Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — 2022 EEI Financial Conference
22 slides from Public Service Enterprise's conference presentation, Nov 14, 2022
Slide 1: Public Service Enterprise Group 2022 EEI Financial Conference Supplement
Public Service Enterprise Group 2022 EEI Financial Conference Supplement November 13 – 15, 2022 NYSE TICKER: PEG EXHIBIT 99
Slide 2: 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 “forward-looking statements” with
Slide 3: Non-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 exclude the impa
Slide 4: PSEG's Vision
PSEG’s Vision: To power a future where people use less energy, and it’s cleaner, safer and delivered more reliably than ever.
Slide 5: Continued focus on stability and predictability of our business results
Continued focus on stability and predictability of our business results Note: All future decisions and declarations regarding dividends on the common stock are subject to approval by the Board of Directors. PSEG 2022-2023: 90% regulated business mix from stable, predictable operations of PSE&G PSE&G
Slide 6: Delivering on our Commitments
Delivering on our Commitments: PSEG has a 17-year track record of meeting or exceeding non-GAAP Operating Earnings guidance Current Guidance: Narrowed 2022 Operating EPS Guidance to $3.40 – $3.50 per share Reaffirmed 2022 – 2025 Operating EPS CAGR of 5% – 7% Looking Forward: Initiating 2023 Operatin
Slide 7: 2023 Operating Earnings guidance of $3.35 to $3.55 per share
2023 Operating Earnings guidance of $3.35 to $3.55 per share incorporates expected headwinds and actions to offset Intend to narrow 2023 guidance further to $0.15 range in Q1 2023 after year-end pension measurement O&M savings, T&D growth and higher hedged energy prices offset pension and interest c
Slide 8: 2023 pension expectations capture 2022 asset returns and OPEB roll-off
2023 pension expectations capture 2022 asset returns and the OPEB benefit roll-off, as well as mitigation actions to date Actual 2022 asset return impact on 2023 YE 2022E asset balance (fair value) lower by ~25% due to 2022 returns, which lowers assets earning the 2023 expected return on plan assets
Slide 9: Interest expense is higher but transmission recovery and collateral roll-off dampen 2023 impact
Interest expense is higher but transmission recovery and the roll-off of collateral on hedges will help dampen 2023 impact Non-GAAP interest expense related to financing costs excluding certain items (clause interest, other miscellaneous) contained in GAAP interest expense. Includes the impact from
Slide 10: PSEG has extended cost reduction efforts into 2023
Note: CFIO excludes Nuclear ARO, early retirement of Hudson/Mercer coal plants, Bethlehem Energy Center goodwill write-off, write-offs related to Strategic Alternatives and certain regulatory balance account and pass-through items. Excludes PSEG Fossil and Power Ventures in 2022E. 2018 – 2023E CAGR
Slide 11: Significant backlog of base capital awaiting recovery in next rate case
Significant backlog of base capital awaiting recovery in PSE&G’s next distribution rate case supports EPS CAGR to 2025 PSE&G infrastructure and clean energy investment programs benefit from clause-based recovery but also include base spend awaiting recovery in upcoming rate case PSE&G will begin to
Slide 12: Establishing 2023–2027 non-GAAP Operating EPS CAGR of 5%–7%
Establishing 2023–2027 non-GAAP Operating EPS CAGR of 5%–7% ~$(0.10) to ~$(0.15) ~$0.90 to ~$0.95 ~$0.20 to ~$0.25 Improved energy prices, at nuclear PTC levels, partially offset by absence of one-time 2023 tax benefits Continued growth from T&D investment programs Higher interest costs on CFIO debt
Slide 13: PSE&G's updated five-year spending is higher, maintaining rate base growth
PSE&G’s updated five-year spending is ~$1.5B to $2B higher, maintaining consistent rate base growth on a higher starting point Capital Spending includes AFUDC. Year-End Rate Base excludes CWIP. CEF-EC/AMI is included in Electric Distribution Note: Hashed portion of the chart represents additional in
Slide 14: PSE&G's Infrastructure Advancement Program
PSE&G’s Infrastructure Advancement Program: 4-year investment begins proactive work on “Last Mile” reliability Investment Total Description Electric Distribution – Inside Plant ~$205M Replace 1960s-era 4kV switchgear with modern equipment at five stations and replace oil-filled circuit breakers with
Slide 15: Inflation Reduction Act of 2022 establishes nuclear production tax credit
Inflation Reduction Act (IRA) of 2022 establishes a nuclear power production tax credit, expands incentives and promotes carbon-free generation IRA 2022 Provisions New Federal Energy Tax Credit Provisions Enacts a nuclear power production tax credit (PTC) for existing generation PSEG qualifies for t
Slide 16: EEI Meeting Takeaways
EEI Meeting Takeaways Delivering on our Commitments: PSEG has a 17-year track record of meeting or exceeding non-GAAP Operating Earnings guidance Current Guidance: Narrowed 2022 Operating EPS Guidance to $3.40 – $3.50 per share Reaffirmed 2022 – 2025 Operating EPS CAGR of 5% – 7% Looking Forward: In
Slide 17: Appendix
* PSEG Appendix
Slide 18: Non-GAAP Operating Earnings Guidance by Business
Non-GAAP Operating Earnings Guidance PSEG 2022 and 2023 Guidance by Business $ millions (except EPS) Current 2022E Guidance Initial 2023E Guidance PSE&G $1,545 - $1,575 $1,490 - $1,540 CFIO $160 - $180 $185 - $235 Operating Earnings (non-GAAP) $1,705 - $1,755 $1,675 - $1,775 Operating EPS (non-GAAP)
Slide 19: PSEG maintains a solid financial position
PSEG Power Issuer Credit Ratings Moody’s = Baa2 / Outlook = Stable S&P = BBB / Outlook = Stable PSEG Power Long-term Debt Outstanding as of 9/30/2022 (2) $1.3B PSEG maintains a solid financial position PSEG PSEG Senior Unsecured Credit Ratings Moody’s = Baa2 / Outlook = Stable S&P = BBB / Outlook =
Slide 20: 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, we will apply our EROA assumption (7.2% for 2022) to the Fair Value of Plan Assets at year-end in determining pension impact for the following yea
Slide 21: Q3 Year-to-Date 2022 Generation Measures & Hedge Update
Q3 Year-to-Date 2022 Generation Measures & Hedge Update Note: Generation indicates period net generation; Delivery Year runs from June 1 to May 31 of the next calendar year; Average Prices and Cleared Capacity reflect base and incremental auctions. S=Salem; HC=Hope Creek; PB=Peach Bottom Nuclear Gen
Slide 22: Glossary and Investor Relations contact
GSMPGas System Modernization Program IAPInfrastructure Advancement Program IRAInflation Reduction Act ITCInvestment Tax Credit LTDLong-Term Debt M&RMetering and Regulating MTMMark-to-Market O&MOperations and Maintenance OPEBOther Post-Employment Benefits PTCProduction Tax Credit SF6Sulfur Hexafluori
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