Public Service Enterprise Group Incorporated Price & Performance (PEG)

Following our prepared remarks, we will conduct a thirty minute question and answer session. I will now turn the call over to Ralph LaRosa, Thank you, Carlotta. Thank you everyone for joining us this morning to review PSEG's 2024 results and our outlook for the business going forward. PSEG reported net income of $0.57 per share for the fourth quarter of twenty twenty four and $3.54 per share for the full year. For non GAAP operating earnings, PSEG reported results of $0.84 per share for the fourth quarter and $3.68 per share for the full year which was at the top of our 2024 guidance range. Our reported results for 2024 also marked the twentieth consecutive year that we have met or exceeded management's non GAAP operating earnings guidance to investors. Are proud of this track record and confidence that our team will continue to build on it. We were also successful in achieving our First, we settled PSE and G's first electric and gas all with a balanced outcome that recovers prudent investments maintains our favorable affordability profile and mitigates variability for our customers. Second, PSE and G received approval to invest $2,900,000,000 in its clean energy future Energy Efficiency II program over the upcoming six year period.

This second phase of the BPU statewide energy efficiency framework has resulted in a meaningful increase to the program. Which will enable us to make investments at more customer premises to reduce energy usage improve affordability and reduce carbon emissions. Third, we efficiently executed the utilities plan $3,600,000,000 capital spending program and notably completed the advanced metering infrastructure program on time and on budget. Installing approximately 2,200,000 smart meters in customers' homes and businesses. And fourth, and I'm very happy to say, we implemented new deferral mechanisms for pension and storm increases the predictability of PSE and G's future financial results and stabilizes rates for customers. Speaking of customer rates, the new base rates that were placed into effect last October represented an annual increase of about 1% per year since our last rate case in 2018. Also, last October PSE and G lowered its gas commodity charge to $0.33 per therm for the winter of twenty twenty five. The third supply charge reduction since January of twenty twenty three All of these steps will serve to moderate the recent outcome of the B auction results, which will increase customer electric bills this June 1. PSE and G's record of reliability affordability and customer satisfaction continues to be a valuable combination.

Were recently made number one in customer satisfaction with residential electric and gas service in the East among large utilities by J. D. Power in 2024.

The utility also received the PA Consulting twenty twenty four Reliability I Award for the Mid Atlantic region for the twenty third consecutive year. I want to take a moment to recognize and thank all of our over 13,000 employees for the incredible teamwork and individual efforts that delivered 2024 strategic objectives and financial results. So let's turn to our outlook for 2025 starting with Slides five and six. For the current year, we have initiated PSEG's non GAAP operating earnings guidance at $3.94 to $4.06 per share. Which is up by 9% at the midpoint over our 2024 reported Our 2025 guidance midpoint is the new base year for PSEG's 5% to 7% non GAAP operating earnings catered at the nuclear production tax credit threshold for the 2025 to 2029 period.

I would also note this CAGR while unchanged as we pursue incremental revenue opportunities at PSEG Nuclear, starts from a $4 midpoint of 2025 guidance that is 9% higher than our 2024 non GAAP results. For 2025, we plan to invest $4,000,000,000 across enterprise, driven by regulated investments. We also raised PSEG's twenty twenty five twenty twenty nine capital spending plan to $22,500,000,000 to $26,000,000,000 which is up by $3,500,000,000 from the prior plan. This increase is largely comprised of incremental investments at PSE and G will meet growing customer demand. Modernize infrastructure and further execute on a previously mentioned energy efficiency [indiscernible] Please see Slides fourteen and fifteen for the updated regulated capital spending plan and rate based projections for the 2025 to 2029 period. This updated five year capital spending program is expected to support a PSE and G rate base carry that continues at 6% to 7.5% over the upcoming five year period which grows from a starting point of approximately $34,000,000,000 which is notably 12% higher than the year end 2023 balance.

Something new for PSE and G year has been a significant increase in inquiries from large load and data center customers. Last year at this time, these totaled under 400 megawatts. Today, interest has grown to 4,700 megawatts, which includes both mature leads and initial inquiries. This pipeline represents an over twelvefold increase over the last year.

The average size of these project leads is in the 100 megawatt range, which can often fit within PSE and G's existing robust utility transmission infrastructure. We are responding to these inquiries in under four months on average. Approximately 25% of the 4,700 megawatts of new business leads have been incorporated into PGMs 2025 system peak load forecast. As I mentioned earlier, the basic generation service auction results will raise the residential [indiscernible] starting June 1. This increase is being driven by the significant rise in the capacity prices coming out of PJM's latest RPM auction conducted last July. Which reflects growing energy demand combined with the need for new power generation. As a reminder, electric supplies have passed through cost that PSE and G does not earn a profit on. Even with this upcoming BGS increase, our combined bill still compares favorably to all other utilities in New Jersey and we remain a leader across the nation on our low share of wallet comparison. PSE and G's bill remains at about 3% of total income for medium income customers and even lower still approximately 2% for our low to moderate income customers that take advantage of payment assistance programs.

Turning to PSE and G Power and Other, while the PTC threshold provides sufficient support to meet PSEGs, 5% to 7% long term growth outlook, we continue to pursue nuclear revenue growth opportunities at PSEG Nuclear that would be incremental. These opportunities to contract portions of our nuclear output under long term contracts can also benefit the economic development interests of the state in helping to attract AI hubs to New Jersey. We had an exceptional year in 2024. Continuing to execute on our business plan and in doing so have made our business is more predictable and our earnings growth more visible. These benefits will enhance our ability to drive our future performance that prioritizes maintaining our financial strength making disciplined investments and delivering operational excellence. Another key PSEG distinction that we are proud to extend our ability to continue supporting another robust five year capital program without the need to issue new equity or sell assets through 2029. Even with the latest $3,500,000,000 increase over the prior plan. Before I conclude, I want to highlight that our Board of Directors recently announced a $0.12 per share increase in PSEG's annual common dividend, indicative annual rate of $2.52 per share for 2025.

This is PSEG's fourteenth consecutive annual increase. Made possible by a longstanding commitment to financial discipline has enabled us to pay a common dividend to our shareholders one hundred and eighteen consecutive years I'll now turn the call over to Dan to walk you through the results for the quarter and our outlook for 2025 through 2029 period.

And then rejoin the call for Q and A. Thank you, Ralph, and good morning, everybody. As Ralph mentioned earlier, PCG reported net income of $3.54 per share for the full year of 2024. Compared with net income of $5.13 per share for 2023. And non GAAP operating earnings for the full year of 2024 were $3.68 per share compared to $3.48 per share for 2023. For the fourth quarter of twenty twenty four, net income was $0.57 per share compared to $1.1 per share in 2023. And non GAAP operating earnings were $0.84 per share in the fourth quarter of twenty twenty compared to $0.54 per share in 2023.

Slides eight and ten detail the contribution to non GAAP operating earnings per share five business segments for the fourth quarter and full year of 2024 And Slides nine and eleven contain waterfall charts that take you through the net changes For the quarter over quarter and full year periods, in non GAAP operating earnings per share, by major business. Starting with PSE and G, which reported fourth quarter twenty twenty four net income of $0.75 per share compared to $0.58 per share in 2023.

PSE and G had non GAAP operating earnings of $0.75 per share for the fourth quarter of twenty twenty four, compared to $0.59 per share in 2023. Utilities results were driven by the implementation of new electric and gas [indiscernible] The new rates went into effect on October 15, and the fourth quarter results reflect the impact of seasonality of gas revenues during winter months. 2025 comparisons will benefit from a full year of new rates for both gas and electric revenues. Compared to the fourth quarter of twenty twenty three, transmission margin was a benefit of $0.02 per share due to higher recovery of investment.

Distribution margin increased by $0.16 per share and reflects the impacts of the rate case on gas revenues in the fourth quarter. Distribution O and A expense was $0.01 per share favorable compared to the fourth quarter of twenty twenty three primarily due to the timing of spending Depreciation and interest expense rose by $0.01 per share and $0.02 per share respectively Compared to the fourth quarter of twenty twenty three, reflecting continued growth in investment, and higher interest expense. Lower pension and OCAV income resulting from cessation of OCAV related credits which ended in 2023, resulted in a $0.02 per share unfavorable comparison to the year earlier quarter. And lastly, the timing of tax is recorded through an annual effective tax rate which nets to zero over the full year And other taxes had a net favorable impact of $0.02 per share in the fourth quarter compared to 2023. And for the full year, PSE and G results reflect higher earnings from increased investment in infrastructure replacement and energy efficiency, as well as the rate case partially offset by higher interest and depreciation expense from higher investment balances. Weather during the fourth quarter as measured by heating degree days was 12% warmer than normal, but 3% cooler than the fourth quarter of twenty twenty three. [indiscernible] As I'm sure you know, weather variations have a minimal impact on PSE and Gs you utility margin because of the Conservation Incentive Program or SIP mechanism.

This decoupling mechanism limits the impact of weather and other sales variances positive or negative on electric and gas margins while helping PSE and G promote the widespread adoption of its energy efficiency [indiscernible] Under the SIP, the number of electric and gas customers is what drives margin, and each segment grew by approximately 1% in 2024. On capital spending, as Ralph mentioned, PSE and G invested approximately $9,000,000,000 or $900,000,000 during the fourth quarter and for the full year 2024, our capital spending totaled $3,600,000,000 slightly higher than our original plan of $3,400,000,000 based on the continued execution of our electric system reliability programs including energy strong and last mile spend in the IAP our ongoing gas infrastructure replacement spending as well as our energy efficiency programs. For 2025, we plan to invest approximately $3,800,000,000 in regulated investments focused on infrastructure modernization, energy efficiency, and meeting growing demand and electrification initiatives. We've rolled forward our five year regulated capital investment plan through 2029 amounting to $21,000,000,000 to $24,000,000,000 compared to our prior plan of $18,000,000,000 to $21,000,000,000 The $3,000,000,000 increase in regulated under PSE and G's existing infrastructure programs and the CESEE2 program. Our 2025 to 2029 regulated capital investment plan is expected to produce compound annual growth in rate base.

Of 6% to 7.5% starting from a year end 2024 rate base of approximately $34,000,000,000 including construction work in progress, and as Ralph mentioned is an increase of approximately 12% over the same number for year end 2023. Moving to PSEG Power and Other, For the fourth quarter of twenty twenty four, PCG Power and Other reported a net loss of $0.18 per share compared to net income of $0.52 per share in the fourth quarter of twenty twenty three non GAAP operating earnings were $0.09 per share for the fourth quarter compared to a non GAAP operating earnings loss of $0.05 per share in the fourth quarter of twenty twenty three. For the fourth quarter of twenty twenty four, net energy margin rose by $0.18 per share driven by higher recontracting prices at nuclear, which includes the net impact of the nuclear PTC that took effect 01/01/2024. As anticipated, we realized a significant portion of the increase in the 2024 gross margin over twenty twenty three's gross margin, during the second half of the year, based upon the shape of our underlying hedges, 0 and M was a $0.01 per share unfavorable Interest expense was $0.02 per share higher reflecting incremental debt at higher rates.

And lower pension income and OTAV credits were $0.01 per share unfavorable versus fourth quarter of twenty twenty three. Taxes and other were $0.01 per share favorable compared to the year earlier quarter. On the operating side, the nuclear fleet produced approximately 7.3 terawatt hours during the fourth quarter at approximately 31 terawatt hours for the full year running at a capacity factor of approximately 8690% for the quarter and full year respectively. Touching on some recent financing activity, As of the December, PSEG had total available liquidity of $2,600,000,000 including approximately $100,000,000 of cash on hand. Through December 2024, cash from operations was strong well below the 2023 level which is substantially helped by the return of cash collateral. Our cash collateral balance was approximately $250,000,000 as December 31, which supported our strong liquidity position. Last November, PSE and G repaid its $250,000,000 3.05% secured medium term notes or MTNs upon maturity. And in December of twenty twenty four, PSG Power entered into a new three sixty four day variable rate term loan for $400,000,000 supported by the strength of its cash flow.

And also in December, PSEG Power amended existing $1,250,000,000 variable rate three year term loan agreement to extend the maturity from March to June of twenty twenty five which just helps manage our cash position during the upcoming year. At the end of twenty twenty four, Power had $1,650,000,000 of debt outstanding. With $1,250,000,000 swapped to a fixed rate mitigating fluctuations in interest rates through March of twenty twenty five. And given our swaps, we continue to have a low level of variable rate debt approximately just 7% of total debt.

Looking ahead, our solid balance sheet supports the execution of PSG's five year capital spending plan dominated by regulated CapEx without the need to sell new equity [indiscernible] And provides for the opportunity for consistent and sustainable Before I conclude my remarks let's review some earnings drivers for 2025 and those are outlined on Slide five. The most impactful driver will be the implementation of new distribution base rates in effect for the full year.

Recall that the fourth quarter of twenty twenty four is a seasonal peak for gas, which comes into play in a projection of the new base rates over a full year. Also note electric seasonality will produce a similar impact from the third quarter of this In addition, clause based recoveries for investments in GSMP, the Infrastructure Enhancement Program or IAP, and the CEF Energy Efficiency II program will also add the 2025 utility margin. Partly offsetting these positives are higher O and M interest and depreciation expense, reflecting higher investment balances of PSE and G, as well as higher interest expense at PSEG Power and parent related to refinancing maturities at higher current interest costs. At PSEG Nuclear, our 100% owned Hope Creek Nuclear unit has a scheduled repealing set for the fall of twenty twenty five that will include the fuel cycle extension work to extend its next scheduled refueling in twenty four months, for the fall of twenty twenty seven, And as a reminder, the zero emission certificate amounts earned by our New Jersey nuclear units will conclude in May of twenty twenty five. In closing, we delivered our twentieth year in a row of meeting or exceeding our guidance.

And we carry that confidence forward to our full year 2025 non GAAP operating earnings guidance, of $3.94 to $4.06 per share. Approximately 9% higher at the midpoint over 2024 results. We also extended our 5% to 7% non GAAP operating earnings CAGR through 2029 starting with 2025 as the base year, As Ralph mentioned, we're continuing to pursue a which could enhance our long term growth CAGR relative to the range that we provided based on the PTC. That concludes our formal remarks and we are ready to begin the question and answer session.

Thank you. Ladies and gentlemen, we'll now begin the question and answer session for members of the financial community. One moment please for the first question. The first question comes from the line of Shar Pourusa with Guggenheim Partners. Please proceed with your questions. Hey, guys. Good morning. Good morning, Shar. Thanks, Shar. Morning, Will. Good morning, Dan.

So just Ralph, starting off on the nuclear side with artificial island, do you see sort of commercial discussions being delayed with the recent actions at FERC? Does the complexity of like behind the meter deals change the deal structure to potential opportunities around side of the meter?

And any sense on timing, especially given the Governor's ambitions? Thanks.

Yes. Thanks, Sure. So I'm going to let Dan give you some details on that. But since you mentioned the governor I would just say this on that front. Well, New Jersey Economic Development Authority has made a few comments about their wind port and specifically that they're looking at alternative uses for that wind port. So that's one thing that we just want to point out. The Governor has also mentioned that he has In a recent call and show that they're looking at alternate uses for it. So you kind of put those pieces together and we know that there's some interest from the governor standpoint and from New Jersey standpoint to continue for us to look to pursue these opportunities. And as far as so that's the timing issue that you hit on the back end. And Dan will we'll kind of address generically the upfront piece. I think sure our messaging there is really fairly consistent. I think we've continued to see interest. We continue to have discussions with multiple parties for various elements of what we're talking about and that interest remains strong. So I think you touched on FERC as well. I think that while it would have been great to have complete answers throughout everything from what FERC said.

I don't know that we necessarily expected that and we got to wait for some. But I think directionally what they said was favorable for the flexibility to do what you want to do and those details have yet to be written.

So we'll continue to see what happens there, but I think our messaging is really consistent with respect to what's going on. Related to nuclear.

And the Class A full on the FERC charges to reinforce that. So The timing of it is is pretty aggressive and it was a clear message from FERC on their need to to get to a solution here. So took that as a positive. We certainly could have been in a different place.

At least for the No, that one potential solution behind the meter is still in front of the meter and there's still other other offload opportunities there.

That's a fair point. I appreciate that Ralph. And then just I just want to make sure, does the PSE and G pipeline of opportunities and inquiries you just highlighted, it's over four gig.

Does that negate any of the artificial island opportunities? Like in other words, any chance that a potential deal with artificial island kind of shift towards the front of the meter with PSING or the Artificial island counterparty is completely separate from the PSNG conversations you just highlighted? Thanks.

Yes. So I think the message on the 40 megawatts, which includes other things besides data centers. We were clear in there was data centers plus large load and believe it or not, we're still seeing some large electric vehicle interconnections that are taking place. So it's it's a number of items. I think there's two takeaways though that we want to make sure, first of all, from a data center standpoint, there's interest from the industry in New Jersey. When you see a 4,700 megawatts showing up, That's a request that is that are showing up. So that's that's part one. And part two is, the states marketing in this area has been working. They've got a Public that they've they've announced in New Brunswick, their number of Nokia, about New Jersey, Bell Labs just announced that they're going to be in New Brunswick. So there's a number of the efforts that are taking place taking hold and just look forward to the momentum continuing.

Fantastic. Thank you guys so much. Appreciate it and great execution. The next question is from the line of David O'Cara with Morgan Stanley.

Please proceed with your question. Hey, thanks. Good morning.

Hey, David. Hey, how are you doing? Let me see. I guess the PJM auction has been getting a lot of attention recently is going to be relooking at auction structures in a number changes are underway now. I was wondering if you could comment on how you're thinking about the outlook for the PJM market you know, What could change? Are there possibilities of structural changes here? And how do you navigate that maybe both from a customer impact and for your nuclear fleet Yes. So I think the way we are by setting our all of our targets off the PTC floor, we've been very clear about that. And the impacts there. From a customer standpoint, we will do everything in our power to help keep customer costs down from an affordability standpoint. We will have done that. We will continue to advocate on that behalf. I just don't know whether or not the premise of the question of the PJM market is is valid, because I don't know if I don't know if there is a PJM market anymore and we've been talking to that for quite some time.

So My concern there is mostly from a reliability standpoint Are we going to be able in this construct to attract generation. To the PJM region as a whole. And if so, is it going to is it be in a timely enough fashion for everything that we have going on. The region. So those are the questions at hand. It's really focused on reliability in affordability for us. And are going to keep advocating on customers behalf in both of those areas.

Yes. I think just to add on to that a little bit, David, I think those are the longer term that are going to be really important for resource adequacy and it's vital to get that right. And I think there's still work to be done there. I think for the nearer term, to the extent that this collar in pricing ends up being put forth for a couple of years, it can give you a little bit more stability as to where things are going to turn But I go back again to Ralph's first comment that what we're to the extent that things move below that, that floor is there. If it moves above that, there could be some potential benefit for us. But I think job one is getting resource adequacy right.

Yes, absolutely. I appreciate that color. And maybe somewhat related, I guess, is the uncertain in the outlook for PJM broadly Deterrent for new large load customers, new maybe new customer broadly looking at the market? There's been I guess with all these changes being considered, for the auction construct and looking at the resource adequacy challenges ahead in the market, are you seeing that lowering the interest levels from some of these customers Any perspective there would be helpful.

Yes. No, I'd point you back to the in the prepared remarks where we talked about the increase from 400 I think, megawatts to 4,700 megawatts of interest in large load in New Jersey alone [indiscernible] I really can't talk for the other jurisdictions, but certainly in New Jersey, we're still seeing that uptick that we reflected in those remarks.

Yes, got it. That's fair.

Great. I'll leave it there. Thanks so much.

Thanks.

Our next question is from the line of Nick Campanella with Barclays. Please proceed with your questions.

Hey, good morning, everyone. Thanks for taking the time.

Morning.

Hey, so I just want to put a finer point on Shar's question just in terms of bringing maybe a commercial deal forward for the nuclear fleet, Are you still watching and waiting for the state at this point? Or is it really waiting on FERC?

And then just a follow-up to that is just as we kind of think about the timeline if a large load customer was to be able to Next to the facility, what's the timeline for ramp?

And it can that affect earnings in 2027 or is more later data towards the end of the decade? Thanks.

Yes. And Nick, I think that we're not waiting on anything on the state. And I think we're not waiting anything either from the standpoint of FERC. I think that some of the details with respect to what flexibility they're can be may come out of where that goes. But I think there's the ability to to continue work and we are continuing work with respect to the state that we're in right now. It's interesting. I do think that there was expectation by some that we might see something more definitive come out of FERC.

But I will say that they did highlight the thirty days and another thirty days, they seem to have understood the urgency in what they said even though we didn't get complete clarity in what they did. So I think that urgency will be helpful as we continue to go forward, but it's not stopping anything. I think from the standpoint of some final details as to how some things can be done. It may add some flexibility.

Okay. And then just like the I guess, the the ramp for a customer, it does take time for these data centers to ramp up, it seems like and I'm just wondering, is this something that you think can impact the outlook on the five year plan or is it more longer dated than that?

Yes, think about it in a couple of different ways, Nick. I would say that to the extent that there is a sale of what exists today, then something could happen quicker. To the [indiscernible] upon the nature of where things go and there's a couple of things that we're working towards that's going to dictate the timing as to when you might see some in the bottom line.

Okay. I appreciate that. And then just following up on the the capacity auction commentary, just wanted to try to understand if we kind of continue to clear near the two seventy level How does that kind of impact your gross receipts calculation out to 27% and where you are in the range? Thanks.

Yes. So I would say as you go out in time, you're going to have to take a look at what's in place from the standpoint of hedging and where the market goes. And then you're going to lay that capacity price on top of it. I'll remind you that at least in in the structural formation of how the capacity auction is set, It's based upon a net cone, which is net of energy. And I think that as you do see one price rise, the other price should react in the opposite direction the prices being energy and capacity. So we saw some of that when we saw the last [indiscernible] go up, we saw a temporary decline in energy prices. And so there is a relationship there. I think that if I were you and I was looking out in time I think to the extent that you saw increases in energy and you thought that we were going to clear higher, it would move us higher within the range or above the range depending upon where you go with it, right? We have the comfort of the floor And I think the stability of that is really important to us and should be for you to think about how the results are going to go.

But that upside is there to the extent that markets move up.

Up. And don't the only thing I would add is not to forget in those calculations that you make there's an inflation adjustment to that floor. So in the out years that will impact where those lines cross, which I think was the root of your question.

Absolutely, I appreciate the commentary on the range. That's helpful. Thank you.

Thanks. Our next question is from the line of Paul Fremont with Ladenburg Thalmann.

Please proceed with your question.

Great.

I guess first question, can you give us sort of any color on hedges that you have at Peg Power Has normally, I guess, you would be at 90% for this year What how should we think about sort of [indiscernible] Guidance versus where you are right now?

Paul, what we have done and what we have said that we've done is try to balance the existing uncertainty of the definition of grocery seats in order to try to make sure that we're going forward in a way that minimizes our risk of results understanding that we do have a PTC floor. What I would tell you directionally is that has not resulted in kind of radical shifts from the standpoint of what those hedging percentages would have been back when we had more of a three year ratable. So to your point, if you want to think about being somewhere in the 90s and '25 and maybe two thirds in '26 and a third in '27 is we would have told you based upon a more ratable approach. And while we've made some movements to that, don't think of that as very radically different than the radical.

Approach Great. And then I guess you used to provide sort of a breakout of net income guidance between the utility and Peg Power and other. Is there a reason why you've not done that for this year?

It's just I think we made that change a year or two back. Paul, and we're comfortable with leaving it at the enterprise level.

Yes, 90% utility. We've been pretty consistent about that. So give or takes in that range, but we're comfortable discussing this at the enterprise level.

And then just to sort of follow-up on Nick's question, the gross margins sensitivity that you provide includes capacity prices to the extent that the auctions continue.

Let's hear a question in there.

Oh, the question is, should we in other words, do you give $1 per megawatt hour as sensitivity? Does that include the dollar per megawatt hour equivalent of the capacity auction? Yes. Think about that as an all in price that you would see for a megawatt hour And yes, you'd have to variableize that fixed charge, but yes, that's the right way to think.

Yes. Great. Thank you very much. Thanks Paul. Thanks Paul.

The next question is from the line of Paul Zimbardo with Jefferies. Proceed with your question.

We might have lost Paul.

Our next question is from the line of Paul Patterson with Glenrock Associates.

Hey, Paul. We're on a four roll right now, so we'll keep it going.

Hey, Paul. There you go.

It's a charm.

So just I mean, it's back to the sort of the sorry, back to the original question about the timing on the co location. I noticed the language that reiterated on Friday and what have you. But what does that actually mean in terms of when you think that actual order might come out?

Well, I have to take it at their face value and that they said they want to come out shortly thereafter. I think it was the words that came out in the last statement. So [indiscernible] mean, we could you could guess at what shortly means, but I think they've been pretty consistent in delivering on what they've said they're going to do. So I wouldn't expect it to be much beyond the sixty days if that is the path that's taken.

Okay.

And then you also said something that was interesting about the PJM market or the lack thereof This is something that obviously is being there's just a lot of activity, a lot of discussion. A lot of apprehension, I think about reliability and pricing and what have you. You have any anything you'd like to share in terms of what potentially might What you might be looking for, I mean, in terms of maybe a longer term setup or something or just what are your thoughts about I mean, I'd just be curious as to what you think might come out of Of all the examination of this market and what how it might evolve? Well, I think it's going to depend upon what state you're in and and what the economic policies of that state is. You certainly hear certain certain positions being taken in Pennsylvania. You see positions being taken in other states I've just talked specifically to New Jersey We have a decker which is the war of the land here from Generation standpoint and utilities are not involved in that process.

We do have PSEG nuclear, which is involved right now in the generation side of the business. But New Jersey is at a crossroads. And I think right now, we're all trying to figure out the best way move forward, I don't think there's a clear answer on it. So I don't want to front run any policy decisions that are being made in the state But it's certainly it's certainly something we need to continue to discuss for the two reasons that we stated upfront. Affordability for customers the reliability.

Absolutely. Any idea when we might see something of a proposal or Yes, there's some talk about it as you master plan coming out, but look Paul, to be be honest about all of this, I think there's some decisions that have to be made that will probably bridge administrations here in New Jersey. Right. So I think what we're trying to do as a company is continue to educate everyone on the issue and try to help people think through different opportunities that the state of New Jersey could pursue.

Okay, great. I really appreciate it.

Thanks so much. The next question is from the line of Carly Davenport with Goldman Sachs.

Please proceed. Hello.

Hey, Carly.

Hey, thanks for taking the question. Sorry to put a stop to the Paul train there. But thanks for all the color so far on the power side. Maybe just one from me on the regulated side. Just on the GSMP3 filing, do you still expect to to revisit that this quarter? And then would that be upside to the plan in '26 plus or are there already assumptions kind of baked in after the GSMP2 extension kind of runs itself out?

Yes, Carly. Yes, we are starting to have those conversations. And and it is in the plan. Is a simple answer to both of those things. So So that work is part of our core business activities and something we expect to continue. So Those conversations have started.

Great. Thank you for that. I'll leave it there. Thanks, Carly.

The next question is from the line of Paul Zimbardo with Jefferies.

Back on the Paul train.

Hey, can you hear me? Hopefully, we're on the train. We got it. Yes. We got it, Paul. We got it. There we go. [indiscernible] The neighborhood reception is not always the best spot. But not. Thank you very much.

I want to follow-up on a little bit just on the balance sheet side. So saw the no additional equity in the outlook even with the CapEx increase. Could you level set what was the actual 2024 FFO to debt and kind of where do you envision the credit metrics going throughout the plan?

Yes, Paul, I don't have that at my fingertips. And I think you'll be able to pull that together when the K comes out, so I won't jump that. But we continue as we look forward and as we're putting forward the forward looking guidance for the next few years. We continue to be in that mid teens range and are in a pretty good place from that perspective, which is the reason it gives us the comfort say exactly what we did say. Within our prepared remarks. Okay.

Got it. I'll follow-up on that one. And then shifting a little bit, going back to the BGS, looking at the one year results for commercial industrial, Through year zone, it was very high on a dollar per megawatt day basis, almost $700 And megawatt day, I know that you do not purchase a date in that with your unregulated fleet. But just is there any thoughts or kind of takeaways of kind of what that indicates to what New Jersey could look like without [indiscernible] The customers Yes. So Paul, that we were I think around 17 in the numbers that were generated by the state and published And I think that there were other ones that were up in the 20. These are residential provider of last resort [indiscernible] that are in that BGS, right? So first of all, customers are certainly have the opportunity to shop I would expect some of that to happen from third party suppliers.

But for those customers that are relying on BGS, it is it is something that we have to lean in on certainly from a payment assistance standpoint, which we're working on and then also from our energy efficiency program and continuing to get the energy message out for customers and helping them gain access to those programs. So those are the two pieces that I would say it means what it means to us in the state of New Jersey. But we are higher but not as high as some other areas in the state.

And I mean just a reminder on that PGS contract that that's not something that we profit from. That's a pass through coming from the supply. Providers and the biggest element related to The providers are going to have to go back to that same well which had some higher prices in the last auction. Okay. And did you go by [indiscernible] [indiscernible] Thank you.

Yes. I think it's still coming from the same supplier base, just just with a different calculation going to them. And I think the same ability shop is going to exist there. So I think you've got a parallel Thanks, Paul.

Thank you. Our final question is from the line of Anthony Crowder with Mizuho.

Please proceed with your question.

Hey, good morning, Dan. Good morning, Ralph. Just a quick follow-up Quick follow-up to Paul Patterson and kind of the comments you're making about maybe the PGM market I don't know if you said it doesn't exist or whatever. Just is the state of New Jersey in a net long position on generation And if so, what's the reserve margin there? Or do you have a reserve mark? Yes. So the state of New Jersey does not have an integrated resource plan. So there is not a there is not a reserve margin set for the state of New Jersey that anybody can quote you. But we are short, right? So if you look at some of the information that's out there, New Jersey is a net importer, especially on the peak days. So we look to 2%, but more margin than what their target was. Right? The question is, as this load comes in, Where do we move to and where does that reserve margin get to, which is the need for the additional generation of and the resource adequacy conversation we keep having. Right. So Ralph said it, peak times are going to be different than off peak seasonal.

It matters a lot when you are talking about it, but across the year, we are a net importer.

Is one of the options and just as just [indiscernible] Obviously you said you need a resource adequacy plan. Is it similar to maybe other states that have gone maybe like I've got the acronym, I think maybe FRR [indiscernible] pulled out the generation and the load, is that one of the multitude of options that the state could face or I be thinking about something different?

Yes. No, I absolutely believe that that's something that the state could consider, right? The state could go a bunch of different paths, but Adecco is I keep referring back to that from back in February timeframe. When we deregulated and the rules were put in place.

And we count on PJM.

Right? And that's the market that's out there. So when I when I say I'm not sure about what what kind of market it is, it's a market that has been influenced by a number of factors. And so they're trying to balance affordability and reliability with a free market and that's a tough thing to do. So we'll see where it goes.

But it's certainly something that from a state of New Jersey standpoint, we're going to keep banging the desk about because we've got to get it right as we participate in that market.

Great. Thanks for taking my questions. Thanks, Anthony. Thank you. I'd like to turn the floor back to Mr. LaRosa for closing comments.

Well, thank you, Rob. So look, I think we had a lot conversation about where we where we expected it to be, which was on a lot of the nuclear output and the potential data centers and on and so forth. But I don't want to lose sight for one minute of all the good work that was completed back in twenty twenty four and that's not a complaint about what we talked about, but simply a statement of a fact that the team executed on everything that it had in front of the last year, not the least of which was the rate case The storms that came through this area cold weather snaps that we had and so on and so forth. So I want to end with a comment that was made in the beginning of in the middle of my prepared remarks, which is a thank you to the employees that are here at PSEG. We do a fantastic job day in and day out and that shows up in a multitude of areas. So thank you, thank you, thank you. We look forward to seeing you at one of the road shows. Thanks. Ladies and gentlemen, this concludes today's teleconference.

You may disconnect your lines at this time. Thank you for your participation.