Income Taxes

9 Months Ended

Sep. 30, 2024

Income Taxes [Line Items]

Income Taxes

Note 14. Income Taxes

A reconciliation of reported income tax expense for PSEG with the amount computed by multiplying pre-tax income by the statutory federal income tax rate of 21% is as follows:

	Three Months Ended						Nine Months Ended
PSEG	September 30,						September 30,
	2024			2023			2024			2023
	Millions
Pre-Tax Income	$	559		$	65		$	1,625		$	2,394
Tax Computed at Statutory Rate @ 21% Increase (Decrease) Attributable to:	$	117		$	14		$	341		$	503
State Income Taxes (net of federal income tax)		38			(1	)		112			157
NDT Fund		11			(3	)		26			11
Uncertain Tax Positions		1			1			3			(6	)
Leasing Activities		—			—			—			(17	)
GPRC-CEF-EE		(16	)		(13	)		(44	)		(36	)
Tax Credits		(90	)		(2	)		(195	)		(7	)
Estimated Annual Effective Tax Rate Interim Period Adjustment		14			9			1			(7	)
TAC		(33	)		(62	)		(100	)		(188	)
Other		(3	)		(17	)		(5	)		(33	)
Subtotal		(78	)		(88	)		(202	)		(126	)
Total Income Tax Expense (Benefit)	$	39		$	(74	)	$	139		$	377
Effective Income Tax Rate		7.0	%	N/A				8.6	%		15.7	%

A reconciliation of reported income tax expense for PSE&G with the amount computed by multiplying pre-tax income by the statutory federal income tax rate of 21% is as follows:

	Three Months Ended						Nine Months Ended
PSE&G	September 30,						September 30,
	2024			2023			2024			2023
	Millions
Pre-Tax Income	$	469		$	454		$	1,410		$	1,365
Tax Computed at Statutory Rate @ 21% Increase (Decrease) Attributable to:	$	98		$	95		$	296		$	287
State Income Taxes (net of federal income tax)		32			33			99			100
Uncertain Tax Positions		—			—			—			(5	)
Tax Credits		(2	)		(2	)		(6	)		(7	)
GPRC-CEF-EE		(16	)		(13	)		(44	)		(36	)
TAC		(33	)		(62	)		(100	)		(188	)
Bad Debt Flow-Through		(3	)		(2	)		(9	)		(9	)
Other		14			4			5			(1	)
Subtotal		(8	)		(42	)		(55	)		(146	)
Total Income Tax Expense	$	90		$	53		$	241		$	141
Effective Income Tax Rate		19.2	%		11.7	%		17.1	%		10.3	%

PSEG’s and PSE&G’s total income tax expense (benefit) for interim periods is determined using an estimated annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, PSEG and PSE&G update the respective estimated annual effective tax rates, and if the estimated tax rate changes, PSEG and PSE&G make cumulative adjustments.

In August 2022, the Inflation Reduction Act (IRA) was signed into law. The IRA enacted a new 15% corporate alternative minimum tax (CAMT), which is based on adjusted financial statement income, effective in 2023, and made certain changes to existing energy tax credit laws.

PSEG has determined that it is not subject to the CAMT for 2023 and 2024 as it is not an applicable corporation in accordance with the statute. The U.S. Treasury issued a notice of proposed rulemaking in September 2024 that provided proposed regulations regarding the CAMT. The proposed CAMT regulations and certain relevant rules remain unclear and require further guidance. As such, the impact of the CAMT on PSEG’s and PSE&G’s financial statements is subject to continued evaluation.

The IRA established a new PTC for existing qualified nuclear generation facilities, effective 2024 through 2032, a new technology neutral energy tax credit, inclusive of both new nuclear units and increases to nuclear generation capacity, effective 2025, and the transferability of energy tax credits, effective 2023.

The PTC for a given nuclear facility can be multiplied by five if prevailing wage requirements are met, and the value of the PTC is designed to phase down as the facility’s gross receipts increase. Both the PTC rate and phase down amount are subject to the Internal Revenue Service’s determination of annual inflation.

In 2024, PSEG recorded the benefit of the estimated PTCs generated by PSEG’s nuclear plants within Income Tax Expense in its Consolidated Statements of Operations in accordance with Accounting Standards Codification Topic 740, Income Taxes. The amounts recorded are subject to change based on several factors, including but not limited to, adjustments to estimated market prices and generation and the issuance of authoritative guidance by Treasury/the Internal Revenue Service, including clarification of the definition of “gross receipts” used to determine the phase out. Any adjustments to amounts previously recorded could be material.

The enactment of additional federal or state tax legislation and clarification of previously enacted tax laws could impact PSEG’s and PSE&G’s financial statements.

Public Service Electric and Gas Company [Member]

Income Taxes [Line Items]

Income Taxes

Note 14. Income Taxes

A reconciliation of reported income tax expense for PSEG with the amount computed by multiplying pre-tax income by the statutory federal income tax rate of 21% is as follows:

	Three Months Ended						Nine Months Ended
PSEG	September 30,						September 30,
	2024			2023			2024			2023
	Millions
Pre-Tax Income	$	559		$	65		$	1,625		$	2,394
Tax Computed at Statutory Rate @ 21% Increase (Decrease) Attributable to:	$	117		$	14		$	341		$	503
State Income Taxes (net of federal income tax)		38			(1	)		112			157
NDT Fund		11			(3	)		26			11
Uncertain Tax Positions		1			1			3			(6	)
Leasing Activities		—			—			—			(17	)
GPRC-CEF-EE		(16	)		(13	)		(44	)		(36	)
Tax Credits		(90	)		(2	)		(195	)		(7	)
Estimated Annual Effective Tax Rate Interim Period Adjustment		14			9			1			(7	)
TAC		(33	)		(62	)		(100	)		(188	)
Other		(3	)		(17	)		(5	)		(33	)
Subtotal		(78	)		(88	)		(202	)		(126	)
Total Income Tax Expense (Benefit)	$	39		$	(74	)	$	139		$	377
Effective Income Tax Rate		7.0	%	N/A				8.6	%		15.7	%

A reconciliation of reported income tax expense for PSE&G with the amount computed by multiplying pre-tax income by the statutory federal income tax rate of 21% is as follows:

	Three Months Ended						Nine Months Ended
PSE&G	September 30,						September 30,
	2024			2023			2024			2023
	Millions
Pre-Tax Income	$	469		$	454		$	1,410		$	1,365
Tax Computed at Statutory Rate @ 21% Increase (Decrease) Attributable to:	$	98		$	95		$	296		$	287
State Income Taxes (net of federal income tax)		32			33			99			100
Uncertain Tax Positions		—			—			—			(5	)
Tax Credits		(2	)		(2	)		(6	)		(7	)
GPRC-CEF-EE		(16	)		(13	)		(44	)		(36	)
TAC		(33	)		(62	)		(100	)		(188	)
Bad Debt Flow-Through		(3	)		(2	)		(9	)		(9	)
Other		14			4			5			(1	)
Subtotal		(8	)		(42	)		(55	)		(146	)
Total Income Tax Expense	$	90		$	53		$	241		$	141
Effective Income Tax Rate		19.2	%		11.7	%		17.1	%		10.3	%

PSEG’s and PSE&G’s total income tax expense (benefit) for interim periods is determined using an estimated annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, PSEG and PSE&G update the respective estimated annual effective tax rates, and if the estimated tax rate changes, PSEG and PSE&G make cumulative adjustments.

In August 2022, the Inflation Reduction Act (IRA) was signed into law. The IRA enacted a new 15% corporate alternative minimum tax (CAMT), which is based on adjusted financial statement income, effective in 2023, and made certain changes to existing energy tax credit laws.

PSEG has determined that it is not subject to the CAMT for 2023 and 2024 as it is not an applicable corporation in accordance with the statute. The U.S. Treasury issued a notice of proposed rulemaking in September 2024 that provided proposed regulations regarding the CAMT. The proposed CAMT regulations and certain relevant rules remain unclear and require further guidance. As such, the impact of the CAMT on PSEG’s and PSE&G’s financial statements is subject to continued evaluation.

The IRA established a new PTC for existing qualified nuclear generation facilities, effective 2024 through 2032, a new technology neutral energy tax credit, inclusive of both new nuclear units and increases to nuclear generation capacity, effective 2025, and the transferability of energy tax credits, effective 2023.

The PTC for a given nuclear facility can be multiplied by five if prevailing wage requirements are met, and the value of the PTC is designed to phase down as the facility’s gross receipts increase. Both the PTC rate and phase down amount are subject to the Internal Revenue Service’s determination of annual inflation.

In 2024, PSEG recorded the benefit of the estimated PTCs generated by PSEG’s nuclear plants within Income Tax Expense in its Consolidated Statements of Operations in accordance with Accounting Standards Codification Topic 740, Income Taxes. The amounts recorded are subject to change based on several factors, including but not limited to, adjustments to estimated market prices and generation and the issuance of authoritative guidance by Treasury/the Internal Revenue Service, including clarification of the definition of “gross receipts” used to determine the phase out. Any adjustments to amounts previously recorded could be material.

The enactment of additional federal or state tax legislation and clarification of previously enacted tax laws could impact PSEG’s and PSE&G’s financial statements.