AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 18/10/2026
Moat69
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 3/4 · A dense installed delivery network, millions of connections and existing exclusive service rights provide strong structural protection. Actual approved investment recovery corroborates its economic relevance; no separate merchant-generation advantage is established.
durability · 3/4 · Established infrastructure, exclusive service rights and formula-rate recovery support persistence. Policy dependence and potential distributed-generation substitution prevent an exceptional grade or assured duration.
customer dependency · 3/4 · The large connected customer base relies on PSE&G’s protected delivery service. This is indirect evidence of dependency, rather than measured voluntary loyalty or inability to change commodity suppliers.
erosion resilience · 2/4 · Approved recovery and higher first-half utility earnings support resilience, but affordability interventions have already increased bad debt. Business-model review and changed program returns add uncertainty; distributed-generation risks are possibilities, not demonstrated losses.
Pricing power50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · Approved recovery of completed gas investments demonstrates realized tariff increases with a return component. Commodity rates moved both upward and downward, but those pass-through changes do not demonstrate discretionary pricing power.
retention · 3/4 · Exclusive delivery rights and the installed customer base support continuing demand indirectly. The approved five-year Long Island extension supplies direct renewal evidence for a smaller operation, although litigation creates uncertainty. No retention percentage is inferred.
margin resilience · 2/4 · Formula rates and investment recovery protect utility economics, and first-half PSE&G net income increased from $878 million to $919 million. Consolidated earnings declined, merchant results include substantial valuation effects, and bad debt and financing costs increased. These mixed results do not establish group-wide margin protection.
contractual freedom · 1/4 · Delivery prices are regulated and utility commodity charges provide no margin. Merchant competitive sales offer market exposure, but the passages do not demonstrate meaningful unilateral control over their prices or terms.
Predictability68
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 75.00
- Revenue growth volatility (pp)
- 10.72
- Positive FCF years (%)
- 40.00
- FCF margin volatility (pp)
- 7.27
Financial strength5
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 0.00
- netDebtEbitGrade
- 0.00
- interestCoverageGrade
- 17.87
- currentRatioGrade
- 4.06
- Debt / FCF (x)
- 925.92
- Net debt / operating income (x)
- 8.03
- Interest coverage (x)
- 2.97
- Current ratio (x)
- 0.80
Capital allocation58
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 8.16
- 3-year average dilution (%)
- 0.07
- 3-year average SBC / revenue (%)
- 0.30
- cashConversionGrade
- 0.00
Management56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Actual infrastructure spending and approved returns on completed investments demonstrate investment conversion into regulated recovery. Stable reported credit outlooks and broadly stable share counts support financing discipline, while higher debt costs and a delayed transmission project temper the assessment. Complete cash-generation and investment-return coverage is missing.
incentive alignment · 3/4 · The existing LTIP allocates 70% to performance shares with relative shareholder return, EPS growth and sustainability measures. Ownership, clawback and hedging controls strengthen alignment. Retirement eligibility weakens service-based vesting for most named executives; complete ownership compliance is not established.
execution · 2/4 · Completed investments receiving rate recovery, higher utility earnings and the approved Long Island extension demonstrate delivery. A transmission project is not expected to meet its directed service date. Execution is assessed indirectly from these operating and contractual outcomes; supplied passages lack comprehensive reliability and project-budget results.
governance · 2/4 · Disclosed clawback and trading controls, together with a compensation consultant reporting directly to the committee and meeting without management, establish substantive safeguards. Proposed elimination of supermajority provisions indicates unresolved shareholder-rights constraints as of the proxy date; no adoption outcome is supplied.
Evidence
We provide distribution service to 2.4 million electric customers and 1.9 million gas customers in a service area that covers approximately 2,600 square miles running diagonally across New Jersey.
Business / PSE&G distribution customer base and service area · Filed 26/02/2026
We serve the most densely populated, commercialized and industrialized territory in New Jersey, including its six largest cities and approximately 300 suburban and rural communities.
Business / service-territory density · Filed 26/02/2026
In addition, if legislative and regulatory structures were to evolve in such a way that PSE&G’s exclusive rights to serve its regulated customers were eroded, its future earnings could be negatively impacted.
Risk factors / existing exclusive regulated service rights and possible erosion · Filed 26/02/2026
Transmission We use formula rates for our transmission cost of service and investments.
Business / transmission formula rates · Filed 26/02/2026
• Gas System Modernization Program II Extension (GSMP II Ext)—In July 2025, the BPU approved PSE&G’s updated GSMP II Ext petition to recover $49 million annually in gas base rates effective August 1, 2025.
Note 5 / approved GSMP II Extension annual rate recovery · Filed 26/02/2026
The approved gas revenue increase represents the return on and of actual GSMP II Ext investments placed in service through April 30, 2025.
Note 5 / approved return on and of actual investments placed in service · Filed 26/02/2026
Advances in distributed generation technologies, such as fuel cells, micro turbines, micro grids, windmills and net-metered solar installations, coupled with subsidies, could (i) affect the price of energy, (ii) reduce energy deliveries as customer-owned generation becomes more cost-effective, (iii) require further improvements to our distribution systems to address changing load demands, and (iv) make portions of our transmission and/or distribution facilities obsolete prior to the end of their useful lives.
Risk factors / distributed generation and potential network obsolescence · Filed 26/02/2026
In 2025, per direction to EDCs from the BPU, PSE&G took steps to mitigate the impacts of increasing electricity costs resulting from capacity market price increases, including the implementation of extended deferred payment arrangements.
Regulatory developments / electricity-affordability payment arrangements · Filed 04/08/2026
Further, the New Jersey legislature enacted a law prohibiting disconnection for non-payment during the period June 15 through August 31, beginning in 2026, and for such period annually thereafter, for certain qualified electric and gas customers.
Regulatory developments / seasonal disconnection restrictions · Filed 04/08/2026
Both of these actions increased our bad debt expense in 2025, with potential additional increases in the future.
Regulatory developments / realized increase in 2025 bad debt expense · Filed 04/08/2026
Executive Order No. 1 directed the BPU to complete and issue a study regarding modernization of the traditional electric distribution utility business model and the BPU retained a consultant to prepare the study.
Regulatory developments / distribution utility business-model review · Filed 04/08/2026
The final framework includes elements that adjust the overall budget for the extension, requiring budgets to be based on gross, not net, energy savings, adjusts return on equity that the utilities can earn for achieving performance goals, and replaces the existing method to collect foregone revenue.
Capital requirements / changed energy-efficiency budget and return framework · Filed 04/08/2026
Pricing for those services is set by the BPU as a pass-through, resulting in no margin for our utility operations.
Business / commodity pass-through pricing without utility margin · Filed 26/02/2026
The rates charged for electric transmission are regulated by FERC while the rates charged for electric and gas distribution are regulated by the BPU.
Note 16 / FERC and BPU authority over delivery rates · Filed 04/08/2026
The February 2025 BGS auction resulted in a significant cost increase for electricity supplied by PSE&G and all other New Jersey electric distribution companies that was reflected in customers’ rates beginning June 1, 2025.
BGS process / 2025 supply cost increase reflected in customer rates · Filed 04/08/2026
The February 2026 BGS auction resulted in a slight cost decrease for electricity supplied by PSE&G that became effective June 1, 2026.
BGS process / realized June 2026 supply cost decrease · Filed 04/08/2026
PSE&G PSEG Power & Other (A) Eliminations (B) Consolidated Total Millions Three Months Ended June 30, 2026 Operating Revenues $ 2,137 $ 534 $ (117 ) $ 2,554 Energy Costs 776 207 (117 ) 866 Controllable Operation and Maintenance (C) 343 185 — 528 Depreciation and Amortization 286 35 — 321 Interest Income 3 3 — 6 Interest Expense 174 95 — 269 Income Tax Expense 51 13 — 64 Other Segment Items (D) 168 10 — 178 Net Income (Loss) $ 342 $ (8 ) $ — $ 334 Gross Additions to Long-Lived Assets $ 631 $ 135 $ — $ 766 Three Months Ended June 30, 2025 Operating Revenues $ 2,031 $ 920 $ (146 ) $ 2,805 Energy Costs 760 212 (146 ) 826 Controllable Operation and Maintenance (C) 331 185 — 516 Depreciation and Amortization 275 33 — 308 Interest Income 5 9 (1 ) 13 Interest Expense 161 88 (1 ) 248 Income Tax Expense 33 108 — 141 Other Segment Items (D) 144 50 — 194 Net Income $ 332 $ 253 $ — $ 585 Gross Additions to Long-Lived Assets $ 674 $ 113 $ — $ 787 53 Table of Contents NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) PSE&G PSEG Power & Other (A) Eliminations (B) Consolidated Total Millions Six Months Ended June 30, 2026 Operating Revenues $ 5,222 $ 1,950 $ (770 ) $ 6,402 Energy Costs 2,134 1,009 (770 ) 2,373 Controllable Operation and Maintenance (C) 707 323 — 1,030 Depreciation and Amortization 581 69 — 650 Interest Income 10 6 — 16 Interest Expense 349 192 — 541 Income Tax Expense 130 41 — 171 Other Segment Items (D) 412 166 — 578 Net Income $ 919 $ 156 $ — $ 1,075 Gross Additions to Long-Lived Assets $ 1,252 $ 207 $ — $ 1,459 Six Months Ended June 30, 2025 Operating Revenues $ 4,695 $ 2,012 $ (680 ) $ 6,027 Energy Costs 1,854 838 (680 ) 2,012 Controllable Operation and Maintenance (C) 685 364 — 1,049 Depreciation and Amortization 555 73 — 628 Interest Income 9 14 (2 ) 21 Interest Expense 318 173 (2 ) 489 Income Tax Expense 77 92 — 169 Other Segment Items (D) 337 190 — 527 Net Income $ 878 $ 296 $ — $ 1,174 Gross Additions to Long-Lived Assets $ 1,279 $ 167 $ (31 ) $ 1,415 As of June 30, 2026 Total Assets $ 50,429 $ 8,582 $ (198 ) $ 58,813 Investments in Equity Method Subsidiaries $ — $ 30 $ — $ 30 As of December 31, 2025 Total Assets $ 49,024 $ 9,067 $ (515 ) $ 57,576 Investments in Equity Method Subsidiaries $ — $ 26 $ — $ 26 (A) PSEG Power & Other results include net after-tax gains (losses) of $(185) million and $136 million for the three months and ($215) million and $1 million for the six months ended June 30, 2026 and 2025, respectively, related to the impacts of non-trading commodity mark-to-market activity, which consists of the financial impact from positions with future delivery dates.
Note 16 / comparative segment earnings, expenses, assets and commodity valuation effects · Filed 04/08/2026
PSEG LI PSEG LI has been operating LIPA’s electric T&D system in Long Island, New York since 2014 under a 12-year OSA with LIPA that expired on December 31, 2025.
PSEG LI / operation under the original 12-year services agreement · Filed 04/08/2026
In 2025, a five year extension of the contract was approved.
PSEG LI / approved five-year contract extension · Filed 04/08/2026
A competitor in the contract bidding process filed litigation against LIPA challenging the process.
PSEG LI / unnamed competing bidder’s litigation · Filed 04/08/2026
PSE&G During the six months ended June 30, 2026, PSE&G made capital expenditures of $1,252 million, primarily for T&D system reliability.
Capital requirements / actual first-half 2026 utility capital expenditures · Filed 04/08/2026
Moody’s (A) S&P (B) PSEG Outlook Stable Stable Senior Notes Baa2 BBB Commercial Paper P2 A2 PSE&G Outlook Stable Stable Mortgage Bonds A1 A Commercial Paper P2 A2 PSEG Power Outlook Stable Stable Senior Notes Baa2 BBB (A) Moody’s ratings range from Aaa (highest) to C (lowest) for long-term securities and P1 (highest) to NP (lowest) for short-term securities.
Liquidity and capital resources / reported credit ratings and stable outlooks · Filed 04/08/2026
Interest Expense increased $59 million due primarily to incremental debt and the replacement of maturing long-term debt at higher rates.
Results of operations / increased interest expense from debt and refinancing · Filed 26/02/2026
However, based on the procedural timeline established by order of the Maryland Public Service Commission, we do not currently believe a 2027 in-service date for the project is reasonably achievable.
Competitive transmission projects / expected inability to meet directed 2027 service date · Filed 04/08/2026
48 PSEG 2026 Proxy Statement Compensation Discussion and Analysis – Our Compensation Elements Explained 2025 LTIP (2025 – 2027 Performance Period) 70% PSUs • Rewards strong financial and stock price performance over a longer time frame than annual awards • Facilitates retention, as recipient generally must remain an employee through vesting dates to earn payout, unless retirement eligible • Aligns the interest of officers with long-term stockholder value • PSUs are denominated in units of common stock and are subject to achievement of certain performance goals over a three-year period, vesting at the end of the performance period • Awards can be earned from 0%-200% of target based on Relative TSR (50%), EPS Growth (25%) and Sustainability (25%) 30% RSUs • Facilitates retention, as recipient generally must remain an employee through vesting dates to earn payout, unless retirement eligible • Aligns the interest of officers with long-term stockholder value • RSUs are denominated in units of common stock and vest beginning with the 2024 grant, on a graded basis over three years starting from the date of grant.
Executive compensation / existing 2025 LTIP composition, performance measures and vesting · Filed 12/03/2026
Executive Compensation Best Practices What We Do What We Don’t Do Pay for performance, with a significant portion of target compensation at risk No guaranteed incentive compensation Use of sustainability metrics in both the MICP and LTIP for the PSU component No excise tax gross ups Set stretch performance goals, and disclose them for forward-looking PSU grants No hedging or pledging for any employee, including officers and Directors Target competitive pay based on relevant market data, taking into consideration scope of role, performance and tenure in role No compensation plans that encourage or reward executives’ excessive risks Payout cap maximum for incentive plans No dividends paid on unearned awards Vesting of three years for PSUs and 3-year graded vesting period starting from the grant date for RSUs, unless retirement eligible No repricing or exchange of underwater stock options No excessive perks Use of “double-trigger” in the event of a change-in-control to receive severance benefits No additional service credit for pension calculation Apply clawback practices related to financial restatements or in the event of misconduct or material violations of our Standards of Conduct and covers the MICP and LTIP (RSUs and PSUs) Utilize robust stock ownership guidelines for executives Review of programs and practices by independent executive compensation consultant Engage stockholders to solicit feedback on our compensation programs 44 PSEG 2026 Proxy Statement Compensation Discussion and Analysis – Peer Comparison and Benchmarking Peer Comparison and Benchmarking How We Choose Peers for Benchmarking We evaluate and set executive compensation to be competitive within a peer group comprising similarly-sized utilities.
Executive compensation / ownership, clawback, hedging and payout controls · Filed 12/03/2026
All of our NEOs are retirement eligible, except for Grace H.
Executive compensation / retirement eligibility of named executives · Filed 12/03/2026
CAP reports directly to the O&CC. Select responsibilities include: Review compensation programs and levels Analyze pay and performance alignment Provide comparative industry trends and peer data Ad hoc support on executive compensation matters CAP meets with the O&CC in Executive Session without the presence of management and provides only executive and Director compensation consulting services.
Compensation governance / consultant reporting and executive sessions · Filed 12/03/2026
Consider and act upon three management proposals to approve amendments to our Certificate of Incorporation and By-Laws to eliminate supermajority voting requirements; 4.
Annual meeting proposals / proposed elimination of supermajority requirements · Filed 12/03/2026
• PSEG Power LLC (PSEG Power)—which is an energy supply company that consists of the operations of merchant nuclear generating assets and fuel supply functions engaged in competitive energy sales via its principal direct wholly owned subsidiaries.
Organization / merchant nuclear generation and competitive energy sales · Filed 04/08/2026
The following table shows the effect of these dilutive potential shares on the weighted average number of shares outstanding used in calculating diluted EPS: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Basic Diluted Basic Diluted Basic Diluted Basic Diluted EPS Numerator (Millions): Net Income $ 334 $ 334 $ 585 $ 585 $ 1,075 $ 1,075 $ 1,174 $ 1,174 EPS Denominator (Millions): Weighted Average Common Shares Outstanding 498 498 499 499 498 498 499 499 Effect of Stock Based Compensation Awards — 1 — 1 — 1 — 1 Total Shares 498 499 499 500 498 499 499 500 EPS Net Income $ 0.67 $ 0.67 $ 1.17 $ 1.17 $ 2.15 $ 2.15 $ 2.35 $ 2.35 Dividends Three Months Ended Six Months Ended June 30, June 30, Dividend Payments on Common Stock 2026 2025 2026 2025 Per Share $ 0.67 $ 0.63 $ 1.34 $ 1.26 In Millions $ 334 $ 315 $ 668 $ 629 On July 20, 2026, PSEG’s Board of Directors approved a $0.67 per share common stock dividend for the third quarter of 2026.
Note 15 / comparative share counts, earnings and dividends · Filed 04/08/2026
Funding for our investments in capital improvement and additions, scheduled payments of principal and interest on our existing indebtedness and the extension and refinancing of such indebtedness has been provided primarily by internally-generated cash flow and external debt financings.
Liquidity risk / historical funding through internal cash generation and external debt · Filed 26/02/2026
