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    PEG
    Earnings call· Dec 2025(Q4 FY25)

    PUBLIC SERVICE ENTERPRISE GROUP INC PEG

    Feb 26, 2026 Source

    Executive summary

    Public Service Enterprise Group Q4 FY25 — Raised Long-Term EPS Growth and Capital Plan

    Public Service Enterprise Group delivered strong Q4 FY25 results, achieving the high end of its earnings guidance and extending its track record of predictability. The company raised its long-term non-GAAP EPS growth outlook to 6-8% through 2030, supported by an increased $24-28 billion capital program focused on regulated investments and nuclear generation. Management emphasized its commitment to operational excellence and customer affordability amidst ongoing discussions regarding New Jersey's energy supply and regulatory reform.

    Highlights

    5

    • Non-GAAP operating earnings for FY25 reached $4.05 per share, at the high end of the narrowed guidance range.

    • The indicative annual dividend rate for Q1 2026 was set at $2.68 per share, an increase of approximately 6% over last year's dividend.

    • The updated capital program for 2026-2030 increased to $24 billion to $28 billion, with over 90% focused on regulated investments.

    • Long-term non-GAAP earnings growth outlook was raised to 6% to 8% through 2030.

    • PSEG Long Island was awarded a 5-year contract extension through 2030 to continue as the electric transmission and distribution operator.

    Concerns

    3

    • PSEG Power and Other reported a net loss of $37 million for Q4 2025, compared to a net loss of $92 million in Q4 2024.

    • Non-GAAP operating earnings for PSEG Power and Other decreased to $10 million in Q4 2025 from $43 million in Q4 2024.

    • Interest expense for PSEG Power and Other rose by $0.04 per share in Q4 2025, reflecting incremental debt at higher interest rates.

    Guidance & targets

    7
    CategoryTargetConfidence
    Non-GAAP Operating Earnings
    $4.28 to $4.40 per share
    high materiality
    High
    Long-Term Non-GAAP Earnings Growth Outlook
    6% to 8%
    high materiality
    High
    Capital Program
    $24 billion to $28 billion
    high materiality
    High
    Regulated Capital Spending
    $22.5 billion to $25.5 billion
    medium materiality
    High
    Rate Base CAGR
    6% to 7.5%
    high materiality
    High
    Dividend per Share
    $2.68 per share
    high materiality
    High
    FFO to Debt
    Mid-teens
    medium materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    PSE&G
    Utilities results for the full year were driven by the implementation of new electric and gas base distribution rates that took effect in mid-October 2024 to recover a return of and on previous capital investments totaling more than $3 billion and higher working capital balances. Electric base rates for 2026 are projected to be stable. The CIP mechanism decouples weather and other economic sales variances from a significant portion of distribution margin.
    Net Income and Non-GAAP Operating Earnings Q4 2024: $378 millionNet Income and Non-GAAP Operating Earnings FY 2025: $1.75 billionNet Income and Non-GAAP Operating Earnings FY 2024: $1.55 billionDistribution margin increase Q4 2025: $0.07 per shareDistribution O&M increase Q4 2025: $0.04 per shareDepreciation and interest expense increase Q4 2025: $0.02 per shareDistribution-related taxes increase Q4 2025: $0.05 per shareWeather Q4 2025: 9% colder than normalWeather Q4 2025: 23% colder than Q4 2024Residential customer growth 2025: approx 1%Capital spending FY 2025: approx $3.7 billionCapital spending Q4 2025: approx $1 billionPlanned capital investment 2026: approx $4.2 billionRate base year-end 2025: approx $36 billionAnnual FERC transmission revenue increase: $82 million
    		———$352 million
    PSEG Power and Other
    Net energy margin was flat compared to the prior year quarter as higher gas operations were offset by the absence of zero emission certificates and lower generation volume due to the scheduled refueling at the 100% owned Hope Creek nuclear plant. The zero emission certificate amounts earned by New Jersey nuclear units concluded in May 2025. Nuclear refueling cycle for 2026 includes a spring refueling at Salem Unit 2 and fall refuelings at Salem Unit 1 and Peach Bottom Unit 2.
    Net loss Q4 2024: $92 millionNon-GAAP Operating Earnings Q4 2025: $10 millionNon-GAAP Operating Earnings Q4 2024: $43 millionNet Income FY 2025: $366 millionNet Income FY 2024: $225 millionNon-GAAP Operating Earnings FY 2025: $284 millionNon-GAAP Operating Earnings FY 2024: $292 millionNet energy margin Q4 2025: flatO&M increase Q4 2025: $0.04 per shareDepreciation expense Q4 2025: $0.01 per share favorableInterest expense increase Q4 2025: $0.04 per shareNonoperating expenses increase Q4 2025: $0.02 per shareTaxes and other Q4 2025: $0.01 per share favorableNuclear generation Q4 2025: approx 7.2 TWhNuclear generation Q4 2024: approx 7.3 TWhNuclear generation FY 2025: approx 30.9 TWhNuclear generation FY 2024: 30.6 TWhNuclear capacity factor Q4 2025: 83.7%Nuclear capacity factor FY 2025: 91.2%Nuclear hedging 2026: approx 95% hedgedHope Creek nuclear plant ownership: 100%
    		———Net loss of $37 million

    Operational metrics

    23
    Non-GAAP Operating Earnings
    $4.05Up from $3.68 in FY 2024
    FY 2025

    At the high end of narrowed guidance range of $4.00 to $4.06 per share.

    Non-GAAP Operating Earnings
    $0.72Down from $0.84 in Q4 2024
    Q4 2025

    Company-wide non-GAAP operating earnings.

    Net Income
    $4.22Up from $3.54 in FY 2024
    FY 2025

    Company-wide net income.

    Net Income
    $0.63Up from $0.57 in Q4 2024
    Q4 2025

    Company-wide net income.

    Dividend per share
    $2.686% increase over last year's dividend
    Q1 2026 indicative annual rate

    Represents a $0.16 per share increase, higher than last year's increase of $0.12 per share.

    Methane emissions reduction
    30%
    Since 2018

    Cumulative progress from GSMP III programs.

    Nuclear capacity factor
    91.2%
    FY 2025

    For the full year.

    Nuclear generation
    30.9Up slightly from 30.6 TWh in 2024
    FY 2025

    24/7 carbon-free baseload power.

    Nuclear generation
    7.2Down from 7.3 TWh in Q4 2024
    Q4 2025

    Impacted by Hope Creek refueling outage.

    Nuclear hedging
    95%
    2026

    For the remainder of 2026.

    Variable rate debt
    $500 million
    As of Dec 31

    Amended existing $400 million loan to $500 million.

    Total available liquidity
    $2.8 billion
    As of end of December

    Includes approximately $130 million of cash on hand.

    Residential customer growth
    1%
    2025

    Drives margin under the CIP mechanism.

    Distribution margin increase
    $0.07Compared to Q4 2024
    Q4 2025

    Contribution to non-GAAP operating earnings.

    Distribution O&M increase
    $0.04Compared to Q4 2024
    Q4 2025

    Impact on non-GAAP operating earnings.

    Depreciation and interest expense increase
    $0.02Compared to Q4 2024
    Q4 2025

    Impact on non-GAAP operating earnings.

    Distribution-related taxes increase
    $0.05Compared to Q4 2024
    Q4 2025

    Impact on non-GAAP operating earnings.

    O&M increase
    $0.04Compared to Q4 2024
    Q4 2025

    Impact on non-GAAP operating earnings.

    Depreciation expense impact
    $0.01Favorable compared to Q4 2024
    Q4 2025

    Impact on non-GAAP operating earnings.

    Interest expense increase
    $0.04Compared to Q4 2024
    Q4 2025

    Impact on non-GAAP operating earnings.

    Nonoperating expenses increase
    $0.02Compared to Q4 2024
    Q4 2025

    Impact on non-GAAP operating earnings.

    Taxes and other impact
    $0.01Favorable compared to Q4 2024
    Q4 2025

    Impact on non-GAAP operating earnings.

    O&M cost-cutting target
    2% to 2.25%From 3% inflationary assumption
    Ongoing

    Achieved by pulling back on inflationary assumptions through efficiencies.

    Industry KPIs

    7
    MetricValueDetails
    Adjusted operating EPS$4.05$/share
    Multi year capital plan$24B-$28BUSD
    Dividend per share growth$2.68$/share
    Regulatory rate base growth6% to 7.5%%
    Allowed ROE equity layer rate cases—
    Combined electric gas framework mandates30%%
    Major regulated project construction progress—

    Deals & partnerships

    1
    LIPA5-year contract extension to continue as the electric transmission and distribution operator on Long Island and the Rockaways5 years

    Enables PSEG Long Island to continue as the best-performing overhead electric service provider in New York State and a top performer nationally for reliability and safety.

    Capital programs

    1
    Multi-year Capital Investment Planunderway$24B-$28B
    Period spend: $4.2B
    Spent to date: Approximately $3.7B
    Funding: No new equity or asset sales
    Start: 2026

    Benefit: Rate base CAGR of 6% to 7.5%

    Updated from prior plan of $21B-$24B, with $1.5B increase primarily due to anticipated load growth from data centers and other new customers, plus incremental distribution reliability and resiliency investments. Over 90% focused on regulated investments. $4.2B is the planned capital investment for the regulated business in 2026.

    Risks & headwinds

    4
    Higher interest ratesQ4 2025

    Interest expense rose by $0.04 per share for PSEG Power and Other

    Mitigation: Solid balance sheet supports execution of 5-year capital plan without new equity/asset sales; FFO to debt projected mid-teens through 2030.

    Absence of Zero Emission Certificates (ZECs)Q4 2025 onwards

    Net energy margin was flat compared to the prior year quarter as higher gas operations were offset by the absence of zero emission certificates

    Mitigation: Nuclear output realizing market prices that exceed the nuclear PTC threshold; 95% hedged for 2026.

    Nuclear refueling outagesQ4 2025 (Hope Creek), 2026 (Salem Unit 2, Salem Unit 1, Peach Bottom Unit 2)

    Lower generation volume due to the scheduled refueling at Hope Creek nuclear plant; O&M was $0.04 per share higher mostly driven by that Hope Creek refueling outage.

    Mitigation: Hope Creek transitioned to a 24-month refueling cycle for long-term additional MWh and O&M savings.

    New Jersey energy supply/cost concernsOngoing

    PJM-related electric supply costs that PSE&G passes through to customers

    Mitigation: Summer relief initiatives, holding residential gas rates flat, 1.8% reduction in average monthly bill for residential electric customers starting June 1, 2026, due to BGS auction results. Exploring regulatory reform and new generation options.

    What to watch in Q1 FY26

    4

    New Jersey energy policy and generation procurement

    Next quarter
    CurrentBills reintroduced for new natural gas and nuclear procurement; BPU exploring supply options.
    TargetClarity on legislative progress, IRP process, and BPU's approach to new generation.

    Why it matters

    Policy decisions will shape future investment opportunities and the energy mix in New Jersey, directly impacting PSEG's regulated and power segments.

    In the past few days, a bill was reintroduced in the state legislature to establish a new natural gas power plant procurement program at the BPU and incentivize the development of new natural gas power plants in the state.

    Q&A highlights

    9

    Inquired about the timing and next steps for the new gas bill, potential IRP process, PPA structures, and challenges like air permits and turbine backlogs.

    Ralph LaRossa stated that many variables are still in play and policymakers need to address them. He noted that the IRP process informs output but doesn't drive definitive decisions, as policymakers ultimately own the direction.

    “Much of it's in play, right, as you said. And many of those variables that you laid out are the exact variables that policymakers need to come to grips with.”

    asked by Shahriar Pourreza · answered by Ralph LaRossa

    2 min read5 chapters

    Detailed Narrative

    01

    Operational Excellence and Customer Focus

    PSEG highlighted its strong operational performance, including managing severe winter weather and achieving high reliability and customer satisfaction. PSE&G ranked #1 in customer satisfaction among large electric utilities in the East region for the fourth consecutive year, and PSEG Long Island also achieved #1 in business customer satisfaction. These achievements underscore the company's commitment to best-in-class utility operations.

    02

    Affordability Initiatives

    The company is actively working with New Jersey regulators to minimize utility bill increases, implementing summer relief initiatives and holding residential gas rates flat for winter 2025-2026. The latest electric supply auction results are expected to reduce average residential electric bills by 1.8% starting June 1, 2026. PSEG plans to introduce more ways to help customers manage and save on utility bills, including budget billing education, new time-of-use rates, and energy-efficiency solutions.

    03

    Methane Emission Reduction

    PSE&G received approval to extend its 3-year GSMP III program, which has cumulatively reduced methane emissions by over 30% system-wide from 2018 levels. This progress validates the effectiveness of gas system investments in reducing pipe breaks and low-pressure issues during cold weather events.

    04

    New Jersey Energy Policy Discussions

    PSEG is actively engaged in discussions with policymakers regarding executive orders to explore supply options, including 3,000 MW of community solar and battery storage, and potential regulatory reform. The company is also monitoring re-introduced bills for new natural gas and nuclear power plant procurement programs, positioning itself to help meet potential in-state generation needs with existing sites and expertise.

    05

    Nuclear Fleet Performance and Refueling Cycle

    PSEG Nuclear posted a 91.2% capacity factor for the full year 2025, producing approximately 30.9 terawatt-hours of carbon-free baseload power. Hope Creek completed a refueling outage to transition to a 24-month refueling cycle, expected to yield additional megawatt-hours and O&M savings over the long term⏳. The nuclear fleet is approximately 95% hedged for 2026, and PTCs are not expected to be booked due to higher market prices.

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