8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) February 20, 2015

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

(Exact name of registrant as specified in its charter)

New Jersey	001-09120	22-2625848
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

80 Park Plaza, P.O. Box 1171

Newark, New Jersey 07101-1171

(Address of principal executive offices) (Zip Code)

973-430-7000

(Registrant’s telephone number, including area code)

http://www.pseg.com

PUBLIC SERVICE ELECTRIC AND GAS COMPANY

(Exact name of registrant as specified in its charter)

Delaware	001-34232	22-1212800
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

80 Park Plaza, P.O. Box 570

Newark, New Jersey 07101-0570

(Address of principal executive offices) (Zip Code)

973-430-7000

(Registrant’s telephone number, including area code)

http://www.pseg.com

PSEG POWER LLC

(Exact name of registrant as specified in its charter)

New Jersey	001-34232	22-3663480
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

80 Park Plaza, T-25

Newark, New Jersey 07102-4194

(Address of principal executive offices) (Zip Code)

973-430-7000

(Registrant’s telephone number, including area code)

http://www.pseg.com

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

The information contained in Item 2.02. Results of Operations and Financial Condition in this Form 8-K is furnished solely for Public Service Enterprise Group Incorporated (PSEG). The information contained in Item 7.01 Regulation FD Disclosure in this combined Form 8-K is separately furnished, as noted, by PSEG, Public Service Electric and Gas Company (PSE&G) and PSEG Power LLC (Power). Information contained herein relating to any individual company is provided by such company on its own behalf and in connection with its respective Form 8-K. PSE&G and Power each makes representations only as to itself and makes no other representations whatsoever as to any other company. The materials furnished as Exhibits 99 and 99.1 are available on the pseg.com website under the investor tab, or at http://investor.pseg.com.

Item 2.02 Results of Operations and Financial Condition

PSEG

On February 20, 2015, PSEG announced unaudited financial results for the three months and twelve months ended December 31, 2014. A copy of the earnings release dated February 20, 2015 is furnished as Exhibit 99 to this Form 8-K.

Item 7.01 Regulation FD Disclosure

PSEG, Power and PSE&G

On February 20, 2015, PSEG conducted an earnings call regarding its results for the three and twelve months ended December 31, 2014. A copy of the slideshow presentation used during the earnings call is furnished as Exhibit 99.1 to this Form 8-K.

Item 9.01 Financial Statements and Exhibits

Exhibit 99	Press Release dated February 20, 2015
Exhibit 99.1	Slideshow Presentation

2

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof.

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
(Registrant)
By:	/s/ Stuart J. Black
	STUART J. BLACK
	Vice President and Controller
	(Principal Accounting Officer)

Date: February 20, 2015

3

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof.

PUBLIC SERVICE ELECTRIC AND GAS COMPANY
(Registrant)
By:	/s/ Stuart J. Black
	STUART J. BLACK
	Vice President and Controller
	(Principal Accounting Officer)

Date: February 20, 2015

4

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof.

PSEG POWER LLC
(Registrant)
By:	/s/ Stuart J. Black
	STUART J. BLACK
	Vice President and Controller
	(Principal Accounting Officer)

Date: February 20, 2015

5

EX-99

Exhibit 99

        Investor News NYSE: PEG

For further information, contact:

Ø     Kathleen A. Lally, Vice President – Investor Relations	Phone: 973-430-6565
Ø     Carlotta Chan, Manager - Investor Relations	Phone: 973-430-6596

PSEG ANNOUNCES 2014 RESULTS

$2.99 NET INCOME PER SHARE

Operating Earnings of $2.76 Per Share Exceeds Guidance of $2.60 - $2.75 Per Share

Company Provides 2015 Guidance of $2.75 - $2.95 Per Share

(February 20, 2015 – Newark, NJ) Public Service Enterprise Group (PSEG) reported today 2014 Net Income of $1,518 million or $2.99 per share as compared to Net Income of $1,243 million, or $2.45 per share for 2013. Operating Earnings for the year 2014 were $1,400 million or $2.76 per share compared to 2013 Operating Earnings of $1,309 million or $2.58 per share.

PSEG also reported Net Income for the fourth quarter of 2014 of $476 million, or $0.94 per share. This compares to fourth quarter 2013 Net Income of $200 million, or $0.39 per share. Operating Earnings for the fourth quarter of 2014 were $247 million, or $0.49 per share compared to fourth quarter 2013 Operating Earnings of $248 million, or $0.49 per share.

“We are delighted with our results. Our strategy has transformed our business mix and resulted in continued growth in earnings. PSEG reported operating earnings for 2014 above the upper end of guidance,” said Ralph Izzo, chairman, president and chief executive officer. “Our financial performance is a direct result from disciplined capital allocation. We are seeing the benefits of an expanded capital program contributing to double-digit earnings growth from our regulated company, PSE&G, which has grown to represent 52% of 2014’s operating earnings while Power’s successful management of its gas supply arrangements supported better than anticipated earnings. Our utility customers have benefited from improvements in reliability and our ability to pass along savings in gas costs. Our Board’s recent decision to meaningfully increase the common dividend by 5.4% to the indicative annual level of $1.56 per share is an expression of confidence in our outlook, the continued growth of our utility and an acknowledgment of our strong financial position.”

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. Operating Earnings exclude the impact of gains/(losses) associated with Nuclear Decommissioning Trust (NDT) investments and Mark-To-Market (MTM) accounting as well as other material one-time items. The table below provides a reconciliation of PSEG’s Net Income to Operating Earnings (a non-GAAP measure) for the full year and fourth quarter. See Attachment 12 for a complete list of items excluded from Net Income in the determination of Operating Earnings.

PSEG CONSOLIDATED EARNINGS (unaudited)

Full-Year Comparative Results

2014 and 2013

	Income					Diluted Earnings
	($ millions)					Per Share
	2014		2013			2014		2013
Operating Earnings	$	1,400	$	1,309		$	2.76	$	2.58
Reconciling Items		118		(66	)		0.23		(0.13	)
Net Income	$	1,518	$	1,243		$	2.99	$	2.45
				Avg. Shares			508M		508M

PSEG CONSOLIDATED EARNINGS (unaudited)

Fourth Quarter Comparative Results

2014 and 2013

	Income					Diluted Earnings
	($ millions)					Per Share
	2014		2013			2014		2013
Operating Earnings	$	247	$	248		$	0.49	$	0.49
Reconciling Items		229		(48	)		0.45		(0.10	)
Net Income	$	476	$	200		$	0.94	$	0.39
				Avg. Shares			508M		508M

“Our core strategy – focused on operational excellence, financial strength and disciplined investment – is expected to yield a third year of growth in operating earnings over the coming year.” Izzo continued, “For 2015, we are initiating Operating Earnings guidance of $2.75 - $2.95 per share. The hard work and dedication of the men and women of PSEG have been a major factor in our success and provide me with confidence in our ability to achieve our goals.”

The following table outlines PSEG’s 2014 operating earnings by subsidiary and expectations for 2015.

2015 Guidance and 2014 Operating Earnings

($ millions, except EPS)

	2015E		2014A
PSE&G	$	735 - $775	$	725
PSEG Power	$	620 - $680	$	642
PSEG Enterprise/Other	$	40 - $45	$	33
Operating Earnings	$	1,395 - $1,500	$	1,400
Earnings Per Share	$	2.75 - $2.95	$	2.76

E = Estimate

Operating Earnings Review and Outlook by Operating Subsidiary

See Attachments 6 and 7 for detail regarding the quarter-over-quarter and year-over-year earnings reconciliations for each of PSEG’s businesses.

PSE&G

PSE&G reported operating earnings of $160 million ($0.32 per share) for the fourth quarter bringing full year operating earnings to $725 million ($1.43 per share). On a comparative basis, PSE&G reported operating earnings of $144 million ($0.29 per share) and $612 million ($1.21 per share) for the fourth quarter and full year 2013, respectively.

PSE&G’s earnings in the fourth quarter benefited from a reduction in operating expenses and a return on its expanded infrastructure capital program which more than offset the impact of mild weather on sales. PSE&G’s successful management of its investment program allowed it to earn its authorized return for the full year as it maintained its focus on satisfying the needs of customers.

PSE&G’s investment in transmission infrastructure increased quarter-over-quarter earnings by $0.02 per share. The transmission earnings improvement in the fourth quarter was less than the increase experienced during the first three quarters of the year, and reflects the impact on rate base from an expansion of bonus depreciation at the end of the year. Tight control of operating expenses and lower pension costs together resulted in a quarter-over-quarter increase in earnings of $0.04 per share. A continued improvement in gas volume and demand – which improved quarter-over-quarter earnings by $0.01 per share – was offset by a similar decline in electric volume and demand. Weather, which was mild relative to conditions experienced in the prior year, reduced earnings comparisons by $0.01 per share. Earnings were reduced by $0.02 per share due to the absence of a tax-related change which benefited earnings in the prior year’s fourth quarter.

Economic conditions continue to exhibit signs of improvement in the service area. On a weather-normalized basis, gas deliveries are estimated to have increased 1% in the quarter and 3.1% for the year. Demand continues to benefit not only from the improvement in the economy and but also from lower commodity prices. On a weather-normalized basis, electric sales are estimated to have declined by 2.3% in the fourth quarter and increased by 0.3% for the year. The decline in the quarter is impacted by a number of winter storms at the end of 2013 that increased residential consumption, and decreases in demand this quarter from large customers. The increase for the year is indicative of improving economic conditions partially offset by continued customer conservation.

PSE&G announced that it would provide its residential gas customers with a credit against their bill for the months of February and March. The credit is an extension of the bill credits PSE&G provided its residential customers for gas usage in November, December and January. With these credits, a typical residential customer would experience savings on their bill over the five months of approximately $210, or about 31%.

An increase in revenue of $182 million under PSE&G’s transmission formula rate went into effect on January 1, 2015. The increase in revenue will provide PSE&G with recovery of and a return on its forecast of transmission related capital expenditures through the year. Each year, transmission revenues are adjusted to reflect an update of data that was estimated in the formula rate filing. The adjustment for 2015 will include the impact of the extension of bonus

depreciation, which was enacted after the formula rate filing was made, and is estimated to reduce our 2015 revenue increase as filed by approximately $21 million. PSE&G’s investment in transmission grew to $4.5 billion at the end of 2014 to represent 39% of the company’s consolidated rate base of $11.4 billion.

PSE&G’s operating earnings for 2015 are forecast at $735 million - $775 million. Operating earnings will be influenced by an increase in transmission revenues and construction activity associated with the Energy Strong capital program approved in 2014.

PSEG Power

PSEG Power reported operating earnings of $91 million ($0.18 per share) for the fourth quarter of 2014, bringing full year operating earnings to $642 million ($1.27 per share). On a comparative basis, PSEG Power reported operating earnings of $115 million ($0.23 per share) and $710 million ($1.40 per share) for the fourth quarter and full year 2013, respectively.

PSEG Power’s operating earnings in the fourth quarter were influenced by the known decline in capacity revenues, lower market prices for energy offset by the monetization of its gas supply position and a reduction in operation and maintenance expense.

A decline in average PJM capacity prices to $166/MW-day from $244/MW-day on June 1, 2014 reduced Power’s quarter-over-quarter earnings by $0.09 per share. A decline in the average price received on energy hedges and lower market prices were more than offset by strong margins on gas sales to increase Power’s quarter-over-quarter earnings comparisons by $0.01 per share. Operation and maintenance (O&M) expenditures were lower than levels experienced in the year-ago period, which was heavily influenced by outage related work. A decline in O&M improved quarter-over-quarter earnings comparisons by $0.05 per share. Higher levels of depreciation and interest expense along with miscellaneous items combined to reduce quarterly earnings comparisons by $0.02 per share.

Power’s output increased 3.1% in the quarter from year-ago levels. For the year, output increased 1.3% to 54.2 TWh. The fleet’s flexibility in response to volatile markets was demonstrated in the quarter and throughout the year as 2014’s output represented the third highest level in the fleet’s history as a merchant producer. The nuclear fleet produced 29.1 TWh (54% of total generation) operating at an average capacity factor during the year of 89.3%. Hope Creek experienced its second best year operating at a 97.9% capacity factor which partially offset the impact of an extended refueling outage at Salem 2. The market is rewarding efficient combined cycle gas units. The gas-fired combined cycle fleet (CCGTs) set a generation record during the year. The fleet produced 16.5 TWh (30% of total generation) during the year with record levels of output from the Bergen Station and Linden 1. The coal fleet produced 7.4 TWh (14% of total generation). The peaking fleet’s responsiveness during the abnormally cold weather experienced early in the year led to full year production of 1.2 TWh (2% of total generation).

Power is forecasting an improvement in output for 2015 to 55 – 57 TWh. The improvement – largely at nuclear – takes into consideration the Peach Bottom uprate and a forecast increase in output at the Salem station. Following completion of the Basic Generation Service auction in New Jersey in early February 2015, Power enters the year with 100% of its baseload generation hedged. Approximately 75% – 80% of anticipated annual production is hedged at an average price of $52 per MWh which compares with average hedge prices in 2014 of $48 per MWh. Power has hedged approximately 50% – 55% of its forecast generation in 2016 of 55 – 57 TWh

at an average price of $52 per MWh. For 2017, Power has hedged 25% – 30% of forecast production of 55 – 57 TWh at an average price of $52 per MWh. Power assumes BGS volumes will represent approximately 11.5 TWh in each of 2015 and 2016 – consistent with 2014’s deliveries under the BGS contract.

Power’s operating earnings for 2015 are forecast at $620 - $680 million. Results for the full year will be affected by a decline in capacity revenues, an increase in the average price received on energy hedges, Power’s role as agent for LIPA’s generation portfolio, and a modest increase in operation and maintenance expense.

PSEG Enterprise/Other

PSEG Enterprise/Other reported a loss in operating earnings for the fourth quarter of $4 million ($0.01 per share) compared to an operating earnings loss of $11 million ($0.03 per share) for the fourth quarter of 2013. The results for the fourth quarter brought the full year 2014 for PSEG Enterprise/Other to $33 million ($0.06 per share) versus Operating Earnings loss in 2013 of $13 million ($0.03 per share).

The difference in operating results quarter-over-quarter primarily reflects the absence of tax payments and other items in the fourth quarter of 2013. For the year, the operating contract for PSEG Long Island contributed $0.02 per share to earnings, in line with expectations.

For 2015, operating earnings for PSEG Enterprise/Other are forecast to be $40 - $45 million. Results will be influenced by contractual payments associated with the operation of PSEG Long Island, and income on the lease portfolio including the renegotiation and extension of the lease on the Grand Gulf nuclear generating facility.

Forward Looking Statement

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:

• 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 transmission planning,

• 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,

• 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 manage our energy obligations, available supply and risks,

• adverse outcomes of any legal, regulatory or other proceeding, settlement, investigation or claim applicable to us and/or the energy industry,

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

• 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 insurance coverage or recover proceeds of insurance with respect to such events,

• acts of terrorism, cybersecurity attacks or intrusions that could adversely impact our businesses,

• increases in competition in energy supply markets as well as for 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,

• changes in technology, such as distributed generation and micro grids, and greater reliance on these technologies, and

• changes in customer behaviors, including increases in 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.

Attachment 1

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Operating Earnings and Per Share Results by Subsidiary

(Unaudited)

	Three Months Ended December 31,						Year-Ended December 31,
	2014			2013			2014		2013
Earnings Results ($ Millions)
PSE&G	$	160		$	144		$	725	$	612
PSEG Power		91			115			642		710
PSEG Enterprise/Other		(4	)		(11	)		33		(13	)
Operating Earnings	$	247		$	248		$	1,400	$	1,309
Reconciling Items(a)		229			(48	)		118		(66	)
Net Income	$	476		$	200		$	1,518	$	1,243
Fully Diluted Average Shares Outstanding (in Millions)		508			508			508		508
Per Share Results (Diluted)
PSE&G	$	0.32		$	0.29		$	1.43	$	1.21
PSEG Power		0.18			0.23			1.27		1.40
PSEG Enterprise/Other		(0.01	)		(0.03	)		0.06		(0.03	)
Operating Earnings	$	0.49		$	0.49		$	2.76	$	2.58
Reconciling Items(a)		0.45			(0.10	)		0.23		(0.13	)
Net Income	$	0.94		$	0.39		$	2.99	$	2.45

(a) See Attachment 12 for details of items excluded from Net Income to compute Operating Earnings.

Attachment 2

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Consolidating Statements of Operations

(Unaudited, $ Millions)

	Three Months Ended December 31, 2014
	PSEG			PSEG Enterprise/ Other (a)			PSE&G			PSEG Power
OPERATING REVENUES	$	2,773		$	(368	)	$	1,531		$	1,610
OPERATING EXPENSES
Energy Costs		878			(464	)		631			711
Operation and Maintenance		780			97			368			315
Depreciation and Amortization		308			7			224			77
Total Operating Expenses		1,966			(360	)		1,223			1,103
OPERATING INCOME		807			(8	)		308			507
Income from Equity Method Investments		3			—			—			3
Other Income and (Deductions)		75			(2	)		17			60
Other Than Temporary Impairments		(6	)		—			—			(6	)
Interest Expense		(98	)		3			(71	)		(30	)
INCOME BEFORE INCOME TAXES		781			(7	)		254			534
Income Tax Benefit (Expense)		(305	)		3			(94	)		(214	)
NET INCOME	$	476		$	(4	)	$	160		$	320
OPERATING EARNINGS	$	247		$	(4	)	$	160		$	91
Reconciling Items Excluded from Net Income (b)		229			—			—			229
NET INCOME	$	476		$	(4	)	$	160		$	320
	Three Months Ended December 31, 2013
	PSEG			PSEG Enterprise/ Other (a)			PSE&G			PSEG Power
OPERATING REVENUES	$	2,318		$	(498	)	$	1,571		$	1,245
OPERATING EXPENSES
Energy Costs		825			(519	)		633			711
Operation and Maintenance		818			27			435			356
Depreciation and Amortization		292			7			214			71
Taxes Other Than Income Taxes		18			—			18			—
Total Operating Expenses		1,953			(485	)		1,300			1,138
OPERATING INCOME		365			(13	)		271			107
Income from Equity Method Investments		2			(2	)		—			4
Other Income and (Deductions)		41			1			13			27
Other Than Temporary Impairments		(5	)		—			—			(5	)
Interest Expense		(99	)		2			(70	)		(31	)
INCOME BEFORE INCOME TAXES		304			(12	)		214			102
Income Tax Benefit (Expense)		(104	)		1			(70	)		(35	)
NET INCOME	$	200		$	(11	)	$	144		$	67
OPERATING EARNINGS	$	248		$	(11	)	$	144		$	115
Reconciling Items Excluded from Net Income (b)		(48	)		—			—			(48	)
NET INCOME	$	200		$	(11	)	$	144		$	67

(a) Includes activities at Energy Holdings, PSEG Long Island and the Parent as well as intercompany eliminations.

(b) See Attachment 12 for details of items excluded from Net Income to compute Operating Earnings.

Attachment 3

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Consolidating Statements of Operations

(Unaudited, $ Millions)

	Year-Ended December 31, 2014
	PSEG			PSEG Enterprise/ Other (a)			PSE&G			PSEG Power
OPERATING REVENUES	$	10,886		$	(1,314	)	$	6,766		$	5,434
OPERATING EXPENSES
Energy Costs		3,886			(1,770	)		2,909			2,747
Operation and Maintenance		3,150			406			1,558			1,186
Depreciation and Amortization		1,227			29			906			292
Total Operating Expenses		8,263			(1,335	)		5,373			4,225
OPERATING INCOME		2,623			21			1,393			1,209
Income from Equity Method Investments		13			(1	)		—			14
Other Income and (Deductions)		229			1			58			170
Other Than Temporary Impairments		(20	)		—			—			(20	)
Interest Expense		(389	)		10			(277	)		(122	)
INCOME BEFORE INCOME TAXES		2,456			31			1,174			1,251
Income Tax Benefit (Expense)		(938	)		2			(449	)		(491	)
NET INCOME	$	1,518		$	33		$	725		$	760
OPERATING EARNINGS	$	1,400		$	33		$	725		$	642
Reconciling Items Excluded from Net Income (b)		118			—			—			118
NET INCOME	$	1,518		$	33		$	725		$	760
	Year-Ended December 31, 2013
	PSEG			PSEG Enterprise/ Other (a)			PSE&G			PSEG Power
OPERATING REVENUES	$	9,968		$	(1,750	)	$	6,655		$	5,063
OPERATING EXPENSES
Energy Costs		3,536			(1,801	)		2,841			2,496
Operation and Maintenance		2,887			24			1,639			1,224
Depreciation and Amortization		1,178			33			872			273
Taxes Other Than Income Taxes		68			—			68			—
Total Operating Expenses		7,669			(1,744	)		5,420			3,993
OPERATING INCOME		2,299			(6	)		1,235			1,070
Income from Equity Method Investments		11			(5	)		—			16
Other Income and (Deductions)		159			3			51			105
Other Than Temporary Impairments		(12	)		—			—			(12	)
Interest Expense		(402	)		7			(293	)		(116	)
INCOME BEFORE INCOME TAXES		2,055			(1	)		993			1,063
Income Tax Benefit (Expense)		(812	)		(12	)		(381	)		(419	)
NET INCOME	$	1,243		$	(13	)	$	612		$	644
OPERATING EARNINGS	$	1,309		$	(13	)	$	612		$	710
Reconciling Items Excluded from Net Income (b)		(66	)		—			—			(66	)
NET INCOME	$	1,243		$	(13	)	$	612		$	644

(a) Includes activities at Energy Holdings, PSEG Long Island and the Parent as well as intercompany eliminations.

(b) See Attachment 12 for details of items excluded from Net Income to compute Operating Earnings.

Attachment 4

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Capitalization Schedule

(Unaudited, $ Millions)

	December 31, 2014			December 31, 2013
DEBT
Long-Term Debt	$	8,869		$	8,131
Securitization Debt		259			496
Project Level, Non-Recourse Debt		16			16
Total Debt		9,144			8,643
STOCKHOLDERS’ EQUITY
Common Stock		4,876			4,861
Treasury Stock		(635	)		(615	)
Retained Earnings		8,227			7,457
Accumulated Other Comprehensive Loss		(283	)		(95	)
Total Common Stockholders’ Equity		12,185			11,608
Noncontrolling Interests—Equity Investments		1			1
Total Equity		12,186			11,609
Total Capitalization	$	21,330		$	20,252

Attachment 5

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, $ Millions)

	Year-Ended December 31,
	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	1,518		$	1,243
Adjustments to Reconcile Net Income to Net Cash Flows From Operating Activities		1,642			1,915
NET CASH PROVIDED BY OPERATING ACTIVITIES		3,160			3,158
NET CASH USED IN INVESTING ACTIVITIES		(2,892	)		(2,801	)
NET CASH USED IN FINANCING ACTIVITIES		(359	)		(243	)
Net Change in Cash and Cash Equivalents		(91	)		114
Cash and Cash Equivalents at Beginning of Period		493			379
Cash and Cash Equivalents at End of Period	$	402		$	493

Attachment 6

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Quarter-over-Quarter EPS Reconciliation

December 31, 2014 vs. December 31, 2013

(Unaudited)

* See Attachment 12 for Items excluded from 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.

Attachment 7

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Year-over-Year EPS Reconciliation

December 31, 2014 vs. December 31, 2013

(Unaudited)

* See Attachment 12 for Items excluded from 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.

Attachment 8

PSEG POWER LLC

Generation Measures*

(Unaudited)

	GWhr Breakdown						GWhr Breakdown
	Three Months Ended December 31,						Year-End December 31,
	2014			2013			2014			2013
Nuclear—NJ		5,069			4,463			19,722			20,098
Nuclear—PA		1,887			2,249			9,386			9,397
Total Nuclear		6,956			6,712			29,108			29,495
Fossil—Coal/Natural Gas—NJ**		(19	)		55			1,421			1,141
Fossil—Coal—PA		1,163			1,485			5,108			5,491
Fossil—Coal—CT		122			257			832			691
Total Coal		1,266			1,797			7,361			7,323
Fossil—Oil & Natural Gas—NJ		3,503			2,999			12,922			12,579
Fossil—Oil & Natural Gas—NY		1,129			932			4,527			3,952
Fossil—Oil & Natural Gas—CT		5			31			244			109
Total Oil & Natural Gas		4,637			3,962			17,693			16,640
		12,859			12,471			54,162			53,458
	% Generation by Fuel Type						% Generation by Fuel Type
	Three Months Ended December 31,						Year-End December 31,
	2014			2013			2014			2013
Nuclear—NJ		39	%		36	%		37	%		38	%
Nuclear—PA		15	%		18	%		17	%		17	%
Total Nuclear		54	%		54	%		54	%		55	%
Fossil—Coal/Natural Gas—NJ**		0	%		0	%		3	%		2	%
Fossil—Coal—PA		9	%		12	%		9	%		11	%
Fossil—Coal—CT		1	%		2	%		2	%		1	%
Total Coal		10	%		14	%		14	%		14	%
Fossil—Oil & Natural Gas—NJ		27	%		24	%		24	%		24	%
Fossil—Oil & Natural Gas—NY		9	%		8	%		8	%		7	%
Fossil—Oil & Natural Gas—CT		0	%		0	%		0	%		0	%
Total Oil & Natural Gas		36	%		32	%		32	%		31	%
		100	%		100	%		100	%		100	%

* Excludes Solar and Kalaeloa

** Includes Pumped Storage. Pumped Storage accounted for <1% of total generation for the three months and twelve months ended December 31, 2014 and 2013. Also includes natural gas fuel switching intervals.

Attachment 9

PUBLIC SERVICE ELECTRIC & GAS COMPANY

Retail Sales and Revenues

(Unaudited)

December 31, 2014

Electric Sales and Revenues

	Three Months Ended		Change vs. 2013			Year Ended		Change vs. 2013
Sales (millions kWh)
Residential		2,804		-5.3	%		13,081		-3.0	%
Commercial & Industrial		6,404		-2.6	%		27,329		-0.5	%
Street Lighting		95		-3.3	%		327		-0.9	%
Interdepartmental		2		-0.1	%		10		2.5	%
Total		9,305		-3.5	%		40,747		-1.3	%
Revenue (in millions)
Residential	$	435		-4.2	%	$	2,055		-1.3	%
Commercial & Industrial		419		-4.1	%		2,052		1.0	%
Street Lighting		18		-3.3	%		69		-1.6	%
Other Operating Revenues*		125		18.9	%		508		19.5	%
Total	$	996		-1.7	%	$	4,684		1.7	%
	Three Months Ended		Change vs. 2013			Year Ended		Change vs. 2013
Weather Data
THI Hours—Actual		245		-57.6	%		13,764		-21.7	%
THI Hours—Normal		301					16,073

* Primarily sales of Non-Utility Generator energy to PJM and Transmission related revenues.

Attachment 10

PUBLIC SERVICE ELECTRIC & GAS COMPANY

Retail Sales and Revenues

(Unaudited)

December 31, 2014

Gas Sold and Transported

	Three Months Ended		Change vs. 2013			Year Ended		Change vs. 2013
Sales (millions therms)*
Firm Sales
Residential Sales		444		-2.8	%		1,573		9.1	%
Commercial & Industrial		284		-0.9	%		1,055		8.6	%
Total Firm Sales		728		-2.1	%		2,628		8.9	%
Non-Firm Sales
Commercial & Industrial		639		20.6	%		2,467		76.3	%
Total Non-Firm Sales		639					2,467
Total Sales		1,367		7.3	%		5,095		33.6	%
Revenue ($ millions)
Residential Sales—Firm	$	83		-12.9	%	$	491		-8.4	%
Commercial & Industrial—Firm Sales		81		9.7	%		314		28.1	%
Non-Firm Sales		8		-19.8	%		41		-3.2	%
Other Operating Revenues**		44		-3.0	%		172		1.4	%
Total	$	216		-3.9	%	$	1,018		2.5	%
Gas Transported	$	319		-4.0	%	$	1,064		0.9	%
	Three Months Ended		Change vs. 2013			Year Ended		Change vs. 2013
Weather Data
Degree Days—Actual		1,607		-4.2	%		5,078		5.9	%
Degree Days—Normal		1,617					4,653

* CSG rate included in non-firm sales

** Primarily Appliance Service.

Attachment 11

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Statistical Measures

(Unaudited)

	Three Months Ended December 31,						Year Ended December 31,
	2014			2013			2014			2013
Weighted Average Common Shares Outstanding (millions)
Basic		506			506			506			506
Diluted		508			508			508			508
Stock Price at End of Period							$	41.41		$	32.04
Dividends Paid per Share of Common Stock	$	0.37		$	0.36		$	1.48		$	1.44
Dividend Payout Ratio*								53.6	%		55.8	%
Dividend Yield								3.6	%		4.5	%
Price/Earnings Ratio*								15.0			12.4
Rate of Return on Average Common Equity*								11.8	%		11.8	%
Book Value per Common Share							$	24.09		$	22.95
Market Price as a Percent of Book Value								172	%		140	%
Total Shareholder Return		12.2	%		-1.6	%		34.4	%		9.4	%

* Calculation based on Operating Earnings for the 12 month period ended.

Attachment 12

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Reconciling Items, net of tax	Three Months Ended December 31,						Year Ended December 31,
	2014			2013			2014			2013
	(Unaudited)
Earnings Impact ($ Millions)
Operating Earnings	$	247		$	248		$	1,400		$	1,309
Gain (Loss) on Nuclear Decommissioning Trust (NDT) Fund Related Activity (PSEG Power)		28			11			68			40
Gain (Loss) on Mark-to-Market (MTM)(a) (PSEG Power)		204			(52	)		66			(74	)
Storm O&M, net of insurance recoveries (PSEG Power)		(3	)		(7	)		(16	)		(32	)
Net Income	$	476		$	200		$	1,518		$	1,243
Fully Diluted Average Shares Outstanding (in Millions)		508			508			508			508
Per Share Impact (Diluted)
Operating Earnings	$	0.49		$	0.49		$	2.76		$	2.58
Gain (Loss) on NDT Fund Related Activity (PSEG Power)		0.05			0.02			0.13			0.08
Gain (Loss) on MTM(a) (PSEG Power)		0.40			(0.11	)		0.13			(0.14	)
Storm O&M, net of insurance recoveries (PSEG Power)		—			(0.01	)		(0.03	)		(0.07	)
Net Income	$	0.94		$	0.39		$	2.99		$	2.45

(a) Includes the financial impact from positions with forward delivery months.

EX-99.1

Public Service Enterprise Group

PSEG Earnings Conference Call

4   Quarter & Year-end 2014

February 20, 2015

EXHIBIT 99.1

th

1

Forward-Looking Statement

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:

•

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 transmission planning, 

•

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,

•

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 manage our energy obligations, available supply and risks,

•

adverse outcomes of any legal, regulatory or other proceeding, settlement, investigation or claim applicable to us and/or the energy industry, 

•

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

•

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 insurance coverage or recover proceeds of insurance with respect to such events,

•

acts of terrorism, cybersecurity attacks or intrusions that could adversely impact our businesses,

•

increases in competition in energy supply markets as well as for 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, 

•

changes in technology, such as distributed generation and micro grids, and greater reliance on these technologies, and 

•

changes in customer behaviors, including increases in 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.

2

GAAP Disclaimer

PSEG presents Operating Earnings in addition to its 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 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. The last slide in this presentation includes

a list of items excluded from 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/

PSEG

2014 Q4 and Full Year Review

Ralph Izzo

Chairman, President and Chief Executive Officer

4

Q4 Earnings Summary

$ millions (except EPS)

2014

2013

Operating Earnings

$  247

$  248

Reconciling Items, Net of Tax

229

(48)

Net Income

$  476

$  200   

EPS from Operating Earnings*

$  0.49 

$  0.49 

Quarter ended December 31         

* See Slide 32 for Items excluded from Net Income to reconcile to Operating Earnings.

5

Full-year Earnings Summary –

EPS exceeded guidance

$ millions (except EPS)

2014

2013

Operating Earnings

$  1,400

$  1,309

Reconciling Items, Net of Tax

118

(66)

Net Income

$  1,518

$  1,243

EPS from Operating Earnings*

$  2.76

$  2.58

Twelve Months ended December 31        

* See Slide 32 for Items excluded from Net Income to reconcile to Operating Earnings.

6

PSEG –

2014 Highlights

Strong 2014 financial performance –

exceeded upper end of guidance

Achieved operating earnings of $2.76 per share, up 7% compared to $2.58

per share in 2013

PSE&G

achieved

double-digit

growth

in

earnings,

adding

to

5

years

of

18%

compound

annual growth

PSEG Power’s operating earnings exceeded the high end of guidance

Continued operational excellence

PSE&G’s control of O&M supported results

Power generation up 1.3% for the year led by record CCGT production and

strong Hope Creek performance

PSE&G recognized for the 13

**

consecutive year as the Mid-Atlantic region’s

most reliable electric utility

Disciplined capital investment –

producing results

Transmission projects in construction –

on schedule and on budget

Energy Strong investments underway –

gas mains replacement prioritized 

Power announced a new $100-$120 million investment in the PennEast Pipeline

Filed Energy Efficiency II extension with NJBPU ($100 million)

th

PSEG Annual Dividend –

Increased 5.4%

PSEG Annual Dividend Rate 

*INDICATED ANNUAL PSEG  COMMON DIVIDEND RATE PER SHARE.

**2015 PAYOUT RATIO REFLECTS THE INDICATED ANNUAL DIVIDEND RATE DIVIDED BY THE MIDPOINT OF 2015 OPERATING EARNINGS GUIDANCE OF $2.75-2.95 PER SHARE.

7

Payout

Ratio

63% 

66%

43%

44%

43%

44%

50% 

58%

56%

54%

55%**

An improved rate of growth in the dividend, building on a

long history of returning cash to the shareholder

8

$2.75 -

$2.95E

PSEG 2015 Earnings Guidance –

Anticipates Another Year of Growth

$2.58

* See Slide 32 for Items excluded from Net Income to reconcile to Operating Earnings.  E = Estimate.                           

$2.76

2015 guidance reflects continued increased level of investment,

and assumes normal weather and unit operations

PSEG

2014 Q4 Operating Company Review

Caroline Dorsa

EVP and Chief Financial Officer

10

Q4 Operating Earnings by Subsidiary

Operating Earnings

Earnings per Share

$ millions (except EPS)

2014

2013

2014

2013

PSE&G

$  160 

$  144

$  0.32

$  0.29

PSEG Power

91

115

0.18

0.23

PSEG Enterprise/Other

(4)

(11)

(0.01)

(0.03)

Operating Earnings*

$  247

$  248   

$  0.49

$  0.49

Quarter ended December 31

* See Slide 32 for Items excluded from Net Income to reconcile to Operating Earnings.

11

$0.49

0.03

0.02

$0.49

(0.05)

0.00

0.10

0.20

0.30

0.40

0.50

0.60

PSEG EPS Reconciliation –

Q4 2014 versus Q4 2013

Capacity  (0.09)

Re-Contracting

and Market

Pricing  0.01

O&M  0.05

D&A and

Other  (0.02)

Transmission  0.02

O&M (Distribution)  0.04

Gas Volume

& Demand  0.01

Electric Volume

& Demand  (0.01)

Weather  (0.01)

Taxes and

Other  (0.02)

Q4 2014       

Operating

Earnings*

Q4 2013       

Operating

Earnings*

PSEG Power**

PSE&G**

PSEG

Enterprise/

Other

*

See

Slide

32

for

Items

excluded

from

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.

Taxes

and

Other

12

Strong

Full-year

Operating

Earnings

Delivered

–

Up

7%

Operating Earnings

Earnings per Share

$ millions (except EPS)

2014

2013

2014

2013

PSE&G

$  725 

$  612

$  1.43

$  1.21

PSEG Power

642

710

1.27

1.40

PSEG Enterprise/Other

33

(13)

0.06

(0.03)

Operating Earnings*

$  1,400

$  1,309 

$  2.76

$  2.58

Twelve Months ended

December 31

•See Slide 32 for Items excluded from Net Income to reconcile to Operating Earnings.

13

$2.58

0.22

0.09

$2.76

(0.13)

0.00

0.50

1.00

1.50

2.00

2.50

3.00

PSEG EPS Reconciliation –

Full-year 2014 versus

Full-year 2013

Capacity  (0.04)

Re-Contracting

and Market

Pricing  (0.10)

O&M  0.02

D&A and

Other  (0.01)

Transmission 0.11

Gas Volume

& Demand  0.03

Weather  (0.02)

O&M (Distribution)

0.08

Lower Interest  0.02

2014       

Operating

Earnings*

2013       

Operating

Earnings*

PSEG Power**

PSE&G**

PSEG

Enterprise/

Other

Taxes  0.04

PSEG

Long Island  0.02

Other  0.03

*

See

Slide

32

for

Items

excluded

from

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.

PSE&G

2014 Q4 Review

15

PSE&G –

Q4 Earnings Summary

$ millions (except EPS)

Q4 2014

Q4 2013

Variance

Operating Revenues

$  1,531

$  1,571

$  (40)

Operating Expenses

Energy Costs

631

633

(2)

Operation & Maintenance

368

435

(67)

Depreciation & Amortization

224

214

10

Taxes Other than Income Taxes

-

18

(18)

Total Operating Expenses

1,223

1,300

(77)

Operating Earnings / Net Income

$  160

$  144   

$  16

EPS from Operating Earnings

$  0.32

$  0.29

$  0.03

$0.29

0.01

0.04

$0.32

(0.02)

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

16

PSE&G EPS Reconciliation –

Q4 2014

versus Q4 2013

Q4 2014      

Operating

Earnings

Q4 2013    

Operating

Earnings

Transmission

Margin  0.02

Gas Volume &

Demand  0.01

Electric Volume &

Demand  (0.01)

Weather  (0.01)

O&M

(Distribution)

Taxes

and Other

Prior quarter results for reconciling items may not add to year-to-date (YTD) totals due to rounding.

17

PSE&G –

Q4 Operating Highlights

Construction of major transmission lines continues on schedule and on budget

FERC approved formula rate revenue increase of $182 million, effective January 1, 2015

Energy Efficiency extension filing pending at NJBPU

PSE&G extended BGSS gas rate credits through March 2015; this winter’s total PSE&G

bill credit is ~$210, or a 31% savings for the average gas customer (Nov 2014-Mar 2015)

PSE&G recognized for the 13

**

year as the Mid-Atlantic region’s most reliable electric utility

PSE&G ranks “Highest in Customer Satisfaction with Large Business Electric Service and

Business Natural Gas Service in the East”

according to a 2015 J.D. Power study

Operations

Regulatory and Market

Environment

PSE&G earned its authorized return in 2014

Financial

Q4 weather was warmer than both Q4 2013 and normal: Heating degree days were

4.2% lower than Q4 ‘13 and 0.7% lower than normal

Gas sales were up 1% for Q4 and up 3.1% for the year on a weather normalized basis

Electric sales were down 2.3% in Q4 but up 0.3% for the year on a weather adjusted basis

th

PSEG Power

2014 Q4 Review

19

PSEG Power –

Q4 EPS Summary

$ millions (except EPS)

Q4 2014

Q4 2013

Variance

Operating Revenues

$  1,610 

$  1,245

$  365

Operating Earnings

91

115

(24)

Pro Forma Adjustments,

Net of Tax**

229

(48)

277

Net Income

$  320

$  67

$  253

EPS from Operating Earnings*

$  0.18

$  0.23

$  (0.05)

* See Slide 32 for Items excluded from Net Income to reconcile to Operating Earnings.

**Includes the financial impact from Mark-to-Market positions with forward delivery months.

20

$0.23

0.03

$0.18

(0.08)

0.00

0.05

0.10

0.15

0.20

0.25

Lower Capacity  (0.09) 

Re-Contracting

and Market

Pricing  0.01

PSEG Power EPS Reconciliation –

Q4 2014 versus Q4 2013

Q4 2014       

Operating

Earnings*

Q4 2013       

Operating

Earnings*

Lower O&M 

0.05

D&A and

Other  (0.02)

* See Slide 32 for Items excluded from Net Income to reconcile to Operating Earnings.

21

PSEG Power –

Q4 Generation Measures –

Volume %

6,712

6,956

1,797

1,266

3,962

4,637

0

7,500

15,000

2013

2014

Quarter ended December 31

Total Nuclear

Total Coal*

Oil & Natural Gas

* Includes figures for Pumped Storage. Includes Hudson and Mercer when run on gas.

PSEG Power –

Generation (GWh)

12,471

12,859

Quarter ended December 31

PSEG Power –

Capacity Factors (%)

2013

2014

Combined Cycle

PJM and NY

53.1%

59.9%

Coal*

NJ (Coal/Gas)

3.2%

0.7%

PA

87.3%

68.4%

CT

29.1%

13.8%

Nuclear

81.7%

84.5%

22

PSEG

Power

–

Full-Year

Generation

Measures

–

Volume

%

29,495

29,108

7,323

7,361

16,640

17,693

0

10,000

20,000

30,000

40,000

50,000

60,000

2013

2014

Twelve months ended December 31

Total Nuclear

Total Coal*

Oil & Natural Gas

* Includes figures for Pumped Storage.  Includes Hudson and Mercer when run on gas. 

PSEG Power –

Generation (GWh)

53,458

54,162

Twelve months ended December 31

PSEG Power –

Capacity Factors (%)

2013

2014

Combined Cycle

PJM and NY

56.0%

56.0%

Coal*

NJ (Coal/Gas)

11.3%

14.0%

PA

81.4%

75.7%

CT

19.7%

23.7%

Nuclear

90.3%

89.3%

23

PSEG Power –

Fuel Costs

Quarter ended December 31

($ millions)

2013

2014

Coal

47.3

38.8

Oil & Gas

134.9

134.2

Total Fossil

182.2

173.0

Nuclear

53.6

48.5

Total Fuel Cost

235.8

221.5

Total Generation

(GWh)

12,471

12,859

$ / MWh

18.91

17.23

PSEG Power –

Fuel Costs

Twelve months ended

December 31

($ millions)

2013

2014

Coal

188.7

208.5

Oil & Gas

618.8

757.7

Total Fossil

807.5

966.2

Nuclear

220.2

210.4

Total Fuel Cost

1,027.7

1,176.6

Total Generation

(GWh)

53,458

54,162

$ / MWh

19.22

21.72

24

PSEG Power –

Q4 2014 Gross Margin Performance

$0

$10

$20

$30

$40

$50

$60

2012

2013

2014

$0

$10

$20

$30

$40

$50

$60

2012

2013

2014

$46

Quarter ended

December 31

Twelve  Months ended

December 31

$45

Lower capacity pricing in second half of 2014

Lower quarter-over-quarter market prices influenced by warmer than

normal weather

Access to Marcellus gas continues to provide fuel cost savings

Regional Performance

Region

Q4 Gross

Margin ($M)

Q4 2014 Performance

PJM

$452

Lower capacity prices, lower market

pricing and higher generation output

New

England

$14

Lower generation and lower market

pricing

New York

$14

Higher generation and lower market

pricing

PSEG Power Gross Margin ($/MWh)

$46

$47

$37

$42

25

Full Requirements Component

Capacity Markets/RPM

Growing Renewable Energy/Transmission

Component for Market Risk

Market Perspective –

2015 BGS Auction Results

…

reflects a 2.2% increase over the prior year

driven primarily by transmission and green costs

Note: BGS prices reflect PSE&G Zone; results from the 2013-2015 auctions will be the new blended prices beginning June 1, 2015.

Three-Year Average

Round the Clock

PJM West Forward

Energy Price

Capacity

Load shape

Transmission

Congestion

Ancillary services

Risk premium

Green

2011

2012

2013

2014

2015

$97.39

$94.30

~ $48

~ $46

~ $53

$83.88

~

$59

$92.18

$45

-

$47

$37

-

$38

$39

-

$40

$38

-

$39

$37

-

$38

~ $62

$99.54

26

Hedging Update…

Contracted Energy*

* Hedge percentages and prices as of February 12, 2015.  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.

2015

2016

2017

Volume TWh

36

36

36

Base Load

% Hedged

100%

80-85%

40-45%

(Nuclear and Base Load Coal)

Price $/MWh

$52

$52

$52

Volume TWh

21

19

19

Intermediate Coal, Combined

% Hedged

40-45%

0%

0%

Cycle, Peaking

Price $/MWh

$52

$52

$52

Volume TWh

55-57

55-57

55-57

Total

% Hedged

75-80%

50-55%

25-30%

Price $/MWh

$52

$52

$52

27

PSEG Power –

Q4 2014 Operating Highlights

Q4 output up 3.1% over Q4 2013; YTD generation up 1.3% to 54.2 TWh

Nuclear

capacity

factor

of

84.5%

for

Q4,

completed

refuelings

at

Salem

1

and

Peach

Bottom

2

For 2014, nuclear capacity factor was 89.3%; Hope Creek at 100% capacity factor in Q4

and 97.9% for the year –

the 2

nd

best run in its history

CCGT fleet set an all-time production record of 16.5 TWh in 2014; Bergen 1 & 2

and Linden 1 also set generation records for the year

Operations

Regulatory and Market

Environment

Financial

2015 BGS auction priced higher at $99.54/MWh vs. $97.39/MWh in 2014 and

$92.18 in 2013 –

for the PSE&G contract

2015 anticipated base load output hedged at an average price of $52/MWh vs.

2014 average hedge price of $48/MWh

2015 BGS load projected at 11 TWhs

Power markets adjusting to heightened volatility, winter peak demand, less liquidity

PJM’s Capacity Performance Proposal filed at the FERC; decision expected April 2015

Power’s total debt as a percentage of capitalization at year-end was 31%

Power’s FFO/Debt was 59% at December 31

PSEG

29

PSEG Financial Highlights

Introducing 2015 operating earnings guidance of $2.75 -

$2.95 per share

Focused on maintaining operating efficiency and customer reliability

PSE&G expected to contribute over 50% of 2015 operating earnings

Energy Strong Infrastructure Spend

BPU authorized $1.22 billion for system resiliency improvements over 2014-2017  

Gas mains replacement prioritized in 2014; ~$350 million capital

spend expected to be

completed in 2015

Executing existing transmission capital spending program on schedule

and pursuing new RTEP, FERC 1000, and 345 kV projects

Financial position remains strong:

Positive cash from Power and increasing cash flow from operations at PSE&G supports

dividend growth and funds capital spending program without the need to issue equity

Debt as a percentage of capitalization was 42%

at December 31

Increased common dividend 5.4% to indicative annual rate of $1.56 per share

Increasing regulated earnings mix supports growing dividend

30

PSEG 2015 Operating Earnings Guidance -

By Subsidiary

$ millions (except EPS)

2015E

2014

2013

PSE&G

$735 -

$775

$725

$612

PSEG Power

$620 -

$680

$642

$710

PSEG Enterprise/Other

$40 -

$45

$33

$(13)

Operating Earnings*

$1,395 -

$1,500

$1,400

$1,309

Earnings per Share

$2.75 -

$2.95E

$2.76

$2.58

* See Slide 32 for Items excluded from Net Income to reconcile to Operating Earnings.  E = Estimate. 

Anticipates Another Year of Growth

PSEG Liquidity as of December 31, 2014

31

Items Excluded from Net income to Reconcile to Operating Earnings

Please see Slide 2 for an explanation of PSEG’s use of Operating Earnings as a non-GAAP financial measure

and how it differs from Net Income.

32

2014

2013

2014

2013

Earnings Impact ($ Millions)

Operating Earnings

247

$         

248

$      

1,400

$     

1,309

$     

Gain (Loss) on Nuclear Decommissioning Trust (NDT)

Fund Related Activity (PSEG Power)

28

11

68

40

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

(a)

(PSEG Power)

204

(52)

66

(74)

Storm O&M, net of insurance recoveries (PSEG Power)

(3)

(7)

(16)

(32)

Net Income

476

$         

200

$      

1,518

$     

1,243

$     

Fully Diluted Average Shares Outstanding (in Millions)

508

508

508

508

Per Share Impact (Diluted)

Operating Earnings

0.49

$        

0.49

$     

2.76

$       

2.58

$       

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

0.05

0.02

0.13

0.08

Gain (Loss) on MTM

(a)

(PSEG Power)

0.40

(0.11)

0.13

(0.14)

Storm O&M, net of insurance recoveries (PSEG Power)

-

(0.01)

(0.03)

(0.07)

Net Income

0.94

$        

0.39

$     

2.99

$       

2.45

$       

(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

December 31,

December 31,

(Unaudited)