 EXHIBIT 99
We have the
energy
to make things better
…
for you, for our investors
and for our stakeholders. |
 2
Forward-Looking Statement
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.
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.
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,
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,
any deterioration in our credit quality or the credit quality of our
counterparties,
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, increases in competition in energy supply markets as well as competition for
certain transmission projects, 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 and enforcement that
could increase our costs or limit our operations, 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,
acts of terrorism, cybersecurity attacks or intrusions that could adversely
impact our businesses,
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.
Certain of the matters discussed in this report 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: |
 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.
Slides A and B at the end of this presentation include 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.
These
materials
and
other
financial
releases
can
be
found
on
the
pseg.com
website under the investor tab, or at http://investor.pseg.com/
3 |
 PSEG OVERVIEW
Caroline Dorsa
VICE PRESIDENT –
INVESTOR RELATIONS
EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
Kathleen Lally |
 5
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
DISCIPLINED
INVESTMENT
OPERATIONAL
EXCELLENCE
FINANCIAL
STRENGTH
ENGAGED
WORKFORCE |
 6
Two complementary businesses
Strong asset platform, performing well and positioned for the future
ASSETS AND OPERATING EARNINGS ARE FOR THE YEAR ENDED 12/31/2013.
PSE&G AND POWER DO NOT ADD TO TOTAL DUE TO PARENT, PSEG LONG ISLAND AND
ENERGY HOLDINGS ACTIVITY. SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME
FROM CONTINUING OPERATIONS/NET INCOME TO RECONCILE TO OPERATING
EARNINGS. Assets $12B
Operating Earnings $710M
Regional Competitive Generation
Assets $20B
Operating Earnings $612M
Electric & Gas Delivery
and Transmission
2013
2013
Strategy:
Strategy:
Positioned
to
meet
customers’
needs as we respond to state and federal
energy policy and economic growth objectives
Value
Proposition:
A
$11.3
billion
infrastructure program -
focused on
transmission
–
that
produces
double-digit
rate base growth through 2016
Fuel
diverse
fleet
is
geographically
and environmentally well positioned, with
investments to enhance competitiveness
Value
Proposition:
Provides
substantial
free cash flow in current environment
and poised for price recovery |
 7
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
th
straight year
•
PSE&G:
Mid-Atlantic
Reliability
Award
(12
th
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 settlement
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 |
 8
Maintaining PSEG 2014 Operating Earnings
Guidance
SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING
OPERATIONS/NET INCOME TO RECONCILE TO OPERATING
EARNINGS. $2.44
$2.58
$2.55
-
$2.75E
Reflects increased level of utility investment, pension savings and assumes
normal weather and unit operations for the rest of year
2012
2013
2014 Guidance
E = ESTIMATE. |
 Operating Earnings Mix
Long term investment program has driven increased earnings
contribution from stable, regulated business
*SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM
CONTINUING OPERATIONS/ NET INCOME TO RECONCILE TO OPERATING EARNINGS;
DISCONTINUED OPERATIONS REFLECT TEXAS. E=ESTIMATE ** 2014
PERCENTS USE MIDPOINT OF EARNINGS GUIDANCE. 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
2009
2010
2011
2012
2013
2014E**
9
20%
27%
38%
43%
47%
54%
76%
69%
62%
54%
54%
43% |
 Maintaining a robust capital program
focused on growth
PSEG 2014 -
2018E Capital Spending
$13.1 Billion
PSEG 2009 -
2013 Capital Spending
$11.3 Billion
NOTE: POWER 2009–2013 ACTUALS ARE RESTATED TO INCLUDE SOLAR CAPITAL
SPEND. POWER CAPITAL SPENDING EXCLUDES NUCLEAR FUEL.
E=ESTIMATE .
Power
$1.6B
PSE&G
$11.3B
Power
$2.8B
PSE&G
$8.4B
10
$3.3
$1.0
$4.1
$0.8
$1.2
$0.8
$0.1
$2.9
$1.2
$0.3
$6.8
$1.0
$0.4
$0.2
$0.2 |
 11
PSEG’s business profile has been transformed through
significant growth in utility capital spending
3 YR
AVG
3 YR
AVG
ENDED
3 YEAR AVERAGE PSE&G CAPITAL
SPENDING GREW AT A RATE OF
23%
PER
YEAR
FROM
2008
-
2013
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
$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
$620
$729
$958
$1,138
$1,443
$1,749 |
 12
•
Energy Strong Agreement reached with all parties
Agreement recognizes the benefits of system investments that prevent or
shorten outages
Supports $1.22 billion capital program over several years on reasonable terms:
$1 billion recovered through accelerated, rate recovery mechanism
-
$820 million Electric
-
$400 million Gas
Allows PSE&G to earn a 9.75% ROE on the $1 billion recovered through
mechanism
Requires PSE&G to file a base rate case by November 2017
Final NJBPU approval anticipated
•
Over 100 New Jersey municipalities supported Energy Strong
•
Energy Strong agreement clears path for PSE&G to pursue the initial phase of
this robust capital program
Energy
Strong
Agreement
recognizes
benefits of system investments |
 13
PSEG Power –
Value-advantaged through asset diversity,
fuel flexibility, location and installed environmental controls
2013
PERIOD
*INCLUDES
NEW
JERSEY
COAL
UNITS
THAT
FUEL
SWITCH
TO
GAS.
43%
23%
34%
1%
44%
27%
9%
1%
18%
<1
%
30%
55%
2%
<1%
13%
Load Following
Peaking
Base load
Fuel Diversity
Total MW: 13,450
Energy Produced
Total GWh: 54,264
Energy Market Served
Total MW: 13,450
Gas
Pumped
Storage
Nuclear
Oil
Coal*
Solar |
 14
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. $40
$45
$50
$55
2011
2012
2013
PSEG Power Gross Margin**
Hedges + Forwards*
Actual |
 15
Balance Sheet Strength
2009
–
2013:
Reduced
risk
profile
and
transformed
business mix
•
PSE&G’s $11.3 billion 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
2014
–
Forward:
Strong
cash
flows
and
increasingly
regulated business mix fully support:
•
Invested $8.4 billion in PSE&G
•
Improved credit ratings
•
Monetized
and
de-risked
Holdings’
portfolio |
 16
Opportunity for
consistent,
sustainable growth
Operating Earnings Per Share
Where we’re going …
actions taken to focus on
more predictable growth
•
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%)
(forecast
)
•$14,600
•$6,500
•$7,500
•$600
4
•31.4TWh
•91%
•$0.07
5
2016E
($ Millions except as noted)
•
1.5% (actual
)
•
$10,400
•
$3,800
•
$6,000
•
$600
•
29.5TWh
•
89%
•
$0
2013
•
2.4%
(planned
)
•
$6,800
•
$866
•
$5,900
•
$0
•
29.3TWh
•
90%
•
$0
2008
(1)
Planned compound annual growth rate 2008-2013.
(4) Includes approved solar programs.
(2) Actual compound annual growth rate 2008-2013.
(5) Includes management fee for T&D operations under expanded OSA and
fuel (3) Planned compound annual growth rate
2013-2016. and
energy procurement contract. (6) Forward market as of 5/7/2014.
SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM
CONTINUING OPERATIONS/ NET INCOME TO RECONCILE TO OPERATING
EARNINGS. E = ESTIMATE .
$1.29
$1.44
Common Dividend Per Share
$70
$38
$44
6
PJM West RTC ($/MWh)
$2.58
$2.91
PSEG Focus
1
2
3 |
 17
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
*INDICATED ANNUAL RATE.
**2014 PAYOUT RATIO REFLECTS THE MIDPOINT OF OPERATING EARNINGS GUIDANCE.
E=ESTIMATE 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 |
 18
PSEG Q1 2014 Financial Highlights
Strong Q1 Earnings Operating earnings of $1.01 vs. $0.85 per share in Q1 2013 Power benefited from higher market pricing, market volatility and
increased output
Increased contribution to earnings from PSE&G’s investment in
transmission
Maintaining 2014 operating earnings guidance of $2.55 - $2.75 per share
Focused on maintaining operating efficiency and customer reliability PSE&G expected to grow at double-digit rate in 2014 and provide
over 50% of operating earnings
Executing existing 5-year, $6.8 billion transmission capital spending program on budget and on schedule
Agreement on PSE&G’s Energy Strong infrastructure program to invest
$1.22 billion over 2014 – 2018,
awaiting final NJBPU approval
Power recognized a liability in the quarter related to its discovery that it
incorrectly calculated certain components of its cost-based bids for
certain generating units in the PJM energy market, with resulting over-collection of revenues related
to its fossil fleet. Power has notified FERC, PJM and the PJM Independent Market
Monitor of this issue, which is still under review; we are unable to
estimate the ultimate impact or predict any resulting penalties or other costs associated with
the matter at this time
Financial position remains strong
Positive cash from Power and increasing cash flow from PSE&G supports
dividend growth and funds capital spending program without the need to
issue equity
Increased common dividend to indicative annual rate of $1.48 per share in Q1
2014
Debt as a percentage of capital was 41% at March 31, 2014
|
 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. |
 PSE&G |
 21
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 |
 22
PSE&G is the largest electric and gas distribution and
transmission utility company in New Jersey
* WEATHER
NORMALIZED
-
ESTIMATED
ANNUAL
GROWTH
PER
YEAR
OVER
FORECAST
PERIOD.
** SPECIFIC PROJECTS APPROVED FOR INCENTIVE RATE TREATMENT WITH ADDITIONAL
ROE. 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 |
 23
12 time
Mid-Atlantic
ReliabilityOne
award winner
and Outstanding
Response to a
Major Event |
 24
PSE&G’s operating earnings grew
~18% over the 5-year period with
increased investment, cost control and supportive rate mechanisms
*SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING OPERATIONS/NET
INCOME TO RECONCILE TO OPERATING EARNINGS.
PSE&G Operating Earnings* Per Share
$0.63
$0.85
$1.03
$1.04
$1.21
2009
2010
2011
2012
2013 |
 25
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 0
200
600
800
1,000
1,200
2009
2010
2011
2012 **
2013
2014E
400 |
 26
Growth in rate base is driven by investments with
constructive recovery mechanisms
6%
$10.4B
PSE&G Rate Base
$7.3B
PSE&G’s
rate base
has grown
~9% annualized
with investment
focused on
meeting
customers’
requirements
1%
84%
58%
15%
36%
2009
2013
Solar & Energy
Efficiency
Transmission
Distribution |
 27
Successfully worked with regulators
to develop multiple solutions for New Jersey’s energy and
economic development goals
RENEWABLES
–
creative
solutions to install solar
generation: $0.7B
ENERGY EFFICIENCY –
assisting customers with
controlling energy usage: $0.3B
DISTRIBUTION
–
improving
the electric and gas delivery
infrastructure: $1.0B
Invested ~$2.0B through 2013; plan to invest additional ~$1.6B
through 2018 in approved programs
NOTE: SPENDING THROUGH 2013 UNLESS INDICATED OTHERWISE
•
Carbon Abatement
–
2008
•
Energy Efficiency
–
2009
•
Demand Response
–
2009
•
Energy Efficiency Ext
–
2011
•
NJ Capital Infrastructure
Program 1 (CIP 1)
•
NJ Capital Infrastructure
Program 2 (CIP 2)
•
Energy Strong
•
Solar Loan I
–
2008
•
Solar Loan II
–
2009
•
Solar 4 All
–
2009
•
Solar Loan III
–
2013
•
Solar 4 All Ext
–
2013
–
2009
–
2011
–
2014 |
 28
A 60% increase to $11.3 billion, in our
5-year investment program, including Energy Strong
PSE&G’s Capital Expenditures
2013-2017E
$7.0 Billion
2014-2018E
$11.3 Billion
E = ESTIMATE
26%
11%
3%
60%
Distribution
Energy Strong
Solar/Energy Efficiency
Transmission
33%
2%
65% |
 29
PSE&G’s capital program has expanded
with the addition of Energy Strong
PSE&G’s Capital Expenditures
E = ESTIMATE
0
500
1,500
2,000
2,500
3,000
2009
2010
2011
2012
2013
2014E
2015E
2016E
2017E
2018E
Distribution
Transmission
Solar/Energy Efficiency
1,000
Previous Forecast for 2013-2017 Approved Programs
|
 30
Energy Strong Agreement supports customers’ needs in the aftermath of Superstorm Sandy
•
Settled with NJBPU Staff and all other parties in May 2014
for $1.22 billion
•
Program addresses system resiliency and hardening by:
$620 million to raise, relocate or protect 29 switching and substations that
were damaged by water in recent storms
$350 million to replace and modernize 250 miles of low-pressure, cast
iron gas mains in or near flood areas
$100 million to create redundancy in the electric system, reducing outages
when damage occurs
$100 million to deploy smart grid technologies to better monitor
system
operations to increase our ability to more swiftly deploy repair
teams
$50 million to protect five natural gas metering stations and a liquefied
natural gas station affected by Sandy or located in flood zones
|
 31
Over 70% of PSE&G’s $11.3 billion investment program will be recovered
through contemporaneous mechanisms Clause Recovery Mechanisms
Energy Strong / Solar / Energy Efficiency
FERC Formula Rates
Transmission
Traditional Recovery Mechanisms
Distribution Base Rates
E = ESTIMATE
2014-2018E PSE&G Capital Spending by Recovery Method
$11.3 Billion
12%
60%
28% |
 PSE&G
TRANSMISSION |
  33
Transmission represented ~36% of rate base at YE 2013
up from ~15% at YE 2009
Transmission
has
delivered,
and has grown
to represent
~36% of rate
base
PSE&G’s Transmission Capital Expenditures
|
 PSE&G’s existing major transmission
investment program remains on schedule and on budget
Major Transmission Projects
Approved
ROE
Inclusion
of CWIP in
Rate Base
100%
Recovery
of Costs
Due to
Abandonment
Project
Estimate
Up To
($ 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
Mickleton–Gloucester–Camden 230kV
11.68%
$435
June 2015
Completed
34 |
 35
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
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
IS
SHARED
WITH
PPL.
PROJECT
ESTIMATE
REPRESENTS
PSE
&
G’S
CONSTRUCTION RESPONSIBILITY FOR THE NJ PORTION.
Project Status: Major permitting & siting complete, outside plant
construction in progress, inside plant construction is complete and
commissioning is in progress |
 36
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
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 |
 37
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 |
 38
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
Completed
•
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: In-service April 2014 |
 39
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
•
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 |
 40
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
•
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 |
 41
Planned transmission spend of $6.8 billion
is driven by PJM reliability projects, 69kV conversions and
life-cycle replacement projects
PSE&G’s Transmission Capital Expenditures
Previous Forecast for 2013-2017
E=
ESTIMATE |
 42
PSE&G’s processes and culture
are the
foundation for project execution success
Diverse, well-rounded team
Culture with a focus for on-time, on-scope and on-budget
execution
Successful recruitment, development and retention
strategies
Strong unions and supplier relationships
Cradle to grave project execution organization
Processes designed to be scalable, repeatable and
improvable
Emphasis on best practices and lessons learned
sharing
Improvements driven by performance metric
management
Collaborative relationship with regulatory agencies
Innovative design and construction practices to minimize
environmental impacts
Robust environmental compliance system |
 PSE&G’s
demonstrated
ability
to
successfully
execute large
projects leaves us
well positioned to
pursue new
opportunities
Future RTEP as
identified by PJM
Near-term participation
in RTO competitive
open planning windows
PJM
MISO
NYISO
Anticipate participating
in future competitive
solicitations under
FERC 1000
43 |
 44
PSE&G’s 2014 operating earnings
to benefit from increased investment in transmission and
on-going cost control
E=ESTIMATE
*SEE
SLIDE
A
FOR
ITEMS
EXCLUDED
FROM
INCOME
FROM
CONTINUING
OPERATIONS/NET INCOME TO RECONCILE TO OPERATING EARNINGS.
PSE&G Operating Earnings*
($ Millions) |
 PSEG LONG ISLAND |
 46
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
|
 47
PSEG Long Island commenced operations
on January 1, 2014
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 |
 PSEG POWER |
 49
PSEG Power
strategy
Excellence in
operating our units
safely, reliably, cost-
competitively and in
an environmentally,
responsible manner
DISCIPLINED
INVESTMENT
ENGAGED
WORKFORCE
OPERATIONAL
EXCELLENCE
FINANCIAL
STRENGTH |
 50
Agenda
•
Delivering Value
•
Fleet Advantage, Location, Flexibility and
Fuel Diversity
•
Nuclear Operation
•
Fossil Operation
•
Financial Performance
•
Expansion Opportunities
•
Regulatory
•
Engaged Workforce |
 51
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
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
th |
 52
Financial
Strength
Disciplined
Investment
Operational
Excellence
•
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
PSEG Power Delivering on priorities
•
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 |
 53
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 |
 54
PSEG Power exceeded 2013’s earnings guidance $630-$685M
$710M
$535-$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. |
 55
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 York ISO
PJM |
 56
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
Energy Produced |
 57
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 |
 58
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
•
Unit 2 –
Fall 2014
•
Unit 3 –
Fall 2015
•
Uprate: 130 MW in
2015/2016 |
 59
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. 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 |
 60
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 |
 61
PSEG Power’s Fossil Fleet Performance
has shown improvement
*LM6000 AND 7EA UNITS
•
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
0%
25%
50%
75%
2008
2009
2010
2011
2012
2013
Coal
Combined Cycle
Peaking
0%
5%
10%
15%
2008
2009
2010
2011
2012
2013
0%
1%
2%
3%
4%
5%
2008
2009
2010
2011
2012
2013
80%
85%
90%
95%
100%
2008
2009
2010
2011
2012
2013
Capacity Factor
NJ Coal EFORp
Peaking Start Success*
NJ Combined Cycle EFORp |
 62
7,300
7,400
7,500
7,600
7,700
7,800
2008
2009
2010
2011
2012
2013
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
Combined Cycle Operating Heat Rate
AGP projected efficiency
improvement 2014-2018
2018 |
 63
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:
-
Linden (63 MW –
Completed)
-
Bergen (31 MW –
2015)
-
BEC (58 MW –
2017-2018)
Increases Efficiency -
Combined Cycle
(CC) heat rate improvement ~ 1.2%
Upgrades technology and extends
maintenance outage cycles |
 64
PSEG Power’s fleet is among the lowest
emitting in the industry
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
•
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
|
 65
PSEG Power’s capital expenditures for
environmental requirements are essentially complete*
*BASED ON CURRENTLY KNOWN AND QUANTIFIABLE ENVIRONMENTAL REQUIREMENTS.
E=ESTIMATE COMPLETION OF
CONEMAUGH SCR/FGD
MODS IN 2015 |
 Cost control actions taken:
•
Fossil plant assessment
•
CCGT material condition assessment
•
Contract renegotiations
•
Nuclear maintenance productivity study
•
Nuclear outage efficiency initiative
•
Materials management
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
$0
$500
$1,000
$1,500
2009
2010
2011
2012
2013
2014E
66 |
 PSEG Power is well-positioned
for
growth
when market conditions warrant
Available locations
•
Bergen
•
Burlington
•
Essex
•
Edison
•
Kearny
•
Hudson
•
Linden
•
Sewaren
•
Bridgeport
Harbor
•
Electric Transmission Interconnections
•
Access to Gas Pipelines
•
Space
•
Emissions
Our sites possess infrastructure advantages
67 |
 PSEG Solar Source owns 92 MW of
operating solar facilities
68
Shasta
California (4 MW)
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 Power is an established leader
within the industry
69
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 |
 70
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 |
 Portfolio Management Strategy
Optimize value of assets
Manage risk vs. reward
Directly engage with
regulatory agencies
DISCIPLINED
INVESTMENT
OPERATIONAL
EXCELLENCE
FINANCIAL
STRENGTH
ENGAGED
WORKFORCE
72 |
 PSEG Power: Enjoys real and sustainable
advantages in the merchant generation space
Market Review
•
•
PSEG’s Competitive Advantage
•
•
•
•
PSEG’s Sustainable Advantage
•
•
•
Gas, Power, Spark Spreads
Regulatory construct
Fuel flexibility
Heat Rate diversity
Access to Marcellus Shale gas
Asset flexibility
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
73 |
 74
Market Review:
Prices have stabilized
•
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
F=FORWARDS AS OF 12/31/2013
$6
$5
$4
$3
$2
$1
$-
$50
$45
$40
$35
$30
$25
$20
2011
2012
2013
2014F
2015F
2016F
2017F
2018F
2011
2012
2013
2014 F
2015 F
2016 F
2017 F
2018 F
$23
$21
$19
$17
$15
$13
$11
$9
$7
$5
Historical
Forward
NYMEX Natural Gas Price
PJM West RTC
PJM West Spark Spreads |
 75
Market Review:
New generation in PJM not keeping
pace with coal retirements
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*
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
6/1/2014
6/1/2015
6/1/2016
6/1/2017
6/1/2018
Demand Response
Energy Efficiency
Solar + Wind
Reserve Requirement
Existing + Expected New Generation
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Jan-14
Jul-14
Jan-15
Jul-15
Jan-16
Jul-16
Jan-17
Jul-17 |
 76
Market
Review:
Regulatory framework showing signs
of improvement
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
|
 77
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
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)
Salem 3
PJM Dispatch Curve |
 78
Competitive Advantage:
PSEG’s extensive gas
asset portfolio gives unparalleled access to Marcellus Shale gas
Gulf Coast Supply
0.7 BCF/D
Shale Supply
0.6 BCF/D
Storage
0.9 BCF/D |
 79
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 Market
Prices for
Natural Gas
Access
to Lower
Cost Shale
Gas in
Marcellus
and Utica
Spot
Natural
Gas
Prices:
June
2013
–
April
2014 |
 80
Competitive Advantage:
Locational advantage
from short term basis volatility
$45
-
$47
$37
-
$38
$56
-
$58
$39
-
$40
•
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
ANNUAL FORWARD BASIS TO PJM-WEST AS OF 12/31/2013.
($200)
($150)
($100)
($50)
$0
$50
$100
$150
$-
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
2011
2012
2013
2014 F
2015 F
2016 F
2017 F
2018 F
$-
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20 |
 81
Competitive Advantage:
Trading & Asset Flexibility
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
Base load and load following generation
sufficient to cover load and hedge
obligations
Hourly Generation and Load 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
$-
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Hour
Day Ahead
Real Time
$(80.0)
$(60.0)
$(40.0)
$(20.0)
$-
$20.0
$40.0
$60.0
$80.0
$100.0
Salem/HC
PB
Key/Con
Mer
Hud
Ber
Linden
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Hour
Nuclear
Coal
Combined Cycle
Other
Real Time Balancing Generation
LOAD/HEDGES
On Peak Basis to PJM-W on January 7, 2014 |
 82
Competitive Advantage:
Trading & Asset Flexibility
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
$-
$100
$200
$300
$400
$500
$600
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Hour
Day Ahead
Real Time
$(10.0)
$(5.0)
$-
$5.0
$10.0
$15.0
$20.0
Salem/HC
Key/Con
Hud
Linden
-
2,000
4,000
6,000
8,000
10,000
12,000
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Hour
Nuclear
Coal
Combined Cycle
Other
Real Time Balancing Generation
LOAD/HEDGES |
 83
Sustainable Advantage:
BGS Auction provides
excellent opportunity to forward hedge our generation
Capacity
Load shape
Transmission
Congestion
Ancillary
services
Risk premium
Green
~ $53
$37
-
$38
$39
-
$40
$38
-
$39
BGS sales account for about a quarter of our forward portfolio of hedges
3 Year Average
Round the Clock
PJM West
Forward Energy
Price
$/MWH; BGS PRICES REFLECT PSE&G ZONE; RESULTS FOR 2012-2014 WILL BE
THE NEW BLENDED PRICES BEGINNING JUNE 1, 2014. $95.77
$94.30
$83.88
~ $46
$92.18
~ $47
~ $48
~ $43
~ $53
~ $59
$97.39
$48
-
$50
$45
-
$47
$68
-
$71 |
 84
Sustainable Advantage: Hedging strategy
designed to protect gross margin while leveraging the portfolio
Forecast output:
Increased
to reflect
improvement
in economic
dispatch
Apr-Dec
2014
2015
2016
Volume TWh
26
35
36
Base Load
% Hedged
100%
75 -
80%
35 -
40%
(Nuclear and Base Load Coal)
Price $/MWh
$49
$51
$51
Volume TWh
18
21
19
Intermediate Coal, Combined
% Hedged
30 -
35%
0%
0%
Cycle, Peaking
Price $/MWh
$49
$51
$51
Volume TWh
42 -
44
54 -
56
54 -
56
Total
% Hedged
70 -
75%
50 -
55%
25 -
30%
Price $/MWh
$49
$51
$51
HEDGE PERCENTAGES AND PRICES AS OF MARCH 31, 2014. REVENUES OF FULL
REQUIREMENT LOAD DEALS BASED ON CONTRACT PRICE, INCLUDING
RENEWABLE ENERGY CREDITS, ANCILLARY, AND TRANSMISSION COMPONENTS BUT EXCLUDING
CAPACITY. HEDGES INCLUDE POSITIONS WITH MTM
ACCOUNTING TREATMENT AND OPTIONS. EXCLUDES SOLAR AND KALAELOA. |
 85
2017/2018 RPM Auction Influenced By:
•
Updated Demand Curve
•
Updated Transfer Capabilities
•
Environmental Retirements
•
New Build/Cost of New Entry
•
Minimum Offer Price Rule
•
Demand Response
*PSEG POWER’S AVERAGE PRICES AND CLEARED CAPACITY (MW) REFLECT BASE AND
INCREMENTAL RPM
AUCTION
RESULTS.
DELIVERY
YEAR
RUNS
FROM
JUNE
1
TO
MAY
31
OF
THE
NEXT
CALENDAR
YEAR.
RPM Auction Results*
($/MW-day)
2012 / 2013
2013 / 2014
2014 / 2015
2015 / 2016
2016 / 2017
Power’s
Average Prices
$153
$242
$166
$166
$166
Rest of Pool
Prices
$16
$28
$126
$136
$59
Power’s Cleared
Capacity (MW)
10,400
10,890
10,710
9,210
8,610
Sustainable Advantage:
PJM’s capacity market
is expected to continue to recognize locational value
|
 86
Forward curve shows that Marcellus shale supply averages over $1.50/MMbtu
discount year-round through 2018 2013 AVERAGE
6/1/13-12/31/13; F= FORWARDS AS OF 12/31/13. LEIDY BASIS FROM ICE/BROKER QUOTES
(2.50)
(2.25)
(2.00)
(1.75)
(1.50)
(1.25)
(1.00)
(0.75)
(0.50)
(0.25)
-
0.25
0.50
0.75
1.00
2013
2014F
2015F
2016F
2017F
2018F
Leidy Basis to HH
TRANS6 Basis to HH
TETM3 Basis to HH
Basis to Henry Hub
Sustainable Advantage: Fuel advantage
continues throughout the curve |
 87
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 |
 PSEG
FINANCIAL
REVIEW & OUTLOOK |
 89
Strong financial position to support our
business initiatives
2013 Financial Position
Exceeded upwardly revised 2013 earnings guidance
Pension fully funded
Strong balance sheet and upgraded credit ratings
2014 and Beyond
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
|
 90
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
*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. |
 91
Power Cash
from Ops
~$1.3B
Power
Capital
Investment
~0.6B
Dividend
to Parent
~$0.7B
Net Debt
~$0.2B
Power 2013 Cash Flows
Free Cash Flow
~$0.7B
Cash
~$0.2B
In 2013, Power had significant free cash flow
~$0.9B Available for PSEG
$0.0
$0.5
$1.0
$1.5 |
 92
PSE&G Cash
from Ops
(1)
~$1.4B
PSE&G
Capital
Investment
~$2.2B
In 2013, PSE&G invested over $2B, using $1.4B of
internally generated cash flow and debt, while maintaining its
capital structure
(1) PSE&G CASH FROM OPERATIONS ADJUSTS FOR SECURITIZATION PRINCIPAL
REPAYMENTS OF ~$220 MILLION. Cash ~$0.1B
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
PSE&G
Net Debt
~$0.6B
PSE&G 2013 Cash Flows
Parent Capital
Contribution
~$0.1B |
 93
In 2013, Power’s Free Cash Flow supported PSE&G’s
capital program and shareholder dividend
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
(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.
$0.0
$1.0
$2.0
$3.0
$4.0
Sources
Uses
Other
Cash Flow
(2)
~$0.1B |
 94
PSEG growth spend, including Energy
Strong, of ~$6.4B represents ~76% of total 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 ~$6.4B
E = ESTIMATE; CAPITAL INCLUDES AFUDC AND IDC.
PSEG
Planned
Spend
Maintenance ~$2B
~$0.9B
~$0.3B
~$1.1B
~$0.8B
~$4.3B
~$1.0B
~$8.4B
PSEG 2014 – 2016E Capital Investment |
 95
PSE&G’s Capital Program drives double-digit growth in rate base
and earnings over the 2013 to 2016 period E = ESTIMATE
2013
Rate Base
2016E
Rate Base
~$10.4B
~$14.6B
~$6.6B
~$3.8B
~$2.7B
~$6.5B
~$0.5B
~$1.0B
~$8.1B
Transmission
Growth
Energy
Strong
Solar and
New Business
2013 –
2016E Rate Base CAGR Growth of ~12%
Distribution
Transmission
95 |
 96
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
(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
(2)
Shareholder
Dividend
Power
Cash from Ops
Power Net
Debt
Power
Capital
Investment
Power
Capital
Investment
Other
Cash Flow
(2)
Power Net
Debt
PSEG Sources and Uses
96
Sources
Uses
Sources
Uses |
 97
Power’s key credit metric
supports incremental
investment opportunities
E = ESTIMATE
PSEG Power
Funds From Operations /
Debt
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
0%
10%
20%
30%
40%
50%
60%
70%
80%
2012
2013
97 |
 98
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
83%
106%
$4.36B
$5.12B
~$0.15B
~$0.86B
~($0.25B)
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
98
Fully Funded Pension
PBO Funded
Ratio |
 99
Our Pension Management
is expected to result
in pension income in 2014 and over the planning horizon
Pension (Expense)/Income
2013 to 2014 Drivers
(1) OTHER REFLECTS UPDATES TO THE POPULATION OF OUR EMPLOYEES AND
RETIREES E=ESTIMATE
2013
2014
2015E
2016E
Expense
($110) M
Discount
Rate
~$40M
Investment
Return
~$70M
Other
(1)
~$15M
($125)
($75)
($25)
$25
Income ~$15M per annum
99 |
 100
(1)
POWER EXCLUDES IMPACTS FROM STORM RECOVERY COSTS AND POTENTIAL RELATED
INSURANCE PROCEEDS NM = NOT MATERIAL E = ESTIMATE.
2013 -
2016E CAGR: ~(0.7)%
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
2013 –
2016E CAGR
Transmission
~(0.8)%
Distribution
~(1.2)%
Power
~(0.7)%
Other: N.M.
100 |
 101
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.
101 |
 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
$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
102 |
 PSEG’s longer-term outlook is influenced by
Power’s hedge position and increased investment at
PSE&G 2015E
2016E
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
Segment EPS Drivers
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
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 E = ESTIMATE |
 104
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
104 |
 105
PSE&G
APPENDIX |
 106
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. |
 107
PSE&G prioritizes public safety
while maintaining value to customers
LEAK RESPONSE RATE = PERCENTAGE OF UTILITY RESPONSES TO REPORTED LEAKS WITHIN
ONE HOUR. |
 108
PSEG POWER
AND ER&T
APPENDIX |
 109
Nuclear
fuel
needs
have
been
hedged
through
2016
Hedged
$0
$5
$10
2014
2015
2016
Anticipated Nuclear Fuel Cost
109 |
 110
Power’s coal hedging reflects 2014 supply
matched with 2014 sales
Station
Coal Type
Pricing
($/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)
$0
$10
$20
$30
$40
$50
0%
20%
40%
60%
80%
100%
2014
2015
2016
*COMMODITY PLUS TRANSPORTATION.
Contracted Coal |
 The full requirements BGS rate recognizes the
forward PJM capacity market price
111
2014-2015
$172
Three Year Average ($/MW-day)
$172
2015-2016
$166
MW per Tranche (varies by EDC)
109
2016-2017
$178
Days per Year
365
Three Year Average ($/MW-day)
$172
MWh per Tranche
Energy MW per Tranche (varies by EDC)
109
Hours per Year
8,768
Load Factor (varies by EDC)
~37%
MWh per Tranche, approx.
350,090
Capacity Cost per MWh
$20
Capacity Price per RPM Auction for PSEG Zone
Capacity Price per BGS Tranche
Capacity Cost per Tranche $ 6,841,016 |
 PSEG
FINANCIAL
APPENDIX
112 |
 Q1 Operating Earnings by Subsidiary
Operating Earnings
Earnings per Share
$ millions (except EPS)
2014
2013
2014
2013
PSEG Power
$ 293
$ 254
$ 0.58
$ 0.50
PSE&G
214
179
0.42
0.35
PSEG Enterprise/Other
8
-
0.01
-
Operating Earnings*
$ 515
$ 433
$ 1.01
$ 0.85
Quarter ended March 31
*
SEE SLIDE B FOR ITEMS EXCLUDED FROM NET INCOME TO RECONCILE TO OPERATING
EARNINGS.
113 |
 114
PSEG EPS Reconciliation
–
Q1 2014 versus Q1 2013
Q1 2014
Operating
Earnings*
Q1 2013
Operating
Earnings*
PSEG Power
PSE&G
PSEG
Enterprise/
Other
Capacity 0.11
Market Prices
and Volume 0.02
Re-contracting (0.05)
Gas Send-Out 0.05
Lower Pension
Expense 0.01
O&M (0.05)
Taxes and
Other (0.01)
Transmission
Net Earnings 0.03
Gas Volume &
Demand 0.02
Weather 0.01
Lower Pension
Expense 0.02
Distribution
O&M (0.02)
Taxes and
Other 0.01
Interest
and
PSEG
Long Island
0.01
$0.85
0.07
0.08
$1.01
0.00
0.20
0.40
0.60
0.80
1.00
* SEE SLIDE B FOR ITEMS EXCLUDED FROM NET INCOME TO RECONCILE TO OPERATING
EARNINGS. |
 115
March 31, 2014
PSEG
PSE&G
Power
Cash Investments
$0.6
$0.1
N/A
(2)
Short Term Debt
$0.0
$0.0
N/A
(2)
Long
Term
Debt
(3)
8.1
5.5
2.5
Common Equity
11.8
6.3
5.7
Total Capitalization
$19.9
$11.8
$8.2
Total Debt / Capitalization
41%
47%
31%
PSE&G
Regulated
Equity
Ratio
(1)
53%
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 $442 MILLION. $
Billions |
 116
PSEG Liquidity as of March 31, 2014
In April 2014, Power and PSEG amended their respective 5-Year credit agreements
ending in 2017, extending the expiration dates from March 2017 to April 2019.
Expiration
Total
Available
Company
Facility
Date
Facility
Usage
Liquidity
($Millions)
PSE&G
5-year Credit Facility
Mar-18
$600
1
$13
$587
5-Year Credit Facility (Power)
Mar-17
$1,600
$67
$1,533
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
$4,112
1 PSE&G Facility to be reduced by $29M on April 15, 2016
$434
2 Power Facility to be reduced by $48M on April 15, 2016
PSE&G ST Investment
$132
3 PSEG Facility to be reduced by $23M on April 15, 2016
Total Liquidity Available
$4,678
Total Parent / Power Liquidity
$3,959
PSEG /
Power
PSEG Money Pool ST Investment
116 |
 117
PSEG Energy Holdings
Investment Portfolio
Equipment
Investment Balance
*
at 3/31/14
($millions)
Merchant Energy Leases
NRG REMA
Keystone, Conemaugh & Shawville (PA)
3 coal-fired plants (1,162 equity MW)
$344
Edison Mission Energy (EME)**
Powerton & Joliet Generating Stations
(IL)
2 coal-fired generating facilities (1,640 equity MW)
$218
Regulated Energy Leases
Merrill Creek
Reservoir in NJ (PECO, MetEd, Delmarva Power & Light)
$193
Grand Gulf
Nuclear station in Mississippi (175 equity MW)
Real Estate Leveraged Leases
GM Renaissance Center; Wal-Marts; E-D (shopping) Centers
$73
Real Estate Operating Leases
Office
Towers,
Shopping
Centers
-
30
properties
$69
Generation Legacy Assets
GWF (in wind down stage), Bridgewater, GSOE
$4
Other
Land & Receivables
$7
Total Holdings Investments
$908
*
BOOK BALANCE EXCLUDING DEFERRED TAX ACCOUNTS.
**
EME AND ITS SUBSIDIARIES FILED CHAPTER 11 BANKRUPTCY ON 12/17/2012.
ON APRIL 1,2014, EME WAS ACQUIRED BY NRG; ALL MONETARY DEFAULTS WERE CURED AT
CLOSING WITH NO CHANGE TO HOLDINGS’
STATED EQUITY VALUE. |
 118
Strong,
full
year
2013
operating
earnings
delivered
*
SEE SLIDE A FOR ITEMS EXCLUDED FROM INCOME FROM CONTINUING OPERATIONS/NET
INCOME TO RECONCILE TO OPERATING EARNINGS. 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
118 |
 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. A
2013
2012
2011
2010
2009
2008
Earnings
Impact
($
Millions)
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 (PSEG Enterprise/Other)
-
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 (PSEG Enterprise/Other)
-
-
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
Per
Share
Impact
(Diluted)
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 (PSEG Enterprise/Other)
-
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 (PSEG Enterprise/Other)
-
-
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)
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
Reconciling Items, net of tax |
 Items Excluded from Net Income to Reconcile to Operating Earnings
B
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. Attachment 10
2014
2013
2013
2012
Earnings Impact ($ Millions)
Operating Earnings
515
$
433
$
1,309
$
1,236
$
Gain (Loss) on Nuclear Decommissioning Trust (NDT)
Fund Related Activity (PSEG Power)
9
9
40
52
Gain
(Loss)
on
Mark-to-Market
(MTM)
(a)
(PSEG Power)
(132)
(105)
(74)
(10)
Lease Related Activity (PSEG Enterprise/Other)
-
-
-
36
Storm O&M, net of insurance recoveries (PSEG Power)
(6)
(17)
(32)
(39)
Net Income
386
$
320
$
1,243
$
1,275
$
Fully Diluted Average Shares Outstanding (in Millions)
508
507
508
507
Per Share Impact (Diluted)
Operating Earnings
1.01
$
0.85
$
2.58
$
2.44
$
Gain (Loss) on NDT Fund Related Activity (PSEG Power)
0.02
0.02
0.08
0.10
Gain
(Loss)
on
MTM
(a)
(PSEG Power)
(0.26)
(0.21)
(0.14)
(0.02)
Lease Related Activity (PSEG Enterprise/Other)
-
-
-
0.07
Storm O&M, net of insurance recoveries (PSEG Power)
(0.01)
(0.03)
(0.07)
(0.08)
Net Income
0.76
$
0.63
$
2.45
$
2.51
$
(a) Includes the financial impact from positions with forward delivery
months. PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
Reconciling Items, net of tax
Three Months Ended
Year Ended
March 31,
December 31,
(Unaudited) |