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Leases
 12 Months Ended
Dec. 31, 2019
Leases Leases
As of December 31, 2019, PSEG and its subsidiaries were both a lessee and a lessor in operating leases.
Lessee
PSE&G
PSE&G has operating leases for office space for customer service centers, rooftops and land for its Solar 4 All® facilities, equipment, vehicles and land for certain electric substations. These leases have remaining lease terms through 2039, some of which include options to extend the leases for up to two five-year terms. Some leases have fixed rent payments that have escalations based on certain indices, such as the CPI. Certain leases contain variable payments.
PSEG Power
PSEG Power has operating leases for buildings, land leases for its solar generating facilities, merchant transmission and equipment. These leases have remaining terms through 2055, some of which include options to extend the leases for up to seven five-year terms and certain other leases which include options to extend the leases for 15 to 20 year terms. Some leases have fixed rent payments that have escalations based on certain indices, such as the CPI. Certain leases contain variable payments.
Other
Services has operating leases for real estate and office equipment. These leases have remaining terms through 2030. Services’ lease for its headquarters, which ends in 2030, includes options to extend for two five-year terms. Energy Holdings has land leases with remaining lease terms through 2027, some of which include options to extend the leases for up to eight five-year terms. Some leases have fixed rent payments that have escalations based on certain indices, such as the CPI. Certain leases contain variable payments.
Operating Lease Costs
The following amounts relate to total operating lease costs, including both amounts recognized in the Consolidated Statements of Operations during the year ended December 31, 2019 and any amounts capitalized as part of the cost of another asset, and the cash flows arising from lease transactions.
 
 
 
 
 
 
 
 
 
 
 
 
PSE&G
 
PSEG Power
 
Other
 
Total
 
 
 
Millions
 
 
Operating Lease Costs
 
 
 
 
 
 
 
 
 
Year Ended December 31, 2019
 
 
 
 
 
 
 
 
 
  Long-term Lease Costs
$
24

 
$
13

 
$
15

 
$
52

 
 
  Short-term Lease Costs
14

 
10

 
—

 
24

 
 
  Variable Lease Costs
2

 
10

 
10

 
22

 
 
Total Operating Lease Costs
$
40

 
$
33

 
$
25

 
$
98

 
 
 
 
 
 
 
 
 
 
 
 
Year Ended December 31, 2019
 
 
 
 
 
 
 
 
 
Cash Paid for Amounts Included in the Measurement of Operating Lease Liabilities
$
16

 
$
11

 
$
15

 
$
42

 
 
 
 
 
 
 
 
 
 
 
 
Weighted Average Remaining Lease Term in Years
13

 
14

 
10

 
12

 
 
Weighted Average Discount Rate
3.6
%
 
4.4
%
 
4.2
%
 
4.1
%
 
 
 
 
 
 
 
 
 
 
 

Operating lease commitments as of December 31, 2018 had the following maturities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PSE&G
 
PSEG Power
 
Other
 
Total
 
 
 
 
Millions
 
 
2019
 
$
15

 
$
11

 
$
15

 
$
41

 
 
2020
 
11

 
13

 
16

 
40

 
 
2021
 
10

 
13

 
16

 
39

 
 
2022
 
8

 
14

 
16

 
38

 
 
2023
 
8

 
8

 
15

 
31

 
 
Thereafter
 
66

 
51

 
105

 
222

 
 
Total Minimum Lease Payments
 
$
118

 
$
110

 
$
183

 
$
411

 
 
 
 
 
 
 
 
 
 
 
 

Operating lease liabilities as of December 31, 2019 had the following maturities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PSE&G
 
PSEG Power
 
Other
 
Total
 
 
 
 
Millions
 
 
2020
 
$
15

 
$
13

 
$
16

 
$
44

 
 
2021
 
13

 
14

 
16

 
43

 
 
2022
 
10

 
14

 
16

 
40

 
 
2023
 
9

 
8

 
15

 
32

 
 
2024
 
8

 
3

 
15

 
26

 
 
Thereafter
 
71

 
48

 
90

 
209

 
 
Total Minimum Lease Payments
 
$
126

 
$
100

 
$
168

 
$
394

 
 
 
 
 
 
 
 
 
 
 
 

The following is a reconciliation of the undiscounted cash flows to the discounted Operating Lease Liabilities recognized on the Consolidated Balance Sheets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2019
 
 
 
 
PSE&G
 
PSEG Power
 
Other
 
Total
 
 
 
 
Millions
 
 
Undiscounted Cash Flows
 
$
126

 
$
100

 
$
168

 
$
394

 
 
Reconciling Amount due to Discount Rate
 
(27
)
 
(28
)
 
(33
)
 
(88
)
 
 
Total Discounted Operating Lease Liabilities
 
$
99

 
$
72

 
$
135

 
$
306

 
 
 
 
 
 
 
 
 
 
 
 

As of December 31, 2019, the current portions of Operating Lease Liabilities included in Other Current Liabilities were $33 million, $12 million and $10 million for PSEG, PSE&G and PSEG Power, respectively.
Lessor
PSEG Power
Certain of PSEG Power’s sales agreements related to its solar generating plants qualify as operating leases with remaining terms through 2043 with no extension terms. Lease income is based on solar energy generation; therefore, all rental income is variable under these leases. As of December 31, 2019, PSEG Power’s solar generating plants subject to these leases had a total carrying value of $393 million.
Other
Energy Holdings is the lessor in leveraged leases. See Note 9. Long-Term Investments and Note 10. Financing Receivables.
Energy Holdings is the lessor in various operating leases for domestic energy and real estate assets with remaining terms through 2036. As of December 31, 2019, Energy Holdings’ property subject to these leases had a total carrying value of $22 million.
The following is the operating lease income for PSEG Power and Energy Holdings for the year ended December 31, 2019:
 
 
 
 
 
 
 
 
 
 
PSEG Power
 
Energy Holdings
 
Total
 
 
 
Millions
 
 
Operating Lease Income
 
 
 
 
 
 
 
Year Ended December 31, 2019
 
 
 
 
 
 
 
Fixed Lease Income
$
—

 
$
22

 
$
22

 
 
Variable Lease Income
23

 
—

 
23

 
 
Total Operating Lease Income
$
23

 
$
22

 
$
45

 
 
 
 
 
 
 
 
 

Energy Holdings’ operating leases had the following minimum future fixed lease receipts as of December 31, 2019:
 
 
 
 
 
 
 
 
 
Millions
 
 
2020
 
$
20

 
 
 
2021
 
18

 
 
 
2022
 
17

 
 
 
2023
 
17

 
 
 
2024
 
16

 
 
 
Thereafter
 
172

 
 
 
Total Minimum Future Lease Receipts
 
$
260

 
 
 
 
 
 
 
 
Leases Leases
As of December 31, 2019, PSEG and its subsidiaries were both a lessee and a lessor in operating leases.
Lessee
PSE&G
PSE&G has operating leases for office space for customer service centers, rooftops and land for its Solar 4 All® facilities, equipment, vehicles and land for certain electric substations. These leases have remaining lease terms through 2039, some of which include options to extend the leases for up to two five-year terms. Some leases have fixed rent payments that have escalations based on certain indices, such as the CPI. Certain leases contain variable payments.
PSEG Power
PSEG Power has operating leases for buildings, land leases for its solar generating facilities, merchant transmission and equipment. These leases have remaining terms through 2055, some of which include options to extend the leases for up to seven five-year terms and certain other leases which include options to extend the leases for 15 to 20 year terms. Some leases have fixed rent payments that have escalations based on certain indices, such as the CPI. Certain leases contain variable payments.
Other
Services has operating leases for real estate and office equipment. These leases have remaining terms through 2030. Services’ lease for its headquarters, which ends in 2030, includes options to extend for two five-year terms. Energy Holdings has land leases with remaining lease terms through 2027, some of which include options to extend the leases for up to eight five-year terms. Some leases have fixed rent payments that have escalations based on certain indices, such as the CPI. Certain leases contain variable payments.
Operating Lease Costs
The following amounts relate to total operating lease costs, including both amounts recognized in the Consolidated Statements of Operations during the year ended December 31, 2019 and any amounts capitalized as part of the cost of another asset, and the cash flows arising from lease transactions.
 
 
 
 
 
 
 
 
 
 
 
 
PSE&G
 
PSEG Power
 
Other
 
Total
 
 
 
Millions
 
 
Operating Lease Costs
 
 
 
 
 
 
 
 
 
Year Ended December 31, 2019
 
 
 
 
 
 
 
 
 
  Long-term Lease Costs
$
24

 
$
13

 
$
15

 
$
52

 
 
  Short-term Lease Costs
14

 
10

 
—

 
24

 
 
  Variable Lease Costs
2

 
10

 
10

 
22

 
 
Total Operating Lease Costs
$
40

 
$
33

 
$
25

 
$
98

 
 
 
 
 
 
 
 
 
 
 
 
Year Ended December 31, 2019
 
 
 
 
 
 
 
 
 
Cash Paid for Amounts Included in the Measurement of Operating Lease Liabilities
$
16

 
$
11

 
$
15

 
$
42

 
 
 
 
 
 
 
 
 
 
 
 
Weighted Average Remaining Lease Term in Years
13

 
14

 
10

 
12

 
 
Weighted Average Discount Rate
3.6
%
 
4.4
%
 
4.2
%
 
4.1
%
 
 
 
 
 
 
 
 
 
 
 

Operating lease commitments as of December 31, 2018 had the following maturities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PSE&G
 
PSEG Power
 
Other
 
Total
 
 
 
 
Millions
 
 
2019
 
$
15

 
$
11

 
$
15

 
$
41

 
 
2020
 
11

 
13

 
16

 
40

 
 
2021
 
10

 
13

 
16

 
39

 
 
2022
 
8

 
14

 
16

 
38

 
 
2023
 
8

 
8

 
15

 
31

 
 
Thereafter
 
66

 
51

 
105

 
222

 
 
Total Minimum Lease Payments
 
$
118

 
$
110

 
$
183

 
$
411

 
 
 
 
 
 
 
 
 
 
 
 

Operating lease liabilities as of December 31, 2019 had the following maturities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PSE&G
 
PSEG Power
 
Other
 
Total
 
 
 
 
Millions
 
 
2020
 
$
15

 
$
13

 
$
16

 
$
44

 
 
2021
 
13

 
14

 
16

 
43

 
 
2022
 
10

 
14

 
16

 
40

 
 
2023
 
9

 
8

 
15

 
32

 
 
2024
 
8

 
3

 
15

 
26

 
 
Thereafter
 
71

 
48

 
90

 
209

 
 
Total Minimum Lease Payments
 
$
126

 
$
100

 
$
168

 
$
394

 
 
 
 
 
 
 
 
 
 
 
 

The following is a reconciliation of the undiscounted cash flows to the discounted Operating Lease Liabilities recognized on the Consolidated Balance Sheets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2019
 
 
 
 
PSE&G
 
PSEG Power
 
Other
 
Total
 
 
 
 
Millions
 
 
Undiscounted Cash Flows
 
$
126

 
$
100

 
$
168

 
$
394

 
 
Reconciling Amount due to Discount Rate
 
(27
)
 
(28
)
 
(33
)
 
(88
)
 
 
Total Discounted Operating Lease Liabilities
 
$
99

 
$
72

 
$
135

 
$
306

 
 
 
 
 
 
 
 
 
 
 
 

As of December 31, 2019, the current portions of Operating Lease Liabilities included in Other Current Liabilities were $33 million, $12 million and $10 million for PSEG, PSE&G and PSEG Power, respectively.
Lessor
PSEG Power
Certain of PSEG Power’s sales agreements related to its solar generating plants qualify as operating leases with remaining terms through 2043 with no extension terms. Lease income is based on solar energy generation; therefore, all rental income is variable under these leases. As of December 31, 2019, PSEG Power’s solar generating plants subject to these leases had a total carrying value of $393 million.
Other
Energy Holdings is the lessor in leveraged leases. See Note 9. Long-Term Investments and Note 10. Financing Receivables.
Energy Holdings is the lessor in various operating leases for domestic energy and real estate assets with remaining terms through 2036. As of December 31, 2019, Energy Holdings’ property subject to these leases had a total carrying value of $22 million.
The following is the operating lease income for PSEG Power and Energy Holdings for the year ended December 31, 2019:
 
 
 
 
 
 
 
 
 
 
PSEG Power
 
Energy Holdings
 
Total
 
 
 
Millions
 
 
Operating Lease Income
 
 
 
 
 
 
 
Year Ended December 31, 2019
 
 
 
 
 
 
 
Fixed Lease Income
$
—

 
$
22

 
$
22

 
 
Variable Lease Income
23

 
—

 
23

 
 
Total Operating Lease Income
$
23

 
$
22

 
$
45

 
 
 
 
 
 
 
 
 

Energy Holdings’ operating leases had the following minimum future fixed lease receipts as of December 31, 2019:
 
 
 
 
 
 
 
 
 
Millions
 
 
2020
 
$
20

 
 
 
2021
 
18

 
 
 
2022
 
17

 
 
 
2023
 
17

 
 
 
2024
 
16

 
 
 
Thereafter
 
172

 
 
 
Total Minimum Future Lease Receipts
 
$
260

 
 
 
 
 
 
 
 
Public Service Electric and Gas Company  
Leases Leases
As of December 31, 2019, PSEG and its subsidiaries were both a lessee and a lessor in operating leases.
Lessee
PSE&G
PSE&G has operating leases for office space for customer service centers, rooftops and land for its Solar 4 All® facilities, equipment, vehicles and land for certain electric substations. These leases have remaining lease terms through 2039, some of which include options to extend the leases for up to two five-year terms. Some leases have fixed rent payments that have escalations based on certain indices, such as the CPI. Certain leases contain variable payments.
PSEG Power
PSEG Power has operating leases for buildings, land leases for its solar generating facilities, merchant transmission and equipment. These leases have remaining terms through 2055, some of which include options to extend the leases for up to seven five-year terms and certain other leases which include options to extend the leases for 15 to 20 year terms. Some leases have fixed rent payments that have escalations based on certain indices, such as the CPI. Certain leases contain variable payments.
Other
Services has operating leases for real estate and office equipment. These leases have remaining terms through 2030. Services’ lease for its headquarters, which ends in 2030, includes options to extend for two five-year terms. Energy Holdings has land leases with remaining lease terms through 2027, some of which include options to extend the leases for up to eight five-year terms. Some leases have fixed rent payments that have escalations based on certain indices, such as the CPI. Certain leases contain variable payments.
Operating Lease Costs
The following amounts relate to total operating lease costs, including both amounts recognized in the Consolidated Statements of Operations during the year ended December 31, 2019 and any amounts capitalized as part of the cost of another asset, and the cash flows arising from lease transactions.
 
 
 
 
 
 
 
 
 
 
 
 
PSE&G
 
PSEG Power
 
Other
 
Total
 
 
 
Millions
 
 
Operating Lease Costs
 
 
 
 
 
 
 
 
 
Year Ended December 31, 2019
 
 
 
 
 
 
 
 
 
  Long-term Lease Costs
$
24

 
$
13

 
$
15

 
$
52

 
 
  Short-term Lease Costs
14

 
10

 
—

 
24

 
 
  Variable Lease Costs
2

 
10

 
10

 
22

 
 
Total Operating Lease Costs
$
40

 
$
33

 
$
25

 
$
98

 
 
 
 
 
 
 
 
 
 
 
 
Year Ended December 31, 2019
 
 
 
 
 
 
 
 
 
Cash Paid for Amounts Included in the Measurement of Operating Lease Liabilities
$
16

 
$
11

 
$
15

 
$
42

 
 
 
 
 
 
 
 
 
 
 
 
Weighted Average Remaining Lease Term in Years
13

 
14

 
10

 
12

 
 
Weighted Average Discount Rate
3.6
%
 
4.4
%
 
4.2
%
 
4.1
%
 
 
 
 
 
 
 
 
 
 
 

Operating lease commitments as of December 31, 2018 had the following maturities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PSE&G
 
PSEG Power
 
Other
 
Total
 
 
 
 
Millions
 
 
2019
 
$
15

 
$
11

 
$
15

 
$
41

 
 
2020
 
11

 
13

 
16

 
40

 
 
2021
 
10

 
13

 
16

 
39

 
 
2022
 
8

 
14

 
16

 
38

 
 
2023
 
8

 
8

 
15

 
31

 
 
Thereafter
 
66

 
51

 
105

 
222

 
 
Total Minimum Lease Payments
 
$
118

 
$
110

 
$
183

 
$
411

 
 
 
 
 
 
 
 
 
 
 
 

Operating lease liabilities as of December 31, 2019 had the following maturities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PSE&G
 
PSEG Power
 
Other
 
Total
 
 
 
 
Millions
 
 
2020
 
$
15

 
$
13

 
$
16

 
$
44

 
 
2021
 
13

 
14

 
16

 
43

 
 
2022
 
10

 
14

 
16

 
40

 
 
2023
 
9

 
8

 
15

 
32

 
 
2024
 
8

 
3

 
15

 
26

 
 
Thereafter
 
71

 
48

 
90

 
209

 
 
Total Minimum Lease Payments
 
$
126

 
$
100

 
$
168

 
$
394

 
 
 
 
 
 
 
 
 
 
 
 

The following is a reconciliation of the undiscounted cash flows to the discounted Operating Lease Liabilities recognized on the Consolidated Balance Sheets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2019
 
 
 
 
PSE&G
 
PSEG Power
 
Other
 
Total
 
 
 
 
Millions
 
 
Undiscounted Cash Flows
 
$
126

 
$
100

 
$
168

 
$
394

 
 
Reconciling Amount due to Discount Rate
 
(27
)
 
(28
)
 
(33
)
 
(88
)
 
 
Total Discounted Operating Lease Liabilities
 
$
99

 
$
72

 
$
135

 
$
306

 
 
 
 
 
 
 
 
 
 
 
 

As of December 31, 2019, the current portions of Operating Lease Liabilities included in Other Current Liabilities were $33 million, $12 million and $10 million for PSEG, PSE&G and PSEG Power, respectively.
Lessor
PSEG Power
Certain of PSEG Power’s sales agreements related to its solar generating plants qualify as operating leases with remaining terms through 2043 with no extension terms. Lease income is based on solar energy generation; therefore, all rental income is variable under these leases. As of December 31, 2019, PSEG Power’s solar generating plants subject to these leases had a total carrying value of $393 million.
Other
Energy Holdings is the lessor in leveraged leases. See Note 9. Long-Term Investments and Note 10. Financing Receivables.
Energy Holdings is the lessor in various operating leases for domestic energy and real estate assets with remaining terms through 2036. As of December 31, 2019, Energy Holdings’ property subject to these leases had a total carrying value of $22 million.
The following is the operating lease income for PSEG Power and Energy Holdings for the year ended December 31, 2019:
 
 
 
 
 
 
 
 
 
 
PSEG Power
 
Energy Holdings
 
Total
 
 
 
Millions
 
 
Operating Lease Income
 
 
 
 
 
 
 
Year Ended December 31, 2019
 
 
 
 
 
 
 
Fixed Lease Income
$
—

 
$
22

 
$
22

 
 
Variable Lease Income
23

 
—

 
23

 
 
Total Operating Lease Income
$
23

 
$
22

 
$
45

 
 
 
 
 
 
 
 
 

Energy Holdings’ operating leases had the following minimum future fixed lease receipts as of December 31, 2019:
 
 
 
 
 
 
 
 
 
Millions
 
 
2020
 
$
20

 
 
 
2021
 
18

 
 
 
2022
 
17

 
 
 
2023
 
17

 
 
 
2024
 
16

 
 
 
Thereafter
 
172

 
 
 
Total Minimum Future Lease Receipts
 
$
260

 
 
 
 
 
 
 
 
Leases Leases
As of December 31, 2019, PSEG and its subsidiaries were both a lessee and a lessor in operating leases.
Lessee
PSE&G
PSE&G has operating leases for office space for customer service centers, rooftops and land for its Solar 4 All® facilities, equipment, vehicles and land for certain electric substations. These leases have remaining lease terms through 2039, some of which include options to extend the leases for up to two five-year terms. Some leases have fixed rent payments that have escalations based on certain indices, such as the CPI. Certain leases contain variable payments.
PSEG Power
PSEG Power has operating leases for buildings, land leases for its solar generating facilities, merchant transmission and equipment. These leases have remaining terms through 2055, some of which include options to extend the leases for up to seven five-year terms and certain other leases which include options to extend the leases for 15 to 20 year terms. Some leases have fixed rent payments that have escalations based on certain indices, such as the CPI. Certain leases contain variable payments.
Other
Services has operating leases for real estate and office equipment. These leases have remaining terms through 2030. Services’ lease for its headquarters, which ends in 2030, includes options to extend for two five-year terms. Energy Holdings has land leases with remaining lease terms through 2027, some of which include options to extend the leases for up to eight five-year terms. Some leases have fixed rent payments that have escalations based on certain indices, such as the CPI. Certain leases contain variable payments.
Operating Lease Costs
The following amounts relate to total operating lease costs, including both amounts recognized in the Consolidated Statements of Operations during the year ended December 31, 2019 and any amounts capitalized as part of the cost of another asset, and the cash flows arising from lease transactions.
 
 
 
 
 
 
 
 
 
 
 
 
PSE&G
 
PSEG Power
 
Other
 
Total
 
 
 
Millions
 
 
Operating Lease Costs
 
 
 
 
 
 
 
 
 
Year Ended December 31, 2019
 
 
 
 
 
 
 
 
 
  Long-term Lease Costs
$
24

 
$
13

 
$
15

 
$
52

 
 
  Short-term Lease Costs
14

 
10

 
—

 
24

 
 
  Variable Lease Costs
2

 
10

 
10

 
22

 
 
Total Operating Lease Costs
$
40

 
$
33

 
$
25

 
$
98

 
 
 
 
 
 
 
 
 
 
 
 
Year Ended December 31, 2019
 
 
 
 
 
 
 
 
 
Cash Paid for Amounts Included in the Measurement of Operating Lease Liabilities
$
16

 
$
11

 
$
15

 
$
42

 
 
 
 
 
 
 
 
 
 
 
 
Weighted Average Remaining Lease Term in Years
13

 
14

 
10

 
12

 
 
Weighted Average Discount Rate
3.6
%
 
4.4
%
 
4.2
%
 
4.1
%
 
 
 
 
 
 
 
 
 
 
 

Operating lease commitments as of December 31, 2018 had the following maturities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PSE&G
 
PSEG Power
 
Other
 
Total
 
 
 
 
Millions
 
 
2019
 
$
15

 
$
11

 
$
15

 
$
41

 
 
2020
 
11

 
13

 
16

 
40

 
 
2021
 
10

 
13

 
16

 
39

 
 
2022
 
8

 
14

 
16

 
38

 
 
2023
 
8

 
8

 
15

 
31

 
 
Thereafter
 
66

 
51

 
105

 
222

 
 
Total Minimum Lease Payments
 
$
118

 
$
110

 
$
183

 
$
411

 
 
 
 
 
 
 
 
 
 
 
 

Operating lease liabilities as of December 31, 2019 had the following maturities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PSE&G
 
PSEG Power
 
Other
 
Total
 
 
 
 
Millions
 
 
2020
 
$
15

 
$
13

 
$
16

 
$
44

 
 
2021
 
13

 
14

 
16

 
43

 
 
2022
 
10

 
14

 
16

 
40

 
 
2023
 
9

 
8

 
15

 
32

 
 
2024
 
8

 
3

 
15

 
26

 
 
Thereafter
 
71

 
48

 
90

 
209

 
 
Total Minimum Lease Payments
 
$
126

 
$
100

 
$
168

 
$
394

 
 
 
 
 
 
 
 
 
 
 
 

The following is a reconciliation of the undiscounted cash flows to the discounted Operating Lease Liabilities recognized on the Consolidated Balance Sheets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2019
 
 
 
 
PSE&G
 
PSEG Power
 
Other
 
Total
 
 
 
 
Millions
 
 
Undiscounted Cash Flows
 
$
126

 
$
100

 
$
168

 
$
394

 
 
Reconciling Amount due to Discount Rate
 
(27
)
 
(28
)
 
(33
)
 
(88
)
 
 
Total Discounted Operating Lease Liabilities
 
$
99

 
$
72

 
$
135

 
$
306

 
 
 
 
 
 
 
 
 
 
 
 

As of December 31, 2019, the current portions of Operating Lease Liabilities included in Other Current Liabilities were $33 million, $12 million and $10 million for PSEG, PSE&G and PSEG Power, respectively.
Lessor
PSEG Power
Certain of PSEG Power’s sales agreements related to its solar generating plants qualify as operating leases with remaining terms through 2043 with no extension terms. Lease income is based on solar energy generation; therefore, all rental income is variable under these leases. As of December 31, 2019, PSEG Power’s solar generating plants subject to these leases had a total carrying value of $393 million.
Other
Energy Holdings is the lessor in leveraged leases. See Note 9. Long-Term Investments and Note 10. Financing Receivables.
Energy Holdings is the lessor in various operating leases for domestic energy and real estate assets with remaining terms through 2036. As of December 31, 2019, Energy Holdings’ property subject to these leases had a total carrying value of $22 million.
The following is the operating lease income for PSEG Power and Energy Holdings for the year ended December 31, 2019:
 
 
 
 
 
 
 
 
 
 
PSEG Power
 
Energy Holdings
 
Total
 
 
 
Millions
 
 
Operating Lease Income
 
 
 
 
 
 
 
Year Ended December 31, 2019
 
 
 
 
 
 
 
Fixed Lease Income
$
—

 
$
22

 
$
22

 
 
Variable Lease Income
23

 
—

 
23

 
 
Total Operating Lease Income
$
23

 
$
22

 
$
45

 
 
 
 
 
 
 
 
 

Energy Holdings’ operating leases had the following minimum future fixed lease receipts as of December 31, 2019:
 
 
 
 
 
 
 
 
 
Millions
 
 
2020
 
$
20

 
 
 
2021
 
18

 
 
 
2022
 
17

 
 
 
2023
 
17

 
 
 
2024
 
16

 
 
 
Thereafter
 
172

 
 
 
Total Minimum Future Lease Receipts
 
$
260

 
 
 
 
 
 
 
 
PSEG Power LLC  
Leases Leases
As of December 31, 2019, PSEG and its subsidiaries were both a lessee and a lessor in operating leases.
Lessee
PSE&G
PSE&G has operating leases for office space for customer service centers, rooftops and land for its Solar 4 All® facilities, equipment, vehicles and land for certain electric substations. These leases have remaining lease terms through 2039, some of which include options to extend the leases for up to two five-year terms. Some leases have fixed rent payments that have escalations based on certain indices, such as the CPI. Certain leases contain variable payments.
PSEG Power
PSEG Power has operating leases for buildings, land leases for its solar generating facilities, merchant transmission and equipment. These leases have remaining terms through 2055, some of which include options to extend the leases for up to seven five-year terms and certain other leases which include options to extend the leases for 15 to 20 year terms. Some leases have fixed rent payments that have escalations based on certain indices, such as the CPI. Certain leases contain variable payments.
Other
Services has operating leases for real estate and office equipment. These leases have remaining terms through 2030. Services’ lease for its headquarters, which ends in 2030, includes options to extend for two five-year terms. Energy Holdings has land leases with remaining lease terms through 2027, some of which include options to extend the leases for up to eight five-year terms. Some leases have fixed rent payments that have escalations based on certain indices, such as the CPI. Certain leases contain variable payments.
Operating Lease Costs
The following amounts relate to total operating lease costs, including both amounts recognized in the Consolidated Statements of Operations during the year ended December 31, 2019 and any amounts capitalized as part of the cost of another asset, and the cash flows arising from lease transactions.
 
 
 
 
 
 
 
 
 
 
 
 
PSE&G
 
PSEG Power
 
Other
 
Total
 
 
 
Millions
 
 
Operating Lease Costs
 
 
 
 
 
 
 
 
 
Year Ended December 31, 2019
 
 
 
 
 
 
 
 
 
  Long-term Lease Costs
$
24

 
$
13

 
$
15

 
$
52

 
 
  Short-term Lease Costs
14

 
10

 
—

 
24

 
 
  Variable Lease Costs
2

 
10

 
10

 
22

 
 
Total Operating Lease Costs
$
40

 
$
33

 
$
25

 
$
98

 
 
 
 
 
 
 
 
 
 
 
 
Year Ended December 31, 2019
 
 
 
 
 
 
 
 
 
Cash Paid for Amounts Included in the Measurement of Operating Lease Liabilities
$
16

 
$
11

 
$
15

 
$
42

 
 
 
 
 
 
 
 
 
 
 
 
Weighted Average Remaining Lease Term in Years
13

 
14

 
10

 
12

 
 
Weighted Average Discount Rate
3.6
%
 
4.4
%
 
4.2
%
 
4.1
%
 
 
 
 
 
 
 
 
 
 
 

Operating lease commitments as of December 31, 2018 had the following maturities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PSE&G
 
PSEG Power
 
Other
 
Total
 
 
 
 
Millions
 
 
2019
 
$
15

 
$
11

 
$
15

 
$
41

 
 
2020
 
11

 
13

 
16

 
40

 
 
2021
 
10

 
13

 
16

 
39

 
 
2022
 
8

 
14

 
16

 
38

 
 
2023
 
8

 
8

 
15

 
31

 
 
Thereafter
 
66

 
51

 
105

 
222

 
 
Total Minimum Lease Payments
 
$
118

 
$
110

 
$
183

 
$
411

 
 
 
 
 
 
 
 
 
 
 
 

Operating lease liabilities as of December 31, 2019 had the following maturities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PSE&G
 
PSEG Power
 
Other
 
Total
 
 
 
 
Millions
 
 
2020
 
$
15

 
$
13

 
$
16

 
$
44

 
 
2021
 
13

 
14

 
16

 
43

 
 
2022
 
10

 
14

 
16

 
40

 
 
2023
 
9

 
8

 
15

 
32

 
 
2024
 
8

 
3

 
15

 
26

 
 
Thereafter
 
71

 
48

 
90

 
209

 
 
Total Minimum Lease Payments
 
$
126

 
$
100

 
$
168

 
$
394

 
 
 
 
 
 
 
 
 
 
 
 

The following is a reconciliation of the undiscounted cash flows to the discounted Operating Lease Liabilities recognized on the Consolidated Balance Sheets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2019
 
 
 
 
PSE&G
 
PSEG Power
 
Other
 
Total
 
 
 
 
Millions
 
 
Undiscounted Cash Flows
 
$
126

 
$
100

 
$
168

 
$
394

 
 
Reconciling Amount due to Discount Rate
 
(27
)
 
(28
)
 
(33
)
 
(88
)
 
 
Total Discounted Operating Lease Liabilities
 
$
99

 
$
72

 
$
135

 
$
306

 
 
 
 
 
 
 
 
 
 
 
 

As of December 31, 2019, the current portions of Operating Lease Liabilities included in Other Current Liabilities were $33 million, $12 million and $10 million for PSEG, PSE&G and PSEG Power, respectively.
Lessor
PSEG Power
Certain of PSEG Power’s sales agreements related to its solar generating plants qualify as operating leases with remaining terms through 2043 with no extension terms. Lease income is based on solar energy generation; therefore, all rental income is variable under these leases. As of December 31, 2019, PSEG Power’s solar generating plants subject to these leases had a total carrying value of $393 million.
Other
Energy Holdings is the lessor in leveraged leases. See Note 9. Long-Term Investments and Note 10. Financing Receivables.
Energy Holdings is the lessor in various operating leases for domestic energy and real estate assets with remaining terms through 2036. As of December 31, 2019, Energy Holdings’ property subject to these leases had a total carrying value of $22 million.
The following is the operating lease income for PSEG Power and Energy Holdings for the year ended December 31, 2019:
 
 
 
 
 
 
 
 
 
 
PSEG Power
 
Energy Holdings
 
Total
 
 
 
Millions
 
 
Operating Lease Income
 
 
 
 
 
 
 
Year Ended December 31, 2019
 
 
 
 
 
 
 
Fixed Lease Income
$
—

 
$
22

 
$
22

 
 
Variable Lease Income
23

 
—

 
23

 
 
Total Operating Lease Income
$
23

 
$
22

 
$
45

 
 
 
 
 
 
 
 
 

Energy Holdings’ operating leases had the following minimum future fixed lease receipts as of December 31, 2019:
 
 
 
 
 
 
 
 
 
Millions
 
 
2020
 
$
20

 
 
 
2021
 
18

 
 
 
2022
 
17

 
 
 
2023
 
17

 
 
 
2024
 
16

 
 
 
Thereafter
 
172

 
 
 
Total Minimum Future Lease Receipts
 
$
260

 
 
 
 
 
 
 
 
Leases Leases
As of December 31, 2019, PSEG and its subsidiaries were both a lessee and a lessor in operating leases.
Lessee
PSE&G
PSE&G has operating leases for office space for customer service centers, rooftops and land for its Solar 4 All® facilities, equipment, vehicles and land for certain electric substations. These leases have remaining lease terms through 2039, some of which include options to extend the leases for up to two five-year terms. Some leases have fixed rent payments that have escalations based on certain indices, such as the CPI. Certain leases contain variable payments.
PSEG Power
PSEG Power has operating leases for buildings, land leases for its solar generating facilities, merchant transmission and equipment. These leases have remaining terms through 2055, some of which include options to extend the leases for up to seven five-year terms and certain other leases which include options to extend the leases for 15 to 20 year terms. Some leases have fixed rent payments that have escalations based on certain indices, such as the CPI. Certain leases contain variable payments.
Other
Services has operating leases for real estate and office equipment. These leases have remaining terms through 2030. Services’ lease for its headquarters, which ends in 2030, includes options to extend for two five-year terms. Energy Holdings has land leases with remaining lease terms through 2027, some of which include options to extend the leases for up to eight five-year terms. Some leases have fixed rent payments that have escalations based on certain indices, such as the CPI. Certain leases contain variable payments.
Operating Lease Costs
The following amounts relate to total operating lease costs, including both amounts recognized in the Consolidated Statements of Operations during the year ended December 31, 2019 and any amounts capitalized as part of the cost of another asset, and the cash flows arising from lease transactions.
 
 
 
 
 
 
 
 
 
 
 
 
PSE&G
 
PSEG Power
 
Other
 
Total
 
 
 
Millions
 
 
Operating Lease Costs
 
 
 
 
 
 
 
 
 
Year Ended December 31, 2019
 
 
 
 
 
 
 
 
 
  Long-term Lease Costs
$
24

 
$
13

 
$
15

 
$
52

 
 
  Short-term Lease Costs
14

 
10

 
—

 
24

 
 
  Variable Lease Costs
2

 
10

 
10

 
22

 
 
Total Operating Lease Costs
$
40

 
$
33

 
$
25

 
$
98

 
 
 
 
 
 
 
 
 
 
 
 
Year Ended December 31, 2019
 
 
 
 
 
 
 
 
 
Cash Paid for Amounts Included in the Measurement of Operating Lease Liabilities
$
16

 
$
11

 
$
15

 
$
42

 
 
 
 
 
 
 
 
 
 
 
 
Weighted Average Remaining Lease Term in Years
13

 
14

 
10

 
12

 
 
Weighted Average Discount Rate
3.6
%
 
4.4
%
 
4.2
%
 
4.1
%
 
 
 
 
 
 
 
 
 
 
 

Operating lease commitments as of December 31, 2018 had the following maturities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PSE&G
 
PSEG Power
 
Other
 
Total
 
 
 
 
Millions
 
 
2019
 
$
15

 
$
11

 
$
15

 
$
41

 
 
2020
 
11

 
13

 
16

 
40

 
 
2021
 
10

 
13

 
16

 
39

 
 
2022
 
8

 
14

 
16

 
38

 
 
2023
 
8

 
8

 
15

 
31

 
 
Thereafter
 
66

 
51

 
105

 
222

 
 
Total Minimum Lease Payments
 
$
118

 
$
110

 
$
183

 
$
411

 
 
 
 
 
 
 
 
 
 
 
 

Operating lease liabilities as of December 31, 2019 had the following maturities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PSE&G
 
PSEG Power
 
Other
 
Total
 
 
 
 
Millions
 
 
2020
 
$
15

 
$
13

 
$
16

 
$
44

 
 
2021
 
13

 
14

 
16

 
43

 
 
2022
 
10

 
14

 
16

 
40

 
 
2023
 
9

 
8

 
15

 
32

 
 
2024
 
8

 
3

 
15

 
26

 
 
Thereafter
 
71

 
48

 
90

 
209

 
 
Total Minimum Lease Payments
 
$
126

 
$
100

 
$
168

 
$
394

 
 
 
 
 
 
 
 
 
 
 
 

The following is a reconciliation of the undiscounted cash flows to the discounted Operating Lease Liabilities recognized on the Consolidated Balance Sheets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2019
 
 
 
 
PSE&G
 
PSEG Power
 
Other
 
Total
 
 
 
 
Millions
 
 
Undiscounted Cash Flows
 
$
126

 
$
100

 
$
168

 
$
394

 
 
Reconciling Amount due to Discount Rate
 
(27
)
 
(28
)
 
(33
)
 
(88
)
 
 
Total Discounted Operating Lease Liabilities
 
$
99

 
$
72

 
$
135

 
$
306

 
 
 
 
 
 
 
 
 
 
 
 

As of December 31, 2019, the current portions of Operating Lease Liabilities included in Other Current Liabilities were $33 million, $12 million and $10 million for PSEG, PSE&G and PSEG Power, respectively.
Lessor
PSEG Power
Certain of PSEG Power’s sales agreements related to its solar generating plants qualify as operating leases with remaining terms through 2043 with no extension terms. Lease income is based on solar energy generation; therefore, all rental income is variable under these leases. As of December 31, 2019, PSEG Power’s solar generating plants subject to these leases had a total carrying value of $393 million.
Other
Energy Holdings is the lessor in leveraged leases. See Note 9. Long-Term Investments and Note 10. Financing Receivables.
Energy Holdings is the lessor in various operating leases for domestic energy and real estate assets with remaining terms through 2036. As of December 31, 2019, Energy Holdings’ property subject to these leases had a total carrying value of $22 million.
The following is the operating lease income for PSEG Power and Energy Holdings for the year ended December 31, 2019:
 
 
 
 
 
 
 
 
 
 
PSEG Power
 
Energy Holdings
 
Total
 
 
 
Millions
 
 
Operating Lease Income
 
 
 
 
 
 
 
Year Ended December 31, 2019
 
 
 
 
 
 
 
Fixed Lease Income
$
—

 
$
22

 
$
22

 
 
Variable Lease Income
23

 
—

 
23

 
 
Total Operating Lease Income
$
23

 
$
22

 
$
45

 
 
 
 
 
 
 
 
 

Energy Holdings’ operating leases had the following minimum future fixed lease receipts as of December 31, 2019:
 
 
 
 
 
 
 
 
 
Millions
 
 
2020
 
$
20

 
 
 
2021
 
18

 
 
 
2022
 
17

 
 
 
2023
 
17

 
 
 
2024
 
16

 
 
 
Thereafter
 
172

 
 
 
Total Minimum Future Lease Receipts
 
$
260