---
ticker: PEG
company: PEG
filing_type: 10-K
year_current: 2024
year_prior: 2023
risks_added: 2
risks_removed: 2
risks_modified: 8
risks_unchanged: 18
source: SEC EDGAR
url: https://riskdiff.com/peg/2024-vs-2023/
markdown_url: https://riskdiff.com/peg/2024-vs-2023/index.md
generated: 2026-06-01
---

# PEG: 10-K Risk Factor Changes 2024 vs 2023

> Source: U.S. Securities and Exchange Commission (EDGAR)  
> Generated: 2026-06-01  
> All data extracted directly from official filings. No hallucinated content.

## Summary

| Status | Count |
|--------|-------|
| New risks added | 2 |
| Risks removed | 2 |
| Risks modified | 8 |
| Unchanged | 18 |

---

## New in Current Filing: If we are unable to extend certain significant contracts on terms acceptable to us, this may negatively affect our financial condition and operating results

We are party to several contracts from which we derive significant revenues. PSEG Power sells wholesale natural gas, primarily through a full-requirements BGSS contract with PSE&G to meet the needs of PSE&G's default gas supply service customers. In 2022, the BPU approved an extension of the long-term BGSS contract to March 31, 2027, and thereafter the contract remains in effect unless terminated by either party with a two-year notice. PSEG LI has an OSA with LIPA to operate LIPA's electric T&D system in Long Island. The OSA continues through 2025, but can be extended by mutual agreement of the parties. Further, PSEG Power provides fuel procurement and power management services to LIPA under separate agreements that expire at the end of 2025. It is uncertain whether any of these contracts and agreements will be extended on terms acceptable to us or at all, which may negatively affect our financial condition and operating results. For additional information, see Item 1. Business - PSEG Power & Other.

---

## New in Current Filing: Artificial Intelligence is an emerging area of technology that has the potential to impact various aspects of our business operations and customer interactions.

The development, adoption, and use for generative AI technologies are still in their early stages and ineffective or inadequate AI development or deployment practices by PSEG or third-party vendors could result in unintended consequences. We contract third-party vendors that use AI in products and/or services they provide and we may not have full control or visibility over the quality, performance, security or compliance of the products and services that incorporate AI-related technology. AI algorithms that we or our third-party vendors use may be flawed or may be based on datasets that are biased or insufficient. These limitations or failures could result in reputational damage and legal liabilities. Developing, testing, and deploying resource-intensive AI systems may require additional investment and increase our costs. In addition, the evolving nature of AI may cause new laws and regulations to be enacted which may require significant resources to modify and maintain business practices to comply with the new laws and regulations, the nature of which cannot be determined at this time. Further, inaccurate results generated as a result of our employees', contractors' or vendors' use of generative AI technologies could lead to operational interruptions or reputational harm.

---

## No Match in Current: Our financial condition and results of operations could be adversely affected by the coronavirus pandemic.

*This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.*

In response to the global coronavirus pandemic, we have implemented a comprehensive set of actions to help our customers, communities and employees, and will continue to closely monitor developments and adjust as needed to ensure reliable service while protecting the safety and health of our workforce and the communities we serve. The pandemic's potential impact will depend on a number of factors outside of our control, including the duration and severity of the outbreak as well as third-party actions, including governmental requirements. Pursuant to a BPU order, we have deferred a significant amount of costs for future recovery. Any inability to obtain timely recovery of these costs could have a material adverse effect on our business. Further, a number of expanded customer protection measures have been implemented by the State and the BPU, such as an extended moratorium on shut-offs of residential service for non-payment, and more extensive processes to be taken prior to any shut-off of service. These actions have negatively affected customer payment patterns, leading to an elevated aged accounts receivable balance. Our ability to manage our accounts receivable balance, recover its carrying costs and any associated bad debts could have a material impact on our business. We currently cannot estimate the potential impact the coronavirus pandemic may have on our business, results of operations, financial condition, liquidity and cash flows. The impacts of the pandemic and associated government and regulatory responses, including the long-term impact they may have on the economy, which could extend beyond the duration of the pandemic, could affect, among other things: •PSE&G's residential and C&I customer payment patterns, in part as residential customer non-safety related service disconnections for non-payment were temporarily suspended for an extended period, resulting in adverse impacts to accounts receivable and bad debt expense; •the recovery of incremental costs incurred related to the pandemic, including higher bad debts; and •the availability of materials and supplies due to supply chain interruptions.

---

## No Match in Current: Certain of our generation facilities rely on transmission facilities that we do not own or control and that may be subject to transmission constraints. Transmission facility owners' inability to maintain adequate transmission capacity could restrict our ability to deliver wholesale electric power to our customers and we may either incur additional costs or forgo revenues.

*This section from the 2023 filing does not have a high-confidence textual match in 2024. It may have been removed, merged, or substantially reworded.*

We depend on transmission facilities owned and operated by others to deliver the wholesale power we sell from our generation facilities. If transmission is disrupted or if the transmission capacity infrastructure is inadequate, our ability to sell and deliver wholesale power may be adversely impacted. If a region's power transmission infrastructure is inadequate, our recovery of wholesale costs and profits may be limited. In addition, in PJM, energy transmission congestion risk and associated costs exist. We may not be able to accurately predict and hedge this risk due to insufficient market data and liquidity. An increase in our congestion costs may adversely affect our financial results.

---

## Modified: We may be adversely affected by changes in energy regulatory policies, including energy and capacity market design rules and developments affecting transmission.

**Key changes:**

- Reworded sentence: "PJM's capacity market design rules continue to evolve, including in response to efforts to integrate public policy initiatives into the wholesale markets, and recent extreme weather events in PJM."
- Reworded sentence: "In September 2022, the BPU issued a Progress Report expanding on the recommendations contained in the 2021 report."

**Prior (2023):**

The energy industry continues to be regulated and the rules to which our businesses are subject are always at risk of being changed. Our business has been impacted by established rules that create locational capacity markets in PJM. Under these rules, generators located in constrained areas are paid more for their capacity so there is an incentive to locate in those areas where generation capacity is most needed. PJM's capacity market design rules continue to evolve, including in response to efforts to integrate public policy initiatives into the wholesale markets. For a discussion of recent changes in energy regulatory policies that may affect our business and results of operations, see Item 1. Regulatory Issues - Federal Regulation. Further, some of the market-based mechanisms in which we participate are at times the subject of review or discussion by some of the participants in the New Jersey and federal arenas. We can provide no assurance that these mechanisms will continue to exist in their current form, nor otherwise be modified. In July 2021, the BPU issued a report on its investigation related to whether New Jersey can achieve its long-term clean energy and environmental objectives under the current resource adequacy procurement paradigm. The report found that participating in the regional market is the most efficient way for New Jersey to achieve its clean energy goals and therefore consideration of leaving the regional market is paused while market reforms are being considered at the regional and national level. In 28 28 28 28 28 28 Table of Contents Table of Contents Table of Contents September 2022, the BPU issued a Progress Report expanding on the recommendations contained in the 2021 report. The Progress Report found that it is in New Jersey's best interest to pursue a voluntary independent clean energy market and Staff sought the BPU's authorization to evaluate various options that would serve as alternatives to the PJM capacity market or work in conjunction with it. We cannot predict whether the BPU will ultimately take any measures in the future that will have an impact on the capacity market or our generating stations.

**Current (2024):**

The energy industry continues to be regulated and the rules to which our businesses are subject are always at risk of being changed. Our business has been impacted by established rules that create locational capacity markets in PJM. Under these rules, generators located in constrained areas are paid more for their capacity so there is an incentive to locate in those areas where generation capacity is most needed. PJM's capacity market design rules continue to evolve, including in response to efforts to integrate public policy initiatives into the wholesale markets, and recent extreme weather events in PJM. For a discussion of recent changes in energy regulatory policies that may affect our business and results of operations, see Item 1. Regulatory Issues - Federal Regulation. Further, some of the market-based mechanisms in which we participate are at times the subject of review or discussion by some of the participants in the New Jersey and federal arenas. We can provide no assurance that these mechanisms will continue to exist in their current form, nor otherwise be modified. In July 2021, the BPU issued a report on its investigation related to whether New Jersey can achieve its long-term clean energy and environmental objectives under the current resource adequacy procurement paradigm. The report found that participating in the regional market is the most efficient way for New Jersey to achieve its clean energy goals and therefore consideration of leaving the regional market is paused while market reforms are being considered at the regional and national level. In September 2022, the BPU issued a Progress Report expanding on the recommendations contained in the 2021 report. The Progress Report found that it is in New Jersey's best interest to pursue a voluntary independent clean energy market and the BPU Staff sought the BPU's authorization to evaluate various options that would serve as alternatives to the PJM capacity market or work in conjunction with it. The BPU is currently examining whether and how to implement a forward clean energy attributes market that could involve several states in PJM and work in tandem with PJM's capacity and energy markets. We 27 27 27 27 27 27 Table of Contents Table of Contents Table of Contents cannot predict whether the BPU will ultimately take any measures in the future that will have an impact on the capacity market or our generating stations.

---

## Modified: There may be periods when PSEG Power generation may not operate and/or may not be able to meet its commitments under forward sale obligations and PJM rules at a reasonable cost or at all.

**Key changes:**

- Reworded sentence: "Some issues that could impact the operation of our facilities are: •breakdown or failure of equipment, IT, processes or management effectiveness; •disruptions in the transmission of electricity; •labor disputes or work stoppages; •fuel supply interruptions; 24 24 24 24 24 24 Table of Contents Table of Contents Table of Contents •limitations which may be imposed by environmental or other regulatory requirements; and •operator error, acts of war or terrorist attacks (including physical or cybersecurity breaches) or catastrophic events such as fires, earthquakes, explosions, floods, severe weather or other similar occurrences."
- Added sentence: "In addition, changing capacity performance rules and/or failure to follow existing rules - by PJM or market participants - creates regulatory uncertainty and reliability risk."

**Prior (2023):**

A substantial portion of PSEG Power's nuclear generation output has been sold forward under fixed price financial power sales contracts. Forward financial sales offset physical sales in the PJM RTO spot market. Our forward sales of energy and capacity assume sustained, acceptable levels of operating performance. Operations at any of our plants could degrade to the point where the plant has to shut down or operate at less than full capacity. Some issues that could impact the operation of our facilities are: •breakdown or failure of equipment, IT, processes or management effectiveness; •disruptions in the transmission of electricity; •labor disputes or work stoppages; •fuel supply interruptions; •transportation constraints; •limitations which may be imposed by environmental or other regulatory requirements; and •operator error, acts of war or terrorist attacks (including cybersecurity breaches) or catastrophic events such as fires, 25 25 25 25 25 25 Table of Contents Table of Contents Table of Contents earthquakes, explosions, floods, severe weather or other similar occurrences. Identifying and correcting any of these issues may require significant time and expense. Depending on the materiality of the issue, we may choose to close a plant rather than incur the expense of restarting it or returning it to full capacity. Because the obligations under most of these forward sale agreements are not contingent on a unit being available to generate power, PSEG Power's results of operations and cash flows are at risk even in the event of a plant outage, or a reduction in the available capacity of the unit. To the extent that PSEG Power does not meet its expected nuclear generation output, PSEG Power would be required to pay the difference between the market price and the contract price on its financial contracts without receiving the physical spot energy revenue or be required to purchase energy at higher prices to cover its shortfall. In addition, as capacity performance resources in PJM, PSEG's nuclear units have been and will in the future be required to pay penalties if a forced outage at a plant occurs during a declared emergency event within PJM and that plant's expected performance exceeds its actual performance during such event. The amount of such payments could be substantial and could have a material adverse effect on our financial condition, results of operations and cash flows. In addition, as market prices for energy and fuel fluctuate, our forward energy sale and forward fuel purchase contracts could require us to post substantial additional collateral, thus requiring us to obtain additional sources of liquidity during periods when our ability to do so may be limited.

**Current (2024):**

A substantial portion of PSEG Power's nuclear generation output has been sold forward under fixed price financial power sales contracts. Forward financial sales offset physical sales in the PJM RTO spot market. Our forward sales of energy and capacity assume sustained, acceptable levels of operating performance. Operations at any of our plants could degrade to the point where the plant has to shut down or operate at less than full capacity. Some issues that could impact the operation of our facilities are: •breakdown or failure of equipment, IT, processes or management effectiveness; •disruptions in the transmission of electricity; •labor disputes or work stoppages; •fuel supply interruptions; 24 24 24 24 24 24 Table of Contents Table of Contents Table of Contents •limitations which may be imposed by environmental or other regulatory requirements; and •operator error, acts of war or terrorist attacks (including physical or cybersecurity breaches) or catastrophic events such as fires, earthquakes, explosions, floods, severe weather or other similar occurrences. Identifying and correcting any of these issues may require significant time and expense. Depending on the materiality of the issue, we may choose to close a plant rather than incur the expense of restarting it or returning it to full capacity. Because the obligations under most of these forward sale agreements are not contingent on a unit being available to generate power, PSEG Power's results of operations and cash flows are at risk even in the event of a plant outage, or a reduction in the available capacity of the unit. To the extent that PSEG Power does not meet its expected nuclear generation output, PSEG Power would be required to pay the difference between the market price and the contract price on its financial contracts without receiving the physical spot energy revenue or be required to purchase energy at higher prices to cover its shortfall. In addition, as capacity performance resources in PJM, PSEG's nuclear units have been and will in the future be required to pay penalties if a forced outage at a plant occurs during a declared emergency event within PJM and that plant's expected performance exceeds its actual performance during such event. The amount of such payments could be substantial and could have a material adverse effect on our financial condition, results of operations and cash flows. In addition, changing capacity performance rules and/or failure to follow existing rules - by PJM or market participants - creates regulatory uncertainty and reliability risk. In addition, as market prices for energy and fuel fluctuate, our forward energy sale and forward fuel purchase contracts could require us to post substantial additional collateral, thus requiring us to obtain additional sources of liquidity during periods when our ability to do so may be limited.

---

## Modified: Increases in the costs of equipment and materials, fuel, services and labor could adversely affect our operating results.

**Key changes:**

- Reworded sentence: "Higher costs from suppliers of equipment and materials, fuel, services and labor costs to attract and retain our workforce, could lead to increased costs, which could reduce our earnings."

**Prior (2023):**

Inflation has recently increased across the economy and is impacting portions of our business. Higher costs from suppliers of equipment and materials, fuel, services and labor costs to attract and retain our workforce, could lead to increased costs, which 22 22 22 22 22 22 Table of Contents Table of Contents Table of Contents could reduce our earnings. Also, seeking recovery of higher costs in future rate cases could pressure customer rates, resulting in a potentially adverse outcome of such proceedings, or in other proceedings, including the proposal of certain investment programs or other proceedings that impact customer rates.

**Current (2024):**

Higher costs from suppliers of equipment and materials, fuel, services and labor costs to attract and retain our workforce, could lead to increased costs, which could reduce our earnings. Also, seeking recovery of higher costs in future distribution base rate cases could pressure customer rates, resulting in a potentially adverse outcome of such proceedings, or in other proceedings, including the proposal of certain investment programs or other proceedings that impact customer rates.

---

## Modified: We may be unable to obtain an adequate nuclear fuel supply in the future.

**Key changes:**

- Reworded sentence: "In addition, we face risks with regard to the delivery to, and the use of nuclear fuel by, our power plants including the following: •creditworthiness of third-party suppliers, defaults by third-party suppliers on supply obligations and our ability to replace supplies currently under contract may delay or prevent timely delivery; •market liquidity for physical supplies of such fuels or availability of related services (e.g., fabrication) may be insufficient or available only at prices that are not acceptable to us; •variation in the quality of such fuels may adversely affect our power plant operations; •domestic and foreign legislative or regulatory actions or requirements may increase the cost of such fuels; and •the loss of critical infrastructure, acts of war or terrorist attacks (including cybersecurity breaches) or catastrophic events such as fires, earthquakes, explosions, floods, severe storms or other similar occurrences could impede the delivery of such fuels."
- Removed sentence: "Certain of our other generation facilities also require fuel or other services that may only be available from one or a limited number of suppliers."
- Removed sentence: "The availability and price of this fuel may vary due to supplier financial or operational disruptions, transportation disruptions, force majeure and other factors, including market conditions."
- Removed sentence: "At times, such fuel may not be available at any price, or we may not be able to transport it to our facilities on a timely basis."
- Removed sentence: "In this case, we may not be able to run those facilities even if it would be profitable."

**Prior (2023):**

We obtain substantially all of our nuclear fuel supply from third parties pursuant to arrangements that vary in term, pricing structure, firmness and delivery flexibility. Our fuel supply arrangements must be coordinated with storage services and other contracts to ensure that the nuclear fuel is delivered to our power plants at the times, in the quantities and otherwise in a manner that meets the needs of our generation portfolio and our customers. We must also comply with laws and regulations governing the transportation of such fuels. We are exposed to increases in the price of nuclear fuel, and it is possible that sufficient supplies to operate our generating facilities profitably may not continue to be available to us. Significant changes in the price of nuclear fuel could affect our future results and impact our liquidity needs. In addition, we face risks with regard to the delivery to, and the use of nuclear fuel by, our power plants including the following: •creditworthiness of third-party suppliers, defaults by third-party suppliers on supply obligations and our ability to replace supplies currently under contract may delay or prevent timely delivery; •market liquidity for physical supplies of such fuels or availability of related services (e.g. fabrication) may be insufficient or available only at prices that are not acceptable to us; •variation in the quality of such fuels may adversely affect our power plant operations; •domestic and foreign legislative or regulatory actions or requirements may increase the cost of such fuels; and •the loss of critical infrastructure, acts of war or terrorist attacks (including cybersecurity breaches) or catastrophic events such as fires, earthquakes, explosions, floods, severe storms or other similar occurrences could impede the delivery of such fuels. Our nuclear units have a diversified portfolio of contracts and inventory that provide a substantial portion of our fuel raw material needs over the next several years. However, each of our nuclear units has contracted with a single fuel fabrication services provider, and transitioning to an alternative provider could take an extended period of time. Certain of our other generation facilities also require fuel or other services that may only be available from one or a limited number of suppliers. The availability and price of this fuel may vary due to supplier financial or operational disruptions, transportation disruptions, force majeure and other factors, including market conditions. At times, such fuel may not be available at any price, or we may not be able to transport it to our facilities on a timely basis. In this case, we may not be able to run those facilities even if it would be profitable. If we had sold forward the power from such a facility, we could be required to supply or purchase power from alternate sources, perhaps at a loss. This could have a material adverse impact on our business, the financial results of specific plants and on our results of operations. Although our fuel contract portfolio provides a degree of hedging against these market risks, such hedging may not be effective and future increases in our fuel costs could materially and adversely affect our liquidity, financial condition and results of 24 24 24 24 24 24 Table of Contents Table of Contents Table of Contents operations. While our generation runs on nuclear fuel, an increase in the cost of any particular fuel ultimately used by other generation facilities could impact our results of operations.

**Current (2024):**

We obtain substantially all of our nuclear fuel supply from third parties pursuant to arrangements that vary in term, pricing structure, firmness and delivery flexibility. Our fuel supply arrangements must be coordinated with storage services and other contracts to ensure that the nuclear fuel is delivered to our power plants at the times, in the quantities and otherwise in a manner that meets the needs of our generation portfolio and our customers. We must also comply with laws and regulations governing the transportation of such fuels. We are exposed to increases in the price of nuclear fuel, and it is possible that sufficient supplies to operate our generating facilities profitably may not continue to be available to us. Significant changes in the price of nuclear fuel could affect our future results and impact our liquidity needs. In addition, we face risks with regard to the delivery to, and the use of nuclear fuel by, our power plants including the following: •creditworthiness of third-party suppliers, defaults by third-party suppliers on supply obligations and our ability to replace supplies currently under contract may delay or prevent timely delivery; •market liquidity for physical supplies of such fuels or availability of related services (e.g., fabrication) may be insufficient or available only at prices that are not acceptable to us; •variation in the quality of such fuels may adversely affect our power plant operations; •domestic and foreign legislative or regulatory actions or requirements may increase the cost of such fuels; and •the loss of critical infrastructure, acts of war or terrorist attacks (including cybersecurity breaches) or catastrophic events such as fires, earthquakes, explosions, floods, severe storms or other similar occurrences could impede the delivery of such fuels. Our nuclear units have a diversified portfolio of contracts and inventory that provide a substantial portion of our fuel raw 23 23 23 23 23 23 Table of Contents Table of Contents Table of Contents material needs over the next several years. However, each of our nuclear units has contracted with a single fuel fabrication services provider, and transitioning to an alternative provider could take an extended period of time. This could have a material adverse impact on our business, the financial results of specific plants and on our results of operations. Although our fuel contract portfolio provides a degree of hedging against these market risks, such hedging may not be effective and future increases in our fuel costs could materially and adversely affect our liquidity, financial condition and results of operations.

---

## Modified: The markets, PTC and/or ZEC program may not provide sufficient financial support for our New Jersey nuclear plants which could result in the retirement of all of these nuclear plants.

**Key changes:**

- Reworded sentence: "MD&A - Executive Overview of 2023 and Future Outlook, in April 2019, PSEG Power's Salem 1, Salem 2 and Hope Creek nuclear plants were awarded ZECs by the BPU through May 2022."
- Removed sentence: "In May 2021, the New Jersey Rate Counsel filed an appeal with the New Jersey Appellate Division of the BPU's April 2021 decision."
- Removed sentence: "PSEG cannot predict the outcome of these matters."
- Reworded sentence: "The enacted legislation established a PTC for electricity generation using nuclear energy which begins January 1, 2024 and continues through 2032."
- Reworded sentence: "The PTC rate and the gross receipts threshold are subject to annual inflation adjustments."

**Prior (2023):**

As further described in Item 7. MD&A - Executive Overview of 2022 and Future Outlook, in April 2019, PSEG Power's Salem 1, Salem 2 and Hope Creek nuclear plants were awarded ZECs by the BPU through May 2022. In April 2021, these nuclear plants were awarded ZECs for the three-year period starting June 2022. In May 2021, the New Jersey Rate Counsel filed an appeal with the New Jersey Appellate Division of the BPU's April 2021 decision. PSEG cannot predict the outcome of these matters. In August 2022, the IRA was signed into law expanding incentives promoting carbon-free generation. The enacted legislation established a PTC for electricity generation using nuclear energy set to begin in 2024 through 2032. The expected PTC rate is up to $15/MWh subject to adjustment based upon a facility's gross receipts. The PTC rate and the gross receipts cap are subject to annual inflation adjustments. The U.S. Treasury is expected to clarify the definition of gross receipts prior to when the eligibility period begins in 2024. The ZEC payment may be adjusted by the BPU at any time to offset environmental or fuel diversity payments that a selected nuclear plant may receive from another source. We are continuing to analyze the impact of the IRA on our nuclear units including additional future guidance from the U.S. Treasury and the interactions with PTCs on expected ZEC payments. If the markets, PTC and/or the ZEC program do not provide sufficient revenue, or, in the case of the Salem nuclear plants, decisions by the EPA and state environmental regulators regarding the implementation of Section 316(b) of the CWA and related state regulations, or other factors, PSEG Power may take all necessary steps to cease to operate all of these plants and will incur associated costs and accounting charges in the event that the financial condition of the plants is materially adversely impacted in the future. Ceasing operations of these plants would result in a material adverse impact on PSEG's results of operations.

**Current (2024):**

As further described in Item 7. MD&A - Executive Overview of 2023 and Future Outlook, in April 2019, PSEG Power's Salem 1, Salem 2 and Hope Creek nuclear plants were awarded ZECs by the BPU through May 2022. In April 2021, these nuclear plants were awarded ZECs for the three-year period starting June 2022. In August 2022, the IRA was signed into law expanding incentives promoting carbon-free generation. The enacted legislation established a PTC for electricity generation using nuclear energy which begins January 1, 2024 and continues through 2032. The expected PTC rate is up to $15/MWh subject to adjustment based upon a facility's gross receipts. The PTC rate and the gross receipts threshold are subject to annual inflation adjustments. The U.S. Treasury is expected to clarify the definition of gross receipts. The ZEC payment may be adjusted by the BPU to offset environmental or fuel diversity payments that a selected nuclear plant may receive from another source. Until additional guidance is issued by the U.S. Treasury, we are unable to fully determine the impacts of the PTC. If the markets, PTC and/or the ZEC program do not provide sufficient financial support, or, in the case of the Salem nuclear plants, decisions by the EPA and state environmental regulators regarding the implementation of Section 316(b) of the CWA and related state regulations, or other factors, PSEG Power may take all necessary steps to cease to operate all of these plants and will incur associated costs and accounting charges in the event that the financial condition of the plants is materially adversely impacted in the future. Ceasing operations of these plants would result in a material adverse impact on PSEG's results of operations.

---

## Modified: PSE&G's proposed investment projects or programs may not be fully approved by regulators and actual capital investment by PSE&G may be lower than planned, which would cause lower than anticipated rate base.

**Key changes:**

- Reworded sentence: "Transmission projects are subject to a FERC-approved transmission expansion planning process while distribution and clean 25 25 25 25 25 25 Table of Contents Table of Contents Table of Contents energy projects are subject to approval by the BPU."
- Reworded sentence: "FERC has also proposed elimination of certain transmission rate incentives, including the incentive that PSE&G receives for being a transmission owner member of PJM and accepting the related risk of RTO membership."

**Prior (2023):**

PSE&G is a regulated public utility that operates and invests in an electric T&D system and a gas distribution system as well as certain regulated clean energy investments, including solar and EE within New Jersey. PSE&G invests in capital projects to maintain and improve its existing T&D system and to address various public policy goals and meet customer expectations. Transmission projects are subject to a FERC-approved transmission expansion planning process while distribution and clean energy projects are subject to approval by the BPU. The costs of PSE&G's transmission projects are subject to prudency challenge at FERC and PSE&G's rates themselves may also be challenged at FERC. We cannot be certain that any proposed project will be approved as requested or at all. If the programs that PSE&G may file from time to time are only approved in part, or not at all, or if the approval fails to allow for the timely recovery of all of PSE&G's costs, including a return of, or on, its investment, PSE&G will have a lower than anticipated rate base, thus causing its future earnings to be lower than anticipated. If these programs are not approved, that could also adversely affect our service levels for customers. Further, the BPU could take positions to exclude or limit utility participation in certain areas, such as renewable generation, EE, EV infrastructure, energy storage, renewable natural gas or hydrogen projects, which would limit our relationship with customers and narrow our future growth prospects.

**Current (2024):**

PSE&G is a regulated public utility that operates and invests in an electric T&D system and a gas distribution system as well as certain regulated clean energy investments, including solar and EE within New Jersey. PSE&G invests in capital projects to maintain and improve its existing T&D system and to address various public policy goals and meet customer expectations. Transmission projects are subject to a FERC-approved transmission expansion planning process while distribution and clean 25 25 25 25 25 25 Table of Contents Table of Contents Table of Contents energy projects are subject to approval by the BPU. The costs of PSE&G's transmission projects are subject to prudency challenge at FERC and PSE&G's rates themselves may also be challenged at FERC. FERC has also proposed elimination of certain transmission rate incentives, including the incentive that PSE&G receives for being a transmission owner member of PJM and accepting the related risk of RTO membership. We cannot be certain that any proposed project or program will be approved as requested or at all. If the projects or programs that PSE&G may file from time to time are only approved in part, or not at all, or if the approval fails to allow for the timely recovery of all of PSE&G's costs, including a return of, or on, its investment, PSE&G will have a lower than anticipated rate base, thus causing its future earnings to be lower than anticipated. Further, the BPU could take positions to exclude or limit utility participation in certain areas, such as renewable generation, EE, EV infrastructure, or energy storage programs, renewable natural gas or hydrogen projects, which would limit our relationship with customers and narrow our future growth prospects.

---

## Modified: Changes in tax laws and regulations may adversely affect our financial condition, results of operations and cash flows.

**Key changes:**

- Reworded sentence: "The enactment of additional federal or state tax legislation and clarification of previously enacted tax laws, including anticipated U.S."

**Prior (2023):**

The enactment of additional federal or state tax legislation and clarification of previously enacted tax laws could have a material impact on our effective tax rate and cash tax position.

**Current (2024):**

The enactment of additional federal or state tax legislation and clarification of previously enacted tax laws, including anticipated U.S. Treasury guidance relating to the 15% corporate alternative minimum tax and energy tax credit provisions, could have a material impact on our effective tax rate and cash tax position. 29 29 29 29 29 29 Table of Contents Table of Contents Table of Contents

---

## Modified: A material shift away from natural gas toward increased electrification and a reduction in the use of natural gas as a result of decarbonization measures could adversely impact our gas business and ability to execute on our overall PSE&G business strategy.

**Key changes:**

- Reworded sentence: "Various jurisdictions outside of New Jersey have enacted prohibitions or restrictions on the use and consumption of natural gas and the BPU has commenced stakeholder proceedings regarding the Future of Natural Gas as required by the New Jersey governor's EO issued in 2023."
- Added sentence: "If the above changes occurred, that would also require investment in the electric T&D system to accommodate higher loads."
- Added sentence: "In addition, in order to enable the New Jersey clean energy economy, sustained grid modernization will be required to accommodate increased EE, EV infrastructure, increased penetration of distributed energy resources on the electric system, such as on-site solar generation and also anticipated increased deployment of energy storage, fuel cells, and DR technologies."
- Added sentence: "If these changes progress rapidly in the near-term, our business model and our ability to execute on our overall PSE&G business strategy could be materially impacted."

**Prior (2023):**

Technological advancements enabling customer choice and state climate policy supporting decarbonization are driving transformative change in the electric power industry. New Jersey utilities are experiencing increased usage by customers and third parties of distributed energy resources, such as on-site solar generation, energy storage, fuel cells, EE, and demand response technologies. These developments will require modernization of the electric distribution grid to, among other things, accommodate two-way flows of electricity, increase the grid's capacity, and interconnect distributed energy resources. In order to enable the New Jersey clean energy economy, sustained investments are required in grid modernization, renewable integration projects, EE programs, energy storage options, EV infrastructure and state infrastructure modernization. If these changes progressed in the near-term, our business model and our ability to execute on our strategy could be materially impacted. Various jurisdictions outside of New Jersey have enacted prohibitions or restrictions on the use and consumption of natural gas that will reduce the use of natural gas. If New Jersey were to enact similar prohibitions or restrictions, a reduction in the use of natural gas could lead to a reduction in the gas customer base, higher customer rates for those customers who remain, and a diminished need for gas infrastructure, which could potentially cause substantial investment value of gas assets to be stranded and removed from our rate base, resulting in a reduction in associated rate recovery. Our inability to recover through rates our investments into the natural gas system, while still ensuring gas system safety and reliability, could materially affect our financial condition, results of operations, liquidity, and cash flows. Further, these industry changes, costs associated with complying with new regulatory developments and initiatives and with technological advancements could materially affect our financial condition, results of operations, liquidity, and cash flows.

**Current (2024):**

Various jurisdictions outside of New Jersey have enacted prohibitions or restrictions on the use and consumption of natural gas and the BPU has commenced stakeholder proceedings regarding the Future of Natural Gas as required by the New Jersey governor's EO issued in 2023. The CIP protects PSE&G's margin variances against changes in customer usage of gas and electricity, but not against a decrease in the gas customer base (number of customers on the system). If New Jersey were to enact similar prohibitions or restrictions, a reduction in the use of natural gas could lead to a reduction in the gas customer base, higher customer rates for those customers who remain, and a diminished need for gas infrastructure, which could potentially cause substantial investment value of gas assets to be stranded and removed from our rate base, resulting in a reduction in associated rate recovery. Our inability to recover through rates our investments into the natural gas system, while still ensuring gas system safety and reliability, could materially affect our financial condition, results of operations, liquidity, and cash flows. Further, these industry changes, costs associated with complying with new regulatory developments and initiatives and with technological advancements could materially affect our financial condition, results of operations, liquidity, and cash flows. If the above changes occurred, that would also require investment in the electric T&D system to accommodate higher loads. In addition, in order to enable the New Jersey clean energy economy, sustained grid modernization will be required to accommodate increased EE, EV infrastructure, increased penetration of distributed energy resources on the electric system, such as on-site solar generation and also anticipated increased deployment of energy storage, fuel cells, and DR technologies. If these changes progress rapidly in the near-term, our business model and our ability to execute on our overall PSE&G business strategy could be materially impacted.

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*Data sourced from SEC EDGAR. Last updated 2026-06-01.*