Public Service Enterprise Group Incorporated

Ladies and gentlemen, thank you for standing by. My name is Shamali, and I am your event operator today. I would like to welcome everyone to today's conference, Public Service Enterprise Group's first quarter 2025 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 the star and the number one on your telephone keypad. To withdraw your question, please press star and the number two. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded today, April 30th, 2025, and will be available for replay as an audio webcast on PSEG's investor relations website at investor.pseg.com. I would now like to turn the conference over to Carlotta Chan. Please go ahead.

Good morning, and welcome to PSEG's first quarter 2025 earnings presentation. On today's call are Ralph LaRosa, Chair, President, and CEO, and Dan Craig, Executive Vice President and CFO. The press release attachments and slides for today's discussion are posted on our IR website at investor.pseg.com, and our 10-Q will be filed later today. PSEG's 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 will also discuss non-GAAP operating earnings, which differs from net income, as reported in accordance with generally accepted accounting principles, or GAAP, in the United States. We include reconciliations of our non-GAAP financial measures and a disclaimer regarding forward-looking statements on our IR website and in today's material. Following our prepared remarks, we will conduct a 30-minute question and answer session. I will now turn the call over to Ralph LaRosa.

Thank you, Carlotta, and thank you for joining us this morning to review PSEG's first quarter 2025 results and discuss the outlook for the business. PSEG delivered a solid operating and financial performance at both our utility, PSE&G, and our nuclear units. Overall results for the first quarter benefited from a full quarter of regulatory recovery of and on our invested capital approved in the October 2024 base rate case settlement, as well as the seasonality of gas revenues, which are concentrated in the first quarter. Results also reflected the positive impact of our consistent and reliable nuclear generation performance, which realized higher prices primarily driven by weather. Our service territory experienced multiple cold spells in January and February, with temperatures remaining below 20 degrees Fahrenheit for several days in a row, which prompted our highest winter peak load for both gas and electric in the last six years. During these challenging conditions, PSEG maintained high levels of reliability and efficient customer response times, while PSEG Nuclear generated and supplied the grid with approximately 8.4 terawatt hours of 24x7 carbon-free power. PSE&G's focus on increasing the predictability of our results continues to benefit both customers and the company, aided by our Conservation Incentive Program, which decouples revenues from volumes and deferral mechanisms for pension and storms from the recently concluded rate case. This predictability, combined with PSE&G's predominantly residential and commercial customer profile, also reinforces our stability as a utility investment with defensive characteristics in a turbulent equity market. We consistently manage our cost structure to keep bills as low as possible while maintaining PSEG's financial flexibility to deliver safe and reliable service. The domestic concentration of our supply chain also limits the amount of tariff-related cost pressure on our own end. Combined with our multi-year labor agreements with all of our New Jersey unions extending into 2027 provides stability for our largest operating costs. As we've discussed previously, the Basic Generation Service, or BGS, default rate is scheduled to increase our residential electric bills by 17% starting June 1st. As a reminder, BGS is a pass-through cost for energy supply that PSE&G does not earn a profit on. The increase is largely due to the July 2024 base residual auction result of $270 a megawatt day that was reflected in the latest BGS update, as well as a true-up for the prior two years of BGS auction, which had included proxy prices for capacity. Last week, the New Jersey Board of Public Utilities directed the state's electric companies to submit proposals to mitigate the customer bill impacts of the BGS increase. PSE&G continues to work with the BPU and state policymakers to develop a solution. We understand the real kitchen table difficulties these PGM-related increases will have on our electric customers. However, until new generating supply is added to the grid, given the existing resource adequacy and balance, upward pressure on energy prices will persist. While these discussions are ongoing, PSE&G continues to offer an enviable record of reliability, affordability, and customer satisfaction. PSCNG's combined electric and gas bill still compares favorably to all other utilities in New Jersey. Our reliability metrics continue to differentiate our service, and our customer satisfaction rankings are second to none. I would add that this last metric measures us against all of our large peers in the East, not just in New Jersey. A regulated capital investment plan for 2025 remains focused on infrastructure replacement and modernization to ensure safe and reliable service and to meet growing customer demand. These efforts are on track and on budget. PSE&G also began rolling out the second phase of its Clean Energy Future Energy Efficiency II program, which will help customers save energy, lower their bills, and reduce carbon emissions while supporting job training and economic growth here in New Jersey. In February, we mentioned a 12-fold increase in inquiries from large load or data center customers into PSE&G's new business pipeline, which had grown from 400 megawatts in early 2024 to 4,700 megawatts. These numbers include both mature applications and initial leads. Our latest update now shows PSE&G experienced another quarterly increase in large load inquiries for new service connections, and this pipeline now exceeds 6,400 megawatts of capacity requested as of March 31st. Our engineers have been responding to these inquiries on a timely basis, still averaging about four months, and our speed to response is supportive of the state objective to spur economic development. To the extent these large load prospects convert into new utility customers in the future, fixed costs are then spread over a larger user base, which can help to lower existing customer bills. Turning now to PSEG power and other, our nuclear operations generated and supplied the grid with approximately 8.4 terawatt hours of clean and reliable base load power and achieved a complete capacity factor of 99.9%. Over the past quarter, there has been a lot of discussion in New Jersey about the need and potential for new generation in the region and potentially in the state. Specifically, legislation was introduced this past February that proposes to change the current New Jersey law that prohibits regulated utilities from building and owning new generation. We remain open to this possibility and we continue to work with New Jersey policymakers about this and other solutions to meet New Jersey energy needs. Regarding the ongoing discussion around the pending data center proceeding at FERC, we recently submitted PSEG's comments in support of co-location with the position that the behind-the-meter data centers should pay for their actual use consistent with the treatment of other behind-the-meter customers on our system, such as rooftop solar and universities. Several other large generators and data center developers have requested a 90-day settlement process, which could be a path towards timely establishment of rules for co-location. To recap, we are reiterating PSE&G's full-year non-GAAP operating earnings guidance at $3.94 to $4.06 per share, which is up by approximately 9% at the $4 midpoint over our 2024 reported results. We are also reiterating PSE&G's updated 5-year capital spending program at $21 to $24 billion which supports an expected rate-based CAGR of 6% to 7.5% through 2029. This, in turn, drives PSEG's 5% to 7% non-GAAP operating earnings CAGR using the Nuclear Production Tax Credit as our reference price per hour. Before I conclude, let me again thank our 13,000 employees across PSE&G, nuclear, PS Long Island, and at services for their dedication and positive difference they make every day for our customers, our company, and the communities where we live and work. I'll now turn the call over to Dan, who'll walk you through the results for the quarter and our outlook for the remainder of 2025, and then rejoin the call for our Q&A.