• Net Income (Q4 2024): $0.57 per share.
• Net Income (Full Year 2024): $3.54 per share.
• Non-GAAP Operating Earnings (Q4 2024): $0.84 per share.
• Non-GAAP Operating Earnings (Full Year 2024): $3.68 per share.
• 2025 Non-GAAP Operating Earnings Guidance: $3.94 to $4.06 per share.
• Capital Spending (2024): $3.6 billion.
• Planned Capital Spending (2025): $4 billion.
• Planned Capital Spending (2025-2029): $22.5 billion to $26 billion.
• Rate Base Growth (2025-2029): 6% to 7.5% CAGR.
• Dividend Increase (2025): $0.12 per share, annual rate of $2.52 per share.
• Liquidity (End of 2024): $2.6 billion.
• Cash Collateral Balance (End of 2024): $250 million.
• Debt Outstanding (End of 2024): $1.65 billion at PSEG Power.

• Warning! GuruFocus has detected 6 Warning Signs with PEG.

Release Date: February 25, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Public Service Enterprise Group Inc (NYSE:PEG) reported strong financial results for 2024, with net income of $3.54 per share for the full year and non-GAAP operating earnings of $3.68 per share, which was at the top of their guidance range.
• The company successfully settled its first electric and gas distribution rate case in six years, achieving a balanced outcome that recovers prudent investments and maintains affordability.
• PSE&G received approval to invest $2.9 billion in its Clean Energy Future Energy Efficiency 2 program, enhancing energy efficiency and reducing carbon emissions.
• The company completed its $3.6 billion capital spending program, including the advanced metering infrastructure program, on time and on budget.
• PSEG's Board of Directors announced a $0.12 per share increase in the annual common dividend, marking the 14th consecutive annual increase, supported by strong financial discipline.

Negative Points

• PSEG's net income for 2024 was lower compared to 2023, with a decrease from $5.13 per share in 2023 to $3.54 per share in 2024.
• The company faces challenges with the upcoming increase in customer electric bills due to the basic generation service auction results, driven by rising capacity prices.
• There is uncertainty in the PJM market, raising concerns about the ability to attract new generation and maintain reliability.
• PSEG Power & Other reported a net loss for the fourth quarter of 2024, compared to net income in the same period of 2023.
• The company is navigating regulatory complexities and potential delays in commercial discussions related to its nuclear operations, particularly concerning the Artificial Island project.

Q & A Highlights

Q: Ralph, regarding the nuclear side with Artificial Island, do you see commercial discussions being delayed with recent FERC actions? How does this affect potential opportunities? A: Ralph LaRossa, CEO: The New Jersey Economic Development Authority is considering alternative uses for the wind port, indicating interest from the state. Dan Cregg, CFO, added that discussions with multiple parties continue, and while FERC's complete answers are pending, the direction is favorable for flexibility.

Q: Does the PSE&G pipeline of opportunities negate any Artificial Island opportunities? A: Ralph LaRossa, CEO: The 4,700 megawatts of interest includes data centers and large loads, indicating strong industry interest in New Jersey. The state's marketing efforts are effective, and there's no negation of Artificial Island opportunities.

Q: How are you thinking about the outlook for the PJM market and potential structural changes? A: Ralph LaRossa, CEO: We set targets based on the PTC floor, focusing on customer affordability and reliability. The PJM market's reliability is a concern, and we advocate for customer interests. Dan Cregg, CFO, added that resource adequacy is vital, and the PTC floor provides financial stability.

Q: Is the uncertainty in PJM's outlook a deterrent for new large load customers? A: Ralph LaRossa, CEO: Despite uncertainties, interest in New Jersey has increased from 400 to 4,700 megawatts, indicating strong demand from large load customers.

Q: Can you provide any color on hedges that PEG Power has? A: Daniel Cregg, CFO: We aim to minimize risk with the PTC floor in mind. Our hedging percentages remain consistent with past approaches, maintaining stability despite uncertainties.

Q: Why hasn't PSEG provided a breakout of net income guidance between the utility and PEG Power this year? A: Ralph LaRossa, CEO: We shifted to discussing guidance at the enterprise level for consistency, focusing on overall performance rather than segment-specific details.

Q: Regarding the GSMP III filing, do you expect to revisit it this quarter, and is it included in the plan? A: Ralph LaRossa, CEO: Conversations have started, and GSMP III is part of our core business activities, included in our plan for future growth.

Q: Is New Jersey in a net long position on generation, and what's the reserve margin? A: Ralph LaRossa, CEO: New Jersey is a net importer, especially on peak days, with no integrated resource plan or set reserve margin. PJM's reserve margin is slightly above target, but additional generation is needed as load increases.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.