Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — Investor Presentation (September 2024)
61 slides from Public Service Enterprise's investor presentation, September 2024
Slide 1: PSEG Investor Update
PSEG Investor Update Leading toward a sustainable future September 2024 1
Slide 2: Forward-Looking Statements
PSEG Investor Update September 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 September 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 w
Slide 4: Public Service Enterprise Group
PSEG Investor Update September 2024 Public Service Enterprise Group
Slide 5: 2024: An improved business mix and platform for predictable growth
PSEG Investor Update September 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 September 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 strong nuclear p
Slide 7: Financial Outlook: More Predictability from an Improved Business Profile
PSEG Investor Update September 2024 PSEG Financial Outlook: More Predictability from an Improved Business Profile Well-Positioned for the Future ✓ PTC provides downside price protection through 2032 Retained Carbon Free Nuclear Fleet ✓ Enhances PSEG Power & Other cash flow visibility and predictabil
Slide 8: Growth Opportunities Aligned with Clean Energy Policies
PSEG Investor Update September 2024 PSEG Growth Opportunities Aligned with Clean Energy 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 electrifica
Slide 9: PSEG: Key Assets and Leadership
PSEG Investor Update September 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
Slide 10: PSEG: Financial Strength to Achieve Strategic Plan
PSEG Investor Update September 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 f
Slide 11: Provides Compelling Value for Our Customers
PSEG Investor Update September 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 iro
Slide 12: Provides a Compelling Value for Our Communities
PSEG Investor Update September 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
Slide 13: Provides a Compelling Value for the Environment
PSEG Investor Update September 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
Slide 14: Provides a Compelling Value for Our Investors
PSEG Investor Update September 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 transport
Slide 15: Public Service Electric & Gas
PSEG Investor Update September 2024 Public Service Electric & Gas
Slide 16: PSE&G – A Single State, Dual Jurisdiction Utility
PSEG Investor Update September 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
Slide 17: Top Safety and Reliability Performance Metrics
PSEG Investor Update September 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
Slide 18: PSE&G's Residential Electric and Gas Bills vs Regional Peers
PSEG Investor Update September 2024 PSE&G’s Residential Electric Bills Are Lower than Regional Average and Residential Gas Bills Are the Lowest of Regional Peers $250 $300 Monthly Electric Bills Monthly Gas Bills $263 $200 $250 $200 $177 $200 $148 $183 $150 $170 $132 $134 $169 Regional Average = $15
Slide 19: PSE&G Combined Bills Under 3% of Median NJ Income
PSEG Investor Update September 2024 PSE&G Combined Bills Under 3% of Median NJ Income, Favorable “Share of Wallet” vs. Lower-Cost Regions 5.00% PSE&G Electric & Gas Combined Bills(1) 4.5% % of New Jersey Household Income Including Low-Income Customers After Assumed Credits Affordability of the combi
Slide 20: Regulated Capital Spending and Rate Base CAGR 2024 vs. Prior Plan
PSEG Investor Update September 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 C
Slide 21: Regulated 5-Year Capital Investment Plan of $18B-$21B
PSEG Investor Update September 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 Distribut
Slide 22: Regulated Rate Base Growth
PSEG Investor Update September 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 cons
Slide 23: Transmission Investment Focused on 69kV Upgrades
PSEG Investor Update September 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 futur
Slide 24: Electric Distribution Investment Focused on System Modernization
PSEG Investor Update September 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
Slide 25: Gas Distribution Investment Focused on Infrastructure Replacement
PSEG Investor Update September 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 %
Slide 26: PSE&G's Clean Energy Future Programs
PSEG Investor Update September 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 ~$1.3B investment BPU approved $707M investment BPU approved $166M investment Programs
Slide 27: PSE&G's Proposed Energy Efficiency Offerings
PSEG Investor Update September 2024 PSE&G’s Proposed Energy Efficiency Offerings: An Expanded Suite of 11 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 28: PSE&G's 10-Year Investment Opportunities and NJ Electrification Goals
PSEG Investor Update September 2024 PSE&G’s 10-Year Investment Opportunities are Aligned with New Jersey’s Accelerated Electrification Goals Governor Murphy’s February 2023 Incremental investments to support NJ’s Executive Orders increasing targets to decarbonize the economy • 100% clean energy by 2
Slide 29: Effective Cost Control Keeps O&M CAGR under 2.5%
PSEG Investor Update September 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 offs
Slide 30: PSE&G Dual Jurisdiction Regulation
PSEG Investor Update September 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 rec
Slide 31: PSE&G Base Rate Filing Seeks Recovery of Recent Investments
PSEG Investor Update September 2024 PSE&G Base Rate Filing Seeks Recovery of Recent Investments; Cost Control and CEF-EE Programs Help Keep Bills Affordable New Jersey Electric Utility Costs 2018-2023 ▪ First distribution base rate request in 6 years; 9% overall revenue increase requested (Annual Di
Slide 32: Key Takeaways: Best-in-Class Operations
PSEG Investor Update September 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 mai
Slide 33: PSEG Power & Other
PSEG Investor Update September 2024 PSEG Power & Other
Slide 34: PSEG Power & Other
PSEG Investor Update September 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
Slide 35: Generation Output and Carbon Intensity
PSEG Investor Update September 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 36: Decision to Retain Units Clarified with Passage of the IRA
PSEG Investor Update September 2024 PSEG Decision to Retain Units Clarified with Passage of the IRA; PTC Started in January 2024 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 clean
Slide 37: PSEG Nuclear — Key Fleet Data
PSEG Investor Update September 2024 PSEG Nuclear — Key Fleet Data Fleet Average Capacity Factor of 89.8% for First Half 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 license expires
Slide 38: Nuclear is Critical to the Energy Transition
PSEG Investor Update September 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 2
Slide 39: Salem Capacity Uprate
PSEG Investor Update September 2024 Simplified Drawing of Secondary Side of Plant PSEG Nuclear has Compelling Growth Opportunities: Salem Capacity Uprate • ~45-60 MW PSEG-share (4%-5%) thermal increase targeted • Lowers $/MWh generating cost (same O&M, more MWh) • Targeting in service in 2027-2029 •
Slide 40: Additional PSEG Nuclear Growth Opportunities
PSEG Investor Update September 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 incr
Slide 41: Hydrogen Opportunities
PSEG Investor Update September 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 award
Slide 42: Power & Other — Other Businesses
PSEG Investor Update September 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 43: Key Takeaways: Increasing Predictability
PSEG Investor Update September 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,
Slide 44: Financial Review & Outlook
PSEG Investor Update September 2024 Financial Review & Outlook
Slide 45: 2024 Guidance Consistent with 5% to 7% Long-Term CAGR
PSEG Investor Update September 2024 PSEG 2024 Guidance Consistent with its 5% to 7% Long-Term Non-GAAP Operating Earnings CAGR $3.60 to $3.70 Growth in earnings influenced $3.48 by the following drivers: $ / share • Utility rate base growth net of investment-related expense pending rate case resolut
Slide 46: Long-term Growth Outlook Driven by PSE&G's Regulated Earnings
PSEG Investor Update September 2024 PSEG’s Long-term Growth Outlook Driven by PSE&G’s Regulated Earnings Non-GAAP Operating Earnings Continuing Path of Increasing Predictability • ~90% of PSEG’s non-GAAP Operating Earnings over the 2024-2028 period are from PSE&G • >90% of capital program allocated
Slide 47: No New Equity Needs through 2028
PSEG Investor Update September 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 & Ot
Slide 48: Business Profile Supports Solid BBB Credit Ratings
PSEG Investor Update September 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 inves
Slide 49: 2024 Indicative Annual Dividend Increase of $0.12 Per Share
PSEG Investor Update September 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 50: Meeting Takeaways: A Strong Business Mix and Platform
PSEG Investor Update September 2024 Meeting Takeaways: A Strong Business Mix and Platform for Predictable Growth • 5%-7% long-term earnings growth rate for 2024-2028 driven by • Retaining Nuclear fleet with PTC stabilized, predictable cash PSE&G rate base growth and PTC threshold for Nuclear flows a
Slide 51: Appendix
PSEG Investor Update September 2024 Appendix
Slide 52: PSEG Sustainability and ESG Summary
PSEG Investor Update September 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 ~$2B through year end 2023 to preservation
Slide 53: PSE&G Recognized for Excellence
PSEG Investor Update September 2024 PSE&G Recognized for Excellence PSE&G has been honored on numerous fronts for best-in-class operations • #1 in Customer Satisfaction with Residential and Business Electric Service in the East among Large Utilities by J.D. Power in 2023* • 2023 PA Consulting Reliab
Slide 54: 2022-2023 DEI Recognitions
PSEG Investor Update September 2024 PSEG Provides Compelling Careers for 2022-2023 DEI Our Employees Recognitions PSEG ~12,500 Employees • America’s Best Employers for Diversity • Strong union partnerships with our six unions and the ~7,700 employees • America’s Best Large Employers they represent:
Slide 55: PSEG O&M Expense
PSEG Investor Update September 2024 PSEG has Demonstrated Success in Controlling O&M, Keeping CAGR ~(1%) PSEG O&M Expense (1) 2,500 2,000 ($ 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 Huds
Slide 56: PSEG Power & Other Nuclear Generation Measures
PSEG Investor Update September 2024 PSEG Power & Other Nuclear Generation Measures Other Financial Considerations Three Months Ended Six Months Ended • For 2024, total nuclear generation is forecasted to be 30-32 TWh June 30, June 30, 2024 2023 2024 2023 • Nuclear fuel commitments cover ~100% of est
Slide 57: PSEG Maintains a Solid Financial Position
PSEG Investor Update September 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 58: EPS Reconciliation – First Half 2024 versus First Half 2023
PSEG Investor Update September 2024 PSEG EPS Reconciliation – First Half 2024 versus First Half 2023 $4.00 $2.75 $3.76 $3.75 $2.50 ~ ~ $2.25 $2.09 ($0.09) ($0.06) $1.94 $1.93 $2.00 $ / share Transmission 0.01 Gross Margin and $1.75 Renewables & PTC** 0.10 Energy Efficiency 0.02 O&M (0.08) Electric M
Slide 59: Glossary of Terms
PSEG Investor Update September 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 60: Reconciliation of Non-GAAP Operating Earnings
PSEG Investor Update September 2024 Reconciliation of Non-GAAP Operating Earnings Public Service Enterprise Group Incorporated - Consolidated Operating Earnings (non-GAAP) Reconciliation Three Months Ended Six Months Ended Year Ended (a) Includes the financial impact from positions with Reconciling
Slide 61: Reconciliation of Non-GAAP Operating Earnings
PSEG Investor Update September 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
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