Q2 2025 Public Service Enterprise Group Inc Earnings Call
Ladies and gentlemen, thank you for standing by. My name is Rob and I'm your event operator today.
I would like to welcome everyone to today's conference.
Public Service, Enterprise groups, second quarter 2025 earnings conference call on webcast.
At this time, all participants are in listen-only mode.
Later, we'll talk to question and answer session for members of the financial community.
At that time, if you have a question, you'll need to press the star and the number 1 on your telephone keypad.
To throw all your question, press star. Then the number 2.
On keypad.
As a reminder, this conference is being recorded today. August 5th, 2025, I'll be available for replay as an audio webcast on psg's, investor relations website at https colon slash investor pseg.com.
I would now like to turn the conference call over to Carlotta Chan. Please go ahead.
Good morning and welcome to psg's second quarter 2025 earnings presentation. On today's call, our Ralph larossa, chair president and CEO. And Dan Craig, Executive, Vice President, and CFO the press release attachments and slides. For today's discussion are posted on our IR website at investor.substack.co
Psg's earnings release and other matters. Discussed during today's call contain forward-looking statements and estimates that are subject to various risks and uncertainties. We will also discuss non-gaap operating earnings which differs from net income as reported in accordance with generally accepted accounting principles or gaap in the United States. We include reconciliations of our non-gaap financial measures and a disclaimer regarding forward-looking statements on our IR website. And in today's material,
following our prepared remarks, we will conduct a 30-minute question and answer session, I
Will now turn the call over to Ralph larossa.
Thank you, Carla.
To review psg's second quarter, 2025 results and to discuss our outlook for the business over the rest of the year.
PSG delivered, another quarter of solid operating and financial performance.
And PNG is on track to execute on its full year. 3.8 billion regulated investment program to maintain reliability.
PNG also benefited from a full quarter of regulatory recovery of
on over 3 billion, dollars of previously invested Capital which was approved in the October 2024 settlement of our Electric and Gas Distribution base rate case
Pfcg is results. Also reflect the positive impact of higher output from our Nuclear Generating Fleet, which benefited from the absence of a Spring. Hope Creek, refueling outage experience last year,
During the past quarter, we also continued to prioritize meeting our customers expectations, on both the reliability and affordability for us.
In late June, we successfully operated through 3 consecutive days of a 100th degree plus temperatures.
Prompting high electricity usage, that set a summer peak load of 10,229 megawatts on June 24th.
The highest system load. We have is experienced since 2013
The value of our infrastructure resilience and Storm Restoration efforts benefited customers during a series of intense heat wind and rainstorms.
Providing yet another validation of our investments in the system to maintain reliability.
Also, improves the
customer experience.
Our utility crews in New Jersey and on Long Island are working tirelessly to safely. Keep the lights on.
Restoring service, to interrupt the customers on a timely basis. Redirecting employees from non-emergency work to focus on emergent service requests and deploying Mutual Aid, to reinforce our local Crews to restore service to customers even faster.
during the 4-day heat storm in June psng, Crews restored, service to 99% of storm interrupted customers within 24 hours,
I cannot be more proud of our team's work and these results.
Turning to our affordability. Focus given the warmer than normal summer. Thus, far higher electricity usage is expected to result in higher customer bills.
In addition, our customers are seeing the electric rate impact of last year's pjm capacity auction.
Which is just now translating into summer utility bills.
ESG has responded by partnering with the New Jersey Board of Public Utilities to implement a summary relief initiative.
Providing all residential customers with deferred billing during 2, high usage summer.
Shifting collection of the deferral, to lower electric usage months with no interest charged to customers.
The utility is also extended shut off protections for income qualified residential, customers and suspended, electric reconnect, fees through September 30th.
We also continue to connect our customers in need of payment assistance with all available resources.
Including our award-winning Energy Efficiency programs to help lower usage.
Last month. Pjm released the results of his latest capacity auction which priced within a ferc approved price collar at 329 per megawatt day for the 2026
to 2027 energy year.
Despite this latest increase in capacity prices, we anticipate a near flat impact on customer electric bills. When this latest price is feathered into the bgs supply rates in June of 2026.
This assumes other Supply related costs remain the same preserving the reduction from other charges expected to come off the bill.
As we've discussed on prior calls.
The resource adequacy challenges in New Jersey and across the entire 13-state PJM region are becoming more acute as we see both growing demand and new supply, slow to respond.
Recent reports reflected an increasing amount of new large load applications that are quickly eroding existing reserve margins.
Within the confines of pjm, it's hard to see the path to New Generation through existing Market signals.
Which may require the consideration of a new approach to procuring capacity and resource planning.
In New Jersey, the legislature convened on June 30th having held a series of hearings on energy affordability. In advance of the pjm capacity related summer rate increases
Legislation introduces past March assembly, bill 54309.
Could enable regulated utilities to be among those companies able to compete for.
Potential generation, projects should New Jersey decide to build or pursue new instate generation.
New Jersey remains a net importer of power.
During the June heat, storms imported nearly half of its electric needs from out of state.
The Abundant excess generation capacity to our West that for many years, made Power Imports. And convenient option is quickly being absorbed by rapid growth.
Of native load in those States.
In New Jersey policy makers have begun to actively weigh the priorities of economic growth with system, reliability and affordability, and the state's environmental policies.
In fact, today, the BPU is conducting a technical conference on resource adequacy.
Focusing on the recent pjm capacity auction results, and state driven Solutions.
We look forward to partnering with New Jersey and Regional stakeholders to develop policy consensus on long-term comprehensive solutions that can meet our growing demand and improve resource adequacy while safeguarding affordability and reliability to meet New Jersey's energy needs.
While these conversations continue or 3.8 billion regulated capital investment plan for 2025 is focused on infrastructure replacement and modernization to ensure safe and reliable service and to meet growing customer demands.
These efforts are on track and on budget.
As mentioned in the last quarter, PSC and G began the second phase of its Clean Energy Future Energy Efficiency program, which will help customers save energy, lower their bills, and reduce carbon emissions while supporting job training and our economic growth right here in New Jersey.
speaking of economic growth,
As of June 30th, PSC and G's pipeline of large load, inquiries for new service connections grew to over 9,400 megawatts.
47% from 6,400 megawatts reported, as of March 31st.
And as our state had previously, these numbers include both mature applications that we refer to as new business.
Approximately 2,600 megawatts of the total which has gone up by 40% since March 31st.
As well as feasibility studies. And initial leads.
Our engineering assessment turnaround is still averaging about 4 months.
And this response time is supportive of the state's objective to Spur Economic Development.
For the extent, these large load prospects convert into new utility customers in the future. Fixed costs. Are then spread over a larger user base which can help to lower existing customer bills.
Carbon-free base, load power and achieve the fleet capacity factor of 88.8% for the second quarter lowered by the scheduled refueling outage at Salem unit 1.
During this Falls refueling, outage, PSEG nuclear. Will perform the work needed to extend hope Creek's fuel cycle from 18 to 24 months?
This is the first of several steps. We are taking to optimize our plants.
providing the grid with more reliable 24x, 7 carbon free power between now and hope Creek's next scheduled refueling outage in the fall of 2027
In addition, our Salem upgrade project will bring approximately 200 megawatts for the size of a small modular reactor.
Of incremental, carbon-free, dispatchable power during the 2027 to 2029.
We were also pleased that federal tax legislation passed in July preserved. The downside price protection from the nuclear production tax credit.
For PTC.
As well as the PTC availability for expansion of nuclear capacity.
Sports.
Plan power up rate at Salem.
In addition, the legislation permanently extends, 100% bonus depreciation to qualified business property.
To summarize. We have a good quarter and first half of 2025.
Which provides us with a solid base to confidently deliver on a full year 2025 non-GAAP operating earnings guidance of $46 per share.
Which is up 9% at the midpoint over 2024 results.
Our 2025 guidance includes a full year of new distribution rates from our 2024 base rate case settlement, which was reached last October.
As well as an upcoming refueling outage at our 100% owned Oak Creek nuclear unit this fall.
In closing, we are also reiterating PSEG's updated 5-year capital spending program at $21 to $24 billion.
Reports an expected rate based on a CAD of 6.
Percent through 2029.
This in turn drives PSG's 5% to 7% non-GAAP operating earnings CAGR.
While continuing to use the nuclear PTC as our reference price for power.
BCG in intends to execute this Capital plan without the need to issue new Equity or sell assets.
I will now turn the call over to Dan, who will walk you through the results for the quarter and our outlook for the remainder of 2025. I will then rejoin the call for Q&A.
Great. Thanks. Ralph. Good morning everybody.
TCG, reported net income of 17 cents per share for the
Quarter of 2025.
87 cents.
2024.
And non-gaap operating earnings were 77 cents per share. In the second quarter of 2025,
Compared to 63 cents per share in 2024.
these solid results were up over 20% from last year's second, quarter reflecting the benefit of new distribution rates which were placed into effect at PSC and G and October of
244.
And higher generating volume, that PSG power.
which reflects the absence of last Spring's, hope Creek refueling outage,
Will take place this fall.
Raising OM and lowering output in the second half of 2025.
We provided you with information on slides 8 and 10 regarding the contribution to net income and non-GAAP operating earnings by business.
The second quarter and first half of 2025.
Like 9 and 11 contain waterfall. Charts that take you through the net changes for the quarter and year to date periods.
Prior year and non-gaap operating earnings per share.
Also, by Major business.
let's start with psng, which reported second
quarter net income and non-gaap operating earnings of 332 million for
compared to 302 million in 20224.
For the year to date, ended June 30th psng, reported net income and non-gaap operating earnings.
Of 878 million in 2025.
Compared to 790 million in 2024.
Well, these results were driven by the implementation.
Of October.
To recover a return of and on previous Capital Investments totaling more than 3 billion dollars.
Column transmission margin was a penny per share higher compared to the year ago quarter on higher investment and a prior year through us.
producing margin increased by 10 cents per share compared to the year ago, period, largely reflecting the impact of the rate case, plus recovery of an on
Eng's regulated Energy Efficiency in
On the expense side distribution onm cost for a penny for share favorable, compared to the second quarter of 2024.
Full year this distribution on.
Depreciation and interest expense each Rose.
2 cents per share, compared to the second quarter 2024
for higher levels of
plant.
Investment.
And long-term debt at higher interest rates.
Lastly.
the timing of taxes recorded through an annual effective tax rate, which never
Zero over a full year.
Unfavorable impact of 2 cents per share in the second quarter compared to the prior period.
reversing a positive 2 cents per share impact and the
Weather conditions during the second quarter as measured by the temperature. Humidity index for 21% warmer than normal.
14% cooler.
Than the second quarter of 2024.
as, you know, the conservation incentive program or sip mechanism, decouples weather and other economic sales variances from
a significant portion of our distribution.
While helping psng, promote the widespread adoption of energy conservation.
Including Energy Efficiency and solar programs.
The number of electric and gas, customers is the primary driver of distribution margin.
And each segment grew by approximately 1% over the past year.
On the Capitol Front, as Ralph mentioned earlier pcng invested approximately 900 million dollars during the second quarter. And we are on track to fully execute our 2025 regulated capital investment
At 0.8 billion dollars.
Focused on infrastructure modernization. And
Efficiency.
And meeting growing demand.
And we have maintained our 5-year regulated capital.
$21 billion to $24 billion through 2029.
We began the next phase of our Energy Efficiency program during the first quarter of 2025.
And we anticipate investing up to 2.9 billion dollars over a 6-year period.
The Energy Efficiency program total includes approximately $1 billion of on-bill repayment options.
to help our customers Finance, their Energy, Efficiency, equipment, and appliances
Provides customers with energy information and options, to manage their energy use and lower their bills.
Moving on to PCG power and other.
The second quarter PCG power and other reported net income of 253 million in 2025.
132 million of.
And non-GAAP operating earnings were $53.
$2 million in the second quarter of 2025.
Compared to 11 million.
For the year-to-date end of June 30th,
PCG power and other reported net income of 296 million in 2013.
Compared to 176 million in 2024.
And non-GAAP operating earnings of $224 million in the first.
Half.
Half.
Referring again to the waterfall on slide 9 for the second quarter of 2025.
Net energy margin Rose by 4 cents per share.
Driven by higher Nuclear Generating output.
Onm was 3 cents per share, favorable compared to the second quarter of 2024.
You feel it?
Interesting expense Rose by 2 cents per share.
Incremental debt at higher interest rates?
taxes and other were 3 cents per share, favorable, compared to the second quarter of
Before.
in part due to the use of a lower annual effective tax rate in 2025,
I will reverse over the balance of the year.
operating side, the new
2.5 terow hours during the second quarter.
Up by a half a terow, our over, the same period in 2024.
Both benefiting from the absence of last Spring's Hope Creek refueling outage.
Pass these factors for the nuclear Fleet were 88.8% and 94.3%.
The quarter and 6-month period ended June 30th 2025 respectively.
in Late July PSG nuclear is cleared approximately 3,500 megawatts of
Base residual.
What is $329 per megawatt day for the energy year beginning June 1, 2026?
May 31st 2020.
This latest result is up from 270 per megawatt-day.
Somewhere around amount of capacity in the 20.
PGM capacity.
so, the second half of 2025 results at PSG power and other will be impacted by this fall scheduled hope Creek outage
Completion of the 3-year zero emission certificate, award.
And ended on May 31st.
No offset higher capacity revenues related to the 2025 2027.
In the back half.
touching on some recent financing activity as
of June 30th. PSG had total available liquidity.
Of 3.6 billion dollars.
And 86 million of.
on the financing front PCG power issued a billion and a quarter of senior unsecured debt this past May
consisting of 750 million of 5.2%. 5 year notes. Due 2030.
And 500 million of 5.75%. 10 year notes.
Due 2035.
Proceeds from this sale were used to repay the billion and a quarter dollar variable rate. PSG powered Term Loan.
Mature engine.
Ccgs, variable rate debt. At the end of June, consisted of a 364 day Term Loan at PSG power for 400 million.
Insurers in December of.
And Commercial paperwork.
as of June 30th, following the Redemption of the PCG power billion and a quarter variable rate Term Loan in May
Our level of variable rate debt represents approximately 3% of our total.
July, 2025 federal tax, legislation preserved, the downside price protection,
Nuclear production tax credit.
As well as the PTC availability for expansions of nuclear capacity.
Supports our planned power-up rate at sale.
This legislation permanently extends 100% bonus depreciation for qualified business property.
Proving cash flow at PCG power.
On its plan Capital program.
As Ralph mentioned, we are reaffirming psg's full year 2025 non-gaap operating earnings guidance.
$3.94 to $4.
As well as our long-term 5 to 7% non-gaap operating earnings kager through 2029.
Nuclear PTC threshold.
Our solid balance sheet supports the execution of psg's 5-year.
22 and a half to 26 billion dollar Capital spending plan.
Without the need to sell new equity.
Or assets.
And provides the opportunity for consistent and sustainable dividend.
That concludes our formal remarks, and we are ready to begin.
Answer session.
Thank you, ladies and gentlemen. We will 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 1 on your telephone keypad.
If your question has been answered and you wish to with your polling requests, you may do so by pressing the star and the number 2,
If you're on a speakerphone, please pick up the handset before entering your request.
1 moment, please for the first question.
The first question today is from the line of David Aro with Morgan Stanley, please receive with your questions.
Hey, thanks. Good morning. Good morning, David.
Good morning. Um, let's see. So today, we've got the, uh, New Jersey resource adequacy conference going on at the BPU. I was just wondering if you could give a sense of where conversations stand with,
Regarding the future of Generation Build in New Jersey.
So, there really hasn't been a big change from a legislative standpoint, right? We talked a little bit in the prepared remarks about the bill that is currently sitting in the legislature. Um, but I'm looking forward to the conversation today that that's taken place. And I would tell you, we are advocating really for some decisions to be made.
By the state as we move forward. And that's really just around what are the forecasts they're looking for? We'll be talking about that. What are what are the reliability outcomes they're targeting?
What are the affordability targets they have? And then finally, the Environmental Policy goals when you put those 4 pieces together, we think we'll be able to find the right answer and solution for the state, um, and we'll be willing to help out in that in whatever way the state's looking for us to, to play a role. So uh, we're going to, we're going to stick to those 4 Points. Um and really try to drive some decisions from, you know, the existing Administration and and obviously having conversations with the potential um Google to candidates.
Yeah, absolutely. Uh, that makes sense, appreciate that. And then um, you know, uh, big increase in the data center pipeline uh, for this quarter. And I was wondering if you could give an update on, um, maybe specifically with regards to the nuclear plant opportunities and an update on data center conversations there. You know what, what is the interest level that you're seeing in the site? Um, most
Recently and then thoughts on timing uh, as to whether uh you could get to um an agreement this year.
Well, I'm going to I'll give that to Dan as I usually do on it on a data centers. I would just say from an economic development standpoint, so, you know, we're glad to see New Jersey, still playing a role in that. Uh, they have continued to Advocate, uh, for data centers and for technology companies to, to locate into New Jersey, so it's good to see that that is working, uh, and that is, is playing out in the numbers that we've provided. Uh, I think yesterday there was an announcement by core, we've, uh, for a large investment, they're making in Kennel Worth New Jersey, um, for some, some real estate that they're purchasing. So, uh, I think the work that's being done on the economic development, front is, is, you know, barring some fruits now. And uh, I'll let Dan talked specifically about anything down at at nuclear. Yeah. And and David there, you know, there continues to be discussion and I think Ralph's uh earlier commentary on uh the numbers going up in the state are are evidence of that and I think that you know you're well aware that our our assets are are both in
In New Jersey and in Pennsylvania, I think there are opportunities across those states and, frankly, wherever power can be delivered from those units.
For the, the the nature of what we have. So the the discussions continue, uh, there it continues to be interest and, uh, we'll let the timing kind of speak for itself as we go forward.
All right, I appreciate the color. Thanks so much.
Our next question is from the line of Nicholas Campanella with Barclays. Please just use 3 questions.
Hey, good morning, thanks for taking my questions. Good morning there. Hey, um, I just wanted to follow up on that last point. Maybe, you know, in your prepared. You kind of, um, you know, you brought up clearly the need to add new generation, uh, in New Jersey, uh, the fact that the state is an importer of power, um, and, you know, you talked about needing to kind of balance, affordability and resource adequacy along with economic development. Um, just
How do you kind of see that impacting your ability to move forward with the multi-year contract by the end of this year? And is it still your intention um to deliver something by the end of the year? I just wanted to be a little bit more pointed on that. Thank you. Yeah thanks dick. So we again we we've been saying we'd like to do something with this with this Administration. We've been saying that for many months now and uh I I think that that would still stand but
We're not going to do a deal that just to just for the sake of doing a deal by a certain time frame, right? So we've we've talked about that and that and that really hasn't changed. I think from a balancing standpoint
Dan, just put it really well. You know, we have Assets in both.
Pennsylvania and New Jersey.
Um, we have data centers showing up.
Jam footprint not just in New Jersey.
And I think this resource adequacy conversation that's taking place today recognizes the fact that what happens in our bordering states.
Matters to New Jersey. Um, when you're importing 50% of your power on your peak days,
I I I don't think we have, you know? We we we tend to have to to think we have all the answers but so you're a very specific question on how it all comes together.
I think it's it's it's really a pjm question. It's not just the New Jersey question.
Hey, that makes a lot of sense, I appreciate the context. Um,
And then maybe with the capacity auction results. I know you kind of talked about the Zex roll off, that kind of offsets the 2526.
Um, but then when we think about 2728, um, you know, how are you kind of framing where you are on a gross receipts basis? And um, I guess my question is is are you now higher in the range? Because of, um, because of the 26th? Or, because of the, uh, 26/27, uh outcome, thanks. Well, I I'll let you, I'll let Dan talked to again some more specifics here, but we have not come off of the fact that our guidance remains at the PTC floor, with our 5 to 7 in. I'll give it to Dan to talk from there. Yeah. Exactly. And and, and obviously it goes against the backdrop of what the market looks like Nick. And, and you know, as well as anybody that, uh, capacity is a piece of what the nuclear facilities make. Um, as much as they run, energy is a bigger piece, uh, but if you're seeing higher capacity, clears that sustained, then you're going to see higher capacity component of the overall Revenue that will sustain at a higher place and uh if energy uh Market
The electricity side, the energy side ends up, you know, moving to a point where you are higher. Well, then we're going to have, um, moving off of that. We are not there right now, with respect to what we see for the CAGR that we've put out, but we continue to monitor, we continue to, uh, market the output. And ultimately that's going to determine where we land against the backdrop of, uh, future forecasts. But right now, as Ralph says, uh, what we have out there is based upon the threshold.
Thank you very much.
All right, next question. This is from the line of Michael Sullivan, with Wolf Research. Please proceed with your questions.
Hey, good morning.
Hey, Michael.
Hey you guys wanted to just ask another 1 on on kind of the New Jersey Supply situation I guess outside of this bill that's out there. What what are the other options if that weren't to to move forward? And then, you know, we saw kind of next door and in Pennsylvania 1 of your peers doing kind of a JV outside of the regulated construct is, is that something you guys would would consider at some point.
So we we have so we have very specifically said, we are not interested in moving back into the merchant generation business, so that has not changed uh, for us.
I I I think the construct that was mentioned by others is really maybe a little bit different, but I I'll let that let them speak to themselves.
Um and you know so so what does that leave us with it? Leaves us with the pjm process.
And look, we we've been very vocal about that for many years at this company. We don't think that the, it's a, it's attracting additional generation. We think there's problems with the capacity process that exists, uh, the market as as it's called um, and how it how it exists there at pjm. And so unfortunately, if there isn't a change um and there isn't some more control taken by the state of New Jersey. We will be uh living with the outcome of
of that process and and all we can speak to are the facts. And the facts are that there has not been any new base load generation built in New Jersey for quite some time. And I believe our former Merchant generation business was the last 1 to do so.
And I think I, the only thing I would add to that Michael is is, you know, some of the discussions that you're, uh, that others are listening to concurrent with this call. I think are going to that topic and
You know, there are other discussions. I think there's a...
The pjm governors are going to meet next month to try to talk about what's going on. And and so um I I think that that right now all those discussions are against the backdrop of
Of the challenges that we have from what's in place at PJM and what supply could come out of that process or not come out of that process? And as a result, what things should be done to ensure that we have the supply we need. So that's where those discussions are all circling around.
and then also the uh, the new tax credit on, on the upright like any, any numbers around those 2 items, you can give us
From the standpoint of the PTC. Is it retained? What was in place? There was some discussion that, um, that hard to tell exactly how much traction it got about potentially shortening it or potentially changing it. But everything from a new group PTC perspective stayed in place and, you know, if we in answer to next question, if we move to a a higher overall Market condition, I would still love to have that protective backdrop of a PTC from the standpoint of an overall, uh, Revenue threshold. I think what what really for us was new within that was bonus depreciation. Uh, we've had different bouts of bonus depreciation in the past, and this 1 is, is laying out to make it permanent, but as a reminder, the bonus is not throughout the entire company. It is uh, only for the unregulated piece, and there's not that much Capital that's there. So is it to help you add to help? But it's kind of around the edges from the standpoint of an overall cash flow perspective that it will accelerate some of that cost recovery. Uh,
Earlier than otherwise.
Okay, great. Thank you very much.
Our next questions are from the line of Ross. Fowler with Bank of America, please just to see if your questions
Good morning, guys. It's actually Renie here for Ross.
Um, I just had a quick question about the, um, you know, we saw a lot of affordability-focused bills in the session. So, I guess from your perspective, which of those bills are kind of gaining the most traction and kind of will have the likely biggest impact moving forward? Um, I guess in terms of like regulated Gen, which you talked about, or cost referrals, or reassessing New Jersey's role in PJM?
All right, uh so the session has closed officially right? So that it could always come back. Um but right now there's no
There's no scheduled uh time for the legislature to come back to discuss those bills. I think they have a couple of items that you're dealing with on Healthcare. Um but there's nothing that's very specific to to the utility space. So
I, I would be hard pressed to say that any 1 of those specific bills, uh, are
Ones that we're focused on. I think what we're really focused on is finding a solution for the customers and you know we've done that with the short term. And now we're trying to have a conversation which again is taking place as we speak at the New Jersey Board of Public Utilities on the resource adequacy. And we're going to continue to Advocate as strongly.
We have a lot at PJM. So I wouldn't point you to any one of those bills specifically. Because again, they may change down the road if they even continue in some fashion. But, um,
I I would just I would just leave it at that and that that really speculate on what what might or might not happen.
Okay, that makes sense. And then just secondly. Um, I just mentioned the 200 megawatts out of Salem, but I guess more broadly. What potentially is there for incremental generation and um, upgrades on the nuclear Fleet to upgrades refueling uh Cycles Life Extensions. And then I guess how much of that has already been executed.
Well, thanks, thanks for that. We're actually uh, from an execution standpoint, much of the engineering work has been done on everything that you asked about. Um, but we did mention earlier in the prepared remarks, the fact that uh, in this refueling cycle, that will be taking place in the fall at Hope Creek.
Uh we will be setting the unit up for the first time for a 24 month run.
So that is the change in the fuel cycle that we had talked about. So we're continuing to execute on a plan that we had discussed and the engineering work and we have not discussed the the cost or or the exact timing of that. Uh but we plan the updates for the Salem units uh later uh in the next few years. So um nothing specific has been out there on that yet but I think we did say we have that somebody end of the decade for sure. So I think you're
And we'll have that information out by the end of the year.
Okay, okay, that makes sense. Thanks, guys. Thank you.
Our next question is from the line of Carly Davenport. We call the sax, please. See you with your questions.
Hey, good morning. Thanks for taking the questions.
Hey um maybe just to start on the update on the large load inquiries at the utility level. Um is that sort of 10 to 20% conversion rate? Still hold in your view on that 9,400 megawatts and and is that all data centers at this point or are there any other uh customers in that bucket?
there's a few other customers in that bucket, but I would say the
That is all data center related, and if you think about the numbers that we quoted to you, um,
The 9,600 megawatts is sort of everything together, and then the applied to 10% to 20% kind of aligns with our what we call new business number that's out there. So, uh, short answer is, yes, it's sticking with the 10% to 20%, and the longer answer, as you can see, is in the details that we provided.
Perfect, thank you for that. And then maybe just, you know, thinking about 2025 um earnings growth. As you think about 1 H, you know, growth is tracking above your full year, 9% expectations, and know that we'll have the Hope Creek outage in the fall, which will be a drag. But I guess this would love your thoughts on how you feel about execution, within the full year, uh, guidance range at this point in the year.
Yeah, we’ve tried to make the point. We feel confident about being within the range for sure, and we reiterated that. So, um, I don’t think we’re going to go anywhere beyond that at this point.
Uh, Carly. We, you know, at the halfway point, we do sit a little bit north. And and I think that that Hill Creek outage that that's the reason we did highlight within the materials that that was coming at the back end, just a reminder that that's 100% owned and so when that does come through, it has a bigger impact. As we move through quarter by quarter,
Great, thank you for the time.
Thanks Carly.
My next question is from the line of Ryan LaVine with City. What you see is their questions?
Good morning.
What do you?
Um, would you see the customer build deferral mechanism for additional year as a result of the higher pjm capacity prices during Peak load months? That's something you're contemplating given the recent events.
Well, first of all, that conversation will take place with a new administration and a new BPU. So, um, right now there's nothing in the plan for the state of New Jersey to pursue that.
Okay. And then in terms of, all right, just just to be to be clear with respect to to the the capacity auction that just happened and the impact on the bill. Um, what we saw in June was the reflective of what I'll describe as a, a catch up.
Because the pjm auctions were as delayed as they were, you're seeing the cumulative effect of catching up.
From the prior auction result to that 270 that we saw.
What happened in June brought everything up to 270. So you would not expect to see, as a result of the 329, that kind of a jump. Number one,
number 2, if you just take a look at
Our normal bgs process, the the auction, that's rolling off the bill and the auction. That's rolling on the bill. And you take a look at where prices sit now. We not only do we not expect a jump, like we saw in June, we don't
We expect much movement at all, because what's coming off the bill is a little bit, uh, higher than what would roll on at the current prices. And and so that's not to say that something couldn't be done from the standpoint of what you're describing. Uh, that
Knot in place now, Ralph answered 100% correct.
Work with the regulator as we.
We do that. Um, but
Would not be in the face of an increase like we saw in June because that is not what is forecasted as we go forward. Just to based upon the mechanism
Thanks for the detail on that. And then just one follow-up in terms of the large load requested additions.
Is there any color around? How many customers are individual projects, represent that large megawatt increase uh just to assess kind of the the chunkiness of of that of that. Uh add. Yeah so I I I would I'll add some color without any details and the and the color is that, you know what, we see here in New Jersey would be a smaller projects than what you're hearing in some other places.
You you're not talking about thousand megawatt hyperscale in the middle of the Garden State Parkway, right? So there it's a, it's a little different, uh, type of environment here. A lot of edge Computing, a lot of backup locations. But it's it's, it's large. And and look, our, our Peak load. Um,
You know it's not much north of 10,000, and we're getting close to that in inquiries that we're receiving, and...
It's it's a game changer for all of us, you're seeing it across the pjm footprint. Um, and so just, we're getting our, we're getting our fair, share is the way I would put it but smaller projects than what, than what some of the other states are saying.
And then lastly, you reference the core weave development from earlier in the week. Is that incorporated in this update?
There's a, there's a, uh, a piece of the conversation that they've talked about that's in our current projections. They have not, uh, they have not gone out with their full build yet for what they planned.
Thank you.
Thanks Ryan.
Our next question is are from the line of Travis Miller with Morning Star, please proceed with your questions.
Hi everyone. Thank you.
Hey, Travis Travis.
Hi there. So just following up on this resource, I actually discussion at a high level. Wonder if you could characterize,
Is there concern among New Jersey legislators, the BPU, etc., that there aren't enough electrons, either energy or capacity, in New Jersey? Are we at 50% import? Or is it just that the economics aren't good for the customer bill, if that makes sense?
House that debate characterized.
Well, I would say, in the near term, it has all been focused on affordability.
And that's where the conversation has been focused, um, with the capacity price increases and what customers are seeing. So it starts there, right now.
But it is not too far in the recent past that you can look back and talk about reliability.
Concerns that folks had.
And you can also not too far in the in the recent past, talk about environmental concerns that people have had about what kind of power we were importing or not importing into the state. So we continue to. That's why we keep bringing everybody back to the big, the big picture, what is out there from a policy standpoint that we can, you know, and and what Solutions can we bring to solve for all those policy, uh, issues that are being raised?
So,
Uh, I don't want to say it's all affordability because if it's not, it's not too far in the past. I mean, and my past is a little bit different maybe than others. I'll go back to 2003 when the lights went out. The whole focus at that point was on reliability.
Um, not too far. After that, we had an issue from uh affordability standpoint where
We were, we had some congestion that was taking place and that was resolved with some transmission. Build that was done.
Then we focused back on some environmental concerns that were taking place and then we focused on reliability again, after superstorm Sandy. So it's been all of those pieces that have that have been out there and have been discussed. And uh we're just reminding people of all of it as we as we focus today on affordability.
Okay, that that's great. I appreciate all that. Here's hoping the lights don't go out for you guys again through all this but uh 1 1 quick question on the if if the state were to go to a regulated generation option, would that need for approval?
Would that have to go through fork or some other Federal entity?
No, I don't.
It would I think, as long as the state, you know, the it went through a a regulated, they'll have to your question about whether it's an F frr or how they would actually go about the process. But um, I do not believe it would require any further approvals.
Okay. Very good. That's all I had. Thanks so much. Thanks, Travis.
Our next question is from the line of Paul Freeman with Len Salman. Please proceed with your questions.
Thank you very much, and congratulations on a strong quarter. I just wanted to sort of maybe better understand.
Core weave would the relationship there be with the utility or with PEG power. If there is a a relationship between
Uh, uh, uh, public service and the new data center. Yeah, the only thing that's been out there with CoreWeave has been the utility, and that's what we spoke to. And that's what we've included here. Paul, anything else from a relationship standpoint? We'll come out when Dan.
Talks about whatever Dan talks about down the road at future conversations. So,
Okay. And then, uh,
The purchase that they made involves, uh, some co-generation facilities. So is, is it contemplated that they're, uh, would be a need for, uh, additional generation at the site and and if so, you know how how much in terms of uh, uh, in terms of megawatts? Yeah, that's a question for for their site management. Uh, not I wouldn't be able to tell you that there is a codegen facility there.
Um, so I guess sort of a behind the meter.
Generation as we have said multiple times. There's there's co-generation in the state of New Jersey and there's multiple sites that have that. So, alright, uh, a lot to be determined there as to how that's used and and and what other needs they might have
Facility off the top of my head. Well again, I it's a question for their site team. I'm not sure what what capabilities that unit has today.
Great name plate was under 100 if I remember correctly but I I I couldn't couldn't tell you exactly.
Uh, it's terrific. Um, I think that's it for me. Thank you.
Thank you.
The next question is from the line of Julian. Demoan Smith with Jeffrey, please leave your questions.
Hey, good morning, team Ralph and how you guys doing good great.
There we go. Um bring the energy up at the end here. Um, let's um, just quickly. Well first off, I got to say speaking of energy up on the year, you guys are trending very well on the year. Um, 26 Cents here to date. Uh, I I I heard your comments about being confident in the range but I'm curious where you'll land next quarter, as far as reiterating, that guidance. Um, maybe a comment more than the statement, uh, when the question but, um, any any if you go back to the question, we appreciate that. Thank you.
Absolutely, uh, or maybe in response to Carly's. Um, but um, just going back to this Garden State energy storage and I heard your comments earlier about power, right? And maybe not necessarily expanding the scope per se, but what's the willingness to participate in this initial bid process? That seems ongoing now of the gigawatt or to what extent do you anticipate the power Andor PSG? Um, participate.
Fitting in the current phase into future phases, right? Again, you could, you could approach this from a few different angles. But how do you think about that being quote? The, uh, the primary answer in the current environment? Um, as best we, we talk about this resource adequacy problem here in New Jersey. Yeah. So there's a lot in that question. Um,
I, I would say.
How do we think?
About primary solution.
You know, I want to take it from the 3 or 4 topics that we talked about, and that's the least of which is an affordability question.
Uh, then there's an environmental question. There are some other questions that need to take place there, right? So in Q2, we see what some of the pricing is at. Um, I don't know how much of a solution it will be. We've seen prices that are high, and we've seen prices that are coming down to some degree on some of the battery activity. But.
I wouldn't say it's a silver bullet right now. I think it's part of an all-of-the-above approach that we've advocated for for years.
And I think if I'm not mistaken, we we had made a filing over 5 years ago down with the state of New Jersey proposing, a Battery Solution from our utility. So we believe in it. It's just a question of how much from an affordability standpoint fits into that. We like to call a Venn diagram where everything comes together. So um,
A little bit more there and then our participation. We haven't talked to and I I want front run anything about that. Um, there there are multiple states that have some battery, uh, requests out. And, you know, we we look at all the opportunities all the time, but we have not, um, we have not commented on that.
Got it. And and look, Rob you're you're always in the know on these things with respect to PGM in this conversation on governance and and and engagement here. I mean, how do you think we? We could look at the auction and just pjm and and New Jersey relationship going forward. I mean, I know they're asking for board seats and representation and shifts in government, uh, but there's also a separate conversation about Shifting the nature of this auction towards bifurcated structures. And or, you know, just other permutations that I'm I'm sure swimming out there if you will. Any comments on any of that? Look, I I'm going to take you back to things that we have said for again years.
And even.
um,
Here's their, their, their. The governance at PJM doesn't allow for a lot of the things that people are talking about to just be unilaterally implemented.
So we have to get through a process where, you know, the members are going to vote on this. It may sound crazy, right? Um, but the members are going to vote whether or not they want to have the governors participate or not.
And, and order representatives, and then, and then, and then if not, you know, maybe, maybe the governors could take some action and go down to Furk and have a conversation that could play out. But this governance process is the core problem here right now. And it's really, it's not something we have not said in the past.
We welcome the transparency of the voting process that people are calling for. Uh, we
we think they're at the end of the day, we'll get to a good solution here, but it's it's not an overnight Silver Bullet. I'll use that term again, Solution. That's going to take place and I'm, I'm happy. We have the collar in there right now. It's, it's, it's, uh, it's, it's giving us some time to have a conversation. Um, but it again,
didn't solve the long-term problems that we're facing.
Awesome, guys. Thank you again. Good luck. Thanks.
Thank you. Our last question is from the line of Paul Patterson. Let's go on to Rec Associates, please. Just see with your question.
Hey, good morning, guys. Hey, Paul.
Um, just sort of the follow-up on these policy questions.
I'm just wondering, I mean given that I think you mentioned 5,439.
I don't think that's moved.
and um,
And I guess what I'm wondering is, given that the legislature is kind of in recess here and...
And the fact that you've got a governor who's leaving, we've got an election coming up here.
and,
just the, um,
The politics of all of this and what have you?
Is it likely that anything is going to happen? Legislatively you think this year in, in New Jersey? Excuse me. Um, uh, given all these Dynamics and the fact that we
We just don't seem to have that much movement.
On a lot of this stuff.
Yeah. Look, I think there's a lot of momentum behind it. I think there's a lot of consistency in the conversation, whether it's with the existing administration.
Either of the gubernatorial candidates, I think there's some nuances in how they would approach the solution, but I think every one of them that we talked to continues to desire more control.
Over those items that I mentioned uh, continue to say them. You know, it's the it's the reliability is the affordability and and the uh environmental piece of it and and the forecasting, right. I mean you've heard that in the past so all 4 of those pieces need to come together and and I think that every 1 of the, whether it's the existing Administration or the 2 future potential Administrations,
Feel like that's something they want more control over.
Okay. So the possibility exists, right? It could happen if there's alignment between the existing Administration.
And the incoming administration— a lot of things could happen towards the end of the year.
Okay, um, with respect to batteries.
um, and um,
You know, their ability to sort of give a capacity value.
um,
and give them with prices in the capacity market.
Um, is there any thought about revisiting what you were mentioning before? Because it sounds like you could build those.
As a utility asset. Um,
Any thoughts about how those might work economically?
Given where capacity markets are in the curve and what have you, or...
Where is it? This is. What are your thoughts about that? I guess.
Yeah, no look, I think there's a lot of...
Opportunity there from a revenue standpoint to your, to your what, to what you're saying. But right now, that's still all a merchant solution. The utility did propose a rate based solution, and it has not been acted on yet. And, and I respect that, um, right now, the BPU is, and it's been for for many years, has has looked at that as, as a, as a merchant solution, I think that Garden State battery storage. Specifically says, they would like to have a merchant solution for it. Um, and so maybe
Maybe the math will work out. I won't go into detail on that right now. I'll just tell you that I think there's a role for the utilities to play, and I think there's a potential role for the competitive markets to play.
Okay. I really appreciate it. Thanks so much. Have a good one.
Thank you at this time. I'd like to turn the floor back to Mr. LaRossa for closing comments.
Thank you. Well, I'll end where I started, which is a thank you to the employees, uh, for the work that was done. This is, uh, this is not been, uh, an easy weather pattern for us, uh, over the past couple months.
Uh, while we talk about storms and we talk about heat, we don't talk about when that all occurs and uh, this is this, these storms have rolled in consistently on Fridays.
To spend time with their families is interrupted. And we certainly
Just take a second to pause and thank everyone for the work that they've been doing during that time.
And then I also want to thank our customers for engaging with us and having conversations. We are here for our customers.
But we also know that there's challenging times from an affordability standpoint, not just with utility bills but across the board. And and we are we are bringing those Solutions in the near term and and, and fighting hard and advocating for the long term Solutions. So you'll continue to hear and see more of us doing that. And you'll continue to hear and see more of us on the road as we get back out there in the next couple of months. So thanks for calling in.
And have a great rest of your summer.
Ladies and gentlemen, this concludes today's teleconference. Please disconnect your lines at this time. Thank you for your participation.