PUBLIC SERVICE ELECTRIC & GAS CO

The following discussion of our liquidity and capital resources is on a consolidated basis, noting the uses and contributions, where material, of our two direct major operating subsidiaries.

Operating Cash Flows

We continue to expect our operating cash flows combined with cash on hand and financing activities to be sufficient to fund planned capital expenditures and shareholder dividends.

For the nine months ended September 30, 2026, our operating cash flow decreased $40 million, as compared to the same period in 2025. The net decrease was primarily due to an outflow of $388 million in net cash collateral postings in 2026 as compared to a $137 million inflow in 2025 and the payment of the ZEC refund at PSEG Power, partially offset by a net change at PSE&G, as discussed below, and tax refunds in 2026 as compared to taxes paid in 2025.

PSE&G

PSE&G’s operating cash flow increased $528 million from $1,528 million to $2,056 million for the nine months ended September 30, 2026, as compared to the same period in 2025. The increase was primarily due to higher earnings, a decrease in net regulatory deferrals, a decrease in accounts receivable and unbilled revenues, and an increase in obligations to return cash collateral, partially offset by taxes paid in 2026 as compared to tax refunds received in 2025 and the timing of vendor payments.

Short-Term Liquidity

PSEG meets its short-term liquidity requirements, as well as those of PSEG Power, primarily through the issuance of commercial paper and, from time to time, short-term loans. PSE&G maintains its own separate commercial paper program to meet its short-term liquidity requirements. Each commercial paper program is fully back-stopped by its own separate credit facility.

Each of our credit facilities is restricted as to availability and use to the specific companies as listed below; however, if necessary, the PSEG facilities can also be used to support our subsidiaries’ liquidity needs.

In March 2026, PSEG, PSEG Power and PSE&G executed a two-year extension to their existing $3.75 billion revolving credit facilities, extending the maturity through March 2031, and removed the sustainability linked pricing mechanism associated with the PSEG sublimit of the Master Credit Facility. The $75 million PSEG Power letter of credit facility was also extended through March 2028.

In February 2026, PSEG entered into a 364-day variable rate term loan agreement for $500 million. In June 2026, PSEG prepaid the $500 million term loan.

In December 2025, PSEG Power amended its existing $400 million 364-day variable rate term loan, which increased the balance to $500 million and extended the maturity to December 2026.

Our total committed credit facilities and available liquidity as of September 30, 2026 were as follows:

PSEG Power has uncommitted credit facilities totaling $425 million, which can be utilized for letters of credit. As of September 30, 2026, PSEG Power had $350 million in letters of credit outstanding under these uncommitted credit facilities.

PSE&G has an uncommitted credit facility totaling $30 million, which can be utilized for letters of credit. As of September 30, 2026, PSE&G’s letters of credit outstanding were immaterial under this uncommitted credit facility.

We continually monitor our liquidity and seek to add capacity as needed to meet our liquidity requirements, including to satisfy any additional collateral requirements. As of September 30, 2026, PSEG’s liquidity position, including credit facilities and access to external financing, was expected to be sufficient to meet its projected stressed requirements over a 12-month planning horizon. PSEG analyzes its liquidity requirements using stress scenarios that consider different events, including changes in commodity prices and the potential impact of PSEG Power losing its investment grade credit rating from S&P or Moody’s, which would represent a two-level downgrade from its current Moody’s and S&P ratings. In the event of a deterioration of PSEG Power’s credit rating, certain of PSEG Power’s agreements allow the counterparty to demand further performance assurance. The potential additional collateral that we would be required to post under these agreements if PSEG Power were to lose its investment grade credit rating was approximately $682 million and $703 million as of September 30, 2026 and December 31, 2025, respectively.

For additional information, see Item 1. Note 9. Debt and Credit Facilities.

Long-Term Debt Financing

During the next twelve months,

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PSE&G has $425 million of 3.00% Secured Medium-Term Notes, Series L, due May 2027.

PSEG, PSEG Power, Energy Holdings, PSEG LI and Services participate in a corporate money pool, an aggregation of daily cash balances designed to efficiently manage their respective short-term liquidity needs, which are accounted for as intercompany loans. Servco does not participate in the corporate money pool. Servco’s short-term liquidity needs are met through an account funded and owned by LIPA.

For additional information see Item 1. Note 9. Debt and Credit Facilities.

Common Stock Dividends

On July 20, 2026, our Board of Directors approved a $0.67 per share common stock dividend for the third quarter of 2026. This reflects an indicative annual dividend rate of $2.68 per share. We expect to continue to pay cash dividends on our common stock; however, the declaration and payment of future dividends to holders of our common stock will be at the discretion of the Board of Directors and will depend upon many factors, including our financial condition, earnings, capital requirements of our businesses, alternate investment opportunities, legal requirements, regulatory constraints, industry practice and other factors that the Board of Directors deems relevant. For additional information related to cash dividends on our common stock, see Item 1. Note 15. Earnings Per Share (EPS) and Dividends.

Credit Ratings

If the rating agencies lower or withdraw our credit ratings, such revisions may adversely affect the market price of our securities and serve to materially increase our cost of capital and limit access to capital. Credit ratings shown are for securities that we typically issue. Outlooks are shown for the credit ratings at each entity and can be Stable, Negative, or Positive. There is no assurance that the ratings will continue for any given period of time or that they will not be revised by the rating agencies, if in their respective judgments, circumstances warrant. Each rating given by an agency should be evaluated independently of the other agencies’ ratings. The ratings should not be construed as an indication to buy, hold or sell any security.

(A)

Moody’s ratings range from Aaa (highest) to C (lowest) for long-term securities and P1 (highest) to NP (lowest) for short-term securities.

(B)

S&P ratings range from AAA (highest) to D (lowest) for long-term securities and A1 (highest) to D (lowest) for short-term securities.