FORWARD-LOOKING STATEMENT

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2 FORWARD-LOOKING STATEMENT 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 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 and available on our website: These factors include, but are not limited to: adverse changes in the demand for or the price of the capacity and energy that we sell into wholesale electricity markets, adverse changes in energy industry law, policies and regulation, including market structures and transmission planning, any inability of our transmission and distribution businesses to obtain adequate and timely rate relief and regulatory approvals from federal and state regulators, changes in federal and state environmental regulations and enforcement that could increase our costs or limit our operations, changes 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, actions 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, any inability to manage our energy obligations, available supply and risks, adverse outcomes of any legal, regulatory or other proceeding, settlement, investigation or claim applicable to us and/or the energy industry, any deterioration in our credit quality or the credit quality of our counterparties, availability of capital and credit at commercially reasonable terms and conditions and our ability to meet cash needs, changes in the cost of, or interruption in the supply of, fuel and other commodities necessary to the operation of our generating units, delays in receipt of necessary permits and approvals for our construction and development activities, delays or unforeseen cost escalations in our construction and development activities, any inability to achieve, or continue to sustain, our expected levels of operating performance, any equipment failures, accidents, severe weather events or other incidents that impact our ability to provide safe and reliable service to our customers, and any inability to obtain sufficient insurance coverage or recover proceeds of insurance with respect to such events, acts of terrorism, cybersecurity attacks or intrusions that could adversely impact our businesses, increases in competition in energy supply markets as well as for transmission projects, any inability to realize anticipated tax benefits or retain tax credits, challenges associated with recruitment and/or retention of a qualified workforce, adverse performance of our decommissioning and defined benefit plan trust fund investments and changes in funding requirements, changes in technology, such as distributed generation and micro grids, and greater reliance on these technologies, and changes in customer behaviors, including increases in energy efficiency, net-metering and demand response. 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. Forwardlooking 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. 2

3 Readers are cautioned not to place undue reliance on these forward-looking statements in making any investment decision. Forward-looking statements made in this Fact Book 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 Fact Book 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. GAAP DISCLAIMER PSEG presents Operating Earnings in addition to its Income from Continuing Operations/Net Income reported in accordance with accounting principles generally accepted in the United States (GAAP). Operating Earnings is a non-gaap financial measure that differs from Net Income because it excludes gains or losses associated with Nuclear Decommissioning Trust (NDT), Mark-to-Market (MTM) accounting, and other material one-time items. PSEG presents Operating Earnings because management believes that it is appropriate for investors to consider results excluding these items in addition to the results reported in accordance with GAAP. 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. This information is not intended to be viewed as an alternative to GAAP information. The last page in this presentation includes a list of items excluded from Income from Continuing Operations/Net Income to reconcile to Operating Earnings, with a reference to that page included on each of the pages where the non-gaap information appears. HISTORICAL FINANCIAL OVERVIEW & IR CONTACT INFO This document is prepared once a year and is available online at Any forwardlooking statements included herein represent our estimates as of June 1, 2015 and we disclaim any obligation to update the information provided. This fact book is intended to be used in conjunction with the annual report and other SEC filings to assist in detailed financial analysis. While this document does include abbreviated financial statements, it is not and is not intended to be a substitute for the more detailed financial statements (including footnotes) found in the Annual Report and other SEC filings. We appreciate your comments and suggestions on ways to improve this document and will attempt to incorporate them in future editions. This summary is not intended for use in connection with any sale, offer to sell, or solicitation of any offer to buy securities. Inquiries concerning this summary should be directed to: PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED INVESTOR RELATIONS 80 PARK PLAZA NEWARK, NJ KATHLEEN LALLY CARLOTTA CHAN CATHERINE GOLDA Vice President Investor Relations (973) Kathleen.Lally@pseg.com Manager Investor Relations (973) Carlotta.Chan@pseg.com Administrative Assistant Investor Relations (973) Catherine.Golda@pseg.com PSEG SHAREHOLDER SERVICES PSEG common stock is listed on the New York Stock Exchange and trades under the ticker symbol PEG. Wells Fargo Shareowner Services (WFSS) serves as PSEG s Transfer Agent, Registrar and Dividend Disbursing Agent for its common stock. WFSS' website, offers downloadable forms, answers to FAQs, online access and transaction processing to shareholders. WFSS' shareholder relations representatives can be reached at between the hours of 8 a.m. and 8 p.m. Eastern time Monday through Friday. An Interactive Voice Response System (IVR) is available 24 hours a day, every day. 3

4 RALPH IZZO CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER Letter from the CHAIRMAN GROWING A BRIGHTER ENERGY FUTURE RESPONSIBLY RELIABLY AND EFFICIENTLY PSEG has long pursued a vision based on safe, reliable, economic and greener energy. I am pleased to report that 2014 was a year in which we continued to make progress on our path with our dedicated employees again contributing in countless ways to our efforts. keeping with a long-established PSEG objective. We completed 2014 with operating earnings of $2.76 per share, compared to $2.58 in the prior year. To cite some of the year s highlights: We added to the reputation that we have built over more than 100 years for highly reliable service. We embarked on a major new effort to improve the resiliency of our electric and gas systems against extreme storms. We completed major projects on time and on budget as we continued to implement our large transmission investment program which is essentially rewiring New Jersey supporting reliable service long into the future, giving an important boost to New Jersey s economy and creating thousands of jobs. We further enhanced our financial strength, with a balance sheet that has remained one of the strongest in our industry. We again delivered substantial savings to our customers and low-cost fuel to our power plants through the access we enjoy to shale gas. We had a terrific first year managing the electric system of the Long Island Power Authority with our PSEG Long Island team achieving customer satisfaction scores showing the biggest improvement of any utility in the nation. And, we continued to demonstrate that utilities can be instrumental in expanding access to the benefits of energy efficiency and solar energy in ways that promote a sustainable future. In 2014, we provided our shareholders with attractive returns in Our strong financial position has allowed us to meaningfully increase our dividend. In February 2015, we raised our quarterly dividend by 5.4 percent, bringing our indicative annual dividend rate to $1.56 per share. This was the 11th increase in our dividend in the last 12 years. PSEG has a long history of paying dividends. We see the potential for our shareholders to continue to benefit from consistent and sustainable growth in our dividend, given our business mix, continued positive cash flow from our generation business and our strong balance sheet. We are determined to maintain a relentless focus on operational excellence, financial strength and disciplined investment. These pillars of our strategy will remain basic to how we run the business. Our goal is to sustain a cycle of continuously improving performance, in keeping with our long-standing commitments to our customers, our employees and not least, our shareholders. Operational Excellence Reliability is fundamental to excellence in our industry. In 2014, PSE&G was named the Mid-Atlantic region s most reliable electric utility for the 13th consecutive year by an industrybenchmarking group. While proud of this recognition, we are even prouder of our employees who have a strong tradition of being there for our customers day in and out and in storms and emergencies. 4

5 PSE&G performs well in customer satisfaction when compared to other utilities, and we have continued working hard to improve how our customers experience us. PSE&G recently received J.D. Power s awards in our region and peer group for highest customer satisfaction for both electric and gas business service. In addition to enjoying the benefits of reliability, PSE&G s residential customers have reaped substantial savings from low-cost gas supplies and the astute management of our natural gas storage and transportation contracts. In October 2014, our customers annual gas bills were reduced by 9 percent, the latest in a series of reductions that have lowered bills 44 percent over the last five years, resulting in annual savings of $741 for PSE&G s typical residential gas-heating customer. We followed this by providing bill credits each month from November through March, saving the typical customer $210 for this fivemonth period and helping keep winter heating bills affordable. Increasingly, our customers are online and we are, too, in our ongoing efforts to better serve them. Based on lessons from our experience during Superstorm Sandy, we have increased messaging across all channels to better communicate with customers before, during and after storms. PSE&G is the number-one utility on Twitter, with more than 80,000 Twitter followers. We are using tools like Facebook to alert customers about project work being done in their communities. centers in attractive markets in the Northeastern United States. Our generation fleet uses a range of fuels and technologies, and our facilities span the spectrum from base load to load following and peaking. This diversity improves our ability to meet market demand around the clock from season to season, as was evident during last winter s polar vortex as well as throughout the summer. Some of our generating units have dual-fuel capability, providing us with additional flexibility in responding to various market conditions. Our nuclear fleet remains critical to our success and a major provider of reliable, emissions-free energy for New Jersey and the wider region. In 2014, our nuclear capacity factor was 89.3 percent, following nine consecutive years in which we achieved a nuclear capacity factor in excess of 90 percent. We are working hard to improve on this past year s performance while maintaining a paramount safety-first focus at all times. We have added to our existing nuclear capacity through various plant improvements in recent years, and we expect to add another 130 megawatts of capacity through an uprate at the Peach Bottom nuclear facility, which we jointly own with Exelon. We believe our environmental profile is a growing source of competitive advantage. Older generating units across the country are expected to retire in light of increasingly strict environmental requirements. We are ahead of many of our peers in having already made extensive environmental improvements across our fleet. Whether using new or traditional channels, we strive to become even more responsive to our customers needs. PSEG Long Island has a similar focus and in its first year made significant improvements to its operations. Reliability at PSEG is also about having power plants that are available to run as needed. Our fossil fueled power plants exceeded their generation targets for the year and increased year-over-year electricity output. Our combined-cycle fleet produced at record levels. And, given the overriding importance of safety, we are especially proud that for the second consecutive year, our fossil fleet achieved a safety performance in the top ten percent of its industry. PSEG Power, our large wholesale generation business, has a diverse, low-cost portfolio of generation assets located near load Financial Strength Over many years we have emphasized the importance of financial strength as a key differentiator in our business. We have been proactive in taking a broad range of measures to maintain and further enhance our strong financial position. We didn t sit back when we saw lower energy prices on the horizon five years ago. Since 2009 we reduced risk by selling non-core assets, and we have repeatedly found ways to get more out of our existing assets and reduce costs without compromising safety or reliability. Our financial strength enables us to pursue our growth program without needing to issue equity. We have expanded investments to meet customer requirements, while at the same time increasing our dividend. Our strong balance sheet anchors all of our efforts. 5

6 We have continued to benefit from strong cash flows, substantial liquidity and desirable investment-grade credit ratings. We are determined to maintain a solid financial profile capable of meeting our growth objectives and continuing our track record of returning cash to shareholders. Disciplined Investment Our robust five-year $13 billion capital investment program is largely dedicated to growth-oriented utility investments. More than 70 percent of PSE&G s $10.8 billion planned capital spending through 2019 is eligible for contemporaneous returns. Transmission investment is the largest single part of this effort. In 2014, we completed construction of the $390 million North Central reliability line and placed into service the $400 million Burlington- Camden line, as well. These two 230-kilovolt lines will make an important contribution to system reliability. Also, in 2014, we passed an important milestone by completing construction of the New Jersey portion of the 500-kilovolt Susquehanna to Roseland line, which is expected to go into service this year when the Pennsylvania portion of the line is completed. We have an outstanding team working on our transmission investment program. We have achieved strong results and developed valuable expertise that we are eager to apply where there are good opportunities to do so. For more than 100 years we have been investing in our system to support safe, reliable service. Yet it shouldn t be overlooked that as we continue to do so, we are creating thousands of good jobs, providing business for many local firms and contributing to economic vibrancy. In 2014, PSE&G received approval for a new, three-year $1.22 billion program our Energy Strong initiative which will begin to build the more resilient energy infrastructure that New Jersey will need for the future. Work is well under way to replace and modernize 250 miles of gas pipes in or near floodprone areas. This year, work will begin in earnest to upgrade 29 substations affected by Superstorm Sandy or Hurricane Irene. And, along with other improvements, we are adding smart technology to help us monitor our system and speed restoration when there are outages. Our Energy Strong program will bolster New Jersey s economy by creating 2,000 jobs each year over the next three years. By improving resiliency, this effort will enhance the health, safety and well-being of our customers and communities while having a minimal impact on customers bills. We are promoting sustainability through our focus on clean energy solutions. Since 2009, PSE&G has invested more than $700 million to directly develop or help finance over 160 megawatts of clean solar power. We have used innovative approaches to bring the benefits of renewable energy to all of our customers. We installed solar units on more than 174,000 utility poles an effort that recently earned recognition for being a creative and practical way to integrate solar energy into the grid while preserving open space. More recently, we have been turning landfills and brownfields green by developing large, gridconnected solar projects on these underutilized properties. Meanwhile, we have continued to successfully grow PSEG Solar Source s portfolio of solar projects across the country. In 2014, we added utility-scale solar projects in Vermont, Texas, and Maryland. With these projects, PSEG s Solar Source s portfolio has increased to 123 megawatts of clean, renewable energy with 11 facilities in 9 states. We continue to explore opportunities to expand our solar portfolio. Energy efficiency is a key to a sustainable future. Our energy efficiency programs, in which we have invested about $300 million, have been highly successful in helping customers reduce their energy bills. For example, PSE&G s energy efficiency program for hospitals has helped these healthcare institutions save more than $8 million a year in energy costs. Our ultimate goal is to help all of our customers achieve the benefits of energy efficiency. We have proposed investing approximately $100 million in programs that would extend PSE&G s existing energy efficiency offerings. PSEG Long Island is also focused on meeting the needs of its customers in an environmentally responsible way. Our Utility 2.0 proposal would spend up to $345 million in increased investment in energy efficiency, demand resources and renewable energy. In January 2015, PSEG Long Island proposed a three-year rate plan that will allow it to make further vital improvements consistent with its goal of being a best-in-class electric utility. 6

7 We are actively investing to enhance the competitiveness of our environmentally well-positioned generation business. In 2014, we completed the installation of equipment to increase the output and improve the efficiency of our Linden gas fired combined-cycle plant and we are planning to install similar equipment at our Bergen 2 and Bethlehem Energy Center combined-cycle units. 100 years has been based on putting our energy to work in many ways that benefit our customers, our shareholders and the larger society around us. In 2014, PSEG was named for the seventh consecutive year to the Dow Jones Sustainability North America Index, which recognizes leading companies for their commitment to economic, environmental and social responsibility. Our access to shale gas from the nearby Marcellus region is benefiting our customers and our low-cost fleet operations while providing us with additional market opportunities. To further improve access to this key resource, this past year we acquired an equity interest with an expected investment of $100 million to $120 million in the proposed PennEast pipeline to transport natural gas from eastern Pennsylvania to New Jersey. In summary, we have many opportunities in front of us to extend the growth associated with our existing $13 billion capital program. All of our investments are focused on what we do best as a company dedicated to providing safe, reliable, economic and greener energy. This is the case whether we are investing to provide our customers with access to low-cost gas, deploying cost- effective technologies to reduce emissions, or improving system reliability and resiliency. PSEG is not only an energy leader but a deeply engaged corporate citizen, involved in strengthening communities where we operate. In 2014, the PSEG Foundation launched a new partnership with Sesame Street that makes available educational tools and other resources to help families with young children prepare for emergencies. Our employees have a long and proud Public Service tradition of volunteering for many worthy causes. I would like to thank them for all of their continued support and hard work. We remain as dedicated as ever to growing a brighter energy future responsibly, reliably and efficiently. We thank you, our shareholders, for your loyalty and support. We will continue working hard to maintain your confidence and trust. Sincerely, We continue to benefit from having two complementary businesses. In PSE&G we have a leading utility that has continued on a strong growth course, expanding its investments in projects that provide reasonable, risk-adjusted returns in ways that meet customer needs and help New Jersey achieve important goals. And, in PSEG Power we have a regionally competitive generation business with a strong focus on getting the most value from its diverse, low-cost and environmentally advantaged asset base. We have performed well over many years and believe we are positioned for a successful future. Ralph Izzo Chairman, President and Chief Executive Officer Public Service Enterprise Group February 25, 2015 Building on Good Strong, Values Our values starting with a bedrock commitment to safety and integrity continue to guide us. PSEG s success for more than m/info/environment/s ustainability/2014/sust ainability_report/htm L/index.html WE INVITE YOU TO VIEW PSEG S 2014 SUSTAINABILITY REPORT 7

8 PSEGPublicServiceEnterpriseGroup NYSE: PEG PSEG EMPLOYEES As of 12/31/2014 PSEG had 12,689 employees within our subsidiaries including 7,958 covered under collective bargaining agreements PSE&G Power PSEG LI Other Non-Union 1,693 1, ,031 Union 4,832 1,691 1,427 8 Total Employees 6,525 2,973 2,152 1,039 PSE&G TRANSMISSION EXPANSION PROGRAM NJ ECONOMIC IMPACT STUDY The Bloustein School of Planning & Public Policy at Rutgers University analyzed the impact PSE&G s transmission projects have on New Jersey s economy, including job creation, GDP, and state and local tax revenue. The study looked at seven large-scale projects designed to improve electric transmission capacity across the utility s service territory, including: Susquehanna-Roseland North-Central Reliability Burlington-Camden Reliability Northeast Grid Southern Reinforcement 69 kv Upgrade Portfolio Bergen-Linden Corridor Upgrade For the complete Rutgers study, Economic Impact Analysis of PSE&G s Capital Expenditure Program, please visit: edia/newsreleases/2014/attac hments/rutgers_economic_imp act_analysis.pdf 8

9 TABLEofContents FORWARD LOOKING STATEMENT 2 GAAP DISCLAIMER & HISTORICAL FINANCIAL OVERVIEW 3 INVESTOR RELATIONS CONTACTS & SHAREHOLDER SERVICES 3 MESSAGE FROM CHAIRMAN, PRESIDENT AND CEO 4 PSEG EMPLOYEES; NJ ECONOMIC IMPACT STUDY 8 PUBLIC SERVICE ENTERPRISE GROUP 12 PSEG Financial Highlights 13 PSEG Financial Statements 14 PSEG Common Stock and Dividend Data 18 PSEG Board Of Directors 19 PSEG Executive Officers 20 PUBLIC SERVICE ELECTRIC AND GAS COMPANY 22 Service Territory and Statistics 23 Electric Revenues, Sales and Customers 24 Gas Revenues, Sales and Customers Proposed Investment Plan 26 PSE&G Capital Expenditures 26 Major Transmission Projects 27 Transmission Expansion Program 28 Constructive Regulatory Solutions 28 Energy Strong Infrastructure; Energy Efficiency Ext II 29 PSE&G Utility Scale Solar Programs 30 Gas System Modernization Program 31 Financial Statements 32 New Jersey Board of Public Utilities Members 36 Federal Energy Regulatory Commission Members 37 PSE&G Executive 37 PSEG LONG ISLAND & PSEG LONG ISLAND EXECUTIVES

10 PSEG POWER 41 Plant Locations, PJM Dispatch Curve 42 Generating Facilities 43 Fuel Diversity and Energy Produced; Nuclear Fleet 44 Power Growth Investments 45 Solar Source Projects 45 Generation Measures 46 Capacity Factors 47 PJM Capacity Performance Proposal 48 Gas Sources for Generation 48 PSEG Hedging Update 49 BGS Auction Information 49 PJM Capacity Auction Pricing 50 Financial Statements 51 PSEG Power Executives 55 PSEG Power Glossary of Terms 55 PSEG ADDITIONAL FINANCIAL INFORMATION 57 Balance Sheet Metrics Proposed Capital Program 58 PSEG 2014 Sources & Uses of Cash 59 Short-term Liquidity 59 Long-term Debt 60 Energy Holdings Leveraged Lease Portfolio 63 PSEG Credit Ratings 63 Reconciling Items Excluded from Net Income to Compute Operating Earnings 64 10

11 THE PSEG VISION Being a recognized leader for: PEOPLE PROVIDING SAFE, RELIABLE, ECONOMIC AND GREENER ENERGY 11

12 PSEGPublicServiceEnterpriseGroup Public Service Enterprise Group (PSEG) is a publicly traded (NYSE: PEG) diversified energy company headquartered in New Jersey, and one of the ten largest electric companies in the U.S. Total assets (as of December 31, 2014): $35.3 billion 2014 total annual revenues: $10.9 billion Employees: Approximately 12,689 employees as of December 31, 2014 with inclusion of PSEG-Long Island PSEG celebrated its 100th anniversary in 2003 PSEG has paid a dividend annually since 1907, 2015 marks our 108 th year PSEG is ranked 502 on the 2014 Forbes Global 2000 list PSEG is ranked 284 on the 2014 Fortune 500 list PSEG was named to the 2013 FORTUNE list of Most Admired Companies, ranking fourth among U.S. electric and gas companies PSEG was named to the Dow Jones Sustainability North America Index for the 7 TH consecutive year in 2014 PSEG s principal operating subsidiaries are: PSEG Power LLC (PSEG Power), Public Service Electric & Gas Company (PSE&G), and PSEG Long Island LLC PSEG was awarded the 2010 Edison Award, presented by the Edison Electric Institute, the electric industry s most prestigious honor 12

13 PSEGPublicServiceEnterpriseGroup NYSE: PEG We are determined to be a leader in our industry through our commitment to operational excellence, financial strength and disciplined investment. PSEG FINANCIAL HIGHLIGHTS (UNAUDITED) Year Ended December 31, ($ MILLIONS, EXCEPT FOR PER SHARE DATA) Operating Revenues $10,886 $9,968 $9,781 Operating Earnings (Non-GAAP)* 1,400 1,309 1,236 Net Income 1,518 1,243 1,275 Per Share ($ Diluted) EPS from Operating Earnings ( Non-GAAP)* $2.76 $2.58 $2.44 EPS as Reported Dividends Paid Per Share Book Value Per Share Operating Earnings* PSE&G $725 $612 $528 PSEG Power PSEG Enterprise/Other 33 (13) 45 Operating Earnings Contribution (%)* PSE&G PSEG Power PSEG Enterprise/Other 2 (1) 3 Ratios (%) Debt to Capital Return on Equity** Return on Invested Capital** Payout Ratio Stock Performance - Price Per Share High $43.77 $36.61 $34.07 Low Year-End Weighted Average Common Shares Outstanding (millions) Basic Diluted Other Information Total Assets ($ millions) $35,333 $32,522 $31,725 Capital Expenditures ($ millions) $2,630 $2,622 $2,290 Number of Employees 12,689 9,887 9,798 *SEE LAST PAGE FOR ITEMS EXCLUDED FROM NET INCOME TO RECONCILE TO OPERATING EARNINGS. **CALCULATION BASED ON OPERATING EARNINGS FOR 12-MONTH PERIOD ENDED. 13

14 PSEGPublicServiceEnterpriseGroup NYSE: PEG PSEG CONSOLIDATED STATEMENTS OF OPERATIONS See Notes to Consolidated Financial Statements in PSEG Annual 10-K Report. 14

15 PSEGPublicServiceEnterpriseGroup NYSE: PEG PSEG CONSOLIDATED BALANCE SHEETS See Notes to Consolidated Financial Statements in PSEG Annual 10-K Report. 15

16 PSEGPublicServiceEnterpriseGroup NYSE: PEG PSEG CONSOLIDATED BALANCE SHEETS -- CONTINUED See Notes to Consolidated Financial Statements in PSEG Annual 10-K Report. 16

17 PSEGPublicServiceEnterpriseGroup NYSE: PEG PSEG CONSOLIDATED STATEMENTS OF CASH FLOWS See Notes to Consolidated Financial Statements in PSEG Annual 10-K Report. 17

18 PSEGPublicServiceEnterpriseGroup NYSE: PEG PSEG COMMON STOCK AND DIVIDEND DATA The following table indicates the high and low sale prices for our common stock and dividends paid for the periods indicated: Common Stock High Low Dividend Per Share 2014 First Quarter $ $ $ 0.37 Second Quarter $ $ $ 0.37 Third Quarter $ $ $ 0.37 Fourth Quarter $ $ $ First Quarter $ $ $ 0.36 Second Quarter $ $ $ 0.36 Third Quarter $ $ $ 0.36 Fourth Quarter $ $ $ 0.36 The graph and table below show a comparison of the five-year cumulative return assuming $100 invested on December 31, 2009, in PSEG common stock and the subsequent reinvestment of quarterly dividends, the S&P Composite Stock Price Index, the Dow Jones Utility Index and the S&P Electric Utilities Index. 5-Year Cumulative Total Comparative Returns - as of December 31, PSEG S&P DJ Utilities S&P Electrics

19 PSEGPublicServiceEnterpriseGroup NYSE: PEG BOARD OF DIRECTORS ALBERT R. GAMPER, JR. FORMER CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER CIT GROUP, INC. LEAD DIRECTOR WILLIAM V. HICKEY FORMER CHAIRMAN AND CHIEF EXECUTIVE OFFICER SEALED AIR CORPORATION RALPH IZZO CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER PUBLIC SERVICE ENTERPRISE GROUP SHIRLEY ANN JACKSON PRESIDENT - RENSSELAER POLYTECHNIC INSTITUTE DAVID LILLEY FORMER CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER CYTEC INDUSTRIES INC. THOMAS A. RENYI FORMER EXECUTIVE CHAIRMAN - THE BANK OF NEW YORK MELLON CORPORATION HAK CHEOL SHIN EXECUTIVE VICE PRESIDENT, INTERNATIONAL OPERATIONS - 3M COMPANY RICHARD J. SWIFT FORMER CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER - FOSTER WHEELER LTD. SUSAN TOMASKY FORMER PRESIDENT - AEP TRANSMISSION AMERICAN ELECTRIC POWER CORPORATION ALFRED W. ZOLLAR EXECUTIVE PARTNER SIRIS CAPITAL GROUP, LLC; FORMER GENERAL MANAGER - TIVOLI SOFTWARE, IBM 19

20 NYSE: PEG EXECUTIVE OFFICERS GROUP RALPH IZZO CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER PSEG CAROLINE DORSA EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER PSEG TAMARA L. LINDE EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL PSEG RALPH A. LAROSSA PRESIDENT AND CHIEF OPERATING OFFICER PSE&G WILLIAM LEVIS PRESIDENT AND CHIEF OPERATING OFFICER PSEG POWER DEREK M. DIRISIO PRESIDENT PSEG SERVICES ROBERT C. BRAUN PRESIDENT AND CHIEF NUCLEAR OFFICER PSEG NUCLEAR RICHARD P. LOPRIORE PRESIDENT PSEG FOSSIL SHAHID MALIK PRESIDENT PSEG ENERGY RESOURCES & TRADE MARGARET M. PEGO SENIOR VICE PRESIDENT HUMAN RESOURCES AND CHIEF HUMAN RESOURCES OFFICER PSEG SERVICES CORPORATION 20

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22 PSE&GPublicServiceElectric&Gas Public Service Electric and Gas Company (PSE&G), is a regulated public utility company engaged in the transmission and distribution of gas and electricity. One of the largest combined electric and gas companies in the United States, PSE&G is also New Jersey s oldest and largest publicly-owned utility. The Public Service Corporation was formed in 1903 by amalgamating more than 400 gas, electric and transportation companies in New Jersey; it was renamed Public Service Electric and Gas Company in PSE&G currently serves nearly three quarters of New Jersey s population in a service area consisting of a 2,600- square-mile diagonal corridor across the state from Bergen to Gloucester Counties. PSE&G is the largest provider of gas and electric service, servicing 1.8 million gas customers and 2.2 million electric customers in more than 300 urban, suburban and rural communities, including New Jersey s six largest cities. 22

23 PSE&GPublicServiceElectric&Gas SERVICE TERRITORY AND STATISTICS PSE&G is the largest electric and gas distribution and transmission utility company in New Jersey providing renewable and energy efficiency solutions. SERVICE TERRITORY IN NEW JERSEY PSE&G has received the prestigious ReliabilityOne Award for the Mid-Atlantic region for 13 years in a row. Solid regulatory relationships on traditional utility matters. NJ is ranked 2nd nationally in personal income per capita Sales Mix Residential Commercial Industrial Electric 32% 58% 10% Gas 60% 36% 4% Transmission Statistics (as of December 31, 2014) Network Circuit Miles Billing Peak (MW) Historical Annual Load Growth Electric Transmission 1,659 9,515 (0.4)% Electric and Gas Distribution Statistics Number of Customers December 31, 2014 Electric Sales /Gas Sold & Transported Historic Annual Load Growth Electric 2.2 Million 40,737 GWh (0.6)% Gas 1.8 Million 2,628 Million Therms 2.0% 23

24 PSE&GPublicServiceElectric&Gas PSE&G RETAIL REVENUES AND SALES ELECTRIC (UNAUDITED) Year Ended December 31, Electric Revenues ($Millions) Rate of Growth Residential $2,055 $2,081 $2,113 $2,280 $2, % Commercial & Industrial 2,052 2,031 2,084 2,270 2, % Street Lighting % Other Operating Revenues % Total Revenues $4,684 $4,607 $4,632 $5,009 $5, % Electric Sales (Millions kwh) Rate of Growth Residential 13,081 13,490 13,544 13,803 14, % Commercial 23,332 23,394 23,538 24,059 24, % Industrial 3,997 4,064 4,221 4,343 4, % Street Lighting % Interdepartmental % Total Sales 40,747 41,286 41,641 42,516 43, % Electric Customers (Annual Average) Rate of Growth Residential 1,889,550 1,883,278 1,871,632 1,872,332 1,870, % Commercial 292, , , , , % Industrial 8,871 9,023 9,046 9,156 9, % Street Lighting 10,214 10,166 10,094 10,127 9, % Total Customers 2,201,078 2,194,066 2,180,081 2,178,664 2,174, % NOTE: NUMBERS MAY NOT SUM DUE TO ROUNDING. 24

25 PSE&GPublicServiceElectric&Gas PSE&G RETAIL REVENUES AND SALES GAS SOLD & TRANSPORTED (UNAUDITED) Year Ended December 31, Gas Revenues ($Millions) Rate of Growth Residential $491 $536 $608 $785 $1, % Commercial-Firm Sales % Commercial-Inter. & Cogen % Industrial-Firm Sales % Industrial-Inter. & Cogen % Other Operating Revenues % Total Revenues $1,018 $993 $1,014 $1,313 $1, % Gas Transported $1,064 $1,055 $981 $1,004 $ % Sales (Millions Therms) Rate of Growth Residential 1,431 1,289 1,158 1,281 1, % Commercial-Firm Sales % Commercial-Inter. & Cogen % Industrial-Firm Sales % Industrial-Inter. & Cogen % Total Sales 1,985 1,819 1,645 1,902 1, % Gas Transported-Firm Sales % Gas Transported-Non-Firm 2,396 1,318 1,227 1, % Gas Customers (Annual Avg) Rate of Growth Residential 1,633,785 1,628,516 1,620,622 1,617,742 1,613, % Commercial 157, , , , , % Industrial 6,537 6,628 6,683 6,810 6, % Street Lighting % Total Gas Customers 1,797,632 1,792,077 1,783,369 1,779,901 1,775, % NOTE: NUMBERS MAY NOT SUM DUE TO ROUNDING. 25

26 PSE&GPublicServiceElectric&Gas PSE&G PROPOSED INVESTMENT PLAN PSE&G s Capital Expenditures E = ESTIMATE PSE&G ROBUST CAPITAL INVESTMENT PIPELINE PSE&G Planned and Potential Capital Projects Planned capital spending expected to drive double digit rate base growth and high single digit EPS growth through 2017 Transmission expected to grow to >50% of rate base in 2019 Gas System Modernization Program and Artificial Island investments would be incremental Seeking to broaden platform to expand energy efficiency and other investments 26

27 PSE&GPublicServiceElectric&Gas PSE&G S MAJOR TRANSMISSION PROGRAMS FOCUS ON RELIABILITY AND REPLACING AGING INFRASTRUCTURE PJM s Regional Transmission Expansion Plan (RTEP) identifies system enhancements needed for reliability 69kV system upgrades improve system reliability and provide capacity for future growth Transmission Lifecycle is an ongoing program to manage transmission asset life to maintain and improve system integrity and reliability Transmission Hardening projects focus on increasing system resiliency PSE&G EXISTING MAJOR TRANSMISSION PROJECTS Project Roster Approved ROE Inclusion of CWIP in Rate Base 100% Recovery of Costs Due to Abandonment Project Estimate Up To ($ Millions) Expected In-Service Date Susquehanna Roseland 12.93% $790 Completed Northeast Grid Reliability 11.93% $907 June-Dec 2015 North Central Reliability 11.68% $390 Completed Burlington Camden 230kV 11.68% $399 Completed Mickleton Gloucester Camden 230kV 11.68% $435 June

28 PSE&GPublicServiceElectric&Gas PSE&G S ROBUST PIPELINE OF TRANSMISSION INVESTMENT Project Roster Approved ROE Program Description Project Estimate Up To ($ Millions) Expected In-Service Date Bergen-Linden Corridor 345kV 11.68% PJM Regional Transmission Expansion Plan (RTEP) multiple projects 11.68% PJM baseline project receiving CWIP in rate base treatment PJM mandated system reliability projects $1,200 June 2018 $1,900 Various 69kV Upgrade multiple projects 11.68% Upgrade of 26kV to 69kV $1,500 Various Transmission Lifecycle multiple projects 11.68% Replacement of aging infrastructure $1,100 Various Transmission Hardening multiple projects 11.68% Reliability projects focused on system resiliency $650 Various CONSTRUCTIVE REGULATORY SOLUTIONS TO NEW JERSEY S ENERGY AND ECONOMIC GOALS 28

29 PSE&GPublicServiceElectric&Gas PSE&G SUCCESSFULLY EXECUTING ON ITS $1.22 BILLION ENERGY STRONG PROGRAM WITH ~$150 MILLION DEPLOYED IN 2014 TO ADDRESS SYSTEM RESILIENCY AND HARDENING PSE&G INCREASES INVESTMENT IN AWARD WINNING ENERGY EFFICIENCY PROGRAM Energy Efficiency Extension II Settlement approved in April 2015 extends the investment and time frame for three previously approved programs already in the marketplace: Hospitals Multifamily Direct install government, non-profit, and small business $95 million of rate base investment over a 3-year period with a 9.75% ROE Allows PSE&G to leverage past investments in people, capabilities, systems and processes 29

30 PSE&GPublicServiceElectric&Gas PSE&G IS A LEADER IN UTILITY SOLAR PROJECTS Our renewable energy initiatives have helped make New Jersey one of the leading states for solar energy development creating jobs, spurring economic activity and helping the state meet its renewable energy targets. New Jersey ranks among the top ten states in the amount of solar generation capacity installed and ranks first in the concentration of solar power (installations per square mile). Solar 4 All is our 125 megawatt-dc (MW-dc) program that utilizes rooftops, solar farms, utility poles and landfills/brownfields for large-scale, grid connected solar projects. As of year-end 2014, there were ~100 MW-dc of the 125MW-dc program in service. The revenue PSE&G receives from the sale of Solar 4 All electricity and capacity, the sale of the solar credits (SRECs) and the federal investment tax credit realized is returned to customers by offsetting the overall cost of Solar 4 All. The Solar Loan program is the second piece of PSE&G s solar development strategy. PSE&G s program has made approximately $248 million of financing available through year-end 2014 to help homeowners and businesses develop more than 1,000 solar installations (>80 MW of solar capacity). The loans generally finance up to 50% of the total cost of the solar installation and can be repaid using solar renewable energy credits (SRECs), which are generated by the solar installation. Every Solar 4 All project is grid connected and provides all PSE&G electric customers with universal access to solar power $760+ Million Invested in Solar Renewables Program In Service Total Program Plan Total Investment Solar Loan I, II, III 83 MW MW $247.7 Million Solar 4 All & Extension 100 MW 125 MW $515.8 Million AS OF YEAR-END

31 PSE&GPublicServiceElectric&Gas PSE&G FILED A NEW 5-YEAR, GAS SYSTEM MODERNIZATION PROGRAM (GSMP) OF ~$1.6 BILLION FOCUSING ON AGING GAS MAINS WHAT IS GSMP? A 5-year modernization program to replace 800 miles of old cast iron and unprotected steel pipes with strong, durable plastic piping The 1 st phase of a long-term, 30-year replacement plan Proposed $1.6 B planned investment over next 5 years Enhances system safety Better supports use of high efficiency appliances Reduces fugitive methane Directly creates and supports 500 NJ jobs Requested 9.75% ROE Requested accelerated clause based recovery PSE&G s gas distribution system currently operates and maintains over 4,800 miles of cast iron and unprotected steel main, the largest such system in any single state The GSMP would focus on replacing cast iron and unprotected steel main over a five-year period, beginning mid-2016 GSMP maximizes replacement efficiency and converts large areas of low pressure to high pressure Installs excess flow valve (EFV) safety devices If approved, the GSMP would replace ~160 miles of main per year at a cost of ~$320 M per year Requested accelerated clause-based recovery similar to the Energy Strong program with a 9.75% ROE This program is the first phase of a long-term, 30-year cast iron and unprotected steel replacement plan Benefits: Methane emission reduction is estimated at 24,500 metric tons of CO2 equivalent per year* Higher pressure system allows usage of high efficiency appliances by customers Replaces highest risk, most leak prone facilities BPU Docket: GR * EPA SUBPART W METHODOLOGY. 31

32 PSE&GPublicServiceElectric&Gas PSE&G CONSOLIDATED STATEMENTS OF OPERATIONS PUBLIC SERVICE ELECTRIC AND GAS COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS Millions Years Ended December 31, OPERATING REVENUES $ 6,766 $ 6,655 $ 6,626 OPERATING EXPENSES Energy Costs 2,909 2,841 3,159 Operation and Maintenance 1,558 1,639 1,508 Depreciation and Amortization Taxes Other Than Income Taxes Total Operating Expenses 5,373 5,420 5,543 OPERATING INCOME 1,393 1,235 1,083 Other Income Other Deductions (3) (3) (5) Interest Expense (277) (293) (295) INCOME BEFORE INCOME TAXES 1, Income Tax (Expense) Benefit (449) (381) (307) NET INCOME $ 725 $ 612 $ 528 See Notes to Consolidated Financial Statements in PSEG Annual 10-K Report. 32

33 PSE&GPublicServiceElectric&Gas PSE&G CONSOLIDATED BALANCE SHEETS PUBLIC SERVICE ELECTRIC AND GAS COMPANY CONSOLIDATED BALANCE SHEETS Millions CURRENT ASSETS ASSETS December 31, Cash and Cash Equivalents $ 310 $ 18 Accounts Receivable, net of allowances of $52 and $56 in 2014 and 2013, respectively Accounts Receivable-Affiliated Companies 274 Unbilled Revenues Materials and Supplies Prepayments Regulatory Assets Regulatory Assets of VIEs 249 Derivative Contracts Deferred Income Taxes Other 7 12 Total Current Assets 2,528 1,585 PROPERTY, PLANT AND EQUIPMENT 21,103 19,071 Less: Accumulated Depreciation and Amortization (5,183) (4,964) Net Property, Plant and Equipment 15,920 14,107 NONCURRENT ASSETS Regulatory Assets 3,192 2,612 Regulatory Assets of VIEs 476 Long-Term Investments Other Special Funds Derivative Contracts 8 69 Restricted Cash of VIEs Other Total Noncurrent Assets 3,775 4,028 TOTAL ASSETS $ 22,223 $ 19,720 See Notes to Consolidated Financial Statements in PSEG Annual 10-K Report. 33

34 PSE&GPublicServiceElectric&Gas PSE&G CONSOLIDATED BALANCE SHEETS - CONTINUED PUBLIC SERVICE ELECTRIC AND GAS COMPANY CONSOLIDATED BALANCE SHEETS Millions December 31, LIABILITIES AND CAPITALIZATION CURRENT LIABILITIES Long-Term Debt Due Within One Year $ 300 $ 500 Securitization Debt of VIEs Due Within One Year Commercial Paper and Loans 60 Accounts Payable Accounts Payable Affiliated Companies Accrued Interest Clean Energy Program Deferred Income Taxes Obligation to Return Cash Collateral Regulatory Liabilities Other Total Current Liabilities 2,575 2,237 NONCURRENT LIABILITIES Deferred Income Taxes and ITC 4,575 4,406 Other Postretirement Benefit (OPEB) Costs Accrued Pension Costs Regulatory Liabilities Regulatory Liabilities of VIEs Environmental Costs Asset Retirement Obligations Long-Term Accrued Taxes Other Total Noncurrent Liabilities 6,849 6,272 CAPITALIZATION LONG-TERM DEBT Long-Term Debt 6,012 5,066 Securitization Debt of VIEs 259 Total Long-Term Debt 6,012 5,325 STOCKHOLDER S EQUITY Common Stock; 150,000,000 shares authorized; issued and outstanding, 2014 and ,450,344 shares Contributed Capital Basis Adjustment Retained Earnings 4,212 3,487 Accumulated Other Comprehensive Income 2 1 Total Stockholder s Equity 6,787 5,886 Total Capitalization 12,799 11,211 TOTAL LIABILITIES AND CAPITALIZATION $ 22,223 $ 19,720 See Notes to Consolidated Financial Statements in PSEG Annual 10-K Report. 34

35 PSE&GPublicServiceElectric&Gas PSE&G CONSOLIDATED STATEMENTS OF CASH FLOWS PUBLIC SERVICE ELECTRIC AND GAS COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS Millions Years Ended December 31, CASH FLOWS FROM OPERATING ACTIVITIES Net Income $ 725 $ 612 $ 528 Adjustments to Reconcile Net Income to Net Cash Flows from Operating Activities: Depreciation and Amortization Provision for Deferred Income Taxes and ITC Non-Cash Employee Benefit Plan Costs Cost of Removal (98) (93) (116) Change in Accrued Storm Costs (3) (90) (90) Net Change in Regulatory Assets and Liabilities (132) Net Change in Certain Current Assets and Liabilities: Accounts Receivable and Unbilled Revenues 63 (5) (54) Materials and Supplies (18) (1) (20) Prepayments (18) 5 88 Net Change in Tax Receivable 16 Accounts Payable (3) 19 (25) Accounts Receivable/Payable-Affiliated Companies, net (167) 100 (132) Other Current Assets and Liabilities Employee Benefit Plan Funding and Related Payments (83) (166) (213) Other (4) (4) (30) Net Cash Provided By (Used In) Operating Activities 1,833 1,645 1,256 CASH FLOWS FROM INVESTING ACTIVITIES Additions to Property, Plant and Equipment (2,164) (2,175) (1,770) Proceeds from Sales of Available-for-Sale Securities Investments in Available-for-Sale Securities (101) (20) (77) Solar Loan Investments 7 (15) (74) Other (1) Net Cash Provided By (Used In) Investing Activities (2,155) (2,172) (1,845) CASH FLOWS FROM FINANCING ACTIVITIES Net Change in Short-Term Debt (60) (203) 263 Issuance of Long-Term Debt 1,250 1, Redemption of Long-Term Debt (500) (725) (373) Redemption of Securitization Debt (237) (226) (216) Contributed Capital Other (14) (17) (12) Net Cash Provided By (Used In) Financing Activities Net Increase (Decrease) in Cash and Cash Equivalents 292 (98) (27) Cash and Cash Equivalents at Beginning of Period Cash and Cash Equivalents at End of Period $ 310 $ 18 $ 116 Supplemental Disclosure of Cash Flow Information: Income Taxes Paid (Received) $ 283 $ 84 $ (30) Interest Paid, Net of Amounts Capitalized $ 259 $ 275 $ 280 Accrued Property, Plant and Equipment Expenditures $ 292 $ 246 $ 275 See Notes to Consolidated Financial Statements in PSEG Annual 10-K Report. 35

36 PSE&GPublicServiceElectric&Gas NEW JERSEY BOARD OF PUBLIC UTILITIES The Board of Public Utilities (BPU) is a regulatory authority with a statutory mandate to ensure safe, adequate, and proper utility services at reasonable rates for customers in New Jersey. The BPU consists of five commissioners appointed by the Governor of New Jersey. These appointees are confirmed by the NJ Senate for six-year, staggered terms. The Governor appoints one of the five to serve as Commission President. The commissioners are: RICHARD S. MROZ PRESIDENT REPUBLICAN TERM END: MARCH 2020 UPENDRA J. CHIVUKULA COMMISSIONER DEMOCRAT TERM END: MARCH 2020 JOSEPH L. FIORDALISO COMMISSIONER DEMOCRAT TERM END: MARCH 2013 MARY-ANNA HOLDEN COMMISSIONER REPUBLICAN TERM END: MARCH 2017 DIANNE SOLOMON COMMISSIONER REPUBLICAN TERM END: MARCH 2018 The website of the New Jersey Board of Public Utilities is: 36

37 PSE&GPublicServiceElectric&Gas FEDERAL ENERGY REGULATORY COMMISSION The Federal Energy Regulatory Commission, or FERC, is an independent agency that regulates the interstate transmission of electricity, natural gas, and oil. CHERYL A. LAFLEUR ACTING CHAIR TERM EXPIRES: JUNE 2019 DEMOCRAT PHILIP D. MOELLER COMMISSIONER TERM EXPIRES: JUNE 2015 REPUBLICAN TONY CLARK COMMISSIONER TERM EXPIRES: JUNE 2016 REPUBLICAN The website of the Federal Energy Regulatory Commission is: NORMAN C. BAY COMMISSIONER TERM EXPIRES: JUNE 2018 DEMOCRAT COLETTE D. HONORABLE COMMISSIONER TERM EXPIRES: JUNE 2017 DEMOCRAT PSE&G EXECUTIVE RALPH A. LAROSSA PRESIDENT AND CHIEF OPERATING OFFICER PSE&G 37

38 PSEGLongIsland PSEG was selected to operate Long Island Power Authority s (LIPA) electric transmission and distribution system beginning on January 1, 2014 under a 12-year Operating Services Agreement (OSA) with PSEG Long Island using its brand in the Long Island T&D service area. In connection with the OSA, PSEG Long Island acts as LIPA s agent in performing many of its obligations and in return receives reimbursement for pass-through operating expenditure and receives a fixed management fee and is eligible to receive an incentive fee based on meeting establish performance metrics. There is the opportunity for the OSA to be extended for an additional eight years subject to the achievement by PSEG Long Island of certain performance levels during the initial agreement. As of January 2015, PSEG Power began providing fuel procurement and power management services to LIPA under separate agreements. The earnings related to these contracts will be included in PSEG Power s financial results. LONG ISLAND 38

39 PSEGLongIsland WELCOMING PSEG LONG ISLAND TO OUR FAMILY OF OPERATING COMPANIES The PSEG family of The companies PSEG family welcomed of companies welcomed PSEG Long PSEG Island Long on Island on January 1, 2014, as we began began operating operating the the electric system electric of the system Long of Island the Power Long Authority Island Power (LIPA) serving Authority 1.1 million (LIPA) customers serving 1.1 million customers Focused on improving customer service and reliability PSEG Long Island has committed to creating a best-in-class utility, setting ambitious goals, which included implementing noticeable improvements in customer satisfaction by the end of According to J.D. Power, in 2014 PSEG Long Island showed the most improvement in overall customer satisfaction of any large electric utility, anywhere in the nation. PSEG Long Island also received the 2014 ENERGY STAR Partner of the Year Sustained Excellence Award from the U.S. Environmental Protection Agency (EPA), for its commitment and dedication to energy efficiency and the ENERGY STAR program. In January 2015, PSEG Power began providing fuel procurement and power management services for LIPA under a separate agreement. PSEG Power will earn a fixed management fee for its role: Acting as an agent for LIPA by performing ISO bidding for its 6,000 MW of generation and tolls; procuring natural gas and oil for the majority of these assets; scheduling two DC transmission cables into Long Island; and entering into financial hedges to reduce LIPA customer s price volatility. PSEG LONG ISLAND EXECUTIVES RALPH A. LAROSSA CHAIRMAN OF THE BOARD PSEG LONG ISLAND DAVID M. DALY PRESIDENT AND CHIEF OPERATING OFFICER PSEG LONG ISLAND 39

40 AN ENERGY PROVIDER MEETING THE NEEDS OF CUSTOMERS AND SHAREHOLDERS 40

41 PSEGPower A major independent power producer in the U.S., PSEG Power operates one of the most balanced portfolios in the country, both in terms of fuel mix and market segment (base load, load following, and peaking) that helps us generate the power our customers need, when they need it. PSEG Fossil operates the company s portfolio of natural gas, coal, and oil-fired electric generating units. PSEG Nuclear operates the Salem and Hope Creek Nuclear Generating Stations in Lower Alloways Creek, NJ and is a part owner of the Peach Bottom Nuclear Generation Station in Delta, PA. COMMITTED TO OPERATIONAL EXCELLENCE: PSEG Power is committed to operational excellence and constantly strives to improve our performance while maintaining a sharp eye on safety. In 2014, Power operated its nuclear units at an 89% capacity factor, with Hope Creek posting its 2 nd best run in its history with a capacity factor of 97.9%. Power s CCGT fleet set an all-time production record of 16.5 TWh in 2014, with Bergen 1 & 2 and Linden 1 also setting generation records. 41

42 PSEGPower PLANT LOCATIONS PSEG Power is a major electric generation company with 13,337 MW of base-load, load following, and peaking capability operating in attractive markets in the Northeast. Assets near loads Low cost portfolio Fuel flexibility with gas cost advantage Poised to benefit from volatility in real-time markets Readiness for capacity performance (CP) in PJM Fleet positioned to maintain diversity and efficiency after HEDD Most sites suitable for expansion New York ISO Keystone Conemaugh PJM Hudson Yards Creek Peach Bottom Hope Creek Salem Bethlehem Energy Center (Albany) Mercer ISO New England Bridgeport New Haven Linden Sewaren Edison Burlington National Park Bergen Kearny Essex PSEGPower POWER S PJM ASSETS ALONG THE DISPATCH CURVE REDUCE THE RISK OF SERVING FULL REQUIREMENT LOAD CONTRACTS AND CAN TAKE ADVANTAGE OF VOLATILE MARKET CONDITIONS Energy Revenue X X X Capacity Revenue X X X Ancillary Revenue X X Dual Fuel X X Base Load ensures cash flow certainty Load Following provides ability to serve load shape Readiness for Capacity Performance Peaking takes advantage of real-time prices and reduces operational risk Dual fuel capability at 87% of load following and peaking units 42

43 PSEGPower GENERATING FACILITIES (AS OF DECEMBER 31, 2014) NAME LOCATION TOTAL CAPACITY (MW) % OWNED OWNED CAPACITY (MW) PRINCIPAL FUELS USED MISSION Steam Hudson NJ % 620 Coal/Gas Load Following Mercer NJ % 632 Coal/Gas Load Following Sewaren NJ % 453 Gas Load Following Keystone (A) PA 1,711 23% 391 Coal Base Load Conemaugh (A) PA 1,711 23% 385 Coal Base Load Bridgeport Harbor CT % 383 Coal Load Following New Haven Harbor CT % 443 Oil Load Following Total Steam 5,953 3,307 Nuclear Hope Creek NJ 1, % 1,178 Nuclear Base Load Salem 1&2 NJ 2,307 57% 1,324 Nuclear Base Load Peach Bottom 2&3 (B) PA 2,242 50% 1,121 Nuclear Base Load Total Nuclear 5,727 3,623 Combined Cycle Bergen NJ 1, % 1,198 Gas Load Following Linden NJ 1, % 1,300 Gas Load Following Bethlehem NY % 774 Gas Load Following Kalaeloa HI % 104 Oil Load Following Total Combined Cycle 3,480 3,376 Combustion Turbine (C) Essex NJ % 623 Gas Peaking Edison NJ % 516 Gas Peaking Kearny NJ % 452 Gas Peaking Burlington NJ % 376 Oil/Gas Peaking Linden NJ % 347 Gas Peaking Mercer NJ % 115 Oil Peaking Sewaren NJ % 105 Oil Peaking Bergen NJ % 21 Gas Peaking National Park NJ % 21 Oil Peaking Salem 3 NJ 38 57% 22 Oil Peaking New Haven Harbor CT % 129 Gas/Oil Peaking Bridgeport Harbor CT % 17 Oil Peaking Total Combustion Turbine 2,760 2,744 Pumped Storage Yards Creek (D) NJ % 200 Peaking Total Power Plants 18, ,250 (A) OPERATED BY GENON NORTHEAST MGMT; (B) OPERATED BY EXELON GENERATION; C) 1,545 MW OF OWNED INSTALLED COMBUSTION TURBINE CAPACITY WILL BE RETIRED IN 2015; (D) OPERATED BY JERSEY CENTRAL POWER & LIGHT 43

44 PSEGPower PSEG POWER WILL MAINTAIN DIVERSITY AND EFFICIENCY AFTER A REALIGNMENT OF THE FLEET DUE TO HEDD Objective Fuel Diversity ,337 MW 11,900 MW Energy Produced 54 TWh TWh Maintain fuel diversity Maintain load-serving capability Maintain low cost structure Improve environmental & heat rate profiles Complete Peach Bottom (PB) uprate and Advanced Gas Path (AGP) Solar Kalaeloa Oil Pumped Storage HEDD Other gas Peakers AGP/PB EPU CCGT Coal Nuclear Oil, Other gas, HEDD, Pumped storage, Kalaeloa, Solar Peakers AGP/PB EPU CCGT Coal Nuclear E E E=ESTIMATE PSEGPower PSEG Power Nuclear is a critical element of our success Hope Creek Operated by PSEG Nuclear PSEG Ownership: 100% Technology: Boiling Water Reactor Total Capacity: 1,178 MW Owned Capacity: 1,178 MW License Expiration: 2046 Next Refueling Fall 2016 Salem Units 1 and 2 Operated by PSEG Nuclear PSEG Ownership: 57% Technology: Pressurized Water Reactor Total Capacity: 2,307 MW Owned Capacity: 1,324 MW License Expiration: 2036 and 2040 Next Refueling Unit 1 Spring 2016 Unit 2 Fall 2015 Peach Bottom Units 2 and 3 Operated by Exelon PSEG Ownership: 50% Technology: Boiling Water Reactor Total Capacity: 2,242 MW Owned Capacity: 1,121 MW License Expiration: 2033 and 2034 Next Refueling Unit 2 Spring 2016 Unit 3 Fall 2015 Uprate: 130 MW (PS Share) U2 Completed/ U

45 PSEGPower PSEGPower PSEG POWER S GROWTH INVESTMENTS Project Benefits Total Increased Capacity 371 MW * INTERCONNECTION SERVICE AGREEMENTS. PSEGPower PSEG SOLAR SOURCE OWNS ~123 MW OF SOLAR FACILITIES* WITH LONG TERM CONTRACTED REVENUES Newman Texas (13 MW) COD December 2014 Polycrystalline - single axis Investment $22 million 30 year PPA with El Paso Elec. In Construction Rockfish Maryland (13 MW) COD - June 2015E Polycrystalline - single axis 20 year PPA with SMECO Whitcomb Vermont (4 MW) COD October 2014 Polycrystalline fixed tilt Investment $10 million 25 year PPA with VT Elec Power Producers, Inc. *PROJECT SIZE IN MEGAWATTS SHOWN IN DC (DIRECT CURRENT). E=ESTIMATE 45

46 PSEGPower PSEG POWER GENERATION MEASURES* (UNAUDITED) Year Ended December 31, GWHR BREAKDOWN Nuclear Nuclear NJ 19,722 20,098 20,370 Nuclear PA 9,386 9,397 9,403 Total Nuclear 29,108 29,495 29,773 Coal Fossil Coal NJ* 1,421 1,141 1,108 Fossil Coal PA 5,108 5,491 4,566 Fossil Coal CT Total Coal 7,361 7,323 5,777 Oil & Natural Gas Fossil Oil & Natural Gas NJ 12,922 12,579 11,950 Fossil Oil & Natural Gas NY 4,527 3,952 4,904 Fossil Oil & Natural Gas CT Total Oil & Natural Gas 17,693 16,640 16,961 Total 54,162 53,458 52,511 % GENERATION BY FUEL TYPE Nuclear Nuclear NJ 37% 38% 39% Nuclear PA 17% 17% 18% Total Nuclear 54% 55% 57% Coal Fossil Coal NJ** 3% 2% 2% Fossil Coal PA 9% 11% 9% Fossil Coal CT 2% 1% 0% Total Coal 14% 14% 11% Oil & Natural Gas Fossil Oil & Natural Gas NJ 24% 24% 23% Fossil Oil & Natural Gas NY 8% 7% 9% Total Oil & Natural Gas 32% 31% 32% Total 100% 100% 100% * EXCLUDES SOLAR AND KALAELOA; **INCLUDES PUMPED STORAGE. ALSO, 2012 GENERATION INCLUDES NATURAL GAS FUEL SWITCHING INTERVALS. 46

47 PSEGPower CAPACITY FACTORS (UNAUDITED) Year Ended December 31, NUCLEAR CAPACITY FACTORS % PS Share Hope Creek Peach Bottom Peach Bottom Salem Salem Total (PS Share) COAL CAPACITY FACTORS % NJ Coal Hudson Mercer Mercer Total NJ* PA Coal Keystone Keystone Conemaugh Conemaugh Total PA* CT Coal Bridgeport Total CT* Total* *WEIGHTED AVERAGE 47

48 PSEGPower PSEGPower PJM CAPACITY PERFORMANCE PROPOSAL: AIMS TO INCREASE ELECTRIC SUPPLY RELIABILITY Moderate Investment to Meet CP Requirement Larger Investment to Meet CP Requirement Meets CP Requirement with No to Minimal Investment Combustion Turbine Nuclear Combined Cycle Steam How does our fleet stack up?* CP Compliant Assets Capacity performance (CP) proposal places emphasis on reliability, given observed outages during times of extreme weather stress and anticipated retirements; Imposition of higher penalty structure and enhanced opportunities for cost recovery to encourage reliability Generator performance/flexibility is key objective for units with secure fuel supply capable of meeting more stringent operating standards Elimination of 2.5% holdback offsetting weak demand growth, making all capacity resources annual products in end state, net CONE bidding safe harbor, and the change in the demand curve (VRR) support price formation and improve resource adequacy *EXCLUDES 205MW OF PUMPED STORAGE. PSEGPower PSEG S EXTENSIVE GAS ASSET PORTFOLIO GIVES UNPARALLELED ACCESS TO MARCELLUS SHALE GAS Power s Gas for Generation in 2014 Eastern PA Shale 34% 40% Western PA Shale 6% Gulf Coast 20% Delivered Gas PSEG Power maintains a robust portfolio of pipeline and storage assets in the Mid-Atlantic PSEG Power s gas for generation was ~100 BCF in 2014, of which >60% was supplied by Shale gas PSEG Power procured over 400 BCF in 2014 with ~75% going to PSE&G s utility gas customers When gas is surplus to customer needs, PSEG Power sells surplus to others; margins from such sales benefit PSE&G gas customers and PSEG Power 48

49 PSEGPower PSEGPower HEDGING STRATEGY DESIGNED TO PROTECT GROSS MARGIN WHILE LEVERAGING THE PORTFOLIO APR-DEC Volume TWh Base Load (Nuclear and Base Load Coal) % Hedged 100% 80-85% 40-45% Price $/MWh $52 $51 $52 Volume TWh Intermediate Coal, Combined Cycle, Peaking % Hedged 30-35% 0% 0% Price $/MWh $ Volume TWh Total % Hedged 70-75% 50-55% 25-30% Price $/MWh $52 $51 $52 HEDGE PERCENTAGES AND PRICES AS OF MARCH 31, REVENUES OF FULL REQUIREMENT LOAD DEALS BASED ON CONTRACT PRICE, INCLUDING RENEWABLE ENERGY CREDITS, ANCILLARY, AND TRANSMISSION COMPONENTS BUT EXCLUDING CAPACITY. HEDGES INCLUDE POSITIONS WITH MTM ACCOUNTING TREATMENT AND OPTIONS. EXCLUDES SOLAR AND KALAELOA. PSEGPower $/MWH BGS AUCTION: PROVIDES EXCELLENT OPPORTUNITY TO FORWARD HEDGE OUR GENERATION AND PROTECT OUR POWER BASIS $94.30 ~ $48 $45 - $47 $83.88 ~ $46 $37 - $38 $92.18 $97.39 ~ $53 ~ $59 $39 - $40 $99.54 ~ $ $38 - $39 $37 - $38 Capacity Load shape Transmission Congestion Ancillary services Risk premium Green 3 Year Average Round the Clock PJM West Forward Energy Price BGS sales account for about 20% of our forward portfolio of hedges BGS Information: PSEG Power participates in New Jersey s Basic Generation Service auction. The auction, which takes place on an annual basis in February, allows load serving entities to meet electric requirements for customers who do not purchase electric supply from third-party suppliers. Each auction represents one-third of the state s annual supply requirements for the upcoming three-year period. The full contract price consists of the cost of energy priced at the PJM-West hub as well as the cost of other elements required to meet a full service contract, e.g. capacity, transmission, congestion, load shaping. $/MWH; BGS PRICES REFLECT PSE&G ZONE; RESULTS FOR WILL BE THE NEW BLENDED PRICES BEGINNING JUNE 1,

50 PSEGPower PJM S CAPACITY MARKET CONTINUES TO RECOGNIZE POWER S LOCATIONAL VALUE PJM s Reliability Pricing Model (RPM) is based on making capacity commitments three years ahead in an effort to create long-term price signals to attract needed investments to meet reliability requirements in the multi-state PJM region. PJM S RELIABILITY PRICING MODEL (RPM) n EASTERN MAAC n MAAC n DPL SOUTH N REST OF POOL PSEG ZONE PSEG POWER S ASSETS ARE IN CONSTRAINED ZONES, WHICH CLEARED AT HIGHER PRICES. 2017/2018 RPM AUCTION INFLUENCED BY: UPDATED DEMAND CURVE UPDATED TRANSFER CAPABILITIES ENVIRONMENTAL RETIREMENTS NEW BUILD/COST OF NEW ENTRY MINIMUM OFFER PRICE RULE DEMAND RESPONSE RPM Auction Results ($/MW-day) 2013 / 2014* 2014 / 2015* 2015 / 2016* 2016 / 2017* 2017 / 2018 Power s Average Prices Rest of Pool Prices Power s Cleared Capacity (MW) $242 $168 $168 $167 $165 $28 $126 $136 $59 $120 10,900 10,600 8,800 8,700 8,700 *PSEG POWER S AVERAGE PRICES AND CLEARED CAPACITY (MW) REFLECT BASE AND INCREMENTAL RPM AUCTION RESULTS AS OF FEBRUARY DELIVERY YEAR RUNS FROM JUNE 1 TO MAY 31 OF THE NEXT CALENDAR YEAR. 50

51 PSEGPower PSEG POWER CONSOLIDATED STATEMENTS OF OPERATIONS PSEG POWER LLC CONSOLIDATED STATEMENTS OF OPERATIONS Millions Years Ended December 31, OPERATING REVENUES $ 5,434 $ 5,063 $ 4,873 OPERATING EXPENSES Energy Costs 2,747 2,496 2,381 Operation and Maintenance 1,186 1,224 1,127 Depreciation and Amortization Total Operating Expenses 4,225 3,993 3,750 OPERATING INCOME 1,209 1,070 1,123 Income from Equity Method Investments Other Income Other Deductions (52) (49) (90) Other-Than-Temporary Impairments (20) (12) (18) Interest Expense (122) (116) (132) INCOME BEFORE INCOME TAXES 1,251 1,063 1,099 Income Tax (Expense) Benefit (491) (419) (433) NET INCOME $ 760 $ 644 $ 666 See Notes to Consolidated Financial Statements in PSEG Annual 10-K Report. 51

52 PSEGPower PSEG POWER CONSOLIDATED BALANCE SHEETS PSEG POWER LLC CONSOLIDATED BALANCE SHEETS Millions CURRENT ASSETS ASSETS December 31, Cash and Cash Equivalents $ 9 $ 6 Accounts Receivable Tax Receivable 3 Accounts Receivable Affiliated Companies Short-Term Loan to Affiliate Fuel Materials and Supplies, net Derivative Contracts Prepayments Deferred Taxes 30 Other 4 2 Total Current Assets 2,359 2,476 PROPERTY, PLANT AND EQUIPMENT 10,732 10,278 Less: Accumulated Depreciation and Amortization (3,217) (2,911) Net Property, Plant and Equipment 7,515 7,367 NONCURRENT ASSETS Nuclear Decommissioning Trust (NDT) Fund 1,780 1,701 Long-Term Investments Goodwill Other Intangibles Other Special Funds Derivative Contracts Other Total Noncurrent Assets 2,172 2,159 TOTAL ASSETS $ 12,046 $ 12,002 See Notes to Consolidated Financial Statements in PSEG Annual 10-K Report. 52

53 PSEGPower PSEG POWER CONSOLIDATED BALANCE SHEETS -- CONTINUED PSEG POWER LLC CONSOLIDATED BALANCE SHEETS Millions CURRENT LIABILITIES LIABILITIES AND MEMBER S EQUITY December 31, Long-Term Debt Due Within One Year $ 300 $ 44 Accounts Payable Accounts Payable Affiliated Companies 118 Derivative Contracts Deferred Income Taxes 43 Accrued Interest Other Total Current Liabilities 1, NONCURRENT LIABILITIES Deferred Income Taxes and Investment Tax Credits (ITC) 2,065 2,031 Asset Retirement Obligations Other Postretirement Benefit (OPEB) Costs Derivative Contracts Accrued Pension Costs Long-Term Accrued Taxes Other Total Noncurrent Liabilities 3,061 2,847 LONG-TERM DEBT Total Long-Term Debt 2,243 2,497 MEMBER S EQUITY Contributed Capital 2,214 2,214 Basis Adjustment (986) (986) Retained Earnings 4,558 4,693 Accumulated Other Comprehensive Loss (228) (63) Total Member s Equity 5,558 5,858 TOTAL LIABILITIES AND MEMBER S EQUITY $ 12,046 $ 12,002 See Notes to Consolidated Financial Statements in PSEG Annual 10-K Report. 53

54 PSEGPower PSEG POWER CONSOLIDATED STATEMENTS OF CASH FLOWS PSEG POWER LLC CONSOLIDATED STATEMENTS OF CASH FLOWS Millions Years Ended December 31, CASH FLOWS FROM OPERATING ACTIVITIES Net Income $ 760 $ 644 $ 666 Adjustments to Reconcile Net Income to Net Cash Flows from Operating Activities: Depreciation and Amortization Amortization of Nuclear Fuel Provision for Deferred Income Taxes and ITC Interest Accretion on Asset Retirement Obligation Net Realized and Unrealized (Gains) Losses on Energy Contracts and Other Derivatives (93) Non-Cash Employee Benefit Plan Costs Net Realized (Gains) Losses and (Income) Expense from NDT Fund (166) (104) (118) Net Change in Certain Current Assets and Liabilities: Fuel, Materials and Supplies 19 (8) 47 Margin Deposit (22) (43) (116) Accounts Receivable (15) (4) 24 Accounts Payable (59) Accounts Receivable/Payable-Affiliated Companies, net 220 (40) Accrued Interest Payable 2 (6) Other Current Assets and Liabilities (6) 70 (17) Employee Benefit Plan Funding and Related Payments (7) (46) (72) Other Net Cash Provided By (Used In) Operating Activities 1,425 1,347 1,453 CASH FLOWS FROM INVESTING ACTIVITIES Additions to Property, Plant and Equipment (626) (609) (770) Proceeds from Sales of Available-for-Sale Securities 1,557 1,084 1,478 Investments in Available-for-Sale Securities (1,573) (1,102) (1,506) Short-Term Loan Affiliated Company, net 206 (216) 333 Other (88) (18) (7) Net Cash Provided By (Used In) Investing Activities (524) (861) (472) CASH FLOWS FROM FINANCING ACTIVITIES Issuance of Recourse Long-Term Debt 500 Cash Dividend Paid (895) (705) (619) Redemption of Long-Term Debt (300) (414) Contributed Capital Cash Payment on Debt Redemption/Exchange (15) Other (3) (6) (7) Net Cash Provided By (Used In) Financing Activities (898) (487) (986) Net Increase (Decrease) in Cash and Cash Equivalents 3 (1) (5) Cash and Cash Equivalents at Beginning of Period Cash and Cash Equivalents at End of Period $ 9 $ 6 $ 7 Supplemental Disclosure of Cash Flow Information: Income Taxes Paid (Received) $ 68 $ 291 $ 81 Interest Paid, Net of Amounts Capitalized $ 119 $ 106 $ 119 Accrued Property, Plant and Equipment Expenditures $ 91 $ 90 $ 95 See Notes to Consolidated Financial Statements in PSEG Annual 10-K Report. 54

55 PSEGPower PSEG POWER EXECUTIVES WILLIAM LEVIS PRESIDENT AND CHIEF OPERATING OFFICER PSEG POWER ROBERT C. BRAUN PRESIDENT AND CHIEF NUCLEAR OFFICER PSEG NUCLEAR RICHARD P. LOPRIORE PRESIDENT PSEG FOSSIL SHAHID MALIK PRESIDENT PSEG ENERGY RESOURCES & TRADE PSEG POWER GLOSSARY OF TERMS CCGT HEDD NRC PJM RPM COMBINED CYCLE GAS TURBINE HIGH ELECTRIC DEMAND DAY UNIT U.S. NUCLEAR REGULATORY COMMISSION PJM INTERCONNECTION, L.L.C., A REGIONAL TRANSMISSION ORGANIZATION THAT COORDINATES THE MOVEMENT OF WHOLESALE ELECTRICITY IN ALL OR PARTS OF 13 NORTHEASTERN STATES AND THE DISTRICT OF COLUMBIA. RELIABILITY PRICING MODEL, A PROCESS FOR PRICING GENERATION CAPACITY BASED ON OVERALL SYSTEM RELIABILITY REQUIREMENTS; USING MULTI-YEAR FORWARD AUCTIONS, PARTICIPANTS CAN BID CAPACITY IN THE FORM OF GENERATION, DEMAND RESPONSE, OR TRANSMISSION TO MEET RELIABILITY NEEDS BY LOCATION AND/OR AN ISO MARKET. PLEASE REFER TO THE GLOSSARY OF TERMS BEGINNING ON PAGE 190 OF THE 2014 PSEG ANNUAL 10-K FOR ADDITIONAL TERMS AND DEFINITIONS. 55

56 STRONG FINANCIAL POSITION AND CASH FLOW PROVIDE FLEXIBILITY IN VOLATILE MARKETS 56

57 PSEG PublicServiceEnterpriseGroup ADDITIONAL FINANCIAL INFORMATION BALANCE SHEET METRICS E PROJECTED CAPITAL PROGRAM E SOURCES AND USES SHORT-TERM LIQUIDITY LONG-TERM DEBT LEVERAGED LEASE PORTFOLIO CREDIT RATINGS RECONCILING ITEMS EXCLUDED FROM NET INCOME TO COMPUTE OPERATING EARNINGS 57

58 PSEGPublicServiceEnterpriseGroup Additional Financial Information BALANCE SHEET METRICS As of December 31, ($ Billions) Capitalization Subsidiary Debt* PSE&G PSEG Power Parent & Other Total PSEG Debt Subsidiary Equity PSE&G PSEG Power Parent & Other Total PSEG Equity PSE&G Debt to Cap 49% 49% 48% Power Debt to Cap 30% 30% 31% PSEG Debt to Cap 41% 41% 42% *DEBT INCLUDES SHORT TERM DEBT (INCLUDING COMMERCIAL PAPER) AND EXCLUDES NON-RECOURSE AND SECURITIZATION DEBT MAINTAINING A ROBUST CAPITAL PROGRAM FOCUSED ON GROWTH PSEG Capital Spending $12.6 Billion PSEG E* Capital Spending $13 Billion PSE&G Total $9.8B PSE&G Total $10.8B Power Total*** $2.7B Power Total*** $2.0B 2015E 2019E: $1.3B of capital for Gas System Modernization Program and Artificial Island would be incremental *INCLUDES ALL PLANNED SPENDING. **ENERGY STRONG EXCLUDES RISK AND CONTINGENCY. ***POWER CAPITAL SPENDING EXCLUDES NUCLEAR FUEL. ****INCLUDES PENNEAST PIPELINE EQUITY INVESTMENT OF $0.1B. E=ESTIMATE. DATA AS OF MARCH 2,

59 NYSE: PEG PSEG CONSOLIDATED 2014 SOURCES AND USES OF CASH POWER S FREE CASH FLOW SUPPORTED PSE&G S CAPITAL PROGRAM AND SHAREHOLDER DIVIDEND Power Cash from Ops ~$1.4B Other Cash Flow (2) PSE&G Cash from Ops (1) Power ~$1.6B Cash from Ops PSE&G Net Debt ~$0.7B Shareholder Dividend ~$0.7B Power Cash Investment (3) ~$0.7B PSE&G Cash Investment ~$2.2B PSEG SHORT-TERM LIQUIDITY As of March 31, 2015 COMPANY FACILITY EXPIRATION DATE TOTAL FACILITY USAGE ($MILLIONS) AVAILABLE LIQUIDITY PSE&G 5-Year Credit Facility March 18 $600 1,2 $14 $586 PSEG/Power 5-Year Credit Facility (Power) April 19 $1,600 $178 $1,422 5-Year Credit Facility (Power) March 18 $1,0001,3 $ $1,000 5-Year Bilateral (Power) September 15 $100 $--- $100 5-Year Credit Facility (PSEG) April 19 $500 $8 $492 5-Year Credit Facility (PSEG) March 18 $500 1,4 $ $500 Total $4,300 $200 $4,100 PSEG Money Pool ST Investment $636 PSE&G ST Investments $316 Total Liquidity Available $5,052 Total Parent/Power Liquidity $4,150 1 IN APRIL 2015, EXPIRATION DATES OF THESE FACILITIES WERE EXTENDED TO APRIL PSE&G FACILITY WILL BE REDUCED BY $29 MILLION IN APRIL 2016 AND $14 MILLION IN MARCH POWER FACILITY WILL BE REDUCED BY $48 MILLION IN APRIL 2016 AND $24 MILLION IN MARCH PSEG FACILITY WILL BE REDUCED BY $23 MILLION IN APRIL 2016 AND $12 MILLION IN MARCH

60 NYSE: PEG PSEG LONG-TERM DEBT PSEG LONG-TERM DEBT As of December 31, Millions PSEG (Parent) Fair Value of Swaps $ 22 $ 38 Amounts Due Within One Year (8) Unamortized Discount Related to Debt Exchange (8) (14) Total Long-Term Debt of PSEG (Parent) $ 6 $ 24 As of December 31, Maturity Millions Power Senior Notes: 5.50% 2015 $ 300 $ % % % % % % % Total Senior Notes 2,509 2,509 Pollution Control Notes: Floating Rate Total Pollution Control Notes Principal Amount Outstanding 2,553 2,553 Amounts Due Within One Year (300) (44) Net Unamortized Discount (10) (12) Total Long-Term Debt of Power $ 2,243 $ 2,497 See Notes to Consolidated Financial Statements in PSEG Annual 10-K Report. 60

61 NYSE: PEG PSEG LONG-TERM DEBT -- CONTINUED PSEG LONG-TERM DEBT As of December 31, Maturity Millions PSE&G First and Refunding Mortgage Bonds: 6.75% 2016 $ 171 $ % % % Total First and Refunding Mortgage Bonds Pollution Control Bonds: Floating rate Floating rate Total Pollution Control Bonds Medium-Term Notes (MTNs): 0.85% % % % % % % % % % % % % % % % % % % % % % Total MTNs 5,909 5,159 Principal Amount Outstanding 6,329 5,579 Amounts Due Within One Year (300) (500) Net Unamortized Discount (17) (13) Total Long-Term Debt of PSE&G (excluding Transition Funding and Transition Funding II) $ 6,012 $ 5,066 See Notes to Consolidated Financial Statements in PSEG Annual 10-K Report. 61

62 NYSE: PEG PSEG LONG-TERM DEBT -- CONTINUED PSEG LONG-TERM DEBT As of December 31, Maturity Millions Transition Funding (PSE&G) Securitization Bonds: 6.75% 2014 $ $ % Principal Amount Outstanding Amounts Due Within One Year (251) (225) Total Securitization Debt of Transition Funding 251 Transition Funding II (PSE&G) Securitization Bonds: 4.57% Principal Amount Outstanding 8 20 Amounts Due Within One Year (8) (12) Total Securitization Debt of Transition Funding II 8 Total Long-Term Debt of PSE&G $ 6,012 $ 5,325 Energy Holdings Non-Recourse Project Debt: Resources % to 5.275% $ 16 $ 16 Principal Amount Outstanding Amounts Due Within One Year (16) Total Non-Recourse Project Debt 16 Total Long-Term Debt of Energy Holdings $ $ 16 See Notes to Consolidated Financial Statements in PSEG Annual 10-K Report. 62

63 NYSE: PEG PSEG ENERGY HOLDINGS LEVERAGED LEASE PORTFOLIO Merchant Energy Leases NRG REMA NRG/Midwest Gen** Equipment Keystone, Conemaugh & Shawville (PA) 3 coal-fired plants (1,162 equity MW) Powerton & Joliet Generating Stations (IL) 2 coal-fired generating facilities (1,640 equity MW) Investment Balance* at 3/31/2015 ($Millions) $355 $218 Regulated Energy Leases Merrill Creek Reservoir in NJ (PECO, MetEd, Delmarva Power & Light) $176 Grand Gulf Nuclear Station in Mississippi (175 equity MW) Real Estate Leveraged Leases GM Renaissance Center; Wal-Marts; E-D (shopping) Centers $62 Real Estate Operating Leases Office Towers, Shopping Centers - 28 properties $40 Generation Legacy Assets GWF (in wind down stage), Bridgewater, GSOE $2 Other Land & Receivables $5 *BOOK BALANCE EXCLUDING DEFERRED TAX ACCOUNTS. **EME WAS ACQUIRED BY NRG ON APRIL 1, Total Holdings Investments $858 PSEG CREDIT RATINGS As of March 31, 2015 MOODY S S&P FITCH PSEG OUTLOOK STABLE POSITIVE STABLE COMMERCIAL PAPER P2 A2 F2 PSE&G OUTLOOK STABLE POSITIVE STABLE MORTGAGE BONDS Aa3 A A+ COMMERCIAL PAPER P1 A2 F2 PSEG POWER OUTLOOK STABLE POSITIVE STABLE SENIOR NOTES Baa1 BBB+ BBB+ Note: Each rating given by an agency should be evaluated independently of the other agencies ratings. Outlooks assigned to ratings are as follows: stable, negative, or positive. There is no assurance that the ratings will continue for any given period of time or that they will not be revised by the ratings agencies, if, in their respective judgments, circumstances warrant. If the rating agencies lower or withdraw our credit ratings, such revisions may adversely affect the market price of our securities and serve to materially increase our cost of capital and limit access to capital. The ratings should not be construed as an indication to buy, hold or sell any security. 63

64 NYSE: PEG PSEG RECONCILING ITEMS EXCLUDED FROM NET INCOME TO COMPUTE OPERATING EARNINGS Pro-forma Adjustments, Net of Tax Earnings Impact ($ Millions) Operating Earnings $ 1,400 $ 1,309 $ 1,236 Gain (Loss) on Nuclear Decommissioning Trust (NDT) Fund Related Activity (PSEG Power) Gain (Loss) on Mark-to-Market (MTM) (a) (PSEG Power) 66 (74) (10) Lease Transaction Activity (PSEG Enterprise/Other) Storm O&M (PSEG Power) (16) (32) (39) Net Income $ 1,518 $ 1,243 $ 1,275 Fully Diluted Average Shares Outstanding (in Millions) Per Share Impact (Diluted) Year Ended December 31, Operating Earnings $ 2.76 $ 2.58 $ 2.44 Gain (Loss) on NDT Fund Related Activity (PSEG Power Gain (Loss) on MTM (a) (PSEG Power) 0.13 (0.14) (0.02) Lease Transaction Activity (PSEG Enterprise/Other) Storm O&M (PSEG Power) (0.03) (0.07) (0.08) Net Income $ 2.99 $ 2.45 $ 2.51 (a) Includes the financial impact from positions with forward delivery months. 64

65 Public Service Enterprise Group Incorporated 80 Park Plaza Newark, New Jersey