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Public Service Enterprise Group 8-K Report, Regulation FD Disclosure (Jan 3, 2024)

Reports
Regulation FD·Exhibits & Filings
Filing Date
Filed January 3, 2024
Period End
January 3, 2024
Security
PEG
In the record · 2016–202610-K1110-Q338-K149

PEG filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 149 current reports (8-K) between 2016 and 2026.

  1. Impairment8-K · Oct ’16Oct ’16
  2. Impairment8-K · Jun ’19Jun ’19
  3. Leadership change8-K · Jul ’22Jul ’22
  4. Leadership change8-K · Apr ’26Apr ’26

01—Abstract

Summary

Summary of the 8-K filed January 3, 2024. Cited figures are marked; the original filing is the authoritative source.

Public Service Enterprise Group Incorporated (PSEG) and its subsidiary Public Service Electric and Gas Company (PSE&G) filed this combined Form 8-K on January 3, 2024, under Item 7.01 (Regulation FD Disclosure).

The filing furnishes Exhibit 99, discussion materials for investor meetings scheduled during January 2024. The materials announce 2024-2028 guidance: a non-GAAP Operating Earnings compound annual growth rate of 5%-7%, a PSE&G rate base CAGR of 6%-7.5%, and a regulated capital investment plan of $18 billion to $21 billiona for 2024-2028 (total PSEG capital plan of $19 billion to $22.5 billion). The regulated plan was raised by more than $2 billion from the prior $16 billion to $18.5 billion range, reflecting expanded clean energy, electric reliability and electrification needs and a competitively bid transmission project.

The materials describe a business mix in which regulated operations at PSE&G represent about 90% of PSEG's non-GAAP Operating Earnings over the next five years. PSEG states that the five-year capital plan requires no new equity or required asset sales through 2028. The company initiated 2024 non-GAAP Operating Earnings guidance of $3.60 to $3.70b per share, compared with $3.40 to $3.50 per share for 2023 estimated results.

PSEG says its nuclear fleet, retained after the company exited fossil and offshore wind generation, has a production tax credit providing stabilized revenue through 2032. The materials also describe PSE&G's base electric and gas rate cases filed with the New Jersey Board of Public Utilities in December 2023.

The filings seek a 9% overall revenue increase, $462 millionc for electric and $364 million for gas, a 10.4% return on equity and recovery of $3.3 billion of recent capital investment. The company reports 2023 annual dividend of $2.28 per share, a 5.6% increase over 2022, and states that future dividend decisions are subject to Board approval.

02—Key points

Key Highlights

  1. Long-term outlook: non-GAAP Operating Earnings CAGR of 5%-7% for 2024-2028, driven mainly by PSE&G net income and PTC-supported nuclear revenues at the threshold level.
  2. Capital plan: regulated capital spending of $18 billion to $21 billion for 2024-2028, up more than $2 billion from the prior plan, with a rate base CAGR of 6%-7.5%.
  3. 2024 guidance: non-GAAP Operating Earnings of $3.60 to $3.70 per share, versus $3.40 to $3.50 for 2023 estimated results.
  4. Financing: PSEG states it can fund the five-year capital plan with no new equity or required asset sales through 2028.
  5. Rate case: PSE&G requested a 9% overall revenue increase ($462 million electric, $364 million gas) with a 10.4% return on equity, seeking recovery of $3.3 billion in investments.
  6. Portfolio: PSEG exited merchant fossil generation and offshore wind generation, sold a 25% stake in Ocean Wind 1 recouping its full investment, and retained its nuclear fleet of 3,766 MW under a production tax credit through 2032.
  7. Dividend: 2023 annual dividend of $2.28 per share, up 5.6% over 2022; the materials cite a 3%-4% dividend yield and 8%-11% total potential shareholder return.

03—Questions

Frequently Asked Questions

  1. What growth rate is PSEG guiding to for 2024-2028?

    PSEG guides to a long-term non-GAAP Operating Earnings compound annual growth rate of 5%-7% for 2024-2028, with the primary contributor being PSE&G net income and a rate base CAGR of 6%-7.5%.

  2. How large is the regulated capital investment plan and how has it changed?

    The regulated capital spending plan for 2024-2028 is $18 billion to $21 billion, and the total PSEG capital plan is $19 billion to $22.5 billion. The regulated plan increased by more than $2 billion from the prior $16 billion to $18.5 billion range, reflecting expanded clean energy, electric reliability and electrification needs and a competitively bid transmission project.

  3. Will PSEG need to issue new equity to fund its growth?

    According to the materials, the solid balance sheet supports the five-year capital plan with no new equity or required asset sales through 2028.

  4. What is the status of PSE&G's rate request?

    In December 2023 PSE&G filed electric and gas base rate cases with the New Jersey Board of Public Utilities, requesting a 9% overall revenue increase, including $462 million for electric and $364 million for gas, a 10.4% return on equity and recovery of $3.3 billion of recent capital investment. The materials expect a resolution during Q4 2024.

  5. How much of PSEG's earnings come from regulated operations?

    The materials state that PSE&G's regulated operations represent about 90% of PSEG's non-GAAP Operating Earnings over the next five years, and that more than 90% of the capital program is allocated to regulated activities.

04—Continue

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