PSE&G 2012 Annual Report Download - page 4

We have been able to continue increasing our dividend,
with the latest increase in February 2013 raising our indicated
annual dividend rate to $1.44 per share from $1.42 per share.
This was the ninth increase in our dividend in the past 10 years.
The increased contribution to earnings from our more stable,
regulated business along with continued cash flow from our
generation business should allow for future consideration of
dividend increases, subject to board approval.
delivering
award-winning
reliability
Reliability is a hallmark of excellence in our industry. This
past year, PSE&G, our New Jersey energy delivery company,
was again named America’s most reliable electric utility by
PA Consulting, an industry benchmarking firm. In addition
to winning this national recognition for the fifth time in eight
years, PSE&G was named the Mid-Atlantic region’s most
reliable electric utility for the 11th consecutive year. PSE&G
was recognized as well for its outstanding response during
the October 2011 snowstorm and Hurricane Irene.
Our reputation for reliability has opened new business
opportunities. We took a range of preparatory steps this past
year in regard to our 10-year contract to manage the electric
transmission and distribution system of the Long Island Power
Authority, beginning 2014.
For us, reliability also means having power plants that
are ready and available to run as needed. PSEG Power, our
regional wholesale energy supply business, has a low-cost,
well-run generation fleet that is geographically well positioned
and environmentally responsible. Our financial investments in
our generating stations have improved their reliability, and our
fleet was there again to help keep our customers cool and
comfortable all summer long. It certainly helped that before
the summer began we brought online 400 megawatts of new,
clean peaking capacity in New Jersey and Connecticut. These
new units contributed admirably from the start.
optimizing value
Our generation fleet is not only one of the largest in the
Northeastern United States, but also one of the most diverse
by fuel mix and dispatch capability. This diversity helps us
to optimize the value of our fleet, providing more flexibility
in serving the needs of the market around the clock and
throughout the year. For example, we have been running
our gas-fueled, combustion-turbine units more and our coal
units less in an environment with lower gas prices. Also, our
New Jersey coal stations have dual-fuel capability and have
increasingly switched to gas generation as economics dictate.
Our nuclear fleet remains critical to our success – and a vital
resource for New Jersey and the wider region. In 2011, both our
Hope Creek and Salem nuclear generating stations had their
licenses extended for another 20 years. In 2012, Hope Creek
was recognized as one of the top-performing nuclear power
plants in the country. We have increased our existing nuclear
capacity through various plant improvements in recent years,
and these efforts continue.
The commodity markets in which we compete have
experienced considerable volatility. We continue to make
extensive use of hedging to reduce market risks. Our forward
sales of electricity have helped to mitigate the impact of the
lower power prices in recent years. We believe our combined
emphasis on operational excellence and cost management is
the right focus to respond to the market over the long term.
Our environmental profile should stand us in good stead,
as well. We have invested substantially in state-of-the-art
systems to dramatically reduce emissions at our facilities.
This distinguishes us from many of our peers, and favorably
positions us in a climate of increasingly strict environmental
rules and regulations. Our efforts show it is possible to reduce
emissions and power the economy at the same time.
Our investments in clean, efficient power facilities testify to our
strong environmental commitment, yet also reflect the effective
functioning of competitive energy markets. We will continue to
support market rules to ensure fair competition, provide proper
incentives and protect the interests of consumers.