Daniel J. Cregg
Chief Financial Officer, Executive Vice President at Public Service Enterprise Group
Thank you, Ralph. Good morning, everybody. For the full year 2022, GAAP earnings were $2.06 per share compared to a GAAP loss of $1.29 per share for the full year of 2021, which included Fossil sale -related impairments. Non-GAAP results were $3.47 per share for 2022 compared to 2021's non-GAAP results of $3.65 per share which you may recall excluded depreciation related to the Fossil assets held for sale in the fourth quarter of '21 and retirement of power debt. For the fourth quarter of 2022, GAAP earnings improved to $1.58 per share compared with $0.88 per share for the fourth quarter of 2021.
Non-GAAP operating earnings were $0.64 per share compared with $0.69 per share for the fourth quarter of 2021, which contain the Fossil sale -related items I just mentioned. We provided you with information on Slides 9 and 11 regarding the contribution to non-GAAP operating earnings by business. The fourth quarter and full year periods ended December 31.
Slides 10 and 12 contain waterfall charts that take you through the net changes quarter-over-quarter and year-over-year and non-GAAP operating earnings by major business, which I will review now starting with PSE&G.
Full year 2022 net income rose by $119 million or over 8% to $1.565 billion compared to 2021 net income of $1.446 billion, reflecting higher earnings from continued investment in T&D programs and the favorable impact of a full year of decoupling in 2022. For the fourth quarter of 2022, the Utilities net income rose by $81 million to $352 million or $0.70 per share compared to $0.53 per share in the fourth quarter of 2021.
As you can see on Slide 10, transmission margin added $0.01 per share compared to the year earlier quarter, reflecting growth in rate base, partly offset by the timing of O&M recovery.
Gas, electric and other margin contributed to a combined to add $0.07 per share compared with last year's fourth quarter, reflecting GSMP II roll-ins, the Conservation Incentive Program or CIP decoupling for both electric and gas, appliance service and other margin.
On the expense side, O&M was flat versus the prior year quarter. Higher distribution depreciation and interest expense each reduced results by $0.01 per share, reflecting higher plant in service and investment. Lower pension expense added $0.01 per share versus the year ago quarter and flow -through taxes, the impact of lower outstanding shares and other items added $0.10 per share compared to the fourth quarter of '21 with $0.07 of that amount reversing the timing impact of taxes from prior quarters in 2022.
During '22, PSE&G invested over $3 billion in planned capital spending to upgrade transmission and distribution facilities, enhance reliability and increase resiliency. In 2022, we also launched the IAP, our $511 million infrastructure advancement program, which the BPU authorized last June to improve the reliability of the last mile of our electric distribution system and address aging substations and gas M&R stations. And as Ralph mentioned, at year-end '22, PSE&G's rate base stood at approximately $26.4 billion, a 7.7% increase over year -end 2021.
Last Friday, the Board of Public Utilities approved an order authorizing PSE&G to modify its method of pension accounting for ratemaking purposes, which will mitigate variability in the calculation of PSE&G's pension expense for calendar year 2023 and beyond.
The backdrop of economic conditions continue to improve in New Jersey during 2022. New Jersey's unemployment rate returned to pre-pandemic levels of 3.3% in September and remained below the national average at year -end. System peak load reached 10,147 megawatts on August 9, exceeding the 10,000 megawatt level for the second year in a row.
Weather -normalized electric sales increased by 2% for the year, with residential sales flat and C&I sales increasing by 3%. Weather -normalized gas sales were flat for the year, with residential gas sales down 1%, while C&I sales increased by 2%. The CIP mechanism decouples the impact of most customer usage from margin subject to earnings and rate capital limitations, leading the change in the number of customers as the major driver of margin growth going forward. The number of electric and gas customer rose by approximately 1% each in 2022.
Wrapping up the utility update. We've narrowed our forecast of PSE&G's net income for 2023 to $1.5 billion to $1.525 billion, which reflects pension and OPEB updates compared to 2022 offset by the benefit of contemporaneously recovered investments, predictability of utility margin from the CIP decoupling as well as the implementation of the pension accounting filing effective for calendar year '23.
Now turning to carbon -free infrastructure and other. For full year '22, CFIO's net loss of $534 million or $1.06 per share, reflected higher losses on both mark -to -market transactions and nuclear decommissioning trust fund related activity. The full year 2021 net loss included impairments and debt extinguishment costs related to the Fossil sale. Non-GAAP operating earnings declined $174 million or $0.35 per share from $407 million for full year '21, reflecting the absence of the fossil assets. For the fourth quarter of '22, CFIO's net income improved to $436 million or $0.88 per share from $174 million in the year ago quarter, reflecting higher gains on both mark-to-market transactions and NDT fund -related activities.
Net income for the fourth quarter of '21 included debt extinguishment costs and other charges related to the sale of Fossil. For the fourth quarter of 2022, the non-GAAP operating earnings loss of $34 million or $0.06 per share reflected the absence of the Fossil assets compared to the fourth quarter 2021 non-GAAP earnings of $81 million or $0.16 per share, which reflected the cessation of depreciation and lower interest costs related to the Fossil sale.
Returning again to Slide 10. Non-GAAP operating earnings were $0.22 per share lower in the fourth quarter -- than the fourth quarter of 2021, driven by lower capacity prices for the remaining nuclear fleet, lower generation volume recontracting at lower prices and lower ZEC revenue compared to the year ago quarter. Combined, these items drove electric gross margin to decline $0.34 per share. Gas operations improved by $0.04 per share, reflecting higher off -system sales, higher commodity pricing and higher storage margin. Power -related cost comparisons for the fourth quarter of 2022 improved as overall O&M expense was $0.07 per share favorable compared to the year ago quarter, again reflecting the Fossil asset sale, partly offset by the planned refueling at the 100% on Hope Creek nuclear plant in this year's fourth quarter. Depreciation and interest were higher by $0.01 per share and reflected the March 2022 debt issuance of power versus the year earlier debt retirements related to the Fossil sale.
Current activity was a $0.01 per share favorable compared to the fourth quarter 2021 and primarily reflecting the absence of 2021's donation to the PCG Foundation, partly offset by higher parent interest of $0.04. Taxes and other improved by $0.01 per share over the fourth quarter of 2021 and includes the accelerated receipt of an expected tax carryback claim in '22 instead of '23, which is partially offset by the reversing of a timing impact from tax benefits in prior quarters in 2022.
Turning to ops. The nuclear fleet operated at an average capacity factor of 85.8% during the fourth quarter, which included the Hope Creek refueling and produced 7.3 terawatt hours of carbon-free generation. An unplanned outage at Salem Unit 2 in late December of 2022 occurred during a PJM region -wide generation emergency action and resulted in capacity performance penalties. The net financial impact of the outage including replacement power, capacity penalties as well as bonuses earned by the other operating PSEG units is not expected to be material.
For the full year, the nuclear fleet operated at an average capacity factor of 92.2%, producing 31.3 terawatt hours of generation. PCG is forecasting total baseload nuclear generation of approximately 31 terawatt hours for the full year of '23 hedged 95% to 100% at an average price of $31 per megawatt hour, an increase of about $4 per megawatt hour compared to '22. For '24, total nuclear generation is forecasted also to be approximately 31 terawatt hours and 55% to 60% hedged at an average price of $32 per megawatt hour. In addition, in December, we exited certain legacy BGS or basic generation service contracts in order to rebalance our hedge portfolio and realign it to our baseload nuclear fleet and reduce volatility in 2023. Wrapping up CFIO, we've narrowed our forecast of non-GAAP operating earnings to $200 million to $225 million from $185 million to $235 million.
A quick update on financing activity and collateral postings. As of December 31, 2022, total available credit capacity was $3.7 billion, including $1 billion at PSE&G. In addition, we had total cash and cash equivalents on hand of approximately $465 million. PSEG Power had net cash collateral postings of $1.5 billion at December 31, primarily related to the money hedge positions resulting from higher energy prices, which declined to $700 million through last Friday. Given the recent improvement in our collateral position in January of this year, we prepaid $750 million of a $1.5 billion short -term loan that was due in April.
Following the repayment of this term loan, PSEG had outstanding a total of $1.25 billion of 365 -day term loans expiring the spring to support Power's collateral needs. And Power had outstanding a $1.25 billion term loan expiring in March of 2025. Combined, these term loans comprised $2.5 billion of variable rate debt.
As we mentioned during our third quarter call, we entered into interest rate swaps during September and October of last year, which converted $1.05 billion of our outstanding term loans from floating to fixed rate, reducing our variable rate debt exposure. Following the measurement of the pension at year -end 2022, we've incorporated the impact of the actual 2022 investment returns, discount rate and interest rates into the 2023 pension costs. Our expected return on plan assets increased to 8.1% for 2023 as the decline in value of the fixed income securities due to higher interest rates during '22 enables a higher yield on them going forward.
While 2022 investment returns had a negative impact on 2023 pension calculations, the increase in interest rates served to reduce the pension liability with the funded status of our pension plan ending the year at a solid 87%. In addition, accounting settlement approved by the BPU will create a regulatory asset or liability to overlay our current accounting, which will probably mitigate the impact of certain expense related pension calculations going forward.
As Ralph mentioned earlier, we've narrowed our 2023 non-GAAP operating earnings guidance to $3.40 to $3.50 per share, around the same $3.45 per share midpoint with regulated operations continuing to contribute approximately 90% of that total. As a reminder, PSEG does not forecast GAAP earnings related and related long -term growth rates.
PSE&G's forecast of 2023 net income is narrowed to $1.5 billion to $1.525 billion, reflecting the predictability provided by the CIP, expected transmission distribution of investment recovery and focus on O&M cost control.
Non-GAAP operating earnings guidance for CFIO is now forecasted at $200 million to $225 million. CFIO's narrow guidance also removes the previously expected benefit for the tax carryback claim PSEG's 2023 operating guidance.
That concludes our prepared remarks. So Shamali, please open the line, and we'll take some questions.
