UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED June 30, 2022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM          TO

Commission File Number	Name of Registrant, Address, and Telephone Number			State or other jurisdiction of Incorporation or Organization	I.R.S. Employer Identification  Number
001-09120	Public Service Enterprise Group Incorporated			New Jersey	22-2625848
	80 Park Plaza
	Newark,	New Jersey	07102
	973	430-7000
001-00973	Public Service Electric and Gas Company			New Jersey	22-1212800
	80 Park Plaza
	Newark,	New Jersey	07102
	973	430-7000

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange On Which Registered
Public Service Enterprise Group Incorporated
Common Stock without par value	PEG	New York Stock Exchange
Public Service Electric and Gas Company
8.00% First and Refunding Mortgage Bonds, due 2037	PEG37D	New York Stock Exchange
5.00% First and Refunding Mortgage Bonds, due 2037	PEG37J	New York Stock Exchange

Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrants have submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrants were required to submit such files). Yes ☒ No ☐

Indicate by check mark whether each registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Public Service Enterprise Group Incorporated	Large accelerated filer	☒	Accelerated filer	☐	Non-accelerated filer	☐	Smaller reporting company	☐	Emerging growth company	☐
Public Service Electric and Gas Company	Large accelerated filer	☐	Accelerated filer	☐	Non-accelerated filer	☒	Smaller reporting company	☐	Emerging growth company	☐

(Cover continued on next page)

(Cover continued from previous page)

If any of the registrants is an emerging growth company, indicate by check mark if such registrant has elected not to use

the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether any of the registrants is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 19, 2022, Public Service Enterprise Group Incorporated had outstanding 498,860,141 shares of its sole class of Common Stock, without par value.

As of July 19, 2022, Public Service Electric and Gas Company had issued and outstanding 132,450,344 shares of Common Stock, without nominal or par value, all of which were privately held, beneficially and of record, by Public Service Enterprise Group Incorporated.

Public Service Electric and Gas Company is a wholly owned subsidiary of Public Service Enterprise Group Incorporated and meets the conditions set forth in General Instruction H(1) of Form 10-Q. Public Service Electric and Gas Company is filing its Quarterly Report on Form 10-Q with the reduced disclosure format authorized by General Instruction H.

		Page
FORWARD-LOOKING STATEMENTS		ii
FILING FORMAT		iii
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Public Service Enterprise Group Incorporated	1
	Public Service Electric and Gas Company	7
	Notes to Condensed Consolidated Financial Statements
	Note 1. Organization, Basis of Presentation and Significant Accounting Policies	13
	Note 2. Recent Accounting Standards	14
	Note 3. Revenues	16
	Note 4. Early Plant Retirements/Asset Dispositions and Impairments	21
	Note 5. Variable Interest Entities (VIEs)	22
	Note 6. Rate Filings	23
	Note 7. Leases	24
	Note 8. Financing Receivables	25
	Note 9. Trust Investments	27
	Note 10. Pension and Other Postretirement Benefits (OPEB)	32
	Note 11. Commitments and Contingent Liabilities	34
	Note 12. Debt and Credit Facilities	39
	Note 13. Financial Risk Management Activities	41
	Note 14. Fair Value Measurements	45
	Note 15. Other Income (Deductions)	49
	Note 16. Income Taxes	50
	Note 17. Accumulated Other Comprehensive Income (Loss), Net of Tax	51
	Note 18. Earnings Per Share (EPS) and Dividends	53
	Note 19. Financial Information by Business Segment	55
	Note 20. Related-Party Transactions	56
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	57
	Executive Overview of 2022 and Future Outlook	57
	Results of Operations	65
	Liquidity and Capital Resources	71
	Capital Requirements	73
	Accounting Matters	73
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	73
Item 4.	Controls and Procedures	74
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	75
Item 1A.	Risk Factors	75
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	75
Item 5.	Other Information	76
Item 6.	Exhibits	77
	Signatures	78

i

FORWARD-LOOKING STATEMENTS

Certain of the matters discussed in this report about our and our subsidiaries’ future performance, including, without limitation, future revenues, earnings, strategies, prospects, consequences and all other statements that are not purely historical constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those anticipated. Such statements are based on management’s beliefs as well as assumptions made by and information currently available to management. When used herein, the words “anticipate,” “intend,” “estimate,” “believe,” “expect,” “plan,” “should,” “hypothetical,” “potential,” “forecast,” “project,” variations of such words and similar expressions are intended to identify forward-looking statements. Factors that may cause actual results to differ are often presented with the forward-looking statements themselves. Other factors that could cause actual results to differ materially from those contemplated in any forward-looking statements made by us herein are discussed in filings we make with the United States Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K and subsequent reports on Form 10-Q and Form 8-K. These factors include, but are not limited to:

•any inability to successfully develop, obtain regulatory approval for, or construct transmission and distribution, and solar and wind generation projects;

•the physical, financial and transition risks related to climate change, including risks relating to potentially increased legislative and regulatory burdens, changing customer preferences and lawsuits;

•any equipment failures, accidents, critical operating technology or business system failures, severe weather events, acts of war, terrorism, sabotage, cyberattack or other incidents that may impact our ability to provide safe and reliable service to our customers;

•any inability to recover the carrying amount of our long-lived assets;

•disruptions or cost increases in our supply chain, including labor shortages;

•any inability to maintain sufficient liquidity or access sufficient capital on commercially reasonable terms;

•the impact of cybersecurity attacks or intrusions or other disruptions to our information technology, operational or other systems;

•the impact of the ongoing coronavirus pandemic;

•failure to attract and retain a qualified workforce;

•inflation, including increases in the costs of equipment, materials, fuel and labor;

•the impact of our covenants in our debt instruments on our business;

•adverse performance of our nuclear decommissioning and defined benefit plan trust fund investments and changes in funding requirements and pension costs;

•the failure to complete, or delays in completing, the Ocean Wind 1 offshore wind project and the failure to realize the anticipated strategic and financial benefits of this project;

•fluctuations in wholesale power and natural gas markets, including the potential impacts on the economic viability of our generation units;

•our ability to obtain adequate nuclear fuel supply;

•market risks impacting the operation of our nuclear generating stations;

•changes in technology related to energy generation, distribution and consumption and changes in customer usage patterns;

•third-party credit risk relating to our sale of nuclear generation output and purchase of nuclear fuel;

•any inability to meet our commitments under forward sale obligations;

•reliance on transmission facilities to maintain adequate transmission capacity for our nuclear generation fleet;

•the impact of changes in state and federal legislation and regulations on our business, including PSE&G’s ability to recover costs and earn returns on authorized investments;

ii

•PSE&G’s proposed investment programs may not be fully approved by regulators and its capital investment may be lower than planned;

•the absence of a long-term legislative or other solution for our New Jersey nuclear plants that sufficiently values them for their carbon-free, fuel diversity and resilience attributes, or the impact of the current or subsequent payments for such attributes being materially adversely modified through legal proceedings;

•adverse changes in and non-compliance with energy industry laws, policies, regulations and standards, including market structures and transmission planning and transmission returns;

•risks associated with our ownership and operation of nuclear facilities, including increased nuclear fuel storage costs, regulatory risks, such as compliance with the Atomic Energy Act and trade control, environmental and other regulations, as well as financial, environmental and health and safety risks;

•changes in federal and state environmental laws and regulations and enforcement;

•delays in receipt of, or an inability to receive, necessary licenses and permits; and

•changes in tax laws and regulations.

All of the forward-looking statements made in this report are qualified by these cautionary statements and we cannot assure you that the results or developments anticipated by management will be realized or even if realized, will have the expected consequences to, or effects on, us or our business, prospects, financial condition, results of operations or cash flows. Readers are cautioned not to place undue reliance on these forward-looking statements in making any investment decision. Forward-looking statements made in this report apply only as of the date of this report. While we may elect to update forward-looking statements from time to time, we specifically disclaim any obligation to do so, even in light of new information or future events, unless otherwise required by applicable securities laws.

The forward-looking statements contained in this report are intended to qualify for the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

FILING FORMAT

This combined Quarterly Report on Form 10-Q is separately filed by Public Service Enterprise Group Incorporated (PSEG) and Public Service Electric and Gas Company (PSE&G). Information relating to any individual company is filed by such company on its own behalf. PSE&G is only responsible for information about itself and its subsidiaries.

Discussions throughout the document refer to PSEG and its direct operating subsidiaries. Depending on the context of each section, references to “we,” “us,” and “our” relate to PSEG or to the specific company or companies being discussed.

iii

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Millions, except per share data

(Unaudited)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
OPERATING REVENUES	$	2,076	$	1,874	$	4,389	$	4,763
OPERATING EXPENSES
Energy Costs	765		606		2,010		1,635
Operation and Maintenance	751		783		1,545		1,561
Depreciation and Amortization	269		322		552		663
(Gains) Losses on Asset Dispositions and Impairments	(5)		457		38		457
Total Operating Expenses	1,780		2,168		4,145		4,316
OPERATING INCOME (LOSS)	296		(294)		244		447
Income from Equity Method Investments	7		6		11		9
Net Gains (Losses) on Trust Investments	(187)		81		(255)		141
Other Income (Deductions)	38		33		43		58
Net Non-Operating Pension and Other Postretirement Benefit (OPEB) Credits (Costs)	94		82		188		164
Interest Expense	(150)		(147)		(287)		(293)
INCOME (LOSS) BEFORE INCOME TAXES	98		(239)		(56)		526
Income Tax Benefit (Expense)	33		62		185		(55)
NET INCOME (LOSS)	$	131	$	(177)	$	129	$	471
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
BASIC	497		504		499		504
DILUTED	500		504		502		507
NET INCOME (LOSS) PER SHARE:
BASIC	$	0.26	$	(0.35)	$	0.26	$	0.94
DILUTED	$	0.26	$	(0.35)	$	0.26	$	0.93

See Notes to Condensed Consolidated Financial Statements.

1

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Millions

(Unaudited)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
NET INCOME (LOSS)	$	131	$	(177)	$	129	$	471
Other Comprehensive Income (Loss), net of tax
Unrealized Gains (Losses) on Available-for-Sale Securities, net of tax (expense) benefit of $30, $(10), $69 and $16 for the three and six months ended 2022 and 2021, respectively	(46)		16		(107)		(26)
Unrealized Gains (Losses) on Cash Flow Hedges, net of tax (expense) benefit of $(1), $(1), $(1) and $(1) for the three and six months ended 2022 and 2021, respectively	—		—		1		1
Pension/OPEB adjustment, net of tax (expense) benefit of $0, $(1), $0 and $(3) for the three and six months ended 2022 and 2021, respectively	1		4		1		7
Other Comprehensive Income (Loss), net of tax	(45)		20		(105)		(18)
COMPREHENSIVE INCOME (LOSS)	$	86	$	(157)	$	24	$	453

See Notes to Condensed Consolidated Financial Statements.

2

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

Millions

(Unaudited)

	June 30, 2022		December 31, 2021
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents	$	2,207	$	818
Accounts Receivable, net of allowance of $324 in 2022 and $325 in 2021	1,998		1,859
Tax Receivable	8		9
Unbilled Revenues, net of allowance of $11 in 2022 and $12 in 2021	217		217
Fuel	250		296
Materials and Supplies, net	484		448
Prepayments	331		63
Derivative Contracts	131		72
Regulatory Assets	491		364
Assets Held for Sale	—		2,060
Other	50		44
Total Current Assets	6,167		6,250
PROPERTY, PLANT AND EQUIPMENT	44,890		43,684
Less: Accumulated Depreciation and Amortization	(9,731)		(9,318)
Net Property, Plant and Equipment	35,159		34,366
NONCURRENT ASSETS
Regulatory Assets	3,754		3,605
Operating Lease Right-of-Use Assets	189		201
Long-Term Investments	577		541
Nuclear Decommissioning Trust (NDT) Fund	2,266		2,637
Long-Term Tax Receivable	47		47
Long-Term Receivable of Variable Interest Entity (VIE)	839		828
Rabbi Trust Fund	197		242
Intangibles	38		20
Derivative Contracts	59		28
Other	316		234
Total Noncurrent Assets	8,282		8,383
TOTAL ASSETS	$	49,608	$	48,999

See Notes to Condensed Consolidated Financial Statements.

3

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

Millions

(Unaudited)

	June 30, 2022		December 31, 2021
LIABILITIES AND CAPITALIZATION
CURRENT LIABILITIES
Long-Term Debt Due Within One Year	$	1,200	$	700
Commercial Paper and Loans	3,313		3,519
Accounts Payable	1,214		1,315
Derivative Contracts	220		17
Accrued Interest	127		121
Accrued Taxes	39		67
Clean Energy Program	230		146
Obligation to Return Cash Collateral	731		179
Regulatory Liabilities	341		388
Liabilities Held for Sale	—		144
Other	519		476
Total Current Liabilities	7,934		7,072
NONCURRENT LIABILITIES
Deferred Income Taxes and Investment Tax Credits (ITC)	5,474		5,759
Regulatory Liabilities	2,403		2,497
Operating Leases	179		191
Asset Retirement Obligations	1,600		1,573
OPEB Costs	558		572
OPEB Costs of Servco	655		640
Accrued Pension Costs	226		318
Accrued Pension Costs of Servco	169		174
Environmental Costs	231		245
Derivative Contracts	30		17
Long-Term Accrued Taxes	69		100
Other	181		184
Total Noncurrent Liabilities	11,775		12,270
COMMITMENTS AND CONTINGENT LIABILITIES (See Note 11)
CAPITALIZATION
LONG-TERM DEBT	16,471		15,219
STOCKHOLDERS’ EQUITY
Common Stock, no par, authorized 1,000 shares; issued, 2022 and 2021—534 shares	5,038		5,045
Treasury Stock, at cost, 2022 and 2021—37 and 30 shares, respectively	(1,382)		(896)
Retained Earnings	10,227		10,639
Accumulated Other Comprehensive Loss	(455)		(350)
Total Stockholders’ Equity	13,428		14,438
Total Capitalization	29,899		29,657
TOTAL LIABILITIES AND CAPITALIZATION	$	49,608	$	48,999

See Notes to Condensed Consolidated Financial Statements.

4

PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Millions (Unaudited)

	Six Months Ended
	June 30,
	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income	$	129	$	471
Adjustments to Reconcile Net Income to Net Cash Flows from Operating Activities:
Depreciation and Amortization	552		663
Amortization of Nuclear Fuel	93		94
Losses on Asset Dispositions and Impairments	38		457
Emission Allowances and Renewable Energy Credit (REC) Compliance Accrual	40		82
Provision for Deferred Income Taxes (Other than Leases) and ITC	(385)		(205)
Non-Cash Employee Benefit Plan (Credits) Costs	(120)		(89)
Leveraged Lease (Income), (Gains) and Losses, Adjusted for Rents Received and Deferred Taxes	25		6
Net Realized and Unrealized (Gains) Losses on Energy Contracts and Other Derivatives	951		331
Cost of Removal	(63)		(60)
Net Change in Regulatory Assets and Liabilities	(188)		(24)
Net (Gains) Losses and (Income) Expense from NDT Fund