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Trust Investments

12 Months Ended

Dec. 31, 2021

Schedule of Trust Investments [Line Items]

Trust Investments

NDT Fund

In accordance with NRC regulations, entities owning an interest in nuclear generating facilities are required to determine the costs and funding methods necessary to decommission such facilities upon termination of operation. As a general practice, each nuclear owner places funds in independent external trust accounts it maintains to provide for decommissioning. PSEG Power is required to file periodic reports with the NRC demonstrating that its NDT Fund meets the formula-based minimum NRC funding requirements. PSEG Power maintains an external master NDT to fund its share of decommissioning costs for its five nuclear facilities upon their respective termination of operation. The trust contains two separate funds: a qualified fund and a non-qualified fund. Section 468A of the Internal Revenue Code limits the amount of money that can be contributed into a qualified fund. PSEG Power’s share of decommissioning costs related to its five nuclear units was estimated to be between $3.0 billion and $3.4 billion, including contingencies. The liability for decommissioning recorded on a discounted basis as of December 31, 2021 was approximately $1.2 billion and is included in the ARO. The funds are managed by third-party investment managers who operate under investment guidelines developed by PSEG Power.

The following tables show the fair values and gross unrealized gains and losses for the securities held in the NDT Fund.



	As of December 31, 2021
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	Millions
Equity Securities
Domestic	$	491	$	363	$	(3)	$	851
International	346		119		(15)		450
Total Equity Securities	837		482		(18)		1,301
Available-for-Sale Debt Securities
Government	683		12		(8)		687
Corporate	637		16		(6)		647
Total Available-for-Sale Debt Securities	1,320		28		(14)		1,334
Total NDT Fund Investments (A)	$	2,157	$	510	$	(32)	$	2,635

(A) The NDT Fund Investments table excludes foreign currency of $2 million as of December 31, 2021,

which is part of the NDT Fund.



	As of December 31, 2020
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	Millions
Equity Securities
Domestic	$	519	$	305	$	(3)	$	821
International	388		152		(9)		531
Total Equity Securities	907		457		(12)		1,352
Available-for-Sale Debt Securities
Government	555		27		(1)		581
Corporate	528		39		(1)		566
Total Available-for-Sale Debt Securities	1,083		66		(2)		1,147
Total NDT Fund Investments (A)	$	1,990	$	523	$	(14)	$	2,499

(A) The NDT Fund Investments table excludes foreign currency of $2 million as of December 31, 2020, which is part of the NDT Fund.

Net unrealized gains on debt securities of $8 million (after-tax) were included in Accumulated Other Comprehensive Loss on PSEG’s Consolidated Balance Sheet as of December 31, 2021. The portion of net unrealized gains recognized during 2021 related to equity securities still held at the end of December 31, 2021 was $130 million.

The amounts in the preceding tables do not include receivables and payables for NDT Fund transactions which have not settled at the end of each period. Such amounts are included in Accounts Receivable and Accounts Payable on the Consolidated Balance Sheets as shown in the following table.



	As of December 31,
	2021		2020
	Millions
Accounts Receivable	$	11	$	11
Accounts Payable	$	11	$	12

The following table shows the value of securities in the NDT Fund that have been in an unrealized loss position for less than and greater than 12 months.



	As of December 31, 2021								As of December 31, 2020
	Less Than 12 Months				Greater Than 12 Months				Less Than 12 Months				Greater Than 12 Months
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	Millions
Equity Securities (A)
Domestic	$	69	$	(3)	$	—	$	—	$	23	$	(2)	$	6	$	(1)
International	76		(13)		9		(2)		26		(2)		27		(7)
Total Equity Securities	145		(16)		9		(2)		49		(4)		33		(8)
Available-for-Sale Debt Securities
Government (B)	332		(5)		67		(3)		72		(1)		—		—
Corporate (C)	306		(4)		30		(2)		31		(1)		7		—
Total Available-for-Sale Debt Securities	638		(9)		97		(5)		103		(2)		7		—
NDT Trust Investments	$	783	$	(25)	$	106	$	(7)	$	152	$	(6)	$	40	$	(8)

(A)Equity Securities—Investments in marketable equity securities within the NDT Fund are primarily in common stocks within a broad range of industries and sectors. Unrealized gains and losses on these securities are recorded in Net Income.

(B)Debt Securities (Government)—Unrealized gains and losses on these securities are recorded in Accumulated Other Comprehensive Income (Loss). The unrealized losses on PSEG Power’s NDT investments in U.S. Treasury obligations and Federal Agency mortgage-backed securities were caused by interest rate changes. PSEG Power also has investments in municipal bonds. It is not expected that these securities will settle for less than their amortized cost. PSEG Power does not intend to sell these securities nor will it be more-likely-than-not required to sell before recovery of their amortized cost. PSEG Power did not recognize credit losses for U.S. Treasury obligations and Federal Agency mortgage-backed securities because these investments are guaranteed by the U.S. government or an agency of the U.S. government. PSEG Power did not recognize credit losses for municipal bonds because they are primarily investment grade securities.

(C)Debt Securities (Corporate)—Unrealized gains and losses on these securities are recorded in Accumulated Other Comprehensive Income (Loss). Unrealized losses were due to market declines. It is not expected that these securities would settle for less than their amortized cost. PSEG Power does not intend to sell these securities nor will it be more-likely-than-not required to sell before recovery of their amortized cost. PSEG Power did not recognize credit losses for these corporate bonds because they are primarily investment grade securities.

The proceeds from the sales of and the net gains on securities in the NDT Fund were:



	Years Ended December 31,
	2021		2020		2019
	Millions
Proceeds from Sales (A)	$	1,930	$	2,031	$	1,614
Net Realized Gains (Losses):
Gross Realized Gains	$	236	$	214	$	107
Gross Realized Losses	(70)		(94)		(53)
Net Realized Gains (Losses) on NDT Fund (B)	166		120		54
Net Unrealized Gains (Losses) on Equity Securities	19		120		196
Impairment of Available-for-Sale Debt Securities (C)	—		(3)		—
Net Gains (Losses) on NDT Fund Investments	$	185	$	237	$	250

(A)Includes activity in accounts related to the liquidation of funds being transitioned within the trust.

(B)The cost of these securities was determined on the basis of specific identification.

(C)PSEG Power recognized an impairment of available-for-sale debt securities in 2020. PSEG Power’s policy is to sell all securities that are rated below investment grade.

The NDT Fund debt securities held as of December 31, 2021 had the following maturities:



Time Frame	Fair Value
	Millions
Less than one year	$	24
1 - 5 years	335
6 - 10 years	234
11 - 15 years	84
16 - 20 years	113
Over 20 years	544
Total NDT Available-for-Sale Debt Securities	$	1,334

PSEG Power periodically assesses individual debt securities whose fair value is less than amortized cost to determine whether the investments are impaired. For these securities, management considers its intent to sell or requirement to sell a security prior to expected recovery. In those cases where a sale is expected, any impairment would be recorded through earnings. For fixed income securities where there is no intent to sell or likely requirement to sell, management evaluates whether credit loss is a component of the impairment. If so, that portion is recorded through earnings while the noncredit loss component is recorded through Accumulated Other Comprehensive Income (Loss). Any subsequent recoveries of the noncredit loss component of the impairment would be recorded through Accumulated Other Comprehensive Income (Loss). Any subsequent recoveries of the credit loss component would be recognized through earnings. The assessment of fair market value compared to cost is applied on a weighted average basis taking into account various purchase dates and initial cost of the securities.

Rabbi Trust

PSEG maintains certain unfunded nonqualified benefit plans to provide supplemental retirement and deferred compensation benefits to certain key employees. Certain assets related to these plans have been set aside in a grantor trust commonly known as a “Rabbi Trust.”

The following tables show the fair values, gross unrealized gains and losses and amortized cost basis for the securities held in the Rabbi Trust.



	As of December 31, 2021
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	Millions
Domestic Equity Securities	$	14	$	12	$	—	$	26
Available-for-Sale Debt Securities
Government	107		1		(1)		107
Corporate	105		5		(1)		109
Total Available-for-Sale Debt Securities	212		6		(2)		216
Total Rabbi Trust Investments	$	226	$	18	$	(2)	$	242



	As of December 31, 2020
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	Millions
Domestic Equity Securities	$	21	$	10	$	—	$	31
Available-for-Sale Debt Securities
Government	94		6		—		100
Corporate	123		12		—		135
Total Available-for-Sale Debt Securities	217		18		—		235
Total Rabbi Trust Investments	$	238	$	28	$	—	$	266

Net unrealized gains (losses) on debt securities of $3 million (after-tax) were included in Accumulated Other Comprehensive Loss on PSEG’s Consolidated Balance Sheet as of December 31, 2021. The portion of net unrealized gains recognized during 2021 related to equity securities still held at the end of December 31, 2021 was $1 million.

The amounts in the preceding tables do not include receivables and payables for Rabbi Trust Fund transactions which have not settled at the end of each period. Such amounts are included in Accounts Receivable and Accounts Payable on the Consolidated Balance Sheets as shown in the following table.



	As of December 31,
	2021		2020
	Millions
Accounts Receivable	$	1	$	1
Accounts Payable	$	—	$	1

The following table shows the value of securities in the Rabbi Trust Fund that have been in an unrealized loss position for less than and greater than 12 months:



	As of December 31, 2021								As of December 31, 2020
	Less Than 12 Months				Greater Than 12 Months				Less Than 12 Months				Greater Than 12 Months
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	Millions




Available-for-Sale Debt Securities
Government (A)	$	57	$	—	$	16	$	(1)	$	19	$	—	$	—	$	—
Corporate (B)	40		(1)		5		—		2		—		1		—
Total Available-for-Sale Debt Securities	97		(1)		21		(1)		21		—		1		—
Rabbi Trust Investments	$	97	$	(1)	$	21	$	(1)	$	21	$	—	$	1	$	—

(A)Debt Securities (Government)—Unrealized gains and losses on these securities are recorded in Accumulated Other Comprehensive Income (Loss). The unrealized losses on PSEG’s Rabbi Trust investments in U.S. Treasury obligations and Federal Agency mortgage-backed securities were caused by interest rate changes. PSEG also has investments in municipal bonds. It is not expected that these securities will settle for less than their amortized cost. PSEG does not intend to sell these securities nor will it be more-likely-than-not required to sell before recovery of their amortized cost. PSEG did not recognize credit losses for U.S. Treasury obligations and Federal Agency mortgage-backed securities because these investments are guaranteed by the U.S. government or an agency of the U.S. government. PSEG did not recognize credit losses for municipal bonds because they are primarily investment grade securities.

(B)Debt Securities (Corporate)—Unrealized gains and losses on these securities are recorded in Accumulated Other Comprehensive Income (Loss). Unrealized losses were due to market declines. It is not expected that these securities would settle for less than their amortized cost. PSEG does not intend to sell these securities nor will it be more-likely-than-not required to sell before recovery of their amortized cost. PSEG did not recognize credit losses for these corporate bonds because they are primarily investment grade.

The proceeds from the sales of and the net gains on securities in the Rabbi Trust Fund were:



	Years Ended December 31,
	2021		2020		2019
	Millions
Proceeds from Rabbi Trust Sales	$	170	$	203	$	173
Net Realized Gains (Losses):
Gross Realized Gains	$	16	$	19	$	7
Gross Realized Losses	(8)		(6)		(3)
Net Realized Gains (Losses) on Rabbi Trust (A)	8		13		4
Net Unrealized Gains (Losses) on Equity Securities	1		3		6
Net Gains (Losses) on Rabbi Trust Investments	$	9	$	16	$	10

(A)The cost of these securities was determined on the basis of specific identification.

The Rabbi Trust debt securities held as of December 31, 2021 had the following maturities:



Time Frame	Fair Value
	Millions
Less than one year	$	—
1 - 5 years	40
6 - 10 years	24
11 - 15 years	10
16 - 20 years	25
Over 20 years	117
Total Rabbi Trust Available-for-Sale Debt Securities	$	216

PSEG periodically assesses individual debt securities whose fair value is less than amortized cost to determine whether the investments are considered to be impaired. For these securities, management considers its intent to sell or requirement to sell a security prior to expected recovery. In those cases where a sale is expected, any impairment would be recorded through earnings. For fixed income securities where there is no intent to sell or likely requirement to sell, management evaluates whether credit loss is a component of the impairment. If so, that portion is recorded through earnings while the noncredit loss component is recorded through Accumulated Other Comprehensive Income (Loss). Any subsequent recoveries of the noncredit loss component of the impairment would be recorded through Accumulated Other Comprehensive Income (Loss). Any subsequent recoveries of the credit loss component would be recognized through earnings. The assessment of fair market value compared to cost is applied on a weighted average basis taking into account various purchase dates and initial cost of the securities.

The fair value of the Rabbi Trust related to PSEG and PSE&G are detailed as follows:



	As of December 31,		As of December 31,
	2021		2020
	Millions
PSE&G	$	43	$	51
Other	199		215
Total Rabbi Trust Investments	$	242	$	266

Public Service Electric and Gas Company