Q1 2024 Public Service Enterprise Group Inc Earnings Call

Yeah.

Rob: Ladies and gentlemen, thank you for standing by. My name is Rob, and I am your event operator today. I would like to welcome everyone to today's conference, Public Service Enterprise Group's first quarter 2024 earnings conference call and webcast. At this time, all 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 will need to press the star and the number one on your telephone keypad.

Ladies and gentlemen, thank you for standing by.

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

Rob: I would like to welcome everyone to today's conference call.

Rob: Quick service Enterprise groups first quarter 2024 earnings conference call and webcast.

Rob: At this time, all participants are in listen only mode.

Rob: Later, we will conduct a question and answer session for members of the financial community at.

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

Rob: To withdraw your question, please press the star and the number 2. 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, April 30th, 2024, and will be available for replay as an audio webcast on PSCG's Investor Relations website at www.investorrelations.com. I would now like to turn the conference over to Carlotta Chan.

Rob: To withdraw your question. Please press the star and the number two.

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

Rob: As a reminder, this conference is being recorded today April 32024 and will be available.

Rob: Oh for replay as an audio webcast on PSEG.

Rob: Mr Relations website at https colon forward slash forward Slash <unk>.

Rob: Investor that PSEG Dot com.

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

Carlotta N. Chan: Please go ahead.

Carlotta N. Chan: Good morning, and welcome to PSEG's first quarter 2024 earnings presentation. On today's call are Ralph LaRosa, Chair, President, and CEO, and Dan Cregg, Executive Vice President and CFO.

Carlotta N. Chan: Good morning, and welcome to Pseg's first quarter 2024 earnings presentation on today's call are Ralph La Rosa Chair, President and CEO, and Dan Craig Executive Vice President and CFO.

Carlotta N. Chan: The press release, attachments, and slides for today's discussion are posted on our IR website at investor.pseg.com, and our 10-Q will be filed later today. PSEG's earnings release and other matters discussed during today's call contain forward-looking statements and estimates that are subject to various risks and uncertainties. We will discuss non-GAAP operating earnings, which differs from net income, as recorded in accordance with generally accepted accounting principles 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 material. Following the prepared remarks, we will conduct a 30-minute question-and-answer session. I will now turn the call over to Ralph LaRossa.

Carlotta N. Chan: The press release attachments and slides for today's discussion are posted on our IR website at Investor PSEG Dot Com and our 10-Q will be filed later today.

Carlotta N. Chan: <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 discuss non-GAAP operating earnings which differs from net income as reported in accordance with generally accepted accounting principles in the United States. We include reconciliations of our non-GAAP.

Rob: Financial measures and a disclaimer regarding forward looking statements on our IR website and in today's materials.

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

Ralph A. LaRossa: Thank you, Carlotta. Good morning to everyone, and thanks for joining us to review PSCG's first quarter 2024 results. BSEG's financial results for the first quarter are in line with our full year expectations for 2024, and we are reaffirming our non-GAAP operating earnings guidance of $3.60 to $3.70 per share. We are also continuing to execute on our long-term strategy to grow PSEG's non-GAAP operating earnings by 5-7% through 2028, which we are also reaffirming today.

Ralph A. LaRossa: Thank you Carolina.

Ralph A. LaRossa: Turning to everyone and thanks for joining us to review Pseg's first quarter 2024 results.

Ralph A. LaRossa: Pseg's financial results for the first quarter are in line with our full year expectations for 2024, and we are reaffirming our non-GAAP operating earnings guidance of $3 60 to $3 70 per share.

Rob: We are also continuing to execute on our long term strategy to grow Pseg's non-GAAP operating earnings by five 7% through 2028, which we are also reaffirming today.

Ralph A. LaRossa: This will be accomplished by investing in energy infrastructure and energy efficiency programs that support greater electrification of transportation, homes, and workplaces, while also reducing greenhouse gas emissions while helping our customers lower their bills. Turning to the first quarter of 2024, TSEG reported net income of $1.06 per share compared to $2.58 per share in 2023, which reflects the absence of mark-to-market gains that benefited first quarter gap earnings in 2023. Non-GAAP operating earnings were $1.31 per share in the first quarter of 2024 compared to $1.39 per share in 2023. As a reminder, our non-GAAP results exclude the items shown in Attachments 7 and 8, which we provide with earnings relief.

Rob: This will be accomplished by investing in energy infrastructure and energy efficiency programs, which support greater electrification of transportation homes and workplaces, while also reducing greenhouse gas emissions, while helping our customers lower their bills.

Rob: Turning to the first quarter of 2020 for PSEG reported net income of $1 six per share compared to $2 58 per share in 2023.

Rob: Which reflects the absence of mark to market gains that benefited first quarter GAAP earnings in 2023.

Rob: non-GAAP operating earnings were $1 31 per share in the first quarter of 2024 compared to $1 39 per share in 2023.

Rob: As a reminder, our non-GAAP results exclude the items shown in attachment seven and eight which we provide with the earnings release.

Ralph A. LaRossa: The main driver for the quarter was continued rate-based growth from investments focused on infrastructure replacement, which was offset by higher investment-related expenses. These expenses will build over the balance of 2024 as we await the resolution of our pending distribution rate case later this year. In addition, the Nuclear Production Tax Credit went into effect on January 1st, 2024, which provides our nuclear fleet with downside price protection through 2032, an important contributor to the increasing predictability of PSEG's results.

Rob: The main driver for the quarter was continued rate base growth from investments focus on infrastructure replacement, which was offset by higher investment related expense.

Rob: These expenses will build over the balance of 2024 as we await the resolution of our pending distribution rate case later this year.

Rob: In addition, the nuclear production tax credit went into effect on January one of 2024, which provides our nuclear fleet with downside price protection through 2032.

Rob: An important contributor to the increasing predictability of Pseg's results.

Ralph A. LaRossa: They will provide a detailed financial review later in the call, but I want to note for PSEG Power & Other, some margin contribution will be skewed to the back half of 2024 as we expect to realize most of the increase in 2024's gross margin versus 2023 during the second half of the year. Turning to operations, we are pleased to report that both our utility and nuclear businesses continue to exemplify operational excellence. PSE&G and PSEG Long Island met the challenge of quickly restoring service to tens of thousands of customers following severe rain and wind storms early in the year.

Rob: Dan will provide a detailed financial review later in the call, but I want to note for PSEG power. Another some margin contribution will be skewed to the back half of 2024 as we expect to realize most of the increase in 2024 is gross margin versus 2023 during the second half of the year.

Rob: Turning to operations. We are pleased to report that both our utility and nuclear businesses continue to exemplify operational excellence.

Rob: Yes, EOG and PSEG long island met the challenge of quickly restoring service to tens of thousands of customers following severe rain and wind storms early in the year.

Ralph A. LaRossa: And at PSCG Power, our nuclear fleet also operated well during the quarter, achieving a capacity factor of 96.8% and supplying New Jersey and the region with over 8 terawatt hours of reliable, carbon-free baseload energy. Shifting to an update on our pending rate case, our combined electric and gas base distribution case covering 57% of our rate base is progressing as expected at the BPU. We are currently working through the discovery and documentation phase, responding to requests for information from parties to the case, and we recently submitted updated test year financials. The procedural schedule for the case includes several weeks of built-in settlement discussions beginning later in the second quarter.

Rob: And at PSEG power, our nuclear fleet also operated well during the quarter.

Rob: Achieving a capacity factor of 96, 8% in supply in New Jersey, and the region with over eight terawatt hours of reliable carbon free base load energy.

Rob: Shifting to an update of our pending rate case, our combined electric and gas base distribution case, covering 57% of our rate base is progressing as expected at the Btu.

Rob: We are currently working through the discovery and documentation phase responding to requests for information from parties to the case and we recently submitted updated test of your financials.

Rob: The procedural schedule for the case includes several weeks of built in settlement discussions beginning later in the second quarter.

Ralph A. LaRossa: Based on recent and prior rate case timelines, we anticipate that this rate case will be settled later in 2024. As a reminder, this combined electric and gas filing proposes an overall revenue increase of 9%, with a typical combined residential, electric, and gas customer seeing a proposed increase of 12% or less than 2% compounded growth over this six-year period. During this same period, we have consistently delivered on our reputation for reliability, affordability, and nationally top-tier customer satisfaction scores.

Ralph A. LaRossa: Based on recent and prior rate case timelines, we anticipate that this rate case will be settled later in 2024.

Ralph A. LaRossa: As a reminder, this combined electric and gas filing proposes an overall revenue increase of 9%.

Rob: Would a typical combined residential electric and gas customers seeing a proposed increase of 12% or less than 2% compounded growth over the six year period.

Ralph A. LaRossa: During the same period, we have consistently delivered on our reputation for reliability affordability and nationally top tier customer satisfaction scores.

Ralph A. LaRossa: With a nonstop focus on cost containment, PSE&G continues to manage its O&M to minimize customer bills while continuing to compare favorably to regional peers for residential electric and gas service and is among the lowest in national comparisons on a share of wallet basis. Moving on to capital investments, we are on track to execute PSEG's five-year $19 to $22.5 billion capital plan through 2028. The regulated portion of that program is $18 to $21 billion, and it's focused on infrastructure replacement, as well as our clean energy future EE program. DSE&G has installed and placed into service about 1.8 million of the planned 2.3 million smart meters for our AMI program.

Rob: With our non stop focus on cost containment PSC LNG continues to manage its O&M to minimize customer bills, while continuing to compare favorably to regional peers for residential electric and gas service and are among the lowest in national comparisons on a share of wallet basis.

Rob: Now moving on to capital investments, we are on track to execute Pseg's five year, 19% to $22 5 billion capital plan through 2028.

Ralph A. LaRossa: The regulated portion of that program is $18 billion to $21 billion and is focused on infrastructure replacement as well as our clean energy future E program.

Ralph A. LaRossa: <unk> is installed and placed into service about $1 8 million of the planned $2 3 million smart meters through our <unk> program.

Ralph A. LaRossa: Still on schedule, it's still on budget for completion by the year end. These investments are projected to result in a compound annual growth in rate base of six to seven and a half percent through the 2024 through 2028 period, premised on TSE&G's year-end 2023 rate base of $29 billion, which was up 10% over the prior year, and we continue to pursue potential investment opportunities for future regulated growth. Among those opportunities, we are currently evaluating competitive transmission solicitations in the Mid-Atlantic region.

Ralph A. LaRossa: Still on schedule is still on budget for completion by year end.

Rob: These investments are projected to result in a compound annual growth in rate base of six to seven 5% through the 2024 through 2028 period.

Rob: Premised on <unk> year end 2023 rate base of $29 billion, which was up 10% over the prior year and.

Ralph A. LaRossa: And we continue to pursue potential investment opportunities for future regulated growth.

Ralph A. LaRossa: Among those opportunities we are currently evaluating a competitive transmission solicitations in our mid Atlantic region, similar to Pseg's Award of $424 million project from Pjm's 2022 window three process.

Ralph A. LaRossa: Similar to PSCG's award of a $424 million project from PJM's 2022 window three process, in April of 2024, PSC&G submitted bids to the New Jersey Board of Public Utilities, or the BPU, for its pre-build infrastructure project to support offshore wind. The BPU is expected to announce the winner or winners of the pre-billed infrastructure solicitation in the second half of 2024.

Ralph A. LaRossa: In April of 2024, <unk> submitted bids to the New Jersey board of public utilities or the Btu.

Ralph A. LaRossa: Or it's prebuilt infrastructure projects to support offshore wind.

Rob: The BPA is expected to announce the winner or winners of the prebuilt infrastructure solicitation in the second half of 2024.

Ralph A. LaRossa: DSEG is also evaluating two other upcoming regulated transmission solicitations this July. The first is the BPU's second public policy solicitation for offshore wind transmission infrastructure utilizing the state agreement approach. Second, is PJM's 2024 Regional Transmission Expansion Plan Window 1 solicitation, which is expected to include the impacts of higher load growth forecasts that have been influenced by increased electrification expectations and data center load growth throughout PJM. At power, our nuclear fleet is also pursuing multiple growth paths with modest capital spending needs.

Rob: <unk> is also evaluating two other upcoming regulated transmission solicitations. This July.

Ralph A. LaRossa: The first is to Btu's second public policy solicitation for offshore wind transmission infrastructure utilizing a state agreement approach.

Rob: The second is <unk> 2024 regional transmission expansion plan window, one solicitation.

Ralph A. LaRossa: Which is expected to include the impacts of higher load growth forecasts that have been influenced by increased electrification expectations and data center load growth throughout PJM.

Ralph A. LaRossa: At power our nuclear fleet is also pursuing multiple growth paths with modest capital spending needs.

Ralph A. LaRossa: We have previously commented on our plans for thermal upgrades at the Salem Nuclear Station, which could potentially add up to 200 megawatts of additional capacity and would qualify for Clean Hydrogen Tax Credits under current rules for both additionality and hourly matching. PSEG Nuclear has also notified the Nuclear Regulatory Commission of its intention to pursue subsequent 20-year license renewals for our three reactors in New Jersey. This would extend the operational capabilities from 2036, 2040, and 2046 for Salem Units 1 and 2 in Hope Creek to 2056, 2060, and 2066, respectively.

Ralph A. LaRossa: We have previously comment on our plans for thermal operates at Salomon nuclear station, which could potentially add 200 megawatts of additional capacity and we're qualified for clean hydrogen tax credits under current rules for both additionality and hourly matching.

Ralph A. LaRossa: PSEG nuclear is also notified the nuclear regulatory commission of its intention to pursue subsequent 20 year license renewals for our three reactors in New Jersey.

Ralph A. LaRossa: It would extend the operational capabilities from 236 2040 in 2046 for selling units, one and two and Hope Creek.

Ralph A. LaRossa: 2056, 2062 66, respectively.

Ralph A. LaRossa: Beyond these opportunities in nuclear energy, there has been discussion lately about the potential for direct power sales to data centers from our three-unit artificial island site. We have had discussions related to both sides of the meter in recent months, in the form of new business inquiries at PSC&G for mid-sized data center construction of approximately 50 to 100 megawatts, and behind-the-meter inquiries for co-located facilities that prioritize highly reliable, carbon-free baseload power from existing facilities, all without the challenges faced by non-dispatchable generation.

Ralph A. LaRossa: Beyond these opportunities in nuclear there's been discussion lately about the potential for direct power sales to data centers from our three unit artificial island site.

Rob: We have had discussions related to both sides of the meter in recent months.

Ralph A. LaRossa: In the form of new business inquiries at <unk> for mid sized data center construction of approximately 50 to 100 megawatts.

Ralph A. LaRossa: And behind the meter enquiries for co located facilities that prioritize highly reliable carbon free base load power from existing facilities.

Rob: All without the challenges faced by non dispatch of coal generation.

Ralph A. LaRossa: DSCG has a long history of aligning with New Jersey policy goals, and this data center opportunity has the potential to create a nexus between economic development and energy policy. And we stand ready to support New Jersey in its recent efforts to create an in-state artificial intelligence hub. Our New Jersey nuclear units could provide access to a highly reliable carbon-free source of baseload power and infrastructure consideration that is increasingly mission critical for large data center developers and hyperscalers.

Ralph A. LaRossa: PSEG has a long history of aligning with New Jersey policy goals.

Ralph A. LaRossa: This data center opportunity has the potential to create a nexus between economic development and energy policy and we stand ready to support New Jersey in this recent efforts to create an in state artificial intelligence hub.

Ralph A. LaRossa: Our new Jersey nuclear units could provide access to a highly reliable carbon free source of Baseload power.

Ralph A. LaRossa: In infrastructure consideration is increasingly mission critical for the large data center developers and Hyperscale.

Ralph A. LaRossa: One thing that is certain at this point is that all these opportunities in nuclear would be incremental to our long-term forecasted growth rate guidance of 5 to 7 percent through 2028, based upon that PTC threshold price. Another differentiating factor for PSEG overall is that our nuclear operations provide the business with the added flexibility to fund its current regulated investment plan without the need to issue new equity or sell assets. I'd like to close my remarks by thanking our employees for all they do and their dedication to safety, reliability, and our customers. I'll now turn the call over to Dan to discuss our financial results and outlook in greater detail, and I will be available for your questions after his remarks.

Ralph A. LaRossa: One thing that is certain at this point is that all of these opportunities and nuclear will be incremental to our long term forecasted growth rate guidance of 5% to 7% through 2028.

Rob: Based upon that PTC threshold price.

Rob: Another differentiating factor for PSEG overall is that our nuclear operations provides the business with the added flexibility to fund its current regulated investment plan without the need to issue new equity or sell assets.

Ralph A. LaRossa: I'd like to close my remarks by thanking our employees for all they do and their dedication to safety reliability and our customers.

Ralph A. LaRossa: Now I'll turn the call over to Dan to discuss our financial results and outlook in greater detail and I will be available for your questions. After his remarks.

Daniel J. Cregg: Thank you, Ralph. Good morning, everyone.

Dan: Thank you Ralph good morning, everyone.

Daniel J. Cregg: As Ralph mentioned earlier, PSCG reported net income of $1.06 per share for the first quarter of 2024, compared to $2.58 per share in 2023. Non-GAAP operating earnings were $1.31 per share in the first quarter of 2024, compared to $1.39 per share in 2023. We've provided you with information on slide 7 regarding the contribution to non-GAAP operating earnings per share by business for the first quarter, and slide eight contains a waterfall chart that takes you through the net changes quarter over quarter in non-GAAP operating earnings per share by major business.

Dan: As Ralph mentioned earlier PSEG reported net income of $1 six per share for the first quarter of 2024.

Daniel J. Cregg: Compared to $2 58 per share in 2023.

Daniel J. Cregg: non-GAAP operating earnings were $1 31 per share in the first quarter of 2024.

Daniel J. Cregg: Compared to a $1 39 per share in 2023.

Daniel J. Cregg: We've provided you with information on slide seven regarding the contribution to non-GAAP operating earnings per share by business for the first quarter.

Daniel J. Cregg: Slide eight contains a waterfall chart that takes you through the net changes quarter over quarter and non-GAAP operating earnings per share.

Daniel J. Cregg: By major business.

Daniel J. Cregg: Starting with PSE&G, which reported first quarter net income of $0.98 per share for both 2024 and 2023, this E&G had non-GAAP operating earnings of $0.98 per share for the first quarter of 2024 compared to $0.99 per share in 2023. The main drivers for both net income and non-GAAP results for the quarter were growth in the rate base from continued investments in infrastructure replacement, offset by higher distribution investment-related depreciation and interest expense, not yet reflected in rates, as well as higher O&M costs. Compared to the first quarter of 2023. Margin was 7 cents higher in total, driven by transmission at three cents per share.

Daniel J. Cregg: Starting with PSA in G, which reported first quarter net income of 98 per share for both 2024 and 2023.

Daniel J. Cregg: Yes, <unk> had non-GAAP operating earnings of <unk> 98 per share for the first quarter of 2004 compared to 99 per share in 2023.

Daniel J. Cregg: The main drivers for both net income and non-GAAP results for the quarter or growth in rate base from continued investments in infrastructure replacements.

Daniel J. Cregg: Offset by higher distribution investment related depreciation and interest expense not yet reflected in rates.

Daniel J. Cregg: As well as higher O&M costs.

Daniel J. Cregg: Compared to the first quarter of 2023.

Daniel J. Cregg: Margin was seven cents higher in total.

Daniel J. Cregg: Driven by transmission at <unk> <unk> per share.

Daniel J. Cregg: Gas margin was at a penny per share, and other utility margin added $0.03 per share. Distribution O&M expense increased five cents per share compared to the first quarter of 2023, primarily due to gas meter inspections and overhead corrective maintenance following severe rain, wind, and flooding events early in the year and tree trees. Appreciation and interest expense increased by a penny per share and three cents per share, respectively, compared to the first quarter of 2023, reflecting continued growth and investment. These costs await recovery in our pending distribution rate case, anticipated to be settled later this year.

Daniel J. Cregg: Gas margin at a penny per share.

Daniel J. Cregg: Other utility margin added <unk> <unk> per share.

Daniel J. Cregg: Distribution O&M expense increased <unk> <unk> per share compared to the first quarter of 2023.

Daniel J. Cregg: Primarily due to gas meter inspections and overhead corrective maintenance following severe rain wind and flooding events early in the year entry.

Daniel J. Cregg: And tree trimming.

Daniel J. Cregg: Depreciation and interest expense increased by a penny per share and <unk> per share respectively.

Daniel J. Cregg: Compared to the first quarter of 2023.

Daniel J. Cregg: <unk> continued growth and investment.

Daniel J. Cregg: These costs await recovery and our pending distribution rate case anticipated to be settled later this year.

Daniel J. Cregg: Lower pension and OPEB income resulting from the cessation of OPEB-related credits, which ended in 2023, resulted in a penny-per-share unfavorable comparison to the year-earlier quarter. Lastly, the timing of taxes recorded through an annual effective tax rate, which nets to zero over a full year, had a net favorable impact of $0.02 per share in the quarter compared to 2023. Weather during the first quarter, as measured by heating degree days.

Daniel J. Cregg: Lower pension and <unk> income, resulting from the cessation of OPEC related credits, which ended in 2023.

Daniel J. Cregg: Resulted in a penny per share unfavorable comparison to the year earlier quarter.

Daniel J. Cregg: Lastly, the timing of taxes recorded through an annual effective tax rate.

Daniel J. Cregg: Which nets to zero over a full year at.

Daniel J. Cregg: At a net favorable impact of <unk> <unk> per share in the quarter compared to 2023.

Daniel J. Cregg: Weather during the first quarter as measured by heating degree days.

Daniel J. Cregg: 17% warmer than normal, but 9% colder than the first quarter of 2023, which was the warmest first quarter in PSE&G's record. As we've mentioned, the Conservation Incentive Program, or CIP, limits the impact of weather and other sales variances, positive or negative, on electric and gas prices for helping PSE&G broadly promote the adoption of its energy efficiency program. The number of electric and gas customers, which is the driver of margin under the SIP mechanism, continues to grow by approximately 1% over the past year.

Daniel J. Cregg: It was 17% warmer than normal.

Daniel J. Cregg: But 9% colder than the first quarter of 2023.

Daniel J. Cregg: Which was the warmest first quarter in <unk> Records.

Daniel J. Cregg: As we've mentioned.

Daniel J. Cregg: The conservation incentive program or Sip.

Daniel J. Cregg: The impact of weather and other sales variances positive or negative.

Daniel J. Cregg: On electric and gas margins.

Daniel J. Cregg: We're helping PSE and G broadly promote the adoption of its energy efficiency programs.

Daniel J. Cregg: The number of electric and gas customers, which is the driver of margin under the Sip mechanism.

Daniel J. Cregg: Continued to grow by approximately 1% over the past year.

Daniel J. Cregg: On capital spending, as Ralph mentioned, PSC&G invested approximately $800 million during the first quarter. And we remain on track to execute on our 2024 regulated capital investment plan of $3.4 billion, focused on infrastructure modernization and electrification initiatives, which include upgrades and replacements to our T&D facilities.

Daniel J. Cregg: Our capital spending as Ralph mentioned.

Daniel J. Cregg: <unk> invested approximately $800 million during the first quarter.

Daniel J. Cregg: And we remain on track to execute on our 2024 regulated capital investment plan.

Daniel J. Cregg: A $3 4 billion.

Daniel J. Cregg: Focused on <unk>.

Daniel J. Cregg: Infrastructure modernization and electrification initiatives.

Daniel J. Cregg: These include upgrades and replacements to our T&D facilities.

Daniel J. Cregg: Last Mile Spend in the Infrastructure Advancement Program. Ongoing Gas Infrastructure Replacement Spending, Energy Strong 2 Investments, and a continued rollout of the clean energy investments in EE smart meter installation, and EV Make Ready Infrastructure. We're reaffirming our five-year regulated capital investment plan of $18 to $21 billion; this 2024 to 2028 plan includes the $3.1 billion CEF-EE2 filing made in December 2023, which would enable commitments starting January 2025 through June of 2027 based upon the BPU's EE framework, with investments being made over a six-year period. This proceeding is expected to be resolved at the BPU later this

Daniel J. Cregg: Last mile span in the infrastructure Advancement program.

Daniel J. Cregg: Ongoing gas infrastructure replacement spending.

Daniel J. Cregg: Energy strong II investments.

Daniel J. Cregg: And the continued rollout of the clean energy investments in E smart meter installation and EV make ready infrastructure.

Daniel J. Cregg: We are reaffirming our five year regulated capital investment plan of $18 billion to $21 billion.

Daniel J. Cregg: This 2024 to 2028 plan includes.

Daniel J. Cregg: Includes the $3 $1 billion CES.

Daniel J. Cregg: Two filing made in December 2023.

Daniel J. Cregg: Which would enable commitments starting January 2025 through June of 2027 based upon the <unk> framework.

Daniel J. Cregg: With investments being made over a six year period.

Daniel J. Cregg: This proceeding is expected to be resolved at the Btu later this year.

Daniel J. Cregg: Moving on to PSAG Power and Other for the first quarter of 2024, PCG Power and Other reported net income of $0.08 per share, compared to $1.60 per share for the first quarter of 2023. Now GAAP operating earnings were 33 cents per share for the first quarter of 2024, compared to non-GAAP operating earnings of $0.40 per share for the first quarter of 2023. For the first quarter of this year, net energy margin rose by three cents per share, including $0.02 favorable contribution from Nuclear, driven by the net impact of the nuclear production tax credit, which went into effect January 1st of this year, partially offset by a reduction in capacity

Daniel J. Cregg: Moving onto PSEG power and other for the first quarter of 2024.

Daniel J. Cregg: <unk> power and other reported net income of <unk> <unk> per share.

Daniel J. Cregg: Compared to a $1 60 per share for the first quarter of 2023.

Daniel J. Cregg: non-GAAP operating earnings were <unk> 33 per share for the first quarter of 2024.

Daniel J. Cregg: Impaired to non-GAAP operating earnings of <unk> 40 per share for the first quarter 2023.

Daniel J. Cregg: For the first quarter of this year net energy margin rose by <unk> <unk> per share.

Daniel J. Cregg: Including <unk> favorable contribution from nuclear.

Daniel J. Cregg: Driven by the net impact of the nuclear production tax credit.

Daniel J. Cregg: Which went into effect January one of this year.

Daniel J. Cregg: Partially offset by a reduction in capacity revenue.

Daniel J. Cregg: Also, an energy margin, gas operations increased by a penny per share compared to the year earlier quarter. Importantly for 2024, while the PTC begins this year, there will be a shape to our results per quarter as we move through the year.

Daniel J. Cregg: Also in energy margin gas operations increased by a penny per share compared to the year earlier quarter.

Daniel J. Cregg: Importantly for 2024, while the PTC begins this year, there will be a shape to our results per quarter as we move through the year.

Daniel J. Cregg: We anticipate realizing the majority of the increase in the 2024 gross margin over the 2023 gross margin during the second half of the year based upon the shape of our underlying hedges. This will differ from last year, when TCG Power realized most of the step-up in the annual hedge price in the first quarter, based on lower pricing in the winter of 2022 compared to 2023. O&M increased by 3 cents per share, mostly driven by the start of the scheduled refueling at our 100% owned Oak Creek Nuclear Plant. Interest expense was a penny unfavorable, reflecting higher interest rates, partially offset by a lower short-term debt balance.

Daniel J. Cregg: We anticipate realizing the majority of the increase in the 2020 for gross margin over 2023 gross margin.

Daniel J. Cregg: During the second half of the year based upon the shape of our underlying hedges.

Daniel J. Cregg: This will differ from last year, when PSEG power realized most of the step up in the annual hedge price in the first quarter.

Daniel J. Cregg: Based on lower pricing in the winter of 2022 compared to 2023.

Daniel J. Cregg: Our AUM increased by <unk> <unk> per share, mostly driven by the start of the scheduled refueling at our 100% owned Hope Creek nuclear plant.

Daniel J. Cregg: Interest expense was a penny unfavorable reflecting higher interest rates, partially offset by lower short term debt balances.

Daniel J. Cregg: Taxes and other were $0.06 per share, unfavorable compared to the first quarter of 2023, primarily reflecting the use of a higher effective tax rate in the quarter that will reverse over the balance of 2024. From an operating standpoint, the nuclear fleet produced approximately 8.2 terawatt hours during the first quarter of 2024, compared to 8.4 terawatt hours in the year-earlier period, and ran at a capacity Our Hope Creek Nuclear Unit is undergoing its scheduled refueling cycle, which will include preliminary work on the Fuel Cycle Extension Project. As a result, as is always the case with outages for our 100% owned Hope Creek unit, we expect a little higher O&M and lower generation in the second quarter.

Daniel J. Cregg: Taxes, and other was <unk> <unk> per share unfavorable compared to the first quarter of 2023.

Daniel J. Cregg: Primarily reflecting the use of a higher effective tax rate in the quarter that will reverse over the balance of 2024.

Daniel J. Cregg: From an operating standpoint, the nuclear fleet produced approximately $8 two terawatt hours during the first quarter of 2024.

Daniel J. Cregg: Compared to eight four terawatt hours in the year earlier period.

Daniel J. Cregg: And ran at a capacity factor of 96, 8%.

Daniel J. Cregg: Our Hope Creek nuclear unit is undergoing its scheduled refueling outage, which will include preliminary work on the fuel cycle extension project.

Daniel J. Cregg: As a result as is always the case with outages for our 100% owned Hope Creek unit, we expect a little higher O&M and lower generation in the second quarter.

Daniel J. Cregg: Touching on some recent financing activity, At the end of March, PCG had a total available liquidity of $5 billion, including $1.2 billion of cash on hand. Our revolving credit facilities totaling $3.75 billion were also extended by one year to March of 2028 during the first quarter. At the end of March, PSCG had $500 million outstanding on a 364-day variable rate term loan, which subsequently matured in April of 2024, and PCG Power had $1.25 billion outstanding on a variable rate term loan maturing in March of 2025. The entirety of these term loans were swapped from a variable rate to a fixed rate. Mitigating Fluctantuations in Interest Rates

Daniel J. Cregg: Touching on some recent financing activity.

Daniel J. Cregg: At the end of March <unk> had a total available liquidity of $5 billion.

Daniel J. Cregg: $1 2 billion of cash on hand.

Daniel J. Cregg: Our revolving credit facilities totaling $3 $75 billion. We're also extended by one year to March of 2028 during the first quarter.

Daniel J. Cregg: At the end of March <unk> had $500 million outstanding of 364 day variable rate term loan.

Daniel J. Cregg: Which subsequently matured in April of 2024 and.

Daniel J. Cregg: And PSEG power at $1 $25 billion outstanding of our variable rate term loan maturing in March of 2025.

Daniel J. Cregg: The entirety of these term loans were.

Daniel J. Cregg: Where swaps from a variable rate to a fixed rate.

Daniel J. Cregg: Mitigating the fluctuations in interest rates.

Daniel J. Cregg: As of the end of March, given our swaps and cash position, we had minimal variable rate debt. In early March, PSE&G issued $1 billion of 10- and 30-year-secured medium-term notes, consisting of $450 million at 5.2% through March 2034 and $550 million at 5.45% due March 2054. A portion of the proceeds was used to pay the maturity of $250 million of 3.75% secured MTMs on March 15. Later in March, PSCG issued $1.25 billion of senior notes, consisting of 750 million at 5.2% through April 2029. $500 million at 5.45% due April 2034. A portion of the proceeds will be used to pay the maturity of $750 million of 2.875% senior notes in June.

Daniel J. Cregg: As of the end of March given our swaps and cash position we.

Daniel J. Cregg: Minimal variable rate debt.

Daniel J. Cregg: In early March <unk> issued $1 billion of 10, and 30 year secured medium term notes.

Daniel J. Cregg: <unk>, a $450 million at five 2% due March 2034.

Daniel J. Cregg: And $550 million at 545% due March 2054.

Daniel J. Cregg: A portion of the proceeds was used to pay the maturity of $250 million of 375% secured MTN.

Daniel J. Cregg: On March 15th.

Daniel J. Cregg: Later in March PSEG issued $1 5 billion of senior notes consisting of $750 million at five 2% through April 2029, and 500 million at 545% through April 2034.

Daniel J. Cregg: A portion of the proceeds will be used to pay the maturity of $750 million.

Daniel J. Cregg: Of two 875% senior notes in June.

Daniel J. Cregg: We continue to maintain a solid investment grade rating. Looking ahead, we expect that PSE&G's considerable cash generation, combined with PSG Power's enhanced cash flow visibility from the nuclear PTC, will support the execution of PSCG's five-year capital spending plan, dominated by regulated CAPEX, without the need to issue new equity or sell assets. In closing, we are reaffirming PSCG's full year 2024 non-GAAP operating earnings guidance of $3.60 to $3.70 per share, which reflects continued rate-based growth from ongoing regulated investment, offset by higher depreciation and interest expense that would build over the balance of 2024, as we await resolution of our pending distribution rate case later this year.

Daniel J. Cregg: We continue to maintain solid investment grade ratings.

Daniel J. Cregg: Looking ahead, we expect that <unk> considerable cash generation.

Daniel J. Cregg: Combined with PSEG Power's enhanced cash flow visibility from the nuclear PTC.

Daniel J. Cregg: We will support the execution of Pseg's five year capital spending plan.

Daniel J. Cregg: Dominated by regulated capex without the need to issue new equity or sell assets.

Daniel J. Cregg: In closing we are reaffirming pseg's full year 2024, non-GAAP operating earnings guidance of $3 60 to $3 70 per share.

Daniel J. Cregg: Which reflects continued rate base growth from ongoing regulated investments.

Daniel J. Cregg: Offset by higher depreciation and interest expense that will build over the balance of 2024.

Daniel J. Cregg: As we await resolution of our pending distribution rate case later this year.

Daniel J. Cregg: We are also reaffirming our forecast of long-term 5-7% compound annual growth and non-GAAP operating earnings through 2028, supported by our capital investment programs and the new nuclear PTC. That concludes our formal remarks, and we are ready to begin the question and answer session.

Daniel J. Cregg: We are also reaffirming our forecast of long term, 5% to 7% compound annual growth in non-GAAP operating earnings through 2028.

Daniel J. Cregg: Supported by our capital investment programs and the new nuclear PTC.

Daniel J. Cregg: That concludes our formal remarks, and we're ready to begin the question and answer session.

Rob: Ladies and gentlemen, we'll 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 2. If you're on a speakerphone, please pick up your handset before entering your request. One moment, please, while we poll for the first questions. The first question is from Nick Campanella, Barclays. Please proceed with your question.

Daniel J. Cregg: Yeah.

Rob: Ladies and gentlemen, we'll now begin the question and answer session from members of the financial community.

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

Nicholas Joseph Campanella: My question has been answered or you wish to Australia, you're pulling request you may do so by pressing the star and the number two.

Rob: If you're on a speakerphone please pick up your handset before entering your request.

Nicholas Joseph Campanella: Please pull for questions first question.

Rob: The first question is from Nick Campanella with Barclays. Please proceed with your question.

Nick Campanella: Hey, good morning everyone. Thanks for taking my questions here.

Nicholas Joseph Campanella: Hey, good morning, everyone and thanks for taking my questions here, Hey, good morning, Nick.

Ralph A. LaRossa: Hey, good morning, Nick. Morning. Hey.

Ralph A. LaRossa: Hey, so I guess, thanks for all the context around the direct power sales opportunities with your nuclear facilities. Can you just kind of comment on the potential, just the timing around any potential announcement, and then how we should kind of think about when that could contribute to EPS if it were to be achieved? And then just, I know you kind of talked about being in the nexus between economic development and energy policy.

Ralph A. LaRossa: So I guess.

Nicholas Joseph Campanella: For all the context around the direct power sales opportunities with your with your nuclear facilities can you just kind of comment on the potential just the timing around any potential announcement.

Ralph A. LaRossa: And then how we should kind of think about when that could contribute to EPS. If it were to be achieved.

Ralph A. LaRossa: And then just I know you've kind of talked about being in like the Nexus between economic development and energy policy. So is there something that youre looking for from the state before moving forward with this or just what are the data points that investors should be looking forward to know whether this is becoming more of a reality or not thanks.

Ralph A. LaRossa: So is there something that you're looking for from the state, you know, before moving forward with this? Or just what are the data points that investors should be looking for to know whether this is becoming more of a reality or not?

Ralph A. LaRossa: So look I think the.

Ralph A. LaRossa: Bottom line here for US is that we can.

Speaker Change: See this is just a continuation of us following the state's policy not selling it and I think the governor has been very clear about his desire to attract AI jobs to new Jersey, and the infrastructure and data centers and other other.

Ralph A. LaRossa: Yeah, Nick.

Ralph A. LaRossa: Yeah, Nick, so look, I think the bottom line here for us is that we kind of see this as just a continuation of us following the state's policy, not setting it. And I think the governor has been very clear about his desire to attract AI jobs to New Jersey, and the infrastructure in data centers and other other IT assets are things that he's looking to have in place. Now, the timing of something like this, I think is driven by a number of different factors, right? You've got some of the hyperscale. I would just really follow the state, announcements, and policy initiatives around this effort.

Ralph A. LaRossa: Assets are things that he is looking to have in place now the timing of something like this I think is driven by a number of different factors right you've got some of the hyperscale.

Ralph A. LaRossa: Data centers and their timing so I don't want to I really don't want to call. It for them and I don't want to front run the governor on some things that that he may or may not be working on so we're here to support.

Ralph A. LaRossa: I think from a from a timing overall timing standpoint, I would just really followed the states.

Ralph A. LaRossa: Announcements and policy initiatives around this effort.

Ralph A. LaRossa: Okay, I appreciate that. I guess, um... You know, I think you also said in your remarks that you would maybe provide an update later in the fall. I guess that would be dependent on how the rate case kind of progresses, but to the extent that you're giving a refreshed kind of financial outlook, you know, when would that be? And then also, is the data center opportunity something that could be included in that, or would it really kind of be post that 25 and beyond?

Nicholas Joseph Campanella: Okay I appreciate that I guess.

Ralph A. LaRossa: Yes, I think you also said in your remarks that you would maybe provide an update later in the fall.

Ralph A. LaRossa: I guess that would be.

Ralph A. LaRossa: Dependent on how the rate case kind of progresses, but to the extent that you are giving us.

Ralph A. LaRossa: Our refreshed kind of financial outlook when would that be and then also as.

Ralph A. LaRossa: And the data center opportunity something that could be included in that or it was really kind of be post that 25 and beyond.

Ralph A. LaRossa: Yeah, Nick, I think those are really kind of a couple of different pieces there, right? So we'll roll forward later in the year as we roll forward every year. I think we start out with the CapEx and some other items at the end of the year and then our earnings at the beginning of next year. But on data center specifics, we're not going to change our plan. You know, power is still a very small part of this company's... earning stream. It's a it's it is a it is all upside.

Speaker Change: Yes, Nick I think those are really kind of a couple of different pieces there right. So we will.

Ralph A. LaRossa: Roll forward later in the year as we roll forward every year.

Ralph A. LaRossa: We start out with the Capex and some other items at the end of the year and then our earnings beginning of next year, but the data center specific we're not going to change our plan.

Ralph A. LaRossa: Power is still a very small part of this company's.

Ralph A. LaRossa: Earnings stream.

Ralph A. LaRossa: It is a it is all upside so I understand the attention to it but.

Ralph A. LaRossa: So I understand the intention behind it. But what we'll do is roll out any PPAs, whether it be on data centers or hydrogen, opportunities, or anything else that we have down at the plant. We'll optimize it. And as soon as we agree on terms around something like that, we'll roll it in and be transparent about it. But right now, our plan as we look forward is to continue to project ourselves out based on that PTC floor.

Ralph A. LaRossa: What we'll do is we'll roll in any ppas, whether it be on data centers, our hydrogen opportunities or anything else that we have done it at the at the plant we will optimize it and as soon as we are.

Ralph A. LaRossa: Agree on terms around something like that we'll roll it in and then be transparent about it but right now our plan as we look forward is to continue to.

Ralph A. LaRossa: Project ourselves out based upon that piece.

Ralph A. LaRossa: PTC floor.

Nick Campanella: Fair enough. I really appreciate the time. Thanks.

Speaker Change: Fair enough I really appreciate the time thanks, Thanks, Nick.

Rob: Our next question is from the line of Jeremy Tonet with J.P. Morgan. I'm pleased to see you with your questions.

Nick Campanella: Our next question is from the line of Jeremy Tonet with J P. Morgan. Please proceed with your questions.

Jeremy Bryan Tonet: Hi, good morning. Good morning, Jeremy.

Jeremy Bryan Tonet: Hi, good morning, good morning, Jeremy.

Jeremy Bryan Tonet: Just wanted to touch base on a non-datacenter question here. You've been closely following the state and regional transmission needs for offshore. Now that datacenters have come into the equation having an outsized impact, how do you see the transmission system changing overall, and how do you see PEG's role in it?

Jeremy Bryan Tonet: Just wanted to touch base on the non data center question here.

Jeremy Bryan Tonet: <unk> been closely following the stay in regional transmission needs for offshore.

Jeremy Bryan Tonet: Now the data centers have come into the equation, having an outsize impact how do you see the transmission system changing overall and how is it how do you see <unk> role in it.

Ralph A. LaRossa: Jeremy, I think it's really important for you to keep a very close eye on the PJM RTEP process. As they continue to re-evaluate the topology of the transmission grid, I think there will be opportunities across the PJM footprint. You know, you got to just take a look at what happened with talent. As a very simple example, a power plant was connected to our Susquehanna Roseland line. That power, at least 100 megawatts or so of it, wouldn't be flowing out of the power plant into the grid.

Speaker Change: Yes, Jeremy I think it's.

Ralph A. LaRossa: It's really my advice is to keep a very close eye on the PJM or type process.

Ralph A. LaRossa: As they continue to reevaluate the topology of the transmission grid.

Ralph A. LaRossa: I think there'll be opportunities across the PJM footprint.

Ralph A. LaRossa: No.

Ralph A. LaRossa: You guys just take a look at what happened at that with talent as a very simple example that.

Ralph A. LaRossa: Power plant was connected to our Susquehanna Roseland line that power.

Ralph A. LaRossa: 100 megawatts or so of it won't be flowing out of the power plant into the grid and so that'll have an impact on the topology and a very simple term than you've got data centers popping up in different locations. We have a number of requests that of <unk>.

Ralph A. LaRossa: And so that'll have an impact on the topology in a very simple term. Then you've got data centers popping up in different locations. We have a number of requests that have come into our utility that we're processing, not of the magnitude of a hyperscale, but smaller edge-type computing solutions. And so on. You know, each one of those will have an impact, and the place where it all comes together, and I would, you know, encourage you to take a look at it, is through that RTEP process. Offshore wind will be one of the generation solutions for it, but there will be a need for additional modifications to the grid, and that's a TBD for all of us.

Ralph A. LaRossa: Come into our utility.

Ralph A. LaRossa: That we're processing.

Ralph A. LaRossa: And that over the magnitude of a hyperscale hyperscale, but smaller edge type computing solutions and so.

Ralph A. LaRossa: Each one of those will have an impact in the place where it all comes together and I would I would encourage you to take a look at it is through that <unk> process.

Ralph A. LaRossa: Offshore wind will be one of the generation solutions for it.

Ralph A. LaRossa: But there will be need for additional modifications to the grid and it's a TBD for all of us.

Ralph A. LaRossa: Got it. That's helpful. And then, you know, just think about the picture at large in, you know, structuring tariffs in a way that doesn't impact other rate payers. Just wondering if you could provide any other thoughts on that, I guess, making sure this is developed in a way such that other rate payers don't bear more burdens.

Speaker Change: Got it that's helpful and then.

Ralph A. LaRossa: Just thinking about the picture at large.

Ralph A. LaRossa: In structuring tariffs in a way that.

Ralph A. LaRossa: It doesn't impact other rate payers, just wondering if you could provide.

Ralph A. LaRossa: Any other thoughts on that I guess, making sure. This is developed in a way such that other retailers don't bear more burden.

Ralph A. LaRossa: Yes, so look, if it's a behind-the-meter solution... The way rate payers will be held harmless on that is that, you know, there won't be any additional infrastructure charges, so they wouldn't be burdened with additional infrastructure, other than if there's new generation that comes on and we, you know, it has to be supplied into the grid, and there's different paths. Those interconnection agreements are the way that that's handled through cost allocations in the PGM market today.

Speaker Change: Yeah. So so.

Ralph A. LaRossa: Look.

Ralph A. LaRossa: If it's if it's a behind the meter solution.

Ralph A. LaRossa: The the way rate payers will be held harmless on that is it.

Ralph A. LaRossa: There won't be any additional infrastructure charges. So they wouldn't be burdened with additional infrastructure other than if there's new generation that comes on and.

Ralph A. LaRossa: It has to be supplied into the grid and theres different pass those interconnection agreements are the way that that's handled.

Ralph A. LaRossa: Through cost allocations.

Ralph A. LaRossa: The PJM market today.

Ralph A. LaRossa: So I think there's a very fair and transparent way that that's taken care of. And I think each state has a different solution for, in front of the meter, data centers, or loads that are popping up and, you know, those individual state tariffs. And I guess, you know, every state will take a look at it from an economic development standpoint and determine how they want to handle it, but we haven't seen any changes in New Jersey to the tariff requirements for new business extensions.

Ralph A. LaRossa: So I think there is a very fair and transparent way that that's that's taken care of and I think each state has a different solution for it.

Ralph A. LaRossa: In front of the meter data centers or loads that are that are popping up and.

Ralph A. LaRossa: The state individuals' tariffs.

Ralph A. LaRossa: And I guess every state will take a look at it from an economic development standpoint, and determine how they want to handle it but we haven't seen any changes in new jersey to the tariff requirements for new business expansions.

Jeremy Bryan Tonet: Got it. That's helpful. I'll leave it there. Thanks.

Speaker Change: Got it that's helpful I'll leave it there thanks.

Jeremy Bryan Tonet: Yeah.

Rob: Our next question comes from the line of Durgesh Chopra with Abercore ISI. Please proceed with your questions.

Jeremy Bryan Tonet: Our next question comes from the line of Joe <unk> with Evercore ISI. Please proceed with your questions.

Durgesh Chopra: Hey, good morning, team. Thanks for giving me time. Morning, Durgesh. Hey, good morning, Ralph. Hey, Dan, maybe just, what are, like, any updates on the nuclear PTC guidance from the IRS? It feels like we've been waiting on it forever.

Durgesh Chopra: Hey, good morning team, Thanks for giving me time.

Durgesh Chopra: Hey, good morning, Ralph.

Durgesh Chopra: Then maybe just what are like just any updates on the nuclear P. D C.

Durgesh Chopra: Guidance from the IRS. It seems like we've been waiting on it forever and then any implications that you see coming from that guidance.

Daniel J. Cregg: And then any implications that you see coming from that guidance, you know, on your financial plan?

Daniel J. Cregg: Yeah, Durgesh, I wish I had a better answer for you, but we continue to wait for guidance to come out of Treasury. I know that there's been a host of different approaches to Treasury to try to spur some information to come out, but I know that you know that the PTC began January 1st, so we are in it. And I continue to think that the most important definition is, as we've all thought about it, the definition of gross receipts.

Daniel J. Cregg: On your financial plan. Please.

Dan: Yes, yes, I wish I had a better answer for you, but we continue to wait for guidance to come out of Treasury I know that theres been a.

Daniel J. Cregg: A host of different approaches to treasury to try to spur.

Daniel J. Cregg: Some information to come out, but I know I know that you know that the PTC began January one so we are in it.

Daniel J. Cregg: And I continue to think that the most important definition is that as we've all thought about it is definition of gross receipts and so that's that's what we're waiting for more than anything else I think we are.

Daniel J. Cregg: And so that's what we're waiting for more than anything else. I think we're, you know, moving forward. We're finding out a little bit more about what 24 looks like every day that goes by in 24, and we continue to do what we've been doing, which is try to think about what different potential outcomes could come from Treasury and try to position ourselves as ideally as we can against the backdrop of that uncertainty.

Daniel J. Cregg: We're moving forward, we're finding out a little bit more about what 24. It looks like every day that goes by 'twenty four.

Daniel J. Cregg: And we continue to do.

Daniel J. Cregg: Do what we've been doing is trying to think about what different potential outcomes could come from treasury and try to position ourselves as ideally as we can against the backdrop of that uncertainty and I think we're doing fine there, but we would prefer to have it I don't have a date for you I don't have an estimated date.

Daniel J. Cregg: And I think we're doing fine there, but we would prefer to have it. I don't have a date for you. I don't have an estimated date, and I've not heard that one is forthcoming. So I think we're in the same boat, Durgesh. I think we're just waiting.

Speaker Change: And I have not.

Daniel J. Cregg: Heard that one is forthcoming so I think we are in the same boat together I think we're just waiting.

Durgesh Chopra: I appreciate that color. Sounds like you're kind of planning different scenarios, and you've kind of baked that risk and opportunity into your 2024 guidance. Is that a fair way to put it, Dan?

Durgesh Chopra: Alright, I appreciate that color. It sounds like you are kind of planning different scenarios, and you've kind of baked that risk and opportunity and deal with 'twenty 'twenty four guidance guidance is that a fair way to put it.

Daniel J. Cregg: Yep, I think that's exactly right.

Dan: Yes, I think that's exactly right.

Durgesh Chopra: Okay. And then, just, you had this very nice chart that you used to share, I think it was maybe a bit dated now, which showed your balance sheet capacity in terms of, you know, funding more or higher CapEx, and you have all this opportunity, whether it's transmission, you know, related, or on the nuke side, I know that's going to be capital light, but generally speaking, at the utility, whether it's energy efficiency, In December, 13% over the prior five years. So maybe, can you give us a sense of how much more capital the balance sheet can cover without issuing any equity, if there's a way to do that?

Daniel J. Cregg: Okay and then just you had this very nice chart that you used to share I think it was maybe a bit dated now matured your balance sheet capacity.

Durgesh Chopra: In terms of funding more or a higher capex and you have all this opportunity whether it's transmission.

Durgesh Chopra: No related or on the nuc side, I know, that's going to be capital light, but generally speaking other utility whether it's energy efficiency, whether it's the transmission opportunity.

Durgesh Chopra: Can you give us a sense of in the Capex line recently was raised lately, but indeed.

Durgesh Chopra: In December 13% over the prior five years. So maybe can you give us a sense of how much more capital again, the balance sheet cover without issuing any equity if there's a way to do that thank you Dan.

Daniel J. Cregg: Thank you, Dan. Yeah. Thank you.

Durgesh Chopra: And.

Daniel J. Cregg: Yeah, and, you know, we've talked about it's going to come off of the FFO to debt, and I think that, you know, one of the things that when you did see that increase in capital that you referenced There are different FFO to debt implications depending upon exactly what the capital is. And kind of on the opposite ends of the spectrum, our energy efficiency program has a recoverable life, depreciable life, amortizable life, whatever you want to call it, of, you know, closer to 10 to 12 years, and our more infrastructure-oriented investments have a longer recoverable life, and so when you look at those particular investments, you're going to see much less of an impact on your FFO to debt because you're going to see a lot of cash coming back to you quicker to the extent that it's EE benefits.

Daniel J. Cregg: We've talked about it's going to it's going to come off of the <unk> debt and I think that one of the things that when you did see that increase in capital that you referenced there.

Daniel J. Cregg: There are different <unk> to debt implications, depending upon exactly what the capital is in kind of on the opposite ends of the spectrum. Our energy efficiency program has a recoverable life depreciable life amortize over life, whatever you want to call it of.

Daniel J. Cregg: Closer to 10 to 12 years and are more infrastructure oriented investments have a longer.

Daniel J. Cregg: Recoverable life and so.

Daniel J. Cregg: When you look at those particular investments youre going to see a much less of an impact on your episode of debt because you're going to see a lot of cash coming back to you quicker to the extent that its E benefits, that's something that's more steel on the ground whether its on a on the transmission side or electric or gas side, and then to your to your other point I totally agree.

Daniel J. Cregg: That's something that puts more steel on the ground, whether it's on the transmission side or the electric or gas side. And then, you know, to your other point, I totally agree with your comment that on the power side, it would be capital light, but it could be FFO positive in a fairly significant way. So those are the elements that move around if we're in the mid-teens; our current threshold for where we are is 13-14, depending upon whether you're talking about Moody's and S&P.

Daniel J. Cregg: With your comment that on the power side of it will be capital light, but it could be SFO positive.

Daniel J. Cregg: And a fairly significant way so it so those are the the elements. They move around if we're in the mid teens are our current threshold for where we are as 13 14, depending upon whether youre talking about Moody's and S&P. So.

Daniel J. Cregg: So we've got some room in there, but I think it's not a.

Daniel J. Cregg: So we've got some room in there, but I think it's not a – it's going to depend a little bit on the nature of the investment. And I think as you saw more of that increase coming from EE of late, it was more credit-friendly for us to move in that direction.

Daniel J. Cregg: Uh huh.

Daniel J. Cregg: It's going to depend a little bit on the nature of the investment and I think as you saw more of that increase coming from <unk> of late.

Daniel J. Cregg: It was more credit friendly.

Daniel J. Cregg: For us to move in that direction.

Durgesh Chopra: That's helpful. Thank you. I appreciate the time.

Speaker Change: That's helpful. Thank you I appreciate the time guys.

Rob: Our next question is from the line of Shahriar Pourreza with Guggenheim. Please proceed with your question.

Durgesh Chopra: Our next question is from the line of sharper reset with Guggenheim. Please proceed with your questions.

Shahriar Pourreza: Hi, good morning. See you in a second.

Rob: Hi, Good morning team, it's actually Constantine here for Charles Thanks for taking my questions Hey, Constantine.

Constantine Lednev: This is Constantine here for CHAR. Thanks for taking the questions.

Constantine Lednev: Hey Constantine, Hey,

Ralph A. LaRossa: I really appreciate the commentary on the nuclear opportunity. Maybe a bit of nuance from your perspective: is behind the meter a scalable opportunity for data centers in New Jersey, or is it a bit more of a one-off as you look at it? And maybe, as you mentioned, there's a level of potential grid dependence, and do you see that becoming a concern at all for regulators, or is that kind of getting addressed in other forms, regulatory forms?

Constantine Lednev: Really appreciate the commentary on the nuclear opportunity, maybe a bit of nuance from your perspective in behind the meter and scalable opportunity for data centers in new Jersey, or the a bit more kind of one off and you look at it and maybe as you mentioned, there's a level of potential grid independence and do you see that becoming a concern at all for the regulators.

Ralph A. LaRossa: Getting addressed in other forums regulatory forums.

Ralph A. LaRossa: Yeah, look, the grid. I'll go backwards on that. The grid dependence, Constantine, I think is... It's not just data centers, right? We're seeing electrification across the board, and as policymakers continue to move in that direction, we have to be aware and make sure that the system is being built out correctly.

Ralph A. LaRossa: Yeah look the grid I'll start I'll go backwards on that the grid dependence Constantine I think is.

Ralph A. LaRossa: Not just data centers right, we're seeing electrification across the board and as policymakers continue to move in that direction, we have to be aware and make sure that the system is being built out correctly I think it is being handled in multiple fronts, it's been handle that at.

Ralph A. LaRossa: I think it's being handled on multiple fronts. For example, it's being handled at FERC. It'll be handled at each individual state, but there are plenty of avenues for those conversations that take place and to keep the burden to customers to a minimum. So no offense or whatsoever about that on a commercial front. I'll just point out that there are different ways you can look at it, and Dan's team is doing a great job of talking to multiple folks and looking at multiple solutions, and he can give you some more detail about that.

Ralph A. LaRossa: FERC it'll be b handle that.

Ralph A. LaRossa: Each individual state, but theres plenty of avenues for those conversations to take place in and keep the burden to customers to a minimum so no no in terms of what's about that on a scalable side I'm going to give it to Dan because his team does a lot of work on the.

Ralph A. LaRossa: On the commercial front I'll, just tee up that there is there are there are.

Ralph A. LaRossa: Different ways, you can look at it and Dan's team is doing a great job of.

Ralph A. LaRossa: Talking to multiple folks and looking at multiple solutions that he can give you some more detail about yes constitute it's a great question, but if.

Daniel J. Cregg: Yeah, Constantine, it's a great question, but if I try to think about exactly the nature of how you're asking it, I think that, by definition, if you're going to do something behind the meter, you're going to do it at scale. And so I think that, you know, you wouldn't move into that situation with something that was not of scale and grow it to scale, other than the natural fact that I think you're not going to have a data center of scale appear immediately.

Daniel J. Cregg: If I try to think about exactly then the nature of how you're asking I think that by definition, if you're going to do something behind the meter youre going to do it at scale.

Daniel J. Cregg: And so I think that you.

Daniel J. Cregg: You Wouldnt move into that situation was something that was not of scale and growth of scale other than the natural fact that I think youre not going to have a data center upscale appear immediately and so it's more likely than from what we have seen you would see something that would be agreed to the upscale.

Daniel J. Cregg: And so it's more likely, and from what we have seen, you would see something that would be agreed to be of scale that would come in over time. And so if that meets your definition of scalable, meaning it's going to grow as you step through time, I think that the answer would be yes, but I think you'd want to set that all up right at the jump.

Daniel J. Cregg: That would come in over time, and so if you if that meets your definition of scalable, meaning it's going to grow as you step through time.

Daniel J. Cregg: I think that the answer would be yes, but I think you'd want to set that all up right.

Ralph A. LaRossa: And, Constantine, the only thing I'd add to what Stan said, just a reminder of where we sit. Geographically, it's a great spot, but I also point out to everyone that we're the only merchant site that has three units on it. So, the ability to scale there is a little bit different, and the ability to back up. The supply is also very different, so we're really excited about whatever those opportunities might be down the road because of that.

Daniel J. Cregg: The gel.

Daniel J. Cregg: Constitute the only thing I'd add towards the is that just a reminder.

Ralph A. LaRossa: Where we sit.

Ralph A. LaRossa: Geographically is a great spot, but I also point out to everyone. We are the only merchant site that has three units on it.

Ralph A. LaRossa: So the ability to scale, there is a little bit different than the ability to back up.

Ralph A. LaRossa: The the supply is also very different so.

Ralph A. LaRossa: We're really excited about whatever those opportunities might be down the road because of that.

Constantine Lednev: Thank you, that's abundantly clear. And maybe as we look a little bit more broadly at just supply and demand in power markets and power prices that are now well north of the PTC levels for the 25-26 strip, which kind of continue to be, you know, the PTCs that were the core planning input. Do you plan to update guidance as you kind of re-contract or start realizing those revenues? And do those become accretive to the credit metrics and the investment capacity that you talked earlier about?

Speaker Change: Thank you that's that's abundantly clear and maybe as we look a little bit more broadly I, just supply and demand in power markets and power prices are now well north of the BTC levels for 'twenty five 'twenty six.

Constantine Lednev: Which kind of continued to be the <unk>.

Constantine Lednev: Do you see that burns at core planning input.

Constantine Lednev: Do you plan to update guidance as you kind of re contracting and start realizing those revenues and then it will become accretive to credit metrics on kind of the investment capacity that you talked earlier about.

Daniel J. Cregg: Yeah, I think if there's a change in how we look at things and what we are seeing that is in place and locked for a period of time for us to be able to say something about it, I think that's a logical time for us to do something. Constantine, you've seen these markets for a long, long time. You know that they come up, they come down, and they're cyclical. And so, in an instant, when they are higher, our intention is to try to be more predictable and go out to investors and let them know what they can count on.

Speaker Change: Yes, I think if theres a change in how we are looking at things and what we're saying.

Daniel J. Cregg: That is in place and locked for a period of time for us to be able to say something about it I think that's a logical time for us to do something.

Daniel J. Cregg: <unk> seen these markets for a long long time, you know that they come up they come down and they are cyclical and so.

Daniel J. Cregg: In an instant when they are higher.

Daniel J. Cregg: Our intention is try to is to try to be more predictable and come out to.

Daniel J. Cregg: To investors and let them know what they can count on and to the extent that there are some outside opportunities speak about it but not have it be embedded until it is it is real we're trying to just kind of keep things grounded and so my sense is that you will probably see that as you continue to go forward from us.

Daniel J. Cregg: And to the extent that there are some outside opportunities, speak about them, but don't have them be embedded until it is real. We're trying to just kind of keep things grounded. And so my sense is that you will probably see that as you continue to go forward.

Ralph A. LaRossa: Excellent. Sounds like a good problem to have. Yeah, just a reminder, Constantine, that highly visible and liquid PJM West hub is not necessarily reflective of the entire PJM marketplace. So those numbers aren't dead on for everybody.

Constantine Lednev: Thanks, a lot.

Ralph A. LaRossa: Good.

Speaker Change: Okay, and just a reminder, constancy hi.

Ralph A. LaRossa: Billy visible and liquid PJM west hub is not necessarily reflective of the entire PJM marketplace. So.

Ralph A. LaRossa: Those numbers aren't aren't dead on for everybody.

Constantine Lednev: That's Gary Farr. We appreciate your time today. Thank you.

Speaker Change: That's very fair.

Speaker Change: I appreciate your time thank you.

Rob: Our next question is from the line of Carly Davenport with Goldman Sachs. Please proceed with your questions.

Constantine Lednev: The next question is from the line of Carly Davenport with Goldman Sachs. Please proceed with your question.

Carly S. Davenport: Hey, good morning. Thanks for taking the questions and all the details so far. Maybe just on the Hope Creek outage, you mentioned that you're doing some of the initial work on the kind of fuel cycle shift there with the outage. Could you just talk a little bit about the scope of what's getting done and how much will be left in order to make that shift as we get to 2025?

Carly S. Davenport: Hey, good morning, Thanks for taking the questions.

Carly S. Davenport: The detail so far.

Carly S. Davenport: Maybe just on the Hope Creek outage, you mentioned that Youre doing some of the initial work on the kind of fuel cycle shift there with the outage could you just talk a little bit about sort of the scope of whats getting done and how much will be left in order to make that shift as we get to 2025.

Ralph A. LaRossa: Yeah, Carly, it's a very small piece of the puzzle that's going on now. There's a lot of engineering work that's going on. There's work that's being done on what we're doing. We're doing a rewind on the generator that is part of this outage.

Carly S. Davenport: Yes.

Carly S. Davenport: And currently it's a very small pieces of puzzle what's going on now there is a lot of engineering work that's going on there's work that's being done on on.

Ralph A. LaRossa: What we're doing we're doing a rewind on the.

Ralph A. LaRossa: On the generator that is part of this outage, we've got a upgrade that would basically cleaning out some old installation on the cooling tower, which provides us about eight megawatts of additional.

Ralph A. LaRossa: We've got an upgrade that we're doing. We're basically cleaning out some old insulation on the cooling tower, which gives us about capability there. I mean, small little pieces, but it really helps us some based upon weather conditions and the rates that are required. So lots of work to optimize the unit itself in anticipation of that fuel change that we're going to be making down the road. So it's, you know, the investments will be made at Home Creek over the next couple fuel cycles, and then we'll be, we'll be ready for the ultimate change to the 24 month cycle.

Ralph A. LaRossa: Capability, there I mean small little pieces, but really helps us in some those based upon weather conditions in the rates that are required so lots of work to optimize the unit itself in anticipation of that fuel change that we're going to be making down the road. So.

Ralph A. LaRossa: <unk>.

Ralph A. LaRossa: The investments will be made at hope Creek over the next couple of fuel cycles and it will be we'll be ready for the for the ultimate changed at a 24 month cycle.

Carly S. Davenport: Got it. Okay, great. That's helpful. And then maybe you just mentioned a bit, you know, higher O&M related to the Hope Creek outage. And then you talked a bit at the beginning about some of the storm activity that you had to respond to earlier this year. Any thoughts on where O&M for the full year could sort of trend versus last year with some of those early moving pieces in mind?

Speaker Change: Got it okay, great that's helpful.

Carly S. Davenport: And then maybe you just mentioned a bit higher O&M related to the Hope Creek outage and then you talked about a bit at the beginning.

Carly S. Davenport: The storm activity that you had to respond to earlier this year, just any thoughts on where O&M for the full year it could sort of trend versus last year with some of those early moving pieces in mind.

Daniel J. Cregg: Yeah, Carly, we may see it move a little bit higher. You know, it's funny, we talked a little bit about the weather in the earlier remarks, and it was a fairly mild winter, but it was a really wet winter, and we had some storms that were not exactly temperature-driven as much as they were precipitation-driven. And so some of that drove costs a little bit higher, as did, you know, anytime we have a Hope Creek outage, it's 100% owned, so there's a little bit of a bigger impact there, and so some years we'll have that; some years we won't. You'll see that come through on the power side, but really, the storms were one of the contributors to the first quarter's impact on OSU.

Daniel J. Cregg: Yes, currently we may see it move a little bit higher it's funny, we talked a little bit about the weather in the earlier remarks, and it was a fairly mild winter, but it was a really wet winter and we had some some storms that we're not.

Daniel J. Cregg: Xactly temperature driven as much as they were precipitation driven and so some of that drove costs a little bit higher as did anytime we have a hope creek outage. Its a 100% owned so theres a little bit of a bigger impact there and so.

Daniel J. Cregg: Some years, we'll have that some years, we won't so youll see that come through on the power side, but really the storms were one of the contributors to the first quarter's impact on O&M.

Carly S. Davenport: Got it. Okay. I appreciate that, caller. Thank you.

Carly: Got it okay I appreciate that color. Thank you.

Rob: Our next question is from the line of Andrew Weisel with Scotiabank. Please proceed with your question.

Carly S. Davenport: Our next question is from the line of Andrew Weisel with Scotiabank. Please proceed with your question.

Andrew Marc Weisel: Good morning, Andrew.

Andrew Marc Weisel: Hi, good morning. Appreciate the details on the nukes. Maybe just one question, if I can kind of pin you down a little bit to size up the opportunity, how much nuclear capacity do you have that's not committed to state programs like the ZEX or other obligations? In other words, how many megawatts could actually be committed to a new dedicated customer?

Andrew Marc Weisel: Hi, good morning.

Andrew Marc Weisel: I appreciate the details on the new <unk>, maybe just one if I can kind of pin you down a little bit to size up the opportunity how much nuclear capacity do you have that's not committed to state programs like the extra other obligations in other words, how many megawatts could actually be committed to a new dedicated.

Andrew Marc Weisel: Customer.

Ralph A. LaRossa: Yeah, Andrew, I think you can look at what happened at Talon as a placeholder for the size of units that hyperscalers are thinking about. Just a reminder, our state plan kind of ends on May 25, right? So I don't see a data center being built before May 25, down at that site. We may be in discussions with folks and have something to say sooner than that.

Speaker Change: Yeah, Andrew I think look you can look at what happened that talent is a.

Ralph A. LaRossa: A placeholder for size of units at Hyperscale or is or are thinking about just a reminder, our our state.

Ralph A. LaRossa: Playing kind of ends in May of 'twenty five right. So were I don't see is data center being built before may of 'twenty five down at that site, we may be in discussions with folks and have something to say sooner than that.

Ralph A. LaRossa: But I don't expect any power to be flowing to a data center before May 25 when that program ends. And then, you know, then we'll see what the rules say on the IRA and how the PTCs interact with any of these kinds of agreements that are reached.

Ralph A. LaRossa: But I I don't expect any any power to be flow into a data center before may of 'twenty five one when that program.

Ralph A. LaRossa: Yes.

Ralph A. LaRossa: And then.

Ralph A. LaRossa: And we'll see what the rule say on the on the IRA and how to Ptc's interact with with any of these kind of agreements that are reached.

Ralph A. LaRossa: Okay, but your expectation is that the entire portfolio is available.

Ralph A. LaRossa: Okay, but your expectation is the entire portfolio is available.

Ralph A. LaRossa: I think that the entire portfolio could be available for long-term contracts, and again, I think that falls into a bunch of different scenarios.

Ralph A. LaRossa: Yes, I think the entire portfolio that could be available for <unk>.

Ralph A. LaRossa: For long term contracts and again, I think that that falls into a bunch of different scenarios.

Ralph A. LaRossa: Yeah, I don't think there's anything that's a restriction, and we'll continue to work forward and keep you posted.

Ralph A. LaRossa: Don't think there's anything that's a restriction and we will continue to work forward and keep you posted.

Andrew Marc Weisel: Okay, great. I just wanted to clarify that.

Speaker Change: Okay, Great just wanted to clarify that and then second pivoting to the energy efficiency side of the utility the E. Two program.

Andrew Marc Weisel: Then, second, pivoting to the energy efficiency side of the utility, the EE2 program you filed in December calls for $3.1 billion in spending, much bigger than the first program at about $1 billion. Can you just talk about some of those dynamics of why each incremental kilowatt hour of savings is so much more expensive? And maybe more importantly, are you seeing any pushback from the BPU or key stakeholders, or is this all well understood and supported?

Andrew Marc Weisel: You filed in December called for $3 1 billion up spending much bigger than the first program at about $1 billion can you just talk to some of those dynamics of why each incremental kilowatt hour savings is so much more expensive and maybe more importantly are you seeing any pushback from the BP were key stakeholders or is this all well understood and supported.

Ralph A. LaRossa: Yeah, Andrew, it's kind of simple as to why the dollar per megawatt saved goes up, right? I mean, you go from changing light bulbs, which was the first effort that we started way back when, and thermostat changes to now you're upgrading HVAC units and moving into commercial and industrial operations. So that that's very different, just from a dollar per megawatt-hour save standpoint. As far as the pushback, you know, this was all part of the BPU's triennial.

Speaker Change: Yeah, Andrew it's kind of simple as to why the dollar per megawatt saved goes up right. I mean, you go you go from changing light bulbs, which was the first effort that we started way back when.

Ralph A. LaRossa: And thermostat changes to now you're upgrading HVAC units.

Ralph A. LaRossa: And moving into commercial and industrial operations. So that's very different just from a dollar per megawatt hour save standpoint as far as the pushback. This was all part of the bps triennial.

Ralph A. LaRossa: So, a lot of what was submitted was based upon the needs identified by the Board of Public Utilities and really is not a surprise. The question will be, just from a total spend standpoint, how far they would like to go. I don't think there will be a lot of arguments about the cost per based upon, one, our historic performance, which has been really good, and then, second, the type of work that we'll be doing going forward.

Ralph A. LaRossa: So a lot of what was submitted was was based upon the needs identified by by the board of public utilities and.

Ralph A. LaRossa: Really not a surprise the question will be.

Ralph A. LaRossa: Just from a total spend standpoint.

Ralph A. LaRossa: How far they they would like to go I don't I don't think there'll be a lot of arguments about the cost per <unk>.

Ralph A. LaRossa: Based upon one our historic performance, which has been <unk> been really good and then second the types of work that type of work that will be doing going forward.

Daniel J. Cregg: Yeah, Andrew, the the-

Daniel J. Cregg: Yeah, Andrew, also, within what the VPU did, I think to their credit, they tried to take a philosophy in approaching this that they wanted to target things through this program that they viewed would not happen otherwise. And so, you know, these light bulbs are an example of that, given that incandescents are off the shelf.

Daniel J. Cregg: Yeah, Andrew also within what the Btu did I think to their credit they try to take a.

Daniel J. Cregg: Our philosophy in approaching this that they wanted to target things through this program that they viewed would not happen otherwise and so you know these light bulbs as an example of that given that incandescence or off the shelf, but in other examples too.

Daniel J. Cregg: But in other examples, too, things that were going to happen anyway, are not a great target for this kind of a program. It's to try to expand what would otherwise happen. And so that, I think, expands the reach a little bit, moves them to a better place, but may cost a little bit more to get it done.

Daniel J. Cregg: Things that we're gonna happen anyway.

Daniel J. Cregg: Are not a great target for this kind of a program is to try to expand what would otherwise happen and so that I think expanded the reach of little bit moves them to a better place than they cost a little bit more to get it done.

Andrew Marc Weisel: Okay, very clear. Thanks so much. Thanks, Andrew.

Speaker Change: Okay very clear thanks, so much.

Andrew Marc Weisel: Andrew.

Rob: Our next question is from the line of Steve Fleischman with Wolf Research.

Andrew Marc Weisel: Our next question is from the line of Steve Fleishman with Wolfe Research. Please proceed with your questions.

Steve Fleischman: Hi, good morning. Sorry, another Hi, sorry, another nuclear question. So just, you know, we've talked about this hypothetically for the last, let's say, six, nine months. Hydrogen. I think there's supposed to potentially be like an offshore wind port next to the plants or around there, and then obviously data centers. Now, should we think about these as things all things you can do there, or yet you have to kind of focused on one, and data centers are now, kind of top of the list.

Steve Fleischman: Yeah.

Speaker Change: Hi, good morning.

Steve Fleischman: Sorry, another sorry, another nuclear question.

Steve Fleischman: So just you know.

Steve Fleischman: We've talked about this hypothetically.

Steve Fleischman: The last let's say six nine months.

Steve Fleischman: Hydrogen.

Steve Fleischman: I think they're supposed to potentially be like offshore wind toward next to the plants or around there.

Steve Fleischman: And then obviously data centers now just should we think about these as things.

Steve Fleischman: All things you can do there or you have to kind of.

Steve Fleischman: Focus to one and data centers is now.

Steve Fleischman: Kind of top of the list.

Ralph A. LaRossa: No, Steve, so it's a great question. So, the port is built. I mean, they've done a ton of work down there, and that was the New Jersey Economic Development Authority did a lot of work there. I don't know if we can pull a ship up there yet, but we're pretty darn close. So there's been a ton of activities completed, and they started to leave some space for some of the offshore wind developers. And so I think from a state standpoint, that's going pretty well.

Steve Fleischman: Steve So.

Ralph A. LaRossa: It's a great question. So the port is built I mean, they've done a ton of work down there and that was the New Jersey Economic development Authority has done a lot of work there I don't know if we can pull a ship up there yet, but we're we're pretty darn close so there's been a ton of activities completed and they started to lease some space to some of the offshore.

Ralph A. LaRossa: When developers and so I think from a state standpoint, that's going pretty well.

Ralph A. LaRossa: Then there's additional land that's available, and you could put a data center there. How big it is is a question, right? You've got to figure all of that out based upon each individual developer's design criteria and what they might be considering and the size that they're looking for. You could put a hydrogen unit there. You might have an electrolyzer or something that makes some sense to go there.

Ralph A. LaRossa: Then there is additional land thats available and you could put it data center there you could put a how big it is as a question right.

Ralph A. LaRossa: You've got to figure all of that out based upon each individual developers design criteria and what they might be considering in the size that they are looking for you could put a hydrogen.

Ralph A. LaRossa: The unit there you might they might might have an electrolyzed or is something that that makes some sense to go there or maybe it goes a little bit off.

Ralph A. LaRossa: Or maybe it goes a little bit offshore in property, right? And again, it all depends upon the rules that come out, what we finally see from the IRA implementation. So we're thinking about it as all of the above in an optimization strategy, just figure out what is the best way for us to use that electricity that's coming off the units and do it in a way that's completely aligned with the state's policy. So you could do it all; it's just a matter of the policies of the state and how big any one of those individual opportunities becomes.

Ralph A. LaRossa: Property right and again it all depends upon the rules to come out what we finally see.

Ralph A. LaRossa: From the IRA implementation so.

Ralph A. LaRossa: We're thinking about it is all of the above in an optimization strategy just figure out what is the best way for US to you know use those that electricity is coming off the units.

Ralph A. LaRossa: And doing it in a way that is completely aligned with the states policy. So you can do at all it's just a matter of.

Ralph A. LaRossa: You know what the policy is at the state and how big any one of those individual opportunities become man on the hydrogen fronts. Neither is just a reminder that operate there would meet both additionality and hourly matching to the extent that those limitations continue on hydrogen. So I do think we feel pretty good about.

Daniel J. Cregg: And on the hydrogen front, Steve, just a reminder, an uprate there would meet both additionality and hourly matching to the extent that those limitations continue on hydrogen. So I do think we feel pretty good about what we have the ability to do down there and don't see limitations on having to pick one or the other.

Daniel J. Cregg: What we have the ability to do down there and don't see limitations.

Daniel J. Cregg: I'm, having to pick one or the other.

Steve Fleischman: Okay, and then just the other part of this is just reliability in New Jersey overall and just that you know a lot of focus on offshore wind that's been delayed and the like, and just so, from that state's standpoint, can you kind of see how you are in alignment with the state thinking about that aspect? to be able to do something behind the meter at nuclear power. Yeah, so that's what I was thinking.

Speaker Change: Okay, and then just the other.

Steve Fleischman: The other part of this is just reliability and New Jersey overall, just a lot of focus on offshore wind that's been delayed and the like and just so I guess from that standpoint.

Steve Fleischman: Kind of.

Steve Fleischman: How are you and this alignment with the state thinking about that aspect.

Ralph A. LaRossa: Yes, that power flows a whole bunch of different ways, right? Not just in New Jersey but in other states, right?

Ralph A. LaRossa: To be able to do something behind the meter with nuclear.

Ralph A. LaRossa: Yes.

Ralph A. LaRossa: The power flows all a bunch of different ways right and that just in new Jersey, but other other states right. So it's more of a PJM question as to that specific unit in those specific megawatts, but I will say this and you know what.

Ralph A. LaRossa: So it's more of a PJM question as to that specific unit and those specific megawatts. But I will say this, and you know what we've said in multiple settings. So I apologize if it's a repeat, but That 2003 blackout gave us the opportunity to rebuild the transmission infrastructure, and we did that. And then Sandy came along, and we rebuilt the switching stations and substations. So we're well prepared for this.

Ralph A. LaRossa: We said it in multiple settings, so I apologize if it's a repeat but.

Ralph A. LaRossa: That 2003 blackout gave us the opportunity to rebuild the transmission infrastructure and we did that and then Sandy comes along when we rebuilt the.

Ralph A. LaRossa: The switching stations and substation. So we were well prepared for this I think new Jersey is uniquely prepares and I've got my economic development had on here for a second but I think we're in a really good place and the margins arent quite as tight as some others might have.

Ralph A. LaRossa: I think New Jersey is uniquely prepared, and I've got my economic development hat on here for a second, but I think we're in a really good place, and the margins aren't quite as tight as some others might have. So I think we're looking at this and trying to figure out what's the best solution for the state, and we're doing it in partnership, not as an isolated act of the state's plans. So we... feel pretty good. Great, thank you. Thanks, Stephen. Don't apologize for answering the nuclear question. We chose to stay in, so we welcome your questions.

Ralph A. LaRossa: So I.

Ralph A. LaRossa: I think we're looking at this and trying to figure out what's the best solution for the state and we're doing it in partnership not not one off of.

Ralph A. LaRossa: The states plans so we've.

Ralph A. LaRossa: <unk>.

Ralph A. LaRossa: Feel pretty good.

Speaker Change: Great. Thank you.

Ralph A. LaRossa: Thanks, Stephen don't apologize for asking a nuclear question, we chose to stay and so we will take questions.

Speaker Change: Oh, yes.

Steve Fleischman: Our next question is from the line of Ryan Levine with Citi. Please just use your questions.

Speaker Change: No worries.

Ralph A. LaRossa: Okay.

Steve Fleischman: Our next question is from the line of Ryan Levine with Citi. Please proceed with your question.

Rob: Hi everybody. I had, I guess, one or two more on nuclear. In terms of the duration of contracts that your counterparties may be willing to sign, I think in your comments you mentioned long-term. Any call you could share around how long long-term is as you look at it? And then, to the extent that there are transmission constraints in PJM, how does the timeline of any investment there play into the ability to serve that longer-term outlook?

Ryan Michael Levine: Hi, everybody.

Rob: I guess, one or two more in nuclear in terms of the duration of it.

Rob: Of contracts that Youre counterparties may be willing to sign I think in your comments you mentioned long term.

Rob: Any color you can share on how long long term is as you look at it and then to the extent that there is transmission constraints in PJM.

Rob: The timeline of any investment there play into this or that that longer term outlook.

Ryan Michael Levine: Yeah, Ryan, I think that, you know, the simple answer to the first question is, if somebody's going to come in and build a data center, that's going to be a very, very significant investment, and it's going to be around for a long time. So I don't have a specific number of years to give you, but I think the long term is pretty comfortably thought about as being long term.

Speaker Change: Yeah, right I think.

Ryan Michael Levine: Simple answer on the first question is if somebody is going to come in and build a data center.

Ryan Michael Levine: That's going to be a very very significant investment and it's going to be around for a long time. So.

Ryan Michael Levine: The specific number of years to give you, but I think long term is pretty comfortably thought about it as being long term.

Daniel J. Cregg: And I think on the transmission side of things, you know, Ralph just really gave the right response. As much as we have built out the transmission system, given what we went through about 20 years ago and 10 years ago, I do think we're prepared for whatever flows need to happen within the region. So both of those, I think, are in pretty good shape.

Ryan Michael Levine: And I think on the transmission side of things you know Ralph just really I think gave.

Daniel J. Cregg: The right response as much as we have built out the transmission system given what we are.

Daniel J. Cregg: Went through about 20 years ago, and 10 years ago I do think we're prepared for whatever flows need to happen within the region. So both.

Daniel J. Cregg: Both of those I think are are are in pretty good shape.

Speaker Change: Okay, and then to follow on the.

Ryan Michael Levine: And then to follow on the last line of questions. To the extent that there are policy opportunities to maybe attract this customer base to the state, are there any legislative initiatives that you're keeping an eye on that may make it more palatable for other stakeholders to attract this load to the service territory?

Daniel J. Cregg: The last line of questioning.

Ryan Michael Levine: Extent that there is policy opportunities to maybe attract this customer base to the state are there any legislation initiatives that youre keeping an eye on that may make it more palatable for other stakeholders to attract has slowed to the service territory.

Ralph A. LaRossa: Yeah, no, so I believe...

Speaker Change: So I I believe again I'll put my other hat on I believe the state has plenty of solutions for new.

Ralph A. LaRossa: Yeah, no, so I believe, again, I'll put my other hat on, I believe the state has plenty of solutions for new businesses to move to New Jersey or to start up here. There are a number of different initiatives down at the EDA that could attract businesses. And I don't think anything that I've seen would require additional legislative changes. There may be some to speed things up or expand opportunities for folks, but I'm pretty confident that the state has the tools and its tool chest to reach out to the opportunities that it has.

Ralph A. LaRossa: New businesses to move to new Jersey or to start up here. There was a number of different initiatives down at the EPA that could attract businesses and I don't think anything that I've seen would require additional legislative changes there may be some to <unk>.

Ralph A. LaRossa: Speed things up or or expand opportunities for folks, but I'm pretty confident that the state has the tools and it's still just the to reach out to the opportunity set it has.

Rob: Our next questions are from the line of Travis Miller with Morningstar. I'm pleased to see you with your questions.

Speaker Change: Thanks for taking my questions.

Rob: Pardon.

Rob: Next questions are from the line of Travis Miller with Morningstar. Please proceed with your question.

Travis Miller: Hi everyone, thank you. Since I don't have to apologize for a nuclear question, I suppose I'll jump in with another one here. I was thinking about what a contract at a very high level might look like for a co-located facility, and mainly I'm thinking about who would take the risk of perhaps a non-performance or something like that. Is that something you'd be comfortable with, or is that something you're not going to? Century, make the off taker.

Travis Miller: Everyone. Thank you.

Travis Miller: Since I don't have to apologize for our nuclear question I suppose I'll jump in.

Travis Miller: With another one here.

Travis Miller: I was thinking about what our contracts at a very high level might look like for a co located facility and mainly I'm thinking about who would take the risk on there.

Travis Miller: Perhaps a nonperformance or something like that is that something you'd be comfortable with or is that something you're going to essentially make the offtake or.

Travis Miller: Travis, I would...

Speaker Change: Take that risk.

Century: So I would I would simply tell you wait too soon for us to be talking about anything like that.

Ralph A. LaRossa: Simply tell you, it's way too soon for us to be talking about anything like that. We're not in a position to talk about any details of the discussions. I would say this to you, though, we've answered this question a bunch of times, and I'll tie it back to the hydrogen opportunities. We don't want to get into commodity risks. Commodity Risk Situation. So, what we basically look at this is, you know, we put a meter at point A, and folks can pick it up from there and figure out what they want to do with the electricity. And I don't I don't see data centers or, Electrolyzers or anything else that might happen in that space is as different than what you want to add.

Ralph A. LaRossa: It's a we're not we're not in a position to talk about any details or any any discussions I would say this to you, though we've answered the question a bunch of times.

Ralph A. LaRossa: Tie it back to the hydrogen opportunities, we don't want to get into the commodity risk.

Ralph A. LaRossa: Commodity risk situation. So what we basically look at this is we've put a meter at point, a and folks can pick it up from there and figure out what they're going to do with the electricity.

Ralph A. LaRossa: And I don't I don't see Datacenters or.

Ralph A. LaRossa: Electrolyze or anything else that might happen in that.

Ralph A. LaRossa: That space is different and Dennis you want to add I mean, the only thing I would say is just from a practical perspective. If you think about a three unit site, you've got a lot of redundancy and the ability to deal with things like that and so obviously contractual Ts and CS are going to be worked through as a across the entire breadth of of whatever agreement you come to.

Ralph A. LaRossa: No, I mean, the only thing I would say is just from a practical perspective, if you think about a three-unit site, you've got a lot of redundancy and the ability to deal with things like that. And so, obviously, contractual T's and C's are going to be worked through across the entire breadth of whatever agreement you come to. But I think we start from a position of strength.

Ralph A. LaRossa: But I think we start from a position of strength there.

Daniel J. Cregg: Okay, perfect. That's great.

Speaker Change: Okay perfect that's great it's fair.

Travis Miller: It's fair. And then one other question on the transmission in your bids and proposals there. How much does what you proposed or put in those bids depend on a second round of offshore wind projects coming in? Any of it or some of it? Yeah, so Travis, I think there's two answers there.

Daniel J. Cregg: And then one other question on the transmission in your bids and proposals there how much does what you proposed or put in those bids depend on a second round of offshore wind.

Travis Miller: Wind projects coming in any of it or some of it yes.

Travis Miller: I think theres two answers there first the P B I D.

Ralph A. LaRossa: First, the PBI, the pre-billed opportunity does not require that. It's basically very similar to what happened in the first solicitation where, use an analogy, it's a catcher's mitt for pipes coming in or wires coming in from the..., from the Offshore Wind Farms. So that piece really isn't dependent. I think the size and scope of the next solicitation are clearly dependent upon how big that offshore wind opportunity gets for the state as a whole. And we have not seen a scope of what that might look like yet. Okay, and would that be through the PJM process or through New Jersey's process?

Ralph A. LaRossa: The prebuilt opportunity does not require that it's basically very similar to what happened in the first solicitation where.

Ralph A. LaRossa: He was an analogy is the catcher's mitt for for pipes coming on wires coming in from the from the offshore wind farms.

Ralph A. LaRossa: So that piece really is not dependent I think the size and scope.

Ralph A. LaRossa: The next solicitation is clearly dependent upon the.

Ralph A. LaRossa: What how big that offshore wind opportunity gets for the state as a whole.

Ralph A. LaRossa: And that we have not seen the scope of what that might look like yet.

Ralph A. LaRossa: Okay.

Ralph A. LaRossa: That would be through the PJM process or through New Jersey process. It would be a PJM process initiated by the state agreement approach.

Ralph A. LaRossa: It would be a PJM process initiated by the state agreement approach from New Jersey. So New Jersey would pick up the phone, call PJM, and ask them to run the process on behalf of the state. Yes.

Ralph A. LaRossa: From New Jersey, So new Jersey would pick up the phone call PJM and ask them to run the process for on behalf of the state.

Travis Miller: Okay, great. Thanks so much. I appreciate it. Thank you.

Speaker Change: Okay, great. Thanks, so much appreciate it thank you.

Rob: Thank you. Our last question is from Paul Pedersen with Glenrock Associates. Please proceed with your questions.

Travis Miller: Thank you. Our last question is from Paul Paul Peterson, What's gone wrong Associates. Please proceed with your question.

Paul Patterson: How are you doing? So, um, just to sort of follow up on the transmission stuff. I was wondering if you could give me your thoughts on the upcoming transmission policy agenda that's coming up here with FERC in the next few weeks? Any thoughts about what you think might be coming out there and how it might affect you guys?

Paul Patterson: Hello, Paul.

Paul Patterson: How you doing.

Paul Patterson: I'm just sort of follow up on the transmission stuff I was wondering if you could.

Paul Patterson: What your thoughts might be with respect to the b the upcoming transmission policy.

Paul Patterson: The agenda, that's coming up here with FERC.

Paul Patterson: And the next few weeks.

Paul Patterson: Any thoughts about how would you think might be coming out there and how it might affect you guys.

Ralph A. LaRossa: No, I think, look, there's five or six items that are there. We have some folks that are heavily involved in transmission in a wires organization, some of the other ones, so we're staying abreast of it. I think FERC has remained balanced under the current chairperson, and I don't expect any wild swings in the outcomes there, but we're monitoring it closely right now, Paul, and I wouldn't have much more to add than that.

Paul Patterson: No I think look theres five or six items that are there. We have we have some folks that are heavily involved in transmission in our wires organization. So many other ones. So we're staying abreast of it.

Ralph A. LaRossa: I think.

Ralph A. LaRossa: <unk> remained balanced under the current share and I don't I don't expect some wild swings in the AR and the outcomes there, but we're monitoring it closely right now Paul and I won't have much more to add than that.

Paul Patterson: Okay, and then just on another big policy push that we're seeing from different officials is green enhancing technologies. Just wondering if you see how that might impact you guys or your operations in the next few years.

Paul Patterson: Okay, and then just on another big policy push that we're seeing from different.

Paul Patterson: Officials is great enhancement technologies in.

Paul Patterson: Just wondering if you're if you see.

Paul Patterson: How do you see that might.

Paul Patterson: How that might impact you guys or your operations in the next few years.

Ralph A. LaRossa: Yeah, so look, some of that grid enhancement has really been focused, I think there was a New York Times article on it, about the upgrades of some of the conductors that people have installed. And we've looked at some of that and piloted some of that, as we've talked about, we've done a lot of transmission upgrades. We've also built into our system the ability to do some additional upgrades, but I think that just becomes a cost benefit for the consumer, based upon what additional capacity we would get out of it and whether or not we would want to front run the need.

Paul Patterson: Yeah, So look some of that grid enhancing.

Ralph A. LaRossa: <unk> has really been focused I think there was a new York times article about the.

Ralph A. LaRossa: Upgrades of some of the conductors.

Ralph A. LaRossa: That that people have installed and we've looked at some of that and piloted some of that.

Ralph A. LaRossa: We've talked about we've done a lot of transmission upgrades. We've also built into our system the ability to do some additional upgrades, but I think that just becomes a cost benefit for the consumer based upon what additional capacity, we would get out of it and whether or not we.

Ralph A. LaRossa: We wouldn't want to front run the need so it's something we'll monitor and as something that PJM again will have an air tool tool chest.

Ralph A. LaRossa: So it's something we'll monitor, and it's something that PJM, again, will have in their tool chest to make some determinations about how they want to solve some of the issues, the gaps that might get created as we move forward here with electrification. Okay.

Ralph A. LaRossa: It makes it some determinations upon how they want to solve some of the.

Ralph A. LaRossa: So the gaps that might get created as we move forward here with electrification.

Paul Patterson: Okay. Awesome. Thanks so much. Thanks.

Speaker Change: Okay awesome. Thanks, so much.

Ralph A. LaRossa: Thank you. There are no further questions at this time. I'd like to turn the floor back to Mr. LaRossa for closing comments.

Paul Patterson: Yeah.

Speaker Change: Thank you there are no further questions at this time I would like to turn the floor back to Mr. On the Rosa for closing comments.

Ralph A. LaRossa: You know, I just want to thank you all for your continued confidence and support. We welcome all these questions, and we really look forward to getting together with most of you at AGA later in May. So, again, thank you to our employees, to our customers, and to our investors. And we'll see you all in California. Take care.

Ralph A. LaRossa: Aye.

Ralph A. LaRossa: I just simply want to thank you all for your continued confidence and support.

Ralph A. LaRossa: We welcome all of these questions and we really look forward to getting together with most of you at a later in May. So again, thank you to our employees to our customers and to our investors and we will see you all in California take care.

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

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

Rob: Okay.