PSEG (NYSE: PEG) outlines utility growth, nuclear fleet and grid risks
Rhea-AI Filing Summary
Public Service Enterprise Group (PSEG) files its annual report describing a predominantly regulated New Jersey electric and gas utility, plus a nuclear generation business operated through PSE&G and PSEG Power. The strategy emphasizes capital allocation to regulated transmission and distribution, clean energy programs, and monetizing carbon‑free nuclear output.
PSE&G serves about 2.4 million electric and 1.9 million gas customers, with most distribution margin now decoupled from sales volumes via a Conservation Incentive Program. Approved investment clause programs include multi‑year energy efficiency, gas system modernization, infrastructure advancement and EV initiatives totaling several billion dollars of authorized spending.
PSEG Power owns 3,758 MW of nuclear capacity in PJM, benefits from production tax credit and zero‑emission certificate frameworks, and uses hedging to manage power price exposure. The report details extensive federal and state regulatory oversight, transmission planning changes, cybersecurity and environmental requirements, and highlights risks from resource adequacy challenges, climate change, major storms, project execution and evolving New Jersey energy policy.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED
OR
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
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State or other |
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Securities registered pursuant to Section 12(b) of the Act:
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Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether each registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
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No |
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Indicate by check mark if each of the registrants is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. ☐ Yes ☒
Indicate by check mark whether each of the registrants (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. ☒
(Cover continued on next page)
Table of Contents
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Indicate by check mark whether the registrants have submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrants were required to submit such files). ☒
Indicate by check mark whether each registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Accelerated Filer |
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Smaller reporting company |
Emerging growth company |
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Large Accelerated Filer |
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Accelerated Filer |
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Smaller reporting company |
Emerging growth company |
If any of the registrants is an emerging growth company, indicate by check mark if such registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether each of the registrants has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 726(b)) by the registered public accounting firm that prepared and issued its audit report.
Public Service Enterprise Group Incorporated |
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Public Service Electric and Gas Company |
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If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrants included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrants’ executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether any of the registrants is a shell company (as defined in Rule 12b-2 of the Exchange Act).
☐ Yes
The aggregate market value of the Common Stock of Public Service Enterprise Group Incorporated held by non-affiliates as of June 30, 2025 was $
The number of shares outstanding of Public Service Enterprise Group Incorporated’s sole class of Common Stock as of February 20, 2026 was
As of February 20, 2026, Public Service Electric and Gas Company had issued and outstanding
Public Service Electric and Gas Company is a wholly owned subsidiary of Public Service Enterprise Group Incorporated and meets the conditions set forth in General Instruction I(1)(a) and (b) of Form 10-K. Public Service Electric and Gas Company is filing its Annual Report on Form 10-K with the reduced disclosure format authorized by General Instruction I.
DOCUMENTS INCORPORATED BY REFERENCE
Part of Form 10-K of |
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Documents Incorporated by Reference |
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Portions of the definitive Proxy Statement for the 2026 Annual Meeting of Stockholders of Public Service Enterprise Group Incorporated, which definitive Proxy Statement is expected to be filed with the Securities and Exchange Commission on or about March 12, 2026, as specified herein. |
Table of Contents
TABLE OF CONTENTS
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Page |
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FORWARD-LOOKING STATEMENTS |
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iii |
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FILING FORMAT |
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1 |
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WHERE TO FIND MORE INFORMATION |
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1 |
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PART I |
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Item 1. |
Business |
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1 |
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Operations and Strategy |
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2 |
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Competitive Environment |
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8 |
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Human Capital Management |
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9 |
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Regulatory Issues |
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10 |
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Environmental Matters |
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16 |
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Information About Our Executive Officers (PSEG) |
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18 |
Item 1A. |
Risk Factors |
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19 |
Item 1B. |
Unresolved Staff Comments |
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33 |
Item 1C. |
Cybersecurity |
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33 |
Item 2. |
Properties |
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37 |
Item 3. |
Legal Proceedings |
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38 |
Item 4. |
Mine Safety Disclosures |
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38 |
PART II |
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Item 5. |
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
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38 |
Item 6. |
[Reserved] |
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40 |
Item 7. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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41 |
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Executive Overview of 2025 and Future Outlook |
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41 |
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Results of Operations |
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48 |
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Liquidity and Capital Resources |
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53 |
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Capital Requirements |
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57 |
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Critical Accounting Estimates |
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59 |
Item 7A. |
Quantitative and Qualitative Disclosures About Market Risk |
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64 |
Item 8. |
Financial Statements and Supplementary Data |
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65 |
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Report of Independent Registered Public Accounting Firm (PCAOB ID No. |
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66 |
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Consolidated Financial Statements |
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70 |
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Notes to Consolidated Financial Statements |
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Note 1. Organization, Basis of Presentation and Summary of Significant Accounting Policies |
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82 |
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Note 2. Revenues |
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88 |
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Note 3. Variable Interest Entity (VIE) |
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93 |
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Note 4. Property, Plant and Equipment and Jointly-Owned Facilities |
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93 |
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Note 5. Regulatory Assets and Liabilities |
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94 |
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Note 6. Leases |
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99 |
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Note 7. Long-Term Investments |
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103 |
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Note 8. Financing Receivables |
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104 |
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Note 9. Trust Investments |
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105 |
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Note 10. Asset Retirement Obligations (AROs) |
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111 |
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Note 11. Pension, Other Postretirement Benefits (OPEB) and Savings Plans |
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112 |
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Note 12. Commitments and Contingent Liabilities |
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122 |
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Note 13. Debt and Credit Facilities |
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128 |
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Note 14. Schedule of Consolidated Capital Stock |
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133 |
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Note 15. Financial Risk Management Activities |
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133 |
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Note 16. Fair Value Measurements |
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137 |
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Note 17. Stock Based Compensation |
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141 |
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Note 18. Net Other Income (Deductions) |
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144 |
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Note 19. Income Taxes |
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145 |
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Note 20. Accumulated Other Comprehensive Income (Loss), Net of Tax |
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151 |
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Note 21. Earnings Per Share (EPS) and Dividends |
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153 |
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TABLE OF CONTENTS (continued)
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Note 22. Financial Information by Business Segment |
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154 |
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Note 23. Related-Party Transactions |
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157 |
Item 9. |
Changes In and Disagreements With Accountants on Accounting and Financial Disclosure |
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158 |
Item 9A. |
Controls and Procedures |
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158 |
Item 9B. |
Other Information |
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159 |
Item 9C. |
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections |
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159 |
PART III |
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Item 10. |
Directors, Executive Officers and Corporate Governance |
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163 |
Item 11. |
Executive Compensation |
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164 |
Item 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
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164 |
Item 13. |
Certain Relationships and Related Transactions, and Director Independence |
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Item 14. |
Principal Accountant Fees and Services |
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PART IV |
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Item 15. |
Exhibits, Financial Statement Schedules |
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Schedule II - Valuation and Qualifying Accounts |
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Signatures |
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172 |
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FORWARD-LOOKING STATEMENTS
Certain of the matters discussed in this report 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” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those anticipated. Such statements are based on management’s beliefs as well as assumptions made by and information currently available to management. When used herein, the words “anticipate,” “intend,” “estimate,” “believe,” “expect,” “plan,” “should,” “hypothetical,” “potential,” “forecast,” “project,” variations of such words and similar expressions are intended to identify forward-looking statements. Factors that may cause actual results to differ are often presented with the forward-looking statements themselves. Other factors that could cause actual results to differ materially from those contemplated in any forward-looking statements made by us herein are discussed in Item 1A. Risk Factors, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A), Item 8. Financial Statements and Supplementary Data—Note 12. Commitments and Contingent Liabilities, and other filings we make with the United States Securities and Exchange Commission (SEC), including our subsequent reports on Form 10-Q and Form 8-K. These factors include, but are not limited to:
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All of the forward-looking statements made in this report are qualified by these cautionary statements and we cannot assure you that the results or developments anticipated by management will be realized or even if realized, will have the expected consequences to, or effects on, us or our business, prospects, financial condition, results of operations or cash flows. Readers are cautioned not to place undue reliance on these forward-looking statements in making any investment decision. Forward-looking statements made in this report apply only as of the date of this report. While we may elect to update forward-looking statements from time to time, we specifically disclaim any obligation to do so, even in light of new information or future events, unless otherwise required by applicable securities laws.
The forward-looking statements contained in this report are intended to qualify for the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
From time to time, PSEG and PSE&G release important information via postings on their corporate Investor Relations website at https://investor.pseg.com. Investors and other interested parties are encouraged to visit the Investor Relations website to review new postings. You can sign up for automatic email alerts regarding new postings at the bottom of the webpage at https://investor.pseg.com or by navigating to the Email Alerts webpage at https://investor.pseg.com/resources/email-alerts/default.aspx. The information on https://investor.pseg.com and https://investor.pseg.com/resources/email-alerts/default.aspx is not incorporated herein and is not part of this Form 10-K.
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FILING FORMAT
This combined Annual Report on Form 10-K is separately filed by Public Service Enterprise Group Incorporated (PSEG) and Public Service Electric and Gas Company (PSE&G). Information relating to any individual company is filed by such company on its own behalf. PSE&G is only responsible for information about itself and its subsidiaries.
Discussions throughout the document refer to PSEG and its direct operating subsidiaries. Depending on the context of each section, references to “we,” “us,” and “our” relate to PSEG or to the specific company or companies being discussed.
WHERE TO FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other information with the SEC. You may obtain our filed documents from commercial document retrieval services, the SEC’s internet website at www.sec.gov or our website at https://investor.pseg.com. Information on our website should not be deemed incorporated into or as a part of this report. Our Common Stock is listed on the New York Stock Exchange under the trading symbol PEG. You can obtain information about us at the offices of the New York Stock Exchange, Inc., 11 Wall Street, New York, New York 10005.
PART I
ITEM 1. BUSINESS
We were incorporated under the laws of the State of New Jersey in 1985 and our principal executive offices are located at 80 Park Plaza, Newark, New Jersey 07102. We are a public utility holding company that, acting through our wholly owned subsidiaries, is a predominantly regulated electric and gas utility and a nuclear generation business. Our business plan focuses on achieving growth by allocating capital primarily toward regulated investments in an effort to continue to improve the sustainability and predictability of our business and realizing the value of the consistent and reliable carbon-free generation from our nuclear units.
As a holding company, our profitability depends on our subsidiaries’ operating results. We principally conduct our business through two direct wholly owned subsidiaries, PSE&G and PSEG Power LLC (PSEG Power), described below, each of which also has its principal executive offices at 80 Park Plaza, Newark, New Jersey 07102.
Our other direct wholly owned subsidiaries are: PSEG Long Island LLC (PSEG LI), which operates the Long Island Power Authority’s (LIPA) electric transmission and distribution (T&D) system under a contractual agreement; PSEG Energy Holdings L.L.C. (Energy Holdings), which primarily holds our legacy lease investments and competitively bid, FERC regulated transmission; and PSEG Services Corporation (Services), which provides us and our operating subsidiaries with certain management, administrative and general services at cost.
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OPERATIONS AND STRATEGY
PSE&G
Our regulated T&D public utility, PSE&G, distributes electric energy and natural gas to customers within a designated service territory running diagonally across New Jersey where approximately 6.8 million people, or about 74% of New Jersey’s population resides.
Products and Services
Our utility operations primarily earn margins through:
The commodity portion of our utility business’ electric and gas sales is managed by basic generation service (BGS) and basic gas supply service (BGSS) suppliers. Pricing for those services is set by the BPU as a pass-through, resulting in no margin for our utility operations.
In addition, we continue to invest in and pursue opportunities in regulated clean energy programs, including EE, electric vehicle (EV) make-ready charging infrastructure and other potential investments.
We also earn margins through competitive services, such as appliance repair, in our service territory.
How PSE&G Operates
We are a transmission owner in PJM Interconnection, L.L.C. (PJM) which is an Independent System Operator (ISO) and Regional Transmission Organization (RTO) that operates the electric transmission system in the Mid-Atlantic Region,
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including New Jersey and the surrounding states. We provide distribution service to 2.4 million electric customers and 1.9 million gas customers in a service area that covers approximately 2,600 square miles running diagonally across New Jersey. We serve the most densely populated, commercialized and industrialized territory in New Jersey, including its six largest cities and approximately 300 suburban and rural communities.
Transmission
We use formula rates for our transmission cost of service and investments. Formula rates provide a method of rate recovery where the transmission owner annually determines its revenue requirements through a fixed formula that provides for a recovery of our operating costs and a return of and on our capital investments in the system, net of accumulated depreciation and deferred tax liabilities (also known as rate base) using an approved return on equity (ROE) in developing the weighted average cost of capital. Under this formula, rates are put into effect in January of each year based upon our internal forecast of annual expenses and capital expenditures. Rates are subsequently trued up to reflect actual annual expenses and capital expenditures. Our transmission revenues are not impacted by sales volumes. Our current approved transmission rates provide for a base ROE of 9.90% and a 50 basis point adder for our membership in PJM as an RTO. See Item 7. MD&A—Executive Overview of 2025 and Future Outlook for additional information.
Distribution
PSE&G distributes electricity and natural gas to end users in our respective franchised service territories. Our distribution rates are subject to periodic rate cases approved by the BPU. In October 2024, the BPU issued an Order approving the settlement of PSE&G’s electric and gas distribution base rate case with new rates effective October 15, 2024. The Order provided for a $17.8 billion rate base, a 9.6% return on equity for PSE&G’s distribution business and a 55% equity component of its capitalization structure. For additional information, see Item 8. Note 5. Regulatory Assets and Liabilities.
The BPU has also approved a series of PSE&G infrastructure, EE, EV and renewable energy investment programs with cost recovery through various clause mechanisms. For a discussion of proposed and approved programs, see Investment Clause Programs as follows and Item 7. MD&A—Executive Overview of 2025 and Future Outlook.
Our load requirements are split among commercial, residential and industrial customers, as shown in the following table for 2025:
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% of 2025 Sales |
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Customer Type |
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Electric |
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Gas |
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Commercial |
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57 |
% |
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38 |
% |
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Residential |
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34 |
% |
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58 |
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Industrial |
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9 |
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4 |
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Total |
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100 |
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100 |
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Our customer base has modestly increased since 2021, with electric and gas loads changing as illustrated in the following table:
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Electric and Gas Distribution Statistics |
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Customers as of December 31, 2025 |
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Historical Annual |
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Electric Sales and |
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Historical Annual |
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Electric |
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2.4 million |
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0.9% |
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40,561 Gigawatt Hours |
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0.4% |
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Gas |
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1.9 million |
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0.7% |
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2,633 Million Therms |
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2.1% |
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As part of the BPU's approval of the Clean Energy Future-Energy Efficiency (CEF-EE) filing in 2021, we implemented the Conservation Incentive Program (CIP) that trues up PSE&G’s distribution margin to a rate case-approved baseline per customer for the majority of our customers. As a result, electric and gas sales volumes and demands are no longer a driver of our margin and over 90% of our Electric and Gas Distribution margin will only vary based upon the number of customers. While load has modestly decreased in the past due to a decline in larger industrial customers, greater EE and other factors, a significant increase in load is anticipated due to the increasing adoption of EVs, the expansion of data centers and other large users in our area, ongoing growth in the number of customers, other sources of electrification and other factors, which will collectively drive the need for increased system investment.
Investment Clause Programs
The following table lists our major approved investment clause programs that are in progress:
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Program |
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Investment |
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Approval |
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Term of |
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Year Started |
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CEF-EE II |
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$2.9 billion |
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2024 |
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6 years |
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2025 |
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CEF-EE |
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$1.6 billion |
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2020 |
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5 years |
(A) |
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2020 |
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Gas System Modernization Program (GSMP) III |
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$1.4 billion |
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2025 |
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3 years |
(B) |
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2026 |
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GSMP II Extension |
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$902 million |
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2023 |
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2 years |
(C) |
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2024 |
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Infrastructure Advancement Program (IAP) |
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$511 million |
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2022 |
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4 years |
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2022 |
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CEF-EV |
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$166 million |
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2021 |
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~6 years |
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2021 |
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To date, we launched three of the four components of our CEF:
Our CEF-Energy Storage (ES) program, which was filed with the BPU in October 2018, is being held in abeyance.
GSMP III—designed to replace at least 600 miles of cast iron and unprotected steel mains and services in our gas system.
GSMP II Extension—designed to replace at least 400 miles of cast iron and unprotected steel mains and services in our gas system.
IAP—designed to improve the reliability of the “last mile” of our electric distribution system and address aging substations and gas metering and regulation stations.
See Item 7. MD&A—Executive Overview of 2025 and Future Outlook for additional information.
Solar Generation
We have also undertaken solar initiatives at PSE&G, which primarily invest in utility-owned solar photovoltaic (PV) grid-connected solar systems installed on PSE&G property and third-party sites with our economics driven by our net investment in solar, with a contemporaneous return on that rate base.
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Supply
We make no margin on the default supply of electricity and gas since the actual costs are passed through to our customers.
All electric and gas customers in New Jersey have the ability to choose their electric energy and/or gas supplier. Pursuant to BPU requirements, we serve as the supplier of last resort for two types of electric and gas customers within our service territory that are not served by another supplier. The first type provides default supply service for smaller C&I customers and residential customers at seasonally-adjusted fixed prices for a three-year term (BGS-Residential Small Commercial Pricing (RSCP)). These rates change annually on June 1 and are based on the average price obtained at auctions in the current year and two prior years. The second type provides default supply for larger customers, with energy priced at hourly PJM real-time market prices for a contract term of 12 months (BGS-Commercial Industrial Energy Pricing).
We procure the supply to meet our BGS obligations through auctions authorized by the BPU for New Jersey’s total BGS requirement. These auctions take place annually in February. Once approved by the BPU, electricity prices for BGS service are set. Approximately one-third of PSE&G’s total BGS-RSCP eligible load is auctioned each year for a three-year term. For information on current prices, see Item 8. Note 12. Commitments and Contingent Liabilities.
PSE&G procures the supply requirements of its default service BGSS gas customers through a full-requirements contract with PSEG Power. The BPU has approved a mechanism designed to recover all gas commodity costs related to BGSS for residential customers. BGSS filings are made annually by June 1 of each year, with a targeted effective date of provisional rates by October 1. PSE&G’s revenues are matched with its costs using deferral accounting, with the goal of achieving a zero cumulative balance by September 30 of each year. In addition, we have the ability to put in place two self-implementing BGSS increases on December 1 and February 1 of up to 5% and also may reduce the BGSS rate at any time and/or provide bill credits. Any difference between rates charged under the BGSS contract and rates charged to our residential customers is deferred and collected or refunded through adjustments in future rates. C&I customers that do not select third-party suppliers are also supplied under the BGSS arrangement. These customers are charged a market-based price largely determined by prices for commodity futures contracts.
PSEG Power & Other
PSEG Power & Other is predominantly comprised of its nuclear generation assets, its natural gas supply operations, the Operating Services Agreement (OSA) of PSEG LI with LIPA, and other legacy investments. PSEG Power is a public utility within the meaning of the Federal Power Act (FPA) and the payments it receives and how it operates are subject to FERC regulation.
PSEG Power
Products and Services
As a nuclear generation owner and operator, our revenue has been derived primarily from energy, capacity and ancillary services sold to PJM in the spot markets. These products and services may also be hedged through exchange markets or bilaterally.
PSEG Power also sells wholesale natural gas, primarily through a full-requirements BGSS contract with PSE&G to meet the needs of PSE&G’s default service customers. In 2022, the BPU approved an extension of the long-term BGSS contract to March 31, 2027, and thereafter the contract remains in effect unless terminated by either party with a two-year notice.
PSEG Power supplies PSE&G’s peak daily gas requirements through its balanced portfolio of firm gas transportation capacity, storage contracts, contract peaking supply, and liquefied natural gas and propane. Based upon the availability of natural gas beyond PSE&G’s actual daily needs, PSEG Power sells gas to other customers and shares these proceeds with PSE&G’s customers.
How PSEG Power’s Nuclear Generation Operates
As of December 31, 2025, PSEG Power had 3,758 MW of nuclear generation capacity. All of our nuclear generation capacity is located in New Jersey and Pennsylvania.
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Our nuclear generation is considered to be base load. Base load units run the most and typically are called to operate whenever they are available. Variable operating costs are low due to the combination of highly efficient operations and the use of relatively lower-cost fuels. Performance is generally measured by the unit’s “capacity factor,” or the ratio of the actual output to the theoretical maximum output.
Nuclear Fuel Supply
We have long-term contracts for nuclear fuel. These contracts provide for:
We expect to be able to meet the nuclear fuel supply demands of our operations. However, there are limited suppliers for certain aspects of this supply chain and the ability to maintain an adequate fuel supply could be affected by several factors not within our control, including changes in prices and demand, tariffs, curtailments by suppliers, severe weather, environmental regulations, war and hostilities, and other factors. For additional information and a discussion of risks, see Item 1A. Risk Factors, Item 7. MD&A—Executive Overview of 2025 and Future Outlook and Item 8. Note 12. Commitments and Contingent Liabilities.
Markets and Market Pricing
All of PSEG Power’s nuclear generation assets are located within the PJM RTO. In PJM, owners of power plants specify prices at which they are prepared to generate and sell energy based on the marginal cost of generating energy from each individual unit. Typically, the bid price of the last unit dispatched by PJM establishes the energy market-clearing price.
This method of determining supply and pricing creates a situation where natural gas prices often have a major influence on the price that generators will receive for their output, especially in periods of relatively strong or weak demand. Therefore, changes in the price of natural gas will often translate into changes in the wholesale price of electricity and will continue to have a strong influence on the price of electricity in the markets in which we operate.
Market wholesale prices may vary by location resulting from congestion or other factors and do not necessarily reflect our contract prices. Forward prices are volatile and there can be no assurance that current forward prices will remain in effect or that we will be able to contract output at these forward prices.
In August 2022, the Inflation Reduction Act (IRA) was signed into law expanding incentives that promote carbon-free generation. The enacted legislation established the production tax credit (PTC) for electricity generation using nuclear energy, which began January 1, 2024 and is available through 2032. PSEG Power’s nuclear plants are eligible to benefit from the PTC. The expected PTC rate is up to $15 per megawatt hour (MWh) subject to adjustment based upon a facility’s gross receipts and meeting prevailing wage rules. The PTC rate and the gross receipts threshold are subject to annual inflation adjustments. Until additional guidance is issued by the U.S. Treasury, the final realized value of the PTC is subject to adjustment, which may be material. PSEG did not record any PTCs for any of its nuclear units in 2025 as gross receipts exceeded the level at which we would receive PTCs. However, the PTC continues to provide a benefit to our nuclear units by helping to mitigate the exposure to potential downside market volatility.
Our nuclear generating units’ performance and market prices have a considerable effect on our profitability. The PTC is designed to increase with inflation, and therefore, future inflation levels will impact the potential financial support for our nuclear units. In addition, market revenues in excess of the PTC threshold provide opportunity for incremental benefit.
PSEG Power’s Salem 1, Salem 2 and Hope Creek nuclear plants were also awarded zero emission certificates (ZECs) by the BPU through May 2025. These nuclear plants received ZEC revenue from the electric distribution companies (EDCs) in New Jersey, which was equivalent to approximately $10/MWh. ZEC revenue recorded was reduced by the estimated PTCs generated from PSEG Power’s Salem 1, Salem 2, and Hope Creek nuclear plants. ZEC revenue will be adjusted based upon
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the actual amount of the PTCs when guidance is issued on how to calculate gross receipts and that adjustment could be material.
In addition to energy sales, we earn revenue from capacity payments for our generating assets. These payments are compensation for committing our generating units to PJM for dispatch at its discretion. Capacity payments reflect the value to PJM of assurance that there will be sufficient generating capacity available at all times to meet system reliability and energy requirements.
In PJM the market design for capacity payments provides for a forward-looking, capacity pricing mechanism through the Reliability Pricing Model (RPM). For additional information regarding auction delays, complaints against PJM regarding RPM, PJM and FERC actions related to the capacity market construct and resulting market uncertainty, see Regulatory Issues—Federal Regulation.
The prices to be received by generating units in PJM for capacity have been set through RPM base residual and incremental auctions and depend upon the zone in which the generating unit is located. The average capacity prices that PSEG expects to receive from the base residual and incremental auctions which have been completed are disclosed in Item 8. Note 2. Revenues.
In addition, the PJM capacity market imposes performance obligations and non-performance penalties on resources during times of system stress. These rules provide an opportunity for bonus payments or require the payment of penalties depending on whether a unit is available during a performance interval.
Hedging Strategy
Generally, we seek to hedge the financial risks of our generation through sales at PJM West or other nodes corresponding to our nuclear generation portfolio. Our hedge transactions in PJM generally reflect energy sales at the liquid PJM Western Hub or other basis locations when available and other transactions that seek to secure price certainty for our energy output. Our hedging practices help to manage some of the volatility of the nuclear generation business when forward prices are greater than the level at which we would receive PTCs.
To mitigate volatility in our results, we seek to contract in advance to hedge the price exposure for a significant portion of our anticipated electric output, capacity and fuel needs. Our hedging strategy also considers the risk reduction impact of the PTC, as the PTC is intended to provide sufficient and stable support for nuclear units. While the PTC eligibility period began in January 2024, the U.S. Treasury has yet to issue guidance regarding the definition of gross receipts. We continue to analyze the impact of the IRA on our nuclear units, including potential future guidance from the U.S. Treasury, potential impacts on hedging strategies and overall financial support.
We historically have sold a portion of our anticipated generation over a multi-year forward horizon, normally over a period of up to three years, while also retaining the flexibility to add hedges for longer terms if market conditions are favorable. Our hedging strategy has incorporated an estimated range of risk reduction impacts from the PTCs on our nuclear generation portfolio while retaining the ability to benefit when market pricing exceeds the level at which we would receive PTCs. As of December 31, 2025, we expect that our current portfolio position for 2026 will result in the realized value of our nuclear generation output being above the level at which we would receive PTCs. Our strategy may continue to evolve taking into account energy market conditions, PTC guidance uncertainty, and potential incremental changes upon receiving U.S. Treasury guidance.
Our fuel strategy is to maintain certain levels of uranium in inventory and to make periodic purchases to support such levels.
LIPA Operations Services Agreement (OSA)
PSEG LI has been operating LIPA’s electric T&D system in Long Island, New York since 2014 under a 12-year OSA with LIPA that expired on December 31, 2025. In 2025, a five year extension of the contract was approved. A competitor in the contract bidding process filed litigation against LIPA challenging the process. LIPA filed a motion to dismiss the competitor’s claim as untimely, which was granted by the New York Supreme Court in December 2025. The competitor filed an appeal in January 2026.
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Under the OSA, PSEG LI acts as LIPA’s agent in performing many of its obligations and in return (a) is prefunded for pass-through operating expenditures, (b) receives a fixed management fee and (c) is eligible to receive an incentive fee contingent on meeting established performance metrics.
Competitively Bid, FERC Regulated Transmission
PSEG continues to evaluate investment opportunities in regulated transmission. In December 2023, PJM awarded us an approximately $424 million project to construct a 500 kV transmission line to address increasing load and reliability issues in Maryland and northern Virginia as part of its 2022 Window 3 competitive solicitation. PJM directed that the project be placed in service in 2027. However, based on the procedural timeline established by order of the Maryland Public Service Commission, we do not currently believe a 2027 in-service date for the project is reasonably achievable. We are continuing to take all available steps to obtain approvals for timely project execution. We cannot predict the outcome.
PSEG will continue to evaluate opportunities to participate in transmission solicitation processes and may decide to submit bids for these opportunities, some of which could be material investments. For additional information, see Item 7. MD&A— Executive Overview of 2025 and Future Outlook.
Energy Holdings
Energy Holdings maintains our portfolio of legacy lease investments. See Item 8. Note 7. Long-Term Investments and Note 8. Financing Receivables for additional information.
COMPETITIVE ENVIRONMENT
PSE&G
Our T&D business is not affected when customers choose alternate electric or gas suppliers since we earn our return on our net investment in rate base to provide T&D service, not by supplying the commodity. Based on our transmission formula rate and the CIP program for electric and gas distribution, we are also minimally impacted by changes in customers’ usage. Our growth is driven by (i) our investment program to deliver energy more reliably by investing to meet anticipated demand growth and modernizing our electric transmission and electric and gas distribution system and (ii) investing in programs that meet State targets to help deliver cleaner energy, including our EE programs to help customers use less energy and investment programs to build EV infrastructure and solar generation. There may also be opportunities to expand into related energy infrastructure, including generation and storage, though participation in these areas is subject to regulatory approval and market design, which continues to evolve. That growth can be affected by customer cost pressures which could result from higher commodity costs, higher supply costs to support subsidized renewable generation, higher operating costs, higher tax rates, macro-economic conditions including inflation, and other factors. Further, technological advances could impact the rate of growth of our gas and electric T&D businesses.
Changes previously ordered by FERC and implemented by PJM and other ISOs to eliminate contractual provisions that previously provided us a “right of first refusal” to construct new transmission projects in our service territory could result in third-party construction of transmission lines in our area in the future and also allow us to seek opportunities to build in other service territories. While there has been minimal impact so far, these rules continue to evolve so both the extent of the risk within our service territory and the opportunities for our transmission business elsewhere remain difficult to assess.
PSEG Power
Various market participants compete with us and one another in transacting in the wholesale energy markets and entering into bilateral contracts. Our competitors include but are not limited to merchant generators, utility generators, energy marketers, retailers, private equity firms, and other financial entities.
Anticipated demand growth and the pace of that relative to retirements of existing firm generation and new additions of intermittent and firm generation capacity, as well as subsidized generation capacity, or technological advances could impact forward market prices in the future.
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PJM has a capacity market that has been approved by FERC. FERC regulates this market and must approve market design rule changes proposed by PJM. For information regarding recent actions by FERC relating to capacity market design, see the discussion in Regulatory Issues—Federal Regulation.
Environmental issues could also impact our competitiveness, including requirements regarding capital investments at our nuclear stations, such as cooling towers, and could lead to a material adverse effect, while other actions to further regulate carbon dioxide emissions could better position our nuclear plants.
HUMAN CAPITAL MANAGEMENT
Our human capital management strategy is integrated with our overall business strategy. Our values and strong culture of inclusion support our goal to attract, develop and retain a high performing diverse workforce - one with the skill sets to succeed in a rapidly evolving environment.
We believe in treating people with dignity and respect, protecting each of our fundamental human rights, and striving to maintain the high standards of ethical conduct on which our business and reputation have been built.
The Organization and Compensation Committee of the PSEG Board of Directors is responsible for the oversight of PSEG’s human capital management strategy and risks. It is updated regularly on matters related to culture, executive compensation, and leadership succession and development. Safety metrics, such as leading indicators, serious injury rate, Occupational Safety and Health Administration (OSHA) recordable incidence rate, and OSHA days away from work rate, are regularly monitored and reported to our Board.
Fifty-nine percent of our workforce is represented by six unions under various collective bargaining agreements that cover wages, benefits and other terms and conditions of employment. Our current agreements with all six unions remain in place until 2027 and support strategic objectives and business goals.
The following chart presents our total employee population indicating percentages of employees that are represented by a labor organization:
As of December 31, 2025, women constituted approximately 28% of our non-represented employees and 19% of our total workforce. People who are racially/ethnically diverse constituted approximately 36% of our non-represented employees and 31% of our total workforce.
Safety and Security
The safety and security of our employees and the public are integrated into our culture and business operations. We demonstrate this by providing support to employees so that everyone is empowered and encouraged to question, stop and correct any unsafe act or condition and provide feedback on safety and security matters. We take measures to provide employees with proper knowledge, training and protective equipment to maintain their personal health and safety and to mitigate workplace risks.
Employee Experience & Engagement
We provide our dedicated workforce the tools, the resources and an inclusive workplace culture needed to deliver safe and reliable energy to our customers. Under our Inclusion for All program, we embrace a broad definition of diversity as reflected in our values where we look to embrace each other’s differences. Our efforts are supported by our Employee Business Resource Groups and Local Inclusion Teams within our business units and field locations. We seek to offer opportunities that
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are relevant and accessible to all employees, including community outreach, volunteerism, mentorship, recognition and professional development.
To determine if we are being responsive to the needs of our employees, we routinely assess the impact of our work by soliciting employee feedback through focus groups, listening sessions, pulse surveys and a biennial employee engagement survey.
Talent Management
Our recruitment strategy is focused on hiring a workforce to meet our business objectives, including critical skilled trades roles. We have a comprehensive workforce planning strategy to support our hiring needs. It includes hiring ahead of attrition for skilled trades roles, community outreach, workforce development and strategic sourcing with key external partners like trade schools, colleges, county workforce development boards, and other non-profit partners.
We value the growth and development of all our employees and offer a variety of opportunities to enhance their skills and abilities. We hold talent reviews and succession discussions regularly for leadership and critical positions to support workforce planning. We use tailored development opportunities and other tools to build a strong internal pipeline that is ready to take the next step in their careers. We continue to focus on upskilling roles to adapt to evolving technologies and digital advancements.
Total Rewards Program
We support the wellbeing of our employees through a comprehensive total rewards program. We provide competitive compensation to our workforce and offer a benefits program that is designed to support physical, emotional, social and financial wellbeing.
REGULATORY ISSUES
In the ordinary course of our business, we are subject to regulation by, and are party to various claims and regulatory proceedings with FERC, the BPU, the Commodity Futures Trading Commission (CFTC) and various state and federal environmental regulators, among others. For information regarding material matters, other than those discussed below, see Item 8. Note 12. Commitments and Contingent Liabilities. In addition, information regarding PSE&G’s specific filings pending before the BPU is discussed in Item 8. Note 5. Regulatory Assets and Liabilities.
Federal Regulation
FERC is an independent federal agency that regulates the transmission of electric energy and natural gas in interstate commerce and the sale of electric energy and natural gas at wholesale pursuant to the FPA and the Natural Gas Act. PSE&G and certain operating subsidiaries of PSEG Power are public utilities as defined by the FPA. FERC has extensive oversight over such public utilities. FERC approval is usually required when a public utility seeks to: sell or acquire an asset that is regulated by FERC (such as a transmission line or a generating station); collect costs from customers associated with a new transmission facility; charge a rate for wholesale sales under a contract or tariff; or engage in certain mergers and internal corporate reorganizations.
FERC also regulates RTOs/ISOs, such as PJM, and their regional transmission planning processes as well as their energy and capacity markets.
Transmission Regulation
FERC has exclusive jurisdiction to establish the rates and terms and conditions of service for interstate transmission. We currently have FERC-approved formula rates in effect to recover the costs of our transmission facilities. Under this formula, rates are put into effect in January of each year based upon our internal forecast of annual expenses and capital expenditures. Rates are subsequently trued up to reflect actual annual expenses and capital expenditures.
Transmission Rate Proceedings and ROE—From time to time, various matters are pending before FERC relating to, among other things, transmission planning and transmission rates and returns, including incentives. Depending on their outcome, any of these matters could materially impact our results of operations and financial condition.
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In a rulemaking proceeding issued in 2021, FERC proposed to eliminate the existing 50 basis point adder for RTO membership, which is currently available to PSE&G and other transmission owners in RTOs. Elimination of the RTO adder for RTO membership would reduce PSE&G’s annual Net Income and annual cash inflows by approximately $40 million.
Transmission Planning Proceedings—In May 2024, FERC issued a Final Rule to reform regional transmission planning and cost allocation. This order requires transmission providers like PJM to engage in long-term regional planning of not less than 20 years. It also requires certain reforms to the local planning process, including enhancing the transparency of that process and evaluating whether local transmission facilities that need replacing can be “right-sized” to meet broader regional needs.
In December 2025, both PJM and its Transmission Owners made compliance filings at FERC seeking to implement the Final Rule’s requirements, including establishing a comprehensive set of long-term transmission needs based on a 20-year planning horizon, providing a role for the states in identifying needs and solutions, and establishing procedures for identifying and planning “right-sized” replacement facilities. If approved by FERC, these changes will provide a regulatory framework for the planning of transmission infrastructure to help address resource adequacy challenges in PJM. Separately, the PJM Transmission Owners, including PSE&G, are working with the states to develop cost allocation rules to decide who will pay for these long-term transmission facilities, with a FERC filing to be made later in 2026.
In December 2024, a coalition of industrial customers and state ratepayer advocates filed a complaint at FERC against various named public utilities and RTOs/ISOs, including PJM. The complaint alleges that local planning has produced inefficient planning and projects that are not cost-effective, and therefore requests that FERC require the application of regional planning requirements, including relevant competitive solicitation processes, to all transmission facilities over 100kV. The complaint also requests that FERC require RTOs/ISOs to appoint an “Independent System Planner” to oversee transmission planning. While PSEG is not a named party in the complaint, our local planning authority and rights may be impacted by the resolution of this proceeding. We cannot predict the outcome of this proceeding.
Regulation of Wholesale Sales—Generation/Market Issues/Market Power
Under FERC regulations, public utilities that wish to sell power at market rates must receive FERC authorization (market-based rate (MBR) authority) to sell power in interstate commerce before making power sales. They can sell power at cost-based rates or apply to FERC for authority to make MBR sales. For a requesting company to receive MBR authority, FERC must first determine that the requesting company lacks market power in the relevant markets and/or that market power in the relevant markets is sufficiently mitigated. Certain PSEG companies are public utilities and currently have MBR authority. These companies, which include PSEG Energy Resources & Trade LLC, PSEG Nuclear LLC and PSE&G must file at FERC every three years to update their market power analyses. At the end of 2025, PSEG filed an updated market power analysis.
In October 2024, FERC issued a Final Rule that eliminates compensation for reactive power in circumstances when the generator is operating within the normal power factor range specified in its interconnection agreement. FERC denied rehearing of this order in June 2025 and in August 2025 accepted a PJM filing that establishes a June 1, 2026 date for elimination of reactive power compensation. In August 2025, PSEG sought judicial review of FERC’s decision. This appeal is pending and we cannot predict the outcome. The loss of reactive power compensation is not expected to have a material impact on PSEG's results of operations.
In addition, there are ongoing proceedings at FERC that may impact the interconnection of large loads such as data centers to the power grid, including addressing the issue of what transmission services and charges should be paid by future co-located customers. In February 2025, FERC issued a “show cause” order directing PJM and PJM transmission owners to explain why the PJM tariff is just and reasonable or, alternatively, what revisions might be necessary to address perceived gaps in the PJM tariff with respect to co-located load arrangements. In December 2025, FERC issued an order in this proceeding finding the PJM tariff to be unjust and unreasonable, directing PJM to file tariff revisions to reflect new types of transmission services that will be made available to co-located loads and establishing a paper hearing to set the appropriate level of charges to be paid by co-located load customers.
Relatedly, in October 2025, in response to a directive by the Secretary of Energy, FERC initiated a rulemaking proceeding to establish rules by the end of April 2026 to facilitate the interconnection of large load customers to the transmission system through a queue process. We cannot predict the outcome of these matters.
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Energy Clearing Prices
Energy clearing prices in the markets in which we operate are generally based on bids submitted by generating units. Under FERC-approved market rules, bids are subject to price caps and mitigation rules applicable to certain generation units. FERC rules also govern the overall design of these markets. At present, all units, including those owned by PSEG, within a delivery zone receive a clearing price based on the bid of the marginal unit (i.e., the last unit that must be dispatched to serve the needs of load) which can vary by location.
Capacity Market Issues
PJM operates a capacity market called the Reliability Pricing Model (RPM), the rules for which are approved by FERC. RPM incorporates a forward auction for installed capacity. Under the RPM, generators located in constrained areas within PJM are paid more for their capacity as an incentive to ensure adequate supply where generation capacity is most needed.
Over the past few years, RPM has been under considerable scrutiny at both the federal and state level as clearing prices in the capacity auctions have reached unprecedented levels and there is growing concern that the capacity market is not procuring sufficient generation to meet increasing demand for electricity.
In PJM’s most recent capacity auction run in December 2025, the auction cleared at the FERC-approved price cap of $333.44/MW-day, and PJM indicated that without the price cap the clearing price would have been $529.80/MW-day. Furthermore, for the first time, PJM was unable to procure enough generation to meet its reliability requirement, which incorporates a 20% reserve margin to meet demand during times of system stress. In fact, PJM fell 6,625 MW short of meeting this reliability requirement.
In January 2026, the White House’s National Energy Dominance Council and governors from all 13 states in PJM signed an agreement urging PJM to expeditiously reform its capacity market to ensure reliability and lower costs to consumers. Specifically, the agreement seeks to provide “15 year price certainty,” which may be accomplished by having PJM conduct a reliability backstop auction to procure new generation capacity. The agreement also supports an extension of the existing price collar for two more Base Residual Auctions, which PJM has recently indicated it supports. Over the next few months, PJM will be developing rules that will enable it to run such an auction in September 2026 following FERC approval of rules changes. One of the open questions is which set of customers will pay the generation procurement costs, and whether zones where demand exceeds supply will pay a proportionately larger allocation of costs. PJM will also be considering other reforms to its markets.
Compliance
Reliability Standards—PSEG is required to comply with the North American Electric Reliability Corporation (NERC) Reliability Standards, promulgated by NERC and approved by FERC, which are designed to ensure the security and reliability of the United States electric transmission and generation system (the “electric grid”). As a result, PSEG is subject to requirements governing the planning and operation of the electric grid, and requirements governing the physical and cyber security of PSEG assets that are used to protect and operate the electric grid. Due to the increasing sophistication of physical and cyber security threats to the security and reliability of the electric grid, it is anticipated that FERC and NERC will continue to promulgate new Reliability Standards, and modify existing Reliability Standards, to meet these challenges.
CFTC
In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC and the CFTC continue to implement a regulatory framework for swaps and security-based swaps. The rules are intended to reduce risk, increase transparency and promote market integrity within the financial system by providing for the registration and comprehensive regulation of swap dealers and by imposing recordkeeping, data reporting, margin and clearing requirements with respect to swaps. We are currently subject to recordkeeping and data reporting requirements applicable to commercial end users. The CFTC finalized rules establishing federal position limits for trading in certain commodities, such as natural gas. Entities such as PSEG began complying with the rules in 2022.
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Nuclear
Nuclear Regulatory Commission (NRC)
Our operation of nuclear generating facilities is subject to comprehensive regulation by the NRC, a federal agency established to regulate nuclear activities to ensure the protection of public health and safety, as well as the environment. Such regulation involves testing, evaluation and modification of all aspects of plant operation in light of NRC safety, security, cybersecurity, and environmental requirements. Continuous demonstration to the NRC that plant operations meet requirements is necessary.
The NRC has the ultimate authority to determine whether any U.S. nuclear generating unit may operate. The NRC conducts ongoing reviews of nuclear industry operations experience and may issue or revise regulatory requirements. We are unable to predict the final outcome of these reviews or the cost of any actions we would need to take to comply with any new regulations, including possible modifications to the Salem, Hope Creek and Peach Bottom facilities, but such costs could be material.
The current operating licenses of our nuclear facilities expire in the years shown in the following table:
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Unit |
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Year |
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Salem Unit 1 |
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2036 |
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Salem Unit 2 |
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2040 |
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Hope Creek |
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2046 |
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Peach Bottom Unit 2 |
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2053 |
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Peach Bottom Unit 3 |
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2054 |
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In 2024, PSEG submitted a letter to the NRC regarding a potential timeline to seek a second license renewal for our Salem and Hope Creek units. This second license renewal would extend the operating licenses through 2056 and 2060 for Salem Units 1 and 2, respectively, and 2066 for Hope Creek.
In 2022, the NRC issued an order related to its review of the subsequent license renewal (SLR) application for the Peach Bottom nuclear units which concluded that the previous environmental review required by the National Environmental Policy Act (NEPA) was incomplete and changed the expiration dates for the licenses to 2033 and 2034, until the completion of the NEPA analysis. The NEPA analysis was completed in 2025 and the NRC reinstated the 2053 and 2054 license expiration dates for the Peach Bottom units.
State Regulation
Our principal state regulator is the BPU, which oversees electric and natural gas distribution companies in New Jersey. We are also subject to various other states’ regulations due to our operations in those states.
Our New Jersey utility operations are subject to comprehensive regulation by the BPU including, among other matters, regulation of retail electric and gas distribution rates and service, the issuance and sale of certain types of securities and compliance matters.
In addition to base rates, we recover certain costs or earn on certain investments pursuant to mechanisms known as adjustment clauses. These clauses permit the flowthrough of costs to, or the recovery of investments from, customers related to specific programs, outside the context of base rate proceedings. Recovery of these costs or investments is subject to BPU approval for which we make periodic filings. Delays in the pass-through of costs or recovery of investments under these mechanisms could result in significant changes in PSE&G’s cash flow. PSE&G’s participation in solar, EV and EE programs is also regulated by the BPU, as the terms and conditions of these programs are approved by the BPU. BPU regulation can also have a direct or indirect impact on our power generation business as it relates to energy supply agreements and energy policy in New Jersey.
New Jersey Energy Master Plan (EMP) and Future of Gas Stakeholder Proceeding—In June 2022, the BPU commenced a proceeding to update New Jersey’s EMP. An effort was subsequently undertaken during 2023 through early 2025 to create a revised plan, including a series of stakeholder meetings and comments. In March 2025, BPU Staff and a third-party
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consultant discussed the results of their modeling. The main themes presented were: a need for continued reliability and affordability; challenges for New Jersey to achieve greenhouse gas reduction goals; the new capacity additions that are needed to maintain system reliability, and that these additions can be “clean firm” additions (without details of the meaning of “clean firm”); and the need for new strategies to guide the evolution of natural gas. Following the receipt of additional comments, in November 2025 the BPU released the updated EMP.
The updated EMP included a set of what was presented as “No Regrets” recommendations, described as strategies the state should pursue regardless of any other planning scenarios or steps taken as a broader energy planning strategy. These recommendations include accelerated deployment of clean energy generation sources (for example, solar, wind, advanced nuclear); continued investment in energy efficiency; grid modernization; transportation electrification; workforce development; and expansion of customer assistance programs. In addition to these strategies, the EMP also presents modeling based on 2023-2024 data for alternative pathways to achieve state goals (high electrification, hybrid electrification and remaining at the current state). Given the new administration took office in January 2026, it is not clear how the EMP might influence New Jersey’s energy policy and we cannot predict the impact on our business that might result.
Stakeholder Proceeding on Gas Competition, BGSS—In February 2023, the BPU announced that it would open a new docket to conduct a stakeholder proceeding regarding gas supply issues previously raised by competitive gas suppliers, including third-party suppliers’ participation in New Jersey gas distribution companies’ annual BGSS filings, and other aspects of the existing BGSS construct. There has been no public activity in this matter since May 2023.
Regional Energy Access (REA) Expansion Project — In September 2024, the United States Circuit Court for the District of Columbia Circuit vacated FERC approval of the REA Expansion Project, which involves a natural gas pipeline running through New Jersey and several other states, and in which PSEG Energy Resources & Trade, LLC, the provider of gas supplies to satisfy PSE&G’s BGSS customers, is a customer. The court found that FERC failed to properly consider the environmental consequences of the project, and the alleged lack of market demand for additional natural gas capacity in New Jersey. In January 2025, FERC responded to the Circuit Court’s concerns and reinstated its approval of the project. In February 2025, a subset of intervenors filed a rehearing request seeking to overturn FERC’s reinstatement of the REA certificate. The same subset of intervenors also filed a motion for an evidentiary hearing. In March 2025, the rehearing request was denied by operation of law, and in August 2025 FERC addressed the arguments raised on rehearing while confirming the denial of the rehearing request and motion for evidentiary hearing.
Energy Efficiency, Triennial Review—In November 2025, BPU Staff issued its straw proposal for the third triennium framework and requirements for energy efficiency programs. The proposed framework suggests changes that, if adopted as proposed, would increase risk to utilities implementing these programs to meet energy efficiency targets that are required by law. PSE&G submitted responsive comments recommending changes to the proposed framework that, if accepted, could better enable optimization of investments and benefits including achieving energy savings targets. Depending on the timing of BPU approval of a final framework, utilities could be expected to file triennium 3 program proposals during 2026 for a program to begin in July 2027. We cannot predict the outcome of this review and straw proposal at this time.
BGS Process—In July 2025, New Jersey’s EDCs, including PSE&G, filed their annual joint proposal for the conduct of the February 2026 BGS auction covering energy years 2027 through 2029. The February 2025 BGS auction resulted in a significant cost increase for electricity supplied by PSE&G and all other New Jersey electric distribution companies that was reflected in customers’ rates beginning June 1, 2025. The cost increases were in large part due to higher prices from the PJM capacity market (base residual auction). Rates resulting from the February 2026 BGS auction will become effective June 1, 2026.
Grid Modernization—In June 2022, following a stakeholder proceeding, the BPU Staff issued a report containing findings and recommendations to update the BPU’s interconnection regulations and processes. In furtherance of the recommendations, in June 2024 the BPU amended its interconnection rules to speed up the interconnection of renewable resources to the distribution grid. Separately, in July 2024, BPU Staff convened a working group to develop recommendations for integrated distribution planning for distributed energy resources. In July 2025 and January 2026, the BPU adopted various regulations intended to streamline the process for utility interconnection applications and ensure compliance with a recently enacted law mandating that EDCs in New Jersey improve the interconnection process for certain grid supply solar and energy storage facilities. We cannot predict the impact on our business or results of operations from this Grid Modernization plan or any
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laws, rules or regulations promulgated as a result thereof, particularly as they may relate to PSE&G’s electric distribution assets.
Cybersecurity Regulation
Federal—NERC Critical Infrastructure Protection standards establish cybersecurity and physical security protections for critical systems and facilities. These standards are also designed to promote coordination, threat sharing and interaction between utilities and various government agencies regarding potential cyber and physical threats against the nation’s electric grid. The Critical Infrastructure Protection standards are designed to protect Bulk Electric System (BES) Cyber Systems that would impact the reliable operation of the BES. PSE&G is obligated to comply with the NERC Critical Infrastructure Protection standards. NERC continues to examine revising criteria for low-impact cyber systems, which could result in expanding the Critical Infrastructure Protection standards to a larger set of applicable cyber assets.
NERC Critical Infrastructure Protection standards do not apply to nuclear facilities which are instead governed by the NRC for purposes of physical and cyber security. NRC has a number of risk-informed, performance-based security programs in place to effectively protect U.S. commercial nuclear facilities. NRC has existing requirements, effective processes, and the expertise to regulate and inspect cybersecurity to ensure the federal requirements are met.
NRC requires operating nuclear power plant licensees and license applicants to ensure that digital computer and communication systems associated with a nuclear power plant’s safety, security, and emergency preparedness functions are protected from cyberattacks. As a result, computer systems at operating power plants that monitor and control safety systems and help the reactor operate are isolated from external communications. Security systems that provide safeguards of the facility are also isolated from external communications, including the Internet.
NRC’s Office of Nuclear Security and Incident Response established the Cyber Security Branch (CSB) to strengthen internal governance of the agency’s regulatory activities. The CSB plans, coordinates, and manages agency activities related to cybersecurity for NRC applicants and licensees, such as security programs’ development and policy enhancements to prevent malevolent cyber acts against NRC-licensed facilities. The CSB’s cybersecurity-related responsibilities include developing rules and guidance, reviewing licensing actions, developing policy enhancements, and overseeing NRC-licensed facilities.
NRC regularly monitors the threats associated with cybersecurity, including potential threats against NRC-licensed facilities. Within the CSB there is a cyber assessment team that assesses real-world cyber events at NRC-licensed facilities. The team evaluates whether an identified threat could impact licensed facilities and makes recommendations for NRC actions and communications to the licensees. Furthermore, the NRC has established liaison relationships with the intelligence and law enforcement communities to include the National Counterterrorism Center, the U.S. Department of Homeland Security’s (DHS) Computer Emergency Response Team, and the Federal Bureau of Investigation.
The Transportation Security Administration, an agency of the DHS, has issued multiple security directives since May 2021 designed to mitigate cybersecurity threats to natural gas pipelines.
State—The BPU requires utilities, including PSE&G, to, among other things, implement a cybersecurity program that defines and implements organizational accountabilities and responsibilities for cyber risk management activities, and establishes policies, plans, processes and procedures for identifying and mitigating cyber risk to critical systems. Additional requirements of this order include, but are not limited to (i) annually inventorying critical utility systems; (ii) annually assessing risks to critical utility systems; (iii) implementing controls to mitigate cyber risks to critical utility systems; (iv) monitoring log files of critical utility systems; (v) reporting cyber incidents to the BPU; and (vi) establishing a cybersecurity incident response plan and conducting biennial exercises to test the plan. In addition, New York’s Stop Hacks and Improve Electronic Data Security (SHIELD) Act, which became effective in March 2020, requires businesses that own or license computerized data that includes New York State residents’ private information to implement reasonable safeguards to protect that information.
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ENVIRONMENTAL MATTERS
We are subject to federal, state and local laws and regulations with regard to environmental matters. Our associated obligations change as legislatures and regulators pass new laws and regulations and amend existing ones. Therefore, it is difficult to project future costs of compliance and their impact on competition. The costs of compliance associated with any new requirements that may be imposed by future regulations are not known but may be material.
For additional information related to environmental matters, including proceedings not discussed below, as well as anticipated expenditures for installation of compliance technology, hazardous substance liabilities and fuel and waste disposal costs, see Item 1A. Risk Factors and Item 8. Note 12. Commitments and Contingent Liabilities.
Air Pollution Control
Our facilities are subject to federal, state and local regulation that requires controls of emissions from sources of air pollution and imposes recordkeeping, reporting and permit requirements.
Water Pollution Control
The Federal Water Pollution Control Act prohibits the discharge of pollutants from point sources to water, except pursuant to a duly issued permit. These permits must generally be renewed every five years. Applicable regulations also impose obligations on facility operators like PSEG Power to install certain technology to treat their discharges to ensure discharges meet certain water quality requirements.
The Environmental Protection Agency’s (EPA) Clean Water Act (CWA) Section 316(b) rule establishes requirements for the regulation of cooling water intakes at existing power plants, such as Salem.
Hazardous Substance Liability
PSEG’s operations involve substances and byproducts classified by environmental regulations as hazardous. These regulations impose handling, storage and disposal requirements for hazardous materials. They also impose liability for damages to the environment, including cash penalties.
Site Remediation—Federal and state environmental laws and regulations require the cleanup of discharged hazardous substances. They authorize the EPA, the New Jersey Department of Environmental Protection (NJDEP) and private parties to commence lawsuits to compel clean-ups or seek reimbursement for such remediation. The clean-ups can be more complicated and costly when the hazardous substances are in or under a body of water. Clean-up obligations may be imposed regardless of the absence of fault, contractual agreements between parties, or the legality of activities at the time of discharge.
In May 2024, the EPA finalized revisions to the coal combustion residuals rule (CCR Rule) which established new requirements for the investigation and, if necessary, the cleanup of certain types of coal ash placed at certain fossil generation station sites, including certain sites owned or formerly owned by PSEG Power. We are in the process of investigating each of the sites that we currently own that are subject to the CCR Rule, as well as sites that we formerly owned that are subject to the CCR Rule where we retained certain environmental obligations to investigate and, if necessary, remediate. PSEG is currently unable to estimate the impact of the CCR Rule, but it could have a material impact on our business, results of operations and cash flows.
Natural Resource Damages—Federal and state environmental laws and regulations authorize damage assessments against persons who have caused an injury to natural resources through the discharge of a hazardous substance. The NJDEP requires persons conducting remediation to address such injuries through restoration or damage assessments.
Wildlife and Habitat Protection
Federal and state environmental laws and regulations govern activities that may harm certain wildlife or habitats. These laws and regulations impose permit requirements, prohibit certain activities, and impose penalties for violations.
In December 2024, the U.S. Fish and Wildlife Service proposed to designate the monarch butterfly as a “threatened” species under the federal Endangered Species Act. PSEG is unable to determine the impact of this development.
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Fuel and Waste Disposal
Nuclear Fuel Disposal—The federal government has entered into contracts with the operators of nuclear power plants for transportation and ultimate disposal of spent nuclear fuel. Under the Nuclear Waste Policy Act of 1982 (NWPA), nuclear plant owners are required to contribute to a Nuclear Waste Fund to pay for this service. Since May 2014, the nuclear waste fee rate has been zero. No assurances can be given that this fee will not be increased in the future. The NWPA allows spent nuclear fuel generated in any reactor to be stored in reactor facility storage pools or in Independent Spent Fuel Storage Installations located at reactors or away from reactor sites.
We have on-site storage facilities that are expected to satisfy the storage needs of Salem 1, Salem 2, Hope Creek, Peach Bottom 2 and Peach Bottom 3 through the end of their operating licenses.
Low-Level Radioactive Waste—As a by-product of their operations, nuclear generation units produce low-level radioactive waste. Such waste includes paper, plastics, protective clothing, water purification materials and other materials. These waste materials are accumulated on site and disposed of at licensed permanent disposal facilities. New Jersey, Connecticut and South Carolina have reached an agreement that gives New Jersey nuclear generators continued access to a waste disposal facility which is owned by South Carolina. We believe that this agreement will provide for adequate low-level radioactive waste disposal for Salem and Hope Creek through the end of their current licenses including full decommissioning, although no assurances can be given. Additionally, there are on-site storage facilities for Salem, Hope Creek and Peach Bottom, which we believe have the capacity for at least five years of temporary storage for each facility.
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INFORMATION ABOUT OUR EXECUTIVE OFFICERS (PSEG)
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Name |
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Age as of December 31, 2025 |
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Office |
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Effective Date First Elected to Present Position |
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Ralph A. LaRossa |
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62 |
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Chair of the Board (COB), President and Chief Executive Officer (CEO) - PSEG |
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January 2023 to present |
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President and CEO -PSEG |
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September 2022 to present |
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Chief Operating Officer (COO) - PSEG |
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January 2020 to August 2022 |
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COB and CEO - PSE&G |
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September 2022 to present |
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COB, President and CEO - PSEG Power |
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May 2023 to present |
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COB and CEO - PSEG Power |
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September 2022 to May 2023 |
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COB and CEO - Energy Holdings |
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September 2022 to present |
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COB, CEO and President - Services |
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September 2022 to present |
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President and COO - PSEG Power |
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October 2017 to August 2022 |
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President and COO - PSE&G |
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October 2006 to October 2017 |
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COB - PSEG Long Island LLC |
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December 2020 to August 2022 |
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Daniel J. Cregg |
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62 |
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Executive Vice President (EVP) and Chief Financial Officer (CFO) - PSEG |
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October 2015 to present |
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EVP and CFO - PSE&G |
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October 2015 to present |
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EVP and CFO - PSEG Power |
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October 2015 to present |
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Kim C. Hanemann |
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62 |
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President and COO - PSE&G |
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June 2021 to present |
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Senior Vice President (SVP) and COO - PSE&G |
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January 2020 to June 2021 |
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Charles V. McFeaters |
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66 |
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President and Chief Nuclear Officer - PSEG Nuclear LLC |
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May 2023 to present |
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SVP - Nuclear Operations - PSEG Nuclear LLC |
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November 2020 to May 2023 |
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Grace Park |
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50 |
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EVP and General Counsel - PSEG |
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September 2024 to present |
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EVP and General Counsel - PSE&G |
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September 2024 to present |
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EVP and General Counsel - PSEG Power |
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September 2024 to present |
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VP - Deputy General Counsel and Chief Litigation Counsel - Services |
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July 2020 to September 2024 |
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Sheila J. Rostiac |
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55 |
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SVP - Chief Administrative Officer and Chief Human Resources Officer - Services |
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January 2020 to present |
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Richard T. Thigpen |
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65 |
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SVP - Corporate Citizenship - Services |
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July 2018 to present |
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Rose M. Chernick |
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62 |
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VP and Controller - PSEG |
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March 2019 to present |
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VP and Controller - PSE&G |
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March 2019 to present |
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VP and Controller - PSEG Power |
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March 2019 to present |
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ITEM 1A. RISK FACTORS
The following factors should be considered when reviewing our business. These factors could have a material adverse impact on our business, prospects, financial position, results of operations or cash flows and could cause results to differ materially from those expressed elsewhere in this report.
GENERAL OPERATIONAL AND FINANCIAL RISKS
Inability to successfully develop, obtain regulatory approval for, or construct T&D, and our nuclear generation projects could adversely impact our businesses.
Our business plan calls for extensive investment in capital improvements and additions, including the construction of T&D facilities, modernizing and expanding existing infrastructure pursuant to investment programs that provide for current recovery in rates, addressing needs of new customers and increasing demand on the system, and our CEF programs, particularly our energy efficiency program which provides incentives for customers to install high-efficiency equipment at their premises and transmission capital investments outside of our utility service territory, as well as uprates and other potential investments at our nuclear facilities. Currently, we have several significant capital investments underway or being contemplated.
The successful construction and development of these projects will depend, in part, on our ability to:
Failure to obtain regulatory or other approvals, delays, cost escalations or otherwise unsuccessful construction and development could materially affect our financial position, results of operations and cash flows.
Macroeconomic considerations, including inflationary levels, gas and electric supply prices that are passed through to customers and other pressures could factor into our regulators’ assessment in approving the size, duration and timing of cost recovery of certain of these programs. Further, certain negative public and political views by certain stakeholders on energy infrastructure could result in diminishing support for those investments.
In addition, the successful operation of new facilities or transmission or distribution projects is subject to risks relating to supply interruptions; labor availability, work stoppages and labor disputes; weather interferences; unforeseen engineering and environmental problems, including those related to climate change; opposition from local communities, and the other risks described herein.
Any of these risks could cause the amounts of our investments and/or our return on these investments to be lower than expected, which could adversely impact our financial condition and results of operations through lower investment opportunities and/or lower returns.
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Significant resource adequacy challenges present affordability and reliability concerns that could cause policymakers to implement responsive measures that could have a material, adverse impact on our business, strategy, growth rates, cash flows, results of operation, and financial condition and increase regulatory uncertainty for utility investment initiatives and programs.
PJM continues to face significant resource adequacy challenges, driven by a lack of sufficient supply to meet electric demand, which has increased significantly over the past several years and is expected to continue to increase going forward. Increasing demand is caused by data centers, EV adoption, electrification and other factors. Insufficient supply to meet forecasted demand has caused increases in energy and capacity prices which, in turn, have caused the customer rates by which we recover electric supply costs to materially increase. This has resulted in continuing affordability concerns that have caused regulators and other policymakers to consider ways to reduce utility rates, including proposing to mitigate electric rate increases, and create increased regulatory uncertainty for utility investment initiatives and programs. Actions that policymakers could implement in response to these affordability concerns could have a material, adverse impact on our business, strategy, growth rates, cash flows, results of operation, and financial condition.
In addition, both lack of supply and increasing demand pose reliability risk for customers. Substantial investments in generation, transmission and distribution will be required to meet current projections of increasing customer demand. Sustained distribution grid modernization will also be required to accommodate increased EE, EV infrastructure, increased penetration of distributed energy resources on the electric system, such as on-site solar generation and also potential deployment of energy storage, fuel cells, and distributed resources technologies. In addition, inability of PJM to procure sufficient capacity to meet demand plus its reserve margin increase future risk of blackouts and load reduction, which may in turn result in litigation, political and regulatory scrutiny and reputational impacts.
We are subject to physical, financial and transition risks related to climate change, including potentially increased legislative and regulatory burdens and changing customer preferences, and we may be subject to lawsuits, all of which could impact our businesses and results of operations.
Climate change may drive change to existing or additional legislation and regulation that may impact our business and shape our customers’ energy preference and sustainability goals, including impacts of potential changes in use of natural gas and electricity due to electrification over the long-term and the impact on need for additional generation to meet those electric needs. These factors could impact the need to invest in our electric and gas T&D systems and, therefore, our growth rate.
Severe weather or acts of nature, including hurricanes, winter storms, earthquakes, floods, wildfires and other natural disasters can stress systems, disrupt operation of our facilities and cause service outages, and property damage that require incurring additional expenses. In addition, the effects of climate change will have increased the physical risks to our facilities and operations resulting from such climate hazards as more severe weather events (extreme wind, rainfall and flooding), such as experienced from Superstorm Sandy and Tropical Storms Isaias and Ida, sea level rise, and extreme heat and drought.
These and other physical changes could result in changes in customer demand, increased costs associated with repairing and maintaining generation facilities and T&D systems, resulting in increased maintenance and capital costs (and potentially increased financing needs), increased regulatory oversight, and lower customer satisfaction. Where recovery of costs to restore service and repair damaged equipment and facilities is available, any determination by the regulator not to permit timely and full recovery of the costs incurred could have a material adverse effect on our businesses, financial condition, results of operations and prospects.
To the extent financial markets view climate change and greenhouse gas (GHG) emissions as a financial risk, our ability to access capital markets could be negatively affected or cause us to receive less than favorable terms and conditions.
While the CIP protects PSE&G’s margin variances against changes in customer usage of gas and electricity, climate change-related state policy goals, including but not limited to those related to GHG emissions reductions, energy efficiency targets, solar targets, energy storage targets, encouragement of electrification through EV adoption, policies to encourage electrification of end use equipment currently fueled by natural gas, and the associated legislative and regulatory responses, may create additional costs for our customers and/or our business, which could be material.
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We may be subject to climate change lawsuits that may seek injunctive relief, monetary compensation, penalties, and punitive damages, including but not limited to, for liabilities for damages related to mitigate harm caused by climate change. An adverse outcome could require substantial capital expenditures and possibly require payment of substantial penalties or damages. Defense costs associated with such litigation can also be significant and could affect results of operations, financial condition or cash flows if such costs are not recovered through regulated rates.
Further, our business is subject to policy, regulatory, technology and economic uncertainties and contingencies, including regulatory approvals required for our various investments, many of which are beyond our control and may affect planned investments and our ability to meet GHG emissions reduction or climate-related goals that we may set from time to time, in a cost-effective manner or at all.
We may be adversely affected by asset and equipment failures, gas explosions, accidents, critical operating technology or business system failures, natural disasters, severe weather events, acts of war or terrorism or other acts of violence, sabotage, physical attacks or security breaches, cyberattacks, or other incidents, including pandemics, that impact our ability to provide safe and reliable service to our customers and remain competitive and could result in substantial financial losses.
The success of our businesses is dependent on our ability to continue providing safe and reliable service to our customers while minimizing service disruptions. We are exposed to the risk of asset and equipment failures, gas explosions or leaks, accidents, pandemics, natural disasters, severe weather events, acts of war or terrorism or other acts of violence, including active shooter situations, sabotage, physical attacks or security breaches, cyberattacks or other incidents, which could result in damage to or destruction of our substations or other facilities or infrastructure, or damage to persons or property, fire, loss of life, outages, mechanical problems, environmental pollution, electric and gas supply interruptions or other adverse impacts to our business. Further, a major failure of availability or performance of a critical operating technology or business system, and inadequate preparation or execution of business continuity or disaster recovery plans for the loss of one or several critical systems, could result in extended disruption to operations or business processes, damage to systems and/or loss of data. We have historically benefited from access to mutual aid, a voluntary and reciprocal arrangement with other utilities that provides access to a trained and flexible labor force which has helped to reduce outage restoration times during extreme weather events. There is no guarantee that we will have continued access to mutual aid as the frequency of severe weather events rises.
These events could result in increased political, economic, financial and insurance market instability, a lack of available insurance or the availability of insurance on commercially reasonable terms, and volatility in power and fuel markets, which could materially adversely affect our business and results of operations, including our ability to access capital on terms and conditions acceptable to us.
Any of the issues described above, if experienced at our facilities or otherwise in our business, or by others in our industry, could adversely impact our revenues; increase costs to repair and maintain our systems; subject us to potential litigation and/or damage claims, fines or penalties; and increase the level of oversight of our utility and generation operations and infrastructure through investigations or through the imposition of additional regulatory or legislative requirements. Such actions could adversely affect our costs, competitiveness, future investments and customer rates, which could be material to our financial position, results of operations and cash flow. For our T&D business, the cost of storm restoration efforts may not be fully recoverable through the regulatory process. In addition, the inability to restore power to our customers on a timely basis could result in negative publicity and materially damage our reputation.
Any inability to recover the carrying amount of our long-lived assets could result in future impairment charges which could have a material adverse impact on our financial condition and results of operations.
Long-lived assets represent approximately 73% and 80% of the total assets of PSEG and PSE&G, respectively, as of December 31, 2025. Management evaluates long-lived assets for impairment whenever events or changes in circumstances, such as significant adverse changes in regulation, including a disallowance of certain costs, a potential sale or disposition of an asset significantly before the end of its useful life, business climate or market conditions, including prolonged periods of adverse commodity and capacity prices, could potentially indicate an asset’s or group of assets’ carrying amount may not be recoverable. Significant reductions in our expected revenues or cash flows for an extended period of time resulting from such
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events could result in future asset impairment charges, which could have a material adverse impact on our financial condition and results of operations.
Disruptions or cost increases in our supply chain, including labor shortages, could materially impact our business.
The supply chain of goods and services could be impacted by several factors, including sanctions, tariffs, manufacturing labor shortages, domestic and international shipping constraints, increases in demand, physical alterations in technologies that create cyber risks, and shortages of raw materials and specialty components. This could cause price increases in some areas and delivery delays of certain goods, which could increase our costs and impact our operations.
Inability to maintain sufficient liquidity in the amounts and at the times needed or access sufficient capital at reasonable rates or on commercially reasonable terms could adversely impact our business.
Funding for our investments in capital improvement and additions, scheduled payments of principal and interest on our existing indebtedness and the extension and refinancing of such indebtedness has been provided primarily by internally-generated cash flow and external debt financings. We have significant capital requirements and depend on our ability to generate cash in the future from our operations and continued access to capital and bank markets to efficiently fund our cash flow needs. Our ability to generate cash flow is dependent upon, among other things, industry conditions and general economic, financial, competitive, legislative, regulatory and other factors. The ability to arrange financing and to refinance existing debt and the costs of such financing or refinancing depend on numerous factors including, among other things:
Market disruptions, such as economic downturns experienced in the U.S. and abroad, the bankruptcy of an unrelated energy company or a systemically important financial institution, changes in market prices for electricity and gas, and actual or threatened acts of war or terrorist attacks, may increase our cost of borrowing or adversely affect our ability to access capital. As a result, no assurance can be given that we will be successful in obtaining financing for projects and investments, extending or refinancing maturing debt or meeting our other cash flow needs on acceptable terms or at all, which could materially adversely impact our financial position, results of operations and future growth.
During periods of rising energy prices, hedged positions could be out-of-the-money, increasing PSEG Power’s collateral requirements. In addition, if PSEG Power were to lose its investment grade credit rating from S&P or Moody’s, it would be required under certain agreements to provide a significant amount of additional collateral in the form of letters of credit or cash, which would have a material adverse effect on our liquidity and cash flows.
Cybersecurity attacks, data breaches, or intrusions or other disruptions to our IT, operational or other systems could adversely impact our businesses.
Cybersecurity threats to the energy market infrastructure are increasing in sophistication, magnitude and frequency. Because of the inherent vulnerability of infrastructure and technology and operational systems to disability or failure due to hacking, viruses, malicious or destructive code, phishing and other social engineering attacks, denial of service attacks, ransomware,
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acts of war or terrorism, or other cybersecurity incidents, we face increased risk of cyberattack. We rely on information and operational technology systems and network infrastructure to operate our generation and T&D systems and to conduct power marketing and hedging activities. We also store sensitive data, intellectual property and proprietary or personally identifiable information regarding our business, infrastructure, employees, shareholders, customers and vendors on our IT systems. In addition, the operation of our business is dependent upon the IT systems of Nth parties (i.e., our third parties and other business relationships, including fourth parties, etc.), including our vendors, regulators, RTOs and ISOs, among others. Our and Nth-party operational and IT systems and products may be vulnerable to cybersecurity attacks involving fraud, malice or oversight on the part of our employees, other insiders or Nth parties, whether domestic or foreign sources. Further, new types of cyberattacks, whether directed at our own infrastructure and technology and operational systems or that of third parties, may be generated or enhanced through the use of Artificial Intelligence (AI) and/or cloud-based infrastructure. A successful cybersecurity attack may result in unauthorized use of our systems to cause disruptions at an Nth party. Cybersecurity risks to our operations include:
We and our Nth-party vendors have been and will continue to be subject to cybersecurity attacks, including but not limited to ransomware, denial of service, business email compromises, and malware attacks. To date, there has been no material impact or reasonably likely material impact on our business strategy, results of operations or financial condition from these attacks or other cybersecurity incidents, including as a result of prior cybersecurity incidents. However, we may be unable to prevent all such attacks in the future from having such a material impact as such attacks continue to increase in sophistication and frequency. If a significant cybersecurity event or breach occurs within our company or with one of our material vendors, we could be exposed to loss of revenue, repair costs to intellectual and physical property, fines and penalties if determined that we were in non-compliance with existing laws and regulations, litigation costs, increased costs to finance our businesses, negative publicity, damage to our reputation and loss of confidence from our customers, regulators, investors, vendors and employees. The misappropriation, corruption or loss of personally identifiable information and other confidential data from us or one of our vendors could lead to breach notification expenses, mitigation expenses such as credit monitoring, and legal and regulatory fines and penalties. Moreover, new or updated security laws or regulations, including laws and regulations that respond to evolving application of AI, or unforeseen threat sources could require changes in current measures taken by us and our business operations, which could result in increased costs. Similarly, a significant cybersecurity event or breach experienced by a competitor, regulatory authority, RTO, ISO, or vendor could also materially impact our business and results of operations via enhanced legal and regulatory requirements. The amount and scope of insurance we maintain against losses that result from cybersecurity incidents may not be sufficient to cover losses or adequately compensate for resulting business disruptions. To address the risks to our information and operational technology systems, we maintain a cybersecurity program that includes policies and controls, cybersecurity insurance, cybersecurity governance and compliance, awareness and training, table-top exercises, logging and monitoring, and testing. These preventative actions reduce the likelihood and potential impact of cybersecurity breaches. For a discussion of state and federal cybersecurity regulatory requirements and information regarding our cybersecurity program, see Item 1C. Cybersecurity. Further, we are subject to changing data protection laws in the U.S. and abroad. Legal requirements and regulatory scrutiny for the collection, storage, handling, use, disclosure, transfer, and security of personal data continue to evolve and expand, which may present material obligations and risks to our business, including expanded compliance burdens, restrictions on transfer of personal data, costs, and enforcement risks.
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Failure to attract and retain a qualified workforce could have an adverse effect on our business.
Certain events such as an aging workforce looking to retire without an opportunity to transfer knowledge to a successor, inadequate workforce plans and replacements, lack of skill set to meet current and evolving business needs, a culture that does not foster inclusion leading to turnover, a failure to successfully negotiate new collective bargaining agreements with our labor unions on mutually acceptable terms or at all, acts of violence in the workplace, inadequate training and a workforce that is not engaged may lead to operating challenges, safety concerns and increased costs. The challenges include loss of knowledge and a lengthy time period associated with skill development, increased turnover, costs for contractors to replace employees, poor productivity, and a lack of innovation. Specialized knowledge and experience are required of employees across PSEG and its affiliates. There is competition for these skilled employees. Failure to hire and adequately train and retain employees, including the transfer of significant historical knowledge and expertise to new employees, may adversely affect our results of operations, financial position and cash flows.
Inflation, including increases in the costs of equipment and materials, fuel, services and labor could adversely affect our operating results.
Higher costs from suppliers of equipment and materials, fuel and services and labor and health care costs to attract and retain our workforce, as well as policy matters such as tax rates, tariffs and other policies impacting costs, could lead to increased costs. Also, seeking recovery of higher costs in future distribution base rate cases could pressure customer rates, resulting in a potentially adverse outcome of such proceedings, or in other proceedings, including the proposal of certain investment programs or other proceedings that impact customer rates.
Covenants in our debt instruments and credit agreements may adversely affect our business.
PSEG’s, PSE&G’s and PSEG Power’s debt instruments contain events of default customary for financings of their type, including cross accelerations to other debt of that entity. PSEG’s, PSE&G’s and PSEG Power’s bank credit agreements contain events of default customary for financings of their type, including cross defaults and accelerations and, in the case of PSEG’s and PSEG Power’s bank credit agreements, certain change of control events. PSEG’s, PSE&G’s and PSEG Power’s bank credit agreements, and PSEG Power’s debt instruments contain certain limitations on the incurrence of liens and PSEG Power’s bank credit agreements and debt instruments also contain limitations on the incurrence of certain subsidiary debt. PSEG Power’s bank credit agreements contain limitations on sales of assets and PSEG Power’s debt instruments contain limitations on certain sale and leaseback transactions. PSEG Power's term loan agreements contain a change-of-control clause, which includes under certain circumstances, PSEG Power ceasing to be a wholly owned subsidiary of PSEG. Our ability to comply with these and future covenants may be affected by events beyond our control. If we fail to comply with the covenants and are unable to obtain a waiver or amendment, or a default exists and is continuing under such debt, the lenders or the holders or trustee of such debt, as applicable, could give notice and declare outstanding borrowings and other obligations under such debt immediately due and payable. We may not be able to obtain waivers, amendments or alternative financing, or if obtainable, it could be on terms that are not acceptable to us. Any of these events could adversely impact our financial condition, results of operations and cash flows.
Financial market performance directly affects the asset values of our defined benefit plan trust funds and Nuclear Decommissioning Trust (NDT) Fund. Market performance and other factors could decrease the value of trust assets and could result in the need for significant additional funding.
The performance of the financial markets will affect the value of the assets that are held in trust to satisfy our future obligations under our defined benefit plan and to decommission our nuclear generating plants. A decline in the market value of the defined benefit plan trust funds could increase our pension plan funding requirements and result in increased pension costs in future years. The market value of our defined benefit plan trusts could be negatively impacted by adverse financial market conditions that reduce the return on trust assets, decreased interest rates used to measure the required minimum funding levels, and future government regulation. Additional funding requirements for our defined benefit plan could be caused by changes in required or voluntary contributions, an increase in the number of employees becoming eligible to retire and changes in life expectancy assumptions. A decline in the market value of our NDT Fund could increase PSEG Power’s funding requirements to decommission its nuclear plants. An increase in projected costs could also lead to additional funding requirements for our decommissioning trust. Failure to adequately manage our investments in our defined benefit plan trusts
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and NDT Fund could result in the need for us to make significant cash contributions in the future to maintain our funding at sufficient levels, which would negatively impact our results of operations, cash flows and financial position.
If we are unable to enter into or extend certain significant contracts, this may negatively affect our financial condition and operating results
We are party to, and are also exploring opportunities to enter into, several contracts from which we currently or may in the future derive significant revenues.
PSEG Power sells wholesale natural gas, primarily through a full-requirements BGSS contract with PSE&G to meet the needs of PSE&G’s default gas supply service customers. In 2022, the BPU approved an extension of the long-term BGSS contract to March 31, 2027, and thereafter the contract remains in effect unless terminated by either party with a two-year notice. PSEG LI has an OSA with LIPA to operate LIPA’s electric T&D system in Long Island which was recently extended through 2030. Any discontinuation of these contracts may negatively affect our financial condition and operating results.
In addition, we are exploring opportunities for the potential sale of power from our nuclear facilities pursuant to long-term agreements with large power users, such as data centers. It is uncertain whether we will be successful in entering into any of such contracts, including without limitation in connection with various ongoing regulatory proceedings.
Artificial Intelligence is an emerging area of technology that has the potential to impact various aspects of our business operations and customer interactions.
AI, including Generative AI and Post-Quantum Cryptography, has the potential to change the way we operate by creating efficiencies and improving processes and customer experiences. The development, adoption, and use for generative AI technologies are still in their early stages and ineffective or inadequate AI development or deployment practices by PSEG or Nth-party vendors could result in unintended consequences. We contract third-party vendors that use AI in products and/or services they provide and we may not have full control or visibility over the quality, performance, security or compliance of the products and services that incorporate AI-related technology. AI algorithms that we or our Nth-party vendors use may be flawed or may be based on data sets that are biased or insufficient. These limitations or failures could result in reputational damage, unauthorized disclosure of data, and legal liabilities. Developing, testing, and deploying resource-intensive AI systems may require additional investment and increase our costs. In addition, the evolving nature of AI may cause new laws and regulations to be enacted which may require significant resources to modify and maintain business practices to comply with the new laws and regulations, the nature of which cannot be determined at this time. Further, inaccurate results generated as a result of our employees’, contractors’ or vendors’ use of generative AI technologies could lead to operational interruptions or reputational harm.
RISKS RELATED TO OUR GENERATION BUSINESS
Fluctuations in the wholesale power and natural gas markets could negatively affect our financial condition, results of operations and cash flows.
In the competitive markets where we operate, participants are not guaranteed any specific rate of return on their capital investments and natural gas prices have a major impact on the price that generators receive for their output. The natural gas market and energy markets have been, and may continue to be, volatile due to higher domestic demand, increased natural gas exports and impacts from the global liquefied natural gas market, weather and other factors. Lower natural gas prices often result in lower electricity prices, which could reduce our margins where our nuclear generation costs may not have declined similarly.
Changes in prevailing market prices could have a material adverse effect on our financial condition and results of operations. Factors that may cause market price fluctuations include:
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Our generation business currently involves the establishment of forward sale positions in the wholesale energy markets on long-term and short-term bases. If the realized value of our generation falls outside of the level at which we would receive PTCs, to the extent that we have contracted obligations in excess of energy we have produced, an increase in market prices could reduce profitability. If the strategy we utilize to hedge our exposure to these various risks or if our internal policies and procedures designed to monitor the exposure to these various risks are not effective, we could incur material losses. Our market positions can also be adversely affected by the level of volatility in the energy markets that, in turn, depends on various factors, including weather in various geographical areas, short-term supply and demand imbalances, and pricing differentials at various geographic locations. These risks cannot be predicted with certainty.
In addition, the volatility and potential for higher natural gas or energy prices may have a material impact on collateral requirements related to the forward value of our open futures contracts. Higher collateral requirements reduce available short-term liquidity and increase working capital costs and may affect our ability to hedge generation output and fuel.
We may be unable to obtain an adequate nuclear fuel supply in the future.
We obtain substantially all of our nuclear fuel supply from third parties pursuant to arrangements that vary in term, pricing structure, firmness and delivery flexibility. Our fuel supply arrangements must be coordinated with storage services and other contracts to ensure that the nuclear fuel is delivered to our power plants at the times, in the quantities and otherwise in a manner that meets the needs of our generation portfolio and our customers. We must also comply with laws and regulations governing the transportation of such fuels.
We are exposed to increases in the price of nuclear fuel, and significant changes in the price of nuclear fuel could affect our cash flow, future results and impact our liquidity needs. In addition, we face risks with regard to the delivery to, and the use of nuclear fuel by, our power plants including the following:
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The nuclear units we operate have a diversified portfolio of contracts and inventory that provide a substantial portion of our fuel raw material needs over the next several years. However, each of the nuclear units we operate has contracted with a single fuel fabrication services provider, and transitioning to an alternative provider could take an extended period of time. This could have a material adverse impact on our business, the financial results of specific plants and on our results of operations.
Although our fuel contract portfolio provides a degree of hedging against these market risks, such hedging may not be effective and future increases in our fuel costs could materially and adversely affect our financial condition and results of operations.
The introduction or expansion of technologies related to energy generation, distribution and consumption and changes in customer usage patterns could adversely impact us.
Federal and state incentives for the development and operation of renewable sources of power have facilitated the penetration of competing technologies, such as wind, solar, and commercial-sized power storage. Additionally, the development of demand side management (DSM) and EE programs can impact demand requirements for electricity and natural gas markets. The development of competing on-site power generation could also result in a reduction in anticipated growth which could negatively impact our financial condition, results of operations and cash flows.
Advances in distributed generation technologies, such as fuel cells, micro turbines, micro grids, windmills and net-metered solar installations, coupled with subsidies, could (i) affect the price of energy, (ii) reduce energy deliveries as customer-owned generation becomes more cost-effective, (iii) require further improvements to our distribution systems to address changing load demands, and (iv) make portions of our transmission and/or distribution facilities obsolete prior to the end of their useful lives. These technologies could also result in further declines in commodity prices or demand for delivered energy.
Some or all of these factors could result in a lack of growth or decline in customer demand for electricity or natural gas or of customers, and may cause us to fail to fully realize anticipated benefits from significant capital investments and expenditures, which could have a material adverse effect on our financial position, results of operations and cash flows. These factors could also materially affect our results of operations, cash flows or financial positions through, among other things, reduced operating revenues, increased O&M expenses, and increased capital expenditures, as well as potential asset impairment charges or accelerated depreciation and decommissioning expenses over shortened remaining asset useful lives.
We are subject to third-party credit risk relating to our sale of nuclear generation output.
In the spot markets, we are exposed to the risks of the default sharing mechanisms that exist in those markets, some of which attempt to spread the risk across all participants. Therefore, a default by a third party could increase our costs, which could negatively impact our results of operations and cash flows. We hedge generation output through the execution of bilateral contracts. These contracts are subject to credit risk, which relates to the ability of our counterparties to meet their contractual obligations to us. Any failure of these counterparties to perform could have a material adverse impact on our results of operations, cash flows and financial position.
There may be periods when PSEG Power generation may not operate and/or may not be able to meet its commitments under forward sale obligations and PJM rules at a reasonable cost or at all.
A portion of PSEG Power’s nuclear generation output has been sold forward under fixed price financial power sales contracts. Forward financial sales offset physical sales in the PJM RTO spot market. Our forward sales of energy and capacity assume sustained, acceptable levels of operating performance. Operations at any of our plants could degrade to the point where the plant has to shut down or operate at less than full capacity. Some issues that could impact the operation of our facilities are:
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Identifying and correcting any of these issues may require significant time and expense. Depending on the materiality of the issue, we may choose to close a plant rather than incur the expense of restarting it or returning it to full capacity.
Because the obligations under most of these forward sale agreements are not contingent on a unit being available to generate power, PSEG Power’s results of operations and cash flows are at risk even in the event of a plant outage, or a reduction in the available capacity of the unit. To the extent that PSEG Power does not meet its expected nuclear generation output, PSEG Power would be required to pay the difference between the market price and the contract price on its financial contracts without receiving the physical spot energy revenue or be required to purchase energy at higher prices to cover its shortfall. In addition, as capacity performance resources in PJM, PSEG’s nuclear units have been and will in the future be required to pay penalties if a forced outage at a plant occurs during a declared emergency event within PJM as defined by PJM's rules and that plant’s expected performance exceeds its actual performance during such event. The amount of such payments could be substantial and could have a material adverse effect on our financial condition, results of operations and cash flows.
In addition, changing market design rules, including capacity performance rules and the design and timing of capacity market auctions, and/or failure to follow existing rules by PJM or market participants, as well as any future supply/demand imbalance in PJM, creates regulatory uncertainty and reliability risk.
Generation activities at the Peach Bottom plants present risks similar to those to which nuclear generation plants that we operate are subject.
Generation activities at, and the operation of, the Peach Bottom plants present risks similar to those described above in GENERAL OPERATIONAL AND FINANCIAL RISKS and RISKS RELATED TO OUR GENERATION BUSINESS and below in REGULATORY, LEGISLATIVE AND LEGAL RISKS.
While we have a 50% ownership interest in the Peach Bottom nuclear generation plants, these plants are operated by a third party and, therefore, we have limited control over the risks associated with these plants.
REGULATORY, LEGISLATIVE AND LEGAL RISKS
PSE&G’s revenues, earnings and results of operations are dependent upon state laws and regulations that affect distribution and related activities.
PSE&G is subject to regulation by the BPU. Such regulation affects almost every aspect of its businesses, including its retail rates. Failure to comply with these regulations could have a material adverse impact on PSE&G’s ability to operate its business and could result in fines, penalties or sanctions. The retail rates for electric and gas distribution services are established in a distribution base rate proceeding and remain in effect until a new distribution base rate proceeding is filed and concluded. PSE&G's base rates were most recently approved in October 2024. In addition, our utility has received approval for several clause recovery mechanisms, some of which provide for recovery of costs and earn returns on authorized investments. These clause mechanisms require periodic financial reviews to update rates charged to customers which are independent of base rate proceedings and are subject to prudency reviews by the BPU. Inability to obtain fair or timely recovery of all our costs pursuant to the distribution base rate case and/or these clause recovery mechanisms, including a return of, or on, our investments in rates, could have a material adverse impact on our results of operations and cash flows. In addition, if legislative and regulatory structures were to evolve in such a way that PSE&G’s exclusive rights to serve its regulated customers were eroded, its future earnings could be negatively impacted.
The BPU also conducts periodic combined management/competitive service audits of New Jersey utilities related to affiliate standard requirements, competitive services, cross-subsidization, cost allocation and other issues. A finding by the BPU of
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non-compliance with these requirements could potentially impact our business, results of operations and cash flows. For information regarding PSE&G’s most recent affiliate and management audit, see Item 8. Note 12. Commitments and Contingent Liabilities.
In addition, PSE&G procures the supply requirements of its default service BGSS gas customers through a full-requirements contract with PSEG Power. Government officials, legislators and advocacy groups are aware of the affiliation between PSE&G and PSEG Power. In periods of rising utility rates, those officials and advocacy groups may question or challenge costs and transactions incurred by PSE&G with PSEG Power, irrespective of any previous regulatory processes or approvals underlying those transactions. The occurrence of such challenges may subject PSEG Power to a level of scrutiny not faced by other unaffiliated competitors in those markets and could even adversely affect retail rates received by PSE&G.
PSE&G’s proposed investment projects or programs may not be fully approved by regulators and actual capital investment by PSE&G may be lower than planned, which would cause lower than anticipated rate base.
PSE&G is a regulated public utility that operates and invests in an electric T&D system and a gas distribution system as well as certain regulated clean energy investments, including solar and EE within New Jersey. PSE&G invests in capital projects to maintain and improve its existing T&D system and to address various public policy goals and meet customer expectations. Transmission projects are subject to the rules governing PJM's FERC-approved transmission expansion planning process which may be challenged in the future as well as other FERC rules, while distribution and clean energy projects are subject to approval by the BPU. The costs of PSE&G’s transmission projects are subject to prudency challenge at FERC and PSE&G’s rates themselves may also be challenged at FERC. FERC has also proposed elimination of certain transmission rate incentives, including the incentive that PSE&G receives for being a transmission owner member of PJM and accepting the related risk of RTO membership.
We cannot be certain that any proposed project or program will be approved as requested or at all. If the projects or programs that PSE&G may file from time to time are only approved in part, or not at all, or if the approval fails to allow for the timely recovery of all of PSE&G’s costs, including a return of, or on, its investment, PSE&G will have a lower than anticipated rate base, thus causing its future earnings to be lower than anticipated. Further, the BPU could take positions to exclude or limit utility participation in certain areas, such as renewable generation, EE, EV infrastructure, or energy storage programs, renewable natural gas or hydrogen projects, which would limit our relationship with customers and narrow our future growth prospects. In addition, PSE&G’s Clean Energy Future – Energy Efficiency II Program provides nearly $1 billion of funding to continue the on-bill repayment program, which allows customers to repay their cost of equipment upgrades over time directly through their PSE&G bill. While the deployment of this capital in the form of on-bill repayment is subject to customers meeting acceptable credit standard and bad debt expense is a recoverable cost in this program, any such recovery is subject to prudency review and approval by the BPU.
We are subject to comprehensive federal regulation that affects, or may affect, our businesses.
We are subject to regulation by federal authorities. Such regulation affects almost every aspect of our businesses, including management and operations; the terms and rates of transmission services; the rules governing the payments we receive from PJM markets; investment strategies; the financing of our operations and the payment of dividends. Failure to comply with these regulations could have a material adverse impact on our ability to operate our business and could result in fines, penalties or sanctions.
Hazardous Substance Liability—PSEG’s operations involve substances and byproducts classified by environmental regulations as hazardous. These regulations impose handling, storage and disposal requirements for hazardous materials. They can also impose strict and joint and several liability for damages to the environment, including cash penalties. Federal and state environmental laws and regulations require the cleanup of discharged hazardous substances.
Recovery of wholesale transmission rates—PSE&G’s wholesale transmission rates are regulated by FERC and our project costs are recovered through a FERC-approved formula rate. The revenue requirements are reset each year through this formula. Our formula rate and its components can be challenged at FERC in the future.
In April 2021, FERC issued a supplemental notice of proposed rulemaking to eliminate the incentive for RTO membership for transmitting utilities that have already received the incentive for three or more years. PSE&G began receiving a 50 basis
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point adder for RTO membership in 2008. Elimination of the adder for RTO membership would reduce PSE&G’s annual Net Income and annual cash inflows by approximately $40 million.
Transmission Planning—FERC Order 1000 generally opened transmission development to competition from independent developers, allowing such developers to compete with incumbent utilities for the construction and operation of transmission facilities in its service territory. While Order 1000 retains limited carve-outs for certain projects that will continue to default to incumbents for construction responsibility, increased competition for transmission projects could decrease the value of new investments that would be subject to recovery by PSE&G under its rate base, which could have a material adverse impact on our financial condition and results of operations. FERC has considered, and may in the future consider, whether to modify - either limit or expand - Order 1000’s competition rules. FERC is also examining whether additional oversight is needed to control transmission costs.
A significant input into PJM’s transmission planning process is its regional load forecast, which is adjusted on an annual basis. PJM’s regional load forecast has increased significantly over the past few years, reflecting increased expectations of large customer growth and in January 2026, PJM provided an annual update of its load forecast in the PSEG zone and across PJM to reflect continued expectations of large customer growth. Developing an accurate load forecast that reflects customer demand of the state – and other states in PJM – is critical to ensure that transmission is planned and built where it is needed to maintain reliability and that sufficient generation is procured in the capacity market.
NERC Compliance—NERC, at the direction of FERC, has implemented mandatory NERC Operations and Planning and Critical Infrastructure Protection standards to ensure the reliability of the North American Bulk Electric System, which includes electric transmission and generation systems, and to prevent major system blackouts. NERC Critical Infrastructure Protection standards establish cybersecurity and physical security protections for critical systems and facilities. We have been, and will continue to be, periodically audited by NERC for compliance with both Operations and Planning and Critical Infrastructure Protection standards and are subject to penalties for non-compliance with applicable NERC standards. Failure to comply with applicable NERC standards could result in penalties or increased costs to bring such facilities into compliance. Such penalties and costs could materially adversely impact our business, results of operations and cash flows. Adverse audit findings and/or penalties for non-compliance could also pose reputational risk to us.
MBR Authority and Other Regulatory Approvals—Under FERC regulations, public utilities that sell power at market rates must receive MBR authority before making power sales, and the majority of our businesses operate with such authority. Failure to maintain MBR authorization, or the effects of any severe mitigation measures that would be required if market power was evaluated differently in the future, could have a material adverse effect on our business, financial condition and results of operations. In December 2025, all of PSEG’s operating companies with MBR authority filed at FERC for acceptance of the companies’ updated triennial market power analysis. This filing remains pending at FERC.
Oversight by the CFTC relating to derivative transactions—The CFTC has regulatory oversight of the swap and futures markets and options, including energy trading, and licensed futures professionals such as brokers, clearing members and large traders. Changes to regulations or adoption of additional regulations by the CFTC, including any regulations relating to futures and other derivatives or margin for derivatives and increased investigations by the CFTC, could negatively impact PSEG Power’s ability to hedge its portfolio in an efficient, cost-effective manner by, among other things, potentially decreasing liquidity in the forward commodity and derivatives markets or limiting PSEG Power’s ability to utilize non-cash collateral for derivatives transactions.
We may also be required to obtain various other regulatory approvals to, among other things, buy or sell assets, engage in transactions between our public utility and our other subsidiaries, and, in some cases, enter into financing arrangements, issue securities and allow our subsidiaries to pay dividends. Failure to obtain these approvals on a timely basis could materially adversely affect our results of operations and cash flows.
The markets, and/or PTC may not provide sufficient financial support for our New Jersey nuclear plants which could result in the retirement of all of these nuclear plants.
As further described in Item 7. MD&A—Executive Overview of 2025 and Future Outlook, PSEG Power’s Salem 1, Salem 2 and Hope Creek nuclear plants were awarded ZECs by the BPU through May 2025.
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In August 2022, the IRA was signed into law expanding incentives promoting carbon-free generation. The enacted legislation established a PTC for electricity generation using nuclear energy which begins January 1, 2024 and continues through 2032. The expected PTC rate is up to $15/MWh subject to adjustment based upon a facility’s gross receipts. The PTC rate and the gross receipts threshold are subject to annual inflation adjustments. The U.S. Treasury has not yet defined gross receipts. The ZEC payment will be adjusted by the BPU to offset environmental or fuel diversity payments that a selected nuclear plant may receive from another source. We continue to estimate the PTC while we await additional guidance from the U.S. Treasury. The U.S. Treasury may issue guidance related to the PTC and/or the Federal government could amend the IRA, either of which could have an adverse impact on our financial condition, results of operations and cash flows.
If the markets or PTC do not provide sufficient financial support, or, in the case of the Salem nuclear plants, decisions by the EPA and state environmental regulators regarding the implementation of Section 316(b) of the CWA and related state regulations, or other factors, PSEG Power may take all necessary steps to cease to operate all of these plants and will incur associated costs and accounting charges in the event that the financial condition of the plants is materially adversely impacted in the future. Ceasing operations of these plants would result in a material adverse impact on PSEG’s results of operations.
We may be adversely affected by changes in energy regulatory policies, including energy and capacity market design rules and developments affecting transmission.
The energy industry continues to be regulated and the rules to which our businesses are subject are always at risk of being changed. PJM’s capacity market design rules continue to evolve and change, including in response to projections of higher demand, lack of sufficient generation capacity and extreme weather events. These changes have led to capacity market auction delays and rules changes that have created regulatory and business uncertainty. For a discussion of recent changes in energy regulatory policies that may affect our business and results of operations, see Item 1. Business—Regulatory Issues—Federal Regulation.
Our ownership and operation of nuclear power plants involve regulatory risks as well as financial, environmental and health and safety risks.
We are exposed to risks related to the continued successful operation of our nuclear facilities and issues that may adversely affect the nuclear generation industry. In addition to the risk of retirement discussed below, risks associated with the operation of nuclear facilities include:
Storage and Disposal of Spent Nuclear Fuel—Federal law requires the United States Department of Energy (DOE) to provide for the permanent storage of spent nuclear fuel. The DOE has not yet begun accepting spent nuclear fuel. Until a federal site is available, we use on-site storage for spent nuclear fuel, which is reimbursed by the DOE. However, future capital expenditures may be required to increase spent fuel storage capacity at our nuclear facilities. Once a federal site is available, the DOE may impose fees to support a permanent repository. Further, the on-site storage for spent nuclear fuel may significantly increase our nuclear unit decommissioning costs.
Regulatory and Legal Risk—We may be required to substantially increase capital expenditures or operating or decommissioning costs at our nuclear facilities if there is a change in the Atomic Energy Act or the applicable regulations, trade controls or the environmental rules and regulations applicable to nuclear facilities; a modification, suspension or revocation of licenses issued by the NRC; the imposition of civil penalties for failure to comply with the Atomic Energy Act, related regulations, trade controls or the terms and conditions of the licenses for nuclear generating facilities; or the shutdown of one of our nuclear facilities. Any such event could have a material adverse effect on our financial condition or results of operations.
Operational Risk—Operations and equipment reliability at any of our nuclear facilities, whether operated by us or our co-owner, could degrade to the point where an affected unit needs to be shut down or operated at less than full capacity. If this were to happen, identifying and correcting the causes could require significant time and expense and a significant outage could result in reduced earnings as we would have less electric output to sell and would be required to deliver on our forward sale commitments.
In addition, if a unit cannot be operated through the end of its current estimated useful life, our results of operations could be adversely affected by increased depreciation rates, impairment charges and accelerated future decommissioning costs.
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Nuclear Incident or Accident Risk—Accidents and other unforeseen problems have occurred at nuclear stations, both in the U.S. and elsewhere. The consequences of an accident can be severe and may include loss of life, significant property damage and/or a change in the regulatory climate. We have nuclear units at two sites. It is possible that an accident or other incident at a nuclear generating unit could adversely affect our ability to continue to operate unaffected units located at the same site, which would further affect our financial condition, results of operations and cash flows. An accident or incident at a nuclear unit not owned by us could lead to increased regulation, which could affect our ability to continue to economically operate our units. Any resulting financial impact from a nuclear accident may exceed our resources, including insurance coverages. Further, as a licensed nuclear operator subject to the Price-Anderson Act and a member of a nuclear industry mutual insurance company, PSEG Power is subject to potential retroactive assessments as a result of an industry nuclear incident or retrospective premiums due to adverse industry loss experience and such assessments may be material.
In the event of non-compliance with applicable legislation, regulation and licenses, the NRC may increase oversight, impose fines, and/or shut down a unit, depending on its assessment of the severity of the non-compliance. If a serious nuclear incident were to occur, our business, reputation, financial condition and results of operations could be materially adversely affected. In each case, the amount and types of insurance available to cover losses that might arise in connection with the operation of our nuclear fleet are limited and may be insufficient to cover any costs we may incur.
Decommissioning—NRC regulations require that licensees of nuclear generating facilities demonstrate reasonable assurance that funds will be available to decommission a nuclear facility at the end of its useful life. PSEG Nuclear has established an NDT Fund to satisfy these obligations. However, forecasting trust fund investment earnings and costs to decommission nuclear generating stations requires significant judgment, and actual results could differ significantly from current estimates. If we determine that it is necessary to retire one of our nuclear generating stations before the end of its useful life, there is a higher risk that it will no longer meet the NRC minimum funding requirements due to the earlier commencement of decommissioning activities and a shorter time period over which the NDT investments could appreciate in value. A shortfall could require PSEG to post parental guarantees or make additional cash contributions to ensure that the NDT Fund continues to satisfy the NRC minimum funding requirements. As a result, our financial position or cash flows could be significantly adversely affected.
We are subject to numerous federal, state and local environmental laws and regulations that may significantly limit or affect our businesses, result in significant litigation, adversely impact our business plans and/or expose us to significant environmental fines, costs and other liabilities.
We are subject to extensive federal, state and local environmental laws and regulations regarding air quality, water quality, site remediation, land use, waste disposal, climate change impact, natural resource damages and other matters. These laws and regulations affect how we conduct our operations and make capital expenditures. Over the past several years, there have been various changes to make existing environmental laws and regulations stricter and this trend may continue. Changes in these laws, or violations of laws, could result in significant increases in our compliance costs, capital expenditures to bring facilities into compliance, operating costs for remediation and clean-up actions, civil penalties or damages from actions brought by third parties for alleged health or property damages. Any such increase in our costs could have a material impact on our financial condition, results of operations and cash flows and could require further economic review to determine whether to continue operations or decommission an affected facility. We may also be unable to successfully recover certain of these cost increases through our existing regulatory rate structures, in the case of PSE&G, or our contracts with our customers, in the case of PSEG Power.
PSE&G recovers certain remediation and legal costs associated with its manufactured gas plant sites through Remediation Adjustment Charge (RAC) filings with the BPU. Continued future recoveries through the RAC are not guaranteed. Any failure to make future recoveries could materially impact our financial condition.
In addition, PSEG Power retained ownership of certain liabilities excluded from the sale of its fossil generation portfolio. These primarily relate to obligations under environmental regulations, including remediation obligations under the New Jersey Industrial Site Recovery Act and the Connecticut Transfer Act. It will require multiple years and comprehensive environmental sampling to understand the extent of and to carry out the required remediation. At this stage of the remediation process, the full remediation costs are not estimable, but given the number and operating history of the facilities in the
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portfolio, the full remediation costs will likely be material in the aggregate. The costs could potentially include costs for, among other things, excavating soil, implementation of institutional controls, and the construction, operation and maintenance of engineering controls.
Environmental laws and regulations have generally become more stringent over time, and this trend is likely to continue. For further discussion of environmental laws and regulations impacting our business, results of operations and financial condition, including the impact of federal and state laws and regulations relating to remediation of environmental contamination, see Item 8. Note 12. Commitments and Contingent Liabilities.
We may not receive necessary licenses, permits and siting approvals in a timely manner or at all, which could adversely impact our business and results of operations.
We must periodically apply for licenses and permits from various regulatory authorities, including environmental regulatory authorities, and siting/permitting approvals for our transmission investments, and abide by their respective orders. Delay in obtaining, or failure to obtain and maintain, any permits or approvals, including environmental permits or approvals, or delay in or failure to satisfy any applicable regulatory requirements, could:
each of which could materially affect our business, financial condition, results of operations and cash flows. In addition, the process of obtaining licenses and permits from regulatory authorities may be delayed or defeated by concerted community opposition and such delay or defeat could have a material effect on our business.
Changes in tax laws and regulations may adversely affect our financial condition, results of operations and cash flows.
The enactment, amendment or repeal of federal or state tax legislation and/or the clarification of previously enacted tax laws, including U.S. Treasury guidance relating to the 15% CAMT, the nuclear PTC and other energy tax credit provisions, could have a material impact on our effective tax rate and cash tax position.
ITEM 1B. UNRESOLVED STAFF COMMENTS
PSEG and PSE&G
None.
ITEM 1C. CYBERSECURITY
To reduce the likelihood and severity of cybersecurity incidents, we maintain a comprehensive cybersecurity program designed to protect and preserve the confidentiality, integrity, and availability of our technology systems and business operations. For a discussion of cybersecurity risks, see Item 1A. Risk Factors.
Risk Management and Strategy
Our processes for assessing, identifying, and managing material risks from cybersecurity threats include:
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Governance
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The assessment and management of material risks from cyber threats is managed by the CIDO, CISO and Cybersecurity Council, as further described below.
As noted above, the CIDO regularly attends and provides updates with the CISO to the IOC.
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The CIDO remains informed about the monitoring, prevention, detection, mitigation, and remediation of cybersecurity incidents through the CISO and other members of the cybersecurity team, who are tasked with these responsibilities on a day-to-day basis.
As noted above, the CISO provides cybersecurity updates during the four regularly scheduled IOC meetings and regularly meets with the IOC, without other members of management present, during executive sessions.
For a discussion of regulatory requirements relating to cybersecurity matters, see Item 1. Business—Regulatory Issues.
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ITEM 2. PROPERTIES
All of our owned physical property is held by our subsidiaries. We believe that we and our subsidiaries maintain adequate insurance coverage against loss or damage to plants and properties, subject to certain exceptions and deductibles, to the extent such property is usually insured and insurance is available at a reasonable cost. For a discussion of nuclear insurance, see Item 8. Note 12. Commitments and Contingent Liabilities.
PSE&G
Primarily all of PSE&G’s property is located in New Jersey and PSE&G’s First and Refunding Mortgage, which secures the bonds issued thereunder, constitutes a direct first mortgage lien on substantially all of PSE&G’s property. PSE&G’s electric lines and gas mains are located over or under public highways, streets, alleys or lands, except where they are located over or under property owned by PSE&G or occupied by it under easements or other rights. PSE&G deems these easements and other rights to be adequate for the purposes for which they are being used.
Electric Property and Facilities
As of December 31, 2025, PSE&G’s electric T&D system included approximately 25,000 circuit miles and 871,000 poles, of which 64% are jointly-owned. In addition, PSE&G owns and operates 58 switching stations with an aggregate installed capacity of approximately 40,000 megavolt-amperes (MVA) and 238 substations with an aggregate installed capacity of approximately 10,890 MVA. In addition, PSE&G owns four electric distribution headquarters and five electric sub-headquarters.
Gas Property and Facilities
As of December 31, 2025, PSE&G’s gas system included approximately 18,000 miles of gas mains, 12 gas distribution headquarters, two sub-headquarters, and two meter shops serving all of its gas territory in New Jersey. In addition, PSE&G operates 54 natural gas metering and regulating stations, of which 25 are located on land owned by customers or natural gas pipeline suppliers and are operated under lease, easement or other similar arrangement. In some instances, the pipeline companies own portions of the metering and regulating facilities. PSE&G also owns one liquefied natural gas and three liquid petroleum air gas peaking facilities. The daily gas capacity of these peaking facilities (the maximum daily gas delivery available during the three peak winter months) is approximately 2.9 million therms in the aggregate.
Solar
As of December 31, 2025, PSE&G owned 158 MW dc of installed PV solar capacity throughout New Jersey.
PSEG Power
Generation Facilities
As of December 31, 2025, PSEG Power’s share of installed nuclear generating capacity is shown in the following table:
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Location |
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Total |
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% Owned |
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Owned |
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Nuclear: |
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Hope Creek |
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NJ |
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1,174 |
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100 |
% |
|
|
1,174 |
|
|
|
Salem 1 & 2 |
|
NJ |
|
|
2,280 |
|
|
|
57 |
% |
|
|
1,309 |
|
|
|
Peach Bottom 2 & 3 (A) |
|
PA |
|
|
2,549 |
|
|
|
50 |
% |
|
|
1,275 |
|
|
|
Total Nuclear |
|
|
|
|
6,003 |
|
|
|
|
|
|
3,758 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
37
Table of Contents
ITEM 3. LEGAL PROCEEDINGS
We are party to various lawsuits and environmental and regulatory matters, including in the ordinary course of business. For information regarding material legal proceedings, see Item 1. Business—Regulatory Issues and Environmental Matters and Item 8. Note 12. Commitments and Contingent Liabilities.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Our common stock is listed on the New York Stock Exchange, Inc. under the trading symbol “PEG.” As of February 20, 2026, there were 43,642 registered holders.
The following graph shows a comparison of the five-year cumulative return assuming $100 invested on December 31, 2020 in our common stock and the subsequent reinvestment of quarterly dividends, the S&P Composite Stock Price Index, the Dow Jones Utilities Index and the S&P Electric Utilities Index.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
2020 |
|
|
2021 |
|
|
2022 |
|
|
2023 |
|
|
2024 |
|
|
2025 |
|
|
||||||
|
PSEG |
|
$ |
100.00 |
|
|
$ |
118.33 |
|
|
$ |
112.30 |
|
|
$ |
116.36 |
|
|
$ |
165.95 |
|
|
$ |
162.80 |
|
|
|
S&P 500 |
|
$ |
100.00 |
|
|
$ |
128.68 |
|
|
$ |
105.36 |
|
|
$ |
133.03 |
|
|
$ |
166.28 |
|
|
$ |
195.98 |
|
|
|
DJ Utilities |
|
$ |
100.00 |
|
|
$ |
117.01 |
|
|
$ |
118.96 |
|
|
$ |
112.19 |
|
|
$ |
129.21 |
|
|
$ |
144.69 |
|
|
|
S&P Utilities |
|
$ |
100.00 |
|
|
$ |
117.67 |
|
|
$ |
119.51 |
|
|
$ |
111.05 |
|
|
$ |
137.07 |
|
|
$ |
159.06 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
||||||
38
Table of Contents
On February 24, 2026, our Board of Directors approved a $0.67 per share common stock dividend for the first quarter of 2026. This reflects an indicative annual dividend rate of $2.68 per share. We expect to continue to pay cash dividends on our common stock; however, the declaration and payment of future dividends to holders of our common stock will be at the discretion of the Board of Directors and will depend upon many factors, including our financial condition, earnings, capital requirements of our businesses, alternate investment opportunities, legal requirements, regulatory constraints, industry practice and other factors that the Board of Directors deems relevant.
The following table indicates the securities authorized for issuance under equity compensation plans as of December 31, 2025:
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Plan Category |
|
Number of Securities |
|
|
Weighted-Average |
|
|
Number of Securities |
|
|
|||
|
Equity Compensation Plans Approved by Security Holders |
|
|
— |
|
|
$ |
— |
|
|
|
5,937,370 |
|
|
|
Equity Compensation Plans Not Approved by Security Holders |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
Total |
|
|
— |
|
|
$ |
— |
|
|
|
5,937,370 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
The number of shares available for future issuance includes amounts remaining under our 2021 Long-Term Incentive Plan (2021 LTIP) and 2021 Equity Compensation Plan for Outside Directors and the Employee Stock Purchase Plan and reflect a reduction for non-vested restricted stock units and performance share units (PSUs) (assumed at target payout). The number of shares available for future issuance may be increased or decreased depending on actual payouts for the PSUs based on achievement of targets and is increased by the number of shares that are forfeited, canceled or otherwise terminated without the issuance of shares. For additional discussion of specific plans concerning equity-based compensation, see Item 8. Note 17. Stock Based Compensation.
39
Table of Contents
From time to time, PSEG may repurchase shares to satisfy obligations under equity compensation awards and repurchase shares to satisfy purchases by employees under the Employee Stock Purchase Plan (ESPP). In November 2025, we entered into a share repurchase plan that complies with Rule 10b5-1 of the Exchange Act, solely with respect to the repurchase of shares to satisfy obligations under equity compensation awards and the repurchase of shares to satisfy purchases by employees under the ESPP. The following table indicates our common share repurchases in the open market during the fourth quarter of 2025 to satisfy obligations under equity compensation awards that were issued in 2025 and purchases by employees under the ESPP during 2025.
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2025 |
|
Total Number of Shares Purchased |
|
Average Price Paid per Share |
|
|
October 1 - October 31 |
|
— |
|
— |
|
|
November 1 - November 30 |
|
— |
|
— |
|
|
December 1 - December 31 |
|
850,000 |
|
$79.50 |
|
|
|
|
|
|
|
|
There are 865,000 additional shares that remain available to be repurchased under the plan to satisfy obligations under equity compensation awards anticipated to be issued in 2026 and purchases anticipated by employees under the ESPP during 2026. The plan expires on the earlier of the completion of all trades under the plan, April 30, 2026, or the occurrence of such other termination events as specified in the plan, including but not limited to termination of the plan.
PSE&G
We own all of the common stock of PSE&G. For additional information regarding PSE&G’s ability to continue to pay dividends, see Item 7. MD&A—Liquidity and Capital Resources.
ITEM 6. [RESERVED]
40
Table of Contents
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)
This combined MD&A is separately filed by Public Service Enterprise Group Incorporated (PSEG) and Public Service Electric and Gas Company (PSE&G). Information contained herein relating to any individual company is filed by such company on its own behalf.
PSEG’s business consists of two reportable segments, PSE&G and PSEG Power LLC (PSEG Power) & Other, primarily comprised of our principal direct wholly owned subsidiaries, which are:
The PSEG Power & Other reportable segment also includes amounts related to the parent company as well as PSEG’s other direct wholly owned subsidiaries, which are: PSEG Long Island LLC (PSEG LI), which operates the Long Island Power Authority’s (LIPA) transmission and distribution (T&D) system under an Operations Services Agreement (OSA); PSEG Energy Holdings L.L.C. (Energy Holdings), which primarily holds legacy lease investments and competitively bid, FERC regulated transmission; and PSEG Services Corporation (Services), which provides certain management, administrative and general services to PSEG and its subsidiaries at cost.
Our business discussion in Item 1. Business provides a review of the regions and markets where we operate and compete, as well as our strategy for conducting our businesses within these markets, focusing on operational excellence, financial strength and making disciplined investments. Our risk factor discussion in Item 1A. Risk Factors provides information about factors that could have a material adverse impact on our businesses. The following discussion provides an overview of the significant events and business developments that have occurred during 2025 and key factors that we expect may drive our future performance. This discussion refers to the Consolidated Financial Statements (Statements) and the related Notes to the Consolidated Financial Statements (Notes). This discussion should be read in conjunction with such Statements and Notes.
EXECUTIVE OVERVIEW OF 2025 AND FUTURE OUTLOOK
We are a public utility holding company that, acting through our wholly owned subsidiaries, is a predominantly regulated electric and gas utility and a nuclear generation business. Our business plan focuses on achieving growth by allocating capital primarily toward regulated investments in an effort to continue to improve the sustainability and predictability of our business and realizing the value of the consistent and reliable carbon-free generation from our nuclear units. We are focused on investing to meet growing energy demand, modernize our energy infrastructure, improve reliability and resilience, increase EE to meet customer expectations and be well aligned with public policy objectives. With these investments and higher working capital recovery approved in the distribution rate case, our regulated rate base increased from approximately $34 billion as of December 31, 2024 to approximately $36 billion as of December 31, 2025. In addition, our nuclear facilities retain the downside price protection of a production tax credit (PTC) from 2024 through 2032.
41
Table of Contents
For the years 2026-2030, our regulated capital investment program is estimated to be in a range of $22.5 billion to $25.5 billion. We expect these capital investments to result in a compound annual growth rate in our regulated rate base in a range of 6.0% to 7.5% from year-end 2025 to year-end 2030. The regulated capital investments represent the majority of PSEG’s total capital investment program of $24 billion to $28 billion. The low end of the range includes an extension of our Gas System Modernization Program (GSMP) and Clean Energy Future (CEF)-EE program, as these programs are expected to continue beyond their currently approved timeframes. The upper end of our capital investment range includes potential incremental investments to address continued demand growth and other investments to meet infrastructure needs and support New Jersey's clean energy goals.
PSE&G
At PSE&G, our focus is on investing capital in T&D infrastructure and clean energy programs to meet growing demand, enhance the reliability and resiliency of our T&D system, meet customer expectations and support public policy objectives.
In October 2024, the BPU approved our CEF-EE II filing authorizing approximately $2.9 billion for energy efficiency projects committed between January 1, 2025 through June 30, 2027, and completed over an expected six-year period. The Order approved a program investment budget of approximately $1.9 billion, net of administrative expenses, and approximately $1 billion to continue our customer on-bill repayment program. This EE filing is a significant increase from our prior filings, driven by an increase in the savings targets required under the BPU Energy Efficiency Framework and higher costs to achieve those targeted savings.
Our GSMP II program extension provided for main replacement through December 2025 plus trailing services replacement and paving costs into 2026 totaling approximately $900 million of investment. Of the $900 million, $750 million is recovered through three periodic rate adjustments with the balance recovered through a future base rate case. In November 2025, the BPU issued an Order approving PSE&G’s GSMP III program, authorizing $1.05 billion of capital investment to replace 525 miles of high pressure cast iron gas mains and unprotected steel mains, with cost recovery through three periodic rate adjustments as portions of the investment are put into service. In that Order, the BPU also authorized $360 million of investment to replace an additional 75 miles of gas main, with cost recovery to be requested in a future base rate case. Investment under the GSMP III program will begin in 2026 and continue through December 2028 plus trailing services replacement and paving costs into 2029.
In October 2024, the BPU issued an Order approving the settlement of PSE&G's distribution rate case with new rates effective October 15, 2024. The Order provided for a $17.8 billion rate base, a 9.6% return on equity for PSE&G’s distribution business and a 55% equity component of its capitalization structure. In addition, the Order approved mechanisms beginning January 1, 2025 associated with the recovery of future storm costs as well as the recovery of annual pension and OPEB expenses.
PSEG Power
At PSEG Power, we seek to produce low-cost electricity by efficiently operating our nuclear generation assets, mitigate earnings volatility through hedging and the PTC mechanism, and support public policies that preserve these existing carbon-free base load nuclear generating plants. During 2025, our nuclear units generated approximately 30.9 terawatt hours and operated at a capacity factor of 91.2%. Effective April 2025, PSEG Power revised the estimated useful lives for the Salem 1, Salem 2 and Hope Creek nuclear plants due to our expectation that a 20-year license extension will be approved for these facilities. In October 2025, we completed work to extend the refueling cycle at our Hope Creek facility from 18 months to 24 months. In addition, we are planning power uprates at Salem Units 1 and 2 that will increase generation capacity and reliability and support long-term operation of these units, including through a potential subsequent license renewal.
Our hedging strategy continues to incorporate an estimated range of risk reduction impacts from the PTCs on our nuclear generation portfolio while retaining the ability to benefit when market pricing exceeds the level at which we would receive PTCs. As of December 31, 2025, we expect that our current portfolio position for 2026 will result in the realized value of our nuclear generation output being above the level at which we would receive PTCs. Our strategy will continue to evolve taking into account energy market conditions, PTC guidance uncertainty, and potential incremental changes upon receiving U.S.
42
Table of Contents
Treasury guidance. In addition, we continue to explore opportunities for the potential sale of power, capacity and/or emission credits from our nuclear facilities pursuant to long-term agreements.
Climate Strategy and Sustainability Efforts
We remain guided by our vision to power a future where people use energy more efficiently, and it’s safer and delivered more reliably than ever. Our investments remain focused on infrastructure modernization, energy efficiency, and supporting growing customer demand, as well as New Jersey's long-term energy goals. We have adjusted our net zero greenhouse gas (GHG) emissions goal that includes direct GHG emissions (Scope 1) and indirect GHG emissions from operations (Scope 2) across our business operations, which supports New Jersey's clean energy and climate goals, from 2030 to 2050. Transition risks, including federal and/or state policy and regulation, technology availability and affordability, market demands, and customer needs likely will impact the pace of our net zero progress and our ability to achieve the 2050 goal.
PSE&G has undertaken a number of initiatives that support the reduction of GHG emissions, including our implementation of New Jersey's EE and related programs that are intended to support New Jersey’s Energy Master Plan (EMP) and Gubernatorial Executive Orders through programs designed to help customers use energy more efficiently, reduce GHG emissions, support the expansion of the EV infrastructure in New Jersey, install energy storage capacity to supplement solar generation and enhance grid resiliency, install smart meters and supporting infrastructure to allow for the integration of other clean energy technologies and to more efficiently respond to weather and other outage events.
We continue to assess physical risks of climate change and adapt our capital investment program to improve the reliability and resiliency of our system in an environment of increasing frequency and severity of weather events. PSE&G is committed to the safe and reliable delivery of natural gas to approximately 1.9 million customers throughout New Jersey and we are equally committed to reducing GHG emissions associated with such operations. The GSMP is designed to improve safety and reliability and significantly reduce natural gas leaks in our distribution system, which would reduce the release of methane, a potent GHG, into the air. From 2018 through 2025 we reduced reported methane emissions by over 30% system wide.
We also continue to focus on working to preserve the economic viability of our nuclear units, which provide over 80% of the carbon-free energy in New Jersey. These efforts include reducing market risk by advocating for state and federal policies, such as the PTC established by the IRA, and capacity market reform and related generator interconnection policies at PJM Interconnection, L.L.C. (PJM) that recognize the value of our nuclear fleet’s carbon-free generation and its contribution to grid reliability and resource adequacy, and potential long-term contracts that recognize the value of its consistent and reliable carbon-free energy.
Competitively Bid, FERC Regulated Transmission
PSEG continues to evaluate additional investment opportunities in regulated transmission. In December 2023, PJM awarded us an approximately $424 million project to address increasing load and reliability issues in Maryland and northern Virginia as part of its 2022 Window 3 competitive solicitation. PJM has directed that the project be placed in service in 2027. However, based on the procedural timeline established by order of the Maryland Public Service Commission, we do not currently believe a 2027 in-service date for the project is reasonably achievable. We are continuing to take all available steps to obtain approvals for timely project execution. We cannot predict the outcome.
PSEG will continue to evaluate opportunities to participate in transmission solicitation processes and may decide to submit bids for these opportunities, some of which could be material investments.
PSEG LI
PSEG LI has been operating LIPA’s electric T&D system in Long Island, New York since 2014 under a 12-year OSA with LIPA that expired on December 31, 2025. In 2025, a five year extension of the contract was approved. A competitor in the contract bidding process filed litigation against LIPA challenging the process. LIPA filed a motion to dismiss the competitor’s claim as untimely, which was granted by the New York Supreme Court in December 2025. The competitor filed an appeal in January 2026.
43
Table of Contents
Financial Results
The financial results for PSEG, PSE&G and PSEG Power & Other for the years ended December 31, 2025 and 2024 are presented as follows:
|
|
|
|
|
|
|
|
|
||
|
|
|
Years Ended December 31, |
|
|
|||||
|
|
|
2025 |
|
|
2024 |
|
|
||
|
|
|
Millions, except per share data |
|
|
|||||
|
PSE&G |
|
$ |
1,745 |
|
|
$ |
1,547 |
|
|
|
PSEG Power & Other |
|
|
366 |
|
|
|
225 |
|
|
|
PSEG Net Income |
|
$ |
2,111 |
|
|
$ |
1,772 |
|
|
|
|
|
|
|
|
|
|
|
||
|
PSEG Net Income Per Share (Diluted) |
|
$ |
4.22 |
|
|
$ |
3.54 |
|
|
|
|
|
|
|
|
|
|
|
||
For a detailed discussion of our financial results, see Results of Operations.
Regulatory, Legislative and Other Developments
We closely monitor and engage with stakeholders on significant regulatory and legislative developments.
Transmission Rate Proceedings and Return on Equity (ROE)
Under current FERC rules, PSE&G continues to earn a 50 basis point adder to its base ROE for its membership in PJM as a transmission owner. However, certain regulatory or legislative actions could potentially lead to the loss of this adder which, if eliminated, would prospectively reduce PSE&G’s annual Net Income and annual cash inflows by approximately $40 million.
New Jersey Clean Energy Stakeholder Proceedings
In February 2023, the previous governor of New Jersey issued executive orders (EOs) that establish or accelerate previously established 2050 targets for clean-sourced energy, building decarbonization, and EV adoption goals, with new target dates of 2030 or 2035, as applicable. In November 2025 the BPU released the updated Energy Master Plan (EMP) that presents potential pathways toward meeting New Jersey’s clean energy and decarbonization goals. Given the new administration took office in January 2026, it is not clear how the EMP might influence New Jersey’s energy policy and we cannot predict the impact on our business that might result.
Environmental Regulation
We are subject to liability under environmental laws for the costs and penalties of remediating contamination of property now or formerly owned by us and of property contaminated by hazardous substances that we generated. In particular, the historic operations of PSEG companies and the operations of numerous other companies within the Newark Bay Complex are alleged by federal and state agencies to have discharged substantial contamination into the Newark Bay Complex in violation of various statutes. The Newark Bay Complex is a tidal estuary in northern New Jersey that includes Newark Bay, as well as portions of the Passaic River, the Hackensack River and other surrounding waterways. The U.S. Environmental Protection Agency (EPA) has designated various portions of the Newark Bay Complex as federal Superfund sites that must be investigated and remediated under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA).
In addition, PSEG Power has retained ownership of certain liabilities excluded from the sale of its fossil generation portfolio, primarily related to obligations under New Jersey and Connecticut state laws to investigate and remediate the sites. We are also currently involved in a number of proceedings relating to sites where other hazardous substances may have been discharged and may be subject to additional proceedings in the future, and the costs and penalties of any such remediation efforts could be material.
For further information regarding the matters described above, as well as other matters that may impact our financial condition and results of operations, see Item 8. Note 12. Commitments and Contingent Liabilities.
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Table of Contents
Nuclear
In May 2025, PSEG Power’s Salem 1, Salem 2 and Hope Creek nuclear plants zero emission certificate (ZEC) sales concluded. Pursuant to a process established by the BPU, ZECs were purchased from these nuclear plants by the electric distribution companies (EDCs) in New Jersey. As previously noted, the Federal government established a PTC for electricity generated using existing nuclear energy, which began January 2024 and continues through 2032 and impacted PSEG Power's decision not to apply for the next ZEC three-year eligibility period starting June 2025. The expected PTC rate is up to $15/MWh subject to adjustment based upon a facility’s gross receipts. The PTC rate and the gross receipts threshold are subject to annual inflation adjustments. ZEC revenue recorded has been reduced by the estimated PTCs generated from these nuclear plants. The PTC amounts recorded to date are subject to change based on several factors, including but not limited to, adjustments to estimated market prices and generation and the issuance of authoritative guidance by Treasury/the Internal Revenue Service, including clarification of the definition of “gross receipts” used to determine the phase out. Any adjustments to amounts previously recorded could be material. We continue to analyze the impact of the PTC, including any future guidance from the U.S. Treasury to assess any impact of PTCs on expected ZEC payments and/or any future ZEC application periods.
Demand, Supply and Energy Costs
An increasing demand for power and a lack of sufficient new generation resources in PJM and in New Jersey, has raised resource adequacy concerns and has resulted in higher electricity costs for our customers in 2025. Prices from the July 2024 PJM annual capacity market auction, which were approximately 10 times higher than prices from the 2023 auction and which impacted customer bills, provoked concern from state regulators and legislators and have created regulatory uncertainty. Prices from the July 2025 capacity market auction were higher than those produced by the July 2024 auction and PJM indicated that the prices would have been even higher if not for the existence of a FERC-approved ceiling, which remained in effect for the December 2025 auction and which PJM has recently indicated it will seek to extend for two more auction cycles. In January 2026, the White House’s National Energy Dominance Council signed an agreement with the governors of all 13 states in the PJM region that memorializes a “statement of principles” intended to prompt PJM to make major changes to its capacity market, including running a “reliability backstop auction” to procure new generation capacity to provide 15-year “price certainty”. PJM has committed to run this backstop auction and is targeting a September 2026 date following FERC approval of all needed rule changes. There are outstanding questions associated with this auction, including whether the procurement costs will be disproportionately allocated to zones where demand exceeds supply. In addition, in 2025, FERC both issued an order that will encourage optionality for “large load” customers like data centers by facilitating co-location with generation, and initiated a rulemaking to establish definitive rules for future large customer connections intended to ensure reliability and address resource adequacy concerns. See Item 1. Business—Regulatory Issues—Federal Regulation.
As a result of the capacity market price increases, the costs of which are flowed through to customers, and per direction to EDCs from the BPU, PSE&G filed a petition in May 2025 that provided proposals to mitigate bill impacts to customers. In June 2025, the BPU approved a settlement under which PSE&G applied a credit to each residential electric customer’s monthly bill for July 2025 and August 2025, with the offset being charged on monthly bills for September 2025 through February 2026. PSE&G agreed to waive carrying costs on the outstanding credit amount. In addition, PSE&G agreed to: extend protections precluding the shut-off of eligible residential customers, normally available during the winter months, to the period from July 1, 2025 through September 30, 2025; offer residential customers deferred payment arrangements with terms of up to twenty-four months for the payment of overdue billed amounts; and waive all reconnection fees for residential customers during the period from July 1, 2025 through September 30, 2025. In September 2025, the New Jersey Legislature enacted a law prohibiting disconnection for non-payment during the period June 15 through August 31, beginning in 2026, and for such period annually thereafter, for certain qualified electric and gas customers. This new requirement for a summer shutoff moratorium and the extended deferred payment arrangements have increased our Accounts Receivable and bad debt expense in 2025 with potential additional increases in the future.
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Table of Contents
Federal and State Executive Orders and State Legislative and Other Activity
There have been a number of federal executive orders during the past year, including but not limited to orders requiring retiring generating units to stay on-line beyond their retirement date to mitigate system reliability risk and orders imposing widespread and substantial tariffs on imports.
There has been increased New Jersey state legislative activity and executive orders regarding energy affordability, resource adequacy and regulatory topics.
We are continuing to monitor the federal and state legislative activity and executive orders, certain of which may require regulatory actions to implement, and their impacts on our supply chain, business, cash flow, results of operations and financial condition.
Interest Rate Matters
PSEG’s long-term financing plan is designed to replace maturities and support funding its capital program. Given our financing needs, the prevailing interest rate environment will be a key factor in determining interest expense on variable-rate debt and long-term rates on future financing plans. In order to increase the predictability of interest expense, we may use interest rate hedges to help limit our exposure to fluctuating interest rates and fix a portion of our interest rate exposure for anticipated long-term financing plans at PSEG and PSEG Power. PSE&G’s interest rate risk is moderated due to annual transmission rate filings and distribution recoveries through periodic rate filings.
Tax Legislation
The enactment, amendment or repeal of federal or state tax legislation and/or the clarification of previously enacted tax laws could have a material impact on our effective tax rate and cash tax position.
In August 2022, the IRA enacted a 15% corporate alternative minimum tax (CAMT), which is based on adjusted financial statement income, and established a PTC for existing qualified nuclear facilities. In February 2026, the U.S. Treasury issued Notice 2026-07 (CAMT Notice) which clarifies AFSI computation by allowing an adjustment to deduct certain repair and maintenance costs that are capitalized in the applicable financial statement. This CAMT Notice will result in a reduction to PSEG’s and PSE&G’s AFSI for CAMT purposes. However, aspects of the IRA provisions for CAMT and PTCs remain unclear; therefore, the issuance of future authoritative guidance could materially impact PSEG’s and PSE&G’s results of operations, financial condition and cash flows.
In April 2023, the U.S. Treasury issued Revenue Procedure 2023-15 that provides a Natural Gas Safe Harbor (NGSH) method of accounting to determine the annual repair tax deduction for gas T&D property. As a result of the CAMT Notice, PSE&G intends to adopt the NGSH method for its gas distribution assets in its 2025 Federal tax return, including a historical cumulative IRC Section 481(a) adjustment. While PSEG is still evaluating this guidance, it expects that the additional repair deductions will reduce our taxable income and AFSI, and will result in lower cash taxes.
In July 2025, “An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14” (the Act) was signed into law. The Act made no material changes to the PTC for existing qualified nuclear generation facilities. The Act permanently extends 100% bonus depreciation to qualified business property retroactive to January 19, 2025. The impact of the Act on PSEG’s and PSE&G’s financial statements is subject to continued evaluation.
Future Outlook
Our future success will be influenced by our ability to continue to maintain strong operational and financial performance, address regulatory and legislative developments that impact our business and respond to the issues and challenges described below. In order to do this, we will seek to:
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Table of Contents
In addition to the risks described elsewhere in this Form 10-K for 2025 and beyond, the key issues and challenges we expect our business to confront include:
We continually assess a broad range of strategic options to maximize long-term shareholder value and address the interests of our multiple stakeholders. We consider a wide variety of factors when determining how and when to efficiently deploy capital, including the performance and prospects of our businesses; returns and the sustainability and predictability of future earnings streams; the views of investors, regulators, public policy initiatives, rating agencies, customers and employees; our existing indebtedness and restrictions it imposes; and tax considerations, among other things. Strategic options available to us include:
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Table of Contents
There can be no assurance, however, that we will successfully develop and execute any of the strategic options noted above, or any additional options we may consider in the future. The execution of any such strategic plan may not have the expected benefits or may have unexpected adverse consequences.
RESULTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
Years Ended December 31, |
|
|
|||||||||
|
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
|||
|
Earnings |
|
Millions, except per share data |
|
|
|||||||||
|
PSE&G |
|
$ |
1,745 |
|
|
$ |
1,547 |
|
|
$ |
1,515 |
|
|
|
PSEG Power & Other (A)(B) |
|
|
366 |
|
|
|
225 |
|
|
|
1,048 |
|
|
|
PSEG Net Income |
|
$ |
2,111 |
|
|
$ |
1,772 |
|
|
$ |
2,563 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
PSEG Net Income Per Share (Diluted) |
|
$ |
4.22 |
|
|
$ |
3.54 |
|
|
$ |
5.13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
PSEG Power’s results above include the Nuclear Decommissioning Trust (NDT) Fund activity and the impacts of non-trading commodity mark-to-market (MTM) activity, which consist of the financial impact from positions with future delivery dates.
The variances in our Net Income attributable to changes related to the NDT Fund and MTM are shown in the following table:
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
Years Ended December 31, |
|
|
|||||||||
|
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
|||
|
|
|
Millions, after tax |
|
|
|||||||||
|
NDT Fund and Related Activity (A) (B) |
|
$ |
136 |
|
|
$ |
81 |
|
|
$ |
109 |
|
|
|
Non-Trading MTM Gains (Losses) (C) |
|
$ |
(54 |
) |
|
$ |
(151 |
) |
|
$ |
959 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Our increase in Net Income for 2025 as compared to 2024 was driven primarily by
48
Table of Contents
Our results of operations are primarily comprised of the results of operations of our principal operating segments, PSE&G and PSEG Power, excluding charges related to intercompany transactions, which are eliminated in consolidation. For additional information on intercompany transactions, see Item 8. Note 23. Related-Party Transactions.
PSEG
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
Increase / |
|
|
Increase / |
|
|
|||||||||||||
|
|
|
Years Ended December 31, |
|
|
(Decrease) |
|
|
(Decrease) |
|
|
|||||||||||||||||||
|
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
2025 vs. 2024 |
|
|
2024 vs. 2023 |
|
|
|||||||||||||
|
|
|
Millions |
|
|
Millions |
|
|
% |
|
|
Millions |
|
|
% |
|
|
|||||||||||||
|
Operating Revenues |
|
$ |
12,168 |
|
|
$ |
10,290 |
|
|
$ |
11,237 |
|
|
$ |
1,878 |
|
|
|
18 |
|
|
$ |
(947 |
) |
|
|
(8 |
) |
|
|
Energy Costs |
|
|
4,159 |
|
|
|
3,393 |
|
|
|
3,260 |
|
|
|
766 |
|
|
|
23 |
|
|
|
133 |
|
|
|
4 |
|
|
|
Operation and Maintenance (A) |
|
|
3,772 |
|
|
|
3,362 |
|
|
|
3,157 |
|
|
|
410 |
|
|
|
12 |
|
|
|
205 |
|
|
|
6 |
|
|
|
Depreciation and Amortization |
|
|
1,257 |
|
|
|
1,182 |
|
|
|
1,135 |
|
|
|
75 |
|
|
|
6 |
|
|
|
47 |
|
|
|
4 |
|
|
|
Net Gains (Losses) on Trust Investments |
|
|
189 |
|
|
|
127 |
|
|
|
189 |
|
|
|
62 |
|
|
|
49 |
|
|
|
(62 |
) |
|
|
(33 |
) |
|
|
Net Other Income (Deductions) |
|
|
145 |
|
|
|
154 |
|
|
|
173 |
|
|
|
(9 |
) |
|
|
(6 |
) |
|
|
(19 |
) |
|
|
(11 |
) |
|
|
Net Non-Operating Pension and OPEB (Costs) Credits |
|
|
65 |
|
|
|
73 |
|
|
|
(218 |
) |
|
|
(8 |
) |
|
|
(11 |
) |
|
|
291 |
|
|
N/A |
|
|
|
|
Interest Expense |
|
|
1,005 |
|
|
|
882 |
|
|
|
748 |
|
|
|
123 |
|
|
|
14 |
|
|
|
134 |
|
|
|
18 |
|
|
|
Income Tax Expense |
|
|
263 |
|
|
|
53 |
|
|
|
518 |
|
|
|
210 |
|
|
N/A |
|
|
|
(465 |
) |
|
|
(90 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
The 2025, 2024 and 2023 amounts in the preceding table for Operating Revenues and O&M costs each include $644 million, $592 million and $533 million, respectively, for PSEG LI’s subsidiary, Long Island Electric Utility Servco, LLC (Servco). These amounts represent the O&M pass-through costs for the Long Island operations, the full reimbursement of which is reflected in Operating Revenues. See Item 8. Note 3. Variable Interest Entity for additional information. The following discussions for PSE&G and PSEG Power provide a detailed explanation of their respective variances.
49
Table of Contents
PSE&G
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
Years Ended December 31, |
|
|
Increase / |
|
|
Increase / |
|
|
|||||||||||||||||||
|
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
2025 vs. 2024 |
|
|
2024 vs. 2023 |
|
|
|||||||||||||
|
|
|
Millions |
|
|
Millions |
|
|
% |
|
|
Millions |
|
|
% |
|
|
|||||||||||||
|
Operating Revenues |
|
$ |
9,558 |
|
|
$ |
8,449 |
|
|
$ |
7,807 |
|
|
$ |
1,109 |
|
|
|
13 |
|
|
$ |
642 |
|
|
|
8 |
|
|
|
Energy Costs |
|
|
3,782 |
|
|
|
3,189 |
|
|
|
3,010 |
|
|
|
593 |
|
|
|
19 |
|
|
|
179 |
|
|
|
6 |
|
|
|
Operation and Maintenance (A) |
|
|
2,253 |
|
|
|
1,949 |
|
|
|
1,843 |
|
|
|
304 |
|
|
|
16 |
|
|
|
106 |
|
|
|
6 |
|
|
|
Depreciation and Amortization |
|
|
1,116 |
|
|
|
1,025 |
|
|
|
980 |
|
|
|
91 |
|
|
|
9 |
|
|
|
45 |
|
|
|
5 |
|
|
|
Net Other Income (Deductions) |
|
|
64 |
|
|
|
64 |
|
|
|
80 |
|
|
|
— |
|
|
|
— |
|
|
|
(16 |
) |
|
|
(20 |
) |
|
|
Net Non-Operating Pension and OPEB Credits |
|
|
70 |
|
|
|
77 |
|
|
|
114 |
|
|
|
(7 |
) |
|
|
(9 |
) |
|
|
(37 |
) |
|
|
(32 |
) |
|
|
Interest Expense |
|
|
644 |
|
|
|
582 |
|
|
|
493 |
|
|
|
62 |
|
|
|
11 |
|
|
|
89 |
|
|
|
18 |
|
|
|
Income Tax Expense |
|
|
152 |
|
|
|
298 |
|
|
|
160 |
|
|
|
(146 |
) |
|
|
(49 |
) |
|
|
138 |
|
|
|
86 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
(A) Includes amortization of EE programs regulatory investment expenditures of $169 million, $125 million and $82 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Year Ended December 31, 2025 as compared to 2024
Operating Revenues increased $1,109 million due to changes in delivery, clause, commodity and other operating revenues.
Delivery Revenues are primarily derived from revenues recovered on our regulated investments in rate base and costs through periodic filings of distribution rate cases, approved distribution investment recovery programs and the annual filing of transmission formula rates. Due to PSE&G’s electric and gas distribution CIP decoupling mechanism, there is minimal impact from sales volumes on most distribution delivery revenues. Also included in delivery revenues are revenue credits to customers to flowback tax benefits realized by PSE&G. These revenue credits are offset in Income Tax Expense.
Delivery revenues increased $584 million due primarily to $577 million from increased electric and gas revenues primarily as a result of the 2024 distribution base rate case, $87 million from higher GPRC revenues and a $44 million increase in transmission revenues due primarily to higher rate base investments, offset primarily by a $146 million increase in revenue credits flowed back to customers as part of our TAC mechanism.
Clause Revenues are revenues from various pass through regulatory programs for which PSE&G earns no margin. These revenues are entirely offset by the amortization of related costs in O&M, D&A and Interest and Income Tax Expense, which were originally recognized as regulatory assets.
Clause Revenues decreased $94 million due primarily to a $186 million decrease in Tax Adjustment Credits (TAC) and Green Program Recovery Charge (GPRC) deferrals, offset by $91 million in higher Societal Benefits Clause (SBC) collections.
Commodity Revenues are revenues from customers choosing default electric (basic generation service or BGS) and gas supply (basic gas supply service or BGSS) from PSE&G. PSE&G procures the BGS and BGSS on behalf of these retail customers and earns no margin on this service as all costs are passed back to the BGS and BGSS customers. The changes in Commodity Revenues for both electric and gas are entirely offset by changes in Energy Costs.
Commodity Revenues increased $706 million due to higher electric BGS revenues of $575 million primarily from higher prices, and higher gas BGSS revenues of $131 million primarily from higher sales volumes.
Other Operating Revenues are primarily comprised of revenues derived from various GPRC programs including Transition Renewable Energy Certificates (TREC) revenues, Community Solar collections and the Successor Solar Incentive Program (SuSI) and ZECs. The revenues from these programs offset costs included in Energy Costs. In addition, other operating revenues include revenues from our Appliance Service Business (ASB) which offers various appliance protection and repair plans to customers.
50
Table of Contents
Other Operating revenues decreased $87 million due primarily to a decrease in ZECs as a result of the ZEC collection ending effective May 31, 2025.
Operating Expenses
Energy Costs increased $593 million. This is offset by changes in Commodity Revenues and Other Operating Revenues.
Operation and Maintenance increased $304 million due primarily to $178 million in higher clause and renewable expenditures, $72 million in higher distribution and transmission operational expenditures and $49 million in higher other operating and service company expenses.
Depreciation and Amortization increased $91 million due primarily to an increase in depreciation due to higher plant placed in service and increases in the amortization of software and Regulatory Assets and Liabilities.
Net Non-Operating Pension and OPEB Credits decreased $7 million due primarily to a decrease in the expected return on plan assets.
Interest Expense increased $62 million due primarily to incremental debt and the replacement of maturing debt at higher rates.
Income Tax Expense decreased $146 million primarily due to an increase in the flowback of excess deferred income tax benefits to customers, partially offset by higher pre-tax income.
Year Ended December 31, 2024 as compared to 2023
See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2024 as filed with the SEC on February 25, 2025 for information related to the year ended December 31, 2024 as compared to 2023, which information is incorporated herein by reference.
51
Table of Contents
PSEG Power & Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
Years Ended December 31, |
|
|
Increase / |
|
|
Increase / |
|
|
|||||||||||||||||||
|
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
2025 vs. 2024 |
|
|
2024 vs. 2023 |
|
|
|||||||||||||
|
|
|
Millions |
|
|
Millions |
|
|
% |
|
|
Millions |
|
|
% |
|
|
|||||||||||||
|
Operating Revenues |
|
$ |
3,722 |
|
|
$ |
2,807 |
|
|
$ |
4,533 |
|
|
$ |
915 |
|
|
|
33 |
|
|
$ |
(1,726 |
) |
|
|
(38 |
) |
|
|
Energy Costs |
|
|
1,489 |
|
|
|
1,170 |
|
|
|
1,353 |
|
|
|
319 |
|
|
|
27 |
|
|
|
(183 |
) |
|
|
(14 |
) |
|
|
Operation and Maintenance |
|
|
1,519 |
|
|
|
1,413 |
|
|
|
1,314 |
|
|
|
106 |
|
|
|
8 |
|
|
|
99 |
|
|
|
8 |
|
|
|
Depreciation and Amortization |
|
|
141 |
|
|
|
157 |
|
|
|
155 |
|
|
|
(16 |
) |
|
|
(10 |
) |
|
|
2 |
|
|
|
1 |
|
|
|
Net Gains (Losses) on Trust Investments |
|
|
189 |
|
|
|
127 |
|
|
|
189 |
|
|
|
62 |
|
|
|
49 |
|
|
|
(62 |
) |
|
|
(33 |
) |
|
|
Net Other Income (Deductions) |
|
|
84 |
|
|
|
95 |
|
|
|
97 |
|
|
|
(11 |
) |
|
|
(12 |
) |
|
|
(2 |
) |
|
|
(2 |
) |
|
|
Net Non-Operating Pension and OPEB Costs |
|
|
5 |
|
|
|
4 |
|
|
|
332 |
|
|
|
1 |
|
|
|
25 |
|
|
|
(328 |
) |
|
|
(99 |
) |
|
|
Interest Expense |
|
|
364 |
|
|
|
305 |
|
|
|
259 |
|
|
|
59 |
|
|
|
19 |
|
|
|
46 |
|
|
|
18 |
|
|
|
Income Tax Expense (Benefit) |
|
|
111 |
|
|
|
(245 |
) |
|
|
358 |
|
|
|
356 |
|
|
N/A |
|
|
|
(603 |
) |
|
N/A |
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Year Ended December 31, 2025 as compared to 2024
Operating Revenues increased $915 million due primarily to changes in generation and gas supply and other operating revenues.
Generation Revenues increased $493 million due primarily to
Gas Supply Revenues increased $362 million due primarily to
Operating Expenses
Energy Costs represent the cost of generation, which includes fuel costs for generation as well as purchased energy in the market, and gas purchases to meet PSEG Power’s obligation under its BGSS contract with PSE&G. Energy Costs increased $319 million due to
Gas costs increased $313 million due primarily to
Generation costs increased $6 million due primarily to increased fuel costs at nuclear.
Operation and Maintenance increased $106 million due primarily to higher Servco operating costs, and increased planned refueling outage costs in 2025.
52
Table of Contents
Depreciation and Amortization decreased $16 million due primarily to revised estimated useful lives in April 2025 for the Salem and Hope Creek nuclear plants based on the expectation that a 20-year license extension will be approved for these facilities.
Net Gains (Losses) on Trust Investments increased $62 million due primarily to NDT investments with a $59 million increase in net unrealized gains in 2025 on equity securities, and a $4 million increase in net realized gains in 2025.
Net Other Income (Deductions) decreased $11 million due primarily to an increase in donations, partially offset by higher NDT dividend income.
Interest Expense increased $59 million due primarily to incremental debt and the replacement of maturing long-term debt at higher rates.
Income Tax Expense (Benefit) variance of $356 million due primarily to the absence of the benefit from nuclear PTCs in 2025 and higher pre-tax income.
Year Ended December 31, 2024 as compared to 2023
See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2024 as filed with the SEC on February 25, 2025 for information related to the year ended December 31, 2024 as compared to 2023, which information is incorporated herein by reference.
LIQUIDITY AND CAPITAL RESOURCES
The following discussion of our liquidity and capital resources is on a consolidated basis, noting the uses and contributions, where material, of our two direct major operating subsidiaries.
Financing Methodology
We expect our capital requirements to be met through internally generated cash flows and external financings, consisting of short-term debt for working capital needs and long-term debt for capital investments.
PSE&G’s sources of external liquidity include a $1 billion multi-year revolving credit facility. PSE&G uses internally generated cash flow and its commercial paper program to meet seasonal, intra-month and temporary working capital needs. PSE&G does not engage in any intercompany borrowing or lending arrangements. PSE&G maintains a back-up credit facility in an amount sufficient to cover the commercial paper and letters of credit outstanding. PSE&G’s dividend payments to/capital contributions from PSEG are consistent with its capital structure objectives which have been established to maintain investment grade credit ratings. PSE&G’s long-term financing plan is designed to replace maturities, fund a portion of its capital program and manage short-term debt balances. Generally, PSE&G uses either secured medium-term notes or first mortgage bonds to raise long-term capital.
PSEG, PSEG Power, Energy Holdings, PSEG LI and Services participate in a corporate money pool, an aggregation of daily cash balances designed to efficiently manage their respective short-term liquidity needs, which are accounted for as intercompany loans. Servco does not participate in the corporate money pool. Servco’s short-term liquidity needs are met through an account funded and owned by LIPA.
PSEG and PSEG Power have access through sub-limits to a revolving Master Credit Facility, which provides for $2.75 billion of multi-year credit capacity. The current PSEG sub-limit is $1.5 billion and current PSEG Power sub-limit is $1.25 billion. Sub-limits can be adjusted subject to the terms of the Master Credit Facility.
PSEG’s available sources of external liquidity may include the issuance of long-term debt securities and the incurrence of additional indebtedness through our commercial paper program back-stopped by our credit facility. Our current sources of external liquidity include the Master Credit Facility. This facility is available to back-stop PSEG’s commercial paper program, issue letters of credit and for general corporate purposes. PSEG’s Master Credit Facility and the commercial paper program are available to support PSEG’s working capital needs and are also available to make equity contributions or provide liquidity support to its subsidiaries. Additionally, from time to time, PSEG enters into short-term loan agreements designed to enhance its liquidity position.
53
Table of Contents
PSEG Power’s sources of external liquidity include the Master Credit Facility and PSEG Power’s letter of credit facilities and may include the issuance of long-term debt securities and entering into short-term loan agreements. Credit capacity is primarily used to provide collateral in support of PSEG Power’s sales and purchases of electricity and natural gas as the market prices for energy and fuel fluctuate, and to meet potential collateral postings in the event that PSEG Power is downgraded to below investment grade by Standard & Poor’s (S&P) or Moody’s. PSEG Power’s dividend payments to PSEG are also designed to be consistent with its capital structure objectives which have been established to maintain investment grade credit ratings and provide sufficient financial flexibility.
Operating Cash Flows
We continue to expect our operating cash flows combined with cash on hand and financing activities to be sufficient to fund planned capital expenditures and shareholder dividends.
For the year ended December 31, 2025, our operating cash flow increased $1,165 million, as compared to 2024. The net increase was primarily due to a net change at PSE&G, as discussed below, combined with an inflow of $22 million in net cash collateral postings in 2025 as compared to a $131 million outflow in 2024 at PSEG Power, and an $89 million decrease in payments to counterparties at PSEG Power.
PSE&G
PSE&G’s operating cash flow increased $643 million from $1,725 million to $2,368 million for the year ended December 31, 2025, as compared to 2024. The increase was due primarily to a decrease in net regulatory deferrals, a decrease in materials and supplies inventory, lower tax payments, and the timing of vendor payments, partially offset by an increase in accounts receivable.
Short-Term Liquidity
PSEG meets its short-term liquidity requirements, as well as those of PSEG Power, primarily through the issuance of commercial paper and, from time to time, short-term loans. PSE&G maintains its own separate commercial paper program to meet its short-term liquidity requirements. Each commercial paper program is fully back-stopped by its own separate credit facility.
Each of our credit facilities is restricted as to availability and use to the specific companies as listed below; however, if necessary, the PSEG facilities can also be used to support our subsidiaries’ liquidity needs.
In March 2025, PSEG, PSEG Power and PSE&G executed a one year extension to their existing $3.75 billion revolving credit facilities, extending the maturity through March 2029 and PSEG Power amended certain provisions in the Master Credit Facility including removal of subsidiary guarantees of PSEG Power. The PSEG Power letter of credit facilities and term loans were also amended to be consistent with the Master Credit Facility, and the $150 million uncommitted credit facility at a subsidiary of PSEG Power was terminated.
In December 2025, PSEG Power amended its existing $400 million 364-day variable rate term loan, which increased the balance to $500 million and extended the maturity to December 2026.
In February 2026, PSEG entered into a 364-day variable rate term loan agreement for $500 million.
PSEG Power has uncommitted credit facilities totaling $425 million, which can be utilized for letters of credit. As of December 31, 2025, PSEG Power had $243 million in letters of credit outstanding under these uncommitted credit facilities.
PSE&G has an uncommitted credit facility totaling $30 million, which can be utilized for letters of credit. As of December 31, 2025, PSE&G's letters of credit outstanding were immaterial under this uncommitted credit facility.
54
Table of Contents
Our total committed credit facilities and available liquidity as of December 31, 2025 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
As of December 31, 2025 |
|
|
|||||||||
|
Company/Facility |
|
Total |
|
|
Usage |
|
|
Available |
|
|
|||
|
|
|
Millions |
|
|
|||||||||
|
PSEG |
|
$ |
1,500 |
|
|
$ |
719 |
|
|
$ |
781 |
|
|
|
PSE&G |
|
|
1,000 |
|
|
|
351 |
|
|
|
649 |
|
|
|
PSEG Power |
|
|
1,325 |
|
|
|
82 |
|
|
|
1,243 |
|
|
|
Total |
|
$ |
3,825 |
|
|
$ |
1,152 |
|
|
$ |
2,673 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
For additional information, see Item 8. Note 13. Debt and Credit Facilities.
We continually monitor our liquidity and seek to add capacity as needed to meet our liquidity requirements, including to satisfy any additional collateral requirements. As of December 31, 2025, our liquidity position, including our credit facilities and access to external financing, was expected to be sufficient to meet our projected stressed requirements over our 12-month planning horizon. PSEG analyzes its liquidity requirements using stress scenarios that consider different events, including changes in commodity prices and the potential impact of PSEG Power losing its investment grade credit rating from S&P or Moody’s, which would represent a two-level downgrade from its current Moody’s and S&P ratings. In the event of a deterioration of PSEG Power’s credit rating, certain of PSEG Power’s agreements allow the counterparty to demand further performance assurance. The potential additional collateral that we would be required to post under these agreements if PSEG Power were to lose its investment grade credit rating was approximately $703 million and $618 million as of December 31, 2025 and 2024, respectively. See Item 8. Note 12. Commitments and Contingent Liabilities for additional discussion of PSEG Power’s agreements.
Long-Term Debt Financing
During the next twelve months,
For additional information, see Item 8. Note 13. Debt and Credit Facilities.
Debt Covenants
Our credit agreements contain maximum debt to equity ratios and other restrictive covenants and conditions to borrowing. We are currently in compliance with all of our debt covenants. Continued compliance with applicable financial covenants will depend upon our future financial position, level of earnings and cash flows, as to which no assurances can be given.
In addition, under its First and Refunding Mortgage (Mortgage), PSE&G may issue new First and Refunding Mortgage Bonds against previous additions and improvements, provided that its ratio of earnings to fixed charges calculated in accordance with its Mortgage is at least 2 to 1, and/or against retired Mortgage Bonds. As of December 31, 2025, PSE&G’s Mortgage coverage ratio was 3.9 to 1 and the Mortgage would permit up to approximately $10.2 billion aggregate principal amount of new Mortgage Bonds to be issued against additions and improvements to its property.
Default Provisions
Our bank credit agreements and indentures contain various, customary default provisions that could result in the potential acceleration of indebtedness under the defaulting company’s agreement.
In particular, PSEG’s bank credit agreement contains provisions under which certain events, including an acceleration of material indebtedness under PSE&G’s and PSEG Power’s respective financing agreements, a failure by PSEG, PSE&G or PSEG Power to satisfy certain final judgments and certain bankruptcy events by PSEG, PSE&G or PSEG Power, would constitute an event of default under the PSEG bank credit agreements. Under the PSEG bank credit agreements, it would also be an event of default if, in certain circumstances, either PSE&G or PSEG Power ceases to be wholly owned by PSEG. The PSE&G and PSEG Power bank credit agreements include certain similar default provisions; however, such provisions only
55
Table of Contents
relate to the respective borrower under such agreement and its subsidiaries and do not contain cross default provisions to each other. The PSE&G and PSEG Power bank credit agreements do not include cross default provisions relating to PSEG. Each of PSEG's, PSE&G’s and PSEG Power’s bank credit agreements also contain limitations on the incurrence of liens by it and certain of its subsidiaries and PSEG Power’s bank credit agreements contain restrictions on the incurrence of certain subsidiary debt.
PSEG’s senior notes include a cross acceleration provision that may be triggered upon the acceleration of more than $75 million of indebtedness incurred by PSEG. Such provision does not extend to an acceleration of indebtedness by any of PSEG’s subsidiaries. PSEG Power’s senior notes contain a similar provision with respect to the acceleration of more than $75 million of indebtedness incurred by PSEG Power but such provision does not extend to an acceleration of indebtedness by any of PSEG Power’s subsidiaries. Under PSE&G’s medium-term note indenture, an event of default under PSE&G’s mortgage indenture and acceleration of the mortgage bonds would constitute an event of default.
Ratings Triggers
Our debt indentures and credit agreements do not contain any material “ratings triggers” that would cause an acceleration of the required interest and principal payments in the event of a ratings downgrade. However, in the event of a downgrade, any one or more of the affected companies may be subject to increased interest costs on certain bank debt and certain collateral requirements. In the event that we are not able to affirm representations and warranties on credit agreements, lenders would not be required to make loans.
In accordance with BPU requirements under the BGS contracts, PSE&G is required to maintain an investment grade credit rating. If PSE&G were to lose its investment grade rating, it would be required to file a plan to assure continued payment for the BGS requirements of its customers.
Fluctuations in commodity prices or a deterioration of PSEG Power’s credit rating to below investment grade could increase PSEG Power’s required margin postings under various agreements entered into in the normal course of business. PSEG Power believes it has sufficient liquidity to meet the required posting of collateral which would result from a credit rating downgrade to below investment grade by S&P or Moody’s at today’s market prices.
Common Stock Dividends
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
Years Ended December 31, |
|
|
|||||||||
|
Dividend Payments on Common Stock |
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
|||
|
Per Share |
|
$ |
2.52 |
|
|
$ |
2.40 |
|
|
$ |
2.28 |
|
|
|
in Millions |
|
$ |
1,258 |
|
|
$ |
1,196 |
|
|
$ |
1,137 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
On February 24, 2026, our Board of Directors approved a $0.67 per share common stock dividend for the first quarter of 2026. This reflects an indicative annual dividend rate of $2.68 per share. We expect to continue to pay cash dividends on our common stock; however, the declaration and payment of future dividends to holders of our common stock will be at the discretion of the Board of Directors and will depend upon many factors, including our financial condition, earnings, capital requirements of our businesses, alternate investment opportunities, legal requirements, regulatory constraints, industry practice and other factors that the Board of Directors deems relevant. For additional information related to cash dividends on our common stock, see Item 8. Note 21. Earnings Per Share (EPS) and Dividends.
Credit Ratings
If the rating agencies lower or withdraw our credit ratings, such revisions may adversely affect the market price of our securities and serve to materially increase our cost of capital and limit access to capital. Credit ratings shown are for securities that we typically issue. Outlooks are shown for the credit ratings at each entity and can be Stable, Negative, or Positive. There is no assurance that the ratings will continue for any given period of time or that they will not be revised by the rating agencies, if in their respective judgments, circumstances warrant. Each rating given by an agency should be evaluated independently of the other agencies’ ratings. The ratings should not be construed as an indication to buy, hold or sell any security.
56
Table of Contents
|
|
|
|
|
|
|
|
|
|
Moody’s (A) |
|
S&P (B) |
|
|
PSEG |
|
|
|
|
|
|
Outlook |
|
Stable |
|
Stable |
|
|
Senior Notes |
|
Baa2 |
|
BBB |
|
|
Commercial Paper |
|
P2 |
|
A2 |
|
|
PSE&G |
|
|
|
|
|
|
Outlook |
|
Stable |
|
Stable |
|
|
Mortgage Bonds |
|
A1 |
|
A |
|
|
Commercial Paper |
|
P2 |
|
A2 |
|
|
PSEG Power |
|
|
|
|
|
|
Outlook |
|
Stable |
|
Stable |
|
|
Senior Notes |
|
Baa2 |
|
BBB |
|
|
|
|
|
|
|
|
Other Comprehensive Income
For the year ended December 31, 2025, we had Other Comprehensive Income of $42 million on a consolidated basis. The Other Comprehensive Income was due primarily to $34 million of net unrealized gains related to available-for-sale debt securities, $20 million related to pension and other postretirement benefits, partially offset by $12 million of unrealized losses on derivative contracts accounted for as hedges. See Item 8. Note 20. Accumulated Other Comprehensive Income (Loss), Net of Tax for additional information.
CAPITAL REQUIREMENTS
We expect that all of our capital requirements over the next three years will come from a combination of internally generated funds and external debt financing. Projected capital construction and investment expenditures, excluding nuclear fuel purchases, for the next three years are presented in the following table. These projections include Allowance for Funds Used During Construction for PSE&G and Interest Capitalized During Construction for PSEG’s other subsidiaries. These amounts are subject to change, based on various factors. Amounts shown below for PSE&G include currently approved programs. We intend to continue to invest in infrastructure modernization and will seek to extend these and related programs as appropriate.
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
2026 |
|
|
2027 |
|
|
2028 |
|
|
|||
|
|
|
|
|
|
Millions |
|
|
|
|
|
|||
|
PSE&G: |
|
|
|
|
|
|
|
|
|
|
|||
|
Transmission |
|
$ |
835 |
|
|
$ |
950 |
|
|
$ |
975 |
|
|
|
Electric Distribution |
|
|
1,410 |
|
|
|
1,440 |
|
|
|
1,520 |
|
|
|
Gas Distribution |
|
|
1,130 |
|
|
|
1,115 |
|
|
|
1,165 |
|
|
|
Clean Energy |
|
|
810 |
|
|
|
885 |
|
|
|
700 |
|
|
|
Total PSE&G |
|
$ |
4,185 |
|
|
$ |
4,390 |
|
|
$ |
4,360 |
|
|
|
Competitively Bid, FERC Regulated Transmission |
|
|
20 |
|
|
|
115 |
|
|
|
195 |
|
|
|
PSEG Power & Other |
|
|
435 |
|
|
|
330 |
|
|
|
275 |
|
|
|
Total PSEG |
|
$ |
4,640 |
|
|
$ |
4,835 |
|
|
$ |
4,830 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
57
Table of Contents
PSE&G
PSE&G’s projections for future capital expenditures include material additions and replacements to its T&D systems to meet expected growth and to manage reliability. As project scope and cost estimates develop, PSE&G will modify its current projections to include these required investments. PSE&G’s projected expenditures for the various items reported above are primarily comprised of the following:
In 2025, PSE&G made $2,731 million of capital expenditures, primarily for T&D system reliability. In addition, PSE&G had $145 million associated with CEF-EE II on-bill repayments included in investing cash flows, as well as cost of removal, net of salvage, of $156 million associated with capital replacements, and expenditures for EE programs of approximately $552 million, which are included in operating cash flows.
Competitively Bid, FERC Regulated Transmission
In December 2023, PJM awarded us an approximately $424 million project to address increasing load and reliability issues in Maryland and northern Virginia as part of its 2022 Window 3 competitive solicitation.
PSEG Power & Other
PSEG’s other projected expenditures are primarily comprised of investments to maintain and enhance current nuclear operations and opportunities to increase nuclear generation at PSEG Power and to purchase hardware, software and office equipment at Services.
In 2025, PSEG Power & Other made capital expenditures of $236 million, excluding $336 million for nuclear fuel, primarily related to various nuclear projects at PSEG Power and various IT projects at Services.
Other Material Cash Requirements
The following table reflects our other material cash requirements which include debt maturities and interest payments, operating lease payments and energy related purchase commitments in the respective periods in which they are due. For additional information, see Item 8. Note 13. Debt and Credit Facilities and Note 6. Leases.
58
Table of Contents
The table below does not reflect any anticipated cash payments for pension and OPEB or AROs due to uncertain timing of payments. See Item 8. Note 11. Pension, Other Postretirement Benefits (OPEB) and Savings Plans and Note 10. Asset Retirement Obligations (AROs) for additional information.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
Total |
|
|
Less |
|
|
2 - 3 |
|
|
4 - 5 |
|
|
Over |
|
|
|||||
|
|
|
Millions |
|
|
|||||||||||||||||
|
Long-Term Recourse Debt Maturities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
PSEG |
|
$ |
5,346 |
|
|
$ |
— |
|
|
$ |
1,300 |
|
|
$ |
1,900 |
|
|
$ |
2,146 |
|
|
|
PSE&G |
|
|
16,115 |
|
|
|
875 |
|
|
|
1,125 |
|
|
|
675 |
|
|
|
13,440 |
|
|
|
PSEG Power |
|
|
1,250 |
|
|
|
— |
|
|
|
— |
|
|
|
750 |
|
|
|
500 |
|
|
|
Interest on Recourse Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
PSEG |
|
|
1,385 |
|
|
|
253 |
|
|
|
466 |
|
|
|
296 |
|
|
|
370 |
|
|
|
PSE&G |
|
|
10,318 |
|
|
|
653 |
|
|
|
1,256 |
|
|
|
1,183 |
|
|
|
7,226 |
|
|
|
PSEG Power (A) |
|
|
449 |
|
|
|
68 |
|
|
|
136 |
|
|
|
116 |
|
|
|
129 |
|
|
|
Operating Leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
PSE&G |
|
|
103 |
|
|
|
18 |
|
|
|
26 |
|
|
|
20 |
|
|
|
39 |
|
|
|
PSEG Power & Other |
|
|
76 |
|
|
|
16 |
|
|
|
32 |
|
|
|
28 |
|
|
|
— |
|
|
|
Energy-Related Purchase Commitments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
PSEG Power (B) |
|
|
3,049 |
|
|
|
861 |
|
|
|
997 |
|
|
|
489 |
|
|
|
702 |
|
|
|
Total |
|
$ |
38,091 |
|
|
$ |
2,744 |
|
|
$ |
5,338 |
|
|
$ |
5,457 |
|
|
$ |
24,552 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
CRITICAL ACCOUNTING ESTIMATES
Under accounting guidance generally accepted in the United States (GAAP), many accounting standards require the use of estimates, variable inputs and assumptions (collectively referred to as estimates) that are subjective in nature. Because of this, differences between the actual measure realized versus the estimate can have a material impact on results of operations, financial position and cash flows. We have determined that the following estimates are considered critical to the application of rules that relate to the respective businesses.
Accounting for Pensions and Other Postretirement Benefits (OPEB)
The market-related value of plan assets held for PSEG’s qualified pension and OPEB plans is equal to the fair value of these assets as of year-end. The plan assets are comprised of investments in both debt and equity securities which are valued using quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. Plan assets also include investments in unlisted real estate which is valued via third-party appraisals. We calculate pension and OPEB costs using various economic and demographic assumptions.
Assumptions and Approach Used: Economic assumptions include the discount rate and the expected rate of return on plan assets. Demographic pension and OPEB assumptions include projections of future mortality rates, pay increases and retirement patterns, as well as projected health care costs for OPEB.
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Assumption |
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
|||
|
Qualified Pension |
|
|
|
|
|
|
|
|
|
|
|||
|
Discount Rate |
|
|
5.50 |
% |
|
|
5.68 |
% |
|
|
5.02 |
% |
|
|
Expected Rate of Return on Plan Assets |
|
|
8.10 |
% |
|
|
8.10 |
% |
|
|
8.10 |
% |
|
|
OPEB |
|
|
|
|
|
|
|
|
|
|
|||
|
Discount Rate |
|
|
5.31 |
% |
|
|
5.59 |
% |
|
|
4.96 |
% |
|
|
Expected Rate of Return on Plan Assets |
|
|
8.10 |
% |
|
|
8.10 |
% |
|
|
8.10 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
59
Table of Contents
The discount rate used to calculate PSEG’s pension and OPEB obligations is determined as of December 31 each year, our measurement date. The discount rate is determined by developing a spot rate curve based on the yield to maturity of a universe of high quality corporate bonds with similar maturities to the plan obligations. The spot rates are used to discount the estimated plan distributions. The discount rate is the single equivalent rate that produces the same result as the full spot rate curve.
Our expected rate of return on plan assets reflects current asset allocations, historical long-term investment performance and an estimate of future long-term returns by asset class, long-term inflation assumptions and a premium for active management.
We utilize a corridor approach that reduces the volatility of reported costs/credits. The corridor requires differences between actuarial assumptions and plan results be deferred and amortized as part of the costs/credits. Amortization occurs only when the accumulated differences exceed 10% of the greater of the benefit obligation or the fair value of plan assets as of each year-end. For PSEG’s qualified pension plan, the excess would be amortized over the average remaining service period of active employees, which is approximately fifteen years.
Effect if Different Assumptions Used: As part of the business planning process, we have modeled future costs assuming an 8.00% expected rate of return and a 5.50% discount rate for 2026 pension costs/credits and a 5.31% discount rate for 2026 OPEB costs/credits. Based upon these assumptions, we have estimated a net periodic pension expense in 2026 of approximately $27 million, or pension income of $10 million, net of amounts capitalized, and net periodic OPEB income in 2026 of approximately $8 million, or $8 million, net of amounts capitalized. Beginning in 2023, our net periodic pension amounts include the impact of the accounting order approved by the BPU authorizing PSE&G to modify its pension accounting for ratemaking purposes. Actual future pension costs/credits and funding levels will depend on future investment performance, changes in discount rates, market conditions, funding levels relative to our projected benefit obligation and accumulated benefit obligation and various other factors related to the populations participating in the pension plans. Actual future OPEB costs/credits will depend on future investment performance, changes in discount rates, market conditions, and various other factors.
The following chart reflects the sensitivities associated with a change in certain assumptions.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
% Change |
|
|
Impact on Benefit Obligation as of December 31, 2025 |
|
|
Increase to |
|
|
Increase to |
|
|
||||
|
Assumption |
|
|
|
|
Millions |
|
|
||||||||||
|
Qualified Pension |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Discount Rate |
|
|
(1 |
)% |
|
$ |
458 |
|
|
$ |
19 |
|
|
$ |
13 |
|
|
|
Expected Rate of Return on Plan Assets |
|
|
(1 |
)% |
|
N/A |
|
|
$ |
41 |
|
|
$ |
41 |
|
|
|
|
OPEB |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Discount Rate |
|
|
(1 |
)% |
|
$ |
58 |
|
|
$ |
(1 |
) |
|
$ |
(1 |
) |
|
|
Expected Rate of Return on Plan Assets |
|
|
(1 |
)% |
|
N/A |
|
|
$ |
4 |
|
|
$ |
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
See Item 7A. Quantitative and Qualitative Disclosures About Market Risk for additional information.
Derivative Instruments
The operations of PSEG, PSEG Power and PSE&G are exposed to market risks from changes in commodity prices, interest rates and equity prices that could affect their results of operations and financial condition. Exposure to these risks is managed through normal operating and financing activities and, when appropriate, through executing derivative transactions. Derivative instruments are used to create a relationship in which changes to the value of the assets, liabilities or anticipated transactions exposed to market risks are expected to be offset by changes in the value of these derivative instruments.
Current accounting guidance requires us to recognize all derivatives on the balance sheet at their fair value, except for derivatives that qualify for and are designated as normal purchases and normal sales contracts.
60
Table of Contents
Assumptions and Approach Used: In general, the fair value of our derivative instruments is determined primarily by end of day clearing market prices from an exchange, such as the Intercontinental Exchange and Nodal Exchange, among others, or auction prices.
For our wholesale energy business, many of the forward sale, forward purchase, option and other contracts are derivative instruments that hedge commodity price risk, but do not meet the requirements for, or are not designated as, either cash flow or fair value hedge accounting. The changes in value of such derivative contracts are marked to market through earnings as the related commodity prices fluctuate. As a result, our earnings may experience significant fluctuations depending on the volatility of commodity prices.
Effect if Different Assumptions Used: Any significant changes to the fair market values of our derivatives instruments could result in a material change in the value of the assets or liabilities recorded on our Consolidated Balance Sheets and could result in a material change to the unrealized gains or losses recorded in our Consolidated Statements of Operations.
For additional information regarding Derivative Financial Instruments, see Item 8. Note 1. Organization, Basis of Presentation and Summary of Significant Accounting Policies, Note 15. Financial Risk Management Activities and Note 16. Fair Value Measurements.
Long-Lived Assets
Management evaluates long-lived assets for impairment and reassesses the reasonableness of their related estimated useful lives whenever events or changes in circumstances warrant assessment. Such events or changes in circumstances may be as a result of significant adverse changes in regulation, business climate, counterparty credit worthiness, market conditions, or a determination that it is more-likely-than-not that an asset or asset group will be sold or retired before the end of its estimated useful life.
Assumptions and Approach Used: In the event certain triggers exist indicating an asset/asset group may not be recoverable, an undiscounted cash flow test is performed to determine if an impairment exists. When the carrying value of a long-lived asset/asset group exceeds the undiscounted estimate of future cash flows associated with the asset/asset group, an impairment may exist to the extent that the fair value of the asset/asset group is less than its carrying amount.
For PSEG Power, cash flows for long-lived assets and asset groups are determined at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The cash flows from the nuclear generation units are evaluated at the portfolio level. These tests require significant estimates and judgment when developing expected future cash flows. Significant inputs may include, but are not limited to, forward power prices, the impact of PTCs, fuel costs, other operating and capital expenditures, the cost of borrowing and asset sale prices and probabilities associated with any potential sale prior to the end of the estimated useful life or the early retirement of assets. The assumptions used by management incorporate inherent uncertainties that are at times difficult to predict and could result in impairment charges or accelerated depreciation in future periods if actual results materially differ from the estimated assumptions utilized in our forecasts.
In addition, long-lived assets are depreciated under the straight-line method based on estimated useful lives. An asset’s operating useful life is generally based upon operational experience with similar asset types and other non-operational factors. In the ordinary course, management, together with an asset’s co-owners in the case of certain of our jointly-owned assets, make a number of decisions that impact the operation of our generation assets beyond the current year. These decisions may have a direct impact on the estimated remaining useful lives of our assets and will be influenced by the financial outlook of the assets, including future market conditions such as forward energy, capacity prices, and long-term agreements to supply large power users, such as data centers, operating and capital investment costs and any state or federal legislation and regulations, among other items.
Effect if Different Assumptions Used: The above cash flow tests, and fair value estimates and estimated remaining useful lives may be impacted by a change in the assumptions noted above and could significantly impact the outcome, triggering additional impairment tests, write-offs or accelerated depreciation.
61
Table of Contents
Asset Retirement Obligations (ARO)
PSE&G, PSEG Power and Services recognize liabilities for the expected cost of retiring long-lived assets for which a legal obligation exists. These AROs are recorded at fair value in the period in which they are incurred and are capitalized as part of the carrying amount of the related long-lived assets. PSE&G, as a rate-regulated entity, recognizes Regulatory Assets or Liabilities as a result of timing differences between the recording of costs and costs recovered through the rate-making process. We accrete the ARO liability to reflect the passage of time with the corresponding expense recorded in O&M Expense.
Assumptions and Approach Used: Because quoted market prices are not available for AROs, we estimate the initial fair value of an ARO by calculating discounted cash flows that are dependent upon various assumptions, including:
We obtain updated nuclear decommissioning cost studies triennially unless new information necessitates more frequent updates. The most recent cost study was done in 2024. When we revise any assumptions used to calculate fair values of existing AROs, we adjust the ARO balance and corresponding long-lived asset which generally impacts the amount of accretion and depreciation expense recognized in future periods.
Nuclear Decommissioning AROs
AROs related to the future decommissioning of PSEG Power’s nuclear facilities comprised nearly 100% or $916 million of PSEG Power’s total AROs as of December 31, 2025. PSEG Power determines its AROs for its nuclear units by assigning probability weighting to various discounted cash flow outcomes for each of its nuclear units that incorporate the assumptions above as well as:
Effect if Different Assumptions Used: Changes in the assumptions could result in a material change in the ARO balance sheet obligation and the period over which we accrete to the ultimate liability. Had the following assumptions been applied, our estimates of the approximate impacts on the Nuclear ARO as of December 31, 2025 are as follows:
Accounting for Regulated Businesses
PSE&G prepares its financial statements to comply with GAAP for rate-regulated enterprises, which differs in some respects from accounting for non-regulated businesses. In general, accounting for rate-regulated enterprises should reflect the economic effects of regulation. As a result, a regulated utility is required to defer the recognition of costs (Regulatory Asset)
62
Table of Contents
or recognize obligations (Regulatory Liability) if the rates established are designed to recover the costs and if the competitive environment makes it probable that such rates can be charged or collected. This accounting results in the recognition of revenues and expenses in different time periods than that of enterprises that are not regulated.
Assumptions and Approach Used: PSE&G recognizes Regulatory Assets where it is probable that such costs will be recoverable in future rates from customers and Regulatory Liabilities where it is probable that refunds will be made to customers in future billings. The highest degree of probability is an order from the BPU either approving recovery of the deferred costs over a future period or requiring the refund of a liability over a future period.
Virtually all of PSE&G’s Regulatory Assets and Regulatory Liabilities are supported by BPU orders. In the absence of an order, PSE&G will consider the following when determining whether to record a Regulatory Asset or Liability:
All deferred costs are subject to prudence reviews by the BPU. When the recovery of a Regulatory Asset or payment of a Regulatory Liability is no longer probable, PSE&G charges or credits earnings, as appropriate.
Effect if Different Assumptions Used: A change in the above assumptions may result in a material impact on our results of operations or our cash flows. See Item 8. Note 5. Regulatory Assets and Liabilities for a description of the amounts and nature of regulatory balance sheet amounts.
Uncertain Tax Positions - Nuclear Production Tax Credits (PTCs)
We are required to make judgments in developing our provision for income tax expense (benefit), including those related to the uncertainty of tax positions taken, or expected to be taken, on a tax return. Our most significant uncertain tax position relates to the estimated benefit associated with PTCs.
Assumptions and Approach Used: We account for uncertain income tax positions using a benefit recognition model with a two-step approach, a more-likely-than-not recognition criterion and a measurement attribute that measures the position as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement. If it is not more-likely-than-not that the benefit will be sustained on its technical merits, no benefit will be recorded. Uncertain tax positions that relate only to timing of when an item is included on a tax return are considered to have met the recognition threshold.
Management uses judgments in determining the amount of income tax benefit to recognize due to the uncertainties associated with the technical merits of each position and with consideration to the amount of benefit to be sustained upon examination by a taxing authority. The estimated PTC benefits are subject to change based on the issuance of authoritative guidance by the U.S. Treasury. Specifically, clarification of the definition of “gross receipts”, which is used to determine the reduction amount of the PTC, by the U.S. Treasury could affect the amount to be recognized.
Effect if Different Assumptions Used: There were no PTCs recorded for the year ended December 31, 2025. While we believe the amount of PTCs recognized for the year ended December 31, 2024, is more-than-likely to be sustained upon examination, the ultimate outcome could result in material favorable or unfavorable adjustments to our consolidated financial statements. Guidance issued by the U.S. Treasury supporting or not supporting our tax position could result in an additional income tax benefit (expense) between approximately $89 million and $(89) million, respectively. Further, ZEC revenue was reduced by the estimated PTCs generated from PSEG Power’s Salem 1, Salem 2, and Hope Creek nuclear plants for the year ended December 31, 2024. ZEC revenue will be adjusted based upon the actual value of the PTCs generated which is dependent on the U.S. Treasury issuing additional guidance. This would result in an additional adjustment to Net Income between $(29) million and $44 million if our tax position discussed above is, or is not supported, respectively. See Item 8. Note 19. Income Taxes and Note 2. Revenues for more information.
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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The risk inherent in our market-risk sensitive instruments and positions is the potential loss arising from adverse changes in commodity prices, equity security prices and interest rates as discussed in the Notes to Consolidated Financial Statements. It is our policy to use derivatives to manage risk consistent with business plans and prudent practices. We have a Risk Management Committee comprised of executive officers who utilize a risk oversight function to ensure compliance with our corporate policies and risk management practices.
Additionally, we are exposed to counterparty credit losses in the event of non-performance or non-payment. We have a credit management process, which is used to assess, monitor and mitigate counterparty exposure. In the event of non-performance or non-payment by a major counterparty, there may be a material adverse impact on our financial condition, results of operations or net cash flows.
Commodity Contracts
The availability and price of energy-related commodities are subject to fluctuations from factors such as weather, environmental policies, changes in supply and demand, state and federal regulatory policies, market rules and other events. To reduce price risk caused by market fluctuations, we enter into supply contracts and derivative contracts, including forwards, futures, swaps, and options with approved counterparties. These contracts, in conjunction with physical sales and other services, help reduce risk and optimize the value of owned electric generation capacity.
Value-at-Risk (VaR) Models
VaR represents the potential losses, under normal market conditions, for instruments or portfolios due to changes in market factors, for a specified time period and confidence level. We estimate VaR across our commodity businesses.
MTM VaR consists of MTM derivatives that are economic hedges. The calculation does not include market risks associated with activities that are subject to accrual accounting, primarily our generating facilities and some load-serving activities.
The VaR models used are variance/covariance models adjusted for the change of positions with 95% and 99.5% confidence levels and a one-day holding period for the MTM activities. The models assume no new positions throughout the holding periods; however, we actively manage our portfolio.
|
|
|
|
|
|
|
|
|
||
|
|
|
MTM VaR |
|
|
|||||
|
|
|
Years Ended December 31, |
|
|
|||||
|
|
|
2025 |
|
|
2024 |
|
|
||
|
|
|
Millions |
|
|
|||||
|
95% Confidence Level, Loss could exceed VaR one day in 20 days |
|
|
|
|
|
|
|
||
|
Period End |
|
$ |
63 |
|
|
$ |
36 |
|
|
|
Average for the Period |
|
$ |
41 |
|
|
$ |
44 |
|
|
|
High |
|
$ |
71 |
|
|
$ |
152 |
|
|
|
Low |
|
$ |
17 |
|
|
$ |
25 |
|
|
|
|
|
|
|
|
|
|
|
||
|
99.5% Confidence Level, Loss could exceed VaR one day in 200 days |
|
|
|
|
|
|
|
||
|
Period End |
|
$ |
99 |
|
|
$ |
57 |
|
|
|
Average for the Period |
|
$ |
64 |
|
|
$ |
69 |
|
|
|
High |
|
$ |
111 |
|
|
$ |
238 |
|
|
|
Low |
|
$ |
27 |
|
|
$ |
39 |
|
|
|
|
|
|
|
|
|
|
|
||
See Item 8. Note 15. Financial Risk Management Activities for a discussion of credit risk.
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Interest Rates
PSEG, PSE&G and PSEG Power are subject to the risk of fluctuating interest rates in the normal course of business. Exposure to this risk is managed by targeting a balanced debt maturity profile which limits refinancing in any given period or interest rate environment. PSEG, PSE&G and PSEG Power may also use a mix of fixed and floating rate debt and interest rate hedges.
As of December 31, 2025, a hypothetical 10% increase in market interest rates would result in an additional $1 million in pre-tax annual interest costs related to either the current or the long-term portion of long-term debt, and term loan agreements.
Debt and Equity Securities
As of December 31, 2025, we had $4.8 billion of net assets in trust for our pension and OPEB plans. Although fluctuations in market prices of securities within this portfolio do not directly affect our earnings in the current period, changes in the value of these investments could affect
The NDT Fund is comprised primarily of fixed income and equity securities. As of December 31, 2025, the portfolio included $1.5 billion of equity securities inclusive of $0.3 billion of investments in listed real assets, and $1.4 billion in fixed income securities. The fair market value of the assets in the NDT Fund will fluctuate primarily depending upon the performance of equity markets. As of December 31, 2025, a hypothetical 10% change in the equity market would impact the value of the equity securities in the NDT Fund by approximately $155 million.
We use duration to measure the interest rate sensitivity of the fixed income portfolio. Duration is a summary statistic of the effective average maturity of the fixed income portfolio. The benchmark for the fixed income component of the NDT Fund currently has a duration of 5.98 years and a yield of 4.32%. The portfolio’s value will appreciate or depreciate by the duration with a 1% change in interest rates. As of December 31, 2025, a hypothetical 1% increase in interest rates would result in a decline in the market value for the fixed income portfolio of approximately $81 million.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
This combined Form 10-K is separately filed by PSEG and PSE&G. Information contained herein relating to any individual company is filed by such company on its own behalf. PSE&G makes representations only as to itself and makes no representations as to any other company.
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Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Public Service Enterprise Group Incorporated
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Public Service Enterprise Group Incorporated and subsidiaries (the “Company” or “PSEG”) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, stockholders' equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes and the consolidated financial statement schedule listed in the Index at Item 15(B)(a) (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 26, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Accounting for the Effects of Regulation – Refer to Notes 1 and 5 to the financial statements
Critical Audit Matter Description
PSEG’s subsidiary, Public Service Electric and Gas Company (PSE&G), prepares its financial statements to comply with GAAP for rate-regulated enterprises, which differs in some respects from accounting for non-regulated businesses. Management believes that PSE&G’s transmission and distribution businesses continue to meet the accounting requirements for rate-regulated entities, and PSE&G’s financial statements reflect the economic effects of regulation. PSE&G has deferred certain costs based on rate orders issued by the New Jersey Board of Public Utilities (“BPU”) or Federal Energy Regulatory Commission (“FERC”) or based on PSE&G’s experience with prior rate proceedings.
66
Table of Contents
PSE&G defers the recognition of costs as a regulatory asset or records the recognition of obligations as a regulatory liability if it is probable that, through the rate-making process, there will be a corresponding increase or decrease in future rates. This accounting results in the recognition of revenues and expenses in different time periods than that of enterprises that are not regulated. Regulatory assets and other investments and costs incurred under various infrastructure filings and clause mechanisms are subject to prudence reviews and can be disallowed in the future by regulatory authorities. To the extent that collection of any infrastructure or clause mechanism revenue, regulatory assets or payments of regulatory liabilities is no longer probable, the amounts would be charged or credited to income.
We identified the accounting for the effects of rate regulation as a critical audit matter due to the significant judgments made by management in assessing the probable recovery of regulatory assets and incurred costs or the likelihood of refunds of regulatory liabilities. Auditing these judgments required specialized knowledge of accounting for rate regulation and the ratemaking process due to its inherent complexities.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures to evaluate the accounting for the effects of cost-based rate regulation, including the probable recovery or refund of regulatory assets and liabilities, included the following, among others:
/s/ |
|
February 26, 2026 |
|
We have served as the Company’s auditor since 1934. |
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Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Sole Stockholder of
Public Service Electric and Gas Company
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Public Service Electric and Gas Company and subsidiaries (the “Company” or “PSE&G”) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, common stockholder’s equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes and the consolidated financial statement schedule listed in the Index at Item 15(B)(b) (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Accounting for the Effects of Regulation – Refer to Notes 1 and 5 to the financial statements
Critical Audit Matter Description
PSE&G prepares its financial statements to comply with GAAP for rate-regulated enterprises, which differs in some respects from accounting for non-regulated businesses. Management believes that PSE&G’s transmission and distribution businesses continue to meet the accounting requirements for rate-regulated entities, and PSE&G’s financial statements reflect the economic effects of regulation. PSE&G has deferred certain costs based on rate orders issued by the New Jersey Board of Public Utilities (“BPU”) or Federal Energy Regulatory Commission (“FERC”) or based on PSE&G’s experience with prior rate proceedings.
68
Table of Contents
PSE&G defers the recognition of costs as a regulatory asset or records the recognition of obligations as a regulatory liability if it is probable that, through the rate-making process, there will be a corresponding increase or decrease in future rates. This accounting results in the recognition of revenues and expenses in different time periods than that of enterprises that are not regulated. Regulatory assets and other investments and costs incurred under various infrastructure filings and clause mechanisms are subject to prudence reviews and can be disallowed in the future by regulatory authorities. To the extent that collection of any infrastructure or clause mechanism revenue, regulatory assets or payments of regulatory liabilities is no longer probable, the amounts would be charged or credited to income.
We identified the accounting for the effects of rate regulation as a critical audit matter due to the significant judgments made by management in assessing the probable recovery of regulatory assets and incurred costs or the likelihood of refunds of regulatory liabilities. Auditing these judgments required specialized knowledge of accounting for rate regulation and the ratemaking process due to its inherent complexities.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures to evaluate the accounting for the effects of cost-based rate regulation, including the probable recovery or refund of regulatory assets and liabilities, included the following, among others:
/s/ Deloitte & Touche LLP |
|
Morristown, New Jersey |
February 26, 2026 |
|
We have served as the Company’s auditor since 1934. |
69
Table of Contents
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
Millions, except per share data
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
Years Ended December 31, |
|||||||||||
|
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
|||
|
OPERATING REVENUES |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|||
|
Energy Costs |
|
|
|
|
|
|
|
|
|
|
|||
|
Operation and Maintenance |
|
|
|
|
|
|
|
|
|
|
|||
|
Depreciation and Amortization |
|
|
|
|
|
|
|
|
|
|
|||
|
Total Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|||
|
OPERATING INCOME |
|
|
|
|
|
|
|
|
|
|
|||
|
Net Gains (Losses) on Trust Investments |
|
|
|
|
|
|
|
|
|
|
|||
|
Net Other Income (Deductions) |
|
|
|
|
|
|
|
|
|
|
|||
|
Net Non-Operating Pension and Other Postretirement Benefit (OPEB) (Costs) Credits |
|
|
|
|
|
|
|
|
( |
) |
|
||
|
Interest Expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
INCOME BEFORE INCOME TAXES |
|
|
|
|
|
|
|
|
|
|
|||
|
Income Tax Expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
NET INCOME |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: |
|
|
|
|
|
|
|
|
|
|
|||
|
BASIC |
|
|
|
|
|
|
|
|
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|
|||
|
DILUTED |
|
|
|
|
|
|
|
|
|
|
|||
|
NET INCOME PER SHARE: |
|
|
|
|
|
|
|
|
|
|
|||
|
BASIC |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
DILUTED |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
See Notes to Consolidated Financial Statements.
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PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Millions
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
Years Ended December 31, |
|
|
|||||||||
|
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
|||
|
NET INCOME |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
Other Comprehensive Income (Loss), net of tax |
|
|
|
|
|
|
|
|
|
|
|||
|
Unrealized Gains (Losses) on Available-for-Sale Securities, net of tax (expense) benefit of $( |
|
|
|
|
|
( |
) |
|
|
|
|
||
|
Unrealized Gains (Losses) on Cash Flow Hedges, net of tax (expense) benefit of $ |
|
|
( |
) |
|
|
|
|
|
|
|
||
|
Pension/OPEB adjustment, net of tax (expense) benefit of $( |
|
|
|
|
|
|
|
|
|
|
|||
|
Other Comprehensive Income (Loss), net of tax |
|
|
|
|
|
|
|
|
|
|
|||
|
COMPREHENSIVE INCOME |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
See Notes to Consolidated Financial Statements.
71
Table of Contents
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONSOLIDATED BALANCE SHEETS
Millions
|
|
|
|
|
|
|
|
|
||
|
|
|
December 31, |
|
|
|||||
|
|
|
2025 |
|
|
2024 |
|
|
||
|
ASSETS |
|
|
|||||||
|
CURRENT ASSETS |
|
|
|
|
|
|
|
||
|
Cash and Cash Equivalents |
|
$ |
|
|
$ |
|
|
||
|
Accounts Receivable, net of allowance of $ |
|
|
|
|
|
|
|
||
|
Tax Receivable |
|
|
|
|
|
|
|
||
|
Unbilled Revenues, net of allowance of $ |
|
|
|
|
|
|
|
||
|
Fuel |
|
|
|
|
|
|
|
||
|
Materials and Supplies, net |
|
|
|
|
|
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|
||
|
Prepayments |
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|
||
|
Derivative Contracts |
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||
|
Regulatory Assets |
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|
||
|
Other |
|
|
|
|
|
|
|
||
|
Total Current Assets |
|
|
|
|
|
|
|
||
|
PROPERTY, PLANT AND EQUIPMENT |
|
|
|
|
|
|
|
||
|
Less: Accumulated Depreciation and Amortization |
|
|
( |
) |
|
|
( |
) |
|
|
Net Property, Plant and Equipment |
|
|
|
|
|
|
|
||
|
NONCURRENT ASSETS |
|
|
|
|
|
|
|
||
|
Regulatory Assets |
|
|
|
|
|
|
|
||
|
Operating Lease Right-of-Use Assets |
|
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|
|
|
|
|
||
|
Long-Term Investments |
|
|
|
|
|
|
|
||
|
Nuclear Decommissioning Trust (NDT) Fund |
|
|
|
|
|
|
|
||
|
Long-Term Receivable of Variable Interest Entity |
|
|
|
|
|
|
|
||
|
Rabbi Trust Fund |
|
|
|
|
|
|
|
||
|
Derivative Contracts |
|
|
|
|
|
|
|
||
|
Other |
|
|
|
|
|
|
|
||
|
Total Noncurrent Assets |
|
|
|
|
|
|
|
||
|
TOTAL ASSETS |
|
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
|
|
||
See Notes to Consolidated Financial Statements.
72
Table of Contents
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONSOLIDATED BALANCE SHEETS
Millions
|
|
|
|
|
|
|
|
|
||
|
|
|
December 31, |
|
|
|||||
|
|
|
2025 |
|
|
2024 |
|
|
||
|
LIABILITIES AND CAPITALIZATION |
|
|
|||||||
|
|
|
|
|
|
|
|
|
||
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
||
|
Long-Term Debt Due Within One Year |
|
$ |
|
|
$ |
|
|
||
|
Commercial Paper and Loans |
|
|
|
|
|
|
|
||
|
Accounts Payable |
|
|
|
|
|
|
|
||
|
Derivative Contracts |
|
|
|
|
|
|
|
||
|
Accrued Interest |
|
|
|
|
|
|
|
||
|
Accrued Taxes |
|
|
|
|
|
|
|
||
|
New Jersey Clean Energy Program |
|
|
|
|
|
|
|
||
|
Obligation to Return Cash Collateral |
|
|
|
|
|
|
|
||
|
Regulatory Liabilities |
|
|
|
|
|
|
|
||
|
Other |
|
|
|
|
|
|
|
||
|
Total Current Liabilities |
|
|
|
|
|
|
|
||
|
NONCURRENT LIABILITIES |
|
|
|
|
|
|
|
||
|
Deferred Income Taxes and Investment Tax Credits (ITC) |
|
|
|
|
|
|
|
||
|
Regulatory Liabilities |
|
|
|
|
|
|
|
||
|
Operating Leases |
|
|
|
|
|
|
|
||
|
Asset Retirement Obligations |
|
|
|
|
|
|
|
||
|
Other Postretirement Benefit (OPEB) Costs |
|
|
|
|
|
|
|
||
|
OPEB Costs of Servco |
|
|
|
|
|
|
|
||
|
Accrued Pension Costs |
|
|
|
|
|
|
|
||
|
Accrued Pension Costs of Servco |
|
|
|
|
|
|
|
||
|
Environmental Costs |
|
|
|
|
|
|
|
||
|
Derivative Contracts |
|
|
|
|
|
|
|
||
|
Long-Term Accrued Taxes |
|
|
|
|
|
|
|
||
|
Other |
|
|
|
|
|
|
|
||
|
Total Noncurrent Liabilities |
|
|
|
|
|
|
|
||
|
(See Note 12) CAPITALIZATION |
|
|
|
|
|
|
|
||
|
LONG-TERM DEBT |
|
|
|
|
|
|
|
||
|
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
||
|
Common Stock, par, authorized |
|
|
|
|
|
|
|
||
|
Treasury Stock, at cost, 2025 and 2024— |
|
|
( |
) |
|
|
( |
) |
|
|
Retained Earnings |
|
|
|
|
|
|
|
||
|
Accumulated Other Comprehensive Loss |
|
|
( |
) |
|
|
( |
) |
|
|
Total Stockholders’ Equity |
|
|
|
|
|
|
|
||
|
Total Capitalization |
|
|
|
|
|
|
|
||
|
TOTAL LIABILITIES AND CAPITALIZATION |
|
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
|
|
||
See Notes to Consolidated Financial Statements.
73
Table of Contents
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
Millions
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
Years Ended December 31, |
|
|
|||||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
|||
|
Net Income |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
Adjustments to Reconcile Net Income to Net Cash Flows from Operating Activities: |
|
|
|
|
|
|
|
|
|
|
|||
|
Depreciation and Amortization |
|
|
|
|
|
|
|
|
|
|
|||
|
Amortization of Nuclear Fuel |
|
|
|
|
|
|
|
|
|
|
|||
|
Provision for Deferred Income Taxes and ITC |
|
|
|
|
|
|
|
|
|
|
|||
|
Non-Cash Employee Benefit Plan (Credits) Costs |
|
|
|
|
|
|
|
|
|
|
|||
|
Net Realized and Unrealized (Gains) Losses on Energy Contracts and Other Derivatives |
|
|
|
|
|
|
|
|
( |
) |
|
||
|
Cost of Removal |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
Energy Efficiency Programs Regulatory Investment Expenditures |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
Amortization of Energy Efficiency Programs Regulatory Investment Expenditures |
|
|
|
|
|
|
|
|
|
|
|||
|
Net Change in Other Regulatory Assets and Liabilities |
|
|
|
|
|
( |
) |
|
|
|
|
||
|
Net (Gains) Losses and (Income) Expense from NDT Fund |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
Net Change in Certain Current Assets and Liabilities: |
|
|
|
|
|
|
|
|
|
|
|||
|
Tax Receivable |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
Accrued Taxes |
|
|
|
|
|
|
|
|
( |
) |
|
||
|
Cash Collateral |
|
|
|
|
|
( |
) |
|
|
|
|
||
|
Obligation to Return Cash Collateral |
|
|
|
|
|
|
|
|
( |
) |
|
||
|
Other Current Assets and Liabilities |
|
|
|
|
|
( |
) |
|
|
|
|
||
|
Employee Benefit Plan Funding and Related Payments |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
Other |
|
|
|
|
|
|
|
|
|
|
|||
|
Net Cash Provided By (Used In) Operating Activities |
|
|
|
|
|
|
|
|
|
|
|||
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|||
|
Additions to Property, Plant and Equipment |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
Proceeds from Sales of Trust Investments |
|
|
|
|
|
|
|
|
|
|
|||
|
Purchases of Trust Investments |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
Proceeds from Sales of Long-Lived Assets and Lease Investments |
|
|
|
|
|
|
|
|
|
|
|||
|
Proceeds from Sales of Equity Method Investments |
|
|
|
|
|
|
|
|
|
|
|||
|
Other |
|
|
( |
) |
|
|
|
|
|
|
|
||
|
Net Cash Provided By (Used In) Investing Activities |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|||
|
Net Change in Commercial Paper |
|
|
( |
) |
|
|
|
|
|
|
|
||
|
Proceeds from Short-Term Loans |
|
|
|
|
|
|
|
|
|
|
|||
|
Repayment of Short-Term Loans |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
Issuance of Long-Term Debt |
|
|
|
|
|
|
|
|
|
|
|||
|
Redemption of Long-Term Debt |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
Cash Dividends Paid on Common Stock |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
Other |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
Net Cash Provided By (Used In) Financing Activities |
|
|
|
|
|
|
|
|
( |
) |
|
||
|
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash |
|
|
|
|
|
|
|
|
( |
) |
|
||
|
Cash, Cash Equivalents and Restricted Cash at Beginning of Period |
|
|
|
|
|
|
|
|
|
|
|||
|
Cash, Cash Equivalents and Restricted Cash at End of Period |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
Supplemental Disclosure of Cash Flow Information: |
|
|
|
|
|
|
|
|
|
|
|||
|
Income Taxes Paid (Received) |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
Interest Paid, Net of Amounts Capitalized |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
Accrued Property, Plant and Equipment Expenditures |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
See Notes to Consolidated Financial Statements.
74
Table of Contents
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
Millions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
Common |
|
|
Treasury |
|
|
|
|
|
Accumulated |
|
|
|
|
|
|||||||||||||
|
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Retained |
|
|
Comprehensive |
|
|
Total |
|
|
|||||||
|
Balance as of December 31, 2022 |
|
|
|
|
$ |
|
|
|
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
||||
|
Net Income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
||
|
Other Comprehensive Income (Loss), net of tax (expense) benefit of $( |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
||
|
Comprehensive Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Cash Dividends at $ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
Other |
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
Balance as of December 31, 2023 |
|
|
|
|
$ |
|
|
|
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
||||
|
Net Income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
||
|
Other Comprehensive Income (Loss), net of tax (expense) benefit of $( |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
||
|
Comprehensive Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Cash Dividends at $ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
Other |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
||
|
Balance as of December 31, 2024 |
|
|
|
|
$ |
|
|
|
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
||||
|
Net Income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
||
|
Other Comprehensive Income (Loss), net of tax (expense) benefit of $( |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
||
|
Comprehensive Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Cash Dividends at $ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
Other |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
Balance as of December 31, 2025 |
|
|
|
|
$ |
|
|
|
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
See Notes to Consolidated Financial Statements.
75
Table of Contents
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
Millions
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
Years Ended December 31, |
|
|
|||||||||
|
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
|||
|
OPERATING REVENUES |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|||
|
Energy Costs |
|
|
|
|
|
|
|
|
|
|
|||
|
Operation and Maintenance |
|
|
|
|
|
|
|
|
|
|
|||
|
Depreciation and Amortization |
|
|
|
|
|
|
|
|
|
|
|||
|
Total Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|||
|
OPERATING INCOME |
|
|
|
|
|
|
|
|
|
|
|||
|
Net Other Income (Deductions) |
|
|
|
|
|
|
|
|
|
|
|||
|
Net Non-Operating Pension and OPEB Credits |
|
|
|
|
|
|
|
|
|
|
|||
|
Interest Expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
INCOME BEFORE INCOME TAXES |
|
|
|
|
|
|
|
|
|
|
|||
|
Income Tax Expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
NET INCOME |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
See disclosures regarding Public Service Electric and Gas Company included in the Notes to Consolidated Financial Statements.
76
Table of Contents
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Millions
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
Years Ended December 31, |
|
|
|||||||||
|
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
|||
|
NET INCOME |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
Other Comprehensive Income (Loss), net of tax |
|
|
|
|
|
|
|
|
|
|
|||
|
Unrealized Gains (Losses) on Available-for-Sale Securities, net of tax (expense) benefit of $ |
|
|
|
|
|
|
|
|
|
|
|||
|
COMPREHENSIVE INCOME |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
See disclosures regarding Public Service Electric and Gas Company included in the Notes to Consolidated Financial Statements.
77
Table of Contents
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
CONSOLIDATED BALANCE SHEETS
Millions
|
|
|
|
|
|
|
|
|
||
|
|
|
December 31, |
|
|
|||||
|
|
|
2025 |
|
|
2024 |
|
|
||
|
ASSETS |
|
|
|||||||
|
CURRENT ASSETS |
|
|
|
|
|
|
|
||
|
Cash and Cash Equivalents |
|
$ |
|
|
$ |
|
|
||
|
Accounts Receivable, net of allowance of $ |
|
|
|
|
|
|
|
||
|
Unbilled Revenues, net of allowance of $ |
|
|
|
|
|
|
|
||
|
Materials and Supplies, net |
|
|
|
|
|
|
|
||
|
Prepayments |
|
|
|
|
|
|
|
||
|
Regulatory Assets |
|
|
|
|
|
|
|
||
|
Other |
|
|
|
|
|
|
|
||
|
Total Current Assets |
|
|
|
|
|
|
|
||
|
PROPERTY, PLANT AND EQUIPMENT |
|
|
|
|
|
|
|
||
|
Less: Accumulated Depreciation and Amortization |
|
|
( |
) |
|
|
( |
) |
|
|
Net Property, Plant and Equipment |
|
|
|
|
|
|
|
||
|
NONCURRENT ASSETS |
|
|
|
|
|
|
|
||
|
Regulatory Assets |
|
|
|
|
|
|
|
||
|
Operating Lease Right-of-Use Assets |
|
|
|
|
|
|
|
||
|
Long-Term Investments |
|
|
|
|
|
|
|
||
|
Rabbi Trust Fund |
|
|
|
|
|
|
|
||
|
Long-Term Accrued Taxes |
|
|
|
|
|
|
|
||
|
Other |
|
|
|
|
|
|
|
||
|
Total Noncurrent Assets |
|
|
|
|
|
|
|
||
|
TOTAL ASSETS |
|
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
|
|
||
See disclosures regarding Public Service Electric and Gas Company included in the Notes to Consolidated Financial Statements.
78
Table of Contents
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
CONSOLIDATED BALANCE SHEETS
Millions
|
|
|
|
|
|
|
|
|
||
|
|
|
December 31, |
|
|
|||||
|
|
|
2025 |
|
|
2024 |
|
|
||
|
LIABILITIES AND CAPITALIZATION |
|
|
|||||||
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
||
|
Long-Term Debt Due Within One Year |
|
$ |
|
|
$ |
|
|
||
|
Commercial Paper and Loans |
|
|
|
|
|
|
|
||
|
Accounts Payable |
|
|
|
|
|
|
|
||
|
Accounts Payable—Affiliated Companies |
|
|
|
|
|
|
|
||
|
Accrued Interest |
|
|
|
|
|
|
|
||
|
New Jersey Clean Energy Program |
|
|
|
|
|
|
|
||
|
Obligation to Return Cash Collateral |
|
|
|
|
|
|
|
||
|
Regulatory Liabilities |
|
|
|
|
|
|
|
||
|
Other |
|
|
|
|
|
|
|
||
|
Total Current Liabilities |
|
|
|
|
|
|
|
||
|
NONCURRENT LIABILITIES |
|
|
|
|
|
|
|
||
|
Deferred Income Taxes and ITC |
|
|
|
|
|
|
|
||
|
Regulatory Liabilities |
|
|
|
|
|
|
|
||
|
Operating Leases |
|
|
|
|
|
|
|
||
|
Asset Retirement Obligations |
|
|
|
|
|
|
|
||
|
OPEB Costs |
|
|
|
|
|
|
|
||
|
Accrued Pension Costs |
|
|
|
|
|
|
|
||
|
Environmental Costs |
|
|
|
|
|
|
|
||
|
Long-Term Accrued Taxes |
|
|
|
|
|
|
|
||
|
Other |
|
|
|
|
|
|
|
||
|
Total Noncurrent Liabilities |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|||
|
CAPITALIZATION |
|
|
|
|
|
|
|
||
|
LONG-TERM DEBT |
|
|
|
|
|
|
|
||
|
STOCKHOLDER’S EQUITY |
|
|
|
|
|
|
|
||
|
Common Stock; |
|
|
|
|
|
|
|
||
|
Contributed Capital |
|
|
|
|
|
|
|
||
|
Retained Earnings |
|
|
|
|
|
|
|
||
|
Accumulated Other Comprehensive Loss |
|
|
( |
) |
|
|
( |
) |
|
|
Total Stockholder’s Equity |
|
|
|
|
|
|
|
||
|
Total Capitalization |
|
|
|
|
|
|
|
||
|
TOTAL LIABILITIES AND CAPITALIZATION |
|
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
|
|
||
See disclosures regarding Public Service Electric and Gas Company included in the Notes to Consolidated Financial Statements.
79
Table of Contents
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Millions
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
Years Ended December 31, |
|
|
|||||||||
|
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
|||
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|||
|
Net Income |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
Adjustments to Reconcile Net Income to Net Cash Flows from Operating Activities: |
|
|
|
|
|
|
|
|
|
|
|||
|
Depreciation and Amortization |
|
|
|
|
|
|
|
|
|
|
|||
|
Provision for Deferred Income Taxes and ITC |
|
|
|
|
|
|
|
|
|
|
|||
|
Non-Cash Employee Benefit Plan (Credits) Costs |
|
|
|
|
|
|
|
|
|
|
|||
|
Cost of Removal |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
Energy Efficiency Programs Regulatory Investment Expenditures |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
Amortization of Energy Efficiency Programs Regulatory Investment Expenditures |
|
|
|
|
|
|
|
|
|
|
|||
|
Net Change in Other Regulatory Assets and Liabilities |
|
|
|
|
|
( |
) |
|
|
|
|
||
|
Net Change in Certain Current Assets and Liabilities |
|
|
|
|
|
|
|
|
|
|
|||
|
Accounts Receivable and Unbilled Revenues |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
Materials and Supplies |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
Prepayments |
|
|
|
|
|
|
|
|
( |
) |
|
||
|
Accounts Payable |
|
|
|
|
|
|
|
|
|
|
|||
|
Accounts Receivable/Payable—Affiliated Companies, net |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
Obligation to Return Cash Collateral |
|
|
|
|
|
|
|
|
( |
) |
|
||
|
Other Current Assets and Liabilities |
|
|
|
|
|
( |
) |
|
|
|
|
||
|
Employee Benefit Plan Funding and Related Payments |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
Other |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
Net Cash Provided By (Used In) Operating Activities |
|
|
|
|
|
|
|
|
|
|
|||
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|||
|
Additions to Property, Plant and Equipment |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
Proceeds from Sales of Trust Investments |
|
|
|
|
|
|
|
|
|
|
|||
|
Purchases of Trust Investments |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
Other |
|
|
( |
) |
|
|
|
|
|
|
|
||
|
Net Cash Provided By (Used In) Investing Activities |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|||
|
Net Change in Commercial Paper and Loans |
|
|
( |
) |
|
|
|
|
|
|
|
||
|
Issuance of Long-Term Debt |
|
|
|
|
|
|
|
|
|
|
|||
|
Redemption of Long-Term Debt |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
Cash Dividends Paid |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
Other |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
Net Cash Provided By (Used In) Financing Activities |
|
|
|
|
|
|
|
|
|
|
|||
|
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash |
|
|
|
|
|
|
|
|
( |
) |
|
||
|
Cash, Cash Equivalents and Restricted Cash at Beginning of Period |
|
|
|
|
|
|
|
|
|
|
|||
|
Cash, Cash Equivalents and Restricted Cash at End of Period |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
Supplemental Disclosure of Cash Flow Information: |
|
|
|
|
|
|
|
|
|
|
|||
|
Income Taxes Paid (Received) |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
Interest Paid, Net of Amounts Capitalized |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
Accrued Property, Plant and Equipment Expenditures |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
See disclosures regarding Public Service Electric and Gas Company included in the Notes to Consolidated Financial Statements.
80
Table of Contents
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDER’S EQUITY
Millions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
Common Stock |
|
|
Contributed |
|
|
Retained |
|
|
Accumulated |
|
|
Total |
|
|
|||||
|
Balance as of December 31, 2022 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
||||
|
Net Income |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
||
|
Other Comprehensive Income (Loss), net of tax (expense) benefit of $ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
||
|
Comprehensive Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Cash Dividend Paid |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
Balance as of December 31, 2023 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
||||
|
Net Income |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
||
|
Other Comprehensive Income (Loss), net of tax (expense) benefit of $ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
Comprehensive Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Cash Dividend Paid |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
Balance as of December 31, 2024 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
||||
|
Net Income |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
||
|
Other Comprehensive Income (Loss), net of tax (expense) benefit of $ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
||
|
Comprehensive Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Cash Dividends Paid |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
Balance as of December 31, 2025 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
See disclosures regarding Public Service Electric and Gas Company included in the Notes to Consolidated Financial Statements.
81
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Organization, Basis of Presentation and Summary of Significant Accounting Policies
Organization
Public Service Enterprise Group Incorporated (PSEG) is a public utility holding company that, acting through its wholly owned subsidiaries, is a predominantly regulated electric and gas utility and a nuclear generation business. PSEG’s principal operating subsidiaries are:
PSEG’s other direct wholly owned subsidiaries are: PSEG Long Island LLC (PSEG LI), which operates the Long Island Power Authority’s (LIPA) electric transmission and distribution (T&D) system under an Operations Services Agreement (OSA); PSEG Energy Holdings L.L.C. (Energy Holdings), which primarily holds legacy lease investments and competitively bid, FERC regulated transmission; and PSEG Services Corporation (Services), which provides certain management, administrative and general services to PSEG and its subsidiaries at cost.
Basis of Presentation
The respective financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) applicable to Annual Reports on Form 10-K and in accordance with accounting guidance generally accepted in the United States (GAAP). Certain line item reclassifications have been made to prior year financial statements to conform with current year presentation. These reclassifications had no impact on PSEG’s or PSE&G’s results of operations, financial condition or cash flows.
Significant Accounting Policies
Principles of Consolidation
Each company consolidates those entities in which it has a controlling interest or is the primary beneficiary. See Note 3. Variable Interest Entity. Entities over which the companies exhibit significant influence, but do not have a controlling interest and/or are not the primary beneficiary, are accounted for under the equity method of accounting. Equity investments that do not qualify for consolidation or equity method accounting are recorded at fair value or, if fair value is not readily determinable, are initially recognized at cost and subsequently remeasured if there is an orderly transaction in an identical or similar investment of the same issuer or if the investment is impaired. All significant intercompany accounts and transactions are eliminated in consolidation.
PSE&G and PSEG Power also have undivided interests in certain jointly-owned facilities, with each responsible for paying its respective ownership share of construction costs, fuel purchases and operating expenses. PSE&G and PSEG Power consolidate their portion of any revenues and expenses related to their respective jointly-owned facilities in the appropriate revenue and expense categories.
Accounting for the Effects of Regulation
In accordance with accounting guidance for rate-regulated entities, PSE&G’s financial statements reflect the economic effects of regulation. PSE&G defers the recognition of costs (a Regulatory Asset) or records the recognition of obligations (a Regulatory
82
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Liability) if it is probable that, through the rate-making process, there will be a corresponding increase or decrease in future rates. Accordingly, PSE&G has deferred certain costs and recoveries, which are being amortized over various future periods. To the extent that collection of any such costs or payment of liabilities becomes no longer probable as a result of changes in regulation, the associated Regulatory Asset or Liability is charged or credited to income. Management believes that PSE&G’s T&D businesses continue to meet the accounting requirements for rate-regulated entities. For additional information, see Note 5. Regulatory Assets and Liabilities.
Cash, Cash Equivalents and Restricted Cash
The following provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same such amounts in the Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024. Restricted cash consists primarily of deposits received related to construction projects at PSE&G.
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
PSE&G |
|
|
PSEG Power & Other (A) |
|
|
Consolidated |
|
|
|||
|
|
|
Millions |
|
|
|||||||||
|
As of December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|||
|
Cash and Cash Equivalents |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
Restricted Cash in Other Current Assets |
|
|
|
|
|
|
|
|
|
|
|||
|
Restricted Cash in Other Noncurrent Assets |
|
|
|
|
|
|
|
|
|
|
|||
|
Cash, Cash Equivalents and Restricted Cash |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
As of December 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|||
|
Cash and Cash Equivalents |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
Restricted Cash in Other Current Assets |
|
|
|
|
|
|
|
|
|
|
|||
|
Restricted Cash in Other Noncurrent Assets |
|
|
|
|
|
|
|
|
|
|
|||
|
Cash, Cash Equivalents and Restricted Cash |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
Derivative Instruments
Each company uses derivative instruments to manage risk pursuant to its business plans and prudent practices.
Within PSEG and its affiliate companies, PSEG Power has the most exposure to commodity price risk. PSEG Power is exposed to commodity price risk primarily relating to changes in the market price of electricity, natural gas and other commodities. Fluctuations in market prices result from changes in supply and demand, fuel costs, market conditions, weather, state and federal regulatory policies, environmental policies, transmission availability and other factors. PSEG Power uses a variety of derivative and non-derivative instruments, such as financial options, futures and swaps to manage the exposure to fluctuations in commodity prices and optimize the value of PSEG Power’s expected generation. PSEG Power also uses derivatives to hedge a portion of its anticipated BGSS obligations with PSE&G.
PSEG, PSE&G and PSEG Power are subject to the risk of fluctuating interest rates in the normal course of business. PSEG uses interest rate hedges which are designated and effective as cash flow hedges, to manage its exposure to the variability of cash flows, primarily related to variable-rate debt instruments or anticipated future long-term debt issuances.
Determining whether a contract qualifies as a derivative requires that management exercise significant judgment, including assessing the contract’s market liquidity. PSEG has determined that contracts to purchase and sell certain products do not meet the definition of a derivative under the current authoritative guidance since they do not provide for net settlement, or the markets are not sufficiently liquid to conclude that physical forward contracts are readily convertible to cash. Certain other contracts may be designated as normal purchases and normal sales (NPNS) and qualify for a scope exception under derivative accounting guidance. Further, derivatives that qualify for hedge accounting can be designated as fair value or cash flow hedges.
Under current authoritative guidance, all derivatives are recognized on the balance sheet at their fair value, and changes in fair value are recorded in earnings unless they are designated as cash flow hedges. For cash flow hedges, the gain or loss is deferred in Accumulated Other Comprehensive Income (Loss) until earnings are affected by the variability of cash flows of the hedged
83
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
transaction. Cash flows related to derivative instruments are included as a component of operating, investing or financing cash flows in PSEG’s Consolidated Statements of Cash Flows, depending on the nature of hedges.
Certain offsetting derivative assets and liabilities are subject to a master netting or similar agreement. In general, the terms of the agreements provide that in the event of an early termination the counterparties have the right to offset amounts owed or owing under that and any other agreement with the same counterparty. Accordingly, these positions are offset on the Consolidated Balance Sheets of PSEG.
For derivative contracts that do not qualify or are not designated as cash flow or fair value hedges or as NPNS, changes in fair value are recorded in current period earnings. PSEG does not currently elect hedge accounting on its commodity derivative positions.
For additional information regarding derivative financial instruments, see Note 15. Financial Risk Management Activities.
Revenue Recognition
PSE&G’s regulated electric and gas revenues are recorded primarily based on services rendered to customers. PSE&G records unbilled revenues for the estimated amount customers will be billed for services rendered from the time meters were last read and billed to the end of the respective accounting period. The unbilled revenue is estimated each month based on usage per day, the number of unbilled days in the period, estimated seasonal loads based upon the time of year and the variance of actual degree-days and temperature-humidity-index hours of the unbilled period from expected norms.
Regulated revenues from the transmission of electricity are recognized as services are provided based on a FERC-approved annual formula rate mechanism. This mechanism provides for an annual filing of estimated revenue requirement with rates effective January 1 of each year. After completion of the annual period ending December 31, PSE&G files a true-up whereby it compares its actual revenue requirement to the original estimate to determine any over or under collection of revenue. PSE&G records the estimated financial statement impact of the difference between the actual and the filed revenue requirement as a refund or deferral for future recovery when such amounts are probable and can be reasonably estimated in accordance with accounting guidance for rate-regulated entities.
PSEG Power currently owns generation within PJM Interconnection, L.L.C. (PJM), which facilitates the dispatch of energy and energy-related products. PSEG generally reports electricity sales and purchases conducted with the PJM Independent System Operator (ISO) at PSEG Power on a net hourly basis in either Revenues or Energy Costs in its Consolidated Statement of Operations, the classification of which depends on the net hourly activity. Capacity revenue and expense are also reported net based on PSEG Power’s monthly net sale or purchase position in PJM. PSEG Power also has revenues that relate to bilateral contracts, which are accounted for on the accrual basis as the energy is delivered. PSEG Power’s revenue also includes changes in the value of energy derivative contracts. See Note 15. Financial Risk Management Activities for further discussion.
PSEG LI is the primary beneficiary of Long Island Electric Utility Servco, LLC (Servco). For transactions in which Servco acts as principal, Servco records revenues and the related pass-through expenditures separately in Operating Revenues and Operation and Maintenance (O&M) Expense, respectively. See Note 3. Variable Interest Entity for further information.
For additional information regarding Revenues, see Note 2. Revenues.
Depreciation and Amortization
PSE&G calculates depreciation under the straight-line method based on estimated average remaining lives of the several classes of property. These estimates are reviewed on a periodic basis and necessary adjustments are made as approved by the BPU or FERC.
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|||
|
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Average Rate |
|
|
|||||||||
|
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
|||
|
Electric Transmission |
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|
% |
|
|
% |
|
|
% |
|
|||
|
Electric Distribution |
|
|
% |
|
|
% |
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|
% |
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|||
|
Gas Distribution |
|
|
% |
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% |
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|
% |
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|||
|
|
|
|
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|||
PSEG calculates depreciation on its nuclear generation-related assets under the straight-line method based on the assets’ estimated useful lives of approximately
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Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Allowance for Funds Used During Construction (AFUDC) and Interest Capitalized During Construction (IDC)
AFUDC represents the cost of debt and equity funds used to finance the construction of new utility assets at PSE&G. IDC represents the cost of debt used to finance construction at PSEG’s other subsidiaries. The amount of AFUDC or IDC capitalized as Property, Plant and Equipment is included as a reduction of interest charges or other income for the equity portion.
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||||||
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|
AFUDC/IDC Capitalized |
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2025 |
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2024 |
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2023 |
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|||||||||||||||
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Millions |
|
|
Avg Rate |
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|
Millions |
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|
Avg Rate |
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|
Millions |
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|
Avg Rate |
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|
||||||
|
PSE&G |
|
$ |
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|
|
% |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
|
||||||
|
Other |
|
$ |
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|
|
% |
|
$ |
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|
|
% |
|
$ |
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% |
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||||||
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||||||
Income Taxes
PSEG and its subsidiaries file a consolidated federal income tax return and PSEG and PSE&G file state income tax returns, some of which are combined or unitary. Income taxes are allocated to PSEG’s subsidiaries in accordance with a tax allocation agreement whereby each PSEG subsidiary’s current and deferred tax expense is computed on a stand-alone basis. Each subsidiary is allocated an amount of tax similar to that which would be paid if it filed a separate income tax return, except for certain tax attributes and state apportionment results. Allocations between PSEG and its subsidiaries are recorded through intercompany accounts. Investment tax credits (ITC) deferred in prior years are being amortized over the useful lives of the related property.
Uncertain income tax positions are accounted for using a benefit recognition model with a two-step approach, a more-likely-than-not recognition criterion and a measurement attribute that measures the position as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement. If it is not more-likely-than-not that the benefit will be sustained on its technical merits, no benefit will be recorded. Uncertain tax positions that relate only to timing of when an item is included on a tax return are considered to have met the recognition threshold.
PSEG records any benefit from estimated PTCs generated by PSEG’s qualified nuclear generation facilities within Income Tax Expense in its Consolidated Statements of Operations in accordance with Accounting Standards Codification Topic 740, Income Taxes. See Note 19. Income Taxes for further discussion.
Impairment of Long-Lived Assets
Management evaluates long-lived assets for impairment whenever events or changes in circumstances, such as significant adverse changes in regulation, business climate, counterparty credit worthiness or market conditions, including prolonged periods of adverse commodity and capacity prices or a current expectation that a long-lived asset will be sold or disposed of significantly before the end of its previously estimated useful life, could potentially indicate an asset’s or asset group’s carrying amount may not be recoverable. In such an event, an undiscounted cash flow analysis is performed to determine if an impairment exists. When a long-lived asset’s or asset group’s carrying amount exceeds the associated undiscounted estimated future cash flows, the asset/asset group is considered impaired to the extent that its fair value is less than its carrying amount. An impairment would result in a reduction of the value of the long-lived asset/asset group through a non-cash charge to earnings. There were
For PSEG, cash flows for long-lived assets and asset groups are determined at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The cash flows from the nuclear generation units are evaluated at the portfolio level.
Accounts Receivable—Allowance for Credit Losses
PSE&G’s accounts receivable, including unbilled revenues, are primarily comprised of utility customer receivables for the provision of electric and gas service and appliance services, and are reported in the balance sheet as gross outstanding amounts adjusted for an allowance for credit losses. The allowance for credit losses reflects PSE&G’s best estimate of losses on the account balances. The allowance is based on PSE&G’s projection of accounts receivable aging, historical experience, economic factors and
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Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
other currently available evidence. PSE&G’s electric bad debt expense is recovered through the Societal Benefits Clause (SBC) mechanism. See Note 2. Revenues and Note 5. Regulatory Assets and Liabilities.
Accounts receivable are charged off in the period in which the receivable is deemed uncollectible. Recoveries of accounts receivable are recorded when it is known they will be received.
Materials and Supplies and Fuel
PSEG and PSE&G’s materials and supplies are carried at average cost and charged to inventory when purchased and expensed or capitalized to Property, Plant and Equipment, as appropriate, when installed or used. Fuel inventory at PSEG is valued at the lower of average cost or market and primarily includes stored natural gas used to satisfy obligations under PSEG Power’s gas supply contracts with PSE&G. The costs of fuel, including initial transportation costs, are included in inventory when purchased and charged to Energy Costs when used or sold. The cost of nuclear fuel is capitalized within Property, Plant and Equipment and amortized to fuel expense using the units-of-production method.
Property, Plant and Equipment
PSE&G’s additions to and replacements of existing property, plant and equipment are capitalized at cost. The cost of maintenance, repair and replacement of minor items of property is charged to expense as incurred. At the time units of depreciable property are retired or otherwise disposed of, the original cost, adjusted for net salvage value, is charged to accumulated depreciation.
PSEG capitalizes costs related to its generating assets, including those related to its jointly-owned facilities that increase the capacity, improve or extend the life of an existing asset; represent a newly acquired or constructed asset; or represent the replacement of a retired asset. The cost of maintenance, repair and replacement of minor items of property is charged to appropriate expense accounts as incurred. Environmental costs are capitalized if the costs mitigate or prevent future environmental contamination or if the costs improve existing assets’ environmental safety or efficiency. All other environmental expenditures are expensed as incurred. PSEG also capitalizes spare parts for its generating assets that meet specific criteria. Capitalized spare parts are depreciated over the remaining lives of their associated assets.
Leases
PSEG and its subsidiaries, when acting as lessee or lessor, determine if an arrangement is a lease at inception. PSEG assesses contracts to determine if the arrangement conveys (i) the right to control the use of the identified property, (ii) the right to obtain substantially all of the economic benefits from the use of the property, and (iii) the right to direct the use of the property.
Lessee—Operating Lease Right-of-Use Assets represent the right to use an underlying asset for the lease term and Operating Lease Liabilities represent the obligation to make lease payments arising from the lease. Operating Lease Right-of-Use Assets and Operating Lease Liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term.
The current portion of Operating Lease Liabilities is included in Other Current Liabilities. Operating Lease Right-of-Use Assets and noncurrent Operating Lease Liabilities are included as separate captions in Noncurrent Assets and Noncurrent Liabilities, respectively, on the Consolidated Balance Sheets of PSEG and PSE&G. PSEG and its subsidiaries do not recognize Operating Lease Right-of-Use Assets and Operating Lease Liabilities for leases where the term is twelve months or less.
PSEG and its subsidiaries recognize the lease payments on a straight-line basis over the term of the leases and variable lease payments in the period in which the obligations for those payments are incurred.
As lessee, most of the operating leases of PSEG and its subsidiaries do not provide an implicit rate; therefore, incremental borrowing rates are used based on the information available at commencement date in determining the present value of lease payments. The implicit rate is used when readily determinable. PSE&G’s incremental borrowing rates are based on secured borrowing rates. PSEG’s incremental borrowing rates are generally unsecured rates. Having calculated simulated secured rates for each of PSEG and PSEG Power, it was determined that the difference between the unsecured borrowing rates and the simulated secured rates had an immaterial effect on their recorded Operating Lease Right-of-Use Assets and Operating Lease Liabilities. Services, PSEG LI and other subsidiaries of PSEG that do not borrow funds or issue debt may enter into leases. Since these companies do not have credit ratings and related incremental borrowing rates, PSEG has determined that it is appropriate for these companies to use the incremental borrowing rate of PSEG, the parent company.
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Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Lease terms may include options to extend or terminate the lease when it is reasonably certain that such options will be exercised.
PSEG and its subsidiaries have lease agreements with lease and non-lease components. For real estate, equipment and vehicle leases, the lease and non-lease components are accounted for as a single lease component.
Lessor—Property subject to operating leases, where PSEG or one of its subsidiaries is the lessor, is included in Property, Plant and Equipment and rental income from these leases is included in Operating Revenues.
PSEG and its subsidiaries have lease agreements with lease and non-lease components, which are primarily related to domestic energy generation and real estate assets. PSEG and subsidiaries account for the lease and non-lease components as a single lease component. See Note 6. Leases for detailed information on leases.
Energy Holdings is the lessor in leveraged leases. Leveraged lease accounting guidance is grandfathered for existing leveraged leases. Energy Holdings’ leveraged leases are accounted for in Operating Revenues and in Noncurrent Long-Term Investments. If modified after January 1, 2019, those leveraged leases will be accounted for as operating or financing leases. See Note 7. Long-Term Investments and Note 8. Financing Receivables.
Trust Investments
These securities comprise the Nuclear Decommissioning Trust (NDT) Fund, a master independent external trust account maintained to provide for the costs of decommissioning PSEG’s nuclear facilities and amounts that are deposited to fund a Rabbi Trust which was established to meet the obligations related to non-qualified pension plans and deferred compensation plans.
Unrealized gains and losses on equity security investments are recorded in Net Income. The debt securities are classified as available-for-sale with the unrealized gains and losses recorded as a component of Accumulated Other Comprehensive Income (Loss). Realized gains and losses on both equity and available-for-sale debt security investments are recorded in earnings and are included with the unrealized gains and losses on equity securities in Net Gains (Losses) on Trust Investments. When applicable, other-than-temporary impairments on NDT and Rabbi Trust debt securities are also included in Net Gains (Losses) on Trust Investments. See Note 9. Trust Investments for further discussion.
Pension and Other Postretirement Benefits (OPEB) Plans
The market-related value of plan assets held for the qualified pension and OPEB plans is equal to the fair value of those assets as of year-end. Fair value is determined using quoted market prices and independent pricing services based upon the security type as reported by the trustee at the measurement date (December 31) as well as investments in unlisted real estate which are valued via third-party appraisals.
PSEG recognizes a long-term receivable primarily related to future funding by LIPA of Servco’s recognized pension and OPEB liabilities. This receivable is presented separately on the Consolidated Balance Sheet of PSEG as a noncurrent asset. Pursuant to the OSA, Servco records expense for contributions to its pension plan trust and for OPEB payments made to retirees.
See Note 11. Pension, Other Postretirement Benefits (OPEB) and Savings Plans for further discussion.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Recent Accounting Standards
Improvements to Income Tax Disclosures—ASU 2023-09
This ASU makes amendments to the current reconciliation disclosure to improve transparency by requiring consistent categories and greater jurisdictional disaggregation. The ASU also provides for the inclusion of an income taxes paid disclosure by jurisdiction. The ASU is effective for annual periods beginning after December 15, 2024. PSEG and PSE&G
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Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Disaggregation of Income Statement Expenses and Effective Date Clarification—ASU 2024-03
This ASU requires additional annual and interim disclosure about certain expenses in the notes to financial statements that provide disaggregated information (within a new tabular disclosure, the amounts of specified natural expenses included in each relevant expense caption: (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) amortization, and (e) depletion) about an entity’s expense captions that are presented on the face of the income statement within continuing operations.
The ASU also requires certain expense related disclosures within the new tabular disclosure and disclosure of the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within annual periods beginning after December 15, 2027. PSEG and PSE&G are currently analyzing the impact of this ASU on their future disclosures.
Note 2. Revenues
Nature of Goods and Services
The following is a description of principal activities by which PSEG and its subsidiaries generate their revenues.
PSE&G
Revenues from Contracts with Customers
Electric and Gas Distribution and Transmission Revenues—PSE&G sells gas and electricity to customers under default commodity supply tariffs. PSE&G’s regulated electric and gas default commodity supply and distribution services are separate tariffs which are satisfied as the product(s) and/or service(s) are delivered to the customer. The electric and gas commodity and delivery tariffs are recurring contracts in effect until modified through the regulatory approval process as appropriate. Revenue is recognized over time as the service is rendered to the customer. Included in PSE&G’s regulated revenues are unbilled electric and gas revenues which represent the estimated amount customers will be billed for services rendered from the most recent meter reading to the end of the respective accounting period.
PSE&G’s transmission revenues are earned under a separate tariff using a FERC-approved annual formula rate mechanism. The performance obligation of transmission service is satisfied and revenue is recognized as it is provided to the customer. The formula rate mechanism provides for an annual filing of an estimated revenue requirement with rates effective January 1 of each year and a true-up to that estimate based on actual revenue requirements. The true-up mechanism is an alternative revenue which is outside the scope of revenue from contracts with customers.
Other Revenues from Contracts with Customers
Other revenues from contracts with customers, which are not a material source of PSE&G revenues, are generated primarily from appliance repair services and solar generation projects. The performance obligations under these contracts are satisfied and revenue is recognized as control of products is delivered or services are rendered.
Revenues Unrelated to Contracts with Customers
Other PSE&G revenues unrelated to contracts with customers are derived from alternative revenue mechanisms recorded pursuant to regulatory accounting guidance. These revenues, which include the Conservation Incentive Program (CIP), green energy program true-ups and transmission formula rate true-ups, are not a material source of PSE&G revenues.
PSEG Power & Other
Revenues from Contracts with Customers
Electricity and Related Products—PSEG Power owns generation solely within PJM, which facilitates the dispatch of energy and energy-related products. PSEG Power primarily sells to the PJM ISO energy and ancillary services which are separately transacted in the day-ahead or real-time energy markets. The energy and ancillary services performance obligations are typically satisfied over time as delivered and revenue is recognized accordingly. PSEG generally reports electricity sales and purchases conducted with PJM net on an hourly basis in either Operating Revenues or Energy Costs in its Consolidated Statements of Operations. The classification depends on the net hourly activity.
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Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PSEG Power enters into capacity sales and capacity purchases through PJM. The transactions are reported on a net basis dependent on PSEG Power’s monthly net sale or purchase position through PJM. The performance obligations with PJM are satisfied over time upon delivery of the capacity and revenue is recognized accordingly. In addition to capacity sold through PJM, PSEG Power sells capacity through bilateral contracts and the related revenue is reported on a gross basis and recognized over time upon delivery of the capacity.
In May 2025, PSEG Power’s Salem 1, Salem 2 and Hope Creek nuclear plants zero emission certificate (ZEC) sales concluded. These nuclear plants received ZEC revenue from the electric distribution companies (EDCs) in New Jersey. PSEG Power recognized revenue when the units generated electricity, which was when the performance obligation was satisfied. These revenues have been considered variable consideration within the scope of revenue from contracts with customers and are included in PJM Sales in the following tables. ZEC revenue has been adjusted by the estimated production tax credits (PTCs) generated from these nuclear plants. ZEC revenue will be adjusted based upon the actual value of the PTCs generated by these nuclear plants and that adjustment could be material. See Note 19. Income Taxes for further discussion on the factors that could result in an adjustment to the value of the PTCs.
Gas Contracts—PSEG Power sells wholesale natural gas, primarily through an index based full-requirements Basic Gas Supply Service (BGSS) contract with PSE&G to meet the gas supply requirements of PSE&G’s customers. The BGSS contract remains in effect unless terminated by either party with a two-year notice. Based upon the availability of natural gas, storage and pipeline capacity beyond PSE&G’s daily needs, PSEG Power also sells gas and pipeline capacity to other counterparties under bilateral contracts. The performance obligation is primarily the delivery of gas which is satisfied over time. Revenue is recognized as gas is delivered or pipeline capacity is released.
PSEG LI Contract—PSEG LI has a contract with LIPA which generates revenues. PSEG LI’s subsidiary, Long Island Electric Utility Servco, LLC (Servco) records costs which are recovered from LIPA and records the recovery of those costs as revenues when Servco is a principal in the transaction. In September 2025, the LIPA board of trustees approved a five-year extension of the contract. See Amended OSA below for further information.
Other Revenues from Contracts with Customers
PSEG Power has contracted to provide energy management and fuel procurement services for LIPA. Revenue is recognized over time as services are rendered. This agreement expired in December 2025.
Revenues Unrelated to Contracts with Customers
PSEG Power’s revenues unrelated to contracts with customers include electric, gas and certain energy-related transactions accounted for in accordance with Derivatives and Hedging accounting guidance. See Note 15. Financial Risk Management Activities for further discussion.
Energy Holdings generates lease revenues which are recorded pursuant to lease accounting guidance.
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Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Disaggregation of Revenues
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||||
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PSE&G |
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PSEG |
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Eliminations |
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Consolidated |
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||||
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|
Millions |
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|
|||||||||||||
|
Year Ended December 31, 2025 |
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|
|
|
|
|
|
|
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|
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||||
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Revenues from Contracts with Customers |
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|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Electric Distribution |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
|
Gas Distribution |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Transmission |
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||||
|
Electricity and Related Product Sales |
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|
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||||
|
Third-Party Sales |
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||||
|
Sales to Affiliates |
|
|
|
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|
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( |
) |
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|||
|
Gas Sales |
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||||
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Third-Party Sales |
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||||
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Sales to Affiliates |
|
|
|
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|
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|
|
( |
) |
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|
|
|
|||
|
Other Revenues from Contracts with Customers (B) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
|
Total Revenues from Contracts with Customers |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
|
Revenues Unrelated to Contracts with Customers (C) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|||
|
Total Operating Revenues |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|||
|
|
|
|
|
|
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|
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||||
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|
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|
|
|
|
|
||||
|
|
|
PSE&G |
|
|
PSEG |
|
|
Eliminations |
|
|
Consolidated |
|
|
||||
|
|
|
Millions |
|
|
|||||||||||||
|
Year Ended December 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Revenues from Contracts with Customers |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Electric Distribution |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
|
Gas Distribution |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Transmission |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Electricity and Related Product Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Third-Party Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Sales to Affiliates |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
|
Gas Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Third-Party Sales |
|
|
|
|
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|
|
|
|
|
|
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|
||||
|
Sales to Affiliates |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
|
Other Revenues from Contracts with Customers (B) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
|
Total Revenues from Contracts with Customers |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
|
Revenues Unrelated to Contracts with Customers (C) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Total Operating Revenues |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|||
|
|
|
|
|
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|
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|
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|
||||
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Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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|
||||
|
|
|
PSE&G |
|
|
PSEG |
|
|
Eliminations |
|
|
Consolidated |
|
|
||||
|
|
|
Millions |
|
|
|||||||||||||
|
Year Ended December 31, 2023 |
|
|
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|
|
|
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|
|
|
|
|
||||
|
Revenues from Contracts with Customers |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Electric Distribution |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
|
Gas Distribution |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Transmission |
|
|
|
|
|
|
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|
|
|
|
|
|
||||
|
Electricity and Related Product Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Third-Party Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Sales to Affiliates |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
|
Gas Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Third-Party Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Sales to Affiliates |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
|
Other Revenues from Contracts with Customers (B) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
|
Total Revenues from Contracts with Customers |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
|
Revenues Unrelated to Contracts with Customers (C) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Total Operating Revenues |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Contract Balances
PSE&G
PSE&G did not have any material contract balances (rights to consideration for services already provided or obligations to provide services in the future for consideration already received) as of December 31, 2025 and 2024. Substantially all of PSE&G’s accounts receivable and unbilled revenues result from contracts with customers that are priced at tariff rates. The allowance for credit losses represented approximately
Accounts Receivable—Allowance for Credit Losses
PSE&G’s accounts receivable, including unbilled revenues, is primarily comprised of utility customer receivables for the provision of electric and gas service and appliance services, and are reported on the balance sheet as gross outstanding amounts adjusted for an allowance for credit losses. The allowance for credit losses reflects PSE&G’s best estimate of losses on the account balances. The allowance is based on PSE&G’s projection of accounts receivable aging, historical experience, economic factors and other currently available evidence. PSE&G’s electric bad debt expense is recoverable through its Societal Benefits Clause (SBC) mechanism.
91
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following provides a reconciliation of PSE&G’s allowance for credit losses for the years ended December 31, 2025 and 2024.
|
|
|
|
|
|
|
|
|
||
|
|
|
Years Ended December 31, |
|
|
|||||
|
|
|
2025 |
|
|
2024 |
|
|
||
|
|
|
Millions |
|
|
|||||
|
Balance at Beginning of Year |
|
$ |
|
|
$ |
|
|
||
|
Utility Customer and Other Accounts |
|
|
|
|
|
|
|
||
|
Provision |
|
|
|
|
|
|
|
||
|
Write-offs, net of Recoveries of $ |
|
|
( |
) |
|
|
( |
) |
|
|
Balance at End of Year |
|
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
|
|
||
PSEG Power & Other
PSEG Power generally collects consideration upon satisfaction of performance obligations, and therefore, PSEG Power had no material contract balances as of December 31, 2025 and 2024.
PSEG Power’s accounts receivable include amounts resulting from contracts with customers and other contracts which are out of scope of accounting guidance for revenues from contracts with customers. The majority of these accounts receivable are subject to master netting agreements. As a result, accounts receivable resulting from contracts with customers and receivables unrelated to contracts with customers are netted within Accounts Receivable and Accounts Payable on the Consolidated Balance Sheets.
PSEG Power’s accounts receivable consist mainly of revenues from energy and ancillary services sold directly to ISOs and other counterparties. In the wholesale energy markets in which PSEG Power operates, payment for services rendered and products transferred are typically due within 30 days of delivery. As such, there is little credit risk associated with these receivables. PSEG Power did not record an allowance for credit losses for these receivables as of December 31, 2025 and 2024. PSEG Power monitors the status of its counterparties on an ongoing basis to assess whether there are any anticipated credit losses.
PSEG LI did not have any material contract balances as of December 31, 2025 and 2024.
Remaining Performance Obligations under Fixed Consideration Contracts
PSEG primarily records revenues as allowed by the guidance, which states that if an entity has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date, the entity may recognize revenue in the amount to which the entity has a right to invoice. PSEG has future performance obligations under contracts with fixed consideration as follows:
Capacity Revenues from the PJM Annual Base Residual and Incremental Auctions—The Base Residual Auction is generally conducted annually three years in advance of the operating period. However, changes to capacity market rules have resulted in auction suspensions and delays so that recent auctions have been run closer in time to their operating periods. In July 2024 the results of the 2025/2026 auction were released, in July 2025 the results of the 2026/2027 auction were released and in December 2025 the results of the 2027/2028 auction were released. PSEG Power expects to realize the following average capacity prices resulting from the base and incremental auctions, including unit specific bilateral contracts for previously cleared capacity obligations.
|
|
|
|
|
|
|
|
|
||
|
Delivery Year |
|
$ per |
|
|
MW |
|
|
||
|
June 2025 to May 2026 |
|
$ |
|
|
|
|
|
||
|
June 2026 to May 2027 |
|
$ |
|
|
|
|
|
||
|
June 2027 to May 2028 |
|
$ |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
||
Amended OSA—PSEG LI has been operating LIPA’s electric T&D system in Long Island, New York since 2014 under a 12-year OSA with LIPA that expired on December 31, 2025, with annual fixed and variable components. The fixed fee for the provision of services thereunder in 2025 was approximately $
92
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
OSA ending on December 31, 2030. The fixed fee for the provision of services r in
Note 3. Variable Interest Entity (VIE)
VIE for which PSEG LI is the Primary Beneficiary
PSEG LI consolidates Servco, a marginally capitalized VIE, which was created for the purpose of operating LIPA’s T&D system in Long Island, New York as well as providing administrative support functions to LIPA. PSEG LI is the primary beneficiary of Servco because it directs the operations of Servco, the activity that most significantly impacts Servco’s economic performance and it has the obligation to absorb losses of Servco that could potentially be significant to Servco. Such losses would be immaterial to PSEG.
Pursuant to the OSA, Servco’s operating costs are paid entirely by LIPA, and therefore, PSEG LI’s risk is limited related to the activities of Servco. PSEG LI has no current obligation to provide direct financial support to Servco. In addition to payment of Servco’s operating costs as provided for in the OSA, PSEG LI receives an annual contract management fee. PSEG LI’s annual contract management fee, in certain situations, could be partially offset by Servco’s annual storm costs that are denied reimbursement by the Federal Emergency Management Agency, limited contingent liabilities and penalties for failing to meet certain performance metrics.
For transactions in which Servco acts as principal and controls the services provided to LIPA, such as transactions with its employees for labor and labor-related activities, including pension and OPEB-related transactions, Servco records revenues and the related pass-through expenditures separately in Operating Revenues and O&M Expense, respectively. In 2025, 2024 and 2023, Servco recorded $
Note 4. Property, Plant and Equipment and Jointly-Owned Facilities
Information related to Property, Plant and Equipment as of December 31, 2025 and 2024 is detailed below:
|
|
|
|
|
|
|
|
|
||
|
|
|
2025 |
|
|
2024 |
|
|
||
|
|
|
Millions |
|
|
|||||
|
PSE&G |
|
|
|
|
|
|
|
||
|
Electric Transmission |
|
$ |
|
|
$ |
|
|
||
|
Electric Distribution |
|
|
|
|
|
|
|
||
|
Gas Distribution and Transmission |
|
|
|
|
|
|
|
||
|
Construction Work in Progress |
|
|
|
|
|
|
|
||
|
Other |
|
|
|
|
|
|
|
||
|
Total PSE&G |
|
$ |
|
|
$ |
|
|
||
|
PSEG Power & Other |
|
|
|
|
|
|
|
||
|
Nuclear Production |
|
$ |
|
|
$ |
|
|
||
|
Nuclear Fuel in Service |
|
|
|
|
|
|
|
||
|
Construction Work in Progress |
|
|
|
|
|
|
|
||
|
Other |
|
|
|
|
|
|
|
||
|
Total PSEG Power & Other |
|
$ |
|
|
$ |
|
|
||
|
Total |
|
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
|
|
||
PSE&G and PSEG Power have ownership interests in and are responsible for providing their respective shares of the necessary financing for the following jointly-owned facilities to which they are a party. All amounts reflect PSE&G’s or PSEG Power’s share
93
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
of the jointly-owned projects and the corresponding direct expenses are included in the Consolidated Statements of Operations as Operating Expenses.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
As of December 31, |
|
|
||||||||||||||
|
|
|
|
|
|
2025 |
|
|
2024 |
|
|
|||||||||||
|
|
|
Ownership |
|
|
|
|
|
Accumulated |
|
|
|
|
|
Accumulated |
|
|
|||||
|
|
|
Interest |
|
|
Plant |
|
|
Depreciation |
|
|
Plant |
|
|
Depreciation |
|
|
|||||
|
|
|
|
|
|
Millions |
|
|
||||||||||||||
|
PSE&G: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Transmission Facilities |
|
Various |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
PSEG Power: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Nuclear Generating: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Peach Bottom |
|
|
% |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
Salem |
|
|
% |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
Nuclear Support Facilities |
|
Various |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
Other |
|
|
% |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
PSEG Power co-owns Salem and Peach Bottom with Constellation Energy Generation, LLC. PSEG Power is the operator of Salem and Constellation Energy Generation, LLC is the operator of Peach Bottom. A committee appointed by the co-owners provides oversight. Proposed O&M budgets and requests for major capital expenditures are reviewed and approved as part of the normal PSEG Power governance process.
Note 5. Regulatory Assets and Liabilities
PSE&G prepares its financial statements in accordance with GAAP for regulated utilities as described in Note 1. Organization, Basis of Presentation and Summary of Significant Accounting Policies. PSE&G has deferred certain costs based on rate orders issued by the BPU or FERC or based on PSE&G’s experience with prior rate proceedings. Most of PSE&G’s Regulatory Assets and Liabilities as of December 31, 2025 are supported by written orders, either explicitly or implicitly through the BPU’s treatment of various cost items. These costs will be recovered and amortized over various future periods.
Regulatory Assets and other investments and costs incurred under our various infrastructure filings and clause mechanisms are subject to prudence reviews and can be disallowed in the future by regulatory authorities. To the extent that collection of any infrastructure or clause mechanism revenue, Regulatory Assets or payments of Regulatory Liabilities is no longer probable, the amounts would be charged or credited to income.
94
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PSE&G had the following Regulatory Assets and Liabilities:
|
|
|
|
|
|
|
|
|
||
|
|
|
As of December 31, |
|
|
|||||
|
|
|
2025 |
|
|
2024 |
|
|
||
|
|
|
Millions |
|
|
|||||
|
Regulatory Assets |
|
|
|
|
|
|
|
||
|
Deferred Income Tax Regulatory Assets |
|
$ |
|
|
$ |
|
|
||
|
Green Program Recovery Charges (GPRC) |
|
|
|
|
|
|
|
||
|
Pension and OPEB Costs |
|
|
|
|
|
|
|
||
|
Asset Retirement Obligations (ARO) |
|
|
|
|
|
|
|
||
|
Clean Energy Future-Energy Cloud (CEF-EC) |
|
|
|
|
|
|
|
||
|
Cost of Removal |
|
|
|
|
|
|
|
||
|
Societal Benefits Clause (SBC) |
|
|
|
|
|
|
|
||
|
Manufactured Gas Plant (MGP) Remediation Costs |
|
|
|
|
|
|
|
||
|
New Jersey Clean Energy Program |
|
|
|
|
|
|
|
||
|
Conservation Incentive Program (CIP) |
|
|
|
|
|
|
|
||
|
COVID-19 Deferral |
|
|
|
|
|
|
|
||
|
Remediation Adjustment Charge (RAC) (Other SBC) |
|
|
|
|
|
|
|
||
|
Clean Energy Future-Electric Vehicles (CEF-EV) |
|
|
|
|
|
|
|
||
|
2024 Distribution Base Rate Case Regulatory Assets (BRC) |
|
|
|
|
|
|
|
||
|
Other |
|
|
|
|
|
|
|
||
|
Total Regulatory Assets |
|
|
|
|
|
|
|
||
|
Less: Current Regulatory Assets |
|
|
|
|
|
|
|
||
|
Total Noncurrent Regulatory Assets |
|
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
||
|
|
|
As of December 31, |
|
|
|||||
|
|
|
2025 |
|
|
2024 |
|
|
||
|
|
|
Millions |
|
|
|||||
|
Regulatory Liabilities |
|
|
|
|
|
|
|
||
|
Deferred Income Tax Regulatory Liabilities |
|
$ |
|
|
$ |
|
|
||
|
Gas Costs—Basic Gas Supply Service (BGSS) |
|
|
|
|
|
|
|
||
|
Other |
|
|
|
|
|
|
|
||
|
Total Regulatory Liabilities |
|
|
|
|
|
|
|
||
|
Less: Current Regulatory Liabilities |
|
|
|
|
|
|
|
||
|
Total Noncurrent Regulatory Liabilities |
|
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
||
All Regulatory Assets and Liabilities are excluded from PSE&G’s rate base unless otherwise noted. The Regulatory Assets and Liabilities in the table above are defined as follows:
95
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As part of PSE&G's 2018 distribution base rate case settlement with the BPU and the establishment of the TAC mechanism, PSE&G agreed to a ten-year flowback to customers of its accumulated deferred income taxes from previously realized tax repair deductions which resulted in the recognition of a $
As part of PSE&G’s 2024 base rate case settlement with the BPU, PSE&G agreed to an additional five-year flowback to customers of its accumulated deferred income taxes from previously realized mixed service cost deductions which resulted in the recognition of a $
For the years ended December 31, 2025, 2024 and 2023, PSE&G had provided $
96
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The approved GPRC components receiving recovery for the return on and of investments include: Carbon Abatement, Energy Efficiency Economic Stimulus Program (EEE), EEE Extension Program, EEE Extension II Program, Solar Generation Investment Program (Solar 4 All®), Solar 4 All® Extension, Solar 4 All® Extension II, Solar Loan II Program, Solar Loan III Program, EE 2017 Program, Clean Energy Future–Energy Efficiency (CEF-EE) and CEF-EE-II.
In addition, the GPRC components receiving cost recovery for deferred expenses include: the Transition Renewable Energy Certificate Program, Community Solar Energy Program and the Successor Solar Incentive Program.
The Regulatory Asset balances represent the deferred investment and related undercollected balances with a Regulatory Liability recorded for any overrecovered balance. Interest is accrued monthly on any over-or under- recovered balances. Amortization of deferred investment and expenses are recorded in O&M expense. The capital asset portion of GPRC investments primarily in company-owned solar facilities is included in Property, Plant and Equipment, with depreciation recorded in Depreciation and Amortization Expense.
Significant 2025 regulatory orders received and currently pending rate filings with the BPU or FERC by PSE&G are as follows:
In May 2025, PSE&G made its annual filing with the BPU requesting an increase to its BGSS rate to approximately
97
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Under BGSS Orders issued by the BPU, New Jersey gas distribution companies (GDCs) may self-implement a rate increase resulting in no more than a
In May 2025, the BPU gave final approval to the provisional gas CIP rates which were effective October 1, 2024.
In December 2025, the BPU approved on a provisional basis, PSE&G’s annual gas CIP petition recover deficient gas revenues of approximately $
In January 2026, the BPU gave final approval to the provisional electric CIP rates recovering annual deficient electric revenues of approximately $
In November 2025, PSE&G updated its GSMP II Ext cost recovery petition seeking BPU approval to recover in gas base rates an annual revenue increase of $
In June 2025, PSE&G filed its 2025 GPRC cost recovery petition requesting BPU approval for recovery of increases of $
In January 2026, PSE&G filed an updated IAP cost recovery petition seeking BPU approval to recover in electric and gas base rates an annual revenue increase of $
98
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In October 2025, PSE&G filed its annual transmission formula rate update with FERC, which will result in an approximate $
Note 6. Leases
As of December 31, 2025, PSEG and its subsidiaries were both a lessee and a lessor in operating leases.
Lessee
PSE&G
PSE&G has operating leases for office space for customer service centers, rooftops and land for its Solar 4 All® facilities, equipment, vehicles and land for certain electric substations. These leases have remaining lease terms through 2044, some of which include options to extend the leases for up to 5-year terms or 10-year term; and two include options to extend the leases for 45-year and 48-year term, respectively. Some leases have fixed rent payments that have escalations based on certain indices, such as the CPI. Certain leases contain variable payments.
PSEG Power & Other
PSEG Power has operating leases for buildings and equipment. These leases have remaining terms through 2030, one of which has fixed rent payments that has escalations based on the CPI. One lease contains variable payments.
Services has operating leases for real estate and office equipment. These leases have remaining terms through 2030. Services’ lease for its headquarters, which ends in 2030, includes options to extend for 5-year terms.
99
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Operating Lease Costs
The following amounts relate to total operating lease costs, including both amounts recognized in the Consolidated Statements of Operations during the years ended December 31, 2025, 2024 and 2023 and any amounts capitalized as part of the cost of another asset, and the cash flows arising from lease transactions.
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
PSE&G |
|
|
PSEG |
|
|
Total |
|
|
|||
|
|
|
Millions |
|
|
|||||||||
|
Operating Lease Costs |
|
|
|
|
|
|
|
|
|
|
|||
|
Year Ended December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|||
|
Long-term Lease Costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
Short-term Lease Costs |
|
|
|
|
|
|
|
|
|
|
|||
|
Variable Lease Costs |
|
|
|
|
|
|
|
|
|
|
|||
|
Total Operating Lease Costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Year Ended December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|||
|
Cash Paid for Amounts Included in the Measurement of Operating Lease Liabilities |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Weighted Average Remaining Lease Term in Years |
|
|
|
|
|
|
|
|
|
|
|||
|
Weighted Average Discount Rate |
|
|
% |
|
|
% |
|
|
% |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
PSE&G |
|
|
PSEG |
|
|
Total |
|
|
|||
|
|
|
Millions |
|
|
|||||||||
|
Operating Lease Costs |
|
|
|
|
|
|
|
|
|
|
|||
|
Year Ended December 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|||
|
Long-term Lease Costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
Short-term Lease Costs |
|
|
|
|
|
|
|
|
|
|
|||
|
Variable Lease Costs |
|
|
|
|
|
|
|
|
|
|
|||
|
Total Operating Lease Costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Year Ended December 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|||
|
Cash Paid for Amounts Included in the Measurement of Operating Lease Liabilities |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Weighted Average Remaining Lease Term in Years |
|
|
|
|
|
|
|
|
|
|
|||
|
Weighted Average Discount Rate |
|
|
% |
|
|
% |
|
|
% |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
100
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
PSE&G |
|
|
PSEG |
|
|
Total |
|
|
|||
|
|
|
Millions |
|
|
|||||||||
|
Operating Lease Costs |
|
|
|
|
|
|
|
|
|
|
|||
|
Year Ended December 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|||
|
Long-term Lease Costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
Short-term Lease Costs |
|
|
|
|
|
|
|
|
|
|
|||
|
Variable Lease Costs |
|
|
|
|
|
|
|
|
|
|
|||
|
Total Operating Lease Costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Year Ended December 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|||
|
Cash Paid for Amounts Included in the Measurement of Operating Lease Liabilities |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Weighted Average Remaining Lease Term in Years |
|
|
|
|
|
|
|
|
|
|
|||
|
Weighted Average Discount Rate |
|
|
% |
|
|
% |
|
|
% |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
Operating lease liabilities as of December 31, 2025 had the following maturities on an undiscounted basis:
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
PSE&G |
|
|
PSEG |
|
|
Total |
|
|
|||
|
|
|
Millions |
|
|
|||||||||
|
2026 |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
2027 |
|
|
|
|
|
|
|
|
|
|
|||
|
2028 |
|
|
|
|
|
|
|
|
|
|
|||
|
2029 |
|
|
|
|
|
|
|
|
|
|
|||
|
2030 |
|
|
|
|
|
|
|
|
|
|
|||
|
Thereafter |
|
|
|
|
|
|
|
|
|
|
|||
|
Total Minimum Lease Payments |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
The following is a reconciliation of the undiscounted cash flows to the discounted Operating Lease Liabilities recognized on the Consolidated Balance Sheets:
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
As of December 31, 2025 |
|
|
|||||||||
|
|
|
PSE&G |
|
|
PSEG |
|
|
Total |
|
|
|||
|
|
|
Millions |
|
|
|||||||||
|
Undiscounted Cash Flows |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
Reconciling Amount due to Discount Rate |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
Total Discounted Operating Lease Liabilities |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
As of December 31, 2024 |
|
|
|||||||||
|
|
|
PSE&G |
|
|
PSEG |
|
|
Total |
|
|
|||
|
|
|
Millions |
|
|
|||||||||
|
Undiscounted Cash Flows |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
Reconciling Amount due to Discount Rate |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
Total Discounted Operating Lease Liabilities |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
101
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2025, the current portions of Operating Lease Liabilities included in Other Current Liabilities were $
Lessor
PSEG Power & Other
Energy Holdings is the lessor in leveraged leases. See Note 7. Long-Term Investments and Note 8. Financing Receivables.
Energy Holdings is the lessor in an operating lease for a domestic energy generation facility with a remaining term through 2036. As of December 31, 2025, Energy Holdings’ property subject to this lease had a total carrying value of $
In March 2023, Energy Holdings completed the sale of one of its domestic energy generating facilities and recorded an immaterial pre-tax gain. In December 2023, Energy Holdings completed the sale of its real estate assets and recorded an immaterial pre-tax gain.
A wholly owned subsidiary of PSEG Power is the lessor in an operating lease for certain parcels of land with terms through 2050, plus
The following is the operating lease income for the years ended December 31, 2025, 2024 and 2023:
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
Years ended December 31, |
|
|
|||||||||
|
Operating Lease Income |
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
|||
|
|
|
Millions |
|
|
|||||||||
|
Fixed Lease Income |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
Variable Lease Income |
|
|
|
|
|
|
|
|
|
|
|||
|
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
Operating leases had the following minimum future fixed lease receipts as of December 31, 2025:
|
|
|
|
|
|
|
|
|
|
Millions |
|
|
|
|
2026 |
|
$ |
|
|
|
|
2027 |
|
|
|
|
|
|
2028 |
|
|
|
|
|
|
2029 |
|
|
|
|
|
|
2030 |
|
|
|
|
|
|
Thereafter |
|
|
|
|
|
|
Total Minimum Future Lease Receipts |
|
$ |
|
|
|
|
|
|
|
|
|
|
102
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 7. Long-Term Investments
Long-Term Investments as of December 31, 2025 and 2024 included the following:
|
|
|
|
|
|
|
|
|
||
|
|
|
As of December 31, |
|
|
|||||
|
|
|
2025 |
|
|
2024 |
|
|
||
|
|
|
Millions |
|
|
|||||
|
PSE&G |
|
|
|
|
|
|
|
||
|
CEF-EE II On-Bill Repayment (OBR) Program (A) |
|
$ |
|
|
$ |
|
|
||
|
Life Insurance and Supplemental Benefits |
|
|
|
|
|
|
|
||
|
Solar Loans |
|
|
|
|
|
|
|
||
|
PSEG Power & Other |
|
|
|
|
|
|
|
||
|
Lease Investments |
|
|
|
|
|
|
|
||
|
Equity Method Investments (B) |
|
|
|
|
|
|
|
||
|
Other |
|
|
|
|
|
|
|
||
|
Total Long-Term Investments |
|
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
|
|
||
Leases
Energy Holdings, through its indirect subsidiaries, has investments in assets subject primarily to leveraged lease accounting. A leveraged lease is typically comprised of an investment by an equity investor and debt provided by a third-party debt investor. The debt is recourse only to the assets subject to lease and is not included on PSEG’s Consolidated Balance Sheets. As an equity investor, Energy Holdings’ equity investments in the leases are comprised of the total expected lease receivables over the lease terms, reduced for any income not yet earned on the leases. This amount is included in Long-Term Investments on PSEG’s Consolidated Balance Sheets. The more rapid depreciation of the leased property for tax purposes creates tax cash flow that will be repaid to the taxing authority in later periods. As such, the liability for such taxes due is recorded in Deferred Income Taxes on PSEG’s Consolidated Balance Sheets.
Leveraged leases outstanding as of December 31, 2025 commenced in or prior to 2000.
|
|
|
|
|
|
|
|
|
||
|
|
|
As of December 31, |
|
|
|||||
|
|
|
2025 |
|
|
2024 |
|
|
||
|
|
|
Millions |
|
|
|||||
|
Lease Receivables (net of Non-Recourse Debt) |
|
$ |
|
|
$ |
|
|
||
|
Estimated Residual Value of Leased Assets |
|
|
|
|
|
|
|
||
|
Total Investment in Rental Receivables |
|
|
|
|
|
|
|
||
|
Unearned and Deferred Income |
|
|
( |
) |
|
|
( |
) |
|
|
Gross Investments in Leases |
|
|
|
|
|
|
|
||
|
Deferred Tax Liabilities |
|
|
( |
) |
|
|
( |
) |
|
|
Net Investments in Leases |
|
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
|
|
||
The pre-tax income and income tax effects related to investments in leases were immaterial for the years ended December 31, 2025, 2024 and 2023.
103
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 8. Financing Receivables
PSE&G
OBR Program
As part of the CEF–EE II OBR program that began in 2025, PSE&G provides funding to customers to upgrade equipment to increase energy efficiency. The OBR program allows customers to repay their portion of costs for equipment upgrades over time directly through their PSE&G bill.
|
|
|
|
|
|
|
|
|
|
As of December 31, |
|
|
|
|
Outstanding OBR Loans by Class of Customers |
|
2025 |
|
|
|
|
|
|
Millions |
|
|
|
|
Commercial/Industrial |
|
$ |
|
|
|
|
Residential |
|
|
|
|
|
|
Total |
|
|
|
|
|
|
Current Portion (included in Accounts Receivable) |
|
|
( |
) |
|
|
Noncurrent Portion (included in Long-Term Investments) |
|
$ |
|
|
|
|
|
|
|
|
|
|
Payments on all outstanding loans were current as of December 31, 2025 and have an average remaining life of approximately
Solar Loan Program
PSE&G’s Solar Loan Programs are designed to help finance the installation of solar power systems throughout its electric service area. Interest income on the loans is recorded on an accrual basis. The loans are paid back with SRECs generated from the related installed solar electric system. PSE&G uses collection experience as a credit quality indicator for its Solar Loan Programs and conducted a comprehensive credit review for all borrowers. As of December 31, 2025, none of the solar loans were impaired; however, in the event a loan becomes impaired, the basis of the solar loan would be recovered through a regulatory recovery mechanism. Therefore, no current credit losses have been recorded for Solar Loan Programs I, II and III.
|
|
|
|
|
|
|
|
|
||
|
|
|
As of December 31, |
|
|
|||||
|
Outstanding Solar Loans by Class of Customers |
|
2025 |
|
|
2024 |
|
|
||
|
|
|
Millions |
|
|
|||||
|
Commercial/Industrial |
|
$ |
|
|
$ |
|
|
||
|
Residential |
|
|
|
|
|
|
|
||
|
Total |
|
|
|
|
|
|
|
||
|
Current Portion (included in Accounts Receivable) |
|
|
( |
) |
|
|
( |
) |
|
|
Noncurrent Portion (included in Long-Term Investments) |
|
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
|
|
||
The solar loans originated under the remaining Solar Loan Programs are comprised as follows:
104
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Programs |
|
Balance as of December 31, 2025 |
|
|
Funding Provided |
|
Residential Loan Term |
|
Non-Residential Loan Term |
|
|
|
|
|
Millions |
|
|
|
|
|
|
|
|
|
|
Solar Loan II |
|
|
|
|
prior to 2015 |
|
|
|
|||
|
Solar Loan III |
|
|
|
|
prior to 2022 |
|
|
|
|||
|
Total |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The average life of loans paid in full is
Energy Holdings
Energy Holdings had net investments in assets subject to leveraged lease accounting of $
The corresponding receivables associated with the lease portfolio are reflected as follows, net of non-recourse debt. The ratings in the table represent the ratings of the entities providing payment assurance to Energy Holdings.
|
|
|
|
|
|
|
|
|
|
Lease Receivables, Net of |
|
|
|
|
Counterparties’ Standard & Poor’s (S&P) Credit Rating as of December 31, 2025 |
|
As of December 31, 2025 |
|
|
|
|
|
|
Millions |
|
|
|
|
AA |
|
$ |
|
|
|
|
A- |
|
|
|
|
|
|
Total |
|
$ |
|
|
|
|
|
|
|
|
|
|
PSEG recorded no credit losses for the leveraged leases existing on December 31, 2025. Upon the occurrence of certain defaults, indirect subsidiaries of Energy Holdings would exercise their rights and seek recovery of their investments, potentially including stepping into the lease directly to protect their investments. While these actions could ultimately protect or mitigate the loss of value, they could require the use of significant capital and trigger certain material tax obligations which could, for certain leases, wholly or partially be mitigated by tax indemnification claims against the counterparty. A bankruptcy of a lessee would likely delay and potentially limit any efforts on the part of the lessors to assert their rights upon default and could delay the monetization of claims.
Note 9. Trust Investments
NDT Fund
In accordance with NRC regulations, entities owning an interest in nuclear generating facilities are required to determine the costs and funding methods necessary to decommission such facilities upon termination of operation. As a general practice, each nuclear owner places funds in independent external trust accounts it maintains to provide for decommissioning. PSEG Power is required to file biennial reports with the NRC demonstrating that its NDT Fund meets the formula-based minimum NRC funding requirements. Any funding shortfalls are required to be cured prior to the next NDT reporting period. PSEG Power does not currently expect to be required to provide supplemental funding of the NDT Fund. PSEG Power maintains an external master NDT to fund its share of decommissioning costs for its
105
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
as of December 31, 2025 was approximately $
The following tables show the fair values and gross unrealized gains and losses for the securities held in the NDT Fund.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
As of December 31, 2025 |
|
|
|||||||||||||
|
|
|
Cost |
|
|
Gross |
|
|
Gross |
|
|
Fair |
|
|
||||
|
|
|
Millions |
|
|
|||||||||||||
|
Equity Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Domestic |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|||
|
International |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
|
Total Equity Securities |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
|
Available-for-Sale Debt Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Government |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
|
Corporate |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
|
Total Available-for-Sale Debt Securities |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
|
Total NDT Fund Investments (A) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
As of December 31, 2024 |
|
|
|||||||||||||
|
|
|
Cost |
|
|
Gross |
|
|
Gross |
|
|
Fair |
|
|
||||
|
|
|
Millions |
|
|
|||||||||||||
|
Equity Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Domestic |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|||
|
International |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
|
Total Equity Securities |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
|
Available-for-Sale Debt Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Government |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
|
Corporate |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
|
Total Available-for-Sale Debt Securities |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
|
Total NDT Fund Investments (A) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net unrealized gains (losses) on debt securities of $(
The amounts in the preceding tables do not include receivables and payables for NDT Fund transactions which have not settled at the end of each period. Such amounts are included in Accounts Receivable and Accounts Payable on the Consolidated Balance Sheets as shown in the following table.
|
|
|
|
|
|
|
|
|
||
|
|
|
As of December 31, |
|
|
|||||
|
|
|
2025 |
|
|
2024 |
|
|
||
|
|
|
Millions |
|
|
|||||
|
Accounts Receivable |
|
$ |
|
|
$ |
|
|
||
|
Accounts Payable |
|
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
|
|
||
106
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table shows the value of securities in the NDT Fund that have been in an unrealized loss position for less than and greater than 12 months.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
As of December 31, 2025 |
|
|
As of December 31, 2024 |
|
|
||||||||||||||||||||||||||
|
|
|
Less Than 12 Months |
|
|
Greater Than 12 Months |
|
|
Less Than 12 Months |
|
|
Greater Than 12 Months |
|
|
||||||||||||||||||||
|
|
|
Fair |
|
|
Gross |
|
|
Fair |
|
|
Gross |
|
|
Fair |
|
|
Gross |
|
|
Fair |
|
|
Gross |
|
|
||||||||
|
|
|
Millions |
|
|
|||||||||||||||||||||||||||||
|
Equity Securities (A) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Domestic |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
||||
|
International |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
||||
|
Total Equity Securities |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
||||
|
Available-for-Sale Debt Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Government (B) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
||||
|
Corporate (C) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
||||
|
Total Available-for-Sale Debt Securities |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
||||
|
NDT Trust Investments |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
The proceeds from the sales of and the net gains (losses) on securities in the NDT Fund were:
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
Years Ended December 31, |
|
|
|||||||||
|
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
|||
|
|
|
Millions |
|
|
|||||||||
|
Proceeds from Sales (A) |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
Net Realized Gains (Losses): |
|
|
|
|
|
|
|
|
|
|
|||
|
Gross Realized Gains |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
Gross Realized Losses |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
Net Realized Gains (Losses) on NDT Fund (B) |
|
|
|
|
|
|
|
|
|
|
|||
|
Net Unrealized Gains (Losses) on Equity Securities |
|
|
|
|
|
|
|
|
|
|
|||
|
Net Gains (Losses) on NDT Fund Investments |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
107
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The NDT Fund debt securities held as of December 31, 2025 had the following maturities:
|
|
|
|
|
|
|
|
Time Frame |
|
Fair Value |
|
|
|
|
|
|
Millions |
|
|
|
|
Less than one year |
|
$ |
|
|
|
|
1 - 5 years |
|
|
|
|
|
|
6 - 10 years |
|
|
|
|
|
|
11 - 15 years |
|
|
|
|
|
|
16 - 20 years |
|
|
|
|
|
|
Over 20 years |
|
|
|
|
|
|
Total NDT Available-for-Sale Debt Securities |
|
$ |
|
|
|
|
|
|
|
|
|
|
PSEG Power periodically assesses individual debt securities whose fair value is less than amortized cost to determine whether the investments are impaired. For these securities, management considers its intent to sell or requirement to sell a security prior to expected recovery. In those cases where a sale is expected, any impairment would be recorded through earnings. For fixed income securities where there is no intent to sell or likely requirement to sell, management evaluates whether credit loss is a component of the impairment. If so, that portion is recorded through earnings while the noncredit loss component is recorded through Accumulated Other Comprehensive Income (Loss). Any subsequent recoveries of the noncredit loss component of the impairment would be recorded through Accumulated Other Comprehensive Income (Loss). Any subsequent recoveries of the credit loss component would be recognized through earnings. The assessment of fair market value compared to cost is applied on a weighted average basis taking into account various purchase dates and initial cost of the securities.
Rabbi Trust
PSEG maintains certain unfunded nonqualified benefit plans to provide supplemental retirement and deferred compensation benefits to certain key employees. Certain assets related to these plans have been set aside in a grantor trust commonly known as a “Rabbi Trust.”
The following tables show the fair values, gross unrealized gains and losses and amortized cost basis for the securities held in the Rabbi Trust.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
As of December 31, 2025 |
|
|
|||||||||||||
|
|
|
Cost |
|
|
Gross |
|
|
Gross |
|
|
Fair |
|
|
||||
|
|
|
Millions |
|
|
|||||||||||||
|
Domestic Equity Securities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
|
Available-for-Sale Debt Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Government |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
|
Corporate |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
|
Total Available-for-Sale Debt Securities |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
|
Total Rabbi Trust Investments |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
108
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
As of December 31, 2024 |
|
|
|||||||||||||
|
|
|
Cost |
|
|
Gross |
|
|
Gross |
|
|
Fair |
|
|
||||
|
|
|
Millions |
|
|
|||||||||||||
|
Domestic Equity Securities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
|
Available-for-Sale Debt Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Government |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
|
Corporate |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
|
Total Available-for-Sale Debt Securities |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
|
Total Rabbi Trust Investments |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net unrealized gains (losses) on debt securities of $(
The amounts in the preceding tables do not include receivables and payables for Rabbi Trust Fund transactions which have not settled at the end of each period. Such amounts were immaterial as of December 31, 2025 and 2024.
The following table shows the value of securities in the Rabbi Trust Fund that have been in an unrealized loss position for less than and greater than 12 months:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
As of December 31, 2025 |
|
|
As of December 31, 2024 |
|
|
||||||||||||||||||||||||||
|
|
|
Less Than 12 Months |
|
|
Greater Than 12 Months |
|
|
Less Than 12 Months |
|
|
Greater Than 12 Months |
|
|
||||||||||||||||||||
|
|
|
Fair |
|
|
Gross |
|
|
Fair |
|
|
Gross |
|
|
Fair |
|
|
Gross |
|
|
Fair |
|
|
Gross |
|
|
||||||||
|
|
|
Millions |
|
|
|||||||||||||||||||||||||||||
|
Available-for-Sale Debt Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Government (A) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
||||||
|
Corporate (B) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
||||||
|
Total Available-for-Sale Debt Securities |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
||||||
|
Rabbi Trust Investments |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
109
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The proceeds from the sales of and the net gains (losses) on securities in the Rabbi Trust Fund were:
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
Years Ended December 31, |
|
|
|||||||||
|
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
|||
|
|
|
Millions |
|
|
|||||||||
|
Proceeds from Rabbi Trust Sales |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
Net Realized Gains (Losses): |
|
|
|
|
|
|
|
|
|
|
|||
|
Gross Realized Gains |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
Gross Realized Losses |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
Net Realized Gains (Losses) on Rabbi Trust (A) |
|
|
|
|
|
|
|
|
( |
) |
|
||
|
Net Unrealized Gains (Losses) on Equity Securities |
|
|
|
|
|
|
|
|
|
|
|||
|
Net Gains (Losses) on Rabbi Trust Investments |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
The Rabbi Trust debt securities held as of December 31, 2025 had the following maturities:
|
|
|
|
|
|
|
|
Time Frame |
|
Fair Value |
|
|
|
|
|
|
Millions |
|
|
|
|
Less than one year |
|
$ |
|
|
|
|
1 - 5 years |
|
|
|
|
|
|
6 - 10 years |
|
|
|
|
|
|
11 - 15 years |
|
|
|
|
|
|
16 - 20 years |
|
|
|
|
|
|
Over 20 years |
|
|
|
|
|
|
Total Rabbi Trust Available-for-Sale Debt Securities |
|
$ |
|
|
|
|
|
|
|
|
|
|
PSEG periodically assesses individual debt securities whose fair value is less than amortized cost to determine whether the investments are considered to be impaired. For these securities, management considers its intent to sell or requirement to sell a security prior to expected recovery. In those cases where a sale is expected, any impairment would be recorded through earnings. For fixed income securities where there is no intent to sell or likely requirement to sell, management evaluates whether credit loss is a component of the impairment. If so, that portion is recorded through earnings while the noncredit loss component is recorded through Accumulated Other Comprehensive Income (Loss). Any subsequent recoveries of the noncredit loss component of the impairment would be recorded through Accumulated Other Comprehensive Income (Loss). Any subsequent recoveries of the credit loss component would be recognized through earnings. The assessment of fair market value compared to cost is applied on a weighted average basis taking into account various purchase dates and initial cost of the securities.
The fair value of the Rabbi Trust related to PSEG and PSE&G are detailed as follows:
|
|
|
|
|
|
|
|
|
||
|
|
|
As of December 31, |
|
|
As of December 31, |
|
|
||
|
|
|
2025 |
|
|
2024 |
|
|
||
|
|
|
Millions |
|
|
|||||
|
PSE&G |
|
$ |
|
|
$ |
|
|
||
|
PSEG Power & Other |
|
|
|
|
|
|
|
||
|
Total Rabbi Trust Investments |
|
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
|
|
||
110
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 10. Asset Retirement Obligations (AROs)
PSEG and PSE&G recognize liabilities for the expected cost of retiring long-lived assets for which a legal obligation exists to remove or dispose of an asset or some component of an asset at retirement. These AROs are recorded at fair value in the period in which they are incurred and are capitalized as part of the carrying amount of the related long-lived assets. PSEG’s subsidiaries, except for PSE&G, accrete the ARO liability to reflect the passage of time with the corresponding expense recorded in O&M. PSE&G, as a rate-regulated entity, recognizes Regulatory Assets or Liabilities as a result of timing differences between the recording of costs and costs recovered through the rate-making process.
PSE&G has conditional AROs primarily for legal obligations related to the removal of treated wood poles and the requirement to seal natural gas pipelines at all sources of gas when the pipelines are no longer in service. PSE&G does not record an ARO for its protected steel and poly-based natural gas lines, as management believes that these categories of gas lines have an indeterminable life.
PSEG’s other ARO liability primarily relates to decommissioning of its nuclear power plants in accordance with NRC requirements. PSEG has an independent external trust that is intended to fund decommissioning of its nuclear facilities upon termination of operation. For additional information, see Note 9. Trust Investments. PSEG also identified conditional AROs related to PSEG’s retained fossil generation sites primarily related to liabilities for removal of asbestos. To estimate the fair value of its other AROs, PSEG uses a probability weighted, discounted cash flow model which, on a unit by unit basis, considers multiple outcome scenarios that include significant estimates and assumptions, and are based on third-party decommissioning cost estimates, cost escalation rates, inflation rates and discount rates.
Updated nuclear cost studies are obtained triennially unless new information necessitates more frequent updates. The most recent cost study was completed in 2024. When assumptions are revised to calculate fair values of existing AROs, generally, the ARO balance and corresponding long-lived asset are adjusted which impact the amount of accretion and depreciation expense recognized in future periods. For PSE&G, Regulatory Assets and Regulatory Liabilities result when accretion and amortization are adjusted to match rates established by regulators resulting in the regulatory deferral of any gain or loss.
The changes to the ARO liabilities for PSEG and PSE&G during 2024 and 2025 are presented in the following table:
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
PSEG |
|
|
PSE&G |
|
|
PSEG Power & Other |
|
|
|||
|
|
|
Millions |
|
|
|||||||||
|
ARO Liability as of January 1, 2024 |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
Liabilities Settled |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
Accretion Expense |
|
|
|
|
|
|
|
|
|
|
|||
|
Accretion Expense Deferred and Recovered in Rate Base (A) |
|
|
|
|
|
|
|
|
|
|
|||
|
Revision to Present Values of Estimated Cash Flows |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
ARO Liability as of December 31, 2024 |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
Liabilities Settled |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
Accretion Expense |
|
|
|
|
|
|
|
|
|
|
|||
|
Accretion Expense Deferred and Recovered in Rate Base (A) |
|
|
|
|
|
|
|
|
|
|
|||
|
Revision to Present Values of Estimated Cash Flows |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
ARO Liability as of December 31, 2025 |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
In 2024, PSE&G recorded an increase to its ARO liabilities primarily due to the impact of increases in labor rates and other costs, partially offset by decreases from changes in inflation and discount rate assumptions. Those changes had
In December 2024, PSEG Power reassessed its ARC and ARO assumptions related to its nuclear plants, as part of the triennial cost study update. As a result, PSEG Power decreased its ARC asset and ARO liability by $
111
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
increase in the probability the units would obtain additional license renewals, partially offset by increases in inflation rates and other costs.
Effective April 2025, PSEG Power revised the estimated useful lives for the Salem 1, Salem 2 and Hope Creek nuclear plants due primarily to the expectation that a 20-year license extension will be approved for these facilities. As a result, PSEG revised the related Asset Retirement Cost (ARC) asset and Asset Retirement Obligation (ARO) liability assumptions, including the probabilities associated with the retirement dates for the nuclear plants, which resulted in a decrease to the ARC asset and ARO liability of $
Note 11. Pension, Other Postretirement Benefits (OPEB) and Savings Plans
PSEG sponsors qualified and nonqualified pension plans and OPEB plans covering PSEG’s and its participating affiliates’ current and former employees who meet certain eligibility criteria. PSEG merged its two qualified defined benefit pension plans (Pension Plan of Public Service Enterprise Group Incorporated and Pension Plan of Public Service Enterprise Group Incorporated II, or the Plans) effective January 1, 2026. The merged qualified pension plan includes a Final Average Pay and two Cash Balance components and both represented and non-represented employees are eligible for participation.
PSEG and PSE&G are required to record the under or over funded positions of their defined benefit pension and OPEB plans on their respective balance sheets. Such funding positions are required to be measured as of the date of their respective year-end Consolidated Balance Sheets. For underfunded plans, the liability is equal to the difference between the plan’s benefit obligation and the fair value of plan assets. For defined benefit pension plans, the benefit obligation is the projected benefit obligation. For OPEB plans, the benefit obligation is the accumulated postretirement benefit obligation. In addition, GAAP requires that the total unrecognized costs for defined benefit pension and OPEB plans be recorded as an after-tax charge to Accumulated Other Comprehensive Income (Loss), a separate component of Stockholders’ Equity. However, for PSE&G, because the amortization of the unrecognized costs is being collected from customers, the accumulated unrecognized costs are recorded as a Regulatory Asset. The unrecognized costs represent actuarial gains or losses and prior service costs which have not been expensed. The charge to Accumulated Other Comprehensive Income (Loss) and the Regulatory Asset for PSE&G are amortized and recorded as net periodic pension cost in the Consolidated Statements of Operations.
In July 2023, PSEG and Fiduciary Counselors Inc., as independent fiduciary of the Plans, entered into a commitment agreement (for a “lift-out”) with The Prudential Insurance Company of America (the Insurer) under which the Plans agreed to purchase a nonparticipating single premium group annuity contract that has transferred to the Insurer approximately $
Amounts for Servco are not included in any of the following pension and OPEB benefit information for PSEG and its affiliates but rather are separately disclosed later in this note.
112
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table provides a roll-forward of the changes in the benefit obligation and the fair value of plan assets during each of the two years in the periods ended December 31, 2025 and 2024. It also provides the funded status of the plans and the amounts recognized and amounts not recognized on the Consolidated Balance Sheets at the end of both years.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
Pension Benefits |
|
|
Other Benefits |
|
|
||||||||||
|
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|
||||
|
|
|
Millions |
|
|
|||||||||||||
|
Change in Benefit Obligation |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Benefit Obligation at Beginning of Year (A) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
|
Service Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Interest Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Actuarial Loss (Gain) (B) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
||
|
Gross Benefits Paid |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
Plan Amendments |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
|
Benefit Obligation at End of Year (A) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
|
Change in Plan Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Fair Value of Assets at Beginning of Year |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
|
Actual Return on Plan Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Employer Contributions |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Gross Benefits Paid |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
Fair Value of Assets at End of Year |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
|
Funded Status |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Funded Status (Plan Assets less Benefit Obligation) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
Additional Amounts Recognized in the Consolidated Balance Sheets |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Current Accrued Benefit Cost |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
Noncurrent Accrued Benefit Cost |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
Amounts Recognized |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
Additional Amounts Recognized in Accumulated Other Comprehensive Income (Loss), Regulatory Assets, Deferred Assets and Deferred Liabilities (C) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Prior Service Cost (Credit) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|||
|
Net Actuarial Loss (Gain) |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
||
|
Total |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
The pension benefits table above provides information relating to the funded status of the qualified and nonqualified pension and OPEB plans on an aggregate basis. As of December 31, 2025, PSEG had funded approximately
113
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
the projected benefit obligation in the above table were $
Accumulated Benefit Obligation
The accumulated benefit obligation for all PSEG’s defined benefit pension plans was $
The following table provides the components of net periodic benefit costs (credits) relating to all qualified and nonqualified pension and OPEB plans on an aggregate basis for PSEG, excluding Servco for the years ended December 31, 2025, 2024 and 2023. Amounts shown do not reflect the impacts of capitalization, co-owner allocations and certain regulatory orders. Only the service cost component is eligible for capitalization, when applicable.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
Pension Benefits Years Ended December 31, |
|
|
Other Benefits Years Ended December 31, |
|
|
||||||||||||||||||
|
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
||||||
|
|
|
Millions |
|
|
|||||||||||||||||||||
|
Components of Net Periodic Benefit Costs (Credits) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Service Cost (included in O&M Expense) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||||
|
Non-Service Components of Pension and OPEB (Credits) Costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Interest Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Expected Return on Plan Assets |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
Amortization of Net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Prior Service Cost (Credit) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|||||
|
Actuarial Loss (Gain) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|||
|
Settlement Charge Resulting from Pension Lift-Out |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Non-Service Components of Pension and OPEB (Credits) Costs |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|||
|
Total Net Periodic Benefit Costs (Credits) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Pension and OPEB costs (credits) for PSE&G and PSEG Power & Other are detailed as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
Pension Benefits |
|
|
Other Benefits |
|
|
||||||||||||||||||
|
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
||||||
|
|
|
Millions |
|
|
|||||||||||||||||||||
|
PSE&G |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|||
|
PSEG Power & Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|||||
|
Total Net Periodic Benefit Costs (Credits) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
PSEG completed the above mentioned “lift-out” transaction in August 2023. As a result of the transaction, PSEG recognized a settlement charge of $
114
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table provides the pre-tax changes recognized in Accumulated Other Comprehensive Income (Loss), Regulatory Assets, Deferred Assets and Deferred Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
Pension |
|
|
Other Benefits |
|
|
||||||||||
|
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|
||||
|
|
|
Millions |
|
|
|||||||||||||
|
Net Actuarial (Gain) Loss in Current Period due to Plan Experience and Assumption Changes |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
Amortization of Net Actuarial (Loss) Gain |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
|
Prior Service (Credit) Cost in Current Period |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
|
Amortization of Prior Service Credit |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
||
|
Total |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
The following assumptions were used to determine the benefit obligations and net periodic benefit costs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
Pension Benefits |
|
|
Other Benefits |
|
|
||||||||||||||||||
|
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Weighted-Average Assumptions Used to Determine Benefit Obligations as of December 31 |
|
|
|
||||||||||||||||||||||
|
Discount Rate |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|
||||||
|
Rate of Compensation Increase |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|
||||||
|
Cash Balance Interest Crediting Rate |
|
|
% |
|
|
% |
|
|
% |
|
N/A |
|
|
N/A |
|
|
N/A |
|
|
||||||
|
Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost for Years Ended December 31 |
|
|
|||||||||||||||||||||||
|
Discount Rate |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|
||||||
|
Service Cost Interest Rate |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|
||||||
|
Interest Cost Interest Rate |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|
||||||
|
Expected Return on Plan Assets |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|
||||||
|
Rate of Compensation Increase |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|
||||||
|
Cash Balance Interest Crediting Rate |
|
|
% |
|
|
% |
|
|
% |
|
N/A |
|
|
N/A |
|
|
N/A |
|
|
||||||
|
Assumed Health Care Cost Trend Rates as of December 31 |
|
|
|||||||||||||||||||||||
|
Health Care Costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Immediate Rate |
|
|
|
|
|
|
|
|
|
|
|
% |
|
|
% |
|
|
% |
|
||||||
|
Ultimate Rate |
|
|
|
|
|
|
|
|
|
|
|
% |
|
|
% |
|
|
% |
|
||||||
|
Year Ultimate Rate Reached |
|
|
|
|
|
|
|
|
|
|
2034 |
|
|
2034 |
|
|
2033 |
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Plan Assets
The investments of pension and OPEB plans are held in trust accounts by the Trustee and consist of an undivided interest in an investment account of the Master Retirement Trust. The investments in the pension and OPEB plans are measured at fair value within a hierarchy that prioritizes the inputs to fair value measurements into three levels. See Note 16. Fair Value Measurements for more information on fair value guidance. Use of the Master Trust permits the commingling of pension plan assets and OPEB plan assets for investment and administrative purposes. Although assets of the plans are commingled in the Master Trust, the Trustee maintains supporting records for the purpose of allocating the net gain or loss of the investment account to the respective participating plans. The net investment income of the investment assets is allocated by the Trustee to each participating plan based on the relationship of the interest of each plan to the total of the interests of the participating plans. Additional investments of OPEB plans included in the Fair Value of Assets are held in a Welfare Trust. As of December 31, 2025, the pension plan interest and OPEB plan interest in such assets were approximately
The following tables present information about the investments measured at fair value on a recurring basis as of December 31, 2025 and 2024, including the fair value measurements and the levels of inputs used in determining those fair values.
115
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
Recurring Fair Value Measurements as of December 31, 2025 |
|
|
|||||||||
|
|
|
|
|
|
Quoted |
|
|
Significant |
|
|
|||
|
Description |
|
Total |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
|||
|
|
|
Millions |
|
|
|||||||||
|
Cash Equivalents (A) |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
Equity Securities |
|
|
|
|
|
|
|
|
|
|
|||
|
Common Stock (B) |
|
|
|
|
|
|
|
|
|
|
|||
|
Commingled (C) |
|
|
|
|
|
|
|
|
|
|
|||
|
Debt Securities (D) |
|
|
|
|
|
|
|
|
|
|
|||
|
U.S. Treasury |
|
|
|
|
|
|
|
|
|
|
|||
|
Commingled |
|
|
|
|
|
|
|
|
|
|
|||
|
Subtotal Fair Value |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
Measured at net asset value practical expedient |
|
|
|
|
|
|
|
|
|
|
|||
|
Commingled—Equities (E) |
|
|
|
|
|
|
|
|
|
|
|||
|
Real Estate Investment (F) |
|
|
|
|
|
|
|
|
|
|
|||
|
Other |
|
|
|
|
|
|
|
|
|
|
|||
|
Total Fair Value (G) |
|
$ |
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
Recurring Fair Value Measurements as of December 31, 2024 |
|
|
|||||||||
|
|
|
|
|
|
Quoted |
|
|
Significant |
|
|
|||
|
Description |
|
Total |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
|||
|
|
|
Millions |
|
|
|||||||||
|
Cash Equivalents (A) |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
Equity Securities |
|
|
|
|
|
|
|
|
|
|
|||
|
Common Stock (B) |
|
|
|
|
|
|
|
|
|
|
|||
|
Commingled (C) |
|
|
|
|
|
|
|
|
|
|
|||
|
Debt Securities (D) |
|
|
|
|
|
|
|
|
|
|
|||
|
U.S. Treasury |
|
|
|
|
|
|
|
|
|
|
|||
|
Commingled |
|
|
|
|
|
|
|
|
|
|
|||
|
Subtotal Fair Value |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
Measured at net asset value practical expedient |
|
|
|
|
|
|
|
|
|
|
|||
|
Commingled—Equities (E) |
|
|
|
|
|
|
|
|
|
|
|||
|
Real Estate Investment (F) |
|
|
|
|
|
|
|
|
|
|
|||
|
Other |
|
|
|
|
|
|
|
|
|
|
|||
|
Total Fair Value (G) |
|
$ |
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
116
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table provides the percentage of fair value of total plan assets for each major category of plan assets held for the qualified pension and OPEB plans as of the measurement date, December 31:
|
|
|
|
|
|
|
|
|
||
|
|
|
As of December 31, |
|
|
|||||
|
Investments |
|
2025 |
|
|
2024 |
|
|
||
|
Equity Securities |
|
|
% |
|
|
% |
|
||
|
Debt Securities |
|
|
% |
|
|
% |
|
||
|
Other Investments |
|
|
% |
|
|
% |
|
||
|
Total Percentage |
|
|
% |
|
|
% |
|
||
|
|
|
|
|
|
|
|
|
||
PSEG utilizes forecasted returns, risk, and correlation of all asset classes in order to develop an efficient portfolio. PSEG’s long-term target asset allocation of
Plan Contributions
PSEG contributed $
117
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Estimated Future Benefit Payments
The following pension benefit and postretirement benefit payments are expected to be paid to plan participants.
|
|
|
|
|
|
|
|
|
||
|
Year |
|
Pension |
|
|
Other |
|
|
||
|
|
|
Millions |
|
|
|||||
|
2026 |
|
$ |
|
|
$ |
|
|
||
|
2027 |
|
|
|
|
|
|
|
||
|
2028 |
|
|
|
|
|
|
|
||
|
2029 |
|
|
|
|
|
|
|
||
|
2030 |
|
|
|
|
|
|
|
||
|
2031-2035 |
|
|
|
|
|
|
|
||
|
Total |
|
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
|
|
||
401(k) Plans
PSEG sponsors
Employees hired or rehired on or after January 1, 2025 can choose between two different Retirement Program options - the “Core Contribution / 401(k) Program” or the “Cash Balance / 401(k) Program.” The Cash Balance / 401(k) Program provides pay credits in the Cash Balance components of PSEG's qualified pension plans and a 401(k) company match of employee contributions as noted above. The Core Contribution / 401(k) Program provides participants with a non-elective Core Contribution equal to
In addition to the above, beginning January 1, 2025, employees who are not participants in the Final Average Pay Component of PSEG’s qualified pension plans may also be eligible for an annual company contribution to the 401(k) Plan.
The amounts expensed for employer contributions to the above plans for PSE&G and PSEG Power & Other are detailed as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
Thrift Plan and Savings Plan |
|
|
|||||||||
|
|
|
Years Ended December 31, |
|
|
|||||||||
|
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
|||
|
|
|
Millions |
|
|
|||||||||
|
PSE&G |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
PSEG Power & Other |
|
|
|
|
|
|
|
|
|
|
|||
|
Total Employer Matching Contributions |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
Servco Pension and OPEB
Servco sponsors a qualified pension plan and OPEB plan covering its employees who meet certain eligibility criteria. Under the OSA, employee benefit costs for these plans are funded by LIPA. See Note 3. Variable Interest Entity. These obligations, as well as the offsetting long-term receivable, are separately presented on the Consolidated Balance Sheet of PSEG.
118
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table provides a roll-forward of the changes in Servco’s benefit obligation and the fair value of its plan assets during the years ended December 31, 2025 and 2024. It also provides the funded status of the plans and the amounts recognized and amounts not recognized on the Consolidated Balance Sheets at the end of both years.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
Pension Benefits |
|
|
Other Benefits |
|
|
||||||||||
|
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|
||||
|
|
|
Millions |
|
|
|||||||||||||
|
Change in Benefit Obligation |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Benefit Obligation at Beginning of Year (A) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
|
Service Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Interest Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Actuarial Gain (B) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
Gross Benefits Paid |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
Benefit Obligation at End of Year (A) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
|
Change in Plan Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Fair Value of Assets at Beginning of Year |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
|
Actual Return on Plan Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Employer Contributions |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Gross Benefits Paid |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
Fair Value of Assets at End of Year |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
|
Funded Status |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Funded Status (Plan Assets less Benefit Obligation) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
Additional Amounts Recognized in the Consolidated Balance Sheets |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Prepaid (Accrued) Pension Costs of Servco |
|
$ |
|
|
$ |
( |
) |
|
N/A |
|
|
N/A |
|
|
|||
|
OPEB Costs of Servco |
|
N/A |
|
|
N/A |
|
|
|
( |
) |
|
|
( |
) |
|
||
|
Amounts Recognized (C) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Pension and OPEB costs of Servco are accounted for according to the OSA. Servco recognizes expenses for contributions to its pension plan trust and for OPEB payments made to retirees. Operating Revenues are recognized for the reimbursement of these costs. The pension-related revenues and costs for 2025, 2024 and 2023 were $
119
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following assumptions were used to determine the benefit obligations of Servco:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
Pension Benefits |
|
|
Other Benefits |
|
|
||||||||||||||||||
|
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
||||||
|
Weighted-Average Assumptions Used to Determine Benefit Obligations as of December 31 |
|
|
|||||||||||||||||||||||
|
Discount Rate |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|
||||||
|
Rate of Compensation Increase |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|
||||||
|
Cash Balance Interest Crediting Rate |
|
|
% |
|
|
% |
|
|
% |
|
N/A |
|
|
N/A |
|
|
N/A |
|
|
||||||
|
Assumed Health Care Cost Trend Rates as of December 31 |
|
|
|||||||||||||||||||||||
|
Health Care Costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Immediate Rate |
|
|
|
|
|
|
|
|
|
|
|
% |
|
|
% |
|
|
% |
|
||||||
|
Ultimate Rate |
|
|
|
|
|
|
|
|
|
|
|
% |
|
|
% |
|
|
% |
|
||||||
|
Year Ultimate Rate Reached |
|
|
|
|
|
|
|
|
|
|
2036 |
|
|
2036 |
|
|
2033 |
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Plan Assets
All the investments of Servco’s pension plans are held in a trust account by the Trustee and consist of an undivided interest in an investment account of the Servco Master Trust. The investments in the pension are measured at fair value within a hierarchy that prioritizes the inputs to fair value measurements into three levels. See Note 16. Fair Value Measurements for more information on fair value guidance.
The following tables present information about Servco’s investments measured at fair value on a recurring basis as of December 31, 2025 and 2024, including the fair value measurements and the levels of inputs used in determining those fair values.
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
Recurring Fair Value Measurements as of December 31, 2025 |
|
|
|||||||||
|
|
|
|
|
|
Quoted |
|
|
Significant |
|
|
|||
|
Description |
|
Total |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
|||
|
|
|
Millions |
|
|
|||||||||
|
Cash Equivalents |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
Equity Securities |
|
|
|
|
|
|
|
|
|
|
|||
|
Common Stock (A) |
|
|
|
|
|
|
|
|
|
|
|||
|
Commingled (B) |
|
|
|
|
|
|
|
|
|
|
|||
|
Commingled Bonds (B) |
|
|
|
|
|
|
|
|
|
|
|||
|
Total Fair Value |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
120
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
Recurring Fair Value Measurements as of December 31, 2024 |
|
|
|||||||||
|
|
|
|
|
|
Quoted |
|
|
Significant |
|
|
|||
|
Description |
|
Total |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
|||
|
|
|
Millions |
|
|
|||||||||
|
Cash Equivalents |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
Equity Securities |
|
|
|
|
|
|
|
|
|
|
|||
|
Common Stock (A) |
|
|
|
|
|
|
|
|
|
|
|||
|
Commingled (B) |
|
|
|
|
|
|
|
|
|
|
|||
|
Commingled Bonds (B) |
|
|
|
|
|
|
|
|
|
|
|||
|
Total Fair Value |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
The following table provides the percentage of fair value of total plan assets for each major category of plan assets held for the qualified pension and OPEB plans of Servco as of the measurement date, December 31:
|
|
|
|
|
|
|
|
|
||
|
|
|
As of December 31, |
|
|
|||||
|
Investments |
|
2025 |
|
|
2024 |
|
|
||
|
Equity Securities |
|
|
% |
|
|
% |
|
||
|
Debt Securities |
|
|
% |
|
|
% |
|
||
|
Total Percentage |
|
|
% |
|
|
% |
|
||
|
|
|
|
|
|
|
|
|
||
Servco utilizes forecasted returns, risk, and correlation of all asset classes in order to develop an efficient portfolio. Servco’s long-term target asset allocation of
Plan Contributions
Servco plans to contribute $
121
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Estimated Future Benefit Payments
The following pension benefit and postretirement benefit payments are expected to be paid to Servco’s plan participants:
|
|
|
|
|
|
|
|
|
||
|
Year |
|
Pension |
|
|
Other |
|
|
||
|
|
|
Millions |
|
|
|||||
|
2026 |
|
$ |
|
|
$ |
|
|
||
|
2027 |
|
|
|
|
|
|
|
||
|
2028 |
|
|
|
|
|
|
|
||
|
2029 |
|
|
|
|
|
|
|
||
|
2030 |
|
|
|
|
|
|
|
||
|
2031-2035 |
|
|
|
|
|
|
|
||
|
Total |
|
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
|
|
||
Servco 401(k) Plans
Servco sponsors
Note 12. Commitments and Contingent Liabilities
Guaranteed Obligations
PSEG Power’s activities primarily involve the purchase and/or sale of energy, nuclear fuel and other related products under transportation, physical, financial and forward contracts at fixed and variable prices. These transactions are with numerous counterparties and brokers that may require cash, letters of credit or guarantees as a form of credit support.
PSEG Power has unconditionally guaranteed payments to counterparties on behalf of its subsidiaries in commodity-related transactions in order to
PSEG Power is subject to
Under these agreements, guarantees cover credit extended between entities and is often reciprocal in nature. The exposure between counterparties can move in either direction.
In order for PSEG Power to incur a liability for the face value of the outstanding guarantees,
122
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PSEG Power believes the probability of this result is unlikely. For this reason, PSEG Power believes that the current exposure at any point in time is a more meaningful representation of the potential liability under these guarantees. Current exposure consists of the net of accounts receivable and accounts payable and the forward value on open positions, less any collateral posted.
Changes in commodity prices can have a material impact on collateral requirements under such contracts, which are posted and received primarily in the form of cash and letters of credit.
PSEG Power also routinely enters into futures and options transactions primarily for electricity as part of its operations and for natural gas from time to time. These futures contracts usually require a cash margin deposit with brokers, which can change based on market movement and in accordance with exchange rules.
In addition to the guarantees discussed above, PSEG Power has also provided payment guarantees to third parties and regulatory authorities on behalf of its affiliated companies. These guarantees support various other non-commodity related obligations.
The following table shows the face value of PSEG Power’s outstanding guarantees, current exposure and margin positions as of December 31, 2025 and 2024.
|
|
|
|
|
|
|
|
|
||
|
|
|
As of December 31, |
|
|
|||||
|
|
|
2025 |
|
|
2024 |
|
|
||
|
|
|
Millions |
|
|
|||||
|
Face Value of Outstanding Guarantees |
|
$ |
|
|
$ |
|
|
||
|
Exposure under Current Guarantees |
|
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
|
|
||
|
Letters of Credit - Counterparty Margining Posted |
|
$ |
|
|
$ |
|
|
||
|
Letters of Credit - Counterparty Margining Received |
|
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
|
|
||
|
Cash Deposited and Received |
|
|
|
|
|
|
|
||
|
Counterparty Cash Collateral Deposited |
|
$ |
|
|
$ |
|
|
||
|
Counterparty Cash Collateral Received |
|
$ |
|
|
$ |
( |
) |
|
|
|
Net Broker Balance Deposited (Received) |
|
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
|
|
||
|
Additional Amounts Posted |
|
|
|
|
|
|
|
||
|
Other Letters of Credit |
|
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
|
|
||
As part of determining credit exposure, PSEG Power nets receivables and payables with the corresponding net fair values of energy contracts. See Note 15. Financial Risk Management Activities for further discussion. In accordance with PSEG’s accounting policy, where it is applicable, cash (received)/deposited is allocated against derivative asset and liability positions with the same counterparty on the face of the Consolidated Balance Sheet. The remaining balances of net cash (received)/deposited after allocation are generally included in Accounts Payable and Accounts Receivable, respectively.
In addition to amounts for outstanding guarantees, current exposure and margin positions, PSEG and PSEG Power have posted letters of credit to support PSEG Power’s various other non-energy contractual and environmental obligations. See Other Letters of Credit in the preceding table.
Environmental Matters
Newark Bay Complex
The Newark Bay Complex is a tidal estuary in northern New Jersey that includes Newark Bay, as well as portions of the Passaic River, the Hackensack River and other surrounding waterways. The U.S. Environmental Protection Agency (EPA) has designated various portions of the Newark Bay Complex as federal Superfund sites that must be investigated and remediated under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA).
Lower Passaic River Study Area
The EPA has determined that a 17-mile stretch of the Passaic River (Lower Passaic River Study Area (LPRSA)) in New Jersey is a “Superfund” site. PSE&G and certain of its predecessors conducted operations at properties in this area, including at
123
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The EPA has announced two separate cleanup plans for the Lower 8.3 miles and Upper 9 miles of the LPRSA. The EPA’s plan for the Lower 8.3 miles involves dredging and capping sediments at an estimated cost of $
Occidental Chemical Corporation (Occidental) has voluntarily completed the design of the cleanup plan for the Lower 8.3 miles and has received an EPA Unilateral Administrative Order directing it to design the cleanup plan for the Upper 9 miles.
Occidental has filed two lawsuits against PSE&G and others to attempt to recover costs associated with its past investigation and cleanup work within the LPRSA and to obtain a declaratory judgment of parties’ shares of any future costs. PSEG cannot predict the outcome of the litigation.
In January 2026, Occidental’s parent company completed the sale of Occidental to a third party and identified a new company, Environmental Resource Holdings, LLC, as the successor to Occidental’s environmental liability at the Newark Bay Complex and elsewhere. PSE&G and others have filed suit for a declaratory judgment that Occidental remains liable for investigation and cleanup costs within the Newark Bay Complex and elsewhere.
The EPA finalized and received court approval of a settlement with 82 parties who have agreed to pay $
As of December 31, 2025, PSEG has approximately $
The outcome of this matter is uncertain, and until (i) a final remedy for the entire LPRSA is selected and an agreement is reached by the PRPs to fund it, (ii) PSE&G’s and PSEG Power’s respective shares of the costs are determined, and (iii) PSE&G’s ability to recover the costs in its rates is determined, it is not possible to predict this matter’s ultimate impact on PSEG’s financial statements. It is possible that PSE&G and PSEG Power will record additional costs beyond what they have accrued, and that such costs could be material, but PSEG cannot at the current time estimate the amount or range of any additional costs.
Newark Bay Study Area
The EPA has established the Newark Bay Study Area, which is an extension of the LPRSA and includes Newark Bay and portions of surrounding waterways. The EPA has notified PSEG and
Natural Resource Damage Claims
New Jersey and certain federal regulators have alleged that PSE&G, PSEG Power and
Hackensack River
EPA has designated approximately 23 river miles of the Lower Hackensack River as a federal Superfund site. The site runs from the river's confluence with Newark Bay north to the Oradell Dam. PSE&G and certain of its predecessors conducted operations at properties in this area, including at the Hudson, Bergen and Kearny generating stations that were transferred to PSEG Power. PSEG
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Power subsequently contractually transferred all land rights and structures on the Hudson generating station site to a third-party purchaser, along with the assumption of the environmental liabilities for that site.
In 2024, the EPA identified PSE&G and four other parties as PRPs for the site and requested that they voluntarily perform a technical study of a portion of the Lower Hackensack River designated as “Operable Unit 2.” PSE&G and PSEG Power have agreed to participate in the technical study. PSE&G and PSEG Power do not believe participation in the technical study will have a material impact on their results of operations and financial condition; however, future costs related to this matter could be material.
In September 2025, the EPA identified PSE&G and three other parties as PRPs for a new portion of the Lower Hackensack River. EPA requested the PRPs voluntarily perform a technical study for this incremental portion designated as “Operable Unit 3.” PSE&G and PSEG Power are considering the EPA’s request. We cannot predict the outcome of this matter.
MGP Remediation Program
PSE&G is working with the New Jersey Department of Environmental Protection (NJDEP) to assess, investigate and remediate environmental conditions at its former MGP sites. To date, 38 sites requiring some level of remedial action have been identified. Based on its current studies, PSE&G has determined that the estimated cost to remediate all MGP sites to completion could range between $
Legacy Environmental Obligations at Former Fossil Generating Sites
PSEG Power has retained ownership of certain liabilities excluded from the 2022 sale of its fossil generation portfolio. These liabilities primarily relate to obligations under the New Jersey Industrial Site Recovery Act (ISRA) and the Connecticut Transfer Act (CTA) to investigate and remediate PSEG Power’s two formerly owned generating station sites in Connecticut, and six formerly owned generating station sites in New Jersey. In addition, PSEG Power still owns two former generating station sites in New Jersey that triggered ISRA in 2015.
PSEG Power is in the process of fulfilling its obligations under the New Jersey ISRA and the CTA to investigate these sites. It will require multiple years and comprehensive environmental sampling to understand the extent of and to carry out the required remediation. At this stage in the remediation process, the full remediation costs are not estimable, but given the number and operating history of the facilities in the portfolio, the full remediation costs will likely be material in the aggregate. The costs could potentially include costs for, among other things, excavating soil, implementation of institutional controls, and the construction, operation and maintenance of engineering controls.
In May 2024, the EPA finalized revisions to the coal combustion residuals rule (CCR Rule) which established new requirements for the investigation and, if necessary, the cleanup of certain types of coal ash placed at certain fossil generation station sites, including certain sites owned or formerly owned by PSEG Power. PSEG is in the process of investigating each of the sites that PSEG Power currently owns that are subject to the CCR Rule, as well as sites that were formerly owned that are subject to the CCR Rule where PSEG Power retained certain environmental obligations to investigate and, if necessary, remediate. PSEG is currently unable to estimate the impact of the CCR Rule, but it could have a material impact on PSEG’s business, results of operations and cash flows.
BGS, BGSS and ZECs
Each year, PSE&G obtains its electric supply requirements through annual New Jersey BGS auctions for two categories of customers that choose not to purchase electric supply from third-party suppliers. The first category is residential and smaller commercial and industrial customers (BGS-Residential Small Commercial Pricing (RSCP)). The second category is larger customers that exceed a BPU-established load (kW) threshold (BGS-Commercial and Industrial Energy Pricing (CIEP)). Pursuant to applicable BPU rules, PSE&G enters into the Supplier Master Agreements with the winners of these RSCP and CIEP BGS auctions to purchase BGS for PSE&G’s load requirements. The winners of the RSCP and CIEP auctions are responsible for
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
fulfilling all the requirements of a PJM load-serving entity including the provision of capacity, energy, ancillary services and any other services required by PJM. As such, prices set through these auctions are impacted by FERC-approved prices set in the PJM capacity auctions, which significantly increased for the 2025/2026 and subsequent auction years. See Note 2. Revenues for additional information. BGS suppliers assume all volume risk and customer migration risk and must satisfy New Jersey’s renewable portfolio standards.
The BGS-CIEP auction is for a one-year supply period from June 1 to May 31 with the BGS-CIEP auction price measured in dollars per MW-day for capacity. The final price for the BGS-CIEP auction year commencing June 1, 2026 is $
PSE&G contracts for its anticipated BGS-RSCP load on a three-year rolling basis, whereby each year one-third of the load is procured for a three-year period.
|
|
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|
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|
|
||||
|
|
|
Auction Year |
|
|
|
|||||||||||||
|
|
|
2023 |
|
|
2024 |
|
|
2025 |
|
|
2026 |
|
|
|
||||
|
36-Month Terms Ending |
|
|
|
|
|
|
|
|
(A) |
|
||||||||
|
Load (MW) |
|
|
|
|
|
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|
|
|
|
|
|
|
||||
|
$ per MWh |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
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|
|
||||
|
|
|
|
|
|
|
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|
||||
PSE&G has a full-requirements contract with PSEG Power to meet the gas supply requirements of PSE&G’s gas customers. PSEG Power has entered into hedges for a portion of these anticipated BGSS obligations, as permitted by the BPU. The BPU permits PSE&G to recover the cost of gas hedging up to
Pursuant to a process established by the BPU, New Jersey EDCs, including PSE&G, were required to purchase ZECs from eligible nuclear plants selected by the BPU. In April 2021, PSEG Power’s Salem 1, Salem 2 and Hope Creek nuclear plants were awarded ZECs for the three-year eligibility period from June 2022 through May 2025. PSE&G purchased the ZECs on a monthly basis with payment to be made annually following completion of each energy year. The ZEC program ended effective June 1, 2025, and the final ZEC payment from PSE&G to PSEG Power settled in August 2025.
FERC Matters
FERC has completed a non-public investigation of the Roseland-Pleasant Valley (RPV) transmission project. In December 2024, FERC approved an agreement between PSE&G and FERC Enforcement Staff resolving its investigation. The agreement included a $
BPU Audit of PSE&G
In 2020, the BPU ordered the commencement of a comprehensive affiliate and management audit of PSE&G. It has been more than ten years since the BPU last conducted a management and affiliate audit of this kind of PSE&G, which is initiated periodically as required by New Jersey statutes/regulations. Phase 1 of the audit reviews affiliate relations and cost allocation between PSE&G and its affiliates, including an analysis of the relationship between PSE&G and PSEG Energy Resources & Trade, LLC, a wholly
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
owned subsidiary of PSEG Power over the past ten years, and between PSE&G and PSEG LI. Phase 2 is a comprehensive management audit, which addresses, among other things, executive management, corporate governance, system operations, human resources, cyber security, compliance with customer protection requirements and customer safety. The audit officially began in late May 2021. The BPU Audit Staff submitted the final audit report to the BPU in June 2023. The BPU is currently considering public comments on the audit report and has not yet determined which audit recommendations it will require PSE&G to implement. It is not possible at this time to predict the outcome of this matter.
Litigation
Sewaren 7 Construction
In June 2018, a complaint was filed in federal court in Newark, New Jersey against PSEG Fossil LLC, which at the time was a wholly owned subsidiary of PSEG Power, regarding an ongoing dispute with Durr Mechanical Construction, Inc. (Durr), a contractor on the Sewaren 7 project. Among other things, Durr sought damages of $
Sherman Act Antitrust Matter
Other Litigation and Legal Proceedings
PSEG and its subsidiaries are party to various lawsuits in the ordinary course of business. In view of the inherent difficulty in predicting the outcome of such matters, PSEG and PSE&G generally cannot predict the eventual outcome of the pending matters, the timing of the ultimate resolution of these matters, or the eventual loss, fines or penalties related to each pending matter.
In accordance with applicable accounting guidance, a liability is accrued when those matters present loss contingencies that are both probable and reasonably estimable. In such cases, there may be an exposure to loss in excess of any amounts accrued. PSEG will continue to monitor the matter for further developments that could affect the amount of the accrued liability that has been previously established.
Based on current knowledge, management does not believe that loss contingencies arising from pending matters, other than the matters described herein, could have a material adverse effect on PSEG’s or PSE&G’s consolidated financial position or liquidity. However, in light of the inherent uncertainties involved in these matters, some of which are beyond PSEG’s control, and the large or indeterminate damages sought in some of these matters, an adverse outcome in one or more of these matters could be material to PSEG’s or PSE&G’s results of operations or liquidity for any particular reporting period.
Nuclear Insurance Coverages and Assessments
PSEG Power is a member of the joint underwriting association, American Nuclear Insurers (ANI), which provides nuclear liability insurance coverage at the Salem and Hope Creek site and the Peach Bottom site. The ANI policies are designed to satisfy the financial protection requirements outlined in the Price-Anderson Act, which sets the limit of liability for claims that could arise from an incident involving any licensed nuclear facility in the United States. The limit of liability per incident per site is composed of primary and excess layers. As of December 31, 2025, nuclear sites were required to purchase $
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In the event a nuclear site, which is part of the industry self-insurance pool, has a claim that exceeds the primary layer, each licensee would be assessed a prorated share of the excess layer. The excess layer limit is $
PSEG Power is also a member of an industry mutual insurance company, Nuclear Electric Insurance Limited (NEIL), which provides the property, decontamination and decommissioning liability insurance at the Salem and Hope Creek site and the Peach Bottom site. NEIL also provides replacement power coverage through its accidental outage policy. NEIL policies may make retrospective premium assessments in the case of adverse loss experience. The current maximum aggregate annual retrospective premium obligation for PSEG Power is approximately $
The ANI and NEIL policies all include coverage for claims arising out of acts of terrorism. However, NEIL policies are subject to an industry aggregate limit of $
Note 13. Debt and Credit Facilities
Long-Term Debt
|
|
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|
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|
||
|
|
|
|
|
|
As of December 31, |
|
|
|||||
|
|
|
|
Maturity |
|
2025 |
|
|
2024 |
|
|
||
|
|
|
|
|
|
Millions |
|
|
|||||
|
PSEG |
|
|
|
|
|
|
|
|
|
|||
|
Senior Notes: |
|
|
|
|
|
|
|
|
|
|||
|
|
2025 |
|
$ |
|
|
$ |
|
|
||||
|
|
2027 |
|
|
|
|
|
|
|
||||
|
|
2028 |
|
|
|
|
|
|
|
||||
|
|
|
2029 |
|
|
|
|
|
|
|
|||
|
|
|
2030 |
|
|
|
|
|
|
|
|||
|
|
2030 |
|
|
|
|
|
|
|
||||
|
|
|
2031 |
|
|
|
|
|
|
|
|||
|
|
2031 |
|
|
|
|
|
|
|
||||
|
|
2033 |
|
|
|
|
|
|
|
||||
|
|
|
2034 |
|
|
|
|
|
|
|
|||
|
|
|
2035 |
|
|
|
|
|
|
|
|||
|
Total Senior Notes |
|
|
|
|
|
|
|
|
|
|||
|
Principal Amount Outstanding |
|
|
|
|
|
|
|
|
|
|||
|
Amounts Due Within One Year |
|
|
|
|
|
|
|
( |
) |
|
||
|
Net Unamortized Discount and Debt Issuance Costs |
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
Total Long-Term Debt of PSEG |
|
|
|
$ |
|
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||
128
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
As of December 31, |
|
|
|||||
|
|
Maturity |
|
2025 |
|
|
2024 |
|
|
||
|
|
|
|
Millions |
|
|
|||||
|
PSE&G |
|
|
|
|
|
|
|
|
||
|
First and Refunding Mortgage Bonds (A): |
|
|
|
|
|
|
|
|
||
|
2037 |
|
$ |
|
|
$ |
|
|
|||
|
2037 |
|
|
|
|
|
|
|
|||
|
Total First and Refunding Mortgage Bonds |
|
|
|
|
|
|
|
|
||
|
Medium-Term Notes (A): |
|
|
|
|
|
|
|
|
||
|
2025 |
|
|
|
|
|
|
|
|||
|
2026 |
|
|
|
|
|
|
|
|||
|
2026 |
|
|
|
|
|
|
|
|||
|
2027 |
|
|
|
|
|
|
|
|||
|
2028 |
|
|
|
|
|
|
|
|||
|
2028 |
|
|
|
|
|
|
|
|||
|
2029 |
|
|
|
|
|
|
|
|||
|
2030 |
|
|
|
|
|
|
|
|||
|
2031 |
|
|
|
|
|
|
|
|||
|
2032 |
|
|
|
|
|
|
|
|||
|
2032 |
|
|
|
|
|
|
|
|||
|
2033 |
|
|
|
|
|
|
|
|||
|
2033 |
|
|
|
|
|
|
|
|||
|
2034 |
|
|
|
|
|
|
|
|||
|
2034 |
|
|
|
|
|
|
|
|||
|
2035 |
|
|
|
|
|
|
|
|||
|
2035 |
|
|
|
|
|
|
|
|||
|
2035 |
|
|
|
|
|
|
|
|||
|
2036 |
|
|
|
|
|
|
|
|||
|
2037 |
|
|
|
|
|
|
|
|||
|
2039 |
|
|
|
|
|
|
|
|||
|
2040 |
|
|
|
|
|
|
|
|||
|
2042 |
|
|
|
|
|
|
|
|||
|
2042 |
|
|
|
|
|
|
|
|||
|
2043 |
|
|
|
|
|
|
|
|||
|
2044 |
|
|
|
|
|
|
|
|||
|
2045 |
|
|
|
|
|
|
|
|||
|
2045 |
|
|
|
|
|
|
|
|||
|
2046 |
|
|
|
|
|
|
|
|||
|
2047 |
|
|
|
|
|
|
|
|||
|
2048 |
|
|
|
|
|
|
|
|||
|
2049 |
|
|
|
|
|
|
|
|||
|
2049 |
|
|
|
|
|
|
|
|||
|
2050 |
|
|
|
|
|
|
|
|||
|
2050 |
|
|
|
|
|
|
|
|||
|
2050 |
|
|
|
|
|
|
|
|||
|
2051 |
|
|
|
|
|
|
|
|||
|
2053 |
|
|
|
|
|
|
|
|||
|
2053 |
|
|
|
|
|
|
|
|||
|
2054 |
|
|
|
|
|
|
|
|||
|
2054 |
|
|
|
|
|
|
|
|||
|
2055 |
|
|
|
|
|
|
|
|||
|
Total MTNs |
|
|
|
|
|
|
|
|
||
|
Principal Amount Outstanding |
|
|
|
|
|
|
|
|
||
|
Amounts Due Within One Year |
|
|
|
( |
) |
|
|
( |
) |
|
|
Net Unamortized Discount and Selling Expense |
|
|
|
( |
) |
|
|
( |
) |
|
|
Total Long-Term Debt of PSE&G |
|
|
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
|
|
|
||
129
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
As of December 31, |
|
|
|||||
|
|
Maturity |
|
2025 |
|
|
2024 |
|
|
||
|
|
|
|
Millions |
|
|
|||||
|
PSEG Power |
|
|
|
|
|
|
|
|
||
|
Term Loan: |
|
|
|
|
|
|
|
|
||
|
Variable Rate |
2025 |
|
$ |
|
|
$ |
|
|
||
|
Total Term Loan |
|
|
|
|
|
|
|
|
||
|
Senior Notes: |
|
|
|
|
|
|
|
|
||
|
2030 |
|
|
|
|
|
|
|
|||
|
2035 |
|
|
|
|
|
|
|
|||
|
Total Senior Notes |
|
|
|
|
|
|
|
|
||
|
Principal Amount Outstanding |
|
|
|
|
|
|
|
|
||
|
Amounts Due Within One Year |
|
|
|
|
|
|
( |
) |
|
|
|
Net Unamortized Discount and Debt Issuance Costs |
|
|
|
( |
) |
|
|
|
|
|
|
Total Long-Term Debt of PSEG Power |
|
|
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
|
|
|
||
Long-Term Debt Maturities
The aggregate principal amounts of maturities for each of the five years following December 31, 2025 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Year |
|
PSEG |
|
|
PSE&G |
|
|
PSEG Power |
|
|
Total |
|
|
||||
|
|
|
Millions |
|
|
|||||||||||||
|
2026 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
|
2027 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
2028 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
2029 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
2030 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Thereafter |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Long-Term Debt Financing Transactions
During 2025, the following long-term debt transactions occurred:
PSEG
PSE&G
PSEG Power
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Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PSE&G
In January 2026, PSE&G issued $
Short-Term Liquidity
PSEG meets its short-term liquidity requirements, as well as those of PSEG Power, primarily through the issuance of commercial paper and, from time to time, short-term loans. PSE&G maintains its own separate commercial paper program to meet its short-term liquidity requirements. Each commercial paper program is fully back-stopped by its own separate credit facility.
The commitments under the $
As of December 31, 2025, no single institution represented more than
As of December 31, 2025, PSEG’s liquidity position, including credit facilities and access to external financing, was expected to be sufficient to meet its projected stressed requirements over a 12-month planning horizon.
Each of the credit facilities is restricted as to availability and use to the specific companies as listed in the following table; however, if necessary, the PSEG facilities can also be used to support its subsidiaries’ liquidity needs.
The total committed credit facilities and available liquidity as of December 31, 2025 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
As of December 31, 2025 |
|
|
|
||||||||||||
|
Company/Facility |
|
Total |
|
|
Usage (B) |
|
|
Available |
|
|
Expiration |
|
Primary Purpose |
|
|||
|
|
|
Millions |
|
|
|
|
|
|
|||||||||
|
PSEG |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Revolving Credit Facility (A) |
|
$ |
|
|
$ |
|
|
$ |
|
|
|
Commercial Paper Support/Funding/Letters of Credit |
|
||||
|
Total PSEG |
|
$ |
|
|
$ |
|
|
$ |
|
|
|
|
|
|
|||
|
PSE&G |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Revolving Credit Facility |
|
$ |
|
|
$ |
|
|
$ |
|
|
|
Commercial Paper Support/Funding/Letters of Credit |
|
||||
|
Total PSE&G |
|
$ |
|
|
$ |
|
|
$ |
|
|
|
|
|
|
|||
|
PSEG Power |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Revolving Credit Facility (A) |
|
$ |
|
|
$ |
|
|
$ |
|
|
|
Funding/Letters of Credit |
|
||||
|
Letter of Credit Facility |
|
|
|
|
|
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|
|
Letters of Credit |
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||||
|
Total PSEG Power |
|
$ |
|
|
$ |
|
|
$ |
|
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|
|||
|
Total (C) |
|
$ |
|
|
$ |
|
|
$ |
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|||
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|
|||
131
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PSEG Power has uncommitted credit facilities totaling $
PSE&G has an uncommitted credit facility totaling $
Debt Covenants
PSEG Power’s credit agreements and debt instruments contain covenants restricting the ability of PSEG Power from consummating certain mergers and consolidations, and contain limitations on the incurrence of certain subsidiary debt and the incurrence of liens. PSEG Power’s bank credit agreements contain limitations on sales of assets and PSEG Power’s debt instruments contain limitations on sale and leaseback transactions.
Short-Term Loans
In December 2025, PSEG Power amended its existing $
In February 2026, PSEG entered into a 364-day variable rate term loan agreement for $
Fair Value of Debt
The estimated fair values, carrying amounts and methods used to determine the fair values of long-term debt as of December 31, 2025 and 2024 are included in the following table and accompanying notes as of December 31, 2025 and 2024. See Note 16. Fair Value Measurements for more information on fair value guidance and the hierarchy that prioritizes the inputs to fair value measurements into three levels.
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||||
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|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
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||||||||||
|
|
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Carrying |
|
|
Fair |
|
|
Carrying |
|
|
Fair |
|
|
||||
|
|
|
Millions |
|
|
|||||||||||||
|
Long-Term Debt: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
PSEG (A) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
|
PSE&G (A) |
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||||
|
PSEG Power (A)(B) |
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|
||||
|
Total Long-Term Debt |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
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|
||||
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132
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 14. Schedule of Consolidated Capital Stock
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||||
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As of December 31, |
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Outstanding Shares |
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Book Value |
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2025 |
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2024 |
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2025 |
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2024 |
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||||
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Millions |
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|||||||||||||
|
PSEG Common Stock (no par value) (A) |
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||||
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Authorized |
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$ |
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$ |
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||||
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|
||||
As of December 31, 2025, PSE&G had an aggregate of
Note 15. Financial Risk Management Activities
Derivative accounting guidance requires that a derivative instrument be recognized as either an asset or a liability at fair value, with changes in fair value of the derivative recognized in earnings each period. Other accounting treatments are available through special election and designation provided that the derivative instrument meets specific, restrictive criteria, both at the time of designation and on an ongoing basis. These alternative permissible treatments include normal purchases and normal sales (NPNS), cash flow hedge and fair value hedge accounting. PSEG uses interest rate swaps and other derivatives, which are designated and qualifying as cash flow or fair value hedges. PSEG Power enters into additional contracts that are derivatives, but are not designated as either cash flow hedges or fair value hedges. These transactions are economic hedges and are recorded at fair market value with changes recognized in earnings.
Commodity Prices
Within PSEG and its affiliate companies, PSEG Power has the most exposure to commodity price risk. PSEG Power is exposed to commodity price risk primarily relating to changes in the market price of electricity, natural gas and other commodities. Fluctuations in market prices result from changes in supply and demand, fuel costs, market conditions, weather, state and federal regulatory policies, environmental policies, transmission availability and other factors. PSEG Power uses a variety of derivative and non-derivative instruments, such as financial options, futures and swaps to manage the exposure to fluctuations in commodity prices and optimize the value of PSEG Power’s expected generation. PSEG Power also uses derivatives to hedge a portion of its anticipated BGSS obligations with PSE&G. For additional information see Note 12. Commitments and Contingent Liabilities.
Interest Rates
PSEG, PSE&G and PSEG Power are subject to the risk of fluctuating interest rates in the normal course of business. Exposure to this risk is managed by targeting a balanced debt maturity profile which limits refinancing in any given period or interest rate environment. PSEG and PSEG Power may use a mix of fixed and floating rate debt and interest rate hedges.
Cash Flow Hedges
PSEG uses interest rate hedges which are designated and effective as cash flow hedges, to manage its exposure to the variability of cash flows, primarily related to variable-rate debt instruments or anticipated future long-term debt issuances.
As of December 31, 2025, PSEG had interest rate hedges outstanding through December 2026 which were executed to convert to fixed, a portion of PSEG Power’s $
As of December 31, 2025, PSEG also had interest rate hedges outstanding to fix the interest rate for anticipated 2026 debt issuances. The fair value of these hedges was $
133
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Accumulated Other Comprehensive Income (Loss) (after tax) related to outstanding and terminated interest rate hedges designated as cash flow hedges was $
Fair Values of Derivative Instruments
The following are the fair values of derivative instruments on the Consolidated Balance Sheets. The following tables also include disclosures for offsetting derivative assets and liabilities which are subject to a master netting or similar agreement. In general, the terms of the agreements provide that in the event of an early termination the counterparties have the right to offset amounts owed or owing under that and any other agreement with the same counterparty. Accordingly, and in accordance with PSEG’s accounting policy, these positions are offset on the Consolidated Balance Sheets of PSEG. For additional information see Note 16. Fair Value Measurements.
Substantially all derivative instruments are contracts subject to master netting agreements. Contracts not subject to master netting or similar agreements are immaterial and did not have any collateral posted or received as of December 31, 2025 and 2024. The following tabular disclosure does not include the offsetting of trade receivables and payables.
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|||||
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As of December 31, 2025 |
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|||||||||||||||||
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|
|
PSEG |
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|
PSEG Power |
|
|
Consolidated |
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|
|||||||||||
|
|
|
Cash Flow |
|
|
Not Designated |
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|
|||||
|
Balance Sheet Location |
|
Interest |
|
|
Energy- |
|
|
Netting |
|
|
Total |
|
|
Total |
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|
|||||
|
|
|
Millions |
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|
|||||||||||||||||
|
Derivative Contracts |
|
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|
|
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|
|
|
|
|
|
|
|
|
|
|
|||||
|
Current Assets |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
||||
|
Noncurrent Assets |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
||||
|
Total Mark-to-Market Derivative Assets |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
||||
|
Derivative Contracts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Current Liabilities |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
||
|
Noncurrent Liabilities |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
||
|
Total Mark-to-Market Derivative (Liabilities) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
||
|
Total Net Mark-to-Market Derivative Assets (Liabilities) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
||
|
|
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|
|||||
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|
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|
|||||
|
|
|
As of December 31, 2024 |
|
|
|||||||||||||||||
|
|
|
PSEG |
|
|
PSEG Power |
|
|
Consolidated |
|
|
|||||||||||
|
|
|
Cash Flow |
|
|
Not |
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|
|
|
|
|
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|
|||||
|
Balance Sheet Location |
|
Interest |
|
|
Energy- |
|
|
Netting |
|
|
Total |
|
|
Total |
|
|
|||||
|
|
|
Millions |
|
|
|||||||||||||||||
|
Derivative Contracts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Current Assets |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
||||
|
Noncurrent Assets |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
||||
|
Total Mark-to-Market Derivative Assets |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
||||
|
Derivative Contracts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Current Liabilities |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
||
|
Noncurrent Liabilities |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
||
|
Total Mark-to-Market Derivative (Liabilities) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
||
|
Total Net Mark-to-Market Derivative Assets (Liabilities) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
134
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Certain of PSEG Power’s derivative instruments contain provisions that require PSEG Power to post collateral. This collateral may be posted in the form of cash or credit support with thresholds contingent upon PSEG Power’s credit rating from each of the major credit rating agencies. The collateral and credit support requirements vary by contract and by counterparty. These credit risk-related contingent features stipulate that if PSEG Power were to be downgraded to a below investment grade rating by S&P or Moody’s, it would be required to provide additional collateral. A below investment grade credit rating for PSEG Power would represent a two level downgrade from its current Moody’s and S&P ratings. This incremental collateral requirement can offset collateral requirements related to other derivative instruments that are assets with the same counterparty, where the contractual right of offset exists under applicable master agreements. PSEG Power may also enter into commodity transactions on the New York Mercantile Exchange (NYMEX), Nodal Exchange (Nodal) and Intercontinental Exchange (ICE). The NYMEX, Nodal and ICE clearing houses act as counterparties to each trade. Transactions on the NYMEX, Nodal and ICE must adhere to comprehensive collateral and margin requirements.
The aggregate fair value of all derivative instruments with credit risk-related contingent features in a liability position that are not fully collateralized (excluding transactions on the NYMEX, Nodal and ICE that are fully collateralized) was $
The following shows the effect on the Consolidated Statements of Operations and on AOCL of derivative instruments designated as cash flow hedges for the years ended December 31, 2025, 2024 and 2023.
|
|
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|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
Amount of Pre-Tax Gain (Loss) Recognized in AOCL on Derivatives |
|
|
Location of Pre-Tax Gain (Loss) Reclassified from AOCL into Income |
|
Amount of Pre-Tax Gain (Loss) Reclassified from AOCL into Income |
|
|
||||||||||||||||||
|
Derivatives in Cash Flow Hedging Relationships |
|
Years Ended December 31, |
|
|
|
|
Years Ended December 31, |
|
|
||||||||||||||||||
|
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
||||||
|
|
|
Millions |
|
|
|
|
Millions |
|
|
||||||||||||||||||
|
Interest Rate Derivatives |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
Interest Expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
Total |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
The effect of interest rate cash flow hedges is recorded in Interest Expense in PSEG’s Consolidated Statement of Operations. The amount of gain on interest rate hedges reclassified from AOCL into income was $
135
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following reconciles the Accumulated Other Comprehensive Income (Loss) for derivative activity included in the AOCL of PSEG on a pre-tax and after-tax basis.
|
|
|
|
|
|
|
|
|
||
|
Accumulated Other Comprehensive Income (Loss) |
|
Pre-Tax |
|
|
After-Tax |
|
|
||
|
|
|
Millions |
|
|
|||||
|
Balance as of December 31, 2023 |
|
$ |
|
|
$ |
|
|
||
|
Gain Recognized in AOCL |
|
|
|
|
|
|
|
||
|
Less: Gain Reclassified into Income |
|
|
( |
) |
|
|
( |
) |
|
|
Balance as of December 31, 2024 |
|
$ |
|
|
$ |
|
|
||
|
Loss Recognized in AOCL |
|
|
( |
) |
|
|
( |
) |
|
|
Less: Gain Reclassified into Income |
|
|
( |
) |
|
|
( |
) |
|
|
Balance as of December 31, 2025 |
|
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
|
|
||
The following shows the effect on the Consolidated Statements of Operations of derivative instruments not designated as hedging instruments or as NPNS for the years ended December 31, 2025, 2024 and 2023. PSEG Power’s derivative contracts reflected in this table primarily includes contracts to hedge the purchase and sale of electricity and natural gas.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Derivatives Not Designated as Hedges |
|
Location of Pre-Tax Gain (Loss) Recognized in Income on Derivatives |
|
Pre-Tax Gain (Loss) Recognized in Income on Derivatives |
|
|
|||||||||
|
|
|
|
|
Years Ended December 31, |
|
|
|||||||||
|
|
|
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
|||
|
|
|
|
|
Millions |
|
|
|||||||||
|
Energy-Related Contracts |
|
Operating Revenues |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
||
|
Energy-Related Contracts |
|
Energy Costs |
|
|
( |
) |
|
|
|
|
|
|
|
||
|
Total |
|
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
The following table summarizes the net notional volume purchases/(sales) of open derivative transactions by commodity as of December 31, 2025 and 2024.
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
As of December 31, |
|
|
|||||
|
Type |
|
Notional |
|
2025 |
|
|
2024 |
|
|
||
|
|
|
|
|
Millions |
|
|
|||||
|
Natural Gas |
|
Dekatherm |
|
|
|
|
|
|
|
||
|
Electricity |
|
MWh |
|
|
( |
) |
|
|
( |
) |
|
|
Financial Transmission Rights (FTRs) |
|
MWh |
|
|
|
|
|
|
|
||
|
Interest Rate Derivatives |
|
U.S. Dollars |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||
Commodity Credit Risk
Credit risk relates to the risk of loss that PSEG would incur as a result of non-performance by counterparties pursuant to the terms of their contractual obligations for the purchase and/or sale of energy, nuclear fuel and other related products. PSEG has established credit policies that it believes significantly minimize credit risk. These policies include an evaluation of potential counterparties’ financial condition (including credit rating), collateral requirements under certain circumstances and the use of standardized agreements, which allow for the netting of positive and negative exposures associated with a single counterparty. In the event of non-performance or non-payment by a major counterparty, there may be a material adverse impact on PSEG’s financial condition, results of operations or net cash flows.
As of December 31, 2025, more than
PSE&G’s supplier master agreements are approved by the BPU and govern the terms of its electric supply procurement contracts. These agreements define a supplier’s performance assurance requirements and allow a supplier to meet its credit requirements with
136
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
a certain amount of unsecured credit. The amount of unsecured credit is determined based on the supplier’s credit ratings from the major credit rating agencies and the supplier’s tangible net worth. The credit position is based on the initial market price, which is the forward price of energy on the day the procurement transaction is executed, compared to the forward price curve for energy on the valuation day. To the extent that the forward price curve for energy exceeds the initial market price, the supplier is required to post a parental guarantee or other security instrument such as a letter of credit or cash, as collateral to the extent the credit exposure is greater than the supplier’s unsecured credit limit. As of December 31, 2025, PSE&G held parental guarantees, letters of credit and cash as security. PSE&G’s BGS suppliers’ credit exposure is calculated each business day. As of December 31, 2025, PSE&G had $
PSE&G is permitted to recover its costs of procuring energy through the BPU-approved BGS tariffs. PSE&G’s counterparty credit risk is mitigated by its ability to recover realized energy costs through customer rates.
Note 16. Fair Value Measurements
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Accounting guidance for fair value measurement emphasizes that fair value is a market-based measurement, not an entity-specific measurement, and establishes a fair value hierarchy that distinguishes between assumptions based on market data obtained from independent sources and those based on an entity’s own assumptions. The hierarchy prioritizes the inputs to fair value measurement into three levels:
Level 1—measurements utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that PSEG and PSE&G have the ability to access. These consist primarily of listed equity securities and money market mutual funds, as well as natural gas and electric futures contracts executed on an exchange.
Level 2—measurements include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and other observable inputs such as interest rates and yield curves that are observable at commonly quoted intervals. These consist primarily of non-exchange traded derivatives such as forward contracts, all option contracts and most fixed income securities.
Level 3—measurements use unobservable inputs for assets or liabilities, based on the best information available and might include an entity’s own data and assumptions. In some valuations, the inputs used may fall into different levels of the hierarchy. In these cases, the financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. These consist primarily of certain capacity contracts that deliver beyond the PJM capacity auction periods.
Certain derivative transactions may transfer from Level 2 to Level 3 if inputs become unobservable and internal modeling techniques are employed to determine fair value. Conversely, measurements may transfer from Level 3 to Level 2 if the inputs become observable. There were no transfers in 2025 and 2024 to or from Level 3.
137
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following tables present information about PSEG’s and PSE&G’s respective assets and (liabilities) measured at fair value on a recurring basis as of December 31, 2025 and December 31, 2024, including the fair value measurements and the levels of inputs used in determining those fair values. Amounts shown for PSEG include the amounts shown for PSE&G.
|
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|
|
|
|
|
|
|||||
|
|
|
Recurring Fair Value Measurements as of December 31, 2025 |
|
|
|||||||||||||||||
|
Description |
|
Total |
|
|
Netting (E) |
|
|
Quoted Market Prices for Identical Assets |
|
|
Significant Other Observable Inputs (Level 2) |
|
|
Significant Unobservable Inputs |
|
|
|||||
|
|
|
Millions |
|
|
|||||||||||||||||
|
PSEG |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Cash Equivalents (A) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
Derivative Contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Energy-Related Contracts (B) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
|
Interest Rate Derivatives (C) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
NDT Fund (D) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Equity Securities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
Debt Securities—U.S. Treasury |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
Debt Securities—Govt Other |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
Debt Securities—Corporate |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
Rabbi Trust (D) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Equity Securities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
Debt Securities—U.S. Treasury |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
Debt Securities—Govt Other |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
Debt Securities—Corporate |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Derivative Contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Energy-Related Contracts (B) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
||
|
PSE&G |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Cash Equivalents (A) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
Rabbi Trust (D) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Equity Securities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
Debt Securities—U.S. Treasury |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
Debt Securities—Govt Other |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
Debt Securities—Corporate |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
138
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
Recurring Fair Value Measurements as of December 31, 2024 |
|
|
|||||||||||||||||
|
Description |
|
Total |
|
|
Netting (E) |
|
|
Quoted Market Prices for Identical Assets |
|
|
Significant Other Observable Inputs (Level 2) |
|
|
Significant Unobservable Inputs |
|
|
|||||
|
|
|
Millions |
|
|
|||||||||||||||||
|
PSEG |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Cash Equivalents (A) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
Derivative Contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Energy-Related Contracts (B) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
|
Interest Rate Derivatives (C) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
NDT Fund (D) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Equity Securities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
Debt Securities—U.S. Treasury |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
Debt Securities—Govt Other |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
Debt Securities—Corporate |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
Rabbi Trust (D) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Equity Securities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
Debt Securities—U.S. Treasury |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
Debt Securities—Govt Other |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
Debt Securities—Corporate |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Derivative Contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Energy-Related Contracts (B) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
PSE&G |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Cash Equivalents (A) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
Rabbi Trust (D) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Equity Securities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
Debt Securities—U.S. Treasury |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
Debt Securities—Govt Other |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
Debt Securities—Corporate |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Level 2—Fair values for energy-related contracts are obtained primarily using a market-based approach. Most derivative contracts (forward purchase or sale contracts, swaps, and all options) are valued using settled prices from similar assets and liabilities from an exchange, such as NYMEX, ICE and Nodal Exchange, or auction prices. Prices used in the valuation process are also corroborated independently by management to determine that values are based on actual transaction data or, in the absence of transactions, bid and offers for the day. Examples may include certain electricity, capacity and natural gas contracts based on market prices, basis adjustments and other premiums where adjustments and premiums are not considered significant to the overall inputs.
Level 3—Unobservable inputs are used for the valuation of certain contracts. See “Additional Information Regarding Level 3 Measurements” for more information on the utilization of unobservable inputs.
139
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Level 1—Investments in marketable equity securities within the NDT Fund are primarily investments in common stocks across a broad range of industries and sectors. Most equity securities are priced utilizing the principal market close price or, in some cases, midpoint, bid or ask price. Certain other securities classified as equity in the NDT and Rabbi Trust Funds consist primarily of investments in money market funds which seek a high level of current income as is consistent with the preservation of capital and the maintenance of liquidity. To pursue its goals, the funds normally invest in diversified portfolios of high quality, short-term, dollar-denominated debt securities and government securities. The funds’ net asset value is priced and published daily. The Rabbi Trust’s Russell 3000 index fund is valued based on quoted prices in an active market and can be redeemed daily without restriction.
Level 2—NDT and Rabbi Trust fixed income securities include primarily investment grade corporate bonds, collateralized mortgage obligations, asset-backed securities and certain government and U.S. Treasury obligations or Federal Agency asset-backed securities and municipal bonds with a wide range of maturities. Since many fixed income securities do not trade on a daily basis, they are priced using an evaluated pricing methodology that varies by asset class and reflects observable market information such as the most recent exchange price or quoted bid for similar securities. Market-based standard inputs typically include benchmark yields, reported trades, broker/dealer quotes and issuer spreads. Certain short-term investments are valued using observable market prices or market parameters such as time-to-maturity, coupon rate, quality rating and current yield.
Additional Information Regarding Level 3 Measurements
For valuations that include both observable and unobservable inputs, if the unobservable input is determined to be significant to the overall inputs, the entire valuation is categorized in Level 3. This includes derivatives valued using indicative price quotations for contracts with tenors that extend into periods with no observable pricing. In instances where observable data is unavailable, consideration is given to the assumptions that market participants would use in valuing the asset or liability. This includes assumptions about market risks such as liquidity, volatility and contract duration. Such instruments are categorized in Level 3 because the model inputs generally are not observable. PSEG considers credit and non-performance risk in the valuation of derivative contracts categorized in Levels 2 and 3, including both historical and current market data, in its assessment of credit and non-performance risk by counterparty. The impacts of credit and non-performance risk were not material to the financial statements.
As of December 31, 2025, PSEG carried $
As of December 31, 2024, PSEG carried $
140
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 17. Stock Based Compensation
PSEG’s 2021 Long-Term Incentive Plan (2021 LTIP), approved by shareholders on April 20, 2021 and the Amended and Restated 2004 Long-Term Incentive Plan ((2004 LTIP) under which no new grants have been made effective April 20, 2021), are broad-based equity compensation programs that provide for grants of various long-term incentive compensation awards, such as stock options, stock appreciation rights, performance share units (PSUs), restricted stock, restricted stock units (RSUs), cash awards or any combination thereof. The types of long-term incentive awards that have been granted under the LTIP are non-qualified options to purchase shares of PSEG’s common stock, restricted stock unit awards and performance share unit awards. The type of equity award that is granted and the details of that award may vary from time to time and is subject to the approval of the Organization and Compensation Committee of PSEG’s Board of Directors (O&CC), the LTIP’s administrative committee.
The 2021 LTIP currently provides for the issuance of equity awards with respect to
In addition, on April 20, 2021 shareholders approved the PSEG 2021 Equity Compensation Plan for Outside Directors (2021 BOD Plan) and the PSEG 2007 Equity Compensation Plan for Outside Directors (2007 BOD Plan) was closed to new awards.
Under the 2021 BOD Plan, the only equity instrument which may be granted are RSUs and the Board member must defer the award until they have achieved their stock ownership requirement.
Stock Options
Under the 2021 LTIP, non-qualified options to acquire shares of PSEG common stock may be granted to officers and other key employees selected by the O&CC. No options have been granted since 2009.
RSUs
Under both the 2021 LTIP and 2004 LTIP (LTIPs), PSEG has granted RSU awards to officers and other key employees. These awards, which are bookkeeping entries only, are subject to risk of forfeiture until vested by continued employment. Until distributed, the units are credited with dividend equivalent units (DEUs) proportionate to the dividends paid on PSEG common stock. Distributions are made in shares of common stock. The RSU grants for 2025 and 2024 have a
PSUs
Under the LTIPs, PSEG has granted PSUs to officers and other key employees. These provide for distribution in shares of PSEG common stock based on achievement of certain goals over a performance period of
Stock-Based Compensation
PSEG recognizes compensation expense for RSUs over the vesting period based on the grant date fair value of the shares, which is equal to the closing market price of PSEG’s common stock on the date of the grant.
PSEG recognizes compensation expense for the total shareholder return (TSR) target for its PSU awards based on the grant date fair values of the award, which are determined using the Monte Carlo model.
|
|
|
|
|
|
|
|
Grant Date |
|
Risk-Free |
|
Volatility |
|
|
February 11, 2025 |
|
|
|
||
|
February 13, 2024 |
|
|
|
||
|
February 14, 2023 |
|
|
|
||
|
|
|
|
|
|
|
141
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The accrual of compensation cost is based on the probable achievement of the performance conditions, which result in a payout from
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
|||
|
|
|
Millions |
|
|
|||||||||
|
Compensation Cost included in O&M Expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
Income Tax Benefit Recognized in Consolidated Statements of Operations |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
For each of the years 2025, 2024 and 2023, PSEG also recorded excess tax benefits of $
PSEG recognizes compensation cost of awards issued over the shorter of the original vesting period or the period beginning on the date of grant and ending on the date an individual is eligible for retirement and the award vests.
RSUs
Changes in RSUs for the year ended December 31, 2025 are summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
Shares |
|
|
Weighted |
|
|
Weighted |
|
|
Aggregate |
|
|
||||
|
Non-vested as of January 1, 2025 |
|
|
|
|
$ |
|
|
|
|
|
|
|
|
||||
|
Granted |
|
|
|
|
$ |
|
|
|
|
|
|
|
|
||||
|
Vested |
|
|
|
|
$ |
|
|
|
|
|
|
|
|
||||
|
Canceled/Forfeited |
|
|
|
|
$ |
|
|
|
|
|
|
|
|
||||
|
Non-vested as of December 31, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
The weighted average grant date fair value per share for RSUs during the years ended December 31, 2025, 2024 and 2023 was $
The total intrinsic value of RSUs distributed during the years ended December 31, 2025, 2024 and 2023 was $
As of December 31, 2025, there was approximately $
142
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PSUs
Changes in PSUs for the year ended December 31, 2025 are summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
Shares |
|
|
Weighted |
|
|
Weighted |
|
|
Aggregate |
|
|
||||
|
Non-vested as of January 1, 2025 |
|
|
|
|
$ |
|
|
|
|
|
|
|
|
||||
|
Granted |
|
|
|
|
$ |
|
|
|
|
|
|
|
|
||||
|
Vested |
|
|
|
|
$ |
|
|
|
|
|
|
|
|
||||
|
Canceled/Forfeited |
|
|
|
|
$ |
|
|
|
|
|
|
|
|
||||
|
Non-vested as of December 31, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
The weighted average grant date fair value per share for PSUs during the years ended December 31, 2025, 2024 and 2023 was $
The total intrinsic value of PSUs distributed during the years ended December 31, 2025, 2024 and 2023 was $
As of December 31, 2025, there was approximately $
Outside Directors
Under the closed 2007 BOD Plan and the new 2021 BOD Plan, annually, on the first business day of May, each non-employee member of the Board of Directors is awarded stock units based on the amount of annual compensation to be paid at the closing price of PSEG common stock on that date. DEUs are credited quarterly and distributions will occur as specified by their election in accordance with the provisions of the BOD Plan.
The fair value of these awards is recorded as compensation expense in the Consolidated Statements of Operations. Compensation expense for the plan was $
ESPP
PSEG maintains an ESPP for all eligible employees of PSEG and its subsidiaries. Under the ESPP, shares of PSEG common stock may be purchased at
During the years ended December 31, 2025, 2024 and 2023, employees purchased
143
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 18. Net Other Income (Deductions)
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
PSE&G |
|
|
PSEG Power & Other (A) |
|
|
Consolidated |
|
|
|||
|
|
|
Millions |
|
|
|||||||||
|
Year Ended December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|||
|
NDT Fund Interest and Dividends |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
AFUDC |
|
|
|
|
|
|
|
|
|
|
|||
|
Solar Loan Interest |
|
|
|
|
|
|
|
|
|
|
|||
|
Other Interest |
|
|
|
|
|
|
|
|
|
|
|||
|
Donations |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
Other |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
Total Net Other Income (Deductions) |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
Year Ended December 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|||
|
NDT Fund Interest and Dividends |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
AFUDC |
|
|
|
|
|
|
|
|
|
|
|||
|
Solar Loan Interest |
|
|
|
|
|
|
|
|
|
|
|||
|
Other Interest |
|
|
|
|
|
|
|
|
|
|
|||
|
Donations |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
Other |
|
|
|
|
|
( |
) |
|
|
|
|
||
|
Total Net Other Income (Deductions) |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
Year Ended December 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|||
|
NDT Fund Interest and Dividends |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
AFUDC |
|
|
|
|
|
|
|
|
|
|
|||
|
Solar Loan Interest |
|
|
|
|
|
|
|
|
|
|
|||
|
Other Interest |
|
|
|
|
|
|
|
|
|
|
|||
|
Donations |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
Other |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
Total Net Other Income (Deductions) |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
144
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 19. Income Taxes
The components of PSEG’s income tax provision are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
Years Ended December 31, |
|
|
|||||||||
|
PSEG |
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
|||
|
|
|
Millions |
|
|
|||||||||
|
Income Taxes: |
|
|
|
|
|
|
|
|
|
|
|||
|
Current Expense (Benefit): |
|
|
|
|
|
|
|
|
|
|
|||
|
Federal |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
||
|
State |
|
|
( |
) |
|
|
|
|
|
|
|
||
|
Total Current |
|
|
|
|
|
( |
) |
|
|
|
|
||
|
Deferred Expense (Benefit): |
|
|
|
|
|
|
|
|
|
|
|||
|
Federal |
|
|
( |
) |
|
|
|
|
|
|
|
||
|
State |
|
|
|
|
|
|
|
|
|
|
|||
|
Total Deferred |
|
|
|
|
|
|
|
|
|
|
|||
|
ITC |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
Total Income Tax Expense (Benefit) |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
A reconciliation of reported income tax expense for PSEG with the amount computed by multiplying pre-tax income by the statutory federal income tax rate of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
Years Ended December 31, |
|
|
||||||||||||||||||
|
PSEG |
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
||||||||||||
|
|
|
Millions |
|
% |
|
|
Millions |
|
% |
|
|
Millions |
|
% |
|
|
||||||
|
Pre-Tax Income |
|
$ |
|
|
|
|
$ |
|
|
|
|
$ |
|
|
|
|
||||||
|
U.S. Federal Statutory Tax Rate |
|
$ |
|
|
% |
|
$ |
|
|
% |
|
$ |
|
|
% |
|
||||||
|
|
|
|
|
% |
|
|
|
|
% |
|
|
|
|
% |
|
|||||||
|
Tax Credits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
PTCs |
|
|
|
|
|
|
|
( |
) |
|
( |
%) |
|
|
|
|
|
|
||||
|
Other Credits |
|
|
( |
) |
|
( |
%) |
|
|
( |
) |
|
( |
%) |
|
|
( |
) |
|
( |
%) |
|
|
Nontaxable or Nondeductible Items |
|
|
( |
) |
|
( |
%) |
|
|
|
|
% |
|
|
( |
) |
|
( |
%) |
|
||
|
Changes in Unrecognized Tax Benefits |
|
|
|
|
% |
|
|
|
|
% |
|
|
( |
) |
|
( |
%) |
|
||||
|
Effect of Utility Ratemaking |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
TAC |
|
|
( |
) |
|
( |
%) |
|
|
( |
) |
|
( |
%) |
|
|
( |
) |
|
( |
%) |
|
|
GPRC-CEF-EE |
|
|
( |
) |
|
( |
%) |
|
|
( |
) |
|
( |
%) |
|
|
( |
) |
|
( |
%) |
|
|
Other Flow-Through Accounting |
|
|
|
|
% |
|
|
( |
) |
|
( |
%) |
|
|
( |
) |
|
( |
%) |
|
||
|
Other Adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
NDT Fund |
|
|
|
|
% |
|
|
|
|
% |
|
|
|
|
% |
|
||||||
|
Leasing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
( |
%) |
|
||||
|
Other |
|
|
|
|
|
|
|
( |
) |
|
( |
%) |
|
|
( |
) |
|
( |
%) |
|
||
|
Effective Tax Rate |
|
$ |
|
|
% |
|
$ |
|
|
% |
|
$ |
|
|
% |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
(a)
145
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2025, 2024 and 2023, PSEG paid income taxes as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
Income Taxes Paid (Received) |
|
|
|||||||||
|
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
|||
|
PSEG |
|
Millions |
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Federal |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
State |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
The following is an analysis of deferred income taxes for PSEG:
|
|
|
|
|
|
|
|
|
||
|
|
|
As of December 31, |
|
|
|||||
|
PSEG |
|
2025 |
|
|
2024 |
|
|
||
|
|
|
Millions |
|
|
|||||
|
Deferred Income Taxes |
|
|
|
|
|
|
|
||
|
Assets: |
|
|
|
|
|
|
|
||
|
Regulatory Liability Excess Deferred Tax |
|
$ |
|
|
$ |
|
|
||
|
OPEB |
|
|
|
|
|
|
|
||
|
Bad Debt |
|
|
|
|
|
|
|
||
|
Operating Leases |
|
|
|
|
|
|
|
||
|
Mark-to-Market |
|
|
|
|
|
|
|
||
|
Other |
|
|
|
|
|
|
|
||
|
Total Assets |
|
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
|
|
||
|
Liabilities: |
|
|
|
|
|
|
|
||
|
Plant-Related Items |
|
$ |
|
|
$ |
|
|
||
|
New Jersey Corporate Business Tax |
|
|
|
|
|
|
|
||
|
Leasing Activities |
|
|
|
|
|
|
|
||
|
AROs and NDT Fund |
|
|
|
|
|
|
|
||
|
Taxes Recoverable Through Future Rates (net) |
|
|
|
|
|
|
|
||
|
GPRC-CEF-EE |
|
|
|
|
|
|
|
||
|
Pension Costs |
|
|
|
|
|
|
|
||
|
Operating Leases |
|
|
|
|
|
|
|
||
|
Other |
|
|
|
|
|
|
|
||
|
Total Liabilities |
|
$ |
|
|
$ |
|
|
||
|
Summary of Accumulated Deferred Income Taxes: |
|
|
|
|
|
|
|
||
|
Net Deferred Income Tax Liabilities |
|
$ |
|
|
$ |
|
|
||
|
ITC |
|
|
|
|
|
|
|
||
|
Net Total Deferred Income Taxes and ITC |
|
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
|
|
||
The deferred tax effect of certain assets and liabilities is presented in the table above net of the deferred tax effect associated with the respective regulatory deferrals.
146
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The components of PSE&G’s income tax provision are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
Years Ended December 31, |
|
|
|||||||||
|
PSE&G |
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
|||
|
|
|
Millions |
|
|
|||||||||
|
Income Taxes: |
|
|
|
|
|
|
|
|
|
|
|||
|
Current Expense (Benefit): |
|
|
|
|
|
|
|
|
|
|
|||
|
Federal |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
||
|
State |
|
|
|
|
|
|
|
|
|
|
|||
|
Total Current |
|
|
|
|
|
( |
) |
|
|
|
|
||
|
Deferred Expense (Benefit): |
|
|
|
|
|
|
|
|
|
|
|||
|
Federal |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
State |
|
|
|
|
|
|
|
|
|
|
|||
|
Total Deferred |
|
|
|
|
|
|
|
|
|
|
|||
|
ITC Benefit |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
Total Income Tax Expense (Benefit) |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
A reconciliation of reported income tax expense for PSE&G with the amount computed by multiplying pre-tax income by the statutory federal income tax rate of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
Years Ended December 31, |
|
|
||||||||||||||||||
|
PSE&G |
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
||||||||||||
|
|
|
Millions |
|
% |
|
|
Millions |
|
% |
|
|
Millions |
|
% |
|
|
||||||
|
Pre-Tax Income |
|
$ |
|
|
|
|
$ |
|
|
|
|
$ |
|
|
|
|
||||||
|
U.S. Federal Statutory Tax Rate |
|
$ |
|
|
% |
|
$ |
|
|
% |
|
$ |
|
|
% |
|
||||||
|
|
|
|
|
% |
|
|
|
|
% |
|
|
|
|
% |
|
|||||||
|
Tax Credits |
|
|
( |
) |
|
( |
%) |
|
|
( |
) |
|
( |
%) |
|
|
( |
) |
|
( |
%) |
|
|
Nontaxable or Nondeductible Items |
|
|
|
|
% |
|
|
|
|
% |
|
|
|
|
% |
|
||||||
|
Changes in Unrecognized Tax Benefits |
|
|
|
|
% |
|
|
|
|
|
|
|
( |
) |
|
( |
%) |
|
||||
|
Effect of Utility Ratemaking |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
TAC |
|
|
( |
) |
|
( |
%) |
|
|
( |
) |
|
( |
%) |
|
|
( |
) |
|
( |
%) |
|
|
GPRC-CEF-EE |
|
|
( |
) |
|
( |
%) |
|
|
( |
) |
|
( |
%) |
|
|
( |
) |
|
( |
%) |
|
|
Other Flow-Through Accounting |
|
|
|
|
% |
|
|
( |
) |
|
( |
%) |
|
|
( |
) |
|
( |
%) |
|
||
|
Other Adjustments |
|
|
|
|
% |
|
|
( |
) |
|
( |
%) |
|
|
( |
) |
|
( |
%) |
|
||
|
Effective Tax Rate |
|
$ |
|
|
% |
|
$ |
|
|
% |
|
$ |
|
|
% |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
(a)
For the years ended December 31, 2025, 2024 and 2023, PSE&G paid federal income taxes of $
147
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following is an analysis of deferred income taxes for PSE&G:
|
|
|
|
|
|
|
|
|
||
|
|
|
As of December 31, |
|
|
|||||
|
PSE&G |
|
2025 |
|
|
2024 |
|
|
||
|
|
|
Millions |
|
|
|||||
|
Deferred Income Taxes |
|
|
|
|
|
|
|
||
|
Assets: |
|
|
|
|
|
|
|
||
|
Regulatory Liability Excess Deferred Tax |
|
$ |
|
|
$ |
|
|
||
|
OPEB |
|
|
|
|
|
|
|
||
|
Bad Debt |
|
|
|
|
|
|
|
||
|
Operating Leases |
|
|
|
|
|
|
|
||
|
Customer Advances |
|
|
|
|
|
|
|
||
|
Other |
|
|
|
|
|
|
|
||
|
Total Assets |
|
$ |
|
|
$ |
|
|
||
|
Liabilities: |
|
|
|
|
|
|
|
||
|
Plant-Related Items |
|
$ |
|
|
$ |
|
|
||
|
New Jersey Corporate Business Tax |
|
|
|
|
|
|
|
||
|
Pension Costs |
|
|
|
|
|
|
|
||
|
Taxes Recoverable Through Future Rates (net) |
|
|
|
|
|
|
|
||
|
GPRC-CEF-EE |
|
|
|
|
|
|
|
||
|
Conservation Costs |
|
|
|
|
|
|
|
||
|
Operating Leases |
|
|
|
|
|
|
|
||
|
Other |
|
|
|
|
|
|
|
||
|
Total Liabilities |
|
$ |
|
|
$ |
|
|
||
|
Summary of Accumulated Deferred Income Taxes: |
|
|
|
|
|
|
|
||
|
Net Deferred Income Tax Liabilities |
|
$ |
|
|
$ |
|
|
||
|
ITC |
|
|
|
|
|
|
|
||
|
Net Total Deferred Income Taxes and ITC |
|
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
|
|
||
The deferred tax effect of certain assets and liabilities is presented in the table above net of the deferred tax effect associated with the respective regulatory deferrals.
PSEG and PSE&G each provide deferred taxes at the enacted statutory tax rate for all temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities irrespective of the treatment for ratemaking purposes. Management believes that it is probable that the accumulated tax benefits that previously have been treated as a flow-through item to PSE&G customers will be recovered from or refunded to PSE&G’s customers in the future. See Note 5. Regulatory Assets and Liabilities.
The 2018 decrease in the federal tax rate resulted in PSE&G recording excess deferred income taxes. As of December 31, 2025, the remaining balance of excess deferred income taxes is all protected and was approximately $
In August 2022, the Inflation Reduction Act (IRA) was signed into law. The IRA enacted a 15% corporate alternative minimum tax (CAMT), which is based on adjusted financial statement income (AFSI), effective in 2023, and made certain changes to existing energy tax credit laws.
In 2025, PSEG determined that it is subject to CAMT as it is an applicable corporation in accordance with the statute. The impact of the CAMT for the twelve months ended December 31, 2025 was not material. PSEG had determined that it is not subject to the
148
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CAMT for 2024 and 2023 as it was not an applicable corporation in accordance with the statute. In February 2026, the U.S. Treasury issued Notice 2026-07 (CAMT Notice) which clarifies AFSI computation by allowing an adjustment to deduct certain repair and maintenance costs that are capitalized in the applicable financial statement. This CAMT Notice will result in a reduction to AFSI for CAMT purposes. However, certain CAMT rules remain unclear; therefore, the issuance of future authoritative guidance could materially impact PSEG’s and PSE&G’s results of operations, financial condition and cash flows.
In April 2023, the U.S. Treasury issued Revenue Procedure 2023-15 that provides a Natural Gas Safe Harbor (NGSH) method of accounting to determine the annual repair tax deduction for gas T&D property. As a result of the CAMT Notice, PSE&G intends to adopt the NGSH method for its gas distribution assets in its 2025 Federal tax return including a historical cumulative IRC Section 481(a) adjustment. While PSEG is still evaluating this guidance, it expects that the additional repair deductions will reduce our taxable income and AFSI, and will result in lower cash taxes.
The IRA established a new PTC for existing qualified nuclear generation facilities, effective 2024 through 2032, a new technology neutral energy tax credit, inclusive of both new nuclear units and increases to nuclear generation capacity, effective 2025, and the transferability of energy tax credits, effective 2023. The PTC for a given nuclear facility can be multiplied by five if prevailing wage requirements are met, and the value of the PTC is designed to phase down as the facility’s gross receipts increase. Both the PTC rate and reduction amount are subject to the Internal Revenue Service’s determination of annual inflation.
PSEG’s estimated full year 2025 gross receipts for its nuclear operations were above the level at which it would receive PTCs, therefore, PSEG did not record a PTC benefit for the year ended December 31, 2025. For the year ended December 31, 2024, PSEG recorded an income tax benefit associated with PTCs of approximately $
Despite the issuance of proposed regulations and various Notices that provide interim guidance on numerous provisions of the IRA, many aspects of the IRA, including the PTCs and the CAMT, remain unclear and are in need of further guidance; therefore, the impact of several provisions of the IRA will have on PSEG's and PSE&G's financial statements is subject to continued evaluation.
In July 2025, “An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14” (the Act) was signed into law. The Act made no material changes to the PTC for existing qualified nuclear generation facilities. The Act permanently extends 100% bonus depreciation to qualified business property retroactive to January 19, 2025. The impact of the Act on PSEG’s and PSE&G’s financial statements is subject to continued evaluation.
As of December 31, 2025, PSEG had a $
149
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PSEG recorded the following amounts related to its unrecognized tax benefits, which were primarily comprised of amounts recorded for PSE&G and PSEG’s other subsidiaries:
|
|
|
|
|
|
|
|
|
||
|
2025 |
|
PSEG |
|
|
PSE&G |
|
|
||
|
|
|
Millions |
|
|
|||||
|
Total Amount of Unrecognized Tax Benefits as of January 1, 2025 |
|
$ |
|
|
$ |
|
|
||
|
Increases as a Result of Positions Taken in a Prior Period |
|
|
|
|
|
|
|
||
|
Decreases as a Result of Positions Taken in a Prior Period |
|
|
( |
) |
|
|
|
|
|
|
Increases as a Result of Positions Taken during the Current Period |
|
|
|
|
|
|
|
||
|
Decreases as a Result of Positions Taken during the Current Period |
|
|
|
|
|
|
|
||
|
Decreases as a Result of Settlements with Taxing Authorities |
|
|
|
|
|
|
|
||
|
Decreases due to Lapses of Applicable Statute of Limitations |
|
|
( |
) |
|
|
|
|
|
|
Total Amount of Unrecognized Tax Benefits as of December 31, 2025 |
|
$ |
|
|
$ |
|
|
||
|
Accumulated Deferred Income Taxes Associated with Unrecognized Tax Benefits |
|
|
( |
) |
|
|
( |
) |
|
|
Regulatory Asset—Unrecognized Tax Benefits |
|
|
( |
) |
|
|
( |
) |
|
|
Total Amount of Unrecognized Tax Benefits that if Recognized, would Impact the Effective Tax Rate (including Interest and Penalties) |
|
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
||
|
2024 |
|
PSEG |
|
|
PSE&G |
|
|
||
|
|
|
Millions |
|
|
|||||
|
Total Amount of Unrecognized Tax Benefits as of January 1, 2024 |
|
$ |
|
|
$ |
|
|
||
|
Increases as a Result of Positions Taken in a Prior Period |
|
|
|
|
|
|
|
||
|
Decreases as a Result of Positions Taken in a Prior Period |
|
|
( |
) |
|
|
( |
) |
|
|
Increases as a Result of Positions Taken during the Current Period |
|
|
|
|
|
|
|
||
|
Decreases as a Result of Positions Taken during the Current Period |
|
|
|
|
|
|
|
||
|
Decreases as a Result of Settlements with Taxing Authorities |
|
|
( |
) |
|
|
|
|
|
|
Decreases due to Lapses of Applicable Statute of Limitations |
|
|
( |
) |
|
|
( |
) |
|
|
Total Amount of Unrecognized Tax Benefits as of December 31, 2024 |
|
$ |
|
|
$ |
|
|
||
|
Accumulated Deferred Income Taxes Associated with Unrecognized Tax Benefits |
|
|
( |
) |
|
|
( |
) |
|
|
Regulatory Asset—Unrecognized Tax Benefits |
|
|
( |
) |
|
|
( |
) |
|
|
Total Amount of Unrecognized Tax Benefits that if Recognized, would Impact the Effective Tax Rate (including Interest and Penalties) |
|
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
||
|
2023 |
|
PSEG |
|
|
PSE&G |
|
|
||
|
|
|
Millions |
|
|
|||||
|
Total Amount of Unrecognized Tax Benefits as of January 1, 2023 |
|
$ |
|
|
$ |
|
|
||
|
Increases as a Result of Positions Taken in a Prior Period |
|
|
|
|
|
|
|
||
|
Decreases as a Result of Positions Taken in a Prior Period |
|
|
( |
) |
|
|
( |
) |
|
|
Increases as a Result of Positions Taken during the Current Period |
|
|
|
|
|
|
|
||
|
Decreases as a Result of Positions Taken during the Current Period |
|
|
|
|
|
|
|
||
|
Decreases as a Result of Settlements with Taxing Authorities |
|
|
( |
) |
|
|
( |
) |
|
|
Decreases due to Lapses of Applicable Statute of Limitations |
|
|
( |
) |
|
|
( |
) |
|
|
Total Amount of Unrecognized Tax Benefits as of December 31, 2023 |
|
$ |
|
|
$ |
|
|
||
|
Accumulated Deferred Income Taxes Associated with Unrecognized Tax Benefits |
|
|
( |
) |
|
|
( |
) |
|
|
Regulatory Asset—Unrecognized Tax Benefits |
|
|
( |
) |
|
|
( |
) |
|
|
Total Amount of Unrecognized Tax Benefits that if Recognized, would Impact the Effective Tax Rate (including Interest and Penalties) |
|
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
|
|
||
PSEG and its subsidiaries include accrued interest and penalties related to uncertain tax positions required to be recorded as Income Tax Expense in the Consolidated Statements of Operations. Accumulated interest and penalties that are recorded on the Consolidated Balance Sheets on uncertain tax positions were as follows:
150
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
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|
|
|
|
|
|
|
|
|
|||
|
|
|
Accumulated Interest and Penalties |
|
|
|||||||||
|
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
|||
|
|
|
Millions |
|
|
|||||||||
|
PSEG |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
PSE&G |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
Description of income tax years that remain subject to examination by material jurisdictions, where an examination has not already concluded are:
|
|
|
|
|
|
|
|
|
|
PSEG |
|
PSE&G |
|
|
United States |
|
|
|
|
|
|
Federal |
|
|
|
||
|
New Jersey |
|
|
|
||
|
New Jersey |
|
|
|
||
|
Pennsylvania |
|
|
|
||
|
Connecticut |
|
|
|
||
|
Maryland |
|
|
|
||
|
New York |
|
|
|
||
|
|
|
|
|
|
|
Note 20. Accumulated Other Comprehensive Income (Loss), Net of Tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
PSEG |
|
Other Comprehensive Income (Loss) |
|
|
|||||||||||||
|
Accumulated Other Comprehensive Income (Loss) |
|
Cash Flow Hedges |
|
|
Pension and OPEB Plans |
|
|
Available-for -Sale Securities |
|
|
Total |
|
|
||||
|
|
|
Millions |
|
|
|||||||||||||
|
Balance as of December 31, 2022 |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
Current Period Other Comprehensive Income (Loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Other Comprehensive Income (Loss) before Reclassifications |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
||
|
Net Current Period Other Comprehensive Income (Loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Balance as of December 31, 2023 |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
Other Comprehensive Income (Loss) before Reclassifications |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
|
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|||
|
Net Current Period Other Comprehensive Income (Loss) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
|
Balance as of December 31, 2024 |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
Other Comprehensive Income (Loss) before Reclassifications |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|||
|
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|||
|
Net Current Period Other Comprehensive Income (Loss) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|||
|
Balance as of December 31, 2025 |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
151
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
PSEG |
|
|
|
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) to Statement of Operations |
|
|
|||||||||
|
|
|
|
|
Year Ended December 31, 2023 |
|
|
|||||||||
|
Description of Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) |
|
Location of Pre-Tax Amount in Statement of Operations |
|
Pre-Tax Amount |
|
|
Tax (Expense) Benefit |
|
|
After-Tax Amount |
|
|
|||
|
|
|
|
|
Millions |
|
|
|||||||||
|
Cash Flow Hedges |
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Interest Rate Derivatives |
|
Interest Expense |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
||
|
Total Cash Flow Hedges |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||
|
Pension and OPEB Plans |
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Amortization of Prior Service (Cost) Credit |
|
Net Non-Operating Pension and OPEB Credits (Costs) |
|
|
|
|
|
( |
) |
|
|
|
|
||
|
Amortization of Actuarial Loss |
|
Net Non-Operating Pension and OPEB Credits (Costs) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
Pension Settlement Charge |
|
Net Non-Operating Pension and OPEB Credits (Costs) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
Total Pension and OPEB Plans |
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
Available-for-Sale Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Realized Gains (Losses) |
|
Net Gains (Losses) on Trust Investments |
|
|
|
|
|
( |
) |
|
|
|
|
||
|
Total Available-for-Sale Securities |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||
|
Total |
|
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
PSEG |
|
|
|
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) to Statement of Operations |
|
|
|||||||||
|
|
|
|
|
Year Ended December 31, 2024 |
|
|
|||||||||
|
Description of Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) |
|
Location of Pre-Tax Amount in Statement of Operations |
|
Pre-Tax Amount |
|
|
Tax (Expense) Benefit |
|
|
After-Tax Amount |
|
|
|||
|
|
|
|
|
Millions |
|
|
|||||||||
|
Cash Flow Hedges |
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Interest Rate Derivatives |
|
Interest Expense |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
||
|
Total Cash Flow Hedges |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||
|
Pension and OPEB Plans |
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Amortization of Prior Service (Cost) Credit |
|
Net Non-Operating Pension and OPEB Credits (Costs) |
|
|
|
|
|
|
|
|
|
|
|||
|
Amortization of Actuarial Loss |
|
Net Non-Operating Pension and OPEB Credits (Costs) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
Total Pension and OPEB Plans |
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
Available-for-Sale Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Realized Gains (Losses) |
|
Net Gains (Losses) on Trust Investments |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
Total Available-for-Sale Securities |
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
Total |
|
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
152
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
PSEG |
|
|
|
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) to Statement of Operations |
|
|
|||||||||
|
|
|
|
|
Year Ended December 31, 2025 |
|
|
|||||||||
|
Description of Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) |
|
Location of Pre-Tax Amount in Statement of Operations |
|
Pre-Tax Amount |
|
|
Tax (Expense) Benefit |
|
|
After-Tax Amount |
|
|
|||
|
|
|
|
|
Millions |
|
|
|||||||||
|
Cash Flow Hedges |
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Interest Rate Derivatives |
|
Interest Expense |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
||
|
Total Cash Flow Hedges |
|
|
|
|
|
|
|
( |
) |
|
|
|
|
||
|
Pension and OPEB Plans |
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Amortization of Prior Service (Cost) Credit |
|
Net Non-Operating Pension and OPEB Credits (Costs) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
Amortization of Actuarial Loss |
|
Net Non-Operating Pension and OPEB Credits (Costs) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
Total Pension and OPEB Plans |
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
Available-for-Sale Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Realized Gains (Losses) |
|
Net Gains (Losses) on Trust Investments |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
Total Available-for-Sale Securities |
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
Total |
|
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Note 21. Earnings Per Share (EPS) and Dividends
EPS
Basic EPS is calculated by dividing Net Income (Loss) by the weighted average number of shares of common stock outstanding. Diluted EPS is calculated by dividing Net Income (Loss) by the weighted average number of shares of common stock outstanding, plus dilutive potential shares related to PSEG’s stock based compensation. For additional information on PSEG’s stock compensation plans see Note 17. Stock Based Compensation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
Years Ended December 31, |
|
|
|||||||||||||||||||||
|
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|
|||||||||||||||
|
|
|
Basic |
|
|
Diluted |
|
|
Basic |
|
|
Diluted |
|
|
Basic |
|
|
Diluted |
|
|
||||||
|
EPS Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
(Millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Net Income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||||
|
EPS Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
(Millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Weighted Average Common Shares Outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Effect of Stock Based Compensation Awards |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Total Shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
EPS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Net Income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
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$ |
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||||||
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||||||
From time to time, PSEG may repurchase shares to satisfy obligations under equity compensation awards and repurchase shares to satisfy purchases by employees under the ESPP.
For additional information on all the types of long-term incentive awards, see Note 17. Stock Based Compensation.
153
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Common Stock Dividends
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Years Ended December 31, |
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Dividend Payments on Common Stock |
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2025 |
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2024 |
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2023 |
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|||
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Per Share |
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$ |
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$ |
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$ |
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in Millions |
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$ |
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$ |
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$ |
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|||
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|||
On February 24, 2026, PSEG’s Board of Directors approved a $
Note 22. Financial Information by Business Segment
Basis of Organization
PSEG’s and PSE&G’s operating segments were determined by management in accordance with GAAP. These segments were determined based on how the Chief Operating Decision Maker (CODM) (the Chief Executive Officer (CEO) for PSEG and PSE&G), measures performance based on segment Net Income. The CODM uses Net Income for each segment in the annual budget and forecasting process. The CODM considers budget-to-actual variances on a monthly basis when making decisions about the allocation of operating and capital resources to each segment.
Based on management’s analysis, PSE&G and PSEG Power were determined to be the operating segments of PSEG. The operating segments were determined based on the nature of regulated and unregulated operations and services provided by the respective segments. As discussed below, PSEG’s
PSE&G
The PSE&G reportable segment earns revenues from its tariffs, under which it provides electric transmission and electric and gas distribution services to residential, commercial and industrial customers in New Jersey. The rates charged for electric transmission are regulated by FERC while the rates charged for electric and gas distribution are regulated by the BPU. Revenues are also earned from several other activities such as investments in EE equipment on customers’ premises, solar investments, the appliance service business and other miscellaneous services.
PSEG Power & Other
This reportable segment is comprised primarily of PSEG Power which earns revenues primarily by selling energy and capacity from our nuclear generation units and from the sale of wholesale natural gas through a full-requirements BGSS contract with PSE&G. PSEG Power also enters into bilateral contracts for energy, gas and other energy-related contracts to optimize the value of its portfolio of generating assets and its gas supply obligations.
This reportable segment also includes amounts applicable to PSEG LI, which generates revenues under its contract with LIPA, primarily for the recovery of costs when Servco is a principal in the transaction (see Note 3. Variable Interest Entity for additional information) as well as fixed and variable fee components under the contract, and Energy Holdings which holds an immaterial portfolio of remaining lease investments. Other also includes amounts applicable to PSEG (parent corporation) and Services.
154
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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||||
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PSE&G |
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PSEG Power & Other (A) |
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Eliminations (B) |
|
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Consolidated |
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||||
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|
|
Millions |
|||||||||||||||
|
Year Ended December 31, 2025 |
|
|
|
|
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|
|
|
|
|
|
|
|
||||
|
Operating Revenues |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|||
|
Energy Costs |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
|
Controllable Operation and Maintenance (C) |
|
|
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|
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||||
|
Depreciation and Amortization |
|
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||||
|
Interest Income |
|
|
|
|
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( |
) |
|
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|||
|
Interest Expense |
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|
|
|
|
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|
( |
) |
|
|
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|||
|
Income Tax Expense (Benefit) |
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||||
|
Other Segment Items (D) |
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||||
|
Net Income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
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|
||||
|
Gross Additions to Long-Lived Assets |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|||
|
As of December 31, 2025 |
|
|
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|
|
|
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||||
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Total Assets |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|||
|
Investments in Equity Method Subsidiaries |
|
$ |
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$ |
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$ |
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$ |
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||||
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||||
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PSE&G |
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PSEG Power & Other (A) |
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Eliminations (B) |
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Consolidated |
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||||
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Millions |
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Year Ended December 31, 2024 |
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|
||||
|
Operating Revenues |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|||
|
Energy Costs |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|||
|
Controllable Operation and Maintenance (C) |
|
|
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|
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||||
|
Depreciation and Amortization |
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||||
|
Interest Income |
|
|
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|
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|
|
|
( |
) |
|
|
|
|
|||
|
Interest Expense |
|
|
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|
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|
|
|
( |
) |
|
|
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|
|||
|
Income Tax Expense (Benefit) |
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|
|
|
|
( |
) |
|
|
|
|
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|
|||
|
Other Segment Items (D) |
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|
|
|
|
|
|
|
|
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|
||||
|
Net Income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
|
Gross Additions to Long-Lived Assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
|
As of December 31, 2024 |
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|
|
|
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|
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|
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|
||||
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Total Assets |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|||
|
Investments in Equity Method Subsidiaries |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
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||||
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155
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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||||
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|
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PSE&G |
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PSEG Power & Other (A) |
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Eliminations (B) |
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Consolidated |
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||||
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Millions |
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Year Ended December 31, 2023 |
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|
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|
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|
||||
|
Operating Revenues |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|||
|
Energy Costs |
|
|
|
|
|
|
|
|
( |
) |
|
|
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|
|||
|
Controllable Operation and Maintenance (C) |
|
|
|
|
|
|
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|
|
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|
||||
|
Depreciation and Amortization |
|
|
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||||
|
Interest Income |
|
|
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|
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|
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|
( |
) |
|
|
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|
|||
|
Interest Expense |
|
|
|
|
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|
|
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( |
) |
|
|
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|
|||
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Income Tax Expense (Benefit) |
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|
|
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||||
|
Other Segment Items (D) |
|
|
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|
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|
|
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|
||||
|
Net Income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
|
Gross Additions to Long-Lived Assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
||||
|
As of December 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
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|
||||
|
Total Assets |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
|||
|
Investments in Equity Method Subsidiaries |
|
$ |
|
|
$ |
|
|
$ |
|
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$ |
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|
||||
|
|
|
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|
||||
156
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 23. Related-Party Transactions
The following discussion relates to intercompany transactions, which are eliminated during the PSEG consolidation process in accordance with GAAP.
PSE&G
The financial statements for PSE&G include transactions with related parties presented as follows:
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|||
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|
Years Ended December 31, |
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|
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|
Related Party Transactions |
|
2025 |
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|
2024 |
|
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2023 |
|
|
|||
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|
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Millions |
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Net Billings from PSEG Power (A) |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
|
Administrative Billings from Services (B) |
|
$ |
|
|
|
|
|
$ |
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|
|||
|
Total Billings from Affiliates |
|
$ |
|
|
$ |
|
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$ |
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|
|||
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||
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|
Years Ended December 31, |
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|||||
|
Related Party Transactions |
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2025 |
|
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2024 |
|
|
||
|
|
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Millions |
|
|
|||||
|
Net Payable to PSEG Power (A) |
|
$ |
|
|
$ |
|
|
||
|
Net Payable to Services (B) |
|
|
|
|
|
|
|
||
|
Net Payable to PSEG (C) |
|
|
|
|
|
|
|
||
|
Accounts Payable—Affiliated Companies |
|
$ |
|
|
$ |
|
|
||
|
Working Capital Advances to Services (D) |
|
$ |
|
|
$ |
|
|
||
|
Long-Term Accrued Taxes Payable (Receivable) (C) |
|
$ |
|
|
$ |
( |
) |
|
|
|
|
|
|
|
|
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||
157
Table of Contents
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
PSEG and PSE&G
We have established and maintain disclosure controls and procedures as defined under Rule 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to provide reasonable assurance that information required to be disclosed in the reports that are filed or submitted under the Exchange Act is recorded, processed, summarized and reported and is accumulated and communicated to the Chief Executive Officer (CEO) and Chief Financial Officer (CFO) of each respective company, as appropriate, by others within the entities to allow timely decisions regarding required disclosure. We have established a disclosure committee which includes several key management employees and which reports directly to the CFO and CEO of each of PSEG and PSE&G. The committee monitors and evaluates the effectiveness of these disclosure controls and procedures. The CFO and CEO of each of PSEG and PSE&G have evaluated the effectiveness of the disclosure controls and procedures and, based on this evaluation, have concluded that disclosure controls and procedures at each respective company were effective at a reasonable assurance level as of the end of the period covered by the report.
Internal Controls
PSEG and PSE&G
We have conducted assessments of our internal control over financial reporting as of December 31, 2025, as required by Section 404 of the Sarbanes-Oxley Act, using the framework promulgated by the Committee of Sponsoring Organizations of the Treadway Commission, commonly referred to as “COSO.” Managements’ reports on PSEG’s and PSE&G’s internal control over financial reporting are included on pages 160 and 161, respectively. The Independent Registered Public Accounting Firm’s report with respect to the effectiveness of PSEG’s internal control over financial reporting is included on page 162. Management has concluded that internal control over financial reporting is effective as of December 31, 2025.
We continually review our disclosure controls and procedures and make changes, as necessary, to ensure the quality of our financial reporting. There have been no changes in internal control over financial reporting that occurred during the fourth quarter of 2025 that have materially affected, or are reasonably likely to materially affect, each registrant’s internal control over financial reporting.
158
Table of Contents
ITEM 9B. OTHER INFORMATION
Director and Officer Rule 10b5-1 and non-Rule 10b5-1 Trading Plans
During the three months ended December 31, 2025, certain of our officers and directors
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Name and Title |
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Action |
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Date |
|
Aggregate Number of Shares to be Sold or Purchased |
|
Expiration (A) |
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|
Sell |
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|
||||
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(A)
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
159
Table of Contents
MANAGEMENT REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING—PSEG
Management of Public Service Enterprise Group Incorporated (PSEG) is responsible for establishing and maintaining effective internal control over financial reporting and for the assessment of the effectiveness of internal control over financial reporting. As defined by the SEC in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and implemented by the company’s management and other personnel, with oversight by the Audit Committee of the Board of Directors to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America (generally accepted accounting principles).
PSEG’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of PSEG’s assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of PSEG are being made only in accordance with authorizations of PSEG’s management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of PSEG’s assets that could have a material effect on the financial statements.
In connection with the preparation of PSEG’s annual financial statements, management of PSEG has undertaken an assessment, which includes the design and operational effectiveness of PSEG’s internal control over financial reporting based on criteria established in the Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, commonly referred to as “COSO”. The COSO framework is based upon five integrated components of control: control environment, risk assessment, control activities, information and communications and ongoing monitoring.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projection of any evaluation of effectiveness to future periods is subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Based on the assessment performed, management has concluded that PSEG’s internal control over financial reporting is effective and provides reasonable assurance regarding the reliability of PSEG’s financial reporting and the preparation of its financial statements as of December 31, 2025 in accordance with generally accepted accounting principles. Further, management has not identified any material weaknesses in internal control over financial reporting as of December 31, 2025.
PSEG’s external auditors, Deloitte & Touche LLP, have audited PSEG’s financial statements for the year ended December 31, 2025 included in this annual report on Form 10-K and, as part of that audit, have issued a report on the effectiveness of PSEG’s internal control over financial reporting, a copy of which is included in this annual report on Form 10-K.
/s/ RALPH A. LAROSSA |
|
Chief Executive Officer |
|
|
|
/s/ DANIEL J. CREGG |
|
Chief Financial Officer |
|
February 26, 2026 |
|
160
Table of Contents
MANAGEMENT REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING—PSE&G
Management of Public Service Electric and Gas Company (PSE&G) is responsible for establishing and maintaining effective internal control over financial reporting and for the assessment of the effectiveness of internal control over financial reporting. As defined by the SEC in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and implemented by the company’s management and other personnel, with oversight by the Audit Committee of the Board of Directors of its parent, Public Service Enterprise Group Incorporated, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America (generally accepted accounting principles).
PSE&G’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of PSE&G’s assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of PSE&G are being made only in accordance with authorizations of PSE&G’s management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of PSE&G’s assets that could have a material effect on the financial statements.
In connection with the preparation of PSE&G’s annual financial statements, management of PSE&G has undertaken an assessment, which includes the design and operational effectiveness of PSE&G’s internal control over financial reporting based on criteria established in the Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, commonly referred to as “COSO”. The COSO framework is based upon five integrated components of control: control environment, risk assessment, control activities, information and communications and ongoing monitoring.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projection of any evaluation of effectiveness to future periods is subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Based on the assessment performed, management has concluded that PSE&G’s internal control over financial reporting is effective and provides reasonable assurance regarding the reliability of PSE&G’s financial reporting and the preparation of its financial statements as of December 31, 2025 in accordance with generally accepted accounting principles. Further, management has not identified any material weaknesses in internal control over financial reporting as of December 31, 2025.
/s/ RALPH A. LAROSSA |
|
Chief Executive Officer |
|
|
|
/s/ DANIEL J. CREGG |
|
Chief Financial Officer |
|
February 26, 2026 |
|
161
Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Public Service Enterprise Group Incorporated
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Public Service Enterprise Group Incorporated and subsidiaries (the “Company” or “PSEG”) as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements and the consolidated financial statement schedule listed in the Index at Item 15(B)(a) as of and for the year ended December 31, 2025, of the Company and our report dated February 26, 2026, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management Report on Internal Control Over Financial Reporting - PSEG. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Deloitte & Touche LLP
Morristown, New Jersey
February 26, 2026
162
Table of Contents
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Executive Officers
PSEG
The information required by Item 10 of Form 10-K with respect to executive officers is set forth in Part I. Information About Our Executive Officers (PSEG).
PSE&G
Omitted pursuant to conditions set forth in General Instruction I of Form 10-K.
Directors
PSEG
The information required by Item 10 of Form 10-K with respect to (i) present directors of PSEG who are nominees for election as directors at PSEG’s 2026 Annual Meeting of Stockholders, (ii) the director nomination process, and (iii) the composition of the Audit Committee of the Board, is set forth under the headings “Nominees For Director-Biographical Information,” “Overview of Board Nominees-Board Refreshment and Tenure,” and “-Board Membership Selection,” and “Corporate Governance-Board Committees,” respectively, in PSEG’s definitive Proxy Statement for such Annual Meeting of Stockholders, which definitive Proxy Statement is expected to be filed with the U.S. Securities and Exchange Commission (SEC) on or about March 12, 2026 and which information set forth under said heading is incorporated herein by this reference thereto.
PSE&G
Omitted pursuant to conditions set forth in General Instruction I of Form 10-K.
Standards of Conduct
Our Standards of Conduct (Standards) is a code of ethics applicable to us and our subsidiaries. The Standards are an integral part of our business conduct compliance program and embody our commitment to conduct operations in accordance with the highest legal and ethical standards. The Standards apply to all of our directors and employees (including PSE&G’s, PSEG Power’s, Energy Holdings’ and Services’ respective principal executive officer, principal financial officer, principal accounting officer or Controller and persons performing similar functions). Each such person is responsible for understanding and complying with the Standards. The Standards are posted on our website, https://corporate.pseg.com/aboutpseg/leadershipandgovernance/standardsofconduct.
The Standards establish a set of common expectations for behavior to which each employee must adhere in dealings with investors, customers, fellow employees, competitors, vendors, government officials, the media and all others who may associate their words and actions with us. The Standards have been developed to provide reasonable assurance that, in conducting our business, employees behave ethically and in accordance with the law and do not take advantage of investors, regulators or customers through manipulation, abuse of confidential information or misrepresentation of material facts.
To the extent required by applicable rules of the SEC and/or NYSE, we will post on our website, https://corporate.pseg.com/aboutpseg/leadershipandgovernance/standardsofconduct:
Insider Trading Policies and Procedures
We have
163
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and regulations, and any listing standards applicable to us. A copy of our insider trading policies and procedures is filed as Exhibit 19 as part of this Annual Report on Form 10-K and incorporated by reference herein.
ITEM 11. EXECUTIVE COMPENSATION
PSEG
The information required by Item 11 of Form 10-K is set forth in PSEG’s definitive Proxy Statement for the 2026 Annual Meeting of Stockholders which definitive Proxy Statement is expected to be filed with the SEC on or about March 12, 2026 and such information that is responsive to this Item 11, except for information set forth under the heading “Pay Versus Performance,” is incorporated herein by this reference thereto.
PSE&G
Omitted pursuant to conditions set forth in General Instruction I of Form 10-K.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
PSEG
The information required by Item 12 of Form 10-K with respect to directors, executive officers and certain beneficial owners is set forth under the heading “Security Ownership of Directors, Management and Certain Beneficial Owners” in PSEG’s definitive Proxy Statement for the 2026 Annual Meeting of Stockholders which definitive Proxy Statement is expected to be filed with the SEC on or about March 12, 2026 and such information set forth under such heading is incorporated herein by this reference thereto.
For information relating to securities authorized for issuance under equity compensation plans, see Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
PSE&G
Omitted pursuant to conditions set forth in General Instruction I of Form 10-K.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
PSEG
The information required by Item 13 of Form 10-K is set forth under the heading “Corporate Governance-Certain Relationships and Related Person Transactions” in PSEG’s definitive Proxy Statement for the 2026 Annual Meeting of Stockholders which definitive Proxy Statement is expected to be filed with the SEC on or about March 12, 2026 and such information set forth under such heading is incorporated herein by this reference thereto.
PSE&G
Omitted pursuant to conditions set forth in General Instruction I of Form 10-K.
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ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by Item 14 of Form 10-K is set forth under the heading “Oversight of the Independent Auditor-Fees Billed by Deloitte for 2025 and 2024” in PSEG’s definitive Proxy Statement for the 2026 Annual Meeting of Stockholders which definitive Proxy Statement is expected to be filed with the SEC on or about March 12, 2026. Such information set forth under such heading is incorporated herein by this reference hereto.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Schedule II—Valuation and Qualifying Accounts for each of the three years in the period ended December 31, 2025 (page 171).
Schedule II—Valuation and Qualifying Accounts for each of the three years in the period ended December 31, 2025 (page 171).
Schedules other than those listed above are omitted for the reason that they are not required or are not applicable, or the required information is shown in the consolidated financial statements or notes thereto.
|
LIST OF EXHIBITS: |
|
a. |
|
PSEG: |
3a |
|
Certificate of Incorporation Public Service Enterprise Group Incorporated(1) |
3b |
|
Certificate of Amendment of Certificate of Incorporation of Public Service Enterprise Group Incorporated, effective April 23, 1987(2) |
3c |
|
Certificate of Amendment of Certificate of Incorporation of Public Service Enterprise Group Incorporated, effective April 20, 2007(3) |
3d |
|
By-Laws of Public Service Enterprise Group Incorporated effective February 14, 2023(4) |
4a |
|
Indenture between Public Service Enterprise Group Incorporated and First Union National Bank (U.S. Bank National Association, successor), as Trustee, dated January 1, 1998 providing for Deferrable Interest Subordinated Debentures in Series (relating to Quarterly Preferred Securities)(5) |
4b |
|
Indenture between Public Service Enterprise Group Incorporated and U.S. Bank National Association (as successor to First Union National Bank), as Trustee, dated November 1, 1998 providing for Senior Debt Securities(6) |
4c |
|
Description of Common Stock(7) |
10a(1) |
|
Supplemental Executive Retirement Income Plan, amended effective July 1, 2019(8) |
10a(2) |
|
Retirement Income Reinstatement Plan for Non-Represented Employees, Amended effective July 1, 2019(9) |
10a(3) |
|
2007 Equity Compensation Plan for Outside Directors, amended and restated effective November 19, 2019 (10) |
10a(4) |
|
Deferred Compensation Plan for Directors, amended effective January 1, 2019(11) |
10a(5) |
|
Key Executive Severance Plan of Public Service Enterprise Group Incorporated, amended effective December 15, 2025 |
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|
LIST OF EXHIBITS: |
|
10a(6) |
|
Stock Plan for Outside Directors, as amended(12) |
10a(7) |
|
Compensation Plan for Outside Directors(13) |
10a(8) |
|
2004 Long-Term Incentive Plan, amended and restated as of April 16, 2013(14) |
10a(9) |
|
Form of Agreement for Advancement of Expenses with Outside Directors(15) |
10a(10) |
|
Agreement with Tamara L. Linde dated September 16, 2024(16) |
10a(11) |
|
Agreement with Daniel J. Cregg dated September 22, 2015(17) |
10a(12) |
|
Clawback Practice, effective February 20, 2018(18) |
10a(13) |
|
Agreement with Ralph A. LaRossa dated April 18, 2022(19) |
10a(14) |
|
2021 Long-Term Incentive Plan, effective April 20, 2021(20) |
10a(15) |
|
2021 Equity Compensation Plan for Outside Directors, effective April 20, 2021(21) |
10a(16) |
|
Agreement with Kim C. Hanemann dated May 21, 2021(22) |
10a(17) |
|
Retention Award for Daniel J. Cregg dated April 17, 2023(23) |
10a(18) |
|
2021 Equity Compensation Plan for Outside Directors - Restricted Stock Unit Award Agreement(24) |
10a(19) |
|
Deferred Compensation Plan for Certain Employees, amended and restated effective November 18, 2024(25) |
10a(20) |
|
Management Incentive Compensation Plan, amended December 16, 2025 and effective January 1, 2026 |
10a(21) |
|
Equity Deferral Plan, amended and restated effective November 20, 2023(26) |
10a(22) |
|
2021 Long-Term Incentive Plan - Performance Share Units Award Agreement |
10a(23) |
|
2021 Long-Term Incentive Plan - Restricted Stock Unit Award Agreement |
10a(24) |
|
Agreement with Charles V. McFeaters dated April 18, 2023(27) |
10a(25) |
|
Agreement with Grace Park dated September 16, 2024(28) |
19 |
|
Insider Trading Policies and Procedures(29) |
21 |
|
Subsidiaries of the Registrant |
23 |
|
Consent of Independent Registered Public Accounting Firm |
31 |
|
Certification by Ralph A. LaRossa, pursuant to Rules 13a-14 and 15d-14 of the Securities Exchange Act of 1934 (1934 Act) |
31a |
|
Certification by Daniel J. Cregg, pursuant to Rules 13a-14 and 15d-14 of the 1934 Act |
32 |
|
Certification by Ralph A. LaRossa, pursuant to Section 1350 of Chapter 63 of Title 18 of the U.S. Code |
32a |
|
Certification by Daniel J. Cregg, pursuant to Section 1350 of Chapter 63 of Title 18 of the U.S. Code |
97 |
|
Clawback Practice for Recovery of Erroneously Awarded Compensation to Executive Officers(30) |
101.INS |
|
Inline XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
101.SCH |
|
Inline XBRL Taxonomy Extension Schema |
104 |
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
b. |
|
PSE&G |
3a(1) |
|
Restated Certificate of Incorporation of PSE&G(31) |
3a(2) |
|
Certificate of Amendment of Restated Certificate of Incorporation of PSE&G filed February 18, 1987 with the State of New Jersey adopting limitations of liability provisions in accordance with an amendment to New Jersey Business Corporation Act(32) |
3a(3) |
|
Certificate of Amendment of Restated Certificate of Incorporation of PSE&G filed June 17, 1992 with the State of New Jersey, establishing the 7.44% Cumulative Preferred Stock ($100 Par) as a series of Preferred Stock(33) |
3a(4) |
|
Certificate of Amendment of Restated Certificate of Incorporation of PSE&G filed March 11, 1993 with the State of New Jersey, establishing the 5.97% Cumulative Preferred Stock ($100 Par) as a series of Preferred Stock(34) |
3a(5) |
|
Certificate of Amendment of Restated Certificate of Incorporation of PSE&G filed January 27, 1994 with the State of New Jersey, establishing the 6.92% Cumulative Preferred Stock ($100 Par) and the 6.75% Cumulative Preferred Stock ($25 Par) as a series of Preferred Stock(35) |
3b(1) |
|
By-Laws of PSE&G as in effect April 17, 2007(36) |
4a(1) |
|
Indenture between PSE&G and Fidelity Union Trust Company (now, Wachovia Bank, National Association), as Trustee, dated August 1, 1924(37), securing First and Refunding Mortgage Bond and Supplemental Indentures between PSE&G and U.S. Bank National Association, successor, as Trustee, supplemental to Exhibit 4a(1), dated as follows: |
4a(2) |
|
June 1, 1937(38) |
4a(3) |
|
July 1, 1937(39) |
4a(4) |
|
June 1, 1991 (No. 1)(40) |
4a(5) |
|
August 1, 2004 (No. 4)(41) |
4a(6) |
|
April 1, 2007(42) |
4a(7) |
|
November 1, 2009(43) |
4a(8) |
|
May 1, 2012(44) |
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|
LIST OF EXHIBITS: |
|
4a(9) |
|
May 1, 2013(45) |
4a(10) |
|
August 1, 2014(46) |
4a(11) |
|
May 1, 2015(47) |
4a(12) |
|
September 1, 2016(48) |
4a(13) |
|
April 1, 2018(49) |
4a(14) |
|
December 1, 2019(50) |
4a(15) |
|
March 1, 2022(51) |
4a(16) |
|
February 1, 2024(52) |
4a(17) |
|
December 1, 2025 |
4b |
|
Description of the First and Refunding Mortgage Bonds(53) |
4c |
|
Indenture of Trust between PSE&G and Chase Manhattan Bank (National Association) (The Bank of New York Mellon, successor), as Trustee, providing for Secured Medium-Term Notes dated July 1, 1993(54) |
4d |
|
Indenture dated as of December 1, 2000 between Public Service Electric and Gas Company and First Union National Bank (U.S. Bank National Association, successor), as Trustee, providing for Senior Debt Securities(55) |
10a(1) |
|
Supplemental Executive Retirement Income Plan, amended effective July 1, 2019(8) |
10a(2) |
|
Retirement Income Reinstatement Plan for Non-Represented Employees, Amended effective July 1, 2019(9) |
10a(3) |
|
2007 Equity Compensation Plan for Outside Directors, amended and restated effective November 19, 2019(10) |
10a(4) |
|
Deferred Compensation Plan for Directors, amended effective January 1, 2019(11) |
10a(5) |
|
Key Executive Severance Plan of Public Service Enterprise Group Incorporated, amended effective December 15, 2025 |
10a(6) |
|
Stock Plan for Outside Directors, as amended(12) |
10a(7) |
|
Compensation Plan for Outside Directors(13) |
10a(8) |
|
2004 Long-Term Incentive Plan amended and restated as of April 16, 2013(14) |
10a(9) |
|
Form of Agreement for Advancement of Expenses with Outside Directors(56) |
10a(10) |
|
Agreement with Tamara L. Linde dated September 16, 2024(16) |
10a(11) |
|
Agreement with Daniel J. Cregg dated September 22, 2015(17) |
10a(12) |
|
Clawback Practice, effective February 20, 2018(18) |
10a(13) |
|
Agreement with Ralph A. LaRossa dated April 18, 2022(19) |
10a(14) |
|
2021 Long-Term Incentive Plan, effective April 20, 2021(20) |
10a(15) |
|
2021 Equity Compensation Plan for Outside Directors, effective April 20, 2021(21) |
10a(16) |
|
Agreement with Kim C. Hanemann dated May 21, 2021(22) |
10a(17) |
|
Retention Award for Daniel J. Cregg dated April 17, 2023(23) |
10a(18) |
|
2021 Equity Compensation Plan for Outside Directors - Restricted Stock Unit Award Agreement (24) |
10a(19) |
|
Deferred Compensation Plan for Certain Employees, amended and restated effective November 18, 2024(25) |
10a(20) |
|
Management Incentive Compensation Plan, amended December 16, 2025 and effective January 1, 2026 |
10a(21) |
|
Equity Deferral Plan, amended and restated effective November 20, 2023(26) |
10a(22) |
|
2021 Long-Term Incentive Plan - Performance Share Units Award Agreement |
10a(23) |
|
2021 Long-Term Incentive Plan - Restricted Stock Unit Award Agreement |
10a(24) |
|
Agreement with Grace Park dated September 16, 2024(28) |
19 |
|
Insider Trading Policies and Procedures(29) |
23a |
|
Consent of Independent Registered Public Accounting Firm |
31b |
|
Certification by Ralph A. LaRossa, pursuant to Rules 13a-14 and 15d-14 of the 1934 Act |
31c |
|
Certification by Daniel J. Cregg, pursuant to Rules 13a-14 and 15d-14 of the 1934 Act |
32b |
|
Certification by Ralph A. LaRossa, pursuant to Section 1350 of Chapter 63 of Title 18 of the U.S. Code |
32c |
|
Certification by Daniel J. Cregg, pursuant to Section 1350 of Chapter 63 of Title 18 of the U.S. Code |
97 |
|
Clawback Practice for Recovery of Erroneously Awarded Compensation to Executive Officers(30) |
101.INS |
|
Inline XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
101.SCH |
|
Inline XBRL Taxonomy Extension Schema |
104 |
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
167
Table of Contents
168
Table of Contents
169
Table of Contents
170
Table of Contents
Schedule II—Valuation and Qualifying Accounts Years Ended December 31, 2025—December 31, 2023
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
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Column A |
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Column B |
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Column C Additions |
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Column D |
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Column E |
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Description |
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Balance at |
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Charged to |
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Charged to |
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Deductions- |
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Balance at |
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Millions |
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2025 |
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Allowance for Credit Losses |
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$ |
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$ |
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(A) |
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$ |
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$ |
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(B) |
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$ |
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Materials and Supplies Valuation Reserve |
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2024 |
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|||||
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Allowance for Credit Losses |
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$ |
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$ |
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(A) |
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$ |
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$ |
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(B) |
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$ |
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Materials and Supplies Valuation Reserve |
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(C) |
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2023 |
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|||||
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Allowance for Credit Losses |
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$ |
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$ |
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(A) |
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$ |
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$ |
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(B) |
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$ |
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|||||
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Materials and Supplies Valuation Reserve |
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PUBLIC SERVICE ELECTRIC AND GAS COMPANY
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Column A |
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Column B |
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Column C Additions |
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Column D |
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Column E |
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Description |
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Balance at |
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Charged to |
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Charged to |
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Deductions- |
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Balance at |
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Millions |
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2025 |
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|||||
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Allowance for Credit Losses |
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$ |
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$ |
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(A) |
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$ |
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$ |
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(B) |
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$ |
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Materials and Supplies Valuation Reserve |
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2024 |
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|||||
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Allowance for Credit Losses |
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$ |
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$ |
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(A) |
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$ |
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$ |
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(B) |
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$ |
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|||||
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Materials and Supplies Valuation Reserve |
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(C) |
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2023 |
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|||||
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Allowance for Credit Losses |
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$ |
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$ |
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(A) |
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$ |
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$ |
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(B) |
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$ |
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Materials and Supplies Valuation Reserve |
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof.
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PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED |
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By: |
/s/ RALPH A. LAROSSA |
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Ralph A. LaRossa |
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Chair of the Board, President and |
|
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Chief Executive Officer |
Date: February 26, 2026
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. The signatures of the undersigned shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof.
Signature |
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Title |
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Date |
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/s/ RALPH A. LAROSSA |
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Chair of the Board, President, Chief Executive Officer and |
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February 26, 2026 |
Ralph A. LaRossa |
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Director (Principal Executive Officer) |
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/s/ DANIEL J. CREGG |
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Executive Vice President and Chief Financial Officer |
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February 26, 2026 |
Daniel J. Cregg |
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(Principal Financial Officer) |
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/s/ ROSE M. CHERNICK |
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Vice President and Controller |
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February 26, 2026 |
Rose M. Chernick |
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(Principal Accounting Officer) |
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/s/ WILLIE A. DEESE |
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Director |
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February 26, 2026 |
Willie A. Deese |
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/s/ JAMIE M. GENTOSO |
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Director |
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February 26, 2026 |
Jamie M. Gentoso |
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/s/ BARRY H. OSTROWSKY |
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Director |
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February 26, 2026 |
Barry H. Ostrowsky |
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/s/ RICARDO G. PÉREZ |
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Director |
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February 26, 2026 |
Ricardo G. Pérez |
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/s/ VALERIE A. SMITH |
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Director |
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February 26, 2026 |
Valerie A. Smith |
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/s/ SCOTT G. STEPHENSON |
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Director |
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February 26, 2026 |
Scott G. Stephenson |
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/s/ LAURA A. SUGG |
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Director |
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February 26, 2026 |
Laura A. Sugg |
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/s/ JOHN P. SURMA |
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Director |
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February 26, 2026 |
John P. Surma |
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/s/ KENNETH Y. TANJI |
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Director |
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February 26, 2026 |
Kenneth Y. Tanji |
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/s/ SUSAN TOMASKY |
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Director |
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February 26, 2026 |
Susan Tomasky |
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof.
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PUBLIC SERVICE ELECTRIC AND GAS COMPANY |
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By: |
/s/ KIM C. HANEMANN |
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Kim C. Hanemann |
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President |
Date: February 26, 2026
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. The signatures of the undersigned shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof.
Signature |
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Title |
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Date |
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/s/ RALPH A. LAROSSA |
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Chair of the Board and Chief Executive Officer and |
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February 26, 2026 |
Ralph A. LaRossa |
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Director (Principal Executive Officer) |
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/s/ DANIEL J. CREGG |
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Executive Vice President and Chief Financial Officer |
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February 26, 2026 |
Daniel J. Cregg |
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(Principal Financial Officer) |
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/s/ ROSE M. CHERNICK |
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Vice President and Controller |
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February 26, 2026 |
Rose M. Chernick |
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(Principal Accounting Officer) |
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/s/ WILLIE A. DEESE |
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Director |
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February 26, 2026 |
Willie A. Deese |
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/s/ BARRY H. OSTROWSKY |
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Director |
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February 26, 2026 |
Barry H. Ostrowsky |
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/s/ SUSAN TOMASKY |
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Director |
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February 26, 2026 |
Susan Tomasky |
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FAQ
What are PSEG (PEG) main business segments and how do they generate revenue?
How many customers does PSE&G serve and how is usage growth trending?
What major regulated investment programs has PSE&G (PEG) received approval for?
What is the scale and market context of PSEG Power’s nuclear generation?
How do climate change and resource adequacy risks affect PSEG (PEG)?
What is PSEG’s role in Long Island and competitive transmission projects?
