2021 Annual Report
Letter from the chairman
T  O      O  U  R      S  H  A  R  E  H  O  L  D  E  R  S

A fundamental rule of business is that organizations must evolve – continuously improving and even reinventing themselves – if they are to best serve their stakeholders over time. Even a 119-year-old company like PSEG, whose reputation has been built upon such durable values as safety and reliability, must adapt to the evolving needs of the world in which we operate.

This pursuit of progress has driven our success for more than a century. Today, unprecedented social and economic challenges, from climate change to the COVID-19 pandemic, have only served to accelerate the pace of that change.

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PSEG is a different company in 2022 than we were a year ago. Earlier this month, our company completed its transition to becoming a predominately regulated electric and gas utility, centered on building and maintaining a clean energy-focused infrastructure, complemented by an essentially carbon-free generation fleet that offers investors a more stable, predictable growth profile than we have in the recent past.

Our evolution to this cleaner energy profile has been underway for some time.

Over the past decade, PSEG Power retired approximately 4,000 megawatts of fossil-fueled electric generation, culminating with the May 2021 retirement of Bridgeport Harbor Station Unit No. 3 in Connecticut, the last remaining coal plant in our power fleet. More recently, as part of our Strategic Alternatives process, we sold an additional 6,750 MW of fossil capacity, resulting in what now is a power portfolio that is among the top 10 producers of carbon-free energy in the U.S.

At the same time, we have accelerated our commitment to clean generation – including increased momentum toward investments in offshore wind generation and transmission, ongoing efforts to reduce the economic challenges facing the existing nuclear power fleet, and even exploring new investments in grid-connected storage and solar energy.

As a result of these actions, our utility business, PSE&G, is expected to contribute approximately 90% of our consolidated non-GAAP operating earnings in 2022 and beyond. Today, PSE&G is keenly focused on execution of our historic Clean Energy Future investment program, featuring our landmark $1 billion energy efficiency program, as well as the installation of advanced metering infrastructure and electric vehicle charging infrastructure across its service territory.

Moving forward, our utility efforts will turn toward extensions of our successful infrastructure modernization programs – Energy Strong and the Gas System Modernization Program – as well as new ventures such as our Infrastructure Advancement Program, with its focus on last-mile reliability to the home, as well as exploration of hydrogen as a potential grid decarbonization strategy.

As it has for more than a decade, the global challenges of climate change – including extreme weather where we operate – have been a motivating factor in the evolution of PSEG. Today, our vision for net-zero emissions by 2030 is leading the energy industry.

In November, I joined a small delegation of my fellow U.S. utility CEOs for COP26, the global climate conference in Glasgow, Scotland. As participants in the UN-sponsored Business Ambition for 1.5°C and the Race to Zero campaigns, I was able to share PSEG’s ambitious goals with business and government leaders from around the world.

COP26 provided an opportunity for government and business to focus our efforts on solving these generational climate challenges while also strengthening economies and communities. At this pivotal moment in the climate change crisis, it is clear that the momentum toward growth-oriented solutions is building every day – most importantly, here at home.

PSEG’s ongoing evolution touches all of our stakeholders – from our 12,500 employees, to the millions of homes and businesses we provide with safe, reliable and affordable energy, to the many diverse communities we serve across two states, and of course, to our shareholders. This transition, however, is meaningful beyond our portfolio of investments and the source of our earnings.

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Today, a company must have not only a clear vision, but also a clear purpose, so that you, our investors, and also our customers, our workforce of today and tomorrow, and the partners and officials we work with – all know what we stand for. PSEG’s vision is to power a future where we help our customers use less energy, and it’s cleaner, safer and delivered more reliably than ever.

Our purpose, our mission – the thing that gets us excited about getting up in the morning – is fourfold: to be a positive force in a changing world by providing an infrastructure to access safe, affordable, reliable and cleaner energy; to work toward a carbon-free economy; to empower the lives of our customers, our communities, our workforce and other stakeholders; and to embrace diversity and inclusion, and promote equitable and ethical behavior.

Throughout 2022, this mission will serve as the driving force behind our efforts to remain a sustainable company, and to prioritize environmental stewardship, social responsibility and ethical corporate governance (ESG).

During the coming year, we also will continue on our diversity, equity and inclusion journey – both internally and externally – as we focus on underrepresented voices and recognize and appreciate the diverse points of view and experiences that all of our employees and our customers have to offer.

We firmly believe that this powerful combination of attributes presented here – a best-in-class utility, a nearly carbon-free generation fleet, an expanse of clean energy growth opportunities, and a commitment to the principles of ESG – provides a compelling investment proposition and road map to a more sustainable, cleaner energy future.

We thank you, our shareholders, for your loyalty and support. We will continue to work hard and deliver our best effort, every day, to maintain your confidence and trust.


Ralph Izzo Signature

Ralph Izzo
Chairman, President and Chief Executive Officer
Public Service Enterprise Group

Feb. 24, 2022

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