EXHIBIT 99

We have the

energy

to make things better

…

for you, for our investors

and for our stakeholders.

Forward-Looking Statement

2

Certain of the matters discussed in this communication about our and our subsidiaries’

future performance, including, without limitation, future revenues, earnings, strategies,

prospects, consequences and all other statements that are not purely historical

constitute “forward-looking statements” within the meaning of the Private Securities

Litigation Reform Act of 1995. Such forward-looking statements are subject to risks

and uncertainties, which could cause actual results to differ materially from those

anticipated. Such statements are based on management's beliefs as well as

assumptions made by and information currently available to management. When used

herein, the words “anticipate,” “intend,” “estimate,” “believe,” “expect,” “plan,”

“should,” “hypothetical,” “potential,” “forecast,” “project,” variations of such words and

similar expressions are intended to identify forward-looking statements. Factors that

may cause actual results to differ are often presented with the forward-looking

statements themselves. Other factors that could cause actual results to differ

materially from those contemplated in any forward looking statements made by us

herein are discussed in filings we make with the United States Securities and Exchange

Commission (SEC), including our Annual Report  on Form 10-K and subsequent reports

on Form 10-Q and Form 8-K and available on our website: http://www.pseg.com. 

These factors include, but are not limited to:

•

any deterioration in our credit quality or the credit quality of our counterparties,

including in our leveraged leases,

•

availability of capital and credit at commercially reasonable terms and conditions 

and our ability to meet cash needs,

•

changes in the cost of, or interruption in the supply of, fuel and other commodities

necessary to the operation of our generating units,

•

delays in receipt of necessary permits and approvals for our construction and

development activities,

•

delays or unforeseen cost escalations in our construction and development

activities,

•

any inability to achieve, or continue to sustain, our expected levels of operating

performance,

•

any equipment failures, accidents, severe weather events or other incidents  that

impact our ability to provide safe and reliable service to our customers, and any

inability to obtain sufficient coverage or recover proceeds of insurance with respect

to such events,

•

cybersecurity attacks or intrusions that could adversely impact our businesses,

•

increases in competition in energy supply markets as well as competition from

certain transmission projects,

•

any inability to realize anticipated tax benefits or retain tax credits,

•

challenges associated with recruitment and/or retention of a qualified workforce,

•

adverse performance of our decommissioning and defined benefit plan trust fund

investments and changes in funding requirements, and

•

changes in technology, such as distributed generation and micro grids, and greater

reliance on these technologies and changes in customer behaviors,  including

energy efficiency, net metering and demand response.

All of the forward-looking statements made in this report are qualified by these

cautionary statements and we cannot assure you that the results or developments

anticipated by management will be realized or even if realized, will have the expected

consequences to, or effects on, us or our business prospects, financial condition or

results of operations. Readers are cautioned not to place undue reliance on these

forward-looking statements in making any investment decision. Forward-looking

statements made in this report apply only as of the date of this report. While we may

elect to update forward-looking statements from time to time, we specifically disclaim

any obligation to do so, even if internal estimates change, unless otherwise required

by applicable securities laws. The forward-looking statements contained in this report

are intended to qualify for the safe harbor provisions of Section 27A of the Securities

Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,

as amended.

•

adverse changes in the demand for or the price of the capacity and energy that we

sell into wholesale electricity markets,

•

adverse changes in energy industry law, policies and regulation, including market

structures and a potential shift away from competitive markets toward subsidized

market mechanisms, transmission planning and cost allocation rules, including  rules

regarding how transmission is planned and who is permitted to build transmission in

the future, and reliability standards,

•

any inability of our transmission and distribution businesses to obtain adequate and

timely rate relief and regulatory approvals from federal and state regulators,

•

changes in federal and state environmental regulations that could increase our costs

or limit our operations,

•

changes in nuclear regulation and/or general developments in the nuclear power

industry, including various impacts from any accidents or incidents experienced at

our facilities or by others in the industry, that could limit operations of our nuclear

generating units,

•

actions or activities at one of our nuclear units located on a multi-unit site that  might

adversely affect our ability to continue to operate that unit or other units located at

the same site,

•

any inability to balance our energy obligations, available supply and risks,

3

GAAP Disclaimer

PSEG presents Operating Earnings in addition to its Income from Continuing

Operations/Net Income reported in accordance with accounting principles

generally accepted in the United States (GAAP). Operating Earnings is a non-

GAAP financial measure that differs from Income from Continuing

Operations/Net Income because it excludes gains or losses associated with

Nuclear Decommissioning Trust (NDT), Mark-to-Market (MTM) accounting, and

other material one-time items. PSEG presents Operating Earnings because

management believes that it is appropriate for investors to consider results

excluding these items in addition to the results reported in accordance with

GAAP. PSEG believes that the non-GAAP financial measure of Operating

Earnings provides a consistent and comparable measure of performance of its

businesses to help shareholders understand performance trends. This

information is not

intended to be viewed as an alternative to GAAP information.

Slide

A

at

the

end

of

this

presentation

includes

a

list

of

items

excluded

from

Income from Continuing Operations/Net Income to reconcile to Operating

Earnings, with a reference to that slide included on each of the

slides where the

non-GAAP information appears.

4

2014 PSEG Conference Agenda

Presentation

Presenter

Welcome and Introductions

Kathleen Lally

PSEG

Ralph Izzo

PSE&G

Ralph LaRossa

PSE&G Transmission

Kim Hanemann

PSEG Long Island

Ralph LaRossa

Q&A Session

Break

PSEG Power

William Levis

Power ER&T

Shahid Malik

Q&A Session

Financial Review & Outlook

Caroline Dorsa

Summary and Q&A

Conference Conclusion

PSEG INTRODUCTION

& OVERVIEW

Ralph Izzo

C H A I R M A N ,   P R E S I D E N T    A N D

C H I E F   E X E C U T I V E   O F F I C E R

PSEG’s Strategy –

delivering results

Our businesses’

focus on cost-

effective, reliable operations yields

strong cash flow

We are funding growth-oriented

investments aligned with customer

needs and state energy policies

We are enhancing the competitiveness

of our environmentally well-positioned

generation business

The results of our financial strategy

support a credit profile capable of

meeting our corporate objectives

and providing sustained dividend

growth for our shareholders

6

ENGAGED

WORKFORCE

DISCIPLINED

INVESTMENT

FINANCIAL

STRENGTH

OPERATIONAL

EXCELLENCE

Two complementary businesses

Strong asset platform, performing well and positioned for the future

7

Electric & Gas Delivery

and Transmission

needs as we respond to state and federal

energy policy and economic growth objectives

program -

focused on transmission –

that

produces double-digit rate base growth

through 2016

2013

Assets  $20B

Operating Earnings

$612M

Regional Competitive Generation

Strategy:

Fuel diverse fleet is geographically

and environmentally well positioned, with

investments to enhance competitiveness

free cash flow in current environment

and poised for price recovery 

2013

Assets $12B

Operating Earnings $710M

A S S E T S   A N D   O P E R A T I N G   E A R N I N G S   A R E   F O R   T H E   Y E A R   E N D E D   1 2 / 3 1 / 2 0 1 3 .

P

S

E

&

G

A

N

D

P

O

W

E

R

D

O

N

O

T

A

D

D

T

O

T

O

T

A

L

D

U

E

T

O

P

A

R

E

N

T .

P

S

E

G

L

O

N

G

I

S

L

A

N

D

A

N

D

E

N

E

R

G

Y

H

O

L

D

I

N

G

S

A

C

T

I

V

I

T

Y .

S E E   S L I D E   A   F O R   I T E M S   E X C L U D E D   F R O M   I N C O M E   F R O M   C O N T I N U I N G   O P E R A T I O N S / N E T   I N C O M E   T O   R E C O N C I L E

T O   O P E R A T I N G   E A R N I N G S .

Strategy:

Positioned to meet customers’

Value

Proposition:

A

$10

billion

infrastructure

Value

Proposition:

Provides

substantial

8

Delivering on commitments and pursuing

opportunities for growth

Operational

Excellence

•

Power:  Record 2013 output at Linden CCGT and Salem 2;

nuclear capacity factor greater than 90% for 9   straight year

•

PSE&G:

Mid-Atlantic

Reliability

Award

(12

consecutive

year)

•

PSEG Long Island:  Went “live”

on January 1, 2014

•

PSEG:  Cost-control benefits continue

Financial

Strength

•

Strong cash flows supported credit rating increases

•

Pension more than fully funded

•

Dividend increased

Disciplined

Investment

•

PSE&G

Transmission capital program execution and growth

Energy Strong program under discussion

Solar 4 All Extension and Solar Loan III programs

•

Power:  Investments to enhance the fleet’s competitiveness –

130 MW Nuclear uprate, 150 MW CCGT uprate and efficiency improvement

th

th

9

Operating Earnings Guidance

Building on the successful implementation of our strategy

S E E   S L I D E   A   F O R   I T E M S   E X C L U D E D   F R O M   I N C O M E   F R O M   C O N T I N U I N G  

O

P

E

R

A

T

I

O

N

S

/

N

E

T

I

N

C

O

M

E

T

O

R

E

C

O

N

C

I

L

E

T

O

O

P

E

R

A

T

I

N

G

E

A

R

N

I

N

G

S

.

E

=

E

S

T

I

M

A

T

E

.

$2.44

$2.58

$2.55

-

$2.75E

2012

2013

2014 Guidance

10

Operating Earnings Mix 

Long term investment program has driven increased earnings

contribution from stable, regulated business

* S E E   S L I D E   A   F O R   I T E M S   E X C L U D E D   F R O M   I N C O M E   F R O M   C O N T I N U I N G   O P E R A T I O N S /

N E T   I N C O M E   T O   R E C O N C I L E   T O   O P E R A T I N G   E A R N I N G S ;   D I S C O N T I N U E D   O P E R A T I O N S   R E F L E C T

T

E

X

A

S

.

E

=

E

S

T

I

M

A

T

E

*

*

2

0

1

4

P

E

R

C

E

N

T

S

U

S

E

M

I

D

P

O

I

N

T

O

F

E

A

R

N

I

N

G

S

G

U

I

D

A

N

C

E

.

Power’s

diverse

fuel

mix

and dispatch flexibility

continues to generate

earnings and free cash flow

PSE&G’s

investment in

transmission has

diversified its asset base

and, coupled with other

investments

and cost controls,

supported compound

annual earnings growth of

~18% over  2009 –

2013

Operating Earnings* Contribution by Subsidiary (%)

PSE&G

Power

Other

$2.44

$2.58

$2.55 -

$2.75E

$3.12

$2.74

$3.09

20%

27%

38%

43%

47%

54%

76%

69%

62%

54%

54%

43%

2009

2010

2011

2012

2013

2014E**

11

Maintaining a robust capital program

focused on growth

PSEG 2014 -

2018E Capital Spending

$11.8 Billion

PSEG 2009 -

2013 Capital Spending

$11.3 Billion

N

O

T

E

:

P

O

W

E

R

2

0

0

9

–

2

0

1

3

A

C

T

U

A

L

S

A

R

E

R

E

S

T

A

T

E

D

T

O

I

N

C

L

U

D

E

S

O

L

A

R

C

A

P

I

T

A

L

S

P

E

N

D

.

P

O

W

E

R

C

A

P

I

T

A

L

S

P

E

N

D

I

N

G

E

X

C

L

U

D

E

S

N

U

C

L

E

A

R

F

U

E

L

.

E

=

E

S

T

I

M

A

T

E

.

Power

$1.6B

PSE&G

$10B

Power

$2.8B

PSE&G

$8.4B

$3.3

$1.0

$4.1

$0.8

$1.2

$0.8

$0.1

$2.9

$0.3

$6.8

$1.0

$0.4

$0.2

$0.2

PSEG’s business profile has been transformed

through significant growth in utility capital spending

3 YR

AVG

3 YR

AVG

ENDED

AVERAGE PSE&G CAPITAL SPENDING

FOR THE 3-YEAR PERIOD

ENDING IN BASE YEAR.

PSE&G TOTAL CAPITAL SPENDING

IN BASE YEAR.

3 YR

AVG

3 YR

AVG

3 YR

AVG

3 YR

AVG

3 YR

AVG

3 YR

AVG

12

$620

$729

$958

$1,138

$1,443

$1,749

$761

$855

$1,257

$1,302

$1,770

$2,175

$0

$500

$1,000

$1,500

$2,000

$2,500

2008

2009

2010

2011

2012

2013

3 YEAR AVERAGE PSE&G CAPITAL

SPENDING GREW AT A RATE OF

23%

PER

YEAR

FROM

2008

-

2013

13

recognizes need to

Energy Strong is:

A $2.6 Billion investment program over 5 years as the first phase of a 10-year,

$3.9 Billion infrastructure program

Proposal is based on contemporaneous recovery of investment, subject to

NJ Board of Public Utilities (BPU) review

Energy Strong proposal would harden 29 electric substations,

modernize the gas distribution system, make the grid smarter, and

improve the system’s ability to communicate with customers

Over 100 New Jersey municipalities support Energy Strong

Proposed Energy Strong program would create approximately 5,800

jobs and stimulate NJ’s economy

Energy Strong Proposal

strengthen and harden the distribution system

14

PSEG Power –

Value-advantaged through asset diversity,

fuel flexibility, location and installed environmental controls

Load Following

Peaking

Base load

1%

44%

27%

9%

1%

18%

<1%

30%

55%

2%

<1%

13%

43%

23%

34%

Gas

Pumped

Storage

Nuclear

Oil

Coal*

Solar

2

0

1

3

P

E

R

I

O

D

* I

N

C

L

U

D

E

S

N

E

W

J

E

R

S

E

Y

C

O

A

L

U

N

I

T

S

T

H

A

T

F

U

E

L

S W

I

T

C

H

T

O

G

A

S .

Fuel Diversity

Total MW: 13,450

Energy Produced

Total GWh: 54,264

Energy Market Served

Total MW: 13,450

PSEG Power –

Our diverse fleet and flexible portfolio

allow us to capture opportunities arising from market volatility

*AT THE BEGINNING OF EACH YEAR.      **EXCLUDES BGSS.

15

$40

$45

$50

$55

2011

2012

2013

PSEG Power Gross Margin**

Hedges + Forwards*

Actual

Balance Sheet Strength

16

2009

–

2013:

Reduced

risk

profile

and

transformed

business mix

•

Invested $8.4 billion in PSE&G

•

Improved credit ratings

•

Monetized

and

de-risked

Holdings’

portfolio

2014

–

Forward:

Strong

cash

flows

and

increasingly

regulated business mix fully support:

•

PSE&G’s $10B approved investment program through 2018

•

Consistent and sustainable dividend growth

•

Additional

investment

capacity

to

deploy

in

opportunities

beyond

those

in the current capital plan

•

No need to issue equity

17

Where we’re going …

actions taken to focus on

more predictable growth

S E E   S L I D E   A   F O R   I T E M S   E X C L U D E D   F R O M   I N C O M E   F R O M   C O N T I N U I N G   O P E R A T I O N S /

N E T   I N C O M E   T O   R E C O N C I L E   T O   O P E R A T I N G   E A R N I N G S .    E  =  E S T I M A T E

.

PSEG Focus

Opportunity for

consistent,

sustainable growth

Operating Earnings Per Share

•

O&M Growth per year

•

PSE&G Rate Base

•

Transmission

•

E&G Distribution

•

EE and Solar

•

Nuclear Generation

•

CC Equivalent Availability

•

PSEG LI Earnings

•(0.7%) (forecast³)

•$13,700

•$6,500

•$6,600

4

•$600

4

•31.4TWh

•91%

•$0.07

5

2016E

($ Millions except as noted)

•

1.5% (actual²)

•

$10,400

•

$3,800

•

$6,000

•

$600

•

29.5TWh

•

89%

•

$0

2013

•

2.4% (planned¹)

•

$6,800

•

$866

•

$5,900

•

$0

•

29.3TWh

•

90%

•

$0

2008

$1.29

$1.44

Common Dividend Per Share

$70

$38

$38

6

PJM West RTC ($/MWh)

$2.58

$2.91

(

1

)

P

l

a

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–

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(

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.

(

3

)

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–

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.

( 4 )  I n c l u d e s    a p p r o v e d    s o l a r    p r o g r a m s .

(

5

)

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a n d    e n e r g y   p r o c u r e m e n t   c o n t r a c t .

( 6 )  F o r w a r d    m a r k e t   a s   o f   2 / 2 6 / 2 0 1 4  .

18

PSEG Annual Dividend –

A long history of growth

and returning cash to shareholders with a financial position that

provides opportunity for consistent and sustained growth

Payout Ratio

70%

63%

66%

43%

44%

43%

44%

50%

58%

56%

56%**

PSEG Annual Dividend Rate 

* I N D I C A T E D   A N N U A L   R A T E .

*

*

2

0

1

4

P

A

Y

O

U

T

R

A

T

I

O

R

E

F

L

E

C

T

S

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H

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M

I

D

P

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I

N

T

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F

O

P

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R

A

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I

N

G

E

A

R

N

I

N

G

S

G

U

I

D

A

N

C

E

.

E

=

E

S

T

I

M

A

T

E

10-YEAR COMPOUND ANNUAL

RATE OF GROWTH 3.0%

$1.10

$1.12

$1.14

$1.17

$1.29

$1.33

$1.37

$1.37

$1.42

$1.44

$1.48*

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014E

19

Value Proposition

PSEG is positioned to expand its investment in PSE&G

projects that provide reasonable, risk-adjusted returns,

in ways that meet customer needs and state goals,

given strong cash flow of Power and growing cash

contribution from PSE&G.

PSEG will maintain a strong financial profile that

provides the opportunity to achieve our growth

objectives and maintains our track record of returning

cash to shareholders.

We have the

energy

to make things better

…

for you, for our investors

and for our stakeholders.

PSE&G

P R E S I D E N T   A N D   C H I E F   O P E R A T I N G   O F F I C E R

P U B L I C   S E R V I C E   E L E C T R I C   &   G A S

Ralph LaRossa

22

Agenda

•

Company Overview

•

Financial Performance

•

Capital Investment

•

Energy Strong

•

In-depth Transmission Review

23

PSE&G

strategy

Building a

sustainable

platform that

balances

reliability,

customer rates

and public

policy to ensure

growth at

reasonable

returns

DISCIPLINED

INVESTMENT

OPERATIONAL

EXCELLENCE

FINANCIAL

STRENGTH

ENGAGED

WORKFORCE

PSE&G is the largest electric and gas distribution and

transmission utility company in New Jersey

*

W

E

A

T

H

E

R

N

O

R

M

A

L

I

Z

E

D

-

E

S

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M

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D

A

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N

U

A

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R

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P

E

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E

A

R

O

V

E

R

F

O

R

E

C

A

S

T

P

E

R

I

O

D .

**

S

P

E

C

I

F

I

C

P

R

O

J

E

C

T

S

A

P

P

R

O

V

E

D

F

O

R

I

N

C

E

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T

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V

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R

A

T

E

T

R

E

A

T

M

E

N

T

W

I

T

H

A

D

D

I

T

I

O

N

A

L

R

O

E .

Electric

Gas

Customers

Growth

(2009

–

2013)

2.2 Million

0.6%

1.8 Million

0.6%

Electric Sales and Gas Sold and Transported

41,286 GWh

3,813M

Therms

Projected

Annual

Load Growth

(2014 –

2016)

0.6%*

0.5%*

Projected Annual Load Growth

Transmission

(2014

–

2016)

1.1%

Sales Mix

Residential

33%

60%

Commercial

57%

36%

Industrial

10%

4%

Transmission

Electric

Gas

Approved Rate of Return

11.68% ROE**

10.3% ROE

10.3% ROE

Renewables and Energy Efficiency Approved

Programs

2009-2013

Total

Program Plan 

Solar Loan Capacity

79 MW

178.5 MW

Solar 4 All  Capacity

79 MW

125 MW

Energy Efficiency Annual Electric savings

182  GWh

204 GWh

Energy Efficiency Annual Gas savings

5M Therms

6M Therms

24

25

12 time

Mid-Atlantic

ReliabilityOne

award winner

and Outstanding

Response to a

Major Event

26

PSE&G’s operating earnings grew ~18%      

over the 5-year period with increased investment, cost control

and supportive rate mechanisms

* S E E   S L I D E   A   F O R   I T E M S   E X C L U D E D   F R O M   I N C O M E   F R O M   C O N T I N U I N G   O P E R A T I O N S / N E T  

I

N

C

O

M

E

T

O

R

E

C

O

N

C

I

L

E

T

O

O

P

E

R

A

T

I

N

G

E

A

R

N

I

N

G

S

.

PSE&G Operating Earnings* Per Share

$0.63

$0.85

$1.03

$1.04

$1.21

2009

2010

2011

2012

2013

Focus on controlling O&M and lower pension costs

support decline in expenses

PSE&G O&M*

2009–2014 CAGR: (1.0%)

* EXCLUDES REGULATORY CLAUSES                ** INCLUDES $40M IMPACT FROM SUPERSTORM SANDY.                E = ESTIMATE

27

0

200

400

600

800

1,000

1,200

2009

2010

2011

2012 **

2013

2014E

28

Growth in rate base is driven by investments with

constructive recovery mechanisms

PSE&G’s

rate base

has grown

~9% annualized

with investment

focused on

meeting

customers’

requirements

PSE&G Rate Base

84%

58%

15%

36%

2009

2013

Solar & Energy

Efficiency

Transmission

Distribution

$10.4B

$7.3B

1%

6%

29

Successfully worked with regulators to

develop multiple solutions for New Jersey’s energy and

economic development goals

Invested ~$2.0B through 2013; plan to invest additional ~$0.3B

through 2018 in approved programs

NOTE: SPENDING THROUGH 2013 UNLESS INDICATED OTHERWISE

•

Solar Loan I

–

2008

•

Solar Loan II

–

2009

•

Solar 4 All

–

2009

•

Solar Loan III

–

2013

•

Solar 4 All Ext

–

2013

RENEWABLES –

creative

solutions to install solar

generation:  $0.7B

•

Carbon Abatement

–

2008

•

Energy Efficiency

–

2009

•

Demand Response

–

2009

•

Energy Efficiency Ext

–

2011

ENERGY EFFICIENCY –

assisting customers with

controlling energy usage:  $0.3B

•

NJ Capital Infrastructure

Program 1 (CIP 1)

–

2009

•

NJ Capital Infrastructure

Program 2 (CIP 2)

–

2011

•

Energy Strong

–

Pending

DISTRIBUTION –

improving

the electric and gas delivery

infrastructure:  $1.0B

A 40% increase to $10 billion, in our

5-year investment program, with further opportunity from

Energy Strong

PSE&G’s Capital Expenditures

2013-2017E

$7.0 Billion

2014-2018E

$10.0 Billion

E   =   E S T I M A T E

30

33%

2%

65%

29%

3%

68%

Distribution

Solar/Energy Efficiency

Transmission

31

PSE&G’s capital program

has been expanded

and continues to focus on delivering energy solutions

PSE&G’s Capital Expenditures

E = ESTIMATE

0

500

1,000

1,500

2,000

2,500

3,000

2009

2010

2011

2012

2013

2014E

2015E

2016E

2017E

2018E

Distribution

Transmission

Solar/Energy Efficiency

Previous Forecast for 2013-2017 Approved Programs

PSE&G’s capital program

could expand further

with the addition of Energy Strong

PSE&G’s Capital Expenditures

E = ESTIMATE

32

0

500

1,000

1,500

2,000

2,500

3,000

2009

2010

2011

2012

2013

2014E

2015E

2016E

2017E

2018E

Distribution

Transmission

Solar/Energy Efficiency

Energy Strong -

as filed

Previous Forecast for 2013-2017 Approved Programs

33

Energy Strong filing for resiliency and hardening to

support customers’

needs in the wake of Superstorm Sandy

•

Filed 5-year $2.6 billion capital program with NJ Board of Public

Utilities (BPU) in February 2013

•

Program addresses system resiliency and hardening by:

•

Protecting distribution substations from severe storms

•

Making the electric grid smarter and easier to repair

•

Adding backup distribution lines and system redundancies

•

Moving overhead distribution lines underground

•

Modernizing the gas distribution system

•

Currently in confidential negotiations with Staff of BPU and

major intervenors; hearings conclude March 7, 2014

•

Anticipate a final order following either settlement or litigated

decision by the end of April 2014

Over 70% of PSE&G’s $10 billion investment program will

be recovered through contemporaneous mechanisms

Clause Recovery Mechanisms

Solar/Energy Efficiency

FERC Formula Rates

Transmission

Traditional Recovery Mechanisms

Distribution Base Rates

E  =  E S T I M A T E

34

3%

68%

29%

2014-2018E PSE&G Capital Spending by Recovery Method

$10.0 Billion

The Energy Strong impact to customer bills is

expected to be fully offset

PSE&G’s Typical Average Residential Bill

Consumer

Price

Index

35

$0

$1,000

$2,000

$3,000

$4,000

2008

2014

2015

2016

2017

2018

2019

Customer Bill

-

Electric

Customer Bill

-

Gas

Transitional Energy

Facility Assessment

Securitization

Non-Utility

Generation

Energy Strong

Proposal

O U T – Y E A R   B G S / B G S S ,   S B C ,   A N D   D I S T R I B U T I O N    R A T E S   H E L D   C O N S T A N T   A T   C U R R E N T   2 0 1 4   R A T E S .

R A T E S   R E L A T E D   T O   E L E C T R I C   R E S T R U C T U R I N G :   S E C U R I T I Z A T I O N   ( S T C ) ,   N O N – U T I L I T Y   G E N E R A T I O N   C H A R G E   ( N G C ) ,   &   T R A N S I T I O N A L   E N E R G Y   F A C I L I T I E S  

A S S E S S M E N T   ( T E F A ) ,   A R E   R E D U C E D   T O   Z E R O   B Y   2 0 1 7 .   T H E   R G G I   R E C O V E R Y   C H A R G E   ( R R C ) ,   S O L A R   P I L O T   R E C O V E R Y   C H A R G E   ( S P R C ) ,   A N D   C A P I T A L 

E C O N O M I C   S T I M U L U S   I N F R A S T R U C T U R E   I N V E S T M E N T   P R O G R A M   E X T E N S I O N   ( C I P   I I  )   B I L L   I M P A C T S   A R E   I N C L U D E D   I N   T H E I R   R E S P E C T I V E   G A S   A N D  

E L E C T R I C   B A R S   A N D   F O R E C A S T E D   I N   O U T – Y E A R S   B A S E D   U P O N   L A T E S T   E S T I M A T E .   E N E R G Y    S T R O N G   B I L L   I M P A C T S   A R E   B A S E D   U P O N   C U R R E N T   F O R E C A S T .

IN-DEPTH

TRANSMISSION REVIEW

V I C E -

P R E S I D E N T   D E L I V E R Y   P R O J E C T S

A N D   C O N S T R U C T I O N

Kim Hanemann

Transmission

has

delivered,

and has grown

to represent 

~36% of rate

base

PSE&G’s Transmission Capital Expenditures

37

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2009

2010

2011

2012

2013

Burlington-Camden

Mickelton-Gloucester-Camden

North Central Reliability

Northeast Grid

Susquehanna-Roseland

Remaining Transmission

Transmission represented ~36% of rate base at YE 2013

up  from ~15% at YE 2009

PSE&G’s existing major transmission

investment program remains on schedule and on budget

Major Transmission Projects

Approved

ROE

Inclusion

of CWIP in

Rate Base

100%

Recovery

of Costs

Due to

Abandonment

Project

Estimate

Up To

($ Millions)

Expected

In-service

Date

Susquehanna-Roseland

12.93%

$790

June 2014 /

June 2015

Northeast Grid Reliability

11.93%

$907

June 2015

North Central Reliability

11.68%

$390

June 2014

Burlington–Camden 230kV

11.68%

$399

June 2014

Mickleton–Gloucester–Camden 230kV

11.68%

$435

June 2015

38

Susquehanna-Roseland consists of constructing

150 miles of 500kV circuit (46 miles in NJ) with two new 500kV

GIS switching stations at Roseland and Hopatcong

* P R O J E C T   I S   S H A R E D   W I T H   P P L .   P R O J E C T   E S T I M A T E   R E P R E S E N T S   P S E & G ’S   

C O N S T R U C T I O N   R E S P O N S I B I L I T Y   F O R   T H E   N J   P O R T I O N .    

39

Project

Estimate

Up To*

Through

Year-end 2013

Expected

In-service Date

$790M

$661M

June 2014

/ June 2015

•

PJM RTEP project b0489

•

ROE of 12.93% (including 1.25% incentive)

•

100% CWIP in rate base during development

•

100% recovery of prudently incurred costs due to abandonment

Customer Benefit: Improves reliability and reduces congestion

Project Status:  Major permitting & siting

complete, outside plant

construction in progress, inside plant construction is complete and

commissioning  is in progress

Northeast Grid Reliability consists of

upgrading approximately 50 overhead circuit miles of 138kV

transmission line to 230kV, constructing ~18 miles of new

underground 230kV lines, and converting/upgrading 12

existing stations to 230kV operation

40

Project Estimate

Up To

Through Year-end

2013

Expected

In-service Date

$907M

$228M

June 2015

•

PJM RTEP project b1304

•

ROE of 11.93% (including 0.25% incentive)

•

100% CWIP in rate base during development

•

100% recovery of prudently incurred costs due to abandonment

•

Project estimate has increased ~$12M associated with hardening

related scope changes as a result of Superstorm Sandy

Customer Benefit: Improves reliability and increases transfer capability

Project Status: Nearing completion of engineering/design and

licensing/permitting phase.  Outside and inside plant construction are in

progress

North Central Reliability consists of upgrading

55 circuit miles of 138kV transmission line to 230kV, and

converting six existing stations to 230kV operation

Project Estimate

Up To

Through Year-end

2013

Expected

In-service Date

$390M

$349M

June 2014

•

PJM RTEP project b1154

•

ROE of 11.68%

•

100% CWIP in rate base during development

•

100% recovery of prudently incurred costs due to abandonment

Customer Benefit: Improves power quality and increases transfer

capability

Project Status: Major permitting & siting complete, outside and

inside plant construction is essentially complete, commissioning

is

in progress

41

Burlington-Camden 230kV

consists of

upgrading 37 circuit miles (30 miles of overhead and 7 miles of

underground) of 138kV transmission line to 230kV, converting

the existing stations to 230kV operation

Project Estimate

Up To

Through Year-end

2013

Expected

In-service Date

$399M

$301M

June 2014

42

•

PJM RTEP project b1156

•

ROE of 11.68%

•

100% CWIP in rate base during development

•

100% recovery of prudently incurred costs due to

abandonment

Customer Benefit: Addresses voltage reliability and

increases transfer capability

Project Status: Major permitting & siting complete, outside

plant construction is complete, and inside plant construction

and commissioning is in progress

Mickleton-Gloucester-Camden 230kV

consists of upgrading 10 circuit miles of overhead transmission,

installing ~16 circuit miles of new 230kV underground, 10

circuit miles of new 230kV overhead, and

modifications/upgrades at five existing stations

Project Estimate

Up To

Through Year-end

2013

Expected

In-service Date

$435M

$122M

June 2015

43

•

PJM RTEP project b1398

•

ROE of 11.68%

•

100% CWIP in rate base during development

•

100% recovery of prudently incurred costs due to abandonment

Customer Benefit: Addresses thermal reliability and increases

transfer capability

Project Status: Major permitting & siting complete, outside and

inside plant construction in progress

Bergen-Linden Corridor is a recently approved

project which will provide a double-circuit 345kV line to

maintain reliability

Project Estimate

Up To

Through Year-end

2013

Expected

Completion Date

$1,200M

-

June 2018

44

•

PJM RTEP project b2436

•

30 miles of underground cable

•

New ~ 23 miles

•

Reconductor (Upgrade of 138 to 345) ~7 miles

•

13 miles of double circuit overhead conductor (replacing

double circuit 138 with double circuit 345)

•

11 station upgrades to 345kV

Customer Benefit: Addresses thermal and short-circuit

reliability

Project Status: Engineering

Planned transmission spend of $6.8 billion

is driven by PJM reliability projects, 69kV conversions and

life-cycle replacement projects

PSE&G’s Transmission Capital Expenditures

E= ESTIMATE

45

PSE&G’s processes and culture

are the

foundation for project execution success

Diverse, well-rounded team

Culture with a focus for on-time, on-scope and on-budget

execution

Successful

recruitment,

development

and

retention

strategies 

Strong unions and supplier relationships

Cradle to grave project execution organization

Processes designed to be scalable, repeatable and

improvable

Emphasis on best practices and lessons learned

sharing

Improvements driven by performance metric

management

Collaborative relationship with regulatory agencies

Innovative design and construction practices to minimize

environmental impacts

Robust environmental compliance system

46

People

Process

Environment

PSE&G’s

demonstrated

ability

to

successfully

execute large

projects leaves us

well positioned to

pursue new

opportunities

Future RTEP as

identified by PJM

Near-term participation

in RTO competitive

open planning windows

PJM

MISO

NYISO

Anticipate participating

in future competitive

solicitations under

FERC 1000

47

PSE&G’s 2014 operating earnings

to benefit from increased investment in transmission and

on-going cost control

E=ESTIMATE

48

*SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING OPERATIONS/NET INCOME TO

RECONCILE TO OPERATING EARNINGS.

PSEG LONG ISLAND

CHAIRMAN OF THE BOARD

PSEG LONG ISLAND

Ralph LaRossa

PSEG was selected to operate Long Island Power

Authority’s (LIPA) electric transmission and distribution system

for 12 years starting in 2014

Pursuant

to

the

Operating

Services

Agreement

(OSA),

all

expenses

and

capital costs to operate the system are pre-funded by LIPA and passed

through to their customers

Compensation consists of a fixed fee and an incentive fee

Fixed compensation fee for 2014 with scheduled increases in 2015

and 2016

Starting in 2015 PSEG Energy Resources and Trading (ER&T) begins

managing fuel/energy contracts

PSEG Long Island expected to contribute $0.03 to operating earnings in 2014

increasing to $0.07 per share in 2016 including contribution at ER&T

Potential for an 8-year extension of the OSA

50

PSEG Long Island commenced operations

on January 1, 2014

51

Key elements of Operating Services Agreement

Increased PSEG

scope and control

Performance metrics

NY Department of

Public Service

oversight

Potential for “Utility

2.0”

investment

Use of PSEG brand

as PSEG Long Island

3-Year rate freeze

(2013-2015)

Early performance

Successful transition

to PSEG Long Island

Stakeholder

communication

Winter storm

response

We have the

energy

to make things better

…

for you, for our investors

and for our stakeholders.

PSEG POWER

PRESIDENT AND CHIEF OPERATING OFFICER

PSEG POWER

William Levis

PSEG Power

strategy

Excellence in

operating our units

safely, reliably, cost-

competitively and in

an environmentally,

responsible manner

DISCIPLINED

INVESTMENT

OPERATIONAL

EXCELLENCE

FINANCIAL

STRENGTH

ENGAGED

WORKFORCE

54

Agenda

•

Delivering Value

•

Fleet Advantage, Location, Flexibility and 

Fuel Diversity

•

Nuclear Operation

•

Fossil Operation

•

Financial Performance

•

Expansion Opportunities

•

Regulatory

•

Engaged Workforce

55

PSEG Power creating value by responding to

changing markets and regulations

Safety/Environmental Focus

Fleet Diversity/Efficiency Focus

Financial/Economic

Focus

Regulatory Focus

•

Nuclear units continue to achieve strong

operational results, operating

at over 90% capacity factors for the

9

th

consecutive

year

•

Fleet diversity across the dispatch curve

and fuel types provide flexibility to meet

changing conditions

•

Linden CCGT and Salem 2 nuclear unit

achieved record output in 2013

•

“Getting the most out of

existing fleet”

•

Locational advantage

•

O&M control programs

have delivered a CAGR of

1.6% between 2009 and

2014

•

Sites offer competitive

advantage for expansion

•

Strong regulatory

performance

•

Industry leadership in the

changing business

environment

56

•

Maximize value of existing generating

plants through implementation of the

Operational Excellence Model (OEM)

•

Workforce engagement and development

•

Deliver on Business Plan Commitments

•

Maintain competitive markets and improve

constituent

communication on issues    

important to Power

•

Successfully complete the Advanced Gas         

Path (AGP) uprates

•

Seek new opportunities in target markets        

(PJM, ISO-NE, NYISO)

•

Develop our renewables business (solar)

•

Maintain new nuclear option by successfully

managing the Early Site Permit (ESP) process

•

OEM implemented and

achieving measures

•

Resource sharing program

initiated

•

Exceeded earnings guidance

in 2013

•

Ongoing effort in key markets

showing success

•

Successful court outcome

against subsidized generation

•

Accelerated schedule for

AGP to maximize opportunity

•

LIPA contract for fuel and

generation dispatch

•

Completed 19 MW solar project,

4 MW project under construction,

established robust pipeline

•

Nuclear ESP is expected in 2015

57

Financial

Strength

Disciplined

Investment

Operational

Excellence

PSEG Power Delivering on priorities

PSEG Power met 2013 challenges

Storm and

weather challenges

•

SuperStorm Sandy

impacted

our generating sites

•

Cold and hot weather

extremes created

challenging

operating

environment, but

also presented

opportunities

Market

challenges

•

Unit outages and

planned

transmission

outages resulted in

pressure on basis

•

Lower gas cost

impacted dark

spread pressuring

coal unit dispatch

•

Load impacted by

economy

Value

delivered

•

Optimized unit dispatch across fleet

during storm recovery

•

Expedited return from storm outages,

restored margin opportunities

•

High availability when needed

•

Achieved fuel cost savings

•

Captured value through coal/gas

switching, unit flexibility

•

Coal & oil sales optimized inventory

•

Flexibility of portfolio captured real-

time basis opportunities

58

PSEG Power exceeded 2013’s earnings guidance

$630-$685M

$710M

$535M-$600M

Winter/

Summer

Volatility

Lower

Gas

Cost

Basis

Volatility

Spark/

Dark

Spread

Fuel

Flexibility

SOLAR/

KALAELOA

$15M*

GUIDANCE

RANGE

Over $100M of additional

value gained from fleet

flexibility, locational

advantage and market

volatility

Initial

Guidance

Actual

Revised

Guidance

OPERATING

EARNINGS

FOR

PSEG

POWER

IN

2013;

SEE

SLIDE

A

FOR

ITEMS

EXCLUDED

FROM

INCOME

FROM

CONTINUING

OPERATIONS/NET

INCOME TO RECONCILE TO OPERATING EARNINGS.  *ASSETS TRANSFERRED TO POWER AT YEAR-END 2013.

59

PSEG Power has generating assets

in three competitive markets

•

Assets near loads

•

Low cost portfolio

•

Fuel flexibility with gas

cost advantage

•

Poised to benefit from

volatility in real-time

markets

•

Fleet will maintain

diversity and efficiency

after HEDD

•

Most sites suitable for

expansion

ISO

New

England

New Haven

Bridgeport

Bethlehem Energy Center

(Albany)

Conemaugh

Keystone

Peach Bottom

Bergen

Kearny

Essex

Sewaren

Edison

Linden

Mercer

Burlington

National Park

Hudson

Hope Creek

Salem

Yards Creek

New York ISO

PJM

60

PSEG Power will maintain diversity and efficiency after a

realignment of the fleet due to HEDD

•

Maintain fuel diversity

•

Maintain load-serving

capability

•

Maintain low cost

structure

•

Environmental

improvement

•

Peach Bottom (PB)

uprate

•

Advanced Gas Path

(AGP)

•

Kalaeloa and Solar

transfer adds ~200MW

of capacity

Objective

2013

2017

13,450 MW

11,900 MW

Fuel Diversity

55 -

56 TWh

54 TWh

61

2013

2017

2013

2017

Solar

Kalaeloa

Oil

Pumped Storage

HEDD

Other gas

Peakers

AGP/PB EPU

CCGT

Coal

Nuclear

CCGT

Coal

Nuclear

AGP/PB EPU

Peakers

Oil, Other gas, HEDD,

Pumped storage,

Kalaeloa, Solar

Energy Produced

Power’s PJM assets along the dispatch curve reduce

the risk of serving full requirement load contracts and can take

advantage of volatile market conditions

Energy Revenue

X

X

X

Capacity Revenue

X

X

X

Ancillary Revenue

X

X

Dual Fuel

X

X

Illustrative

Salem

Hope

Creek

Keystone

Conemaugh

Hudson 2

Linden 1,2

Bergen 1

Mercer 1, 2

Bergen 2

Peach

Bottom

Burlington 8-9-11

Edison 1-2-3

Essex 10-11-12

Sewaren 6

Linden 5-8 / Essex 9

National Park

Salem 3

Bergen 3

Mercer 3

Sewaren 1-4

Burlington 12

Yards Creek

Base Load Units

Peaking Units

Load Following Units

Kearny 9-12-13-14

Nuclear

Coal

Coal/Gas

Combined Cycle

Steam

Combustion Turbine /

Pumped Storage

•

Base Load ensures cash flow certainty

•

Load Following provides ability to serve load shape

•

Peaking takes advantage of real-time prices and

reduces operational risk

•

Dual fuel flexibility for >60% of fleet

62

PSEG

Power

Nuclear

is

a

critical

element

of

our

success

Hope Creek

•

Operated by PSEG Nuclear

•

PSEG Ownership: 100%

•

Technology: Boiling Water

Reactor

•

Total Capacity: 1,178 MW

•

Owned

Capacity:

1,178

MW

•

License Expiration: 2046

•

Next Refueling

•

Spring 2015

Salem

Units 1 and 2

•

Operated by PSEG Nuclear

•

PSEG Ownership:  57%

•

Technology: Pressurized Water

Reactor

•

Total Capacity: 2,365 MW

•

Owned Capacity: 1,358 MW

•

License Expiration: 2036

and 2040

•

Next Refueling

•

Unit 1 --

Fall 2014

•

Unit 2 –

Spring 2014

Peach Bottom

Units 2 and 3

•

Operated by Exelon

•

PSEG Ownership: 50%

•

Technology: Boiling Water

Reactor

•

Total Capacity: 2,251 MW

•

Owned Capacity:

1,125 MW

•

License Expiration: 2033

and 2034

•

Next Refueling

•

Uprate:  130 MW in

2015/2016

63

•

Unit 2 –

Fall 2014

•

Unit 3 –

Fall 2015

PSEG Power Nuclear is core to the fleet and

has competitive advantages

*STRATEGY

KNOWN

AS

THE

“DIVERSE

AND

FLEXIBLE

MITIGATION

CAPABILITY”

OR

FLEX,

ADDRESSES

RECOMMENDATIONS OF THE NUCLEAR REGULATORY COMMISSION’S FUKUSHIMA TASK FORCE.

64

•

Continued strong nuclear operations:

nine consecutive years of >90%

capacity factor

•

Significant earnings contributor

•

Top quartile of cost performance/MWh

•

One third new staff, recruitment of the

best new and experienced talent, and

attractive training program

•

Fukushima action plan

in response to NRC staff review

FLEX* plan submitted with implementation

starting with Fall outage

•

Peach Bottom extended power uprate,

130 MW Power’s share, scheduled in

service 2015/2016

•

Active and influential participation at

INPO, NEI, EPRI, USA Alliance

Power’s nuclear fleet is well positioned

with significantly lower-than-average US cost structure

*SOURCE: ELECTRIC UTILITY COST GROUP

** SOURCE: PSEG NUCLEAR

Total

Fuel,

Capital

and

O&M

Costs*

3 YEAR AVERAGE 2010 -

2012

65

0

25

50

All US*

PSEG Nuclear**

PSEG Power’s Fossil Fleet Performance

has shown improvement

*LM6000 AND 7EA UNITS

Capacity Factor

NJ Coal EFORp

Peaking Start Success*

NJ Combined Cycle EFORp

•

Fossil Capacity Factor rebounded with market

•

Peaking Units maintain high start success

•

Coal EFORp improving

•

CC EFORp less than 1% in 2013

•

Consistent recipient of EFORp payments

66

PSEG Power

improvements

achieved in

combined cycle

fleet efficiency

Actions Taken to Create Value

•

Operational Excellence Model

•

Training programs

•

Unit testing initiative

•

Outage work to restore

efficiency

•

Second gas line at BEC

•

Heat rate improvement

2008-2013 translates to

meaningful fuel savings

at current market prices

•

Advanced Gas Path (AGP)

investments 2014 through

2018 to provide additional

fuel savings

AGP projected efficiency

improvement 2014-2018

2018

67

7,300

7,400

7,500

7,600

7,700

7,800

2008

2009

2010

2011

2012

2013

Combined Cycle Operating Heat Rate

Investing to expand CCGT capacity and

improve efficiency

o

Expand Power’s CCGT fleet, one of the

largest gas-fired portfolios in PJM, with

incremental base and peaking MWs

o

Retrofit Bergen, Linden and BEC with

Advanced Gas Path (AGP) components

at

cost

of

~$120M

over

2014

-

2018

AGP Project Benefits 

PSEG Power -

CCGT Uprate Project

CCGT capacity uprates of ~150 MW: 

-

Bergen (31MW –

2015)

-

BEC (58 MW –

2017-18)

Increases Efficiency -

Combined Cycle

(CC) heat rate improvement ~ 1.2%

Upgrades technology and extends

maintenance outage cycles

68

-

Linden (63 MW –

2014)

PSEG Power’s fleet is among the lowest

emitting in the industry

•

Mercury reduced 80% across the timeframe above

•

More efficient testing and improved operational flexibility through utilization of Continuous

Emission Monitoring System testing

•

Cost control through testing coordination program

69

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2006

2007

2008

2009

2010

2011

2012

2013

Generation

SO2

NOx

PSEG Power’s capital expenditures for

environmental requirements are essentially complete*

COMPLETION OF

CONEMAUGH SCR/FGD

MODS IN 2015

70

$0

$100

$200

$300

$400

$500

$600

$700

2009

2010

2011

2012

2013

2014E

2015E

2016E

Growth

Environmental / Regulatory

Maintenance

*BASED ON CURRENTLY KNOWN AND QUANTIFIABLE ENVIRONMENTAL REQUIREMENTS. E=ESTIMATE

71

$0

$500

$1,000

$1,500

2009

2010

2011

2012

2013

2014E

2009 to 2014 CAGR = 1.6%

Power O&M Expense*

*EXCLUDES IMPACTS FROM STORM RECOVERY COSTS

E=ESTIMATE

PSEG Power’s

focus on costs

has resulted in

moderate increase

in O&M for

six years

Cost control actions taken:

•

Fossil plant assessment

•

CCGT material condition assessment

•

Contract renegotiations

•

Nuclear maintenance productivity study

•

Nuclear outage efficiency initiative

•

Materials management

72

PSEG Power is well-positioned

for

growth

when market conditions warrant

Available locations

Our sites possess infrastructure advantages

•

Bergen

•

Burlington

•

Essex

•

Edison

•

Kearny

•

Hudson

•

Linden

•

Sewaren

•

Bridgeport

Harbor

•

Electric Transmission Interconnections

•

Access to Gas Pipelines

•

Space

•

Emissions

73

Shasta

California (4 MW)

Expected COD March 2014

Polycrystalline -

single axis

tracker

Investment $13 million est.

20 year PPA with PG&E

Hackettstown  (Mars)

New Jersey  (2 MW)

COD September 2009

Thin film panels –

fixed tilt

Investment $13 million

15 year PPA with Mars, Inc.

Wyandot

Ohio (12 MW)

COD May 2010

Thin film panels –

fixed tilt

Investment $45 million

20 year PPA with AEP

JEA

Florida (15 MW)

COD September 2010

Thin film panels –

fixed tilt

Investment $59 million

30 year PPA with JEA

Queen Creek

Arizona (25 MW)

COD October 2012

Polycrystalline -

single axis tracker

Investment $79 million

20 year PPA with SRP

Milford

Delaware (15 MW)

COD December 2012

Polycrystalline -

fixed tilt

Investment $49 million

20 year PPA with DEMEC

Badger I

Arizona (19 MW)

COD November 2013

Polycrystalline -

single axis

tracker

Investment $50 million

30 year PPA with APS

•

Continue to seek high quality projects with

creditworthy off-takers.

•

Solar portfolio delivers strong EBITDA post-

construction period.

PSEG Solar Source owns 88 MW of

operating solar facilities and has one project under construction

74

PSEG Power is an established leader

within the industry

INPO

•

Board of Directors

•

National Nuclear Accrediting Board

NEI

•

Chair Communications Advisory Committee

•

Board of Directors

•

Board of Directors Executive Committee

•

Chair Emergency Preparedness Working Group

•

Security Working Group

•

Fukushima Response Steering Committee

•

Nuclear Strategic Issues Advisory Committee

Steering Group

EPRI

•

Chairman Nuclear Power Council

•

Executive Committee Nuclear Power Council

BWR Owners Group

•

Vice Chair of the Executive Oversight Committee

USA Alliance

•

Chair

EPSA

•

Executive committee member

UWAG

•

Chair of the Cooling Systems Committee

PJM/NY/ISO-NE

•

Chair of NEPOOL Participants Committee

•

Member of various Committees at PJM

•

Vice-Chair of the Supplier Sector of the    

NEPOOL

•

Chair of the NEPOOL Budget & Finance

Subcommittee from 2008 through 2013

•

Seat on the ISO-NE Board of Directors

Joint Nominating Committee

•

Founding member of NEPGA (New England

Power

Generators

Association)

–

trade

association, position on Board of Directors

75

Developing People to drive operational excellence

and to optimize the workforce

•

Succession planning and development planning

•

Training & development of employees

•

Outreach programs

•

Employee engagement

•

Shared resources between Fossil and Nuclear              

(outage support)

PSEG POWER

ER&T

Shahid Malik

PRESIDENT, PSEG ENERGY

RESOURCES & TRADE

77

Portfolio Management Strategy

Optimize value of assets

Manage risk vs. reward

Directly engage with

regulatory agencies

ENGAGED

WORKFORCE

DISCIPLINED

INVESTMENT

OPERATIONAL

EXCELLENCE

FINANCIAL

STRENGTH

78

Agenda

Market Review

PSEG’s Competitive Advantage

PSEG’s Sustainable Advantage

79

•

Energy and gas prices appear to have

stabilized

•

Environmental restrictions may

tighten market

•

Insufficient gas infrastructure

continues to place upward pressure on

fuel prices during seasonal peaks

NYMEX Natural Gas Price

PJM West RTC

PJM West Spark Spreads

Market Review:

Prices have stabilized

F=FORWARDS AS OF 12/31/2013

80

Forecast Reserve Margin (PJM January 2014)

•

PJM

forecasts

a

declining

Reserve

Margin

through

2018,

which

may

improve

forward

prices

•

Brattle

estimates

energy

prices

could

rise

at

least

$3-4/MWh

from

today’s

prices

*PJM AS OF FEBRUARY 20, 2014

SOURCE OF CHART DATA:  PJM

Cumulative Generation Retirements*

Market Review:

New generation in PJM not

keeping pace with coal retirements

81

ISSUE / POLICY

REGULATORY GAINS

PJM

SUBSIDIZED GENERATION

(NJ and MD)

•

Comprehensively defeated in federal court (appeals currently pending)

DEMAND RESPONSE

RULES

•

PJM and ISO-NE enacted stricter rules of eligibility and deployment

ENERGY PRICE

FORMATION

•

Concerted drive to improve price formation for generation and ancillary

services

•

Waiver of price caps during extreme market conditions

NYISO

TRANSMISSION

•

Significant progress made to relieve bottling of upstate generation

ISO-NE

CAPACITY

•

Improvement in price formation to better reflect tight supply conditions

•

Implementation of sloping demand curve in Forward Capacity Auction (FCA) 9

ENERGY

•

Demand response required to participate in Day Ahead markets

FEDERAL

GAS to ELECTRIC

•

Better coordination between pipelines and ISO’s will promote efficiency

ENVIRONMENTAL

REGULATIONS

•

HEDD, HAPS/MACT may lead to tightening of supply in 2015+ timeframe

Market Review:

Regulatory framework showing signs

of improvement

82

Market Review

PSEG’s Competitive Advantage

PSEG’s Sustainable Advantage

PSEG Power:  Enjoys real and competitive

advantages in the merchant generation space

Fuel Flexibility

Heat Rate Diversity

Access to Marcellus Shale Gas

Trading & Asset Flexibility

Volatile Power Basis to PJM-West

Location

83

Competitive Advantage:

Heat Rate Diversity &

Flexible Dispatch

Illustrative

Salem

Hope

Creek

Keystone

Conemaugh

Hudson 2

Linden 1,2

Bergen 1

Mercer 1, 2

Bergen 2

Peach

Bottom

Burlington 8-9-11

Edison 1-2-3

Essex 10-11-12

Sewaren 6

Linden 5-8 / Essex 9

National Park

Salem 3

Bergen 3

Mercer 3

Sewaren 1-4

Burlington 12

Yards Creek

Base Load Units

Peaking Units

Load Following Units

Kearny 9-12-13-14

Nuclear

Coal

Coal/Gas

Combined Cycle (gas/oil)

Steam (gas/oil)

Combustion Turbine / Pumped Storage

(gas/oil)

PJM Dispatch Curve

84

Shale Supply

0.6 BCF/D

Storage

0.9 BCF/D

Competitive Advantage:

PSEG’s extensive gas

asset portfolio gives unparalleled access to Marcellus Shale gas

Gulf Coast Supply

0.7 BCF/D

85

Competitive Advantage:

~25% of Power’s gas

for generation comes from Marcellus

•

Our combined cycle and peaking assets have been able to take advantage of locational gas

price volatility driven by production and logistical constraints

•

Lower cost shale supply provides additional savings during periods of lower residential gas

demand

Spot Natural Gas Prices:  Jun-Dec 2013

Market

Prices for

Natural Gas

Access

to Lower

Cost Shale

Gas in

Marcellus

and Utica

86

Competitive Advantage:

Locational advantage

from short term basis volatility

$45

-

$47

$37

-

$38

$56

-

$58

$39

-

$40

ANNUAL FORWARD BASIS TO PJM-WEST AS OF 12/31/2013.

•

Annual basis benefits baseload

units

•

Intermediate units flexible to

seasonal opportunities

•

Combined Cycle and Peaking

units positioned to optimize daily

and hourly volatility

PS Zone Annual Basis to PJM-W

PS Zone Day Ahead On Peak Monthly Basis to PJM-W

PS Zone Real Time On Peak Hourly Basis to PJM-W

87

High gas market at $58/MMbtu setting

power prices in PS zone on 1/7/14

PSEG Zone LMP’s on January 7, 2014

Higher basis to generation

On Peak Basis to PJM-W on January 7, 2014

Additional steam and peaking generation

available above day ahead commitment

to gain value from real time market

Fuel flexibility with coal/gas/oil

optionality among available units

Hourly Generation and Load on January 7, 2014

Competitive Advantage:

Trading & Asset Flexibility

Base load and load following generation

sufficient to cover load and hedge

obligations

88

High demand in constrained northern NJ

Base load and load following generation

sufficient to cover load and hedge

obligations

Additional generation available above

obligations to gain value from real time

market spikes

Gas advantage in procuring low cost

shale supply to capture savings

PSEG Zone LMP’s on July 18, 2013

On Peak Basis to PJM-W on July 18, 2013

Hourly Generation and Load on July 18, 2013

Competitive Advantage:

Trading & Asset Flexibility

89

Market Review

PSEG’s Competitive Advantage

PSEG’s Sustainable Advantage

•

•

•

Long-term access to discounted Marcellus gas

Robust capacity market pricing in one of the most

concentrated load pockets in the US

PSEG Power:  Enjoys real and sustainable

advantages in the  merchant generation space

Positive cash-flow hedging into the long-term

90

Capacity

Load shape

Transmission

Congestion

Ancillary services

Risk premium

Green

~ $53

BGS sales account for about a quarter of our forward portfolio of hedges

3 Year Average

Round the Clock

PJM West

Forward Energy

Price

$94.30

$83.88

~ $46

$92.18

~ $47

~ $48

~ $43

~ $53

~ $59

$97.39

$48

-

$50

$68

-

$71

$48

-

$50

Sustainable Advantage:

BGS Auction provides

excellent opportunity to forward hedge our generation

$37

-

$38

$45

-

$47

$39

-

$40

$38

-

$39

$95.77

$/MWH; BGS PRICES REFLECT PSE&G ZONE; RESULTS FOR 2012-2014 WILL BE THE NEW BLENDED PRICES BEGINNING JUNE 1, 2014.

91

2014

2015

2016

Volume

TWh

35

35

35

Base

Load

%

Hedged

100%

75-80%

30-35%

Price

$/MWh

$48

$51

$53

Volume

TWh

20

19

19

%

Hedged

35-40%

0%

0%

Price

$/MWh

$48

$51

$53

Volume

TWh

53-55

53-55

53-55

Total

%

Hedged

75-80%

45-55%

20-30%

Price

$/MWh

$48

$51

$53

Sustainable Advantage: Hedging strategy

designed to protect gross margin while leveraging the portfolio

Intermediate Coal, Combined

Cycle, Peaking

(Nuclear and Base Load Coal)

HEDGE PERCENTAGES AND PRICES AS OF FEBRUARY 11, 2014. REVENUES OF FULL REQUIREMENT LOAD DEALS BASED ON CONTRACT PRICE,   

INCLUDING RENEWABLE ENERGY CREDITS, ANCILLARY, AND TRANSMISSION COMPONENTS BUT EXCLUDING CAPACITY. HEDGES   

INCLUDE POSITIONS WITH MTM ACCOUNTING TREATMENT AND OPTIONS.   EXCLUDES SOLAR AND KALAELOA.

92

$/MW-day

2012 / 2013

2013 / 2014

2014 / 2015

2015 / 2016

2016 / 2017

Power’s

Average Prices

$153

$244

$162

$167

$166

Rest

of

Pool

Prices

$16

$28

$126

$136

$59

10,400

10,600

10,300

9,000

8,600

2017/2018 RPM Auction Influenced By:

•

Updated Demand Curve

•

Updated Transfer Capabilities

•

Environmental Retirements

•

New Build/Cost of New Entry

•

Minimum Offer Price Rule

•

Demand Response

Sustainable Advantage:

PJM’s capacity market

is expected to continue to recognize locational value

Sustainable Advantage:

PJM’s capacity market

is expected to continue to recognize locational value

Power’s Capacity

(MW)

93

Forward curve shows that Marcellus shale supply averages over $1.50/MMbtu discount year-round through 2018

Basis to Henry Hub

2013 AVERAGE  6/1/13-12/31/13; F= FORWARDS AS OF 12/31/13.  LEIDY BASIS FROM ICE/BROKER QUOTES

Sustainable Advantage:  Fuel advantage

continues throughout the curve

94

Market Review

•

Gas, Power, Spark Spreads

•

Regulatory construct

PSEG’s Competitive Advantage

•

Fuel flexibility

•

Heat Rate diversity

•

Access to Marcellus Shale gas

•

Asset flexibility

PSEG’s Sustainable Advantage

•

Positive cash-flow hedging into the long-term

•

Robust capacity market pricing in most concentrated load pocket in US

•

Long-term access to discounted Marcellus gas

PSEG Power:  Enjoys real and sustainable

advantages in the merchant generation space

95

PSEG Power’s Value Proposition

•

Well-positioned fleet of merchant generating assets

concentrated in PJM market

•

Advantaged by low cost structure, fuel diversity and

dispatch flexibility

•

Low environmental capital requirements

•

Capacity uprates to enhance value of nuclear and

combined cycle stations

•

Consistent hedging strategy recognizes asset flexibility

•

Continue to meet commitments and to provide

free cash flow

We have the

energy

to make things better

…

for you, for our investors

and for our stakeholders.

PSEG

EXECUTIVE VICE PRESIDENT AND

CHIEF FINANCIAL OFFICER

Caroline Dorsa

98

Strong financial position to support our

business initiatives

2013 Financial Position

2014 and Beyond

Exceeded upwardly revised 2013 earnings guidance 

Pension fully funded 

Strong balance sheet and upgraded credit ratings

Continued positive earnings trend in 2014

Controlled O&M growth

Balance Sheet and Cash Flow support investments without equity issuance

Growth in PSE&G investments with contemporaneous returns

Diversified Power assets with a balanced hedge profile

Growth in PSE&G Cash from Operations, with continued significant Cash from Operations/FFO at Power 

Increased Dividend by $0.04 to indicative annual rate of $1.48 for 2014

Opportunity for consistent and sustainable dividend growth

99

*SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING OPERATIONS/NET INCOME TO RECONCILE TO OPERATING EARNINGS.

NOTE: 2012 OPERATING EARNINGS RE-STATED FOR TRANSFER OF ASSETS FROM PSEG HOLDINGS TO PSEG POWER.

Exceeded upwardly revised guidance

in both businesses

PSEG Operating Earnings

$ Millions (except EPS)

2012

2013

PSE&G

$528

$612

PSEG Power

$663

$710

Other

$45

($13)

Operating Earnings

$1,236

$1,309

Operating EPS*

$2.44

$2.58

Upwardly Revised Earnings Guidance (Nov 2013)

$2.40 -

$2.55

Earnings Guidance (Feb 2013)

$2.25 -

$2.50

100

Power Cash

from Ops

~$1.3B

Power

Capital

Investment

~0.6B

Dividend

to Parent

~$0.7B

Net Debt

~$0.2B

Free Cash Flow

~$0.7B

Cash

~$0.2B

~$0.9B Available for PSEG

In 2013, Power had significant free cash flow

Power 2013 Cash Flows

101

PSE&G Cash

from Ops

(1)

~$1.4B

PSE&G

Capital

Investment

~$2.2B

(1) PSE&G CASH FROM OPERATIONS ADJUSTS FOR SECURITIZATION PRINCIPAL REPAYMENTS OF ~$220 MILLION.

Cash ~$0.1B

In 2013, PSE&G invested over $2B, using $1.4B of

internally generated cash flow and debt, while maintaining its

capital structure  

PSE&G 2013 Cash Flows

Parent Capital

Contribution

~$0.1B

PSE&G

Net Debt

~$0.6B

102

In 2013, Power’s Free Cash Flow supported PSE&G’s

capital program and shareholder dividend

(1)

PSE&G CASH FROM OPERATIONS ADJUSTS FOR SECURITIZATION PRINCIPAL REPAYMENTS OF ~$220 MILLION.

(2)

OTHER CASH FLOW INCLUDES HOLDINGS NET CASH FLOW AND PARENT CASH.

Power

Cash from Ops

~$1.3B

PSE&G

Cash from Ops

(1)

~$1.4B

PSE&G

Capital

Investment

~$2.2B

Power

Capital

Investment

~$0.6B

Shareholder

Dividend

~$0.7B

Net Debt

Issuances

~$0.7B

PSEG Consolidated

2013 Sources and Uses

Other

Cash Flow

(2)

~$0.1B

103

PSEG growth spend of ~$5.4B represents ~72% of total

investment with Energy Strong potentially enhancing the profile

PSEG 2014 –

2016E Capital Investment

Power & Other

Maintenance

PSE&G

Distribution

Maintenance

Power

Growth

PSE&G

Transmission

Growth

PSE&G

Solar and  

New Business

PSE&G

Energy

Strong

Approved Growth Investment ~$5.4B

E = ESTIMATE; CAPITAL INCLUDES AFUDC AND IDC.

PSEG

Potential

Spend

Maintenance ~$2B

PSEG

Approved

Programs

Potential

Energy Strong

~$0.9B

~$0.3B

~$1.1B

~$0.8B

~$4.3B

~$1.3B

~$8.7B

~$7.4B

104

PSE&G’s Capital Program drives double-digit

growth in rate base and earnings over the 2013 to 2016 period

Distribution

2013

Rate Base

Potential 2016E

Rate Base

~$10.4B

~$13.7B

~$6.6B

~$3.8B

~$2.7B

~$6.5B

~$0.6B

~$1.3B

~$7.2B

Transmission

Growth

Energy

Strong

Solar and

New Business

~$15.0B

~$6.5B

~$8.5B

Approved 2016E

Rate Base

Approved Rate Base ~$3.3B

Potential Energy Strong

Transmission

2013 –

2016E Rate Base CAGR in approved Growth of ~10%

E = ESTIMATE

105

PSE&G’s Cash from Operations and Power’s Free Cash Flow

support growth investments without the need for new equity

2014 –

2016E

PSE&G

Cash from Ops

(1)

PSE&G

Capital

Investment

PSE&G

Net Debt

2014 –

2016E

PSEG Sources and Uses

(1)

PSE&G CASH FROM OPERATIONS ADJUSTS FOR SECURITIZATION PRINCIPAL REPAYMENTS OF ~$500M FROM 2014-2016

(2)

OTHER CASH FLOW INCLUDES PSEG LI, HOLDINGS NET CASH FLOW, CASH, AND SHORT TERM DEBT

E = ESTIMATE

PSE&G

Cash from Ops

(1)

PSE&G

Capital

Investment

PSE&G

Net Debt

Approved Programs

With Energy Strong

Shareholder

Dividend

Power

Cash from Ops

Other

Cash Flow

(3)

Shareholder

Dividend

Power

Cash from Ops

Power Net

Debt

Power

Capital

Investment

Power

Capital

Investment

Other

Cash Flow

(2)

Power Net

Debt

Sources

Uses

Sources

Uses

106

Power’s key credit metric

supports incremental

investment opportunities

E = ESTIMATE

PSEG Power

Funds From Operations /

Debt

(1)

2014-2016E

Average

Increased contribution to earnings from the more

stable regulated business allows us to reset

Power’s FFO/Debt threshold from 35% to 30%,

providing additional financial flexibility

Power’s annual Cash From Operations and Funds

From Operations each average ~$1.1B over the

2014 to 2016 period supported by:

Capacity Revenues

Hedged Generation

O&M Control

Financial strength can be used to pursue future

growth in both businesses beyond current plans

(1)

ESTIMATE BASED ON APPROVED PROGRAMS

0%

10%

20%

30%

40%

50%

60%

70%

80%

2012

2013

Pension: Our Long Term Asset allocation

strategy resulted in a ~17% increase in pension assets during

2013

Trust Assets

12/31/2012

Cash

Contributions

Investment

Return

Gross Benefits

Paid

Trust Assets

12/31/2013

$4.36B

$5.12B

~$0.15B

~$0.86B

~($0.25B)

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

107

PBO Funded

Ratio

83%

Fully

Funded Pension

106%

Our Pension Management

is expected to

result in pension income in 2014 and over the planning horizon

Pension (Expense)/Income

2013 to 2014 Drivers

2013

2014E

2015E

2016E

Expense

($110) M

Discount

Rate

~$40M

Investment

Return

~$70M

Other

(1)

~$15M

($125)

($75)

($25)

$25

Income ~$15M per annum

108

(1) OTHER REFLECTS UPDATES TO THE POPULATION OF OUR EMPLOYEES AND RETIREES

E=ESTIMATE

109

(1)

POWER EXCLUDES IMPACTS FROM STORM RECOVERY COSTS AND POTENTIAL RELATED INSURANCE PROCEEDS

NM = NOT MATERIAL E = ESTIMATE.

2013 -

2016E CAGR: ~(0.5)%

2013 –

2016E CAGR

Transmission

~(0.8)%

Distribution

~(0.9)%

Power

~(0.7)%

Other: N.M.

PSEG O&M Expense

(1)

Ongoing cost control efforts, including pension,

expected to reduce O&M over the forecast period

$0

$500

$1,000

$1,500

$2,000

$2,500

2013

2014E

2015E

2016E

110

Improving Operating Earnings

and increased contribution from PSE&G

PSEG Operating Earnings

$ Millions (except EPS)

2012

2013

2014E

PSE&G

$528

$612

$705 -

$745

PSEG Power

$663

$710

$550 -

$610

Other

$45

($13)

$35 -

$40

Operating Earnings*

$1,236

$1,309

$1,290 -

$1,395

Operating EPS*

$2.44

$2.58

$2.55 -

$2.75

Regulated % of Earnings

43%

47%

53%  -

55%

*SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING OPERATIONS/NET

INCOME TO RECONCILE TO OPERATING EARNINGS.

NOTE: 2012 OPERATING EARNINGS RE-STATED FOR TRANSFER OF ASSETS FROM PSEG HOLDINGS TO PSEG POWER.

E=ESTIMATE.

111

$1.33

$1.37

$1.37

$1.42

$1.44

$1.48

$0.60

$0.80

$1.00

$1.20

$1.40

2009

2010

2011

2012

2013

2014E

PSE&G

EPS

$1.47

$1.39

Annual Dividend Per Share

(10 YEAR HISTORICAL CAGR ~3%)

(1)

THE 2014 PAYOUT RATIO IS BASED ON THE MIDPOINT OF PSEG'S 2014 OPERATING EARNINGS GUIDANCE OF $2.55-$2.75E PER SHARE. SEE SLIDE A FOR ITEMS

EXCLUDED FROM INCOME FROM CONTINUING OPERATIONS/NET INCOME TO RECONCILE TO OPERATING EARNINGS.

Opportunity

for

consistent and sustainable

dividend growth supported by strong cash flow from both

businesses

2.8% increase

Payout Ratio

43%

44%

50%

58%

56%

56%

( 1)

E = ESTIMATE

$1.60

112

PSEG’s longer-term outlook is influenced by

Power’s hedge position and increased investment at PSE&G

2015E

2016E

Segment EPS Drivers

E = ESTIMATE

Sensitivities derived from typical annual market variability*

* Estimated

annual

variability

approximating

one

standard

deviation

based

on

2011

–

2013

historical data and forward curve estimates applied to PSEG Power open positions

Each $0.75/mcf Change in Natural Gas

Each $2/MWh Change in Spark Spread

Each $5/MWh Change in Dark Spread

Each 1% Change in Nuclear Capacity Factor

Each $100 Million of Incremental Investment

Each 1% Change in Sales

Electric

Gas

Each 1% Change in O&M

Each 10 bp Change in ROE

$0.01

$0.01

$0.01

$0.01

$0.01

$0.12 -

$0.15

$0.04

$0.04

$0.01

$0.04 -

$0.07

$0.04

$0.04

$0.01

$0.01

$0.01

$0.01

$0.01

$0.01

113

PSEG Summary

•

Our 2013 earnings of $2.58 exceeded our upwardly revised operating

earnings

guidance

of

$2.40

-

$2.55

per

share

•

Double digit earnings growth at PSE&G on one and three year basis

from 2013 to 2016, driven by transmission investments and

approved programs

•

Power’s continued focus on operational excellence, market expertise

and financial strength delivers value in current price environment

•

Strong Balance Sheet and Cash Flow support full capital program and

new potential opportunities without the need for equity

•

Long history of returning cash to the shareholder through the common

dividend, with opportunity for consistent and sustainable growth

PSEG EXECUTIVE

PROFILES

115

CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Ralph Izzo

Ralph Izzo was elected chairman and chief executive officer of Public

Service Enterprise Group Incorporated (PSEG) in April 2007. He was

named as the company’s president and chief operating officer and a

member of the board of directors of PSEG in October 2006. Previously, 

Mr. Izzo was president and chief operating officer of Public Service Electric

and Gas Company (PSE&G).

Since joining PSE&G in 1992 Mr. Izzo was elected to several executive

positions within PSEG’s family of companies, including PSE&G senior vice

president – utility operations, PSE&G vice president – appliance service,

PSEG vice president - corporate planning, and PSE&G vice president -

electric ventures.  In these capacities he broadened his experience in the

areas of general management, strategic planning and finance.

Mr. Izzo is a well-known leader within the utility industry, as well as the

public policy arena.  He is frequently asked to testify before Congress and

speak to organizations on matters pertaining to national energy policy.

Mr. Izzo’s career began as a research scientist at the Princeton Plasma

Physics Laboratory, performing numerical simulations of fusion energy

experiments.  He has published or presented over 35 papers on

magnetohydrodynamic modeling. Mr. Izzo received his Bachelor of

Science and Master of Science degrees in mechanical engineering and his

Doctor of Philosophy degree in applied physics from Columbia University. 

He also received a Master of Business Administration degree, with a

concentration in finance from the Rutgers Graduate School of

Management. He is listed in numerous editions of Who’s Who and has

been the recipient of national fellowships and awards.  Mr. Izzo has

received Honorary Degrees from the New Jersey Institute of Technology

(Doctor of Science), Thomas A. Edison State College (Doctor of Humane

Letters), Bloomfield College (Doctor of Humane Letters), and Rutgers

University (Doctor of Humane Letters).

Mr. Izzo serves as chair of the New Jersey Chamber of Commerce, and on

the Rutgers University Board of Governors, the board of directors for The

Williams Companies, the New Jersey Utilities Association, the Edison

Electric Institute (EEI), the Nuclear Energy Institute (NEI), the National

Center on Addiction and Substance Abuse at Columbia University (CASA),

and The Center for Energy Workforce Development.  He is also a member

of the Columbia University School of Engineering Board of Visitors and the

Princeton University Adlinger Center for Energy and the Environment

Advisory Council, as well as a member of the Visiting Committee for the

Department of Nuclear Engineering at MIT.

116

J. A. Bouknight, Jr. (Lon)

J.A. Bouknight, Jr. (“Lon”) was named executive vice president and

general counsel in January, 2010.  He had been Executive Vice President

–

Law since November 2009.  In his current position, he has general

supervisory responsibilities for the law department, office of the

corporate secretary, business assurance and resilience, and Federal

public affairs and sustainability.

Mr. Bouknight was a partner in the Washington law office of Steptoe &

Johnson, where he served as a member of the regulatory and industry

affairs department and as former chairman of the firm.  His practice

focused on the electric power and natural gas industries and on antitrust

and competition issues in both regulated and unregulated industries.

From 2005 to 2008, Mr. Bouknight served as executive vice president

and general counsel of Edison International, a major electric company

based in California. 

A graduate of Wofford College and Duke University School of Law,

Mr. Bouknight has authored a number of articles and lectured

extensively on energy industry and competition topics.

EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL, PUBLIC SERVICE

ENTERPRISE GROUP INCORPORATED, PUBLIC SERVICE ELECTRIC AND GAS

COMPANY, PSEG SERVICES CORPORATION, EXECUTIVE VICE PRESIDENT  AND

PSEG POWER

117

EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED, PUBLIC SERVICE ELECTRIC

AND GAS COMPANY, PSEG POWER LLC AND PSEG SERVICES CORPORATION

Caroline Dorsa

Caroline Dorsa was named executive vice president and chief

financial officer for Public Service Enterprise Group Incorporated

(PSEG) in April 2009. She is also the executive vice president and

chief financial officer of Public Service Electric and Gas Company

(PSE&G), PSEG Power and PSEG Services Corporation.

Ms. Dorsa is responsible for all financial functions, including Internal

Audit Services and Investor Relations. Given the array of financial

instruments which serve as the primary means of selling wholesale

energy to customers, Ms. Dorsa also has responsibility for the Risk

Management function, which provides independent oversight of the

PSEG Power trading organization.  In addition to her financial

responsibilities, Ms. Dorsa leads the Information Technology and

Procurement organizations.  She is a member of PSEG’s Executive

Officer Group.

In her role as chief financial officer, she has overseen the execution

of the Company’s financial strategy, which has involved a significant

deleveraging of the balance sheet and enhancement of the

company’s financial strength.  The company is in the midst of a

major capital investment program focused on deploying more than

$6 billion over three years to ensure the reliability and efficiency of

the energy generation and distribution system in New Jersey.  PSEG

has an uninterrupted record of paying dividends to shareholders for

105 years. 

Ms. Dorsa had been a member of the PSEG Board of Directors for six years,

and a member of PSEG's Audit, Corporate Governance and Finance

Committees

before

joining

the

company’s

management.

Her

previous

management position had been with Merck & Co., where she was senior vice

president –

global human health, strategy and integration.  Prior to this,

Ms. Dorsa served as senior vice president and chief financial officer at Avaya,

Inc.  Earlier in her career, she held a range of financial positions at Merck,

including

serving

as

vice

president

and

treasurer

of

the

company

for

over

12

years. She was also the Secretary of the Finance Committee of Merck's Board

of Directors.

Before joining Merck, Ms. Dorsa worked for Mayor Edward Koch of the City of

New York promoting economic development in midtown Manhattan.

Ms. Dorsa is a member of the Junior Achievement of New Jersey State Board

of

Directors.

She

is

a

member

of

the

Board

of

Directors

and

the

financial

expert for the Finance and Audit Committee of Biogen Idec (NASDAQ: BIIB), a

biopharmaceutical

company

located

in

Cambridge,

MA.

Ms.

Dorsa

is

also a

member

of

the

Board

of

Directors

and

Chairman

of

the

Audit

Committee

of

Joule, a privately financed solar fuels company based in Bedford, MA.

Ms.

Dorsa

holds

a

B.A.

from

Colgate

University

and

an

M.B.A

from

Columbia

Business School.

118

PRESIDENT AND CHIEF NUCLEAR OFFICER

PSEG NUCLEAR

Thomas P. Joyce

Thomas

P.

Joyce

was

named

president

and

chief

nuclear

officer

of

PSEG

Nuclear (Nuclear), in October 2008. He had been senior vice president –

operations of Salem/Hope Creek for Nuclear, since June 2007.  Mr. Joyce

was also vice president –

Salem, since January 2007, and previously

assumed the role of PSEG Nuclear’s site vice president as part of the

Nuclear Operating Services Agreement between PSEG and Exelon

Corporation in 2005.

PSEG Nuclear’s  Salem and Hope Creek Generating stations comprise the

second largest commercial nuclear power facility in the United States.

Together the units provide enough electricity for three million homes.

Together the plants also provide 49 percent of New Jersey’s electricity.

Mr. Joyce has more than 38 years of experience in commercial nuclear

power operations. Under his leadership as president and chief nuclear

officer, Salem and Hope Creek combined to set a new site generation

record in 2009. In 2011, the stations also received approval from the

Nuclear Regulatory Commission (NRC) to extend their operating licenses

an additional 20 years. Reinforcing the company’s strong ties to the local

community, the license renewal approvals did not encounter any formal

legal contentions like many other plants across the country.

While

leading

Salem,

the

station

completed

two

successful

reactor

vessel

head replacement outages. Salem Unit 1 completed its outage capturing

the world record for shortest head replacement outage.

Prior to coming to PSEG Mr. Joyce was site vice president at Exelon

Nuclear’s Braidwood Station. During his tenure the station achieved overall

performance improvements and retained their excellent INPO

rating.

The

plant

completed

a

refueling

in

15

days,

14

hours

–

setting a

record for outage efficiency among U.S. pressurized water reactors. 

Before serving at Braidwood he held leadership positions at Exelon’s

Byron, Dresden, and Zion Stations, and in the corporate offices of both Exelon

Corporation and Exelon Nuclear.

Mr. Joyce holds a Bachelor of Science degree in nuclear engineering from

the University of Missouri at Rolla, and a Master of Business

Administration degree from the Keller Graduate School of Management.

While at Byron, he earned his senior reactor operators (SRO) license.

A recognized leader in the nuclear industry, Mr. Joyce currently serves as 

chairman of the Utilities Service Alliance (USA). The organization is

comprised of eight of America’s leading electric utilities operating 14

nuclear reactors located at 10 stations. Its two major objectives are to

improve individual plant and fleet performance and to reduce operating

and maintenance costs. Mr. Joyce also chairs the Nuclear Energy

Institute’s (NEI) Emergency Preparedness Working Group and the EPRI

Nuclear Power Council.  

119

Ralph A. LaRossa

PRESIDENT AND CHIEF OPERATING OFFICER

PUBLIC SERVICE ELECTRIC AND GAS COMPANY

Ralph

A.

LaRossa

was

named

president

and

chief

operating

officer

of

Public

Service

Electric

and

Gas

Company

(PSE&G),

in

October

2006.

Prior

to

this

position

he

was

vice

president

-

electric

delivery

for

PSE&G.

In

addition

to

his

responsibilities

with

PSE&G,

he

also

oversees

the

communications

and

state

governmental

affairs

organizations. 

On January 1, 2014, Mr. LaRossa became Chairman of the Board of PSEG

Long Island, a subsidiary of Public Service Enterprise Group (PSEG), which   

manages the electric transmission and distribution systems on Long Island

and in the Rockaways.

Mr. LaRossa joined PSE&G in 1985 as an associate engineer and

advanced through a variety of management positions in the utility’s gas

and electric operations.  In 1998 he received Gas Industry Magazine’s

Outstanding Manager of the Year Award.  PSE&G is New Jersey’s largest

electric and gas utility.

Mr.

LaRossa

is

a

graduate

of

Stevens

Institute

of

Technology

and

has

completed

the

Harvard

Business

School’s

Program

for

Management

Development.

He

serves

on

the

board

of

directors

for

the

American

Gas

Association (AGA), New Jersey Utilities Association (NJUA), New Jersey

Performing Arts Center (NJPAC), Partnership for a Drug-Free NJ, Choose

New Jersey, and Bergen County’s United Way. He also serves on the board

of trustees for Montclair State University and the Newark Alliance.

PRESIDENT

PSEG ENERGY RESOURCES & TRADE

Shahid Malik was elected President of PSEG Energy Resources & Trade

(ER&T) in December, 2011.  PSEG operates one of the most balanced

portfolios in the country, both in terms of fuel mix and market segment (base

load units, load following units and peaking units), and Mr. Malik is essentially

responsible for managing these assets and taking them to market.

He

oversees PSEG’s generation portfolio and the purchase and sale of all energy

commodities.

Mr. Malik has an extensive background in the energy industry across the oil,

gas, electric and renewable energy sectors in Europe and the United States. 

Previously, he was with Pittiglio, Rabin, Todd & McGrath (PRTM) in

Pittsburgh, PA and was responsible for all aspects of growing the global

energy practice, with a primary focus on the North American utility sector. 

Prior to that he served as President & CEO of Strategic Energy, Great Plains

Energy’s unregulated retail marketing subsidiary and a provider of energy and

services to business clients in North America.  He was accountable for the

Company’s strategy and operations and led a successful turnaround of the

company, achieving significant growth in products and services while reducing

costs.

Mr. Malik’s career has included Executive Leadership positions with

several energy companies including Entergy Corporation, Reliant

Energy and BP Oil Company.  In addition, he served on the Board of

Directors of South Jersey Industries (NYSE: SJI) immediately prior to

joining PSEG.

Mr. Malik has been in the energy business for more than 20 years, since

receiving his Economics degree from Manchester University in England

and an MBA from Rice University, Houston.  He sits on the Executive

Committee of the Board of Trustees of Newark Museum.

Shahid Malik

120

121

Margaret M. Pego,

SPHR

SENIOR

VICE

PRESIDENT

–

HUMAN

RESOURCES

AND

CHIEF HUMAN RESOURCES OFFICER

PSEG SERVICES CORPORATION

Margaret

M.

Pego

was

named

senior

vice

president

–

human

resources

and

chief

human

resources

officer

of

PSEG

Services

Corporation

in

December

2006.

Prior,

she

had

been

vice

president

–

human

resources.

Ms.

Pego

joined

PSEG

in

1974,

and

has

held

a

variety

of

management

positions

in

the

human

resources

department.

Ms. Pego holds a Bachelor of Arts degree in business administration from

William Paterson College, and a Master of Business Administration degree

with a concentration in management and labor relations from Seton Hall

University. In addition, she holds a certificate in EEO studies from Cornell

University, and has completed the Human Resources Executive Program at

the University of Michigan. She is also certified as a senior professional in

human resources.

Ms. Pego was named one of 2013’s HR Top 10 Breakaway Leaders by

Evanta, a leading organization that fosters leadership development and

collaborative exchange among North America’s top executives.

Ms. Pego is active in several local and national organizations, including the

EEI Chief HR Executive Advisory Committee; the American Gas Association

HR Policy Committee; the Conference Board Advisory Council of HR

Management –

Council of HR Executives; and the Society for Human

Resources

Management.

In

addition,

she

is

a

member

of

the

board

of

trustees

of

the

College

of

Saint

Elizabeth,

Rutgers

Business

School

and

she

is

first

vice

chair

of

the

Children’s

Specialized

Hospital

board

and

chair

of

the

board’s

HR

committee.

She

is

the

former

Chair

of

the

Center

for

Energy

Workforce

Development

(CEWD)

Executive

Council.

She

is

a

former

member

of

the

Supreme

Court

of

New

Jersey

Attorney

Ethics

Committee.

Ms.

Pego

is

a

2002

Leadership

New

Jersey

fellow,

1997

TWIN

Honoree,

2006

Executive

Woman

of

New

Jersey

Honoree

and

2008

NJ

Best

50

Women

in

Business

Honoree.

122

William Levis

PRESIDENT AND CHIEF OPERATING OFFICER

PSEG

POWER

William Levis is president and chief operating officer of PSEG Power, a

position

he’s

held

since

June

2007.

PSEG Power is a major, merchant

power producer in the U.S. with four main subsidiaries: PSEG Nuclear,

PSEG Fossil, PSEG Energy Resources and Trade (ER&T) and PSEG Power

Ventures.

PSEG Power operates one of the most balanced portfolios in the country,

both in terms of fuel mix and market segment (based load units, load

following

units

and

peaking

units).

Its

low-cost,

load

following

fleet

is

geographically

well

positioned

in

competitive

markets.

Its

13,450

MWs

represent a diverse fuel mix which includes 44 percent natural gas, 27

percent nuclear, 18 percent coal, 9 percent oil, 1 percent solar, and

1 percent pumped storage.

Before coming to PSEG, Mr. Levis was Exelon Nuclear’s vice-president –

Mid-Atlantic operations.

During his years at Exelon, Mr. Levis oversaw

significant improvements, setting records for total annual megawatt

production

and

establishing

efficiency

records

for

refueling

outages.

Prior

to joining Exelon, Mr. Levis worked at Ontario Hydro’s Pickering Plant and

held several positions over a five-year period with Carolina Power and

Light’s Brunswick facility.

During this time, the station was removed from

the NRC Watch List and set new records in the areas of safety,

production, and cost.

Mr.

Levis

has

a

Bachelor

of

Science

degree

in

marine

engineering

from

the U.S. Naval Academy and holds an SRO (senior reactor operator)

certification.

He retired as a commander in the Naval Reserves and

attained his professional engineer license in 1985.

Mr. Levis serves as a member of Pennsylvania Congressman James

Gerlach’s Service Academies Selection Committee.  He is also a member

of Nuclear Energy Institute’s (NEI) Board of Directors, and serves as a

member of the Institute of Nuclear Power Operations (INPO) National

Nuclear Accrediting Board. He is a member of the Philadelphia

Archdiocese Catholic Charities Appeals Board and its Operations

Committee, and is a member of the CEO Council for Growth based in

Philadelphia.

123

Richard P. Lopriore

PRESIDENT

PSEG FOSSIL

Mr. Lopriore

has

been

a

valuable

part

of

the

electric

generation

industry

for

more

than 40 years. Prior to joining PSEG Fossil, he had been senior vice president -

mid-Atlantic operations for Exelon Nuclear, responsible for oversight of the

Limerick, Peach Bottom, Oyster Creek and Three Mile Island stations.  During his

tenure, Three Mile Island achieved INPO 1 status (2007).

From 1997-1999, Mr. Lopriore was an Executive Advisor for Ontario Hydro

Nuclear Power Plant’s recovery and performance improvement program. 

Mr. Lopriore

joined

Exelon

as

plant

manager

of

Byron

Stations

in

1999

and

was

promoted to site vice president in 2001. In 2003 he became corporate vice

president -

operations support at Exelon’s nuclear headquarters, responsible for

both the Midwest and mid-Atlantic regions. He then became vice president -

operations, Midwest boiling water reactors in 2004 responsible for the Dresden,

LaSalle County, Quad Cities and Clinton nuclear plants.

Prior to Exelon, Mr. Lopriore held several key management positions at the

Brunswick Nuclear Plant in North Carolina, including plant manager. At Vermont

Yankee,

he

achieved

an

operational

SRO

certification

for

Boiling

Water

Reactors.

Mr. Lopriore received his Bachelor of Science degree from Southern Vermont

College and is a member of the American Nuclear Society.

He also served in the National Guard.

Richard P. Lopriore was elected president of PSEG Fossil in May 2007.  He

oversees operations for 13 generation facilities spanning four states. He is

also responsible for the oversight of two service groups: Laboratory & Testing

Services,

and

Maintenance

&

Repair

Services.

Additionally,

he

is

responsible

for Construction, Capital Projects and Engineering. 

The PSEG Fossil fleet is comprised of natural gas, coal and oil-fired electric

generating units that contribute about 9,700 megawatts of electricity to PSEG

Power’s generation portfolio. This includes an ownership interest of 1,000

megawatts in three jointly-owned facilities.

Under Lopriore’s leadership, nine LM6000 peaking units were constructed. 

Fossil also outfitted its two New Jersey coal plants with about $1.5 billion in

new pollution control equipment resulting in substantial reductions in

emissions.  These plants are among the cleanest, most responsible coal

stations in the country. 

Mr. Lopriore instituted an in-depth Operational Excellence Model (OEM), one

of the first programs in the nation to drive standardization across a Fossil

fleet.  The program resulted in consistent improvement in operating results,

reliability and fleet performance and the achievement of all-time generation

records. He also revamped PSEG Fossil’s training program. Two industry-first,

award-winning

mobile

training

trailers

were

developed

to

take

training

directly

to the work sites reducing costs and increasing productivity.

124

VICE PRESIDENT –

DELIVERY PROJECTS AND CONSTRUCTION

PUBLIC SERVICE ELECTRIC AND GAS COMPANY

Kim C. Hanemann is vice president-delivery projects and

construction, for PSE&G, where she is responsible for ensuring

the on-time, on-scope and on-budget execution of all large utility

construction projects, which includes overseeing project

management,

project

controls,

and

licensing

and

permitting.

Her organization also includes a mobile construction workforce.

Ms. Hanemann joined PSE&G as an engineer in 1986.  She has

held numerous leadership positions in both electric and gas field

operations as well as in utility support operations.  She was named

a director in 2007, overseeing three different groups (Transmission

Engineering and Construction, Utility Operations Support, and

Delivery Projects and Construction) before her promotion to vice

president in 2010. 

Ms. Hanemann holds a Bachelor of Science degree in mechanical

engineering from Lehigh University and an MBA from the Rutgers

Graduate School of Management. 

Kim C. Hanemann

PSE&G

APPENDIX

125

126

PSE&G provides high reliability at below

average cost which creates superior value to customers

SAIDI = SYSTEM AVERAGE INTERRUPTION DURATION INDEX, A MEASURE OF AVERAGE OUTAGE DURATION FOR

ALL CUSTOMERS SERVED.

127

PSE&G prioritizes public safety

while maintaining value to customers

LEAK RESPONSE RATE = PERCENTAGE OF UTILITY RESPONSES TO REPORTED

LEAKS WITHIN ONE HOUR.

PSEG POWER

AND ER&T

APPENDIX

128

129

Nuclear fuel needs have been hedged through 2016

Anticipated Nuclear Fuel Cost

Hedged

$0

$5

$10

2014

2015

2016

130

Power’s coal hedging reflects 2014 supply

matched with 2014 sales

Station

Coal Type

Pricing

($/MWh)*

Comments

Bridgeport

Harbor

Adaro

Low $40’s

Higher

price, lower

BTU, enviro

coal

Hudson

CAPP

Mid $40’s

Flexibility

after BET in

2010

Mercer

Metallurgical

CAPP/NAPP

Low $40’s

More

limited

segment of

coal

market

Keystone

NAPP

Mid $20’s

Prices

steady

Conemaugh

NAPP

Mid $20’s

Prices

steady

%

Hedged

(left

scale)

$/MWh

(right scale)

$20

$30

$40

$50

40%

60%

80%

100%

0%

20%

2014

2015

2016

$0

$10

*COMMODITY PLUS TRANSPORTATION.

Contracted Coal

131

The full requirements BGS rate recognizes the

forward PJM capacity market price

PSEG

FINANCIAL

APPENDIX

132

133

December 31, 2013

$ Billions 

PSEG

PSE&G

Power

Cash Investments

$0.4

$0.0

N/A

(2)

Short Term Debt

$0.1

$0.1

N/A

(2)

Long Term Debt

(3)

8.1

5.6

2.5

Common Equity

11.6

5.9

5.9

Total Capitalization

$19.8

$11.5

$8.4

Total Debt / Capitalization

41%

49%

30%

PSE&G Regulated Equity Ratio

(1)

51%

Our balance sheet remains strong

(1)

REGULATED EQUITY RATIO INCLUDES CUSTOMER DEPOSITS OF ~$95 MILLION AND EXCLUDES SHORT-TERM DEBT

(2)

N/A BECAUSE POWER INVESTS AND BORROWS SHORT-TERM THROUGH INTERCOMPANY ARRANGEMENT WITH PSEG PARENT

(3)

DOES NOT INCLUDE SECURITIZATION DEBT OF $496MILLION.

134

PSEG Liquidity as of December 31, 2013

Expiration

Total

Available

Company

Facility

Date

Facility

Usage

Liquidity

($Millions)

PSE&G

5-year Credit Facility

Mar-18

$600

1

$73

$527

5-Year Credit Facility (Power)

Mar-17

$1,600

$70

$1,530

5-Year Credit Facility (Power)

Mar-18

$1,000

2

$0

$1,000

5-Year Bilateral (Power)

Sep-15

$100

$100

$0

5-year Credit Facility (PSEG)

Mar-17

$500

$8

$492

5-year Credit Facility (PSEG)

Mar-18

$500

3

$0

$500

Total

$4,300

$4,049

1

PSE&G Facility to be reduced by $29M on April 15, 2016

$439

2

Power Facility to be reduced by $48M on April 15, 2016

PSE&G ST Investment

$0

3

PSEG Facility to be reduced by $23M on April 15, 2016

Total Liquidity Available

$4,488

Total Parent / Power Liquidity

$3,961

PSEG /

Power

PSEG Money Pool ST Investment

135

PSEG Energy Holdings

Investment Portfolio

*BOOK BALANCE EXCLUDING DEFERRED TAX ACCOUNTS.

**EME AND ITS SUBSIDIARIES FILED CHAPTER 11 BANKRUPTCY ON 12/17/2012. ON 10/18/2013,

NRG ENERGY ANNOUNCED AN ACQUISITION OF EME ASSETS THAT WOULD CURE

ALL MONETARY DEFAULTS AT CLOSING AND PRESERVE HOLDINGS’

ENTIRE EQUITY VALUE.

Merchant Energy Leases

GenOn (REMA)

Edison Mission Energy (EME)**

Regulated Energy Leases

Merrill Creek

Grand Gulf

Real Estate Leveraged Leases

Real Estate Operating Leases

Generation Legacy Assets

Other

Equipment

Keystone, Conemaugh & Shawville (PA)

3 coal-fired plants (1,162 equity MW)

Powerton & Joliet Generating Stations (IL)                     

2 coal-fired generating facilities (1,640 equity MW)

Reservoir in NJ  (PECO, MetEd, Delmarva Power & Light)

Nuclear station in Mississippi (175 equity MW)

GM Renaissance Center; Wal-Marts; E-D (shopping) Centers

Office

Towers,

Shopping

Centers

-

30

properties

GWF (in wind down stage), Bridgewater, GSOE 

Land & Receivables

Investment  Balance *          

at 12/31/13

($millions)

$343

$218

$191

$ 73

$70

$5

$7

Total Holdings Investments

$907

136

Strong, full year

2013

operating

earnings

delivered

Operating Earnings

Earnings per Share

$ millions (except EPS)

2013

2012

2013

2012

PSEG Power

$  710

$  663 

$  1.40

$  1.31

PSE&G

612

528

1.21

1.04

PSEG Enterprise/Other

(13)

45

(0.03)

0.09

Operating Earnings*

$  1,309 

$  1,236

$  2.58

$  2.44

Twelve Months ended December 31

*

SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING OPERATIONS/NET INCOME TO RECONCILE TO OPERATING EARNINGS.

137

PSEG EPS Reconciliation–

Full Year 2013

versus Full Year 2012

$2.44

0.09

0.17

$2.58

(0.12)

0.00

0.50

1.00

1.50

2.00

2.50

3.00

Higher Capacity 0.34

Market Pricing and Lower

Supply Costs 0.05

Gas Send-out and Fixed Cost

Recovery 0.05

Higher Volume 0.02

Lower Hedge

Pricing (0.25)

O&M (0.13)

Other 0.01

Transmission 0.14

Renewables 

and CIP 0.02

O&M (Distribution)

0.02

Other 0.02

D&A (0.01)

Higher Taxes (0.02)

2013       

Operating

Earnings*

2012       

Operating

Earnings*

PSEG Power**

PSE&G**

PSEG Enterprise/

Other

Absence of Tax

Settlement (0.07)

Tax Adjustment (0.03)

Asset Sales and Other

(0.02)  

*

SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING OPERATIONS/NET INCOME TO RECONCILE TO OPERATING EARNINGS. 

**

PRIOR QUARTER RESULTS FOR RECONCILING ITEMS MAY NOT ADD TO YEAR-TO-DATE (YTD) TOTALS DUE TO ROUNDING.

A

Items Excluded from Income from Continuing

Operations/Net Income to Reconcile to Operating Earnings

PLEASE SEE PAGE 3 FOR AN EXPLANATION OF PSEG’S USE OF OPERATING EARNINGS AS A NON-GAAP FINANCIAL MEASURE AND HOW IT

DIFFERS FROM NET INCOME.

(a)

Includes the financial impact from positions with forward delivery months.

2013

2012

2011

2010

2009

2008

Operating Earnings

1,309

$     

1,236

$  

1,389

$  

1,584

$    

1,567

$  

1,478

$  

Gain (Loss) on Nuclear Decommissioning Trust (NDT)

Fund Related Activity (PSEG Power)

40

52

50

46

9

(71)

Gain (Loss) on Mark-to-Market (MTM)

(a)

(PSEG Power)

(74)

(10)

107

(1)

(11)

14

Lease Transaction Activity (Energy Holdings)

-

36

(173)

-

29

(490)

Storm O&M (PSEG Power)

(32)

(39)

-

-

-

-

Market Transition Charge Refund (PSE&G)

-

-

-

(72)

-

-

Gain (Loss) on Asset Sales and Impairments (Energy Holdings)

-

-

34

-

-

(13)

Income from Continuing Operations

1,243

$     

1,275

$  

1,407

$  

1,557

$    

1,594

$  

918

$     

Discontinued Operations

-

-

96

7

(2)

270

Net Income

1,243

$     

1,275

$  

1,503

$  

1,564

$    

1,592

$  

1,188

$  

Fully Diluted Average Shares Outstanding (in Millions)

508

507

507

507

507

508

Operating Earnings

2.58

$       

2.44

$    

2.74

$    

3.12

$      

3.09

$    

2.91

$    

Gain (Loss) on NDT Fund Related Activity (PSEG Power)

0.08

0.10

0.10

0.09

0.02

(0.14)

Gain (Loss) on MTM

(a)

(PSEG Power)

(0.14)

(0.02)

0.21

-

(0.02)

0.03

Lease Transaction Activity (Energy Holdings)

-

0.07

(0.34)

-

0.05

(0.96)

Storm O&M (PSEG Power)

(0.07)

(0.08)

-

-

-

-

Market Transition Charge Refund (PSE&G)

-

-

-

(0.14)

-

-

Gain (Loss) on Asset Sales and Impairments (Energy Holdings)

-

-

0.06

-

-

(0.03)

Income from Continuing Operations

2.45

$       

2.51

$    

2.77

$    

3.07

$      

3.14

$    

1.81

$    

Discontinued Operations

-

-

0.19

0.01

-

0.53

Net Income

2.45

$       

2.51

$    

2.96

$    

3.08

$      

3.14

$    

2.34

$    

For the Year Ended

December 31,

(Unaudited)

Reconciling Items, net of tax

Earnings

Impact

($

Millions)

Per

Share

Impact

(Diluted)

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED