PEG · Q2 2025 Earnings
BullishPublic Service Enterprise Group
Reported August 5, 2025
30-second summary
PSEG held its FY2025 non-GAAP EPS guide at $3.94–$4.06 (midpoint +9% YoY) while flagging a 47% QoQ jump in PSE&G's large-load inquiry pipeline to 9,400 MW, of which ~90% is data-center linked. The PJM 2026/2027 capacity auction cleared at $329/MW-day, but management argues bill impact will be near-flat once feathered into BGS supply rates. Federal tax legislation in July locked in nuclear PTC downside protection and 100% bonus depreciation — two material tailwinds that did not exist on the prior call.
Headline numbers
EPS
Q2 FY2025
$0.77
Revenue
Q2 FY2025
$2.81B
+15.8% YoY
Operating margin
Q2 FY2025
29.1%
Key financials
Q2 FY2025| Metric | Q2 FY2025 | YoY |
|---|---|---|
| Revenue | $2.81B | +15.8% |
| EPS | $0.77 | — |
| Operating margin | 29.1% | — |
Guidance
Prior quarter data unavailable — comparison not possible.
Segment KPIs
Q2 FY2025| Segment | Q2 FY2025 | YoY |
|---|---|---|
| PSE&G | $2.031B | +9.0% |
| PSEG Power & Other | $0.92B | +34.3% |
Other KPIs
Q2 FY2025| Segment | Q2 FY2025 |
|---|---|
| Nuclear Generation - NJ | 4,670 GWh |
| Nuclear Generation - PA | 2,841 GWh |
| Total Nuclear Generation | 7,511 GWh |
| Electric Retail Sales - Residential | 3,142 million kWh |
| Electric Retail Sales - C&I | 6,252 million kWh |
| Large Load Inquiries | 9,400 MW |
| Operating Income | $817 million |
| PJM Capacity Price - 2026/2027 | $329/MW-day |
Management tone
PSEG's posture this quarter is notably more forward-leaning than typical utility conservatism — management is selling a growth story anchored on data-center demand and federal policy tailwinds, while drawing hard strategic lines on what they won't do.
The PJM capacity auction reframe. The June auction at $270 had been positioned as a customer affordability headwind heading into 2026. This quarter, with the 2026/2027 auction clearing higher at $329, management instead framed it as benign: "we anticipate a near flat impact on customer electric bills when this latest price is feathered into the BGS supply rates in June of 2026." The pivot signals that PSEG is no longer treating capacity inflation as a regulatory crisis but as a manageable feathering exercise — a meaningful tone shift given how loudly New Jersey politicians complained about the June print.
Nuclear from defensive asset to strategic optionality. The federal tax legislation passed in July is the single most consequential development this quarter. Management called out that the law "preserved the downside price protection from the Nuclear Production Tax Credit" and extended PTC eligibility to nuclear capacity expansions, specifically citing the planned Salem uprate. Combined with the Hope Creek 18-to-24 month fuel cycle extension, the nuclear fleet narrative has shifted from policy-dependent to a multi-year reliable cash generator with embedded uprate optionality.
Large-load pipeline crossed from interest to commitment. Three months ago the 6,400 MW inquiry pipeline read as speculative top-of-funnel demand. This quarter the pipeline is 9,400 MW with 2,600 MW now classified as mature "new business" applications (+40% QoQ on that subset alone). The Q&A confirmed >90% is data-center driven. Management held the conversion rate at 10–20%, declining to revise upward — a credibility choice that preserves room to surprise positively in coming quarters.
Resource adequacy now framed as systemic, not regional. Last quarter's language treated PJM tightness as a regional concern. This quarter it is "becoming more acute," and management said "it's hard to see the path to new generation through existing market signals, which may require the consideration of a new approach." This is a setup for state-level intervention advocacy — and the Q&A made clear PSEG wants any solution to flow through the regulated construct, not a return to merchant generation.
Hard line on merchant. Asked directly whether a JV outside the regulated construct (à la a Pennsylvania peer) was on the table, management said flatly they are not interested in returning to merchant generation. That closes a strategic door analysts had been probing and reinforces the "no new equity, no asset sales" capital discipline message.
Recurring themes management leaned on this quarter:
Risks management surfaced:
Q&A highlights
Nicholas Campanella · Barclays
How does balancing affordability, resource adequacy, and economic development impact the ability to move forward with a multi-year generation contract by end of year? Is that still the intention?
Management reaffirmed they want to do a deal with the current administration but won't do one just to meet a timeline. Emphasized that generation needs are a PJM question, not just New Jersey, since the state imports 50% of peak power and data centers are appearing across the PJM footprint, not just in New Jersey.
Michael Sullivan · Wolf Research
What are alternative options if the New Jersey generation bill doesn't move forward? Would management consider a JV structure outside of the regulated construct, as a peer did in Pennsylvania?
Management explicitly stated they are not interested in returning to merchant generation business. They remain focused on advocating for the PJM process and state-level policy decisions. Noted no new baseload generation has been built in New Jersey in a long time, and their former merchant business was the last to do so.
Ryan Levine · Citi
Given recent higher PJM capacity prices during peak load months, would management seek an additional customer bill deferral mechanism? Also, what is the expected bill impact from the recent 329/MWday capacity auction outcome?
No plans for additional deferral mechanism with new administration/BPU. Management expects minimal bill movement from the 329 auction result because what's rolling off the bill is slightly higher than what's rolling on at current prices. June's jump was a catch-up from delayed prior auctions.
David Acaro · Morgan Stanley
What is the status of New Jersey generation build conversations at the state resource adequacy conference? Any updates on nuclear plant data center opportunities and timeline for agreement?
Conversations happening in real-time at the conference. Management advocating for state decisions based on four criteria: forecasts, reliability targets, affordability targets, and environmental goals. On data centers at nuclear site: discussions continue with interest shown; timing to be determined.
Carly Davenport · Goldman Sachs
Does the 10-20% conversion rate on large load inquiries (9,400 MW) still hold? Is this all data centers or are there other customer types?
10-20% conversion rate still holds. Over 90% of the 9,600 MW bucket is data center related with a few other customers. The numbers align with the company's new business projections.
What to watch into next quarter
Mature large-load applications conversion: 2,600 MW is the disclosed mature bucket. Watch whether Q3 disclosure breaks out signed contracts or service agreements vs. application stage; flat mature-bucket growth alongside continued top-of-funnel expansion would suggest the pipeline is becoming top-heavy.
Multi-year NJ generation contract: management declined to commit to year-end. Watch the Q3 call for whether the timeline slips into 2026 or a structure (RFP, BPU order, legislative path) becomes visible.
Hope Creek fall refueling outage execution: first step in the 18-to-24 month fuel cycle extension. Watch O&M cost disclosure on Q3 print and any output guidance update for 2026.
PJM 2027/2028 capacity auction outcome and BGS feathering: management bet that the $329 print produces near-flat 2026 bill impact. Watch whether the BGS auction results in early 2026 confirm or undermine that.
FY2025 EPS landing within the $3.94–$4.06 range: 1H non-GAAP EPS of $3.94 already equals the low end. Watch whether the FY guide is raised on the Q3 print, or whether management points to 2H-specific cost or weather drags that justify holding the range.
Sources
- PSEG Q2 2025 press release, SEC Form 8-K Exhibit 99: https://www.sec.gov/Archives/edgar/data/788784/000119312525173127/d206274dex99.htm
- Q2 2025 earnings call prepared remarks and Q&A (as referenced in tone and Q&A extractions)
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