PSEG's participation in the RBA (Reliability Backstop Auction) from both power and EDC sides, and concerns about capacity cost allocation.

Ralph LaRossa advised caution, stating there are many steps ahead. He emphasized protecting customers from planning assumptions not driven by their responsibility. Dan Cregg added that PSEG will continue to ensure fair cost allocations for customers, referencing a recent FERC decision. “Obviously, we need to protect the customers, the utilities make sure that they're not being burdened with planning assumptions that are being driven outside of anybody's responsibility.”

Expectations for focus areas or what's on the table for the utility business model review.

Ralph LaRossa expects performance to be a major focus, which PSEG welcomes given its strong track record in reliability, customer connections, and satisfaction. He stated PSEG would be constructive in the conversations. “we expect performance to be one of the biggest issues that will be on the table. And we welcome that in the areas that we've seen focus in other states. Our performance, we think, has been exemplary, and I would expect that to continue.”

Color on current state of conversations and interest, total count versus last quarter's 11.8 GW, and how demand response factors in.

Dan Cregg noted that the significant increase in data center interest seen last year has leveled off, with the 11 GW figure still a good ballpark. He mentioned that only 10-20% of such inquiries typically materialize. Demand response hasn't changed discussions, but the absence of significant tax incentives in New Jersey means less sizable interest there compared to other states where hyperscalers follow financial incentives. “I'd say directionally, you've seen that kind of level off within the state. That 11,000 we always talked about as being somewhere, I don't know, maybe 10%, 15%, 20% of that may come to fruition if we look based upon history, what we've seen within different new business coming forward.”

PEG

Public Service Enterprise Group (PEG) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Utilities· May 5, 2026

Source: earnings call transcript

Executive summary

Public Service Enterprise Group Q1 FY26 — Solid Start with Reaffirmed Guidance and Infrastructure Investment

PSEG delivered a strong first quarter, reaffirming its full-year operating earnings guidance and long-term growth targets, driven by continued investment in utility infrastructure and robust nuclear operations. The company is actively engaged in regulatory processes to manage customer affordability and explore new generation opportunities, including nuclear development, while navigating evolving market dynamics and PJM's reliability initiatives.

Highlights

Non-GAAP operating earnings of $1.55 per share, up from $1.43 in Q1 2025.
PSE&G electric rates kept flat in 2026, with a 1.8% reduction in residential electric bills starting June 1.
PSEG Power's Q1 non-GAAP operating earnings increased to $201 million from $172 million in Q1 2025.
Utility and nuclear operations delivered excellent reliability during harsh winter, with Salem Unit 2 achieving a 95.5% capacity factor.
FERC approved extension of PJM capacity price collar through 2029/2030 base residual auction, stabilizing prices.

Concerns

Distribution O&M expense was $0.01 per share higher due to increased operating costs from inflation and extreme weather.
Higher interest costs and lower depreciation expense resulted in a $0.01 per share drag for PSEG Power.
PJM's proposed reliability backstop procurement auction raises concerns about cost allocation burden on LDCs.

Guidance & targets

Category	Target	Timeline	Confidence
Full-year 2026 non-GAAP operating earnings	$4.28 to $4.40 per share high materiality	FY26 · 2026	High
PSE&G Regulated Capital Investment Plan	$22.5 billion to $25.5 billion high materiality	through 2030	High
PSEG Total Capital Investment Plan	$24 billion to $28 billion high materiality	through 2030	High
PSE&G Utility Rate Base CAGR	6% to 7.5% high materiality	through 2030	High
PSEG Non-GAAP Operating Earnings CAGR	6% to 8% high materiality	through 2030	High
Annual Dividend Rate	$2.68 per share high materiality	2026	High
Annual Dividend Increase	approximately 6% high materiality	2026	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
PSE&G PSE&G's Q1 results reflect ongoing investment in energy efficiency, gas system modernization, and transmission, along with increased customer count and higher gas demand. Weather was 5% colder than normal and 8% colder than Q1 2025, but the CIP mechanism limited its impact on margin. Non-GAAP Operating Earnings Q1 2025: $546 millionTransmission Margin YoY Change: +$0.01 per shareDistribution Margin YoY Change: +$0.07 per shareDistribution O&M Expense YoY Change: +$0.01 per shareDepreciation and Interest YoY Change: +$0.01 per share eachUtility Taxes and Other YoY Change: +$0.01 per share (favorable)Residential Customer Growth: ~1% (electric and gas, over past year)Q1 2026 Capital Spending: ~$800 millionFull Year 2026 Capital Spending Plan: ~$4.2 billion5-Year Regulated Capital Investment Plan (through 2030): $22.5 billion to $25.5 billionGSMP III Program Total Investment: $1.4 billion over 3 yearsGSMP III Accelerated Recovery: $1 billionGSMP III Stipulated Base: $360 million	—	—	—	$577 million
PSEG Power and Other PSEG Power's Q1 non-GAAP operating earnings increased due to higher gas operations and capacity prices, offsetting the absence of zero emission certificates and lower generation volume. O&M costs declined, providing a benefit. Non-GAAP Operating Earnings Q1 2025: $172 millionNet Energy Margin YoY Change: FlatO&M Costs YoY Change: +$0.06 per share (benefit)Interest Costs and Lower Depreciation Expense YoY Change: -$0.01 per share (drag)Taxes and Other Items YoY Change: +$0.01 per share (favorable)Nuclear Capacity Factor: 95.5% (Q1)Nuclear Energy Supplied: 8 terawatt hours (Q1)	—	—	—	$201 million

PEG operating KPIs by quarter

PEG operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Sep 2025 Q3 FY25	Dec 2025 Q4 FY25	This call Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	Change vs prior quarter
Capital expenditures PSE&G	—	—	~$800M On our regulated capital spending program, PSE&G invested approximately $800 million during the first quarter, and we remain on track to execute our full year 2026 plan, of approximately $4.2 billion, focused on continued investments in infrastructure modernization, energy efficiency, electrification initiatives and load growth. Source: earnings call transcript	~$1B On the capital front, PSE&G invested approximately $1 billion during the second quarter and is on track to execute our full year 2026 regulated capital investment plan, of approximately $4.2 billion, focused on continued investments in infrastructure modernization, energy efficiency, electrification initiatives and load growth. Source: earnings call transcript	—
Nuclear generation PSEG Nuclear	—	~7.2 TWh On the operating side, the nuclear fleet produced approximately 7.2 terawatt hours during the fourth quarter of 2025 compared to approximately 7.3 terawatt hours in the fourth quarter of 2024. Source: earnings call transcript	8 TWh That notable accomplishment contributed to a 95.5% capacity factor and supplied 8 terawatt hours of reliable, carbon-free baseload energy to New Jersey and the grid during the first quarter. Source: earnings call transcript	7.8 TWh PSEG nuclear also performed well during the quarter, supplying the grid with 7.8 terawatt hours of carbon-free 24/7 baseload generation and achieving a capacity factor of 92% that included the second consecutive breakthrough breaker run at Salem Unit 2. Source: earnings call transcript	-2.5%
Nuclear generation capacity factor PSEG Nuclear	92.4% Capacity factors for the nuclear fleet were 92.4% and 93.7% for the quarter and 9-month period ended September 30, 2025, respectively. Source: earnings call transcript	83.7% Capacity factors for the nuclear fleet were 83.7% and 91.2% for the quarter and full year of 2025, respectively. Source: earnings call transcript	95.5% That notable accomplishment contributed to a 95.5% capacity factor and supplied 8 terawatt hours of reliable, carbon-free baseload energy to New Jersey and the grid during the first quarter. Source: earnings call transcript	92% PSEG nuclear also performed well during the quarter, supplying the grid with 7.8 terawatt hours of carbon-free 24/7 baseload generation and achieving a capacity factor of 92% that included the second consecutive breakthrough breaker run at Salem Unit 2. Source: earnings call transcript	-3.5 pt

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Capital programs

Gas System Modernization Program III (GSMP III) underway $1.4 billion

Start: Q1 FY26

PSE&G began the next phase of the GSMP III program in the first quarter. The total includes approximately $1 billion in accelerated recovery and $360 million in stipulated base.

Risks & headwinds

Increased Distribution O&M Expense Q1 FY26

$0.01 per share higher

Higher Interest Costs Q1 FY26

$0.01 per share drag

PJM Reliability Backstop Procurement Auction Cost Allocation near-term to 2031

burden on the LDCs

Mitigation:advocating on behalf of PSE&G's customers

Affordability Concerns in New Jersey ongoing

hot topic

Mitigation:prepared for those conversations

Resource Adequacy in PJM ongoing, particularly by 2031

resource adequacy problem

Mitigation:trying to bring more generation in

Q&A highlights

Are different branches aligning on priorities? Do ROE changes impact affordability, or is pressure mainly from outside the state?

Ralph LaRossa stated that all parties are finding their footing and engaging in constructive conversations. He agreed that external factors drive much of the pressure but acknowledged shared responsibility for affordability. He expressed positivity about the collaborative approach.

“I think everybody is trying to do exactly what you said, find their footings. And I think everybody does recognize the challenge has been generated from outside the state, but I also think we all know that we have some responsibility to do what we can from an affordability standpoint for our customers.”

asked by Unknown Analyst · answered by Ralph LaRossa

2 min read 6 chapters

Detailed narrative

Winter Operations & Reliability

PSE&G successfully navigated a harsh winter with extreme weather events, including significant snow and subfreezing temperatures. The utility's winter readiness procedures ensured timely storm response, restoring service to most affected customers within 24 hours. This performance highlights the importance of continued investment in gas infrastructure modernization to address aging systems and extreme weather impacts.

Customer Affordability Initiatives

PSEG is actively working with the Governor's office and the New Jersey BPU to keep electric and residential natural gas rates flat in 2026. Electric customers will benefit from a 1.8% reduction in supply costs starting June 1, and residential gas bills remain among the lowest in the region.

FERC's ruling reallocating PJM transmission costs is also expected to result in over $100 million in refunds to PSE&G customers.

Energy Efficiency & Demand Response

PSE&G is expanding technology-driven conservation efforts, launching a demand response program with over 32,000 residential and small business customers enrolled for upfront payments. A new residential time-of-use rate leverages AMI investments to encourage off-peak usage. These initiatives, combined with energy efficiency programs, aim to reduce energy consumption, manage bills, and support a flexible energy grid.

New Nuclear Development

Governor Sherrill signed legislation lifting a decades-long moratorium on new nuclear construction, with PSEG actively engaging in efforts to advance new nuclear development at its Salem County site. The site's unique strengths, including an early site permit, logistics, skilled workforce, and operational expertise, position it as a leading candidate for new nuclear deployment, with PSEG advocating for federal and state support.

PJM Market Dynamics & Reliability

PJM's proposed reliability backstop procurement auction, intended to accelerate dispatchable generation by 2031 for data center-driven load growth, is being closely monitored. PSEG is advocating for customer protection regarding cost allocation and emphasizes the need for a balanced approach to resource adequacy, while noting the 2031 timeline presents significant challenges for new generation.

Regulatory Business Model Review

The BPU has initiated a process to examine the regulation of the electric distribution utility business model, with a consultant study expected this summer and a stakeholder process continuing throughout the year. PSEG intends to fully engage, welcoming discussions on performance metrics where its utility has demonstrated strong reliability, customer satisfaction, and connection capabilities.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.