Pension, OPEB and Savings Plans

12 Months Ended

Dec. 31, 2022

Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]

Pension, OPEB and Savings Plans

Pension, Other Postretirement Benefits (OPEB) and Savings Plans

PSEG sponsors and Services administers qualified and nonqualified pension plans and OPEB plans covering PSEG’s and its participating affiliates’ current and former employees who meet certain eligibility criteria. PSEG’s qualified pension plans consist of two qualified defined benefit pension plans, Pension Plan and Pension Plan II. Each of the qualified pension plans include a Final Average Pay and two Cash Balance components. In addition, represented and non-represented employees are eligible for participation in PSEG’s two defined contribution plans.

PSEG and PSE&G are required to record the under or over funded positions of their defined benefit pension and OPEB plans on their respective balance sheets. Such funding positions are required to be measured as of the date of their respective year-end Consolidated Balance Sheets. For underfunded plans, the liability is equal to the difference between the plan’s benefit obligation and the fair value of plan assets. For defined benefit pension plans, the benefit obligation is the projected benefit obligation. For OPEB plans, the benefit obligation is the accumulated postretirement benefit obligation. In addition, GAAP requires that the total unrecognized costs for defined benefit pension and OPEB plans be recorded as an after-tax charge to Accumulated Other Comprehensive Income (Loss), a separate component of Stockholders’ Equity. However, for PSE&G, because the amortization of the unrecognized costs is being collected from customers, the accumulated unrecognized costs are recorded as a Regulatory Asset. The unrecognized costs represent actuarial gains or losses and prior service costs which have not been expensed. The charge to Accumulated Other Comprehensive Income (Loss) and the Regulatory Asset for PSE&G are amortized and recorded as net periodic pension cost in the Consolidated Statements of Operations.

Amounts for Servco are not included in any of the following pension and OPEB benefit information for PSEG and its affiliates but rather are separately disclosed later in this note.

The following table provides a roll-forward of the changes in the benefit obligation and the fair value of plan assets during each of the two years in the periods ended December 31, 2022 and 2021. It also provides the funded status of the plans and the amounts recognized and amounts not recognized on the Consolidated Balance Sheets at the end of both years.

	Pension Benefits				Other Benefits
	2022		2021		2022		2021
	Millions
Change in Benefit Obligation
Benefit Obligation at Beginning of Year (A)	$	7,240	$	7,507	$	1,197	$	1,306
Service Cost	142		151		6		9
Interest Cost	167		140		26		22
Actuarial (Gain) Loss (B)	(1,517)		(199)		(314)		(90)
Gross Benefits Paid	(382)		(359)		(61)		(50)
Other	(22)		—		(3)		—
Benefit Obligation at End of Year (A)	$	5,628	$	7,240	$	851	$	1,197
Change in Plan Assets
Fair Value of Assets at Beginning of Year	$	6,906	$	6,368	$	606	$	564
Actual Return on Plan Assets	(1,606)		886		(139)		79
Employer Contributions	11		11		23		13
Gross Benefits Paid	(382)		(359)		(61)		(50)
Other	(18)		—		—		—
Fair Value of Assets at End of Year	$	4,911	$	6,906	$	429	$	606
Funded Status
Funded Status (Plan Assets less Benefit Obligation)	$	(717)	$	(334)	$	(422)	$	(591)
Additional Amounts Recognized in the Consolidated Balance Sheets
Current Accrued Benefit Cost (C)	$	(12)	$	(16)	$	(12)	$	(19)
Noncurrent Accrued Benefit Cost	(705)		(318)		(410)		(572)
Amounts Recognized	$	(717)	$	(334)	$	(422)	$	(591)
Additional Amounts Recognized in Accumulated Other Comprehensive Income (Loss), Regulated Assets and Deferred Assets (D)
Prior Service Credit	$	—	$	—	$	(52)	$	(181)
Net Actuarial Loss	2,151		1,643		41		193
Total	$	2,151	$	1,643	$	(11)	$	12

(A)Represents projected benefit obligation for pension benefits and the accumulated postretirement benefit obligation for other benefits. The vested benefit obligation is the actuarial present value of the vested benefits to which the employee is currently entitled but based on the employee’s expected date of separation or retirement.

(B)For pension benefits, the net actuarial gains in 2022 and 2021 were due primarily to an increase in the discount rate. For OPEB, the net actuarial gain in 2022 was due primarily to an increase in the discount rate and other assumption updates. For OPEB, the net actuarial gain in 2021 was due primarily to an increase in the discount rate coupled with lower than expected claims experience.

(C)Includes ($5) million and ($7) million for pension benefits and other benefits, respectively, as of December 31, 2021 classified as Held for Sale. For additional information, see Note 4. Early Plant Retirements/Asset Dispositions and Impairments.

(D)Includes $594 million ($426 million, after-tax) and $495 million ($355 million, after-tax) in Accumulated Other Comprehensive Loss related to Pension and OPEB as of December 31, 2022 and 2021, respectively. Also includes Regulatory Assets of $1,405 million and Deferred Assets of $141 million as of December 31, 2022 and Regulatory Assets of $1,043 million and Deferred Assets of $117 million as of December 31, 2021.

The pension benefits table above provides information relating to the funded status of the qualified and nonqualified pension and OPEB plans on an aggregate basis. As of December 31, 2022, PSEG had funded approximately 87% of its projected pension benefit obligation. This percentage does not include $183 million of assets in the Rabbi Trust as of December 31, 2022, which provide funding for the nonqualified pension plans and certain deferred compensation. The nonqualified pension plans included in the projected benefit obligation in the above table were $137 million.

Accumulated Benefit Obligation

The accumulated benefit obligation for all PSEG’s defined benefit pension plans was $5.5 billion as of December 31, 2022 and $7.1 billion as of December 31, 2021.

The following table provides the components of net periodic benefit relating to all qualified and nonqualified pension and OPEB plans on an aggregate basis for PSEG, excluding Servco for the years ended December 31, 2022, 2021 and 2020. Amounts shown do not reflect the impacts of capitalization and co-owner allocations. Only the service cost component is eligible for capitalization, when applicable.

	Pension Benefits Years Ended December 31,						Other Benefits Years Ended December 31,
	2022		2021		2020		2022		2021		2020
	Millions
Components of Net Periodic Benefit (Credits) Costs
Service Cost (included in O&M Expense)	$	142	$	151	$	141	$	6	$	9	$	9
Non-Service Components of Pension and OPEB (Credits) Costs
Interest Cost	167		140		192		26		22		34
Expected Return on Plan Assets	(484)		(476)		(443)		(42)		(42)		(39)
Amortization of Net
Prior Service Credit	—		—		(10)		(129)		(129)		(128)
Actuarial Loss	60		103		92		15		44		47
Non-Service Components of Pension and OPEB (Credits) Costs	(257)		(233)		(169)		(130)		(105)		(86)
Total Benefit (Credits) Costs	$	(115)	$	(82)	$	(28)	$	(124)	$	(96)	$	(77)

Pension costs and OPEB costs for PSEG and PSE&G are detailed as follows:

	Pension Benefits Years Ended December 31,						Other Benefits Years Ended December 31,
	2022		2021		2020		2022		2021		2020
	Millions
PSE&G	$	(70)	$	(64)	$	(27)	$	(109)	$	(92)	$	(76)
PSEG Power & Other	(45)		(18)		(1)		(15)		(4)		(1)
Total Benefit (Credits) Costs	$	(115)	$	(82)	$	(28)	$	(124)	$	(96)	$	(77)

The following table provides the pre-tax changes recognized in Accumulated Other Comprehensive Income (Loss), Regulatory Assets and Deferred Assets:

	Pension				Other Benefits
	2022		2021		2022		2021
	Millions
Net Actuarial (Gain) Loss in Current Period	$	568	$	(608)	$	(138)	$	(127)
Amortization of Net Actuarial Gain (Loss)	(60)		(103)		(14)		(44)
Prior Service Cost (Credit) in Current Period	—		—		—		—
Amortization of Prior Service Credit	—		—		129		129
Total	$	508	$	(711)	$	(23)	$	(42)

The following assumptions were used to determine the benefit obligations and net periodic benefit costs:

	Pension Benefits						Other Benefits
	2022		2021		2020		2022		2021		2020
Weighted-Average Assumptions Used to Determine Benefit Obligations as of December 31
Discount Rate	5.20	%	2.94	%	2.61	%	5.16	%	2.82	%	2.46	%
Rate of Compensation Increase	4.40	%	4.40	%	4.40	%	4.40	%	4.40	%	4.40	%
Cash Balance Interest Crediting Rate	6.00	%	6.00	%	6.00	%	N/A		N/A		N/A
Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost for Years Ended December 31
Discount Rate	2.94	%	2.61	%	3.30	%	2.82	%	2.46	%	3.20	%
Service Cost Interest Rate	3.19	%	2.94	%	3.49	%	3.06	%	2.76	%	3.50	%
Interest Cost Interest Rate	2.37	%	1.91	%	2.87	%	2.21	%	1.70	%	2.87	%
Expected Return on Plan Assets	7.20	%	7.70	%	7.70	%	7.20	%	7.69	%	7.70	%
Rate of Compensation Increase	4.40	%	4.40	%	3.90	%	4.40	%	4.40	%	3.90	%
Cash Balance Interest Crediting Rate	6.00	%	6.00	%	6.00	%	N/A		N/A		N/A
Assumed Health Care Cost Trend Rates as of December 31
Health Care Costs
Immediate Rate							6.98	%	6.14	%	6.37	%
Ultimate Rate							4.75	%	4.75	%	4.75	%
Year Ultimate Rate Reached							2032		2029		2029

Plan Assets

The investments of pension and OPEB plans are held in a trust account by the Trustee and consist of an undivided interest in an investment account of the Master Trust. The investments in the pension and OPEB plans are measured at fair value within a hierarchy that prioritizes the inputs to fair value measurements into three levels. See Note 19. Fair Value Measurements for more information on fair value guidance. Use of the Master Trust permits the commingling of pension plan assets and OPEB plan assets for investment and administrative purposes. Although assets of the plans are commingled in the Master Trust, the Trustee maintains supporting records for the purpose of allocating the net gain or loss of the investment account to the respective participating plans. The net investment income of the investment assets is allocated by the Trustee to each participating plan based on the relationship of the interest of each plan to the total of the interests of the participating plans. As of December 31, 2022, the pension plan interest and OPEB plan interest in such assets of the Master Trust were approximately 92% and 8%, respectively.

The following tables present information about the investments measured at fair value on a recurring basis as of December 31, 2022 and 2021, including the fair value measurements and the levels of inputs used in determining those fair values.

	Recurring Fair Value Measurements as of December 31, 2022
			Quoted Market Prices for Identical Assets		Significant Other Observable Inputs
Description	Total		(Level 1)		(Level 2)
	Millions
Cash Equivalents (A)	$	36	$	36	$	—
Equity Securities
Common Stock (B)	1,231		1,231		—
Commingled (C)	1,346		—		1,346
Debt Securities (D)
U.S. Treasury	1,351		—		1,351
Commingled	4		4		—
Subtotal Fair Value	$	3,968	$	1,271	$	2,697
Measured at net asset value practical expedient
Commingled—Equities (E)	965
Real Estate Investment (F)	395
Private Equity (G)	3
Total Fair Value (H)	$	5,331

	Recurring Fair Value Measurements as of December 31, 2021
			Quoted Market Prices for Identical Assets		Significant Other Observable Inputs
Description	Total		(Level 1)		(Level 2)
	Millions
Cash Equivalents (A)	$	45	$	45	$	—
Equity Securities
Common Stock (B)	1,959		1,959		—
Commingled (C)	1,948		1,085		863
Preferred Stock (B)	2		2		—
Other (I)	2		2		—
Debt Securities (D)
U.S. Treasury	1,761		—		1,761
Commingled	4		4		—
Subtotal Fair Value	$	5,721	$	3,097	$	2,624
Measured at net asset value practical expedient
Commingled—Equities (E)	1,403
Real Estate Investment (F)	372
Private Equity (G)	3
Total Fair Value (H)	$	7,499

(A)The Collective Investment Fund publishes a daily net asset value (NAV) which participants may use for daily redemptions without restrictions (Level 1).

(B)Common stocks and preferred stocks are measured using observable data in active markets and considered Level 1.

(C)Commingled Funds that allow daily redemption at their daily published NAV without restrictions are classified as Level 1. Commingled Funds that publish daily NAV but with certain near-term redemption restrictions which prevent redemption at the published daily NAV are classified as Level 2.

(D)Debt securities include mainly U.S. Treasury obligations. These investments are valued using an evaluated pricing approach 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 or the most recent quotes for similar securities which are a Level 2 measure.

(E)Certain commingled equity funds are not included in the fair value hierarchy as they are measured at fair value using the NAV per share (or its equivalent) practical expedient. These funds do not meet the definition of readily determinable fair value due to the frequency of publishing NAV (monthly). The objectives of these funds are mainly tracking the S&P Index or achieving long-term growth through investment in foreign equity securities and the Morgan Stanley Capital International Index.

(F)The unlisted real estate fund invests in office, apartment, industrial and retail space. The fund is valued using the NAV per unit of funds. The investment value of the real estate properties is determined on a quarterly basis by independent market appraisers engaged by the board of directors of the fund. The ability to redeem funds is subject to the availability of cash arising from net investment income, allocations and the sale of investments in the normal course of business. The fund’s NAV is published quarterly. In addition, redemptions require one quarter advance notice prior to redemption and are fulfilled quarterly. The fund, therefore, does not meet the definition of readily determinable fair value. The purpose of the fund is to acquire, own, hold for investment and ultimately dispose of investments in real estate and real estate-related assets with the intention of achieving current income, capital appreciation or both.

(G)Private equity investments primarily include various limited partnerships that invest in either operating companies through acquisitions or developing a portfolio of non-U.S. distressed investments to maximize total return on capital. These investments are valued at NAV (or its equivalent) on a quarterly basis and have significant redemption restrictions preventing redemption until fund liquidation and limited ability to sell these investments. Fund liquidation is not expected to occur for several more years. These investments are not included in the fair value hierarchy in accordance with the guidance on NAV practical expedient.

(H)Excludes net receivables of $7 million and $11 million as of December 31, 2022 and 2021, respectively, which consist of interest, dividends and receivables and payables related to pending securities sales and purchases. In addition, the table excludes cash and foreign currency of $2 million as of each of December 31, 2022 and 2021.

(I)Investment in a publicly traded limited partnership.

The following table provides the percentage of fair value of total plan assets for each major category of plan assets held for the qualified pension and OPEB plans as of the measurement date, December 31:

	As of December 31,
Investments	2022		2021
Equity Securities	67	%	71	%
Debt Securities	25		23
Other Investments	8		6
Total Percentage	100	%	100	%

PSEG utilizes forecasted returns, risk, and correlation of all asset classes in order to develop an efficient portfolio. PSEG’s long-term target asset allocation of 54% equities, 18% real assets and 28% fixed income is consistent with the funds’ financial objectives. Certain investments in real assets (12% as of December 31, 2022) are made through investing in equity securities and tracked as equities when reporting fair value; however, they are viewed by their asset class, real assets, in our target asset allocation. Derivative financial instruments are used by the plans’ investment managers primarily to adjust the fixed income duration of the portfolio and hedge the currency risk component of foreign investments. The expected long-term rate of return on plan assets was 7.2% for 2022 and will be 8.1% for 2023. This expected return includes a premium for active management.

Plan Contributions

PSEG does not plan to contribute to its pension and OPEB plans in 2023. Internal Revenue Service (IRS) minimum funding requirements for pension plans are determined based on the fund’s assets and liabilities at the end of a calendar year for the subsequent calendar year.

Estimated Future Benefit Payments

The following pension benefit and postretirement benefit payments are expected to be paid to plan participants.

Year	Pension Benefits		Other Benefits
	Millions
2023	$	424	$	77
2024	400		75
2025	405		74
2026	411		72
2027	418		70
2028-2032	2,124		309
Total	$	4,182	$	677

401(k) Plans

PSEG sponsors two 401(k) plans, which are defined contribution retirement plans subject to the Employee Retirement Income Security Act (ERISA). Eligible represented employees of PSEG’s subsidiaries participate in the PSEG Employee Savings Plan (Savings Plan), while eligible non-represented employees of PSEG’s subsidiaries participate in the PSEG Thrift and Tax-Deferred Savings Plan (Thrift Plan). Eligible employees may contribute up to 50% of their annual eligible compensation to these plans, not to exceed the IRS maximums, including any catch-up contributions for those employees age 50 and above. PSEG matches 50% of such employee contributions up to 7% of pay for Savings Plan participants and up to 8% of pay for Thrift Plan participants. The amounts paid for employer matching contributions to the plans for PSEG and PSE&G are detailed as follows:

	Thrift Plan and Savings Plan
	Years Ended December 31,
	2022		2021		2020
	Millions
PSE&G	$	28	$	28	$	27
PSEG Power & Other	14		16		16
Total Employer Matching Contributions	$	42	$	44	$	43

Servco Pension and OPEB

Servco sponsors a qualified pension plan and OPEB plan covering its employees who meet certain eligibility criteria. Under the OSA, employee benefit costs for these plans are funded by LIPA. See Note 5. Variable Interest Entities. These obligations, as well as the offsetting long-term receivable, are separately presented on the Consolidated Balance Sheet of PSEG.

The following table provides a roll-forward of the changes in Servco’s benefit obligation and the fair value of its plan assets during the years ended December 31, 2022 and 2021. It also provides the funded status of the plans and the amounts recognized and amounts not recognized on the Consolidated Balance Sheets at the end of both years.

	Pension Benefits				Other Benefits
	2022		2021		2022		2021
	Millions
Change in Benefit Obligation
Benefit Obligation at Beginning of Year (A)	$	596	$	569	$	640	$	699
Service Cost	38		38		21		23
Interest Cost	17		14		19		18
Actuarial (Gain) Loss (B)	(189)		(18)		(215)		(89)
Gross Benefits Paid	(10)		(7)		(10)		(11)
Benefit Obligation at End of Year (A)	$	452	$	596	$	455	$	640
Change in Plan Assets
Fair Value of Assets at Beginning of Year	$	422	$	343	$	—	$	—
Actual Return on Plan Assets	(72)		49		—		—
Employer Contributions	30		37		10		11
Gross Benefits Paid	(10)		(7)		(10)		(11)
Fair Value of Assets at End of Year	$	370	$	422	$	—	$	—
Funded Status
Funded Status (Plan Assets less Benefit Obligation)	$	(82)	$	(174)	$	(455)	$	(640)
Additional Amounts Recognized in the Consolidated Balance Sheets
Accrued Pension Costs of Servco	$	(82)	$	(174)	N/A		N/A
OPEB Costs of Servco	N/A		N/A		(455)		(640)
Amounts Recognized (C)	$	(82)	$	(174)	$	(455)	$	(640)

(A)Represents projected benefit obligation for pension benefits and the accumulated postretirement benefit obligation for other benefits. The vested benefit obligation is the actuarial present value of the vested benefits to which the employee is currently entitled but based on the employee’s expected date of separation or retirement.

(B)For pension benefits and OPEB, the net actuarial gains in 2022 were due primarily to an increase in the discount rate. For pension benefits, the net actuarial gain in 2021 was due primarily to an increase in the discount rate. For OPEB, the net actuarial gain in 2021 was due primarily to updated assumptions.

(C)Amounts equal to the accrued pension and OPEB costs of Servco are offset in Long-Term Receivable of VIE on PSEG’s Consolidated Balance Sheets.

Pension and OPEB costs of Servco are accounted for according to the OSA. Servco recognizes expenses for contributions to its pension plan trusts and for OPEB payments made to retirees. Operating Revenues are recognized for the reimbursement of these costs. The pension-related revenues and costs for 2022, 2021 and 2020 were $30 million, $37 million and $30 million, respectively. Servco has contributed its entire planned contribution amount to its pension plan trusts during 2022. The OPEB-related revenues earned and costs incurred were $10 million, $11 million and $9 million in 2022, 2021 and 2020, respectively. The following assumptions were used to determine the benefit obligations of Servco:

	Pension Benefits						Other Benefits
	2022		2021		2020		2022		2021		2020
Weighted-Average Assumptions Used to Determine Benefit Obligations as of December 31
Discount Rate	5.30	%	3.21	%	2.98	%	5.34	%	3.28	%	3.08	%
Rate of Compensation Increase	3.95	%	3.95	%	3.95	%	3.95	%	3.95	%	3.95	%
Cash Balance Interest Crediting Rate	4.30	%	3.75	%	3.75	%	N/A		N/A		N/A
Assumed Health Care Cost Trend Rates as of December 31
Health Care Costs
Immediate Rate							6.71	%	6.48	%	6.70	%
Ultimate Rate							4.75	%	4.75	%	4.75	%
Year Ultimate Rate Reached							2032		2029		2029

Plan Assets

All the investments of Servco’s pension plans are held in a trust account by the Trustee and consist of an undivided interest in an investment account of the Servco Master Trust. The investments in the pension are measured at fair value within a hierarchy that prioritizes the inputs to fair value measurements into three levels. See Note 19. Fair Value Measurements for more information on fair value guidance.

The following tables present information about Servco’s investments measured at fair value on a recurring basis as of December 31, 2022 and 2021, including the fair value measurements and the levels of inputs used in determining those fair values.

	Recurring Fair Value Measurements as of December 31, 2022
			Quoted Market Prices for Identical Assets		Significant Other Observable Inputs
Description	Total		(Level 1)		(Level 2)
	Millions
Cash Equivalents	$	1	$	1	$	—
Equity Securities
Common Stock (A)	25		25		—
Commingled (B)	251		—		251
Commingled Bonds (B)	93		—		93
Total	$	370	$	26	$	344

	Recurring Fair Value Measurements as of December 31, 2021
			Quoted Market Prices for Identical Assets		Significant Other Observable  Inputs
Description	Total		(Level 1)		(Level 2)
	Millions
Cash Equivalents	$	1	$	1	$	—
Equity Securities
Common Stock (A)	34		34		—
Commingled (B)	285		—		285
Commingled Bonds (B)	102		—		102
Total	$	422	$	35	$	387

(A)Common stocks are measured using observable data in active markets and considered Level 1.

(B)Investments in commingled equity and bond funds have a readily determinable fair value as they publish a daily NAV available to investors which is the basis for current transactions and contain certain redemption restrictions requiring advance notice of one to two days for withdrawals (Level 2).

The following table provides the percentage of fair value of total plan assets for each major category of plan assets held for the qualified pension and OPEB plans of Servco as of the measurement date, December 31:

	As of December 31,
Investments	2022		2021
Equity Securities	75	%	76	%
Debt Securities	25		24
Total Percentage	100	%	100	%

Servco utilizes forecasted returns, risk, and correlation of all asset classes in order to develop an efficient portfolio. Servco’s long-term target asset allocation of 60% equities, 15% real assets and 25% fixed income is consistent with the funds’ financial objectives. Certain investments in real assets (15% at December 31, 2022) are made through investing in equity securities and tracked as equities when reporting fair value; however, they are viewed by their asset class, real assets, in our target asset

allocation. The expected long-term rate of return on plan assets was 7.60% for 2022 and will be 8.0% for 2023. This expected return includes a premium for active management.

Plan Contributions

Servco plans to contribute $18 million into its pension plan during 2023.

Estimated Future Benefit Payments

The following pension benefit and postretirement benefit payments are expected to be paid to Servco’s plan participants:

Year	Pension Benefits		Other Benefits
	Millions
2023	$	12	$	10
2024	14		12
2025	17		14
2026	19		15
2027	22		17
2028-2032	149		112
Total	$	233	$	180

Servco 401(k) Plans

Servco sponsors two 401(k) plans, which are defined contribution retirement plans subject to ERISA. Eligible non-represented employees of Servco participate in the Long Island Electric Utility Servco LLC Incentive Thrift Plan I (Thrift Plan I), and eligible represented employees of Servco participate in the Long Island Electric Utility Servco LLC Incentive Thrift Plan II (Thrift Plan II). Participants in the plans may contribute up to 50% of their eligible compensation to these plans, not to exceed the IRS maximums, including any catch-up contributions for those employees age 50 and above. Servco does not provide an employer match or core contribution for employees in Thrift Plan II. For employees in Thrift Plan I, Servco matches 50% of such employee contributions up to 8% of eligible compensation and provides core contributions (based on years of service and age) to employees who do not participate in Servco’s Retirement Income Plan. The amount expensed by Servco for employer matching contributions was $9 million for each of the years ended December 31, 2022, 2021 and 2020. Pursuant to the OSA, Servco recognizes Operating Revenues for the reimbursement of these costs.

Public Service Electric and Gas Company

Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]

Pension, OPEB and Savings Plans

Pension, Other Postretirement Benefits (OPEB) and Savings Plans

PSEG sponsors and Services administers qualified and nonqualified pension plans and OPEB plans covering PSEG’s and its participating affiliates’ current and former employees who meet certain eligibility criteria. PSEG’s qualified pension plans consist of two qualified defined benefit pension plans, Pension Plan and Pension Plan II. Each of the qualified pension plans include a Final Average Pay and two Cash Balance components. In addition, represented and non-represented employees are eligible for participation in PSEG’s two defined contribution plans.

PSEG and PSE&G are required to record the under or over funded positions of their defined benefit pension and OPEB plans on their respective balance sheets. Such funding positions are required to be measured as of the date of their respective year-end Consolidated Balance Sheets. For underfunded plans, the liability is equal to the difference between the plan’s benefit obligation and the fair value of plan assets. For defined benefit pension plans, the benefit obligation is the projected benefit obligation. For OPEB plans, the benefit obligation is the accumulated postretirement benefit obligation. In addition, GAAP requires that the total unrecognized costs for defined benefit pension and OPEB plans be recorded as an after-tax charge to Accumulated Other Comprehensive Income (Loss), a separate component of Stockholders’ Equity. However, for PSE&G, because the amortization of the unrecognized costs is being collected from customers, the accumulated unrecognized costs are recorded as a Regulatory Asset. The unrecognized costs represent actuarial gains or losses and prior service costs which have not been expensed. The charge to Accumulated Other Comprehensive Income (Loss) and the Regulatory Asset for PSE&G are amortized and recorded as net periodic pension cost in the Consolidated Statements of Operations.

Amounts for Servco are not included in any of the following pension and OPEB benefit information for PSEG and its affiliates but rather are separately disclosed later in this note.

The following table provides a roll-forward of the changes in the benefit obligation and the fair value of plan assets during each of the two years in the periods ended December 31, 2022 and 2021. It also provides the funded status of the plans and the amounts recognized and amounts not recognized on the Consolidated Balance Sheets at the end of both years.

	Pension Benefits				Other Benefits
	2022		2021		2022		2021
	Millions
Change in Benefit Obligation
Benefit Obligation at Beginning of Year (A)	$	7,240	$	7,507	$	1,197	$	1,306
Service Cost	142		151		6		9
Interest Cost	167		140		26		22
Actuarial (Gain) Loss (B)	(1,517)		(199)		(314)		(90)
Gross Benefits Paid	(382)		(359)		(61)		(50)
Other	(22)		—		(3)		—
Benefit Obligation at End of Year (A)	$	5,628	$	7,240	$	851	$	1,197
Change in Plan Assets
Fair Value of Assets at Beginning of Year	$	6,906	$	6,368	$	606	$	564
Actual Return on Plan Assets	(1,606)		886		(139)		79
Employer Contributions	11		11		23		13
Gross Benefits Paid	(382)		(359)		(61)		(50)
Other	(18)		—		—		—
Fair Value of Assets at End of Year	$	4,911	$	6,906	$	429	$	606
Funded Status
Funded Status (Plan Assets less Benefit Obligation)	$	(717)	$	(334)	$	(422)	$	(591)
Additional Amounts Recognized in the Consolidated Balance Sheets
Current Accrued Benefit Cost (C)	$	(12)	$	(16)	$	(12)	$	(19)
Noncurrent Accrued Benefit Cost	(705)		(318)		(410)		(572)
Amounts Recognized	$	(717)	$	(334)	$	(422)	$	(591)
Additional Amounts Recognized in Accumulated Other Comprehensive Income (Loss), Regulated Assets and Deferred Assets (D)
Prior Service Credit	$	—	$	—	$	(52)	$	(181)
Net Actuarial Loss	2,151		1,643		41		193
Total	$	2,151	$	1,643	$	(11)	$	12

(A)Represents projected benefit obligation for pension benefits and the accumulated postretirement benefit obligation for other benefits. The vested benefit obligation is the actuarial present value of the vested benefits to which the employee is currently entitled but based on the employee’s expected date of separation or retirement.

(B)For pension benefits, the net actuarial gains in 2022 and 2021 were due primarily to an increase in the discount rate. For OPEB, the net actuarial gain in 2022 was due primarily to an increase in the discount rate and other assumption updates. For OPEB, the net actuarial gain in 2021 was due primarily to an increase in the discount rate coupled with lower than expected claims experience.

(C)Includes ($5) million and ($7) million for pension benefits and other benefits, respectively, as of December 31, 2021 classified as Held for Sale. For additional information, see Note 4. Early Plant Retirements/Asset Dispositions and Impairments.

(D)Includes $594 million ($426 million, after-tax) and $495 million ($355 million, after-tax) in Accumulated Other Comprehensive Loss related to Pension and OPEB as of December 31, 2022 and 2021, respectively. Also includes Regulatory Assets of $1,405 million and Deferred Assets of $141 million as of December 31, 2022 and Regulatory Assets of $1,043 million and Deferred Assets of $117 million as of December 31, 2021.

The pension benefits table above provides information relating to the funded status of the qualified and nonqualified pension and OPEB plans on an aggregate basis. As of December 31, 2022, PSEG had funded approximately 87% of its projected pension benefit obligation. This percentage does not include $183 million of assets in the Rabbi Trust as of December 31, 2022, which provide funding for the nonqualified pension plans and certain deferred compensation. The nonqualified pension plans included in the projected benefit obligation in the above table were $137 million.

Accumulated Benefit Obligation

The accumulated benefit obligation for all PSEG’s defined benefit pension plans was $5.5 billion as of December 31, 2022 and $7.1 billion as of December 31, 2021.

The following table provides the components of net periodic benefit relating to all qualified and nonqualified pension and OPEB plans on an aggregate basis for PSEG, excluding Servco for the years ended December 31, 2022, 2021 and 2020. Amounts shown do not reflect the impacts of capitalization and co-owner allocations. Only the service cost component is eligible for capitalization, when applicable.

	Pension Benefits Years Ended December 31,						Other Benefits Years Ended December 31,
	2022		2021		2020		2022		2021		2020
	Millions
Components of Net Periodic Benefit (Credits) Costs
Service Cost (included in O&M Expense)	$	142	$	151	$	141	$	6	$	9	$	9
Non-Service Components of Pension and OPEB (Credits) Costs
Interest Cost	167		140		192		26		22		34
Expected Return on Plan Assets	(484)		(476)		(443)		(42)		(42)		(39)
Amortization of Net
Prior Service Credit	—		—		(10)		(129)		(129)		(128)
Actuarial Loss	60		103		92		15		44		47
Non-Service Components of Pension and OPEB (Credits) Costs	(257)		(233)		(169)		(130)		(105)		(86)
Total Benefit (Credits) Costs	$	(115)	$	(82)	$	(28)	$	(124)	$	(96)	$	(77)

Pension costs and OPEB costs for PSEG and PSE&G are detailed as follows:

	Pension Benefits Years Ended December 31,						Other Benefits Years Ended December 31,
	2022		2021		2020		2022		2021		2020
	Millions
PSE&G	$	(70)	$	(64)	$	(27)	$	(109)	$	(92)	$	(76)
PSEG Power & Other	(45)		(18)		(1)		(15)		(4)		(1)
Total Benefit (Credits) Costs	$	(115)	$	(82)	$	(28)	$	(124)	$	(96)	$	(77)

The following table provides the pre-tax changes recognized in Accumulated Other Comprehensive Income (Loss), Regulatory Assets and Deferred Assets:

	Pension				Other Benefits
	2022		2021		2022		2021
	Millions
Net Actuarial (Gain) Loss in Current Period	$	568	$	(608)	$	(138)	$	(127)
Amortization of Net Actuarial Gain (Loss)	(60)		(103)		(14)		(44)
Prior Service Cost (Credit) in Current Period	—		—		—		—
Amortization of Prior Service Credit	—		—		129		129
Total	$	508	$	(711)	$	(23)	$	(42)

The following assumptions were used to determine the benefit obligations and net periodic benefit costs:

	Pension Benefits						Other Benefits
	2022		2021		2020		2022		2021		2020
Weighted-Average Assumptions Used to Determine Benefit Obligations as of December 31
Discount Rate	5.20	%	2.94	%	2.61	%	5.16	%	2.82	%	2.46	%
Rate of Compensation Increase	4.40	%	4.40	%	4.40	%	4.40	%	4.40	%	4.40	%
Cash Balance Interest Crediting Rate	6.00	%	6.00	%	6.00	%	N/A		N/A		N/A
Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost for Years Ended December 31
Discount Rate	2.94	%	2.61	%	3.30	%	2.82	%	2.46	%	3.20	%
Service Cost Interest Rate	3.19	%	2.94	%	3.49	%	3.06	%	2.76	%	3.50	%
Interest Cost Interest Rate	2.37	%	1.91	%	2.87	%	2.21	%	1.70	%	2.87	%
Expected Return on Plan Assets	7.20	%	7.70	%	7.70	%	7.20	%	7.69	%	7.70	%
Rate of Compensation Increase	4.40	%	4.40	%	3.90	%	4.40	%	4.40	%	3.90	%
Cash Balance Interest Crediting Rate	6.00	%	6.00	%	6.00	%	N/A		N/A		N/A
Assumed Health Care Cost Trend Rates as of December 31
Health Care Costs
Immediate Rate							6.98	%	6.14	%	6.37	%
Ultimate Rate							4.75	%	4.75	%	4.75	%
Year Ultimate Rate Reached							2032		2029		2029

Plan Assets

The investments of pension and OPEB plans are held in a trust account by the Trustee and consist of an undivided interest in an investment account of the Master Trust. The investments in the pension and OPEB plans are measured at fair value within a hierarchy that prioritizes the inputs to fair value measurements into three levels. See Note 19. Fair Value Measurements for more information on fair value guidance. Use of the Master Trust permits the commingling of pension plan assets and OPEB plan assets for investment and administrative purposes. Although assets of the plans are commingled in the Master Trust, the Trustee maintains supporting records for the purpose of allocating the net gain or loss of the investment account to the respective participating plans. The net investment income of the investment assets is allocated by the Trustee to each participating plan based on the relationship of the interest of each plan to the total of the interests of the participating plans. As of December 31, 2022, the pension plan interest and OPEB plan interest in such assets of the Master Trust were approximately 92% and 8%, respectively.

The following tables present information about the investments measured at fair value on a recurring basis as of December 31, 2022 and 2021, including the fair value measurements and the levels of inputs used in determining those fair values.

	Recurring Fair Value Measurements as of December 31, 2022
			Quoted Market Prices for Identical Assets		Significant Other Observable Inputs
Description	Total		(Level 1)		(Level 2)
	Millions
Cash Equivalents (A)	$	36	$	36	$	—
Equity Securities
Common Stock (B)	1,231		1,231		—
Commingled (C)	1,346		—		1,346
Debt Securities (D)
U.S. Treasury	1,351		—		1,351
Commingled	4		4		—
Subtotal Fair Value	$	3,968	$	1,271	$	2,697
Measured at net asset value practical expedient
Commingled—Equities (E)	965
Real Estate Investment (F)	395
Private Equity (G)	3
Total Fair Value (H)	$	5,331

	Recurring Fair Value Measurements as of December 31, 2021
			Quoted Market Prices for Identical Assets		Significant Other Observable Inputs
Description	Total		(Level 1)		(Level 2)
	Millions
Cash Equivalents (A)	$	45	$	45	$	—
Equity Securities
Common Stock (B)	1,959		1,959		—
Commingled (C)	1,948		1,085		863
Preferred Stock (B)	2		2		—
Other (I)	2		2		—
Debt Securities (D)
U.S. Treasury	1,761		—		1,761
Commingled	4		4		—
Subtotal Fair Value	$	5,721	$	3,097	$	2,624
Measured at net asset value practical expedient
Commingled—Equities (E)	1,403
Real Estate Investment (F)	372
Private Equity (G)	3
Total Fair Value (H)	$	7,499

(A)The Collective Investment Fund publishes a daily net asset value (NAV) which participants may use for daily redemptions without restrictions (Level 1).

(B)Common stocks and preferred stocks are measured using observable data in active markets and considered Level 1.

(C)Commingled Funds that allow daily redemption at their daily published NAV without restrictions are classified as Level 1. Commingled Funds that publish daily NAV but with certain near-term redemption restrictions which prevent redemption at the published daily NAV are classified as Level 2.

(D)Debt securities include mainly U.S. Treasury obligations. These investments are valued using an evaluated pricing approach 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 or the most recent quotes for similar securities which are a Level 2 measure.

(E)Certain commingled equity funds are not included in the fair value hierarchy as they are measured at fair value using the NAV per share (or its equivalent) practical expedient. These funds do not meet the definition of readily determinable fair value due to the frequency of publishing NAV (monthly). The objectives of these funds are mainly tracking the S&P Index or achieving long-term growth through investment in foreign equity securities and the Morgan Stanley Capital International Index.

(F)The unlisted real estate fund invests in office, apartment, industrial and retail space. The fund is valued using the NAV per unit of funds. The investment value of the real estate properties is determined on a quarterly basis by independent market appraisers engaged by the board of directors of the fund. The ability to redeem funds is subject to the availability of cash arising from net investment income, allocations and the sale of investments in the normal course of business. The fund’s NAV is published quarterly. In addition, redemptions require one quarter advance notice prior to redemption and are fulfilled quarterly. The fund, therefore, does not meet the definition of readily determinable fair value. The purpose of the fund is to acquire, own, hold for investment and ultimately dispose of investments in real estate and real estate-related assets with the intention of achieving current income, capital appreciation or both.

(G)Private equity investments primarily include various limited partnerships that invest in either operating companies through acquisitions or developing a portfolio of non-U.S. distressed investments to maximize total return on capital. These investments are valued at NAV (or its equivalent) on a quarterly basis and have significant redemption restrictions preventing redemption until fund liquidation and limited ability to sell these investments. Fund liquidation is not expected to occur for several more years. These investments are not included in the fair value hierarchy in accordance with the guidance on NAV practical expedient.

(H)Excludes net receivables of $7 million and $11 million as of December 31, 2022 and 2021, respectively, which consist of interest, dividends and receivables and payables related to pending securities sales and purchases. In addition, the table excludes cash and foreign currency of $2 million as of each of December 31, 2022 and 2021.

(I)Investment in a publicly traded limited partnership.

The following table provides the percentage of fair value of total plan assets for each major category of plan assets held for the qualified pension and OPEB plans as of the measurement date, December 31:

	As of December 31,
Investments	2022		2021
Equity Securities	67	%	71	%
Debt Securities	25		23
Other Investments	8		6
Total Percentage	100	%	100	%

PSEG utilizes forecasted returns, risk, and correlation of all asset classes in order to develop an efficient portfolio. PSEG’s long-term target asset allocation of 54% equities, 18% real assets and 28% fixed income is consistent with the funds’ financial objectives. Certain investments in real assets (12% as of December 31, 2022) are made through investing in equity securities and tracked as equities when reporting fair value; however, they are viewed by their asset class, real assets, in our target asset allocation. Derivative financial instruments are used by the plans’ investment managers primarily to adjust the fixed income duration of the portfolio and hedge the currency risk component of foreign investments. The expected long-term rate of return on plan assets was 7.2% for 2022 and will be 8.1% for 2023. This expected return includes a premium for active management.

Plan Contributions

PSEG does not plan to contribute to its pension and OPEB plans in 2023. Internal Revenue Service (IRS) minimum funding requirements for pension plans are determined based on the fund’s assets and liabilities at the end of a calendar year for the subsequent calendar year.

Estimated Future Benefit Payments

The following pension benefit and postretirement benefit payments are expected to be paid to plan participants.

Year	Pension Benefits		Other Benefits
	Millions
2023	$	424	$	77
2024	400		75
2025	405		74
2026	411		72
2027	418		70
2028-2032	2,124		309
Total	$	4,182	$	677

401(k) Plans

PSEG sponsors two 401(k) plans, which are defined contribution retirement plans subject to the Employee Retirement Income Security Act (ERISA). Eligible represented employees of PSEG’s subsidiaries participate in the PSEG Employee Savings Plan (Savings Plan), while eligible non-represented employees of PSEG’s subsidiaries participate in the PSEG Thrift and Tax-Deferred Savings Plan (Thrift Plan). Eligible employees may contribute up to 50% of their annual eligible compensation to these plans, not to exceed the IRS maximums, including any catch-up contributions for those employees age 50 and above. PSEG matches 50% of such employee contributions up to 7% of pay for Savings Plan participants and up to 8% of pay for Thrift Plan participants. The amounts paid for employer matching contributions to the plans for PSEG and PSE&G are detailed as follows:

	Thrift Plan and Savings Plan
	Years Ended December 31,
	2022		2021		2020
	Millions
PSE&G	$	28	$	28	$	27
PSEG Power & Other	14		16		16
Total Employer Matching Contributions	$	42	$	44	$	43

Servco Pension and OPEB

Servco sponsors a qualified pension plan and OPEB plan covering its employees who meet certain eligibility criteria. Under the OSA, employee benefit costs for these plans are funded by LIPA. See Note 5. Variable Interest Entities. These obligations, as well as the offsetting long-term receivable, are separately presented on the Consolidated Balance Sheet of PSEG.

The following table provides a roll-forward of the changes in Servco’s benefit obligation and the fair value of its plan assets during the years ended December 31, 2022 and 2021. It also provides the funded status of the plans and the amounts recognized and amounts not recognized on the Consolidated Balance Sheets at the end of both years.

	Pension Benefits				Other Benefits
	2022		2021		2022		2021
	Millions
Change in Benefit Obligation
Benefit Obligation at Beginning of Year (A)	$	596	$	569	$	640	$	699
Service Cost	38		38		21		23
Interest Cost	17		14		19		18
Actuarial (Gain) Loss (B)	(189)		(18)		(215)		(89)
Gross Benefits Paid	(10)		(7)		(10)		(11)
Benefit Obligation at End of Year (A)	$	452	$	596	$	455	$	640
Change in Plan Assets
Fair Value of Assets at Beginning of Year	$	422	$	343	$	—	$	—
Actual Return on Plan Assets	(72)		49		—		—
Employer Contributions	30		37		10		11
Gross Benefits Paid	(10)		(7)		(10)		(11)
Fair Value of Assets at End of Year	$	370	$	422	$	—	$	—
Funded Status
Funded Status (Plan Assets less Benefit Obligation)	$	(82)	$	(174)	$	(455)	$	(640)
Additional Amounts Recognized in the Consolidated Balance Sheets
Accrued Pension Costs of Servco	$	(82)	$	(174)	N/A		N/A
OPEB Costs of Servco	N/A		N/A		(455)		(640)
Amounts Recognized (C)	$	(82)	$	(174)	$	(455)	$	(640)

(A)Represents projected benefit obligation for pension benefits and the accumulated postretirement benefit obligation for other benefits. The vested benefit obligation is the actuarial present value of the vested benefits to which the employee is currently entitled but based on the employee’s expected date of separation or retirement.

(B)For pension benefits and OPEB, the net actuarial gains in 2022 were due primarily to an increase in the discount rate. For pension benefits, the net actuarial gain in 2021 was due primarily to an increase in the discount rate. For OPEB, the net actuarial gain in 2021 was due primarily to updated assumptions.

(C)Amounts equal to the accrued pension and OPEB costs of Servco are offset in Long-Term Receivable of VIE on PSEG’s Consolidated Balance Sheets.

Pension and OPEB costs of Servco are accounted for according to the OSA. Servco recognizes expenses for contributions to its pension plan trusts and for OPEB payments made to retirees. Operating Revenues are recognized for the reimbursement of these costs. The pension-related revenues and costs for 2022, 2021 and 2020 were $30 million, $37 million and $30 million, respectively. Servco has contributed its entire planned contribution amount to its pension plan trusts during 2022. The OPEB-related revenues earned and costs incurred were $10 million, $11 million and $9 million in 2022, 2021 and 2020, respectively. The following assumptions were used to determine the benefit obligations of Servco:

	Pension Benefits						Other Benefits
	2022		2021		2020		2022		2021		2020
Weighted-Average Assumptions Used to Determine Benefit Obligations as of December 31
Discount Rate	5.30	%	3.21	%	2.98	%	5.34	%	3.28	%	3.08	%
Rate of Compensation Increase	3.95	%	3.95	%	3.95	%	3.95	%	3.95	%	3.95	%
Cash Balance Interest Crediting Rate	4.30	%	3.75	%	3.75	%	N/A		N/A		N/A
Assumed Health Care Cost Trend Rates as of December 31
Health Care Costs
Immediate Rate							6.71	%	6.48	%	6.70	%
Ultimate Rate							4.75	%	4.75	%	4.75	%
Year Ultimate Rate Reached							2032		2029		2029

Plan Assets

All the investments of Servco’s pension plans are held in a trust account by the Trustee and consist of an undivided interest in an investment account of the Servco Master Trust. The investments in the pension are measured at fair value within a hierarchy that prioritizes the inputs to fair value measurements into three levels. See Note 19. Fair Value Measurements for more information on fair value guidance.

The following tables present information about Servco’s investments measured at fair value on a recurring basis as of December 31, 2022 and 2021, including the fair value measurements and the levels of inputs used in determining those fair values.

	Recurring Fair Value Measurements as of December 31, 2022
			Quoted Market Prices for Identical Assets		Significant Other Observable Inputs
Description	Total		(Level 1)		(Level 2)
	Millions
Cash Equivalents	$	1	$	1	$	—
Equity Securities
Common Stock (A)	25		25		—
Commingled (B)	251		—		251
Commingled Bonds (B)	93		—		93
Total	$	370	$	26	$	344

	Recurring Fair Value Measurements as of December 31, 2021
			Quoted Market Prices for Identical Assets		Significant Other Observable  Inputs
Description	Total		(Level 1)		(Level 2)
	Millions
Cash Equivalents	$	1	$	1	$	—
Equity Securities
Common Stock (A)	34		34		—
Commingled (B)	285		—		285
Commingled Bonds (B)	102		—		102
Total	$	422	$	35	$	387

(A)Common stocks are measured using observable data in active markets and considered Level 1.

(B)Investments in commingled equity and bond funds have a readily determinable fair value as they publish a daily NAV available to investors which is the basis for current transactions and contain certain redemption restrictions requiring advance notice of one to two days for withdrawals (Level 2).

The following table provides the percentage of fair value of total plan assets for each major category of plan assets held for the qualified pension and OPEB plans of Servco as of the measurement date, December 31:

	As of December 31,
Investments	2022		2021
Equity Securities	75	%	76	%
Debt Securities	25		24
Total Percentage	100	%	100	%

Servco utilizes forecasted returns, risk, and correlation of all asset classes in order to develop an efficient portfolio. Servco’s long-term target asset allocation of 60% equities, 15% real assets and 25% fixed income is consistent with the funds’ financial objectives. Certain investments in real assets (15% at December 31, 2022) are made through investing in equity securities and tracked as equities when reporting fair value; however, they are viewed by their asset class, real assets, in our target asset

allocation. The expected long-term rate of return on plan assets was 7.60% for 2022 and will be 8.0% for 2023. This expected return includes a premium for active management.

Plan Contributions

Servco plans to contribute $18 million into its pension plan during 2023.

Estimated Future Benefit Payments

The following pension benefit and postretirement benefit payments are expected to be paid to Servco’s plan participants:

Year	Pension Benefits		Other Benefits
	Millions
2023	$	12	$	10
2024	14		12
2025	17		14
2026	19		15
2027	22		17
2028-2032	149		112
Total	$	233	$	180

Servco 401(k) Plans

Servco sponsors two 401(k) plans, which are defined contribution retirement plans subject to ERISA. Eligible non-represented employees of Servco participate in the Long Island Electric Utility Servco LLC Incentive Thrift Plan I (Thrift Plan I), and eligible represented employees of Servco participate in the Long Island Electric Utility Servco LLC Incentive Thrift Plan II (Thrift Plan II). Participants in the plans may contribute up to 50% of their eligible compensation to these plans, not to exceed the IRS maximums, including any catch-up contributions for those employees age 50 and above. Servco does not provide an employer match or core contribution for employees in Thrift Plan II. For employees in Thrift Plan I, Servco matches 50% of such employee contributions up to 8% of eligible compensation and provides core contributions (based on years of service and age) to employees who do not participate in Servco’s Retirement Income Plan. The amount expensed by Servco for employer matching contributions was $9 million for each of the years ended December 31, 2022, 2021 and 2020. Pursuant to the OSA, Servco recognizes Operating Revenues for the reimbursement of these costs.