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 $50 million and $38 million for the three months ended March 31, 2026 and 2025, 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 $50 million and $38 million for the three months ended March 31, 2026 and 2025, respectively.

Three Months Ended March 31, 2026 as Compared to Three Months Ended March 31, 2025

Operating Revenues increased $421 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 $93 million due primarily to a $53 million increase in delivery volumes, $29 million from increased GPRC revenues and an $18 million increase in transmission revenues due primarily to higher rate base investments. These delivery revenue increases were offset by a $7 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 increased $62 million due primarily to a $45 million increase in TAC and GPRC deferrals and a $20 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 $308 million primarily due to higher electric BGS revenues of $202 million and higher gas BGSS revenues of $106 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 $42 million due primarily to a decrease in Zero Emission Certificates (ZECs) as a result of the ZEC collection ending effective May 31, 2025.

Operating Expenses

Energy Costs increased $264 million. This is entirely offset by changes in Commodity Revenues and Other Operating Revenues.

Operation and Maintenance increased $61 million due primarily to $52 million in higher clause and renewable expenditures, $4 million in higher distribution and transmission operational expenditures and $5 million in higher other operating and Services expenses.

Depreciation and Amortization increased $15 million due primarily to an increase in depreciation due to higher plant placed in service and increased amortization of software and Regulatory Assets.

Interest Expense increased $18 million due primarily to incremental debt and the replacement of maturing debt at higher rates.

Income Tax Expense increased $35 million due primarily to a decrease in the flowback of historic mixed service cost deductions as an effect of utility ratemaking and higher pre-tax income.

Three Months Ended March 31, 2026 as Compared to Three Months Ended March 31, 2025

Operating Revenues increased $324 million due primarily to changes in generation and gas supply and other operating revenues.

Gas Supply Revenues increased $183 million due primarily to

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a net increase of $171 million in sales under the BGSS contract due primarily to $142 million from higher sales prices and $29 million from higher sales volumes, and

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a net increase of $16 million related to sales to third parties due primarily to $21 million from higher sales prices, partially offset by $5 million from lower sales volumes.

Generation Revenues increased $146 million due primarily to

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a net increase of $150 million due to lower MTM losses in 2026 as compared to 2025, primarily due to changes in forward prices, and

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a net increase of $64 million in capacity revenue due primarily to higher capacity prices,

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partially offset by a net decrease of $55 million primarily due to the conclusion of ZEC sales in May 2025, and

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a net decrease of $13 million due primarily to lower volumes sold in 2026, partially offset by higher average realized prices.

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 $176 million due to

Gas costs increased $177 million due primarily to

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a net increase of $172 million related to sales under the BGSS contract, of which $143 million was due to higher average cost of gas, and $29 million was due to higher send out volumes, and

•

a net increase of $7 million related to sales to third parties due primarily to higher average cost of gas.

Generation costsare flat as compared to the prior year.

Operation and Maintenance decreased $43 million due primarily to a net decrease in various operational expenses and an adjustment to indirect taxes in 2026.

Depreciation and Amortization decreased $6 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 $25 million due primarily to NDT investments with a $38 million increase in net unrealized losses in 2026 on equity securities, partially offset by a $13 million increase in net realized gains in 2026.

Interest Expense increased $12 million due primarily to incremental debt and the replacement of maturing long-term debt at higher rates.

Income Tax Expense (Benefit)variance of $44 million due primarily to higher pre-tax income.