Ladies and gentlemen, thank you for standing by.

My name is Rob and I'm your event operator today. I would like to welcome everyone to today's conference. Public Service Enterprise Group's second quarter 2025 earnings conference call and webcast. At this time, all participants are in listen-only mode. Later, we'll conduct a question and answer session for members of the financial community. At that time, if you have a question, you'll need to press the star and the number one on your telephone keypad. To throw your question, press star then at number 2. If anyone should require operator assistance during the conference, please press star 0 from your telephone keypad. As a reminder, this conference is being recorded today, August 5th, 2025, and will be available for replay as an audio webcast on PSCG's Investor Relations website at https colon forward slash forward slash investor.pscg.com. I would now let you turn the conference call over to Carlotta Chan. Please go ahead.

Good morning, and welcome to PSEG's second quarter 2025 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 for today's discussion are posted on our IR website at investor.pseg.com, and our 10-Q will be filed later today. CSEG'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 as reported in accordance with generally accepted accounting principles, or 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 material. Following our prepared remark, we will conduct a 30-minute question and answer session. I will now turn the call over to Ralph LaRosa.

Thank you, Carlotta, and thanks to all of you for joining us this morning to review PSEG's second quarter 2025 results and to discuss our outlook for the business over the past. PSEG delivered another quarter of solid operating and financial performance, and PSE&G is on track to execute on its full year $3.8 billion regulated investment. PSE&G also benefited from a full $3 billion, which was approved in the settlement of our own. PSEG's results also reflect a positive impact on the nuclear generating fleet, which benefited from the absence of a Spring Hope Creek. During the past quarter, we also continued to prioritize meeting our customers' expectations on both the reliability and a force that successfully operated through three electricity usage that set a summer peak load of experiences the value of our infrastructure resilience and starting yet another validation our utility crews in new jersey and on long island are working tirelessly to safely keep the lights on restoring service to interrupt the customers on a timely basis redirecting employees from non-emergency work to focus on emergent service requests and deploying mutual aid to reinforce our local crews to restore service to customers. Four-day heat storm in June, PSE&G crews restored service to 99% of storm-interrupted customers. I cannot be more proud of our team's work and these results. Affordability focus. Given the warmer-than-normal summer thus far, higher electricity usage is expected to result in higher customer bills. PSE&G are seeing the electric rate impact of last year's PGM capacity auction, which is just now translating into summer utility bills. PSE&G has responded by partnering with the New Jersey Board of Public Utilities to implement a summer relief initiative for residential customers with deferred billing during two high usage, shifting collection of the deferral to lower electric usage months with no interest The utility has also extended shutoff protections for income-qualified residential customers and suspended electric reconnect fees. PSE&G is processing two sets of upcoming state-funded residential energy assistance pay connect our customers in need of payment assistance or award-winning energy efficiency programs to help lower usage. PJM released the results of his latest capacity auction, which priced at $320.97 energy. Despite this latest increase in capacity prices, we anticipate a near-flat impact on other supply-related costs remaining during the reduction from other charges expected discussed on prior calls, the resource adequacy challenges in New Jersey, and a price slow to respond. Recent reports reflect an increasing amount of new large load applications that are quickly eroding existing reserves. In the confines of PJM, it's hard to see the path to new generation through and require the consideration of a new approach to procuring capacity. And the legislature convened on June 30th, having held a series of hearings on energy affordability in advance of the PJM capacity for 39 utilities to be among those companies able to build. New Jersey remains a net importer of power. And during the June heat storms, imported nearly half of its electric needs from our abundant excess generation capacity to our west that for many years made power imports a convenient option is quickly being absorbed in those states. We weigh the priorities of economic growth with system reliability and affordability and the state's environmental policy. The BPU is conducting a technical conference on resource adequacy, focusing on the recent PJM capacity auction results and state-driven partnering with New Jersey and regional stakeholders to develop policy consensus on long-term comprehensive solutions that can meet our growing demand and improve resource adequacy while safeguarding affordability and reliability. to continue our $3.8 billion regulated capital investment plan for 2025 and modernization to an end on budget. PSE&G began the second phase of its clean energy future, which will help customers save energy, lower their bills, and reduce carbon emissions and economic growth right here in PSE&G's pipeline of large load inquiries for new service connections grew to over 94, 47% from 6,400 megawatts reported. As I stated previously, these numbers include both mature applications, the width of the total, which has gone up by 40%, as well as feasibility studies and initial leaks. Our engineering assessment, since these large load prospects convert into new utility customers in the future, fixed costs are then spread over a larger user base, which can help to lower existing customers. Now to PSEG Power and Other, our nuclear units generated and supplied the grid with approximately 7.5 terawatt base load power and achieved a fleet capacity factor of 88.8%. Lowered by the Dennis Falls refueling outage, PSEG Nuclear will perform the work needed to extend Hope Creek's fuel cycle from 18 to several steps we are taking to optimize our plans, providing the grid with more reliable 24 by 7 carbon-free power between now and Hope Creek's next scheduled refueling outage. In addition, our Salem upgrade project will bring approximately 200 megawatts for the size of a small modular reactor of incremental carbon-free dispatchable power during the 2027 to 22 tax legislation passed in July to preserve the downside price for PTC as well as the PTC availability for expansions of nuclear capacity the legislation permanently extends 100 bonus depreciation to qualified business property to summarize we had a good quarter and first half of 2025 which provides us with a solid base to confidently deliver on a full year 2025 non-gap operating earnings guidance of 394 to 4.06 which is up nine percent at the midpoint over 2025 guidance includes a full year of new distribution rates from our 2024 base rate case settlement, which was reached last October, as well as an upcoming refueling outage at our 100% owned Hope Creek. Also reiterating PSE&G's updated five-year capital spending program at $21 to $24 billion. Expected rate-based caterers PSEG's 5 to 7% non-GAAP operating return continuing to use the nuclear PTC as our reference price. The TCG intends to execute this capital plan without the need to issue new equity. I will now turn the call over to Dan, who will walk you through the results for the quarter and our outlook for the remainder of 2020. We join the call for Q&A.

Thanks, Ralph. Good morning, everybody. TCG reported net income of $1.17 per share for the second quarter of 2025, compared to $0.87 per share in 2024. And non-GAAP operating earnings were $0.77 per share in the second quarter of 2025, compared to $0.63 per share. Solid results were up over 20% from last year's second quarter, reflecting the benefit of new distribution rates, which were placed into effect at PSE&G in October of 2020, and higher generating volume at PSE&G Passants of last spring's Hope Creek refueling outage, which will take place this fall. We've provided you with information on Slides 8 and 10 regarding the contribution to net income and non-GAAP operating earnings by business for the second quarter and first Slides 9 and 11 contain waterfall charts that take you through the net changes for the quarter and year-to-date periods over the prior year in non-GAAP operating earnings. We'll start with PSE&G, which reported second quarter net income and non-GAAP operating earnings of $332 million for 2025. compared to $302 million in 2020, reported net income and non-GAAP operating earnings of $878 million in 2020, compared to $790 million in 2020. These results were driven by the implementation of new electric and GAAP base effect last October to recover a return of and on previous capital investments totaling more than three. Beginning on slide nine with the PSE&G column, transmission margin was a penny per share higher compared to the year-ago quarter on higher investment and a prior year through an increase by $0.10 per share compared to the year-ago period, largely reflecting the impact of the Ray case plus recovery of and on PSE&G's regulated energy efficiency. Distribution O&M costs were a penny per share favorable compared to the second quarter of Appreciation and interest expense each rose $0.02 per share compared to the second quarter of 2024. reflecting higher levels of depreciable plant investment and long-term debt at higher interest lastly the timing of taxes recorded through an annual effective tax rate which nets to zero over a full year had a net unfavorable impact of two cents per share in the second quarter compared to the prior seeing a positive two cents per share impact during the second quarter as measured by the temperature humidity index were 21% warmer than normal, but 14% cooler than the second quarter of 2020. As you know, the Conservation Incentive Program or SIP mechanism decouples weather and other economic sales variances from a significant portion of our distribution while helping PSE&G promote the widespread adoption of energy conservation and solar programs. The number of electric and gas customers is the primary driver of distribution margin, And each segment grew by approximately 1% over the capital front. As Ralph mentioned earlier, PSE&G invested approximately $900 million during the second quarter. And we are on track to fully execute our 2025 regulated capital investment plan of $3.8 billion, focused on infrastructure modernization, leading growing demand. and we have maintained our five-year regulated capital investment plan of $21 to $24 billion. We began the next phase of our energy efficiency program during the first quarter of 2025, and we anticipate investing up to $2.9 billion over a six-year period. The energy efficiency program total includes approximately $1 billion of on-bill repayment options to help our customers finance their energy efficiency equipment and appliances. and provides customers with energy information and options to manage their energy use. Moving on to PSG Power & Other. For the second quarter, PSG Power & Other reported net income of $253 million in 2025, compared to $132 million, and non-GAAP operating earnings were $52 million, compared to $11 million. For the year-to-date end of June 30th, PSG Power & Other reported net income of $296 million in 2025. compared to 176 million dollars in 2024 and non-GAAP operating earnings of 224 compared to 180 million referring again to the waterfall on slide nine for the second quarter of 2025 net energy margin rose by four cents per share driven by higher nuclear generating output and was three cents per share favorable compared to the second quarter driven by the absence of last spring's hope creek refueling out expense rose by two incremental debt with three cents per share favorable compared to the second part due to the use of a lower annual effective tax rate in 2025 that will reverse over the balance of the nuclear fleet produced approximately 7.5 terawatt hours over the same period in 2024 15.9 terawatt hours for the first half of this year both benefiting from the absence of last spring's hope creek capacity factors for the nuclear fleet were 88.8% and 94.3% for the quarter- and six-month period ended June 30, 2020. So late July, PSG nuclear cleared approximately 3,500 megawatts of its eligible nuclear capacity in PJM's base residual auction at $329 per megawatt day for the energy year beginning June 1, 2020, May 31, 2020. The latest result is up from $270 per megawatt day for a similar amount of capacity. Half of 2025 results at PSEG Power and Other will be impacted by this fall's scheduled Hope Creek outage and the completion of the three-year zero-emission certificate award that ended on May 31st, which will offset higher capacity revenues related to the 2025-2026 auction results in the back half. Moving on some recent financing activity, as of June 30th, PSEG had total available liquidity of $3.6 billion, including $186 million of cash. On the financing front, PSEG Power issued $1.25 billion of senior unsecured debt this past May, consisting of $750 million of due 2030 and $500 million due 2035. Proceeds from this sale were used to repay the billion-and-a-quarter-dollar variable rate PSG to mature. Variable rate debt at the end of June consisted of a 364-day term loan at PSG Power for $400 million and commercial pay. The redemption of the PSG Power billion-and-a-quarter variable rate or level of variable rate debt represents. July 2025 federal tax legislation preserved the downside price protection of the Nuclear Production Tax Credit. as well as the PTC availability for expansions of nuclear capacity, which supports our planned power up rate at sale. In addition, it extends 100% bonus depreciation for qualified business property, improving cash flow at PSCG Power Plan Capital Program. As Ralph mentioned, we are reaffirming PSCG's full year 2025 non-GAAP operating earnings guidance of $3.94 before non-GAAP operating earnings CAGR through 2029, supports the execution of TSEG's $22.5 to $26 billion capital spending plan without the need to sell new equity provides the opportunity for consistent and sustainable. There are formal remarks and we are ready to begin.

Thank you. Ladies and gentlemen, we'll now begin the question and answer session for members of the financial community. If you have a question, please press the star and the number one on your telephone keypad. If your question has been answered and you wish to withdraw your polling request, you may do so by pressing the star and the number two. If you're on a speakerphone, please pick up the handset before entering your request. One moment please for the first question. The first question today is from the line of David Acaro with Morgan Stanley. Please proceed with your questions.

Hey, thanks. Good morning, David. Good morning. Let's see. So today we've got the New Jersey Resource Adequacy Conference going on at the BPU. I was just wondering if you could give a sense of where conversations stand with regard to the future of generation build in New Jersey.

Thanks, David. Yeah, absolutely.

That makes sense. Appreciate that. And then, you know, a big increase in the data center pipeline for this quarter. And I was wondering if you could give an update on maybe specifically with regard to the nuclear plant opportunities and an update on data center conversations there. You know, what is the interest level that you're seeing in the site most recently? And then thoughts on timing as whether you could get to an agreement this year.

Well, I'll give that to Dan as I usually do on the data centers. I would just say from an economic development standpoint to see New Jersey's discussion,

and I think, Rouse, you're well aware of Pennsylvania, and I think there's opportunities, and frankly, wherever power can be delivered from those units for the nature of what we have. So the discussions continue. There continues to be interest, and we'll let the timing kind of speak for itself as we go forward.

All right. Appreciate the color. Thanks so much.

Our next questions are from the line of Nicholas Campanella with Barclays. Please just use your questions.

Hey, good morning. Thanks for taking my questions.

Good morning, Nick.

Hey, I just wanted to follow up on that last point maybe. You know, in your prepared, you kind of, you know, you brought up clearly the need to add new generation in New Jersey. The fact that the state is an importer of power. and, you know, you talked about needing to kind of balance affordability and resource adequacy along with economic development. Just how do you kind of see that impacting your ability to move forward with a multi-year contract by the end of this year? And is it still your intention to deliver something by the end of the year? I just wanted to be a little bit more pointed on that. Thank you.

Yeah, thanks, Nick. So we...

Hey, that makes a lot of sense. I appreciate the context um and then maybe with the capacity auction results i know you kind of talked about the zex roll off that kind of offsets the 25 26 um but then when we think about 27 28 um you know how are you kind of framing where you are on a gross receipts basis and um i guess my question is is are you now higher in the range because of um because of the 26, or because of the 26, 27 outcome. Thanks.

Well, it looks like Nick, and you know as well as anybody, that the piece of energy markets the electricity side, you know, moving to a point where you are higher, we continue to monitor, we continue to market the output, and ultimately that's going to determine.

Thank you very much.

Our next question is from the line of Michael Sullivan with Wolf Research. Please proceed with your questions.

Hey, good morning.

Hi, Michael.

Hey, you guys, I wanted to just ask another one on kind of the New Jersey supply situation. I guess outside of this bill that's out there, what are the other options if that weren't to move forward? And then, you know, we saw kind of next door in Pennsylvania, one of your peers doing kind of a JV outside of the regulated construct.

Is that something you guys would consider at some point? we have so we have very some and there isn't some more in any new i think i think i would add to

that my topic and uh you know there's other discussions i think there's a the pjm governors are going to meet next month to try to talk about what's going on i think that that right now all the challenges that we have from what's in place at pjm come out of that process or not come out as a result what things should be done to ensure that we have a supply okay that that's really helpful appreciate all the color there and then just uh shifting over to ob3 can you you know

maybe put a little more numbers or quantification around some of the benefits there both risk with respect to bonus depreciation and what that does for your cash tax position and then also the uh the new tax credit on on the upright like any any numbers around those two items you can give us?

No, and Michael, I think that the thing that it mainly did from the standpoint of the PTC is it retained what was in place. There was some discussion that, hard to tell exactly how much traction it got about potentially shortening it or potentially changing it, but everything from a nuclear PTC perspective stayed in place. And, you know, if we, in answer to Nick's question, if we move to a higher overall revenue threshold. I think what really for us was new within that is laying out to make it permanent. But as a reminder, the bonus is the unregulated piece. And there's not that much to help you. That's a help, but it's kind of around the edges from the standpoint of an overall cash flow perspective that it will accelerate some of that cost recovery.

Okay, great. Thank you very much.

Our next questions are from the line of Russ Fowler with Bank of America. Please receive your questions.

Good morning, guys. It's actually Rennie here for Ross. I just had a quick question about the, you know, we saw a lot of affordability-focused bills in this session. So I guess from your perspective, which of those bills are kind of gaining the most traction and kind of will have likely the biggest impact moving forward, I guess, in terms of, like, regulated GEN, which you talked about, or cost referrals or reassessing New Jersey's role in PJM?

So the session has closed officially, right? So they can always come back. There's no schedule to continue to advocate.

That makes sense. And then just secondly, I know you mentioned the 200 megawatts out of Salem, but I guess more broadly, what potential is there for incremental generation and upgrade on the nuclear fleet to up rates, refueling cycles, license extensions, and then I guess how much of that has already been executed?

Well, thanks for that. We're actually, from an execution standpoint, much of the engineering work has been done on everything that you asked about. But we did mention in this refueling, we will be setting the unit up for the first continuing to execute on planning upgrades.

Okay, that makes sense. Thanks, guys.

Thank you.

Our next questions are from the line of Carly Davenport with Goldman Sachs. Please see what's your questions.

Hey, good morning. Thanks for taking the questions. Hey, Carly. And hey, maybe just to start on the update on the large load inquiries at the utility level, is that sort of 10% to 20% conversion rate still hold in your view on that 9,400 megawatts? And is that all data centers at this point, or are there any other customers in that bucket?

There's a few other customers in that bucket, but I would say the…

Perfect. Thank you for that. Yeah. And then maybe just, you know, thinking about 2025 earnings growth, as you think about 1H, you know, growth is tracking above your full year 9% expectations. I know that we'll have the Hope Creek outage in the fall, which will be a drag, but I guess just would love your thoughts on how you feel about execution within the full year guidance range at this point in the year.

Yeah, we've tried to make the point we feel to go anywhere beyond that at this point. reminder that that's 100% owned.

And so when that does come through.

Great. Thank you for the time.

Thanks, Coralie.

Our next questions are from the line of Ryan Levine with Citi. Good morning. Good morning, Ryan.

Would you seek the customer bill deferral mechanism for an additional year as a result of the higher PGM capacity prices during peak load months?

Is that something you're contemplating given the recent event new bpu so um the right now there's nothing in the plan for the state okay right just just to be to be clear with respect to the auction that just happened and the impact on the bill um what we saw in june was because the pjm auctions were you're seeing the cumulative effect of catching up from the prior 270 that we saw what happened And in June 29, that kind of a jump, number one. And number two, if you just take a look at, in our normal BGS process, the bill and the auction that's rolling on the bill, and you take a look at where prices sit now, not only do we not expect a jump like we saw in June, we don't really expect much of what's coming off the bill is a little bit higher than what would roll on at. And so that's not to say that something couldn't be done from the standpoint of what you're describing. that's not in place now as Ralph answered 100 correct that you know we want work with the regulator as we were to do that but it would not be in the face of an increase like we saw in June because that is not what is forecasted as we go forward just based upon the mechanisms and the price thanks for the detail on that and then just one follow-up in terms of the large load request additions is there any color around how many customers or individual projects represent that large megawatt increase just to assess kind of the the chunkiness of that of

that ad yeah so I I would I'll add some color without any details and the color is that you know what we firemen here and then lastly you referenced the core

weave development from earlier in the week is that incorporated in this updated uh forecasts or projection there's a there's a uh thank you our next questions are from the line of travis miller with morningstar please proceed with your questions hi everyone thank you in our episode just following up on this resource ethics lead discussion at a high level i wonder if you could characterize is the concern among new jersey the legislators ppu etc but that there aren't enough electrons, either energy or capacity, in New Jersey, that 50% import, or is it just that the economics aren't good for the customer bill? If that makes sense, how is that debate characterized?

Well, I would say, but it is not too far. And you can also think that we can take a place, and that was resolved.

Okay, that's great. I appreciate all that. Here's hoping the lights don't go out for you guys again through all this. but uh one one quick question on the if if the state were to go to a regulated generation option would that need FERC approval would that have to go through FERC or some other federal entity very good that's all i had thanks so much our next questions are from the line of

paul fremont with landbury fellman please receive your questions thank you very much and congratulations on a strong quarter um i just wanted to sort of maybe better understand uh uh So Corweave, would the relationship there be with the utility or with Peg Power if there is a relationship between public service and the new data center?

Yeah, the only thing that's been out there with Corweave is the firm.

Okay. And then the purchase that they made involves some cogeneration facilities. So is it contemplated that there would be a need for additional generation at the site? And if so, you know, how much in terms of megawatts?

Yeah, that's a question for their site management. I wouldn't be able to tell you. There is a lot to be determined there as to how that's used.

And how big is the existing co-gen facility?

I don't have that off the top of my head. Well, again, nameplate was under 100.

I think that's it for me.

Thank you.

The next questions are from the line of Julian DeMullin-Smith with Jeffrey. Please receive your questions.

Hey, good morning, team. Ralph, Dan, how are you guys doing? We're great. There we go. I'll bring the energy up at the end here. Let's just quickly – well, first off, I've got to say, speaking of energy up on the year, you guys are trending very well on the year, 26 cents year to date. I heard your comments about being confident in the range, but I'm curious where you'll land next quarter as far as reiterating that guidance. Maybe a comment more than a statement, more than a question. But anyway, to go back to the question, we appreciate that.

Thank you.

Absolutely. Or maybe in response to Carly's. But just going back to this Garden State energy storage, right? I heard your comments early about power, right? And maybe not necessarily expanding the scope per se. But what's the willingness to participate in this initial bid process that seems ongoing now of the gigawatt? or to what extent do you anticipate power and or PSE&G participating in the current phase and or future phases, right? Again, you could approach this from a few different angles, but how do you think about that being, quote, the primary answer in the current environment as best we talk about this resource adequacy problem here in New Jersey?

Yeah, so there's a lot in that question. You know, to some degree, we had made a file.

Got it. And look, Ralph, you're always in the know on these things. With respect to PGM and this conversation on governance and engagement here, I mean, how do you think we could look at the auction and just PGM and New Jersey's relationship going forward? I mean, I know they're asking for board seats and representation and shifts in government, but there's also a separate conversation about shifting the nature of this auction towards bifurcated structures and or, you know, just other permutations that I'm sure are swimming out there, if you will. Any comments on any of that?

For, again, years, we think they're, at the end of the day, we'll get to a good solution here, but it's not an overnight term again. It's time to have a conversation.

Awesome, guys. Thank you again. Good luck.

Thank you. Our last question is from the line of Paul Patterson with Glen Rock Associates. Please proceed with your question.

I'm wondering, I mean, given that, I think you mentioned 5, 4, 3, 9, I don't think that's moved. And I guess what I'm wondering is, given that the legislature is kind of in recess here and the fact that you've got a governor who's leaving, we've got an election coming up here, and just this and what have you, is it likely that anything is going to happen legislatively, you think, this year in New Jersey? excuse me um uh given all these dynamics and the fact that we we just don't seem to have that much movement on a lot of this stuff yeah look between sort of give a capacity value and given where prices are in the capacity market um is there any thought about revisiting what you were mentioning before because it sounds like you could build those as a utility asset how those might work economically, given where capacity markets are and the curve and what have you, or is it?

Yeah, no. Thank you.

At this time, I'd like to turn the floor back to Mr. LaRosa for closing comments.

Thank you. Well, I'll end where I started, which is a thank you to the employee that puts on people's lives, the ability that they, the time with their families.

Ladies and gentlemen, this concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.