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Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended March 31, 2026, for Public Service Enterprise Group Incorporated (PSEG) and its wholly-owned subsidiary, Public Service Electric and Gas Company (PSE&G). PSEG operates as a public utility holding company with two primary reportable segments: PSE&G (regulated electric and gas utility in New Jersey) and PSEG Power & Other (merchant nuclear generation and related activities). The filing includes unaudited condensed consolidated financial statements and management discussion and analysis.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Growth: Operating revenues increased by $626 million (19%) year-over-year. This was driven by higher commodity revenues (electric and gas supply) due to increased prices, higher delivery volumes, and increased transmission revenues.
• Profitability: Net income rose by $152 million (26%). PSE&G contributed $577 million in net income, while PSEG Power & Other contributed $164 million. The increase in PSEG Power & Other was largely due to lower mark-to-market (MTM) losses compared to the prior year and higher capacity revenues.
• Expense Increases: Energy costs rose $321 million (27%) primarily due to higher commodity prices. Interest expense increased $31 million (13%) due to incremental debt and higher rates on refinanced debt.
• Trust Investments: Net gains on trust investments turned negative, reporting a loss of $17 million in Q1 2026 compared to a gain of $8 million in Q1 2025, driven by unrealized losses on equity securities in the Nuclear Decommissioning Trust (NDT) Fund.

Guidance, Outlook, and Risks

• Capital Investment: PSEG estimates its regulated capital investment program for 2026-2030 to be between $22.5 billion and $25.5 billion, with a total capital investment program of $24 billion to $28 billion. This is expected to drive a 6.0% to 7.5% compound annual growth rate in the regulated rate base.
• Nuclear Strategy: The company continues to rely on the Production Tax Credit (PTC) for its nuclear fleet through 2032. Management expects the realized value of nuclear generation output in 2026 to remain above the PTC threshold. License extensions for Salem and Hope Creek plants are anticipated.
• Regulatory Environment: Significant uncertainty exists regarding PJM capacity market reforms and price caps. FERC accepted a proposal to extend price caps for 2028/29 and 2029/30. New Jersey legislative actions regarding energy affordability and resource adequacy remain under review.
• Environmental Liabilities: PSEG faces ongoing liabilities related to the Newark Bay Complex and Lower Passaic River Superfund sites. As of March 31, 2026, approximately $66 million is accrued for these matters, though ultimate costs remain uncertain and could be material.
• Dividends: The Board approved a quarterly dividend of $0.67 per share for Q2 2026, maintaining an indicative annual rate of $2.68 per share.

Investor Verification Checklist

• Commodity Price Exposure: Verify the impact of PJM capacity market price volatility on PSEG Power's earnings and the effectiveness of current hedging strategies.
• Regulatory Approvals: Monitor the status of pending rate filings, specifically the Clean Energy Future-Electric Vehicles (CEF-EV) and Infrastructure Advancement Program (IAP) petitions.
• Environmental Accruals: Review updates on the Lower Passaic River and Newark Bay Complex remediation costs, as final liability shares and recovery mechanisms are not yet fully determined.
• Debt Refinancing: Assess the impact of rising interest rates on future interest expense, given the company's significant long-term debt maturities and refinancing needs.
• Trust Fund Performance: Track the performance of the Nuclear Decommissioning Trust (NDT) Fund, as unrealized losses on equity securities can create volatility in reported net income.