLDINGS ------- --------- ------- ------- ----------- (Note 3) OPERATING REVENUES $ 2,779 $ (184) $ 1,530 $ 1,255 $ 178 OPERATING EXPENSES Energy Costs 1,574 (183) 915 804 38 Operation and Maintenance 520 (6) 263 222 41 Depreciation and Amortization 163 2 121 27 13 Taxes Other Than Income Taxes 29 - 29 - - ------- ------- ------- ------- ------- Total Operating Expenses 2,286 (187) 1,328 1,053 92 ------- ------- ------- ------- ------- Income from Equity Method Investments 32 - - - 32 ------- ------- ------- ------- ------- OPERATING INCOME 525 3 202 202 118 Other Income 27 - 1 25 1 Other Deductions (19) - - (14) (5) Interest Expense (207) (29) (96) (26) (56) Preferred Securities Dividends (1) 5 (1) - (5) ------- ------- ------- ------- ------- INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (Note 1) 325 (21) 106 187 53 Income Tax Expense (117) 13 (38) (77) (15) ------- ------- ------- ------- ------- INCOME FROM CONTINUING OPERATIONS 208 (8) 68 110 38 Loss from Discontinued Operations, net of tax (1) - - - (1) ------- ------- ------- ------- ------- NET INCOME $ 207 $ (8) $ 68 $ 110 $ 37 ======= ======= ======= ======= =======
Note 1: Income from Continuing Operations before Income Taxes includes preferred stock dividends / preference units distributions relating to PSE&G of $1 million and $1 million, PSEG Global of $3 million and $4 million and PSEG Resources of $0 and $1 million for the quarters ended September 30, 2004 and 2003, respectively. Note 2: 2003 results reflect the restatement to correct foreign currency impacts of PSEG Energy Holdings' equity method investment in RGE, a distribution company in Brazil, and other minor items. Note 3: Primarily includes financing activities at the parent and intercompany eliminations. Attachment 3 PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED CONSOLIDATING STATEMENT OF OPERATIONS For the Nine Months Ended September 30, 2004 (Unaudited, $ Millions)
PSEG PSEG ENERGY PSEG OTHER PSE&G POWER HOLDINGS ------- --------- ------- ------- ----------- (Note 3) OPERATING REVENUES $ 8,258 $(1,493) $ 5,236 $ 3,814 $ 701 OPERATING EXPENSES Energy Costs 4,495 (1,491) 3,203 2,541 242 Operation and Maintenance 1,614 (28) 797 682 163 Depreciation and Amortization 534 14 393 87 40 Taxes Other Than Income Taxes 103 - 103 - - ------- ------- ------- ------- ------- Total Operating Expenses 6,746 (1,505) 4,496 3,310 445 ------- ------- ------- ------- ------- Income from Equity Method Investments 92 - - - 92 ------- ------- ------- ------- ------- OPERATING INCOME 1,604 12 740 504 348 Other Income 172 10 10 150 2 Other Deductions (73) (1) (1) (56) (15) Interest Expense (658) (81) (273) (108) (196) Preferred Securities Dividends (3) 13 (3) - (13) ------- ------- ------- ------- ------- INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (Note 1) 1,042 (47) 473 490 126 Income Tax Expense (404) 23 (195) (198) (34) ------- ------- ------- ------- ------- INCOME FROM CONTINUING OPERATIONS 638 (24) 278 292 92 Income from Discontinued Operations, including Gain on Disposal, net of tax 5 - - - 5 ------- ------- ------- ------- ------- NET INCOME $ 643 $ (24) $ 278 $ 292 $ 97 ======= ======= ======= ======= =======
For the Nine Months Ended September 30, 2003 (Unaudited, $ Millions)
PSEG PSEG ENERGY PSEG OTHER PSE&G POWER HOLDINGS ------- --------- ------- ------- ----------- (Note 3) OPERATING REVENUES $ 8,468 $(1,411) $ 5,020 $ 4,320 $ 539 OPERATING EXPENSES Energy Costs 4,927 (1,410) 3,341 2,882 114 Operation and Maintenance 1,527 (15) 773 652 117 Depreciation and Amortization 360 5 250 74 31 Taxes Other Than Income Taxes 101 - 101 - - ------- ------- ------- ------- ------- Total Operating Expenses 6,915 (1,420) 4,465 3,608 262 ------- ------- ------- ------- ------- Income from Equity Method Investments 83 - - - 83 ------- ------- ------- ------- ------- OPERATING INCOME 1,636 9 555 712 360 Other Income 116 - 14 94 8 Other Deductions (71) - (1) (54) (16) Interest Expense (615) (86) (290) (82) (157) Preferred Securities Dividends (3) 17 (3) - (17) ------- ------- ------- ------- ------- INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (Note 1) 1,063 (60) 275 670 178 Income Tax Expense (375) 36 (86) (274) (51) ------- ------- ------- ------- ------- INCOME FROM CONTINUING OPERATIONS 688 (24) 189 396 127 Loss from Discontinued Operations, including Loss on Disposal, net of tax (19) - - - (19) ------- ------- ------- ------- ------- INCOME BEFORE EXTRAORDINARY ITEM AND CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE 669 (24) 189 396 108 Extraordinary Item, net of tax (18) - (18) - - Cumulative Effect of a Change in Accounting Principle, net of tax 370 - - 370 - ------- ------- ------- ------- ------- NET INCOME $ 1,021 $ (24) $ 171 $ 766 $ 108 ======= ======= ======= ======= =======
Note 1: Income from Continuing Operations before Income Taxes includes preferred stock dividends / preference units distributions relating to PSE&G of $3 million and $3 million, PSEG Global of $11 million and $13 million and PSEG Resources of $2 million and $4 million for the nine months ended September 30, 2004 and 2003, respectively. Note 2: 2003 results reflect the restatement to correct foreign currency impacts of PSEG Energy Holdings' equity method investment in RGE, a distribution company in Brazil, and other minor items. Note 3: Primarily includes financing activities at the parent and intercompany eliminations. Attachment 4 PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED CAPITALIZATION SCHEDULE (Unaudited, $ Millions)
September 30, December 31, 2004 2003 ------------- ------------ DEBT Commercial Paper and Loans $ 660 $ 301 Long-Term Debt, including amounts due within one year 8,686 8,473 Securitization Debt, including amounts due within one year 2,124 2,222 Project Level, Non-Recourse Debt, including amounts due within one year 1,427 1,775 Debt Supporting Trust Preferred Securities 1,201 1,201 -------- -------- Total Debt 14,098 13,972 SUBSIDIARIES' PREFERRED SECURITIES 80 80 -------- -------- COMMON STOCKHOLDERS' EQUITY Common Stock 4,549 4,490 Treasury Stock (978) (981) Retained Earnings 2,472 2,221 Accumulated Other Comprehensive Loss (469) (201) -------- -------- Total Common Stockholders' Equity 5,574 5,529 -------- -------- Total Capitalization $ 19,752 $ 19,581 ======== ========
Attachment 5 PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited, $ Millions)
For the Nine Months Ended September 30, 2004 2003 --------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES Net Income $ 643 $ 1,021 Adjustments to Reconcile Net Income to Net Cash Flows From Operating Activities 616 (193) ------- ------- Net Cash Provided by Operating Activities 1,259 828 ------- ------- CASH FLOWS USED IN INVESTING ACTIVITIES (581) (1,060) ------- ------- CASH FLOWS (USED IN) PROVIDED BY FINANCING ACTIVITIES (814) 231 ------- ------- Net Decrease in Cash and Cash Equivalents (136) (1) Cash and Cash Equivalents at Beginning of Period 452 150 ------- ------- Cash and Cash Equivalents at End of Period $ 316 $ 149 ======= =======
Attachment 6 PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED Quarter-to-Quarter EPS Reconciliation September 30, 2004 vs. September 30, 2003 (Unaudited) PSEG 3rd Quarter 2003 Net Income (as restated)* $ 0.91 PSEG 3rd Quarter 2003 Income from Continuing Operations (as restated)*: $ 0.91 PSE&G B/(W) -------- 3rd Quarter 2003 $ 0.30 -------- Electric Rate Case 0.10 Weather (0.02) Electric Demand and Volume margin increase (0.01) Other 0.04 Additional Shares Outstanding (2003 Issuance, DRIP) (0.02) -------- 3rd Quarter 2004 $ 0.39 $ 0.09 -------- PSEG Power -------- 3rd Quarter 2003 $ 0.48 -------- Lower Energy Replacement Costs 0.04 Higher Operating Margins 0.12 MTC (ended August 2003) (0.03) O&M and Depreciation (0.04) Additional Shares Outstanding (2003 Issuance, DRIP) (0.02) -------- 3rd Quarter 2004 $ 0.55 $ 0.07 -------- PSEG Energy Holdings -------- 3rd Quarter 2003 (as restated)* $ 0.17 -------- Global Operations (lower results from GWF, RGE and Electroandes, partially offset by effects of strengthening local currencies, higher revenues at MPC and the TIE acquisition) (0.03) Resources Operations (stronger earnings from investment funds and lower interest costs due to lower debt, partially offset by loss of earnings due to termination of EME-Collins Lease) 0.01 Energy Holdings (Parent) (0.01) -------- 3rd Quarter 2004 $ 0.14 $ (0.03) -------- Public Service Enterprise Group -------- 3rd Quarter 2003 $(0.04) -------- 3rd Quarter 2004 $(0.04) $ - -------- PSEG 3rd Quarter 2004 Income from Continuing Operations $ 1.04 ------- PSEG 3rd Quarter 2004 Net Income $ 1.04 -------
* See Attachment 1, Note 3 for further details regarding the 2003 restatement. Attachment 7 PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED YTD-to-YTD EPS Reconciliation September 30, 2004 vs. September 30, 2003 (Unaudited) PSEG Year to Date September 30, 2003 Net Income (as restated)* $ 4.51 Loss from Discontinued Operations (ET and Global's investments in CPC) 0.09 Extraordinary Loss (relating to rate case) 0.08 Cumulative Effect of a Change in Accounting Principle (adoption of Asset Retirement Obligation at PSEG Power) (1.64) ------ PSEG Year to Date September 30, 2003 Income from Continuing Operations (as restated)*: $ 3.04 PSE&G B/(W) ------- Year to Date September 30, 2003 $ 0.84 ------- Electric Rate Case 0.36 Weather (0.06) Electric Demand and Volume margin increase 0.05 Other 0.04 Additional Shares Outstanding (2003 Issuance, DRIP) (0.06) ------- Year to Date September 30, 2004 $ 1.17 $ 0.33 ------- PSEG Power ------- Year to Date September 30, 2003 $ 1.75 ------- Higher Energy Replacement Costs (0.16) Higher Operating Margins including Trading 0.09 MTC (ended August 2003) (0.29) O&M and Depreciation (0.16) Interest Expense (0.04) NDT Income 0.10 Other (0.01) Additional Shares Outstanding (2003 Issuance, DRIP) (0.05) ------- Year to Date September 30, 2004 $ 1.23 $(0.52) ------- PSEG Energy Holdings ------- Year to Date September 30, 2003 (as restated)* $ 0.56 ------- Global Operations (lower results from GWF and Electroandes and the effects of a weak US$, partially offset by the gain on the partial sale of LDS and stronger results from MPC) (0.06) Additional Shares Outstanding (2003 Issuance, DRIP) (0.01) (0.07) ----- Resources Termination of EME-Collins Lease (0.07) Additional Shares Outstanding (2003 Issuance, DRIP) (0.01) (0.08) ----- Energy Holdings (Parent) (0.02) ------- Year to Date September 30, 2004 $ 0.39 $(0.17) ------- Public Service Enterprise Group ------- Year to Date September 30, 2003 $(0.11) ------- ------- Year to Date September 30, 2004 $(0.11) $ - ------- ------ PSEG Year to Date September 30, 2004 Income from Continuing Operations $ 2.68 ------ Income from Discontinued Operations (Global's gain on sale of CPC) 0.02 PSEG Year to Date September 30, 2004 Net Income $ 2.70 ------
* See Attachment 1, Note 3 for further details regarding the 2003 restatement. Attachment 8 PSEG Global L.L.C. Investment Results For the Quarter and Nine Months Ended September 30, 2004 (Unaudited, $ Millions)
As of For the Quarter Ended For the Nine Months Ended September 30, 2004 September 30, 2004 September 30, 2004 ------------------ --------------------------- --------------------------- Capital At Non-Recourse Non-Recourse Region Risk (A) EBIT (B) Interest (C) EBIT (B) Interest (C) - ------------------------- ------------------ ------------ ------------- ---------- ------------ North America $ 412 $ 27 $ 7 $ 91 $ 7 Latin America 1,576 31 4 101 14 Asia Pacific 195 5 - 13 - Europe 236 5 8 25 24 India and Oman 96 5 4 15 12 Global G&A - Unallocated - (6) - (22) - ------ ------ ------ ------ ------ Total $2,515 $ 67 $ 23 $ 223 $ 57 ====== ====== ====== ====== ======
For the Quarter and Nine Months Ended September 30, 2003 (Unaudited, $ Millions)
As of For the Quarter Ended For the Nine Months Ended September 30, 2003 September 30, 2003 September 30, 2003 ------------------ --------------------------- --------------------------- Capital At Non-Recourse Non-Recourse Region Risk (A) EBIT (B) Interest (C) EBIT (B) Interest (C) - ------------------------- ------------------ ------------ ------------- ---------- ------------ North America $ 424 $ 28 $ 1 $ 104 $ 1 Latin America 1,575 44 4 110 12 Asia Pacific 180 2 - 7 - Europe 309 1 - 11 - India and Oman 91 3 5 5 5 Global G&A - Unallocated - (8) - (23) - ------ ------ ------ ------ ------ Total $2,579 $ 70 $ 10 $ 214 $ 18 ====== ====== ====== ====== ======
Reconciliation of EBIT to Income from Continuing Operations
For the Quarters Ended For the Nine Months Ended September 30, 2004 September 30, 2003 September 30, 2004 September 30, 2003 ------------------ ------------------ ------------------ ------------------ Total Global EBIT $ 67 $ 70 $ 223 $ 214 Interest Expense (47) (31) (124) (84) Income Taxes - (7) (19) (25) Minority Interest - (4) (2) (11) Preference Units Distributions (3) (4) (11) (13) ----- ----- ----- ----- Income from Continuing Operations $ 17 $ 24 $ 67 $ 81 ===== ===== ===== =====
(A) Total Capital at Risk includes PSEG Global's gross investments and equity commitment guarantees less non-recourse debt at the project level. (B) For investments accounted for under the equity method of accounting, includes PSEG Global's share of net earnings, including interest expense and income taxes, (C) Non-Recourse Interest is interest expense on debt that is non-recourse to PSEG Global. Attachment 9 PUBLIC SERVICE ELECTRIC & GAS COMPANY Sales and Revenues to Customers September 2004 (Unaudited, $ Millions) Electric Sales
Three Change vs. Nine Change vs. Twelve Change vs. Sales (millions kwh) Months Ended 2003 Months Ended 2003 Months Ended 2003 - -------------------- ------------ ---- ------------ ---- ------------ ---- Residential 3,988 -3.0% 10,181 2.4% 13,035 1.4% Commercial 6,362 3.8% 17,743 5.7% 23,236 5.4% Industrial 1,742 -4.1% 4,947 -2.2% 6,511 -2.5% Street Lighting 81 2.7% 257 -0.6% 364 0.0% Interdepartmental - -100.0% 19 85.8% 21 57.5% ------- ------- ------- Total 12,173 0.3% 33,147 3.4% 43,167 2.9% Revenue (in millions) - --------------------- Residential $ 482 4.6% $ 1,186 17.3% $ 1,513 17.6% Commercial 635 9.8% 1,521 6.9% 1,928 4.6% Industrial 125 12.1% 285 -14.2% 367 -16.7% Street Lighting 15 5.5% 45 11.5% 61 12.4% Other 76 31.3% 218 42.0% 269 45.5% ------- ------- ------- Total $ 1,333 9.0% $ 3,255 10.0% $ 4,138 8.6%
Gas Sold and Transported
Three Change vs. Nine Change vs. Twelve Change vs. Sales (millions therms) Months Ended 2003 Months Ended 2003 Months Ended 2003 - ----------------------- ------------ ---- ------------ ---- ------------ ---- Residential Sales 103 -2.1% 1,020 -5.6% 1,478 -6.3% Commercial - Firm Sales 44 8.8% 420 -4.5% 592 -6.4% Commercial - Interr. & Cogen 11 -19.0% 34 -2.5% 46 -6.5% Industrial - Firm Sales 3 -45.3% 38 -9.6% 53 -12.2% Industrial - Interr. & Cogen 106 -21.2% 287 -26.3% 407 -23.7% Other 3 100.0% 8 234.8% 9 182.1% ------ ------ ------ Total 270 -9.7% 1,807 -9.2% 2,585 -9.5% Gas Transported 243 -18.5% 748 -28.4% 1,046 -24.0% Revenue (in millions) - --------------------- Residential Sales $ 75 1.8% $ 735 5.4% $1,086 11.2% Commercial - Firm Sales 30 1.0% 327 -6.8% 448 -3.7% Commercial - Interr. & Cogen 10 17.0% 26 5.9% 33 3.5% Industrial - Firm Sales 2 -54.9% 29 -12.3% 40 -9.9% Industrial - Interr. & Cogen 76 -8.5% 206 -21.0% 272 -18.0% Other Operating Revenues 29 4.5% 87 3.8% 117 3.9% ------ ------ ------ Total $ 222 -2.0% $1,410 -2.8% $1,996 1.7% Gas Transported $ 81 0.4% $ 571 -6.3% $ 822 -5.8% Three Change vs. Nine Change vs. Twelve Change vs. Weather Data Months Ended 2003 Months Ended 2003 Months Ended 2003 - ------------ ------------ ---- ------------ ---- ------------ ---- Degree Days - Actual 14 -9.7% 3,198 -9.1% 4,839 -9.5% Degree Days - Normal 39 3,182 4,867 THI Hours - Actual 10,422 -13.3% 14,815 1.4% 15,018 -0.9% THI Hours - Normal 11,044 14,614 14,878
Attachment 10 PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED STATISTICAL MEASURES
---------------------------- ---------------------------- Quarters Ending Year to Date ---------------------------- ---------------------------- September 30, September 30, September 30, September 30, 2004 2003 2004 2003 ----- ----- ----- ---- Weighted Average Common Shares Outstanding (000's) Basic 237,269 226,414 236,724 225,893 Diluted 237,728 227,593 237,883 226,455 Stock Price at End of Period $ 42.60 $ 42.00 Dividends Paid per Share of Common Stock $ 0.55 $ 0.54 $ 1.65 $ 1.62 Dividend Payout Ratio* 65.1% 51.2% Dividend Yield 5.2% 5.1% Price/Earnings Ratio* 12.6 10.0 Rate of Return on Average Common Equity* 15.2% 21.0% Ratio of Earnings to Fixed Charges 2.70 2.18 2.30 2.32 Book Value per Common Share $ 23.45 $ 21.36 Market Price as a Percent of Book Value 182% 197% Total Shareholder Return - QTR Ending 7.8% 0.7% Total Shareholder Return - YTD 1.1% 36.3% Total Shareholder Return - 12 Months Ending 6.8% 46.2%
Generation by Fuel Type Quarters Ending September 30, Nine Months Ending September 30, 2004 2003 2004 2003 ----------------------------- -------------------------------- Nuclear - NJ 37% 37% 35% 38% Nuclear - PA 17% 16% 20% 20% --- --- --- --- Total Nuclear 54% 53% 55% 58% Fossil - Coal - NJ 13% 12% 11% 11% Fossil - Coal - PA 11% 12% 12% 12% Fossil - Coal - CT 5% 5% 6% 6% --- --- --- --- Total Coal 29% 29% 29% 29% Fossil - Oil & Natural Gas - NJ 14% 14% 13% 10% Fossil - Oil & Natural Gas - NY 0% 0% 1% 0% Fossil - Oil & Natural Gas - CT 1% 2% 1% 2% Fossil - Oil & Natural Gas - Midwest 1% 1% 0% 0% --- --- --- --- Total Oil & Natural Gas 16% 17% 15% 12% Fossil - Pumped Storage 1% 1% 1% 1% --- --- --- --- 100% 100% 100% 100%
*Calculation based on earnings from continuing operations for 12-month period ending EX-99 3 ex99-1.txt EXHIBIT 99.1 EXHIBIT 99.1 [PSEG INVESTOR NEWS LETTERHEAD] October 18, 2004 HOPE CREEK NUCLEAR UNIT TO BEGIN REFUELING OUTAGE EARLY Decision Follows October 10 Shutdown Due to Steam Pipe Failure Unexpected Replacement Power Costs and O&M Will Pressure PSEG's 2004 Earnings Guidance of $3.15 to $3.35 Per Share PSEG Power, the wholesale energy subsidiary of Public Service Enterprise Group (PSEG), has informed the Nuclear Regulatory Commission (NRC) that its Hope Creek nuclear station will transition to a planned refueling outage following the unit's shutdown on October 10 due to a steam pipe failure. Refueling was to have begun on October 28 and conclude in mid-December. However, an earlier start of the refueling may provide an opportunity for an earlier return-to-service date. Chris Bakken, PSEG's chief nuclear officer and president of PSEG Nuclear, said in a message to employees that the "best course of action is to keep the unit off line and transition to the refueling outage now." Bakken added: "After this outage, I expect Hope Creek will be a much stronger plant, prepared for a safe and reliable cycle." Thomas O'Flynn, PSEG's chief financial officer, said the extension of the refueling outage is expected to increase replacement power costs and O&M by about $12 million (after taxes) or 5 cents per share of PSEG common stock in the fourth quarter. "These added costs will pressure the low end of PSEG's 2004 guidance of $3.15 to $3.35 per share," O'Flynn said. Hope Creek was manually taken out of service as a result of a failed eight-inch discharge line from the "A" moisture separator to the main condenser in Hope Creek's turbine building. "Our preliminary investigation of the event has revealed equipment and personnel performance issues, which we will address prior to the restart of the unit," Bakken said. In a letter over the weekend to the NRC, Bakken outlined the key actions that will be completed prior to resumption of service. A copy of the NRC letter is attached and is available at www.pseg.com/nrcletter. ================================================================================ FORWARD-LOOKING STATEMENT Readers are cautioned that statements contained in this press release about our and our subsidiaries' future performance, including future revenues, earnings, strategies, prospects and all other statements that are not purely historical, are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Although we believe that our expectations are based on reasonable assumptions, we can give no assurance they will be achieved. The results or events predicted in these statements may differ materially from actual results or events. Factors which could cause results or events to differ from current expectations include, among other things: the effects of weather; the performance of generating units and transmission systems; the availability and prices for oil, gas, coal, nuclear fuel, capacity and electricity; changes in the markets for electricity and other energy-related commodities; changes in the number of participants and the risk profile of such participants in the energy marketing and trading business; the effectiveness of our risk management and internal controls systems; the effects of regulatory decisions and changes in law; changes in competition in the markets we serve; the ability to recover regulatory assets and other potential stranded costs; the outcomes of litigation and regulatory proceedings or inquiries; the timing and success of efforts to develop domestic and international power projects; conditions of the capital markets and equity markets; advances in technology; changes in accounting standards; changes in interest rates and in financial and foreign currency markets generally; the economic and political climate and growth in the areas in which we conduct our activities; and changes in corporate strategies. For further information, please refer to our Annual Report on Form 10-K and subsequent reports on Form 10-Q and Form 8-K filed with the Securities and Exchange Commission. These documents address in further detail our business, industry issues and other factors that could cause actual results to differ materially from those indicated in this release. In addition, any forward-looking statements included herein represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements from time to time, we specifically disclaim any obligation to do so, even if our estimates change, unless otherwise required by applicable securities laws. ================================================================================ (Letter to NRC attached.) October 17, 2004 LR-N04-0472 Mr. Samuel J. Collins, Regional Administrator United States Nuclear Regulatory Commission Region I 475 Allendale Road King of Prussia, PA 19406-1415 PSEG ACTIONS IN RESPONSE TO OCTOBER 10, 2004 SCRAM HOPE CREEK GENERATING STATION DOCKET NO. 50-354 Dear Mr. Collins, The purpose of this letter is to provide the Nuclear Regulatory Commission (NRC) with an overview of our plans to respond to the Hope Creek steam leak of October 10, 2004. As the NRC staff is aware, on October 10, 2004, Public Service Enterprise Group (PSEG) Nuclear personnel manually shutdown the Hope Creek Generating Station reactor in response to a steam leak in the turbine building. The steam leak was due to a failed eight (8) inch discharge line from the "A" Moisture Separator to the Main Condenser. Our preliminary investigation of the event has revealed equipment and personnel performance issues. PSEG is appropriately focused on maintaining the plant in a safe condition and continues to aggressively investigate this event. In light of the significance of this event, PSEG Nuclear is providing a summary of the actions planned and underway. Hope Creek Generating Station is currently in cold shutdown. PSEG Nuclear does not plan to recommence power operation until completion of the Hope Creek refueling outage in December 2004. Prior to startup, we will complete the following actions: 1. Complete a root cause analysis of the event. 2. Address the adequacy of operator response and Technical Specification usage during the event. 3. Address the significant equipment issues surrounding this transient and the associated impact on plant operations. 2 Mr. Samuel J. Collins LR-N04-0472 4. Complete the extent of condition review and inspections pertaining to the failed line and components. 5. Repair the failed moisture separator discharge line. 6. Complete necessary operations procedure changes and associated training due to issues identified in post trip review. These changes will include augmenting the procedural guidance for reactor level and pressure control. 7. Review our Operational Challenge Response (OCR) process for improvements. PSEG Nuclear will keep the NRC staff informed about progress on these actions. Should questions arise regarding this plan of action, please contact Ms. Christina Perino, Director, Licensing and Nuclear Safety, at (856) 339-1989. Sincerely, A. Christopher Bakken, III President & Chief Nuclear Officer Attachment 3 Mr. S. J. Collins LR-N04-0472 C United States Nuclear Regulatory Commission Document Control Desk Washington, DC 20555 Mr. Daniel Collins, Salem & Hope Creek Project Manager U. S. Nuclear Regulatory Commission One White Flint North Mail Stop 08C2 Washington, DC 20555-001 USNRC Senior Resident Inspector - Salem (X24) USNRC Senior Resident Inspector - Hope Creek (X24) Mr. K. Tosch, Manager IV Bureau of Nuclear Engineering P. O. Box 415 Trenton, NJ 08625 -----END PRIVACY-ENHANCED MESSAGE-----