The operator introduces the conference call for PSEG's fourth quarter and full year results for 2023. The CEO and CFO will be discussing the financial results, which can be found on the company's investor relations website. The call will include forward-looking statements and non-GAAP financial measures. After prepared remarks, there will be a question-and-answer session. PSEG reported a net income of $1.10 per share for the fourth quarter of 2023, compared to $1.58 per share in the same quarter of 2022.

In the fourth quarter of 2023, PSEG reported non-GAAP operating earnings of $0.54 per share, down from $0.64 per share in the same quarter of 2022. For the full year of 2023, the company's net income was $5.13 per share, exceeding the previous year's $2.06 per share. PSEG reaffirmed its 2024 non-GAAP operating earnings guidance of $3.60 to $3.70 per share and its 5% to 7% earnings CAGR through 2028. The company plans to invest $18 billion to $21 billion in regulated CapEx to support a rate base CAGR of 6% to 7.5% through 2028. PSEG has also submitted two important filings at the New Jersey Board of Public Utilities, including a $3.1 billion Energy Efficiency II investment program.

PSEG has filed for a second energy efficiency program in New Jersey, which aligns with the state's clean energy goals and will run from 2025 to 2027. The company has also filed for a rate increase of 9% in their first distribution base rate case in 6 years, with a proposed 12% increase for residential customers over a 6-year period. PSEG's energy efficiency programs have been successful in lowering customer bills and reducing emissions. The rate case is expected to conclude in 2024.

The rate case includes recovery of capital expenditures and proposes mechanisms to mitigate market volatility. The BPU has added new commissioners and has shown a preference for settlements over adjudicated cases. Settlements have been approved to extend investment in infrastructure and greenhouse gas reduction. The company is focused on cost containment.

In 2023, PSE&G was able to negotiate labor agreements with all of their New Jersey employees, reducing one of their largest costs. This, along with their strict cost discipline, has allowed them to have the lowest distribution rate increases in the state since their last rate case in 2018. PSE&G has also been able to reduce monthly bills for residential natural gas customers and maintain outstanding reliability, earning them a ReliabilityOne award and top rankings in customer satisfaction studies. Now, they will focus on their capital investment programs.

In the fourth quarter of 2023, PSE&G invested $1 billion in energy infrastructure and clean energy, bringing their total capital spend to $3.7 billion. Their rate base increased by 10% due to their successful energy efficiency program and infrastructure advancement program. They also installed 1.5 million smart meters and their nuclear fleet operated at a 93% capacity factor, producing 32 terawatt hours of carbon-free energy. PSEG has been recognized for their sustainability efforts and was named to several prestigious lists, including the Dow Jones Sustainability North America Index and the S&P Global Sustainability Yearbook. They were also included in U.S. News & World Report's list of 200 best companies to work for.

In 2023, PSEG was recognized as a trendsetter for corporate political disclosure practices and completed the sale of its last fossil unit in Hawaii, making it one of the few carbon-free baseload generating fleets in the country. PSE&G is executing on growth investments aligned with New Jersey's energy policy goals and expected growth from increased electrification. The company's progress has increased predictability and it has delivered on its 5-year capital investment plan without the need for new equity or selling assets. PSEG reported net income of $5.13 per share and non-GAAP operating earnings of $3.48 per share for the full year of 2023.

In the fourth quarter of 2023, the company's net income was $1.10 per share compared to $1.58 per share in 2022, and non-GAAP operating earnings were $0.54 per share compared to $0.64 per share in 2022. This was driven by growth in investments in transmission and gas distribution, but offset by expected declines in pension income and higher depreciation and interest expenses. PSE&G had a net income of $0.58 per share and non-GAAP operating earnings of $0.59 per share in the fourth quarter of 2023, with higher margins from transmission and gas and an increase in distribution O&M expenses. Overall, the company's investments and expenses have continued to grow.

The lower pension income and OPEB credits in 2022 and the timing of taxes had a negative impact on the quarter's earnings. The warm weather also affected electric and gas margins, but the Conservation Incentive Program helped mitigate this impact. PSE&G invested $1 billion in the fourth quarter and completed its largest single year investment program of $3.7 billion. The 5-year regulated capital investment plan has been rolled forward to 2028, totaling $18 billion to $21 billion. PCG Power and Other will be discussed next.

In the fourth quarter of 2023, PCG Power & Other reported a decrease in net income compared to the previous year. Non-GAAP operating loss also decreased. Net energy margin increased due to lower capacity revenues and gas offset. Operating and maintenance costs improved due to the absence of a refueling outage. Lower interest expense and unfavorable pension income and taxes also contributed to the decrease in net income. The nuclear fleet ran at a high capacity factor for the quarter and full year. PCG Power has hedged a majority of its expected generation for 2024 at a higher average price compared to 2023. As of December 31, PSEG had a large amount of available liquidity and PCG Power's net cash collateral postings decreased significantly compared to the previous year.

In 2023, PSEG's cash from operations increased to $3.8 billion due to a reduction in collateral. The company also swapped $1.4 billion from variable to fixed rate debt to mitigate interest rate variability. PSEG maintains solid investment-grade ratings and expects strong cash flow from PSE&G and PCG Power to support their 5-year capital spending plan without the need for new equity or asset sales. They have met or exceeded their non-GAAP operating earnings guidance for 19 years in a row and reaffirm their guidance for 2024 and their 5% to 7% annual growth rate through 2028. The question-and-answer session begins with a question from Guggenheim Partners.

The company is considering potential earnings from PPAs and economic development opportunities, such as a wind port and data center, in the future. These are not currently included in the company's plan and will depend on the state's economic growth policies. The company will continue to keep its options open and may see more potential after 2025.

The speaker discusses the potential for optimizing revenues from power plants and the recent rate proceedings in the state. He mentions that New Jersey has its act together and that they don't anticipate any major issues with their case. The speaker also notes that there has been significant load growth in New Jersey, which could potentially lead to higher revenues.

The speaker discusses how state initiatives are pushing for AI and data centers, and how this may impact load growth expectations. They mention that PJM has listened to their recommendations and reflected the state's policies in their latest forecast, but they hope for consistency across the entire PJM footprint. They also mention that they have seen some data centers popping up in their area and that their system is well positioned for these developments.

The speaker reminds the audience of the conservation incentive program and explains that the potential growth in road volumes is more important for infrastructure needs than for selling electricity. They also mention that a data center using 100 megawatts would spread costs over all customers and create more headroom for residential customers. There is potential for incremental T&D CapEx, but it is not currently driving investment above what has been previously signaled. The speaker also discusses affordability in the state and mentions elements of rate headroom, such as storms and ZECs, to put the rate case increase into perspective.

Ralph LaRossa and Dan Cregg discuss the affordability and reliability of the New Jersey energy system on Page 12. They mention that they have managed the system well at an affordable rate for the past 5 years. They also note that the ZECs will roll off in May 2025, resulting in a reduction of a couple hundred million dollars for PSEG customers and $300 million for the state. They clarify that they are not thinking about headroom, but rather maintaining affordable bills for customers while providing quality service. Durgesh Chopra asks about the $3.1 billion energy efficiency filing and whether it is over a 6-year period or from 2025-2027.

Durgesh Chopra asks Ralph LaRossa about when a decision can be expected from the commission on the triennial period, and LaRossa clarifies that the period is actually 2.5 years and the spending will take place over a 5-6 year period. The schedule for the outcome is estimated for the third to fourth quarter of this year, separate from the rate case. Dan Cregg adds that there is still no update on the nuclear PTC and they are waiting for the Treasury to release the rules.

The company is waiting for guidance from the government regarding PTC and does not have a specific date for when it will be provided. In the meantime, the company is trying to minimize risk by adjusting their hedge program and managing O&M costs for 2024.

The speaker discusses the possibility of upward pressure on O&M costs due to nuclear outages, but assures that there are no concerns in this area. They also mention the positive outcome of union negotiations and the small impact of fuel prices on O&M. They do not anticipate any significant changes for 2024 and are waiting for the treasury regulation on tax policy before making any plans.

Dan and his team have been working hard to understand the potential impact of new guidance from the treasury. They are prepared to act once the guidance is released and will share their response with investors. Time of use rates are important for the data center industry in New Jersey and there may be rate design mechanisms discussed in the rate case to attract more development.

The speakers on the call discussed the potential benefits of electrification and EV adoption in the rate case. They also mentioned the company's strong performance in 2023 and its unique position as a provider of affordable, reliable, and high-quality service. The nuclear fleet has also shown improvement in terms of capacity factors.

The speaker expresses gratitude for the support they have received and discusses their plans to continue growing without issuing equity or selling assets. They promise to maintain consistent progress in the future. The operator then ends the teleconference.

This summary was generated with AI and may contain some inaccuracies.