Ralph LaRossa
Chair, President and Chief Executive Officer at Public Service Enterprise Group
Thank you, Carlotta. Good morning to everyone and thanks for joining us to review PSEG's second quarter results. PSEG reported net income of $0.87 per share for the second quarter of 2024, bringing results for the first half of 2024 to $1.93 per share. This compares the net income of $1.18 per share and $3.76 per share for the second quarter and first half of 2023 respectively. The 2023 GAAP earnings had reflected higher mark to market gains that benefited those earnings.
Our results for the quarter and year-to-date periods are summarized on slides 7 and 9 in the webcast slides. Non-GAAP operating earnings were $0.63 per share for the second quarter of 2024 and $1.94 share for the first half of the year. This compares to non-GAAP operating earnings of $0.70 per share and $2.09 per share for the second quarter and first half of 2023 respectively. As a reminder, our non-GAAP results exclude the items shown in attachments 8 and 9, which are included with the earnings release.
Dan will provide a detailed financial review later in the call, but I want to note that the results for the first six months of 2024 are on track with our full year expectations. These expectations reflect the anticipated resolution of PSE&G's distribution rate case later this year, and the realization of most of the increase in PSEG power and others 2024 gross margin concentrated in the fourth quarter.
Turning to operations for the second quarter, New Jersey has experienced what may turn out to be one of the hottest summers. The early and extended heat wave we experienced last month made June 2024 the second warmest June in our records. Our electric transmission and distribution system performed exceptionally well, meeting the daily load requirements. In addition, our employees provided outstanding customer care, handling double the call volume compared to the same period in 2023, responding to requests for customer service and air conditioning repairs. PSE&G responded to the elevated call volume and restored power to the electric customers affected by severe storms and heat related incidents, bringing them back online in under 24 hours, while responding to air conditioning service calls on average in nine hours. Our electric and gas systems also withstood a 4.8 impact earthquake in April, which resulted in required inspections but resulted in no operational issues.
At PSEG power, we completed the scheduled refueling of our wholly owned Hope Creek nuclear station on schedule, which lowered the fleet's capacity factor from over 96% in the first quarter to 82.7% for the second quarter. As expected, the refueling outage also reduced total generation for the second quarter, but for the year to date through June, the two Salem units, which share the site with Hope Creek, operated at a capacity factor of 99%, keeping us on track with our full year generation forecast of 30 terawatt hours to 32 terawatt hours.
Switching to regulatory activity, in May 2024, the New Jersey Board of Public Utilities, or the BPU approved an additional extension of our clean energy future or energy efficiency program of approximately $300 million, covering a six-month commitment period from July of 2024 through December of 2024. And in June, the BPU approved the recovery of PSE and G's previously deferred COVID-19 costs over a five-year period, starting in June of 2025. We continue to participate in confidential discussions with various parties to resolve both our distribution base rate case as well as the $3.1 billion energy efficiency II filing. These discussions are ongoing in parallel, and we anticipate that both cases can be resolved later this year.
We recently submitted the final update to the base rate case filing with actual data for the full test year. As a reminder, the combined electric and gas distribution rate case filing is primarily to recover incremental capital spending. We have proposed an overall revenue increase of 9%, with a typical combined residential, electric and gas customers seeing a proposed increase of 12% or less than 2% compounded growth over the six-year period. As a single state utility with dual regulatory jurisdictions, this distribution filing covers approximately 57% of our total rate base. That said, customer affordability continues to be a priority, and we continue to compare favorably with our regional peers. PSE&G customers have a lower-than-average electric bill, and the lowest gas bill in the region. Additionally, PSE&G recently filed with the BPU to implement another gas supply cost reduction this October, a third since January 2023, which will further help customer affordability this coming winter.
Moving on to capital investments, we remain on track to execute PSEG's five year, $19 billion to $22.5 billion capital plan through 2028. The regulated portion represents $18 billion to $21 billion of the total, focused on infrastructure replacement and our award-winning energy efficiency programs. PSE&G has placed into service over 2 million of the 2.3 million smart meters planned through our AMI program, still on schedule for completion by the end of this year. These investments are captured in our projections for a compound annual growth rate and rate base of 6% to 7.5% over the 2024 through 2028 period, starting from a year end 2023 rate base of $29 billion, which was up 10% over the prior year.
We also continue to pursue potential incremental investment opportunities for future regulated growth. Along those lines, PSE&G has experienced an increase in new business requests and feasibility studies from potential data center customers across our service area compared with 2023 activity, which combined with increased electric vehicle charging, is expected to drive load growth and system investment needs in the future.
Switching to regulated transmission solicitations, which are scheduled for this summer, PSE&G expects that the BPU will announce the winner or winners of the prebuilt offshore wind infrastructure during the second half of 2024. Last month, the BPU postponed a second state agreement approach process to procure transmission to support offshore wind generation, while it evaluates the impact of FERC and PJM activity on long-term transmission planning, cost allocation and interconnection reform. The BPU may reevaluate this timing and the need for a second SAA solicitation in six months, which would be this coming December.
PJM opened the 2024 regional transmission expansion plan window one solicitation earlier this month, which reflects their higher load growth forecast on the 2029 to 2032 planning horizon that has been influenced by increased electrification expectations and data center load growth throughout PJM. We are evaluating the Window One solicitation for potential opportunities to bid this September.
Now crossing the Hudson for a moment, and as expected, the Long Island Power Authority opened a request for proposals process to select the manager to operate their electric grid. Our existing operating services agreement and power supply contract with LIPA runs through the end of 2025. We intend to submit proposals into their RFP process, and LIPA is expected to make selections early next year.
At PSEG power, we are also continuing to explore opportunities for the potential sale of electricity from our nuclear facilities pursuing to long-term agreements to supply large power energy users such as data centers and hydrogen producers. In addition, we are pursuing multiple growth plans that include thermal and efficiency upgrades at our co-owned Salem units that could potentially increase the combined output by up to 200 megawatts to qualify for tax credits under current rules.
Today, we are reaffirming our guidance for long term non-GAAP operating earnings growth of 5% to 7% through 2028, which is based on the threshold price of the nuclear production tax credit, or the PTC that also provides these units with revenue stability through 2032. We continue to deploy the free cash from the nuclear business to help fund utility growth, without the need to issue new equity or sell assets, and this continues to be a differentiating factor for us. Importantly, our solid balance sheet supports the execution of our capital investment program of $19 billion to $22.5 billion through 2028, and provides the opportunity for consistent and sustainable dividend growth.
In summarizing the first six months of the year, solid execution is driving our expected results. We have settled two regulatory proceedings in the past quarter, and we are working to resolve our pending base rate case and the EE2 filings later this year. We are also advancing our five-year capital investment plan focused on infrastructure modernization and energy efficiency initiatives. These investments will help prepare our system for greater electrification of transportation, homes and workplaces, while also reducing greenhouse gas emissions and helping to lower customer bills.
Last, but certainly not least, I want to thank our employees for all they do. Their tireless efforts have helped us to maintain best in class operating statistics and customer service, especially through the challenging heat wave we have seen this year. I'll now turn the call over to Dan to discuss our financial results and outlook in greater detail, and will be available for your questions after his remarks.
