Public Service Enterprise Group Incorporated

Ladies and gentlemen, thank you for standing by. My name is Sylvia, and I will be your event operator today. I would like to welcome everyone to the Public Service Enterprise Group third quarter 2019 earnings conference call and webcast. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session for members of the financial community. At that time, if you have a question, you will need to press star and the number 1 on your telephone keypad. To withdraw your question, press the pound key. As a reminder, this conference is being recorded today, October 31, 2019, and will be available for telephone replay beginning at 1 p.m. Eastern Standard Time today until 11.30 p.m. Eastern Standard Time on Friday, November 8, 2019. It will also be available as an audio webcast on PSEG's corporate website at www.pseg.com. I would now like to turn the conference over to Carlotta Chan. Please go ahead.

Thank you, Sylvia. Good morning, and thank you for participating in our earnings call. PSEG's third quarter 2019 earnings release attachments and slides detailing operating results by company are posted on our website at investor.pseg.com, and our 10-Q will be filed shortly. The earnings release and other matters discussed during today's call contain forward-looking statements and estimates that are subject to various risks and uncertainties. We also discussed non-GAAP operating earnings and non-GAAP-adjusted EBITDA, which differ from net income, as reported in accordance with generally accepted accounting principles in the United States. We include reconciliations of these financial measures and a disclaimer regarding forward-looking statements on our IR website and in today's earnings material. I'll now turn the call over to Ralph Izzo, Chairman, President, and Chief Executive Officer of PSEG. Joining Ralph on today's call is Dan Craig, Executive Vice President and Chief Financial Officer. At the conclusion of their remarks, there will be time for your questions.

Thank you, Carlotta, and thank you all for joining us this morning. PSEG reported non-GAAP operating earnings for the third quarter of 2019 of $0.98 per share versus $0.95 per share in last year's third quarter. Our GAAP results for the third quarter were $0.79 per share compared with $0.81 per share. in last year's third quarter. Our results for the third quarter bring non-GAAP operating earnings for the year to date to $2.64 per share, compared with $2.56 per share for the first nine months of 2018. That is up 3%. Regulated operations are on track to contribute approximately 75% of total op earnings for the year and reflect PSE&G's ongoing investment in New Jersey's energy infrastructure. Slide 6 and 7 summarize the results for 2019's third quarter and year to date. In September, the New Jersey Board of Public Utilities, and I'll refer to them as the BPU, approved PSE&G's Energy Strong II settlement, authorizing continued investment in electric and gas system reliability and resiliency improvements over the next four years. We expect to begin the first of these projects in the current quarter, which will continue the important economic engine associated with PSE&G's investments in New Jersey's energy infrastructure. We continue to eagerly pursue PSE&G's Clean Energy Future filing to bring the benefits of energy efficiency, electric vehicles, energy storage, and advanced metering infrastructure, or AMI, at scale to our entire customer base. which is consistent with Governor Murphy's clean energy goals. Our filing is designed to achieve the 2% electric and 0.75% gas savings contained in the 2018 New Jersey Clean Energy Act. And this represents an order of magnitude increase from the level of spending in our existing energy efficiency program. In September, the BPU approved the extension of the procedural schedule in the case to March 2020 to provide the opportunity for additional discussions. We expect that the BPU's review of our energy efficiency proposal and clean energy filing will be informed by their energy master plan proceedings, which are targeted for conclusion at year end, and an ongoing energy efficiency stakeholder process, which will continue into 2020. In parallel, we continue to engage with key stakeholders to develop the supporting policy framework on the role for utilities, decoupling or lost revenue recovery, and key metrics to measure energy efficiency program effectiveness. Because our energy efficiency proceeding is ongoing, the BPU's review of it will occur prior to those of New Jersey distribution companies that have yet to file their energy efficiency proposals to satisfy the Clean Energy Act requirements. The PSE&G remains on track to invest $2.7 billion in infrastructure upgrades to its transmission and distribution system this year. The forecast to direct over 90% of PSE&G's $13 to $15.5 billion of planned capital investment to the regulated business over the next five years remains intact, as does PSE&G's compound annual growth and rate base of 7.5 to 8.5%. starting from the $19 billion level at year-end 2018. And now over to PSEG Power. Power closed on the sale of its 776 megawatt interest in the Keystone and Conema generating units during the quarter. The sale continues the elimination of coal from PSEG Power's fuel mix by mid-2021, when we will retire our only remaining coal unit located at Bridgeport Harbor. In the last five years, PSEG Power has retired early or sold about 2,400 megawatts of coal-fired generation, which has reduced the carbon intensity of what was already a low-carbon fleet. In addition, earlier this week, PSEG exercised an option on Orsted's Ocean Wind project, resulting in a period of exclusive negotiation for PSEG to potentially acquire a 25% equity interest in the project, subject to negotiations toward a joint venture agreement, advanced due diligence, and any required regulatory approvals. The Ocean Wind Project was the winner of New Jersey's recent offshore wind solicitation and is an important part of Governor Murphy's clean energy agenda. The project, scheduled to come online in 2024, will be located off the coast of Atlantic City and will benefit from Orsted's experience in developing offshore wind projects in the U.S., and internationally. I'm pleased for the opportunity to apply PSEG's expertise in developing energy infrastructure in New Jersey to expanding the state's resources of zero carbon generation toward our goal of reducing carbon emissions. And speaking of carbon emissions, PSEG continues to advocate for a national price on carbon. While we understand the significant challenges to advancing climate legislation in the current we recognize the increasing focus on this topic. So I hope that remarks I made yesterday before the Energy Subcommittee of the House Energy and Commerce Committee will only add to the growing call for meaningful action and thoughtful discussion on how to best address climate change. On a related note, I'm pleased to report that PSEG was again named to the Dow Jones Sustainability Index North America for the 12th consecutive year. And one last item, we continue to await a final order from the Federal Energy Regulatory Commission, I'll just shorten that to FERC, in their effort to reform the PJM capacity auction with the approval of replacement rules. We are optimistic that this will occur once the FERC achieves a quorum of three voting commissioners on this particular docket, which could happen after November 29th when Commissioner Glick will be eligible to vote on this matter or when the Senate confirms a new commissioner. Given our results in the first nine months of the year, we're narrowing the full year forecast of PSEG's non-GAAP operating earnings to $3.20 to $3.30 per share from our original guidance of $3.15 to $3.35 per share. The midpoint of the guidance is unchanged and represents over 4% growth in earnings from the $3.12 per share boasted posted in 2018. Utility earnings continue to benefit from rate relief, and a mid-year re-measurement of the pension plan has raised PSE&G's expected full-year results to a range of $1,225,000,000 to $1,250,000,000, up from the utility's original guidance range of $1.2 billion to $1,230,000,000. Weak power prices have affected PSCG powers results to a range of 395 million to 420 million, where we've lowered the upper end of its original guidance, which had originally been proposed at 395 million to 460 million. Guidance for enterprise and other is 5 million for the full year. Thank you to our employees for delivering another solid quarter on the operations front. and to recognize the tremendous work that goes into maintaining system reliability and generation availability during the summer. I'll now turn the call over to Dan for more details on our operating results and make sure that I'm available for your questions after his remarks.