Public Service Enterprise Group Incorporated (PEG): Business Model Canvas [Dec-2025 Updated]

You're trying to get a clear picture of Public Service Enterprise Group Incorporated's strategy, and frankly, it's a study in dual focus: anchoring stability while aggressively funding growth. We're looking at a utility where about 84% of its 2024 EPS came from the predictable, regulated New Jersey side, but that stability is funding a huge pivot, backed by a $22.5 billion to $26 billion capital plan through 2029, starting with $3.8 billion in 2025 infrastructure spending. This model hinges on maintaining their 3,758 MW carbon-free nuclear fleet while serving 4.3 million customers and managing key relationships with regulators like the New Jersey BPU. Dive below to see the nine blocks that explain how they generate their $11.71 Billion USD in trailing twelve months revenue and manage the risk of that massive investment. That's the real story here.

Public Service Enterprise Group Incorporated (PEG) - Canvas Business Model: Key Partnerships

You're looking at the core relationships that underpin Public Service Enterprise Group Incorporated (PEG)'s regulated and merchant operations as of late 2025. These aren't just vendors; they are essential governance and market access points. Honestly, the stability of the regulated utility business hinges on these agreements.

The New Jersey Board of Public Utilities (BPU) remains the most critical partner for PSE&G, dictating the returns on regulated investments. The settlement from the electric and gas distribution base rate case, which was approved in October 2024, is the current foundation for regulated returns. This settlement, the first since 2018, resulted in a typical combined residential electric and gas customer bill increase of 7% (or $15 per month), though other rate changes effectively lowered that impact to about 5%, or $11 per month, for those customers. This agreement also set the pre-tax WACC (Weighted Average Cost of Capital) at 9.14% for the recovery of prior investments. This regulatory framework directly supports the planned $3.8 billion regulated capital spending for 2025, which is part of a larger $21 billion to $24 billion regulated capital program projected through 2029.

For wholesale market access and capacity planning, PJM Interconnection is the key partner. PJM manages the grid across 13 states, and its capacity auctions set crucial forward pricing signals. The 2025/2026 Base Residual Auction (BRA) for capacity, which determines costs starting June 1, 2025, saw prices jump to $269.92/MW-day, a massive increase from the prior auction's $28.92/MW-day. This resulted in a total projected annual capacity cost for the region of $14.7 billion for that delivery year. Public Service Enterprise Group Incorporated's nuclear fleet, which supplied 7.9 TWh in the third quarter of 2025, benefits from these high clearing prices.

On the non-regulated side, the Long Island Power Authority (LIPA) provides revenue stability through its management contract for PSEG Long Island. LIPA recently awarded a five-year extension of the service contract, running through December 31, 2030, starting January 1, 2026. This extension is projected to be worth roughly $493 million in total and reduces management fees by an estimated $17 million. LIPA makes approximately $80 million in annual payments to Public Service Enterprise Group Incorporated under the current structure. This partnership is underpinned by strong operational metrics, including a 35% reduction in outage frequency since 2014.

Government and state agencies are central to implementing Public Service Enterprise Group Incorporated's Clean Energy Future (CEF) programs. The CEF-EE II program, approved by the BPU and running from January 2025 to June 2027, has an investment budget of $1.9 billion, plus nearly $1 billion for on-bill repayment financing. As of March 2025, nearly 465,000 customers participated in energy efficiency initiatives, collectively saving over $720 million annually on their utility bills. Furthermore, the Clean Energy Jobs Program has supported approximately 2,700 individuals in securing clean energy careers as of November 2024.

You can see the scale of these interdependent relationships in the table below:

The utility's capital plan is massive, with the five-year regulated investment projected to hit $21 billion to $24 billion through 2029. Also, the CEF-EE II program is projected to generate gross lifetime bill savings of approximately $4 billion for participants.

These partnerships are about more than just transactions; they define the operational boundaries and the allowed return on the $22.5B - $26B total capital program Public Service Enterprise Group Incorporated has planned through 2029.

Finance: draft 13-week cash view by Friday.

Public Service Enterprise Group Incorporated (PEG) - Canvas Business Model: Key Activities

You're looking at the core actions Public Service Enterprise Group Incorporated (PEG) takes to run its business as of late 2025. These aren't abstract goals; they are the daily, quarterly, and multi-year commitments driving their regulated utility and power generation segments.

Operating and maintaining New Jersey's largest electric and gas transmission and distribution system is central to the utility side. This involves keeping the lights on and the gas flowing for a massive customer base across the state.

The utility activity also includes managing the grid under stress. For instance, PSE&G managed a peak summer load of 10,229 MW in Q2 2025 and restored 99% of storm-interrupted service within 24 hours during a June heatwave.

A major focus is executing the $3.8 billion regulated capital investment plan for 2025. This single-year spend is part of a larger, multi-year commitment to keep the infrastructure modern and reliable. The total regulated capital investment program targeted for 2025 through 2029 is between $21 billion and $24 billion. This investment supports a targeted compound annual growth rate in the PSE&G Rate Base of 6% to 7.5% through 2029.

For the generation segment, a key activity is generating reliable, carbon-free baseload power from the 3,758 MW nuclear fleet. This fleet is a significant provider of clean energy in New Jersey. In the second quarter of 2025, the nuclear fleet produced 7.5 terawatt-hours (TWh) of energy, an increase from the prior year, partly due to improved plant availability and no refueling outages. Furthermore, Public Service Enterprise Group Incorporated (PEG) secured capacity in the PJM 2026/2027 auction for about 3,500 MW of nuclear capacity at a price of $329 per megawatt-day.

Managing regulatory filings to secure new base rates and investment recovery directly impacts utility earnings predictability. The results from the electric and gas distribution base rate case settlement implemented on October 15, 2024, reflected over $3 billion of prior system investments. The 2025 non-GAAP Operating Earnings guidance of $3.94 to $4.06 per share reflects the benefit of these new base rates being in effect for the full year.

Finally, Public Service Enterprise Group Incorporated (PEG) is actively rolling out the Clean Energy Future - Energy Efficiency II (CEF-EE II) program. This program cycle officially spans from January 2025 to June 2027.

• Investment Budget (Net of Admin): $1.9 billion.
• On-bill Repayment Program Funding: An additional $968 million.
• Program Goal (Year 5): 2.0% electric usage reduction and 0.75% gas usage reduction.
• Projected Lifetime Bill Savings: Approximately $4 billion.
• Job Creation Projection: Approximately 3,500 direct jobs annually.

Finance: draft 13-week cash view by Friday.

Public Service Enterprise Group Incorporated (PEG) - Canvas Business Model: Key Resources

Regulated Rate Base Foundation and Growth Trajectory

Public Service Enterprise Group Incorporated's regulated utility, PSE&G, is anchored by a substantial asset base. The regulated rate base was approximately $34 billion as of December 31, 2024.

This base is targeted to grow at a Compound Annual Growth Rate (CAGR) of 6% to 7.5% through 2029.

The capital program directly underpins this growth:

• Five-Year Capital Spending Plan (2025-2029): $22.5 billion to $26.0 billion.
• Regulated Investment within the Plan: $21 billion to $24 billion.
• 2025 Regulated Investment: $3.8 billion.

This level of committed spending is a key resource, creating significant barriers to entry for competitors in the New Jersey utility space.

Infrastructure Scale and Coverage

The physical assets supporting service delivery are vast. PSE&G operates as New Jersey's oldest and largest gas and electric delivery public utility.

The extensive electric and gas transmission and distribution infrastructure across New Jersey is a non-replicable asset, essential for meeting growing customer demand, including large load connections like data centers.

Carbon-Free Nuclear Generation Fleet

Public Service Enterprise Group Incorporated maintains an independent fleet of carbon-free nuclear power generating units, which provides reliable baseload power.

The total fleet size is 3,761 megawatt capacity, located across New Jersey and Pennsylvania.

This fleet is comprised of ownership stakes in key facilities:

• Hope Creek Generating Station (NJ): 100% ownership, with a capacity of 1,173 MW.
• Salem Generating Station (NJ): 57% ownership, with a total generating capacity of 2,295 MW.
• Peach Bottom Nuclear Plant (PA): 50% ownership.

These nuclear units generate about 40% of New Jersey's electricity and over 80% of the state's carbon-free electricity.

Advanced Metering Infrastructure (AMI) Deployment

The completion of the Advanced Metering Infrastructure (AMI) program represents a finished, critical resource for operational efficiency and customer data access. PSE&G installed more than 2 million smart meters. The multi-year effort aimed to replace 2.3 million existing electric meters. Full completion of the accelerated AMI meter deployment was achieved as of November 30, 2024. This infrastructure links smart meters to system-monitoring applications, enabling features like faster outage restoration and increased clarity on bills by eliminating most estimated bills.

Public Service Enterprise Group Incorporated (PEG) - Canvas Business Model: Value Propositions

You're looking at the core promises Public Service Enterprise Group Incorporated (PEG) makes to its customers and the market right now, late in 2025. It's all about reliable delivery and predictable financial footing.

Highly reliable, regulated electric and gas service for 4.3 million total customers

Public Service Electric and Gas Co. (PSE&G), the utility arm, is the backbone here, delivering essential services across New Jersey. The scale of this operation is significant, providing a foundational value proposition of consistent service delivery.

Stable, predictable returns driven by a predominantly regulated business model

The financial structure is intentionally weighted toward regulated operations, which means earnings are more visible and less subject to volatile wholesale power markets. This stability is a key proposition for investors seeking lower-risk returns. For the full year 2024, the company reported Non-GAAP Operating Earnings of $3.68 per share. Looking ahead, the business mix is expected to be ~90% regulated over the next five years.

Carbon-free baseload power generation with a Q1 2025 capacity factor of 99.9%

Public Service Enterprise Group (PEG) Power maintains a critical, clean energy asset base. The nuclear fleet provides essential 24/7 power, which is a major value driver in the current energy landscape. This reliability is quantified by operational metrics that are frankly best-in-class.

• Nuclear Fleet Owned Capacity: 3,758 MW
• Q1 2025 Nuclear Capacity Factor: 99.9%
• Q1 2025 Baseload Generation: Approximately 8.4 terawatt hours

Energy efficiency programs that help customers save energy and lower their bills

PEG actively invests in programs designed to manage energy demand and help customers control costs, which supports the regulated utility's mission and regulatory standing. The commitment here is backed by substantial, approved capital.

• Clean Energy Future - Energy Efficiency II Program (CEF-EE II) approved spending: Approximately $2.9 billion over a six-year period.
• The Conservation Incentive Program (CIP) helps decouple margin from sales volume volatility.

Grid modernization and resilience to support growing demand from electrification and data centers

The utility is investing heavily to ensure the physical infrastructure can handle future load growth, especially from emerging sectors like data centers and electric vehicle adoption. This forward-looking capital deployment is a direct value proposition to future customers and the state's economic development goals. If onboarding takes 14+ days, churn risk rises, so speed in connecting new load is key.

The company's 2025 regulated capital spending plan is set at ~$3.8 billion. Furthermore, the pipeline for new service connections, driven by large load inquiries, exceeded 6,400 megawatts of requested capacity as of March 31, 2025. The total projected regulated investment from 2025 to 2029 is in the $21 billion to $24 billion range.

Finance: draft 13-week cash view by Friday.

Public Service Enterprise Group Incorporated (PEG) - Canvas Business Model: Customer Relationships

You're looking at how Public Service Enterprise Group Incorporated (PEG) manages the direct connection with its ~2.4 million electric and ~1.9 million natural gas customers in New Jersey. It's a relationship heavily defined by regulation, but with clear efforts to drive satisfaction and manage future demand spikes. Public Service Enterprise Group Incorporated (PEG) serves approximately 2.4 million electric and 1.9 million natural gas customers.

Regulated Service Agreements and Stability

The core relationship is built on regulated service agreements, which is how Public Service Enterprise Group Incorporated (PEG) minimizes direct exposure to volatile energy tariffs and aims for stable returns. The recent electric and gas distribution base rate case settlement in 2024, effective for a full quarter starting October 15, 2024, helps recover prudent investments. To further stabilize distribution margin and customer rates, the Conservation Incentive Program (CIP) decouples revenues, which allows for broad energy efficiency adoption. This focus on cost control supports customer affordability, with Public Service Enterprise Group Incorporated (PEG) reporting the lowest gas bills and average electric bills versus regional peers. This predictability is key to their financial outlook, targeting a 2025 non-GAAP Operating Earnings guidance of $3.94 to $4.06 per share, up 9% at the midpoint over 2024 results.

The utility is also managing rate changes carefully; for instance, Public Service Enterprise Group Incorporated (PEG) filed for a change in the basic gas supply commodity charge to ~$0.36 per therm (up from ~$0.33 per therm) effective December 1, 2025.

High-Touch Service for Large Load Inquiries

For your largest customers, especially those driving massive demand like data centers, Public Service Enterprise Group Incorporated (PEG) shifts to a high-touch service model. The pipeline of potential large load customers seeking new service connections saw a dramatic surge. As of the end of June 2025, this pipeline jumped to 9.4 GW, a 47% increase from just three months prior. This is a significant increase from the 4,700 MW in total inquiries seen over the past year, compared to about 400 MW in 2023. Still, the utility manages expectations, only expecting roughly 10% to 20% of these interconnection inquiries to actually materialize.

Here's a quick look at the scale of these inquiries and the utility's expectation management:

This high-volume engagement requires dedicated resources, including a team of Major Accounts employees liaising with key personnel at these large businesses.

Customer Satisfaction and Digital Engagement

For the residential base, Public Service Enterprise Group Incorporated (PEG) has seen tangible results from its customer focus efforts. In 2024, J.D. Power recognized Public Service Electric & Gas (PSE&G) as the #1 utility for residential customer satisfaction with both electric and gas service in the East among large utilities. Furthermore, in a 2025 J.D. Power Study, customers rated PSE&G the Most Appealing Brand among Residential Electric and Gas Utilities in the East.

The company also supports customer self-service through technology investments:

• Completed the Advanced Metering Infrastructure (AMI) program.
• Installed approximately 2.2 million PSE&G smart meters.
• These systems enable digital self-service options for customers.

The dividend policy also reflects commitment to stakeholders, with the first-quarter common stock dividend at an indicative annual rate of $2.52 per share, a 5% increase for 2025.

Public Service Enterprise Group Incorporated (PEG) - Canvas Business Model: Channels

Public Service Enterprise Group Incorporated (PEG) utilizes a multi-faceted channel strategy to interact with its customer base and regulatory bodies, primarily through its Public Service Electric and Gas Co. (PSE&G) subsidiary.

Physical electric and gas transmission and distribution network

The physical network is the core channel for service delivery, connecting the utility to its customer base across New Jersey. As of late 2025, the scale of this infrastructure supports millions of customers.

Customer service centers and call centers for billing and outage reporting

Direct customer interaction for support, billing inquiries, and immediate outage reporting relies on established service centers and call center operations. PSE&G is recognized for its business customer service performance.

• PSE&G received the #2 ranking in the J.D. Power 2025 Electric Utility Business Customer Satisfaction Study for the East Large Segment.
• The industry standard for Average Handle Time (AHT) in customer service call centers is around 7 to 10 minutes.
• The industry standard call center occupancy rate ranges from 75% to 85%.
• The industry standard call transfer rate benchmark is 15% or less.

Digital channels including website and mobile apps for account management and energy data

Digital engagement is supported by infrastructure upgrades and specific program rollouts that provide customers with usage data and management tools.

• The Advanced Metering Infrastructure (AMI) program is completed, with approximately 2.2 million smart meters in-service.
• The AMI implementation provides a foundation for better service, including granular usage information and faster outage detection.
• Through March 2025, nearly 465,000 customers actively participated in PSEG's energy efficiency initiatives.
• The Electric Vehicle (EV) program has approximately 28,000 chargers energized to date (as of November 2025), with an additional ~12,000 in the application queue.

Direct engagement with state regulators (BPU) for rate and program approvals

Rate and program approvals from the New Jersey Board of Public Utilities (BPU) are a critical channel for authorizing investment recovery and new customer offerings. This involves formal filings and participation in hearings.

On-bill repayment options for energy efficiency equipment financing

On-bill repayment (OBR) is a specific financing channel integrated into customer bills, supporting the Clean Energy Future programs. This helps customers finance energy-saving upgrades.

• The BPU approved total energy efficiency programs since inception of approximately $3.2 billion investment plus approximately $1 billion for on-bill repayment financing.
• The CEF-EE II program, effective January 1, 2025, includes approximately $1 billion of on-bill repayment options to help finance energy efficiency equipment and appliances over a six-year period.
• Through March 2025, customers actively participating in efficiency initiatives collectively saved over $720 million annually on their utility bills.
• Since the start of the program, customers received approximately $740 million in rebates.

Public Service Enterprise Group Incorporated (PEG) - Canvas Business Model: Customer Segments

Public Service Enterprise Group Incorporated (PEG) serves distinct customer segments across its regulated utility operations in New Jersey and its power generation business.

The core utility customer base for Public Service Electric and Gas Company (PSE&G) in New Jersey is substantial, covering both electric and gas services.

The PSEG Long Island segment, operating under the operations service provider contract for the Long Island Power Authority, serves a separate electric customer base.

• Electric customers served by PSEG Long Island: 1.2 million as of November 2025.
• Commercial customers served by PSEG Long Island: more than 130,000 as of November 2025.

The Commercial and Industrial (C&I) segment for PSE&G is currently characterized by significant interest from large energy users, particularly data centers, which are not captured by the standard econometric load forecast model.

The pipeline for large load inquiries, heavily driven by data centers, shows rapid growth:

• Total large load inquiries as of June 30, 2025: over 9,400 megawatts (MW).
• This represents a 47% jump from the 6,400 MW reported at the end of March 2025.
• Approximately 90% of the 9,400 MW in large load projects is attributed to planned data centers.

For context on the existing data center footprint, as of Summer 2024, PSE&G served 39 data centers sites with a forecasted summer peak demand of 343 MW.

Public Service Enterprise Group Incorporated, through PSEG Power, also serves the wholesale energy markets, primarily through its nuclear fleet capacity in the PJM Interconnection.

The nuclear segment is focused on optimizing output, such as extending the Hope Creek fuel cycle to produce more megawatt hours moving forward.

Public Service Enterprise Group Incorporated (PEG) - Canvas Business Model: Cost Structure

You're looking at the core expenses that Public Service Enterprise Group Incorporated (PEG) faces to keep the lights on and the gas flowing across New Jersey. This cost structure is heavily weighted toward regulated asset maintenance and debt obligations, which is typical for a large, capital-intensive utility.

The commitment to infrastructure renewal is a major line item. Public Service Enterprise Group Incorporated planned capital expenditures for regulated infrastructure at $3.8 billion for 2025. This investment fuels the rate base growth, targeting a compound annual growth rate of 6% to 7.5% for the PSE&G Rate Base through 2029.

Servicing the capital base requires significant cash flow dedicated to debt. As of the third quarter of 2025, the total long-term debt outstanding across the consolidated entity was substantial. You can see the breakdown below, but the total debt service costs are directly related to the aggregate long-term debt, which totaled $22.54 billion as of Q3 2025, calculated from the segment debt figures.

Operating costs are also substantial, reflecting the day-to-day running of the utility and the nuclear fleet. We can look at the third quarter of 2025 results to get a snapshot of these recurring expenses, which include fuel, purchased power, and the labor/materials for maintenance. The company demonstrated an ability to control these costs, which helps provide headroom for capital investment recovery.

Depreciation and amortization expenses are a direct consequence of that large, growing asset base. As you invest billions in regulated infrastructure, the non-cash charge for wearing out those assets increases, which is a key component of the overall cost structure that regulators allow Public Service Enterprise Group Incorporated to recover through rates.

Here's a quick look at some of the key financial figures from the third quarter of 2025 for context on the scale of these costs:

The long-term debt structure as of September 30, 2025, shows where the financing obligations lie:

• PSEG Parent Long-Term Debt Outstanding: $5.31 billion
• Public Service Electric & Gas (PSE&G) Long-Term Debt Outstanding: $15.99 billion
• PSEG Power Long-Term Debt Outstanding: $1.24 billion
• Total Long-Term Debt (Sum of above): $22.54 billion

Furthermore, the company's regulated capital spending plan for 2025 is set at approximately $3.8 billion. This heavy investment in infrastructure modernization, energy efficiency, and load growth is the primary driver of future depreciation expenses, which are necessary to maintain and grow the rate base.

You should also note the O&M expenses reflect the company's focus on cost control to mitigate inflationary impacts, which is key to preserving customer affordability.

Finance: draft 13-week cash view by Friday.

Public Service Enterprise Group Incorporated (PEG) - Canvas Business Model: Revenue Streams

You're looking at the core ways Public Service Enterprise Group Incorporated (PEG) brings in cash, which is heavily weighted toward its regulated utility operations in New Jersey. Honestly, the stability here is what anchors the whole model, but the wholesale power sales add a layer of market exposure.

The biggest chunk of revenue comes from the regulated side through Public Service Electric and Gas Company (PSE&G). This is the bread and butter, covering the delivery of electricity and gas to their customer base. The recent rate case settlement from late 2024 is a big driver here. For instance, in the third quarter of 2025, PSE&G alone reported net income of $622 million and non-GAAP Operating Earnings of $565 million, up from $520 million and $448 million, respectively, in the third quarter of 2024. This reflects a full quarter of the new electric and gas base distribution rates that kicked in on October 15, 2024, which are designed to recover over $3 billion in prior system investments.

Here's a quick look at how the regulated utility segment performed in the first three quarters of 2025:

Next, we have regulated transmission revenue, which Public Service Enterprise Group Incorporated (PEG) collects under Federal Energy Regulatory Commission (FERC) formula rates. These rates are key because they allow for timely recovery of capital investments in transmission infrastructure. While the specific $64 million figure you mentioned for January 1, 2025, isn't explicitly confirmed in the latest filings, we do see forward-looking indications of similar mechanisms. For example, a major transmission project awarded in late 2023 is set to recover costs via FERC regulated rate base formula rate recovery, with a filing indicating potential for $65 million in increased annual transmission revenue effective January 1, 2026, subject to true-up. That formulaic recovery provides a predictable revenue stream.

The wholesale market revenue stream comes from PSEG Power, primarily through the sales of carbon-free nuclear energy and capacity. This revenue benefits significantly from federal incentives. The positive contribution from the estimated federal nuclear Production Tax Credit (PTC) is a major factor supporting earnings, which is expected to be in effect through 2032. The performance here shows up in the PSEG Power & Other segment's non-GAAP Operating Earnings:

• First Half of 2025 Non-GAAP Operating Earnings: $224 million compared to $180 million for the first half of 2024.
• Second Quarter 2025 Non-GAAP Operating Earnings: $52 million, a substantial jump from $11 million in the second quarter of 2024.

When you aggregate all these sources, the overall financial picture for Public Service Enterprise Group Incorporated (PEG) as of late 2025 is substantial. The Total revenue for 2025 (TTM) is approximately $11.71 Billion USD. This reflects a strong year-over-year increase, especially compared to the $10.29 Billion USD reported for full-year 2024. Furthermore, management's outlook for profitability remains solid, with the Non-GAAP Operating Earnings guidance for 2025 narrowed to $4.00 to $4.06 per share, which is up about 9% at the midpoint over 2024 results. This guidance sets the base for their reiterated long-term 5% to 7% compound annual growth rate in non-GAAP Operating Earnings through 2029. Finance: draft 13-week cash view by Friday.