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F500 2020 317 Public Service Enterprise Group

The New Jersey-based energy company provides electricity and gas to portions of New Jersey and New York and is one of the 10 largest electric companies in the U.S.

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Public Service Enterprise Group (PEG): Company Profile, Stock Price, News, Rankings

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Public Service Enterprise Group

public service enterprise group

Ladies and gentlemen, thank you for standing by. My name is Rob, and I'm your event operator today. I would like to welcome everyone to today's conference, Public Service Enterprise Group's Second Quarter twenty twenty five Earnings Conference Call and Webcast. At this time, all participants are in listen only mode. Later, we will conduct a question and answer session for members of the financial community.

As a reminder, this conference is being recorded today, 08/05/2025, and will be available for replay as an audio webcast on PSEG's Investor Relations website at https:investor.pseg.com. I would now like to turn the conference call over to Carolina Chan. Please go ahead.

Good morning, and welcome to PSEG's second quarter twenty twenty five earnings presentation. On today's call are Ralph LaRosa, Chair, President and CEO and Dan Craig, Executive Vice President and CFO. The press release, attachments and slides for today's discussion are posted on our IR website at investor.pseg.com and our 10 Q will be filed later today. PSEG's earnings release and other matters discussed during today's call contain forward looking statements and estimates that are subject to various risks and uncertainties. We will also discuss non GAAP operating earnings, which differs from net income as reported in accordance with Generally Accepted Accounting Principles or GAAP in The United States.

We include reconciliations of our non GAAP financial measures and disclaimer regarding forward looking statements on our IR website and in today's material. Following our prepared remarks, we will conduct a thirty minute question and answer session. I will now turn the call over to Ralph LaRosa.

Thank you, Carlotta, and thanks to all of you for joining us this morning to review PSEG's second quarter twenty twenty five results and to discuss our outlook for the business over the rest of the year. PSEG delivered another quarter of solid operating and financial performance and PSE and G is on track to execute on its full year $3,800,000,000 regulated investment program to maintain reliability. PSE and G also benefited from a full quarter of regulatory recovery of and on over $3,000,000,000 of previously invested capital, which was approved in October 2024 settlement of our electric and gas distribution base rate case. PSEG's results also reflect the positive impact of higher output from our nuclear generating fleet which benefited from the absence of a Spring Hope Creek refueling outage experienced last year. During the past quarter, we also continued to prioritize meeting our customers' expectations on both the reliability and affordability fronts.

In late June, we successfully operated through three consecutive days of 100 degree plus temperatures prompting high electricity usage that set a summer peak load of 10,229 megawatts on June 24, the highest system load we have experienced since 2013. The value of our infrastructure resilience and storm restoration efforts benefited customers during a series of intense heat, wind, and rainstorms providing yet another validation of our investments in the system to maintain reliability, which also improves the customer experience. Our utility crews in New Jersey and on Long Island are working tirelessly to safely keep the lights on, restoring service to interrupted customers on a timely basis, redirecting employees from nonemergency work to focus on emergent service requests, and deploying mutual aid to reinforce our local crews to restore service to customers even faster. During the four day heat storm in June, PSE and G crews restored service to 99% of storm interrupted customers within twenty four hours. I could not be more proud of our team's work and these results.

Turning to our affordability focus, given the warmer than normal summer thus far, higher electricity usage is expected to result in higher customer bills. In addition, our customers are seeing the electric rate impact of last year's PJM capacity auction, which is just now translating into summer utility bills. PSE and G has responded by partnering with the New Jersey Board of Public Utilities to implement initiative, providing all residential customers with deferred billing during two high usage summer months, shifting collection of the deferral to lower electric usage months with no interest charged to customers. The utility has also extended shutoff protections for income qualified residential customers and suspended electric reconnect fees through September 30. In addition, PSE and G is processing two sets of upcoming state funded residential energy assistance payments that will also reduce eligible customer bills.

We also continue to connect our customers in need of payment assistance with all available resources, including our award winning energy efficiency programs to help lower usage. Last month, PJM released the results of his latest capacity auction, which priced within a FERC approved price collar at $329 per megawatt day for the twenty twenty six to twenty twenty seven energy year. Despite this latest increase in capacity prices, we anticipate a near flat impact on customer electric bills when this latest price is feathered into the BGS supply rates in June 2026. This assumes other supply related costs remain the same, preserving the reduction from other charges expected to come off the bill. As we've discussed on prior calls, the resource adequacy challenges in New Jersey and across the entire 13 state PGM region are becoming more acute as we see both growing demand and new supply slow to respond.

Recent reports reflected increasing amount of new large load applications that are quickly eroding existing reserve margins. Within the confines of PJM, it's hard to see the path to new generation through existing market signals, which may require the consideration of a new approach to procuring capacity and resource planning. In New Jersey, the legislature convened on June 30 having held a series of hearings on energy affordability in advance of the PJM capacity related summer rate increases. Legislation introduced this past March, Assembly Bill fifty four thirty nine could enable regulated utilities to be among those companies able to compete for potential generation projects should New Jersey decide to build or pursue new in state generation. New Jersey remains a net importer of power and during the June heat storms imported nearly half of its electric needs from out of state.

Abundant excess generation capacity to our west that for many years made power imports a convenient option is quickly being absorbed by rapid growth of native load in those states. In New Jersey, policymakers have begun to actively weigh the priorities of economic growth with system reliability and affordability and the state's environmental policies. In fact, today, the BPU is conducting a technical conference on resource adequacy, focusing on the recent PJM capacity auction results and state driven solutions. We look forward to partnering with New Jersey and regional stakeholders to develop policy consensus on long term comprehensive solutions that can meet our growing demand and improve resource adequacy while safeguarding affordability and reliability to meet New Jersey's energy needs. While these conversations continue, our $3,800,000,000 regulated capital investment plan for 2025 is focused on infrastructure replacement and modernization to ensure safe and reliable service and to meet growing customer demand.

These efforts are on track and on budget. As mentioned last quarter, PSE and G began the second phase of its Clean Energy Future Energy Efficiency two program, which will help customers save energy, lower their bills, and reduce carbon emissions while supporting job training and economic growth right here in New Jersey. Speaking of economic growth, as of June 30, PSE and G's pipeline of large load inquiries for new service connections grew to over 9,400 megawatts, up 47 from 6,400 megawatts reported as of March 31. And as I stated previously, these numbers include both mature applications that we refer to as new business, approximately 2,600 megawatts of the total, which has gone up by 40% since March 31, as well as feasibility studies and initial leads. Our engineering assessment turnaround is still averaging about four months and this response time is supportive of the state's objective to spur economic development.

To the extent these large load prospects convert into new utility customers in the future, fixed costs are then spread over a larger user base which can help to lower existing customer bills. Turning now to PSEG Power and Other, our nuclear units generated and supplied the grid with approximately 7.5 terawatt hours of carbon free baseload power and achieved a fleet capacity factor of 88.8% for the second quarter, lowered by the scheduled refueling outage at Salem Unit 1. During this fall's refueling outage, PSEG nuclear will perform the work needed to extend Hope Creek's fuel cycle from eighteen to twenty four months. This is the first of several steps we are taking to optimize our plants, providing the grid with more reliable 24 by seven carbon free power between now and Hope Creek's next scheduled refueling outage in the 2027. In addition, our Salem upgrade project will bring approximately 200 megawatts or the size of a small modular reactor of incremental carbon free dispatchable power during the 2027 to 2029 timeframe.

We were also pleased that federal tax legislation passed in July preserved the downside price protection from the nuclear production tax credit or PTC as well as the PTC availability for expansions of nuclear capacity which supports the planned power upgrade at Salem. In addition, the legislation permanently extends 100% bonus depreciation to qualified business property. To summarize, we had a good 2025, which provides us with a solid base to confidently deliver on our full year 2025 non GAAP operating earnings guidance of $3.94 to $4.06 per share, which is up 9% at the midpoint over 2024 results. Our 2025 guidance includes a full year of new distribution rates from our 2024 base rate case settlement which was reached last October, as well as an upcoming refueling outage at our 100% owned Hope Creek nuclear unit this fall. In closing, we are also reiterating PSE and G's updated five year capital spending program at 21,000,000,000 to $24,000,000,000 which supports an expected rate base CAGR of 6% to 7.5% through 2029.

This in turn drives PSEG's 5% to 7% non GAAP operating earnings CAGR while continuing to use the nuclear PTC as our reference price for power. PSEG intends to execute this capital plan without the need to issue new equity or sell assets. I will now turn the call over to Dan who will walk you through the results for the quarter and our outlook for the remainder of 2025. And then I'll rejoin the call for Q and A.

Great. Thanks, Ralph. Good morning, everybody. TCG reported net income of $1.17 per share for the 2025 compared to $0.87 per share in 2024. And non GAAP operating earnings were $0.77 per share in the 2025 compared to $0.63 per share in 2024.

These solid results were up over 20% from last year's second quarter reflecting the benefit of new distribution rates which were placed into effect at PSE and G in October 2024 and higher generating volume at PSE and G Power which reflects the absence of last spring's Hope Creek refueling outage which will take place this fall raising O and M and lowering output in the 2025. We've provided you with information on Slides eight and ten regarding the contribution to net income and non GAAP operating earnings by business for the second quarter and 2025. Slides nine and eleven contain waterfall charts that take you through the net changes for the quarter and year to date periods over the prior year and non GAAP operating earnings per share, also by major business. Let's start with PSE and G, which reported second quarter net income and non GAAP operating earnings of $332,000,000 for 2025 compared to $3.00 $2,000,000 in 2024. For the year to date ended June 30, PSE and G reported net income and non GAAP operating earnings of $878,000,000 in 2025 compared to $790,000,000 in 2024.

Utilities results were driven by the implementation of new electric and gas based distribution rates that went into effect last October to recover a return of and on previous capital investments totaling more than $3,000,000,000 Beginning on Slide nine with the PSE and G column, transmission margin was $01 per share higher compared to the year ago quarter on higher investment and a prior year true up. Our distribution margin increased by $0.10 per share compared to the year ago period largely reflecting the impact of the rate case plus recovery of and on PSE and G's regulated energy efficiency investment. On the expense side, distribution O and M costs were $0 per share favorable compared to the 2024, though for the full year distribution O and M is expected to be higher versus the prior year. Both depreciation and interest expense each rose $02 per share compared to the 2024, reflecting higher levels of depreciable plant, investment and long term debt at higher interest rates. Lastly, the timing of taxes recorded through an annual effective tax rate, which nets to zero over a full year, had a net unfavorable impact of $02 per share in the second quarter compared to the prior period, reversing a positive $02 per share impact in the 2025.

Weather conditions during the second quarter as measured by the temperature humidity index were 21% warmer than normal but 14% cooler than the 2024. As you know, the Conservation Incentive Program or SIP mechanism decouples weather and other economic sales variances from a significant portion of our distribution margin while helping PSE and G promote the widespread adoption of energy conservation, including energy efficiency and solar programs. Under the SIP, the number of electric and gas customers is the primary driver of distribution margin and each segment grew by approximately 1% over the past year. On the capital front, as Ralph mentioned earlier, PSE and G invested approximately $900,000,000 during the second quarter and we are on track to fully execute our 2025 regulated capital investment plan of $3,800,000,000 focused on infrastructure modernization, energy efficiency and meeting growing demand. And we have maintained our five year regulated capital investment plan of $21,000,000,000 to $24,000,000,000 through 2029.

We began the next phase of our energy efficiency program during the 2025 and we anticipate investing up to $2,900,000,000 over a six year period. The energy efficiency program total includes approximately $1,000,000,000 of on bill repayment options to help our customers finance their energy efficiency equipment and appliances and provides customers with energy information and options to manage their energy use and lower their bills. Moving on to PSEG Power and Other. For the second quarter PSEG Power and Other reported net income of $253,000,000 in 2025 compared to $132,000,000 in 2024 and non GAAP operating earnings were $52,000,000 in the 2025 compared to $11,000,000 in the 2024. For the year to date ended June 30, PSEG Power and Other reported net income of $296,000,000 in 2025 compared to $176,000,000 in 2024 and non GAAP operating earnings of $224,000,000 in the 2025 compared to $180,000,000 for the 2024.

Referring again to the waterfall on slide nine for the 2025, net energy margin rose by $04 per share driven by higher nuclear generating output. O and M was $03 per share favorable compared to the 2024 driven by the absence of last spring's Hope Creek refueling outage. Interest expense rose by $02 per share reflecting incremental debt at higher interest rates. Taxes and other were $03 per share favorable compared to the 2024 in part due to the use of a lower annual effective tax rate in 2025 that will reverse over the balance of the year. On the operating side, the nuclear fleet produced approximately 7.5 terawatt hours during the second quarter, up by 0.5 terawatt hour over the same period in 2024 and reached 15.9 terawatt hours for the first half of this year, both benefiting from the absence of last spring's Hope Creek refueling outage.

Capacity factors for the nuclear fleet were eighty eight point eight percent and ninety four point three percent for the quarter and six month period ended 06/30/2025 respectively. In late July, PSEG nuclear cleared approximately 3,500 megawatts of its eligible nuclear capacity in PJM's base residual option at $329 per megawatt day for the energy year beginning 06/01/2026 through 05/31/2027. This latest result is up from $270 per megawatt day for a similar amount of capacity in the twenty twenty five-twenty twenty six PJM capacity auction. For the second half of twenty twenty five, results at PSEG Power and other will be impacted by this fall's scheduled Hope Creek outage and the completion of the three year zero emission certificate award that ended on May 31, which will offset higher capacity revenues related to the twenty twenty five-twenty twenty six auction results in the back half of this year. Touching on some recent financing activity.

As of June 30, PSEG had total available liquidity of $3,600,000,000 including $186,000,000 of cash on hand. On the financing front, PSEG Power issued $1,000,000,000.2 of senior unsecured debt this past May consisting of $750,000,000 of five point two percent five year notes due 2,030 and $500,000,000 of five point seven five percent ten year notes due 02/1935. The proceeds from this sale were used to repay the $1,000,000,000.2 variable rate PSEG Power term loan that was scheduled to mature in June. PSEG's variable rate debt at the June consisted of a three sixty four day term loan at PSEG Power for $400,000,000 which matures in December 2025 and commercial paper. As of June 30, following the redemption of the PSEG Power $1,000,000,000.02 variable rate term loan in May, Our level of variable rate debt represents approximately 3% of our total debt.

In July 2025 federal tax legislation preserved the downside price protection of the nuclear production tax credit as well as the PTC availability for expansions of nuclear capacity, which supports our planned power up rate at Salem. In addition, this legislation permanently extends 100% bonus depreciation for qualified business property, improving cash flow at PSEG Power as it executes on its planned capital program. As Ralph mentioned, we are reaffirming PSEG's full year 2025 non GAAP operating earnings guidance of $3.94 to $4.6 per share as well as our long term 5% to 7% non GAAP operating earnings CAGR through 2029 at nuclear PTC threshold. Our solid balance sheet supports the execution of PSEG's five year 22,500,000,000.0 to $26,000,000,000 capital spending plan without the need to sell new equity or assets and provides the opportunity for consistent and sustainable dividend growth. That concludes our formal remarks and we are ready to begin the question and answer session.

Thank you. Ladies and gentlemen, we will now begin the question and answer session for members of the financial community. The first question today is from the line of David O'Carlo with Morgan Stanley. Please proceed with your questions.

Good morning. Let's see. So today we've got the New Jersey Resource Adequacy Conference going on at the BPU. I was just wondering if you could give a sense of where conversations stand with regard to the future of generation build in New Jersey.

Thanks, David. Yeah. So it's a little bit tough for us to do this real time. They are literally, folks are are literally having conversations right now. So there really hasn't been a big change from a legislative

Right? We talked a little bit in the prepared remarks about the bill that is currently sitting in in the legislature. But I'm I'm looking forward to the conversation today that that's taken place. And I I would tell you, we are advocating really for some decisions to be made by the state as we move forward. And that's really just around what are the forecast they're looking for.

We'll be talking about that. What are what are the reliability outcomes they're targeting? What are the affordability targets they have, and then finally, the environmental policy goals. When you put those four pieces together, we think we'll be able to find the right answer and solution for the state, and we'll be willing to help out in that in whatever way the state's looking for us to to play a role. So, we're gonna we're gonna stick to those four points, and really try to drive some decisions from, you know, the existing administration and and obviously having conversations with the potential, gubernatorial candidates.

Yep. Absolutely. That makes sense. Appreciate that. And then, a big increase in the data center pipeline for this quarter.

I was wondering if you could give an update on maybe specifically with regard to the nuclear plant opportunities and an update on data center conversations there. What is the interest level that you're seeing in the site most recently? And then thoughts on timing as to whether you could get to an agreement this year?

Well, I'm going to I'll give that to Dan as I usually do on the on the data centers. I would just say from an economic development standpoint, we're glad to see New Jersey still playing a role in that. They have continued to advocate for data centers and for technology companies to locate into New Jersey. So it's good to see that that is working, and that is playing out in the numbers that we provided. I think yesterday, there was an announcement by Core Weave for a large investment they're making in Kenilworth, New Jersey for some real estate that they're purchasing.

So I think the work that's being done on the economic development front is is, you know, bearing some fruits now, and I'll let Dan talk specifically about anything down at at nuclear.

And and David, there, you know, there continues to be discussion, and I think Ralph's earlier commentary on the numbers going up in the state are are evidence of that. And I think that, you know, you're well aware that our our assets are are both in New Jersey and in Pennsylvania. And I think there's opportunities across those states and frankly wherever power can be delivered from those units for the the the nature of what we have. So the the the discussions continue. There continues to be interest and we'll let the timing kind of speak for itself as we go forward.

Alright. Appreciate the color. Thanks so much.

Our next questions are from the line of Nicholas Campanella with Barclays. Please proceed with your questions.

Hey. Good morning. Thanks for taking my questions.

Hey. I just wanted to follow-up on that last point maybe. In your prepared, you brought up clearly the need to add new generation in New Jersey, the fact that the state is an importer of power. And you talked about needing to kind of balance affordability and resource adequacy along with economic development. Just how do you kind of see that impacting your ability to move forward with a multiyear contract by the end of this year?

Is it still your intention to deliver something by the end of the year? I just wanted to be a little bit more pointed on that. Thank you.

Yeah. Thanks, Nick. So we again, we we've been we're saying we'd like to do something with this with this We've been saying that for many months now, and, I I think that that would still stand. But we're not gonna do a deal just just for the sake of doing a deal by a certain time frame. Right?

So we've we've talked about that, and that and that really hasn't changed. I think from a balancing standpoint, Dan just put it really well. You know, we have assets in both Pennsylvania and New Jersey. We have data centers showing up across the PJM footprint, not just in New Jersey. And I think this resource adequacy conversation that's taken place today recognizes the fact that what happens in our bordering states matters to New Jersey.

When you're importing 50% of your power on your peak days, those decisions that are being made by other economic development organizations, other governors, other utilities, all have an impact on what happens here in New Jersey. So I I don't think we have, you know, that we we we tend to have the to think we have all the answers, but to your very specific question on how it all comes together, I think it's it's it's really a PJM question. It's not just a New Jersey question.

Hey. That makes a lot of sense. I appreciate the context. And then maybe with the capacity auction results, I know you kind of talked about the ZEC's roll off that kind of offsets the '25, '26. But then when we think about 2728, you know, how are you kind of framing where you are on a gross receipts basis?

And I guess my question is, are you now higher in the range because of the 26% or because of the 26%, 27% outcome? Thanks.

Well, I'll let Dan talk to against more specifics here, but we have not come off of the fact that our guidance remains at the PTC floor with our five to seven, and I'll give it to Dan to talk from there.

Yeah. Exactly. And and and obviously, it goes against the backdrop of what the market looks like, Nick, and and you know as well as anybody that capacity is a piece of what the nuclear facilities make as much as they run energy as a bigger piece. But if you're seeing higher capacity clears that sustain, then you're going to see higher capacity component of the overall revenue that will sustain at a higher place. And if energy markets, the electricity side, the energy side ends up moving to a point where you are higher, well then we're going to have moving off of that.

We are not there right now with respect to what we see for for the CAGR that we've put out, but we continue to monitor. We continue to market the output. And ultimately, that's gonna determine where we land against the backdrop of future forecasts. But right now, as Ralph says, what we have out there is based upon the threshold.

Our next question is from the line of Michael Sullivan with Wolfe Research. Proceed with your question.

Hey, guys. Wanted to just ask another one on kind of the New Jersey supply situation. I guess outside of this bill that's out there, what are the other options if that weren't to move forward? And then we saw kind of next door in Pennsylvania, one of your peers doing kind of a JV outside of the regulated construct. Is that something you guys would consider at some point?

We we have so we have very specifically said we are not interested in moving back into the merchant generation business. So that has not changed for us. I I I think the construct that was mentioned by others is really maybe a little bit different, but I I let that let them speak for themselves. And, you know, so so what does that leave us with? It leaves us with the PJM process.

And, look, we we've been very vocal about that for many years at this company. We don't think that that it's it's attracting additional generation. We think there's problems with the capacity process that exists, the market as as it's called, and how it how it exists there at PJM. And so, unfortunately, if there isn't a change, and there isn't some more control taken by the state of New Jersey, we will be, living with the outcome of of that process. And and all we can speak to are the facts.

And the facts are that there has not been any new baseload generation built in New Jersey for quite some time. And I believe our former merchant generation business was the last one to do so.

Makes a lot. The other thing I would add to that, Michael, is, you know, some of the discussions that you're, that others are listening to concurrent with this call, I think, are going to that topic and, you know, there's other discussions. I think there's a the PJM governors are gonna meet next month to try to talk about what's going on. And and so I I think that that right now, all those discussions are against the backdrop of the challenges that we have from what's in place at PJM and what supply could come out of that process or not come out of that process. And as a result, what things should be done to ensure that we have the supply we need. So that that's where those discussions are all circling around.

Okay. That that's really helpful. Appreciate all the color there. And then just shifting over to o b three, can you maybe put a little more numbers or quantification around some of the benefits there, both with respect to bonus depreciation and what that does for your cash tax position and then also the the new tax credit on on the upgrade? Like, any any numbers around those two items you can give us?

No. And and, Michael, I think that the the thing that it mainly did from the standpoint of the PTC is it retained what was in place. There was some discussion that hard to tell exactly how much traction it got about potentially shortening it or potentially changing it. But everything from a nuclear PTC perspective stayed in place. You know, if we in answer to Nick's question, if we move to a higher overall market condition, I would still love to have that protective backdrop of a PTC from the standpoint of an overall revenue threshold.

I think what what really for us was new within that was bonus depreciation. We've had different bouts of bonus depreciation in the past, and this one is is laying out to make it permanent. But as a reminder, the bonus is not throughout the entire company. It is only for the unregulated piece. And there's not that much capital that's there.

So is it a help? Yeah. It's a help, but it's kind of around the edges from the standpoint of an overall cash flow perspective that it will accelerate some of that cost recovery a little bit earlier than otherwise would have been the case.

Our next questions are from the line of Ross Fowler with Bank of America. Please proceed with your questions.

Good morning, guys. It's actually Renee here for Ross. I just had a quick question about the, you know, we saw a lot of affordability focused bills in this session. So I guess from your perspective, which which of those bills are kinda gaining the most traction and kind of have the will have likely the biggest impact moving forward, I guess, in terms of, like, regulated gen, which you talked about, or cost deferrals or reassessing New Jersey's role in PJM?

So the session has closed officially. Right? So they can always come back. But right now, there is no there's no scheduled time for the legislature to come back to discuss those bills. I think they have a couple of items that they're dealing with on health care, but there's nothing that's very specific to the utility space.

So I would be hard pressed to say that any one of those specific bills are ones that we're focused on. I think what we're really focused on is finding a solution for the customers. And, you know, we've done that with the short term, now we're trying to have a conversation, which again is taking place as we speak at the New Jersey Board of Public Utilities on the resource adequacy. And we're gonna continue to advocate as strong as we have at at PJM. So I wouldn't point you to any one of those bills specifically because, again, they may they they will change down the road if they even continue in some fashion.

But I I would just I would just leave it at that and not not really speculate on what what might or might not happen.

Okay. That makes sense. And then just secondly, I know you mentioned the 200 megawatts out of Salem, but I guess more broadly, what potential is there for incremental generation and, upgrade on the nuclear fleets to upgrades, refueling, cycles, life extensions? And then I guess how much of that has already been executed?

Well, thanks for that. We're actually from an execution standpoint, much of the engineering work has been done on everything that you asked about. But we did mention earlier in the prepared remarks the fact that in this refueling cycle that will be taking place in the fall at Hope Creek, we will be setting the unit up for the first time for a twenty four month run. So that is the change in the fuel cycle that we had talked about. So we're continuing to execute on the plan that we had discussed.

And the engineering work and we have not discussed the cost or the exact timing of that, but we plan the upgrades for the Salem units later in the next few years. So nothing specific has been out there on that yet, but I think we did say we'd have that somebody end of the decade for sure. By the year. And we'll have that information out by the end of the year.

Okay. Okay. That makes sense. Thanks, guys.

Our next questions are from the line of Carly Davenport with Goldman Sachs. Please proceed with your questions.

Hey. Good morning. Thanks for taking the questions.

Hey. Maybe just to start on the update on the large load inquiries at the utility level. Is that sort of 10% to 20% conversion rate still hold in your view on that 9,400 megawatts? And is that all data centers at this point? Or are there any other customers in that bucket?

There's a few other customers in that bucket, but I would say the the the bulk of that, if not if not over 90% of that, is all data center related. And if you think about the numbers that we quoted to you, the 9,600 megawatts is sort of everything together, and then you apply the 10 to 20%, it kinda aligns with our, what we call, new business number that's out there. So, short answer is yes. It's sticking with the 10% to 20%. And longer answer is you can see that in the in the details that we've provided.

Perfect. Thank you for that. And then maybe just, thinking about 2025 earnings growth, as you think about 1H growth is tracking above your full year 9% expectations. I know that we'll have the Hope Creek outage in the fall, which will be a drag. But I guess just would love your thoughts on how you feel about execution within the full year guidance range at this point in the year.

Yeah. We've tried to make the point we feel confident about being within the range for sure, and we reiterated that. So I don't think we're gonna go anywhere beyond that at this point.

Carly, we're know, at the halfway point, we do sit a little bit north, and I think that that whole creek outage, that that's the reason we did highlight within the materials that that was coming at the back end. Just a reminder that that's a 100% owned. And so when that does come through, it has a bigger impact as we move through quarter by quarter.

Our next questions are from the line of Ryan Levine with Citi. Please proceed with your questions.

Would you seek the customer build deferral mechanism for an additional year as a result of the higher PJM capacity prices during peak load months? Is that something you're contemplating given the recent event?

Well, first of all, that conversation will take place with a new administration and a new BPU. So the right now, there's nothing in the plan for the state of New Jersey to pursue that.

Just just to be to be clear with respect to to the the capacity auction that just happened and the impact on the bill, what we saw in June was the reflective, what I'll describe as a a catch up because the PJM auctions were as delayed as they were. You're seeing the cumulative effect of catching up from the prior auction result to that $2.70 that we saw. What happened in June brought everything up to two seventy. So you would not expect to see as a result of the $3.29 that kind of a jump, number one. And number two, if you just take a look at in our normal BGS process, the the auction that's rolling off the bill and the auction that's rolling on the bill and you take a look at where prices sit now, we not only do we not expect a jump like we saw in June, we don't really expect much movement at all because what's coming off the bill is a little bit higher than what would roll on at the current prices.

And and so that's not to say that something couldn't be done from the standpoint of what you're describing. That's not in place now, as Ralph answered a 100% correct that, You know, we won't work with the regulator as as we were to do that. But it would not be in the face of an increase like we saw in June because that is not what is forecasted as we go forward just based upon the mechanisms and the pricing.

Thanks for the detail on that. And then just one follow-up in terms of the large load request additions. Is there any color around how many customers or individual projects represent that large megawatt increase, just to assess kind of the the chunkiness of that of that, ad?

Yeah. So I I I would I'll add some color without any details. And the and the color is that, you know, what we see here in New Jersey would be a smaller projects than what you're hearing in some other places. So you you're not talking about thousand megawatt hyperscale in the middle of the Garden State Parkway. Right?

So there it's a it's a little different, type of environment here. A lot of edge computing, a lot of backup locations, but it's it's it's large. And and look, our our peak load, you know, is not much north of 10,000, and we're getting close to that in inquiries that we're receiving. And, it's it's a game changer for all of us. You're seeing it across the PJM footprint.

And so just we're getting our we're getting our fair share is the way I would put it, but smaller projects than what than what some of the other states are saying.

And then lastly, you referenced the core weave development from earlier in the week. Is that incorporated in this updated, forecast or projection?

There's a there's a of the conversation that they've talked about that's that's in our current projections. They have not, they have not gone out with their full build yet for what they planned.

Public Service Enterprise Group Q2 2025 Earnings Call Transcript | Fortune

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Public Service Enterprise Group (PEG) Q2 2025 Earnings Call Transcript

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