XML 40 R18.htm IDEA: XBRL DOCUMENT v3.22.0.1
Long-Term Investments
 12 Months Ended
Dec. 31, 2021
Long-Term Investments [Line Items]  
Long-Term Investments [Text Block] Long-Term Investments
Long-Term Investments as of December 31, 2021 and 2020 included the following:
 As of December 31,
 20212020
 Millions
PSE&G
Life Insurance and Supplemental Benefits$89 $100 
Solar Loans92 122 
Other
Lease Investments187 250 
Equity Method Investments173 64 
Total Long-Term Investments$541 $536 
(A)During the three years ended December 31, 2021, 2020 and 2019, dividends from these investments were $17 million, $15 million and $15 million, respectively.
Leases
Energy Holdings, through its indirect subsidiaries, has investments in assets subject primarily to leveraged lease accounting. A leveraged lease is typically comprised of an investment by an equity investor and debt provided by a third-party debt investor. The debt is recourse only to the assets subject to lease and is not included on PSEG’s Consolidated Balance Sheets. As an equity investor, Energy Holdings’ equity investments in the leases are comprised of the total expected lease receivables over the lease terms plus the estimated residual values at the end of the lease terms, reduced for any income not yet earned on the leases. This amount is included in Long-Term Investments on PSEG’s Consolidated Balance Sheets. The more rapid depreciation of the leased property for tax purposes creates tax cash flow that will be repaid to the taxing authority in later periods. As such, the liability for such taxes due is recorded in Deferred Income Taxes on PSEG’s Consolidated Balance Sheets.
In September 2020, wholly owned subsidiaries of PSEG Energy Holdings L.L.C. (the Sellers) completed the sale of their ownership interests in the Powerton and Joliet generation facilities and related assets, including the assumption by the purchaser of related liabilities. The loss, net of taxes, resulting from the transaction was immaterial. In December 2020, the leveraged lease relating to our interest in the Shawville facilities was modified and extended. Accordingly, the Shawville leveraged lease was reclassified as an operating lease and the underlying assets were recorded in Property, Plant and Equipment.
In the second quarter of 2020, Energy Holdings completed its annual review of estimated residual values embedded in domestic energy leveraged leases and determined no impairments were necessary. During the second quarter of 2019, the outcome of Energy Holdings’ annual review indicated that the updated residual value estimate of the coal-fired Powerton lease was lower than the recorded residual value and the decline was deemed to be other than temporary as a result of expected future adverse market conditions. As a result, a pre-tax write-down of $58 million was reflected in Operating Revenues in 2019, calculated by comparing the gross investment in the leases before and after the revised residual estimates.
Leveraged leases outstanding as of December 31, 2021 commenced in or prior to 2000.The following table shows Energy Holdings’ gross and net lease investment as of December 31, 2021 and 2020.
 As of December 31,
 20212020
 Millions
Lease Receivables (net of Non-Recourse Debt)$274 $299 
Estimated Residual Value of Leased Assets— 55 
Total Investment in Rental Receivables274 354 
Unearned and Deferred Income(87)(104)
Gross Investments in Leases187 250 
Deferred Tax Liabilities(42)(64)
Net Investments in Leases$145 $186 
The pre-tax income (loss) and income tax effects related to investments in leases, excluding gains and losses on sales and the impacts of the Tax Act, were as follows:
 Years Ended December 31,
 202120202019
 Millions
Pre-Tax Income (Loss) from Leases$13 $18 $(39)
Income Tax Expense (Benefit) on Income (Loss) from Leases$3 $2 $(22)
Equity Method Investment
PSEG had a 25% equity interest in Ørsted’s Ocean Wind project of $111 million as of December 31, 2021. For additional information see Note 5. Variable Interest Entities.
PSEG also had a 50% ownership interest in Kalaeloa, a combined-cycle generation facility in Hawaii of $62 million and $64 million as of December 31, 2021 and 2020, respectively.
Public Service Electric and Gas Company  
Long-Term Investments [Line Items]  
Long-Term Investments [Text Block] Long-Term Investments
Long-Term Investments as of December 31, 2021 and 2020 included the following:
 As of December 31,
 20212020
 Millions
PSE&G
Life Insurance and Supplemental Benefits$89 $100 
Solar Loans92 122 
Other
Lease Investments187 250 
Equity Method Investments173 64 
Total Long-Term Investments$541 $536 
(A)During the three years ended December 31, 2021, 2020 and 2019, dividends from these investments were $17 million, $15 million and $15 million, respectively.
Leases
Energy Holdings, through its indirect subsidiaries, has investments in assets subject primarily to leveraged lease accounting. A leveraged lease is typically comprised of an investment by an equity investor and debt provided by a third-party debt investor. The debt is recourse only to the assets subject to lease and is not included on PSEG’s Consolidated Balance Sheets. As an equity investor, Energy Holdings’ equity investments in the leases are comprised of the total expected lease receivables over the lease terms plus the estimated residual values at the end of the lease terms, reduced for any income not yet earned on the leases. This amount is included in Long-Term Investments on PSEG’s Consolidated Balance Sheets. The more rapid depreciation of the leased property for tax purposes creates tax cash flow that will be repaid to the taxing authority in later periods. As such, the liability for such taxes due is recorded in Deferred Income Taxes on PSEG’s Consolidated Balance Sheets.
In September 2020, wholly owned subsidiaries of PSEG Energy Holdings L.L.C. (the Sellers) completed the sale of their ownership interests in the Powerton and Joliet generation facilities and related assets, including the assumption by the purchaser of related liabilities. The loss, net of taxes, resulting from the transaction was immaterial. In December 2020, the leveraged lease relating to our interest in the Shawville facilities was modified and extended. Accordingly, the Shawville leveraged lease was reclassified as an operating lease and the underlying assets were recorded in Property, Plant and Equipment.
In the second quarter of 2020, Energy Holdings completed its annual review of estimated residual values embedded in domestic energy leveraged leases and determined no impairments were necessary. During the second quarter of 2019, the outcome of Energy Holdings’ annual review indicated that the updated residual value estimate of the coal-fired Powerton lease was lower than the recorded residual value and the decline was deemed to be other than temporary as a result of expected future adverse market conditions. As a result, a pre-tax write-down of $58 million was reflected in Operating Revenues in 2019, calculated by comparing the gross investment in the leases before and after the revised residual estimates.
Leveraged leases outstanding as of December 31, 2021 commenced in or prior to 2000.The following table shows Energy Holdings’ gross and net lease investment as of December 31, 2021 and 2020.
 As of December 31,
 20212020
 Millions
Lease Receivables (net of Non-Recourse Debt)$274 $299 
Estimated Residual Value of Leased Assets— 55 
Total Investment in Rental Receivables274 354 
Unearned and Deferred Income(87)(104)
Gross Investments in Leases187 250 
Deferred Tax Liabilities(42)(64)
Net Investments in Leases$145 $186 
The pre-tax income (loss) and income tax effects related to investments in leases, excluding gains and losses on sales and the impacts of the Tax Act, were as follows:
 Years Ended December 31,
 202120202019
 Millions
Pre-Tax Income (Loss) from Leases$13 $18 $(39)
Income Tax Expense (Benefit) on Income (Loss) from Leases$3 $2 $(22)
Equity Method Investment
PSEG had a 25% equity interest in Ørsted’s Ocean Wind project of $111 million as of December 31, 2021. For additional information see Note 5. Variable Interest Entities.
PSEG also had a 50% ownership interest in Kalaeloa, a combined-cycle generation facility in Hawaii of $62 million and $64 million as of December 31, 2021 and 2020, respectively.