PSEG Announces 2012 Results

                         PSEG Announces 2012 Results

Operating Earnings of $2.44 Per Share; Earnings from Continuing Operations of
$2.51 Per Share

Company Provides 2013 Guidance of $2.25 - $2.50 Per Share

PSE&G Proposes 10-year Infrastructure Enhancement Program: $3.9 Billion on
Distribution and $1.5 Billion on Transmission

PR Newswire

NEWARK, N.J., Feb. 21, 2013

NEWARK, N.J., Feb. 21, 2013 /PRNewswire/ -- Public Service Enterprise Group
(PSEG) reported today 2012 Income from Continuing Operations and Net Income of
$1,275 million or $2.51 per share as compared to Income from Continuing
Operations of $1,407 million, or $2.77 per share for 2011. PSEG reported Net
Income for 2011 of $1,503 million, or $2.96 per share. Operating Earnings for
the year 2012 were $1,236 million or $2.44 per share compared to 2011
Operating Earnings of $1,389 million or $2.74 per share.

PSEG also reported Income from Continuing Operations and Net Income for the
fourth quarter of 2012 of $224 million, or $0.44 per share. This compares to
fourth quarter 2011 Income from Continuing Operations of $360 million, or
$0.71 per share. Operating Earnings for the fourth quarter of 2012 were $207
million, or $0.41 per share compared to fourth quarter 2011 Operating Earnings
of $237 million, or $0.47 per share.

"The past year was one of significant accomplishment. We reported results for
the year at the upper end of guidance, and we managed to do so despite the
effects of continued low energy prices and Superstorm Sandy," said Ralph Izzo,
chairman, president and chief executive officer. He went on to say "these
strong results reflect our employees' focus on operational excellence, the
fuel flexibility of our generating fleet and the returns on our investment
programs at PSE&G. Superstorm Sandy challenged us more than any other natural
disaster in PSEG's 109-year history. We restored service to more than 2.1
million customers in a two week period. The damage created by this latest
storm has also challenged us to review and expand our investment program to
pursue measures targeted at preventing a similar level of storm related damage
in the future. We recently filed a proposal at the NJ Board of Public
Utilities (BPU) that calls for spending up to $3.9 billion over 10 years. In
addition, we have proposed spending on transmission projects amounting to
approximately $1.5 billion over the 10-year period. Our proposed investments
are designed to protect our system, enhance our efforts in communicating with
our customers and enable us to continue to deliver the reliable service
expected by our customers."

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 Nuclear Decommissioning
Trust (NDT) investments and Mark-To-Market accounting as well as other
one-time items not related to ongoing operations. The table below provides a
reconciliation of PSEG's Net Income to Operating Earnings (a non-GAAP measure)
for the full year and fourth quarter. See Attachment 12 for a complete list
of items excluded from Income from Continuing Operations in the determination
of Operating Earnings.

Full-Year Comparative Results
2012 and 2011
                                    Income             Diluted Earnings
                                    ($millions)        Per Share
                                    2012   2011        2012    2011
Net Income                          $1,275 $1,503      $2.51   $2.96
(Income) Loss from Discontinued Ops --     (96)        --      (0.19)
Income From Continuing Ops          $1,275 $1,407      $2.51   $2.77
Reconciling Items:
 Power Storm Costs                 39     --          0.08    --
Reconciling Items, Net of Tax     (78)   (18)        (0.15)  (0.03)
Operating Earnings (Non-GAAP)       $1,236 $1,389      $2.44   $2.74
                                           Avg. Shares 507M    507M

Fourth Quarter Comparative Results
2012 and 2011
                                    Income             Diluted Earnings
                                    ($millions)        Per Share
                                    2012   2011        2012    2011
Net Income/Income from
Continuing Ops                      $224   $360        $0.44   $0.71
 Reconciling Items:
 Power Storm Costs                 39     --          0.08    --
 Reconciling Items, Net of Tax     (56)   (123)       (0.11)  (0.24)
Operating Earnings (Non-GAAP)       $207   $237        $0.41   $0.47
                                           Avg. Shares 507M     507M

"We are initiating operating earnings guidance for 2013 of $2.25 - $2.50 per
share," continued Ralph Izzo. He added that "although our guidance for
operating earnings in 2013 remains unchanged from our guidance for 2012, we
believe PSEG is at a transition point. We expect to benefit from investments
made to expand our regulated infrastructure and to improve the reliability of
our system as we continue to control our costs. Our regulated business is
expected to represent approximately half of 2013's operating earnings, and our
planned investment program is expected to greatly expand the earnings
contribution from our regulated business as we maintain the upside optionality
of our merchant business. A strong balance sheet and cash flow allows us to
expand our capital investment and maintain a long history of returning cash to
our shareholders. The Board of Directors recent decision on the common stock
dividend established an indicated annual rate of $1.44 per share for 2013. The
decision represents the ninth increase in the dividend in the past ten years
and over a century of annual dividend payments."

The following table outlines PSEG 2012 operating earnings by subsidiary and
expectations for 2013.

            2013 Guidance and 2012 Operating Earnings

            ($ millions)

                           2013E              2012A
PSE&G                      $580-$635          $528
PSEG Power                 $535-$600          $644
PSEG Energy Holdings/
Parent                    $25-$35            $64
Operating Earnings         $1,140-$1,270      $1,236
Earnings Per Share         $2.25-$2.50        $2.44

Operating Earnings Review and Outlook by Operating Subsidiary

See Attachments 6 and 7 for detail regarding the quarter-over-quarter and
year-over-year earnings reconciliations for each of PSEG's businesses.

PSEG Power

PSEG Power reported operating earnings of $122 million ($0.24 per share) for
the fourth quarter of 2012 bringing full year operating earnings to $644
million ($1.27 per share). On a comparative basis, PSEG Power reported
operating earnings of $134 million ($0.27 per share) and $845 million ($1.67
per share) for the fourth quarter and full year 2011 respectively.

Power's fourth quarter operating earnings benefited from strong control of
operating expenses, higher capacity prices and post-storm recovery of the
power fleet.

PSEG Power's generation and maintenance facilities were affected in the
quarter by the storm surge associated with Superstorm Sandy. The total cost to
restore Power's facilities (prior to insurance recovery) could be up to $300
million. The cost and work associated with restoration of Power's facilities
is expected to occur over a 2 year period from the date of the October storm.
Of this amount, Power incurred $85 million in higher pre-tax operating and
maintenance expenses in the fourth quarter, and recorded $19 million of
insurance recovery to date, to return its facilities to service. These costs,
as well as all future storm-related restoration costs at Power, are excluded
from the calculation of operating earnings given the unusual nature of the
storm's impact on Power's operations.

Lower realized prices for energy reduced Power's earnings by $0.08 per share
quarter-over-quarter. The decline in prices reflects lower contract prices
hedged through the Basic Generation Services (BGS) contract and other
wholesale contracts. The contract price for one-third of the BGS-related load
declined to $84 per MWh on June 1, 2012 from $104 per MWh. The impact on
earnings from lower prices incorporates the effect of a small improvement in
margin quarter-over-quarter on volumes associated with customer migration away
from the BGS contract. An increase in capacity prices on June 1, 2012 to $153
per MW-day from $110 per MW-day improved Power's quarter-over-quarter earnings
by $0.06 per share.

PSEG Power experienced a 4% decline in generation during the quarter, in large
part as a result of Superstorm Sandy's impact on Power's facilities. The
decline in generation reduced earnings quarter-over-quarter by $0.02 per
share. An improvement in off-system margins and generation-related gas volumes
improved quarter-over-quarter earnings from the BGSS contract by $0.01 per
share. The absence of a gain on coal sales in the year-ago quarter reduced
earnings comparisons by $0.02 per share. Power continued to exercise control
of its operating costs (exclusive of storm related activity) helping offset
the impact of lower prices. Operating and maintenance expense (exclusive of
storm-related activity) declined by $0.02 per share in the quarter from year
ago levels. A premium paid on the early extinguishment of debt in the fourth
quarter of 2012 increased Power's interest expense in the quarter by $0.02
per share but did not affect quarter-over-quarter earnings comparisons given a
similar level of cost incurred for the early extinguishment of debt during the
fourth quarter of 2011.

The nuclear fleet operated at a strong capacity factor of 91.1% for the year.
The fleet's capacity factor was reduced by 0.3% as a result of the storm's
effect on operations. The fourth quarter refueling outage at Salem 2 was
delayed for two days to reduce the potential for risk to employee safety, and
Salem 1 was removed from service for five days to reduce the risk of damage
from the storm surge on the unit's intake valves. Operation of the Linden
combined cycle facility was also curtailed during the quarter as a result of
storm damage, but has since returned to service. This caused a reduction in
gas-fired generation in the quarter that was partially offset by an
improvement in generation volumes from Power's low-cost, base-load coal
facilities as well as improved performance from the Bergen and Bethlehem, NY
gas-fired combined cycle units which were available to meet the load.

Power's forecast output for 2013 of 53 - 55 TWh is approximately 75% - 80%
hedged at an average price of $50 per MWh. For 2014, forecast output of 53 -
55 TWh is approximately 50% - 60% hedged at an average price of $49 per MWh.
Power has hedged 25% - 30% of its forecast generation in 2015 of 52 TWh – 54
TWh at an average price of $51 per MWh. The results reflect the impact of the
February 2013 auction of Basic Generation Service (BGS) in New Jersey.
Average prices of $92 per MWh for the PSE&G zone in the latest BGS auction
will replace BGS auction prices of $96 per MWh for the three year period
beginning June 1, 2013. The most recent BGS auction price for the PSE&G zone
represented an increase of approximately 10% from last year's auction result
given increases in transmission, renewables and energy.

Power's operating earnings for 2013 are forecast at $535 million - $600
million. The guidance for Power's operating earnings does not include the
impact of storm restoration costs or any insurance recovery.


PSE&G reported operating earnings of $75 million ($0.15 per share) for the
fourth quarter bringing full year operating earnings to $528 million ($1.04
per share). On a comparative basis, PSE&G reported operating earnings of $99
million ($0.19 per share) and $521 million ($1.03 per share) for the fourth
quarter and full year 2011, respectively.

PSE&G's fourth quarter results reflect the impact of Superstorm Sandy on
operating expenses which more than offset the return on increased levels of
capital investment.

PSE&G made more than 2.1 million electric service restorations over a two-week
period after the storm hit in late October. About 48,000 trees had to be
removed or trimmed and 2,400 utility poles were repaired or replaced. The
restoration cost amounted to approximately $295 million. Of this amount,
approximately 14% or $40 million ($0.05 per share) was expensed and, unlike at
PSEG Power, was included in 2012's fourth quarter and full year operating
earnings. The cost of restoration in 2012 was greater than the storm-related
costs PSE&G incurred in the prior year, and reduced earnings
quarter-over-quarter by $0.04 per share. An increase in other operating
expenses (primarily pension) reduced earnings comparisons by $0.02 per share
quarter-over-quarter. PSE&G's quarter-over-quarter earnings comparisons were
also affected by an increase in depreciation expense and a higher tax rate,
partially offset by an increase in miscellaneous income which together reduced
earnings by $0.02 per share.

An increase in transmission revenue added $0.02 per share to earnings in the
quarter. Electric and gas demand was influenced by weather in the quarter
which was warmer than normal but colder than a year ago. The favorable weather
comparison also added $0.02 per share to earnings.

The most significant event in the quarter was Superstorm Sandy. Widespread
outages resulted in the loss of 3.4% of October customer hours and 5.4% of the
November customer hours. The loss of demand reduced sales by 2.7% and 0.6% for
the quarter and the year respectively.

On a weather normalized basis (excluding the impact of the storm), it is
estimated that electric sales declined by 1.6% in the fourth quarter resulting
in a year-over-year decline in weather normalized electric demand of 0.6%.
Weather normalized demand from residential customers grew by 3.2% and 1.3% for
the fourth quarter and the year respectively. Demand from the commercial and
industrial customer base, which is less sensitive to the weather, declined by
3.7% on a weather normalized basis in the fourth quarter and 1.4% for the year
as a result of the storm's impact on New Jersey's economy and a slow recovery
in the State's economic growth.

The Federal Energy Regulatory Commission (FERC) approved PSE&G's request for
an annual increase in transmission revenue of $174 million under the company's
formula rate filing. The rate increase was effective on January 1, 2013.

PSE&G's operating earnings for 2013 are forecast at $580 million - $635
million. Operating earnings will be influenced by an increase in transmission
revenues and higher levels of capital investment.

PSEG Energy Holdings and Parent

PSEG Energy Holdings/Parent reported operating earnings for the fourth quarter
of $10 million ($0.02 per share) compared to operating earnings of $4 million
($0.01 per share) for the fourth quarter of 2011. The results for the fourth
quarter brought full year 2012 operating earnings for PSEG Energy
Holdings/Parent to $64 million ($0.13 per share) versus $23 million ($0.04 per
share) in 2011.

PSEG Energy Holdings/Parent fourth quarter earnings were aided by the
recognition of tax benefits associated with the start-up of two new solar
projects (Milford and Queen Creek). The projects (which together have a
capacity of 40MW) brought the Energy Holdings solar portfolio to 69 MW at
year-end. Energy Holdings acquired an additional 19MW solar-project currently
under construction in Arizona which is scheduled for commercial operation in
the second half of 2013.

PSEG Energy Holdings/Parent operating earnings for 2013 are forecast to be $25
million - $35 million. The results will primarily reflect the absence of tax
benefits received in 2012 related to the settlement of IRS tax audits.

Balance Sheet

PSEG had $379 million of cash on the balance sheet at year-end and debt
represented 40.8% of consolidated capital. During the quarter, PSEG Power
redeemed $250 million of Senior Notes with an interest rate of 5.0% that were
due in 2014. With this reduction, debt represented 30% of PSEG Power's
capitalization at year-end.

Utility Filings

PSE&G, as announced yesterday, has requested approval from the New Jersey
Board of Public Utilities (BPU) to spend up to $3.9 billion to harden and
improve the resiliency of its utility network; in addition, PSE&G plans to
spend $1.5 billion over this period on its transmission network under its
Federal Energy Regulatory Commission formula rate process. The program would
entail spending approximately $2.8 billion of the $5.4 billion through 2017.
The initial phase of the program includes spending on upgrades to our electric
and gas distribution system and strengthening the backbone of our transmission

The following attachments can be found on

Attachment 1 - Operating Earnings and Per Share Results by Subsidiary
Attachment 2 - Consolidating Statements of Operations
Attachment 3 - Consolidating Statements of Operations
Attachment 4 - Capitalization Schedule
Attachment 5 - Condensed Consolidated Statements of Cash Flows
Attachment 6 - Quarter-over-Quarter EPS Reconciliation
Attachment 7 - Year-over-Year EPS Reconciliation
Attachment 8 - Generation Measures
Attachment 9 - Retail Sales and Revenues
Attachment 10 - Retail Sales and Revenues
Attachment 11 - Statistical Measures
Attachment 12 - Reconciling Items Excluded from Continuing Operations to
Compute Operating Earnings

Forward Looking Statement

Certain of the matters discussed in this report 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 Item 1A. Risk

Factors, Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations (MD&A), Item 8. Financial Statements and
Supplementary Data —Note 13. Commitments and Contingent Liabilities, and other
factors discussed in filings we make with the United States Securities and
Exchange Commission (SEC).

These factors include, but are not limited to:

  oadverse changes in the demand for or the 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
  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,
  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
  oany inability to achieve, or continue to sustain, our expected levels of
    operating performance,
  oany equipment failures, accidents, severe weather events or other
    incidents that impact our ability to provide safe and reliable service to
    our customers,
  oincrease in competition in energy supply markets as well as competition
    for certain rate-based transmission projects,
  oany inability to realize anticipated tax benefits or retain tax credits,
  ochallenges associated with recruitment and/or retention of a qualified
  oadverse performance of our decommissioning and defined benefit plan trust
    fund investments and changes in funding requirements, and
  ochanges in technology and customer usage patterns.

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 or results of operations. 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 if internal estimates change, 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.

Public Service Enterprise Group (NYSE:PEG) is a publicly traded diversified
energy company with annual revenues of more than $11 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)

Contact: Jenn Kramer, +1-973-430-6027,
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