Trust Investments

9 Months Ended

Sep. 30, 2024

Schedule of Trust Investments [Line Items]

Trust Investments

Note 7. Trust Investments

Nuclear Decommissioning Trust (NDT) Fund

PSEG Power maintains an external master NDT to fund its share of decommissioning costs for its five nuclear facilities upon their respective termination of operation. The trust contains two separate funds: a qualified fund and a non-qualified fund. Section 468A of the Internal Revenue Code limits the amount of money that can be contributed into a qualified fund. The funds are managed by third-party investment managers who operate under investment guidelines developed by PSEG Power.

The following tables show the amortized costs basis, gross unrealized gains and losses and fair values for the securities held in the NDT Fund.

	As of September 30, 2024
	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	Millions
Equity Securities
Domestic	$	506	$	407	$	(2	)	$	911
International		418		137		(11	)		544
Total Equity Securities		924		544		(13	)		1,455
Available-for-Sale Debt Securities
Government		822		9		(61	)		770
Corporate		558		9		(25	)		542
Total Available-for-Sale Debt Securities		1,380		18		(86	)		1,312
Total NDT Fund Investments (A)	$	2,304	$	562	$	(99	)	$	2,767

(A)The NDT Fund Investments table excludes cash and foreign currency of $32 million as of September 30, 2024, which is part of the NDT Fund.

	As of December 31, 2023
	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	Millions
Equity Securities
Domestic	$	482	$	300	$	(2	)	$	780
International		423		118		(11	)		530
Total Equity Securities		905		418		(13	)		1,310
Available-for-Sale Debt Securities
Government		759		4		(72	)		691
Corporate		555		6		(39	)		522
Total Available-for-Sale Debt Securities		1,314		10		(111	)		1,213
Total NDT Fund Investments (A)	$	2,219	$	428	$	(124	)	$	2,523

(A)The NDT Fund Investments table excludes cash and foreign currency of $1 million as of December 31, 2023, which is part of the NDT Fund.

Net unrealized gains (losses) on debt securities of $(40) million (after-tax) were included in Accumulated Other Comprehensive Loss (AOCL) on PSEG’s Condensed Consolidated Balance Sheet as of September 30, 2024. The portion of net unrealized gains (losses) recognized in the third quarter and first nine months of 2024 related to equity securities still held as of September 30, 2024 was $86 million and $168 million, respectively.

The amounts in the preceding tables do not include receivables and payables for NDT Fund transactions which have not settled at the end of each period. Such amounts are included in Accounts Receivable and Accounts Payable on the Condensed Consolidated Balance Sheets as shown in the following table.

	As of		As of
	September 30, 2024		December 31, 2023
	Millions
Accounts Receivable	$	21	$	19
Accounts Payable	$	14	$	6

The following table shows the value of securities in the NDT Fund that have been in an unrealized loss position for less than and greater than 12 months.

	As of September 30, 2024										As of December 31, 2023
	Less Than 12 Months					Greater Than 12 Months					Less Than 12 Months					Greater Than 12 Months
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
	Millions
Equity Securities (A)
Domestic	$	16	$	(1	)	$	4	$	(1	)	$	44	$	(1	)	$	4	$	—
International		57		(6	)		16		(5	)		35		(4	)		28		(8	)
Total Equity Securities		73		(7	)		20		(6	)		79		(5	)		32		(8	)
Available-for-Sale Debt Securities
Government (B)		33		—			409		(61	)		90		(1	)		432		(71	)
Corporate (C)		11		—			255		(25	)		19		—			329		(39	)
Total Available-for-Sale Debt Securities		44		—			664		(86	)		109		(1	)		761		(110	)
NDT Trust Investments	$	117	$	(7	)	$	684	$	(92	)	$	188	$	(6	)	$	793	$	(118	)

(A)Equity Securities—Investments in marketable equity securities within the NDT Fund are primarily in common stocks within a broad range of industries and sectors. Unrealized gains and losses on these securities are recorded in Net Income.

(B)Debt Securities (Government)—Unrealized gains and losses on these securities are recorded in Accumulated Other Comprehensive Income (Loss). The unrealized losses on PSEG Power’s NDT investments in U.S. Treasury obligations and Federal Agency mortgage-backed securities were caused by interest rate changes. PSEG Power also has investments in municipal bonds. It is not expected that these securities will settle for less than their amortized cost. PSEG Power does not intend to sell these securities, nor will it be more-likely-than-not required to sell before recovery of their amortized cost. PSEG Power did not recognize credit losses for U.S. Treasury obligations and Federal Agency mortgage-backed securities because these investments are guaranteed by the U.S. government or an agency of the U.S. government. PSEG Power did not recognize credit losses for municipal bonds because they are primarily investment grade securities.

(C)Debt Securities (Corporate)—Unrealized gains and losses on these securities are recorded in Accumulated Other Comprehensive Income (Loss). Unrealized losses were due to market declines. It is not expected that these securities would settle for less than their amortized cost. PSEG Power does not intend to sell these securities, nor

will it be more-likely-than-not required to sell before recovery of their amortized cost. PSEG Power did not recognize credit losses for corporate bonds because they are primarily investment grade securities.

The following tables show the amortized cost basis, gross unrealized gains and losses and fair values for the securities held in the Rabbi Trust.

	As of September 30, 2024
	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	Millions
Domestic Equity Securities	$	9	$	10	$	—		$	19
Available-for-Sale Debt Securities
Government		104		—		(17	)		87
Corporate		77		—		(8	)		69
Total Available-for-Sale Debt Securities		181		—		(25	)		156
Total Rabbi Trust Investments	$	190	$	10	$	(25	)	$	175

	As of December 31, 2023
	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	Millions
Domestic Equity Securities	$	10	$	8	$	—		$	18
Available-for-Sale Debt Securities
Government		110		—		(19	)		91
Corporate		80		—		(10	)		70
Total Available-for-Sale Debt Securities		190		—		(29	)		161
Total Rabbi Trust Investments	$	200	$	8	$	(29	)	$	179

Net unrealized gains (losses) on debt securities of $(18) million (after-tax) were included in AOCL on PSEG’s Condensed Consolidated Balance Sheet as of September 30, 2024. The portion of net unrealized gains (losses) recognized during the third quarter and first nine months of 2024 related to equity securities still held as of September 30, 2024 were each approximately $1 million.

The amounts in the preceding tables do not include receivables and payables for Rabbi Trust Fund transactions which have not settled at the end of each period. Such amounts are included in Accounts Receivable and Accounts Payable on the Condensed Consolidated Balance Sheets as shown in the following table.

	As of		As of
	September 30, 2024		December 31, 2023
	Millions
Accounts Receivable	$	2	$	1
Accounts Payable	$	—	$	—

The following table shows the value of securities in the Rabbi Trust Fund that have been in an unrealized loss position for less than 12 months and greater than 12 months.

	As of September 30, 2024									As of December 31, 2023
	Less Than 12 Months				Greater Than 12 Months					Less Than 12 Months				Greater Than 12 Months
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	Millions
Available-for-Sale Debt Securities
Government (A)	$	1	$	—	$	77	$	(17	)	$	3	$	—	$	83	$	(19	)
Corporate (B)		1		—		53		(8	)		3		—		60		(10	)
Total Available-for-Sale Debt Securities		2		—		130		(25	)		6		—		143		(29	)
Rabbi Trust Investments	$	2	$	—	$	130	$	(25	)	$	6	$	—	$	143	$	(29	)

(A)Debt Securities (Government)—Unrealized gains and losses on these securities are recorded in Accumulated Other Comprehensive Income (Loss). The unrealized losses on PSEG’s Rabbi Trust investments in U.S. Treasury obligations and Federal Agency mortgage-backed securities were caused by interest rate changes. PSEG also has investments in municipal bonds. It is not expected that these securities will settle for less than their amortized cost. PSEG does not intend to sell these securities, nor will it be more-likely-than-not required to sell before recovery of their amortized cost. PSEG did not recognize credit losses for U.S. Treasury obligations and Federal Agency mortgage-backed securities because these investments are guaranteed by the U.S. government or an agency of the U.S. government. PSEG did not recognize credit losses for municipal bonds because they are primarily investment grade securities.

(B)Debt Securities (Corporate)—Unrealized gains and losses on these securities are recorded in Accumulated Other Comprehensive Income (Loss). Unrealized losses were due to market declines. It is not expected that these securities would settle for less than their amortized cost. PSEG does not intend to sell these securities, nor will it be more-likely-than-not required to sell before recovery of their amortized cost. PSEG did not recognize credit losses for corporate bonds because they are primarily investment grade.

The proceeds from the sales of and the net gains (losses) on securities in the Rabbi Trust Fund were:

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2024		2023			2024			2023
	Millions
Proceeds from Rabbi Trust Sales	$	10	$	9		$	25		$	26
Net Realized Gains (Losses) on Rabbi Trust:
Gross Realized Gains	$	—	$	1		$	2		$	5
Gross Realized Losses		—		(1	)		(1	)		(6	)
Net Realized Gains (Losses) on Rabbi Trust (A)		—		—			1			(1	)
Net Unrealized Gains (Losses) on Equity Securities		1		(1	)		1			1
Net Gains (Losses) on Rabbi Trust Investments	$	1	$	(1	)	$	2		$	—

(A)The cost of these securities was determined on the basis of specific identification.

The Rabbi Trust debt securities held as of September 30, 2024 had the following maturities:

Time Frame	Fair Value
	Millions
Less than one year	$	5
1 - 5 years		28
6 - 10 years		17
11 - 15 years		10
16 - 20 years		17
Over 20 years		79
Total Rabbi Trust Available-for-Sale Debt Securities	$	156

PSEG periodically assesses individual debt securities whose fair value is less than amortized cost to determine whether the investments are considered to be impaired. For these securities, management considers its intent to sell or requirement to sell a security prior to expected recovery. In those cases where a sale is expected, any impairment would be recorded through earnings. For fixed income securities where there is no intent to sell or likely requirement to sell, management evaluates whether credit loss is a component of the impairment. If so, that portion is recorded through earnings while the noncredit loss component is recorded through Accumulated Other Comprehensive Income (Loss). Any subsequent recoveries of the noncredit loss component of the impairment would be recorded through Accumulated Other Comprehensive Income (Loss). Any subsequent recoveries of the credit loss component would be recognized through earnings. The assessment of fair market value compared to cost is applied on a weighted average basis taking into account various purchase dates and initial cost of the securities.

The fair value of the Rabbi Trust related to PSE&G and PSEG Power & Other is detailed as follows:

	As of		As of
	September 30, 2024		December 31, 2023
	Millions
PSE&G	$	32	$	32
PSEG Power & Other		143		147
Total Rabbi Trust Investments	$	175	$	179