Public Service Enterprise Group Incorporated · NYSE:PEG
Public Service Enterprise — Investor Presentation (March 2024)
59 slides from Public Service Enterprise's investor presentation, Mar 4, 2024
Slide 1: PSEG Investor Update: Leading toward a sustainable future
Exhibit 99 PSEG Investor Update Leading toward a sustainable future March 2024 1 1
Slide 2: Forward-Looking Statements
PSEG Investor Update March 2024 Forward-Looking Statements Certain of the matters discussed in this presentation about our and our subsidiaries’ future • any inability to extend certain significant contracts on terms acceptable to us; • development, adoption and use of Artificial Intelligence by us
Slide 3: GAAP Disclaimer
PSEG Investor Update March 2024 GAAP Disclaimer PSEG presents Operating Earnings in addition to its Net Income 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 well as inco
Slide 4: Public Service Enterprise Group
PSEG Investor Update March 2024 Public Service Enterprise Group
Slide 5: 2024: An improved business mix and platform for predictable growth
PSEG Investor Update March 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 Power & Other
Slide 6: PSEG's Powering Progress Vision
PSEG Investor Update March 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 perfo
Slide 7: Financial Outlook: More Predictability from an Improved Business Profile
PSEG Investor Update March 2024 PSEG Financial Outlook: More Predictability from an Improved Business Profile Well Positioned for the Future ✓ Eliminated market price volatility on earnings with proceeds used to pay down debt and Exited Merchant Fossil Generation return capital to shareholders ✓ Com
Slide 8: Growth Opportunities Aligned with Clean Energy Policies
PSEG Investor Update March 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 electrification
Slide 9: Key Assets and Leadership
PSEG Investor Update March 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 safe
Slide 10: Financial Strength to Achieve Strategic Plan
PSEG Investor Update March 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 Net Income over this 5-year period • Rate Base CAGR of 6-7.5% driven by expanded capital program starting fr
Slide 11: Provides Compelling Value for Our Customers
PSEG Investor Update March 2024 PSEG Provides Compelling Value for Our Customers We continuously target top quartile performance to deliver better service, at lower cost Lowest Cost, but More Leaks/Mile than Peers: Age of cast iron system Delivering Highest Customer Reliability at Lowest Cost: Achie
Slide 12: Provides a Compelling Value for Our Communities
PSEG Investor Update March 2024 PSEG Provides a Compelling Value for Our Communities Corporate Citizenship & Economic Development NJ Spend ~$2.6B • Recognized as One of America’s Most Responsible Companies ~$2.1B (Newsweek 2023) Substantial ~$1.8B ~$1.7B • Choose NJ – Chair of leading NJ economic de
Slide 13: Provides a Compelling Value for the Environment
PSEG Investor Update March 2024 PSEG Provides a Compelling Value for the Environment Environmental Targets • Carbon-free generation and net-zero for operations (Scope 1 and 2 emissions) by 2030 • Methane emissions – 22% reduction from 2018 through GSMP • Energy Efficiency – PSE&G on path to achieve
Slide 14: Sustainability and ESG Summary
PSEG Investor Update March 2024 PSEG Sustainability and ESG Summary PSEG Leadership Policies & Goals Recognition & Memberships • PSEG is a vocal advocate for an economy- • PSE&G’s Clean Energy Future programs have • MSCI rates PSEG at AAA, its highest wide price on carbon and preservation of our inv
Slide 15: Provides a Compelling Value for Our Investors
PSEG Investor Update March 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 transportatio
Slide 16: Public Service Electric & Gas
PSEG Investor Update March 2024 Public Service Electric & Gas
Slide 17: PSE&G – A Single State, Dual Jurisdiction Utility
PSEG Investor Update March 2024 PSE&G – A Single State, Dual Jurisdiction Utility *** PSE&G YE 2023 Rate Base • Electric Transmission • Electric and Gas Distribution • Appliance Service Provider Transmission • Utility Provider of Energy Efficiency $12.4 B and Renewable Energy Programs 43% ~$29 B 1 C
Slide 18: Top Safety and Reliability Performance Metrics
PSEG Investor Update January 2024 Top Safety and Reliability Performance Metrics Driven by Nonstop Focus on Continuous Improvement OSHA Recordable SAIDI Open Leaks Incidence Rate Consistent top Sustained top decile Open year-end gas leaks performance in OSHA performance in electric reduced by 57% re
Slide 19: PSE&G's Residential Electric and Gas Bills vs Regional Peers
PSE&G’s Residential Electric Bills Are Lower than Regional Average and Gas Bills Are Among the Lowest Among Regional Peers $250 $250 $236 Monthly Electric Bills Monthly Gas Bills $203 $200 $200 $181 $178 $163 $158 Average = $148 $149 $148 $145 $150 $144 $150 $127 $122 $118 $117 Average = $116 $111 $
Slide 20: PSE&G Combined Bills Under 3% of Median NJ Income
PSEG Investor Update March 2024 PSE&G Combined Bills Under 3% of Median NJ Income, Favorable “Share of Wallet” vs. Lower-Cost Regions (1) PSE&G Electric & Gas Combined Bills % of New Jersey Household Income Including Low-Income Customers After Assumed Credits 5.0% 4.5% Affordability of the combined
Slide 21: Regulated planned capital spending range increased by >$2B for 2024-2028
PSEG Investor Update March 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 CAGR
Slide 22: Regulated 5-Year Capital Investment Plan of $18B-$21B
PSEG Investor Update March 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 3 2 1 0 2024E 2025E 2026E 2027E 2028E Transmission Electric Distribution Gas Distribut
Slide 23: Regulated Rate Base Growth Delivers Improved Reliability
PSEG Investor Update March 2024 Regulated Rate Base Growth Delivers Improved Reliability, Enhanced Resiliency, Increased Customer Satisfaction, and Lower Emissions Projected Regulated Year-End Rate Base 2023YE - 2028YE 60 CAGR: 6%-7.5% 50 Our investment 40 opportunities provide consistent 30 rate ba
Slide 24: Transmission Investment Focused on 69kV Upgrades
PSEG Investor Update March 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 el
Slide 25: Electric Distribution Investment Focused on System Modernization
PSEG Investor Update March 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 meet
Slide 26: Gas Distribution Investment Focused on Infrastructure Replacement
PSEG Investor Update March 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 -12% -20% GSMP main replacement -20% 5,000 5,259 4,784 -40% • GSMP II
Slide 27: PSE&G's Clean Energy Future Programs
PSEG Investor Update March 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 for
Slide 28: PSE&G's Proposed Energy Efficiency Offerings
PSEG Investor Update March 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. Provides
Slide 29: 10-Year Investment Opportunities Aligned with NJ Electrification Goals
PSEG Investor Update March 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 2035
Slide 30: Effective Cost Control to Mitigate Inflation Impacts
PSEG Investor Update March 2024 Effective Cost Control to Mitigate Inflation Impacts and Preserve Customer Affordability Keeps O&M CAGR under 2.5% (1) PSE&G O&M Expense • Demonstrated ability to control O&M 1,500 • 2023 cost reductions and a timing benefit of deferred compensation more than offset i
Slide 31: PSE&G Dual Jurisdiction Regulation
PSEG Investor Update March 2024 Transmission Distribution PSE&G Dual Jurisdiction Distribution and Clean Energy Regulation Provides for a • State Regulatory Entity: NJ Board of Public Utilities Clean Energy Mixture of Investment and • Timely recovery of investment programs: - Contemporaneous recover
Slide 32: PSE&G Base Rate Filing
PSEG Investor Update March 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 six years; 9% overall revenue increase requested (Annual Dist
Slide 33: Key Takeaways: Best-in-Class Operations
PSEG Investor Update March 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 infrastructure modernization and decarbonizatio
Slide 34: Power & Other
PSEG Investor Update March 2024 PSEG Power & Other
Slide 35: PSEG Power & Other Overview
PSEG Investor Update March 2024 PSEG Nuclear • Operates Salem 1 & 2 and Hope Creek • 50% owner of Peach Bottom 2 & 3 • Total 3,761 MW PSEG Power • Opportunities for growth & Other PSEG Gas Supply Operations A more stable, predictable business Serves Basic Gas Supply Power & Service (BGSS) contract w
Slide 36: Decision to Retain Nuclear Based on Several Drivers
PSEG Investor Update March 2024 PSEG Decision to Retain Nuclear Based on Several Drivers Decision to Retain Nuclear Units Clarified with Passage of the IRA and PTC Started in January 2024 Key Strategic Drivers: • Unique asset class of existing, low-cost, carbon-free, 24x7 base load generation, provi
Slide 37: Nuclear — Key Fleet Data
PSEG Investor Update March 2024 PSEG Nuclear — Key Fleet Data Fleet Average Capacity Factor of ~93% for Full Year 2023 • 57% PSEG ownership • 50% PSEG ownership • 656 MW owned capacity • 637.5 MW owned capacity • Current license expires 2036 • Current license expires 2053* • 18-month operating cycle
Slide 38: Nuclear is Critical to the Energy Transition
PSEG Investor Update March 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 by Fuel Source 2022* NJ’s clean energy
Slide 39: Salem Capacity Uprate Growth Opportunity
PSEG Investor Update March 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 • Low
Slide 40: Additional PSEG Nuclear Growth Opportunities
PSEG Investor Update March 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 increasi
Slide 41: Hydrogen Opportunities
PSEG Investor Update March 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 awarded i
Slide 42: Power & Other — Other Businesses
PSEG Investor Update March 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 • M
Slide 43: Key Takeaways: Increasing Predictability
PSEG Investor Update March 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, and
Slide 44: Financial Review & Outlook
PSEG Investor Update March 2024 Financial Review & Outlook
Slide 45: 2024 Guidance Consistent with 5% to 7% Long-Term Growth
PSEG Investor Update March 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 by the following drivers: $3.48 + Utility Rate Base Growth + Nuclear PTC - Parent Interest Expense 2023 Non-GAAP 2024E Non-GAAP Oper
Slide 46: Long-term Growth Outlook Driven by PSE&G's Regulated Earnings
PSEG Investor Update March 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 to r
Slide 47: No New Equity Needs through 2028
PSEG Investor Update March 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 • Incremental PSE&G debt Dividend to Parent • PSEG Power & Other
Slide 48: Business Profile Supports Solid BBB Credit Ratings
PSEG Investor Update March 2024 Our Business Profile Supports Solid BBB Credit Ratings as Capital is Deployed for PSE&G Growth PSEG Projected Average (1) FFO/Debt Debt Capacity (2024E-2028E) 20% $3.0 Financial flexibility utilized to fund Projected Average 15% planned investments, ~Mid-Teens with PS
Slide 49: 2024 Indicative Annual Dividend Increase of $0.12 Per Share
PSEG Investor Update March 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 $1.48 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024E 54% 54% 57%
Slide 50: Meeting Takeaways: A Strong Business Mix and Platform for Predictable Growth
PSEG Investor Update March 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 and m
Slide 51: Appendix
PSEG Investor Update March 2024 Appendix
Slide 52: PSE&G Recognized for Excellence
PSEG Investor Update March 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 Reliabil
Slide 53: Provides Compelling Careers for Our Employees
PSEG Investor Update March 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: • Am
Slide 54: PSEG Demonstrated Success in Controlling O&M
PSEG Investor Update March 2024 PSEG has Demonstrated Success in Controlling O&M, Keeping CAGR ~(1%) (1) PSEG O&M Expense 2500 2000 1500 1000 500 0 2018 2019 2020 2021 2022 2023 2024E PSEG Power & Other Distribution Transmission (1) Excludes Nuclear ARO, early retirement of Hudson/Mercer coal plants
Slide 55: Power & Other Nuclear Generation Measures
PSEG Investor Update March 2024 PSEG Power & Other Nuclear Generation Measures Other Financial Considerations Three Months Ended Twelve Months Ended December 31, December 31, • For 2024, total nuclear generation is forecasted to be 30-32 TWh and is 90%-95% hedged at an average price of $38 per MWh*
Slide 56: Maintains a Solid Financial Position
PSEG Investor Update March 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 = Sta
Slide 57: EPS Reconciliation – FY 2023 versus FY 2022
PSEG Investor Update March 2024 PSEG EPS Reconciliation – FY 2023 versus FY 2022 $5.50 $4.50 $5.13 $4.00 $5.00 $3.47 $3.48 ($0.06) $0.07 $3.50 Transmission 0.07 Gross Margin 0.23 Re-contracting/Market 0.36 Renewables & $3.00 Capacity (0.08) Energy Efficiency 0.01 Volume 0.02 Electric Margin 0.03 Gas
Slide 58: Glossary of Terms
PSEG Investor Update March 2024 Glossary of Terms ESG Environmental, Social and Governance PHMSA Pipeline and Hazardous Materials A&G Administrative & General AFUDC Allowance for Funds Used During Construction Safety Administration EV Electric Vehicle AMI Automated Metering Infrastructure FCF Free C
Slide 59: Reconciliation of Non-GAAP Operating Earnings
PSEG Fourth Quarter and Full Year 2023 Reconciliation of Non-GAAP Operating Earnings Public Service Enterprise Group Incorporated - Consolidated Operating Earnings (non-GAAP) Reconciliation Three Months Ended Year Ended (a) Includes the financial impact from positions with December 31, December 31,
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