Did PSEG change its 2024 earnings outlook?

No. PSEG reaffirmed its full-year 2024 non-GAAP Operating Earnings guidance range of $3.60 to $3.70 per share and its five-year non-GAAP Operating Earnings growth outlook of 5% to 7% through 2028. The company said first-half results are in line with its full-year expectations.

Why did earnings decline in the second quarter?

At PSE&G, higher operation and maintenance costs, depreciation and interest expense more than offset incremental investment benefits, with management noting growing regulatory lag before the pending rate case concludes. At PSEG Power & Other, the positive impact of the nuclear production tax credit was offset by higher costs from the scheduled refueling outage at the Hope Creek nuclear plant. The filing also shows lower net gains on trust investments and mark-to-market effects in the reconciliation to Operating Earnings.

What is driving future growth?

Management cited utility rate base growth from its capital investment program, the nuclear production tax credit that took effect January 1, 2024, and multiple growth paths at its nuclear fleet, including capacity uprates, hydrogen pilots and potential sales to data centers. PSE&G also reported an increase in new business requests and feasibility studies from potential data center customers compared with 2023.

What regulatory matters are pending?

PSE&G's distribution base rate case remained pending, and management expected it and the Clean Energy Future-Energy Efficiency II filing to conclude later in 2024. The New Jersey Board of Public Utilities approved an approximately $300 million extension of the energy efficiency program and approved recovery of previously deferred COVID-related expenses, including carrying costs, over five years starting in 2025. PSE&G also filed to reduce its gas supply commodity charge in October 2024.

PEG 8-K: Earnings & Results & Regulation FD

01—Abstract

Summary

Summary of the 8-K filed July 30, 2024. Cited figures are marked; the original filing is the authoritative source.

Public Service Enterprise Group (PSEG) reported second-quarter 2024 net income of $434 million^a, or $0.87 per diluted share, compared with $591 million, or $1.18 per share, in the second quarter of 2023.

Non-GAAP Operating Earnings were $313 million^b, or $0.63 per share, versus $351 million, or $0.70 per share, a year earlier. For the first six months of 2024, net income was $966 million ($1.93 per share) and Operating Earnings were $970 million ($1.94 per share), compared with $1,878 million ($3.76 per share) and $1,046 million ($2.09 per share) in the prior-year period. PSEG reaffirmed its full-year 2024 non-GAAP Operating Earnings guidance of $3.60 to $3.70 per share and its five-year Operating Earnings growth outlook of 5% to 7% through 2028.

PSE&G, the regulated utility, reported second-quarter net income of $302 million^c ($0.60 per share), down from $336 million ($0.67 per share). Management attributed the year-over-year change to higher operation and maintenance costs, depreciation and interest expense, partly offset by incremental investment in transmission, clause-based system modernization and energy efficiency programs. PSE&G invested approximately $0.9 billion in the quarter and $1.7 billion year to date, on track with a full-year plan of $3.4 billion.

PSEG Power & Other reported second-quarter net income of $132 million^d ($0.27 per share), down from $255 million ($0.51 per share), with Operating Earnings of $11 million ($0.03 per share). The nuclear production tax credit, effective January 1, 2024, was a positive factor, offset by costs of the scheduled refueling outage at the Hope Creek nuclear plant. Management stated that its solid balance sheet supports a five-year capital investment program of $19 billion to $22.5 billion without the need to issue new equity or sell assets.

The company cited an increase in new business requests and feasibility studies from potential data center customers as a potential driver of future load growth. The pending distribution base rate case and the Clean Energy Future-Energy Efficiency II filing are expected to conclude later in 2024.

02—Key points

Key Highlights

Second-quarter 2024 net income was $434 million ($0.87 per diluted share), down from $591 million ($1.18 per share) in Q2 2023.
Non-GAAP Operating Earnings were $313 million ($0.63 per share) for Q2 2024, versus $351 million ($0.70 per share) a year earlier.
Full-year 2024 non-GAAP Operating Earnings guidance of $3.60 to $3.70 per share was reaffirmed, and the five-year growth outlook of 5% to 7% through 2028 was reiterated.
PSE&G Q2 net income was $302 million ($0.60 per share) versus $336 million ($0.67 per share); PSE&G invested approximately $0.9 billion in the quarter.
PSEG Power & Other Q2 net income was $132 million ($0.27 per share) versus $255 million ($0.51 per share), reflecting the nuclear production tax credit offset by Hope Creek refueling outage costs.
Five-year capital investment program of $19 billion to $22.5 billion is to be funded without new equity or asset sales, according to the earnings release; the slideshow cites a 2024-2028 regulated capital program of $18 billion to $21 billion.
Total available liquidity was $3,062 million at June 30, 2024, and total debt was $21,398 million, up from $20,233 million at December 31, 2023.

03—Questions

Frequently Asked Questions

Did PSEG change its 2024 earnings outlook?
No. PSEG reaffirmed its full-year 2024 non-GAAP Operating Earnings guidance range of $3.60 to $3.70 per share and its five-year non-GAAP Operating Earnings growth outlook of 5% to 7% through 2028. The company said first-half results are in line with its full-year expectations.
Why did earnings decline in the second quarter?
At PSE&G, higher operation and maintenance costs, depreciation and interest expense more than offset incremental investment benefits, with management noting growing regulatory lag before the pending rate case concludes. At PSEG Power & Other, the positive impact of the nuclear production tax credit was offset by higher costs from the scheduled refueling outage at the Hope Creek nuclear plant. The filing also shows lower net gains on trust investments and mark-to-market effects in the reconciliation to Operating Earnings.
What is driving future growth?
Management cited utility rate base growth from its capital investment program, the nuclear production tax credit that took effect January 1, 2024, and multiple growth paths at its nuclear fleet, including capacity uprates, hydrogen pilots and potential sales to data centers. PSE&G also reported an increase in new business requests and feasibility studies from potential data center customers compared with 2023.
What regulatory matters are pending?
PSE&G's distribution base rate case remained pending, and management expected it and the Clean Energy Future-Energy Efficiency II filing to conclude later in 2024. The New Jersey Board of Public Utilities approved an approximately $300 million extension of the energy efficiency program and approved recovery of previously deferred COVID-related expenses, including carrying costs, over five years starting in 2025. PSE&G also filed to reduce its gas supply commodity charge in October 2024.

04—Continue

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