Q3 2023 Public Service Enterprise Group Inc Earnings Call

Ladies and gentlemen, thank you for standing by.

My name is Rob and I'm your operator today.

I'd like to welcome everyone to today's conference call.

Quick service Enterprise groups third quarter, 2023 earnings conference call and webcast.

At this time all participants are in a listen only mode.

Later, we'll conduct a question and answer session for members of the financial community.

At that time, if you have a question you'll need to press the star and the number one on your telephone keypad.

To withdraw your question. Please press Star and then number two.

If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

As a reminder, this conference is being recorded today October 31, 2023 and will be available for replay as an audio webcast on P. S E G as Investor Relations website.

At <unk>.

H T T P S colon forward slash forward slash.

Investor Dot P. S E G dot com.

I would now like to turn the conference over to Carlotta Chan.

Go ahead.

Good morning, and welcome to Pseg's third quarter 2023 earnings presentation on today's call are Ralph Lorenzo Chair, President and CEO, and Dan Craig Executive Vice President and CFO.

Our press release attachments and slides for today's discussion are posted on our IR website at Investor Doc PSEG Dot com and our 10-Q will be filed shortly.

<unk> 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 or net loss as reported in accordance with generally accepted accounting principles GAAP in the United States. We include reconciliations of our non-GAAP financial measures and a disclaimer regarding forward looking statements on our IR website and in today's materials.

Following Ralph and Dan's prepared remarks, we will conduct a 30 minute question and answer session I will now turn the call over to Ralph Larosa.

Thank you for a lot of good morning to everyone and thanks for joining us to review Pseg's third quarter results.

Earlier today PSEG reported third quarter 2023, net income of 27 per share.

Net income of 22 per share for the third quarter of 2022.

non-GAAP operating earnings for the third quarter were <unk> 85 per share compared to 86 per share in the third quarter of 2022.

Our non-GAAP results exclude items shown in attachment eight and nine which we provided with the earnings release.

We are very pleased with the results of both <unk> and PSEG power and other which are continuing to fully meet our planning expectations.

Through the first nine months PSEG is on track to achieve our full year 2023, non-GAAP operating earnings guidance of $3 40 to $3 50 per share.

This morning, we also reaffirmed both Pseg's full year 2023 earnings guidance and our long term, 5% to 7% earnings growth outlook with the announcement of our third quarter results, which Dan will discuss in greater detail. Following my remarks.

We had a very constructive quarter on several fronts, our utility <unk> invested approximately $1 billion in energy infrastructure during the third quarter, bringing the year to date spend to $2 $7 billion.

Rob: Ladies and gentlemen, thank you for standing by. My name is Rob and I am your operator today. I'd like to welcome everyone to today's conference. Public Service Enterprise Group's third quarter of 2023 earnings conference call on webcast. At this time, well participants are in listen only mode. Later we'll conduct a question and answer session for members of the financial community. At that time, if you have a question, you'll need to press the star and the number one on your telephone keypad. To withdraw your question, please press star and the number two. If anyone should acquire operator assistance during the conference, please press star zero on your telephone keypad.

For the full year of 2023 capital spend is now expected to total $3 7 billion slightly higher than our original plan of $3 $5 billion.

Ahead of schedule and execution on our clean energy future energy efficiency.

Our infrastructure investment programs.

And advanced metering front <unk> has completed the installation and placed into service just over half of $1 3 million of the $2 3 million planned smart meter replacements.

Overall, we remain on schedule and within our cost parameters.

Rob: As a reminder, this conference is being recorded today, October 31st, 2023, and will be available for replay as an audio webcast on PSEG's investor relations website at HTTPS, colon, forward slash, forward slash, investor.psg.com.

We have seen strong demand for <unk> energy efficiency solutions, which is helping our customers save energy lower their bills.

Give you some perspective on how strong the demand for energy efficiency is key.

Consider that PSE and G. Now sells more energy efficiency solutions in a single month than we did in an entire year just a few years ago.

Carlotta Chan: I would now like to turn the conference over to Carlotta Chan. Please go ahead.

In addition, we continue to support the energy transition and decarbonization of the New Jersey economy by upgrading the last mile of our distribution system.

Carlotta Chan: Good morning and welcome to PSEG's third quarter 2023 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.psg.com and our 10Q will be filed shortly.

As well as adding new electric infrastructure due in part to an increase in electric vehicle penetration.

These critical New Jersey energy investments also support our rate base growth trajectory of six to seven 5% through 2027.

The low end of Pseg's rate base CAGR assumes an extension of our investment programs at their current annual levels.

Carlotta Chan: 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-gap operating earnings which differs from net income or net loss as reported in accordance with generally accepted accounting principles gaps in the United States. We include reconciliations of our non-gap financial measures and a disclaimer regarding forward-looking statements on our IR website and in today's material.

Within the upper end of the rate base ranges of potentially higher amount of infrastructure investment and upcoming filings for energy efficiency above their current run rates.

Last week, the <unk> reset the start date for the second three year energy efficiency period to begin January one 2025 and run through June 32027 for a total term of two and a half years.

While adding a six month extension to the current three year period.

Carlotta Chan: Following Ralph and Dan's prepared remarks, we will conduct a 30-minute question and answer session.

The BP requested updated utility filings to be aligned with this new period.

The bps updated framework outlines a robust continuation of E and the state and includes utility specific net annual energy reduction targets for the upcoming filings.

Ralph Larosa: I will now turn the call over to Ralph Larosa. Thank you, Carlotta.

Ralph Larosa: Good morning to everyone and thanks for joining us to review PSEG's third quarter results. Earlier today, PSEG reported third quarter 2023 net income of 27 cents per share compared to net income of 22 cents per share for the third quarter of 2022. Non-gap operating earnings for the third quarter were 85 cents per share compared to 86 cents per share in the third quarter of 2022. Our non-gap results exclude items shown in attachments 8 and 9 which we provided with the earnings release.

It also directed utilities to propose quantitative performance indicators aligned with the updated net annual energy reduction targets.

And the compressed two and a half year timeframe.

The prior year annual reduction goals of 75% for gas and 2% for electric.

The program years of 2026, and 2027 remain unchanged.

Earlier this month the <unk> approved the settlement to extend our current GSM O II program through December 2025, and provided for $900 million of investment to replace a minimum of 400 miles of cast iron and unprotected steel made at a modestly higher run rate than our previous programs.

Ralph Larosa: We are very pleased with the results of both PSE and PSEG power and other which are continuing to fully meet our planning expectations. For the first nine months, PSEG is on track to achieve our full year 2023 non-gap operating earnings guidance of $3.40 to $3.50 per share. This morning, we also reaffirmed both PSEG's full year 2023 earnings guidance and our long term five to seven percent earnings growth outlook with the announcement of our third quarter results which Dan will discuss in greater detail following my review.

So the $900 million investment provided into settlement $750 million will be recovered through three periodic rate update clauses with the balance addressed in the future rate case.

<unk> <unk>, two we reduce methane leased by approximately 22% system wide from 2018 levels.

Ralph Larosa: Marks. We have very constructive quarter on several fronts. Our utility, PSE and G invested approximately $1 billion in energy infrastructure during the third quarter, bringing the year-to-day spend to $2.7 billion. For the full year of 2023, capital spend is now expected to total $3.7 billion, slightly higher than our original plan of $3.5 billion. Ahead of scheduled execution on our clean energy future energy efficiency and our infrastructure advancement programs. An advanced metering front, PSE and G has completed the installation and placed into service just over half a $1.3 million of the $2.3 million planned smart meter replacements.

This extension enables us to remain on track to achieve our long term reduction targeted methane emissions of at least 60% over the 2011 through 2030 period.

Pseg's broader GSM <unk> filing is being held in abeyance.

We expect that this filing which also includes pilot projects to introduce renewable natural gas and hydrogen blending into our existing distribution system.

We'll restart after the future of natural gas utilities stakeholder proceedings conclude.

The <unk> extension approval provides for restarting the GSM <unk> III filing by January of 2025 with these tests at the beginning of the next phase of this work in January of 2026.

Ralph Larosa: Overall, we remain on schedule and within our cost parameters. We have seen strong demand for PSE and G's energy efficiency solutions, which is helping our customers save energy and lower their bills. To give you some perspective on how strong the demand for energy efficiency is, consider that PSE and G now sells more energy efficiency solutions in a single month than we did in an entire year just a few years ago. In addition, we continue to support the energy transition and decarbonization of the New Jersey economy by upgrading the last mile of our distribution system, as well as adding new electric infrastructure, due in part to an increase in electric vehicle penetration.

While we make these investments we remain focused on customer affordability and continue to diligently manage our O&M expense.

We recently completed new four year labor agreements with all of our New Jersey unions.

I want to underscore the importance of this in relation to our cost is labor is one of our largest expenditures.

Having four years of Labour cost certainty helps us keep customer bills affordable and provides our represented employees with wage predictability.

PSEG continues to compare very well appears on a share of wallet basis, both in the region as well as nationally.

Monthly bills for typical residential natural gas customers remain among the lowest in the region.

Ralph Larosa: These critical New Jersey energy investments also support our rate-based growth trajectory of 6 to 7.5 percent through 2027. The low end of PSEG's rate-based canter assumes an extension of our investment programs at their current annual levels. Within the upper end of their rate-based ranges, a potentially higher amount of infrastructure investment and upcoming filings for energy efficiency above their current run rates. Last week, the BPU reset the start date for the second three-year energy efficiency period to begin January 1, 2025 and run through June 30, 2027 for a total term of two and a half years, while adding a six-month extension to the current three-year period.

Beyond that for the upcoming 2020 for heating season, the Btu approved <unk> request to lower the gas commodity charge to approximately 40 per therm effective October one.

This gas commodity charge, which is simply a pass through for the utility has declined by a total of 38% since January one 2023.

Now turning to our nuclear operations the PSEG nuclear fleet operated at 95, 8% capacity factor during the year to date period ended September 30th.

Producing 24, three terawatt hours of carbon free base load energy.

Our 57% on Salem unit, one just completed another breaker to breaker run and entered its scheduled refueling outage after operating for 508 continuous days between refueling.

Ralph Larosa: The BPU requested updated utility filings to be aligned with this new period. The BPU's updated framework outlines a robust continuation of EE in the state and includes utility-specific net annual energy reduction targets for the upcoming filings. It also directs utilities to propose quantitative performance indicators aligned with the updated net annual energy reduction targets and the compressed 2.5-year timeframe. The prior EE annual reduction goals of 0.75 percent for gas and 2 percent for electric during the program years of 2026 and 2027 remain unchanged.

Our efforts to transition our boiling water reactor at Hope Creek from an 18 months to 24 month refueling cycle through lower capital cost projects is ongoing.

Related to our competitive transmission proposal submitted to PJM as part of its 2022 window three solicitation.

Transmission expansion Advisory Committee staff recently recommended that a PSEG project being included as part of a comprehensive solution.

Pseg's projects outlines a $447 million of investment with an expected in service date of 2027.

Ralph Larosa: Earlier this month, the BPU approved the settlement to extend our current GSMP2 program through December 2025 and provide it for $900 million of investment to replace a minimum of 400 miles of gas byron and unprotected steel main at a monthly higher run rate than our previous programs. The $900 million investment provided in the settlement, $750 million will be recovered through three periodic rate update clauses with the balance addressed in the future rates, case.

The PJM board will announce their final decision in December.

This is another example of regulated opportunities that we're pursuing.

And we intend to leverage our considerable transmission skills and similar opportunities that arise.

Switching topics for a moment to sustainability you will recall that we committed to the United Nations back race to zero campaign in September of 2021.

The intention of submitting proposed targets encompassing scopes, one two and three emissions to the science based targets initiative.

Ralph Larosa: Through GSMP2, we reduced methane lease by approximately 22% system-wide from 2018 levels. This extension enables us to remain on track to achieve our long-term reduction target in methane emissions of at least 60% over the 2011 through 2030 period. ESCG's broader GSMP3 filing is being held in advance. We expect that this filing, which also includes pilot projects to introduce renewable natural gas and hydrogen blending into our existing distribution system, will restart after the future of natural gas utilities stakeholder proceedings conclude.

We've made our submission in September and is now under review as part of SPC is validation process.

I'd like to conclude by recapping some of the progress we've made towards our goal of streamlining and improving the predictability of our business.

We now have a lower business risk profile following the sale of the fossil business and our exit from offshore wind generation.

February in August we successfully reduced a significant amount of pension variability our future results with the regulatory accounting order and the lift out and will consider pursuing additional mitigation on our upcoming rate case.

Ralph Larosa: The GSMP2 extension approval provides for restarting the GSMP3 filing by January 2025 with the intent of beginning the next phase of this work in January of 2026. While we make these investments, we remain focused on customer affordability and continue to diligently manage our own MXPETs. We recently completed new four-year labor agreements with all of our New Jersey unions. I want to underscore the importance of this in relation to our costs. The labor is one of our largest expenditures.

And we have helped us secure the financial viability of critical important New Jersey energy assets with the decision to retain our carbon free base load nuclear fleet enhanced by the revenue stability of our production tax credits that begins in January of 2024.

Ralph Larosa: Having four years of labor costs certainty helps us keep customer bills affordable and provides our representative employees with wage predictability. ESCG continues to compare very well with peers on a share wallet basis, both in the region as well as nationally. Monthly bills for typical residential natural gas customers remain among the lowest in the region. Beyond that, for the upcoming 2024 heating season, the BPU approved ESCG's request to lower the gas commodity charge to approximately 40 cents per term effective October 1st.

These actions helped to extend our track record of executing on Pseg's improve business strategy.

Having a decade long visibility of cash flows from the nuclear PTC will help us to maintain a solid financial profile that does not require us to issue any new equity or sell any assets to fund our five year capital investment program.

And supports our ability to pay a competitive and growing dividend.

In closing I want to share our plans for providing 2020 for earnings guidance in other important financial updates.

As you know, we will follow our electric and gas distribution base rate case. This December and we will update you with the parameters once that is public.

We expect to complete our normal business planning in mid December. So you can expect us to provide 2024 non-GAAP operating earnings guidance. Shortly after that business plan is completed.

Ralph Larosa: This gas commodity charge, which is simply a pass-through for the utility, has declined by a total of 38 percent since January 1st, 2023. Now, turning to our nuclear operations, the PSCG nuclear fleet operated at 95.8 percent capacity factor during the year-to-date period and the September 30th, producing 24.3 terawatt hours of carbon-free, base-loaded energy. Our 57 percent on Salem Unit 1 just completed another breaker-to-breaker run and entered its scheduled full refueling outage after operating for 508 continuous days between refueling.

In early December we intend to update our existing 2023 to 2027, Capex and rate base projections to reflect the recent GSM two extension through 2025.

And two upcoming energy efficiency filings.

I want to extend the current <unk> program out through the end of 2024.

Followed by a new filing covering the next round of EE programs through 2027.

These updates will inform our longer term assumptions for capital and rate base projections.

And we expect to post a full roll forward of the capital plan rate base and long term earnings CAGR and the January 2024 Investor update.

Ralph Larosa: Our efforts to transition are boiling water reactor at Hope Creek from an 18-month to 24-month refueling cycle to lower capital cost projects is ongoing. We related to our competitive transmission proposal submitted to PGM as part of its 2022 window 3 solicitation. Their transmission expansion advisory committee staff recently recommended that a PSCG project be included as part of a comprehensive solution. PSCG's project outlines a $447 million investment with an expected in-service state of 2027.

I will now turn the call over to Dan for more details on the operating results and will be available for your questions. After his remarks.

Thank you Ralph and good morning, everybody.

As Rob mentioned earlier PSEG reported net income of $139 million or 27 per share for the third quarter of 2023 compared.

Compared to net income of $114 million or <unk> 22 per share for the third quarter of 2022.

non-GAAP operating earnings for the third quarter of 2023 were $425 million or <unk> 85 per share compared to 429 million or <unk> <unk> per share for the third quarter of 2022.

Ralph Larosa: The PGM board will announce their final decision in December. This is another example of regulated opportunities that we are pursuing, and we intend to leverage our considerable transmission skills in similar opportunities that arise. Pushing topics for a moment to sustainability, you will recall that we committed to the United Nations Back Race Zero campaign in September of 2021, with the intention of submitting proposed targets and composing scopes 1, 2, and 3 emissions to the science-based targets initiative.

We've provided you with information on slides nine and 11 regarding the contribution to non-GAAP operating earnings per share by business for the third quarter and year to date of 2023.

Slides 10, and 12 contain waterfall charts that take you through the net changes.

The quarter over quarter and year to date periods.

And non-GAAP operating earnings per share by major business.

Ralph Larosa: We made our submission in September and it is now under review as part of SBTI's validation process. We'd like to conclude by recapping some of the progress we've made towards our goal of streamlining and improving the predictability of our business. We now have a lower business risk profile following the sale of the fossil business and our exit from offshore wind generation. Every in August, we successfully reduced the significant amount of pension variability on future results with the regulatory counting order and the lift-out and we'll consider pursuing additional mitigation on our upcoming rate case.

Starting with <unk>, which reported third quarter 2023, net income of $401 million or <unk> 80 per share.

Compared with $399 million or <unk> 80 per share in the third quarter of 2022.

<unk> non-GAAP operating earnings of $403 million or <unk> 80 per share for the third quarter of 2003 compared to $399 million or <unk> 80 per share in the third quarter of 2022.

The main drivers for both GAAP and non-GAAP results for the quarter were growth in transmission and distribution margins, resulting from continued investment in infrastructure replacement and clean energy programs.

As well as lower O&M expense.

These favorable items were offset by our anticipated lower pension income and OPEC credits.

Ralph Larosa: And we have helped to secure the financial viability of critical important New Jersey energy assets with the decision to retain our carbon-free based load nuclear fleet enhanced by the revenue stability of a production tax credit that begins in January of 2024. These actions help to extend our track record of executing on PSEG's improved business strategy. Having a decade-long visibility of cash flows from the nuclear PTC will help us to maintain a solid financial profile that does not require us to issue any new equity or sell any assets to fund our five-year capital investment program. It supports our ability to pay a competitive and growing dividend.

Along with higher depreciation and interest expense, resulting from incremental investments.

The year earlier quarter.

Compared to the third quarter of 2022 transmission was <unk> <unk> per share higher.

Electric margin was <unk> <unk> per share higher reflecting investment returns from energy strong II.

Gas margin was a penny per share higher primarily driven by the clause recovery of our <unk> investments.

Lower distribution O&M expense added a penny per share compared with the third quarter of 2022, and depreciation and interest expense increased by <unk> <unk> per share respectively compared.

Compared to third quarter, 2022, reflecting continued growth and investment.

Ralph Larosa: In closing, I want to share our plans from providing 2024 earnings guidance and other important financial updates. As you know, we will file our electric and gas distribution base rate case this December and we'll update you with the parameters once that is public. We expected to complete our normal business planning in mid-December so you can expect us to provide 2024 non-gap operating earnings guidance shortly after that business plan is completed. In early December, we intend to update our existing 2023 to 2027 capex and rate based projections to reflect the recent GSMP2 extension through 2025 and two upcoming energy efficiency filings.

Lower pension income, resulting from 2020 two's investment returns combined with lower hookup credits scheduled to end in 2023.

<unk> and <unk> <unk> per share unfavorable comparisons to the year earlier quarter.

Lastly, the timing of taxes recorded threat effective tax rate, which nets to zero over a full year and other flow through taxes had a net favorable impact of a penny per share in the quarter compared to third quarter of 2022.

Weather during the third quarter as measured by the temperature humidity index was 11% warmer than normal, but 5% cooler than the third quarter of 2022.

As we've mentioned the Sip mechanism in effect since 2021 limits the impact of weather and other sales variance is positive or negative on electric and gas margins.

Ralph Larosa: One to extend the current EE program out through the end of 2024, followed by a new filing covering the next round of EE programs through 2027. These updates will inform our longer-term assumptions for capital and rate based projections and we expect to post a full row forward of the capital plan, rate based and long-term earnings cager in the January 2024 investor update.

While enabling <unk> to promote the widespread adoption of its energy efficiency programs.

Growth in the number of electric and gas customers the driver of margin under the <unk> mechanism continues to be positive.

Each up by approximately 1% year to date.

Our capital spending.

<unk> invested approximately $1 billion during the third quarter and is on track to execute its largest ever investment program of $3 $7 billion in a single year.

Dan Craig: I will now turn the call over to Dan for more details on the operating results and will be available for your questions after his remarks. Thank you, Ralph. Good morning, everybody.

The program includes upgrades and replacements to our T&D facilities.

Dan Craig: As Ralph mentioned earlier, a PCG reported net income of 139 million for 27 cents per share for the third quarter of 2023 compared to net income of 114 million for 22 cents per share for the third quarter of 2022. Non-gap operating earnings for the third quarter of 2023 were 425 million or 85 cents per share compared to 429 million or 86 cents per share for the third quarter of 2022. We provided you with information on slide 9 and 11 regarding the contribution to non-gap operating earnings per share by business, for the third quarter and year date of 2023.

Energy strong II investments.

Last mile spend and the infrastructure advancement program.

Our ongoing <unk> program.

Continued rollout of the clean energy investments and energy efficiency, and the energy cloud, including smart meters.

And adding new electric infrastructure to accommodate an increase in EV.

<unk> penetration.

During 2023, we've taken actions to limit the impact of our pension on earnings and increase the predictability of our financial results.

In February of 2023, the Btu approve an accounting order authorizing PSE and G to modify its method for calculating the amortization.

Dan Craig: Fudge 10 and 12 contain waterfall charts that take you through the net changes, the quarter of a quarter and year-to-date periods in non-gap operating earnings per share by major business. Starting with PSNG which reported third quarter of 2023 net income of 401 million or 80 cents per share compared with 399 million or 80 cents per share in the third quarter of 2022. PSNG at non-gap operating earnings of 403 million or 80 cents per share for the third quarter of 23 compared to 399 million or 80 cents per share in the third quarter of 2022.

Of the net actuarial gain or loss component for ratemaking purposes.

This change is effective for the calendar year 2023 and forward.

For the full year 2023 P. S. <unk> forecast of non-GAAP operating earnings is unchanged at $1.500 billion to $1.525 billion.

Moving to PSEG power and other for the third quarter of 2023.

<unk> power and other reported a net loss of 262 million or <unk> 53 per share largely reflecting the pension settlement charge associated with the lift out transaction.

This compares to a net loss of 285 million or <unk> 58 per share for the third quarter of 2022.

Dan Craig: The major drivers for both gap and non-gap results for the quarter were growth and transmission of distribution margins resulting from continued investment in infrastructure replacement and clean energy program as well as lower alarm expense. These favorable items were offset by our anticipated lower pension income and op-ed credits along with higher depreciation and interest expense resulting from incremental investments since the year earlier quarter. Compared to the third quarter of 2022 transmission was 3 cents per share higher.

The onetime noncash settlement charge of $332 million.

239 million net of tax.

Is it related to the approximately $1 billion of PSEG power and other pension obligations and associated plant assets transferred to the Prudential insurance company.

After providing for the effect of the lift out our pension plans remain well funded and there is no material impact on our non-GAAP operating earnings in 2023.

non-GAAP operating earnings were 22 million or <unk> <unk> per share for the third quarter of 2023 compared to non-GAAP operating earnings of 30 million or <unk> <unk> per share in the third quarter of 2022.

Dan Craig: Electric margin was 2 cents per share higher reflecting investment returns from energy strong to gas margin was a penny per share higher primarily driven by the cause recovery over the year. This is our GSMP investment. Lower distribution alarm expense added a penny per share compared with the third quarter of 2022 and depreciation and interest expense increased by a penny and 2 cents per share respectively compared to third quarter of 2022 reflecting continued growth and investment.

We previously mentioned that during the first quarter of 2023, PSEG power realize the majority of the approximate $4 per megawatt hour increase in the average price of our 2023 hedged output.

Which rose to approximately $31 per megawatt hour with higher winter pricing driving most of that increase.

Dan Craig: Lower pension income resulting from 2022's investment returns combined with lower op-ed credits scheduled to end in 2023 resulted in a 5 cents per share unfavorable comparison to the year earlier quarter. Lastly, the timing of taxes recorded to an effective tax rate which net to 0 over a full year and other flow through taxes had a net favorable impact of a penny per share in the quarter compared to third quarter of 2022.

For the third quarter of 2023 gross margin rose by a total of <unk> <unk> per share primarily reflecting the roll off of certain full requirement bgs load contracts that had a higher cost to serve resulting in a <unk> <unk> per share benefit compared to the prior year.

The gross margin improvement also included higher generation, which added a penny per share.

<unk> from the absence of a hope Creek refueling outage that started at the end of last year's third quarter.

Dan Craig: Whether during the third quarter as measured by the temperature humidity index was 11 percent warmer than normal but 5 percent cooler than the third quarter of 2022. As we've mentioned the SIP mechanism in effect since 2021 limits the impact of weather and other sales variances positive or negative on electric and gas margin while enabling PSENG to promote the widespread adoption of its energy efficiency programs. Growth in the number of electric and gas customers the driver of margin under the SIP mechanism continues to be positive and will each out by approximately 1 percent year to date.

These positive variances were partially offset by lower capacity revenues of <unk> <unk> per share compared with a year ago quarter.

System with prior year capacity auction.

O&M cost comparisons in the third quarter improved by <unk> <unk> per share driven by the absence of Hope Creek refueling outage expenses.

Partly incurred in 2022 third quarter.

Lower depreciation expense was a penny per share favorable compared with the year ago quarter.

Higher interest expense was one penny unfavorable.

Lower pension income from 2022 investment returns and OPEC credits from the lower amortization benefit.

Dan Craig: Capital spending PSENG invested approximately a billion dollars during the third quarter and is on track to execute its largest ever investment program of 3.7 billion in a single year. The program includes upgrades and replacements to our tnd facilities, energy strong to investments. Last mile spend in the infrastructure advancement program are ongoing GSM P2 program continued roll out of the clean energy investments in energy efficiency and the energy cloud including smart meters and adding new electric infrastructure to accommodate an increase in EV penetration, in 2023.

<unk> per share unfavorable versus third quarter 2022.

Taxes, and other were <unk> <unk> per share unfavorable compared to the third quarter of 2022, reflecting a partial reversal of the effective tax pass it from the first quarter of 2023.

On the operating side the nuclear fleet produced approximately $8 one terawatt hours during the third quarter and 24, three terawatt hours for the year to date periods in 2023.

At a capacity factor of 95, 3% and 95, 8% for the quarter and year to date periods respectively.

For the full year 2023, Pseg's forecasting generation output of 30 to 32 Terawatt hours is hedged.

Dan Craig: During 2023, we've taken actions to limit the impact of our pension on earnings and increase the predictability of our financial results. In February of 2023, the BPU approved an accounting order authorizing PSENG to modify its methods for calculating the amortization of the net actuarial gain or loss component for ratemaking purposes. This change is effective for the calendar year 2023 and forward. For the full year 2023, PSENG's forecast of non-gap operating earnings is unchanged. At $1,500,000,000 to $1,525,000,000.

Approximately 95% to 100% of this production at an average price of $31 per megawatt hour.

For 2020 for the nuclear fleet is forecasted to produce 30% to 32 terawatt hours of Baseload output.

Hedged, 85%, 90% of this generation at an average price of $38 per megawatt.

The forecast of non-GAAP operating earnings for PSEG power and other is unchanged at $200 million to 225 million for the full year.

This forecast reflects the realization of a majority of the expected increase in the average 2023 annual hedge price in the first quarter of 'twenty three as we previously discussed.

Dan Craig: Moving to PSG Power and Other, for the third quarter of 2023, PSG Power and Other reported a net loss of 262,000,000 or 53 cents per share, largely reflecting the pension settlement charge associated with the list out transaction. This compares to net loss of 285,000,000 or 58 cents per share for the third quarter of 2022. The one-time non-cash settlement charge of 332,000,000, 239,000 net attacks was related to the approximately $1,000,000 of PSG Power and Other pension obligations and associated plan assets transferred to the financial insurance company.

For the balance of the year higher interest expense largely captured in our November 20 to update.

As expected to reduce PSEG power and other results.

Touching on some recent financing activity as of September 30.

<unk> had total available liquidity of $3 $8 billion.

Including $57 million of cash on hand.

PSEG power had net cash collateral postings of approximately $350 million at September 30.

Which is substantially below the elevated levels seen last year.

In August <unk> issued $500 million of.

Five 2% secured medium term notes due August 2033.

Dan Craig: After providing for the effect of the list out, our pension plans remain well funded and there's no material attack on our non-gap operating earnings in 2023. Non-gap operating earnings were 22,000,000 or 5 cents per share for the third quarter of 2023, compared to non-gap operating earnings of 30,000,000 or 6 cents per share in the third quarter of 2022. We previously mentioned that during the first quarter of 2023, PSG Power realized the majority of the approximate $4 per megawatt hour increase in the average price of our 2023 hedge output, which rose to approximately $31 per megawatt hour, with higher winter pricing driving most of that increase.

And issued $400 million of 545% secured medium term notes.

August 2053.

In September <unk> retired $325 million of three 5% secured medium term notes at maturity.

Subsequent to the end of the third quarter PSEG issued $600 million of 588% senior notes due October 2028 and $400 million.

A $6 one 3% senior notes due October 2033.

Prior to pricing. These notes $800 million of Treasury locks were executed which had a positive fair value of $14 million and this benefit will be amortized over the life of the senior notes.

Dan Craig: For the third quarter of 2023, gross margin rose by a total of $3 cents per share, primarily reflecting the roll-off of certain full requirement, BGS load contracts, and had a higher cost to serve, resulting in a $4 per share of benefit compared to the prior year. The gross margin improvement also included higher generation, which added a pay per share, resulting from the absence of a hope-creepy linkage that started at the end of last year's third quarter.

Partially offsetting interest expense.

Proceeds from the sale of the senior notes will be used for general corporate purposes, including the repayment of $750 million of PSEG debt maturing. This November.

As of September 32023, TCG at $500 million outstanding of.

364 to a variable rate term loan maturing in April 2024.

Dan Craig: These positive variances were partially offset by lower capacity revenues of 2 cents per share compared to the year ago quarter, consistent with prior year capacity options. OAM cost comparisons in the third quarter improved by 3 cents per share during the muddy absence of hope-creepy linkage expenses that were partly incurred in 2022's third quarter. Lower depreciation expense was a penny per share favorable compared with the year ago quarter, while higher interest expense was one penny unsavorable.

And PSEG power had 125 billion of outstanding of our variable rate term loan maturing in March of 2025.

As of the end of the quarter PSEG had swapped $900 million of the power term loan from a variable to a fixed rate.

Moving to mitigate the impact of higher interest rates.

As of September 30th, reflecting our swaps approximately 5% of our total debt was at a variable rate.

Which is down by half since year end 2022.

Dan Craig: Lower pension income from 2022 investment returns and OPEB credits from the lower amortization benefit were $3 cents per share on favorable versus third quarter 2022. And taxes in other were $4 cents per share on favorable compared to the third quarter of 2022, reflecting a partial reversal of the effective tax benefit from the first quarter of 2023. On the operating side, the nuclear fleet produced approximately 8.1TH during the third quarter and 24.3TH for the year-to-date period in 2023, running at capacity factor of 95.3% and 95.8% for the quarter and year-to-date period.

We continue to maintain a solid financial position with limited exposure to variable rate debt given the improvement in our collateral position.

Bagger maturity schedule and PSEG power cash generation to support funding our regulated business.

In closing we are reaffirming pseg's full year 2023, and non-GAAP operating earnings guidance of $3 40 to $3 50 per share.

He is EOG is forecasted to contribute between $1.500 billion to $1.525 billion and.

At PSEG power and other is forecasted at 200 million to 225 million.

That concludes our formal remarks, and operator, we are ready to begin the question and answer session.

Dan Craig: It's respectable. For the full year of 2023, PSG is forecasting generation output of 30 to 32 TWh and it's head to approximately 95 to 100% of this production and an average price of $31 per megaloid hour. For 2024, the nuclear fleet is forecast to produce 30 to 32 TWh of base load output and it's head to 85 to 90% of this generation and an average price of $38 per megaloid hour. The forecast of non-gap operating earns for PSG power and other unchanged at 200 million to 225 million for the full year.

Thank you.

Ladies and gentlemen.

Now begin the question and answer session for members of the financial community.

If you have a question. Please press the star and the number one on your telephone keypad.

If your question has been answered and you wish to withdraw your polling request you may do so by pressing the star and the number two.

In fairness speakerphone, please pick up your handset before entering your request.

One moment please for the first question.

Dan Craig: This forecast reflects the realization of a majority of the expected increase in the average 2023 annual hedge price in the first quarter of 2023 as we previously discussed. For the balance of the year, higher interest expense largely captured in our November 22 update is expected to reduce PSG power and other results. Touching on some recent financing activity as of September 30th, PCG had total available liquidity of $3.8 billion, including 57 million of cash on hand.

The first question is from Nicholas Campanella with Barclays. Please proceed with your question.

Hey, good morning, Thanks for taking the question.

Good morning.

<unk>.

Hey, So I just I wanted to ask on looking forward to 'twenty four.

If the broad market kind of underperformed sooner that could maybe affect your pension headwind, but also kind of understanding that you've done a lot of de risking.

This past year to take the volatility out you had to lift out.

Dan Craig: PCG power had net cash collateral postings of approximately 350 million at September 30th, which is substantially below the elevated level seen last year. In August, PSG and G issued $500 million of 5.2% secured median term notes due August 2033 and issued $400 million of 5.45% secured median term notes due August 2053. In September, PSG retired $325 million of 3.25% secured median term notes at maturity, subsequent to the end of the third quarter, PSG issued $600 million of 5.88% senior notes due October 2028 and $400 million of 6.13% senior notes due October 2333.

You have the accounting order just could you just give us any sense, how we should think about kind of pension contribution as a percentage of earnings for 'twenty, four or just even relative to the drag you've had year to date is there a drag that we should be thinking about for 'twenty four and any detail on how pension has performed year to date versus your expectations as well it would be held.

Thanks.

Sure So listen first of all I appreciate you recognizing a word.

Dan and his team and regulatory team did already here.

We're seeing the benefits of it right.

I'll talk in engineering terms with we've reduced the size of the sine wave and there's less volatility so.

There's nothing that we've seen or expect that is going to become problematic versus we look at 'twenty four but I'll, let Dan give you any more details you want to provide on that but just the results with some good work that we've accomplished this year.

Dan Craig: Prior to pressing these notes, 800 million of treasury locks were executed which had a positive fair value of $14 million and this benefit will be amortized over the life of the senior notes partially offsetting interest expense. Proceeds from the sale of the senior notes will be used for general corporate purposes, including the repayment of $750 million of PSG debt maturing this November. As of September 30 of 2023, PCG had $500 million outstanding of a 364-day variable rate term loan maturing in April 2024 and PSG power had 1.25 billion outstanding of a variable rate term loan maturing March of 2025.

Yes, I think thats.

Really what we set out to do.

But if it doesn't eliminate the effect of markets moving because we still do have attention, but we've been able to minimize the magnitude of what we would see so.

As we step through the year markets have moved they've been off a little bit. The last few months. We've got another couple of months to go we see where we land I think that we're not immune to some of those movements, but I think.

The work that we've done will lessen that effect and as we're looking at it now the magnitude of what we intend to see or what we anticipate seeing as we move through year end is something we can still manage through the overall O&M budget.

Dan Craig: As of the end of the quarter, PSG had swat $900 million of the power term loan from a variable to a fixed rate serving to mitigate the impact of higher interest rates. As of September 30 is reflecting our swaps approximately 5% of our total debt was at a variable rate which is down by half since year end 2022. We continue to maintain a solid financial position with limited exposure to variable rate debt given the improvement in our collateral position. A staggered maturity schedule and PSG power cash generation to support funding are regulated business.

Okay. That's helpful.

Nice to see that Youre ahead of plan on the Capex.

Obviously, there is a bias higher here as you roll forward and.

I guess, we'll get more of those details in January but as we kind of think about putting higher capex through the model. Just how are you thinking about equity proceeds if at all.

No. There is no there hasn't been no and there is no intention to have any equity issuance. So as we go through.

The capital plan that we have on Friday, yeah. So we've had.

And a half to $18 billion for the utility through 'twenty seven.

Dan Craig: In closing, we are reaffirming PSG's full-year 2023 non-gab operating earnings guidance of $3.40 for $3.50 per year. Chair, PSENG is forecasted to contribute between $1,500,000,000 to $1,525,000,000, and PSG Power and others forecasted at $200,000,000 to $225,000.

Full year, we're still within that range as you look across the five years that $3 7 billion is a is a great performance. So we've been able to continue to move forward on that.

But.

What youre seeing there is great and that's helpful.

But it is still within our overall range and there is no equity that we're going to need to fund even the high end of that range and Nick Let me just double down on that right. We've been saying that everyone that we can no equity no kind of equity and no sale of assets.

Dan Craig: That concludes our formal remarks and operated.

Rob: We are ready to begin the question and answer session. Thank you. Ladies and gentlemen, we now begin the question and answer session for members of the financial community. If you have a question, please press the star and the number one on your telephone keypad. If your question has been answered and you wish to withdraw your polling request, you may do so by pressing the star and the number two. If you're on a speaker phone, please pick up your handset before entering your request. One moment please for the first question.

So.

Thank you.

Yeah.

Thank you. The next question is from the line of Shar <unk> with Guggenheim Partners. Please proceed with your question.

Hey, good morning, guys.

Sure.

Good morning, Good morning, So let me just slightly tweak next.

Next question around 24, I mean, obviously, it's going to be going to be a big year for <unk> with the rate case filing in your PTC guidance for nuclear and then the Texas on setting uncertain right I guess, how do you plan to sort of embed the various scenarios into 24 guidance. When you roll forward at <unk>, even if you were thinking about.

Nicholas Campanella: The first question is from Nicholas Campanella with Barkley. Please just see with your question. Hey, good morning. Thanks for taking the question. I wanted to ask on looking forward to 24. If the broad market kind of underperforms here, that could maybe affect your pension headwind, but also kind of understanding that you've done a lot of de-risking this past year to take the volatility out. You had to lift out. You have the accounting order.

Nicholas Campanella: Could you just give us any sense how we should think about pension contribution as a percentage of earnings for 24, or just even relative to the drag. You've had year-to-date. Is there a drag that we should be thinking about for 24 and any detail on how pension is performed year-to-date for your expectations as well? It would be helpful. Thanks. And make sure.

This directionally I mean, obviously, a swift resolution of the <unk> could be part of this I guess, so how do we think about your base assumptions there.

And any changes to the interest rate assumption and 30 cents under earning headwind for <unk> that was presented a year ago any incremental puts and takes on on regulatory lag in the preceding year.

Sure Great questions and again I'll give dan some some chance to answer the details here, but you hit on all the moving parts that we're considering and a lot of that has to do with driving for what our timeframe is that we're going to we're going to come out with the <unk>.

Ralph Larosa: So listen, first of all, I appreciate you recognizing the work that Dan and his team and the regulatory team did already here. And we're seeing the benefits of it, right? We had, I'll talk in engineering terms with, we've reduced the sign of the sign wave, and there's less volatility. So there's nothing that we've seen or expect that it's going to become problematic first as we look at 24. But I'll let Dan give you any more details he wants to provide on that, but just the results of some good work that we've accomplished this year.

Our earnings in December so.

Dan can you just give any more on some of those items, yes, sure we'll finalize.

Where we're headed and let you know and I think.

There is always some assumptions youre going to make as we step forward I think on the on the rate case.

We will file at some point during this quarter, we said that it usually takes somewhere between nine to 12 months to move through so we'll make our assumptions around that.

I would love to be able to tell you that we're going to have PTC guidance in hand, and we're going to know exactly where things land.

Ralph Larosa: Yeah, and that's really what we set out to do. It doesn't eliminate the effect of markets moving because we still do have attention, but we've been able to minimize the magnitude of what we would see. So as we step through the year markets have moved, they've been off a little bit the last few months. We've got another couple of months to go that we see where we went. I think that we're not immune to some of those movements, but I think the work that we've done will lessen that effect.

But I think that Theres a reasonable.

Set of assumptions that you can make within that uncertainty until we get those regulations and we will do that and our guidance on interest rates really will be driven by what we see in the market.

Ralph Larosa: And as we're looking at it now, that the magnitude of what we intend to see or what we anticipate seeing as we move through year-end is something we can still manage through the overall one-end budget. Okay, that's helpful. And not nice to see that you're ahead of plan on the CAPEX. Obviously, there's a bias higher here as you roll forward, and I guess we'll get more of those details in January, but as we kind of think about putting higher CAPEX through the model, just how are you thinking about equity proceeds, if at all?

The captured them.

Moves that we've seen over the last year or so and so all of those.

I think we will still be able to speak with confidence with respect to an overall guidance range for 'twenty four and we'll do that we'll do that soon.

And I don't want to put you.

In a corner, but it seems like there's probably more tailwind until risks that you guys were thinking about that shift from 23 to 24 is that a fair assessment that well look I think what we'll put forth as a balanced view I think that both from next question before in some of the things that you referenced those are the kinds of things that will come into play as we put the estimate.

Ralph Larosa: No, there is no, there has been no, and there is no intention to have any equity issuance as we go through the capital plan that we have in front of you. So we've had $15.5 billion for the utility 327. All year, we're still within that range, as you look across the five years, that $3.7 billion is a great performance, so we've been able to continue to move forward on that. But what you're seeing there is greatness helpful, but it is still within our overall range, and there is no equity that we're going to need to fund even higher into that range.

Together.

But I still think the way that the business is set up we're not going to have to worry about whether movements because of our decoupling.

Got a smaller pension variability that Ralph just mentioned we've captured most of the interest rate moves so.

I think the work that we have been doing over the last year year, and a half or so is really going to pay off to enable us to be able to speak with confidence on that range. When we put it out.

Got it and then just lastly on just the I mean, I guess what are you hearing on the nuclear PTC guidance and I guess, how do you plan a business case around it I mean, you have a refueling cycle you've had some modest capex improvements on the back burner for nuclear are those plans getting closer to a decision point, especially.

Dan Craig: And let me just double down on that. We've been saying that everyone that we can know equity, no kind of equity, and no sale of assets. Thank you.

Shahriar Pourreza: The next question is from the line of Shahra Pourreza with Guggenheim Partners. Please excuse your fear questions. Hey, good morning, guys. Morning, Shahra. Morning, morning. So let me just slightly tweak next question around 24. I mean, obviously it's going to be a big year for PSAG. The rate case filing and your PTC guidance for new clear and then the ZX is on setting, on setting, right? I guess how do you plan to sort of embed the various scenarios into 24 guidance when you roll forward at 4Q?

With the guidance.

So sure I would say a couple of things on that front.

Just to reinforce again the stability that we introduced last year, we said it on the on the PTC floor right. So we're not we're not counting on anything above or beyond that and that's the way. Our plan is set so that should be pretty clear for you all are pretty transparent on that front.

Capex, we have said a couple of times, we're moving ahead.

Shahriar Pourreza: Even if you're thinking about this directionally, I mean, obviously a swift resolution of the GRC could be part of this. I guess so. How do we think about your base assumptions there? And then he changes to the interest rate assumption and 30 cents under earning headwind for PSG and G that was presented a year ago, any incremental puts and takes on on regulatory lag in the preceding year. Thanks. Yeah, short, all great questions.

Very well on the refueling cycle at Hope Creek that work is progressing as we expected and no surprises there and you'll probably be hearing something in 'twenty four from us a little bit more on the upgrades that we plan for seller and the timing of that.

Perfect and then gets Exxon Cal 'twenty for them.

Those will pay dividends as we go.

Got it got it and again sorry just.

Getting hit with a lot of questions on one of my questions.

Shahriar Pourreza: And again, I'll give Dan some some chance to answer details here, but you hit on all the moving parts that we're considering. And a lot of that has to do with driving for what our timeframe is that we're going to we're going to come out with the with our earnings in December. So Dan, you just give any more on some of those items. Yeah, so we'll finalize where we're at and let you know.

When do you plan on giving 24 guidance.

We have said that we're going to give it after we finish our business planning process with our board we have a review with our board that we do in December So we'll be doing it in December.

Fantastic. Thank you guys. So much have a great morning depreciate at Fisher.

Our next question is from the line of their guest Chopa with Evercore ISI.

Shahriar Pourreza: And I think, you know, there's always some assumptions you're going to make as you step forward. I think on the rate case, we will file that at some point during this quarter. We said that it usually takes, you know, somewhere between nine to 12 months to move through, so we'll make our assumptions around that. I would love to be able to tell you that we're going to have PTC guidance in hand and we're going to know exactly where things land.

Please proceed with your question.

<unk>.

Ralph Good morning, Thanks for good morning time.

Hey, just a finer point on equity I think this is theres going to be Dan's wheelhouse, but you showed this slide in the June Investor day, which kind of talked to the 4 billion, then and balance sheet capacity.

Shahriar Pourreza: But I think that there's a reasonable set of assumptions that you can make within that uncertainty until we get those regulations and we'll do that. And our guidance on interest rates really will be driven by what we see in the market. We captured the moves that we've seen over the last year or so. And so all of those are going to play it. I think we'll still be able to speak with confidence with respect to my overall guidance range for 24 and we'll do that.

How does that look now.

As you know obviously the puts and takes how does that look now and then part two just just to be clear as you roll forward. The plan there is energy efficiency, there's obviously the transmission opportunity.

Should we expect no equity as well as you roll forward to 2028.

Yes, so look I'll give it to Dan again give you some details but that both of those things are very good news for us the transmission opportunity as well as the <unk>.

Energy efficiency growth that we see from the triangular to BP put forth.

But dan's answer.

I believe is going to be exactly the same to you, we do not need equity or anything that looks like.

Shahriar Pourreza: And again, I don't want to put you in the corner, but it seems like there's probably more tailwinds and tail risk that you guys were thinking about that ship from 23 to 24 is that a fair assessment? Well, I think what we'll put forth is a balance to you. I think that both from next question before and some of the things that you reference, those are the kinds of things that will come into play as we put the estimate together.

Sure Ralph is right.

So.

We are still moving forward with that same capital range that we talked about earlier.

We will be providing an update ralph referenced that in his earlier remarks.

From what we've heard back from PJM.

And from what the state is looking at energy efficiency in this and the next triennial. This next three year period, and so we will do that update as we go forward.

Shahriar Pourreza: But I still think the way that the businesses set up, we're not going to have to worry about whether movements because of our decoupling, we've got a smaller pension variability that Ralph just mentioned. And we've captured most of the interest rate moves. So I think the work that we have been doing over the last year and a half or so is really going to pay off to enable us to be able to speak with confidence on that range when we put it out.

But that will be the exact.

The way that that will roll through is we have a range of capital we will update that range.

On the other side of that we will have what remains from the standpoint of that debt capacity, but I think you should still look with us look to us with confidence that we will be able to fund that.

Shahriar Pourreza: What are you hearing on the nuclear PTC guidance and I guess how do you plan a business case around it? Have a refueling cycle, you've had some modest capex improvements on the back burner for nuclear? Are those plans getting closer to a decision? Point especially with the guidance? Sure, I'd say a couple things on that front. We're just to reinforce the stability that we introduced last year. We set it on the PTC floor.

The need for incremental thing.

Excellent. Thank you very clear there and then just maybe just on the topic of nuclear Ptc's I saw you've increased your hedges for 2024 the percentage of output hedged. How are you thinking about 25, I mean, obviously, we're still awaiting guidance here, but are you like as you roll forward to 2025 are you going to be less.

Hedged than before.

Anticipating some clarity on nuclear PTC or or what is the thought process there.

Yeah. So I guess, what we said to folks is that.

Shahriar Pourreza: We're not counting on anything above or beyond that and that's the way our plan is set so that should be pretty clear for you all and pretty transparent on that front. And then on the capex we have said a couple times we're moving ahead very well on the refueling cycle at Hope Creek. That work is progressing as we expected and those surprises there and we'll probably be hearing something in 24 from us a little bit more on the upgrades we plan for Salem and the time you know that.

We don't have the exact calculation that's going to be made and what we've tried to do is think through.

What may come to US right. So when you have some of that uncertainty you try to think through the the ultimate answer that will come and then trying to think through the viability of those solutions and where they may land and we've kind of reacted to that.

Thinking against the background of some of that uncertainty and so that doesn't mean that we would not be doing any hedges that means that we would be continuing to move forward our pace thinking about how that PTC may come out those rules will come out at some point, we hope sooner than later for that exact reason credit should shape, how youre thinking about it.

Shahriar Pourreza: Okay, perfect. I think it's on cal 24 though. Those will pay dividends to go down the road. Got it. And again, sorry, just getting in with a lot of questions. One of my questions. When do you plan on giving 24 guidance? We have said that we're going to give it after we finish our business planning process with our board.

But I'd say don't think terribly different from what we had been doing.

With our hedging versus what we're doing now within 25 as a general.

Ralph Larosa: We have a review of our board that we do in December, so we'll be doing it in December. Okay, fantastic. Thank you guys so much. Have a great morning. Appreciate it. Yeah, thank you.

No I appreciate that that color and denim and congrats to you on the team for the quarter.

Dan Craig: Our next question is from the line of their guest Chopra with every core ISI. Please use your questions. Hey. Hey, Ralph. Good morning. Thanks for getting one time. Hey, just to find our point on equity. I think this is going to be a dance wheelhouse, but you showed this slide in the June investor deck, which kind of talked the 4 billion and balance sheet capacity. How does that look now? As you know, obviously the puts and takes.

Thanks again.

Our next question comes from the line of David <unk> with Morgan Stanley. Please proceed with your questions.

Hey, Ralph Hi, Dan Good morning, Hey, David.

Let's see I'm wondering if you could touch on your latest expectations for the rate case, just has anything changed around your thinking for the revenue requirement and anything on the capital or O&M side that would shift your expectations as to what you file coming up this quarter.

Dan Craig: How does that look now? And then part two, just just to be clear, as you roll forward the plan. There's energy efficiency. There's obviously the transmission opportunity. Should we expect no equity as well as you roll forward to 2028? Yeah, so look, I'll give it today and again, give you some details, but that both of those things are very good news for us, the transmission opportunity, as well as the energy efficiency growth that we see from the triennial at the BP you put forth.

Yes, no. There is nothing really that that I'd say, we've been saying all along what our plans are I think the only thing that youll see is that this is what this rate case gives us the opportunity to enroll in a lot of the other things that people have been asking about whether it be interest rates or or pension right and the impact of pension expenses might have on us.

So.

So those are the only two real updates I would say that we have and we're keeping an eye on the.

The capex, but most of those items that we talked about weather GSM fee, which we closed on.

Dan Craig: But dance answer, I believe is going to be exactly the same to you. We do not need equity or anything that looks like it. Yeah, I guess Ralph is right. So, you know, we are still moving forward with that same capital raise that we talked about earlier. We will be providing an update Ralph referenced that in his earlier remarks, both from what we heard back from PJM and from what the state is looking at on energy efficiency and this next trienium, this next three or period.

The transmission opportunity that exists, which will not be with the state of new Jersey or energy efficiency would be a clause mechanism. So nothing really that I would say is driving a big change to us.

Dan anything you want to know just just one thing David the one thing that I think.

We could lose sight of and Shouldnt is that.

With all of the focus at a higher interest rate environment.

There is we got some questions about what might be the implications to any kind of an impact on the rate case as we go forward and I've reminded folks.

Dan Craig: So, we will do that update as we go forward. Look, that will be the exact. The way that that will roll through is we have a range of capital. We will update that range and on the other side of that, we will have what remains from the standpoint of that debt capacity. But I think you should still look with us, look to us with confidence that we will be able to fund that without the need for income.

This is the first rate case filing will do since 2018.

And so the early part of that period between rate cases, we saw lower interest expense and so yes, what we're seeing in this current environment is higher and so there could be some costs that would move through with the overall revenue requirement for the weighted average cost of capital but.

Dan Craig: Next one. Thank you. Very clear there. And then just maybe just on the topic of nuclear PTCs, I saw you've increased hedges for 2024, the percentage of output hedged. How are you thinking about 25? I mean, obviously we are still awaiting guidance here, but are you like, as you roll forward to 2025, are you going to be less hedged than before, you know, anticipating some clarity on nuclear PTC or what is the top process there?

Thinking about stepping through the years, where interest rates were lower and now we're at a higher rate environment net net.

That does not.

Calculate into a considerable rate increase because of interest rates and so that's not a rate pressure as we go into this just as a as a reminder.

Yes got it okay, great. That's helpful and then we've got.

New leadership at the Commission I was just wondering if you could give your perspectives on things.

Dan Craig: Yeah, I guess what we've said to folks is that we don't have the exact calculation that's going to be made and what we try to do is think through what may come to us, right? So when you have some of that uncertainty, you try to think through the ultimate answer that will come and then try to think through the viability of those solutions and where they may land and we've kind of reacted to that thinking against the background of some of that uncertainty.

The overall kind of priorities.

Of the commission and.

How theyre going to treat maybe settlements or just overall views on.

Your your opportunities to work with them now going forward under the new under new leadership and a different.

Set of commissioners.

Yes, David sure look I would.

Opinions really don't matter as much as results and I have to tell you I could not be more pleased with the board and the action. They took on our gas system modernization program that.

Dan Craig: And so that doesn't mean that we wouldn't be doing any hedges. That means that we would be continuing to move forward a pace thinking about how that PTC may come out. Those rules will come out at some point. We hope sooner than later for that exact reason, right? It should shape how you're thinking about it. But I'd say it don't think terribly different from what we had been doing with our hedging versus what we're doing now within 25 as a general.

Quick action and decisive action to move that forward.

<unk> shows a couple of things one is the work that we're doing and how it's helping the environment for methane reduction standpoint is aligned with the policies of the state.

And I would also say the.

Dan Craig: I appreciate that that colored Dan and congrats to you and the team for the quarter.

The desire for the board to continue to reach settlement was exhibited there as well right. So both of those things are are real positives and just should reinforce that for only us in our opinion, but for you all that.

David Arcaro: Thanks, you're good. Our next question comes from the line of David Akaro with Morgan Stanley. Please proceed with your questions.

David Arcaro: Hey, Ralph. Hey, Dan. Good morning. Hey, David. Let's see, wondering if you could touch on your latest expectations for the rate case, just as anything changed around your thinking for the revenue requirement, anything on the capital or own M side that would shift your expectations as to what you file coming up this quarter. Yeah, no, there's nothing really that that I said, you know, we've been saying all along what what our plans are.

We are we are in the same space that we weren't before.

Yeah.

Okay excellent great. Thanks, so much I appreciate it.

Our next question comes from the line of Jeremy Tonet with Jpmorgan. Please proceed with your question.

Hi, good morning.

Hey, Jeremy.

Just wanted to kind of I guess build a little bit on some of the points you laid out there.

David Arcaro: I think the only thing that you'll see is that this is what this rate case gives us the opportunity to roll in. And a lot of the other things that people have been asked about whether it be interest rates or or pensions, right? And any impact that pension expenses might have on us. So that's those are the only two real updates I would say that we have and we're keeping an eye on.

With the GSM <unk> extension can you frame this settlement versus capital plan assumptions versus the longer term goals of GSM <unk> III the state's.

Ongoing energy transition discussions factoring into the settlement just kind of looking at this more holistically, yes, so look here's the way I would frame it.

David Arcaro: The capex, but most of those items that we talked about whether a GSMP, which we closed on transmission opportunity exists, which would not be with state and New Jersey or energy efficiency would be a clause mechanism. So nothing really that I would say is driving a big change to us and anything you want to know just just one thing, David, the one thing that I think we could lose sight of and shouldn't say is that, you know, with all of the focus on a higher interest rate environment, that there's, we've got some questions about what might be the implications to any kind of an impact on the rate case as we go forward and I've reminded folks.

Two years that we that we agreed upon or at a higher run rate than they would've otherwise been based upon our filing so that's a real positive.

I think when you look at the two areas that were of concern in the conversation there were minimal from an investment standpoint, one was the renewable natural gas piece of our filing any otherwise the hydrogen blending.

Those are fair policy conversations that need to take place. So the board wanted to move ahead.

From a commitment standpoint to get the work done to continue to methane reductions.

So we're completely aligned there the run rate was higher and I think we just participate in seat where policy wants to go on those other two items and make a decision on that but from a long term strategy standpoint, our commitment to reduce the cast iron in our system remains and it's supported at this time by.

David Arcaro: This is the first rate case filing will do since 2018. And so the early part of that period between rate cases, we saw lower interest expense. And so yes, what we're seeing in this current environment is higher and so there could be some cost that would move through the overall revenue requirement from the we have cost capital. But thinking about stepping through years where interest rates were lower and now we're in a higher rate environment net net that does not calculate into a considerable rate increase because of interest rates. And so that's not a rate pressure as we go into this just as a as a reminder. Yeah, got it. Okay, great. That's helpful.

The commission, so I see I see nothing nothing really changing from that standpoint, yes, I think.

The backdrop of the capital plan, Jeremy we had talked about at the low end of the range being consistent.

Consistent with where we were in the high end of the range being more like what we had for this particular item more like what we had filed for <unk> three and so we were above our run rate, but not as high as we had filed so we're firmly within that capital plan range.

Got it that's very helpful. There and then following up with hydrogen if if I could what's the latest messaging progress behind the hydrogen hub evaluation in the northeast mid Atlantic Darren.

Should we think about the hydrogen opportunity across local.

David Arcaro: And then, you know, we've got new leadership at the commission. I was just wondering if you could give perspectives on, you know, if you think the overall kind of priorities of the commission and, you know, how they're going to treat maybe settlement or just overall views on, you know, your opportunities to work with them now going forward under, you know, new leadership and a different set of commissioners. Thanks. Yeah, David, sure.

Industry pegs nuclear fleet gas blending regional renewable electrification overall, what can you share there every.

First of all we participated to the hub application as long as the northeast hub and the second was the mark to the Mark to hub was the one that was selected by the dog in this area and we're really happy and proud of being part of that that solution.

David Arcaro: Look, I would opinion is really no matter as much as, as a result. And I have to tell you, I could not be more pleased with the board and the action they took on our guest system on our nation program. That quick action and decisive action to move that forward shows a couple of things. One is the work that we're doing and how it's helped any environment from methane reduction standpoint is aligned with the policies of the state.

I think it's going to provide us with a lot of long term growth opportunities in the region and I say that from an economic development standpoint for the state.

I think we will have a <unk>.

Real opportunity to place, an electrolyzed or somewhere in South Jersey, I think we'll have an opportunity to make use of some pipelines that exist in South Jersey, and some storage that exists in South Jersey for hydrogen as well as some some.

And users that are in that area, both in the Delaware and across the river in Southern Pennsylvania.

David Arcaro: And I would also say the desire for the board to continue to reach settlement was exhibited there as well. Right. So both of those things are, are real positives and just should reinforce that for only us and our opinion, but for you all that, we are, we are in the same space that we work before.

Our refinery standpoint.

That's from the generic economic standpoint, I think our plate here will be really determined when we see what the rules come out from from the IRI and how the PTC is going to interact with both.

David Arcaro: Okay, excellent. Great. Thanks so much. I appreciate it.

Both the nuclear.

PTC and the.

And so you might think of as Pancaking hydrogen credits on top of that or not so we will look at that we don't have any of that baked into our plan I think that's the key for you to take away it's upside for us.

Jeremy Tonet: Our next question is from the line of Jeremy Tune with JP Morgan. Pleasure to hear your question.

Jeremy Tonet: Hi, good morning. Hey, I just wanted to kind of, I guess, build a little bit on some of the point you wait out there. With the GSMP to extension, can you frame the settlement versus capital plan assumptions and versus the longer term goals of GSMP three, the state's ongoing energy transition discussions, battering into this settlement just kind of looking at this more holistically. Yeah, so look, here's the way I frame it.

I will also tell you that.

We have no expectation of being part of anything thats going to create any commodity risk for us on the hydrogen front. So we will look at this will help the state achieve some economic growth.

They have done in the.

The first part of our state and then we will.

We will see what role wheat, specifically play within it as an enterprise.

Got it that's very helpful and I think you guys have been pretty clear on no equity. So I will fully we're point refrain from that part.

Jeremy Tonet: The two years that we, that we agreed upon are at a higher run rate than they would have otherwise been based upon our filing, so that's a real positive. I think when you look at the two areas that were of concern in the conversation, they were minimal from an investment standpoint. One was the renewable natural gas piece of our filing, any other was the hydrogen blending. And those are fair policy conversations that need to take place.

I would just say that again, if you'd like Jeremy.

[laughter] no we heard you loud and clear, but just I guess.

And in December any updates you get there.

Getting kind of a capex update in December.

And then would that be updated kind of later on 24, as we kind of some of the incremental items come through and just.

Jeremy Tonet: So the board wanted to move ahead from a commitment standpoint to get the work done to continue to methane reductions. So we're completely aligned there. The run rate was higher. And I think we just participate and see where policy wants to go on those other two items and make a decision on that, but from a long term strategy standpoint, our commitment to reduce the cast iron and our system remains. And it's supported at this time by the commission.

The clarity comes through on some of the different items and if so how does the expected.

E filing matchup with how you're thinking about it at last year's Capex update yes.

Yeah. So Jeremy so we're going to give you a partial update on capex through 2007.

And then we will give you more in in January.

From a from a capital roll forward standpoint, so that's kind of the rhythm the December update will be a little bit of the run rate that we've talked about for GSM <unk> and the E filings that we have the file which will be in the beginning of December for the for the BPM.

Jeremy Tonet: So I see, I see nothing, nothing really changing from that standpoint. Yeah, I think it against the backdrop of the capital plan, Jeremy, we had talked about the low out of the range being a consistent with where we were on the high end of the range being more like what we had for this particular item or like what we had filed for for GSMP three. And so we were above our run rate, but not as high as we had filed. So we're firmly within that capital plan. I got it. That's a very helpful there.

That said.

What we've been indicating is that that finally, we will.

You look at the at the Triennial you would expect it to be a little bit more than we have seen in the past from a run rate standpoint, we're still assessing it I personally have not seen the final products from our teams. So I Couldnt give you any more details even if I wanted to.

Jeremy Tonet: Then following up with Hydrogen, if I could, what's the latest messaging progress behind the Hydrogen Hub evaluation in the Northeast, Mid-Lenic there? And how should we think about the hydrogen opportunity across local industry, pegged nuclear fleet, gas and blending, regional, renewable, electrification overall? What can you share there? Yeah, so Jeremy, we, first of all, we participated on two of the hub applications. One was the Northeast hub, and the second was the Mach 2.

But.

The indication from everyone, who has looked at that order that came out from the <unk> is that there'll be more opportunity for us there.

Got it Super helpful. I'll leave it there thanks.

Our next question is from the line of Julien Dumoulin Smith with Bank of America. Please proceed with your question.

Jeremy Tonet: The Mach 2 hub was the one that was selected by the DOE in this area. And we're really happy and proud of the impart of that, that solution. I think it's going to provide us with a lot of long-term growth opportunities in the region. And I say that from an economic development standpoint for the state. I think we'll have a real opportunity to place an electrolyzer somewhere in South Jersey. I think we'll have an opportunity to make use of some pipelines that exist in South Jersey, and some storage that exists in South Jersey for Hydrogen, as well as some end users that are in that area, both in Delaware and across the river in southern Pennsylvania from a refinery standpoint.

Hey, good morning team. Thank you very much I appreciate it.

Yes.

Hey, Howdy guys. Thank you so just trying to bring the call together here tie it up a little bit look you talk about December and then January you guys have a lot of different moving pieces coming together right.

And so you've got this <unk> get the energy efficiency of the rate case proposal you got the PJM transmission I think in your comments you said December presumably it again your comment on this new load growth update from PJM December January as well I just wanted maybe just to ask it more directly how do you think about that right.

Based CAGR you said specifically in your remarks again today about being that run rate being the low end of that you commented just now to Jeremy amongst others about seeing a new elevated run rate. How do you think about that that 6% plus rate base outlook, how does that fit into the five to seven and what pieces are we.

Jeremy Tonet: That's from the generic economic standpoint. I think our play here will be really determined when we see what the rules come out from the IRA and how the PTC is going to interact with both the nuclear PTC and what you might think of as pan-caking, hydrogen credits on top of that or not. So we'll look at that. We don't have any of that baked into our plan. I think that's the key for you to take away.

Missing here does that come into the combination if you will in January here. It seems like a lot of positives no equity low and the rate base CAGR clearly seeing a higher run rate just I'm trying to tie this together if I can.

I'm going to give Dan.

A crack at some of this too, but I just want to reinforce I apologize. If I said, we were at the low end I definitely done that.

Jeremy Tonet: It's upside for us. I will also tell you that we have no expectation of being part of anything that's going to create any commodity risk for us on the hydrogen front. So we'll look at this. We'll help the state achieve some economic growth up, you know, that they have down in the press part of our state. And then we'll see what role we specifically play within it as an enterprise. Got it. That's very helpful. And I think you guys have been pretty, pretty clear on no equity. So I will fully refrain from that part. But we heard you loud and clear.

I did not mean to say that if I said it earlier it was not my intention. So we were within the range. We've said that and I would agree with you that there is a lot of positive momentum here, but nothing as firmed up yet and so that's why we are where we are and we will give you that information when we get later in December for two items.

I mentioned, the <unk> and it will give you some more.

In January but then you want to add anything to that.

I think that says a joy there was there was not an update with respect to those numbers today.

We have reaffirmed those numbers today.

Jeremy Tonet: But just I guess in December, you know, any update to get there. I mean, we'll be getting kind of a cat as some of the incremental items come through and just, um, the clarity comes through and some of the different items. And if so, how does he expected, uh, EE filing match-up with how you're thinking about it at last year's cat-backs update? Yeah. So, uh, Jeremy, so we are going to give you a partial update on cat-backs through 27.

We do step forward.

It has and it continues to be a range and so we've gotten some indication from PJM that there could be some incremental transmission spend its in the $400 million range. We've got some indication by going through that that Btu triennial that he could see a little bit of a lift frankly <unk> was a higher run rate, but was not as much as GSM phase III was filed for.

So theres going to be puts and takes and I think what we're saying is that youre going to see that update.

In fall and some of those ranges, having a little bit more color around them because we've stepped through another series of months as we approach the end of the year and move into into year end.

Jeremy Tonet: Um, and then we will give you more in January, uh, from a, from a capital roll phone standpoint. So that's kind of the rhythm. The December update will be a little bit of the run rate that we talked about for GSMT and the EE filings that we have the file which will be in the beginning of December for the, for the BPO. That said, what we've been indicating is that that filing will, you know, if you look at the triennial, you would expect it to be a little bit more than we have seen in the past from a run-right standpoint.

Got it a couple of clarifications. If you could if you don't mind I was saying earlier six to seven and a half at least at the low end of 6% seems like it needs to come up through 'twenty seven would you be rolling forward. The planned 28, and then even more specifically within that how do you think about the linearity if we're going to bring up this term.

Again.

In terms of earnings.

Just off of 'twenty, three but maybe off of a 24 baseline if you will.

Jeremy Tonet: We're still assessing it. I personally have not seen the final product from our team so I couldn't give you any more details even if I wanted to, but, you know, the indication from everyone who has looked at that order that came out from the BPU is that there'll be more opportunity for us there. Got it. Super helpful.

If you don't mind.

Jeremy Tonet: I'll leave it there. Thanks.

Yes.

Look Julien we said six to seven five and that is where we still are so if you're talking about for that number where at the 6% to seven and a half.

What we're trying to do is as we do step forward, we will give you indication as to what these things start to look like the filing for <unk> has not been made.

And we don't have that final answer from PJM with respect to that transmission. So I think those will follow.

Julien Dumoulin Smith: Our next question is from the line of Julien Dumoulin Smith with Bank of America. Please excuse your question. Thank you.

As we do step forward that base will move up and move some incremental capital as we extend the years of our forecast will need to come up a little bit. These are the kinds of things that we'll do that so I think you ought to think about it is exactly how we presented it that we're affirming those numbers as we step forward, we'll give you a little bit more color on 24 come December and then we'll move into a longer term.

Julien Dumoulin Smith: Good morning, team. Thank you very much. Appreciate it. Thank you. Hey, howdy guys. Thank you. So just trying to bring the call together here. Tie it up a little bit. Look, you talk about December and then January. You guys have a lot of different moving pieces coming together, right? And so you've got this GSMP. You've got the energy efficiency. You have the Ray case proposal. You have the PGM transmission. I think in your comments, you said December, presumably.

Update on the other side of our overall finalization of our plan.

Excellent Alright, guys, we'll talk to you and good luck. So you soon thanks Joey Thanks Julia.

Julien Dumoulin Smith: And again, you comment on this new load growth update from PGM December, January as well. I just want to make maybe just to ask it more directly. How do you think about that rate based tagger? You said specifically in your remarks again today about being, you know, that run rate being the low end of that. You comment to just get a Jeremy among others about seeing a new elevated run rate. How do you think about that that 6% plus rate based outlook?

Our next question comes from the line of Michael Sullivan with Wolfe Research. Please proceed with your question.

Hello, Marty.

How's it going.

Hey.

Sorry to belabor, it but just to China.

Tie it up on the year end call update so fair to say that the earnings CAGR will be 2024 to 2028.

Julien Dumoulin Smith: How does that fit into the 5 to 7? And what pieces are we missing here to that that come back? I mean, the combination, if you will, in January here seems like a lot of positives, no equity, low end of rate based tagger, clearly seeing a higher run rate. I'm trying to tie this together if I can. I guess that 5 to 7. I'm going to give Dana a crack at some of this too.

Is that right.

That'll be in the January timeframe Thats, what we said in the prepared remarks, we will be given that update at that time.

Exactly.

Okay.

And kind of consistent with how you laid it out at the analyst day and on the nuclear side of things.

We should assume.

Julien Dumoulin Smith: But I just want to reinforce how I apologize if I said we were at the low end. I definitely didn't that. I did not mean to say that. If I said it earlier, it was not my intention. So we're within the range. We've said that. And I would agree with you that there's a lot of positive momentum here, but nothing is firmed up yet. And so that's why we're where we are and we will give you that information when we get later in December for the two items that I mentioned, the E and GSMP. And we'll give you some more in January. But then you want to add anything to that.

The nuclear PTC four level.

Anywhere else being okay right Yep.

Okay.

And then lastly, just on the credit side of things. So I think I saw earlier this week.

Moody's took a favorable.

Shannon or outlook on the power side of things any potential read through to the consolidated view here and how they might be thinking about your metrics and thresholds.

Yeah nothing that.

We're aware of on that on the parent level, but I will tell you is getting some good work by Dan and his team our Treasury Department to explain what's what's gone on in our on the power side and we were very happy and I appreciate you recognizing.

Julien Dumoulin Smith: No, I think that says it. So there was there was not an update with respect to those numbers today. We have reaffirmed those numbers today. As we do step forward, it hasn't. It continues to be a range. And so we've gotten some indication from PJ and that there could be some incremental transmission spent. It's in the 400 million range. We've gotten some indication by going through that that BPU Triennial that he could see a little bit of a left.

Moody's.

Moving to the letter that went out so thanks on that front, yes, I think what they did Michael made sense right. If you think about.

Nuclear has been and what it is now that PTC does provide that exact floor that you are referencing and so we do intend to continue to.

Julien Dumoulin Smith: Frankly, the GSMP was a higher run rate, but was not as much as GSMP three was filed for. So there's going to be puts and takes. And I think what we're saying is that you're going to see that update in full and some of those ranges having a little bit more color around them because we've stepped through another series of months as we approach the end of the year and move into your end.

To talk about that within our numbers.

And nothing beyond that but certainly that stabilization is supportive of exactly what moodys does.

Okay, great. Thank you very much.

Next questions come from the line of currently Davenport with Goldman Sachs. Please proceed with your question.

Hey, good morning, Thanks for taking my questions. Most of mine have been answered, but just two quick sort of housekeeping questions on nuclear if I could.

Julien Dumoulin Smith: Got it. Couple of clarifications there. If you if you don't mind, I was saying earlier, six to seven and a half, at least the six, the low end of six percent seems like it needs to come up through 27. Would you be rolling forward the plan to 28 and then even more specifically within that, how do you think about the linearity we're going to bring up this term again in terms of earnings, you know, not just off of 23, but maybe off of a 24 baseline, if you will, if you don't mind.

First one are there any updates in terms of nuclear PTC in terms of your view on when we might get clarity there and then the second one is just is there anything to flag so far on the Salem, one refueling outage in terms of how that's been progressing from both a timing and a budget perspective.

Yes look I'll take the last one.

The team continues to perform excellent work there and there is nothing that we have there to discuss other than a normal outage consistent with our business plan. So.

Julien Dumoulin Smith: [inaudible] Yeah, look, Julien, we said 67 and a half and that is where we still are. So if you're talking to me up from that number, we're at the 67 and a half. What we're trying just to do is that as we do step forward, we will give the indication as to what these things start to look like the filing for ease not been made. We don't have that final answer from PJM with respect to that transmission.

Just a great opportunity for me to give kudos to the team down there. So thank you for that.

Dental that'll give you the PTC piece.

I presume treasuries also doing excellent work down there, but they're not reporting out to decide exactly when.

Julien Dumoulin Smith: So I think those will follow. And as we do step forward, that base will move up and we'll send incremental capital as we extend the years of our forecast. We need to come up a little bit. These are the kind of things that will do that. So I think you ought to think about it as exactly how we presented it that we're affirming those numbers. As we step forward, we'll give you a little more call on 24 come December. And then we'll move into a longer term update on the other side of our overall finalization of our plan.

We don't have any particular color on timing.

Julien Dumoulin Smith: Excellent.

Other than to continue to reinforce this that sooner is better than later, but we've not heard anything back yet.

Great I appreciate that color I'll leave it there thanks Carlos.

Carlos Carlos.

Our next question comes from the line of Travis Miller with Morningstar. Please proceed with your question.

Hello, everyone and thank you.

Travis.

Real quick to go and just touch on Capex.

Michael Sullivan: Alright guys, we'll talk to you then. Good luck. See you soon. Thanks, Julien.

That 200 million is that could you characterize that as new projects is that inflation on existing projects pull forwards I wonder if you could clarify that real quick.

Michael Sullivan: Our next question comes from the line of Michael Sullivan with more research. Please just see with your questions.

Michael Sullivan: Hello, Michael. Hey, everyone. Hey, how's it going? Hey, sorry to believe, but just to, you know, tie it up on the year end call update. So fair to say that the earnings cager will be 2024 to 2028. Is that right? That'll be in the January timeframe. That's what we said in the prepared remarks. We will be given that update at that time. Exactly. Okay. And kind of consistent with how you laid it out at the analyst day on the nuclear side of things. We should assume the nuclear PTC for level with, you know, anything else being. Okay, right. Yep. Okay.

All right.

What that really is is the team's been doing a great job of knocking out the work that we have in front of us and their head on a couple of things that that is.

Think of it as just getting some of the work done a little bit quicker than.

Anticipated and we'll follow up with a more fulsome update as we go forward.

Okay, so would that pull out of 2024.

At all or not a relationship there.

I would argue that if you maybe I'll think about it that way, but as we give you an update you'll be able to see what happens because 2025 could get pulled back into 24, it's a little bit fluid as they go forward and if there had on where they are right now you could see some other things coming back into 24, So I wouldn't think about it as a reduction in 24 I think about it is just get a little bit more work done early and.

Dan Craig: And then last just on the credit side of things. So I think I saw earlier this week, movies took a favorable action or outlook on the power side of things. And any potential research into the consolidated due there and how they might be thinking about your metrics and thresholds. Yeah, nothing that I, that we're aware of on the on the parent level, but I will tell you, you know, again, some good work by Dan is team.

We will continue to do so.

True that up as we go forward.

Dakota, There was the comments I made also just indicate there is a lot of interest on the energy efficiency front and we've been able to continue to.

To expand there so.

It's all consistent with what I indicated on the triennial and the support we're getting from the CPU.

Okay perfect. That's helpful. And then I Love your question on offshore wind I know, you're not involved in that anymore, but obviously a lot of stuff coming out in New York any thing Youre hearing and regulatory discussions political halls.

Dan Craig: I tried to inform him to explain what's gone on in our on the power side and we were very happy and I appreciate you recognizing. Moody's, Moody's letter went out. So thanks on that front. Yeah, I think what they did, Michael made sense, right? If you think about what nuclear has been and what it is now that PTC does provide that exact floor that you're referencing. And so we do intend to continue to talk about that within our numbers and nothing beyond that. But certainly that stabilization is supportive of exactly what Moody's did. Okay, great.

Dan Craig: Thank you very much.

You are hearing in terms of New Jersey.

Yes.

No the only truck.

No I mean look we're just we're reading what you're all reading.

Again just.

Happy with the decision we made at this point.

Okay very good that's all I had thanks.

Thanks, Jeff.

Our next question is from the line of Anthony crowded with Mizuho. Please proceed with your question.

Carly Davenport: Next questions come from the line of Carly Davenport with Goldman Sachs. Please assume your questions. Hey, good morning. Thanks for taking the questions. Most might have been answered, but just just to quick sort of housekeeping questions on nuclear if I could. First one, are there any updates in terms of nuclear PTC in terms of your view on when we might get clarity there? And then the second one is just, is there anything to flag so far on the Salem one, refueling outage in terms of how that's been progressing from both the timing and a budget perspective?

Hey, good afternoon, Ralph Good afternoon, Dan Hey, Anthony afternoon Anthony.

Happy Halloween Ralph I, just wanted I mean Halloween.

Just apologies the housekeeping on cadence.

Rate filing in December and we get 2024 guidance earnings guidance in December a little Capex update and then on the <unk> call. We get an update on rate base CAGR earnings growth CAGR is that does that.

And I get that correctly.

That's about the rhythm we expect I don't want to be tied into an hour a day, but yes thats the rhythm we expect yes.

Ralph Larosa: Yeah, look, I'll take the last one. The team continues to perform excellent work there and there's nothing that we have there to discuss other than a normal outage system with our business plan. So just a great opportunity for me to give kudos to the team down there. So thank you for that and Daniel, that'll give you the PTC piece. Yeah, and I presume Treasury is also doing excellent work down there, but they're not reporting out to us, not exactly when. So we don't have any particular color on timing other than to continue to reinforce, but sooner is better than later, but we've not heard anything back in.

And then just.

Easy question.

You talked about the financing maybe interest rate hedges earlier in the call.

Yes.

Bond that's due I guess November you guys have taken care of that is also one do I guess in June of next year. It was an attractive rate at two 9%.

Has that been included in your interest rate hedges or what are the plans for that maturity.

Yes, so we'll take that out and step forward and actually I think the important element is that.

Last November as we gave that update we presume rates, including spreads that were.

Dan Craig: Great, I appreciate that color, I'll leave it there. Thanks, Carly's Carly.

Pretty comparable to where we are we did capture every single dollar of it but I think the delta between what we thought it was going to be at and where we are currently from a market perspective.

Travis Miller: Our next question comes from the line of Travis Miller with Morningstar.

Travis Miller: Lisa, see you for your questions. All right, one, thank you. Hello, Travis. Now, real quick to go just talk on CapEx, that 200 million, is that could you characterize that as new projects, is that inflation on existing projects, pull forwards? One of you could clarify that real quick. Yeah, Travis, I think what that really is, is the team's been doing a great job of knocking out the work that we have in front of us and there are a handful of things that that is.

It is within the range. So I think we've done a nice job of getting ahead of it.

And we will take that out and like like a lot of our refinancings, we will see some higher rates as we flip them, but they are accounted for within our forecast.

Great and then lastly, I guess jumping up to Mike's question earlier about the peg power.

Outlook change I guess at Moody's.

Any thoughts to maybe potential changes at <unk>.

Parent company I believe be doubly to peg power stronger balance sheet their utility.

Travis Miller: Think of it as just getting some of the work done a little bit quicker than anticipated, and we'll follow up with a more awesome update as we go forward. Okay, so would that pull out of 2024 at all or not a relationship there? No, well, I would argue that you may be able to think about it that way, but as we give you an update, you'll be able to see what happens, because 20-25 could get pulled back into 24.

Strong balance sheet any read through on.

Maybe for your interest in moving Peg power I'm, sorry, the parent up to <unk>.

Yeah, I mean, if you take a look at it they didn't move their rating on power is just a positive outlook there and so I think that ripple effect would be would be lesser as you look at the parent, but I think on balance. It's just if you think about the overall business mix.

Travis Miller: It's a little bit fluid as they go forward, and if they're ahead on where they are right now, you can see some other things coming back into 24. So I wouldn't think about it as a reduction in 24. I think about it, just get a little bit more work done early, and we'll continue to through that up as we go forward. And the only thing I would add, there's the comments I made also, just indicate there's a lot of interest on the energy efficiency front, and we've been able to continue to expand there. So it's all consistent with what I indicated on the trial and the support again from the BPO. Okay, perfect. That's helpful.

Reflective of Ptc's and what we've done from the from an overall strategic decisions.

I think we're in a better position going forward.

Great. Thanks for taking my questions. Thanks, Anthony Operator, we'll take our last question.

That is all the time, we have for questions today, I'll turn the floor back to Mr. La Russa for closing comments.

Yeah no. Thanks, Thank you very much.

Tried to sort of play we have so much interest, but sorry, we havent, we havent, hey, listen I just.

Travis Miller: And then I love a question. I'll sure win. I know you're not involved in that anymore, but obviously a lot of stuff come out in New York. Any thing you're hearing in regulatory discussions, political halls, anything you're hearing in terms of New Jersey? No, no. Yeah, no, we're just, we're reading what you're all reading. And again, just happy with the decision we made at this point. Okay, very good. That's all I had. Thanks. Thanks, Chef.

I just wanted to thank you all for your continued interest.

Work that our team continues to produce Amazes me.

I'm really happy with with the stability that we've created here and uncertainty.

We put out some internal information earlier today, and it's just amazing the amount of things that we continue to.

To execute on and I'll just I'll just highlight a few of them here. One was this gas system monetization plan and the work that we completed we've continued to be recognized and awards.

Different different things that have come out of best employers and best companies to work for we lowered our gas bills again for customers effective October one.

Anthony Crowdell: Our next question is from the line of Anthony Crowdell with Mizzouho. This is your third question. Hey, good afternoon, Ralph. Good afternoon, Dan. Happy Halloween, Ralph. Just apologies for housekeeping on cadence. Race filing December, then we get 20, 24 guidance earnings guidance in December. A little capex update. And then on the 4Q call, we get an update on rate based keger earnings growth keger. Did I get that correctly? That's about the rhythm we expect.

We refreshed our board of directors.

So things that a lot of people.

Sometimes struggle with we just seem to be executing time and time again, so a big thanks to our team I hopefully you hear that not only in our voices, but from.

From others that we're a company that you can count on and we're executing on the work that we said we would.

And I'll just leave with this Anthony said, it but happy Halloween to everyone. I Hope you all have a safe and healthy Halloween and that's not just for yourselves, but also for your families enjoy the day take care.

Anthony Crowdell: I don't want to be tied into an hour or a day, but yes, that's the rhythm we expect. Yeah. Great, and then just an easy question. You talked about the financing, maybe interest rate hedgers earlier in the call. The bomb that's due, I guess, no memory, guys, of taking care of that. There's also one due, I guess, in June of next year, it was an attractive rate at 2.9%. Has that been included, like, in your interest rate hedgers, or what are the plans for that maturity?

Ladies and gentlemen. This concludes today's teleconference. You may disconnect. Your lines at this time and thank you for your participation.

Yeah.

Anthony Crowdell: Yeah, so we'll take that out and step forward. And I think the important element is that last November, as we gave that update, we presume rates, including spreads, that were pretty comparable to where we are. We can capture every single dollar of it, but I think the delta between what we thought it was going to be, and where we are, currently, from a market perspective, is within the range. So I think we've done a nice job of getting ahead of it, and we will take that out.

Anthony Crowdell: And like a lot of our refinancing, we will see some higher rates as we flip them, but they're a category within our forecast. Great. And then, last but not least, I jump in up to Mike's question earlier about the Pag Power Outlook change, I guess, at Moody's. I mean, any thoughts to maybe potential changes at the parent company? I believe BWA2, Pag Power, you know, stronger balance sheet there, the utility, you know, strong balance sheet, any read through on, you know, maybe, or your interest in moving Pag Power, I'm sorry, the parent up to a BWA1?

Anthony Crowdell: Yeah, I mean, if you take a look at it, they didn't move the rating on power, it's just a positive outlook there. And so I think that ripple effect would be lesser as you look at the parent, but I think on balance, it's just if you think about the overall business mix, and reflective of PTCs of what we've done from an overall strategic set of decisions. I think we're in a better position going forward. Great. Thanks for taking my questions. Thanks, Anthony.

Rob: Operator, we'll take our last question.

Rob: That is all the time we have for questions today.

Ralph Larosa: I'll turn the floor back to Mr. LaRosa for closing comment. Sorry. Yeah, no. Thank you very much. Sorry, we have so much interest, but sorry, we had it. We had a move on.

Ralph Larosa: Hey, listen, I just want to thank you all for your continued interest. The work that our team continues to produce amazes me. I'm really happy with the stability that we've created here and the certainty. We put out some internal information earlier today, and it's just amazing the amount of things that we continue to execute on. And I'll just highlight a few of them here. One was this gas system monetization plan and the work that we completed.

Ralph Larosa: We've continued to be recognized in awards, different things that have come out of best employers and best companies to work for. We lowered our gas bills again for customers, effective October 1st, and we refreshed our board of directors. So things that a lot of people sometimes struggle with, we just seem to be executing time and time again.

Ralph Larosa: So a big thanks to our team. Hopefully you hear that not only in our voices, but from others that we're a company you can count on, and we're executing on the work that we said we would.

Ralph Larosa: I'll just leave with this Anthony said it, but happy Halloween to everyone. I hope you all have a safe and healthy Halloween, and that's not just for yourself, but also for your families. Enjoy the day. Take care.

Rob: Ladies and gentlemen, this concludes today's teleconference. You may disconnect your lines at this time.

Rob: Thank you for your participation.