Public Service Enterprise Group Incorporated (PEG) 2024 Q2 Earnings Call Summary

Optimistic Highlights

Strong Financial Performance: PSEG reported net income of $0.87 per share for Q2 2024, with non-GAAP operating earnings of $0.63 per share, indicating solid financial health.
Operational Excellence: Despite one of the hottest summers, the electric transmission and distribution system performed exceptionally well, showcasing operational resilience.
Regulatory Approvals: Received approval for an extension of the clean energy future or energy efficiency program and the recovery of COVID-19 costs, supporting financial stability.
Capital Investment Plan on Track: PSEG is executing a $19 billion to $22.5 billion capital plan focused on infrastructure replacement and energy efficiency, indicating strong future growth prospects.
Increased Data Center Interest: Noted a significant increase in new business requests and feasibility studies from potential data center customers, suggesting potential for future revenue growth.

Earnings Comparison: The net income and non-GAAP operating earnings for Q2 2024 were lower compared to Q2 2023, reflecting the impact of higher mark-to-market gains in the previous year.
Operational Challenges: The early and extended heat wave and a 4.8 impact earthquake presented operational challenges, although they were effectively managed.

Positive Growth Forecast: PSEG reaffirmed its guidance for long-term non-GAAP operating earnings growth of 5% to 7% through 2028, supported by capital investment programs and the nuclear PTC.
Regulatory Case Resolutions Expected: Anticipates resolving the distribution base rate case and the $3.1 billion Energy Efficiency II filing later this year, which could positively impact future earnings.

Q: Can you elaborate on the data center opportunity and its economic benefits? (Julien Dumoulin-Smith, Jefferies)
A: Data centers provide a clear signal to AI companies and bring construction activities and other opportunities. PSE&G is seeing several hundred megawatts of firm data center activity. (Ralph LaRossa)
Q: Does the protest at FERC against the Susquehanna ISA affect pursuing a deal with artificial island? (Shar Pourreza, Guggenheim)
A: No, it does not affect pursuing a deal. PSEG is committed to supporting New Jersey's economic development efforts. (Ralph LaRossa)
Q: What progress have you made on the nuclear business outside of data center opportunities? (Shar Pourreza, Guggenheim)
A: Exploring opportunities for thermal and efficiency upgrades at Salem units and pursuing long-term agreements to supply large power energy users. (Ralph LaRossa)
Q: Are you having discussions with your local transmission utility on an ISA for artificial island? (Michael Sullivan, Wolfe Research)
A: No discussions until they move forward with an interconnection agreement. (Ralph LaRossa)
Q: How are you viewing the demand growth broadly in PJM? (Bill Appicelli, UBS)
A: PJM's process is trusted to ensure adequate reliability, with a focus on supporting the marketplace for electricity. (Ralph LaRossa)