PUBLIC SERVICE ELECTRIC & GAS CO

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 $43 million, $33 million, $122 million and $90 million for the three and nine months ended September 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 $43 million, $33 million, $122 million and $90 million for the three and nine months ended September 30, 2025 and 2024, respectively.

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

Operating Revenues increased $396 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 $256 million due primarily to a $251 million increase in electric and gas revenues as a result of the settlement of the 2024 distribution base rate case, $20 million from increased GPRC revenues and a $19 million increase in transmission revenues due primarily to higher rate base investments. These delivery revenue increases were offset by a $38 million decrease due to an increase in credits flowed back to customers as part of our TAC mechanism.

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 $42 million due primarily to a $54 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 $226 million primarily due to higher electric BGS revenues of $227 million primarily from higher prices.

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 $44 million due primarily to a decrease in Zero Emission Certificates (ZECs) sales in other operating revenues.

Energy Costs increased $174 million. This is entirely offset by changes in Commodity Revenues and Other Operating Revenues.

Operation and Maintenance increased $79 million due primarily to a $38 million increase in clause and renewable costs, a $20 million increase in net distribution and transmission expenditures, $8 million in higher service company costs 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 $11 million due primarily to incremental debt and the replacement of maturing debt at higher rates.

Income Tax Expense decreased $32 million due primarily to an increase in the flowback of previously realized distribution-related mixed service cost deductions, partially offset by higher pre-tax income.

Nine Months Ended September 30, 2025 as Compared to Nine Months Ended September 30, 2024

Operating Revenues increased $895 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 $515 million due primarily to a $574 million increase in electric and gas revenues as a result of the settlement of the 2024 distribution base rate case, $63 million from increased GPRC revenues, a $53 million increase from higher gas volumes and a $39 million increase in transmission revenues due primarily to higher rate base investments. These delivery revenue increases were offset by a decrease of $131 million due to an increase in credits flowed back to customers as part of our TAC mechanism and a $110 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 decreased $56 million due primarily to a $127 million decrease in TAC and GPRC deferrals, offset by a $69 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 $487 million due primarily to higher electric BGS revenues of $430 million primarily from higher prices 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 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 $51 million due primarily to a decrease in ZECs sales partially offset by an increase in ASB revenues.

Energy Costs increased $417 million. This is entirely offset by changes in Commodity Revenues and Other Operating Revenues.

Operation and Maintenance increased $228 million due primarily to a $134 million increase in clause and renewable costs, a $36 million increase in net distribution and transmission expenditures, $25 million in higher service company costs and a net increase in other operational expenses.

Depreciation and Amortization increased $74 million due primarily to an increase in depreciation due to higher plant placed in service and increased amortization of Regulatory Assets.

Net Non-Operating Pension and OPEB Credits (Costs) decreased $6 million due primarily to a decrease in the long-term expected return on assets partially offset by the deferral of non-service costs as prescribed in the base rate case settlement.

Interest Expense increased $50 million due primarily to incremental debt and the replacement of maturing debt at higher rates.

Income Tax Expense decreased $106 million due primarily to an increase in the flowback of previously realized distribution-related mixed service cost deductions, partially offset by higher pre-tax income.

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

Operating Revenues increased $166 million due primarily to changes in generation and gas supply and other operating revenues.

Generation Revenues increased $108 million due primarily to

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a net increase of $66 million in capacity revenue due primarily to higher capacity prices, and

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a net increase of $51 million due primarily to higher average realized energy prices,

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partially offset by a net decrease of $8 million due to lower MTM gains in 2025 as compared to 2024. Of this amount, there was a $15 million decrease due to positions reclassified to realized upon settlement, partially offset by a $7 million increase due to changes in forward prices in 2025 as compared to 2024.

Gas Supply Revenues increased $45 million due primarily to

•

a net increase of $26 million related to sales to third parties due primarily to $20 million from higher sales prices, and $6 million from higher sales volumes.

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a net increase of $15 million in sales under the BGSS contract due primarily to higher sales prices, and

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a net increase of $4 million due primarily to changes in forward prices in 2025 as compared to 2024.

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 $38 million due primarily to

•

a net increase of $24 million related to sales to third parties due primarily to $19 million from higher average cost of gas, and $5 million due to higher volumes sold, and

•

a net increase of $14 million related to sales under the BGSS contract due primarily to higher average cost of gas.

Generation costsare flat as compared to the prior year.

Operation and Maintenance increased $40 million due primarily to increased planned refueling outage costs in 2025, and higher Servco operating costs.

Depreciation and Amortization decreased $6 million due primarily to revised estimated useful lives 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 decreased $27 million due primarily to NDT investments with a $31 million decrease in net unrealized gains in 2025 on equity securities, partially offset by a $5 million increase in net realized gains in 2025.

Interest Expense increased $15 million due primarily to incremental debt.

Income Tax Expense (Benefit) variance of $91 million due primarily to higher pre-tax income and the absence of the benefit from nuclear PTCs in 2025.

Nine Months Ended September 30, 2025 as Compared to Nine Months Ended September 30, 2024

Operating Revenues increased $621 million due primarily to changes in generation and gas supply and other operating revenues.

Generation Revenues increased $364 million due primarily to

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a net increase of $156 million due primarily to higher average realized energy prices and volumes sold in 2025,

•

a net increase of $87 million in capacity revenue due primarily to higher capacity prices, and

•

a net increase of $79 million due to MTM gains in 2025 as compared to MTM losses in 2024. Of this amount, there was a $124 million increase due to positions reclassified to realized upon settlement, partially offset by a $45 million decrease due to changes in forward prices in 2025 as compared to 2024.

Gas Supply Revenues increased $225 million due primarily to

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a net increase of $145 million in sales under the BGSS contract due primarily to $80 million from higher sales prices, and $65 million from higher sales volumes,

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a net increase of $60 million related to sales to third parties due primarily to $87 million from higher sales prices, partially offset by $27 million from lower sales volumes, and

•

a net increase of $20 million due primarily to MTM gains in 2025 as compared to MTM losses in 2024. Of this amount, there was an increase of $12 million due to positions reclassified to realized upon settlement coupled with an increase of $8 million due to changes in forward prices in 2025 as compared to 2024.

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 $188 million due to

Gas costs increased $183 million due primarily to

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a net increase of $134 million related to sales under the BGSS contract, of which $80 million was due to higher average cost of gas, and $54 million was due to higher send out volumes, and

•

a net increase of $48 million related to sales to third parties due primarily to $62 million from higher average cost of gas, partially offset by $14 million due to lower volumes sold.

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

Operation and Maintenance increased $57 million due primarily to higher Servco operating costs, and increased planned refueling outage costs in 2025.

Depreciation and Amortization decreased $9 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 decreased $26 million due primarily to NDT investments with a $17 million decrease in net unrealized gains in 2025 on equity securities, and a $7 million decrease in net realized gains in 2025.

Interest Expense increased $41 million due primarily to incremental debt and the replacement of maturing long-term debt at higher rates.

Income Tax Expense (Benefit) variance of $234 million due primarily to higher pre-tax income and the absence of the benefit from nuclear PTCs in 2025.