Dive Brief:
- The net income for Public Service Electric & Gas (PSE&G) increased 25% to $151 million in Q2 2014, on revenue of $1.435 billion, from Q2 2013’s $121 million and revenue of $1.423 billion, while parent company Public Service Enterprise Group's (PSEG) profit fell 36% to $212 million, on revenue of $2.24 billion, from Q2 2013’s $333 million profit and $2.31 billion in revenue.
- PSE&G’s earnings increase was due to a 2014 to 2018 capital program increase to $11.3 billion, from last year’s $10.1 billion, that comes largely from a state regulator-approved rate recovery plan for Energy Strong, the company’s five-year, $1.22 billion grid-hardening plan considered vital to New Jersey’s electricity delivery reliability and expected to support double-digit rate base growth.
- PSE&G’s gains from Energy Strong offset what CEO Ralph Izzo called “mixed operating conditions” and kept the utility on track along with a “favorable natural gas supply position” to get operating earnings for the full year, if operating conditions and weather remain normal, “at the upper end of our guidance” in the $705-$745 million range, or $2.55-$2.75 per share.
Dive Insight:
PSE&G is New Jersey's biggest electricity provider.
The New Jersey Board of Public Utilities approved Energy Strong in May, after a protracted fight over the expenditure that was finally judged necessary due to the havoc wreaked by Superstorm Sandy.
The Q2 2014 report reflected “signs of slow improvement” in the economy of PSE&G’s service territory, with weather-normalized electric sales up 1.9% from Q2 2013, led by increases in the residential sector of 0.5% and in the commercial sector of 1.3%, as well as an increase of 4.4% in weather-normalized sales of natural gas in the first half of 2014.
