Public Service Enterprise Group (NYSE:PEG) (PSEG) Chairman, President and CEO Ralph Izzo said that PSEG’s Public Service Electric and Gas (PSE&G) invested about $2.7bn during 2015 on programs to further enhance the system’s resiliency and reliability.
Izzo also noted that PSE&G invested more than $550m on programs under its $1.2bn Energy Strong initiative. Those programs are designed to strengthen and protect the electric and gas distribution systems from the impacts of extreme weather. During 2015, PSE&G also received approval from New Jersey state regulators to invest an additional $95m in its energy efficiency programs and to continue to work begun under the Energy Strong initiative replacing aging cast iron natural gas pipes, he said.
PSE&G’s investment program, support of revenue recovery mechanisms, and tight control of O&M expenses have provided growth in PSE&G’s operating earnings of about 13% per year for the five-year period ended 2015. During that period, PSE&G’s rate base expanded at a rate of 11% per year and the company has been able to support that growth as customer bills have declined, he said.
Among other things, he noted that the company’s investment program calls for 21% increase in capital spending to $11.5bn for the three years ended 2018 from capital invested during the three-year ended 2015. About 72% of that amount, or $8.3bn over that time frame, will be invested by PSE&G on transmission and distribution infrastructure programs that customers will require for reliability, he said.
“This level of investment is expected to yield growth in PSE&G’s rate base for the three years ended 2018 of 10% per year, even after taking into account the impact of bonus depreciation on rate base,” Izzo said. “The remaining approximate 27%, or $3.2bn, of expected capital investment will be made at [PSEG] Power.”
The majority of Power’s investments will be devoted to expanding its position in new, efficient, clean gas-fired generating capacity, he said.
PSEG on Feb. 19 reported 2015 net income of $1,679m, or $3.30 per share, as compared to net income of $1,518m, or $2.99 per share, for 2014. Operating earnings for 2015 were $1,476m, or $2.91 per share, compared to 2014 operating earnings of $1,400m, or $2.76 per share, PSEG said.
PSEG also reported net income for 4Q15 of $309m, or 60 cents per share. That compares to 4Q14 net income of $476m, or 94 cents per share, the company said. Operating earnings for 4Q15 were $255m, or 50 cents per share, compared to 4Q14 operating earnings of $247million, or 49 cents per share, the company said.
Among other things, PSEG noted that PSE&G reported operating earnings of $156m, or 31 cents per share, for 4Q15, bringing full year operating earnings to $787m, or $1.55 per share. On a comparative basis, PSE&G reported operating earnings of $160m, or 32 cents per share, and $725m, or $1.43 per share, for the fourth quarter and full year 2014, respectively.
PSEG added that PSE&G’s earnings in 4Q15 benefited from a return on the continued expansion of its investment in transmission and distribution infrastructure, which partially offset the impact on earnings of unseasonably mild weather and an increase in operating expenses. For the full year, PSE&G’s management of operations and an expanded capital program allowed it to earn its authorized return on rate base, the company said.