01—Abstract
Summary
Summary of the 10-Q filed July 30, 2024. Cited figures are marked; the original filing is the authoritative source.
Public Service Enterprise Group Incorporated (PSEG) reported second-quarter 2024 net income of $434 milliona, or $0.87 per diluted share, down from $591 million, or $1.18 per diluted share, in the second quarter of 2023.
Operating revenues were essentially flat at $2.42 billionb. For the six months ended June 30, 2024, net income was $966 million, or $1.93 per diluted share, compared with $1.878 billion, or $3.76 per diluted share, a year earlier. The filing attributes the decline primarily to mark-to-market losses and lower nuclear decommissioning trust (NDT) fund results at PSEG Power, partially offset by a benefit from nuclear production tax credits (PTCs) recorded in income tax expense.
PSE&G, the regulated utility, reported net income of $302 millionc for the quarter versus $336 million a year earlier, and $790 million for the six months versus $823 million. The company continues to emphasize regulated investment. For 2024 through 2028, its regulated capital investment program is estimated at $18 billion to $21 billion, within a total capital investment program of $19 billion to $22.5 billion, with a targeted compound annual growth rate in regulated rate base of 6% to 7.5% from year-end 2023 to year-end 2028.
PSE&G filed a distribution base rate case proposing an overall revenue increase of 9%, and several BPU and FERC proceedings remained pending. Liquidity totaled $2.95 billiond of available capacity under $4.03 billion of committed credit facilities at June 30, 2024. Quarterly dividends were $0.60 per share, and the Board approved the same $0.60 dividend for the third quarter of 2024.
Key risks flagged in the filing include environmental remediation exposures such as the Lower Passaic River Superfund matter, pending FERC allegations against PSE&G regarding the Roseland-Pleasant Valley transmission project, a BPU management and affiliate audit of PSE&G, and the Sewaren 7 litigation. Long-term debt rose to $18.42 billion at June 30, 2024, from $17.78 billion at December 31, 2023.
02—Key points
Key Highlights
- Net income fell to $434 million ($0.87 diluted EPS) in Q2 2024 from $591 million ($1.18) in Q2 2023; six-month net income was $966 million ($1.93) versus $1.878 billion ($3.76).
- Operating revenues were $2.423 billion for Q2 2024, essentially flat versus $2.421 billion, while six-month revenues were $5.183 billion versus $6.176 billion.
- PSEG Power's results were driven by mark-to-market losses and lower NDT fund results; PSEG Power & Other net income was $132 million in Q2 2024 versus $255 million in Q2 2023.
- PSE&G net income was $302 million in Q2 2024 versus $336 million a year earlier, with the regulated utility's six-month net income at $790 million versus $823 million.
- Regulated capital investment for 2024-2028 is estimated at $18 billion to $21 billion, targeting a 6% to 7.5% compound annual growth rate in regulated rate base from year-end 2023 to year-end 2028.
- Long-term debt increased to $18.42 billion at June 30, 2024 from $17.78 billion at December 31, 2023, and PSEG's committed credit facilities showed $2.95 billion of available liquidity.
- The Board approved a $0.60 per share common dividend for the third quarter of 2024, and six-month dividends paid totaled $598 million.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed July 30, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $2.42B$2.42B | +0.1% |
| Operating Expenses | $1.84B$1.63B | +13.2% |
| Operating Income | $582.00M$794.00M | −26.7% |
| Interest Expense | $218.00M$185.00M | +17.8% |
| Net Income | $434.00M$591.00M | −26.6% |
| EPS (Basic) | $0.87$1.19 | −26.9% |
| EPS (Diluted) | $0.87$1.18 | −26.3% |
| Shares Outstanding (Basic) | 498.00M497.00M | +0.2% |
| Shares Outstanding (Diluted) | 500.00M500.00M | 0.0% |
05—Questions
Frequently Asked Questions
Why did PSEG's net income decline in the second quarter of 2024?
The filing attributes the decline primarily to changes in mark-to-market activity at PSEG Power, which produced losses in 2024 versus gains in 2023, and to lower net gains on NDT fund investments. Partly offsetting this, income tax expense fell to $3 million from $153 million, reflecting benefits from nuclear production tax credits.
What is the outlook for PSE&G's capital investment and rate base?
PSEG expects its regulated capital investment program for 2024-2028 to be in a range of $18 billion to $21 billion, resulting in a targeted compound annual growth rate in regulated rate base of 6% to 7.5% from year-end 2023 to year-end 2028. PSE&G also filed a distribution base rate case proposing an overall revenue increase of 9%, which the company expects to conclude later in 2024.
What are the main nuclear-related factors affecting PSEG Power?
The Salem 1, Salem 2 and Hope Creek plants are expected to receive production tax credits from 2024 through 2032 under the Inflation Reduction Act, and the company's decision not to apply for the next ZEC eligibility period starting June 2025 reflects that change. The nuclear fleet operated at a capacity factor of 89.8% during the first six months of 2024, and PSEG Power hedged approximately 90% to 95% of its expected 2024 generation output.
What significant legal and environmental exposures does the filing disclose?
The filing discloses the Lower Passaic River Superfund matter, for which PSEG has approximately $66 million accrued and which may involve additional costs that could be material. It also discloses a non-public FERC investigation of the Roseland-Pleasant Valley transmission project, where potential penalties could be material, the BPU management and affiliate audit of PSE&G, and the Sewaren 7 contractor litigation in which Durr seeks damages of $68 million after a partial dismissal.
What liquidity and debt actions did the company take in the first half of 2024?
PSEG issued $750 million of 5.20% Senior Notes due 2029 and $500 million of 5.45% Senior Notes due 2034, and retired $750 million of 2.88% Senior Notes at maturity. PSE&G issued $450 million of 5.20% and $550 million of 5.45% Secured Medium-Term Notes, and retired $250 million of 3.75% notes. PSEG Power's $1.25 billion variable rate term loan due March 2025 is a near-term maturity noted in the filing.
06—Continue