PEG
Earnings call · Dec 2025 (Q4 FY25)

PUBLIC SERVICE ENTERPRISE GROUP Q4 FY25 earnings call 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

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

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

Non-GAAP Operating Earnings
$4.05 Up 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
$0.72 Down from $0.84 in Q4 2024
Q4 2025

Company-wide non-GAAP operating earnings.

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

Company-wide net income.

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

Company-wide net income.

Dividend per share
$2.68 6% 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
30.9 Up slightly from 30.6 TWh in 2024
FY 2025

24/7 carbon-free baseload power.

Nuclear generation
7.2 Down 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
$0.07 Compared to Q4 2024
Q4 2025

Contribution to non-GAAP operating earnings.

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

Impact on non-GAAP operating earnings.

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

Impact on non-GAAP operating earnings.

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

Impact on non-GAAP operating earnings.

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

Impact on non-GAAP operating earnings.

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

Impact on non-GAAP operating earnings.

Interest expense increase
$0.04 Compared to Q4 2024
Q4 2025

Impact on non-GAAP operating earnings.

Nonoperating expenses increase
$0.02 Compared to Q4 2024
Q4 2025

Impact on non-GAAP operating earnings.

Taxes and other impact
$0.01 Favorable 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

MetricValueDetails
Adjusted operating EPS$4.05 $/share
Multi year capital plan$24B-$28B USD
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

LIPA 5-year contract extension to continue as the electric transmission and distribution operator on Long Island and the Rockaways 5 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

Multi-year Capital Investment Plan underway $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

Higher interest rates Q4 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 outages Q4 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 concerns Ongoing

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

New Jersey energy policy and generation procurement

Next quarter
Current Bills reintroduced for new natural gas and nuclear procurement; BPU exploring supply options.
Target Clarity 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

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 read 5 chapters

Detailed narrative

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.

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.

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.

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.

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.