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    PEG
    Earnings call· Mar 2026(Q1 FY26)

    PUBLIC SERVICE ENTERPRISE GROUP Q1 FY26 earnings call PEG

    May 5, 2026 Source

    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

    5

    • 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

    3

    • 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

    7
    CategoryTargetConfidence
    Full-year 2026 non-GAAP operating earnings
    $4.28 to $4.40 per share
    high materiality
    High
    PSE&G Regulated Capital Investment Plan
    $22.5 billion to $25.5 billion
    high materiality
    High
    PSEG Total Capital Investment Plan
    $24 billion to $28 billion
    high materiality
    High
    PSE&G Utility Rate Base CAGR
    6% to 7.5%
    high materiality
    High
    PSEG Non-GAAP Operating Earnings CAGR
    6% to 8%
    high materiality
    High
    Annual Dividend Rate
    $2.68 per share
    high materiality
    High
    Annual Dividend Increase
    approximately 6%
    high materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    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

    Operational metrics

    14
    Non-GAAP Operating Earnings per Share
    $1.55vs $1.43 in Q1 FY25
    Q1 FY26

    Reflects continued investment in utility infrastructure and higher gas volume/capacity revenues.

    Net Income per Share
    $1.48vs $1.18 in Q1 FY25
    Q1 FY26
    Heating Degree Days
    5%colder than normal
    Q1 FY26

    Had limited impact on utility margin due to Conservation Incentive Program (CIP).

    Electric Bill Reduction
    1.8%
    starting June 1, 2026

    For PSE&G residential electric bills due to Basic Generation Service (BGS) auction results.

    PJM Transmission Cost Reallocation Refunds
    over $100 million
    after PJM's implementation

    Expected for PSE&G customers following FERC's ruling.

    Demand Response Program Enrollment
    over 32,000
    current

    Residential and small business customers enrolled to reduce energy use during peak times.

    PJM Capacity Price Collar Extension
    Approved
    through 2029/2030

    Expected to stabilize the effect of upcoming auctions on New Jersey's BGS default prices.

    Total Liquidity
    $3.9 billion
    end of March 2026
    Cash on Hand
    ~$400 million
    end of March 2026

    Primarily related to net PSE&G financing activity.

    Variable Rate Term Loan
    $500 million
    February 2026

    Further supporting liquidity position.

    Revolving Credit Facilities
    $3.75 billion
    extended through March 2031
    Secured Medium-Term Notes Issued
    $1 billion
    January 2026
    Medium-Term Notes Repaid
    $450 million
    March 2026

    MTNs matured in March 2026.

    Variable Rate Debt Exposure
    ~$915 million
    end of March 2026

    Consists of two 364-day term loans and commercial paper.

    Industry KPIs

    5
    MetricValueDetails
    Multi year capital plan$24 billion to $28 billionUSD
    Regulatory rate base growth6% to 7.5%%
    Adjusted EPS dividend growth$4.28 to $4.40$/share
    Major regulated project construction progressOn track
    Combined electric gas framework state mandatesMoratorium lifted

    Capital programs

    1
    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

    5
    Increased Distribution O&M ExpenseQ1 FY26

    $0.01 per share higher

    Higher Interest CostsQ1 FY26

    $0.01 per share drag

    PJM Reliability Backstop Procurement Auction Cost Allocationnear-term to 2031

    burden on the LDCs

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

    Affordability Concerns in New Jerseyongoing

    hot topic

    Mitigation: prepared for those conversations

    Resource Adequacy in PJMongoing, particularly by 2031

    resource adequacy problem

    Mitigation: trying to bring more generation in

    Q&A highlights

    6

    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 read6 chapters

    Detailed Narrative

    01

    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 impact🌐s.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    06

    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.

    AI-generated summary of the company’s earnings call. Not investment advice.