Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2021

Fair Value Disclosures [Abstract]

PSEG's, Power's And PSE&G's Respective Assets And (Liabilities) Measured At Fair Value On A Recurring Basis

The following tables present information about PSEG’s, PSE&G’s and PSEG Power’s respective assets and (liabilities) measured at fair value on a recurring basis as of September 30, 2021 and December 31, 2020, including the fair value measurements and the levels of inputs used in determining those fair values. Amounts shown for PSEG include the amounts shown for PSE&G and PSEG Power.

	Recurring Fair Value Measurements as of September 30, 2021
Description	Total		Netting (D)		Quoted Market Prices for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	Millions
PSEG
Assets:
Cash Equivalents (A)	$	1,525	$	—	$	1,525	$	—	$	—
Derivative Contracts:
Energy-Related Contracts (B)	$	153	$	(2,302)	$	145	$	2,304	$	6
NDT Fund (C)
Equity Securities	$	1,257	$	—	$	1,257	$	—	$	—
Debt Securities—U.S. Treasury	$	324	$	—	$	—	$	324	$	—
Debt Securities—Govt Other	$	389	$	—	$	—	$	389	$	—
Debt Securities—Corporate	$	624	$	—	$	—	$	624	$	—
Rabbi Trust (C)
Equity Securities	$	27	$	—	$	27	$	—	$	—
Debt Securities—U.S. Treasury	$	73	$	—	$	—	$	73	$	—
Debt Securities—Govt Other	$	32	$	—	$	—	$	32	$	—
Debt Securities—Corporate	$	111	$	—	$	—	$	111	$	—
Liabilities:
Derivative Contracts:
Energy-Related Contracts (B)	$	(73)	$	3,219	$	(128)	$	(3,155)	$	(9)
PSE&G
Assets:
Cash Equivalents (A)	$	260	$	—	$	260	$	—	$	—
Rabbi Trust (C)
Equity Securities	$	5	$	—	$	5	$	—	$	—
Debt Securities—U.S. Treasury	$	13	$	—	$	—	$	13	$	—
Debt Securities—Govt Other	$	6	$	—	$	—	$	6	$	—
Debt Securities—Corporate	$	19	$	—	$	—	$	19	$	—
PSEG Power
Assets:
Derivative Contracts:
Energy-Related Contracts (B)	$	153	$	(2,302)	$	145	$	2,304	$	6
NDT Fund (C)
Equity Securities	$	1,257	$	—	$	1,257	$	—	$	—
Debt Securities—U.S. Treasury	$	324	$	—	$	—	$	324	$	—
Debt Securities—Govt Other	$	389	$	—	$	—	$	389	$	—
Debt Securities—Corporate	$	624	$	—	$	—	$	624	$	—
Rabbi Trust (C)
Equity Securities	$	7	$	—	$	7	$	—	$	—
Debt Securities—U.S. Treasury	$	19	$	—	$	—	$	19	$	—
Debt Securities—Govt Other	$	8	$	—	$	—	$	8	$	—
Debt Securities—Corporate	$	29	$	—	$	—	$	29	$	—
Liabilities:
Derivative Contracts:
Energy-Related Contracts (B)	$	(73)	$	3,219	$	(128)	$	(3,155)	$	(9)

	Recurring Fair Value Measurements as of December 31, 2020
Description	Total		Netting  (D)		Quoted Market Prices for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	Millions
PSEG
Assets:
Cash Equivalents (A)	$	312	$	—	$	312	$	—	$	—
Derivative Contracts:
Energy-Related Contracts (B)	$	69	$	(488)	$	26	$	519	$	12
NDT Fund (C)
Equity Securities	$	1,352	$	—	$	1,351	$	1	$	—
Debt Securities—U.S. Treasury	$	239	$	—	$	—	$	239	$	—
Debt Securities—Govt Other	$	342	$	—	$	—	$	342	$	—
Debt Securities—Corporate	$	566	$	—	$	—	$	566	$	—
Rabbi Trust (C)
Equity Securities	$	31	$	—	$	31	$	—	$	—
Debt Securities—U.S. Treasury	$	59	$	—	$	—	$	59	$	—
Debt Securities—Govt Other	$	41	$	—	$	—	$	41	$	—
Debt Securities—Corporate	$	135	$	—	$	—	$	135	$	—
Liabilities:
Derivative Contracts:
Energy-Related Contracts (B)	$	(25)	$	496	$	(33)	$	(483)	$	(5)
PSE&G
Assets:
Cash Equivalents (A)	$	50	$	—	$	50	$	—	$	—
Rabbi Trust (C)
Equity Securities	$	6	$	—	$	6	$	—	$	—
Debt Securities—U.S. Treasury	$	11	$	—	$	—	$	11	$	—
Debt Securities—Govt Other	$	8	$	—	$	—	$	8	$	—
Debt Securities—Corporate	$	26	$	—	$	—	$	26	$	—
PSEG Power
Assets:
Derivative Contracts:
Energy-Related Contracts (B)	$	69	$	(488)	$	26	$	519	$	12
NDT Fund (C)
Equity Securities	$	1,352	$	—	$	1,351	$	1	$	—
Debt Securities—U.S. Treasury	$	239	$	—	$	—	$	239	$	—
Debt Securities—Govt Other	$	342	$	—	$	—	$	342	$	—
Debt Securities—Corporate	$	566	$	—	$	—	$	566	$	—
Rabbi Trust (C)
Equity Securities	$	8	$	—	$	8	$	—	$	—
Debt Securities—U.S. Treasury	$	15	$	—	$	—	$	15	$	—
Debt Securities—Govt Other	$	10	$	—	$	—	$	10	$	—
Debt Securities—Corporate	$	33	$	—	$	—	$	33	$	—
Liabilities:
Derivative Contracts:
Energy-Related Contracts (B)	$	(25)	$	496	$	(33)	$	(483)	$	(5)

(A)Represents money market mutual funds.

(B)Level 1—These contracts represent natural gas futures contracts executed on NYMEX, and are being valued solely on settled pricing inputs which come directly from the exchange.

Level 2—Fair values for energy-related contracts are obtained primarily using a market-based approach. Most derivative contracts (forward purchase or sale contracts and swaps) are valued using settled prices from similar assets and liabilities from an exchange, such as NYMEX, ICE and Nodal Exchange, or auction prices. Prices used in

the valuation process are also corroborated independently by management to determine that values are based on actual transaction data or, in the absence of transactions, bid and offers for the day. Examples may include certain exchange and non-exchange traded capacity and electricity contracts and natural gas physical or swap contracts based on market prices, basis adjustments and other premiums where adjustments and premiums are not considered significant to the overall inputs.

Level 3—Unobservable inputs are used for the valuation of certain contracts. See “Additional Information Regarding Level 3 Measurements” below for more information on the utilization of unobservable inputs.

(C)The fair value measurement table excludes foreign currency of $1 million and $2 million in the NDT Fund as of September 30, 2021 and December 31, 2020, respectively. The NDT Fund maintains investments in various equity and fixed income securities. The Rabbi Trust maintains investments in a Russell 3000 index fund and various fixed income securities. These securities are generally valued with prices that are either exchange provided (equity securities) or market transactions for comparable securities and/or broker quotes (fixed income securities).

Level 1—Investments in marketable equity securities within the NDT Fund are primarily investments in common stocks across a broad range of industries and sectors. Most equity securities are priced utilizing the principal market close price or, in some cases, midpoint, bid or ask price. Certain other equity securities in the NDT and Rabbi Trust Funds consist primarily of investments in money market funds which seek a high level of current income as is consistent with the preservation of capital and the maintenance of liquidity. To pursue its goals, the funds normally invest in diversified portfolios of high quality, short-term, dollar-denominated debt securities and government securities. The funds’ net asset value is priced and published daily. The Rabbi Trust’s Russell 3000 index fund is valued based on quoted prices in an active market and can be redeemed daily without restriction.

Level 2—NDT and Rabbi Trust fixed income securities include investment grade corporate bonds, collateralized mortgage obligations, asset-backed securities and certain government and U.S. Treasury obligations or Federal Agency asset-backed securities and municipal bonds with a wide range of maturities. Since many fixed income securities do not trade on a daily basis, they are priced using an evaluated pricing methodology that varies by asset class and reflects observable market information such as the most recent exchange price or quoted bid for similar securities. Market-based standard inputs typically include benchmark yields, reported trades, broker/dealer quotes and issuer spreads. The preferred stocks are not actively traded on a daily basis and therefore, are also priced using an evaluated pricing methodology. Certain short-term investments are valued using observable market prices or market parameters such as time-to-maturity, coupon rate, quality rating and current yield.

(D)Represents the netting of fair value balances with the same counterparty (where the right of offset exists) and the application of collateral. See Note 13. Financial Risk Management Activities for additional detail.

Schedule of Quantitative Information About Level 3 Fair Value Measurements

	Quantitative Information About Level 3 Fair Value Measurements
							Significant
	Level 3	Fair Value as of				Valuation	Unobservable		Arithmetic
Commodity	Position	September 30, 2021				Technique(s)	Input	Range	Average
		Assets		(Liabilities)
		Millions
PSEG Power
Electricity	Electric Load Deals	$	—	$	(9)	Discounted Cash Flow	Historic Load Variability	0% to 9%	4%
Gas	Other (A)	6		—
Total PSEG Power		$	6	$	(9)
Total PSEG		$	6	$	(9)

	Quantitative Information About Level 3 Fair Value Measurements
							Significant
	Level 3	Fair Value as of				Valuation	Unobservable		Arithmetic
Commodity	Position	December 31, 2020				Technique(s)	Input	Range	Average
		Assets		(Liabilities)
		Millions
PSEG Power
Electricity	Electric Load Contracts	$	12	$	—	Discounted Cash Flow	Load Shaping Cost	0% to 11%	4%
Gas	Gas Physical Contracts	—		(2)		Discounted Cash Flow	Historical Basis Adjustment	-60% to -30%	-43%
Electricity	Other (B)	—		(3)
Total PSEG Power		$	12	$	(5)
Total PSEG		$	12	$	(5)

(A)Other is comprised primarily of physical gas contracts and capacity swaps.

(B)Other is comprised primarily of heat rate call options and capacity swaps.

As of September 30, 2021, significant unobservable inputs listed above would have a direct impact on the fair values of the above Level 3 instruments if they were adjusted. For energy-related contracts in cases where PSEG Power is a seller, an increase in the load variability would decrease the fair value. For gas-related contracts in cases where PSEG Power is a buyer, an increase in the average historical basis would increase the fair value.

Changes In Level 3 Assets And (Liabilities) Measured At Fair Value On A Recurring Basis

A reconciliation of the beginning and ending balances of Level 3 derivative contracts and securities for the three months and nine months ended September 30, 2021 and September 30, 2020, respectively, follows:

Changes in Level 3 Assets and (Liabilities) Measured at Fair Value on a Recurring Basis

for the Three Months and Nine Months Ended September 30, 2021

	Three Months Ended September 30, 2021
Description	Balance as of June 30, 2021		Total Gains or (Losses) Realized/Unrealized Included in Income (A)		Purchases (Sales)		Issuances/ Settlements (B)		Transfers In/Out (C)		Balance as of September 30, 2021
	Millions
PSEG and PSEG Power
Net Derivative Assets (Liabilities)	$	(8)	$	—	$	—	$	5	$	—	$	(3)
	Nine Months Ended September 30, 2021
Description	Balance as of December 31, 2020		Total Gains or (Losses) Realized/Unrealized Included in Income (A)		Purchases (Sales)		Issuances/ Settlements (B)		Transfers In/Out (C)		Balance as of September 30, 2021
	Millions
PSEG and PSEG Power
Net Derivative Assets (Liabilities)	$	7	$	(13)	$	—	$	3	$	—	$	(3)

Changes in Level 3 Assets and (Liabilities) Measured at Fair Value on a Recurring Basis

for the Three Months and Nine Months Ended September 30, 2020

	Three Months Ended September 30, 2020
Description	Balance as of June 30, 2020		Total Gains or (Losses) Realized/Unrealized Included in Income (A)		Purchases (Sales)		Issuances/ Settlements (B)		Transfers In/Out (C)		Balance as of September 30, 2020
	Millions
PSEG and PSEG Power
Net Derivative Assets (Liabilities)	$	10	$	(2)	$	—	$	(8)	$	—	$	—
	Nine Months Ended September 30, 2020
Description	Balance as of December 31, 2019		Total Gains or (Losses) Realized/Unrealized Included in Income (A)		Purchases (Sales)		Issuances/ Settlements (B)		Transfers In/Out (C)		Balance as of September 30, 2020
	Millions
PSEG and PSEG Power
Net Derivative Assets (Liabilities)	$	7	$	7	$	—	$	(14)	$	—	$	—

(A)Unrealized gains (losses) in the following table represent the change in derivative assets and liabilities still held as of September 30, 2021 and 2020.

	Three Months Ended September 30,								Nine Months Ended September 30,
	2021				2020				2021				2020
	Total Gains (Losses)		Unrealized Gains (Losses)		Total Gains (Losses)		Unrealized Gains (Losses)		Total Gains (Losses)		Unrealized Gains (Losses)		Total Gains (Losses)		Unrealized Gains (Losses)
	Millions
PSEG and PSEG Power
Operating Revenues	$	(8)	$	(3)	$	(2)	$	(11)	$	(20)	$	(19)	$	12	$	(9)
Energy Costs	8		8		—		1		7		7		(5)		2
Total	$	—	$	5	$	(2)	$	(10)	$	(13)	$	(12)	$	7	$	(7)

(B)Includes settlements of $5 million and $3 million for the three months and nine months ended September 30, 2021, respectively, and $(8) million and $(14) million for the three months and nine months ended September 30, 2020, respectively.

(C)There were no transfers into or out of Level 3 during the three months and nine months ended September 30, 2021 and 2020.

Schedule of Fair Value of Debt

September 30, 2021 and December 31, 2020 are included in the following table and accompanying notes.

	As of				As of
	September 30, 2021				December 31, 2020
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	Millions
Long-Term Debt (A):
PSEG	$	2,932	$	3,019	$	2,929	$	3,092
PSE&G	11,793		13,410		10,909		13,372
PSEG Power (B)	1,350		1,625		2,342		2,679
Total Long-Term Debt	$	16,075	$	18,054	$	16,180	$	19,143

(A)Given that these bonds do not trade actively, the fair value amounts of taxable debt securities (primarily Level 2 measurements) are generally determined by a valuation model that is based on a conventional discounted cash flow methodology. The fair value amounts above do not represent the price at which the outstanding debt may be called for redemption by each issuer under their respective debt agreements.

(B)In October 2021, PSEG redeemed all of PSEG Power’s outstanding Senior Notes. See Note 12. Debt and Credit Facilities for additional information

Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

Unrealized gains (losses) in the following table represent the change in derivative assets and liabilities still held as of September 30, 2021 and 2020.

	Three Months Ended September 30,								Nine Months Ended September 30,
	2021				2020				2021				2020
	Total Gains (Losses)		Unrealized Gains (Losses)		Total Gains (Losses)		Unrealized Gains (Losses)		Total Gains (Losses)		Unrealized Gains (Losses)		Total Gains (Losses)		Unrealized Gains (Losses)
	Millions
PSEG and PSEG Power
Operating Revenues	$	(8)	$	(3)	$	(2)	$	(11)	$	(20)	$	(19)	$	12	$	(9)
Energy Costs	8		8		—		1		7		7		(5)		2
Total	$	—	$	5	$	(2)	$	(10)	$	(13)	$	(12)	$	7	$	(7)