Ralph Izzo
Chairman, President and Chief Executive Officer
Public Service Enterprise Group Incorporated (PSEG)
Prepared Remarks
Annual Meeting of Stockholders
April 21, 2015
Let me start with four facts that illustrate our fundamentally strong position.
One: Our New Jersey utility, PSE&G, continues to achieve best-in-class growth, as we expand
our investments in ways that meet our customers’ needs.
Two: PSEG Power, our regional wholesale power business, continues to benefit from strong
operations and a diverse fleet.
Three: This February, we increased our common stock dividend by 5.4%, which is more than
two times our dividend growth rate in the previous three years.
And fact Number Four: We have a balance sheet that’s strong with the ability to expand our
investments further.
These facts speak for themselves, but the number that tells our story best is 12,000 because credit
truly goes to the 12,000 dedicated men and women of our workforce and their focus every day
on safe, reliable, economic and greener energy.
Our business model is working the way it should: Operational excellence produces the financial
strength that allows us to invest in a disciplined way for growth.
This same approach supports our continued ability to provide shareholders like you with
attractive returns.
We completed 2014 with operating earnings of $2.76 per share, a 7 percent increase over 2013.
For 2015 we are projecting a third consecutive year of earnings growth.
Our track record shows we are serious about keeping our commitments and delivering on what
we promise.
Reliability is fundamental to excellence in our industry. In 2014, for the 13th consecutive year,
PSE&G was named the Mid-Atlantic region’s most reliable electric utility.
Also, PSE&G recently won J.D. Power’s awards in our peer group and region for highest
satisfaction with business customers for both gas and electric service.
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In addition to enjoying the benefits of reliability, PSE&G’s residential customers have reaped
substantial benefits from low-cost gas supplies and the effective management of our natural gas
storage and transportation contracts.
Our residential gas-heating customers have seen their bills lowered 44 percent since January of
2009, translating into annual savings of $741 for the typical customer.
Plus, lower gas supply costs have enabled us to provide six consecutive months of bill credits
from this past November through April for another $236 in savings.
At the same time we are working hard to continue improving customer service. Increasingly, our
customers are online – and we are, too. PSE&G is the number-one utility on Twitter, with more
than 85,000 followers. And we are using tools like Facebook to alert customers about project
work being done in their communities.
Whether using new or traditional channels, we strive to become even more responsive to our
customers’ needs. PSEG Long Island has a similar focus, and I can’t say enough about the
outstanding first year our team there had, accomplishing a successful management transition and
making many improvements in call center technology and the automated outage management
system that provide the foundation for further progress.
Reliability at PSEG is also about having power plants that are available to run as needed. In
2014, our combined-cycle fleet produced at record levels. Our new peaking units at Kearny had
another year of increased output. And, given the overriding importance of safety, we are
especially proud that for the second consecutive year, our fossil fleet achieved a safety
performance in the top ten percent of its industry.
Our nuclear fleet remains critical to our success and a major provider of reliable, emissions-free
energy for New Jersey and the wider region. This past year, our Hope Creek nuclear generating
station achieved the second highest electricity output in its history.
We benefit from a diverse, low-cost portfolio of generation assets located in attractive markets.
And we believe our environmental profile is a growing source of competitive advantage, as well.
We are ahead of many of our peers in having already made extensive environmental
improvements across our fleet.
Our strong balance sheet anchors all of our efforts. We continue to benefit from strong cash
flows, substantial liquidity and desirable investment-grade credit ratings. Our financial strength
enables us to pursue our growth program without needing to issue equity.
Our five-year $13 billion capital investment program is largely dedicated to growth-oriented
utility investments. Transmission projects comprise the largest part of this program. This past
year, we completed several major projects throughout New Jersey. We have an outstanding team
working on our transmission investment program. We have achieved strong results and
developed valuable expertise that we are eager to apply elsewhere.
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For more than 100 years we have been investing in our system to support safe, reliable service.
Yet it shouldn’t be overlooked that as we continue to do so, we are creating thousands of good
jobs, providing business for many local firms and contributing to economic vibrancy.
This past year we embarked on a new, three-year $1.2 billion program – our Energy Strong
initiative – which will begin to build the more resilient energy infrastructure that New Jersey
needs. Work is well under way to replace and modernize 250 miles of gas pipes in or near floodprone areas.
This year, work will begin to upgrade 29 substations affected by Superstorm Sandy or Hurricane
Irene. Along with other improvements, we are adding smart technology to help us monitor our
system and speed restoration when there are outages.
The importance of improving resiliency is increasingly recognized around the country. PSEG
Long Island recently received approval for a federally funded three-year program of grid
reinforcements.
However, we will need to do much more in our ongoing efforts to improve our infrastructure.
Recently, we proposed investing $1.6 billion over the next five years to proactively modernize
PSE&G’s gas system. Through this program we would replace 800 miles of older mains and
service lines with strong, durable plastic pipes, which are much less likely to leak and release
methane gas.
This initiative will support a safe, reliable gas system well into the future. It will reduce
greenhouse gas emissions. And it will directly support more than 500 jobs to boost New Jersey’s
economy. With gas prices low, this is an ideal time to make this investment with minimal
impact on customers’ bills.
We are promoting sustainability through our focus on clean energy solutions. Since 2009,
PSE&G has invested more than $700 million to develop or help finance over 160 megawatts of
solar power. Among other efforts, we have been using landfills and brownfields to bring the
benefits of renewable energy to all of our customers.
Meanwhile, we have continued to grow PSEG Solar Source’s portfolio of projects across the
country. In 2014, we added utility-scale projects in Vermont, Texas, and Maryland – increasing
Solar Source’s portfolio to 123 megawatts of clean, renewable energy – with 11 facilities in 9
states. We continue to explore opportunities to expand our solar portfolio.
Energy efficiency is a key to a sustainable future. Our energy efficiency programs, in which we
have invested about $300 million, have been highly successful in helping customers reduce their
energy bills.
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For example, PSE&G’s energy efficiency program for hospitals is helping institutions save more
than $11.5 million a year in energy costs. Last week, we received approval to invest an
additional $95 million in energy efficiency programs.
Also, we are actively investing to enhance the competitiveness of our environmentally wellpositioned generation business. In 2014, we completed the installation of equipment to increase
the output and improve the efficiency of our Linden gas-fired combined-cycle plant and we are
planning to install similar equipment at our Bergen 2 and Bethlehem Energy Center combinedcycle units.
Abundant gas from the nearby Marcellus region is benefiting our customers and our low-cost
fleet operations while providing us with additional market opportunities. To further improve
access to this key resource, this past year we acquired an equity interest with an expected
investment of $100 million to $120 million in the proposed PennEast pipeline to transport natural
gas from eastern Pennsylvania for use in New Jersey.
We expect to add another 130 megawatts of nuclear capacity through an uprate at our Peach
Bottom facility, which we jointly own with Exelon. This addition to our strong base of
emissions-free nuclear capacity will further enhance our environmental profile.
In summary, we have many opportunities in front of us to extend the growth associated with our
existing $13 billion capital program. And we have the potential for consistent and sustainable
growth in our dividend. All of our investments are focused on what we do best: providing safe,
reliable, economic and greener energy.
Our values – starting with a bedrock commitment to safety and integrity – continue to guide us.
In 2014, PSEG was named for the seventh consecutive year to the Dow Jones Sustainability
North America Index, which recognizes leading companies for their commitment to economic,
environmental and social responsibility.
PSEG is not only an energy leader but also a deeply engaged corporate citizen. In 2014, the
PSEG Foundation launched a new partnership with Sesame Street that makes available
educational tools and other resources to help families with young children prepare for
emergencies.
Our employees have a long and proud Public Service tradition of volunteering for many worthy
causes. I thank them for all of their continued support and hard work.
Thank you, our shareholders, for your loyalty and support. We will continue working hard to
maintain your confidence and trust.
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