Ralph Izzo
Chairman of the Board, President and Chief Executive Officer at Public Service Enterprise Group
Thank you, Carlotta. Good morning, everyone. Sadly, the events of today do warrant a slight deviation from our normal beginning remarks. And let me just offer our thoughts and prayers from everyone at PSEG to those of you, who are more deeply and personally affected by the events in Eastern Europe. And of course, we pray for a rapid diplomatic resolution of matters. Let me proceed, however, with a review of our 2021 performance and our outlook for 2022 and beyond. We are, in fact, pleased to report strong operating and financial results for 2021, which marked the 17th year in a row that PSEG has delivered results within management's original or in some cases, our raised non-GAAP operating earnings guidance. So PSEG's GAAP results were $0.88 per share for the fourth quarter of 2021, compared to $0.85 per share in the fourth quarter of 2020. For the full year, PSEG reported a 2021 net loss of $1.29 per share, driven by charges related to the sale of PSEG Fossil. This compares to net income of $3.76 per share in 2020. PSEG reported non-GAAP operating earnings for the fourth quarter of $0.69 per share, compared to $0.65 per share in the fourth quarter of the prior year. Non-GAAP results for the full year 2021 rose to $3.65 per share, compared to $3.43 per share in 2020. For 2021, PSE&G net income increased by 9% above 2020 results and contributed approximately 80% of PSEG's consolidated non-GAAP operating earnings.
Slides 15 and 17 detail these results for the quarter and the full year. So we're pleased to report that PSEG has completed the sale of the Fossil portfolio. We closed on the PJM assets on February 18th, and the New York and New England assets closed yesterday, having received all required regulatory approvals from the Federal Energy Regulatory Commission and regulators in Connecticut and New York. I extend my heartfelt thanks to the PSEG Fossil employees for their professionalism throughout the sale process, which resulted in an impressive 2021 operating statistics that actually were among the best in our history. PSEG Fossil's commitment to operational excellence and continuous improvement will continue to inspire all of us at PSEG going forward. The closing of both Fossil sales along with other key priorities achieved during 2021 will support our pursuit of a robust set of regulated and contracted opportunities. PSEG is focused on clean energy and infrastructure investments to drive regulated utility growth with a vision toward powering a future where people use less energy, and it's cleaner, safer and delivered more reliably than ever. PSEG's improved business mix further enhances an already compelling environmental, social and governance profile, and will help us achieve that powering progress vision.
Let me take a minute to recap a few significant accomplishments from last year. PSE&G initiated investments in its $2 billion Clean Energy Future program that has expanded the traditional definition of rate base while helping New Jersey to achieve its clean energy goals and importantly, will provide customers with options to lower their bills. PSE&G also settled the potential challenge through the return on equity in its FERC transmission formula rate last July, resulting in reduced rates for customers and eliminating a regulatory overhang. In addition, our energy strong investments prove their value in the aftermath of a devastating tropical storm Ida last August. Despite floodwaters approaching five feet in height in parts of New Jersey, all of the Energy Strong hardened substations remained operational and help to minimize customer outages across our system. PSEG Power secured a second 3-year term of 0 emission certificates, which will carry us through May of 2025, and help to preserve the state's carbon-free nuclear generating resource. We detailed these and other accomplishments at last September's Investor Day, which highlighted a company built around a 2022 business mix that is projected to be 90% regulated. This more predictable and visible earnings platform has enabled PSEG to provide a multiyear earnings growth rate of 5% to 7% from the 2022 guidance midpoint to 2025.
PSEG also announced at last year's Investor Day that we would pursue a $500 million share repurchase program and raised the 2022 annual dividend by nearly 6% to $2.16 per share. We have completed half of that repurchase program, and we'll be executing the remaining $250 million in the near future. In addition, our Board of Directors recently declared a $0.54 per share first quarter 2022 dividend at the indicative $2.16 per share annual rate. Supporting our strong financial capabilities is our commitment to operational excellence and continuous improvement. I'm proud to report that for 2021, PSE&G achieved better-than-top decile rankings in OSHA scores for safety and SAIDI scores, which is an industry standard for reliability as shown on Slide 8. The utilities JD Power customer satisfaction scores improved in both its electric and gas areas and in each of the residential and business customer segments. These results were our highest cumulative scores to date, achieving a top quartile ranking in the Eastern group in three of the four studies. In addition, for the 20th year in a row, PA Consulting recognized PSE&G with its ReliabilityOne Award as the most reliable electric utility in the Mid-Atlantic region. After a sustained period of low natural gas prices, New Jersey and the rest of the country is experiencing increases in energy prices.
This has resulted in PSE&G implementing two 5% gas rate increases for this winter's heating season. Yet following these adjustments, our typical gas residential customer bills are still the lowest among our regional peers. On the electric side, monthly residential bills remain below our peer group average, and default supply rates will actually decline this coming June, based on the results of New Jersey's basic generation service auction earlier this month. This will result in a decrease in the average PSE&G electric bill of about 2.8%. Including the BGS rate reduction in June and other requested changes, the combined bill of a typical residential customer will be at least 20% lower compared to more than a decade ago, and 35% to 40% lower when you take into account inflation. Next month, in March, the statewide moratorium on shutoffs to residential electric and gas service, which began in March of 2020, is set to be lifted. And PSE&G in partnership with the New Jersey Board of Public Utilities and several community groups, is helping customers enroll in several payment assistance programs. Now turning to our 2022 earnings guidance on Slide 9. We have narrowed the range of full year guidance for non-GAAP operating earnings to $3.35 to $3.55 per share from the $3.30 to $3.60 per share initiated last September. The subsidiary guidance ranges for 2022 are narrower also, with a slightly higher midpoint at PSE&G that is 6% above 2021 results and reflects a more predictable earnings profile and improved business mix overall.
The narrowed range reflects the benefit of a full year impact of the Conservation Incentive Program and finalizing 2022 pension drivers updated for our December 31st performance measurement date. Last September, we introduced PSEG's five-year 2021 through 2025 Capital Investment Program of $15 billion to $17 billion, with approximately 90% or $14 billion to $16 billion allocated to the utility. This plan is expected to produce 6.5% to 8% compound annual growth in rate base over that same five-year period. Recall that we added the Infrastructure Advancement Program, I'll refer to that as IAP, to our 2021 to 2025 capital plan with an investment to be made over four years to improve the reliability of the last mile or the lower voltage of our electric distribution system. This will also address aging substations, and gas metering and regulating stations and allow us to invest in electric vehicle charging infrastructure at our facilities to support the electrification of the utilities' vehicle fleet. We remain in discussions with the BPU with regard to our IAP proposal. And based on current status of the proceeding, we anticipate BPU action in the autumn of this year. With respect to financing our capital spending program, I will reiterate that we expect our strong cash flow, enhanced financial flexibility and solid investment-grade ratings to enable funding this $15 billion to $17 billion program, as well as our planned investment in Ocean Wind one without the need to issue new equity.
Now before moving to Dan's financial review, I would like to touch upon some of the exciting new initiatives for future growth. These range from the new Clean Energy Future investments, which enable opportunities for rate base growth behind the meter, to supporting electrification of transportation and a growing mix of renewables into the distribution system, to expanding the aging infrastructure replacement programs that have been the hallmark of our growth this past decade. During 2021, we advanced our regional offshore wind efforts by acquiring a 25% equity interest in Ocean Wind one and submitting several onshore and offshore solutions into the New Jersey PJM competitive transmission solicitation with orsted, our regional offshore wind partner, as well as through stand-alone PSE&G bids for onshore upgrades. We submitted nine solutions into the state agreement approach proposal window being pursued by the BPU with technical assistance from PJM. seven of those proposals were jointly made with orsted under our partnership, which we've named Coastal Wind Link. These solutions are designed to deliver thousands of megawatts of offshore wind energy into New Jersey, drawing from PSEG's extensive transmission experience, and orsted's expertise in offshore wind energy. These projects range from single collectors at various landing points to a linked transmission network out in the ocean, with total project costs ranging from $2 billion to $7 billion.
We continue to expect the third or fourth quarter 2022 decision from the BPU on this matter. We're also in discussions with orsted regarding near-term opportunities and options to expand our offshore wind investments in the Mid-Atlantic by way of our joint ownership of the Garden State Offshore Energy side and orsted's recent award of the Skipjack two project. Turning to our climate advocacy efforts, we are continuing our active dialogue with federal state regulators, PJM and other stakeholders to develop regulatory and market mechanisms that appropriately recognize the value of carbon-free nuclear generation over the long term. As a top 10 producer of carbon-free energy in the United States with a coal-free fuel mix, we're especially supportive of the nuclear production tax credit and clean energy incentives proposed in previous legislative efforts and are hopeful that the broad support for the clean energy measures will result in new legislative proposals in coming months. Let us move through our updated environmental, social and governance summary on slide 11, where you can see our comprehensive and growing list of action items as well as an equally impressive list of recognition.
In 2021, we not only accelerated and expanded PSEG's climate vision by 20 years to Net 0 2030 covering scopes one and two for our entire operations, we also made a significant commitment by signing on to the United Nations' backed Race to Zero campaign, that will validate science-based targets for all three scopes of our mission reduction goals. We're fully engaged in meeting this commitment and look forward to updating you on our progress. PSEG was recently named to JUST Capital's 2022 JUST 100 ranking of America's Most JUST companies. That's a lot of justs in there. And we were headed to the 2022 Bloomberg Gender Equality Index as well. Among the many ESG accomplishments and recognition we attained in 2021, I'm gratified that our corporate strategy grounded in sustainability is one that is appealing to ESG investors more and more. Finally, I thank the 13,000 strong PSEG workforce contributing to our solid operating and financial results in 2021. The Board of Directors' recent dividend declaration is the 18th annual increase in the last 19 years. Our 2022 dividend marks 115 consecutive years that PSEG has paid a common dividend to shareholders, one of only a very few companies that can make such a claim. This year's $0.12 per share increase reflects our confidence in the durability of our growth strategy, as well as an ongoing commitment to returning capital to our shareholders.
In summary, with the Fossil sale now behind us, we look forward to executing on our robust set of opportunities to grow both the regulated and contracted areas of our business. Solid alignment with the State of New Jersey's energy policy goals and our cost-conscious focus on the customer bill, continue to underpin our approach to regulated growth investments, that powers progress in New Jersey, which has been our core mission for the last 119 years and counting.
I'll now turn the call over to Dan for more details on our operating results, and we'll be available for your questions after his remarks.
