PSEG(US:PEG)2025-11-03 21:32Financial Performance - PSE&G's net income for the three months ended September 30, 2025 was $515 million, compared to $379 million for the same period in 2024, representing a 36% increase [278]. - PSEG Power's net income for the nine months ended September 30, 2025 was $403 million, up from $317 million in 2024, reflecting a 27% increase [278]. - PSEG's net income for the three months ended September 30, 2025 was $622 million, compared to $520 million in 2024, marking a 20% increase [278]. - Operating revenues for the three months ended September 30, 2025, increased by 22% to $3,226 million compared to $2,642 million in 2024 [304]. - PSE&G's operating revenues increased by $396 million (19%) for the three months ended September 30, 2025, compared to the same period in 2024, driven by changes in delivery, commodity, clause, and other operating revenues [307]. - For the nine months ended September 30, 2025, PSE&G's operating revenues increased by $895 million (14%) compared to the same period in 2024 [317]. - PSEG Power's operating revenues increased by $621 million (29%) for the nine months ended September 30, 2025, driven by changes in generation and gas supply revenues [332]. Capital Investment and Rate Base - PSEG's regulated rate base increased from approximately $30 billion as of December 31, 2023 to approximately $34 billion as of December 31, 2024 [260]. - The estimated regulated capital investment program for 2025-2029 is projected to be between $21 billion and $24 billion, with a compound annual growth rate in the regulated rate base of 6% to 7.5% [262]. - The distribution rate case settlement approved a $17.8 billion rate base and a 9.6% return on equity for PSE&G's distribution business [266]. - Capital expenditures for PSE&G during the nine months ended September 30, 2025, were $1,893 million, primarily for T&D system reliability [356]. - PSEG Power & Other made capital expenditures of $146 million during the same period, excluding $135 million for nuclear fuel [357]. Regulatory and Legislative Environment - The company is facing regulatory uncertainty due to significant increases in electricity costs, with July 2024 PJM annual capacity market auction prices approximately 10 times higher than the previous year [289]. - The New Jersey Board of Public Utilities (BPU) approved a settlement allowing PSE&G to apply a credit to residential electric customers' bills for July and August 2025, with offsets charged from September 2025 through February 2026 [291]. - The company is involved in proceedings to achieve a 50% reduction in natural gas emissions by 2030, which could materially impact operations and cash flows [285]. - The enactment of federal and state tax legislation could materially impact the company's effective tax rate and cash tax position [295]. - The company anticipates increased accounts receivable and bad debt expense due to new legislation prohibiting disconnection for non-payment during summer months starting in 2026 [291]. Energy Costs and Revenue Sources - Energy costs rose by 26% to $1,133 million for the three months ended September 30, 2025, compared to $899 million in 2024 [304]. - Delivery revenues rose by $256 million, primarily due to a $251 million increase in electric and gas revenues from the settlement of the 2024 distribution base rate case [309]. - Commodity revenues increased by $226 million, mainly from higher electric basic generation service revenues of $227 million due to elevated prices [311]. - Generation revenues increased by $108 million, attributed to a $66 million rise in capacity revenue and a $51 million increase in average realized energy prices [328]. - PSEG Power's energy costs rose by $38 million, reflecting higher gas costs [329]. Cash Flow and Financial Position - Operating cash flow increased by $811 million for the nine months ended September 30, 2025, compared to the same period in 2024, primarily due to a net change at PSE&G and higher earnings at PSEG Power [341]. - PSE&G's operating cash flow rose from $1,119 million to $1,528 million for the nine months ended September 30, 2025, an increase of $409 million attributed to regulatory deferrals and tax refunds [342]. - Total committed credit facilities as of September 30, 2025, amounted to $3.825 billion, with available liquidity of $3.274 billion [346]. - PSEG Power's uncommitted credit facilities totaled $275 million, with $166 million in letters of credit outstanding as of September 30, 2025 [346]. - The potential additional collateral required if PSEG Power loses its investment grade credit rating was approximately $683 million as of September 30, 2025 [347]. Environmental Goals - PSEG aims for net zero greenhouse gas emissions by 2030, supporting New Jersey's clean energy and climate goals [270]. Risk Management - The company is assessing strategic options to maximize long-term shareholder value, including utility capital investment programs and managing risks related to federal and state energy policies [300]. - The expected Production Tax Credit (PTC) rate for electricity generated from existing nuclear energy is up to $15/MWh, impacting the decision not to apply for the next zero emission certificate eligibility period [288]. Market Risk - From July through September 2025, the MTM VaR varied between a low of $17 million and a high of $45 million at the 95% confidence level [364]. - The average MTM VaR for the three months ended September 30, 2025, was $29 million, compared to $44 million for the year ended December 31, 2024 [364].