PUBLIC SERVICE ENTERPRISE GROUP INC

PSEG

Our results of operations are comprised of the results of operations of our reportable segments, PSE&G and PSEG Power & Other, excluding charges related to intercompany transactions, which are eliminated in consolidation. For additional information on intercompany transactions, see Item 1. Note 17. Related-Party Transactions.

(A)

Includes amortization of EE programs regulatory investment expenditures of $38 million and $27 million for the three months ended March 31, 2025 and 2024, respectively.

The following discussions for PSE&G and PSEG Power & Other provide a detailed explanation of their respective variances.

PSE&G

(A)

Includes amortization of EE programs regulatory investment expenditures of $38 million and $27 million for the three months ended March 31, 2025 and 2024, respectively.

Three Months Ended March 31, 2025 as Compared to Three Months Ended March 31, 2024

Operating Revenues increased $331 million due to changes in delivery, commodity, clause and other operating revenues.

Delivery Revenues are primarily derived from revenues recovered on our regulated investments in rate base and costs through periodic filings of distribution rate cases, approved distribution investment recovery programs and the annual filing of transmission formula rates. Due to PSE&G’s electric and gas distribution CIP decoupling mechanism, there is minimal impact from sales volumes on most distribution delivery revenues. Also included in delivery revenues are revenue credits to customers to flowback tax benefits realized by PSE&G. These revenue credits are offset in Income Tax Expense.

Delivery revenues increased $147 million due primarily to a $163 increase in electric and gas revenues as a result of the recently settled distribution base rate case, $67 million increase in electric and gas volumes, $23 million from increased GPRC revenues and a $4 million increase in transmission revenues due primarily to higher rate base investments. These delivery revenue increases were offset by $57 million due to an increase in revenue credits flowed back to customers as part of our TAC mechanism and a $53 million decrease in CIP decoupling revenues.

Clause Revenues are revenues from various pass-through regulatory programs for which PSE&G earns no margin. These revenues are entirely offset by the amortization of related costs in O&M, D&A and Interest and Income Tax Expense, which were originally recognized as regulatory assets.

Clause Revenues increased $11 million due primarily to a $51 million increase in Societal Benefits Clause (SBC) collections, offset by a $40 million decrease in TAC and GPRC deferrals.

Commodity Revenuesare revenues from customers choosing default electric (basic generation service or BGS) and gas supply (basic gas supply service or BGSS) from PSE&G. PSE&G procures the BGS and BGSS on behalf of these retail customers and earns no margin on this service as all costs are passed back to the BGS and BGSS customers. The changes in Commodity Revenues for both electric and gas are entirely offset by changes in Energy Costs.

Commodity Revenues increased $162 million due to higher electric BGS revenues of $105 million from higher prices and sales volumes and higher gas BGSS revenues of $57 million primarily from higher volumes.

Other Operating Revenues are primarily comprised of revenues derived from various GPRC programs including Transition Renewable Energy Certificates (TREC) revenues, Community Solar collections and the Successor Solar Incentive Program (SuSI). The revenues from these programs offset costs included in Energy Costs. In addition, other operating revenues include revenues from our Appliance Service Business (ASB) which offers various appliance protection and repair plans to customers.

Other Operating revenues increased $11 million due primarily to net increases in ASB and GPRC related other operating revenues of $5 million.

Operating Expenses

Energy Costs increased $166 million. This is entirely offset by changes in Commodity Revenues and Other Operating Revenues.

Operation and Maintenance increased $111 million due primarily to a $66 million increase in clause and renewable costs, an $11 million increase in net distribution and transmission expenditures and a net increase in other operational expenses.

Depreciation and Amortization increased $23 million due primarily to an increase in depreciation due to higher plant placed in service and increased amortization of Regulatory Assets.

Interest Expense increased $19 million due primarily to incremental debt and the replacement of maturing debt at higher rates.

Income Tax Expense decreased $48 million due primarily to an increase in the flowback of previously realized distribution-related mixed service cost deductions.

Three Months Ended March 31, 2025 as Compared to Three Months Ended March 31, 2024

Operating Revenues increased $220 million due primarily to changes in generation and gas supply and other operating revenues.

Gas Supply Revenues increased $135 million due primarily to

•

a net increase of $95 million in sales under the BGSS contract due primarily to $63 million from higher sales volumes and $32 million from higher sales prices,

•

a net increase of $27 million related to sales to third parties due primarily to $51 million from higher sales prices, partially offset by $24 million from lower sales volumes, and

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a net increase of $13 million due primarily to lower MTM losses in 2025 as compared to 2024 from positions reclassified to realized upon settlement.

Generation Revenues increased $81 million due primarily to

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a net increase of $60 million due to lower MTM losses in 2025 as compared to 2024. Of this amount, there was a $96 million increase due to positions reclassified to realized upon settlement, partially offset by a $36 million decrease due to changes in forward prices in 2025 as compared to 2024, and

•

a net increase of $42 million due primarily to higher average realized prices and volumes sold in 2025.

Operating Expenses

Energy Costs represent the cost of generation, which includes fuel costs for generation as well as purchased energy in the market, and gas purchases to meet PSEG Power’s obligation under its BGSS contract with PSE&G. Energy Costs increased $112 million due to

Gas costs increased $111 million due primarily to

•

a net increase of $89 million related to sales under the BGSS contract, of which $52 million was due to higher send out volumes, and $37 million was due to higher average cost of gas, and

•

a net increase of $18 million related to sales to third parties due primarily to $31 million from higher average cost of gas, partially offset by $13 million due to lower volumes sold.

Generation costsare flat as compared to the prior year.

Operation and Maintenance increased $25 million due primarily to increased costs related to a planned refueling outage in 2025 and a net increase in other operational expenses.

Net Gains (Losses) on Trust Investments decreased $87 million due primarily to net unrealized losses in 2025 as compared to net unrealized gains in 2024 on equity securities in the NDT Fund.

Interest Expense increased $17 million due primarily to incremental debt and the replacement of maturing long-term debt at higher rates.

Income Tax Expense (Benefit)decreased $21 million due primarily to lower qualified NDT Trust tax, lower pre-tax income, and excess tax benefits from stock based compensation.