Kathleen A. Lally - Vice President of Investor Relations Ralph Izzo - Chairman, Chief Executive Officer, President, Chairman of Executive Committee, Chairman of PSEG Power LLC, Chairman of Public Service Electric & Gas Company, Chief Executive Officer of PSEG Power LLC and Chief Executive Officer of Public Service Electric & Gas Company Caroline D. Dorsa - Chief Financial Officer and Executive Vice President

Travis Miller - Morningstar Inc., Research Division Dan Eggers - Crédit Suisse AG, Research Division Andrew Levi Paul B. Fremont - Jefferies & Company, Inc., Research Division Neel Mitra - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division Jonathan P. Arnold - Deutsche Bank AG, Research Division Paul Patterson - Glenrock Associates LLC Julien Dumoulin-Smith - UBS Investment Bank, Research Division Michael J. Lapides - Goldman Sachs Group Inc., Research Division Brian Chin - Citigroup Inc, Research Division

Ladies and gentlemen, thank you for standing by. My name is Kimiko, and I'm your operator today. I would like to welcome you to today's conference of Public Service Enterprise Group Fourth Quarter 2012 Earnings Conference Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded, Thursday, February 21, 2013, and will be available for telephone replay beginning at 1:00 p.m. Eastern Time today until 11:30 p.m. Eastern Time on March 4, 2013. It will also be available as an audio webcast on PSEG's corporate website at www.pseg.com. I would now like to turn the conference over to Kathleen Lally. Please go ahead. Kathleen A. Lally: Thank you, Kimiko. Good morning, everyone. We appreciate your participating in our earnings call this morning. As you are aware, we released our fourth quarter and full year 2012 earnings statements earlier today. And as mentioned, the release and attachments are posted on our website, www.pseg.com, under the Investors section. We also posted a series of slides that detail operating results by company for the quarter. Our 10-K for the year ended December 31, 2012 is expected to be filed shortly. We won't go through the entire disclaimer or the comments we have on the difference between operating earnings and GAAP results, but we do ask that you read those comments contained in our slides and on our website. The disclaimer statement regards forward-looking statements detailing the number of risks and uncertainties that cause actual results to differ materially from forward-looking statements made therein. And although we may elect to update forward-looking statements from time to time, we specifically disclaim any obligation to do so, even if our estimates change, unless required by applicable securities laws. We also provide you with a commentary on the difference between operating earnings and net income reported in accordance with Generally Accepted Accounting Principles in the United States. PSEG believes that the non-GAAP financial measure of operating earnings provides a consistent and comparable measure of performance to help shareholders understand trends. I will now turn the call over to Ralph Izzo, Chairman, President and Chief Executive Officer of Public Service Enterprise Group. And joining Ralph on the call is Caroline Dorsa, Executive Vice President and Chief Financial Officer. At the conclusion of their remarks, there will be time for your questions. [Operator Instructions]

Nice try, Kathleen. Thank you, Kathleen, and thanks, everyone, for joining us on today's call. Now before I review the earnings we reported earlier this morning, I want to recognize the extraordinary response by PSEG's employees to Superstorm sandy. This truly epic storm challenged us more than any other natural disaster in PSEG's 109-year history. Every aspect of our business was affected by the storm, electric and gas distribution, as well as transmission and power generation. We restored service to more than 2.1 million customers in a 2-week period of time. We reactivated generating facilities damaged by the storm surge and we repositioned our portfolio in response to the storm's impact on our facilities. We came through this unprecedented storm because our employees worked around the clock to restore service to our customers. We also owe a debt of gratitude to all the employees of utility companies from outside the state who helped us restore our system to working order. We take our commitment to serve the public very seriously, and our employees demonstrated that commitment in the aftermath of Sandy, even at great personal sacrifice. There is simply no better group of people to get the job done. A s we've disclosed previously, we estimate the cost of restoring service and getting back to normal operations at approximately $295 million of PSE&G. Today, we want to let you know that damage from Sandy could cost up to $300 million of PSEG Power. We incurred $85 million of this expense in the fourth quarter of 2012, the amount that PSEG Power will be spent over a 2-year period. The estimate of the storm's impact on our cost doesn't reflect any recovery from our insurance carriers, which we are pursuing. Superstorm Sandy has also caused us to review our investment program, to pursue measures targeted at fortifying our electric system and helping prevent a similar level of storm-related damage in the future. We have filed proposals with the New Jersey Board of Public Utilities that would strengthen our infrastructure, provide us with better intelligence on system outages, enhanced communications with our customers and local stakeholders and improve on the already reliable service expected by our customers. Our plans call for an increase in our distribution capital program of up to $3.9 billion over the next 10 years, with an additional $1.5 billion targeted at our federally regulated transmission system to harden and improve the resiliency of the grid. We propose spending up to $2.8 billion of this $5.4 billion amount through 2017. The initial phase of the program entails spending on upgrades to our electric and gas distribution system and strengthening the backbone of our transmission infrastructure. We filed a proposal with the BPU yesterday, and let me remind you, the $3.9 billion is what was filed with the BPU, and the $1.5 billion related to transmission is separate and apart from that and is a FERC matter. In the meantime, we expect to hear from the BPU in the second quarter on our request to spend up to $883 million on the expansion of solar capacity in the state through our Solar Loan and Solar 4 All investment programs. We originally filed those with the BPU in July of 2012. We are working closely with the state to ensure our investment in solar meets their objectives. These programs together represent a potential investment of over $6 billion. Our commitment from PSE&G to help New Jersey rebuild from Sandy in ways that not only address immediate needs but provide lasting benefits to the customers and communities we serve. The programs will also provide substantial benefits to New Jersey's economy, with the creation of thousands of additional skilled jobs, and all of these investments can be supported without the need to issue additional equity. We view these programs as a natural extension of our strategies to maintain PSE&G as one of the nation's most reliable utilities and expect these programs to sustain the performance and growth of our regulated business. Now let me address our earnings. This morning, we reported operating earnings for 2012 of $2.44 per share. This is at the upper end of our guidance for the year and we managed to achieve these results despite a decline in hedged energy prices and the cost impacts of Superstorm Sandy. The results reflect the continued benefits from our employees' focus on operating excellence, the asset diversity and fuel flexibility of our generating fleet and the returns on our investment program. Excluding storm-related expenses, PSEG Power reduced its O&M year-over-year. We added 400 megawatts of new more efficient peaking capacity in New Jersey and Connecticut. We expanded Energy Holdings portfolio of operating solar projects to 5, which brought its capacity to 69 megawatts, and we received critical regulatory approval supporting the multibillion dollar investment we are making in our electric transmission system. We also continue to be advocates for a competitive wholesale power market and we work tirelessly in support of rules that maintain a level playing field for investment. We expect our operating earnings in 2013 to continue to benefit from the focus we have placed on operational excellence and disciplined investment. We are initiating operating earnings guidance for 2013 of $2.25 to $2.50 per share. Although guidance is in line with our forecast for '12, PSEG is truly at a transition point. The utility, PSE&G, has grown to represent a larger percentage of our consolidated earnings in 2012, and is expected to grow at a double-digit rate in 2013. PSEG Power has done an excellent job of reducing its cost in response to a decline in power prices and we have recently seen more stability in the power market. Power's actions place it in a position to take advantage of future improvements. Our balance sheet and cash flow remain strong. The Board of Directors recently approved an increase in the common stock dividend to an indicated annual rate of $1.44 per share. The decision represents the ninth increase in the dividend in the last 10 years, and we are in a position to support the opportunity for growth in our dividend as we finance our expanded capital program without the need to issue equity. All of these statements, and I'll repeat some of them, our earnings guidance, our dividend action and outlook, our capital program, our ability to finance without the need to issue equity, all of these are based upon the current forward price curve. We've come a long way over the past 4 years. We're building a sustainable platform that balances reliability, affordable customer rates and support for public policy to ensure growth at reasonable returns. And now I'll turn the call over to Caroline for more details on our results, and we'll be available to answer your questions at the close of the call. Caroline D. Dorsa: Thank you, Ralph, and good morning, everyone. As Ralph said, PSEG reported operating earnings for the fourth quarter of $0.41 per share versus operating earnings of $0.47 per share in last year's fourth quarter. Our earnings for the fourth quarter brought operating earnings for the full year to $2.44 per share versus operating earnings for 2011 of $2.74 per share. Our current results were at the upper end of our operating earnings guidance for the year of $2.25 to $2.50 per share. On Slide 4, we've provided you with a reconciliation of operating earnings to income from continuing operations and net income for the quarter. And as you can see on Slide 10, PSEG Power provided the largest contribution to earnings. For the quarter, Power reported operating earnings of $0.24 per share compared to $0.27 per share last year. PSE&G reported operating earnings of $0.15 per share compared to $0.19 per share last year, and Energy Holdings and parent together contributed $0.02 per share to operating earnings compared with operating earnings of $0.01 per share in the year-ago quarter. As always, we've provided you with waterfall charts on Slides 11 and 13 to take you through the net changes in quarter-over-quarter and year-over-year operating earnings by major business. Needless to say, Superstorm Sandy had a major impact on our operations in the fourth quarter and we'll highlight that impact across PSEG. Let me now review each company in more detail starting with Power. As shown on Slide 15, PSEG Power reported operating earnings for the fourth quarter of $0.24 per share compared with $0.27 per share a year ago. The results for the quarter brought Power's full year operating earnings to $1.27 per share. Power's fourth quarter operating earnings benefited from a strong control of operating expense, higher price for capacity and improved performance from the fossil fleet. PSEG Power's generation and maintenance facilities were affected in the quarter by the storm surge associated with Superstorm Sandy. Over the 2-year period following the October 2012 storm, the cost to restore Power's facilities is estimated at up to $300 million. This figure doesn't include any proceeds from insurance claims, which, as received, will offset this gross amount. Of this potential total amount, Power incurred $85 million in higher operating and maintenance expenses and recognized insurance proceeds of $19 million in the fourth quarter, which offset a portion of this cost. We are excluding these costs from the calculation of Power's operating earnings given the unusual nature of the storm and the effect on Power's operations. But you can see the net after-tax impact of $39 million or $0.08 per share, which reflects both the cost and the insurance recovery in the fourth quarter and you'll see that on Attachment 12 of the earnings release, where we show all the reconciling items from operating earnings to continuing operations. Please note that the insurance claims process is just underway, and this initial recovery is not indicative of any final settlement amount or final settlement percentage relative to the amount spent. Let's now turn to Power's operations. Operating earnings declined by $0.08 per share quarter-over-quarter as a result of lower realized prices for energy under contract, both through the BGS contract and other PJM West hedges. Average spot wholesale prices improved in the quarter relative to year-ago levels, leading to a small improvement in margin on volumes associated with customer migration relative to their impact last year. The impact on earnings from the decline in the average price per hedged energy was partially offset in the quarter by higher capacity prices. An increase in capacity prices on June 1, 2012, to $153 per megawatt day from $110 per megawatt day as the prior price improves Power's quarter-over-quarter earnings by $0.06 per share. And you'll recall, we spoke about this year-over-year increase last quarter as well. Taken together, the impact of higher capacity prices in the last 7 months of 2012 offset lower prices realized earlier in 2012 relative to 2011's capacity revenue, resulting in no change in earnings from capacity value on a year-over-year basis. Power undertook a series of actions throughout the year to control its operations and maintenance expense levels. A reduction in operations and maintenance expenses exclusive of the storm-related activity improved quarter-over-quarter earnings comparisons by $0.02 per share, and for the year, that brings the total O&M reduction to $0.05 per share or 3.8% from last year's O&M levels. A premium paid on the early extinguishment of debt in the fourth quarter of 2012 increased Power's interest expense by $0.02 per share but didn't affect quarter-over-quarter earnings comparisons, given a similar level of expense incurred for early extinguishment during the fourth quarter of 2011. Other items including the absence of a gain in the year-ago quarter from the sale of coal resulted in a net decrease in earnings of about $0.01 per share. A loss of generating capacity on a temporary basis in the quarter as a result of the storm resulted in a 4% decline in generation volume. The decline in generation reduced earnings quarter-over-quarter by $0.02 per share. However, Power was always able to meet all demand as the distribution system was restored. The nuclear fleet operated at a consistently strong capacity factor for the year of 91.1%. The impact of the storm on Salem's availability reduced the fleet's capacity factor by 0.3%. The fourth quarter refueling added to Salem 2 was delayed for 2 days to reduce the risk to employee safety during the storm. And Salem 1 was removed from service for 5 days to reduce the risk of damage from the storm surge on the unit's intake valves. Hope Creek's operations, however, were not affected by the storm and that unit operated at a capacity factor in excess of 99% in the quarter. Power's Linden gas-fired combined cycle generating facility suffered damage from the storm and the facility has since been returned to service. The decline in generation at Linden was partially offset by improved performance at the Bergen and Bethlehem, New York gas-fired combined cycle generating facilities, as well as an improvement in generation from Power's low-cost baseload coal-fired generating units. Slide 17 provides more detail on generation in the quarter and for the year. Power's forecasted output for 2013 of 53 to 55 terawatt hours is approximately 75% to 80% hedged at an average price of $50 per megawatt hour, which compares with an average hedged price in 2012 of about $60 per megawatt hour. For 2014, forecasted output of 53 to 55 terawatt hours is approximately 50% to 60% hedged at an average price of $49 per megawatt hour. The results I just mentioned reflect the impact of the February 2013 auction for BGS in New Jersey. Average prices of $92 per megawatt hour in the latest BGS auction for the PSE&G zone will replace BGS auction prices of approximately $96 per megawatt hour for the 3-year period beginning on June 1st of 2013. As we noted in our release, this year's BGS auction price, while an increase from 2012's level, reflects increased costs for transmission, renewables, as well as energy. Our hedged data assumes volumes hedged at BGS prices represent about 22% of our forecasted volume in 2013 or approximately 12 terawatt hours. For 2014, we're assuming that volumes hedged at BGS prices represent approximately 10 terawatt hours, consistent with our earlier expectations. Although BGS has declined in importance as a means of hedging our volume, the real impact on Power from customer migration away from BGS relates, as it always has, to the differential between the average price for energy embedded in the BGS contract and the market price for energy, which moderated in the fourth quarter of 2012 versus last year. We expect our fuel mix in 2013 to be similar to 2012. Although strong wholesale prices have supported the operation of some of our intermediate load coal-fired generating units earlier in the year, the markets remain more supportive of operating our gas-fired combined cycle units, and we anticipate running our dual fuel intermediate coal units on gas, as well as coal. Power's operating earnings for 2013 are forecast at $535 million to $600 million. This excludes the impact for any cost related to the Sandy's -- the repair for Sandy, as well as associated insurance proceeds. These 2 items will continue to be reported below operating earnings and we'll do so on an actual basis. Now let's turn to PSE&G. PSE&G reported operating earnings for the fourth quarter of 2012 of $0.15 per share compared with $0.19 per share for the fourth quarter of 2011, as we show on Slide 25. PSE&G's full year 2012 operating earnings were $528 million or $1.04 per share, exceeding 2011's operating earnings of $521 million or $1.03 per share. PSE&G's fourth quarter and full year results reflect the impact of Superstorm Sandy on operating expenses, which more than offset the return on increased levels of capital investment. We estimate the cost of restoring PSE&G's system in the wake of Superstorm Sandy amounted to approximately $295 million. Of this amount, approximately 14% or $40 million, $0.05 a share, was expensed and is included in 2012's fourth quarter and full year operating earnings. Note that unlike for Power, we're not carving storm costs out of PSE&G, as storms regularly impact the utility. The cost of storm restoration in 2012 was greater than the storm-related cost PSE&G incurred in the prior year related to the October 2011 snowstorm and reduced earnings quarter-over-quarter by $0.04 per share. A known increase in other operating expenses, primarily pension, reduced earnings comparisons by $0.02 per share quarter-over-quarter. PSE&G's earnings continue to benefit from an increase in transmission revenue. Earnings improved by $0.02 per share quarter-over-quarter as a result of the annualized increase in transmission revenue effective throughout 2012. Earnings also benefited from weather, which was colder than conditions experienced in the year-ago quarter and favorable weather -- that comparison added about $0.02 per share to earnings. Other factors, including depreciation and taxes, reduced earnings by $0.02 per share in the quarter. Most significant event in the quarter, however, was Superstorm Sandy. Widespread outages resulted in a loss of about 3.4% of October customer hours, and about 5.4% of November customer hours. On a weather-normalized basis, not accounting for the impact of Sandy, it's estimated that electric sales declined by about 1.6% in the fourth quarter, which resulted in a year-over-year decline in weather-normalized electric sales of 0.6%. Weather-normalized sales to the residential class actually increased by 3.2% from the fourth quarter of 2011 that had extremely warm weather, as you may recall, that resulted in a significant drop in heating load. For the year, residential sales were 1.3% higher than 2011 on a weather-normalized basis. Commercial and industrial sales, however, declined by 3.7% on a weather-normalized basis in the fourth quarter, and 1.4% for the year. These estimates are not adjusted for the impact of Superstorm Sandy on sales, and we estimate if not for the storm, weather-normalized sales for the year would have been relatively unchanged overall versus 2011. PSE&G's operating earnings for 2013 are forecast at $580 million to $635 million. Operating results will be influenced by higher transmission revenues on a higher level of investment. Recall increased transmission revenues of $174 million are in effect as of January 1 of this year compared to last year's increase of $94 million. The increase in transmission revenue provides for the recovery of O&M and capital on our investment to support earning our authorized return. In addition, PSE&G's control of operating and maintenance expense should be aided by a forecast decline in 2013's pension expense, which I'll mention again in a few moments. Now let's turn to PSEG Energy Holdings and parent. Energy Holdings and parent combined reported operating earnings for the fourth quarter of $10 million or $0.02 per share, compared to operating earnings of $4 million, $0.01 per share for the fourth quarter of 2011. The results for the fourth quarter brought Energy Holdings parent full year 2012 operating earnings to $64 million or $0.13 per share compared with 2011's operating earnings of $23 million or $0.04 per share. The fourth quarter results for Energy Holdings and the parent were aided by the startup and recognition of investment tax credit benefits on our 2 -- on our new investments in 2 solar projects at Milford and Queen Creek, which added 40 megawatts of solar capacity to Energy Holdings' portfolio. At the end of 2012, Energy Holdings had a gross investment of approximately $240 million, and a total of 69 megawatts of solar capacity. The portfolio is expected to grow in 2013 with an investment of approximately $50 million and a 19 megawatt solar project in Arizona scheduled for commercial operation during the second half of this year. We're forecasting operating earnings in 2013 for PSEG Energy Holdings and parent of $25 million to $35 million, and these results will be affected by the absence of tax benefits received in 2012 related to the settlement of both LILO/SILO, which, as you recall, is fully settled, as well as the closure of audit years fully through 2006. Now just a word on pension. We contributed $224 million to our pension trust in 2012, and $1.4 billion in the aggregate for the 4 years ended 2012. These pension contributions, as well as double-digit returns on our pension trust during 2012, more than offset the impact on pension expense for 2013, from an 80 basis point decline in the discount rate to 4.2% for 2013. As a result, we're forecasting a slight year-over-year decline in pension and OPEB expense, which helps to mitigate the impact of other cost pressures on operations and maintenance expense. PSEG closed the year with $379 million of cash on the balance sheet and debt represented approximately 41% of consolidated capital. After the early redemption of $250 million of senior notes at Power in December, debt represented 30% of Power's capitalization at yearend. So our balance sheet and strong credit metrics support our plans for capital spending and dividend distribution without the need to issue equity. As Ralph indicated, we are guiding to operating earnings for 2013 of $2.25 to $2.50 per share, and we'll provide more detail on our outlook at our annual financial conference on March 1. With that, that finishes my remarks, and we'll now turn it over to the operator to introduce your questions. Thank you.

[Operator Instructions] And your first question is from Travis Miller of Morningstar. Travis Miller - Morningstar Inc., Research Division: I wanted to get more into the dividend policy, where you think that dividend is going. When you think of, given the CapEx spend and such, do you think you could grow the dividend in line with earnings? Do you think about it in line with corporate earnings and in line with utility earnings? Give us a sense of that growth.

Travis, thanks for your question. What we've consistently said to folks is we don't have a dividend growth rate target, we don't have a payout ratio target. Both of those are items we consider, as well as the relative cash being generated by the businesses and the cash requirements of the businesses. So we summarize it by saying that we do believe we have an opportunity for modest growth in the dividend, consistent with what we see right now in terms of the cash generation and needs of the business, but we don't get numerical or quantitative on it. I mean, we've grown it, 9 or the last 10 years, it's been about a compound annual growth rate of 3%. We've paid it annually for over 100 years, so we try to give you comfort about it without giving you a specific, here's the growth rate. Travis Miller - Morningstar Inc., Research Division: Okay. And the second question, on the BGS auction, particularly looking at that incremental $53 a megawatt hour, you signed all those extra elements, how did that correspond with your expectations? And obviously, the capacity revenues were set. But if you take out that, how did that incremental part line up with your expectations? Caroline D. Dorsa: Sure, Travis. So it really lined up relatively well with our expectations. Because if you think about it, and I know we've talked about this, and Kathleen spoke with folks earlier about this after BGS results came out, the 2 pieces that we pointed to as growing in that green section were the green energy component, right? The renewables. And also transmission. And so transmission wasn't a surprise to us because it really reflects the inclusion in cost for the BGS contract from the significant transmission work that's underway at PSE&G, which we've been talking about, right? So the significant transmission work that's been underway in PSE&G for some time, as well as the ongoing program for increased transmission spend, that is part of the base we've been talking about for a while, it finds its way into those numbers, because obviously, every BGS provider has to fully support the full transmission build out. So that wasn't really a surprise to us. Don't forget, of course, the other thing that increased slightly from the 2012 level was energy based on the PJM Westford energy price. So these results were relatively consistent with our expectations, and the way we think about this is really what you're seeing now is stability in BGS as the PJM West prices have been stable on a year-over-year basis.

And your next question is from Dan Eggers, and he is at Crédit Suisse. Dan Eggers - Crédit Suisse AG, Research Division: Can you mind talking a little bit about the big transmission -- or the big CapEx program you announced yesterday as far as what is the approval process to line up investment both on the distribution side and on the transmission side and maybe a timeline of when you think you'd get approvals to start making those investments?

Sure, Dan. So on the distribution side, if you think of these the same way we thought about what we used to call our CIP programs, our capital infrastructure programs, so there is no time requirement for the BPU to act. These are clause recovery mechanisms that we're proposing. And the pace of review and approval is really directly proportional to the importance that the BPU ascribes to storm readiness. So we expect the BPU to fully scrub the numbers and go through and think about cost benefit. I think they'll trust our judgment in terms of what the priorities are and which substation is the most critical and which switching stations are most critical. But it really is a question for them in terms of what pace of action they want to see occur. I mean, we are a reliable utility. This is not needed for day-to-day reliability. This is to respond to enhanced extreme weather and enhanced reliance on electricity on the part of customer lifestyles. Transmission is a wholly separate story. Those are supplemental projects that come out of our analysis of RTEP. And while PJM can reject those, we don't need to wait for them to be included in the RTEP, and you can be assured that we've scrubbed those pretty tightly and we'll put them into formula rates as the work begins. And let me remind you that, that $1.5 billion is above what we've already announced previously for transmission. So PJM will conduct their no-harm review, and that will just then go into formula retreatment. Dan Eggers - Crédit Suisse AG, Research Division: Okay. And just to make sure I understand on the distribution side. So do you have to get approval to get treatment for these under the capital writer that you've had in the past or is that something that you guys think you can just implement now?

No, we would only do these under a capital writer program. What we proposed is one that's identical to what we had and what we call CIP 1. And CIP 2, that was different writer and that was obviously acceptable to us then, it would be acceptable to us now. And we want to be flexible in talking with the staff and the BPU about what the recovery mechanism is, but we are not going to make these investments under traditional regulatory lag programs. Dan Eggers - Crédit Suisse AG, Research Division: Okay. And then I guess from a spending perspective, as you scale in, a lot of that money is kind of in the next 3 or 4 years, should we assume that not a lot in '13 and have it ramp up in '14 and '15 or is it something you guys are going to get into at the Analyst Day?

Yes. We'll get into more details at the Analyst Commerce, but yes, what you said is accurate, you should not assume a lot of that in '13.

And your next question is from Andy Levi of Avon Capital.

Just 2 very quick questions. Just to clarify on the BGS auction, so the net margin increase, is that about $2, is that kind of a way to look at looking at your chart that kind of hits the bottom line?

We never disclose that number, Andy, sorry. That's been a pretty consistent policy of ours.

Okay. And also then, just on the new CapEx program, could you just reconcile for me -- I guess there are not going to be rate increases for this?

Yes, so...

But just explain, I guess, obviously, there's an increased expense, so there must be some type of rate increase, but what does it offset by, to get your net 0?

You got that right, Andy, right. So the bill consists of numerous rate components. And even a sophisticated audience such as this will be surprised as how many components there are in a rate, which is a way of me saying please don't ask me to list them all because I probably won't remember all components there on the rates. So obviously, the distribution component of rates will go up as a result of this. One cannot invest this amount of money and get a fair return without those increasing. But it will be offset by declines in several components. And the BGS, as Caroline reported, were it not for transmission, would have been down probably, I don't know, $6 or $8, I think, is the exact amount. So there, you see an example of exactly the strategy we've been following, which is as wholesale supply costs come down, this is the time to make needed infrastructure investments and keep the bill essentially flat. And as we look forward, there are a couple of elements of the market transition charges that were put in place in 2000 that will come off. That add up to about 6% of the bill, and that will happen at the end of '13, and at the end of '15. So those declines will be offset by the increase in the distribution rate. So what we hear when we talk to our customers, and we talk to them a lot, is don't confuse me with rates, tell me what's going to happen to my bill. So we're not suggesting that rates aren't going to change. Obviously, rates will change, but the net effect is that if you assume continued flat BGS rates per the forward price curve, that customers' bills will be the same in 5 years as they are today, and customers' bills are substantially 30% to 35% below what they were on the gas side, and a few percent below what they were on the electric side from 2008. And if you were to -- if you would do something that just take CPI, it escalate either today's bill or the 2008's bill, in real terms, customers' bills will be far below. So yes, you're right. One element of the bill, one rate component of the bill will go up to pay for investments, but it will be offset by other pieces coming down.

How much is the stranded cost portion?

I think it's about -- we'll detail it for you on March 1. I think it's about 6%, 4% to 6%.

Which is, in millions of dollars, do you have that?

Oh gosh, no I don't. But I'm being told it's 6.6%, but I don't have it. I really didn't know. We'll give you the details at March 1.

So on the distribution side, what would be the percent increase that you're proposing?

I don't know either.

Yes. I guess, going to wait to see the file. Well, I guess, you made the filing but...

We made the filing, yes. We've been swimming in customer bill questions, because that's what our customers are most concerned about and that's what we want to make sure we're attentive to. So the incremental components, we can give you more detail later.

Okay. So bottom line is the PSE&G Power will offset the distribution rate increase, I guess, is what you're saying?

That's -- I mean, at a high level, it's true, plus some regulatory explorations, all right?

Right. The stranded cost? Right.

We've been pretty consistent and upfront with policymakers and everyone about that, that the decline in natural gas prices and the result which directly affects the gas billing, the result in decline in electric prices, combined with the low interest rate environment, the availability of labor and the pressing need for the infrastructure investments makes this a perfect time to do.

And your next question is from Paul Fremont of Jefferies. Paul B. Fremont - Jefferies & Company, Inc., Research Division: I guess my first question is can you give us an update on what you're expecting to happen with LIPA and the status of your contract? And if it were put up for sale, would you have an interest in it?

So Paul, so we are busily approaching January 1, 2014, per the terms and conditions of that contract, which gives us the authority and the responsibility to manage those distribution and transmission assets. So we are focused on exactly what we're focused on pre-Sandy, post-Sandy and everywhere in between per in terms and conditions of the contract. So we're assuming on January 1, we have those responsibilities. In terms of whether or not we will be interested, we never comment on any asset acquisition or company acquisition. So I just... Paul B. Fremont - Jefferies & Company, Inc., Research Division: Can you update us on what level of customer migration was at the end of the fourth quarter? And also, can you give us a sense of what would be your expected insurance recovery for the $300 million of spending at PEG Power? Caroline D. Dorsa: Sure, Paul. It's Caroline. So relative to customer migration at the end of the year, you may recall at the beginning of the year, we gave an estimate of between 36% to 40% migration by the end of the year. And we don't have the December data at this point. It usually comes about a month from now, because everything's on a bit of a lag. But our best estimates are that we ended the year right about the high end of that range, but right come smack at the edge of the range. So that's really consistent with our expectations. The other point that I made on my remarks about the year-over-year impact is actually an important point relative to how to think about the ongoing impact of migration, and that is about the headroom. So year-over-year, in the fourth quarter, migration was actually a net positive, and that's because in 2011's fourth quarter, we saw headroom expand significantly from what it had been earlier in 2011. And by the end of 2012, that headroom had come down significantly, really, it was coming down during the year. Now to what we see, and you have to calculate your own, but what we see is a single-digit number. So that's important because it goes to a way to think about migration in the upcoming year. As to headroom, if it stays to be a single-digit like number and you saw some -- the prices embedded in the most recent BGS clear, that means the impact of migration, as we've always talked about, becomes a smaller and smaller impact to our margin, because the real impact is that difference or that headroom. So we're not forecasting a specific migration level as we come into the upcoming years. I think you've heard on my remarks what we're really forecasting is terawatt hours for BGS. So 12 ranging down to 10 terawatt hours for BGS this year and next year, but again, with a smaller headroom, it becomes less of an impact as to what you would previously have thought about the impact for BGS would be when we started having migration. So that's really the migration story. In terms of insurance, no, we can't estimate any proceeds at this point. As we said, we'll report them to you on an actual basis. We're in the process of pursuing that claim. What I can tell you, just in a general way, is keep in mind that we believe a large portion, a very large portion of the numbers that we're talking about for Power qualify for coverage. Beyond that, I can't speculate. On the utility, we pursue -- that coverage is applicable on those pieces that would not be eligible for coverage. Obviously, those are things that are deferred for potential recovery for the BPU process. But we'll report that on an actual basis. I just reinforced not to draw any conclusions about amount or any conclusions about proportion of recoverability from the fact that in the fourth quarter, we spent the 85 and the recovery was 19. We're really, at the beginning of the process, not in any way that you should take any kind of linear extrapolation from.

Paul, I guess, I just want to add one thing on LIPA. Obviously, should the contract not take place for whatever reasons, some change in direction, all of the cost that we're incurring this year are recovered from LIPA. And they've been a good payer and a good partner throughout this process. So there's no financial risk there to us. Paul B. Fremont - Jefferies & Company, Inc., Research Division: And quickly, the utility, what type of electric demand growth are you expecting for '13?

So we'll give you those numbers in a second. But be mindful of the fact that my usual speech about weather normalization becoming more of an art than a science has to be multiplied by a factor of 10 with an event like Sandy. But Caroline, do you have those numbers? Caroline D. Dorsa: Sure. When you think about demand growth, we typically stay relatively close to the forecast that you see from PJM. So pretty modest demand growth is what we're assuming over the multi-year period. PJM's most recent documents, as you probably saw, had demand growth of about 0.8%. And so we tend to use figures around that range, so relatively modest demand growth taken in the aggregate.

And your next question is from Neel Mitra of Tudor. Neel Mitra - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: I have a question on holdings, the $25 million to $35 million in operating income guidance for '13. I'm trying to understand what's really driving that. Is that a solar tax credit? And is the $25 million to $35 million earnings, is that something that we can apply going forward or is that more lumpy when you get projects in the Q? Caroline D. Dorsa: So it's a good question, Neel. I would say, from an ongoing basis, it is a little bit lumpy because when you put a solar facility into place, you have a onetime benefit that is a portion, it's not the entire ITC. It's just a portion of the ITC based on how the tax rules work. The remainder of the ITC rolls out over the life of the asset. But there's a little bit of a bump of a benefit there. In addition, the remaining things in holdings that we have are assets, like we have a generating plant in Hawaii for example, those ongoing earnings flow in and also anything that happens on a short-term basis on interest from parent would be in there as well. We have some swaps in there also. So I'd say you should assume last year's level of course was never something you could extrapolate from because we have the audit settlements. The current year level has a little bit of bumpiness for solar, so if you're thinking about it on a longer-term basis, you should have some level of value there but probably not the level that we're forecasting this year until we get to a new solar installation, in which case, we would give you that information on an ongoing basis. Neel Mitra - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: Okay. And then second question. Ralph, on the PJM planning parameters, PS Zone seemed a little tight. Can you just talk about some of the changes year-over-year that would drive that? Would it be just some of the head retirements and less incremental transmission, just what are your thoughts on that?

So it wouldn't be less incremental to transmission but it would be the head retirements, that's right. We typically don't get much further than that in terms of the disclosure, especially with RPM being just 2.5 months away now.

And your next question is from Jonathan Arnold. Jonathan P. Arnold - Deutsche Bank AG, Research Division: My question -- I hope you didn't just answer this, but if you did, just say, I was caught away for a second. Does the investment in storm hardening, in any way, changed the sort of likely pace of -- or enthusiasm for some of the incremental solar investments that you were talking about, say last quarter and/or the gas infrastructure upgrades or should we see it as sort of simultaneous and incremental?

So Jonathan, thanks for the question. So there's no linkage between the solar and the hardening other than the obvious linkage being the customers' ability to pay. But my flat rates comment included the solar component. The gas firing that we had anticipated making has now been superseded by this infrastructure filing. We had originally thought that we would do a gas filing of about $250 million to $300 million per year, and it's turned into this $1.04 billion component of the storm filing that we just made.

Next question is from Paul Patterson of Glenrock. Paul Patterson - Glenrock Associates LLC: Just, I guess, I'm a little bit slow on this, I apologize. But just the incremental amount of CapEx that we should be seeing, I guess, beginning in 2014 versus your previous planning, how should we think about the increase in CapEx because of this program that you're mentioning? You just mentioned the gas thing, and I just wasn't clear.

Yes, and it's understandable, Paul, because what we're basically saying is we're going to give you -- we have the details of that, but it just -- it doesn't lend itself to a phone call conversation. So we'll give you details from '13 to '17, by electric, by gas, by transmission, and that will all become much clearer on March 1. It exists. I'm not saying it doesn't exist, it's just doing that by phone is at least 3 by 5 matrix, and it's just -- it's not pretty, so... Paul Patterson - Glenrock Associates LLC: Okay, great. So we have something to look forward to. And then just the weather-adjusted sales growth, really quickly, the quarter just seems a little bit odd. I mean, it seemed like it was diametrically different for -- on a weather-adjusted basis for residential versus commercial and industrial. I mean, it may seem like big, big differences, I mean, 3.2%-plus for residential if I read that correctly, and minus 3.7%, and you guys associate part of that, with the economic impact associated with Sandy, but it wasn't Sandy itself. Just any sense as to why there's such a big difference between the 2? Caroline D. Dorsa: Right. So I think, Paul, one thing to keep in mind is when we did the weather normalization, right, we are not normalizing for Sandy, right? Because weather normalization is essentially temperature, right? Sandy wasn't temperature, right? Sandy was something completely different in storm surge and outage and all of that. So you have a little bit of a differential in terms of seeing, as you point out, between commercial, industrial and the residential. So you just got to think about it as Sandy really changed a lot of things that really changed that dynamic. But keep in mind that if you kind of look at the year-to-date, you do see a pattern that is of the same direction, right? So the residential was a little bit higher on a full year basis and commercial and industrial were a little bit lower. The fourth quarter is really a distortion for the magnitude given what happened with Sandy. But the year-to-date, you're still seeing a little bit of growth in residential, and you're seeing a little bit of decline in commercial and industrial. We've kind of seen that pattern for a bit. Paul Patterson - Glenrock Associates LLC: So Sandy messes everything up kind of thing? Caroline D. Dorsa: Yes, for the quarter, I wouldn't do any kind of extrapolation because, really, it's hard to pull Sandy out of all that. We think, without Sandy, it would've been more like a neutral picture for the fourth quarter. But as Ralph says, weather normalizations is an art, and probably Sandy normalizations is a double art.

Your next question is from Julien Smith of UBS. Julien Dumoulin-Smith - UBS Investment Bank, Research Division: So first, to go back and clarify the holdings component for '13, if you would've think about a couple pennies or so from this Arizona solar project, is the bulk of the remainder there, call it the $0.04 in earnings, going to be sort of an ongoing element, is that what you were meaning to say earlier? Caroline D. Dorsa: Well, I didn't give any specific numbers, right, for the amount from the solar ITC, kind of onetime effect from that permanent difference calculation for both relative to how to think about kind of ongoing. Yes, I mean, we do have ongoing benefits from our assets and they do flow through. But I would just caution about drawing too many conclusions on exactly how to forecast beyond the current year, because, of course, we don't give guidance beyond the current year. But you should assume that there are a few cents in there for the ongoing performance of our assets. That is the right assumption. We have assets that are performing well. But the solar, as it is for every company, right, creates onetime events that relate to the recognition of a portion of the ITC. Julien Dumoulin-Smith - UBS Investment Bank, Research Division: But to be clear, the single item that you've called out for next year is this Arizona solar project, right?

No, no, no. Caroline D. Dorsa: Well, in terms of ITC for a project coming into service, that's a onetime event, right? So remember, in the ITC, if -- you may not be familiar, right, in the ITC recognition, there is a onetime permanent tax benefit that comes from the implementation of the ITC where you get the ITC, you recognize it over the life of the asset, but you don't take down the tax basis for the full amount of the ITC. It's that permanent difference that gets recognized on a onetime basis. The rest of the time, the ITC flows out over the earnings on an ongoing basis.

But just to correct, we're not saying that one project is the bulk of the $25 to $39 [indiscernible] at all. Caroline D. Dorsa: No, it's just one unusual item that you wouldn't want to forecast from. Julien Dumoulin-Smith - UBS Investment Bank, Research Division: Right. Great. Second question. When it comes to -- perhaps a clarification, when it comes to this filing you've made yesterday, how does that contrast against some of the pending bills out there at the legislature, contemplating similar infrastructure build outs?

The bills in the legislature really have 2 components to them. One component is a change in the penalty schedule for utilities underperforming which we have expressed support for, because we have a lot of confidence in their ability to operate. Well, what we said to folks is, look, if you're going to increase the penalties, please improve the tools that the BPU has available to it to establish rates that facilitate investments that will help us perform at the level you want us to perform. Now there's some debate as to whether or not the BPU already has that authority, but we're of the opinion, "better safe than sorry." So why not make it an explicit option at their disposal. Julien Dumoulin-Smith - UBS Investment Bank, Research Division: Great. Your proposal thus far, though, is not tied to any kind of pending legislation though, right? This is completely independent?

That's correct. Surely, it is not.

And your next question is from Michael Lapides of Goldman Sachs. Michael J. Lapides - Goldman Sachs Group Inc., Research Division: Just actually 2 items, a little bit unrelated, my apologies. First, on the Solar 4 All, what's the timeline for getting approval for that, and the capital spend kind of on an annualized basis?

So the timeline has been stretched to May 1, Michael. The Board staff with Sandy has just been incredibly busy. So there's a period of cooperation, we set the 180-day requirement, something that we're more than willing to live with, even relax. So May 1 is the new date. And that's all for components, $690 million over roughly a 5-year period. Michael J. Lapides - Goldman Sachs Group Inc., Research Division: Got it. Okay. And second item, on O&M, when you think about the O&M that's in ongoing earnings for 2012, so backing out the Sandy impact at PEG Power, can you just -- what's in your guidance for 2013, just all-in for year-over-year O&M growth? Caroline D. Dorsa: Sure. Michael, it's Caroline. So we haven't given the overall O&M growth. So I mentioned pension only because that's quite a swing factor that obviously garners a lot of attention and we've given a lot of attention in the past. As you know, we did pull Sandy out of O&M for Power on an as-reported 2012 basis. We will do that for 2013 as well. And we'll give you the O&M forecast, as we typically do, on a kind of 3-year CAGR basis. We'll give you that for the company as a whole, as well as power utility kind of broken out in 2 pieces on March 1, again, in context, the same way we give you the capital expenditures for an ongoing 3-year basis as well. We haven't given that on this call. We'll give that on March 1 as well.

And your next question is from Brian Chin of Citi. Brian Chin - Citigroup Inc, Research Division: Can you -- I know that you said that you based the guidance on the current forward curves. But given that volatility, can you just be a little bit more specific? Are you talking about the current curves in the last week or 2? Are we talking the current curves maybe a month ago? Just a little bit more specificity there would be helpful.

So Brian, actually the curves have been pretty steady for quite a few quarters now. So I'm a little bit at a loss. I mean, we do refresh our detailed plans on a fairly regular basis. I'm sure the finance team thinks I'm saying that we do it too often, but I mean, I'm just looking at a chart right now that looks like a very small modulating sine wave for the past 9 months. So the day-to-day volatility due to basis differentials or weather spikes, I mean, that's something that ER&T managers on a day-to-day basis, and we don't do our business planning or financial planning on that basis. So I guess, I'm politely disagreeing that we've seen pretty stable prices. And given our hedging, we're even more comfortable with our numbers. Brian Chin - Citigroup Inc, Research Division: Okay. Well, I mean, we can disagree about what is a volatile level of power price movement. But can you give at least a rough timeframe on which you set your forward curves? Was it -- when you say current, is that in the last few weeks, last month, last -- just to give us some sense there?

So the last time we did a full run of the business plan was January -- December 31, 2012. Brian Chin - Citigroup Inc, Research Division: Okay. Great. And then lastly, the $1.5 billion in transmission line spending, when is that going to go through the PJM approval process? Can you give us a sense of the timeframe there?

Yes, this one is a little bit stranger, Brian. It's not a PJM approval process. It's a PJM veto process, so to speak. They come up with an RTEP. We look at RTEP and say, oh, if we're going to do that, we have to do this, this, and these other few things, these supplemental projects. They tend to be of a lower voltage, but still transmission voltage. And then at the staff level, there's no major project that comes out of that as they make sure that there's no harm to the RTEP. And in fact, what we're doing is consistent. If that all works the way it always works, we will start spending in 2014. Brian Chin - Citigroup Inc, Research Division: Okay. So I guess the argument then would be given the veto process by which this proposed spending has to go through at PJM level, it's unlikely that this new proposal is going to change any of the RPM parameters ahead of this auction, it will probably show up in whatever parameters are put out in the next [indiscernible]

Yes, that's correct. I didn't realize That's where you were going, yes. That is an accurate statement.

You may turn over for closing remarks.

So we've had quite a few of these calls together. So by now, I'm sure you're a little bit tired of hearing the pride I take on our operational excellence, I'll have a slightly different emphasis right now, and that is that we work quite hard and take an equal amount of pride in the financial strength we built for the company. And it's really with quite a bit of enthusiasm and optimism that we're proposing to put that balance sheet strength to work to benefit our customers and our shareholders alike. I'm delighted by your questions. I know we said a lot of we'll give you that on March 1, so I hope we see all of you next Friday and have a great week. Thanks for joining us.

This concludes our teleconference. You may now disconnect. Caroline D. Dorsa: Thank you, operator. Thank you all.