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) May 12, 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)

New Jersey	001-00973	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)

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

80 Park Plaza

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 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.

Item 7.01 Regulation FD Disclosure

PSEG, PSE&G and Power

On May 12, 2015, PSEG is participating in a series of investor meetings at the Deutsche Bank Annual Clean Tech, Utilities and Power Conference in New York City, New York. The attachment, which is furnished as Exhibit 99 to this Form 8-K, represents the discussion materials being used in which we are reaffirming earnings guidance or updating information previously furnished on Form 8-K. The meeting materials will be on the pseg.com website under the investor tab, or at http://investor.pseg.com.

Item 9.01 Financial Statements and Exhibits

Exhibit 99. Selected discussion materials reaffirming earnings guidance or updating information previously furnished on Form 8-K.

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: May 12, 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: May 12, 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: May 12, 2015

5

EX-99

Forward-Looking Statement

2

EXHIBIT 99

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. 

GAAP Disclaimer

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 presents Operating Earnings and Adjusted Earnings Before Interest, Taxes, Depreciation and

Amortization (EBITDA) 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

and Adjusted EBITDA are non-GAAP financial measures that differ from Income from

Continuing Operations/Net Income. Operating Earnings exclude 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.

PSEG

is

presenting

Adjusted

EBITDA

because

it

provides

investors

with

additional

information

to

compare

our

business performance to other companies and understand performance trends. Adjusted EBITDA excludes

the same items as our Operating Earnings measure as well as income tax expense, interest expense,

depreciation and amortization and major maintenance expense costs at Power’s fossil generation facilities.

This

information

is

not

intended

to

be

viewed

as

an

alternative

to

GAAP

information.

The

last

three

slides

in

this presentation (Slides A, B and C) include a list of items excluded from Income from Continuing

Operations/Net Income to reconcile to Operating Earnings and Adjusted EBITDA with a reference to that slide

included on each of the slides where the non-GAAP information appears.

3

**

**

Operating Earnings

Disciplined investment program and focus on operational

excellence have supported growth

Power’s

diverse

fuel

mix and dispatch

flexibility continue to

generate strong

earnings and free cash

flow in low price

environment

PSE&G’s

investment

program has driven

double digit compound

annual earnings

growth since 2010

Operating Earnings* Contribution by Subsidiary

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

NET INCOME TO RECONCILE TO OPERATING EARNINGS.  E=ESTIMATE

** 2015 PERCENTS USE MIDPOINT OF EARNINGS GUIDANCE.

8

•

NJ Capital Infrastructure

Program 1 (CIP 1)

–

2009

•

NJ Capital Infrastructure

Program 2 (CIP 2)

–

2011

•

Energy Strong

–

2014

•

Carbon Abatement

–

2008

•

Demand Response

–

2009

•

Energy Efficiency (EE)

–

2009

•

EE Extension

–

2011

•

EE Extension II

–

2015

•

Solar Loan I

–

2008

•

Solar Loan II

–

2009

•

Solar 4 All

–

2009

•

Solar Loan III

–

2013

•

Solar 4 All Ext

–

2013

PSE&G has successfully worked with

regulators

to

develop

multiple

solutions

for

New

Jersey’s

energy and economic development goals

30

RENEWABLES

creative solutions to install

solar generation

ENERGY EFFICIENCY

assisting customers with

controlling energy usage 

DISTRIBUTION

improving electric and gas

delivery infrastructure

Extension of PSE&G’s award winning

Energy Efficiency program

•

Energy Efficiency Extension II approved by the BPU in April 2015

will

extend the investment and time frame for three previously approved

programs already in the marketplace, allowing PSE&G to factor in

lessons learned and balance policy issues

•

$95M of rate base investment approved at an ROE of 9.75%

•

Extends existing programs, two of which have sizable waiting lists:

•

Hospitals

•

Multifamily

•

Direct install –

government, non-profit, and small business

•

Would allow PSE&G to leverage past investments in people, capabilities,

systems and processes

33

PSE&G’s 2015 operating earnings

expected to benefit from increased investment in Transmission

*SEE SLIDE A FOR ITEMS EXCLUDED FROM NET INCOME TO RECONCILE TO 

OPERATING EARNINGS.  E =ESTIMATE.  DATA AS OF MARCH 2, 2015.

37

Shasta A & B

California (4 MW)

COD March 2014

Polycrystalline -

single axis

Investment $13 million

20 year PPAs 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 $44 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

Investment $75 million

20 year PPA with SRP

Milford

Delaware (15 MW)

COD December 2012

Polycrystalline -

fixed tilt

Investment $47 million

20 year PPA with DEMEC

Badger I

Arizona (19 MW)

COD November 2013

Polycrystalline -

single axis

Investment $48 million

30 year PPA with APS

PSEG Solar Source owns ~123 MW

of solar facilities

*

with long term contracted revenues

Newman

Texas (13 MW)

COD December 2014

Polycrystalline -

single axis

Investment $22 million

30 year PPA with El Paso Elec.

Whitcomb

Vermont (4 MW)

COD October 2014

Polycrystalline –

fixed tilt

Investment $10 million

25 year PPA with VT Electric

Power Producers, Inc.

*PROJECT SIZE IN MEGAWATTS SHOWN IN DC (DIRECT CURRENT), AC EQUIVALENT IS 96 MEGAWATTS.  E=ESTIMATE.

In Construction –

Rockfish

Maryland (13 MW)

COD -

June 2015E

Polycrystalline -

single axis

20 year PPA with SMECO

61

Power’s 2015 operating earnings

maintain solid performance

Power Operating Earnings*

($ Millions)

2015 Observations

•

75-80% hedged at

$52/MWh

•

Increase in average

hedge price for energy

helps mitigate reset in

capacity price and

volume

*  SEE SLIDE A FOR ITEMS EXCLUDED FROM NET INCOME TO RECONCILE TO OPERATING EARNINGS.      E = ESTIMATE.

66

Market

Review:

Winter

Z6

gas

prices

retain

seasonal

volatility;

spark

spreads

have

continued

to

be

robust

in

PJM

FORWARDS AS OF APRIL 30, 2015

2015 YTD Z6

PJM West vs. PS Zone Spark Spreads (2013-2018)

2015-2018 Z6

70

Regulatory

Framework:

Significant

reforms

already

implemented

and

new

rules

being

promulgated

to

improve

energy

and

capacity

market

designs

ISSUE /POLICY

OUTCOME

PJM

CAPACITY

•

Higher payments for enhanced reliability (Capacity Performance)

DEMAND RESPONSE

RULES

•

Stricter rules for eligibility and deployment

ENERGY PRICE

FORMATION

•

PJM and FERC forcing improvements to energy price formation;

higher caps

ISO-NE

CAPACITY

•

Higher prices in recent auction better reflect tight supply conditions

•

Implementation of sloping demand curve in FCA 9

•

Zonal demand curves expected in FCA 10

ENERGY

•

Demand response required to participate in Day Ahead markets

•

Implemented hourly offers/real time reoffers

•

Reserve market prices better reflect scarcity prices

•

5 minute interval LMP settlements expected Q1 2016

NYISO

CAPACITY

•

New Capacity Zone (LHV) leads to more accurate price signals

ENERGY

•

Improvement in price formation during reserve shortage conditions

FEDERAL

DEMAND RESPONSE

•

EPSA VS. FERC and national implications; US Supreme Court will

hear case

ENVIRONMENTAL

REGULATIONS

•

HEDD, CPP, HAPS/MACT will lead to tightening of supply in

2015+ timeframe

73

PJM

Capacity

Performance

Proposal:

aims

to

increase

electric

supply

reliability

•

Capacity

performance

(CP)

proposal

places

emphasis

on

reliability,

given

observed outages during times of extreme weather stress and anticipated

retirements; Imposition of higher penalty structure and enhanced

opportunities

for cost recovery to encourage reliability

•

Elimination

of

2.5%

holdback

offsetting

weak

demand

growth,

making

all

capacity resources annual products in end state, net CONE bidding safe harbor,

and the change in the demand curve (VRR) support price formation

and improve

resource adequacy

•

Generator

performance/flexibility

is

key

objective

for

units

with

secure

fuel

supply

capable of meeting more stringent operating standards

74

HEDGE

PERCENTAGES

AND

PRICES

AS

OF

MARCH

31,

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.

EXCLUDES

SOLAR

AND

KALAELOA.

Apr-Dec

2015

2016

2017

Volume TWh

26

37

37

Base Load

% Hedged

100%

80-85%

40-45%

(Nuclear and Base Load Coal)

Price $/MWh

$52

$51

$52

Volume TWh

17

20

20

Intermediate Coal, Combined

% Hedged

30-35%

0%

0%

Cycle, Peaking

Price $/MWh

$52

--

--

Volume TWh

41-43

55-57

55-57

Total

% Hedged

70-75%

50-55%

25-30%

Price $/MWh

$52

$51

$52

Hedging

strategy:

designed

to

protect

gross

margin

while

leveraging

the

portfolio

80

PSEG

2015

Guidance

for

Operating

Income

–

by

Subsidiary

and

PSEG

Power

Adjusted

EBITDA

PSEG Power Adjusted EBITDA**

$ millions (except EPS)

2015E

2014

PSEG Power

$1,545 -

$1,645

$1,584

*

SEE

SLIDE

A

FOR

ITEMS

EXCLUDED

FROM

NET

INCOME

TO

RECONCILE

TO

OPERATING

EARNINGS;

INCLUDES

THE

FINANCIAL

IMPACT

FROM

MARK-TO-MARKET

POSITIONS

WITH

FORWARD

DELIVERY

MONTHS.

**

SEE

SLIDE

B

FOR

A

RECONCILIATION

OF

ADJUSTED

EBITDA

TO

OPERATING

EARNINGS

AND

NET

INCOME.

E

=

ESTIMATE.

96

PSEG Summary

•

Our 2014 earnings of $2.76 exceeded our revised operating earnings

guidance of $2.60 -

$2.75 per share

•

Continued third year of anticipated positive earnings trend in 2015 with

operating earnings guidance of $2.75 to $2.95 per share

•

Continued 5

th

straight year of expected double digit, 5 year growth in rate base

•

Anticipated high single digit earnings growth at PSE&G on three-year basis from

2014 to 2017, driven by transmission investments and planned 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

•

Our $0.08 per share dividend increase is consistent with our long history

of returning cash to the shareholder through the common dividend, with

potential for consistent and sustainable growth

99

March 31, 2015

$ Billions 

PSEG

PSE&G

Power

Cash and Cash Equivalents

$1.0

$0.3

$0.0

Short Term Debt

$0.0

$0.0

N/A

Long

Term

Debt

(1)

8.9

6.3

2.5

Common Equity

12.5

7.0

5.7

Total Capitalization

$21.4

$13.3

$8.2

Total Debt / Capitalization

41%

47%

31%

PSE&G

Regulated

Equity

Ratio

(2)

52.3%

Our balance sheet remains strong

(1)INCLUDES

L-T

DEBT

DUE

WITHIN

1

YEAR;

EXCLUDES

SECURITIZATION

DEBT

OF

$201

MILLION

AND

NON-RECOURSE

DEBT

OF

$16

MILLION.

(2)REGULATED

EQUITY

RATIO

INCLUDES

CUSTOMER

DEPOSITS

OF

~$98

MILLION

AND

EXCLUDES

SHORT-TERM

DEBT.

111

PSEG

Liquidity

as

of

March

31,

2015

115

PSEG Energy Holdings

Investment Portfolio

Equipment

Investment  Balance*             

at 3/31/15

($Millions)

Merchant Energy Leases

NRG  REMA

Keystone, Conemaugh & Shawville (PA)

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

355

NRG Energy, Inc./Midwest Gen**

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)

148

Grand Gulf

Nuclear station in Mississippi (175 equity MW)

28

Real Estate Leveraged Leases

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

62

Real Estate Operating Leases

Office

Towers,

Shopping

Centers

-

28

properties

40

Generation Legacy Assets

GWF (in wind down stage), GSOE 

2

Other

Land

5

Total Holdings Investments

$858

*  BOOK BALANCE EXCLUDING  DEFERRED TAX ACCOUNTS.

**EME WAS ACQUIRED BY NRG ON APRIL 1 2014.

116

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.

2014

2013

2012

2011

2010

2009

Earnings Impact ($ Millions)

Operating Earnings

1,400

$      

1,309

$    

1,236

$    

1,389

$      

1,584

$    

1,567

$    

Gain (Loss) on Nuclear Decommissioning Trust (NDT)

Fund Related Activity (PSEG Power)

68

40

52

50

46

9

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

66

(74)

(10)

107

(1)

(11)

Lease Transaction Activity (PSEG Enterprise/Other)

-

-

36

(173)

-

29

Storm O&M (PSEG Power)

(16)

(32)

(39)

-

-

-

Market Transition Charge Refund (PSE&G)

-

-

-

-

(72)

-

Gain (Loss) on Asset Sales and Impairments (PSEG Enterprise/Other)

-

-

-

34

-

-

Income from Continuing Operations

1,518

$      

1,243

$    

1,275

$    

1,407

$      

1,557

$    

1,594

$    

Discontinued Operations

-

-

-

96

7

(2)

Net Income

1,518

$      

1,243

$    

1,275

$    

1,503

$      

1,564

$    

1,592

$    

Fully Diluted Average Shares Outstanding (in Millions)

508

508

507

507

507

507

Per Share Impact (Diluted)

Operating Earnings

2.76

$        

2.58

$     

2.44

$     

2.74

$       

3.12

$     

3.09

$     

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

0.13

0.08

0.10

0.10

0.09

0.02

Gain (Loss) on MTM     (PSEG Power)

0.13

(0.14)

(0.02)

0.21

-

(0.02)

Lease Transaction Activity (PSEG Enterprise/Other)

-

-

0.07

(0.34)

-

0.05

Storm O&M (PSEG Power)

(0.03)

(0.07)

(0.08)

-

-

-

Market Transition Charge Refund (PSE&G)

-

-

-

-

(0.14)

-

Gain (Loss) on Asset Sales and Impairments (PSEG Enterprise/Other)

-

-

-

0.06

-

-

Income from Continuing Operations

2.99

$        

2.45

$     

2.51

$     

2.77

$       

3.07

$     

3.14

$     

Discontinued Operations

-

-

-

0.19

0.01

-

Net Income

2.99

$        

2.45

$     

2.51

$     

2.96

$       

3.08

$     

3.14

$     

(Unaudited)

For the Year Ended

December 31,

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Reconciling Items, net of tax

(a)

Includes the financial impact from positions with forward delivery months.

A

(a)

(a)

Items Excluded from Net Income to Reconcile to Operating

Earnings and Adjusted EBITDA

PLEASE SEE PAGE 3 FOR AN EXPLANATION OF PSEG’S USE OF OPERATING EARNINGS AND ADJUSTED EBITDA AS NON-GAAP FINANCIAL

MEASURES AND HOW THEY DIFFER FROM NET INCOME.

B

2015

2014

Adjusted EBITDA

626

$        

651

$     

1,584

$    

Fossil Major Maintenance, pre-tax

(49)

(58)

(144)

Depreciation and Amortization, pre-tax

(b)

(77)

(73)

(291)

Interest Expense, pre-tax

(b)

(31)

(31)

(120)

Income Taxes

(b)

(191)

(196)

(387)

Operating Earnings

278

$        

293

$     

642

$       

Gain (Loss) on NDT Fund Related Activity, pre-tax

7

19

138

Gain (Loss) on MTM, pre-tax

(a)

(34)

(223)

111

Storm O&M, net of insurance recoveries, pre-tax

127

(10)

(27)

Income Taxes related to Operating Earnings reconciling items

(43)

85

(104)

Net Income

335

$        

164

$     

760

$       

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

(b) Excludes amounts related to Operating Earnings reconciling items

($ Millions, Unaudited)

PSEG Power Adjusted EBITDA Reconcilation

Year Ended

December 31,

2014

Reconciling Items

Three Months Ended

March 31,

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.

2015

2014

Earnings Impact ($ Millions)

Operating Earnings

529

$         

515

$      

Gain (Loss) on Nuclear Decommissioning Trust (NDT)

Fund Related Activity (PSEG Power)

2

9

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

(20)

(132)

Lease Transaction Activity (PSEG Enterprise/Other)

-

-

Storm O&M (PSEG Power)

75

(6)

Market Transition Charge Refund (PSE&G)

-

-

Gain (Loss) on Asset Sales and Impairments (PSEG Enterprise/Other)

-

-

Income from Continuing Operations

586

$         

386

$      

Discontinued Operations

-

-

Net Income

586

$         

386

$      

Fully Diluted Average Shares Outstanding (in Millions)

508

508

Per Share Impact (Diluted)

Operating Earnings

1.04

$        

1.01

$     

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

-

0.02

Gain (Loss) on MTM     (PSEG Power)

(0.04)

(0.26)

Lease Transaction Activity (PSEG Enterprise/Other)

-

-

Storm O&M (PSEG Power)

0.15

(0.01)

Market Transition Charge Refund (PSE&G)

-

-

Gain (Loss) on Asset Sales and Impairments (PSEG Enterprise/Other)

-

-

Income from Continuing Operations

1.15

$        

0.76

$     

Discontinued Operations

-

-

Net Income

1.15

$        

0.76

$     

Reconciling Items, net of tax

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

Three Months Ended

March 31,

(Unaudited)

(a)

Includes the financial impact from positions with forward delivery months.

C

(a)

(a)