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 Energy Efficiency (EE) programs regulatory expenditures of $53 million, $41 million, $103 million and $79 million for the three months and six months ended June 30, 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 $53 million, $41 million, $103 million and $79 million for the three months and six months ended June 30, 2026 and 2025, respectively.

Three Months Ended June 30, 2026 as Compared to Three Months Ended June 30, 2025

Operating Revenues increased $106 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 $40 million due primarily to a $17 million increase in delivery volumes, $13 million from increased GPRC revenues and a $10 million increase in transmission revenues due primarily to higher rate base investments.

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 $50 million due primarily to a $35 million increase in TAC and GPRC deferrals and a $15 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 $64 million primarily due to higher electric BGS revenues of $66 million, primarily from higher prices, partially offset by lower gas BGSS revenues of $2 million, primarily from lower volume.

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 $48 million due primarily to a decrease in ZECs as a result of the ZEC collection ending effective May 31, 2025.

Energy Costs increased $16 million. This is entirely offset by changes in Commodity Revenues and Other Operating Revenues.

Operation and Maintenance increased $41 million due primarily to $28 million in higher clause and renewable expenditures and $13 million in higher other operating and Services expenses.

Depreciation and Amortization increased $11 million due primarily to an increase in depreciation due to higher plant placed in service and increased amortization of Regulatory Assets.

Interest Expense increased $13 million due primarily to incremental debt and the replacement of maturing debt at higher rates.

Income Tax Expense increased $18 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.

Six Months Ended June 30, 2026 as Compared to Six Months Ended June 30, 2025

Operating Revenues increased $527 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 $130 million due primarily to a $67 million increase in delivery volumes, $42 million from increased GPRC revenues and a $28 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 $114 million due primarily to an $82 million increase in TAC and GPRC deferrals and a $36 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 $371 million primarily due to higher electric BGS revenues of $267 million and higher gas BGSS revenues of $104 million, primarily from higher prices.

Other Operating Revenues are primarily comprised of revenues derived from various GPRC programs including TREC revenues, Community Solar collections 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 $88 million due primarily to a decrease in ZECs as a result of the ZEC collection ending effective May 31, 2025.

Energy Costs increased $280 million. This is entirely offset by changes in Commodity Revenues and Other Operating Revenues.

Operation and Maintenance increased $102 million due primarily to $80 million in higher clause and renewable expenditures, $4 million in higher distribution and transmission operational expenditures and $18 million in higher other operating and Services expenses.

Depreciation and Amortization increased $26 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 $31 million due primarily to incremental debt and the replacement of maturing debt at higher rates.

Income Tax Expense increased $53 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 June 30, 2026 as Compared to Three Months Ended June 30, 2025

Operating Revenues decreased $386 million due primarily to changes in generation and gas supply and other operating revenues.

Generation Revenues decreased $387 million due primarily to

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a net decrease of $450 million due to MTM losses in 2026 as compared to MTM gains in 2025. Of this amount, there was a $370 million decrease due to changes in forward prices in 2026 as compared to 2025, coupled with a $80 million decrease due to positions reclassified to realized upon settlement, and

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a net decrease of $25 million primarily due to the conclusion of ZEC sales in May 2025,

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partially offset by a net increase of $51 million in capacity revenue due primarily to higher capacity prices, and

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a net increase of $37 million due primarily to higher average realized prices and higher volumes sold in 2026.

Gas Supply Revenues decreased $3 million due primarily to

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a net decrease of $12 million in sales under the BGSS contract due primarily to $6 million from lower sales volume and $6 million from lower sales prices,

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partly offset by a net increase of $9 million related to sales to third parties due primarily to $14 million from higher sales volumes, partially offset by $5 million from lower sales prices.

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 decreased $5 million due to

Gas costs decreased $11 million due primarily to

•

a net decrease of $17 million related to sales under the BGSS contract, of which $11 million was due to lower average cost of gas coupled with interstate gas pipeline refunds due to a settlement on pipeline rates from prior periods, and $6 million was due to lower send out volumes, and

•

a net increase of $7 million related to sales to third parties due primarily to $11 million from higher sales volumes, partially offset by $4 million from lower sales prices.

Generation costs increased $6 million due primarily to increased nuclear fuel costs.

Operation and Maintenance increased $11 million due primarily to a net increase in various operational expenses.

Net Gains (Losses) on Trust Investments increased $49 million due primarily to NDT investments with a $157 million increase in net realized gains in 2026, partially offset by $30 million in net unrealized losses in 2026 as compared to $79 million in net unrealized gains in 2025 on equity securities.

Other Income (Deductions)decreased $7 million due primarily to interest income.

Interest Expense increased $7 million due primarily to incremental debt and the replacement of maturing long-term debt at higher rates.

Income Tax Expense decreased $95 million due primarily to lower pre-tax income.

Six Months Ended June 30, 2026 as Compared to Six Months Ended June 30, 2025

Operating Revenues decreased $62 million due primarily to changes in generation and gas supply and other operating revenues.

Generation Revenues decreased $241 million due primarily to

•

a net decrease of $300 million due to MTM losses in 2026 as compared to MTM gains in 2025. Of this amount, there was a $276 million decrease due to changes in forward prices in 2026 as compared to 2025, coupled with a $24 million decrease due to positions reclassified to realized upon settlement, and

•

a net decrease of $81 million primarily due to the conclusion of ZEC sales in May 2025,

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partially offset by a net increase of $115 million in capacity revenue due primarily to higher capacity prices, and

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a net increase of $24 million due primarily to higher average realized prices, partially offset by lower volumes sold in 2026.

Gas Supply Revenues increased $180 million due primarily to

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a net increase of $160 million in sales under the BGSS contract due primarily to $136 million from higher sales prices and $24 million from higher sales volumes, and

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a net increase of $24 million related to sales to third parties due primarily to $16 million from higher sales prices, and $8 million from higher 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 $171 million due to

Gas costs increased $166 million due primarily to

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a net increase of $155 million related to sales under the BGSS contract, of which $131 million was due to higher average cost of gas, which includes a $9 million reduction in cost from interstate gas pipeline refunds due to a settlement on pipeline rates from prior periods, and $24 million was due to higher send out volumes, and

•

a net increase of $14 million related to sales to third parties due primarily to higher sales volumes.

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

Operation and Maintenance decreased $32 million due primarily to an adjustment to indirect taxes in 2026 and a net decrease in nuclear and various operational expenses.

Net Gains (Losses) on Trust Investments increased $24 million due primarily to NDT investments with a $170 million increase in net realized gains in 2026, partially offset by $78 million in net unrealized losses in 2026 as compared to $69 million in net unrealized gains in 2025 on equity securities.

Other Income (Deductions)decreased $5 million due primarily to interest income.

Net Non-Operating Pension and OPEB Credits (Costs)increased $6 million due primarily to a decrease in interest cost and an increase in the long-term expected return on assets.

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

Income Tax Expense decreased $51 million due primarily to lower pre-tax income.