Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — Investor Presentation (February 2023)
28 slides from Public Service Enterprise's investor presentation, February 2023
Slide 1: Public Service Enterprise Group February 2023 Investor Update
Public Service Enterprise Group February 2023 Investor Update NYSE TICKER: PEG
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain of the matters discussed in this presentation about our and our subsidiaries’ future performance, including, without limitation, future revenues, earnings, strategies, prospects, consequences and all other statements that are not purely historical constitute “forwa
Slide 3: GAAP Disclaimer
GAAP Disclaimer PSEG presents Operating Earnings in addition to its Net Income/(Loss) reported in accordance with accounting principles generally accepted in the United States (GAAP). Operating Earnings is a non-GAAP financial measure that differs from Net Income/(Loss). Non-GAAP Operating Earnings
Slide 4: PSEG is increasing the stability and predictability of our business results
PSEG is increasing the stability and predictability of our business results • PSEG 2022-2023: 90% regulated business mix from stable, predictable operations of PSE&G • PSE&G: Robust capital program of $15.5B – $18B from 2023 – 2027, aligned with state clean energy goals at our best-in-class utility
Slide 5: PSEG has a 17-year track record of meeting or exceeding guidance
PSEG has a 17-year track record of meeting or exceeding guidance Delivering on our Commitments ‒ PSEG has met or exceeded its non-GAAP Operating Earnings guidance for 17 years in a row Looking Forward – Established long-term EPS growth outlook of 5% – 7%, updated for 2023 pension impact and higher i
Slide 6: PSE&G – a best-in-class regulated utility and New Jersey's largest
PSE&G – a best-in-class regulated utility and New Jersey’s largest: Electric and gas distribution utility Transmission business Utility provider of energy efficiency Appliance service provider and renewable energy programs Electric Gas PSE&G YE 2021 Rate Base*** Number of Customers 2.3 Milli
Slide 7: PSEG is focused on advancing Powering Progress investments aligned with NJ energy policy
PSEG is focused on advancing Powering Progress investments aligned with New Jersey’s energy policy goals Past Programs (2009-present) New Jersey Energy Policies Ongoing & Opportunities • Transmission Expansion • 2021 Successor Solar Framework • Infrastructure Advancement Program • “Last Mile” Reliab
Slide 8: PSE&G's updated five-year spending is ~$1.5B to $2B higher
PSE&G’s updated five-year spending is ~$1.5B to $2B higher, maintaining consistent rate base growth on a higher starting point PSE&G Capital Spending PSE&G Year-end Rate Base Year-end 20,000 40,000 Rate Base CAGR 18,000 6%-7.5% 35,000 $15.5B-$18B 16,000 $14B-$16B 30,000 14,000 12,000 25,000 ($ Milli
Slide 9: Electric Distribution – Last Mile investment program
Electric Distribution – “Last Mile” investment program is designed to modernize system and improve reliability for customers who are more dependent on the system than ever before Long runway of potential electric system modernization investments: • Targeted asset replacements – Poles, overhead equip
Slide 10: Clean Energy Future programs focus on reducing customers' energy consumption
Clean Energy Future programs focus on reducing customers’ energy consumption Energy Electric Energy Efficiency Energy Cloud “AMI” Vehicles Storage Creating clean energy $1B $707M* $166M $109M jobs for under-employed Commitment Investment Investment Investment and diverse NJ residents 3 years 4 years
Slide 11: Gas Distribution – Investments to modernize infrastructure and reduce methane leaks
Gas Distribution – Investments to modernize infrastructure and drive reduction in methane leaks % Reduction of absolute methane (CH4) emissions from 2011 as reported to the EPA under 40 CFR 98, Subpart W Actual Forecast 0% PSE&G is on track to achieve its • GSMP II will replace ~875 ~22% methane red
Slide 12: Electric Distribution – Energy Strong program benefits to customers
Electric Distribution – Energy Strong program to replace and rebuild substations in flood zones has brought tremendous benefit to customers Somerville Withstood 56” of Flooding during Tropical Storm Ida, and Remained Operational • Superstorm Sandy & Hurricane Irene caused flooding at 29 substations
Slide 13: Transmission: Investment program focused on reliability and resiliency
Transmission: Investment program focused on enhancing reliability and resiliency, and replacing aging infrastructure • 69 kV conversion effort to improve reliability and address aging system transitioning from large end-of-life projects • Load increases in certain areas, driven by electrification ef
Slide 14: PSE&G investments create New Jersey job growth
PSE&G investments create New Jersey job growth and support diverse recruiting efforts Infrastructure Programs: Over 1,500 current direct jobs through GSMP II and Energy Strong II, and over 350 more through IAP Clean Energy: Over 3,000 direct jobs planned, with a focus on unemployed, under-employed,
Slide 15: Investments in technology are making PSE&G more efficient and reliable
Investments in technology are making PSE&G more efficient and reliable, giving customers greater access to information and programs Advanced Metering Infrastructure Providing real time information to help customers Mobile Geographic manage their usage, improving operational Information System effici
Slide 16: PSE&G: Achieving Top Quartile Customer Satisfaction Scores
PSE&G: Achieving Top Quartile Customer Satisfaction Scores Across the Board J.D. Power Residential Customer Satisfaction Studies J.D. Power Business Customer Satisfaction Studies J.D. Power Electric Utility J.D. Power Gas Utility J.D. Power Electric Utility J.D. Power Gas Utility First First First F
Slide 17: PSE&G's residential customer bills compare favorably
PSE&G’s residential customer bills compare favorably Regional gas bills lowest among peers; Regional electric bills lower than average Monthly Gas Bills Monthly Electric Bills $300 $160 $266 $136 $137 $140 $133 $134 $250 $217 $120 $201 $110 $200 $200 $190 $193 $97 $98 $103 Average = $103 Average = $
Slide 18: Residential bill relative to median income has declined from 4.5% to 2.6%
Typical residential combined electric and gas bill relative to median income has declined from 4.5% to 2.6% since 2009 PSE&G Electric & Gas Combined Bill (1) Affordability of the % of New Jersey Household Income combined bill has Including Low-income Customers After Assumed Credits improved by over
Slide 19: PSEG has extended cost reduction efforts into 2023
PSEG has extended cost reduction efforts into 2023 to further mitigate the impacts of higher pension and interest costs 2018 – 2023E CAGR PSEG O&M (3.0%) PSE&G O&M 0.9% $2,500 $2,000 $1,500 ($ Millions) $1,000 $500 $0 2018 2019 2020 2021 2022E 2023E CFIO Distribution Transmission Note: CFIO excludes
Slide 20: 2022 annual dividend increased $0.12 per share
2022 annual dividend increased $0.12 per share, building on a 115-year history of returning cash to our shareholders PSEG Dividend per Share $2.16 $2.04 $1.96 $1.88 $1.80 Opportunity for consistent and $1.72 sustainable dividend growth - $1.64 now with a higher growth rate $1.56 $1.48 $1.44 2013 201
Slide 21: PSEG Sustainability and ESG Summary
PSEG Sustainability and ESG Summary PSEG Leadership Policies & Goals Recognition & Memberships • Joined the U.N.-backed Race to Zero and • PSEG is a vocal advocate for an economy-wide • Named to 2023 JUST 100 list of America’s Most Business Ambition for 1.5°C campaigns price on carbon and preservati
Slide 22: PSEG has outpaced the industry in reducing carbon emissions intensity
PSEG has outpaced the industry in reducing carbon emissions intensity, and is getting recognized for ESG performance PSEG Generation Carbon Emissions Intensity vs. U.S. Fleet Average (2005 – 2023E) PSEG’s ESG Vital Signs: Relative Scores 1,400 PSEG's generation fleet continues to be much less PEERS
Slide 23: Appendix
x* PSEG Appendix
Slide 24: Q3 Year-to-Date 2022 Generation Measures & Hedge Update
Q3 Year-to-Date 2022 Generation Measures & Hedge Update Nuclear Generation Nine Months ended Year ended Measures September 30 December 31 Carbon-Free Contracted Energy Sales* Oct – Dec 2022 2021 2021 2023E 2024E 2022E Capacity Factor 94.3% 93.0% 91.9% Fuel Nuclear Nuclear Nuclear Fuel Cost ($ millio
Slide 25: PSEG maintains a solid financial position
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 = Stable PSEG 364-Day Term Loan Outst
Slide 26: Targeting PSEG's credit ratings at 'Solid' BBB
Targeting PSEG’s credit ratings at ‘Solid’ BBB Target PSEG Issuer Moody’s S&P Credit Metric Senior Unsecured Baa2 BBB FFO / Debt (1) PSEG Outlook Stable Stable ~Mid-Teens Minimum Baa2 @ 14% BBB @ 13% Threshold A1 Senior Secured Regulatory PSE&G A Equity Ratio ~55% Outlook Stable Stable Issuer Rating
Slide 27: Pension is measured annually, at year-end
Pension is measured annually, at year-end, in determining pension impact for the following year PSEG does not “smooth” the year-end asset value, instead, ($ Millions) 2021 2020 we will apply our EROA assumption (7.2% for 2022) to the Fair Value of Plan Assets at year-end in determining pension Dis
Slide 28: Glossary of Terms
Glossary of Terms AFUDC Allowance for Funds Used During Construction ESG Environmental, Social and Governance AMI Automated Metering Infrastructure FFO Funds from Operations ARO Asset Retirement Obligations GHG Greenhouse Gas BPU New Jersey Board of Public Utilities GSMP Gas System Modernization Pro
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