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) September 8, 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 September 8, 2015, PSEG is making a presentation, as well as participating in a series of investor meetings, at the 2015 Barclays CEO Energy-Power Conference in New York, NY. A copy of the discussion materials being used at the meetings, including those reaffirming earnings guidance, is furnished as Exhibit 99 to this 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. Discussion materials for September 8, 2015

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: September 8, 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: September 8, 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: September 8, 2015

5

EX-99

We have the

energy

to make things better

… for you, for our investors

and for our stakeholders.

EXHIBIT 99

2

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.

3

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.

PSEG OVERVIEW

EXECUTIVE VICE PRESIDENT AND

CHIEF FINANCIAL OFFICER

Caroline Dorsa

PRESIDENT

PSEG POWER ER&T

Shahid Malik

VICE PRESIDENT

INVESTOR RELATIONS

Kathleen Lally

5

Operational Excellence:  Maintaining

reliability and improving performance as we

control costs in low price environment

Financial

Strength:

Strong

financial

position

supports investment program and dividend

growth

Disciplined Investment:

•

Balanced business mix

•

Robust pipeline of opportunities

Results:

•

Project

3

rd

year

of

EPS

growth

•

Increased rate of dividend growth

•

Best in class utility growth rate

•

Addition of efficient CCGT capacity

enhances market position

•

Upside potential from power markets

DISCIPLINED

INVESTMENT

OPERATIONAL

EXCELLENCE

FINANCIAL

STRENGTH

ENGAGED

WORKFORCE

PSEG’s Strategy 

Investment program delivering results

6

Two complementary businesses 

A stable platform, each with growth opportunities

Strategy:

Investment program enhances

competitive position with addition of efficient

CCGT capacity

Value Proposition:  Provides substantial

free cash flow in current environment and

upside from market rule improvements

Assets $12B

Operating Earnings $642M

Regional Competitive Generation

Strategy:  Investments aligned with public

policy and customer needs

infrastructure program –

focused on

transmission –

produces double-digit rate

base growth through 2019

Assets  $22B

Operating Earnings

$725M

Electric

& Gas Delivery

and Transmission

2014

2014

ASSETS AND OPERATING EARNINGS ARE FOR THE YEAR ENDED 12/31/2014. 

PSE&G AND POWER DO NOT ADD TO TOTAL DUE TO PARENT AND PSEG LONG ISLAND ACTIVITY. 

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

TO OPERATING EARNINGS.

Value Proposition:  An $11billion

7

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

•

Updated

operating

earnings

guidance

for

2015

to

$2.80-$2.95

per

share from

$2.75-$2.95 per share

•

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

Capital program = rate base growth of 10% over 5 years with increased

investment in Transmission and Electric and Gas distribution

Further

growth

planned

–

Gas

System

Modernization

Program

•

Power:

Keys

&

Sewaren

CCGTs,

uprates,

PennEast

Pipeline,

and

Solar

Source

8

Robust pipeline of investment opportunities

supports >15% growth in capital spending over the period

2015E -

2019E*: $14.7Billion

2010 –

2014: $12.6 Billion

Power Total***

$2.7B

PSE&G Total

$9.8B

PSE&G Total

$10.9B

PSEG Capital Spending

Power Total***

$3.6B

2015E–2019E:

•

Potential incremental capital for Gas System Modernization Program

*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 AUGUST 4, 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

•

$14.5 billion+ investment program through 2019

•

Gas System Modernization

Program could increase capital

investment by up to $1.6 billion as filed

•

Financial

capability supports further expansion of the

current capital plan

10

PSE&G’s investment program

Meeting public policy goals and customer needs

PSE&G Rate Base and Operating Earnings*

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

NET INCOME TO RECONCILE TO OPERATING EARNINGS.

2009-2014

Operating EPS

CAGR:  18%

11

Containing customer bills while investing

in the system

•

PSE&G customers’ combined electric and gas bills declined 23% over the period.

•

Low gas prices drove rate decreases; in addition, gas customers received

bill credits of ~$400 in total from 2012 through 2014.

Gas

Electric

PSE&G Typical Residential Customer Bills*

*FOR ALL YEARS THE BILLING ASSUMES 7,200 KWH FOR ELECTRIC AND 1,010 THERMS FOR GAS ANNUALLY. E = ESTIMATE

11

12

PSE&G’s

robust capital investment pipeline

drives double-digit rate base growth through 2019

E=ESTIMATE

PSE&G Capital Projects

2015E–2019E:

•

Potential incremental capital for Gas System Modernization Program

•

Planned capital spend

supports high single

digit earnings growth at

PSE&G through 2017

•

Transmission expected

to grow to >50% of

rate base in 2019

•

Seeking

to broaden

platform to expand

energy efficiency and

other

investments

13

PSEG Power’s capital expenditures

focused on improving efficiency and reliability

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

(Peach Bottom EPU, AGP, Solar)

14

Economic Drivers

Outlook

Combined

Cycle

Nuclear

Scrubbed

Coal

Peakers

Renewable

Energy Margins

•

Low natural gas and energy

prices

•

Robust portfolio of gas

pipeline contracts

n/a

n/a

Capacity Markets

•

Tightened

rules proposed for

capacity performance

n/a

Environmental

Regulations

•

Tighter air emissions

standards

Location

•

Assets in well-designed

markets, premium regions

•

Opportunities on  brownfield

sites

n/a

3.3

3.7

2.4

2.3

0.1

4.7

3.8

2.4

1.8

0.1

Power’s fleet has the desired attributes to be

successful in today’s and tomorrow’s market

*AS OF AUGUST 2015  APPROXIMATELY 1.3 GW UNDER DEVELOPMENT -

KEYS AND SEWAREN CCGT UNITS, WHICH

ARE TARGETED TO GO INTO SERVICE IN 2018 ALONG WITH RETIREMENT OF OLDER SEWAREN UNITS

•

•

•

Largest nuclear site in the eastern U.S. and ownership in large, fully scrubbed coal facilitiesat Keystone and Conemaugh provide economies of scale

that enhance energy margins in current low market, and provide for upside potential if prices improve.

Dual fuel peakers meet reliability criteria in capacity markets and provide option value in energy market.  Opportunity exists to repower peakers that do

not meet NJ HEDD environmental regulations.

Combined cycle units Keys  and Sewaren, expected to be operational in 2018, will enhance emissions performance and have a combined average

2015 - PSEG Power Total Capacity 11.8 GW

2018 - PSEG Power Total Capacity 12.8 GW *

heat rate of approximately 6,800.

15

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*

(MD)

and

Sewaren

7

in

EMAAC*

•

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

~148

MW**,

with

significant

project

pipeline

•

Continue to

seek opportunities

to expand the fleet

*  SWMAAC = SOUTHWEST MID-ATLANTIC AREA COUNCIL \EMAAC = EASTERN MID-ATLANTIC AREA COUNCIL  

     LOCATIONAL DELIVERABILITY AREA WITHIN PJM.

**PROJECT SIZE IN MEGAWATTS SHOWN IN DC (DIRECT CURRENT), AC EQUIVALENT IS 115 MW.

16

Operating Earnings

Disciplined investment program and focus on operational

excellence have supported growth

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 UPDATED EARNINGS GUIDANCE.

**

**

Power’sdiverse fuel

17

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%

54%*

PSEG Annual Dividend Rate 

2011-2014 CAGR:  2.6%

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

18

Focus areas over business plan horizon

*SWMAAC = SOUTHWEST MID-ATLANTIC AREA COUNCIL/EMAAC = EASTERN MID-ATLANTIC AREA COUNCIL

LOCATIONAL DELIVERABILITY AREA WITHIN PJM.

•

•

•

•

•

•

•

•

•

PSE&G

PSEG Power

PSEG Long Island

Capital program execution –Transmission, Energy Strong and GSMP program

Operational excellence and cost control

Regulatory framework

Continue to develop incremental growth opportunities

Continue execution –Integration and achievement of performance metrics

Operational excellence and cost control

Timely construction of new growth opportunities – Keys Energy Center CCGT in

SWMAAC* and Sewaren 7 CCGT in EMAAC* Zones

Strong performance at Nuclear and Fossil to maximize fleet value in dynamic markets

Monitor and shape market rules - Capacity markets and environmental regulations

19

PSEG’s Value Proposition

•

A stable platform with predictable earnings and a robust

investment pipeline

•

PSE&G – Best in class utility performance and growth profile

•

PSEG Power – Repositioning fleet to enhance efficiency 

and reliability in the current market environment

•

Strong balance sheet – Supports strong credit rating, growth

objectives and the potential for consistent and sustainable

dividend growth

PSE&G

21

PSE&G

strategy

Building a

sustainable

platform that

balances

reliability,

customer rates

and public

policy to ensure

growth at

reasonable

returns

DISCIPLINED

INVESTMENT

OPERATIONAL

EXCELLENCE

FINANCIAL

STRENGTH

ENGAGED

WORKFORCE

22

PSE&G is the largest electric and gas distribution and

transmission utility company in New Jersey

Electric

Gas

Customers

Growth

(2010

–

2014)

2.2 Million

0.3%

1.8 Million

0.3%

2014 Electric Sales and Gas Sold and Transported

40,737 GWh

2,628M

Therms*

Projected

Annual

Load

Growth

(2015

–

2017)**

1.1%

0.5%

Projected Annual Load Growth

Transmission

(2015

–

2017)

0.9%

Sales Mix

Residential

32%

60%

Commercial

58%

36%

Industrial

10%

4%

Transmission

Electric

Gas

Approved Rate of Return***

11.68% ROE

10.3% ROE

10.3% ROE

2009-June 2015

Total Program

Plan

Total

Investment thru

June 2015

Solar Loan Capacity

83 MW

178.5 MW

$250M

Solar 4 All  Capacity

100 MW

125 MW

$527M

EE Annual Electric savings

206 GWh

~250 GWh

EE Annual Gas savings

6.5 M Therms

~10 M Therms

*      GAS FIRM ONLY SALES.

**    ESTIMATED ANNUAL GROWTH PER YEAR, ASSUMES NORMAL WEATHER.

***  SOME PROJECTS APPROVED FOR SPECIFIC ROE.

Renewables & Energy 

Efficiency Approved Programs

23

Mid-Atlantic

ReliabilityOne

award winner

for 13

years in

a row

24

PSE&G’s

service and

reliability is

being

recognized by

customers

25

PSE&G

plans to invest $10.9B over the

next five years

PSE&G’s Capital Expenditures*

*INCLUDES AFUDC.    E=ESTIMATE.

Distribution

34%

Other

Transmission

32%

Major

Transmission

Incentive

Projects

24%

Solar/Energy

Efficiency

10%

2010-2014

$9.8B

Distribution

35%

Other

Transmission

48%

Major

Transmission

Incentive

Projects

14%

Solar/Energy

Efficiency

3%

2015-2019E

$10.9B

26

PSE&G’s major Transmission projects

have been completed on schedule and on budget

Major Transmission Investments

Project Roster

Approved

ROE

Inclusion

of CWIP in

Rate Base

100%

Recovery

of Costs

Due to

Abandonment

Estimate

Up To

($ Millions)

Expected

In-service

Date

Susquehanna-Roseland

12.93%

$790

Completed

North Central Reliability

11.68%

$390

Completed

Burlington–Camden 230kV

11.68%

$399

Completed

Mickleton–Gloucester–Camden

230kV

11.68%

$435

Completed

27

A robust pipeline of Transmission

investments focus on reliability improvements and replacement

of aging infrastructure

Project Roster

Approved

ROE

Program

Description

Estimate

Up To

($ Millions)

Expected

In-service

Date

Northeast Grid Reliability

11.93%

PJM baseline project

receiving CWIP in rate base

treatment

$907

Jun-Dec

2015

Bergen—Linden Corridor 345kV

11.68%

PJM baseline project

receiving CWIP in rate base

treatment

$1,200

June

2018

PJM Regional Transmission

Expansion

Plan

(RTEP)

–

multiple

projects

11.68%

PJM mandated system

reliability projects

$1,900

Various

69kV

Upgrade

–

multiple

projects

11.68%

Upgrade of 26kV to 69kV

$1,500

Various

Transmission

Lifecycle

–

multiple

projects

11.68%

Replacement of aging

infrastructure

$1,100

Various

Transmission Hardening–

multiple projects

11.68%

Reliability projects focused

on system resiliency

$650

Various

Artificial Island

11.68%

PJM Baseline Project

$110-$130*

2019*

*

PJM ESTIMATE

28

Major Transmission programs focus on

reliability and replacing aging infrastructure

•

PJM’s Regional Transmission Expansion Plan (RTEP) identifies system

enhancements needed for reliability

•

69kV system upgrades improve system reliability and provide capacity

for future growth

•

Transmission Lifecycle is an ongoing program to manage transmission

asset life to maintain and improve system integrity and reliability

•

Transmission Hardening projects focus on increasing system resiliency

29

PSE&G is successfully executing on

Energy Strong

with ~$330M deployed

Program

Approved

Spend thru June 2015

Flood Mitigation

$620M

$56M

Electric Contingency Reconfiguration

$100M

$49M

Electric Advanced Technology

$100M

$32M

Gas Utilization Pressure Cast Iron (UPCI)

$350M

$185M

Gas Metering & Regulating (M&R)

$50M

$6M

TOTAL

$1,220M

$328M

30

PSE&G has successfully worked with

regulators to develop multiple solutions for New Jersey’s

energy and economic development goals

•

Solar Loan I

–

2008

•

Solar Loan II

–

2009

•

Solar 4 All

–

2009

•

Solar Loan III

–

2013

•

Solar 4 All Ext

–

2013

RENEWABLES

creative solutions to install

solar generation

•

Carbon Abatement

–

2008

•

Demand Response

–

2009

•

Energy Efficiency (EE) –

2009

•

EE Extension

–

2011

•

EE Extension II

–

2015

ENERGY EFFICIENCY

assisting customers with

controlling energy usage 

•

NJ Capital Infrastructure

Program 1 (CIP 1)

–

2009

•

NJ Capital Infrastructure

Program 2 (CIP 2)

–

2011

•

Energy Strong

–

2014

DISTRIBUTION

improving electric and gas

delivery infrastructure

To date we have

invested over $2B in

the above programs

Over $1B ahead in

Energy Strong, Energy

Efficiency Ext II

and

Solar programs

Gas System

Modernization Program

would increase potential

investment by up

to $1.6B

31

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

•

Allows PSE&G to leverage past investments in people, capabilities,

systems and processes

32

Gas System Modernization Program

of ~$1.6B

focused on aging gas main replacement

•

PSE&G’s gas distribution system currently operates and maintains over

4,800 miles of cast iron and unprotected steel main, the largest such

system in any single state

•

As filed, GSMP provides for investment of ~$1.6B focused on replacing cast

iron and unprotected steel main over a five-year period, beginning mid-2016

•

Program will replace approximately 160 miles of main per year

•

Requested accelerated clause-based recovery similar to the Energy Strong

program with a 9.75% ROE

•

GSMP is the next phase of a long-term replacement program to reduce the

average life of cast iron and unprotected steel main

•

Benefits:

•

Methane emission reduction is estimated at 24,500 metric tons of CO

2

equivalent per year*

•

Higher pressure system allows usage of high efficiency appliances by customers

* EPA SUBPART W METHODOLOGY.

33

Traditional Recovery Mechanisms

Distribution Base Rates

FERC Formula Rates

Transmission

PSE&G continues to receive

contemporaneous/ 

formula rate recovery on ~70% of its investment program

Clause Recovery Mechanisms

Energy Strong / Infrastructure /

Solar / Energy Efficiency

E = ESTIMATE.   DATA AS OF AUGUST 31, 2015

20%

56%

24%

2010-2014 PSE&G Capital Spending

by Recovery Method

$9.8B

10%

62%

28%

2015-2019E PSE&G Capital Spending

by Recovery Method

$10.9B

34

Cost control actions taken:

•

PSE&G is utilizing the Lean Six Sigma discipline to achieve costs savings and process

improvements

•

Conducted organizational reviews resulting in streamlining of processes through

restructuring

•

Continued focus on vendor and inventory practices ensuring maximum value

•

Successful management of pension

2009 to 2015 CAGR = 0.3%

PSE&G O&M Expense

E=ESTIMATE

PSE&G has

controlled costs

through process

improvements and will

continue to drive future

efficiencies

$0

$500

$1,000

$1,500

2009

2010

2011

2012

2013

2014

2015E

35

PSE&G’s 2015 operating earnings

expected to benefit from increased investment in Transmission

$612

$725

2013

2014

2015 Guidance

PSE&G Operating Earnings*

($ Millions)

$760 --

$775E**

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

OPERATING EARNINGS.  E =ESTIMATE.  **UPDATED GUIDANCE ON JULY 31, 2015.

PSEG LONG ISLAND

37

PSEG Long Island is focused on

improving customer service and reliability

•

Provide best-in-class customer service, including building on our new

Call Center Technology platform to better serve our customers

•

According to J.D. Power, in 2014 PSEG Long Island showed the most

improvement in overall customer satisfaction of any large electric utility,

anywhere in the nation

•

Work to maintain industry-leading service reliability

•

Improve every aspect of the storm response process

•

Leveraged our new Outage Management System to improve storm logistics

and outage coordination

•

Contributed $0.02* to PSEG’s earnings per share in 2014, as expected

* EXCLUDES THE ENERGY RESOURCES & TRADE CONTRACT, WHICH WILL BE INCLUDED IN PSEG POWER’S RESULTS.

PSEG POWER

39

PSEG Power

strategy

Excellence in

operating our units

safely, reliably, cost-

competitively and in

an environmentally,

responsible manner

DISCIPLINED

INVESTMENT

OPERATIONAL

EXCELLENCE

FINANCIAL

STRENGTH

ENGAGED

WORKFORCE

40

PSEG Power creating value by responding

to changing markets and regulations

Safety/Environmental Focus

Fleet Diversity/Efficiency Focus

Financial/Economic

Focus

Regulatory Focus

•

Nuclear units have performed well for

ten consecutive years

•

Hope Creek recorded its second highest

output in its history

•

Fleet diversity across the dispatch curve

and fuel types provide flexibility to

meet

changing market conditions

•

Bergen 1 & 2 and Linden 1 individually,

and the CCGT fleet in total, set generation

records in 2014

•

Kearny 13 & 14 have shown increasing

output in each year since start-up

•

Getting the most out of

existing fleet

•

Locational advantage

•

O&M control programs

have delivered a CAGR of

2.6% between 2009 and

2015

•

Sites offer competitive

advantage for expansion

•

Strong regulatory

performance

•

Industry leadership in the

changing business

environment

41

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 148 MW

DC

•

Nuclear ESP is expected in 2016

•

New build Keys CCGT in Maryland

and

Sewaren

7

in

New

Jersey

–

both

targeted in-service 2018

42

PSEG Power met 2014’s challenges

Storm and

weather challenges

•

All of the generation

sites affected by

SuperStorm Sandy

were restored to

service by mid-2014,

with ongoing repairs

•

Cold weather

extremes created a

challenging

operating

environment, but

also presented

opportunities

Market

challenges

•

Transmission

(outages and build

outs) and gas

markets resulted in

pressure on basis

•

Lower gas cost

impacted dark

spread pressuring

coal unit dispatch

•

Load impacted by

economy

Value

delivered

•

Expedited return from storm outages,

restored margin opportunities

•

High availability when needed

•

Flexibility of portfolio captured real-

time basis opportunities

•

Captured value through coal/gas

switching, unit flexibility

•

Management of gas assets benefited

customers and fleet

•

Achieved fuel cost savings

43

PSEG Power has generating assets

in three competitive markets

•

Assets located near load

centers

•

Low cost portfolio

Fuel flexibility with gas cost

advantage

•

Positioned to benefit

from volatility in real-time

markets

•

Readiness for capacity

performance (CP) in PJM

•

Fleet positioned to 

maintain diversity and

efficiency after HEDD

•

Sites suitable for

expansion

ISO

New

England

New York ISO

PJM

New Haven

Bridgeport

Bethlehem Energy Center

(Albany)

Conemaugh

Keystone

Peach Bottom

Bergen

Kearny

Essex

Sewaren

Edison

Linden

Mercer

Burlington

National Park

Hudson

Hope Creek

Salem

Yards Creek

44

PSEG Power value advantaged

by asset diversity, fuel flexibility and location

Fuel Diversity*

Total MW: 13,146

Energy Produced*

Total GWh: 54,162

Energy Market Served*

Total MW: 13,146

Load Following

Peaking

Base load

Gas

Pumped

Storage

Nuclear

Oil

Coal**

Gas

Pumped

Storage

Nuclear

Oil

Coal**

*2014, EXCLUDES SOLAR AND KALAELOA.

**INCLUDES NEW JERSEY UNITS THAT FUEL SWITCH TO GAS.

32%

54%

14%

<1%

<1%

44%

22%

34%

46%

28%

18%

7%

1%

45

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 & Sewaren 7 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

POST -

HEDD

E = ESTIMATE

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

46

PSEG Power will maintain diversity and efficiency after a

realignment of the fleet following HEDD retirements

2014

2018

Oil

Pumped Storage

HEDD

Other gas

Peakers

AGP/PB EPU

CCGT

Coal

Nuclear

•

Maintain fuel diversity

•

Maintain load-serving

capability

•

Maintain low cost structure

•

Environmental

improvement

•

Peach Bottom (PB) uprate

•

Advanced Gas Path (AGP)

•

Combined cycle units Keys

and Sewaren operational

in 2018

Objective

2015

2018

13,146 MW

12,600 MW

Fuel Diversity

2014

2018

Oil, Other gas, HEDD,

Pumped storage

Peakers

AGP/PB EPU

CCGT

Coal

Nuclear

E

Energy Produced

57 -

59 TWh

54 TWh

E

E=ESTIMATE.

47

PSEG Power’s fleet will experience

heat rate and emissions improvements

•

AGP

(Advanced Gas Path) investments

•

Other Efficiency improvements

•

HEDD retirements

•

Keys/Sewaren Combined Cycle Development (2018)

E=ESTIMATE.

0.5

0.6

0.7

0.8

0.9

1.0

8,500

9,000

9,500

10,000

10,500

Heat Rate

NOx + SO2

2014

2018E

48

PSEG Power’s fleet is among the lowest

emitting in the industry

•

Mercury reduced 80% across the timeframe above

•

More efficient testing and improved operational flexibility through utilization of Continuous

Emission Monitoring System testing

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

Generation

SO2

NOx

49

PSEG Power Nuclear is a critical element

of our success

Hope Creek

•

Operated by PSEG Nuclear

•

PSEG Ownership: 100%

•

Technology: Boiling Water

Reactor

•

Total Capacity: 1,178 MW

•

Owned Capacity:  1,178 MW

•

License Expiration: 2046

•

Next Refueling

Fall 2016

Salem

Units 1 and 2

•

Operated by PSEG Nuclear

•

PSEG Ownership: 57%

•

Technology: Pressurized Water

Reactor

•

Total Capacity: 2,307 MW

•

Owned Capacity: 1,324 MW

•

License Expiration: 2036

and 2040

•

Next Refueling

Unit 1 –

Spring 2016

Unit  2 --

Fall 2015

Peach Bottom

Units 2 and 3

•

Operated by Exelon

•

PSEG Ownership: 50%

•

Technology: Boiling Water

Reactor

•

Total Capacity: 2,242 MW

•

Owned Capacity:

1,121 MW

•

License Expiration: 2033

and 2034

•

Next Refueling

Unit 2 -

Spring 2016

Unit 3 -

Fall 2015

•

Uprate:  130 MW (PS Share)

Unit 2 -

March 2015

Unit 3 -

2016

50

PSEG Power Nuclear has competitive advantages

•

Continued strong nuclear operations

•

Nuclear excellence program

•

Top quartile of cost performance/MWh

Brought security services in-house

•

Significant earnings contributor

•

Recruitment of the best new and

experienced talent, and attractive

training program

•

Fukushima action plan

in response to NRC staff review

FLEX* plan submitted with implementation

underway

•

Peach Bottom extended power uprate,

130 MW Power’s share, scheduled in

service 2015/2016

•

Active and influential participation at

INPO, NEI, EPRI, USA Alliance

*STRATEGY KNOWN AS THE “DIVERSE AND FLEXIBLE MITIGATION CAPABILITY” OR FLEX, ADDRESSES

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

51

PSEG Power’s Fossil Fleet has shown

improvement in performance

*LM6000 AND 7EA UNITS       E = ESTIMATE.    

Fossil

Generation

Coal Generation

Peaking

Start Success*

Combined Cycle Generation

•

Fossil Generation rebounded with market

•

Peaking Units maintain high start success

•

Record output

from Kearny 13 & 14 peakers

•

Combined Cycle Generation set

record

•

Bergen

AGP uprate project scheduled for 2015

80%

85%

90%

95%

100%

2011

2012

2013

2014

2015 E

5

6

7

8

9

10

2011

2012

2013

2014

2015 E

10

12

14

16

18

20

2011

2012

2013

2014

2015 E

20

23

25

28

30

2011

2012

2013

2014

2015 E

52

PSEG Power initiatives result in

continuing improvement in combined cycle heat rate

AGP projected efficiency

improvement 2015-2018

2018E*

E= ESTIMATE.

*The weighted average Combined Cycle Heat Rate in 2018, with the addition of Sewaren 7

and Keys Energy Center, will be approximately 7,250

7,200

7,300

7,400

7,500

7,600

7,700

7,800

2008

2009

2010

2011

2012

2013

2014

53

PSEG Power CCGT/Fossil initiatives

Actions Taken to Create Value

Capacity

•

New

Keys

CCGT

755MW

online

in

2018

adds

geographic

diversity

to

fleet

•

Sewaren 7 CCGT 540 MW online in 2018 improves fleet efficiency

•

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

PSEG Power developing 1,300 MW of new,

efficient CCGT capacity in MD and NJ

•

Construction of 755 MW Keys Energy Center

to begin this Fall to build a new, natural gas

fired power plant in Maryland (SWMAAC*) at

an estimated cost of $825 to $875 million

•

Power cleared a new 540 MW CCGT unit,

Sewaren 7 located in New Jersey (EMAAC*),

in the recent 2018/2019 RPM auction;

the unit is expected to cost ~$600 million

and is targeted to be in service in 2018;

older Sewaren units will be retired upon

completion of the new unit

•

PSEG Fossil will oversee the construction

and operation of both PSEG Keys Energy

Center and Sewaren 7

PJM

*SWMAAC = SOUTHWEST/EMAAC = EASTERN MID-ATLANTIC AREA COUNCIL

LOCATIONAL DELIVERABILITY AREA WITHIN PJM.

SEWAREN 7 SITE

KEYS ENERGY

CENTER SITE

54

55

PSEG Power’s Growth Investments

Site

Project

Estimate

($ millions)

Benefits

Status

Maryland

Keys 755 MW

CCGT

$825 -

$875

Geographic diversity

within PJM; highly

efficient gas fired unit in SWMAAC

2018E

Sewaren

Unit 7 540 MW

CCGT

$600

Improved

efficiency and reliability;

increase in capacity 

2018E

Peach Bottom

Peach Bottom

EPU

(2014 –

2015)

$417

Increased capacity: 130 MW

PB2

May 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

* INTERCONNECTION SERVICE AGREEMENTS.        E = ESTIMATE.     **NET OF PLANNED RETIREMENTS.

Total Increased Capacity – 1,132 MW **

56

PSEG Solar Source owns ~148 MW

of solar facilities with long term contracted revenues*

*PROJECT SIZE IN MEGAWATTS SHOWN IN DC (DIRECT CURRENT)

Shasta A & Shasta B

California (2 x 2 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

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.

Rockfish

Maryland (13 MW)

COD July 2015

Polycrystalline -

single axis

Investment $22 million

20 year PPA with SMECO

Columbia

California (25.5 MW)

COD Sept 2015 Est.

Polycrystalline –

fixed tilt

Investment $55 million

20 year PPA with PG&E

57

Gas Asset Optimization

•

Large wholesale provider to PSE&G and others

•

Storage capacity of approximately 75 Bcf (in the Gulf and market regions)

•

Firm transportation of 1.3 Bcf/day on seven pipelines

•

Off-system sales margins shared with residential customers

•

Commercial & Industrial customers (C&I)

•

Weather and price volatility

Ancillary Services

LIPA fuel and energy dispatch management

PSEG Power has other attractive sources of revenues to

round out a robust portfolio, in addition to energy and capacity

58

PSEG Power is an established leader

within the industry

INPO

•

National Nuclear Accrediting Board

NEI

•

Communications Advisory Committee

•

Board of Directors

•

Board of Directors Executive Committee

•

Emergency Preparedness Working Group

•

Security Working Group

•

Fukushima Response Steering Committee

•

Joint Information System Task Force

•

Nuclear Strategic Issues Advisory Committee Steering

Group

EPRI

•

Chairman Nuclear Power Council

•

Executive Committee Nuclear Power Council

BWR Owners Group

•

Vice Chair of the Executive Oversight Committee

Utilities Service Alliance (USA) Fleet

•

Chair

EPSA

•

Executive committee member

UWAG

•

Chair of the Cooling Systems Committee

PJM/NY/ISO-NE

•

Member of various Committees at PJM

•

Chairman & Vice-Chair of the Supplier Sector of the New

England Power Pool (NEPOOL)

•

Chair of the PJM Power Providers Board

•

Board member & member of the board’s Executive

Committee of Independent Power Producers of New York

(IPPNY)

EEI

•

Member of water resources subcommittee

National Coal Council

•

Member of Executive Committee

59

Developing People to drive operational excellence

and to optimize the workforce

•

Succession planning and development planning

•

Recent CNO retirement & succession was part of the plan

•

Training & development of employees

•

Rotational assignments for key leaders in PSEG Power

•

Outreach programs

•

Employee engagement

•

Shared resources between Fossil and Nuclear (outage support)

•

Diversity & inclusion

60

Cost control actions taken:

•

Fossil

plant

assessment

•

CCGT material condition assessment

•

Vendor

contract renegotiations

•

Nuclear

security services brought in-

house to control costs

•

Nuclear maintenance productivity study

•

Nuclear outage efficiency initiative

•

Materials management

2009 to 2015 CAGR = 2.6%

Power O&M Expense*

*EXCLUDES IMPACTS FROM STORM RECOVERY COSTS.   E=ESTIMATE

PSEG Power’s

focus on costs

has resulted in moderate

increase in O&M for

seven years

$0

$500

$1,000

$1,500

2009

2010

2011

2012

2013

2014

2015E

61

Power’s 2015 operating earnings

maintain solid performance

Power Operating Earnings*

($ Millions)

2015 Observations

•

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.

$710

$642

$620

–

$680E

2013

2014

2015 Guidance

61

PSEG POWER

ER&T

Market Review: Winter Z6 gas prices retain seasonal volatility;

spark spreads have continued to be robust in PJM

FORWARDS AS OF AUGUST 3, 2015

2015 YTD Z6

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

2015-2018 Z6

63

64

ANNUAL FORWARD BASIS TO PJM-WEST AS OF AUGUST 3, 2015.

E = YTD ACTUAL PLUS FORWARD;     F = FORWARD

Power Basis in Eastern PJM:

Expected to be volatile and

negative on an annual basis for 2015 and 2016

PS Zone RTC Basis to PJM West

Electric Basis is negative however it is viewed to be stabilizing and turning back to positive within

2 years due to:

•

Export of ~18 bcf/day of gas which will significantly strengthen regional gas prices

•

Easing of transmission constraints in Virginia/Maryland

•

Construction of significant new gas-fired generation in VA/MD

65

Market Review: PSEG’s extensive gas asset portfolio gives

unparalleled access to Marcellus Shale gas

•

PSEG Power maintains a robust portfolio

of pipeline and storage assets in the

Mid-Atlantic

•

PSEG Power’s gas for generation was

~100 BCF in 2014, of which >60%

was supplied by Shale gas

•

PSEG Power procured over 400 BCF in

2014 with ~75% going to PSE&G’s utility

gas customers

•

When gas is surplus to customer needs,

PSEG Power sells surplus to others;

margins from such sales benefit PSE&G

gas customers and PSEG Power

Eastern PA Shale

Western PA Shale

Gulf Coast

Delivered Gas

40%

20%

6%

34%

Power’s Gas for Generation in 2014

66

Market Review: New pipelines will move significant quantities of

Marcellus gas out of the region by 2018

New pipeline investment is expected to increase takeaway capacity from the low cost

Marcellus/Utica shale and reduce regional surpluses and increase gas prices by 2018

New England 3.4 bcf/d 

Southeast 6.4 bcf/d

Midwest 5.9 bcf/d

Gulf Coast  3.1 bcf/d

NJ/NY 1.4 bcf/d

Pipeline capacity grows significantly by

2018

Historical and Expected Marcellus

Production

0

5

10

15

20

25

30

2010

2011

2012

2013

2014

2015

2016

2017

2018

67

Northeast Portfolio: New York and New England

New England (972 MW)

•

Small but dynamic market

•

Significant improvement in market construct

•

High volatility due to extreme (winter) weather

conditions

•

Significant siting

and permitting challenges

•

Gas pipeline infrastructure poses supply

challenges/opportunity

New York (774 MW)

•

Single state ISO

•

Investment in new lateral to connect to the

Dominion pipeline at Bethlehem Energy

Center (BEC) allows for access to fuel supply

from Marcellus

•

Long Island Power Authority Fuel Management

Contract

PSEG Power acting as an agent for LIPA began

January 2015

•

Performing ISO bidding for LIPA’s 6,000

MWs of generation/tolls

•

Procuring natural gas and oil for the

majority of these assets

•

Scheduling two DC transmission cables

(ISO-NE and PJM) into Long Island

•

Entering into financial hedges to reduce

LIPA customer’s price volatility

This relationship has provided PSEG Power:

•

Additional experience in Eastern NY

and Connecticut markets

•

Bigger natural gas footprint

•

Fee-based services contract

Northeast Portfolio: Expanding our footprint with PSEG Long Island

Steam

Combustion Turbine

Cables

Combined Cycle

Resource Recovery,

Pumped Storage, Solar

3%

7%

16%

36%

38%

LIPA Capacity (6,163 MW)

68

69

… and transition auctions offer upside in revenue

from CP product   

Capacity Market Pricing:

~98% of Power’s PJM fleet

that cleared the 2018/2019 RPM auction, met the new CP standards

RPM

–

Auction

Results

($/MW-day)

2015 / 2016*

2016 / 2017*+

2017 / 2018

2018 / 2019

Power’s

Average Prices*

$168

$172

$165

$215

Rest of Pool

Prices

$136

$59

$120

$165/$150

(CP/Base)

Power’s Cleared

Capacity (MW)

8,750

8,700

8,700

8,650

*PSEG POWER’S AVERAGE PRICES AND CLEARED CAPACITY (MW) REFLECT BASE AND INCREMENTAL

RPM AUCTION RESULTS AS OF SEPTEMBER 1, 2015.  DELIVERY YEAR RUNS FROM JUNE 1 TO MAY 31 OF THE NEXT CALENDAR YEAR.

+ INCLUDES CP TRANSITION AUCTION RESULTS AS OF SEPTEMBER 1, 2015

Auction Results: BGS Auction provides ability to forward

hedge our generation and protect our power basis

BGS sales account for approximately 20% of our forward portfolio of hedges

$/MWH; BGS PRICES REFLECT PSE&G ZONE; RESULTS FOR 2013-2015 ARE THE NEW BLENDED PRICES BEGINNING JUNE 1, 2015.

2011

2012

2013

2014

2015

$94.30

$83.88

~ $46

$92.18

~ $48

~ $53

~ $59

$97.39

$45

-

$47

$39

-

$40

$37

-

$38

$38

-

$39

~ $62

$37

-

$38

$99.54

Capacity

Load shape

Transmission

Congestion

Ancillary services

Risk premium

Green

3 Year Average

Round the Clock

PJM West

Forward Energy

Price

70

71

HEDGE PERCENTAGES AND PRICES AS OF JUNE 30, 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.

Jul-Dec

2015

2016

2017

Volume TWh

18

37

37

Base Load

% Hedged

100%

85-90%

50-55%

(Nuclear and Base Load Coal)

Price $/MWh

$53

$51

$50

Volume TWh

11

19

18

Intermediate Coal, Combined

% Hedged

30-35%

0%

0%

Cycle, Peaking

Price $/MWh

$53

--

--

Volume TWh

25-30

55-57

55-57

Total

% Hedged

70-75%

55-60%

30-35%

Price $/MWh

$53

$51

$50

Hedging strategy:

designed to protect gross margin

while leveraging the portfolio

72

PSEG Power’s Value Proposition

•

Re-positioning fleet to improve efficiency and reliability in attractive

markets

•

Advantaged by low cost structure, fuel diversity and dispatch flexibility

•

Value add from strong gas supply capability

•

Significant drive by regulatory bodies to improve market constructs

•

Low capital requirements to meet enhanced performance standards

•

Organic growth opportunities to increase nuclear and combined cycle

generation

•

Hedging strategy is responsive to changing market dynamics, providing

attractive returns and free cash flow

PSEG

FINANCIAL

REVIEW & OUTLOOK

74

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

75

PSEG 2015 Updated 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

$760

-

$775

$725

PSEG Power

$620 -

$680

$642

PSEG Enterprise/Other

$40 -

$45

$33

Operating Earnings*

$1,420

-

$1,500

$1,400

Earnings per Share

$2.80

-

$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.

76

~$1.6B

~$2.2B

~$2.2B

~$1.9B

~$6.8B

~$14.7B

PSEG 2015 –

2019E Capital Expenditures

(1)

PSEG growth spend represents ~75% of total investment

Power & Other

Maintenance

PSE&G

Distribution

Maintenance

Power

Growth

PSE&G

Transmission

Growth

PSE&G

Distribution

Growth

PSEG

Planned

Spend

Maintenance ~$3.8B

(1)

INCLUDES AFUDC AND IDC, KEYS ENERGY CENTER, SEWAREN, PENNEAST PIPELINE EQUITY INVESTMENT OF~$0.1B IS

INCLUDED IN POWER GROWTH.  E = ESTIMATE. 

Planned Growth Investment ~$10.9B

77

2014 –

2017E Rate Base

CAGR Growth of ~12%

Distribution

Transmission

PSE&G’s Capital Program drives double-digit

growth in rate base through 2019

~$11.4B

~$16.0B

~$6.9B

~$4.5B

~$2.2B

~$9.8B

~$3.1B

~$8.5B

Rate Base

Growth

~$0.1B

2014

Rate Base

Planned

2017E

Rate Base

Planned

2019E

Rate Base

~$1.5B

~$8.4B

~$7.6B

~$18.3B

2014 –

2019E Rate Base

CAGR Growth of ~10%

Rate Base

Growth

E = ESTIMATE   

78

0%

5%

10%

15%

Continuing our track record of 5 year

double digit rate base growth leading to high single-digit growth in

earnings through 2017

2010 –

2015E

PSE&G 5 Year Rate Base CAGR

2011 –

2016E

2012 –

2017E

2013 –

2018E

2014 –

2019E

~11%

~13%

~12%

~10%

~10%

E = ESTIMATE   

79

PSEG 2015 -

2019E Sources and Uses

Utilizing financial strength to issue debt

at the parent level in support of regulated growth

Sources

Uses

PSE&G

Cash from

Ops

(1)

PSE&G Cash

Investment

(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      E = ESTIMATES.

PSE&G Net

Debt

Shareholder

Dividend

Power

Cash from

Ops

Power Net

Debt

Other

Cash

Flow

(2)

Parent

Long-Term

Debt

Power Cash

Investment 

(3)

80

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 average

approximately $1.3+ B 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

*INCLUDES KEYS ENERGY CENTER AND SEWAREN.  E= ESTIMATE 

81

Substantial Investment Capacity to pursue

additional growth without the need for equity*

$0.0

$3.0

Power

Parent

Total

($ Billions)

Power

PSEG

Estimate

~ 50%

~27%

Minimum

Threshold

30%

~20%

Our incremental investment capacity can support growth at

both PSE&G and Power

*INCLUDES KEYS ENERGY CENTER, SEWAREN.  E= ESTIMATE 

Average Funds from Operations /Debt

2015

-

2017

Total Incremental Investment Capacity

through 2017

82

PSE&G

EPS

Annual Dividend Per Share

2011 –

2014  CAGR:  2.6%

Potential

for

consistent

and

sustainable

dividend growth given significant contribution from regulated

earnings and Power’s strong free cash flow

5.4% increase

Payout

Ratio

50%

58%

56%

54%

54%

(1)

$1.53

$1.50

$0.60

$0.80

$1.00

$1.20

$1.40

$1.60

2015E

2013

2014

2012

2011

$1.37

$1.44

$1.48

$1.56

82

(1)

THE 2015 PAYOUT RATIO IS BASED ON THE MIDPOINT OF PSEG’S 2015 UPDATED OPERATING EARNINGS GUIDANCE OF $2.80 - $2.95E PER

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

EARNINGS.E= ESTIMATE.

$1.42

83

PSEG’s longer-term outlook is influenced by

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

2015E

**

2016E

Each $0.75/mcf Change in Natural Gas

Each $2/MWh Change in Spark Spread

Each $5/MWh Change in Dark Spread

Each 1% Change in Nuclear Capacity Factor

Segment EPS Drivers

Each $100 Million of Incremental Investment

Each 1% Change in Sales

Electric

Gas

Each 1% Change in O&M

Each 10 basis point Change in Distribution ROE

Each 10 basis point Change in Transmission ROE

$0.01

$0.01

$0.01

$0.01

$0.01

$0.01

$0.03-$0.06

$0.04

$0.04

$0.01

$0.01-$0.02

$0.02

$0.01

$0.01

$0.01

$0.01

$0.01

$0.01

$0.01

$0.01

Sensitivities derived from typical annual market variability*

* Estimated

annual

variability

approximating

one

standard

deviation

based

on

2011

–

2013

historical

data

and

forward

curve estimates applied to PSEG Power open positions.  ** July-December 2015.

E = ESTIMATE.    POWER EARNINGS SENSITIVITIES UPDATED FOR 2015 BGS AUCTION AND 12/31/14 PRICE CURVES.   

2015E

2016E

2017E

$0.10-$0.13

$0.04

$0.04

$0.01

$0.01

$0.01

$0.01

$0.01

$0.01

$0.01

2017E

84

PSEG Summary

•

Continued third year of anticipated positive earnings trend in 2015 with

updated operating earnings guidance of $2.80 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 a 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

•

Power realigning its portfolio with new, efficient CCGT investments in MD and NJ

•

Strong Balance Sheet and Cash Flow support PSE&G’s capital program and

Power’s new investment opportunities without the need for equity

•

Our $0.08 per share dividend increase for 2015 is consistent with our long

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

with potential for consistent and sustainable growth

PSE&G

APPENDIX

85

PSE&G provides high reliability at below

average cost which creates superior value to customers

SAIDI

=

SYSTEM

AVERAGE

INTERRUPTION

DURATION

INDEX,

A

MEASURE

OF

AVERAGE

OUTAGE

DURATION

FOR

ALL

CUSTOMERS

SERVED,

EXCLUDING

MAJOR

EVENTS.

SOURCES:

PSE&G

PEER

PANEL

STUDY,

FIRST

QUARTILE

BENCHMARK

STUDY

AND

VARIOUS

REGULATORY REPORTS.

86

87

PSE&G prioritizes public safety

while maintaining value to customers

LEAK

RESPONSE

RATE

=

PERCENTAGE

OF

UTILITY

RESPONSES

TO

REPORTED

LEAKS

WITHIN

ONE

HOUR.

SOURCES:

PSE&G

PEER

PANEL

STUDY

AND AGA BENCHMARK STUDY.

PSEG POWER

AND ER&T

APPENDIX

88

89

Nuclear fuel needs have been hedged through 2017

Anticipated Nuclear Fuel Cost

Hedged

$0

$5

$10

2015

2016

2017

90

The full requirements BGS rate recognizes the

forward PJM capacity market price

Capacity Price per RPM Auction for PSEG Zone

Capacity Price per BGS Tranche

2015-2016

166

$        

Three Year Average ($/MW-day)

2016-2017

177

$        

Average MW per Tranche (varies by EDC)

2017-2018

175

$        

Days per Year

173

$     

Average Capacity Cost per Tranche

$173

111

365

MWh per Tranche

Average MW per Tranche (varies by EDC)

111

Hours per Year

8,768

Load Factor (varies by EDC)

~37%

MWh per Tranche, approx.

355,000

Capacity Cost per MWh

20

$                      

Average Capacity Price ($/MW-day)

7,007,656

$     

PSEG

FINANCIAL

APPENDIX

91

92

First Half Operating Earnings by Subsidiary

Operating Earnings

Earnings per Share

$ millions (except EPS)

2015

2014

2015

2014

PSE&G

$  409

$  365

$  0.80

$  0.72

PSEG Power

388

380

0.77

0.75

PSEG Enterprise/Other

21

15

0.04

0.03

Operating Earnings*

$  818   

$  760 

$  1.61

$  1.50

Six months ended June 30

•SEE SLIDE C FOR ITEMS EXCLUDED FROM NET INCOME TO RECONCILE TO OPERATING EARNINGS.

93

$1.61

0.01

0.02

0.08

$1.50

0.00

0.25

0.50

0.75

1.00

1.25

1.50

1.75

PSEG EPS Reconciliation –

First Half 2015

versus First Half 2014

YTD 2015       

Operating

Earnings*

YTD 2014       

Operating

Earnings*

Re-Contracting

& Lower Cost

to Serve  0.14

Gas Send-Out & Fixed

Cost Recovery  0.04

Higher Volume

0.02

Capacity  (0.18)

O&M  (0.02)

D&A  (0.01)

Taxes & Other

0.03

PSEG Power

Transmission

Net Earnings  0.07

Gas Volume &

Demand  0.02

Electric Volume &

Demand  0.01

Distribution

O&M  (0.01)

Taxes & Other  

(0.01)

PSE&G

Enterprise/

Other

PSEG Long

Island

* SEE SLIDE C FOR ITEMS EXCLUDED FROM NET INCOME TO RECONCILE TO OPERATING EARNINGS.

94

PSEG Power’s Adjusted EBITDA -

Q2 2015,

YTD and Full-Year 2015 Guidance

Three

Months         

Ended June 30,

Six Months (YTD)

Ended June 30,

Full-Year 2015

Guidance

($ in millions)

2015

2014

2015

2014

Low

High

Operating Earnings**

$110

$87

$388

$380

$620

$680

Add:

Fossil Major Maintenance, pre-tax

52

49

101

107

115

115

Depreciation & Amortization, pre-tax

75

73

152

146

305

305

Interest Expense, pre-tax

32

29

63

60

125

125

Income Taxes

32

38

223

234

380

420

Adjusted EBITDA

$301

$276

$927

$927

$1,545E

$1,645E

PSEG Power -

Adjusted EBITDA*

*    SEE SLIDE B FOR A RECONCILIATION OF ADJUSTED EBITDA TO OPERATING EARNINGS AND NET INCOME.   E = ESTIMATE.

**  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.

95

June 30, 2015

$ Billions 

PSEG

PSE&G

Power

Cash and Cash Equivalents

$0.6

$0.2

$0.0

Short Term Debt

$0.0

$0.0

N/A

Long Term Debt

(1)

9.2

6.6

2.5

Common Equity

12.7

7.2

5.7

Total Capitalization

$21.9

$13.8

$8.2

Total Debt / Capitalization

42%

48%

31%

PSE&G Regulated Equity Ratio 

(2)

51.7%

Our balance sheet remains strong

(1)INCLUDES L-T DEBT DUE WITHIN 1 YEAR; EXCLUDES SECURITIZATION DEBT OF $134 MILLION AND NON-RECOURSE DEBT OF $16 MILLION.

(2)REGULATED EQUITY RATIO INCLUDES CUSTOMER DEPOSITS OF ~$98 MILLION AND EXCLUDES SHORT-TERM DEBT.

96

PSEG Sandy-related insurance settlement

proceeds

($ millions, pre-tax)

Pre-2015

2015

Total

PSEG Power

$44

$179

$223**

PSE&G

6

35

41***

PSEG

$50*

$214

~$264

*       PSE&G RECEIVED $6 MILLION OF INSURANCE SETTLEMENT PROCEEDS IN Q4 2012.  POWER RECEIVED $19 MILLION AND  $25 MILLION OF

INSURANCE SETTLEMENT PROCEEDS IN Q4 2012 AND Q2 2013, RESPECTIVELY.

**    POWER SHARE OF PROCEEDS REDUCED O&M; PROPERTY, PLANT AND EQUIPMENT; INCREASED OTHER INCOME.

*** PSE&G SHARE OF PROCEEDS REDUCED O&M; PROPERTY, PLANT AND EQUIPMENT; AND REGULATORY ASSETS.

97

PSEG Liquidity as of June 30, 2015

PSEG Energy Holdings

Investment Portfolio

Equipment

Investment  Balance*             

at 6/30/15

($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)

150

Grand Gulf

Nuclear station in Mississippi (175 equity MW)

29

Real Estate Leveraged Leases

GM Renaissance Center; Wal-Marts

57

Real Estate Operating Leases

Office

Towers,

Shopping

Centers

-

28

properties

39

Generation Legacy Assets

GWF (in wind down stage), GSOE 

2

Other

Land

5

Total Holdings Investments

$855

*

BOOK BALANCE EXCLUDING  DEFERRED TAX ACCOUNTS.

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

98

Items Excluded from Income from Continuing

Operations/Net Income to Reconcile to Operating Earnings

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

DIFFERS FROM NET INCOME.

(a)

Includes the financial impact from positions with forward delivery months.

A

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)

(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

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.

C