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) June 24, 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	(Commission	(I.R.S. Employer
of incorporation)	File Number)	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	(Commission	(I.R.S. Employer
of incorporation)	File Number)	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 June 24, 2015, PSEG is participating in a series of investor meetings sponsored by Deutsche Bank in Boston, Massachusetts. The attachment, which is furnished as Exhibit 99 to this Form 8-K, represents those discussion materials being used in which we are reaffirming earnings guidance or updating information previously furnished on Form 8-K. The complete 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: June 24, 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: June 24, 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: June 24, 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

Delivering on commitments and realizing growth

Operational

Excellence

•

PSE&G:

Mid-Atlantic

Reliability

Award

(13

th

consecutive

year),

top

ranked

among

eastern electric and gas utilities in

business

customer satisfaction

•

PSEG

Power:

Record

output

from

combined

cycle

units

•

PSEG Long Island:

Demonstrated management and integration capability

through a successful transition in first year

•

PSEG:  Cost-control benefits continue

Financial

Strength

•

Earnings

performance exceeded guidance in 2014

•

Cash

flows

and

business

mix

support

strong

credit

ratings

and

ability

to

fully

fund robust investment pipeline without issuing new equity

•

Increased rate of

dividend growth in 2015

Disciplined

Investment

•

PSE&G

Transmission capital program execution and growth

Energy

Strong

infrastructure

program

underway

Energy efficiency program extension

Further growth planned –

Gas System Modernization Program

•

Power:  Unit uprates, PennEast Pipeline, Solar Source and Keys CCGT

7

**

**

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

Robust pipeline of investment opportunities

supports growth objectives

2015E -

2019E*: $13 Billion

2010 –

2014: $12.6 Billion

Power Total***

$2.7B

PSE&G Total

$9.8B

PSE&G Total

$10.8B

PSEG Capital Spending

Power Total***

$2.0B

2015E–2019E:

•

$2.2B of capital for Gas System Modernization Program, Artificial Island and Keys CCGT would be incremental

*INCLUDES

ALL

PLANNED

SPENDING.

**ENERGY

STRONG

EXCLUDES

RISK

AND

CONTINGENCY.

***POWER

CAPITAL

SPENDING

EXCLUDES

NUCLEAR FUEL.  ****INCLUDES PENNEAST PIPELINE EQUITY INVESTMENT OF $0.1B.  E=ESTIMATE.  DATA AS OF MARCH 2, 2015.

DOES NOT REFLECT $825 -

$875 MILLION KEYS INVESTMENT ANNOUNCED ON JUNE 17, 2015

9

Balance sheet strength supports capital

allocation

Timeframe

Actions taken

2010 –

2014:  

Transformed

business mix

•

Applied $16 billion towards investments and dividends

•

Improved credit ratings

•

Monetized Energy Holdings’ portfolio

•

Strong balance sheet sustained during period of low power

prices, while increasing the dividend

2015

–

Forward:

Strong

financial

position

supports

continued

growth

•

Increased rate of dividend growth in 2015

•

$13 billion investment program through 2019

•

Gas System

Modernization Program, Artificial Island

and Keys CCGT increase capital program by up to

$2.2

billion through 2019

•

Financial

capability supports further expansion of the

current capital plan

10

Power –

Growing value by improving market rules

and developing investment opportunities

Value  Source

Opportunities and Actions Taken

Improving

rules

will

better

recognize

value

of

our

fleet

•

PJM’s

Capacity

market

–

2014

limits

on

demand

response

and

August

2015 Capacity Performance auction

•

Demand response treatment at U.S. Courts / FERC

•

Energy price formation at FERC

•

Increasing air standards through

Federal and State regulations

Our

footprint

provides

growth

opportunities

•

Nuclear and Combined Cycle plant uprates underway

•

New

build Keys CCGT in SWMAAC (Maryland)

•

Brownfield

expansions

at

existing

sites

New peakers built at New Haven and Kearny

sites

Continue to explore further opportunities

•

PennEast pipeline -

equity investment and gas portfolio enhancement

•

Solar Source owns ~123 MW*,

with significant project pipeline

•

Continue to

seek opportunities

to expand the fleet

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

15

   SWMAAC = SOUTHWEST MID-ATLANTIC AREA COUNCIL - LOCATIONAL DELIVERABILITY AREA WITHIN PJM.

PSEG Annual Dividend

An increased dividend growth rate with potential for consistent and

sustainable growth given our business mix and financial position

Payout Ratio

50%

58%

56%

54%

55%*

PSEG Annual Dividend Rate 

2011-2014 CAGR:  2.6%

*2015E PAYOUT RATIO REFLECTS THE MIDPOINT OF OPERATING EARNINGS GUIDANCE.  E=ESTIMATE

16

Focus areas over business plan horizon

PSE&G

•

Capital

program

execution

–

Transmission,

Energy

Strong

and

additional

programs

•

Operational excellence and cost control

•

Regulatory framework

•

Continue to develop incremental growth opportunities

PSEG Power

•

Operational excellence and cost control

•

Strong

performance

at

Nuclear

and

Fossil

to

maximize

fleet

value

in

dynamic

markets

•

Monitor

and

shape

market

rules

-

Capacity

markets

and

environmental

regulations

•

Develop

growth

opportunities

-

Keys

CCGT

in

SWMAAC*

PSEG Long Island

•

Continue

execution

–

Integration

and

achievement

of

performance

metrics

*SWMAAC = SOUTHWEST MID-ATLANTIC AREA COUNCIL  -

LOCATIONAL DELIVERABILITY AREA WITHIN PJM.

17

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

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

between Nuclear & Fossil

initiated

•

Exceeded earnings guidance

in 2014

•

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 began January 1, 2015

•

Solar Source’s portfolio is 123 MW

DC

•

Nuclear ESP is expected in 2016

•

New build Keys CCGT targeted

in-service 2018 in Maryland

43

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

•

Base Load ensures cash flow certainty

•

Load Following provides ability to serve load shape

•

Readiness for Capacity Performance (CP)

•

Keys CCGT to be added to dispatch in 2018E

•

Peaking takes advantage of real-time prices

and reduces operational risk

•

Dual fuel capability at 87% of load following

and peaking units

Illustrative

Salem

Hope

Creek

Keystone

Conemaugh

Hudson 2

Linden 1,2

Bergen 1

Mercer 1, 2

Bergen 2

Peach

Bottom

Essex 9

Sewaren 1-4

Burlington 12

Yards Creek

Base Load Units

Peaking Units

Load Following Units

Kearny 12-13-14

Nuclear

Coal

Coal/Gas

Combined Cycle

Steam

Combustion Turbine /

Pumped Storage

Linden 5-8

POST -

HEDD

E=ESTIMATE

47

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

2014

•

Mercury reduced 80% across the timeframe above

•

More efficient testing and improved operational flexibility through utilization of Continuous

Emission Monitoring System testing

50

PSEG Power CCGT/Fossil initiatives

Actions Taken to Create Value

Capacity

•

New

Keys

CCGT

755MW

online

in

2018E

adds

geographic

diversity

to

fleet

•

Advanced

Gas

Path

(AGP)

investments

2014

through

2018

to

provide

additional

efficient

capacity,

heat

rate

improvements

•

New

lower

cost

gas

line

at

BEC

with

Dominion

Performance

•

EPRI efficiency initiatives

•

GE initiatives for large data analytic

•

Consolidation of unit testing

•

Auto

tuning software

Maintenance

•

Ongoing outage efficiency improvement 

•

Improvements to reliability

•

Central fleet monitoring and diagnostic center

E = ESTIMATE

57

$0

$200

$400

$600

$800

$1,000

2010

2011

2012

2013

2014

2015E

2016E

2017E

Keys CCGT

Penn East (equity investment)

Growth

Environmental/Regulatory*

Maintenance

PSEG Power’s capital expenditures

dedicated toward growing portfolio

*BASED

ON

CURRENTLY

KNOWN

AND

QUANTIFIABLE

ENVIRONMENTAL

REQUIREMENTS.

E=ESTIMATE.

INCREMENTAL

INVESTMENT IN

KEYS 2015E-2017E

58

PSEG Power’s Growth Investments

Site

Project

Cost

($

millions)

Benefits

Status

Maryland

Keys 755 MW

CCGT

$825 -

$875

Geographic diversity

within PJM; highly

efficient gas fired unit in SWMAAC

2018

BEC

Dominion Gas Line

$8

Access

to

a

2

nd

,

lower

cost

gas

supply:

$8-9 million/year increase in margin

Completed

Linden

AGP Upgrade

$69

Increased capacity and

improved heat rate:

63 MW capacity increase

~1.2% heat rate improvement

Completed

CA / TX / VT

Solar Source

Projects

$44

Increased capacity: 21 MW

Completed

Peach Bottom

Peach Bottom

EPU

(2014 –

2015)

$417

Increased capacity: 130 MW

PB2

March 2015,

PB3 in 2016

Bergen /

BEC

Future AGP

Upgrades:

Bergen (2015)

BEC (2017-2018)

$98

Increased capacity and

improved heat rate:

88 MW capacity increase

~1.2% heat rate improvement

Underway

Various

Interim ISA’s*

No cost

Increased capacity: 69 MW

Completed

Eastern PA to

Mercer, NJ

PennEast Pipeline

$119

Estimated Earnings in

2019: 

$13 million

Underway

Total

Increased

Capacity

–

1,126

MW

* INTERCONNECTION SERVICE AGREEMENTS.

59

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.

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)

2013

2014

2015 Guidance

$710

$642

$620 –

$680E

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

PJM Capacity Performance Proposal: aims to

increase electric supply reliability

•

Capacity performance (CP) product places emphasis on reliability, with robust

performance standards, 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

June 2015

FERC Accepted PJM’s

Modified CP Proposal

July/August 2015

Transition Auctions for

2016/2017 & 2017/2018

Capacity Years

August 2015

RPM Auction for

2018/2019

Capacity Year

74

Capacity Performance: >90% of PSEG’s PJM capacity meets the new

capacity performance standards with minimal to moderate investment

CP

Compliant

Assets**

How

does

our

fleet

stack

up?

*

Combined

Cycle

Steam

Nuclear

Combustion

Turbine

* EXCLUDES 205MW OF PUMPED STORAGE.

** KEYS 755 MW CCGT UNIT EXPECTED TO BE CP COMPLIANT IN 2018

Meets CP

Requirement

with No to

Minimal

Investment

Moderate

Investment to

Meet CP

Requirement

Larger

Investment to

Meet CP

Requirement

75

Strong financial position to support our

business initiatives

2014 Financial Position

Strong 2014 earnings growth

Exceeded earnings guidance

Executed major PSE&G capital program

Strong balance sheet with no long term Parent debt

Solid credit metrics

2015 and Beyond

Third year of anticipated positive earnings growth in 2015

Controlled O&M growth

Balance Sheet and Cash Flow support investment program without equity issuance

Substantial additional investment capacity

Growth in PSE&G investments with contemporaneous/formula rate returns and new Power investment

Consistent and strong cash flow from both Power and PSE&G

Potential for accelerated and sustainable dividend growth

83

~$1.6B

~$0.6B

~$2.2B

~$1.9B

~$6.7B

~$14.3B

~$1.3B

~$13.0B

PSEG

2015–

2019E

Capital

Expenditures

(1)

PSEG growth spend represents ~70% of total investment

Power & Other

Maintenance

PSE&G

Distribution

Maintenance

Power

Growth*

PSE&G

Transmission

Growth

PSE&G

Energy Strong,

Solar and  

New Business

Planned Growth Investment

~$9.2B

PSEG

Planned

Spend

Maintenance ~$3.8B

PSE&G

Potential

Upside

PSEG

Potential

Spend

Potential Upside ~$1.3B

(1)

INCLUDES AFUDC AND IDC; PENNEAST PIPELINE EQUITY INVESTMENT OF~$0.1B IS INCLUDED IN POWER GROWTH.

E = ESTIMATE.  *DOES NOT REFLECT $825 -

$875 MILLION KEYS INVESTMENT ANNOUNCED ON JUNE 17, 2015.

88

Substantial internal cash generation

supports our planned growth capital program and potential 

investment opportunities without the need for equity

Sources

Uses

Sources

Uses

PSE&G

Cash from

Ops

(1)

PSE&G Cash

Investment

PSE&G

Net Debt

PSEG 2015 -

2019E Sources and Uses

PSE&G

Cash from

Ops

(1)

PSE&G Net

Debt

Planned Programs

Including Potential Upside Projects

Shareholder

Dividend

Power

Cash from

Ops

Shareholder

Dividend

Power

Cash from

Ops

Power Cash

Investment

(3)

PSE&G Cash

Investment

Power Net

Debt

Other Cash

Flow

(2)

Other Cash

Flow

(2)

Power Net

Debt

Power Cash

Investment

(3)

(1)

PSE&G

CASH

FROM

OPERATIONS

ADJUSTS

FOR

SECURITIZATION

PRINCIPAL

REPAYMENTS

OF

~$260M

FROM

2015-2019

(2)

OTHER

CASH

FLOW

INCLUDES

PSEG

LI,

HOLDINGS

NET

CASH

FLOW,

INVESTED

CASH,

AND

PARENT

SHORT-TERM

DEBT

(3)

POWER

CASH

INVESTMENT

INCLUDES

NUCLEAR

FUEL

AND

EMISSION

PURCHASES.

DOES

NOT

REFLECT

$825

-

$875

MILLION

KEYS

INVESTMENT

ANNOUNCED

ON

JUNE

17,

2015.

E

=

ESTIMATE.

91

0%

10%

20%

30%

40%

50%

60%

70%

Power’s key credit metric

remains strong

providing opportunity for incremental investment*

2015-2017E

Average

Increased contribution to earnings from the more

stable regulated business

Power’s annual Cash From Operations and Funds

From Operations each average ~$1.4B over the

2015 to 2017 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

2013

2014

PSEG

Power

Funds

from

Operations

/

Debt

*DOES

NOT

REFLECT

$825

-

$875

MILLION

KEYS

INVESTMENT

ANNOUNCED

ON

JUNE

17,

2015.

E=

ESTIMATE

92

Total

Incremental

Investment

Capacity

through

2017

Substantial Investment Capacity to pursue

additional growth without the need for equity

$0.0

$4.0

Power

Parent

Total

($ Billions)

Power

PSEG

Estimate

~ 55%

~30%

Minimum

Threshold

30%

Low -

20’s

Average

Funds

from

Operations

/Debt

2015

-

2017

Our incremental investment capacity can support over $6B in

regulated investments

DOES

NOT

REFLECT

THE

IMPACT

OF

$825

-

$875

MILLION

KEYS

CCGT

INVESTMENT

ANNOUNCED

JUNE

17,

2015.

93

PSEG

2015

Guidance

for

Operating

Income

–

by

Subsidiary

and

PSEG

Power

Adjusted

EBITDA

Anticipates Another Year of Growth in Operating Earnings

$ millions (except EPS)

2015E

2014

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 -

$2.95E

$2.76

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 PSE&G’s capital program and

Power’s new investment opportunity 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

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,