Q - PUBLIC SERVICE ENTERPRISE GROUP

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 expenditures of $41million, $30 million, $79 million and $57 million for the three and six months ended June 30, 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 expenditures of $41 million, $30 million, $79 million and $57 million for the three and six months ended June 30, 2025 and 2024, respectively.

Three Months Ended June 30, 2025 as Compared to Three Months Ended June 30, 2024

Operating Revenues increased $168 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 $110 million due primarily to a $160 million increase in electric and gas revenues as a result of the settlement of the 2024 distribution base rate case, $19 million from increased GPRC revenues, a $16 million increase in transmission revenues due primarily to higher rate base investments and a $15 million increase from higher electric delivery prices. These delivery revenue increases were offset by a $47 million decrease in CIP decoupling revenue, $36 million due to an increase in credits flowed back to customers as part of our TAC mechanism and a $19 million decrease from 2024 collections of Energy Strong II.

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 decreased $24 million due primarily to a $34 million decrease in TAC and GPRC deferrals, offset by a $10 million increase in Societal Benefits Clause (SBC) collections

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 $95 million primarily due to higher electric BGS revenues from $129 million due to higher prices partially offset by $35 million of lower sales 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 decreased $13 million due primarily to a decrease in Zero Emission Certificates (ZECs) sales in other operating revenues.

Energy Costs increased $77 million. This is entirely offset by changes in Commodity Revenues and Other Operating Revenues.

Operation and Maintenance increased $38 million due primarily to a $31 million increase in clause and renewable costs, a $4 million increase in net distribution and transmission expenditures and a net increase in other operational expenses.

Depreciation and Amortization increased $28 million due primarily to an increase in depreciation due to higher plant placed in service and increased amortization of Regulatory Assets.

Interest Expense increased $20 million due primarily to incremental debt and the replacement of maturing debt at higher rates.

Income Tax Expense decreased $26 million due primarily to an increase in the flowback of previously realized distribution-related mixed service cost deductions.

Six Months Ended June 30, 2025 as Compared to Six Months Ended June 30, 2024

Operating Revenues increased $499 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 $260 million due primarily to a $323 million increase in electric and gas revenues as a result of the settlement of the 2024 distribution base rate case, a $45 million increase from higher gas volumes, $42 million from increased GPRC revenues, a $40 million increase from higher electric delivery prices and a $20 million increase in transmission revenues due primarily to higher rate base investments. These delivery revenue increases were offset by a $100 million decrease in CIP decoupling revenues, a decrease of $92 million due to an increase in credits flowed back to customers as part of our TAC mechanism and a $20 million decrease from 2024 collections of Energy Strong II.

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 decreased $17 million due primarily to a $76 million decrease in TAC and GPRC deferrals, offset by a $58 million increase in SBC collections.

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 $259 million due primarily to higher electric BGS revenues of $201 million from higher prices and higher gas BGSS revenues of $58 million primarily from higher volumes.

Other Operating Revenues are primarily comprised of revenues derived from various GPRC programs including TREC revenues, and SuSI. The revenues from these programs offset costs included in Energy Costs. In addition, other operating revenues include revenues from our ASB which offers various appliance protection and repair plans to customers.

Other Operating revenues decreased $3 million due primarily to a decrease in ZECs sales partially offset by an increase in ASB revenues.

Energy Costs increased $243 million. This is entirely offset by changes in Commodity Revenues and Other Operating Revenues.

Operation and Maintenance increased $149 million due primarily to a $96 million increase in clause and renewable costs, $18 million in higher service company costs, a $15 million increase in net distribution and transmission expenditures and a net increase in other operational expenses.

Depreciation and Amortization increased $51 million due primarily to an increase in depreciation due to higher plant placed in service and increased amortization of Regulatory Assets.

Interest Expense increased $39 million due primarily to incremental debt and the replacement of maturing debt at higher rates.

Income Tax Expense decreased $74 million due primarily to an increase in the flowback of previously realized distribution-related mixed service cost deductions.

Three Months Ended June 30, 2025 as Compared to Three Months Ended June 30, 2024

Operating Revenues increased $235 million due primarily to changes in generation and gas supply and other operating revenues.

Generation Revenues increased $175 million due primarily to

•

a net increase of $63 million due primarily to higher average realized prices and volumes sold in 2025,

•

a net increase of $28 million due to increased MTM gains in 2025 as compared to 2024. Of this amount, there was a $61 million increase due to positions reclassified to realized upon settlement, partially offset by a $33 million decrease due to changes in forward prices in 2025 as compared to 2024, and

•

a net increase of $21 million in capacity revenue due primarily to higher capacity prices.

Gas Supply Revenues increased $45 million due primarily to

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a net increase of $34 million in sales under the BGSS contract due primarily to $33 million from higher sales prices, and

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a net increase of $7 million related to sales to third parties due primarily to $15 million from higher sales prices, partially offset by $8 million from lower sales volumes.

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 $38 million due to

Gas costs increased $35 million due primarily to

•

a net increase of $31 million related to sales under the BGSS contract due primarily to higher average cost of gas, and

•

a net increase of $5 million related to sales to third parties due primarily to $12 million from higher average cost of gas, partially offset by $7 million due to lower volumes sold.

Generation costs increased $4 million due primarily to increased fuel costs at nuclear.

Operation and Maintenance decreased $8 million due primarily to decreased planned refueling outage costs, partially offset by a net increase in other operational expenses.

Depreciation decreased $5 million due primarily to revised estimated useful lives in April 2025 for the Salem and Hope Creek nuclear plants based on the expectation that a 20-year license extension will be approved for these facilities.

Net Gains (Losses) on Trust Investments increased $88 million due primarily to NDT investments with $79 million in net unrealized gains in 2025 as compared to $23 million of net unrealized losses in 2024 on equity securities, partially offset by a $14 million decrease in net realized gains in 2025.

Interest Expense increased $9 million due primarily to incremental debt.

Income Tax Expense (Benefit) increased $164 million due primarily to higher pre-tax income and the absence of the benefit from nuclear PTCs in 2025.

Six Months Ended June 30, 2025 as Compared to Six Months Ended June 30, 2024

Operating Revenues increased $455 million due primarily to changes in generation and gas supply and other operating revenues.

Generation Revenues increased $256 million due primarily to

•

a net increase of $105 million due primarily to higher average realized prices and volumes sold in 2025,

•

a net increase of $88 million due to MTM gains in 2025 as compared to MTM losses in 2024. Of this amount, there was a $105 million increase due to positions reclassified to realized upon settlement, partially offset by a $17 million decrease due to changes in forward prices in 2025 as compared to 2024, and

•

a net increase of $20 million in capacity revenue due primarily to higher capacity prices.

Gas Supply Revenues increased $180 million due primarily to

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a net increase of $129 million in sales under the BGSS contract due primarily to $65 million from higher sales prices, and $64 million from higher sales volumes,

•

a net increase of $35 million related to sales to third parties due primarily to $67 million from higher sales prices, partially offset by $32 million from lower sales volumes, and

•

a net increase of $16 million due primarily to MTM gains in 2025 as compared to MTM losses in 2024 from positions reclassified to realized upon settlement.

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 $150 million due to

Gas costs increased $146 million due primarily to

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a net increase of $119 million related to sales under the BGSS contract, of which $67 million was due to higher average cost of gas, and $52 million was due to higher send out volumes, and

•

a net increase of $24 million related to sales to third parties due primarily to $43 million from higher average cost of gas, partially offset by $19 million due to lower volumes sold.

Generation costs increased $5 million due primarily to increased fuel costs at nuclear.

Operation and Maintenance increased $17 million due primarily to a net increase in other operational expenses, partially offset by decreased planned refueling outage costs.

Interest Expense increased $26 million due primarily to incremental debt and the replacement of maturing long-term debt at higher rates.

Income Tax Expense (Benefit) increased $143 million due primarily to higher pre-tax income and the absence of the benefit from nuclear PTCs in 2025.