The operator introduces the conference call for PSEG's second quarter 2024 earnings and introduces the speakers. The call will be recorded and available for replay on PSEG's investor relations website. The speakers will discuss the company's financial results, including non-GAAP operating earnings, and will conduct a question-and-answer session. The CEO, Ralph LaRossa, thanks everyone for joining and reports net income of $0.87 per share for the second quarter and $1.93 per share for the first half of 2024.

In the second quarter of 2024, the company reported a net income of $1.18 per share, compared to $3.76 per share in the first half of the year. Non-GAAP operating earnings were $0.63 per share for the quarter and $1.94 per share for the first half. This is in line with the company's full year expectations, which take into account the resolution of a distribution rate case and expected increase in gross margin in the fourth quarter. Despite experiencing one of the hottest summers, the company's electric transmission and distribution system performed well and employees provided excellent customer care, responding to a high volume of calls and restoring power to affected customers within 24 hours.

In the second quarter, PSEG's electric and gas systems were able to withstand an earthquake without any operational issues. The scheduled refueling of the Hope Creek nuclear station was completed on time, and the two Salem units operated at a high capacity factor. In regulatory news, the New Jersey Board of Public Utilities approved an extension of PSEG's clean energy program and the recovery of COVID-19 costs. PSEG is currently in discussions to resolve their distribution base rate case and the Energy Efficiency II filing. They have proposed a 9% overall revenue increase and a 12% increase for typical residential customers over a six-year period.

PSE&G, a single state utility with dual regulatory jurisdictions, recently filed for a distribution rate increase that covers 57% of their total rate base. However, customer affordability remains a priority and PSE&G is taking steps to reduce gas supply costs. The company is also on track to execute a $19 billion to $22.5 billion capital plan through 2028, with a focus on infrastructure replacement and energy efficiency programs. PSE&G is also investing in smart meters and pursuing potential opportunities for future regulated growth. The company is expecting an increase in demand from data centers and electric vehicle charging, which will drive load growth and system investment needs. The BPU is expected to announce the winner of the offshore wind infrastructure bid in the second half of 2024.

The BPU has postponed its second state agreement approach process to procure transmission for offshore wind generation and may reevaluate the timing in six months. PJM has opened a solicitation for transmission expansion plans, influenced by increased electrification and data center load growth. LIPA has opened an RFP process to select a manager for their electric grid, and PSEG Power intends to submit proposals. PSEG Power is also exploring opportunities to sell electricity from their nuclear facilities to large power energy users. They are reaffirming their guidance for long-term non-GAAP operating earnings growth through 2028.

PSEG's solid balance sheet and successful deployment of free cash from the nuclear business has allowed them to fund utility growth without the need for new equity or asset sales. This has also enabled them to maintain consistent and sustainable dividend growth. The company has settled two regulatory proceedings and is working on resolving pending filings while also investing in infrastructure modernization and energy efficiency initiatives. Despite challenges, the company has maintained best-in-class operating statistics and customer service. In the second quarter of 2024, PSEG reported net income of $0.87 per share and non-GAAP operating earnings of $0.63 per share.

The paragraph discusses the net changes in non-GAAP operating earnings per share for PSE&G in the second quarter of 2024 compared to the same period in 2023. The main drivers for these changes were growth in rate base, higher O&M costs, and increased electric and distribution margin. However, there were also higher expenses for corrective maintenance and gas meter inspections, as well as lower pension and OPEB income.

The timing of taxes and weather variations had a net unfavorable impact on the company's second quarter results. However, the Conservation Incentive Program helps mitigate the effects of weather on utility margins. The company remains on track with its capital investment plan, focusing on infrastructure modernization and decarbonization initiatives. They are reaffirming their five-year plan and are awaiting the resolution of a BPU proceeding.

PSEG Power & Other reported a decrease in net income and an increase in non-GAAP operating earnings for the second quarter of 2024 compared to the same period in 2023. Net energy margin rose due to nuclear PTC and other factors, but was partially offset by a planned outage and lower generation. Quarterly results are expected to have a different shape compared to the previous year, with most of the increase in gross margin occurring in the fourth quarter. O&M costs increased due to a scheduled refueling at Hope Creek nuclear unit, while interest expense and taxes also had a negative impact on earnings. The nuclear fleet ran at a capacity factor of 82.7% in the second quarter and 15.2 terawatt hours were produced in the first half of 2024.

In the paragraph, the speaker discusses recent financing activity for PSEG, including their total available liquidity, the issuance and repayment of senior notes and a term loan, their credit ratings, and their reaffirmation of their full year 2024 non-GAAP operating earnings guidance and long-term growth forecast. The speaker also mentions the pending resolution of a distribution rate case and concludes by opening up the question-and-answer session.

The speaker is asked about the data center opportunity in New Jersey and how it will benefit the local community. They explain that the co-located data center will attract AI companies and create job opportunities for construction and wire work. These activities will bring economic benefits to the community over several years.

The utility company PSE&G is seeing a lot of activity in data centers in New Jersey. They consider a commitment to be when a data center has moved beyond the engineering phase. The data centers vary in size and infrastructure needs. The company remains committed to supporting economic development efforts.

The speaker expresses concern about the impact of co-located load on various industries, not just data centers. They mention the potential for issues with rooftop solar and co-generation. The questioner asks if the recent protests against the Susquehanna ISA would affect potential deals, but the speaker says they will be evaluated on a case-by-case basis. They also mention their support for the governor of New Jersey's efforts to attract AI businesses to the state.

During a company meeting, Shar Pourreza asks about the potential for growth in the nuclear business. Ralph LaRossa responds by saying that the company is supportive of state policies and is on track to implement fuel cycle changes and uprates at various plants. He also mentions that there have been no issues or red flags in the process. Shar congratulates the company on their execution and asks about discussions with the local transmission utility for an interconnection agreement, to which Ralph responds that they have not reached that stage yet.

The speaker is discussing the company's position on a FERC docket and the state's goals for offshore wind. They mention that they don't have enough details to weigh in on the docket and trust the process at PJM. They also mention that they are focused on supporting the governor's economic development plans and that there have been no indications of any changes to the state's plans for offshore wind.

The speaker is discussing a potential data center contract opportunity and the uncertainty surrounding it. They mention the possibility of selling up to a third of their total capacity but state that it is too early to discuss specific sizing. The speaker also mentions the upcoming PJM auction and how it will not significantly impact their five to seven year forecast.

The speaker discusses increased inquiries for data centers and the need for system investment to address this and EV charging. They mention that the capital plan will be updated at the end of the year and share examples of scenarios in the utility space where capital may or may not be required for data centers.

The speaker discusses the potential impact of AI on the company, mentioning that it may require more capital and be more complicated. They also mention that there is a mixed bag of results currently, but overall the company is seeing growth and attracting businesses. They also mention the potential for growth through competitive solicitations and note that they are not turning down any EV interconnections.

The speaker discusses the progress of EV expansion in New Jersey and how it has affected the last mile. They also mention the ongoing rate case process and express satisfaction with how it is being handled. The recent COVID settlement has played out as expected and the speaker is grateful for the way it has been portrayed. They end by hoping everyone can enjoy their time on the shore.

The speaker was asked about the potential for a colocation deal in the data center industry and responded that they are being cautious and looking for partners aligned with their policies. They also mentioned a backlog of several hundred megawatts in the utility business, but any updates on that will be provided at the end of the year. The speaker also mentioned the increasing interest in electric vehicles.

Ralph LaRossa does not see any election-related risk to the uptake of EVs in New Jersey and the potential investment needed to support it. He believes that most of the interconnections are done at the distribution level and the next election will not impact the state until next November. He is not concerned about an election change and believes that the uniqueness of their service territory will keep electric vehicles at the forefront. The company is covered for nuclear fuel requirements through 2026 and is actively working to extend supply beyond 2028 when the Russia waivers expire.

The company is pushing out data and giving updates on their energy efficiency program. They are also looking at expanding the program due to load forecasts in the service territory. A feasibility study is being conducted by potential customers for data centers, but no official request has been made yet. The company's engineers are assessing if they can support the requested megawatts.

The speaker discusses the different acronyms and processes used by utilities when dealing with new business requests. They consider feasibility studies to be in the middle of the process, with official requests coming in for larger projects. The number of feasibility studies and leads is currently triple the number of new business requests. The speaker also mentions the potential for regulatory issues if infrastructure cannot support new business requests in a timely manner. The Amazon connection is being handled through the commercial development team. The speaker confirms that the approach to co-located projects may differ from those that are not. The utility has an obligation to serve and must consider capital and system operation when determining the best way to handle new business requests.

The operator of the conference call introduces a question from Sophie Karp of KeyBanc regarding the company's PJM strategy and co-location opportunities. Ralph LaRossa, the speaker, explains that the data center being co-located does not yet exist and will take time to build, so it does not impact their decision on bidding into the next BRA auction. The next question from Andrew Weisel of Scotiabank asks about the land on the artificial island and its potential for data center development, but LaRossa declines to provide details on potential plans.

The speaker discusses the varying needs of data centers and the difficulty in determining how many megawatts of power one acre of land can support. They also mention the potential impact of a political change on the nuclear PTC and the possibility of revamping the New Jersey ZEC program if data centers are co-located. However, they clarify that the ZEC program will end next May, so any potential changes would not occur before then.

The speaker discusses the potential impact of higher capacity and power prices on the company's regulated utility in New Jersey. They mention that while this may benefit their units, it could also have an impact on customer bills and potentially affect rate base investment.

Ralph LaRossa and Dan Cregg of the utility company are discussing the potential impact of commodity prices on their business. They mention their good economic development work in the region and expect the share of wallet for utility bills to remain consistent. They also mention the potential for federal support for nuclear energy and how it will help balance out other carbon-free investments. A question is asked about the demand and supply balance in PJM, to which LaRossa and Cregg do not see any potential issues with demand growth.

Ralph LaRossa, an expert in the energy industry, discusses the reliability of the current PGM process and expresses confidence in the experts at NERC and FERC to ensure adequate reliability. He mentions that PJM has started a process to look at load growth and will release their findings at the end of this year or beginning of next year. LaRossa trusts that the load projections will be accurate and reflect the input provided by other utilities. He also mentions the possibility of needing new generation or transmission in the future, which will be signaled through the capacity markets or RTEP process. LaRossa also comments on the difficulty of making decisions on building new power plants and mentions that his company is not in that business anymore. He also mentions that some companies within PJM have considered pursuing legislation for regulated generation and rate base.

Ralph LaRossa discusses the possibility of New Jersey Resources considering alternative energy sources and their current focus on pipeline and wire projects. He also expresses gratitude for those who responded to the recent storm in Texas.

The speaker expresses surprise at the security issues at center point and in Texas, and reminds listeners to keep in mind the difficult conditions that workers face. The teleconference has ended.

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