PSE&G 2005 Annual Report Download - page 11

PSEG 2005 9
significantly, our gas supply charges remained the
lowest of any utility in New Jersey.
New Jersey’s Basic Generation Service (BGS) auctions
have also helped keep electric supply costs lower than
they would otherwise be. Established four years ago, the
BGS auctions have provided a highly effective mechanism
for New Jersey’s electric utilities to acquire electricity on
behalf of their customers. The auctions have attracted
healthy competition among suppliers. They have also
dampened price volatility by providing staggered three-
year contracts, under which only a portion of the New
Jersey load is bid each year.
Despite these and other constructive steps, higher
energy prices were a fact of life in 2005, reflecting
national and international developments. We continued
to work on many fronts to help customers cope with the
situation, including through special assistance programs
for low-income customers.
PSEG Energy Holdings: Its Best Year Ever
PSEG Energy Holdings, our business with both domestic
and international components, had its best year ever in
2005, delivering earnings well above plan. Its operational
arm, PSEG Global, enjoyed a fine performance from its
diverse portfolio of generation and distribution facilities.
An important earnings contribution in 2005 was made
by PSEG Global’s two modern, clean-burning gas-fired
power stations in Texas – each with 1,000 megawatts of
generating capacity.
PSEG Energy Holdings’ strategy has focused on
extracting the maximum value from its assets and