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 $55 million, $43 million, $158 million and $122 million for the three months and nine months ended September 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 $55 million, $43 million, $158 million and $122 million for the three months and nine months ended September 30, 2026 and 2025, respectively.

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

Operating Revenues decreased $9 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 $8 million due primarily to a $7 million increase in delivery prices.

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 $29 million due primarily to a $22 million increase in Societal Benefits Clause (SBC) collections and a $7 million increase in Tax Adjustment Credit (TAC) and Green Program Recovery Charge (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 decreased $7 million primarily due to lower BGS revenues of $10 million, primarily from lower prices, partially offset by higher BGSS revenues of $3 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 $39 million due primarily to a decrease in ZECs.

Energy Costs decreased $47 million. This is entirely offset by changes in Commodity Revenues and Other Operating Revenues.

Operation and Maintenance increased $30 million due primarily to $35 million in higher clause and renewable expenditures and $13 million in higher other operating and Services expenses, partially offset by $18 million in lower distribution and transmission operational expenditures.

Depreciation and Amortization increased $14 million due primarily to an increase in depreciation due to higher plant placed in service and increased amortization of software.

Net Other Income (Deductions) increased $7 million due to increases in interest income and the allowance for funds used during construction.

Interest Expense increased $21 million due primarily to incremental debt and the replacement of maturing debt at higher rates.

Income Tax Expense Income Tax Expense decreased $9 million due primarily to the discrete acceleration in the amortization of distribution-related excess deferred income taxes being refunded to customers and lower pre-tax income, partially offset by a decrease in the flowback of previously realized distribution-related mixed service cost deductions.

Nine Months Ended September 30, 2026 as Compared to Nine Months Ended September 30, 2025

Operating Revenues increased $518 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 $142 million due primarily to a $79 million increase in delivery volumes, $41 million from increased GPRC revenues and a $29 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 $141 million due primarily to an $87 million increase in TAC and GPRC deferrals and a $57 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 $362 million primarily due to higher BGS revenues of $256 million and higher BGSS revenues of $107 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 $127 million due primarily to a decrease in ZECs as a result of the ZEC collection ending in 2025.

Energy Costs increased $233 million. This is entirely offset by changes in Commodity Revenues and Other Operating Revenues.

Operation and Maintenance increased $132 million due primarily to $115 million in higher clause and renewable expenditures and $31 million in higher other operating and Services expenses, partially offset by $14 million in lower distribution and transmission operational expenditures.

Depreciation and Amortization increased $40 million due primarily to an increase in depreciation due to higher plant placed in service and increased amortization of software and Regulatory Assets.

Net Other Income (Deductions) increased $11 million due to increases in interest income and the allowance for funds used during construction.

Interest Expense increased $52 million due primarily to incremental debt and the replacement of maturing debt at higher rates.

Income Tax Expense increased $44 million due primarily to a decrease in the flowback of previously realized distribution-related mixed service cost deductions and higher pre-tax income, partially offset by an increase in other flow through items.

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

Operating Revenues decreased $217 million due primarily to changes in generation and gas supply revenues.

Generation Revenues decreased $225 million due primarily to

•

a net decrease of $271 million due to MTM losses in 2026 as compared to MTM gains in 2025. Of this amount, there was a $346 million decrease due to changes in forward prices in 2026 as compared to 2025, partially offset by a $75 million increase due to positions reclassified to realized upon settlement,

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partially offset by a net increase of $29 million due primarily to higher average realized prices and higher volumes sold in 2026, and

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a net increase of $19 million in capacity revenue due primarily to higher capacity prices.

Gas Supply Revenues increased $9 million due primarily to

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a net increase of $12 million related to sales to third parties due primarily to higher sales volumes,

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partially offset by a net decrease of $5 million in sales under the BGSS contract due primarily to lower sales prices and 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 $19 million due to

Generation costs increased $14 million due primarily to increased nuclear fuel costs.

Gas costs increased $5 million due primarily to a net increase of $7 million related to sales to third parties due primarily to $14 million from higher sales volumes, partially offset by $7 million from lower average cost of gas.

Operation and Maintenance decreased $9 million due primarily to the absence of a refueling outage at our Hope Creek nuclear plant in 2026, partially offset by outage costs at our Salem 1 nuclear plant in 2026 and a net increase in various operational expenses.

Net Gains (Losses) on Trust Investments decreased $90 million due primarily to $56 million in net unrealized losses in 2026 as compared to $39 million in net unrealized gains in 2025 on equity securities, partially offset by NDT investments with a $4 million increase in net realized gains in 2026.

Interest Expense increased $5 million due primarily to incremental debt and the replacement of maturing long-term debt at higher rates.

Income Tax (Benefit) Expense decreased $86 million due primarily to a pre-tax loss in 2026 compared to pre-tax income in 2025.

Nine Months Ended September 30, 2026 as Compared to Nine Months Ended September 30, 2025

Operating Revenues decreased $279 million due primarily to changes in generation and gas supply revenues.

Generation Revenues decreased $466 million due primarily to

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a net decrease of $571 million due to MTM losses in 2026 as compared to MTM gains in 2025. Of this amount, there was a $566 million decrease due to changes in forward prices in 2026 as compared to 2025, coupled with a $5 million decrease due to positions reclassified to realized upon settlement, and

•

a net decrease of $84 million primarily due to the conclusion of ZEC sales in May 2025,

•

partially offset by a net increase of $134 million in capacity revenue due primarily to higher capacity prices, and

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a net increase of $53 million due primarily to higher average realized prices, and higher volumes sold in 2026.

Gas Supply Revenues increased $189 million due primarily to

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a net increase of $156 million in sales under the BGSS contract due primarily to $134 million from higher sales prices and $22 million from higher sales volumes, and

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a net increase of $37 million related to sales to third parties due primarily to $23 million from higher sales volumes, and $14 million from higher 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 increased $190 million due to

Gas costs increased $171 million due primarily to

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a net increase of $152 million related to sales under the BGSS contract, of which $130 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 $22 million was due to higher send out volumes, and

•

a net increase of $21 million related to sales to third parties due primarily to $25 million from higher sales volumes, partially offset by $4 million from lower average cost of gas.

Generation costs increased $19 million due primarily to increased nuclear fuel costs.

Operation and Maintenance decreased $41 million due primarily to the absence of a refueling outage at our Hope Creek nuclear plant in 2026 and an adjustment to indirect taxes in 2026, partially offset by outage costs at our Salem 1 nuclear plant in 2026 and a net increase in various operational expenses.

Net Gains (Losses) on Trust Investments decreased $66 million due primarily to $134 million in net unrealized losses in 2026 as compared to $108 million in net unrealized gains in 2025 on equity securities, partially offset by NDT investments with a $174 million increase in net realized gains in 2026.

Other Income (Deductions)decreased $8 million due primarily to interest income.

Net Non-Operating Pension and OPEB Credits (Costs)increased $8 million due primarily to a decrease in interest cost and an increase in the long-term expected return on assets.

Interest Expense increased $24 million due primarily to incremental debt and the replacement of maturing long-term debt at higher rates.

Income Tax (Benefit) Expense decreased $137 million due primarily to lower pre-tax income.