PUBLIC SVC ENTERPRISE GRP IN earnings calls

hedge instruments and basis risk

Q (Shahriar Pourreza · Wells Fargo): Analyst asked how the company hedges Power risks, which instruments they use (FTRs, swaps, options), and how much forward sold power could be affected by basis changes.

A: Management said their hedges are centered at the PECO (PICO) hub and they use a mix of direct hedges at PECO, FTRs, swaps and options to manage position and get paid at PECO.

"And with respect to products, think, which is another part of your question, You have got the ability to put on direct hedges where we are at that PECO zone as well as FTRs, but also some swaps and some options." — Daniel J. Cregg (CFO)

PSE&G filing purpose

Q (Richard Sunderland · Truist): Analyst asked whether the upcoming PSE&G filing is a shift away from a full rate case, and whether it focuses on rate changes or accounting ideas to address regulatory lag.

A: Management said they will file and that the filing aims to stay aligned with the governor's initiative while addressing regulatory lag. They will share details after the filing.

"But it is all about staying aligned and enabling the governor's policy." — Ralph A. LaRossa (CEO·CHAIR)

price outlook 2027 and 2028

Q (Nicholas Campanella · Barclays): Analyst asked to confirm the company expects to be above the PTC level in 2027 despite basis widening, and how they see 2028.

A: Management confirmed their statement that they expect to be above the PTC level in 2027. They said markets and forward prices will reflect supply and demand, with upward pressure likely as demand announcements outpace new generation.

"And I think, you know, look. We can look to the forwards for where markets are right now." — Daniel J. Cregg (CFO)

near-term growth drivers

Q (Nicholas Amicucci · Evercore): Analyst asked what near-term items could show up in the next capital update, like transmission wins, nuclear contracts, or solar/storage deals, and whether Salem earnings are included in the outlook.

A: Management said their projection hasn't changed much; they expect more solar, batteries, VPP work, and transmission opportunities as PJM and state policies evolve. They confirmed Salem operations are included in their 5 year plan.

"Yeah. that is within our 5 year plan, Nick." — Daniel J. Cregg (CFO)

financing and interest rate impact

Q (Carly Davenport · Goldman Sachs): Analyst asked how recent interest rate moves and financing activity affect 2027 guidance or earning sensitivities.

A: Management said they completed most of the 2026 financing they needed and are in good shape moving into 2027. They noted Daniel's team manages financing and they expect lower financing activity in 2027 versus 2026.

"We are through most of the 2026 financing that we needed." — Ralph A. LaRossa (CEO·CHAIR)

utility-owned solar and batteries

Q (David Arcaro · Morgan Stanley): Analyst asked how the regulated utility is thinking about owning solar and storage and what proposals they might support to address regulatory lag.

A: Management said they have experience with utility solar and batteries and will participate as state policy becomes clear, but they will not front-run state policy. On regulatory lag, they declined to detail proposals, saying discussions are constructive and they will communicate updates.

"I think the policy is not yet certain here in New Jersey as to whether or not it will move in a regulated direction or stay solely competitive." — Ralph A. LaRossa (CEO·CHAIR)

capacity market and transmission window

Q (Michael Sullivan · Wolfe): Analyst asked views on the future of PJM capacity auctions and how the company sets assumptions for 2031 and the upcoming transmission open window.

A: Management said PJM wants states to pick up capacity needs and you must consider many inputs (RPP, bilateral deals, state mandates). They expect more RTEP/transmission opportunities in the next open window due to basis differentials.

"They reinforced that they are looking for the states to pick up the capacity, issues and deal with what they need to from a generation standpoint in the states." — Ralph A. LaRossa (CEO·CHAIR)

large load inquiries count

Q (Jeremy Tonet · JPMorgan): Analyst asked for an update on PSE&G large load inquiries and whether the previous ~11.8 GW level still holds or has shifted.

A: Management said the inquiry level has been staying about the same and that recent interest is more in edge computing rather than hyperscaler mega data centers, aligning with New Jersey's financial industry demand.

tightening guidance and hedging details

Q (Julien Patrick Dumoulin-Smith · Jefferies): Analyst asked whether anything near term warrants tightening the guidance range and probed hedging positions for 2027-2028 relative to PTC floor and where hedges are executed.

A: Management said they reaffirmed guidance and suggested investors use the midpoint; they reiterated hedges are executed at PECO where their units price, not at the West hub. They declined to provide detailed commercial hedging specifics.

"We just kinda left it at where it is from because it is been consistent with us executing against the entire year." — Ralph A. LaRossa (CEO·CHAIR)

new nuclear progress

Q (RBC): Analyst asked how conversations on new nuclear are progressing in the US and what visible data points to watch for in New Jersey.

A: Management said they are advocating and participating; their site has advantages from an early site permit and port access. They said New Jersey's first visible action will be the Board of Public Utilities auction called for by legislation, and noted the multiparty nature slows announcements.

"I think it is a very complicated multiparty thing that folks are working on." — Daniel J. Cregg (CFO)

hedge impact from big customer deals

Q (Anthony Crowdell · Mizuho): Analyst asked whether landing a large load customer on uprates or nuclear would change hedging strategy and if being short/long different PJM zones explains exposure.

A: Management said any large customer contract would be treated as part of the sold position and would be factored into the overall hedging plan, and that they use products to move positions closer to their actual unit pricing.

"I think the way to think about it is that whatever is in place will be a contract for a portion of what you are looking to sell more broadly." — Daniel J. Cregg (CFO)

base rate filing timing

Q (Nicholas Campanella · Barclays): They asked how the base rate filing relates to the BPU report, the RTO adder, and EE spend. They also asked which parts of the report might be included in the filing.

A: Management said they do not expect much of the BPU report to be included in this filing and that the timing aligns with the state's goals. They said a base rate case is needed to enable more transparency, performance-based ratemaking, and multiyear rate plans, and they reaffirmed the 6% to 8% guidance.

"So I don't expect a lot to make it in -- to this filing, and that's exactly why I think the timing of the filing aligns pretty well with the state's goals here." — Ralph LaRossa (CEO·CHAIR)

PJM RBA project opportunities

Q (Richard Sunderland · Truist): He asked for more detail on project proposals under the RBA and the scale/type of opportunity for PSEG Power. He also asked what PSE&G is focused on to capture distribution investment upside and timing to crystalize plans.

A: Management said they see opportunities for long-term PPA or utility-like agreements and that they have a few opportunities inside New Jersey and a few outside New Jersey that they are reviewing. For PSE&G, they said they will roll forward CapEx at the beginning of next year, gas distribution will keep replacing cast iron, and electric work will focus on solar, DERs, batteries and PSUP; updates will come in the first quarter of next year.

"So we've got a few opportunities, we think, inside New Jersey, a few outside New Jersey that we're taking a look at." — Ralph LaRossa (CEO·CHAIR)

hedging and data-center interest

Q (Carly Davenport · Goldman Sachs): She asked about hedging activity beyond 2026, specifically for 2027 and 2028. She also asked whether interest from data centers or large load customers for PPAs has inflected.

A: Management said there is nothing incremental to disclose about hedging beyond 2026 and they are working through future years. They said they have seen continued interest from customers but not a clear inflection; many parties are waiting for more clarity from PJM before committing.

"There's nothing in the materials that we have disclosed." — Daniel Cregg (CFO)

BPU timeline and RBP returns

Q (Michael Sullivan · Wolfe): He asked when the BPU review will wrap up and whether the upcoming rate case could be an increase or a decrease. He also asked what returns they'd target for RBP opportunities and how the $555 price cap affects the math.

A: Management said the next step is Phase 2 and they will not front-run the BPU's publicly posted timeline; they gave no further details on rate case size. On returns, management said they see potential but will not provide return expectations for competitive situations and that they will evaluate whether opportunities are utility-like or contracted enough to be attractive.

"It would be foolish to provide what an expectation would be of returns in a competitive situation." — Daniel Cregg (CFO)

bilaterals and new nuclear timing

Q (Jeremy Tonet · JPMorgan): He asked whether bilateral discussions are for existing assets, new assets, or both. He also asked whether new nuclear could fit and if it is feasible given timelines.

A: Management said bilateral interest covers both but there is more interest in new generation, since new load generally prefers incremental generation and new build takes time. They said new nuclear makes sense and aligns with state policy, but timelines are long (projects can be 12 years) so nuclear is a long-term solution and short-term options are also needed.

"I do believe that new nuclear makes sense, as we said in the prepared remarks." — Ralph LaRossa (CEO·CHAIR)

Phase I reforms and cost allocation

Q (Rinny Singh · BofA): She asked how the company will engage in stakeholder talks on the Phase I reforms and which reforms have merit in New Jersey. She also asked about state-level cost allocation timing and flexibility procedures.

A: Management said there are multiple paths and they welcome transparency and performance-based rates; they will work through details with policymakers and their base rate filing shows timing alignment. They also said the state will be involved in allocation timelines, they are awaiting FERC detail, and cited a recent FERC approval that will result in a $65 million a year savings going forward for customers.

"And the result is going to be a $65 million a year savings going forward." — Ralph LaRossa (CEO·CHAIR)

bilateral contracting and returns

Q (Sophie Karp · KeyBanc): She asked if they see opportunities to contract bilaterally outside the PJM process to support large load build-out. She also asked what target returns or IRR would justify these investments.

A: Management said new load will likely be funneled into the RBP process but there are other venues and they have good sites and infrastructure to offer. They emphasized they avoid high-risk market positions, consider the PJM marketplace high risk, and are looking for utility-like returns because they want utility-like risk.

"So I think in saying that utility-like investments, we're saying utility-like returns because we're looking for utility-like risk." — Ralph LaRossa (CEO·CHAIR)

virtual power plants (VPP)

Q (Ryan Levine · Citi): He asked how the company views the VPP opportunity and whether there are initiatives underway to align with state policy.

A: Management said VPPs are mainly an opportunity to align with state policy rather than a big financial opportunity for their New Jersey customers. They said they have proposed pilot programs and have engaged with the BPU in regulatory conversations, and they will participate in the stakeholder process as it is initiated.

"There's not a tremendous financial opportunity on the VPP side that we see." — Ralph LaRossa (CEO·CHAIR)

energy efficiency order and nuclear costs

Q (Paul Patterson · Glenrock Associates): He asked how the energy efficiency order fits into the regulatory environment and what stakeholders understand about the affordability impact of new nuclear.

A: Management said the energy efficiency order is a specific piece of the regulatory process and not an overarching rule; it is prospective and tied to extension assets, and union labor and on-bill financing are differentiating issues to discuss. On nuclear, they said many studies give policymakers line of sight on costs but timing and allocation of cost-overrun risk remain key open questions.

"I look at that as a very specific piece of the regulatory process, not overarching." — Ralph LaRossa (CEO·CHAIR)

EO1 next steps and proposals

Q (Travis Miller · Morningstar): He asked whether the company must now put forward proposals for EO1 or if they are waiting for more guidance from the governor or BPU, and whether proposals come after the base rate case.

A: Management said there is a clear Phase 2 the BPU will go through and they will participate, submit comments, and attend stakeholder meetings while they wait for final orders. They said a framework is expected around the end of this year or beginning of next year, and with the base rate filing timing, companies can then efficiently move into the next framework.

"There's a clear Phase 2 that the Board of Public Utilities will go through as the next step in this process." — Ralph LaRossa (CEO·CHAIR)