Letter

from the Chair of the PSEG Board of Directors to our shareholders

Ralph LaRossa

Chair of the Board, President
and Chief Executive Officer

As an employee of this great company since 1985, I have had the pleasure of working alongside countless remarkable people who fuel our success. If I were to pinpoint what it is that makes PSEG successful and what drives our people, it would be consistently doing the right thing, and in doing so, earning the trust and confidence of our stakeholders.

At a time when building trust has never been more essential, PSEG’s approximately 12,500 employees are focused on working hard to maintain the trust of our customers and each other, every single day. And this isn’t something new. The many generations of PSEG colleagues that came before us over the past 120 years knew that doing what you say you’re going to do, and being there when people need us the most is not only what is expected of us, but is the foundation for our success.

Trust is essential to everything we do. Our customers and communities put their trust in us to deliver safe and reliable energy. Our employees trust us to keep safety our top priority and to equip them with the tools they need to have fulfilling careers. Our regulators trust us to keep the promises that we make to them and to always work with integrity. And you, our investors, entrust us with being a well-run company able to deliver on our financial and strategic objectives.

Below are some highlights from 2023 that demonstrate PSEG’s focus on “doing the right thing,” by executing on our strategic plans, delivering increased predictability and producing shareholder benefits:

• With strong 2023 results, we increased our shareholder dividend in 2024 by 5.3% — marking the 117th year of paying a dividend and the 13th consecutive annual increase. We also met or exceeded PSEG’s non-GAAP Operating Earnings guidance for the 19th consecutive year.
  • PSE&G, our regulated utility that contributes approximately 90% of our consolidated non-GAAP Operating Earnings, is on track to continue to provide sustainable rate base growth through major infrastructure investments and, together with cost control through operational excellence, earnings growth for our shareholders.
  • PSEG’s financial strength enables funding of our regulated 2024 through 2028 capital investment program of $18 billion to $21 billion, without the need to issue new equity or to sell assets.
• We’re working to fulfill our Powering Progress vision for a future where people use less energy, and it’s cleaner, safer and delivered more reliably than ever, consistent with New Jersey’s clean energy goals.
  • Our December 2023 distribution base rate case filing, the first in nearly six years, seeks to recover over $3 billion in previously deployed capital to strengthen and modernize New Jersey’s electric and gas infrastructure.
  • We made the decision to retain our carbon-free nuclear fleet enhanced by the financial stability of a long-term federal production tax credit (PTC) and sold our equity stake in the Ocean Wind 1 project, streamlining our business and reducing PSEG’s risk profile.
  • We’re pursuing our goal of net-zero emissions for our operations by 2030 while remaining focused on customer affordability, reliability and meeting the needs of our state and the areas where we do business.
  • We’re supporting our communities, leveraging our expertise from years of modernizing and strengthening our distribution grid to make “Last Mile” upgrades in neighborhoods that also prepare our system for added renewable energy.
  • We’re reducing methane emissions through our extended Gas System Modernization Program (GSMP) and are on track to achieve our long-term methane emissions reduction target of at least 60% by 2030, having already reduced methane emissions by 22% systemwide from 2018 levels.
  • We’re supporting customer demand for programs that save energy and lower bills. We now sell more energy efficiency solutions in a single month than we did in an entire year only a few short years ago.
  • In addition to the 2023 extension of our Clean Energy Future – Energy Efficiency (CEF-EE) programs, we proposed a $3.1 billion second phase covering January 2025 to June 2027. If approved, we plan to achieve a reduction of nearly 10 million metric tons of carbon emissions.
  • We’re putting thousands of people to work across numerous positions at various levels with PSEG, with our partners and through our Clean Energy Jobs Program, and have been recognized nationally as a top employer for diversity.
  • We continue to support electrifying the transportation sector – the number one source of national greenhouse gas emissions – by exploring and pursuing low-risk opportunities to invest in “make ready” electric vehicle infrastructure, enabling a smooth transition to increased electrification.
• We further enhanced our ability to deliver stable, predictable results by taking actions to limit the impact of pension variability on earnings, and continue to be supported by PSE&G’s Conservation Incentive Program and the Transmission Formula Rate.

I am proud to say that our team’s work has received widespread recognition. For the second consecutive year, PSE&G achieved the number one ranking in customer satisfaction for Residential Electric in the East among Large Utilities in the J.D. Power 2023 U.S. Electric Utility Residential Customer Satisfaction Study and also ranked first in the J.D. Power 2023 U.S. Electric Utility Business Customer Satisfaction Study. Our energy efficiency program has received more than 40 industry awards that acknowledge excellence in program design, marketing and best practices.

I am just as proud to say that our gas bills are among the lowest in the region and our electric bills are below our regional peer average. We never lose sight of the importance of bill affordability as we maintain reliability, work to reduce methane emissions, help our customers use less energy, advocate for cleaner power generation, support our communities and aim to reduce greenhouse gas emissions at the household level. PSE&G’s approach to continuous improvement has consistently led us to being one of the most affordable utilities in the region.

At PSEG we work hard to maintain a best-in-class utility, preserve our carbon-free generation fleet, invest in impactful clean energy programs and are privileged to have employees who do right by our diverse communities. Couple this with a leadership team committed to proven business principles and you have a compelling investment proposition that also aligns with state, regional and national sustainability goals.

Let me close by thanking you, our shareholders, for your confidence, support and the continued trust you place in us.

Sincerely,

Ralph LaRossa

Chair of the Board, President and Chief Executive Officer
Public Service Enterprise Group

February 26, 2024