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Achieved 2025 non-GAAP operating earnings at the high end of guidance, marking the 21st consecutive year of meeting or exceeding financial targets.
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Performance was driven by strong execution of a $3.7 billion regulated capital plan and high nuclear fleet reliability, achieving a 91.2% capacity factor.
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Management attributes the successful navigation of extreme weather events to an operational excellence model that maintained top-tier reliability and customer satisfaction rankings.
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Strategic positioning is reinforced by New Jersey’s lowest residential gas bills, providing a favorable headroom for continued infrastructure investment.
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The nuclear fleet serves as a critical differentiator, providing carbon-free baseload power and significant cash flow that supports the broader capital program.
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Operational efficiency was enhanced by transitioning the Hope Creek nuclear unit to a 24-month refueling cycle, expected to increase long-term output and reduce O&M costs.
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Management emphasized a ‘predictable and linear’ growth strategy, leveraging a decoupled distribution margin via the Conservation Incentive Program to mitigate weather volatility.
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Raised long-term non-GAAP operating earnings CAGR to 6% to 8% through 2030, up from the previous 5% to 7% range, reflecting higher market power prices.
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The 2026 guidance midpoint represents a 7% increase in non-GAAP operating earnings over 2025, supported by the investment program at PSE&G and expected nuclear output realizing market prices that exceed the nuclear PTC threshold.
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Forecasted regulated capital spending of $22.5 billion to $25.5 billion through 2030, with over 90% focused on infrastructure modernization and energy efficiency.
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The five-year capital plan is designed to be fully funded by internal cash flow and debt, requiring no new equity issuance or asset sales through 2030.
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Guidance assumes continued stringent cost control and a 95% hedge position for 2026 nuclear output to ensure earnings predictability.
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Identified potential for growth beyond the 6% to 8% CAGR through incremental regulated investments in transmission, solar, and battery storage.
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Monitoring New Jersey legislative bills that could establish new procurement programs for natural gas and nuclear generation to address regional supply scarcity.
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Noted that while PJM-related supply costs are rising, the company is offsetting impacts through residential bill credits and successful electric supply auctions.
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Management highlighted the ‘scarcity issue’ of power in the PJM region as a structural shift that supports higher long-term valuation of existing nuclear assets.
