Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — Investor Presentation (November 2024)
64 slides from Public Service Enterprise's investor presentation, November 2024
Slide 1: PSEG Investor Update
PSEG Investor Update Leading toward a sustainable future November 2024 1
Slide 2: Forward-Looking Statements
PSEG Investor Update November 2024 Forward-Looking Statements Certain of the matters discussed in this presentation about our and our subsidiaries’ future • development, adoption and use of Artificial Intelligence by us and our third-party vendors; performance, including, without limitation, future
Slide 3: GAAP Disclaimer
PSEG Investor Update November 2024 GAAP Disclaimer PSEG presents Operating Earnings in addition to its Net Income/(Loss) reported in Non-GAAP EBITDA excludes the same items as our non-GAAP Operating Earnings accordance with accounting principles generally accepted in the United States measure, as we
Slide 4: Public Service Enterprise Group
PSEG Investor Update November 2024 Public Service Enterprise Group
Slide 5: 2024: An improved business mix and platform for predictable growth
PSEG Investor Update November 2024 PSEG 2024: An improved business mix and platform for predictable growth PSE&G • Regulated Operations Represent ~90% of PSEG’s non-GAAP Operating Earnings Over Next 5 Years NJ’s Largest T&D Utility: 2.4 Million Electric and 1.9 Million Gas Customers PSEG PSEG Power
Slide 6: PSEG's Powering Progress Vision
PSEG Investor Update November 2024 PSEG’s Powering Progress Vision: Powering a future where people use less energy, and it’s cleaner, safer and delivered more reliably than ever • Operational Excellence: Best-in-class utility • Disciplined Investment: >90% of capital allocation and exemplary nuclear
Slide 7: Financial Outlook: More Predictable, Well Positioned for the Future
PSEG Investor Update November 2024 PSEG Financial Outlook: More Predictable, Well Positioned for the Future ✓ Achieved balanced settlement of first distribution base rate case in six years; Recovered all Settled Major Regulatory Filings in 2024 prudent investments; Maintained favorable regional affo
Slide 8: Solid Long-term Growth Outlook has Meaningful Upside Potential
PSEG Investor Update November 2024 PSEG’s Solid Long-term Growth Outlook has Meaningful Upside Potential ✓ Gas System Modernization Program III - potential for incremental in-state resiliency investment Higher/Expanded Regulated Investment in Clauses ✓ Electric System Infrastructure Advancement Prog
Slide 9: Growth Opportunities Aligned with Energy Transition Policies
PSEG Investor Update November 2024 PSEG Growth Opportunities Aligned with Energy Transition Policies Significant events (i.e., the Northeast Blackout of 2003 and Superstorm Sandy) have driven policy changes and led to investment opportunities Future investment will address growing demand for electri
Slide 10: PSEG: Key Assets and Leadership
PSEG Investor Update November 2024 PSEG: Key Assets and Leadership PSE&G – Best-in-Class Regulated Electric & Gas T&D Utility PSEG Power & Other Focused on Affordability, Reliability and Customer Satisfaction • Solid nuclear operations with exemplary ratings on all units, gas supply • Top quartile s
Slide 11: PSEG: Financial Strength to Achieve Strategic Plan
PSEG Investor Update November 2024 PSEG: Financial Strength to Achieve Strategic Plan Long-Term Non-GAAP Operating Earnings Growth Outlook of 5%-7% for 2024-2028 • Primary contributor is PSE&G’s growth over this 5-year period • Rate Base CAGR of 6%-7.5% driven by expanded capital program starting fr
Slide 12: Provides Compelling Value for Our Customers
PSEG Investor Update November 2024 PSEG Provides Compelling Value for Our Customers We continuously target top quartile performance to deliver better service, at lower cost Delivering Highest Customer Reliability at Lowest Cost: Achieving Lowest Cost, but More Leaks/Mile than Peers: Age of cast iron
Slide 13: Provides Compelling Value for Our Communities
PSEG Investor Update November 2024 PSEG Provides a Compelling Value for Our Communities NJ Spend Corporate Citizenship & Economic Development ~$2.6B ~$2.1B ~$1.8B • Recognized as One of America’s Most Responsible Companies ~$1.7B Substantial (Newsweek 2023) investment in • Choose NJ – CEO is Chair o
Slide 14: Provides Compelling Value for the Environment
PSEG Investor Update November 2024 PSEG Provides a Compelling Value for the Environment Environmental Targets • Net-zero for operations (Scope 1 and 2 emissions) by 2030 • PSEG continues to maintain its three-prong climate vision, including producing carbon-free energy, reducing GHG emissions from o
Slide 15: Provides Compelling Value for Our Investors
PSEG Investor Update November 2024 PSEG Provides a Compelling Value for Our Investors P/E Rolling average 2nd and 3rd year expectations Improved business mix and visible earnings growth: 22.5 • Regulated investment opportunities in decarbonization 20.0 of NJ economy and electrification of transporta
Slide 16: Public Service Electric & Gas
PSEG Investor Update November 2024 Public Service Electric & Gas
Slide 17: PSE&G – A Single State, Dual Jurisdiction Utility
PSEG Investor Update November 2024 PSE&G – A Single State, Dual Jurisdiction Utility • Electric and Gas Distribution • Electric Transmission PSE&G YE 2023 Rate Base*** • Utility Provider of Energy Efficiency • Appliance Service Provider Transmission $12.4 B and Renewable Energy Programs 43% ~$29 B C
Slide 18: Top Safety and Reliability Performance Metrics
PSEG Investor Update November 2024 Top Safety and Reliability Performance Metrics Driven by Nonstop Focus on Continuous Improvement OSHA Recordable SAIDI Open Leaks Incidence Rate * * * Consistent top performance Sustained top decile performance Open year-end gas leaks in OSHA recordable incidence i
Slide 19: PSE&G Residential Electric and Gas Bills vs Regional Peers
PSEG Investor Update November 2024 PSE&G’s Residential Electric Bills Are Average for the Region and Residential Gas Bills Are the Lowest of All Regional Peers Monthly Electric Bills Monthly Gas Bills $200 $300 $178 $179 $180 $260 $250 $160 $156 $140 $133 $135 $135 $200 Average = $124 $124 $200 $183
Slide 20: PSE&G Combined Bills ~3% of Median NJ Income
PSEG Investor Update November 2024 PSE&G Combined Bills ~3% of Median NJ Income, Favorable “Share of Wallet” vs. Lower-Cost Regions 5.0% PSE&G Electric & Gas Combined Bills(1) % of New Jersey Household Income 4.5% Including Low-Income Customers After Assumed Credits 4.0% 4.3% 4.0% 3.8% 3.6% 3.7% Aff
Slide 21: Share of Wallet - PSEG is a Top Performer Nationally in Affordability
PSEG Investor Update November 2024 Share of Wallet - PSEG is a Top Performer Nationally in Affordability National Residential Customer Share of Wallet – (percent of income) Mississippi West Virginia Arkansas Kentucky Georgia Alabama Louisiana Maine Oklahoma New York South Carolina Connecticut Tennes
Slide 22: Regulated planned capital spending range increased by >$2B
PSEG Investor Update November 2024 Regulated planned capital spending range increased by >$2B for 2024-2028 reflecting expanded Clean Energy, electric reliability and electrification needs at PSE&G, and inclusion of a competitively bid transmission project Regulated Capital Spending and Rate Base CA
Slide 23: Regulated 5-Year Capital Investment Plan of $18B-$21B
PSEG Investor Update November 2024 Regulated 5-Year Capital Investment Plan of $18B-$21B is Driven by System Modernization and NJ's Decarbonization and Energy Policy Goals Regulated Capital Spending 2024E – 2028E 5 4 ($ Billions) 3 2 1 0 2024E 2025E 2026E 2027E 2028E Transmission Electric Distributi
Slide 24: Regulated Rate Base Growth Delivers Improved Reliability
PSEG Investor Update November 2024 Regulated Rate Base Growth Delivers Improved Reliability, Enhanced Resiliency, Increased Customer Satisfaction, and Lower Emissions Projected Regulated Year-End Rate Base 60 2023YE - 2028YE CAGR: 6%-7.5% 50 Our investment 40 opportunities ($ Billions) provide consi
Slide 25: Transmission Investment is Focused on 69kV Upgrades
PSEG Investor Update November 2024 Transmission Investment is Focused on 69kV Upgrades to Support Future Electrification Efforts • Transitioning from large end-of-life projects to 69kV conversion/expansion and new stations to improve reliability, address aging system and load growth including future
Slide 26: Electric Distribution Investment is Focused on System Modernization
PSEG Investor Update November 2024 Electric Distribution Investment is Focused on System Modernization Providing Long Runway of Investment Opportunities and Maintains Our Best-in-Class Reliability We will build on the success of programs like Energy Strong and Infrastructure Advancement Program to m
Slide 27: Gas Distribution Investment is Focused on Infrastructure Replacement
PSEG Investor Update November 2024 Gas Distribution Investment is Focused on Infrastructure Replacement that Accelerates Emission Reduction Benefits Impact of GSMP on Methane Reduction* Mileage of CI/US Inventory Remaining 0% 6,000 -20% -12% unprotected steel main remaining GSMP main replacement % R
Slide 28: Award-Winning Clean Energy Future Programs
PSEG Investor Update November 2024 PSE&G’s Award-Winning Clean Energy Future Programs Are Delivering Benefits to Customers and Rate Base Growth ENERGY EFFICIENCY ENERGY CLOUD “AMI” ELECTRIC VEHICLES BPU approved total programs since inception BPU approved $707M investment BPU approved $166M investme
Slide 29: CEF-EE II Filing Approved
PSEG Investor Update November 2024 CEF-EE II Filing Approved Investments Expected to Save Customers $4B in Utility Bills and Avoid 10 Million Metric Tons of Carbon Emissions Highlights • CEF-EE II settlement approved by BPU in October 2024 for ~$3B, which includes investments of $1.9B and on-bill re
Slide 30: Proposed Energy Efficiency Offerings: Ten Programs
PSEG Investor Update November 2024 PSE&G’s Proposed Energy Efficiency Offerings: An Expanded Suite of Ten Residential, C&I, and Multifamily & Other programs Program Description Energy Efficient Products Offers incentives and on-bill repayment (OBR) for energy efficient equipment and appliances. Resi
Slide 31: Effective Cost Control Keeps O&M CAGR under 2.5%
PSEG Investor Update November 2024 Effective Cost Control to Mitigate Inflation Impacts and Preserve Customer Affordability Keeps O&M CAGR under 2.5% PSE&G O&M Expense (1) • Demonstrated ability to control O&M 1,500 • 2023 cost reductions and a timing benefit of deferred compensation more than offse
Slide 32: PSE&G Dual Jurisdiction Regulation
PSEG Investor Update November 2024 Transmission Distribution Distribution and Clean Energy PSE&G Dual Jurisdiction • State Regulatory Entity: NJ Board of Public Utilities Regulation Provides for a • Timely recovery of investment programs: Clean Energy Mixture of Investment and - Contemporaneous reco
Slide 33: PSE&G Distribution Base Rate Case Concludes with Balanced Settlement
PSEG Investor Update November 2024 PSE&G Distribution Base Rate Case Concludes with Balanced Settlement First distribution base rate case since 2018 keeps customer bill affordability intact (regional and share of wallet) • Typical Residential Electric and Gas customer bill increase is ~7%*, represen
Slide 34: Key Takeaways: Best-in-Class Operations
PSEG Investor Update November 2024 Key Takeaways: Best-in-Class Operations with Important System Investment Needs Driving a Predictable Earnings Growth Platform Operational Excellence: Delivering top-tier safety, Disciplined Investment: Programs driven by reliability and customer service, while main
Slide 35: Power & Other
PSEG Investor Update November 2024 PSEG Power & Other
Slide 36: PSEG Power & Other
PSEG Investor Update November 2024 PSEG Nuclear • PSEG Power Operates Salem 1 & 2 and Hope Creek • 50% owner of Peach Bottom 2 & 3 • Total 3,761 MW • & Other Opportunities for growth PSEG Gas Supply Operations A more stable, predictable business that generates significant free Power & Serves Basic G
Slide 37: Generation Output and Carbon Intensity
PSEG Investor Update November 2024 PSEG Generation Output and Carbon Intensity 1,400 PSEG PSEGGeneration GenerationOutput Output 70 U.S. U.S.Average AverageCO2 CO2 Intensity Intensity PSEGCO2 PSEG CO2 Intensity Intensity 1,200 60 PSEG Generation Output (Million MWh) Direct CO2 Intensity (lbs/MWh) 1,
Slide 38: Decision to Retain Nuclear Units
PSEG Investor Update November 2024 PSEG Decision to Retain Nuclear Units Influenced by Strategic, Financial and Operational Drivers Key Strategic Drivers: • Unique asset class of existing, low-cost, carbon-free, 24x7 base load generation, providing reliable energy integral to meeting New Jersey’s cl
Slide 39: Nuclear — Key Fleet Data
PSEG Investor Update November 2024 PSEG Nuclear — Key Fleet Data Fleet Average Capacity Factor of 91.4% for First Nine Months of 2024 • 57% PSEG ownership • 656 MW owned capacity • 50% PSEG ownership • Current license expires 2036 • 637.5 MW owned capacity • 18-month operating cycle • Current licens
Slide 40: Nuclear is Critical to the Energy Transition
PSEG Investor Update November 2024 Nuclear is Critical to the Energy Transition Nuclear is a unique asset class providing reliable 24x7, carbon-free energy and price stabilization PSEG Nuclear provides ~40% of New Jersey’s energy and ~85% of NJ Electric Generation NJ’s clean energy by Fuel Source 20
Slide 41: Salem Capacity Uprate
PSEG Investor Update November 2024 Simplified Drawing of Secondary Side of Plant PSEG Nuclear has Compelling Growth Opportunities: Salem Capacity Uprate • ~125 MW PSEG-share (9%-10%) thermal increase targeted • Lowers $/MWh generating cost (same O&M, more MWh) • Targeting in service in 2027-2029 • C
Slide 42: Additional PSEG Nuclear Growth Opportunities
PSEG Investor Update November 2024 Additional PSEG Nuclear Growth Opportunities Transition from 18-month to 24-month Refueling Cycles • An extended fuel cycle eliminates refueling outages over the life of the plant, reducing O&M by eliminating one refueling outage every 6 years (~$50M O&M) and incre
Slide 43: Hydrogen Opportunities
PSEG Investor Update November 2024 Hydrogen Opportunities Federal Government Created Programs to Incentivize the Development of a Hydrogen Economy to Drive Decarbonization Efforts Toward Some of the Hardest Sectors to Abate • Infrastructure Investment and Jobs Act, 2021 — Up to $7 billion was awarde
Slide 44: Power & Other — Other Businesses
PSEG Investor Update November 2024 PSEG Power & Other — Other Businesses Gas Supply Operations — the Next Largest Component of PSEG Power & Other • Broad portfolio of pipeline and storage contracts providing access to low-cost gas and optionality • Serves Basic Gas Supply Service to PSE&G customers
Slide 45: Nuclear PTC Inflation Adjustment and Other Considerations
PSEG Investor Update November 2024 PSEG Power & Other Nuclear PTC Inflation Adjustment Illustration+ Other Financial Considerations Year PTC +2% PTC +3% PTC +4% • Total nuclear generation for 2024 is forecasted to be ~30-32 TWh 2025 $44.75 $44.75 $44.75 • Nuclear fuel commitments cover ~100% of esti
Slide 46: Key Takeaways: Increasing Predictability
PSEG Investor Update November 2024 Key Takeaways: Increasing Predictability • Operational Excellence: Solid nuclear operations with • Disciplined Investment: exemplary ratings on all units, gas supply operations - The PTC is a game-changer, providing LT price stability, benefiting PSE&G customers, a
Slide 47: Financial Review & Outlook
PSEG Investor Update November 2024 Financial Review & Outlook
Slide 48: Narrowed Full Year 2024 Outlook
PSEG Investor Update November 2024 PSEG Narrowed Full Year 2024 Outlook $3.64 - $3.68 • PSEG raised the midpoint and narrowed full year 2024 non-GAAP Operating Earnings guidance to $3.64 - $3.68 per share $3.48 (from $3.60 - $3.70 per share prior) + New PSE&G distribution base rates effective Octobe
Slide 49: Long-term Growth Outlook Driven by PSE&G's Regulated Earnings
PSEG Investor Update November 2024 PSEG’s Long-term Growth Outlook Driven by PSE&G’s Regulated Earnings Non-GAAP Operating Earnings Outlook Continuing Path of Increasing Predictability • ~90% of PSEG’s non-GAAP Operating Earnings over the 2024-2028 period are from PSE&G • Distribution rate case comp
Slide 50: No New Equity Needs through 2028
PSEG Investor Update November 2024 No New Equity Needs through 2028 to Fund Business Plan Capital Needs PSEG Consolidated 2024E – 2028E PSEG Sources and Uses of Cash PSE&G Funding PSE&G Growth • Internally generated PSE&G cash flow PSE&G Dividend to • Incremental PSE&G debt Parent • PSEG Power & Oth
Slide 51: Business Profile Supports Solid BBB Credit Ratings
PSEG Investor Update November 2024 Our Business Profile Supports Solid BBB Credit Ratings as Capital is Deployed for PSE&G Growth PSEG Projected Average FFO/Debt (1) Debt Capacity (2024E-2028E) 20% $3.0 Financial flexibility $ Billions utilized to fund Projected Average 15% ~Mid-Teens planned invest
Slide 52: 2024 Indicative Annual Dividend Increase of $0.12 Per Share
PSEG Investor Update November 2024 PSEG’s 2024 Indicative Annual Dividend Increase of $0.12 Per Share Supported by Predictable Earnings Annual PSEG Dividend Per Share $2.40** $2.28 $2.16 $2.04 $1.96 $1.88 $1.80 $1.72 $1.64 $1.56 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024E 54% 57% 59% 58% 57%
Slide 53: Meeting Takeaways: A Strong Business Mix and Platform
PSEG Investor Update November 2024 Meeting Takeaways: A Strong Business Mix and Platform for Predictable Growth • 5%-7% long-term earnings growth rate for 2024-2028 driven by • Nuclear fleet with PTC stabilized, predictable cash flows and PSE&G rate base growth and PTC threshold for Nuclear multiple
Slide 54: Appendix
PSEG Investor Update November 2024 Appendix
Slide 55: Financial Results and Outlook Disclosure Schedule
PSEG Investor Update November 2024 Financial Results and Outlook Disclosure Schedule Financial Metrics Date Comment PSEG raised the midpoint and narrowed full year 2024 non-GAAP Operating Earnings Q4 and full year 2024 financial results February 2025 guidance to $3.64 - $3.68 per share with new dist
Slide 56: Sustainability and ESG Summary
PSEG Investor Update November 2024 PSEG Sustainability and ESG Summary PSEG Leadership Policies & Goals Recognition & Memberships • PSE&G’s Clean Energy Future programs have • PSEG is a vocal advocate for the • MSCI rates PSEG at AAA, its highest invested ~$2B through year end 2023 to preservation o
Slide 57: PSE&G Recognized for Excellence
PSEG Investor Update November 2024 PSE&G Recognized for Excellence PSE&G has been honored on numerous fronts for best-in-class operations • #1 in Customer Satisfaction with Residential and Business Electric Service in the East among Large Utilities by J.D. Power in 2023* • 2023 PA Consulting Reliabi
Slide 58: 2022-2023 DEI Recognitions
PSEG Investor Update November 2024 PSEG Provides Compelling Careers for 2022-2023 DEI Our Employees Recognitions PSEG ~12,500 Employees • America’s Best Employers for Diversity • Strong union partnerships with our six unions and the ~7,700 employees • America’s Best Large Employers they represent: •
Slide 59: Demonstrated Success in Controlling O&M
PSEG Investor Update November 2024 PSEG has Demonstrated Success in Controlling O&M, Keeping CAGR ~(1%) PSEG O&M Expense (1) 2,500 2,000 ($ Millions) 1,500 1,000 500 0 2018 2019 2020 2021 2022 2023 2024E PSEG Power & Other Distribution Transmission (1) Excludes Nuclear ARO, early retirement of Hudso
Slide 60: PSEG Maintains a Solid Financial Position
PSEG Investor Update November 2024 PSEG Maintains a Solid Financial Position PSEG Public Service Electric & Gas PSEG Senior Unsecured Credit Ratings PSE&G Senior Secured Credit Ratings Moody’s = Baa2 / Outlook = Stable S&P = BBB / Outlook = Stable Moody’s = A1 / Outlook = Stable S&P = A / Outlook =
Slide 61: EPS Reconciliation – YTD 2024 versus YTD 2023
PSEG Investor Update November 2024 PSEG EPS Reconciliation – YTD 2024 versus YTD 2023 $4.00 $4.50 $4.03 $4.00 $3.50 ~ ~ $2.94 $2.97 $3.00 ($0.13) $0.03 $2.84 $ / share Renewables & Gross Margin and Energy Efficiency 0.03 PTC** 0.26 $2.50 Distribution Margin 0.15 O&M (0.11) Distribution O&M (0.14) De
Slide 62: Glossary of Terms
PSEG Investor Update November 2024 Glossary of Terms A&G Administrative & General ESG Environmental, Social and Governance P/E Price to Earnings Ratio AFUDC Allowance for Funds Used During Construction EV Electric Vehicle PB Peach Bottom AMI Automated Metering Infrastructure FCF Free Cash Flow PECO
Slide 63: Reconciliation of Non-GAAP Operating Earnings
PSEG Investor Update November 2024 Reconciliation of Non-GAAP Operating Earnings Public Service Enterprise Group Incorporated - Consolidated Operating Earnings (non-GAAP) Reconciliation Three Months Ended Nine Months Ended Year Ended (a) Includes the financial impact from positions with Reconciling
Slide 64: Reconciliation of Non-GAAP Operating Earnings
PSEG Investor Update November 2024 Reconciliation of Non-GAAP Operating Earnings Public Service Enterprise Group Incorporated - Consolidated Operating Earnings (non-GAAP) Reconciliation Reconciling Items Year Ended December 31, (a) Effective January 1, 2018, unrealized gains (losses) on equity 2023
Public Service Enterprise Group — Investor Presentation (November 2024) on 6ix