NYSE:PEG Public Service Enterprise Group Q3 2023 Earnings Report $80.99 -0.73 (-0.89%) Closing price 03:59 PM EasternExtended Trading$80.96 -0.03 (-0.04%) As of 04:12 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Public Service Enterprise Group EPS ResultsActual EPS$0.85Consensus EPS $0.75Beat/MissBeat by +$0.10One Year Ago EPSN/APublic Service Enterprise Group Revenue ResultsActual Revenue$2.46 billionExpected Revenue$2.42 billionBeat/MissBeat by +$32.51 millionYoY Revenue GrowthN/APublic Service Enterprise Group Announcement DetailsQuarterQ3 2023Date10/31/2023TimeN/AConference Call DateTuesday, October 31, 2023Conference Call Time11:00AM ETUpcoming EarningsPublic Service Enterprise Group's Q1 2025 earnings is scheduled for Wednesday, April 30, 2025, with a conference call scheduled at 11:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q1 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Public Service Enterprise Group Q3 2023 Earnings Call TranscriptProvided by QuartrOctober 31, 2023 ShareLink copied to clipboard.There are 14 speakers on the call. Operator00:00:00And gentlemen, thank you for standing by. My name is Rob, and I am your operator today. I would like to welcome everyone to today's conference, Public Service Enterprise Group's Third Quarter 2023 Earnings Conference Call and Webcast. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session for members of the financial community. Operator00:00:39As a reminder, this conference is being recorded today, October 31, 2023, and will be available for replay as an audio webcast on PSEG's Investor Relations website Speaker 100:00:52at https: Operator00:00:56investor. Pseg.com. I would now like to turn the conference over to Carlotta Chan. Please go ahead. Speaker 200:01:05Good morning, and welcome to PSEG's Q3 2023 earnings presentation. On today's call are Ralph LaRosa, Chair, President and CEO and Dan Craig, Executive Vice President and CFO. The press release, attachments and slides Today's discussion are posted on our IR website at investor. Pseg.com Speaker 300:01:29and our Speaker 200:01:2910 Q will be filed shortly. PSEG's earnings release and other matters discussed during today's call contain forward looking statements and estimates that are subject to various risks and uncertainties. We will also discuss non GAAP operating earnings, which differs from net income or net loss as reported in accordance with Generally Accepted Accounting Principles GAAP in the United States. We include reconciliations of our non GAAP financial measures And a disclaimer regarding forward looking statements on our IR website and in today's materials. Following Ralph and Dan's prepared remarks, We will conduct a 30 minute question and answer session. Speaker 200:02:10I will now turn the call over to Ralph LaRosa. Speaker 400:02:13Thank you, Carlotta. Good morning to everyone and thanks for joining us to review PSEG's 3rd quarter results. Earlier today PSEG reported 3rd quarter 2023 net income of $0.27 per share compared to net income of $0.22 per share for the Q3 of 2022. Non GAAP operating earnings for the Q3 were $0.85 per share compared to $0.86 per share in the Q3 of 2022. Our non GAAP results exclude items shown in Attachments 89, which we provided with the earnings release. Speaker 400:02:48We are very pleased with the results of both PSE and G and PSEG Power and Other, which are continuing to fully meet our planning expectations. Through the 1st 9 months, PSEG is on track to achieve our full year 2023 non GAAP operating earnings guidance of $3.40 to 3 point This morning, we also reaffirmed both PSEG's full year 2023 earnings guidance And our long term 5% to 7% earnings growth outlook with the announcement of our Q3 results, which Dan will discuss in greater detail following my remarks. It had a very constructive quarter on several fronts. Our utility PSE and G invested approximately $1,000,000,000 in energy infrastructure during the Q3, bringing the year to date spend to $2,700,000,000 For the full year of 2023, capital spend is now expected Total $3,700,000,000 slightly higher than our original plan of $3,500,000,000 Ahead of scheduled execution on our clean energy future energy efficiency and our infrastructure advancement programs. On the advanced metering front, PSE and G has completed the installation and placed into service just over half or 1,300,000 Of the 2,300,000 planned smart meter replacements, overall, we remain on schedule and within our cost parameters. Speaker 400:04:15We have seen strong demand for PSE and G's energy efficiency solutions, which is helping our customers save energy and lower their bills. To Give you some perspective on how strong the demand for energy efficiency is, consider that PSE and G now sells more energy efficiency solutions in a single month And we did an entire year just a few years ago. In addition, we continue to support the energy transition and decarbonization of the New Jersey By upgrading the last mile of our distribution system as well as adding new electric infrastructure due in part to an increase in electric vehicle penetration. These critical New Jersey energy investments also support our rate base growth trajectory of 6% to 7.5% through 2027. The low end of PSEG's rate base CAGR assumes an extension of our investment programs at their current annual levels. Speaker 400:05:10Within the upper end of the rate base range is a potentially higher amount of infrastructure investment and upcoming filings for energy efficiency above their current run rates. Last week, the BPU reset the start date for the 2nd 3 year energy efficiency period to begin January 1, 2025 and run through June 30, 2027 for a total term of 2.5 years, while adding a 6 month extension to the current 3 year period. The BPU requested updated utility filings to be aligned with this new period. The BPU's updated framework outlines a robust continuation of EE in the state and includes utility specific net annual energy reduction targets for the upcoming filings. It also directs utilities Bose quantitative performance indicators aligned with the updated net annual energy reduction targets and the compressed 2.5 year timeframe. Speaker 400:06:06The prior EE annual reduction goals of 0.75 percent for gas and 2% for electric during the program years of 2026 2027 Remain unchanged. Earlier this month, the BPU approved the settlement to extend our current GSMP II program through December 2025 And provided for $900,000,000 of investment to replace a minimum of 400 miles of cast iron and unprotected steel main at a modestly higher run rate than our previous programs. For the $900,000,000 investment provided in the settlement, $750,000,000 will be recovered through 3 periodic rate update clauses with the balance addressed in the future rate case. Through GSMP2, we reduced methane lease by approximately 22% system wide from 2018 levels. This extension enables us to remain on track to achieve our long term reduction target in methane emissions of at least 60% over the 20 11 through 2,030 period. Speaker 400:07:12PSEG's broader GSMP-three filing is being held in abeyance. We expect that this filing, which also includes pilot projects to introduce renewable natural gas and hydrogen blending into our existing distribution system, We'll restart after the future of natural gas utility stakeholder proceedings conclude. The GSMP II extension approval I'll provide for restarting the GSMP III filing by January 2025 with the intent of beginning the next phase of this work in January of 2026. While we make these investments, we remain focused on customer affordability and continue to diligently manage our O and M expense. We recently completed new 4 year labor agreements with all of our New Jersey unions. Speaker 400:07:58I want to underscore the importance of this in relation to our costs Labor is one of our largest expenditures. Having 4 years of labor cost certainty helps us keep customer bills affordable and provides our representing employees with wage predictability. PSE and G continues to compare very well with peers on a share of wallet basis, both in the region as well as nationally. Monthly bills for typical residential natural gas customers remain among the lowest in the region. Beyond that for the upcoming 2024 heating season, the BPU approved PSE and G's request to lower the gas commodity charge to approximately $0.40 per therm effective October 1. Speaker 400:08:40This gas commodity charge which is simply a pass through for the utility has declined by a total of 38% since January 1, 2023. Now turning to our nuclear operations, the PSEG nuclear fleet operated at 95.8 capacity factor during the year to date period ended September 30 producing 24.3 terawatt hours of carbon free baseloaded energy. Our 57% owned Salem Unit 1 just completed another breaker to breaker run And entered its scheduled full refueling outage after operating for 5 0 8 continuous days between refuelings. Our efforts to transition our boiling water reactor at Hope Creek from an 18 month to 24 month refueling cycle Through lower capital cost projects is ongoing. Related to our competitive transmission proposal submitted to PJM as part of its 2022 Window 3 The Transmission Expansion Advisory Committee staff recently recommended that a PSEG project be included as part of a comprehensive solution. Speaker 400:09:48PSEG's project outlines a $447,000,000 investment with an expected in service date of 2027. PJM Board will announce their final decision in December. This is another example of regulated opportunities that we are pursuing And we intend to leverage our considerable transmission skills and similar opportunities that arise. Pushing topics for a moment to sustainability, you will recall that we committed to the United Nations backed Race to 0 campaign in September of 2021 With the intention of submitting proposed targets encompassing scopes 1, 2 and 3 emissions to the Science Based Targets initiative. We made our submission in September and it is now under review as part of SBTI's validation process. Speaker 400:10:38I'd like to conclude by recapping some of the progress we've made towards our goal of streamlining and improving the predictability of our business. We now have a lower business risk profile following the sale of the fossil business and our exit from offshore wind generation. February August, we successfully reduced a significant amount of pension variability on future results with the regulatory accounting order And the lift out and will consider pursuing additional mitigation on our upcoming rate case. And we have helped to secure the financial viability of critical important New Jersey Energy assets with the decision to retain our carbon free baseload nuclear fleet, Enhanced by the revenue stability of our production tax credit that begins in January of 2024. These actions help to extend our track record of executing on PSEG's improved business strategy. Speaker 400:11:32Having a decade long visibility of cash flows from the nuclear PTC will help us to maintain a solid financial profile that does not require us to issue any new equity or sell any assets to fund our 5 year capital investment program. It supports our ability to pay a competitive and growing dividend. In closing, I want to share our plans for providing 2024 earnings guidance and other important financial updates. As you know, we will file our electric and gas distribution base rate case this December and we'll update you with the parameters once that is public. We expect to complete our normal business planning in mid December, so you can expect us to provide 2024 non GAAP operating earnings guidance shortly after that business plan is completed. Speaker 400:12:21In early December, we intend to update our existing 2023 to 2027 CapEx and rate base projections to reflect the recent GSMP II extension through 2025 and 2 upcoming energy efficiency filings. 1 to extend the current EE program out through the end of 2024, followed by a new filing covering the next round of EE programs through 2027. These updates will inform our longer term assumptions For capital and rate based projections and we expect to post the full roll forward of the capital plan, rate base and long term earnings CAGR and the January 2024 Investor Update. I will now turn the call over to Dan for more details on the operating results and will be available for your questions after his remarks. Speaker 500:13:11Thank you, Ralph. Good morning, everybody. As Ralph mentioned earlier, PSEG reported net income of 139,000,000 We're $0.27 per share for the Q3 of 2023 compared to net income of $114,000,000 or $0.22 per share for the Q3 of 2022. Non GAAP operating earnings for the Q3 of 2023 were $425,000,000 or $0.85 per share compared to $429,000,000 or $0.86 per share for the Q3 of 2022. We've provided you with information on Slides 9 and 11 regarding Contribution to non GAAP operating earnings per share by business for the Q3 and year to date of 2023. Speaker 500:13:52Slides 1012 contain waterfall charts that take you through the net changes for the quarter over quarter year to date periods and non GAAP operating earnings per share by major business. Starting with PSE and G, which reported Q3 2020 Net income of $401,000,000 or $0.80 per share compared with $399,000,000 or $0.80 per share in the Q3 of 2022. PSE and G had non GAAP operating earnings of $403,000,000 or $0.80 per share for the Q3 of 'twenty 3 compared to 399,000,000 for $0.80 per share in the Q3 of 2022. The main drivers for both GAAP and non GAAP results for the quarter were growth in transmission and distribution margin Resulting from continued investment in infrastructure replacement and clean energy programs as well as lower L and M expense. These favorable items were offset by our anticipated lower pension income and OPEB credits, along with higher depreciation and interest expense resulting from incremental investments since the year earlier quarter. Speaker 500:14:54Compared to the Q3 of 2022, transmission was $0.03 per share higher. Electric margin was $0.02 per share higher reflecting investment returns from Energy Strong 2. Gas margin was a $0.01 per share higher primarily driven by the cause recovery of our GSMP investment. Lower distribution O and M expense added a $0.01 per share compared the Q3 of 2022 and depreciation and interest expense increased by $0.01 $0.02 per share respectively compared to Q3 2022 reflecting continued growth in investment. Lower pension income resulting from 20 22's investment returns combined with lower OPEB credits Scheduled to end in 2023 resulted in a $0.05 per share unfavorable comparison to the year earlier quarter. Speaker 500:15:41Lastly, the timing of taxes recorded through an effective tax rate, which nets to 0 over a full year and other flow through taxes had a net favorable impact of $0.01 per share in the quarter compared to Q3 of 2022. Weather during the Q3 as measured by the temperature humidity index With 11% warmer than normal, but 5% cooler than the Q3 of 2022. As we've mentioned the SIP mechanism in effect since 2021 It limits the impact of weather and other sales variances positive or negative on electric and gas margins, while enabling PSE and G to promote the widespread adoption of its energy efficiency program. Growth in the number of electric and gas customers, the driver of margin under the SIP mechanism, Continues to be positive and will each up by approximately 1% year to date. On capital spending, PSE and G invested approximately $1,000,000,000 during the Q3 and is on track to execute its largest ever investment program of 3,700,000,000 Single year. Speaker 500:16:44The program includes upgrades and replacements to our T and D facilities, Energy Strong II investments, Last mile spend in the Infrastructure Advancement Program, our ongoing GS and P2 program, continued rollout of the clean energy investments In Energy Efficiency and the Energy Cloud, including smart meters and adding new electric infrastructure to accommodate an increase in EV penetration. During 2023, we've taken actions to limit the impact of our pension on earnings and increase the predictability of our financial results. In February of 2023, the BPU approved an accounting order authorizing PSE and G to modify its method for calculating the amortization of the net actuarial gain or loss component for rate making purposes. This change is effective for the calendar year 2023 and forward. For the full year 2023 PSE and G's forecast of non GAAP operating earnings is unchanged at $1,500,000,000 to 1,525,000,000 Moving to PSEG Power and Other for the Q3 of 2023. Speaker 500:17:49PSEG Power and Other reported a net loss of $262,000,000 or 0.5 $0.03 per share, largely reflecting the pension settlement charge associated with the Lift Out transaction. This compares to net loss of for $285,000,000 or $0.58 per share for the Q3 of 2022. The one time non cash settlement charge of $571,000,000 net of tax was related to the approximately $1,000,000,000 of PSEG Power and other pension obligations and associated plan assets Transfer to the Prudential Insurance Company. After providing for the effect of the lift out, our pension plans remain well funded There is no material impact on our non GAAP operating earnings in 2023. Non GAAP operating earnings were $0.22 or $0.05 per share for the Q3 of 2023 Compared to non GAAP operating earnings of $30,000,000 or $0.06 per share in the Q3 of 2022. Speaker 500:18:43We previously mentioned that during the Q1 of 2023, PCG Power realized the majority of the approximate $4 per megawatt hour increase in the average price of our 2023 hedged output, Which rose to approximately $31 per megawatt hour with higher winter pricing driving most of that increase. For the Q3 of 2023, gross margin rose by a total of $0.03 per share, primarily reflecting the roll off of certain full requirement BGS load contracts And at a higher cost to serve, resulting in a $0.04 per share benefit compared to the prior year. The gross margin improvement also included higher generation, Which added a penny per share, resulting from the absence of the Hope Creek refueling outage that started at the end of last year's Q3. These positive variances were partially offset by lower capacity revenues of $0.02 per share compared with the year ago quarter consistent with prior year capacity auctions. OAM cost comparisons in the 3rd quarter improved by $0.03 per share driven by the absence of Hoke Creek refueling outage expenses that were partly incurred in 20 22's Q3. Speaker 500:19:50Lower depreciation expense was $0.01 per share favorable compared with the year ago quarter, while higher interest expense was $0.01 unfavorable. Lower Lower pension income from 2022 investment returns and OFEB credits from the lower amortization benefit were $0.03 per share unfavorable versus Q3 2022 And taxes and other were $0.04 per share unfavorable compared to the Q3 of 2022, reflecting a partial reversal of the effective tax benefit from the Q1 of 2023. On the operating side, the nuclear fleet produced approximately 8.1 terawatt hours during the 3rd quarter At 24.3 terawatt hours for the year to date period in 2023, running at capacity factor of 95.3% 95.8% for the quarter year to date periods respectively. For the full year 2023 PSEG is forecasting generation output of 30 terawatt to 32 terawatt hours It's hedged approximately 95% to 100% of this production at an average price of $31 per megawatt hour. For 2024, the nuclear fleet is forecasted to produce 30 to 32 terawatt hours of base load output and it's 85% to 90% of this generation at an average price of $38 per megawatt hour. Speaker 500:21:01The forecast of non GAAP operating earnings for PSEG Power and Other is unchanged at $200,000,000 to $225,000,000 for the full year. This forecast reflects the realization of a majority of the expected increase in the average 2023 annual hedge price in the Q1 of 2023 as we previously discussed. For the balance of the year, higher interest expense largely captured in our November 22 update is expected to reduce PSEG Power and other results. Touching on some recent financing activity as of September 30, PCG had total available liquidity of $3,800,000,000 including $57,000,000 of cash on ECG Power had net cash collateral postings of approximately $350,000,000 at September 30, which is substantially below the elevated level seen last year. In August, PSE and G issued $500,000,000 of 5.2 percent And issued $400,000,000 of 5.45 percent secured medium term notes due August 2053. Speaker 500:22:06In September, PSE and G retired $325,000,000 of 3.25 percent secured medium term notes At maturity. Subsequent to the end of the Q3, PSEG issued $600,000,000 of 5.88 percent senior notes due October 2028 $400,000,000 of 6.13 percent senior notes due October 2033. Prior to pricing these notes, dollars 800,000,000 of treasury locks were executed, which had a positive fair value of $14,000,000 And this benefit will be amortized over the life of the senior notes, partially offsetting interest expense. Proceeds from the sale of the senior notes will be used for general corporate Including the repayment of $750,000,000 of PSEG debt maturing this November. As of September 30, 2023, PSEG had $500,000,000 outstanding of a 3 64 day variable rate term loan maturing in April 2024 And PSEG Power had $1,250,000,000 outstanding of a variable rate term loan maturing March of 2025. Speaker 500:23:12As of the end of the quarter, PSEG had swapped $900,000,000 of the power term loan from a variable to a fixed rate, Serving to mitigate the impact of higher interest rates. As of September 30 reflecting our swaps approximately 5% of our total debt was At a variable rate, which is down by half since year end 2022. We continue to maintain a solid financial position with limited exposure to variable rate debt The improvement in our collateral position, staggered maturity schedule and PSEG Power cash generation to support funding our regulated business. In closing, we are reaffirming PSEG's full year 2023 non GAAP operating earnings guidance of $3.40 to $3.50 per share. PSE and G is forecasted to contribute between $1,500,000,000 to $1,525,000,000 and PSEG That concludes our formal remarks. Speaker 500:24:11And operator, we are ready to begin the question and answer session. Operator00:24:16Thank you. Ladies and gentlemen, we now begin the question and answer session for members of the financial community. The first question is from Nicholas Campanella with Barclays. Please proceed with your question. Speaker 600:24:51Hey, good morning. Thanks for taking the question. Speaker 400:24:53Good morning, Rick. Well. Speaker 700:24:55Hey, so I just Speaker 600:24:57I wanted to ask on looking forward to 2024, if the broad market kind of underperforms here That could maybe affect your pension headwind, but also kind of understanding that you've done a lot of derisking this past year to take the volatility out. You had to lift out, You have the accounting order. Just Speaker 300:25:16could you just give us any sense how Speaker 600:25:17we should think about kind of pension contribution as a Percentage of earnings for 2024 or just even relative to the drag you've had year to date, is there a drag that we should be thinking about for 2024? And Any detail on how pension has performed year to date versus your expectations as well would be helpful. Thanks. Speaker 400:25:36Yes, Nick, sure. So listen, first of all, I appreciate you recognizing the work that Dan and his team and the regulatory team did already here. And We're seeing the benefits of it, right? We had I'll talk in engineering terms. We've reduced the sine wave and there's less volatility. Speaker 400:25:54So There's nothing that we've seen or expect that is going to become problematic first as we look at 2024, but I'll let Dan give you any more details he wants to provide on that, but Just the results of some good work that we have accomplished this year. Speaker 500:26:07Yes. And Nick, that's really what we set out to do. It doesn't eliminate the effect of markets moving because we still do have attention, but we've been able to minimize the magnitude of what we would So, as we step through the year, markets have moved. They've been off a little bit the last few months. We got another couple of months to go till we see where we land. Speaker 500:26:29I think that we're not immune to some of those movements, but I think the work that we've done will lessen that effect. And as we're looking at it now, the magnitude of what we And what we anticipate seeing as we move through year end is something we can still manage through the overall O and M budget. Speaker 600:26:48Okay. That's helpful. And nice to see that you're ahead of plan on the CapEx. Obviously, there's a bias higher here as you roll forward and, I guess we'll get more of those details in January. But as we kind of think about Putting higher CapEx through the model, just how are you thinking about equity proceeds if at all? Speaker 500:27:10No, there is no there has been no and there is no intention to have any equity issuance as we go through The capital plan that we have in front of you. So we have had $15,500,000,000 to $18,000,000,000 for the utility through 20 27 All year, we are still within that range. As you look across the 5 years, that $3,700,000,000 is a great performance. So we have been able to continue to move forward on that. But what you're seeing there is great and is helpful, but it is Still within our overall range and there is no equity that we are going to need to fund even high end of that range. Speaker 400:27:45And Nick, let me just double down on that, right. We have been saying to everyone We can no equity, no kind of equity and no sale of assets. So Speaker 700:27:57Thank you. Operator00:28:01Thank you. The next question is from the line of Shahriar Pourreza with Guggenheim Partners. Please proceed with your questions. Speaker 800:28:07Hey, good morning guys. Speaker 400:28:09Good morning, Shahriar. Speaker 800:28:10Good morning. So let me just slightly Tweak, next question around 24. I mean, obviously, it's going to be a big year for PSEG with The rate case filing and your PTC guidance for nuclear and then the ZECs is unsetting, right? I guess, how do you plan to sort of embed the various scenarios into 'twenty four guidance when you roll forward at 4Q, even if you're we're thinking about this directionally. I mean, obviously, a With resolution of the GRC could be part of this. Speaker 800:28:40I guess so how do we think about your base assumptions there? And then any changes to the interest Assumption and $0.30 under earning headwind for PSG and G that was presented a year ago, any incremental puts and takes On regulatory lag in the preceding year. Thanks. Speaker 400:28:58Yes. Sure. All great questions. And again, I'll give Dan some Chance to answer the details here. But you hit on all the moving parts that we're considering and a lot of that has to do with Driving for what our timeframe is that we're going to come out with our earnings in December. Speaker 400:29:15So Dan, you just give any more on some of those items. Speaker 500:29:20Yes. Sure. We'll finalize where we're heading and let you know. And I think there's always some assumptions you're going to make as Step forward, I think on the rate case, we will file that at some point during this quarter. We've said that it usually takes Somewhere between 9 to 12 months to move through, so we'll make our assumptions around that. Speaker 500:29:39I would love to be able to tell you that we're going to have PTC guidance in hand and we're going to know exactly where things land. But I think that there's a reasonable set of assumptions that you can make within that uncertainty until we get those regulations and we'll do that. And our guidance on interest rates really will be driven by what we see in the market. We captured the moves that we've seen over the last year or so. And so all of those will come into play and I think we'll still be able To speak with confidence with respect to an overall guidance range for 2024 and we'll do that soon. Speaker 800:30:32And again, I don't want to put you in the corner, but it seems like there's probably more Tailwinds and tail risks that you guys were thinking about that shift from 'twenty three to 'twenty four, is that a fair assessment? Speaker 500:30:43Well, look, I think what Speaker 400:30:45we will put forth is Speaker 500:30:46a balanced I think that both from Nick's question before and some of the things that you referenced, those are the kinds of things that will come into play as we put the estimate together. But I still think the way that the business is set Speaker 700:30:58up, we're not going to Speaker 500:30:59have to worry about weather movements because of our decoupling. We've got a smaller Pension variability that Ralph just mentioned, we've captured most of the interest rate moves. So I think the work that we We have been doing over the last year, year and a half or so is really going to pay off to enable us to be able to speak with confidence on that range when we put it out. Speaker 800:31:19Got it. And then just lastly, I'm just I mean, I guess what are you hearing on the nuclear PTC guidance? And I guess how do you plan a business Case around it, I mean, you have a refueling cycle, you've had some modest CapEx improvements on the back burner For nuclear, are those plans getting closer to a decision point, especially with the guidance? Speaker 900:31:41Yes. So Sure. I'd say a couple Speaker 400:31:43of things on that front. Just to reinforce again the stability that we introduced last year, We said it on the PTC floor, right? So we're not counting on anything above or beyond that And that's the way our plan is set. So that should be pretty clear for you all and pretty transparent on that front. And then on the CapEx, we have said a couple of times, we're moving ahead Very well on the refueling cycle at Hope Creek. Speaker 400:32:12That work is progressing as we expected and no surprises there. And Probably be hearing something in 2024 from us a little bit more on the upgrades that we plan for sale and the timing of that. Speaker 700:32:22Okay, perfect. Speaker 800:32:23I think Speaker 500:32:23it's actually on Cal 24 Those will pay dividends as we go down a Speaker 700:32:28little bit. Speaker 800:32:29Got it. And then, sorry, just getting here with a lot of questions for one of my questions. When do you plan on giving 2020 guidance? Speaker 400:32:37We have said that we're going to give it after we finish our business planning process with our Board. We have a review with our Board that we do December, so we'll be doing it in December. Speaker 800:32:46Okay, fantastic. Thank you guys so much. Have a great morning. Appreciate it. Operator00:32:50Yes. Tishar. Our next question is from the line of Durgesh Chopra with Evercore ISI. Please proceed with your question. Speaker 400:33:00Hey, Dagesh. Speaker 1000:33:02Hey, Ralph. Good morning. Thanks for giving the time. Just a finer point on equity. I I think this is going to be Dan's wheelhouse, but you showed this slide in the June investor deck, Which kind of talked to the $4,000,000,000 in balance sheet capacity. Speaker 1000:33:21How does that look now, as obviously there's been puts and takes. How does that look now? And then part 2, just to be clear, as you roll forward the plan and there's energy efficiency, There's obviously the transmission opportunity. Should we expect no equity as well as you roll forward to 2028? Speaker 400:33:42Yes. So look, I'll give it to Dan again, give you some details, but that both of those things are very good news for us. The transmission opportunity As well as the energy efficiency growth that we see from the triennial that the BPU put forth. But Dan's answer, I believe, is going to be exactly the same to you. We do not need equity or anything that looks like it. Speaker 500:34:05Yes. I guess Ralph is right. So We are still moving forward with that same capital raise that we talked about earlier. We will be providing an Ralph referenced that in his earlier remarks, both from what we've heard back from PJM and from what the state is looking at, on energy efficiency See in this next triennium, this next 3 year period. And so we will do that update as we go forward. Speaker 500:34:34Look, that will be the exact the way that that will roll through is we have a range of capital, we will update that range. And on the other side of that, we will have what remains from the standpoint of that debt capacity. But I think you should still look with us, Look to us with confidence that we will be able to fund that without any incremental funding. Speaker 1000:34:58Excellent. Thank you. Very clear there. And then just maybe just on the topic of nuclear PTCs, I saw you've increased hedges for 2024, the percentage of output hedge. How are you thinking about 2025? Speaker 1000:35:11I mean, obviously, we are still awaiting guidance here. But are you like as you roll forward to 2025, are you going to be less hedged Then before anticipating some clarity on nuclear PTC or what is your thought process there? Speaker 500:35:26Yes. So, I guess what we've said to folks is that, we don't have the exact calculation that's going to be made and what we've tried to do is think through What may come to us, right? So when you have some of that uncertainty, you try to think through the ultimate answer that will come And then try to think through the viability of those solutions and where they may land. And we've kind of reacted to that Thinking against the background of some of that uncertainty. And so that doesn't mean that we would not be doing any hedges. Speaker 500:35:56That means that we would be continuing to move forward A pace thinking about how that PTC may come out. Those rules will come out at some point, we hope sooner than later for that exact reason, but it should shape how you are But I'd say don't think terribly different from what we had been doing with our hedging Versus what we're doing now within 25 as a general rule. Speaker 1000:36:22I appreciate that color Dan, and congrats to you and the team for the quarter. Speaker 500:36:28Thanks, Jigar. Operator00:36:31Our next question comes from the line of David O'Carroll with Morgan Stanley. Please proceed with your questions. Speaker 100:36:38Hey, Ralph. Hey, Dan. Good morning. Speaker 400:36:39Hey, David. Speaker 100:36:43Let's see, wondering if you could touch on your latest expectations for the rate Case, just has anything changed around your thinking for the revenue requirement, anything on the capital or O and M side that would Shift your expectations as to what you file coming up this quarter? Speaker 400:36:58Yes. No, there's nothing really that I've said. We've been saying all along what our plans are. I think the only thing that you'll see is that this is what this rate case gives us the opportunity to roll in a lot of the other things that People have been asking about whether it be interest rates or pensions, right, and the impact that pension expenses might have on us. So those are the only two real updates I would say that we have and we're keeping an eye on The CapEx, but most of those items that we talked about whether GS and P which we closed on, Transmission opportunity exists, which would not be with the state of New Jersey, our energy efficiency would be a clause mechanism. Speaker 400:37:40So Nothing really that I would say is driving a big change to us. And Dan, anything you want to Speaker 700:37:46add? Speaker 500:37:46No, just one thing. David, the one thing that I think We could lose sight of and shouldn't is that with all of the focus on a higher interest rate environment, We got some questions about what might be the implications to any kind of an impact on the rate case as we go forward. And I have reminded folks, This is the 1st rate case filing we will do since 2018. And so the early part of that period between rate cases, We saw lower interest expense. And so, yes, what we're seeing in this current environment is higher and so there could be some costs that would move through The overall revenue requirement for the weighted average cost capital, but thinking about stepping through years where Interest rates were lower and now we're at a higher rate environment. Speaker 500:38:37Net net that does not calculate into a considerable rate increase because of interest rates. And so that's not a rate pressure as we go into this, just as a reminder. Speaker 100:38:51Yes, got it. Okay, great. That's helpful. And then we've got new leadership at the commission. I was just wondering if you could give perspectives on if you I think the overall kind of priorities of the commission and how they're going to treat maybe settlements or just overall views Your opportunities to work with them now going forward under new leadership in a different set of commissioners. Speaker 100:39:21Thanks. Speaker 400:39:22Yes, David, sure. Look, I would opinions really don't matter as much as results. Operator00:39:28And I have Speaker 400:39:29to tell you, I could not be more pleased with the Board and the action they took on our gas system modernization program. That Quick action and decisive action to move that forward shows a couple of things. One is The work that we are doing and how it's helping the environment from a methane reduction standpoint is aligned with the policies of the state. And I would also say The desire for the Board to continue to reach settlement was exhibited there as well, right. So both of those things Our real positives and just should reinforce not for only us in our opinion, but for you all that We are in the same space that we were before. Speaker 100:40:19Okay, excellent. Great. Thanks so much. I appreciate it. Operator00:40:25Our next question is from the line of Jeremy Tonet with JPMorgan. Please proceed with your question. Speaker 300:40:31Hi, good morning. Speaker 1000:40:33Good morning, everybody. Good morning, everybody. Speaker 300:40:34Hey, just wanted to kind of I guess build a little bit on some of the points you laid out there. With the GSMP-two Extension, can you frame the settlement versus capital plan assumptions and versus the longer term goals of GSMP III? Are the state's ongoing energy transition discussions Factoring into this settlement, just kind of looking at this more holistically. Speaker 400:40:56Yes. So look, here's the way I would frame it. The 2 years That we agreed upon are at a higher run rate than they would have otherwise been based upon our filings. So that's a real positive. I think, when you look at the 2 areas that were of concern in the conversation, they were minimal from an investment standpoint. Speaker 400:41:151 was the renewable natural gas A piece of our filing and the other was the hydrogen blending. And those are fair policy conversations that need to take place. So The Board wanted to move ahead from a commitment standpoint to get the work done to continue the methane reductions. So we're completely aligned there. The run rate was higher and I think we just participate and see where policy wants to go on those other two items and make a decision on that. Speaker 400:41:42But from a long term Strategy standpoint, our commitment to reduce the cast iron in our system remains and it's supported at this time by the commission. So I see nothing really changing from that standpoint. Speaker 500:41:55Yes. And I think against the backdrop of the capital plan, Jeremy, we had talked about the low end of the range being Consistent with where we were in the high end of the range being more like what we had for this particular and more like what we had filed for GSMP And so we were above our run rate, but not as high as we had filed. So we're firmly within that capital plan range. Speaker 300:42:16Got it. That's very helpful there. And then following up with hydrogen, if I could, what's the latest messaging progress behind the hydrogen hub evaluation In the Northeast, Mid Atlantic, Darren, how should we think about the hydrogen opportunity across local industry, PEG's nuclear fleet, gas Blending Regional Renewable Electrification overall, what can you share there? Speaker 400:42:39Yes. So, Jeremy, First of all, we participated on 2 of the hub applications. 1 was the Northeast hub and the second was the Mach 2. The Mach 2 hub was the one that was selected by the DOE in this area. And we're really happy and proud of being part of that solution. Speaker 500:42:57I think it's going to provide Speaker 400:42:58us with a lot of long term growth opportunities in the region. And I say that from an economic development standpoint for the state. I think we'll have a real opportunity to place an electrolyzer somewhere in South Jersey. I think we will have an opportunity to make use of some pipelines that exist in South Jersey and some storage that exists in South Jersey for hydrogen As well as some end users that are in that area, both in the Delaware and across the river in Southern Pennsylvania from A refinery standpoint. That's from the generic economic standpoint. Speaker 400:43:37I think our play here will be really determined when we see what the rules come out From the IRA and how the PTC is going to interact with both the nuclear PTC And what might so you might think of as pancaking hydrogen credits on top of that or not. So we'll look at that. We don't have any of that baked into our plant. I think that's the key for you to take away. It's upside for us. Speaker 400:44:05I will also tell you that we have No expectation of being part of anything that's going to create any commodity risk for us on the hydrogen front. So we'll look at this, we'll help State achieved some economic growth that they have down in that depressed part of our state and then we'll see what role we specifically play within it as an Speaker 300:44:29Got it. That's very helpful. And I think you guys have been pretty, pretty clear on no equity. So I will fully refrain from that part. I can say it again if you like, Jeremy. Speaker 300:44:42No, we heard you loud and clear. But just I guess In December, any update to get there? I mean, will we be getting kind of a CapEx update in December? And then would that be updated kind of Later on 2024 as we kind of some of the incremental items come through and just clarity comes through on some of the different items. And If so, how does the expected EE filing match up with how you're thinking about it at last year's CapEx update? Speaker 400:45:10Yes. So, Jeremy, so we are going to give you a partial update on CapEx through 20 27, and then we will give you more In January, from a capital roll forward standpoint. So that's kind of the rhythm. The December update will be A little bit of the run rate that we talked about for GSMP and the EE filings that we have to file, which will be in the beginning of December for the BPO. That said, what we've been indicating is that, that filing will if you look at the triennial, You would expect it to be a little bit more than we have seen in the past from a run rate standpoint. Speaker 400:45:51We're still assessing it. I personally have not seen the final Product from our team, so I couldn't give you any more details even if I wanted to. But the indication from everyone who has looked at That order that came out from the BPU is that there'll be more opportunity for us there. Speaker 300:46:09Got it. Super helpful. I'll leave it there. Thanks. Operator00:46:15Our next question is from the line of Julien Dumoulin Smith with Bank of America. Please proceed with your question. Speaker 700:46:21Hey, good morning, team. Thank you very much. Appreciate it. Hey, Drew. Good afternoon. Speaker 700:46:26Hey, howdy, guys. Thank you. So just trying to Bring the call together here, tie it up a little bit. Look, you talk about December and then January, you guys have a lot of different moving pieces coming together, right? And so you've got GSMP, you got the energy efficiency, you have the rate case proposal, you got the PJM transmission, I think in your comments you said December, Presumably, and again, you comment on this new load growth update from PJM December, January as well. Speaker 700:46:54I just want to maybe just to ask it more directly, How do you think about that rate base CAGR? You said specifically in your remarks again today about being that run rate being the low end of that. You commented just out of Jeremy amongst others about seeing a new elevated run rate. How do you think about that 6% plus rate base outlook? How does that fit into the 5% to 7% and what pieces are we missing here to that combination, if you will, in January here? Speaker 700:47:22It seems like a lot of positives, No equity, low end of rate based CAGR clearly seeing a higher run rate. Just I'm trying to tie this together if I can. I'm Speaker 400:47:32going to give Dan A crack at some of this too, but I just want to reinforce, I apologize if I said we were at the low end. I definitely did not I did not mean to say that. If I said it earlier, it was not my intention. So we're within the range. We've said that and I would agree with you that there's a lot of positive momentum here, but nothing is firmed up yet. Speaker 400:47:55And so that's Why we're where we are and we will give you that information when we get later in December for the two items that I mentioned, the E and GSMP and then we'll give you some more In January, but Dan, you want to Speaker 500:48:07add anything to that? No, I think that says it, Joey, there was not an update with respect to those numbers today. We have reaffirmed those numbers today. Speaker 400:48:19As we do step forward, Speaker 500:48:21it has and it continues to be a range. And so We've gotten some indication from PJM that there could be some incremental transmission spend that's in the $400,000,000 range. We've gotten some indication by going through that BPU triennial That you could see a little bit of a lift. Frankly, the GSMP was a higher run rate, but was not as much as GSMP III was filed for. So there's going to be puts and takes. Speaker 500:48:43And I think what we're saying is that you're going to see that update in full and some of those ranges having a little bit more color around them because we've stepped through another series of months As we approach the end of the year and move into year end. Speaker 700:48:59Got it. A couple of clarifications there, If you don't mind, I was saying earlier 6% to 7.5%, at least the low end of 6% seems like it needs to come up through 27%. Would you be rolling forward the plan to 'twenty eight? And then even more specifically within that, how do you think about the linearity, if we're going to bring up this term again, In terms of earnings, not just off of 23, but maybe off of a 24 baseline, if you will, if you don't mind. Speaker 400:49:27Yes. Look, Speaker 500:49:29Julien, we said 6% to 7.5% and that is where we still are. So if you're Talking me up from that number, we're at the 6% to 7.5%. What we're trying just to do is that as we do step forward, we will give the As to what these things start to look like the filing for E has not been made, and we don't have that final answer from PJM with respect to that transmission. So I think Those will follow. And as we do step forward that base will move up and some incremental capital as we extend the years of our forecast We need to come up a little bit. Speaker 500:49:59These are the kind of things that will do that. So I think you ought to think about it as exactly how we presented it that we're affirming those numbers as we step forward. We give you a little bit more color on 2024 come December and then we'll move into a longer term update on the other side of our overall finalization of our plan. Speaker 700:50:18Excellent. All right, guys. We'll talk to you then. Good luck. See you soon. Speaker 300:50:21Thanks, Joey. Thanks, Julian. Operator00:50:24Our next questions come from the line of Michael Sullivan with Wolfe Research. Please proceed with your questions. Speaker 1100:50:29Hello, Michael. Hey, everyone. Hey, how's it going? Speaker 300:50:33Hi, Michael. Speaker 1100:50:34Hey. Sorry to belabor, but just to tie it up on the year end call update. So Fair to say that the earnings CAGR will be 2024 to 2028, is that right? Speaker 400:50:51That will be in the January timeframe. That's what we said in the prepared remarks. We will be giving that update at that time. Exactly. Speaker 1100:51:01Okay. And kind of consistent with how you laid it out at the Analyst Day on the nuclear side of things, we should assume The nuclear PTC4 level with anything else being up? Right. Okay. Speaker 400:51:16Right. Okay. Speaker 1100:51:19And then last, just on the credit side of things. So I think I saw earlier this week, Moody's took a favorable Action or outlook on the power side of things. Any potential research to the consolidated view there and how they might be thinking about your metrics and thresholds? Speaker 400:51:37Yes. Nothing that we're aware of on the parent level, but I will tell you, again, some good work by Dan and his team, Our Treasury Department explained what's going on on the power side and we were very happy and I appreciate you recognizing Moody's letter went out. So thanks on that front. Speaker 500:51:59Yes. I think what they did, Michael, made sense, right? If you think about What nuclear has been and what it is now that PTC does provide that exact floor that you're referencing. And so we do intend to continue To talk about that within our numbers, and nothing beyond that, but certainly that stabilization It's supportive of exactly what Moody's did. Speaker 1100:52:20Okay, great. Thank you very much. Operator00:52:25Next questions come from the line of Carlee Davenport with Goldman Sachs. Please proceed with your question. Speaker 1200:52:30Hey, good morning. Thanks for taking the questions. Most might have been answered, but just 2 quick sort of housekeeping questions on nuclear, if I could. First one, are there any updates in terms of Nuclear PTC in terms of your view on when we might get clarity there. And then the second one is just, is there anything to flag so far on the Salem 1 refueling outage in terms of how Speaker 400:52:56Yes. Look, I'll take the last one. The team continues to perform Excellent work there and there's nothing that we have there to discuss other than a normal outage consistent with our business plan. So Just a great opportunity for me to give kudos to the team down there. So thank you for that. Speaker 400:53:14And Dan will give you the PTC piece. Speaker 500:53:17Yes. I presume Treasury is also doing excellent work down there, but they're not reporting out to us not exactly when. So we don't have any particular color on Timing, other than to continue to reinforce that sooner is better than later, but we've not heard anything back Speaker 1200:53:35Great. I appreciate that color. I'll leave it there. Speaker 500:53:38Thanks, Carly. Operator00:53:41Our next question comes from the line of Travis Miller with Morningstar. Please proceed with your question. Speaker 900:53:47Hello, everyone. Thank you. Speaker 500:53:49Hello, Travis. Speaker 900:53:50Now real quick to go just touch on CapEx. That $200,000,000 is that could you characterize that as new projects? Is that inflation on existing projects, pull forwards, wonder if you could clarify that real quick? Speaker 500:54:06Yes. Chad, I think what that really is, is the team has doing a great job of knocking out the work that we have in front of us and they're ahead on a couple of things that is Think of it as just getting some of the work done a little bit quicker than anticipated and we'll follow-up with a more fulsome update as we go forward. Speaker 900:54:25Okay. So would that pull out of 2024 at all or not a relationship there? Speaker 500:54:33No. Well, I would argue that you maybe I'll think about it that way, but as we give you an update, you'll be able to see what happens because some 'twenty five could get pulled back into 'twenty four. It's a little bit fluid as they go forward and if they are ahead on where they are right now, you could see some other things coming back into 2024. So I wouldn't think about it as a reduction in 2024. I think about it, just get a little bit more work done early and we'll continue to true that up as we go forward. Speaker 400:54:57And the only thing I would add there is that The comments I made also just indicate there's a lot of interest on the energy efficiency front and we've been able to continue To expand there, so all consistent with what I indicated on the triennial and the support we're getting from the BPU. Speaker 900:55:15Okay, perfect. That's helpful. And then I have a question offshore wind. I know you're not involved in that anymore, but obviously a lot of stuff coming out in New York. Any Anything you're hearing in regulatory discussions, political hauls, anything you're hearing in terms of New Jersey's Speaker 400:55:32Offshore Mobility? Yes. No, look, we're just we're reading what you're all reading. And again, just Happy with the decision that we made at this point. Speaker 900:55:46Okay, very good. That's all I had. Thanks. Speaker 300:55:48Thanks, Jeff. Operator00:55:52Our next question is from the line of Anthony Krowdell with Mizuho. Please proceed with your questions. Speaker 1300:55:58Hey, good afternoon, Ralph. Good afternoon, Dan. Speaker 500:56:01Hey, Anthony. Happy Speaker 1300:56:04Halloween, Ralph. Speaker 400:56:05Happy Halloween. Speaker 1300:56:07Just apologies, the housekeeping on cadence. Rate filing December, then we get 2024 guidance, earnings guidance in December, A little CapEx update and then on the 4Q call, we get an update on rate base CAGR, earnings growth CAGR. Is that did I hear that correctly? Speaker 400:56:27That's about the rhythm we expect. I don't want to be tied into an hour a day, but yes, that's the rhythm we expect. Speaker 1300:56:33Yes. Great. And then just easy question. You talked about the financing maybe interest rate hedges earlier in the call. There's a bond that's due, I guess, November you guys have taken care of that. Speaker 1300:56:45There's also one due, I guess, in June of next year, it was an attractive rate at 2.9%. Has that been included like in your interest rate hedges or What are the plans for that maturity? Speaker 500:56:58Yes. So we'll take that out and step forward. And Anthony, I think the important element is that Last November as we gave that update, we presumed rates including spreads that were Pretty comparable to where we are. We didn't capture every single dollar of it, but I think that the delta between what we thought it was going to be at and where we are currently from a market perspective It is within the range. So I think we've done a nice job of getting ahead of it and we will take that out. Speaker 500:57:27And Like a lot of our refinancings, we will see some higher rates as we flip them, but they were accounted for within our forecast. Speaker 1300:57:35Great. And then last, if I could jump in, up to Mike's question earlier about the PEG Power outlook change, I guess, at Moody's. I mean, any thoughts to maybe potential changes at the parent company? I believe Baa2, PEG Power, stronger balance sheet there. The utility, strong balance sheet, any read through on Your interest in moving PEG Power I'm sorry, the parent up to a BAA1? Speaker 500:58:07Yes. I mean, if you take a look at it, They didn't move the rating on Power. It's just a positive outlook there. And so I think that ripple effect would be lesser as you look at the parent. But I think On balance, just if you think about the overall business mix, and reflective of PTCs and what we've done from an overall strategic set of decisions, I think we're in a better position going forward. Speaker 1300:58:32Great. Thanks for taking my questions. Speaker 800:58:33Thanks, Anthony. Speaker 200:58:34Operator, we'll take our last question. Operator00:58:38That is all the time we have for questions today. I will turn the floor back to Mr. LaRosa for closing comments. Speaker 400:58:43Yes. No, thank you very much and Sorry, we had so much interest, but sorry we had to move on. Hey, listen, I just want to thank you all for your continued interest. The work that our team continues to produce amazes me. I'm really happy with the stability that we've created here End of Certainty. Speaker 400:59:06We put out some internal information earlier today and it's just amazing the amount of things that we continue To execute on and I'll just highlight a few of them here. One was this gas system monetization plan and the work that we completed. We've continued to be recognized in awards, different things that have come out of best employers and Best companies to work for. We lowered our gas bills again for customers effective October 1, and we refreshed our Board of Directors. So things that a lot of people sometimes struggle with, we just seem to be executing time and time again. Speaker 400:59:47So A big thanks to our team. Hopefully, you hear that not only in our voices, but from others that we're a company you can count on And we're executing on the work that we said we would. And I'll just leave with this. Anthony said it, but happy Halloween to everyone. I hope you all have a safe And healthy Halloween and that's not just for yourselves, but also for your families. Speaker 401:00:10Enjoy the day. Take care. Operator01:00:14Ladies and gentlemen, this concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallPublic Service Enterprise Group Q3 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) Public Service Enterprise Group Earnings HeadlinesNew Jersey Rises in American Council for Energy-Efficient Economy Rankings to #8 This Year From ...April 25 at 5:42 PM | gurufocus.comPublic Service Enterprise Group Inc (PEG) Boosts New Jersey's Energy Efficiency Ranking | PEG ...April 25 at 5:42 PM | gurufocus.comReal Americans Don’t Wait on Wall Street’s Next MoveWhat's happening in the markets right now should concern every freedom-loving American who's worked hard and saved smart. Your 401(k) doesn't deserve to be dragged through the mud by tariffs, trade wars, reckless spending, and political standoffs. And you don't have to stand by while Wall Street plays roulette with your future.April 25, 2025 | Premier Gold Co (Ad)Public Service Enterprise (PEG) Receives a Buy from Morgan StanleyApril 24 at 5:15 AM | markets.businessinsider.comPublic Service Enterprise Group: Well Positioned To Capitalize On Growing Power DemandApril 23 at 5:47 AM | seekingalpha.comPSEG Declares Regular Quarterly Dividend for the Second Quarter of 2025April 22 at 2:53 PM | prnewswire.comSee More Public Service Enterprise Group Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Public Service Enterprise Group? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Public Service Enterprise Group and other key companies, straight to your email. Email Address About Public Service Enterprise GroupPublic Service Enterprise Group (NYSE:PEG), through its subsidiaries, operates in electric and gas utility business in the United States. It operates through PSE&G and PSEG Power segments. The PSE&G segment transmits electricity; distributes electricity and natural gas to residential, commercial, and industrial customers; and appliance services and repairs to customers through its service territory, as well as invests in solar generation projects, and energy efficiency and related programs. The PSEG Power segment engages in nuclear generation businesses; and supplies power and natural gas to nuclear power plants and gas storage facilities activities. As of December 31, 2023, it had electric transmission and distribution system of 25,000 circuit miles and 866,600 poles; 56 switching stations with an installed capacity of 39,953 megavolt-amperes (MVA), and 235 substations with an installed capacity of 10,382 MVA; 109 MVA aggregate installed capacity for substations; four electric distribution headquarters and five electric sub-headquarters; 18,000 miles of gas mains, 12 gas distribution headquarters, two sub-headquarters, and one meter shop, as well as 56 natural gas metering and regulating stations; and 158 MegaWatts defined conditions of installed PV solar capacity. Public Service Enterprise Group Incorporated was founded in 1903 and is based in Newark, New Jersey.View Public Service Enterprise Group ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Market Anticipation Builds: Joby Stock Climbs Ahead of EarningsIs Intuitive Surgical a Buy After Volatile Reaction to Earnings?Seismic Shift at Intel: Massive Layoffs Precede Crucial EarningsRocket Lab Lands New Contract, Builds Momentum Ahead of EarningsAmazon's Earnings Could Fuel a Rapid Breakout Tesla Earnings Miss, But Musk Refocuses and Bulls ReactQualcomm’s Range Narrows Ahead of Earnings as Bulls Step In Upcoming Earnings Cadence Design Systems (4/28/2025)Welltower (4/28/2025)Waste Management (4/28/2025)AstraZeneca (4/29/2025)Booking (4/29/2025)DoorDash (4/29/2025)Honeywell International (4/29/2025)Mondelez International (4/29/2025)PayPal (4/29/2025)Regeneron Pharmaceuticals (4/29/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 14 speakers on the call. Operator00:00:00And gentlemen, thank you for standing by. My name is Rob, and I am your operator today. I would like to welcome everyone to today's conference, Public Service Enterprise Group's Third Quarter 2023 Earnings Conference Call and Webcast. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session for members of the financial community. Operator00:00:39As a reminder, this conference is being recorded today, October 31, 2023, and will be available for replay as an audio webcast on PSEG's Investor Relations website Speaker 100:00:52at https: Operator00:00:56investor. Pseg.com. I would now like to turn the conference over to Carlotta Chan. Please go ahead. Speaker 200:01:05Good morning, and welcome to PSEG's Q3 2023 earnings presentation. On today's call are Ralph LaRosa, Chair, President and CEO and Dan Craig, Executive Vice President and CFO. The press release, attachments and slides Today's discussion are posted on our IR website at investor. Pseg.com Speaker 300:01:29and our Speaker 200:01:2910 Q will be filed shortly. PSEG's earnings release and other matters discussed during today's call contain forward looking statements and estimates that are subject to various risks and uncertainties. We will also discuss non GAAP operating earnings, which differs from net income or net loss as reported in accordance with Generally Accepted Accounting Principles GAAP in the United States. We include reconciliations of our non GAAP financial measures And a disclaimer regarding forward looking statements on our IR website and in today's materials. Following Ralph and Dan's prepared remarks, We will conduct a 30 minute question and answer session. Speaker 200:02:10I will now turn the call over to Ralph LaRosa. Speaker 400:02:13Thank you, Carlotta. Good morning to everyone and thanks for joining us to review PSEG's 3rd quarter results. Earlier today PSEG reported 3rd quarter 2023 net income of $0.27 per share compared to net income of $0.22 per share for the Q3 of 2022. Non GAAP operating earnings for the Q3 were $0.85 per share compared to $0.86 per share in the Q3 of 2022. Our non GAAP results exclude items shown in Attachments 89, which we provided with the earnings release. Speaker 400:02:48We are very pleased with the results of both PSE and G and PSEG Power and Other, which are continuing to fully meet our planning expectations. Through the 1st 9 months, PSEG is on track to achieve our full year 2023 non GAAP operating earnings guidance of $3.40 to 3 point This morning, we also reaffirmed both PSEG's full year 2023 earnings guidance And our long term 5% to 7% earnings growth outlook with the announcement of our Q3 results, which Dan will discuss in greater detail following my remarks. It had a very constructive quarter on several fronts. Our utility PSE and G invested approximately $1,000,000,000 in energy infrastructure during the Q3, bringing the year to date spend to $2,700,000,000 For the full year of 2023, capital spend is now expected Total $3,700,000,000 slightly higher than our original plan of $3,500,000,000 Ahead of scheduled execution on our clean energy future energy efficiency and our infrastructure advancement programs. On the advanced metering front, PSE and G has completed the installation and placed into service just over half or 1,300,000 Of the 2,300,000 planned smart meter replacements, overall, we remain on schedule and within our cost parameters. Speaker 400:04:15We have seen strong demand for PSE and G's energy efficiency solutions, which is helping our customers save energy and lower their bills. To Give you some perspective on how strong the demand for energy efficiency is, consider that PSE and G now sells more energy efficiency solutions in a single month And we did an entire year just a few years ago. In addition, we continue to support the energy transition and decarbonization of the New Jersey By upgrading the last mile of our distribution system as well as adding new electric infrastructure due in part to an increase in electric vehicle penetration. These critical New Jersey energy investments also support our rate base growth trajectory of 6% to 7.5% through 2027. The low end of PSEG's rate base CAGR assumes an extension of our investment programs at their current annual levels. Speaker 400:05:10Within the upper end of the rate base range is a potentially higher amount of infrastructure investment and upcoming filings for energy efficiency above their current run rates. Last week, the BPU reset the start date for the 2nd 3 year energy efficiency period to begin January 1, 2025 and run through June 30, 2027 for a total term of 2.5 years, while adding a 6 month extension to the current 3 year period. The BPU requested updated utility filings to be aligned with this new period. The BPU's updated framework outlines a robust continuation of EE in the state and includes utility specific net annual energy reduction targets for the upcoming filings. It also directs utilities Bose quantitative performance indicators aligned with the updated net annual energy reduction targets and the compressed 2.5 year timeframe. Speaker 400:06:06The prior EE annual reduction goals of 0.75 percent for gas and 2% for electric during the program years of 2026 2027 Remain unchanged. Earlier this month, the BPU approved the settlement to extend our current GSMP II program through December 2025 And provided for $900,000,000 of investment to replace a minimum of 400 miles of cast iron and unprotected steel main at a modestly higher run rate than our previous programs. For the $900,000,000 investment provided in the settlement, $750,000,000 will be recovered through 3 periodic rate update clauses with the balance addressed in the future rate case. Through GSMP2, we reduced methane lease by approximately 22% system wide from 2018 levels. This extension enables us to remain on track to achieve our long term reduction target in methane emissions of at least 60% over the 20 11 through 2,030 period. Speaker 400:07:12PSEG's broader GSMP-three filing is being held in abeyance. We expect that this filing, which also includes pilot projects to introduce renewable natural gas and hydrogen blending into our existing distribution system, We'll restart after the future of natural gas utility stakeholder proceedings conclude. The GSMP II extension approval I'll provide for restarting the GSMP III filing by January 2025 with the intent of beginning the next phase of this work in January of 2026. While we make these investments, we remain focused on customer affordability and continue to diligently manage our O and M expense. We recently completed new 4 year labor agreements with all of our New Jersey unions. Speaker 400:07:58I want to underscore the importance of this in relation to our costs Labor is one of our largest expenditures. Having 4 years of labor cost certainty helps us keep customer bills affordable and provides our representing employees with wage predictability. PSE and G continues to compare very well with peers on a share of wallet basis, both in the region as well as nationally. Monthly bills for typical residential natural gas customers remain among the lowest in the region. Beyond that for the upcoming 2024 heating season, the BPU approved PSE and G's request to lower the gas commodity charge to approximately $0.40 per therm effective October 1. Speaker 400:08:40This gas commodity charge which is simply a pass through for the utility has declined by a total of 38% since January 1, 2023. Now turning to our nuclear operations, the PSEG nuclear fleet operated at 95.8 capacity factor during the year to date period ended September 30 producing 24.3 terawatt hours of carbon free baseloaded energy. Our 57% owned Salem Unit 1 just completed another breaker to breaker run And entered its scheduled full refueling outage after operating for 5 0 8 continuous days between refuelings. Our efforts to transition our boiling water reactor at Hope Creek from an 18 month to 24 month refueling cycle Through lower capital cost projects is ongoing. Related to our competitive transmission proposal submitted to PJM as part of its 2022 Window 3 The Transmission Expansion Advisory Committee staff recently recommended that a PSEG project be included as part of a comprehensive solution. Speaker 400:09:48PSEG's project outlines a $447,000,000 investment with an expected in service date of 2027. PJM Board will announce their final decision in December. This is another example of regulated opportunities that we are pursuing And we intend to leverage our considerable transmission skills and similar opportunities that arise. Pushing topics for a moment to sustainability, you will recall that we committed to the United Nations backed Race to 0 campaign in September of 2021 With the intention of submitting proposed targets encompassing scopes 1, 2 and 3 emissions to the Science Based Targets initiative. We made our submission in September and it is now under review as part of SBTI's validation process. Speaker 400:10:38I'd like to conclude by recapping some of the progress we've made towards our goal of streamlining and improving the predictability of our business. We now have a lower business risk profile following the sale of the fossil business and our exit from offshore wind generation. February August, we successfully reduced a significant amount of pension variability on future results with the regulatory accounting order And the lift out and will consider pursuing additional mitigation on our upcoming rate case. And we have helped to secure the financial viability of critical important New Jersey Energy assets with the decision to retain our carbon free baseload nuclear fleet, Enhanced by the revenue stability of our production tax credit that begins in January of 2024. These actions help to extend our track record of executing on PSEG's improved business strategy. Speaker 400:11:32Having a decade long visibility of cash flows from the nuclear PTC will help us to maintain a solid financial profile that does not require us to issue any new equity or sell any assets to fund our 5 year capital investment program. It supports our ability to pay a competitive and growing dividend. In closing, I want to share our plans for providing 2024 earnings guidance and other important financial updates. As you know, we will file our electric and gas distribution base rate case this December and we'll update you with the parameters once that is public. We expect to complete our normal business planning in mid December, so you can expect us to provide 2024 non GAAP operating earnings guidance shortly after that business plan is completed. Speaker 400:12:21In early December, we intend to update our existing 2023 to 2027 CapEx and rate base projections to reflect the recent GSMP II extension through 2025 and 2 upcoming energy efficiency filings. 1 to extend the current EE program out through the end of 2024, followed by a new filing covering the next round of EE programs through 2027. These updates will inform our longer term assumptions For capital and rate based projections and we expect to post the full roll forward of the capital plan, rate base and long term earnings CAGR and the January 2024 Investor Update. I will now turn the call over to Dan for more details on the operating results and will be available for your questions after his remarks. Speaker 500:13:11Thank you, Ralph. Good morning, everybody. As Ralph mentioned earlier, PSEG reported net income of 139,000,000 We're $0.27 per share for the Q3 of 2023 compared to net income of $114,000,000 or $0.22 per share for the Q3 of 2022. Non GAAP operating earnings for the Q3 of 2023 were $425,000,000 or $0.85 per share compared to $429,000,000 or $0.86 per share for the Q3 of 2022. We've provided you with information on Slides 9 and 11 regarding Contribution to non GAAP operating earnings per share by business for the Q3 and year to date of 2023. Speaker 500:13:52Slides 1012 contain waterfall charts that take you through the net changes for the quarter over quarter year to date periods and non GAAP operating earnings per share by major business. Starting with PSE and G, which reported Q3 2020 Net income of $401,000,000 or $0.80 per share compared with $399,000,000 or $0.80 per share in the Q3 of 2022. PSE and G had non GAAP operating earnings of $403,000,000 or $0.80 per share for the Q3 of 'twenty 3 compared to 399,000,000 for $0.80 per share in the Q3 of 2022. The main drivers for both GAAP and non GAAP results for the quarter were growth in transmission and distribution margin Resulting from continued investment in infrastructure replacement and clean energy programs as well as lower L and M expense. These favorable items were offset by our anticipated lower pension income and OPEB credits, along with higher depreciation and interest expense resulting from incremental investments since the year earlier quarter. Speaker 500:14:54Compared to the Q3 of 2022, transmission was $0.03 per share higher. Electric margin was $0.02 per share higher reflecting investment returns from Energy Strong 2. Gas margin was a $0.01 per share higher primarily driven by the cause recovery of our GSMP investment. Lower distribution O and M expense added a $0.01 per share compared the Q3 of 2022 and depreciation and interest expense increased by $0.01 $0.02 per share respectively compared to Q3 2022 reflecting continued growth in investment. Lower pension income resulting from 20 22's investment returns combined with lower OPEB credits Scheduled to end in 2023 resulted in a $0.05 per share unfavorable comparison to the year earlier quarter. Speaker 500:15:41Lastly, the timing of taxes recorded through an effective tax rate, which nets to 0 over a full year and other flow through taxes had a net favorable impact of $0.01 per share in the quarter compared to Q3 of 2022. Weather during the Q3 as measured by the temperature humidity index With 11% warmer than normal, but 5% cooler than the Q3 of 2022. As we've mentioned the SIP mechanism in effect since 2021 It limits the impact of weather and other sales variances positive or negative on electric and gas margins, while enabling PSE and G to promote the widespread adoption of its energy efficiency program. Growth in the number of electric and gas customers, the driver of margin under the SIP mechanism, Continues to be positive and will each up by approximately 1% year to date. On capital spending, PSE and G invested approximately $1,000,000,000 during the Q3 and is on track to execute its largest ever investment program of 3,700,000,000 Single year. Speaker 500:16:44The program includes upgrades and replacements to our T and D facilities, Energy Strong II investments, Last mile spend in the Infrastructure Advancement Program, our ongoing GS and P2 program, continued rollout of the clean energy investments In Energy Efficiency and the Energy Cloud, including smart meters and adding new electric infrastructure to accommodate an increase in EV penetration. During 2023, we've taken actions to limit the impact of our pension on earnings and increase the predictability of our financial results. In February of 2023, the BPU approved an accounting order authorizing PSE and G to modify its method for calculating the amortization of the net actuarial gain or loss component for rate making purposes. This change is effective for the calendar year 2023 and forward. For the full year 2023 PSE and G's forecast of non GAAP operating earnings is unchanged at $1,500,000,000 to 1,525,000,000 Moving to PSEG Power and Other for the Q3 of 2023. Speaker 500:17:49PSEG Power and Other reported a net loss of $262,000,000 or 0.5 $0.03 per share, largely reflecting the pension settlement charge associated with the Lift Out transaction. This compares to net loss of for $285,000,000 or $0.58 per share for the Q3 of 2022. The one time non cash settlement charge of $571,000,000 net of tax was related to the approximately $1,000,000,000 of PSEG Power and other pension obligations and associated plan assets Transfer to the Prudential Insurance Company. After providing for the effect of the lift out, our pension plans remain well funded There is no material impact on our non GAAP operating earnings in 2023. Non GAAP operating earnings were $0.22 or $0.05 per share for the Q3 of 2023 Compared to non GAAP operating earnings of $30,000,000 or $0.06 per share in the Q3 of 2022. Speaker 500:18:43We previously mentioned that during the Q1 of 2023, PCG Power realized the majority of the approximate $4 per megawatt hour increase in the average price of our 2023 hedged output, Which rose to approximately $31 per megawatt hour with higher winter pricing driving most of that increase. For the Q3 of 2023, gross margin rose by a total of $0.03 per share, primarily reflecting the roll off of certain full requirement BGS load contracts And at a higher cost to serve, resulting in a $0.04 per share benefit compared to the prior year. The gross margin improvement also included higher generation, Which added a penny per share, resulting from the absence of the Hope Creek refueling outage that started at the end of last year's Q3. These positive variances were partially offset by lower capacity revenues of $0.02 per share compared with the year ago quarter consistent with prior year capacity auctions. OAM cost comparisons in the 3rd quarter improved by $0.03 per share driven by the absence of Hoke Creek refueling outage expenses that were partly incurred in 20 22's Q3. Speaker 500:19:50Lower depreciation expense was $0.01 per share favorable compared with the year ago quarter, while higher interest expense was $0.01 unfavorable. Lower Lower pension income from 2022 investment returns and OFEB credits from the lower amortization benefit were $0.03 per share unfavorable versus Q3 2022 And taxes and other were $0.04 per share unfavorable compared to the Q3 of 2022, reflecting a partial reversal of the effective tax benefit from the Q1 of 2023. On the operating side, the nuclear fleet produced approximately 8.1 terawatt hours during the 3rd quarter At 24.3 terawatt hours for the year to date period in 2023, running at capacity factor of 95.3% 95.8% for the quarter year to date periods respectively. For the full year 2023 PSEG is forecasting generation output of 30 terawatt to 32 terawatt hours It's hedged approximately 95% to 100% of this production at an average price of $31 per megawatt hour. For 2024, the nuclear fleet is forecasted to produce 30 to 32 terawatt hours of base load output and it's 85% to 90% of this generation at an average price of $38 per megawatt hour. Speaker 500:21:01The forecast of non GAAP operating earnings for PSEG Power and Other is unchanged at $200,000,000 to $225,000,000 for the full year. This forecast reflects the realization of a majority of the expected increase in the average 2023 annual hedge price in the Q1 of 2023 as we previously discussed. For the balance of the year, higher interest expense largely captured in our November 22 update is expected to reduce PSEG Power and other results. Touching on some recent financing activity as of September 30, PCG had total available liquidity of $3,800,000,000 including $57,000,000 of cash on ECG Power had net cash collateral postings of approximately $350,000,000 at September 30, which is substantially below the elevated level seen last year. In August, PSE and G issued $500,000,000 of 5.2 percent And issued $400,000,000 of 5.45 percent secured medium term notes due August 2053. Speaker 500:22:06In September, PSE and G retired $325,000,000 of 3.25 percent secured medium term notes At maturity. Subsequent to the end of the Q3, PSEG issued $600,000,000 of 5.88 percent senior notes due October 2028 $400,000,000 of 6.13 percent senior notes due October 2033. Prior to pricing these notes, dollars 800,000,000 of treasury locks were executed, which had a positive fair value of $14,000,000 And this benefit will be amortized over the life of the senior notes, partially offsetting interest expense. Proceeds from the sale of the senior notes will be used for general corporate Including the repayment of $750,000,000 of PSEG debt maturing this November. As of September 30, 2023, PSEG had $500,000,000 outstanding of a 3 64 day variable rate term loan maturing in April 2024 And PSEG Power had $1,250,000,000 outstanding of a variable rate term loan maturing March of 2025. Speaker 500:23:12As of the end of the quarter, PSEG had swapped $900,000,000 of the power term loan from a variable to a fixed rate, Serving to mitigate the impact of higher interest rates. As of September 30 reflecting our swaps approximately 5% of our total debt was At a variable rate, which is down by half since year end 2022. We continue to maintain a solid financial position with limited exposure to variable rate debt The improvement in our collateral position, staggered maturity schedule and PSEG Power cash generation to support funding our regulated business. In closing, we are reaffirming PSEG's full year 2023 non GAAP operating earnings guidance of $3.40 to $3.50 per share. PSE and G is forecasted to contribute between $1,500,000,000 to $1,525,000,000 and PSEG That concludes our formal remarks. Speaker 500:24:11And operator, we are ready to begin the question and answer session. Operator00:24:16Thank you. Ladies and gentlemen, we now begin the question and answer session for members of the financial community. The first question is from Nicholas Campanella with Barclays. Please proceed with your question. Speaker 600:24:51Hey, good morning. Thanks for taking the question. Speaker 400:24:53Good morning, Rick. Well. Speaker 700:24:55Hey, so I just Speaker 600:24:57I wanted to ask on looking forward to 2024, if the broad market kind of underperforms here That could maybe affect your pension headwind, but also kind of understanding that you've done a lot of derisking this past year to take the volatility out. You had to lift out, You have the accounting order. Just Speaker 300:25:16could you just give us any sense how Speaker 600:25:17we should think about kind of pension contribution as a Percentage of earnings for 2024 or just even relative to the drag you've had year to date, is there a drag that we should be thinking about for 2024? And Any detail on how pension has performed year to date versus your expectations as well would be helpful. Thanks. Speaker 400:25:36Yes, Nick, sure. So listen, first of all, I appreciate you recognizing the work that Dan and his team and the regulatory team did already here. And We're seeing the benefits of it, right? We had I'll talk in engineering terms. We've reduced the sine wave and there's less volatility. Speaker 400:25:54So There's nothing that we've seen or expect that is going to become problematic first as we look at 2024, but I'll let Dan give you any more details he wants to provide on that, but Just the results of some good work that we have accomplished this year. Speaker 500:26:07Yes. And Nick, that's really what we set out to do. It doesn't eliminate the effect of markets moving because we still do have attention, but we've been able to minimize the magnitude of what we would So, as we step through the year, markets have moved. They've been off a little bit the last few months. We got another couple of months to go till we see where we land. Speaker 500:26:29I think that we're not immune to some of those movements, but I think the work that we've done will lessen that effect. And as we're looking at it now, the magnitude of what we And what we anticipate seeing as we move through year end is something we can still manage through the overall O and M budget. Speaker 600:26:48Okay. That's helpful. And nice to see that you're ahead of plan on the CapEx. Obviously, there's a bias higher here as you roll forward and, I guess we'll get more of those details in January. But as we kind of think about Putting higher CapEx through the model, just how are you thinking about equity proceeds if at all? Speaker 500:27:10No, there is no there has been no and there is no intention to have any equity issuance as we go through The capital plan that we have in front of you. So we have had $15,500,000,000 to $18,000,000,000 for the utility through 20 27 All year, we are still within that range. As you look across the 5 years, that $3,700,000,000 is a great performance. So we have been able to continue to move forward on that. But what you're seeing there is great and is helpful, but it is Still within our overall range and there is no equity that we are going to need to fund even high end of that range. Speaker 400:27:45And Nick, let me just double down on that, right. We have been saying to everyone We can no equity, no kind of equity and no sale of assets. So Speaker 700:27:57Thank you. Operator00:28:01Thank you. The next question is from the line of Shahriar Pourreza with Guggenheim Partners. Please proceed with your questions. Speaker 800:28:07Hey, good morning guys. Speaker 400:28:09Good morning, Shahriar. Speaker 800:28:10Good morning. So let me just slightly Tweak, next question around 24. I mean, obviously, it's going to be a big year for PSEG with The rate case filing and your PTC guidance for nuclear and then the ZECs is unsetting, right? I guess, how do you plan to sort of embed the various scenarios into 'twenty four guidance when you roll forward at 4Q, even if you're we're thinking about this directionally. I mean, obviously, a With resolution of the GRC could be part of this. Speaker 800:28:40I guess so how do we think about your base assumptions there? And then any changes to the interest Assumption and $0.30 under earning headwind for PSG and G that was presented a year ago, any incremental puts and takes On regulatory lag in the preceding year. Thanks. Speaker 400:28:58Yes. Sure. All great questions. And again, I'll give Dan some Chance to answer the details here. But you hit on all the moving parts that we're considering and a lot of that has to do with Driving for what our timeframe is that we're going to come out with our earnings in December. Speaker 400:29:15So Dan, you just give any more on some of those items. Speaker 500:29:20Yes. Sure. We'll finalize where we're heading and let you know. And I think there's always some assumptions you're going to make as Step forward, I think on the rate case, we will file that at some point during this quarter. We've said that it usually takes Somewhere between 9 to 12 months to move through, so we'll make our assumptions around that. Speaker 500:29:39I would love to be able to tell you that we're going to have PTC guidance in hand and we're going to know exactly where things land. But I think that there's a reasonable set of assumptions that you can make within that uncertainty until we get those regulations and we'll do that. And our guidance on interest rates really will be driven by what we see in the market. We captured the moves that we've seen over the last year or so. And so all of those will come into play and I think we'll still be able To speak with confidence with respect to an overall guidance range for 2024 and we'll do that soon. Speaker 800:30:32And again, I don't want to put you in the corner, but it seems like there's probably more Tailwinds and tail risks that you guys were thinking about that shift from 'twenty three to 'twenty four, is that a fair assessment? Speaker 500:30:43Well, look, I think what Speaker 400:30:45we will put forth is Speaker 500:30:46a balanced I think that both from Nick's question before and some of the things that you referenced, those are the kinds of things that will come into play as we put the estimate together. But I still think the way that the business is set Speaker 700:30:58up, we're not going to Speaker 500:30:59have to worry about weather movements because of our decoupling. We've got a smaller Pension variability that Ralph just mentioned, we've captured most of the interest rate moves. So I think the work that we We have been doing over the last year, year and a half or so is really going to pay off to enable us to be able to speak with confidence on that range when we put it out. Speaker 800:31:19Got it. And then just lastly, I'm just I mean, I guess what are you hearing on the nuclear PTC guidance? And I guess how do you plan a business Case around it, I mean, you have a refueling cycle, you've had some modest CapEx improvements on the back burner For nuclear, are those plans getting closer to a decision point, especially with the guidance? Speaker 900:31:41Yes. So Sure. I'd say a couple Speaker 400:31:43of things on that front. Just to reinforce again the stability that we introduced last year, We said it on the PTC floor, right? So we're not counting on anything above or beyond that And that's the way our plan is set. So that should be pretty clear for you all and pretty transparent on that front. And then on the CapEx, we have said a couple of times, we're moving ahead Very well on the refueling cycle at Hope Creek. Speaker 400:32:12That work is progressing as we expected and no surprises there. And Probably be hearing something in 2024 from us a little bit more on the upgrades that we plan for sale and the timing of that. Speaker 700:32:22Okay, perfect. Speaker 800:32:23I think Speaker 500:32:23it's actually on Cal 24 Those will pay dividends as we go down a Speaker 700:32:28little bit. Speaker 800:32:29Got it. And then, sorry, just getting here with a lot of questions for one of my questions. When do you plan on giving 2020 guidance? Speaker 400:32:37We have said that we're going to give it after we finish our business planning process with our Board. We have a review with our Board that we do December, so we'll be doing it in December. Speaker 800:32:46Okay, fantastic. Thank you guys so much. Have a great morning. Appreciate it. Operator00:32:50Yes. Tishar. Our next question is from the line of Durgesh Chopra with Evercore ISI. Please proceed with your question. Speaker 400:33:00Hey, Dagesh. Speaker 1000:33:02Hey, Ralph. Good morning. Thanks for giving the time. Just a finer point on equity. I I think this is going to be Dan's wheelhouse, but you showed this slide in the June investor deck, Which kind of talked to the $4,000,000,000 in balance sheet capacity. Speaker 1000:33:21How does that look now, as obviously there's been puts and takes. How does that look now? And then part 2, just to be clear, as you roll forward the plan and there's energy efficiency, There's obviously the transmission opportunity. Should we expect no equity as well as you roll forward to 2028? Speaker 400:33:42Yes. So look, I'll give it to Dan again, give you some details, but that both of those things are very good news for us. The transmission opportunity As well as the energy efficiency growth that we see from the triennial that the BPU put forth. But Dan's answer, I believe, is going to be exactly the same to you. We do not need equity or anything that looks like it. Speaker 500:34:05Yes. I guess Ralph is right. So We are still moving forward with that same capital raise that we talked about earlier. We will be providing an Ralph referenced that in his earlier remarks, both from what we've heard back from PJM and from what the state is looking at, on energy efficiency See in this next triennium, this next 3 year period. And so we will do that update as we go forward. Speaker 500:34:34Look, that will be the exact the way that that will roll through is we have a range of capital, we will update that range. And on the other side of that, we will have what remains from the standpoint of that debt capacity. But I think you should still look with us, Look to us with confidence that we will be able to fund that without any incremental funding. Speaker 1000:34:58Excellent. Thank you. Very clear there. And then just maybe just on the topic of nuclear PTCs, I saw you've increased hedges for 2024, the percentage of output hedge. How are you thinking about 2025? Speaker 1000:35:11I mean, obviously, we are still awaiting guidance here. But are you like as you roll forward to 2025, are you going to be less hedged Then before anticipating some clarity on nuclear PTC or what is your thought process there? Speaker 500:35:26Yes. So, I guess what we've said to folks is that, we don't have the exact calculation that's going to be made and what we've tried to do is think through What may come to us, right? So when you have some of that uncertainty, you try to think through the ultimate answer that will come And then try to think through the viability of those solutions and where they may land. And we've kind of reacted to that Thinking against the background of some of that uncertainty. And so that doesn't mean that we would not be doing any hedges. Speaker 500:35:56That means that we would be continuing to move forward A pace thinking about how that PTC may come out. Those rules will come out at some point, we hope sooner than later for that exact reason, but it should shape how you are But I'd say don't think terribly different from what we had been doing with our hedging Versus what we're doing now within 25 as a general rule. Speaker 1000:36:22I appreciate that color Dan, and congrats to you and the team for the quarter. Speaker 500:36:28Thanks, Jigar. Operator00:36:31Our next question comes from the line of David O'Carroll with Morgan Stanley. Please proceed with your questions. Speaker 100:36:38Hey, Ralph. Hey, Dan. Good morning. Speaker 400:36:39Hey, David. Speaker 100:36:43Let's see, wondering if you could touch on your latest expectations for the rate Case, just has anything changed around your thinking for the revenue requirement, anything on the capital or O and M side that would Shift your expectations as to what you file coming up this quarter? Speaker 400:36:58Yes. No, there's nothing really that I've said. We've been saying all along what our plans are. I think the only thing that you'll see is that this is what this rate case gives us the opportunity to roll in a lot of the other things that People have been asking about whether it be interest rates or pensions, right, and the impact that pension expenses might have on us. So those are the only two real updates I would say that we have and we're keeping an eye on The CapEx, but most of those items that we talked about whether GS and P which we closed on, Transmission opportunity exists, which would not be with the state of New Jersey, our energy efficiency would be a clause mechanism. Speaker 400:37:40So Nothing really that I would say is driving a big change to us. And Dan, anything you want to Speaker 700:37:46add? Speaker 500:37:46No, just one thing. David, the one thing that I think We could lose sight of and shouldn't is that with all of the focus on a higher interest rate environment, We got some questions about what might be the implications to any kind of an impact on the rate case as we go forward. And I have reminded folks, This is the 1st rate case filing we will do since 2018. And so the early part of that period between rate cases, We saw lower interest expense. And so, yes, what we're seeing in this current environment is higher and so there could be some costs that would move through The overall revenue requirement for the weighted average cost capital, but thinking about stepping through years where Interest rates were lower and now we're at a higher rate environment. Speaker 500:38:37Net net that does not calculate into a considerable rate increase because of interest rates. And so that's not a rate pressure as we go into this, just as a reminder. Speaker 100:38:51Yes, got it. Okay, great. That's helpful. And then we've got new leadership at the commission. I was just wondering if you could give perspectives on if you I think the overall kind of priorities of the commission and how they're going to treat maybe settlements or just overall views Your opportunities to work with them now going forward under new leadership in a different set of commissioners. Speaker 100:39:21Thanks. Speaker 400:39:22Yes, David, sure. Look, I would opinions really don't matter as much as results. Operator00:39:28And I have Speaker 400:39:29to tell you, I could not be more pleased with the Board and the action they took on our gas system modernization program. That Quick action and decisive action to move that forward shows a couple of things. One is The work that we are doing and how it's helping the environment from a methane reduction standpoint is aligned with the policies of the state. And I would also say The desire for the Board to continue to reach settlement was exhibited there as well, right. So both of those things Our real positives and just should reinforce not for only us in our opinion, but for you all that We are in the same space that we were before. Speaker 100:40:19Okay, excellent. Great. Thanks so much. I appreciate it. Operator00:40:25Our next question is from the line of Jeremy Tonet with JPMorgan. Please proceed with your question. Speaker 300:40:31Hi, good morning. Speaker 1000:40:33Good morning, everybody. Good morning, everybody. Speaker 300:40:34Hey, just wanted to kind of I guess build a little bit on some of the points you laid out there. With the GSMP-two Extension, can you frame the settlement versus capital plan assumptions and versus the longer term goals of GSMP III? Are the state's ongoing energy transition discussions Factoring into this settlement, just kind of looking at this more holistically. Speaker 400:40:56Yes. So look, here's the way I would frame it. The 2 years That we agreed upon are at a higher run rate than they would have otherwise been based upon our filings. So that's a real positive. I think, when you look at the 2 areas that were of concern in the conversation, they were minimal from an investment standpoint. Speaker 400:41:151 was the renewable natural gas A piece of our filing and the other was the hydrogen blending. And those are fair policy conversations that need to take place. So The Board wanted to move ahead from a commitment standpoint to get the work done to continue the methane reductions. So we're completely aligned there. The run rate was higher and I think we just participate and see where policy wants to go on those other two items and make a decision on that. Speaker 400:41:42But from a long term Strategy standpoint, our commitment to reduce the cast iron in our system remains and it's supported at this time by the commission. So I see nothing really changing from that standpoint. Speaker 500:41:55Yes. And I think against the backdrop of the capital plan, Jeremy, we had talked about the low end of the range being Consistent with where we were in the high end of the range being more like what we had for this particular and more like what we had filed for GSMP And so we were above our run rate, but not as high as we had filed. So we're firmly within that capital plan range. Speaker 300:42:16Got it. That's very helpful there. And then following up with hydrogen, if I could, what's the latest messaging progress behind the hydrogen hub evaluation In the Northeast, Mid Atlantic, Darren, how should we think about the hydrogen opportunity across local industry, PEG's nuclear fleet, gas Blending Regional Renewable Electrification overall, what can you share there? Speaker 400:42:39Yes. So, Jeremy, First of all, we participated on 2 of the hub applications. 1 was the Northeast hub and the second was the Mach 2. The Mach 2 hub was the one that was selected by the DOE in this area. And we're really happy and proud of being part of that solution. Speaker 500:42:57I think it's going to provide Speaker 400:42:58us with a lot of long term growth opportunities in the region. And I say that from an economic development standpoint for the state. I think we'll have a real opportunity to place an electrolyzer somewhere in South Jersey. I think we will have an opportunity to make use of some pipelines that exist in South Jersey and some storage that exists in South Jersey for hydrogen As well as some end users that are in that area, both in the Delaware and across the river in Southern Pennsylvania from A refinery standpoint. That's from the generic economic standpoint. Speaker 400:43:37I think our play here will be really determined when we see what the rules come out From the IRA and how the PTC is going to interact with both the nuclear PTC And what might so you might think of as pancaking hydrogen credits on top of that or not. So we'll look at that. We don't have any of that baked into our plant. I think that's the key for you to take away. It's upside for us. Speaker 400:44:05I will also tell you that we have No expectation of being part of anything that's going to create any commodity risk for us on the hydrogen front. So we'll look at this, we'll help State achieved some economic growth that they have down in that depressed part of our state and then we'll see what role we specifically play within it as an Speaker 300:44:29Got it. That's very helpful. And I think you guys have been pretty, pretty clear on no equity. So I will fully refrain from that part. I can say it again if you like, Jeremy. Speaker 300:44:42No, we heard you loud and clear. But just I guess In December, any update to get there? I mean, will we be getting kind of a CapEx update in December? And then would that be updated kind of Later on 2024 as we kind of some of the incremental items come through and just clarity comes through on some of the different items. And If so, how does the expected EE filing match up with how you're thinking about it at last year's CapEx update? Speaker 400:45:10Yes. So, Jeremy, so we are going to give you a partial update on CapEx through 20 27, and then we will give you more In January, from a capital roll forward standpoint. So that's kind of the rhythm. The December update will be A little bit of the run rate that we talked about for GSMP and the EE filings that we have to file, which will be in the beginning of December for the BPO. That said, what we've been indicating is that, that filing will if you look at the triennial, You would expect it to be a little bit more than we have seen in the past from a run rate standpoint. Speaker 400:45:51We're still assessing it. I personally have not seen the final Product from our team, so I couldn't give you any more details even if I wanted to. But the indication from everyone who has looked at That order that came out from the BPU is that there'll be more opportunity for us there. Speaker 300:46:09Got it. Super helpful. I'll leave it there. Thanks. Operator00:46:15Our next question is from the line of Julien Dumoulin Smith with Bank of America. Please proceed with your question. Speaker 700:46:21Hey, good morning, team. Thank you very much. Appreciate it. Hey, Drew. Good afternoon. Speaker 700:46:26Hey, howdy, guys. Thank you. So just trying to Bring the call together here, tie it up a little bit. Look, you talk about December and then January, you guys have a lot of different moving pieces coming together, right? And so you've got GSMP, you got the energy efficiency, you have the rate case proposal, you got the PJM transmission, I think in your comments you said December, Presumably, and again, you comment on this new load growth update from PJM December, January as well. Speaker 700:46:54I just want to maybe just to ask it more directly, How do you think about that rate base CAGR? You said specifically in your remarks again today about being that run rate being the low end of that. You commented just out of Jeremy amongst others about seeing a new elevated run rate. How do you think about that 6% plus rate base outlook? How does that fit into the 5% to 7% and what pieces are we missing here to that combination, if you will, in January here? Speaker 700:47:22It seems like a lot of positives, No equity, low end of rate based CAGR clearly seeing a higher run rate. Just I'm trying to tie this together if I can. I'm Speaker 400:47:32going to give Dan A crack at some of this too, but I just want to reinforce, I apologize if I said we were at the low end. I definitely did not I did not mean to say that. If I said it earlier, it was not my intention. So we're within the range. We've said that and I would agree with you that there's a lot of positive momentum here, but nothing is firmed up yet. Speaker 400:47:55And so that's Why we're where we are and we will give you that information when we get later in December for the two items that I mentioned, the E and GSMP and then we'll give you some more In January, but Dan, you want to Speaker 500:48:07add anything to that? No, I think that says it, Joey, there was not an update with respect to those numbers today. We have reaffirmed those numbers today. Speaker 400:48:19As we do step forward, Speaker 500:48:21it has and it continues to be a range. And so We've gotten some indication from PJM that there could be some incremental transmission spend that's in the $400,000,000 range. We've gotten some indication by going through that BPU triennial That you could see a little bit of a lift. Frankly, the GSMP was a higher run rate, but was not as much as GSMP III was filed for. So there's going to be puts and takes. Speaker 500:48:43And I think what we're saying is that you're going to see that update in full and some of those ranges having a little bit more color around them because we've stepped through another series of months As we approach the end of the year and move into year end. Speaker 700:48:59Got it. A couple of clarifications there, If you don't mind, I was saying earlier 6% to 7.5%, at least the low end of 6% seems like it needs to come up through 27%. Would you be rolling forward the plan to 'twenty eight? And then even more specifically within that, how do you think about the linearity, if we're going to bring up this term again, In terms of earnings, not just off of 23, but maybe off of a 24 baseline, if you will, if you don't mind. Speaker 400:49:27Yes. Look, Speaker 500:49:29Julien, we said 6% to 7.5% and that is where we still are. So if you're Talking me up from that number, we're at the 6% to 7.5%. What we're trying just to do is that as we do step forward, we will give the As to what these things start to look like the filing for E has not been made, and we don't have that final answer from PJM with respect to that transmission. So I think Those will follow. And as we do step forward that base will move up and some incremental capital as we extend the years of our forecast We need to come up a little bit. Speaker 500:49:59These are the kind of things that will do that. So I think you ought to think about it as exactly how we presented it that we're affirming those numbers as we step forward. We give you a little bit more color on 2024 come December and then we'll move into a longer term update on the other side of our overall finalization of our plan. Speaker 700:50:18Excellent. All right, guys. We'll talk to you then. Good luck. See you soon. Speaker 300:50:21Thanks, Joey. Thanks, Julian. Operator00:50:24Our next questions come from the line of Michael Sullivan with Wolfe Research. Please proceed with your questions. Speaker 1100:50:29Hello, Michael. Hey, everyone. Hey, how's it going? Speaker 300:50:33Hi, Michael. Speaker 1100:50:34Hey. Sorry to belabor, but just to tie it up on the year end call update. So Fair to say that the earnings CAGR will be 2024 to 2028, is that right? Speaker 400:50:51That will be in the January timeframe. That's what we said in the prepared remarks. We will be giving that update at that time. Exactly. Speaker 1100:51:01Okay. And kind of consistent with how you laid it out at the Analyst Day on the nuclear side of things, we should assume The nuclear PTC4 level with anything else being up? Right. Okay. Speaker 400:51:16Right. Okay. Speaker 1100:51:19And then last, just on the credit side of things. So I think I saw earlier this week, Moody's took a favorable Action or outlook on the power side of things. Any potential research to the consolidated view there and how they might be thinking about your metrics and thresholds? Speaker 400:51:37Yes. Nothing that we're aware of on the parent level, but I will tell you, again, some good work by Dan and his team, Our Treasury Department explained what's going on on the power side and we were very happy and I appreciate you recognizing Moody's letter went out. So thanks on that front. Speaker 500:51:59Yes. I think what they did, Michael, made sense, right? If you think about What nuclear has been and what it is now that PTC does provide that exact floor that you're referencing. And so we do intend to continue To talk about that within our numbers, and nothing beyond that, but certainly that stabilization It's supportive of exactly what Moody's did. Speaker 1100:52:20Okay, great. Thank you very much. Operator00:52:25Next questions come from the line of Carlee Davenport with Goldman Sachs. Please proceed with your question. Speaker 1200:52:30Hey, good morning. Thanks for taking the questions. Most might have been answered, but just 2 quick sort of housekeeping questions on nuclear, if I could. First one, are there any updates in terms of Nuclear PTC in terms of your view on when we might get clarity there. And then the second one is just, is there anything to flag so far on the Salem 1 refueling outage in terms of how Speaker 400:52:56Yes. Look, I'll take the last one. The team continues to perform Excellent work there and there's nothing that we have there to discuss other than a normal outage consistent with our business plan. So Just a great opportunity for me to give kudos to the team down there. So thank you for that. Speaker 400:53:14And Dan will give you the PTC piece. Speaker 500:53:17Yes. I presume Treasury is also doing excellent work down there, but they're not reporting out to us not exactly when. So we don't have any particular color on Timing, other than to continue to reinforce that sooner is better than later, but we've not heard anything back Speaker 1200:53:35Great. I appreciate that color. I'll leave it there. Speaker 500:53:38Thanks, Carly. Operator00:53:41Our next question comes from the line of Travis Miller with Morningstar. Please proceed with your question. Speaker 900:53:47Hello, everyone. Thank you. Speaker 500:53:49Hello, Travis. Speaker 900:53:50Now real quick to go just touch on CapEx. That $200,000,000 is that could you characterize that as new projects? Is that inflation on existing projects, pull forwards, wonder if you could clarify that real quick? Speaker 500:54:06Yes. Chad, I think what that really is, is the team has doing a great job of knocking out the work that we have in front of us and they're ahead on a couple of things that is Think of it as just getting some of the work done a little bit quicker than anticipated and we'll follow-up with a more fulsome update as we go forward. Speaker 900:54:25Okay. So would that pull out of 2024 at all or not a relationship there? Speaker 500:54:33No. Well, I would argue that you maybe I'll think about it that way, but as we give you an update, you'll be able to see what happens because some 'twenty five could get pulled back into 'twenty four. It's a little bit fluid as they go forward and if they are ahead on where they are right now, you could see some other things coming back into 2024. So I wouldn't think about it as a reduction in 2024. I think about it, just get a little bit more work done early and we'll continue to true that up as we go forward. Speaker 400:54:57And the only thing I would add there is that The comments I made also just indicate there's a lot of interest on the energy efficiency front and we've been able to continue To expand there, so all consistent with what I indicated on the triennial and the support we're getting from the BPU. Speaker 900:55:15Okay, perfect. That's helpful. And then I have a question offshore wind. I know you're not involved in that anymore, but obviously a lot of stuff coming out in New York. Any Anything you're hearing in regulatory discussions, political hauls, anything you're hearing in terms of New Jersey's Speaker 400:55:32Offshore Mobility? Yes. No, look, we're just we're reading what you're all reading. And again, just Happy with the decision that we made at this point. Speaker 900:55:46Okay, very good. That's all I had. Thanks. Speaker 300:55:48Thanks, Jeff. Operator00:55:52Our next question is from the line of Anthony Krowdell with Mizuho. Please proceed with your questions. Speaker 1300:55:58Hey, good afternoon, Ralph. Good afternoon, Dan. Speaker 500:56:01Hey, Anthony. Happy Speaker 1300:56:04Halloween, Ralph. Speaker 400:56:05Happy Halloween. Speaker 1300:56:07Just apologies, the housekeeping on cadence. Rate filing December, then we get 2024 guidance, earnings guidance in December, A little CapEx update and then on the 4Q call, we get an update on rate base CAGR, earnings growth CAGR. Is that did I hear that correctly? Speaker 400:56:27That's about the rhythm we expect. I don't want to be tied into an hour a day, but yes, that's the rhythm we expect. Speaker 1300:56:33Yes. Great. And then just easy question. You talked about the financing maybe interest rate hedges earlier in the call. There's a bond that's due, I guess, November you guys have taken care of that. Speaker 1300:56:45There's also one due, I guess, in June of next year, it was an attractive rate at 2.9%. Has that been included like in your interest rate hedges or What are the plans for that maturity? Speaker 500:56:58Yes. So we'll take that out and step forward. And Anthony, I think the important element is that Last November as we gave that update, we presumed rates including spreads that were Pretty comparable to where we are. We didn't capture every single dollar of it, but I think that the delta between what we thought it was going to be at and where we are currently from a market perspective It is within the range. So I think we've done a nice job of getting ahead of it and we will take that out. Speaker 500:57:27And Like a lot of our refinancings, we will see some higher rates as we flip them, but they were accounted for within our forecast. Speaker 1300:57:35Great. And then last, if I could jump in, up to Mike's question earlier about the PEG Power outlook change, I guess, at Moody's. I mean, any thoughts to maybe potential changes at the parent company? I believe Baa2, PEG Power, stronger balance sheet there. The utility, strong balance sheet, any read through on Your interest in moving PEG Power I'm sorry, the parent up to a BAA1? Speaker 500:58:07Yes. I mean, if you take a look at it, They didn't move the rating on Power. It's just a positive outlook there. And so I think that ripple effect would be lesser as you look at the parent. But I think On balance, just if you think about the overall business mix, and reflective of PTCs and what we've done from an overall strategic set of decisions, I think we're in a better position going forward. Speaker 1300:58:32Great. Thanks for taking my questions. Speaker 800:58:33Thanks, Anthony. Speaker 200:58:34Operator, we'll take our last question. Operator00:58:38That is all the time we have for questions today. I will turn the floor back to Mr. LaRosa for closing comments. Speaker 400:58:43Yes. No, thank you very much and Sorry, we had so much interest, but sorry we had to move on. Hey, listen, I just want to thank you all for your continued interest. The work that our team continues to produce amazes me. I'm really happy with the stability that we've created here End of Certainty. Speaker 400:59:06We put out some internal information earlier today and it's just amazing the amount of things that we continue To execute on and I'll just highlight a few of them here. One was this gas system monetization plan and the work that we completed. We've continued to be recognized in awards, different things that have come out of best employers and Best companies to work for. We lowered our gas bills again for customers effective October 1, and we refreshed our Board of Directors. So things that a lot of people sometimes struggle with, we just seem to be executing time and time again. Speaker 400:59:47So A big thanks to our team. Hopefully, you hear that not only in our voices, but from others that we're a company you can count on And we're executing on the work that we said we would. And I'll just leave with this. Anthony said it, but happy Halloween to everyone. I hope you all have a safe And healthy Halloween and that's not just for yourselves, but also for your families. Speaker 401:00:10Enjoy the day. Take care. Operator01:00:14Ladies and gentlemen, this concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.Read morePowered by