Ladies and gentlemen, thank you for standing by. My name is Rob, and I am your operator today. I would like to welcome everyone to today's conference, Public Service Enterprise Group's Third Quarter 2023 Earnings Conference Call and Webcast. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session for the members of the financial community. [Operator Instructions] As a reminder, this conference is being recorded today October 31, 2023, and will be available for replay as an audio webcast on PSEG's Investor Relations website at https://investor.pseg.com. I would now like to turn the conference over to Carlotta Chan. Please go ahead.

Good morning, and welcome to PSEG's third quarter 2023 earnings presentation. On today's call are Ralph LaRossa, Chair, President and CEO; and Dan Cregg, Executive Vice President and CFO. The press release, attachments and slides for today's discussion are posted on our IR website at investor.pseg.com, and our 10-Q will be filed shortly. PSEG's earnings release and other matters discussed during today's call contain forward-looking statements and estimates that are subject to various risks and uncertainties. We will also discuss non-GAAP operating earnings, which differs from net income or net loss as reported in accordance with generally accepted accounting principle, GAAP in the United States. We include reconciliations of our non-GAAP financial measures and a disclaimer regarding forward-looking statements on our IR website and in today's materials. Following Ralph and Dan's prepared remarks, we will conduct a 30-minute question-and-answer session. I will now turn the call over to Ralph LaRossa.

Thank you, Carlotta. Good morning to everyone, and thanks for joining us to review PSEG's third quarter results. Earlier today, PSEG reported third quarter 2020 net income of $0.27 per share compared to net income of $0.22 per share for the third quarter of 2022. Non-GAAP operating earnings for the third quarter were $0.85 per share compared to $0.86 per share in the third quarter of 2022. Our non-GAAP results exclude items shown in Attachments 8 and 9, which we provided with the earnings release. We are very pleased with the results of both PSE&G and PSEG Power & Other which are continuing to fully meet our planning expectations. Through the first nine months, PSEG is on track to achieve our full year 2023 non-GAAP operating earnings guidance of $3.40 to $3.50 per share. This morning, we also reaffirmed both PSEG's full year 2023 earnings guidance and our long-term 5% to 7% earnings growth outlook with the announcement of our third quarter results, which Dan will discuss in greater detail following my remarks. We had a very constructive quarter on several fronts. Our utility, PSE&G invested approximately $1 billion in energy infrastructure during the third quarter, bringing the year-to-date spend to $2.7 billion. For the full year 2023, capital spend is now expected to total $3.7 billion, slightly higher than our original plan of $3.5 billion, ahead of scheduled execution on our clean energy future energy efficiency and our infrastructure advancement programs. On the advanced metering front, PSE&G has completed the installation and placed into service just over half of 1.3 million of the 2.3 million planned smart meter replacements. Overall, we remain on schedule and within our cost parameters. We have seen strong demand for PSE&G's energy efficiency solutions, which is helping our customers save energy and lower their bills. To give you some perspective on how strong the demand for energy efficiency is. Consider that PSE&G now sells more energy efficiency solutions in a single month than we did in the entire year just a few years ago. In addition, we continue to support the energy transition and decarbonization of the New Jersey economy by upgrading the last mile of our distribution system as well as adding new electric infrastructure due in part to an increase in electric vehicle penetration. These critical New Jersey energy investments also support our rate base growth trajectory of 6% to 7.5% through 2027. The low end of PSEG's rate base CAGR assumes an extension of our investment programs at their current annual levels. Within the upper end of the rate base range is a potentially higher amount of infrastructure investment and upcoming filings for energy efficiency above their current run rates. Last week, the BPU reset the start date for the second three-year energy efficiency period to begin January 1, 2025, and run through June 30, 2027, for a total term of 2.5 years while adding a six-month extension to the current three-year period. The BPU requested updated utility filings to be aligned with this new period. The BPU's updated framework outlines a robust continuation of EE in the state and includes utility-specific net annual energy reduction targets for the upcoming filings. It also directs utilities to propose quantitative performance indicators aligned with the updated net annual energy reduction targets and the compressed 2.5-year time frame. The prior EE annual reduction goals of 0.75% for gas and 2% for electric during the program years of 2026 and 2027 remain unchanged. Earlier this month, the BPU approved a settlement to extend our current GSMP II program through December 2025 and provided for $900 million of investment to replace a minimum of 400 miles of cast iron and unprotected steel main at a modestly higher run rate than our previous programs. For the $900 million investment provided in the settlement, $750 million will be recovered through three periodic rate update clauses with the balance addressed in the future rate case. Through GSMP II, we reduced methane lease by approximately 22% system-wide from 2018 levels. This extension enables us to remain on track to achieve our long-term reduction target in methane emissions of at least 60% over the 2011 through 2030 period. PSEG's broader GSMP II filing is being held in advance. We expect that this filing, which also includes pilot projects to introduce renewable natural gas and hydrogen blending into our existing distribution system. We'll restart after the future of natural gas utility stakeholder proceedings conclude. The GSMP II extension approval provides for restarting the GSMP III filing by January 2025 with the intent of beginning the next phase of this work in January of 2026. While we make these investments, we remain focused on customer affordability and continue to diligently manage our O&M expense. We recently completed new four-year labor agreements with all of our New Jersey unions. I want to underscore the importance of this in relation to our costs labor is one of our largest expenditures. Having four years of labor cost certainty helps us keep customer bills affordable and provides our represented employees with wage predictability. PSE&G continues to compare very well to peers on a share wallet basis both in the region as well as nationally. Monthly bills for typical residential natural gas customers remained among the lowest in the region. Beyond that, for the upcoming 2024 heating season, the BPU approved PSE&G's request to lower the gas commodity charge to approximately $0.40 per therm effective October 1. This gas commodity charge, which is simply a pass-through for the utility has declined by a total of 38% since January 1, 2023. Now turning to our nuclear operations. The PSEG nuclear fleet operated at 95.8% capacity factor during the year-to-date period ended September 30, producing 24.3 terawatt hours of carbon-free baseload energy. Our 57% owned Salem Unit 1 just completed another breaker to breaker run and entered its scheduled fall refueling outage after operating for 508 continuous days between refuelings. Our efforts to transition our boiling water reactor at Hope Creek from an 18-month to 24-month refueling cycle through lower capital cost projects is ongoing. Related to our competitive transmission proposal submitted to PJM as part of its 2022 Window 3 solicitation -- their transmission expansion advisory committee staff recently recommended that a PSEG project being included as part of a comprehensive solution. PSEG's project outlines a $447 million investment with an expected in-service date of 2027. The PJM Board will announce their final decision in December. This is another example of regulated opportunities that we are pursuing, and we intend to leverage our considerable transmission skills and similar opportunities that arise. Switching topics for a moment to sustainability, you will recall that we committed to the United Nations back race to zero campaign in September of 2021 with the intention of submitting proposed targets encompassing scopes 1, 2 and 3 emissions to the science-based targets initiative. We made our submission in September and is now under review as part of SBTi's validation process. I'd like to conclude by recapping some of the progress we've made towards our goal of streamlining and improving the predictability of our business. We now have a lower business risk profile following the sale of the fossil business and our exit from offshore wind generation. February and August, we successfully reduced a significant amount of pension variability on future results with the regulatory accounting order and the lift-out and we'll consider pursuing additional mitigation on our upcoming rate case. And we have helped them secure the financial viability of critical important New Jersey energy assets with the decision to retain our carbon-free baseload nuclear fleet, enhanced by the revenue stability of a production tax credit that begins January of 2024. These actions helped to extend our track record of executing on PSEG's improved business strategy. Having a decade-long visibility of cash flows from the nuclear PTC will help us to maintain a solid financial profile that does not require us to issue any new equity or sell any assets to fund our five-year capital investment program. It supports our ability to pay a competitive and growing dividend. In closing, I want to share our plans for providing 2024 earnings guidance and other important financial updates. As you know, we will file our electric and gas distribution base rate case this December, and we'll update you with the parameters once that is public. We expect to complete our normal business planning in mid-December, so you can expect us to provide 2024 non-GAAP operating earnings guidance shortly after that business plan is completed. In early December, we intend to update our existing 2023 to 2027 CapEx and rate base projections to reflect the recent GSMP II extension through 2025 and two upcoming energy efficiency filings; one, to extend the current EE program out through the end of 2024, followed by a new filing covering the next round of EE programs through 2027. These updates will inform our longer-term assumptions for capital and rate base projections. And we expect to post a full roll forward of the capital plan rate base and long-term earnings CAGR in the January 2024 investor update. I will now turn the call over to Dan for more details on the operating results and will be available for your questions after his remarks.

Thank you, Ralph, and good morning, everybody. As Ralph mentioned earlier, PSEG reported net income of $139 million or $0.27 per share for the third quarter of 2023 compared to net income of $114 million or $0.22 per share for the third quarter of 2022. Non-GAAP operating earnings for the third quarter of 2023 were $425 million or $0.85 per share compared to $429 million or $0.86 per share for the third quarter of 2022. We've provided you with information on Slides 9 and 11 regarding the contribution to non-GAAP operating earnings per share by business for the third quarter and year-to-date of 2023. Slides 10 and 12 contain waterfall charts that take you through the net changes for the quarter-over-quarter and year-to-date periods and non-GAAP operating earnings per share by major business. Starting with PSE&G, which reported third quarter 2023 net income of $401 million or $0.80 per share compared with $399 million or $0.80 per share in the third quarter of 2022. The PSE&G had non-GAAP operating earnings of $403 million or $0.80 per share for the third quarter of '23 compared to $399 million or $0.80 per share in the third quarter of 2022. The main drivers for both GAAP and non-GAAP results for the quarter were growth in transmission and distribution margins resulting from continued investment in infrastructure replacement and clean energy programs as well as lower O&M expense. These favorable items were offset by our anticipated lower pension income and OPEB credits, along with higher depreciation and interest expense resulting from incremental investments since the year earlier quarter. Compared to the third quarter of 2022, transmission was $0.03 per share higher. Electric margin was $0.02 per share higher, reflecting investment returns from Energy Strong II. Gas margin was $0.01 per share higher, primarily driven by the clause recovery of our GSMP investment. Lower distribution O&M expense added $0.01 per share compared with the third quarter of 2022, and depreciation and interest expense increased by $0.01 and $0.02 per share, respectively compared to third quarter 2022, reflecting continued growth in investment. Lower pension income resulting from 2022's investment returns, combined with lower OPEB credits scheduled to end in 2023, resulted in a $0.05 per share unfavorable comparison to the year earlier quarter. Lastly, the timing of taxes recorded through an effective tax rate, which nets to zero over a full year and other flow-through taxes had a net favorable impact of $0.01 per share in the quarter compared to third quarter of 2022. Weather during the third quarter, as measured by the Temperature-Humidity Index, was 11% warmer than normal, but 5% cooler than the third quarter of 2022. As we've mentioned, the SIP mechanism in effect since 2021 limits the impact of weather and other sales variances positive or negative on electric and gas margins while enabling PSE&G to promote the widespread adoption of its energy efficiency program. Growth in the number of electric and gas customers, the driver of margin under the SIP mechanism continues to be positive and will each up by approximately 1% year-to-date. On capital spending, PSE&G invested approximately $1 billion during the third quarter and is on track to execute its largest ever investment program of $3.7 billion in a single year. The program includes upgrades and replacements to our T&D facilities, Energy Strong II investments, last mile spend in the infrastructure advancement program, our ongoing GSMP II program continued rollout of the clean energy investments in energy efficiency and the energy cloud, including smart meters and adding new electric infrastructure to accommodate an increase in EV penetration. During 2023, we've taken actions to limit the impact of our pension on earnings and increase the predictability of our financial results. In February of 2023, the BPU approved an accounting order authorizing PSE&G to modify its method for calculating the amortization of the net actuarial gain or loss component for ratemaking purposes. This change is effective for the calendar year 2023 and forward. For the full year 2023, PSE&G's forecast of non-GAAP operating earnings is unchanged at $1.5 billion to $1.525 billion. Moving to PSEG Power & Other. For the third quarter of 2023 PSEG Power & Other reported a net loss of $262 million or $0.53 per share largely reflecting the pension settlement charge associated with the lift-out transaction. This compares to a net loss of $285 million or $0.58 per share for the third quarter of 2022. The onetime noncash settlement charge of $332 million, $239 million net of tax was related to the approximately $1 billion of PSEG Power & Other pension obligations and associated plant assets transferred to the Prudential Insurance Company. After providing for the effect of the lift out, our pension plans remain well funded, and there is no material impact on our non-GAAP operating earnings in 2023. Non-GAAP operating earnings were $22 million or $0.05 per share for the third quarter of 2023 compared to non-GAAP operating earnings of $30 million or $0.06 per share in the third quarter of 2022. We previously mentioned that during the first quarter of 2023, PSEG Power realized the majority of the approximate $4 per megawatt hour increase in the average price of our 2023 hedged output which rose to approximately $31 per megawatt hour with higher winter pricing driving most of that increase. For the third quarter of 2023, gross margin rose by a total of $0.03 per share primarily reflecting the roll-off of certain full requirement BGS load contracts and had a higher cost to serve, resulting in a $0.04 per share of benefit compared to the prior year. The gross margin improvement also included higher generation which added $0.01 per share, resulting from the absence of a Hope Creek refueling outage that started at the end of last year's third quarter. These positive variances were partially offset by lower capacity revenues of $0.02 per share compared with the year ago quarter consistent with prior year capacity auction. OEM cost comparisons in the third quarter improved by $0.03 per share, driven by the absence of Hope Creek refueling outage expenses that were partly incurred in 2022's third quarter. Lower depreciation expense was $0.01 favorable compared with the year ago quarter, while higher interest expense was $0.01 unfavorable. Lower pension income from 2022 investment returns and OPEB credits from the lower amortization benefit were $0.03 per share unfavorable versus third quarter 2022. Taxes and other were $0.04 per share unfavorable compared to the third quarter of 2022, reflecting a partial reversal of the effective tax benefit from the first quarter of 2023. On the operating side, the nuclear fleet produced approximately 8.1 terawatt hours during the third quarter and 24.3 terawatt hours for the year-to-date period in 2023, running at a capacity factor of 95.3% and 95.8% for the quarter and year-to-date periods, respectively. For the full year 2023 PSEG is forecasting generation output of 30 to 32 terawatt hours and has hedged approximately 95% to 100% of this production at an average price of $31 per megawatt hour. For 2024, the nuclear fleet is forecasted to produce 30 to 32 terawatt hours of baseload output and has hedged 85% to 90% of this generation at an average price of $38 per megawatt hour. The forecast of non-GAAP operating earnings for PSEG Power & Other is unchanged at $200 million to $225 million for the full year. This forecast reflects the realization of a majority of the expected increase in the average 2023 annual hedge price in the first quarter of '23, as we previously discussed. For the balance of the year, higher interest expense largely captured in our November 22 update is expected to reduce PSEG Power & Other results. Touching on some recent financing activity, as of September 30, PSEG had total available liquidity of $3.8 billion, including $57 million of cash on hand. PSEG Power had net cash collateral postings of approximately $350 million at September 30, which is substantially below the elevated levels seen last year. In August, PSE&G issued $500 million of 5.2% secured medium-term notes due August 2033 and issued $400 million of 5.45% secured medium-term notes due August 2053. In September, PSE&G retired $325 million of 3.25% secured medium-term notes at maturity. Subsequent to the end of the third quarter, PSEG issued $600 million of 5.88% senior notes through October 2028 and $400 million of 6.13% senior notes due October 2033. Prior to pricing these notes, $800 million of treasury locks were executed, which had a positive fair value of $14 million, and this benefit will be amortized over the life of the senior notes, partially offsetting interest expense. Proceeds from the sale of the senior notes will be used for general corporate purposes, including the repayment of $750 million of PSEG debt maturing this November. As of September 30, 2023, PSEG had $500 million outstanding of a 364-day variable rate term loan maturing in April 2024 and PSEG Power had $1.25 billion outstanding of a variable rate term loan maturing March of 2025. As of the end of the quarter, PSEG had swapped $900 million of the power term loan from a variable to a fixed rate serving to mitigate the impact of higher interest rates. As of September 30, reflecting our swaps, approximately 5% of our total debt was at a variable rate, which is down by half since year-end 2022. We continue to maintain a solid financial position with limited exposure to variable rate debt given the improvement in our collateral position, a staggered maturity schedule and PSEG Power cash generation to support funding our regulated business. In closing, we are reaffirming PSEG's full year 2023 non-GAAP operating earnings guidance of $3.40 to $3.50 per share. PSE&G is forecasted between $1.5 billion to $1.525 billion and PSEG Power & Other is forecasted at $200 million to $225 million. That concludes our formal remarks. And operator, we are ready to begin the question-and-answer session.

[Operator Instructions] The first question is from Nicholas Campanella with Barclays. Please proceed with your question.

So I just -- I wanted to ask on looking forward to '24, if the broad market kind of underperforms here that could maybe affect your pension headwind, but also kind of understanding that you've done a lot of derisking this past year to take the volatility out, you had the lift out, you have the accounting order. Just -- could you just give us any sense how we should think about kind of pension contribution as a percentage of earnings for '24 or just even relative to the drag you've had year-to-date? Is there a drag that we should be thinking about for '24? And any detail on how pension has performed year-to-date versus your expectations as well would be helpful.

Yes, Nick. Sure. So listen, first of all, I appreciate you recognizing the work that Dan and his team and the regulatory team did already here. And we're seeing the benefits of it, right? We had -- I'll talk in engineering terms, we've reduced the sign of the sine wave and there's less volatility. So, there's nothing that we've seen or expect that it's going to become problematic for us as we look at '24. But I'll let Dan give you any more details he wants to provide on that, but just the result of some good work that we've accomplished this year.

Yes. And think that's really what we set out to do. It doesn't eliminate the effect of markets moving because we still do have attention, but we've been able to minimize the magnitude of what we would see. So, as we step through the year, markets have moved, they've been off a little bit in the last few months. We got another couple of months to go to we see where we land. I think that we're not immune to some of those movements, but I think the work that we've done will lessen that effect. And as we're looking at it now, the magnitude of what we intend to see or what we anticipate seeing as we move through year-end is something we can still manage through the overall O&M budget.

Okay. That's helpful. And nice to see that you're ahead of plan on the CapEx, obviously, there's a bias hire here as you roll forward. And I guess we'll get more of those details in January, but as we kind of think about putting higher CapEx through the model, just how are you thinking about equity proceeds, if at all?

No. There is no -- there has been no and there is no intention to have any equity issuance as we go through the capital plan that we have in front of you. So we've had $15.5 billion to $18 billion for the utility through '27 all year. We're still within that range as you look across the five years, that $3.7 billion is a great performance. So, we've been able to continue to move forward on that. But what you're seeing there is great and it's helpful, but it is still within our overall range. And there is no equity that we're going to need to fund even the high end of that range.

And Nick, let me just double down on that, right? We've been saying to everyone that we can, no equity, no kind of equity and no sale of assets, so...

The next question is from the line of Shar Pourreza with Guggenheim Partners. Please proceed with your question.

Let me just slightly tweak Nick's question around '24. I mean, obviously, it's going to be a big year for PSEG with the rate case filing and your PTC guidance for nuclear and then the ZEC’s on setting, right? I guess how do you plan to sort of embed the various scenarios into '24 guidance when you roll forward at 4Q, even if you're we're thinking about this directionally? I mean, obviously, a swift resolution of the GRC could be part of this I guess, so how do we think about your base assumptions there? And any changes to the interest rate assumption and $0.30 under earning headwind for PSE&G that was presented a year ago, any incremental puts and takes on regulatory lag in the preceding year?

Yes, Shar. All great questions. And again, I'll give Dan some chance to answer details here, but you hit on all the moving parts that we're considering. And a lot of that has to do with driving for what our time frame is that we're going to come out with the -- with our earnings in December. So Dan, can you just give any more on some of those items.

Yes, sure. We'll finalize where we're heading and let you know. And I think, there's always some assumptions you're going to make as you step forward, I think, on the rate case. We will file that at some point during this quarter. We've said that it usually takes somewhere between 9 to 12 months to move through. So, we'll make our assumptions around that. I would love to be able to tell you that we're going to have PTC guidance in hand, and we're going to know exactly where things land. But I think that there's a reasonable set of assumptions that you can make within that uncertainty until we get those regulations, and we'll do that. And our guidance on interest rates really will be driven by what we see in the market. [Technical Difficulty] We captured the moves that we've seen over the last year or so. And so, all of those will come into play, and I think we'll still be able to speak with confidence with respect to an overall guidance range for '24, and we'll do that soon.

And again, I don't want to put you in a corner, but it seems like there's probably more tailwinds and tail risks that as we're thinking about that shift from '23 to '24. Is that a fair assessment?

Well, look, I think what we'll put forth is a balanced view. I think that both from Nick's question before and some of the things that you referenced, those are the kinds of things that will come into play as we put the estimate together. But I still think the way that the business is set up we're not going to have to worry about weather movements because of our decoupling. We've got a smaller pension variability that Ralph just mentioned. We've captured most of the interest rate moves. So, I think the work that we have been doing over the last 1.5 years or so is really going to pay off to enable us to be able to speak with confidence on that range when we put it out.

Got it. And then just lastly, just -- I mean, I guess, what are you hearing on the nuclear PTC guidance? And I guess, how do you plan a business case around it? I mean you have a refueling cycle, you've had some modest CapEx improvements on the back burner for nuclear, are those plans getting closer to a decision point, especially with the guidance?

Yes. So Shar, I'd say a couple of things on that front. Just to reinforce again the stability that we introduced last year. We said it on the PTC floor, right? So we're not counting on anything above or beyond that. And that's the way our plan is set. So that should be pretty clear for you all and pretty transparent on that front, and then on the CapEx, we have said a couple of times, we're moving ahead very well on the refueling cycle at Hope Creek -- that work is progressing as we expected and those surprises there. And we'll probably be hearing something in '24 from us, a little bit more on the upgrades that we plan for sale and the timing of that. Effects on cal '24 though -- those will pay dividends as we go down the...

Got it. And again, sorry, just getting hit with a lot of questions from one of my questions. When do you plan on giving '24 guidance?

We have said that we're going to give it after we finish our business planning process with our board. We have a review with our Board that we do in December. So, we'll be doing it in December.

Our next question is from the line of Durgesh Chopra with Evercore ISI. Please proceed with your question.

Ralph, just a finer point on equity. I think this is going to be a Dan's wheelhouse. But you showed this slide in the June investor deck, which kind of talked the $4 billion in balance sheet capacity. How does that look now as obviously the puts and takes -- how does that look now? And then part two, just to be clear, as you roll forward the plan, and there's energy efficiency, there's obviously the transmission opportunity. Should we expect no equity as well as you roll forward to 2028?

Yes. So look, I'll give it to Dan again, give you some details, but that -- both of those things are very good news for us. The transmission opportunity as well as the energy efficiency growth that we see from the triennial at the BPU put forth. But Dan's answer, I believe, is going to be exactly the same to you. We do not need equity or anything that looks like it.

Yes. If you guys Ralph is right. We are still moving forward with that same capital raise that we talked about earlier. We will be providing an update. Ralph referenced that in his earlier remarks, both from what we've heard back from PJM and from what the state is looking at on energy efficiency in this next triennium this next three-year period. And so, we will do that update as we go forward. But that will be the exact -- the way that, that will roll through is we have a range of capital. We will update that range. And on the other side of that, we will have what remains from the standpoint of that debt capacity. But I think you should still look with us -- look to us with confidence that we will be able to fund that without the need for incremental.

Excellent. Very clear there. And then just maybe just on the topic of nuclear PTCs. I saw you've increased hedges for 2024, the percentage of output hedged. How are you thinking about '25? I mean, obviously, we are still awaiting guidance here. But are you like -- as you roll forward to 2025, are you going to be less hedged than before anticipating some clarity on nuclear PTC? Or what is your thought process there?

Yes. So guess what we've said to folks is that we don't have the exact calculation that's going to be made and what we try to do is think through what may come to us, right? So when you have some of that uncertainty, you try to think through the ultimate answer that will come and then try to think through the viability of those solutions and where they may land. And we've kind of reacted to that thinking against the background of some of that uncertainty. And so that doesn't mean that we would not be doing any hedges that means that we would be continuing to move forward at pace thinking about how that PTC may come out. Those rules will come out at some point, we hope sooner than later for that exact reason, right? It's just shaped how you're thinking about it. But I'd say, I don't think terribly different from what we had been doing with our hedging versus what we're doing now within 25 as a general rule.

Our next question comes from the line of David Arcaro with Morgan Stanley. Please proceed with your question.

Let's see. Wondering if you could touch on your latest expectations for the rate case. Just has anything changed around your thinking for the revenue requirement, anything on the capital or O&M side that would shift your expectations as to what you file coming up this quarter?

Yes. No, there's nothing really that I said -- we've been saying all along with what our plans are. I think the only thing that you'll see is that this rate case gives us the opportunity to roll in a lot of the other things that people have been asking about, whether it be interest rates or pensions, right, and the impact that pension expenses might have on us. So -- that's -- those are the only two real updates, I would say that we have, and we're keeping an eye on the CapEx, but most of those items that we talked about, whether GSMP, which we closed on, transmission opportunity exists, which will not be with the state of New Jersey, our energy efficiency would be a clause mechanism. So nothing really that I would say is driving a big change to us. Dan, anything you want to add?

No. Just one thing, David, the one thing that I think we could lose sight of and shouldn't is that with all of the focus on a higher interest rate environment, that there's -- we've got some questions about what might be the implications to any kind of an impact on the rate case as we go forward. And I reminded folks, this is the first rate case filing we'll do since 2018. And so the early part of that period between rate cases, we saw lower interest expense. And so yes, what we're seeing in this current environment is higher, and so there could be some costs that would move through the overall revenue requirement from the way we have trust capital. But thinking about stepping through years where interest rates were lower and now we're in a higher rate environment, net-net, that does not calculate into a considerable rate increase because of interest rates. And so that's not a rate pressure as we go into this just as a reminder.

Yes. Got it. Okay. Great. That's helpful. And then we've got new leadership at the commission. I was just wondering if you could give perspectives on if you think the overall kind of priorities of the commission, and how they're going to treat maybe settlements or just overall views on your opportunities to work with them now going forward under new leadership in a different set of commissioners?

Yes, David. Sure. Look, I would -- our opinions really don't matter as much as results. And I have to tell you, I could not be more pleased with the board and the action they took on our gas system modernization program. That quick action and decisive action to move that forward shows a couple of things. One is the work that we're doing and how it's helping the environment from a methane reduction standpoint is aligned with the policies of the state. And I would also say the desire for the board to continue to reach settlement was exhibited there as well, right? So, both of those things are real positives and just should reinforce that for only us, in our opinion, but for you all that we are in the same space that we were before.

Our next question is from the line of Jeremy Tonet with JPMorgan. Please proceed with your question.

Just wanted to kind of, I guess, build a little bit on some of the points you laid out there. With the GSMP II extension, can you frame the settlement versus capital plan assumptions versus the longer-term goals of GSMP III? Are the state's ongoing energy transition discussions factoring into the settlement, just kind of looking at this more holistically.

Yes. So look, here's the way I would frame it. The two years that we agreed upon are at a higher run rate than they would have otherwise been based upon our filing. So that's a real positive. I think when you look at the two areas that were of concern in the conversation they were minimal from an investment standpoint. One was the renewable natural gas piece of our filing and the other was the hydrogen blending. And those are fair policy conversations that need to take place. So, the Board wanted to move ahead from a commitment standpoint to get the work done to continue to methane reductions. So, we're completely aligned there. The run rate was higher. And I think we just participate and see where policy wants to go on those other two items and make a decision on that. But from a long-term strategy standpoint, our commitment to reduce the cast iron in our system remains and it's supported at this time by the commission. So I see nothing really changing from that standpoint.

Yes. And I think against the backdrop of the capital plan, Jeremy, we had talked about the low end of the range being consistent with where we were in the high end of the range being more like what we had for this particular item more like what we had filed for GSMP III. And so, we were above our run rate, but not as high as we had filed. So, we're firmly within that capital plan range.

Got it. That's very helpful there. And then following up with hydrogen, if I could. What's the latest messaging progress behind the hydrogen hub evaluation in the Northeast Mid-Atlantic there? And how should we think about the hydrogen opportunity across local industry, PEG’s nuclear fleet, gas blending, regional renewable electrification overall. What can you share there?

Yes. So Jerry, we -- first of all, we participated on two of the hub applications. One was the Northeast hub and the second was the MACT II. The MACT II hub was the one that was selected by the DOE in this area and we're really happy and proud of being part of that solution. I think it's going to provide us with a lot of long-term growth opportunities in the region. And I say that from an economic development standpoint for the state. I think we'll have a real opportunity to place an electrolyzer somewhere in South Jersey. I think we'll have an opportunity to make use of some pipelines that exist in South Jersey and some storage that exists in South Jersey for hydrogen as well as some end users that are in that area, both in the Delaware and across the river in Southern Pennsylvania from refinery standpoint. That's from the generic economic standpoint. I think our play here will be really determined when we see what the rules come out from the IRA and how the PTC is going to interact with both the nuclear PTC and the -- and what -- so you might think of as pan-caking hydrogen credits on top of that or not. So we'll look at that. We don't have any of that baked into our plan. I think that's the key for you to take away. It's upside for us. I will also tell you that we have no expectation of being part of anything that's going to create any commodity risk for us on the hydrogen front, so we'll look at this. We'll help the state achieve some economic growth that they have down in that depressed part of our state, and then we'll see what role we specifically play within it as an enterprise.

Got it. That's very helpful. And I think you guys have been pretty clear on no equity. So I will fully refrain from that part.

I could say it again, if you like, Jeremy.

No, we heard you loud and clear. But just, I guess, in December, any updates to get there. I mean, will we be getting kind of a CapEx update in December, and then would that be updated kind of later on '24 as we kind of -- some of the incremental items come through? And just clarity comes through on some of the different items. And if so, how does the expected EE filing match up with how you're thinking about it at last year's CapEx update?

Yes. So, Jeremy, so we are going to give you a partial update on CapEx through '27, and then we will give you more in January from a capital roll forward standpoint. So that's kind of the rhythm the December update will be a little bit of the run rate that we talked about for GSMP and the EE filings that we have to file, which will be in the beginning of December for the BPU. That said, what we've been indicating is that, that filing will -- if you look at the triennial, you would expect it to be a little bit more than we have seen in the past from a run rate standpoint. We're still assessing it. I personally have not seen the final product from our team, so I couldn't give you any more details even if I wanted to. But the indication from everyone who has looked at that order that came out from the BPU is that there'll be more opportunity for us there.

Our next question is from the line of Julien Dumoulin-Smith with Bank of America. Please proceed with your question. Julien Dumoulin-Smith: So just trying to bring the call together here, tie it up a little bit. Look, you talked about December and then January. You guys have a lot of different moving pieces coming together, right? And so you've got this GSMP, you got the energy efficiency. You have the rate case proposal. You got the PJM transmission. I think in your comments, you said December presumably. And again, you comment on this new load growth update from PJM December, January as well. I just want to -- maybe just to ask it more directly, how do you think about that rate base CAGR? You said specifically in your remarks again today about being that run rate being the low end of that? You commented just out of Jeremy, amongst others, about seeing a new elevated run rate. How do you think about that 6% plus rate base outlook? How does that fit into the 5% to 7%. And what pieces are we missing here to the culmination, if you will, in January here? It seems like a lot of positives, no equity, low end of rate base CAGR clearly seeing a higher run rate. Just I'm trying to tie this together, if I can. I guess...

I'm going to give Dan a crack at some of this, too, but I just want to reinforce -- I apologize if I said we were at the low end. I definitely is in that -- I did not mean to say that if I said it earlier, it was not my intention. So we're within the range. We've said that. And I would agree with you that there's a lot of positive momentum here, but nothing is firmed up yet. And so that's why we're where we are. And we will give you that information when we get later in December for the two items that I mentioned, the GSMP and then we'll give you some more in January. But Dan, do you want to add anything to that?

No, I think that says Joe. There was not an update with respect to those numbers today. We have reaffirmed those numbers today. As we do step forward, it has and it continues to be a range. And so we've gotten some indication from PJM that there could be some incremental transmission spend is in the $400 million range. We've gotten some indication by going through that BPU triennial that EE could see a little bit of a lift frankly, the GSMP was a higher run rate, but was not as much as GSMP I was filed for. So, there's going to be puts and takes. And I think what we're saying is that you're going to see that update in full and some of those ranges having a little bit more color around that because we've stepped through another series of months as we approach the end of the year and move into year-end. Julien Dumoulin-Smith: Got it. A couple of clarifications there. If you don't mind, I was saying earlier, 6% to 7.5%, at least the -- the low end of 6% seems like it needs to come up through '27 -- would you be rolling forward the plan to '28? And then even more specifically within that, how do you think about the linearity if we're going to bring up this term again in terms of earnings, not just off of '23, but maybe off of a '24 baseline, if you will, if you don't mind?

Yes. Look, Julien, we said 6% to 7.5%, and that is where we still are. So if you're talking me up from that number, we're at the 6% to 7.5% -- what we're trying just to do is as we do step forward, we will give the indication as to what these things start to look like. The filing for EE has not been made. And we don't have that final answer from PJM with respect to that transmission. So I think those will follow. And as we do step forward, that base will move up and will some incremental capital as we extend the years of our forecast. We need to come up a little bit. These are the kind of things that we'll do that. So, I think you ought to Think about it as exactly how we presented it, that we're affirming those numbers as we step forward. We'll give you a little bit more color in '24 come December and then we'll move into a longer-term update on the other side of our overall finalization of our plan.

Our next question is come from the line of Michael Sullivan with Wolfe Research. Please proceed with your question.

Sorry to belabor, but just to tie it up on the year-end call update. So fair to say that the earnings CAGR will be 2024 to 2028, is that right?

That will be in the January time frame. That's what we said in the prepared remarks, and we will be giving that update at that time, exactly.

Okay. And kind of consistent with how you laid it out at the Analyst Day on the nuclear side of things. We should assume the nuclear PTC 4 level with anyone else being...

Yes.

Okay. And then last, just on the credit side of things. So I think I saw earlier this week, Moody's took a favorable action or outlook on the power side of things. And any potential resource to the consolidated view there and how they might be thinking about your metrics and thresholds?

Yes. Nothing that we're aware of on the parent level, but I will tell you, I was getting some good work by Dan and his team treasury department to explain what's going on in our -- on the power side. And we were very happy, and I appreciate you recognizing Moody's letter it went out. So, thanks on that front.

Yes. I think what they did, Michael, made sense, right? If you think about what nuclear has been and what it is now, that PTC does provide that exact floor that you're referencing. And so, we do intend to continue to talk about that within our numbers and nothing beyond that. But certainly, that stabilization is supportive of exactly what Moody's did.

Next question comes from the line of Carly Davenport with Goldman Sachs. Please proceed with your question.

Most of might have been answered, but just two quick sort of housekeeping questions on nuclear, if I could. First one, are there any updates in terms of nuclear PTC in terms of your view on when we might get clarity there? And then the second one is just, is there anything to flag so far on the Salem 1 refueling outage in terms of how that's been progressing from both a timing and a budget perspective?

Yes. Look, I'll take the last one. The team continues to perform excellent work there, and there's nothing that we have there to discuss other than a normal average consistent with our business plan, so just a great opportunity for me to give kudos to the team down there. So thank you for that and Dan will give you the PTC piece.

Yes. I presume treasury is also doing excellent work down there, but they're not reporting now to it's not exactly when. So we don't have any particular color on timing other than to continue to reinforce that, but sooner is better than later, but we've not heard anything back yet.

Next question comes from the line of Travis Miller with Morningstar. Please proceed with your question.

Real quick to go -- just touch on CapEx. That $200 million -- is that -- could you characterize that as new projects? Is that inflation on existing projects pull forward? I wonder if you could clarify that real quick?

Yes. Travis, I think what that really is, is the team has been doing a great job of knocking out the work that we have in front of us, and there are a couple of things that, that is think of it as just getting some of the work done a little bit quicker than anticipated, and we'll follow up with a more fulsome update as we go forward.

Okay. So would that pull out of 2024 at all or not a relationship there?

No. Well, I would argue that you may be able to think about it that way. But as we give you an update, you'll be able to see what happens because 2025 could get pulled back into '24. It's a little bit fluid as they go forward. And if they're ahead on where they are right now, you can see some other things coming back into '24. So I wouldn't think about it as a reduction in '24. I think about it as just getting a little bit more work done early, and we'll continue to true that up as we go forward.

And the only thing I would add there is the comments I made also just indicate there's a lot of interest on the energy efficiency front, and we've been able to continue to expand there. So, all consistent with what I indicated on the triennial and the support we get from the BPU.

Okay. Perfect. That's helpful. And then a high-level question on offshore wind, I know you're not involved in that anymore, but obviously, a lot of stuff coming out in New York. Any thing you're hearing in regulatory discussions, political halls, anything you're hearing in terms of New Jersey's offshore...

Yes. No, look, we're just -- we're reading what you're all reading. And again, just happy with the decision that we made at this point.

Our next question is from the line of Anthony Crowdell with Mizuho. Please proceed with your question.

Just apologies a housekeeping on cadence rate filing in December, then we get 2024 guidance, earnings guidance in December, a little CapEx update. And then on the 4Q call, we get an update on rate base CAGR, earnings growth CAGR. Is that -- did I hear that correctly?

That's about the rhythm we expect. I don't want to be tied into an hour or a day, but yes, that's the rhythm we expect.

Great. And then just an easy question. You talked about the financing, maybe interest rate hedges earlier in the call. There's a bond that's due, I guess, you guys have taken care of that. There's also one due, I guess, in June of next year, it was an attractive rate at 2.9%. Has that been included like in your interest rate hedges or -- what are the plans for that maturity?

Yes. So, we'll take that out and step forward. And Anthony, I think the important element is that last November, as we gave that update, we presume rates including spreads that were pretty comparable to where we are. We didn't capture every single dollar of it. But I think the delta between what we thought it was going to be and where we are currently from a market perspective is within the range. So, I think we've done a nice job of getting ahead of it, and we will take that out. And like a lot of our refinancing, we will see some higher rates as we flip them, but they're a caution our forecast.

Great. And then last, if I could jump in up to Mike's question earlier about the PEG Power outlook change, I guess, at Moody's. I mean, any thoughts to maybe potential changes at the parent company? I believe Baa2 PEG Power, stronger balance sheet there, the utility strong balance sheet, any read-through on or your interest in moving PEG Power -- I'm sorry, the parent up to Baa1.

Yes. I mean if you take a look at it, they didn't move the rating on power. It's just a positive outlook there. And so I think that ripple effect would be would be lesser as you look at the parent. But I think on balance, just if you think about the overall business mix reflective of PTCs and what we've done from an overall strategic set of decisions I think we're in a better position going forward.

That is all the time we have for questions today. I'll turn the floor back to Mr. LaRossa for closing comments.

Yes. No. Thank you very much, and try -- sorry, we had so much interest, but sorry, we had to move on. Listen, I just want to thank you all for your continued interest. The work that our team continues to produce amazes me. I'm really happy with the stability that we've created here and the certainty. We put out some internal information earlier today, and it's just amazing the amount of things that we continue to execute on. And I'll just highlight a few of them here. One was this gas system monetization plan and the work that we completed. We've continued to be recognized in awards different things that have come out of best employers and best companies to work for. We lowered our gas bills again for customers effective October 1, and we refreshed our Board of Directors. So, things that a lot of people sometimes struggle with, we just seem to be executing time and time again. So a big thanks to our team. Hopefully, you hear that not only in our voices, but from others that we're a company you can count on, and we're executing on the work that we said we would. And I'll just leave with this. Anthony said it, but happy Halloween to everyone. I hope you all have a safe and healthy Halloween, and that's not just for yourselves but also for your families. Enjoy the day. Take care.

Ladies and gentlemen, this concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.