PSEG Announces 2012 First Quarter Results

                  PSEG Announces 2012 First Quarter Results

$0.97 Per Share From Continuing Operations

$0.85 Per Share Of Operating Earnings

Operational Efficiency Supports Earnings

Company Maintains 2012 Operating Earnings Guidance of $2.25-$2.50 Per Share

PR Newswire

NEWARK, N.J., May 2, 2012

NEWARK, N.J., May 2, 2012 /PRNewswire/ --Public Service Enterprise Group
(PSEG) reported today Income from Continuing Operations and Net Income for the
first quarter of 2012 of $493 million or $0.97 per share as compared to Income
from Continuing Operations of $462 million or $0.91 per share in the first
quarter of 2011. Including Income from Discontinued Operations, and gain on
sale ($64 million or $0.13 per share), PSEG reported Net Income for the first
quarter of 2011 of $526 million or $1.04 per share. Operating Earnings for
the first quarter of 2012 were $432 million or $0.85 per share compared to
Operating Earnings in the first quarter of 2011 of $431 million or $0.85 per
share.

"PSEG delivered strong results in the face of challenging market conditions"
said Ralph Izzo, chairman, president and chief executive officer. He went on
to say, "our employees' responsiveness to the market and the mild winter
allowed us to better align expenses with operations." He added, "we continue
to implement a $6.7 billion capital program that will improve reliability and
add jobs in New Jersey." In discussing the outlook for 2012, Izzo said "we
continue to forecast operating earnings for 2012 of $2.25 - $2.50 per share."

PSEG believes that the non-GAAP financial measure of "Operating Earnings"
provides a consistent and comparable measure of performance of its businesses
to help shareholders understand performance trends. Operating Earnings
exclude the impact of returns/(losses) associated with NDT and MTM
accounting. The table below provides a reconciliation of PSEG's Net Income to
Operating Earnings (a non-GAAP measure) for the first quarter. See Attachment
10 for a complete list of items excluded from Income from Continuing
Operations in the determination of Operating Earnings.

PSEG CONSOLIDATED EARNINGS (unaudited)
First Quarter Comparative Results
2012 and 2011
                                    Income              Diluted Earnings
                                    ($millions)         Per Share
                                    2012  2011          2012     2011
Operating Earnings                  $432  $431          $0.85    $0.85
Reconciling Items                   61    31            0.12     0.06
Income from Continuing Operations   $493  $462          $0.97    $0.91
Income from Discontinued Operations 0     64            0.00     0.13
Net Income                          $493  $526          $0.97    $1.04
                                           Avg. Shares 507M     507M

In discussing the quarter, Izzo went on to say "fossil operations that took
cost control to a new level allowed us to meet the challenge of a complete
absence of winter, lower demand and a collapse in gas prices". He continued by
saying "this focus on operational excellence is a guiding principle at PSEG
that will help ensure superior results for customers, employees and
shareholders."

The following table outlines continued expectations for operating earnings in
2012 by subsidiary:

2012 Operating Earnings Guidance

($ millions, except EPS)
                            2012E
PSEG Power                  $575-$665
PSE&G                       530-560
PSEG Energy Holdings/Parent 35-45
Operating Earnings          $1,140-$1,270
Earnings Per Share          $2.25 - $2.50

Operating Earnings Review by Subsidiary

See Attachment 5 for detail regarding the quarter-over-quarter reconciliations
for each of PSEG's businesses.

PSEG Power

PSEG Power reported operating earnings of $196 million ($0.39 per share) for
the first quarter of 2012 compared with operating earnings of $267 million
($0.53 per share) for the first quarter of 2011.

PSEG Power's earnings were affected by warmer than normal weather conditions
and a decline in the price for energy and capacity as well as lower fuel
costs. These issues were offset somewhat by continued strong nuclear
operations coupled with greater dispatch from the combined cycle natural gas
fleet.

Output from Power's fleet declined 6.3% in the quarter as a result of a
decline in production from the coal fleet. Production from the nuclear fleet
increased 0.5% from very strong levels in the year ago quarter and output from
Power's combined cycle natural gas fleet increased 8.3% in the quarter. A
decline in demand given warmer than normal weather conditions compared with
more normal weather in the year-ago quarter, as well as a decline in wholesale
energy prices, resulted in reduced dispatch of the coal fleet. The decline in
volume reduced earnings by $0.02 per share in the quarter. Lower realized
pricing reduced earnings by $0.08 per share quarter-over-quarter. A decline in
average capacity prices to $110-MW/Day from $174-MW/Day reduced earnings in
the quarter by $0.07 per share. An increase in customer migration away from
the BGS contract was in line with expectations. The increase in customer
migration to approximately 36% in the quarter reduced earnings by $0.01 per
share. However, an increase in headroom associated with the decline in energy
prices further reduced earnings by $0.03 per share.

Power has reduced the operating and maintenance expenses at its fossil
stations in response to the decline in the market. The reduction in operating
and maintenance expense improved earnings in the quarter by $0.04 per share. A
decline in debt levels at Power coupled with a reduction in interest rates
resulted in lower finance costs and improved earnings comparisons
quarter-over-quarter by $0.02 per share. The absence of losses on wholesale
energy contracts recognized in the year-ago quarter more than offset the
impact of lower volumes and prices on gas supply contracts and net added $0.01
per share to earnings.

PSEG Power's nuclear fleet operated at an average capacity factor of 98.2%
during the quarter. The Hope Creek nuclear facility, 100%-owned by PSEG Power,
entered a refueling outage in April. Salem 2, 57%-owned and operated by PSEG
Power, is scheduled for refueling in the Fall of 2012. The combined cycle
fleet's availability improved in the quarter, and the fleet operated at an
average capacity factor of 56.6% versus 52.9% in the year-ago period.

Power continues to forecast output for 2012 of 53-54 TWh. Output for the
remainder of the year is approximately 70% - 75% hedged at an average price of
$59 per MWh. For 2013, forecast output of 52 - 54 TWh is approximately 55% -
60% hedged at an average price of $53 per MWh. We forecast output for 2014 of
53 - 55 TWh. Of this amount, approximately 20% - 25% is hedged at an average
price of $55 per MWh.

PSE&G

PSE&G reported operating earnings of $197 million ($0.39 per share) for the
first quarter of 2012 compared with operating earnings of $163 million ($0.32
per share) for the first quarter of 2011.

PSE&G's results in the quarter were influenced by higher transmission formula
rates, warmer than normal weather and an adjustment this quarter due to the
settlement of tax audits. An annualized increase in transmission revenue of
$94 million effective on January 1, 2012, added $0.03 per share to results. A
return on investments in energy efficiency, solar and infrastructure programs
added $0.01 per share. Warmer than normal weather versus colder than normal
weather in the year-ago quarter reduced electric and gas sales and lowered
earnings by $0.02 per share. PSE&G's ability to accrue earnings under the gas
weather normalization clause, which has a return cap, was affected by the
positive impact of the settlement of tax audits which reduced the utility's
tax expense. Higher levels of capital investment led to an increase in
depreciation expense which reduced quarterly earnings comparisons by $0.01 per
share. Higher operating and maintenance expense reduced earnings by $0.01 per
share and was offset by other miscellaneous items of $0.01 per share. PSE&G's
quarterly earnings also benefited from the settlement of tax audits for 1997 –
2006 which resulted in a one-time reduction in tax expense. The reduction in
taxes improved earnings by $0.06 per share.

PSE&G experienced the warmest first quarter, in terms of heating degree days,
since 1970. In addition, weak economic conditions continued to have an impact
on demand. In terms of weather-normalized demand, a 1.9% decline in electric
sales was led by a 2.5% decline in sales to the commercial and industrial
sector. Weather-normalized sales to gas customers declined 0.7%
quarter-over-quarter.

PSE&G received news in March from the National Park Service (NPS) that
"identified" our route for the Susquehanna – Roseland transmission line as its
preferred alternative for the portion of the existing transmission line that
runs through the Delaware Water Gap National Recreation Area – the route
approved by state regulators including the NJ Board of Public Utilities (BPU).
A final order from the NPS is expected to be issued in October 2012. The
expected in-service date for the line is June 2015. The capital cost for
Susquehanna – Roseland has been updated, and is now forecast at up to $790
million from $750 million.

PSE&G is awaiting a decision by the BPU on construction of the North-Central
Reliability project, a $390 million upgrade of transmission lines located in
the northern and central portions of New Jersey.

PSEG Energy Holdings/Enterprise

PSEG Energy Holdings/Enterprise reported operating earnings of $39 million
($0.07 per share) for the first quarter of 2012 compared with operating
earnings of $1 million during the first quarter of 2011.

The improvement in operating earnings is due to the settlement with the
Internal Revenue Service of the offshore lease transactions for all tax years,
and a settlement of all federal audit issues for tax years 1997 – 2006. A
reduction in the effective tax rate improved operating earnings by $38
million, or $0.08 per share. A small reduction in lease earnings in 2012's
first quarter was approximately equal to the absence of an asset impairment
recognized in 2011's first quarter.

The following attachments can be found on www.pseg.com:

Attachment 1 - Operating Earnings and Per Share Results by Subsidiary
Attachment 2 - Consolidating Statements of Operations
Attachment 3 - Capitalization Schedule
Attachment 4 - Condensed Consolidated Statements of Cash Flows
Attachment 5 - Quarter-over-Quarter EPS Reconciliation
Attachment 6 - Generation Measures
Attachment 7 – Retail Sales and Revenues
Attachment 8 – Retail Sales and Revenues
Attachment 9 - Statistical Measures
Attachment 10 - Reconciling Items Excluded from Continuing Operations to
Compute Operating Earnings

FORWARD-LOOKING STATEMENT

Readers are cautioned that statements contained in this presentation about our
future performance, including future revenues, earnings, strategies,
prospects, consequences and all other statements that are not purely
historical, are forward-looking statements for purposes of the safe harbor
provisions under The Private Securities Litigation Reform Act of 1995. 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. Although we believe that our
expectations are based on reasonable assumptions, they are subject to risks
and uncertainties and we can give no assurance they will be achieved. The
results or developments projected or predicted in these statements may differ
materially from what may actually occur. Factors which could cause results or
events to differ from current expectations include, but are not limited to:

  oadverse changes in the demand for or price of the capacity and energy that
    we sell into wholesale electricity markets,
  oadverse changes in energy industry law, policies and regulation, including
    market structures and a potential shift away from competitive markets
    toward subsidized market mechanisms, transmission planning and cost
    allocation rules, including rules regarding how transmission is planned
    and who is permitted to build transmission in the future, and reliability
    standards,
  oany inability of our transmission and distribution businesses to obtain
    adequate and timely rate relief and regulatory approvals from federal and
    state regulators,
  ochanges in federal and state environmental regulations that could increase
    our costs or limit our operations,
  ochanges in nuclear regulation and/or general developments in the nuclear
    power industry, including various impacts from any accidents or incidents
    experienced at our facilities or by others in the industry, that could
    limit operations of our nuclear generating units,
  oactions or activities at one of our nuclear units located on a multi-unit
    site that might adversely affect our ability to continue to operate that
    unit or other units located at the same site,
  oany inability to balance our energy obligations, available supply and
    trading risks,
  oany deterioration in our credit quality, or the credit quality of our
    counterparties, including in our leveraged leases,
  oavailability of capital and credit at commercially reasonable terms and
    conditions and our ability to meet cash needs,
  oany inability to realize anticipated tax benefits or retain tax credits,
  ochanges in the cost of, or interruption in the supply of, fuel and other
    commodities necessary to the operation of our generating units,
  odelays in receipt of necessary permits and approvals for our construction
    and development activities,
  odelays or unforeseen cost escalations in our construction and development
    activities,
  oany inability to achieve or continue to sustain, our expected levels of
    operating performance,
  oincrease in competition in energy supply markets as well as competition
    for certain rate-based transmission projects,
  ochallenges associated with recruitment and/or retention of a qualified
    workforce,
  oadverse performance of our decommissioning and defined benefit plan trust
    fund investments and changes in discount rates and funding requirements,
    and
  ochanges in technology and customer usage patterns.

For further information, please refer to our Annual Report on Form 10-K,
including Item 1A. Risk Factors, and subsequent reports on Form 10-Q and Form
8-K filed with the Securities and Exchange Commission. These documents
address in further detail our business, industry issues and other factors that
could cause actual results to differ materially from those indicated in this
presentation. In addition, any forward-looking statements included herein
represent our estimates only as of today and should not be relied upon as
representing our estimates as of any subsequent date. While we may elect to
update forward-looking statements from time to time, we specifically disclaim
any obligation to do so, even if our internal estimates change, unless
otherwise required by applicable securities laws.

Public Service Enterprise Group (NYSE:PEG) is a publicly traded diversified
energy company with annual revenues of more than $12 billion, and three
principal subsidiaries: PSEG Power, Public Service Electric and Gas Company
(PSE&G) and PSEG Energy Holdings.

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SOURCE Public Service Enterprise Group (PSEG)